Document:

Unassociated Document

Exhibit 10.3

 

Contract Code: 07102012657627

 

Maximum Mortgage Contract

 

 

	
Debtor: 

	
Xingtai Zhongding Kirin Real Estate Development Co., Ltd.

 

	
Mortgagor:

	
Xingtai Zhongding Kirin Real Estate Development Co., Ltd.

 

	
Mortgagee:

	
Xingtai Chengjiao Rural Credit Cooperative Union

 

Nan’gong Rural Credit Cooperative Union

Qinghe Rural Credit Cooperative Union

Lincheng Rural Credit Cooperative Union

Nanhe Rural Credit Cooperative Union

Pingxiang Rural Credit Cooperative Union

Linxi Rural Credit Cooperative Union

Guangzong Rural Credit Cooperative Union

Baixiang Rural Credit Cooperative Union

Wei Rural Credit Cooperative Union

Ren Rural Credit Cooperative Union

 

  

  

  

 

Xingtai Chengjiao Rural Credit Cooperative Union

 

Maximum Mortgage Contract

 

No. 07102012657627

 

	
Mortgagor (Party A):

	
Xingtai Zhongding Kirin Real Estate Development Co., Ltd.

 

	
Mortgagee (Party B):

	
Xingtai Chengjiao Rural Credit Cooperative Union

 

Nan’gong Rural Credit Cooperative Union

Qinghe Rural Credit Cooperative Union

Lincheng Rural Credit Cooperative Union

Nanhe Rural Credit Cooperative Union

Pingxiang Rural Credit Cooperative Union

Linxi Rural Credit Cooperative Union

Guangzong Rural Credit Cooperative Union

Baixiang Rural Credit Cooperative Union

Wei Rural Credit Cooperative Union

Ren Rural Credit Cooperative Union

 

Party B constitutes Eleven (in words) county-level credit unions, among which Xingtai Chengjiao Rural Credit Cooperative Union, as the leading union, exercises the rights and bears the obligations on behalf of Party B.

 

For ensuring Party B’s claims, Party A is willing to provide a maximum mortgage guarantee for a series of claims created by Party B and the debtor, Xingtai Zhongding Kirin Real Estate Development Co., Ltd. This contract (“Contract”) is entered into by and between Party A and Party B through mutual agreement in accordance with relevant laws and regulations. Both parties shall comply with this Contract.

 

	
Article 1.  

	
Collateral

 

Party A provides guarantee of assets listed in the List of the Collateral under Article 16 of this Contract.

 

Party A undertakes that it enjoys the ownership or dispose right of the collateral in accordance with laws.

 

Party A undertakes that the collaterals is not seized, possessed, in the dispute over the ownership, etc.

 

	
Article 2.  

	
Guaranteed Claims

 

	
1.  

	
Guaranteed claims shall be a series of claims arising from loans continually provided by Party B to the debtor from August 30, 2012 to August 29, 2014. The maximum amount shall be RMB One Hundred and Fifty Million (in words). In the event that, in accordance with this Contract, Party A performs the guarantee obligation, the performed amount shall be deducted from the maximum amount accordingly.

 

  

2

  

 

	
2.  

	
At any time during the above period, Party B can continually and circularly provide loans to the debtor as long as the balance of unrecovered claims is less than the maximum amount. Party A shall provide guarantee, to the extent of such maximum amount, to Party B for the claim arising from loans provide by Party B, irrespective of the frequency and amount of each loan, or of whether the expiration date of debtor’s each debt exceeds the above period.

 

The balance of unrecovered claims including principal, interest (compound interest and default interest included), penalties, compensation and all the fees used for realization of the claim (including but not limited to costs, arbitration fees, property preservation fees, travel expense, enforcement fees, appraisal fees, auction charge, etc.)

 

	
3.  

	
In the event that the debtors fails to fulfill its obligation under the principal contract, Party B has the right to require Party A to assume the guarantee liabilities within its guarantee scope regardless of whether Party B’s claims are secured by other guarantee (including but not limited to guarantee, mortgage, pledge, etc.) under the principal agreement.

 

	
4.  

	
During the period as described under clause 1 herein, any contracts, agreements or other legal documents entered by and between Party B and the debtor that result in a debtor-creditor relationship shall be the principal contract of this Contract.

 

	
Article 3.  

