Document:

QILU BANK

Qilu Bank

 

Credit Granting Maximum Amount Guarantee Contract of Legal

 

Person

 

(First version in 2010)

Contract No. 2011 L.S.D.L.F.S.Z.G.B.Z. No. 007

 

  

  

  

Guarantor (full name):

Domicile:

Legal representative (principal):

Bank of deposit and account No.:

Telephone or fax number:

Post code:

Guarantor (full name): Song Yanliang

ID No. 372321197510208051

Household register:

Current address:

Post code:

Telephone or fax number:

Creditor: Jinan East Lishan Road Branch of Qilu Bank Co., Ltd.

Domicile: No. 112, Jiefang Road, Jinan City

Legal representative (principal): Liu Wei

Telephone or fax number: 82905066

Post code: 250013

 

  

  

  

To guarantee the performance of the debts under Article 1 of this Contract, the guarantor is willing to provide guarantee for the debts of creditor. Party A and Party B reached this Contract through friendly negotiation in accordance with Property Law of the People’s Republic of China and Guarantee Law of The People's Republic of China and relevant laws and regulations.

Article 1: Main contract and maximum debt amount guaranteed

	
(1)

	
The main contract refers to Credit Granting Contract of Legal Person (L.S.D.L.F.S.Z.No.007 in 2011) signed between Shandong Global Pharm Co., Ltd. (hereinafter referred to as “debtor”) and the creditor on April 27, 2011. The guarantor reviewed and known the clauses of the main contract, and is bound by the main contract as well as assume the relevant responsibilities. According to the main contract, the debtor and creditor will sign the detailed loan contracts (hereinafter referred to as “the Detailed Contracts”), the Detailed Contracts are the indivisible part of the main contract.

	
(2)

	
The maximum debt amount guaranteed in this Contract is RMB 6 million, (or other currencies and amounts converted according to the foreign exchange rate declared by Party B while Party A transacts with Party B).

	
(3)

	
Within the validity of credit granting limit (from April 27, 2011 to Oct. 27, 2011) and credit granting limit agreed in the main contract, the debtor can apply for the recyclable granting limit. The beginning date, expiration date, interest rate and amount of each business shall be based on the detailed contracts, loan notes or debt certificate.

	
(4)

	
Within the validity of credit granting limit and credit granting limit agreed in the main contract, the creditor shall not handle the guarantee procedures when dealing with the detailed granting business.

Article 2: Guarantee scope

 

The scope guaranteed by the guarantor covers all the creditor’s rights under the main contact and the Detailed Contract, including but not limited in the creditor’s right, interest, default interest, compound interest, liquidated damages, indemnity, maintenance fees for guaranteed property, inquiry fees, registration fees, notarial fees, premium, drawing fees, expenses for performing the debt right and guarantee right (including but not limited in legal costs, property preservation cost, execution cost, arbitration cost, counsel fee, travelling cost, appraisal cost, auction cost and transfer cost, etc.)

 

Article 3: Way of guarantee

 

The Contract adopts the guaranty way of joint responsibility. If the performance period of the single debt under the main contract expires, and the debtor fails to perform the entire or part of the debts, the creditor has right to request the guarantor to assume the responsibility.

 

Article 4: Guarantee period

 

	
(1)

	
The loan of each period in the guarantee period shall be calculated separately, from the effective date of the Contract to two years after the loan expires.

 

  

  

  

 

	
(2)

	
The letter of guarantee of each period in the guarantee period shall be calculated separately, from the effective date of the Contract to two years after the creditor pays the amount agreed in the letter of guarantee.

	
(3)

	
The letter of credit of each period in the guarantee period shall be calculated separately, from the effective date of the Contract to two years after the creditor makes external payments for the letter of credit.

	
(4)

	
Each bank’s acceptance bill shall be calculated separately during the guarantee period, from the effective date of the Contract to two years after the expiration date of the single bank’s acceptance bill.

	
(5)

	
For other single debt under the main contract during the guarantee period, it is from the effective date of the Contract to two years after the debt’s performance period expires.

 

Article 5: Commitment of guarantor

 

	
(1)

	
The guarantor shall provide the real balance sheet, income statement, cash flow, annual audit report and the relevant materials and information.

	
(2)

	
If the debtor fails to perform the creditor’s right when expires, the guarantor shall perform the guarantee responsibility voluntarily.

	
(3)

	
If the guarantor fails to perform the guarantee responsibility according to the Contract, the creditor shall deduct from any accounts in Qilu Bank System opened by the guarantor.

	
(4)

	
The guarantor shall notify the creditor within 5 business days after the following matters happened:

 

	
1.

