Document:

ex10-38.htm

Exhibit 10.38

 

 

Loan Contract 

 

No.: No. SLA2014LN 372 

 

Borrower: Altairnano, Inc. 

 

Business license No.: 14792 

 

Legal representative/person in charge: Karen Werner 

 

Domicile: 3019 Enterprise Dr, Anderson, Indiana 46013, USA      Postal code: 46013 

 

Financial institution for account opening and account No.: East West Bank 8003008490 

 

Tel.: +1 415.479.4817      Fax: +1 775.858.3700 

 

 

 

Lender: Seoul Branch of Bank of China Limited 

 

Legal representative/person in charge: Huang De 

 

Domicile: 1/2F., YOUNGPOONG BLDG., 41, CHEONGGYECHEON-RO, JONCNO-GU. SEOUL. KOREA 

 

	
Postal code: 110-752

 

Tel.: 822-3995939   Fax: 822-3995938 
	
 
	

	
 
	
Seoul Branch of Bank of China Limited (seal)
	
 

	The Borrower and the Lender came to an agreement in terms of the Lender issuing the capital loan to the Borrower and hereby signed this Contract through equal negotiation.

 

Article 1      Loan Amount 

 

Loan currency: USD 

 

Loan amount:    (In words) RMB Three Million and Eight Hundred Thousand Only; 

 

(In figures) USD 3,800,000.00. 

 

Article 2      Loan Term 

 

Loan term: Since the actual withdrawal date to October 8, 2015. 

 

Article 3      Loan Purpose 

 

Loan purpose: Turnover of current capital. 

 

Without the written consent of the Lender, the Borrower shall not change the loan purpose, including but not limited to that Borrower shall not use the loans for stock and other security investments and for projects forbidden by any laws, rules, regulations and state policies or without the approval in accordance with law, as well as the project and use purposes banning the accessible of bank loans. 

 

 

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Article 4      Loan Interest Rate and Interest Calculation and Settlement 

 

1. Loan interest rate 

 

The loan interest rate is calculated according to Method (2): 

 

(1)      Fixed interest rate with the annual interest rate of /%. 

 

(2)      Floating interest rate with the floating cycle of three months: 

 

Reset the price every three months since the actual withdrawal date. The pricing reset date is the corresponding date of the current month of the actual withdrawal date, if there is no corresponding date in the current month, then the last day of the month shall be the pricing date of the interest rate. 

 

Each loan interest rate shall be the LIBOR plus 250 base points in the latest three months, which is obtained from the Reuters before 9:00 on the actual withdrawal date or the working day (Beijing time) before the pricing reset date. 

 

2. Interest calculations 

 

Interest is calculated from the Borrower's actual withdrawal date, according to the actual withdrawal amount and days of the loan. 

 

Calculation formula of interest: Interest = principal × actual days number× daily interest rate. 

 

The calculating basis of daily interest rate is 360 days of a year, and the reduction formula is as follows: Daily interest rate = annual interest rate /360. 

 

3. Ways of interest settlement 

 

The Borrower shall conduct interest settlement according to Method (5): 

 

(1)      If the interest is pre-collected, then the interest shall be deducted at the disbursement date. 

 

(2)      For the interest settled monthly, the 20th of each month is the expiry date for interest, and the 21st is the interest payment date. 

 

(3)      For the interest settled quarterly, the 20th of each quarter is the expiry date for interest, and the 21st is the interest payment date. 

 

(4)      If the interest is to be paid in one off in the due day of the loan, the interest shall be paid off with the loan principal together. 

 

(5)      Make payment of the interest of the current day in every floating cycle; If the current day is not a working day, then postpone the date of interest payment to the next working day. If the last instalment of liquidation day of the loan principal is not the interest payment date, then the last instalment of liquidation day of the loan principal shall be the interest payment date, and the Borrower shall pay off all the interest on that day. 

 

4. Interest penalty 

 

(1)      If the Borrower fails to pay the interest and the loan as agreed, as for the overdue amount, it will be collected with interest calculated based on the penalty interest rate from the overdue date until the interest and loan capital are paid off. 

 

 

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(2)      If the Borrower fails to use the loan for the contracted purposes, as for the misappropriated amount, it will be collected with the interest calculated based on the penalty interest rate from the misappropriation day until the interest and loan capital are paid off. 

 

(3)      Calculate and collect the interest penalty and compound interest, in the case of adjustment of loan interest rate agreed in the contract, calculate the penalty interest and compound interest on multi-stage basis since the date of adjustment. 

 

(4)      Penalty interest rate 

 

A.      Within the loan term, the penalty interest rate is the loan interest rate agreed in Article 1 adding 50%; 

 

B.      After the expiration of the loan term, the penalty interest rate of both fixed interest rate and floating interest rate shall be calculated by 10% of the annual interest rate. 

 

Article 5      Requirements for Withdrawal 

 

The Borrower who withdraws shall meet the following conditions: 

 

1. This Contract, as well as its Appendixes, has already come into force; 

 

2. The Borrower already provided guarantee as the Lender required, the guarantee is effective and legal approval, registration and documentation procedures are completed; 

 

3. The Borrower has reserved and prepared Borrower's documents, receipts, seals, staff lists and specimen signatures related to the performance of this Contract to the Lender, and also properly filled out certificates concerned; 

 

4. Written application and relevant materials shall be submitted to the Lender ___ banking day(s) before the withdrawal date; 

 

5. The Borrower has already submitted the Lender the resolution paper and certificate of authorization signed by the board of directors or other authorized department which agrees to sign and fulfill this Contract; (This is optional clause, check if the Borrower has already obtained the relevant approval and authorization before signing this Contract.) 