	
Term of the Existence of the Mortgage Right

 

The term of the existence of the mortgage right shall expire after two years of the expiration date of the limitation of actions.

 

	
Article 4.  

	
The Execution and Amendment of the Guaranteed Principal Contract

 

Matters regarding the amount, term, interest rate, use of loan, etc. shall be agreed by Party B and the debtor in the principal contract.

 

Party A acknowledges that, the executions and amendments of the principal contracts by Party B and the debtor shall be deemed to have been obtained prior consent from Party A which does not need to be notified, and the guarantee liability of the Party A shall not be reduced or remitted.

 

During the term of the existence of the mortgage right, upon the adjustment of the state legal interest, the amendments of the interest rates in principal contracts shall be deemed to have been obtained prior consent from Party A which does not need to be notified, and the guarantee liability of the Party A shall not be reduced or remitted.

 

	
Article 5.  

	
The Severability of the Validity of the Contract

 

The validity of the Contract is independent with the principal contract. The completely or partial invalidity of the principal contract will not affect the validity of the Contract. In the event that the principal contract is declared void, Party A shall use the collateral to assume the guarantee liability for any debt arising from return of assets or compensation of loss by the debtor.

 

  

3

  

 

	
Article 6.  

	
Safekeeping of the Collateral

 

During the term of the existence of the mortgage right, Party A has the obligation of safekeeping the collateral, maintaining the collateral in good condition and accepting for inspection, from time to time, by Party B from time to time. In the event of the impairment, loss of the collateral or other situations that result in significant value reduction of the collateral, Party A shall notify Party B in a timely manner and provide other guarantee equivalent to the impaired value of the collateral in ten business days.

 

	
Article 7.  

	
Insurance of the Collateral

 

During the term of the existence of the mortgage right, before the full repayment of the claims, Party A shall purchase property insurance with typical types and amounts as designated by Party B in accordance with the relevant laws. Before the full repayment of the claims, Party A shall not cease or cancel the insurance. In the event that the insurance expires before the full repayment of the guaranteed claims, Party A shall extend the insurance period accordingly.

 

Party B shall keep the original insurance policy during the term of the existence of the mortgage right.

 

Party A shall require the insurer to note on the insurance policy that, Party B shall be the preferred beneficiary (namely, the first beneficiary). The insurer shall directly pay insurance proceeds to the bank account designated by Party B once insured accidents occurred. In the event that, the collateral is insured without indicating Party B as the preferred beneficiary, such indication of preferred beneficiary for Party B shall be made or amended.

 

Party A agrees that Party B is entitled to handle the insurance proceeds in following manners, and Party A will assist Party B to conduct relevant procedures:

 

	
1)  

	
repay or repay in advance the principal, interest and relevant fees of the debt under the principal contract;

 

	
2)  

	
to transfer the insurance proceeds as fixed deposit and take the deposit receipt as a pledge;

 

	
3)  

	
with consent from Party B, use the insurance proceeds to repair the collateral for recovery of the value of the collateral

 

	
4)  

	
deposit such insurance proceeds in a third party designated by Party B;

 

	
5)  

	
Party A may dispose the insurance proceeds freely if Party A has provided Party B with a new security that meets Party B’s requirements.

 

	
Article 8.  

	
Compensation for Damage by the Third Party

 

During the term of the existence of the mortgage right, if the third party’s actions result in the reduction of collateral, the compensation for damage shall be deposited in the back account designated by Party B. Party A agrees that Party B is entitled to handle such compensation for damage in following manners, and Party A will assist Party B to conduct relevant procedures:

 

	
1)  

	
repay or prepay the principal, interest and relevant fees under the principal contract

 

	
2)  

	
transfer the compensation for damage as fixed deposit and take the deposit receipt as a pledge

 

  

4

  

 

	
3)  

	
with consent from Party B, use the compensation for damage to repair the collateral for recovery of the value of the collateral

 

	
4)  

	
deposit such compensation for damage in a third party designated by Party B

 

	
5)  

	
Party A may dispose the compensation for damage freely if Party A has provided Party B with a new security that meets Party B’s requirements.

 

During the term of the existence of the mortgage right, if the value of collateral is insufficient to satisfy the principal, interest and relevant fees under the principal contract as a result of actions of third party, Party A shall provide an new guarantee accepted by Party B. The remainder of the collateral, whose value has not been reduced, shall still be used as the guarantee of the claims.

 

	
Article 9.  