	
The guarantor has the changes in administrative subordination and management personnel, revision in Articles of Association and adjustment in organizations;

	
2.

	
The guarantor has great difficulties in production operation and financial status or major lawsuits and arbitrations;

	
3.

	
The guarantor changes industrial and commercial information such as name, domicile and legal representative, etc;

	
4.

	
The guarantor changes the capital structure or operation method.

 

	
(5)

	
The guarantor provides the guarantee for the third party’s debt, or makes pledge and mortgage guarantee for himself/herself or the third party, if this may affect the performance of the guarantee responsibility under this Contract, which shall notify the creditor in advance of 15 days and get the permission of the creditor.

	
(6)

	
The Detailed Contracts, loan certificates or relevant certificates of the businesses under this Contract shall be not delivered to the guarantor.

 

Article 6: If the guarantor assumes the responsibility for guarantee, it shall comply with the following orders to pay off:

 

	
1.

	
Expenses to realize the guarantee right;

	
2.

	
Expenses to realize the creditor’s right;

 

  

  

  

 

	
3.

	
Principal debt, interest, default interest and compound interest;

	
4.

	
Other payables such as liquidated damages and indemnity.

 

Article 7: Breach of the contract

 

If the guarantor violates the obligations under this Contract, the creditor has right to request the guarantor to assume 5% liquidated damages of unpaid debt principal under the main contract.

 

Article 8: Disputes solution

 

The disputes aroused in the Contract shall be solved through the negotiation of the two parties, if it needs to be solved through lawsuits, it shall be governed by court located in the creditor’s place.

 

Article 9: When the debt performance period under the main contract expires, and the creditor is not be paid off, whether the creditor has the guarantee right of the debts under the main contract (including but not limited in the ways of guarantee, pledge, mortgage, deposit, letter of guarantee, standby letter of credit and credit insurance, etc.), it has right to request the guarantor to assume the responsibility within the guarantee scope. The abovementioned “period expiration” includes the situation that the creditor announces the debt expiration in advance and requests the debtor to pay off timely in accordance with the contract or state laws and regulations.

Article 10: Other agreed matters

	
(1)

	
The guaranteed principal creditor’s right shall be affirmed if one of the following situations occurs:

	
1.

	
The performance period of the last credit granting business happened in the credit granting limit validity agreed by the debtor and creditor expires;

	
2.

	
The new creditor’s right could not occur;

	
3.

	
The guarantor and debtor are with bankruptcy or canceled;

	
4.

	
Other situations determined by the creditor’s right regulated by the law.

The above guaranteed creditor’s right is determined to have the following effect: When determining the guaranteed creditor’s right, whether the unpaid creditor’s right under the main contract is with the expired period or with additional conditions, which is still within the scope of guarantee; when determining the guaranteed creditor’s right, for all the payments agreed in Article 2 of the Contract excluding the creditor’s right, whether it occurs or not, which is still within the scope of guarantee.

	
(2)

	
If the guarantor belongs to the natural person, the spouse of the guarantor is willing to assume the guarantee obligations under the contract together with the guarantor.

Article 11: Taking effect of the Contract

The Contract will take effect after meeting the following conditions:

	
(1)

	
It is with the guarantor’s seal or contract seal (if the guarantor is the natural person, he/she only needs to make signature);

	
(2)

	
It is signed by the creditor’s principal or authorized agent, with the official seal or special contract seal.

 

  

  

  

Article 12: This contract has_____copies, with the two parties holding____respectively, covering the same legal effect.

	
Signing this column if the guarantor is the legal person

	  	
Signing this column if the guarantor is the natural person

	
Guarantor (seal):

	  	
Guarantor (signature): Song Yanliang

	  	  	
Spouse of guarantor (signature):

	
Legal representative (principal):

	  	  
	
Or authorized agent (seal):

	  	  
	  	  	  
	
Creditor (seal): Jinan East Lishan Road Branch of

Qilu Bank Co., Ltd.

	  	  
	
Principal or authorized agent (seal): Liu Wei

	  	  
	
Operator (signature):

	  	  
	  	
  

	
Signing date:QILU BANK

Qilu Bank

 

Credit Granting Contract of Legal Person

 

(First version in 2010)

 

Contract No.: L.S.D.L.F.S.Z.No.007 in 2010

 

  

  

  

Party A: Shandong Global Pharm Co., Ltd.

Address: No. 80, Jiangjun Road, Jinan City

Legal Representative (Principal): Song Yanliang

Opening Financial Institution and Account No.:

Tel or Fax:

Postal Code:

Party B: Jinan East Lishan Road Branch of Qilu Bank Co., Ltd.