 

6. Other requirements for withdrawal obliged by laws and agreements reached by both parties; 

 

7. If the Borrower is in China, the registration of external debt has already been done. 

 

If the aforementioned requirements for withdrawal cannot be satisfied, the Lender shall be entitled to refuse the withdrawal application of the Borrower, except the agreement of Lender. 

 

Article 6      Withdrawal Time and Mode 

 

1. The Borrower shall conduct the withdrawal based on the time and mode in the following Method (1): 

 

(1)      One-time withdrawal of the loan within 1 month after signing the contract. 

 

(2)      Make withdrawals by installments in / months since the contract is signed, if the loan is not withdrawn within the aforementioned time, then it shall be canceled automatically. 

 

 

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Article 7      Repayment 

 

1. The Borrower shall pay back the loan under this Contract based on No. (1) repayment plan: 

 

(1)      Repay all loans under this Contract upon the expiration of the loan term. 

 

(2)      Repay the loan under this Contract according to the following repayment plans: 

  

	

 

 

In case the Borrower requires to change the aforementioned repayment plans, the Borrower shall send the Lender a written application ten banking days ahead of the expiry date of the loan, and the change of the repayment plans can be available upon the approval of Lender. 

 

2. If the Borrower fails to pay back the loan principal and interest, the Lender shall be entitled to decide the repayment order: Under the situations of instalment repayment, if there are several due loans or overdue loans under this Contract, then the Lender shall be entitled to decide the liquidation order of certain repayment of the Borrower. If the Borrower and Lender have several overdue payments under the loan contract, the Lender shall be entitled to decide the contract order of each repayment by the Borrower. 

 

3. If the Borrower plans to perform the advance repayment, the written notice shall be submitted to the Lender ten banking days in advance, and payment shall be made on the day of every floating cycle. If the Borrower fails to make the repayment on the current day of every floating cycle, as for the advance repayment amount, then Lender shall collect the compensation fee by 1% annual interest rate. The amount of advance repayment shall be firstly reimbursed the last due loan with an inverted order. 

 

Remark: "Compensation fee= the advance repayment amount * × 1%/360 × (actual due date - date for advance repayment)" 

 

4. The Borrower repays the loan according to the following method of (2). 

 

(1)      The Borrower shall deposit enough funds in the following bank repayment account no less than / banking day(s), before every due day of loan and interest, the Lender shall be entitled to deduct every due loan and interest from the account. 

 

Repayment account name: /.    

 

Account No.: /.    

 

(2)      Other repayment methods agreed by both parties: According to the Lender's written notice, the Borrower shall repay the loan and interest under this Contract directly to the assigned account. 

 

 

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Article 8      Guarantee 

 

1. The guarantee mode for the debt under this Contract is: 

 

STAND BY L/C with the number of GC0325314000394, issued by Hebei Branch of Bank of China Limited, shall provide full guarantee for the loan and interest under this Contract. 

 

2. If the Lender deems the happened event that may influence the contract performance capability of the Borrower or Guarantor, or the guarantee contract become invalid, revoked or dissolved, or the financial condition of the Borrower and the Guarantor are deteriorated or get involved in the major lawsuit or arbitration, or their performance is affected due to other reasons, or the Guarantor breaches the guarantee contract or the other contract with the Lender, or the pledged object depreciates, is damaged, lost or sealed up, causing the guarantee value to depreciate or lose, the Lender shall be entitled to require, and the Borrower shall be obliged to provide new guarantee, change the Guarantor to guarantee the debts under this Contract. 

 

3. If the amount stated in the aforementioned STAND BY L/C changed due to exchange rate fluctuation or other reasons, brings forth the pledge rate more than 96% of this loan in three continuous working days, the Lender shall be entitled to ask the Borrower to guarantee the pledge rate is no more than 96% within three working days by supplementing principal, opening new STAND BY L/C, or prepaying the loan which is over the mortgage rate. 

 

If the Borrower cannot guarantee the pledge rate less than 96% as the aforementioned requirements, the Lender shall be entitled to announce that this loan is due in advance, the Borrower shall fulfill the obligation of paying the loan and interest within three days after receiving the Lender's written notice. 

 

(Remarks: in this article " pledge rate = loan principal/collateral (letter of guarantee) value×100%") 

 

Article 9      Statement and Commitment 

 

1. The Borrower makes the following statement: 

 

(1)      The Borrower shall be lawfully registered and of legal existence, and has the full capacity for civil conduct and capacity of signing and performing this Contract; 

 

(2)      The signing and performance of this Contract are the presentation of Borrower' true intention, who has acquired the legal and valid authorization in accordance with its articles of incorporation or other internal management documents; in addition, any agreement, contract and other legal documents with the binding force on the Borrower shall not be violated: The Borrower has or shall have gained all the relevant permission, approval, recording or register to sign and perform this Contract; 

 

(3)      All the documents, financial statements, vouchers, and other materials provided by the Borrower to the Lender under this Contract are true, intact, accurate and valid; 

 

(4)      The background of the transaction that the Borrower applied to the Lender is true, legitimate, and the loan shall not be used for the illegitimate acts such as the money laundry; 

 

(5)      The Borrower does not conceal events that may impact the financial condition of its own and Guarantor and performance capability to the Lender; 

 

(6)      Other matters stated by the Borrower:              /                    .

