Document:

chinapharmexh10_17.htm

Exhibit 10.17

 

 

Contract NO. NO0002

 

 

 

Current Fund Loan Agreement

 

 

 

 

Borrower (Party A): Xi’an Qinba Pharmaceutical Co., Ltd.

 

Address: B0601 Chuang Ye Square, 48 Keji Road, Hi-Tech Zone, Xi’an

 

Legal Representative: Guozhu Wang

 

Lender (Party B): Industrial and Commercial Bank of China Co., Ltd. Hanzhong Subbranch

 

Address: Renmin Road, Hantai District, Hanzhong City

 

Legal Representative: Qi Jin

 

 

 

 

 

 

 

 

 

 

  

1

  

 

Table of Contents

 

	
Article 1.

	
Type of Loan

	
Article 2.

	
Purpose of Loan

	
Article 3.

	
Sum and Period of Loan

	
Article 4.

	
Interest Rate of Loan

	
Article 5.

	
Resource and Method of Repayment

	
Article 6.

	
Loan Guarantee

	
Article 7.

	
Rights and Responsibilities of The Parties

	
Article 8.

	
Liability for Breach Of Contract

	
Article 9.

	
Validity, modification, rescission, termination of the Contract

	
Article 10.

	
Settlement of Disputes

	
Article 11.

	
Other Issues

	
Article 12.

	
Note

 

 

 

 

 

 

 

 

 

 

 

  

2

  

 

Party A borrows fund from Party B due to requirement listed in Article 2 .1 of this contract. Party B agrees lend fund to Party A. In order to clarify the rights, obligations of both parties, in accordance with <Contract Law>, <General Rules on Loans> and other relative laws, regulations, the two parties negotiate to engage this contract.

 

Article 1. Type of Loan

 

	
1.1

	
The period of borrowing current fund under this contract is (mid-term or short-term).

 

Article 2. Purpose of Loan

 

	
2.1 

	
The purpose of borrowing current fund under this contract is: repay the loan under the contract No.0001 in Xi Xiang, 2008.

	
2.2

	
Party A could not change the purpose of the loan without permission of Party B.

 

Article 3. Sum and Period of Loan

 

	
3.1

	
The amount of loan under this contract is RMB(full form) FIVE million yuan(lower case) 5 million yuan(take the upper case as final when disagreement happens between upper case and lower case, same as below)).

	
3.2 

	
The period of loan under this contract is 12 months, from 2009 year 1 month 20 day to 2010year 1 month 19 day.

	
3.3

	
Party A should extract the whole amount of loan in once time in accordance with article 3.2, in event of special reasons, could postpone the extracting date for    days under the permission of Party B. Actual date of release and repayment is written on the due bill. The due bill and certificate of extraction can not be separated, disagreement with this contract of other written notices, except date, shall subject to this contract as final.

 

Article 4. Interest Rate of Loan

 

	
4.1

	
This Loan shall bear interest at a rate of _5.31____‰ per month (mid-term current bank loan rate is fixed annually). Interest will be calculated daily since the actual withdrawal date, and paid monthly. Date of interest payment is 20th day of each month (the 20th day of each month/ the 20th day of last month of each quarter), interests will be paid off with loan due to expiry date.

  

3

  

	
4.2

	
If the People’s Bank of China adjusts the benchmark interest rate, and the adjustment fit this contract, the interest rate of the loan is calculated based on the new interest rate and method above without additional notice to the borrower.

 

Article 5. Resource and Method of Repayment

 

	
5.1

	
The resource and method of payment of Party include but not restricted with the following:

	
5.1.1

	
sales income;

	
5.1.2

	
income from morgtage turned into money .

	
5.2

	
Regardless of limitation from any other contracts that restricts the resource and method of Party A, those limitation must not influence the execute of obligation of Party A under this contract. Party A could not invoke 5.1 to refuse execute its obligation under this contract in any circumstances.

	
5.3

	
Party A shall payback the loan by term, and payback interest in accordance with this contract.

	
5.4

	
Party A shall prepare the repayment at the expiry date of interest or capital before the expiry date of repayment by means of prepay through the account opened by Party B, and grant Party B with the authority to remit account.