	
The Disposal of the Collateral

 

	
1.  

	
During the term of the existence of the mortgage right, Party A shall not grant, transfer, lease, remortgage, relocate or dispose the collateral under this contract in any other means without written consent from Party B.

 

	
2.  

	
During the term of the existence of the mortgage right, Party A shall obtain prior written consent from Party B before its disposal of the collateral. Party A agrees that Party B is entitled to handle the compensation of collateral in following manners:

 

	
   1)  

	
repay or repay in advance the principal, interest and relevant fees of the debt under the principal contract;

 

	
   2)  

	
to transfer the consideration as fixed deposit and take the deposit receipt as a pledge;

 

	
   3)  

	
deposit such consideration in a third party designated by Party B;

 

	
   4)  

	
Party A may dispose the consideration freely if Party A has provided Party B with a new security that meets Party B’s requirements.

 

	
Article 10.  

	
The Realization of the Collateral

 

Party B has the right to dispose the collateral legally in any of the following events:

 

	
1)  

	
Party B has not been repaid when all or part of the principals or interests under the principal contract became due

 

	
2)  

	
Other circumstances that Party B can realize the collateral in advance as provided under the principal contract

 

	
Article 11.  

	
Default and Remedies

 

During the term of the existence of the mortgage right,if Party A violates Article 1, Article 6, Article 7, Article 8 and Article 9 under the Contract, Party B has the right to request Party A to rectify the default within prescribed term, provide relevant security, compensate the losses and may dispose the collateral in advance. 

 

  

5

  

 

Party A agrees that Party B has right to deal with the consideration deriving from disposal of the collateral in following manners:

 

	
1)  

	
 repay or repay in advance the principal, interest and relevant fees of the debt under the principal contract;

 

	
2)  

	
to transfer the consideration as fixed deposit and take the deposit receipt as a pledge;

 

	
3)  

	
deposit such consideration in a third party designated by Party B;

 

	
4)  

	
Party A may dispose the consideration freely if Party A has provided Party B with a new security that meets Party B’s requirements.

 

	
Article 12.  

	
Registration and Write Off of the Collateral

 

The collateral shall be registered in accordance with relevant laws and regulations. The parties hereto shall complete the registration of mortgage with relevant authority after execution of this Contract. Party A shall deliver the mortgage right certificate, mortgage registration document and other certificate of rights of the collateral to Party B on the day that this Contract becomes effective.

 

Party B and Party A shall complete relevant procedures to write off the mortgage registration in a timely fashion when all the debts under the principal contract and the Contract have been repaid.

 

	
Article 13.  

	
Expenses

 

All relevant expenses of valuation, notarization, insurance, registration, appraisal, maintenance and deposit under this Contract shall be borne by Party A.

 

	
Article 14.  

	
Other Provisions Agreed by the Parties

 

	
1.  

	
Party B has the right to collect the principal and interest of the loan in advance if the debtor fails to repay the due interest.

 

	
2.  

	
 

 

	
Article 15.  

	
Dispute Settlement of the Contract

 

Disputes arising from the performance of the Contract may be solved through negotiation. If the parties cannot reach resolution through negotiation, the disputes shall be settled in the following No. 1 means:

 

1. Bring a suit in the court where Party B is located in;

 

2. Submit the disputes to  arbitration commission ( the arbitration will be held in  ) for arbitration in accordance with its then effective arbitration rules. The arbitration is final and binding on both parties.

 

The provisions of the Contract that are not involved in the disputes shall continue to be performed during the period of litigation or arbitration.

 

  

6

  

 

	
Article 16.  

	
List of the Collateral

 

The list of the collateral under this contract as follows:

 

List of the collateral

 

	
Name of the collateral

	
Code of property certificate

	
Value as recorded in the invoice of the Collateral

	
Appraised Value of the Collateral (¥ten thousand)

	
Amount secured for other debts (¥Ten thousand)

	
Note

	
Land Use Right

	
Xing Shi Guo Yong (2011) No.384

	  	
37708.31

	
N/A

	
121,074.17 square meters

 

	
Article 17.  

	
The Contract Will Be effective Upon Satisfaction of the Following Conditions

 

	
1.  

	
The Contract has been signed by the legal representatives or authorized representative or stamped by Party A (signing only if Party A is a nature person) and signed by the person in charge or authorized representative and stamped by Party B;

 

	
2.  