 

 

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2. The commitment by the Borrower is as the followings: 

 

(1)      Submit financial statements (including but not limited to annual reports, quarterly reports and monthly reports) and other related documents to the Lender regularly or timely according to the requirements of Lender; Borrower shall guarantee to meet the following financial requirements continuously: / 

 

(2)      In the case that the Borrower has signed or may sign counter-guarantee agreement or other similar agreements with the Guarantor of this Contract on the guarantee obligations, the agreement shall not impair any rights of the Lender under this Contract; 

 

(3)      Accept the Lender's credit and loan inspection and supervision, and give enough assistance and cooperation; 

 

(4)      If any situation happens to the Borrower and Guarantor that may affect their financial and performance capacity, including but not limited to any form of operation mode changing, like separating, merging, joint operation, joint venture with foreign business, cooperation, contract operation, regroup, restructuring of enterprise, shares issuing, etc., reducing the registered capital, large amount of capital or shares transferring, bearing great amount of debt, or setting new heavy debt on the collateral, pledged objects sealed up, dissolution, revocation, (forced to) file for bankruptcy, etc., or involved in big lawsuit or arbitration, or having difficulty to operate or financial conditions deteriorating, or the Borrower violating other contracts, the Borrower shall inform the Lender in time; if the Borrower plans to take any of the aforementioned measures that may affect the debt paying ability, the permission of the Lender shall be obtained in advance; 

 

(5)      The liquidation sequence of the Borrower repaying debts to the Lender is prior to Borrower's shareholders repaying loans to the Lender and is not second to repaying similar debts to other Creditors; 

 

(6)      The Borrower shall not distribute the dividend or bonus in any form to the shareholders, when the net profit after tax relevant to fiscal year is zero or negative; or the profit after tax is insufficient to cover the accumulated losses of the past fiscal years; or the profit before tax are not used for the liquidation of the principal, interest and costs that shall be paid by the Borrower within the fiscal year, or the profit before tax is insufficient to pay off the principal, interest and costs of the next period; 

 

(7)      The Borrower shall not dispose its own assets by reducing its debt paying ability, at the same time, commit that the total amount of external guarantee shall not \ times higher than his own assets, meanwhile the total amount of external security and the amount of individual security shall not be beyond the limit stipulated in the Articles of Association of his company; 

 

(8)      Apply for the registration of foreign exchange loan, approval of repayment of principal and interest and other formalities timely with the Administration of Exchange Control; 

 

(9)      Other matters committed by the Borrower:    /         .

 

Article 10      Disclosure of the group internal related transaction where Borrower is located 

 

The Borrower belongs to group clients identified by the Lender according to Guidelines for Risk Management by Commercial Banks for Granting Credit to Group Customer (hereinafter referred to as Guidance) The Borrower shall promptly report to the Lender about the situation of related transactions of over 10% of net assets, including the affiliation relation of each party in transaction, transaction project, nature of transaction, transaction amount or corresponding ratio and pricing policy (including the transaction without amount or with nominal amount). 

 

 

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If the Borrower has any of the following situations, the Lender shall be entitled to end the unused loan to the Borrower unilaterally, and take back part or all of the loan capital and interest: Party A shall not use the false contract entered with related parties and discount on or pledge claims such as notes receivable or accounts receivable without actual transaction content to cheat the bank of capital or credit; If there is any major merging, acquisition and reorganization, etc., the Lender may thinks it may affect the safety of the loan; deliberately escape and abolish the Creditor's rights of banks through the related transaction; Other situations of Article 18 in Guidance. 

 

Article 11      Breach of Contract and Treatment 

 

One of the following matters constitutes or is deemed as the breach of contract by the Borrower under this Contract: 

 

1. If the Borrower fails to fulfill the obligations of payment and liquidation according to this Contract to the Lender; 

 

2. The Borrower fails to pay the loan capital in the way stipulated under this Contract or use the capital the way stipulated in this Contract; 

 

3. Borrower's statement in this Contract is not authentic or breaches the commitment made in this Contract; 

 

4. When the situation specified in the Item (4) of Paragraph 2 under Article 9 in this Contract happens, the Lender thinks it probably affects the financial condition and the Borrower or Guarantor's capability to perform the contract, but the Borrower fails to provide the new guarantee and replace the Guarantor according to this Contract; 

 

5. Borrower's credit status declines, or its financial indices deteriorates such as profitability, debt paying ability, operation capacity and cash flow, and it breaks through the stipulated indices of this Contract or other financial conventions; 

 

6. Borrower breaches other contracts among the Lender or other institutions of Bank of China Limited; The breach of contract under the credit granting contract between the Borrower and other financial institutions; 

 

7. Borrower terminates its business or dissolution, revocation or bankruptcy happened. 

 

8. The Borrower involves in or may involve in major economic disputes, lawsuit, arbitration, or other property being sealed up, detained or forced to execute, or being investigated or punished by administrative organizations like judiciary authorities, tax and commercial department, already affected or may affect the performance of obligations under this Contract; 

 

9. The abnormal changing and disappearing of main investor's individual and key management personnel of Borrower or subject to investigation or personal freedom limit of judiciary authorities by laws influence or may influence the performance of obligations under this Contract; 

 

 

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10. The Lender every year (every year since the effective date of this Contract) checks the Borrower's financial condition and contractual capacity, check if there is any situation that may affect the financial situations and contractual capacity of the Borrower or Guarantor; 

 

11. The assigned capital collection account has a large sum of abnormal capital flow and the Borrower cannot provide explanatory material that could be recognized by the Lender; 

 

12. The Borrower breaches other conventions on the rights and obligations of the concerned party under t this Contract; 

 