 

Article 6. Loan Guarantee

 

	
6.1

	
The guarantee method of this contract is: mortgage of real estate.

	
6.2

	
Party A have obligation to assist Party B and let Party B hold the content of this contract signing the guarantee contract NO. NO2008(0002).

	
6.3

	
In event of any disadvantages happens to Party B, Party A should provide Party B with satisfactory guarantee after noticed.

 

Article 7. Rights and Responsibilities of the Parties

 

	
7.1

	
Rights and responsibilities:

	
7.1.1 

	
Extract and use loan in accordance with this contract within the loan period;

	
7.1.2 

	
Prepayment would not be allowed ahead of time;

	
7.1.3

	
Responsible for the reality, accuracy, completeness of provided materials through investigation procedure;

	
7.1.4

	
Automatically accept the investigation, inspection and supervision for loan under this contract;

	
7.1.5

	
Actively coordinates Party B the inspection and supervision with its production, operation and financial status, and have obligation of providing Party B with relative income statement and balance sheet of the company by terms.

	
7.1.6

	
Payoff the debt and interests under this contract in accordance with the engagement;

 

 

  

4

  

	
7.1.7 

	
Assume the relative expenses under this contract, including, without limitation, expenses of appraisal, evaluation, registration and so on;

	
7.1.8

	
Send back receipt within 3 days after received the collection letter through mail or by other methods from Party B;

	
7.1.9

	
In event of contract lease, shareholding reform, joint operation, merger, acquisition, joint venture, stock rights changing, asset deal, and other behaviors that could influence the realization of rights and benefits of Party B, Party A should inform Party B no later than 30 days prior to those behaviors, and permit by Party B, or Party A should not act the above behaviors before paying off the debt.

	
7.1.10

	
Party A may change its residence, mailing address, and scope of business, legal representative and other registration affairs for noticing Party B within 7 days by written notice.

	
7.1.11

	
In event of important affairs that may threaten or bring negative influence to Party A’s regular operation, including, without limitation, involving economic dispute, bankruptcy, financial status deterioration and so on, Party A should inform Party B by written form immediately.

	
7.1.12

	
Party B shall be informed with 5 days after occurrence of the following incidents: discontinuation of business, dissolution, recession, license revocation and cancellation, and guarantee that the principal with interest shall be repaid.

	
7.2

	
Party A’s rights and obligations:

	
7.2.1

	
Request Party A supply all materials related with this borrowing;

	
7.2.2

	
Principal, interest, compound interest, default interest, and all other accrued expenses which shall be paid by Party A from its account pay according to provisions of this Contract and laws;

	
7.2.3

	
Party B has right to exercise credit sanction, notify related departments and units, and urge debt through news media, if Party A avoids Party B’s supervision, and default principal and interest other behaviors breaching this Contract;

	
7.2.4

	
Party B shall offer full loan to Party B according to contract (excluding delay caused by Party A);

	
7.2.5

	
Maintain secrecy of Party A’s liabilities, finance, production, operation, and etc; except as otherwise specified in this Contract, laws and regulations.

 

Article 8 Responsibility for breach of contract

 

	
8.1

	
Both parties shall perform the obligations agreed in this Contract from the date of effectiveness. Any party fails to perform or partly perform the obligations, shall bear the breaching responsibilities.

	
8.2

	
Where Party A fails to handle and withdraw loan in accordance with Article 3.3 in this Contract, Party B has right to collect delayed liquidated damages by the rate in this Contract by day.

	
8.3

	
Where Party B fails to provide loan in accordance with Article 3.3 in this Contract, then it shall pay delayed liquidated damages by the rate in this Contract by day.

 

 

  

5

  

 

 

	
8.4

	
Where Party A returns the loan under this Contract without Party B’s written approval, Party B has right to collect interest according to loan term and rate in this Contract.

	
8.5

	
Where Party A fails to pay due loan principal and interest under this Contract, Party B has right to settle deadline for Party A to pay off, exercise offset right for funds of Party A’ accounts opened in Party B, collect 50% default interest on the basis of interest rate in contract by day for overdue loan, and collect compound interest for unpaid interest.