	
The collateral as specified in List of the Collateral, which has been registered in accordance with relevant laws and regulations.

 

	
Article 18.  

	
The Contract is executed in eleven originals

 

	
Article 19.  

	
Declaration

 

	
1.  

	
Party A acknowledges Party B’s business scope and authorization clearly;

 

	
2.  

	
Party A has read all clauses of the Contract and paid special attention to the clauses in boldface. As requested by Party A, Party B has explained the clauses of the Contract. Party A is aware of and fully understands the meaning and the legal consequences of the clauses of the Contract.

 

	
3.  

	
Party A has the power and authorization to execute the Contract.

 

	
PartyA(Seal):

	
Xingtai Zhongding Kirin Real Estate Development Co., Ltd(Seal)

HU, Longlin (Stamp) / SHI, Lixia (Stamp)

 

Legal Representative (Responsible Officer) or Authorized Representative (SIGNATURE): SHI, Lixia

 

	
1  

	
 Party B(Seal): Xingtai Chengjiao Rural Credit Cooperative Union (Seal) / DONG, Jingliang (Stamp)

 

Responsible Officer or Authorized Representative (SIGNATURE): DONG, Jingliang

 

	
2  

	
Party B(Seal): Lincheng Rural Credit Cooperative Union (Seal) / DONG, Pingtang (Stamp)

 

Responsible Officer or Authorized Representative (SIGNATURE): QI, Hua

 

  

7

  

 

	
3  

	
Party B(Seal): Baixiang Rural Credit Cooperative Union (Seal) / ZHANG, Qunbao (Stamp)

 

Responsible Officer or Authorized Representative (SIGNATURE): TANG, Zhenling

 

	
4  

	
Party B(Real): Linxi Rural Credit Cooperative Union (Seal) / LIU, Peiping (Stamp)

 

Responsible Officer or Authorized Representative (SIGNATURE): CHEN, Shuguo

 

	
5  

	
Party B(Seal): Guangzong Rural Credit Cooperative Union (Seal) / ZHAO, Shaobo(Stamp)

 

Responsible Officer or Authorized Representative (SIGNATURE): YAN, Xiaoshu

 

	
6  

	
Party B(Seal): Qinghe Rural Credit Cooperative Union (Seal) / DU, Yanjun (Stamp)

 

Responsible Officer or Authorized Representative (SIGNATURE): WEI, Baozhang

 

	
7  

	
Party B(Seal): Nanhe Rural Credit Cooperative Union (Seal) / ZHANG, Zhiqiang (Stamp)

 

Responsible Officer or Authorized Representative (SIGNATURE): LIU, Lei

 

	
8  

	
Party B(Seal): Wei Rural Credit Cooperative Union (Seal) / ZHAO, Shufang (Stamp)

 

Responsible Officer or Authorized Representative (SIGNATURE): FAN, Changrong

 

	
9  

	
Party B(Seal): Nan’gong Rural Credit Cooperative Union (Seal) / CHANG, Shibin (Stamp)

 

Responsible Officer or Authorized Representative (SIGNATURE): REN, Lijun

 

	
10  

	
Party B(Seal): Pingxiang Rural Credit Cooperative Union (Seal) / LI, Qingbin (Stamp)

 

Responsible Officer or Authorized Representative (SIGNATURE): HAO, Jianxia

 

	
11  

	
Party B(Seal): Ren Rural Credit Cooperative Union (Seal) / ZHANG, Shiyong (Stamp)

 

Responsible Officer or Authorized Representative (SIGNATURE): LIU, Guowang

 

Signing Date: August 30, 2012

 

 

8Unassociated Document

Exhibit 10.4

 

Contract No.: 04060003-2012 Nian Ye Ban (Di) Zi, No. 0038

 

Maximum Mortgage Contract

 

Important Notes: This Contract is entered into by and between the parties on the basis of equal footing and willingness in accordance with applicable laws and regulations. All terms hereof reflect true intents of the parties hereto. In order to secure legal rights of the Mortgagor, the Mortgagee hereby reminds the Mortgagor of reading the terms in boldface in a careful manner, and of paying close attention to the meanings of such terms.