In the case of the breach of contract specified in the preceding clause, the Lender shall be entitled to take the following measures separately or simultaneously according to the specific situation: 

 

1. Require the Borrower and Guarantor correct default behavior within the limit time; 

 

2. Wholly or partly adjust, reduce, terminate or cancel, suspend the credit limit to the Borrower; 

 

3. All or partially pause, or totally terminate accepting the loan withdrawal of the Borrower under this Contract, or other contracts between the Borrower and the Lender; wholly or partially terminate or cancel, terminate the distribution, payment or handling of the loan which hasn't been issued and the trade finance which has not been settled; 

 

4. Declare that the whole or part of the outstanding principle and interest of the loan/ trade financing and other payables under this Contract and other contracts between the Borrower and the Lender expire immediately; 

 

5. Terminate or cancel this Contract, and wholly or partly terminate or cancel other contracts between the Borrower and the Lender; 

 

6. Require the Borrower to compensate for the losses caused by the Lender due to his breach of contract: 

 

7. Deduct the amount in the accounts opened by the Borrower in the Lender and other institutions of the Bank of China Limited to repay the whole or part of the debt owed by the Borrower to the Lender under this Contract upon the advanced written notice of the Lender. The undue amount in the account is deemed as due in advance. In the case that the currency of the account is different from the business currency valued by the Lender, duct the money converted according to the applicable foreign exchange rate of the Lender; 

 

8. Exercise the real rights granted by way of security; 

 

9. Demand the Guarantor to take guaranty responsibility; 

 

10. Other necessary and possible measures deemed by the Lender; 

 

Article 12      Rights Reservation 

 

If one party fails to exercise this Contract part or all rights, or to require the other party to perform, to bear part or all obligation and responsibility, it does not constitute to the party of the right to give up or of the obligation and responsibility to exempt. 

 

 

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If one party to the other party of any tolerance, extension or delay the exercise of the rights under this Contract, it shall not affect its rights according to this Contract and laws and regulations, nor seen as giving up the right. 

 

Article 13      Modification, Amendment and Termination 

 

This Contract signed by both parties through consultation can be in written form to change or modify, any alteration or modification shall form an integral part of this Contract. 

 

In addition to laws, regulations or the parties otherwise agreed, the Contract shall be terminated after a full performance of its rights and obligations under this Contract. 

 

In addition to laws, regulations or the parties otherwise agreed, the invalidation of any provision under this Contract shall not affect any other terms and conditions of the legal effect. 

 

Article 14      The application of laws, the dispute resolution 

 

This Contract is applicable to the laws of the People's Republic of China. 

 

After validation of this Contract, any dispute concerning the preparation and performing of this Contract or relevant to this Contract shall be resolved by both parties by negotiation, if fails, file the lawsuit to the jurisdictional court. 

 

During the period of disputes solving, if the disputes does not affect the performance of any other provisions of this Contract, the other terms shall continue to perform. 

 

Article 15      Expense 

 

Except reassured by law or agreed by the parties, expenses (including but not limited to lawyer's fee and so on) arising from the signing, performing and disputes solving of this Contract shall be paid by the Borrower. If the tax for the interest is required to be paid due to the Borrower's local tax regulations, the Borrower shall bear all the cost; If tax needs to be paid due to the Lender's local tax regulations, then the Lender shall bear all the cost; the Lender shall bear the stamp tax under this Contract. 

 

Article 16      Appendix 

 

The following appendixes are considered as the indivisible constituent parts of this Contract in company with other appendixes which are jointly confirmed by both parties, hence, they have the same legal forces with this Contract. 

 

1. Withdrawal application; 

 

Article 17      Other Agreements 

 

1. Without the written consent from the Lender, the Borrower shall not transfer the following rights and obligations under this Contract to the third party. 

 

2. The Borrower shall agree that the Lender needs to entrust other institutions of Bank of China Limited to perform the rights and obligations under this Contract, or could allocate the loan business under this Contract to other institutions of Bank of China Limited which takes it over and manage it. Bank of China Limited or other institutions entrusted by the Lender, or Bank of China Limited or other institutions carrying on loan business in this Contract shall be entitled to execute all rights, submit lawsuit to court or arbitration agency or apply for compulsory execution to solve the disputes in the Contract in its own name. 

 

 

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3. On condition that does not affect other agreements under this Contract, this Contract is binding to both parties and their respective Successors and Assignee according to law. 

 

4. Unless otherwise it is agreed, the address specified by both parties in this Contract is the address for communication and contact, in case of changes of the address for communication and contact, both parties promise to promptly notify the other party in written form. 

 

5. The transaction under this Contract shall be carried out based on individual and independent interest. According to the stipulation of laws and rules and the requirement of supervision, all parties in transaction constitute the related parties or affiliated person of the Lender, all parties shall not utilize the relationship to affect the fairness of the transaction. 

 

6. The title and business name of this Contract is only for convenience, and shall not be used for explaining of the clause content and the rights and obligations of the parties. 

 

7. The Lender, bases on the provisions by the related laws and regulations and regulatory agency, shall be entitled to provide information related to this Contract and other information of the Borrower to the credit reporting system of the People's Bank of China and other credit information databases established by law, which shall be applied for suitably qualified organizations or individuals' queries and use based on the laws. The Lender shall also be entitled to check Borrower's related information through the credit reporting system of the People's Bank of China and other credit information databases established by law, in order to ensure the conclusion and performance of this Contract. 