	
8.6

	
Where Party A fails to use loan in accordance with defined usage in this Contract, Party B has right to withdraw part or even all the loan, or terminate contract, collect ‰ interest according to contract-breaching date by day for Party A’s loan which is breaching contract in usage., and collect compound interest for unpaid interest.

	
8.7

	
Where Party A uses the loan in the situations of Article 8.5 and Article 8.6 at the same time, Party B shall perform more severe punishment instead of both punishments.

	
8.8

	
If Party A performs one of the following behaviors, then within 7 days from receiving Party B’s notice, Party A shall correct and adopt appropriate remedial measures to Party B’satisfaction, otherwise, Party B has right to withdraw part or even all the loan; for the loan which cannot be withdrawn, Party B has right to collect liquidated damages by the rate of overdue loan in this Contract by day;

	
8.8.1

	
Supply Party B with balance sheet, income statement, and other financial data which are false or concealing important facts;

	
8.8.2 

	
Fail to cooperate or refuse to receive Party B’s supervision of its loan-using conditions, related production and operation, financial activities;

	
8.8.3

	
Transfer, dispose, or threatened transfer or dispose important parts of its assets without Party B’s approval;

	
8.8.4

	
Important parts of its assets or all assets are occupied by other creditors, or taken over by designated entrusting party, recipient, or similar persons, or its properties are detained, frozen, which will bring severe damages to Party B;

	
8.8.5

	
Perform activities of contract project, leasing, shareholding reform, pool operation, merger, consolidation, joint venture, separation, capital reduction, equity adjustment, equity transfer, and other activities, which will influence Party B’ rights realization and consequently threaten to creditor’s rights safety of Party B;

	
8.8.6

	
Industry and commerce registration changes of residence, correspondence address, operation scope, legal representative, or occurrence of important outward investment, which bring severe influences and threat to  Party B’ realization of rights;

	
8.8.7

	
Involved with severe economical disputes or financial position deteriorates, which brings severe influences and threat to Party B’ realization of rights;

	
8.8.8

	
Other situations which may bring threat or severe loss to Party B’ realization of creditor rights under this Contract;

 

 

 

  

6

  

 

 

Article 9 Effectiveness, alteration, rescission, and termination of Contract

 

	
9.1

	
This Contract will take effect after Party A’s and Party B’s signature and seal; where there is guarantee, this Contract will become effective after Guarantee Contract takes effect. And this contract will terminate until the date when borrowing principal, interest, compound interest, default interest, liquidated damages or other accrued expenses are paid off.

	
9.2

	
Party B has power to dissolve Contract, request Party A to pay loan principal and interest in advance, and pay losses in any of the following circumstances:

	
9.2.1

	
Party A is in shut down of business, dissolution, recession, suspension or revocation of the business licenses;

	
9.2.2

	
The guarantee under this Contract changes which are adverse to Party B’ realization of creditor rights, and Party A fails to supply guarantee separately required as Party B;

	
9.2.3

	
Other activities breaching Contract severely.

	
9.3

	
Where Party A requires loan extension, it shall apply to Party B in written form within 30 days before expiration of Contract, and supply written comments of guarantor’ agreement of continuing guarantee; after Party B’s inspection and approval, and signing of extension agreement, then loan under this Contract will be extended; this Contract will continue to be implemented before signing of extension agreement by both parties.

	
9.4

	
Any party shall not alter or dissolve this Contract without authorization after this Contract enters into effect, unless otherwise stipulated in this Contract. Where it is really necessary to alter or dissolve this contract, a consensus and a written agreement shall be reached through consultation by both parties. Before the reaching of written agreement, this Contract shall continue to be implemented.

 

Article 10 Resolution of disputes

 

	
10.1

	
Disputes occurred in the implementation of this Contract by both parties, shall be resolved by both parties’ consultation; where consultation fails, it shall be settled according to method of _10.1.2_______:

	
10.1.1

	
Arbitration by                   ;

	
10.1.2

	
Litigation under the jurisdiction of people’s court where Party B’s domicile is located.

 

Article 11 Other issues agreed by both parties

 

	
11.1

	
If Party A fails to repay the principal and interest, Party has the right to apply for court enforcement.