 

This Maximum Mortgage Contract (“Contract”) is entered into by and between:

 

Mortgagee: Industrial and Commercial Bank of China, (Xingtai Yejin Branch) (“Party A”)

Responsible Officer: QI, Ruixia

Business Address: No. 128, Yejin Nanlu, Xingtai City

Tel and Fax: 2209100

 

And

 

Mortgagor: Hebei Zhongding Real Estate Development Co., Ltd. (“Party B”)

Legal Representative: GUO, Jianfei

Business Address or Residence: south-east corner of the cross of Gangtie Beilu and Yongjun Jiekou, Xingtai City

Tel and Fax: 5908806

 

For ensuring Party A's claims, Party B is willing to provide Party A with mortgage guarantee (counter guarantee).

 

This Contract is entered into by and between Party A and Party B in order to define their respective rights and obligations, through negotiation based on equal footing, in accordance with the Contract Law, the Guarantee Law, the Property Law and other applicable laws and regulations.

 

Article 1 Guaranteed Principal Claims

 

	
1.1

	
Principal claims guaranteed by Party B shall be the claims against the Debtor under borrowing contract, bank acceptance agreement, L/C opening contract, guarantee agreement and other financing documents (“Principal Contracts”) between Party A and Xingtai Zhongding Jiye Real Estate Development Co., Ltd. (“Debtor”), for the maximum balance to the extent of RMB 217,800,000 (RMB Two Hundreds and Seventeen Million and Eight Hundreds Thousands, in words) (the amount in words shall prevail in the event of any difference between the amount in words and number), from September 19, 2012 to September 18, 2015 (including commencement date and expiry date) (“Effective Term”), irrespective of whether such claims become due during the above period, or of whether such claims have occurred before the maximum mortgage is created.

 

  

 

  

 

	
1.2

	
The above “Maximum Balance” shall mean the total balances of the claims in RMB converted from different foreign exchanges at the middle price of foreign exchange published by Party A on the date when the Principal Claims under Party A's guarantee liability are determined.

 

Article 2 Guaranteed Scope

 

Party B's Maximum Mortgage covers principals of Principal Claims, interest accruals thereon, penalties, compound interests, liquidated damages, damages and fees used for realization of the mortgages (including but not limited to court fees, attorney's fees, and appraisal fees). However, the fees used for realization of the mortgages shall be firstly taken out from revenues of sale of the collaterals, not included in the Maximum Balance under Article 1.1 hereof.

 

Article 3 Collaterals

 

	
3.1

	
Please refer to the Collaterals List for details of the Collaterals. Such list attached to this Contract shall have the same force and effect with this Contract.

 

	
3.2

	
Party A's mortgages shall be extended to accessory things, accessory rights, attachments, additions, natural and legal fruits, substitutes of and arising from the Collaterals, and insurance proceeds, damages and compensations arising from loss, destruction or forfeiture of the Collaterals.

 

	
3.3

	
If the Collaterals are seized by the People's Court according to laws due to any failure to perform its due obligations by the Debtor or realization of mortgages hereunder, Party A shall be entitled to collect natural and legal fruits from the Collaterals from the date of such seizure. And such fruits shall be firstly used for paying for collection of the same.

 

	
3.4

	
The agreed values of Collaterals on the Collaterals List shall not be deemed as the appraisal grounds for disposal of such Collaterals by Party A, nor limit Party A's rights to exercise the mortgages.

 

	
3.5

	
Unless otherwise as provided in the laws, title certificates and relevant information of Collaterals shall be kept by Party A after jointly confirmed by Party A and Party B.

 

	
3.6

	
During the mortgage, Party B shall keep the Collaterals in good conditions without reducing their values by using such Collaterals in an unreasonable manner. Meanwhile, Party A shall be entitled to have access to the use of Collaterals from time to time.

 

	
3.7

	
Party B shall promptly inform Party A of any destruction, loss or forfeiture of the Collaterals, as well as submit to Party A the certifications specifying any such destruction, loss or forfeiture issued by relevant competent authorities or department in a timely manner.

 

	
3.8

	
If the Collaterals are destroyed, lost or forfeited, the insurance proceeds, damages or compensations obtained by Party B shall be applied to clear the Debtor's obligations under the Principal Contracts in advance, or to recover values of Collaterals upon consents of Party A, or shall be deposited into an account as designated by Party A, so as to guarantee performance of obligations under the Principal Contracts. The values of Collaterals that have not been reduced shall be applied to guarantee the Principal Claims.