 

8. If the Lender, due to changes of laws, regulations and regulatory requirements or request from supervision departments, is unable to perform the agreement, or cannot perform in accordance with the agreement, the Lender shall be entitled to terminate or change this Agreement or its single protocols according to changes of laws, regulations and regulatory requirements or request from supervision departments. The Lender shall be exempted from the responsibilities from the termination or change of this Agreement due to the above mentioned reasons which cause the Lender's failure to fulfill or perform in accordance with this Agreement. 

 

Article 18      Effectiveness of Contract 

 

This contract shall be effective as of signing the contract by the legal representative/person in charge or other authorized signatory of both parties and affixing the company seals. 

 

This contract is in quadruplicate, the lending and borrowing parties shall hold two copies respectively, which have the same equal authenticity. 

 

	
Borrower: Altairnano, Inc. 

 

Authorized signatory: 

 

October 16, 2014 
	
Lender: Seoul Branch of Bank of China Limited 

 

Authorized signatory: 

 

 

Seoul Branch of Bank of China Limited (seal) 

 

October 16, 2014 

 

 

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Exhibit 10.39

 

 

 

 

 

Loan Contract of Association

(Northern Altairnano Co., Ltd.)

 

 

 

 

 

 

 

 

 

 

 

Rural Credit Cooperative of Hebei

 

 

 

 

 

Loan Contract of Association

                                                             No. 06802014376089

 

Borrower (hereinafter referred to as “Party A”): Northern Altairnano Co., Ltd. 

Lenders (including major lender and other lenders, hereinafter referred to as “Party B”):

Major lender: Wu’an City Rural Credit Cooperative Co., Ltd.                                                               

Other lender: Cixian County Rural Credit Cooperative                                                                           

Other lender:   ---------                                                                                                                                  

 

Party B consists of two county-level credit cooperatives (including Rural Credit Cooperatives and Agriculture Development Bank). The creditors of Party B, i.e. the members of the association credit cooperatives, authorize Wu’an City Rural Credit Cooperative Co., Ltd. to be the major lender (agency lender) to perform its duties as an agency. The performance of agency duties by the major lender (agency lender) is legally binding upon the creditors. The creditors shall exercise their rights under the contract through the major lender (agency lender). 

Party A applies to Party B for granting of loan, and Party B agrees to grant loan to Party A. According to relevant laws, regulations and rules, both parties enter into the contract through negotiation, with the terms and conditions as follows: 

Article 1 Amount of loan 

Party A borrows RMB 105 million (SAY ONE HUNDRED AND FIVE MILLION YUAN ONLY) from Party B. 

Article 2 Purpose of loan 

Party A shall use the loan for purchase of machines and other equipment, as well as the construction of plants, office buildings and ancillary facilities. Party A shall not use the loan for any other purpose without written consent of Party B. 

Article 3 Term of loan

As agreed herein, the term of the loan is 24 months, i.e. from November 6, 2014 to November 5, 2016.

In case the start date of the term of the loan hereunder is inconsistent with the date on the loan renewal voucher (or receipt for the loan), the actual loan granting date on the loan renewal voucher of the first loan granting shall prevail. The due date of the loan set forth in Paragraph 1 of this article will change accordingly. 

The loan renewal voucher is an integral part hereof with the same legal force as this contract.

 

 

1

 

 

Article 4 Loan interest rate, default interest rate, interest accrual and interest settlement 

I. Loan interest rate

The loan interest rate hereunder is on an annual basis and computed according to the first method below:

1. Fixed interest rate, i.e. floated upward by 100% from 6.15% to 12.3%, will remain unchanged within the term of the loan. In case the benchmark interest rate of the People’s Bank of China is adjusted and the benchmark interest rate mentioned herein has to be adjusted accordingly as stipulated in relevant documents, the adjustment shall be made.

2. Fixed interest rate, i.e. floated ____ (upward or downward) by       % from the benchmark interest rate on the value date, will remain unchanged within the term of the loan. 

3. Floating interest rate, i.e. floated ____ (upward or downward) by       % from the benchmark interest rate on the value date, will be adjusted once every        month(s) according to the benchmark interest rate on the date of interest rate adjustment and the upward/downward floating ratio within the period from the value date to the date when all the principal and interest hereunder have been paid off. The date of interest rate adjustment is set to be the corresponding date of the value date in the month of interest rate adjustment. In case there is no such corresponding date of the value date, the last date of that month is set to be the date of interest rate adjustment.

II. Default interest rate

1. In case Party A fails to use the loan for the purpose mentioned herein, the default interest rate is set by floating the loan interest rate upward by 100%; in case the loan interest rate is adjusted according to the third scenario of Paragraph 1 of this article, the default interest rate shall be adjusted according to the adjusted loan interest rate and the above-mentioned floating ratio. 

2. The default interest rate in case of overdue loan repayment hereunder is set by floating the loan interest rate upward by 50%; in case the loan interest rate is adjusted according to the third scenario of Paragraph 1 of this article, the default interest rate shall be adjusted according to the adjusted loan interest rate and the above-mentioned floating ratio.

3. In case both of overdue loan repayment and loan embezzlement occur, the default interest and the compound interest, whichever is higher, shall be collected. 

III. The value date set forth in this article refers to the date when the first granted loan hereunder is transferred to the account designated by Party A. 

As for the first granted loan hereunder, the benchmark interest rate refers to the loan interest rate during the same period and in the same category as publicized and implemented by the People’s Bank of China on the value date. Thereafter, in case the loan interest rate is adjusted as agreed hereinabove, the benchmark interest rate refers to the loan interest rate during the same period and in the same category as publicized and implemented by the People’s Bank of China on the adjustment date. In case the People’s Bank of China no longer publicizes the loan interest rate during the same period and in the same category, the benchmark interest rate refers to the loan interest rate during the same period and in the same category as generally accepted by banks on the adjustment date or refers to the usual loan interest rate during the same period and in the same category on the adjustment date, unless otherwise agreed by both parties. 