Address: No. 112 Jiefang Road, Jinan City

Legal Representative (Principal): Liu Wei

Tel or Fax: 82905066

Postal Code: 250013

 

  

  

  

Party A applied for comprehensive credit granting (hereinafter referred to as “the granting”) and Party B agreed to provide comprehensive credit granting. To specify both parties’ respective rights and obligations, Party A and Party B entered into the Contract through friendly negotiation according to Contract Law of the People's Republic of China, Property Law of the People’s Republic of China and Guarantee Law of The People's Republic of China and other relevant laws and regulations.

Article 1: Contents of Comprehensive Credit Granting

	
(I)

	
Comprehensive credit granting limit

Party B agrees to provide Party A with the recyclable granting limit, and the maximum debt amount for the granting is (Currency) RMB 6 million (or other currencies and amounts converted according to the foreign exchange rate declared by Party B while Party A transacts with Party B). The two parties agree that the granting limit Party A applied from Party B is 50% of the maximum debt amount.

The granting limit refers to the maximum amount that Party can apply from Party B for granting.

	
(II)

	
Validity of Comprehensive credit granting limit

The limit of comprehensive credit granting under the Contract shall be valid from April 27, 2011 to Oct. 27, 2011. Party A shall apply for the use of credit granting limit within the validity.

Article 2: Application Way of Comprehensive credit granting limit

The application way for the comprehensive credit granting limit includes but not limits the following items:

Loan, discount, bill acceptance, factoring, loan commitment, letter of guarantee and establishment of a letter of credit, etc.

The detailed credit granting business shall be subject to the detailed business contract agreed by both parties.

Article 3: Use of Comprehensive Credit Granting Limit

In the validity of credit granting limit, and after the guarantee procedure agreed in the Contract is finished, Party A shall apply from Party B for using the comprehensive credit granting limit in the written form; otherwise, Party B shall have right to reject the application of Party A. Every time Party A uses the type, amount and term, etc. of credit granting business, Party A shall apply for them one by one. Where Party B agrees the application of Party A upon auditing, Party B shall sign the detailed contract or agreement (hereinafter referred as “Detailed Contract”) of the corresponding credit granting business.

In the validity of credit granting limit, Party A may use the credit granting limit circularly.

Article 4: Interest and Fee

The calculation ways of interest rate, interest of the credit granting under the Contract, the fee receivable and exchange rate, etc. of Party B shall be specified in the contract by both parties.

 

  

  

  

Article 5: Credit Granting Guarantee

To guarantee that the creditor's rights occurred from the Contract can be cleared off, Party A/ the third party shall provide guarantee for Party A to perform the Contract and the debt under each detailed contract abiding by I and III items:

	
(I)

	
Song Yanliang Guarantee (separately signing Legal Person’s Loan Guarantee Contract of Qilu Bank with the No. of 2011 L.S.D.L.F.S.Z.G..B.Z. No. 007)

	
(II)

	
Pledge (No for separate signing of)

	
(III)

	
Shandong Global Pharm Mortgage (separately signing Mortgage Contract of Maximum Amount for Goods Control and Financing of Qilu Bank with the No. of 2011 L.S.D.L.K.H.Z.G..B.Z. No. 007)

	
(IV)

	
Other  (No for separate signing of)

Article 6: Rights and obligations of Party A and Party B

	
(1)

	
Party A has right to request Party B to handle the granting business in accordance with the contract.

	
(2)

	
Party A shall comply with the agreement under this contract and the detailed contracts to pay off the debt principal and interests.

	
(3)

	
Party A shall comply with the agreements under this detailed contract to use the granted capital, and it shall not use it for other purposes without the permission of Party A.

	
(4)

	
Party B has right to supervise the using status of granting capital, production status and financial situation of Party A.

	
(5)

	
Party A shall promptly report to Party B if one of the following situations occurs, and it shall positively coordinate Party B to implement the guarantee measures for all the fees related to the debt principal and interests under this contract.

	
1.

	
There are great financial losses, assets losses or other financial crisis;

	
2.

	
It provides the guarantee for the third party, or provides the pledge/mortgage based on its self-owned assets;

	
3.

	
When there occurred merger, dividing, recombination, cooperation, capital-reducing, equity transfer and shareholding reform;

	
4.

	
When there are business suspending, or the business license is revoked or cancelled, or it applies for or being applied for the bankruptcy and dissolution, etc.

5.    Have any litigation, arbitration or criminal and administrative penalty with great disadvantageous consequences to its operation or property status;

	
6.

	
Have other major issues influencing its capability to repay.