	
11.2

	
Party A’s sales repayment rate shall not be lower than Party B’s loan rate, and the bank loan shall not be used for stock investment, such as shares and futures. Party A shall not alter the purpose of this loan without authorization.

	
11.3

	
_____________________________________________________________

 

 

  

7

  

 

 

Article 12 Supplementary articles

 

	
12.1

	
The appendix of this Contract is an impartible component of this Contract, and with equal legal effect with body part.

	
12.2

	
In the implementation of this Contract, where withdrawal or repayment is on non-workdays of banking, then it may be postponed to next banking workday.

 

 

	
Party A (OFFICIAL SEAL):

Xi’an Qinba Pharmaceutical Co., Ltd

	
Party B (OFFICIAL SEAL):

Industrial and Commercial Bank Co.,Ltd.  

Hanzhong Branch 

(loan contract special seal)

	
Legal Representative

or authorized agent:

Guozhu Wang 

(SEAL&SIGNATURE)

 

	
Legal Representative

or responsible or authorized agent:

Fan Zhang 

(SEAL&SIGNATURE)

	
Signing date: January 20th, 2009

	
Signing date:  January 20th, 2009

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  

8chinapharmexh10_18.htm

Exhibit 10.18

 

 

Mortgage & Guarantee & Borrowing Contract

 

(2007)No.011

Lender: Rural Cooperative Bank of Xixiang, Shaanxi

Borrower: Xi’an Qinba Pharmaceutical Co.,Ltd

Mortgagor: Xi’an Qinba Pharmaceutical Co.,Ltd

This contract is entered by and between the three parties above via negotiation pursuant to relevant laws and regulations.

Article 1 The Lender agreed to lend the following loan to the borrower.

1.   Type of loan: Mid-term loan

2.   Purpose of loan: Floating capital

3.   Currency and sum of loan: RMB THREE MILLION YUAN

4.   Loan period: April 28th 2007 to April 27th 2009

 

Specific fund and repayment plan as following:

 

	
Periodic fund plan

	
Periodic repayment plan

	
Date

	
Amount (Yuan)

	
Date

	
Amount (Yuan)

	
April 28th 2007

	
3000000.00

	
Apirl 27th 2009

	
3000000.00

 

5.   Interest rate of loan: (1) Interest rate of short term loan  ∕  ; (2) Interest rate of long and medium term loan is fixed annually. The rate of the first year is 8.55‰ ; The rate of the second year is executived according to the provisions of RMB interest rate.

6.   Repayment method: pay when expiring.    Interest settlement method: pay by the quarter.

 

Article 2 Mortgagor agrees to offer properties valued 4,802,000 Yuan (see mortgage list) after evaluation as collaterals to guarantee for the borrower.

	
1.

	
If any of the debt fulfillment periods under the main contract expires but the mortgagee is not paid off, the mortgagee has the legal right to convert the collateral into money or auction or sell off the collateral for liquidation in priority.

	
2.

	
Range of mortgage guarantees includes debt principal, interest and all expenses for creditors to realize creditor’s rights, as legal cost, retaining fee, working hours lost, travelling expense and executive fee.

	
3.

	
Effect of mortgage right involves auxiliary object, secondary right, right of subrogation, processed object and yield, etc.

	
4.

	
The period of mortage guarantees is from the date mortage is created to the pay off of all the debt in the range of guarantees.

	
5.

	
The listed assets in collateral list during the mortgage term should be preserved, use, maintained, secured by mortgagor. Certificate of property rights be preserved by mortgagor as well.

	
6.

	
Collaterals under this contract should not be included within the range of bankruptcy properties, the exceeded portion of collaterals after paid off all debts, interests and relative expenses could be included into range of bankruptcy.

 

 

  

1

  

 

 

Article 3. Borrower’s commitment

 

	
1.

	
Repay loan and interests by term;

	
2.

	
Use the loan by engaged purpose under this contract, do not change purpose without permission;

	
3.

	
Provide the Lender with real balance sheet, income statement, opening account bank and accounts monthly;

	
4.

	
Accept the inspection and supervision of financial credit status, operation, and financial activities by Party B;

	
5.

	
May the scope of business, premises or registration funds of legal representatives, legal person changed, Party A should inform Party B immediately;

	
6.