 

 

2

 

 

IV. The loan interest will be accrued since the date when the loan is transferred to the account designated by Party A. The loan hereunder is calculated on a daily basis (daily interest rate = annual interest rate/360). In case Party A fails to pay the interest on the settlement date hereunder, compound interest will be accrued since the next day thereof. 

V. Interest settlement 

1. The interest for the loan with fixed interest rate will be settled as per the agreed interest rate. The interest for the loan with floating interest rate will be settled as per the interest rate as determined in that interest floating period. In case there are several times of interest rate floating in a single interest settlement period, the interest accrued during these interest floating periods shall be calculated first, and be summed up on the interest settlement date to calculate the interest during the interest settlement period. 

2. The interest for the loan hereunder shall be settled according to the second method below:

(1) Monthly interest settlement: the settlement date is set to be the 20th day of every month.

(2) Quarterly interest settlement: the settlement date is set to be the 20th day of the last month of every quarter.

(3) Other method:                                                      .

Article 5 Granting and disbursement of loan

I. Prerequisites of granting loan 

Party B is obliged to grant the loan only if the following prerequisites are being continuously met, unless Party B waives all or part of the prerequisites: 

1. Party A has completed such legal formalities as approval, registration, delivery and insurance related to the loan hereunder. 

2. Any guarantee, if required by Party B and specified hereunder, shall remain effective.

3. Party A has opened an account for fund withdrawal and repayment as required by Party B.

4. Party A has not breached any provision hereunder, and there is no circumstance that might imperil the security of Party B’s creditor rights as specified hereunder.

5. Laws, regulations, rules or competent authorities do not ban or restrict Party B to grant the loan hereunder.

6. Other prerequisites:

                                                                                                                                                                                                                                                                                             

                                                                                                                                                                                                                                                                                            .

 

 

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II. Disbursement schedule 

Disbursement schedule is determined according to the second method below:

1. Disbursement schedule:

(1) Date:                                              Amount:                           ;

(2) Date:                                              Amount:                           ;

(3) Date:                                              Amount:                           ;

(4) Date:                                              Amount:                            . 

2. Party A shall disburse the loan in one installment after Party B grants the loan.

III. Party A shall disburse the loan as agreed in Paragraph 2, and shall not make earlier or postponed disbursement, or cancel the disbursement, unless agreed by Party B in writing. 

IV. In case Party A disburses the loan in several installments, the due date of the term of the loan shall still be determined as agreed under Article 3 hereof.

Article 6 Repayment

I. Repayment principle 

Party A shall repay the loan hereunder according to the following principle:

Party B shall have the right to use Party A’s repayment firstly for repaying the expenses that should be borne by Party A but has been paid by Party B, as well as the expenses for Party B to realize its creditor rights; and the balance shall be repaid according to the principle of “Interest repayment before principal, repayment of principal with interest payment”.

II. Interest payment

Party A shall pay the due interest to Party B on the interest settlement date. The first interest payment date is set to be the first interest settlement date after granting the loan. Interest shall be paid off with repayment of principal at the last time of repayment. 

III. Principal repayment schedule 

The principal repayment schedule is determined according to the       method below:

1. Principal repayment schedule is as follows:

(1) November 5, 2015, RMB 5 million; 

(2) November 5, 2016, RMB 100 million;

(3) Date:                      , RMB              ;

(4) Date:                      , RMB              ;

(5) Date:                      , RMB              ;

2. The interest is settled on a quarterly basis, and the principal will be repaid as scheduled. 

IV. Repayment method

Party A shall deposit the fund enough for current due payable in the account opened by Party B prior to the repayment date as agreed hereunder, and make the repayment by transfer (Party B is also eligible to withdraw the fund from the account for loan repayment); or Party A’s fund in other account shall be transferred for loan repayment on the repayment date as agreed hereunder.

 

 

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V. Advance repayment 

In case Party A intends to repay the principal in advance, it shall apply to Party B before 10 business days. Part or all of the principal may be repaid in advance upon approval by Party B.

In case Party A repays the loan in several installments and intends to repay partial loan principal in advance, the repayment shall be made in the order inverse to the repayment schedule. After advance repayment, the outstanding loan shall still be subject to the loan interest rate as agreed hereunder.

Article 7 Rights and obligations of Party A

I. Rights of Party A

1. Eligible to ask Party B to grant loan as agreed hereunder;

2. Eligible to use the loan for the purpose as agreed hereunder;

3. When the conditions specified by Party B are met, eligible to apply to Party B for loan extension; 

4. Eligible to ask Party B to keep confidential the relevant financial data and the business secrets related to production and operations of Party A, unless there are provisions in laws, regulations and rules otherwise, other requirements by competent authorities or other agreements between both parties;

5. Eligible to refuse Party B and its staff to ask for bribe, and eligible to report to relevant authorities the above misconduct or Party B’s violation of national laws and regulations related to credit interest rate, service fee and so on.