 

	
3.9

	
Party B shall cease any of its activities that is enough to reduce values of the Collaterals; if values of the Collaterals are reduced due to any such activities, it shall be obligated to recover values of the Collaterals, or provide other collaterals whose values equal to the reduced values.

 

  

2

  

 

Article 4 Registration of Mortgage

 

The parties shall complete the mortgage registration with relevant mortgage registrar within ten days after the execution of this Contract. Party A and Party B shall complete the changes in registration in a timely manner if the registered particulars are changed and it is required to complete the changes in registration according to law.

 

Article 5 Insurance

 

	
5.1

	
Party B shall insure the Collaterals at the request of Party A within fifteen days after the execution of this Contract. If the insurance for Collaterals cannot be completed once off due to reasons attributable to the insurer, Party B shall promptly complete insurance formalities to ensure continuous property insurance for the Collaterals during the Effective Term.

 

	
5.2

	
It is required to name Party A as the preferred beneficiary (the first beneficiary) in the policies at the time of occurrence of insured accidents. The insurer shall directly pay insurance proceeds to Party A. No provisions limiting Party A's benefits shall be contained in such policies.

 

	
5.3

	
Party B shall not cease or cancel the insurance during the Effective Term. If Party B ceases the insurance, Party A shall be entitled to insure the Collaterals at sole costs of Party B.

 

	
5.4

	
If the Collaterals meet any insured accidents during the Effective Term, the insurance proceeds shall be disposed subject to Article 3.8 hereof.

Article 6 Determination of Principal Claims

 

The claims under the Maximum Mortgage shall be determined under any of the following circumstances:

 

	
A.

	
Effective Term under Article 1.1 expires;

 

	
B.

	
It is impossible for new claims to occur;

 

	
C.

	
Mortgaged properties have been sealed and/or seized;

 

	
D.

	
The Debtor and/or Party B has been declared as bankrupt or has been cancelled;

 

	
E.

	
Other circumstances as provided for determination of claims by the laws.

 

Article 7 Floating Mortgage

 

	
7.1

	
Party B shall create the mortgages on its existing and future production equipment, raw materials, semi-finished products and products. The mortgaged properties shall be determined under any of the following circumstances:

 

	
A.

	
Party A's claims are not satisfied when the period for performance of obligations becomes expiry;

 

	
B.

	
Party B has been declared as bankrupt or has been cancelled;

 

	
C.

	
Circumstances under Article 8.1 hereof, causing Party A to exercise its mortgage rights, have occurred;

 

  

3

  

 

	
D.

	
Other circumstances, materially impacting Party A's claims, have occurred.

 

	
7.2

	
If Party B creates the Maximum Mortgage on the above properties, other provisions hereof shall be applied as well, unless otherwise provided in this Article.

 

Article 8 Realization of Mortgage

 

	
8.1

	
Party A has the right to realize the mortgages under any of the following circumstances:

 

	
A.

	
The Debtor fails to discharge its obligations when Party A's Principal Claims become due (including becoming due earlier);

 

	
B.

	
Party B fails to recover values of the Collaterals or provide other collaterals whose values equal to reduced values in the event of  occurrence of circumstances as specified in Article 3.9 hereof;

 

	
C.

	
Party B or the Debtor is petitioned for bankruptcy or out-of-business, dissolution, liquidation, or suspended for reorganization, or its  business license is cancelled or withdrawn;

 

	
D.

	
Party B disposes the Collaterals under the floating mortgages by going beyond the arm's length transaction in its production and  operation;

 

	
E.

	
Other circumstances as provided by the laws and regulations, according to which Party A may realize the mortgages.

 

	
8.2

	
When realizing the mortgages, Party A may be indemnified with priority from the proceeds arising out of auction of the Collaterals, or offset obligations owed by the Debtor by appraised prices of the Collaterals, based on its negotiation with Party B. If the parties fail to agree on realization of mortgages, Party A may directly apply to the People's Court for disposing the Collaterals by auction or sales.

 

	
8.3

	
If currency of the proceeds from disposal of the Collaterals is different from such currency as set forth in the Principal Contracts, it is required to satisfy Party A's claims after such proceeds are converted into the money in currency of the Principal Contracts at applicable exchange rate published by Party A.