	
In event of contract lease, shareholding reform, joint operation, merger, acquisition, shareholding reform, joint venture, and other behaviors that could influence the realization of rights and benefits of Party B, Party A should inform Party B and make sure repay loan on time.

 

Article 4. Mortgagor’s commitment

 

	
1.

	
The mortgagor reserves sufficient and undisputable right of ownership and disposition of the collateral.

	
2.

	
The collateral can be circulated or transferred according to law.

	
3.

	
The collateral is not sealed up, detained or re-mortgaged.

	
4.

	
Insure the collaterals. During the mortgage term, Party B will be the first beneficial person of collaterals, the insurance sheet shall be preserved by Party B, Party A should keep insure the collaterals when expiry date pass; if collaterals damaged within the period of insurance, Party A should repay the loan and interests ahead of time in use of settlements of claim, when the settlements of claim is not sufficient to compensate the loan and interests, Party A should response for compensation and provide other insurance;

	
5.

	
Accept inspection and supervision of collaterals by Party B;

Article 5. Lender’s commitment

 

	
1.

	
Provide borrower with loan by term and engaged amount;

	
2.

	
preserve the certificate of property rights, return after paid off of all loan

	
3.

	
Do not charge other fees from Party A excluded from this contract;

	
4.

	
Maintain secrecy of materials provided by Party A.

 

Article 6. In case of Party A could not repay the loan on time due to special reason, Party A could apply for repayment delay no late than 30 days prior to the expiry date. Party A could then delay the repayment with permission of Party B, but the corresponding interests shall be calculated based on the corresponding interest rate level, Party A shall continuously mortgage the collaterals till the end of payment of loan.

 

Article 7. Responsibilities of Breach of Contract

	
1.

	Breach of Contract by Party A:
	
 

	1.1	
If not paid on time nor applied for delay, will be charged for 30% in addition to the basic interest rate;

	
 

	1.2	
If not pay interests on time, will be charge for additional interests.

	
 

	1.3	
If not use loan on purpose by this contract, will be treated as embezzled, the embezzled part will be charged for 50% in addition to the basic interest rate during this period;

 

 

  

2

  

 

 

	
 

	1.4	
The Lender shall have the authority to suspend the loan under leasing and charge for repayment ahead of due time if Borrower breached the 2nd and 6th of Article 3.

	
 

	1.5	
In case of Borrower breached the 1, 2, 3, 4 of this Article, that caused lawsuit, will be charged for additional legal cost, execute cost, attorney fee, travel expenses and compensation.

	
2.

	Breach of Contract by Party B:
	
 

	2.1	
If Party A could not lease on time or due amount to Party B, Party B shall pay penalties according to days and amount by rate of ______ten thousand percent per day.

	
 

	2.2	
Lost of certificate of property rights, shall response for registration and post register and relative expenses.

	
 

	2.3	
In event of breach of 3rd of Article 5, Borrower could refuse, could lodge complaint to People’s Bank of China;

	
3.

	
Breach of Contract by Mortgagors:

In case of breach of Article 4 under this contract, that made Lender suffer losts due to failure in realization of its rights, shall make indemnification.

Article 8. Lender shall deduct from the account of Borrower directly when Lender charge for repayment or charge for repayment ahead of time according to Article 7.  Borrower could not afford to payoff the debt in time before expiry date, Lender could dispose the collaterals, benefit with prior payment, if can not payoff, Lender could keep recourse.

 

Article 9. Lender shall responsible for mortgage registration, Borrower shall responsible for expenses cost of appraisal, evaluation, registration and warrants.

 

Article 10. In event of dispute happens, the court under jurisdiction shall responsible for it.

Article 11. Other Issues:

 

	
1.

	
During the effective period of mortgage, if the collateral is destroyed, lost or expropriated, the mortgagor shall restore the collateral’s value or provide a recognized guarantee within 30 days.

	
2.

	
This contract has been entitled the enforcement by the notary office, permitted by both borrower and mortgagor. If there is no extension contract after the expiry of the borrowing, lender has the right to require the court to enforce the property of both borrower and mortgagor about the loan principal (including interest and compound interest).