II. Obligations of Party A

1. Disburse loan and fully repay the principal and interest of the loan as agreed hereunder, and bear all the expenses as agreed hereunder;

2. As required by Party B, provide to Party B relevant financial data and the data reflecting its production and operations, including but not limited to, the Balance Sheet and the Income Statement (Income and Expense Statement for public institution) as of the end of the last quarter within   15  business days of the first month of every quarter, and the Annual Cash Flow Statement at the end of the current year; be responsible for the authenticity, completeness and validity of the data provided, providing no false data and not concealing material operational and financial facts;

3. In case there is any change in Party A’s name, legal representative (leader), address, business scope, registered capital or Articles of Association, etc, the change shall be notified in writing to Party B within   10  business days following the change and relevant documents after the change shall be attached; 

 

 

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4. Party A shall use the loan for the purpose as agreed hereunder, and shall not divert or embezzle the loan, nor use the loan from rural credit cooperative for any illegal transactions, and shall cooperate with Party B and accept Party B’s inspection and supervision on its production, operations, financial activities, and the utilization of the loan hereunder; shall not surreptitiously withdraw fund, transfer asset or take advantage of related transaction to evade its debtor obligation to Party B; shall not take advantage of false contract between it and its related party as well as such creditor rights as note receivable and account receivable without actual trade backdrop to fraudulently obtain bank fund or credit line by bank discount or pledge;

5. In case Party A uses the loan hereunder in production and construction, it shall abide by national provisions related to environmental protection; 

6. Prior to paying off the principal and interest of the loan from Party B, Party A shall not provide guarantee for a third party using the asset deriving from the loan hereunder without Party B’s approval; 

7. If Party A is a group client, it shall timely report to Party B its related transactions amounting to more than 10% of Party A’s net assets, and the details to be reported include: (1) correlations between related parties; (2) items and nature of transactions; (3) amount or corresponding ratio of the transactions; (4) pricing policy (including zero amount transaction or transaction with symbolic amount);

8. If the loan to be granted hereunder belongs to fixed asset loan or project-financing loan, Party A shall make sure that the project to be built has been approved by relevant government authorities, is not related to illegal practice, and the capital fund or other funds that should have been raised are in place according to specified deadline and ratio, and that the project progresses as scheduled. 

Article 8 Rights and obligations of Party B

I. Party B is eligible to ask Party A to repay the principal, interest and expenses as scheduled, to exercise other rights as agreed hereunder, and to ask Party A to fulfill its other obligations hereunder;

II. Party B shall grant the loan as agreed hereunder, unless the loan granting is postponed owing to Party A’s reason or other reason not blaming on Party B; 

III. Party B shall keep confidential the relevant financial data and the business secrets related to production and operations of Party A, unless there are provisions in laws, regulations and rules otherwise, other requirements by competent authorities or other agreements between both parties;

 

 

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4. Any of the prerequisites of granting the loan as agreed hereunder has not been met all the time;

5. In case the guarantor has any of the following cases that might imperil the security of the creditor rights hereunder as believed by Party B:

(1) Violation of any agreement herein, or any deceiving, fault or omission in statement or commitment;

(2) Contracting, trusteeship (taking over), leasing, shareholding reform, reducing registered capital, investment, joint operation, merging, acquisition and reorganization, separation, application for business suspending for internal rectification as a result of joint venture, application for dissociation, being revoked; being asked to apply for bankruptcy, change in controlling shareholder/actual controller, transfer of material asset, production halt or business closing, huge penalty imposed by competent authority, cancellation of registration, business license revoking, involvement in major legal dispute, serious difficulty in production and operation or worsened financial status, failure of legal representative or leader to normally perform duties that might affect the capacity of the guarantor to undertake the guarantee;

(3) Other circumstances that lead to or might lead to loss of guarantee capacity.

6. There is any of the following cases related to mortgage or pledge that might imperil the security of the creditor rights hereunder as believed by Party B:

(1) Destruction, damage, loss, value reduction of the mortgaged or pledged property caused by the practice of a third party, confiscation, expropriation, reclaiming without compensation, relocation by government, change in market condition or any other reason; 

(2) The mortgaged or pledged property is sealed up, distrained, frozen, deducted, held in custody, auctioned, or monitored by administrative authority; or there is any dispute in ownership;

(3) Violation of any agreement in mortgage contract or pledge contract by the mortgagor or pledgor, or any deceiving, fault or omission in statement or commitment;

(4) Other circumstances that might imperil the fulfillment of Party B’s mortgage right or pledge right.

7. Invalid, ineffective, revoked, cancelled guarantee; the guarantor breaches contract or affirmatively expresses or expresses by action that it will not fulfill its guarantee responsibilities; or the guarantor has lost its guarantee capacity partially or entirely, or reduction in the value of collateral or other circumstances that might imperil the security of Party B’s creditor rights hereunder as believed by Party B.

8. Other circumstances that might imperil the security of Party B’s creditor rights hereunder as believed by Party B.

 

 

 

 

 

IV. Party B’s remedial measures 

In any of the cases as specified in Paragraph 2 or 3 of this article, Party B is eligible to exercise one or more of the following rights:

1. Stop granting the loan; 

2. Declare that the loan is due right now, and ask Party A to immediately repay all the due and undue principal, interest and expenses related to the debt hereunder; 

3. In case Party A fails to disburse loan as agreed hereunder, Party B is eligible to ask Party A to pay the penal sum amounting to 100% of the amount that has not been disbursed as agreed, and eligible to refuse Party A to disburse the undisbursed fund hereunder; 

4. In case Party A fails to use the loan for the purpose as agreed herein, the part embezzled by Party A shall be subject to the ordinary interest and compound interest accrued from the start date of using the loan not as agreed hereunder to the date when all the principal and interest have been paid off according to the default interest rate and the interest settlement method as agreed hereunder. 