 

Article 9 Representations and Warranties by Party B

 

Party B hereby represents and warrants to Party A as follows:

 

	
9.1

	
Party B is the owner, or the manager authorized by the State, of the Collaterals hereunder, and it has full rights to dispose the Collaterals. No dispute in respect of ownership, right to use, or right to operate and manage on the Collaterals exists. Party B has obtained authorization or approvals necessary to the mortgages pursuant to procedures and authority as set forth in its articles of association, without any violation of laws, regulations and other provisions.

 

	
9.2

	
If it is a listed company or a subsidiary controlled by a listed company, it shall disclose the guarantees in a timely manner as required by the Securities Law, the Listing Rules of Stock Exchange, and other applicable laws, regulations and rules.

 

	
9.3

	
It is willing to create the mortgages in favor of the Debtor, and all of its intents hereunder is its true intends. For international/domestic trade financing, Party B acknowledged that the financing is based on true transaction without fraud.

 

  

4

  

 

	
9.4

	
The Collaterals can be created with mortgages according to law without any limitations.

 

	
9.5

	
If there are defects on the Collaterals, such defects have been reasonably stated in any respect.

 

	
9.6

	
The Collaterals have not been sealed, seized or monitored.

 

	
9.7

	
If the Collaterals have been leased in part or whole, the mortgages have been well notified to the Lessee, and such lease has been  notified to Party A in writing.

 

	
9.8

	
No mortgage has been created on the Collaterals in favor of other creditors; or such mortgage has been well notified to Party A in  writing if any such mortgage was created.

 

	
9.9

	
The Collaterals are not co-owned, or the mortgages have been agreed on in writing by other co-owners if such Collaterals are co-owned.

 

	
9.10

	
If the claim under this Contract is an international financing provided by Party A to Debtor, Party B accepts and agrees relevant international custom in connection with such business.

 

Article 10 Undertakings by Party B

 

Party B hereby undertakes to Party A as follows:

 

	
10.1

	
Party B shall continue to perform its guarantee liability hereunder without its further consents under any of the following circumstances:

 

	
A.

	
Party B's guarantee liability has not been increased if Party A and the principal Debtor change the Principal Contracts through negotiation;

 

	
B.

	
In the event of international/domestic trade financing, Party A and the Debtor modify the letter of credit related to the Principal Contracts without increasing the Debtor’s payment obligations or extending the payment term under the letter of credit.

 

	
C.

	
Party A transfers the Principal Claims and the Maximum Mortgage.

 

	
10.2

	
Without prior written consents of Party A, it shall not re-create any mortgage or charge on the Collaterals in any way, nor lease, transfer or present the Collaterals to any third party; however, the Collaterals shall be prevented from any damage.

 

	
10.3

	
Party B shall bear all fees, including but not limited to insurance fees, appraisal fees, estimation fees, registration charges and other relevant fees, arising out of conclusion and performance of this Contract.

 

	
10.4

	
If the mortgages granted to Party A are being or may be damaged by any third party, Party B shall send a timely notice to Party A and assist to hold Party A harmless.

 

	
10.5

	
When Party A realizes the mortgages, Party B shall cooperate in an active manner without giving any limitations against such realization.

 

	
10.6

	
Party B shall inform Party A in a timely manner under any of the following circumstances:

 

	
A.

	
It changes or replaces its articles of association, scope of business, legal representative or equity;

 

	
B.

	
It is out of business, or it is dissolved or comes into liquidation, or it is suspended for reorganization, or its business license is  canceled or withdrawn, or it is petitioned for bankruptcy;

 

	
C.

	
It is being or may be involved in material economic disputes, suits and arbitrations, or its properties have been sealed, seized or  monitored;

 

	
D.

	
If Party B is a natural person, its address, employer and contact methods are changed.

 

	
10.7

	
Party B shall accept and sign written notices from Party A in a timely manner.

 

	
10.8

	
If other guarantees are created in favor of Party A's Principal Claims, irrespective of whether such other guarantees are granted by the  Debtor or a third party, Party A shall be entitled to determine the orders for realizing the guarantees at its own discretions, and Party B hereby undertakes not to bring any defense against any such determination. If Party A waives, changes or loses its benefits in other guarantees, Party B's guarantee liability shall not become null and void, nor reduced, but remain effective.

 

  

5

  

 

	
10.9

	
If any of the following events occurred under the business of domestic letter of credit, purchaser financing of domestic letter of credit, import letter of credit, import bill advance and import re-financing, Party B bears an incontestable obligation of collateral mortgage, and Party B will not raise an exemption or defense as a result of issuing stop-payment order or retaining order, or seizing, possessing or freezing any assets or other similar measures in connection with the letter of credit by any judicial authority or administrative authority:

 

	
A.