	
3.

	
During the implementation of this contract, if the state interest rate is adjusted, the interest rate will be carried out as the adjusted rate.

 

Article 12 Deal with matters not mentioned in this contract in accordance with the relevant laws, regulations and provisions.

 

Article 13 The contract is made out in triplicate. Lender, borrower and mortgagor holds one original respectively.

 

Article 14 This contract becomes valid and effective from the date that parties sign and chop.

 

  

3

  

 

 

	
Lender

 

Lender: Xi’an Qinba Pharmaceuticals Co.,Ltd (seal)

ID No.:

Education level: university

Sex: male     Age: 41

Address: No.48 of Ke Ji Road, Hi-Tech Development Zone, Xi’an City

Legal representative: Guiping Zhang (seal)

(Entrusted agent):                 (seal)

Trustee: Jiang Yang                (seal)

Account bank and No.

	
Borrower

 

Borrower: Rural Cooperative Bank of Xixiang, Shaanxi (seal)

 

Legal representative:               (seal)

 

(Entrusted agent): Wang Yuanbin      (seal)

 

Trustee: Yuanbin Wang             (seal)

 

	
Mortgagor

 

Mortgagor: Xi’an Qinba Pharmaceuticals Co.,Ltd (seal)

ID No.:

Education level:

Sex:              Age:

Address: No.48 of Ke Ji Road, Hi-Tech Development Zone, Xi’an City

Legal representative: Guiping Zhang (seal)

(Entrusted agent):                (seal)

Trustee: Jiang Yang              (seal)

Account bank and No.

	
Mortgagor

 

Mortgagor:                         (seal)

 

ID No.:

Education level:

Sex:           Age:

Address:

 

 

Legal representative:                (seal)

(Entrusted agent):                   (seal)

Trustee:                           (seal)

Account bank and No.

The attachment of this contract:   1. List of mortgage

2. Mortgage license of land tenure and other rights licenses

3.

 

Signing date: Apirl 28th , 2007

 

Signed at: Rural Cooperative Bank of Xixiang, Shaanxi

 

 

 

  

4

  

Loan Extension Agreement

 

	 	 	 	 	 	No.:
	
Borrowing unit:

	
Xi’an Qinba Pharmaceuticals, Co.,Ltd.

	
Original loan use

	
Working capital

	
 

Original loan interest rate(monthly)

	
10.2‰

	
Original loan category

	
Mid-term loan

	
Original contract No.

	  	
Original borrowing date

	
April 28, 2007

	
Original loan amount

	
RMB 3,000,000

	
Original repayment date

	
April 28, 2009

	
Applied 

Extension 

amount

	
RMB 3,000,000

	
Interest rate after extension(monthly)

	
9‰

	
Application 

date&

Repayment plan

	
date

	
April 27, 2009

	
date

	  
	
amount

	
RMB 3,000,000

	
amount

	  
	
Applying reason

	
Due to shortage of working capital, company couldn’t afford repayment; hereby apply for one-year extension repayment of RMB 3,000,000.

Legal Representative: Guozhu Wang

Xi’an Qinba Pharmaceuticals, Co.,Ltd.

(seal & signature)

Date: March 25,2009

	
Guarantor’s opinion

	
Agree to one year extension, and continue to use real estate (appraisal value: RMB 4,800,000 as mortgage guarantee.

Legal Representative: Guozhu Wang

Xi’an Qinba Pharmaceuticals, Co.,Ltd.

(seal & signature)

Date: March 25,2009

	
Lender’s opinion

	
In accordance with 2009 06 comment letter, agree to one-year extension; continue to use original collateral as mortgage guarantee.

Guangzhu Fu

Legal Representative: Yuanbin Wang

Rural Cooperative Bank of Xixiang,

(seal & signature)

Date: April 6,2009

Notes:

	
1.

	
Loan Extension Agreement shall be applied in written form on the basis of lender’s agreement, and then Loan Extension Agreement may be filled in;

	
2.

	
Loan Extension Agreement constitutes the supplementary document of the main contract;

	
3.

	
This agreement is executed in triplicate, borrower, guarantor, bank/loan managing person shall retain their respective agreement.

 

 

  

5

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