(6) If any one of the following situations of the pledge, mortgage, guarantee or other warranty provided by Party A/ the third person occurs, Party B has right to require Party A to get rid of the bad influence aroused, and/or require Party A to increase and change the warranty condition.

1. The warrantor violates the contract of guaranty or loses the ability of assuming joint and several liabilities;

2. The pledger violates the pledge contract or the collateral has depreciation or damage;

3. The mortgagor violates the mortgage contract or the pledged property has depreciation or damage;

4. When there are business suspending, or the business license is revoked or cancelled, or it applies for or being applied for the bankruptcy and dissolution, etc.

5. Have other situations influencing its warranty ability.

 

  

  

  

(7) If the pledge (mortgage) property provided by Party A/ the third person is adopted the forced measures like sealing, detention and freezing, Party B has right to stop the unused credit granting limit of Party A within the credit granting limit.

(8) Party A shall ensure that the credit granting and warranty agreed by the contract shall not violate the rights and interests of the third person, the Articles of Association and regulations of Party A.

(9) Party A shall ensure that the credit granting and warranty agreed by the contract shall not violate the agreement between Party A and the third person.

(10) Party A shall ensure to provide authentic and complete materials to Party B.

(11) Party A has carefully read and known all articles of the corresponding contract of guaranty of the contract, and agrees to be bound by it and assume the corresponding responsibilities.

(12) Party B realizes the principal creditor's right and/or the right of guaranty according to the law or the agreement of the contract, and all fees shall be paid according to the following order:

1. The expense to carry out the right of guaranty;

2. The expense to carry out the creditor's right;

3. The principal creditor's right and interest, default interest and compound interest;

4. Other payables like liquidated damages and damage awards.

Article 7: Remedies for breach of contract

If Party A violates any one of the obligations regulated by article 6 of the contract or has any one of the situations listed in item (5), (6) and (7) of article 6, Party B has right to respectively or simultaneously take the following measures and Party A shall have no objection:

(1) Reduce the credit granting limit of the contract and adjust the period of validity of the credit granting limit;

(2) Stop providing the granting limit that is not used by Party A within the granting limit;

(3) It announces that part or entire debt is expired within the grant limit, and requires Party A to pay off;

(4) Take back the released loans and other loan principal and interest within the granting limit;

(5) Deduct the deposits of Party A’s settlement account or other accounts, to pay off the debts under the contract and detailed items of Party A;

(6) Achieve the security right in advance;

(7) Require Party A assuming 5%’s liquidated damages of unpaid debt principal and interests. If the amounts of liquidated damages under the contracts are not in consistent, it shall comply with the agreement with higher liquidated damages.

(8) Carry out the resources right in accordance this contract.

Article 8: Fees bearing

Party A shall assume the lawyer’s fees, lawsuit fees, travel fees, notification fees, delivery fees, maintenance fees, registration fees, inquiry fees, insurance fees and drawing fees, which are used for performing the contract and handling the guarantee procedures, so as to realize the creditor’s right and/ or guarantee right.

Article 9: Change and termination

This contract can be changed or terminated through the negotiation of Party A and Party B in the written form. Before concluding the written agreement, this contract is still effective. Any party shall not change or terminate the contract without the permission of the other party.

 

  

  

  

Article 10: Contract effect

The detailed contracts under this contract are the inseparable parts, covering the same legal effect with this contract. If there are conflicts between the detailed contracts and this contract, it shall regard this contract as the standard, unless otherwise agreed in the contract.

Article 11: Applicable laws and disputes solution

	
(1)

	
The establishment, explanation and disputes solution of this contract are applicable in the laws of the People’s Republic of China, and the rights and obligations of the two parties are protected by the laws of the People’s Republic of China.

	
(2)

	
The disputes aroused in the performing process shall be negotiated by the two parties; if the negotiation is failed, it shall be submitted to the local people’s court. During the lawsuit process, the two parties shall perform the clauses that have no relation with the disputes.

Article 12: Contract coming into effect

This contract will take effect after meeting the following conditions:

	
(1)

	
The contract is with the official seal or special seal for contract;

	
(2)

	
The contract is sealed by the official seal or special seal for contract of the principal or authorized agent of Party B.

Article 13: Other agreed issues

	
             

	
/

	
               

Article 14

This contract has _____copies, with Party A and Party B holding _____ respectively, covering the same legal effect.

Party A: (seal) Shandong Global Pharm Co., Ltd.

Legal representative: Song Yanliang

Or authorized agent (seal):

Party B: (seal) Jinan East Lishan Road Branch of Qilu Bank Co., Ltd.

Principal: Liu Wei

Or authorized agent (seal):

Signed on: April 27, 2011

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