5. Any overdue repayment of Party A including principal and interest (premature principal and interest of all or part of the loan as declared by Party B inclusive) shall be subject to the ordinary interest and compound interest accrued from the overdue date to the date when all the principal and interest have been paid off according to the default interest rate and the interest settlement method as agreed hereunder. Overdue repayment refers to the practice of Party A failing to repay the loan as scheduled or within the installment repaying period as agreed hereunder.

Before the loan is due, the interest that Party A has not paid off as scheduled shall be subject to the compound interest accrued according to the loan interest rate and interest settlement method as agreed hereunder.

6. Other remedial measures, including but not limited to:

(1) Withdraw corresponding fund in RMB or other currency from the account of Party A opened at Rural Credit Cooperative of Hebei without advance notification; 

(2) Exercise the guarantee rights; 

(3) Ask Party A to provide new guarantee for all the debts hereunder according to the requirement of Party B;

(4) Cancel this contract.

Article 10 Miscellaneous 

1. Bearing expenses 

All the expenses incurred from the lawyer services, insurance, valuation, registration, custody, appraisal, and notarization related to this contract and the guarantee hereunder shall be borne by Party A, unless otherwise agreed by both parties. 

 

 

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All the expenses of Party B for realizing its creditor rights (including but not limited to legal cost, arbitration fee, property preservation fee, travel expense, execution fee, valuation fee, auction fee, notarization fee, delivery fee, announcement fee and lawyer fee, etc) shall be borne by Party A. 

II. Utilization of Party A’s information 

Party A agrees that Party B may enquire Party A’s credit status through the credit database created upon approval by the People’s Bank of China and competent credit investigation authority, or through relevant unit or department, and agrees that Party B may provide Party A’s information to the credit database created upon approval by the People’s Bank of China and competent credit investigation authority. Party A also agrees that Party B may reasonably use and disclose Party A’s information according to business requirements.

III. Urging collection by announcement 

In case Party A is in arrears with the principal or interest of the loan or has other violations, Party B is eligible to report this to relevant department or unit, and urge collection by announcement via news media. 

IV. Evidentiary effect of Party B’s records 

Unless there is credible and doubtless evidence to the contrary, Party B’s in-house financial records related to principal, interest, expenses and repayment, the notes and documents made or maintained by Party B in the process of such businesses as withdrawal, repayment, interest payment by Party A, as well as the records and documents related to Party B’s urging collection of the loan, all are the doubtless evidences that can validly prove the debtor-creditor relation between Party A and Party B. Party A shall not raise any objection in that Party B makes or maintains the above records, notes or documents. 

V. Reservation of rights

The rights of Party B hereunder shall not affect and exclude any rights it enjoys according to laws, regulations and other contracts. Any tolerance or preference for any violation of the contract or any delay, or delay to exercise any rights hereunder shall not be deemed as the waiver of any right and interest hereunder, or as permission or acceptance for any violation of the contract; shall not restrict, inhibit or obstruct Party B to continue to exercise such right or any other right, and shall not cause Party B to assume obligation and responsibility for Party A for that reason. 

VI. In case Party A is liable to Party B for other due debt in addition to the debt hereunder, Party B is eligible to withdraw corresponding fund in RMB or other currency from the account of Party A opened at Rural Credit Cooperative of Hebei to repay any due debt first, and Party A agrees not to raise any objection. 

 

 

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VII. Any change in Party A’s mailing address or contact information shall be promptly informed to Party B in writing, and any loss incurred from late notification shall be borne by Party A itself. 

VIII. Withdrawal of payables 

Party B is eligible to withdraw all the payables of Party A hereunder in RMB or other currency from the account of Party A opened at Rural Credit Cooperative of Hebei without advance notification to Party A.

IX. Settlement method of disputes 

Any disputes occurring in the process of performing the contract may be settled through negotiation. If failed, the disputes shall be settled according to the first method as follows:

1. File a lawsuit to the people’s court in the locality of the major lender. 

2. Submit the disputes to the arbitration committee in the locality of the major lender for arbitration according to the arbitration rules of the committee prevailing when applying for the arbitration. The arbitration award is final and binding on both parties. 

The clauses herein irrelative to the disputes shall survive during such lawsuit or arbitration. 

X. Conditions of effectiveness of the contract 

The contract shall take effect once legal representatives (leaders) or authorized agents of Party A and Party B sign and affix seals on it. 

XI. The contract is made in triplicate. 

XII. Other agreed items:

1.                                                                                 ;

2.                                                                                 ;

Article 11 Recital clauses 

I. Party A has known clearly Party B’s business scope and authorized powers.

II. Party A has read all the clauses herein. As required by Party A, Party B has explained relevant clauses herein. Party A has fully understood the meanings and legal consequences related to the clauses herein. 

III. Signing and fulfilling the obligations hereunder by Party A complies with laws, administrative regulations, rules, and Party A’s Articles of Association or its in-house documents, and has been approved by Party A’s in-house competent authority and/or national competent authority. 

 

Party A (Official Seal): (Seal of Northern Altairnano Co., Ltd.)                                                      

Signature of Legal Representative (Leader) or Authorized Agent: (Signet) (Signature)            

 

Party B (Official Seal): (Seal of Wu’an City Rural Credit Cooperative Co., Ltd.)                         

Signature of Legal Representative or Authorized Agent: (Signature)                                          

 

Party B (Official Seal): (Seal of Cixian County Rural Credit Cooperative)                                     

Signature of Legal Representative or Authorized Agent: (Signature)                                          

 

  November 6, 2014

 

 

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