	
The nominee or authorized person of Party A has made the payment under the instruction of Party A in a bona fide manner;

 

	
B.

	
Party A, the nominee or authorized person of Party A has issued a confirmation letter of due payment in a bona fide manner regarding the payment of domestic letter of credit, or has made an acceptance in a bona fide manner regarding the documents of import letter of credit;

 

	
C.

	
The confirming bank of the letter of credit has performed the payment obligation in a bona fide manner;

 

	
D.

	
The negotiating bank of the letter of credit has negotiated the payment in a bona fide manner.

 

	
10.10

	
Party B will not raise an exemption or defense as a result of refusing payment for the letter of credit by the Debtor under the business of delivery against bank guarantee, endorsement of the bill of lading and authorized collection.

 

Article 11 Undertakings by Party A

 

Party A hereby undertakes to Party B as follows:

 

	
11.1

	
Unless otherwise as provided in laws, regulations and rules, Party A shall keep confidential relevant documents, financial information, and other undisclosed information in relevant materials, submitted by Party B in performance of its obligations hereunder.

 

	
11.2

	
The balance shall be returned to Party B in a timely manner if there is any such balance after all obligations under the Maximum Mortgage are paid from the proceeds generated from disposal of the Collaterals.

 

Article 12 Breach of Contract

 

	
12.1

	
Any party shall be deemed to breach this Contract if it fails to perform any of its obligations hereunder or breaches any of its representations, warranties and undertakings hereunder after this Contract comes into effect. In such case, it shall indemnify the losses caused to the other party.

 

	
12.2

	
Unless otherwise as provided in this Contract, the other party shall be entitled to take any other measures as specified in laws, regulations and rules of the PRC if any party breaches this Contract.

 

  

6

  

 

Article 13 Effectiveness, Modification and Termination

 

	
13.1

	
This Contract comes into effect from the date of execution, and will be terminated on the date when all of Party A's Principal Claims has been satisfied.

 

	
13.2

	
Any modification to this Contract shall be negotiated, made in writing, and agreed on by the parties. Any such modification terms or agreements shall be integral to this Contract, and shall have the same force and effect with this Contract. Except for those terms as modified, the remaining provisions hereof shall remain effective. However, original terms hereof shall remain effective before those modified terms come into effect.

 

	
13.3

	
If any provision of this Contract becomes void or unenforceable, the validity or enforcement of the remaining provisions hereof, or the validity of the whole Contract shall not be affected in any way.

 

	
13.4

	
Any modification to and/or any termination of this Contract shall not affect either party's rights to claim indemnification. And the termination of this Contract shall not affect the validity of the terms in relation to the dispute resolutions.

Article 14 Dispute Resolutions

 

Conclusion, validity, interpretation, performance of, and dispute resolutions arising out of, this contract shall be governed by the laws of the PRC. Any controversy or dispute arising out of or in relation to this Contract shall be resolved through negotiation by the parties hereto; if not reached, any such dispute shall be resolved according to the method as set forth in B below:

 

	
A.

	
To be arbitrated by arbitration commission; and the arbitration will be conducted in ­ (place of arbitration) in accordance with the arbitration rules in force and effect at the time of applying for such arbitration. The awards shall be final and binding upon the parties.

 

	
B.

	
To be judged and resolved by the court at the location of Party A.

 

Article 15 Miscellaneous

 

	
15.1

	
Without prior written consents of Party A, Party B shall not transfer the whole or part of its rights or obligations hereunder.

 

	
15.2

	
Any failure to exercise in whole or part, or any delay to exercise any of its rights hereunder by Party A, shall not constitute a waiver or change of such rights or any other rights, nor affect further exercise of such rights or any other rights by it.

 

	
15.3

	
Party A shall be entitled, in accordance with relevant laws, regulations or other regulatory documents or requirements of finance regulatory institutes, to provide information in relation to this Contract and other relevant information to the basic credit information database of People's Bank of China or other credit database established according to law for search and use by eligible institutes or individuals. Meanwhile, Party A shall be entitled to search relevant information of Party B through basic credit information database of People's Bank of China or other credit database established according to law for purpose of conclusion and performance of this Contract.

 

	
15.4

	
This Contract is made in four originals with Party A, Party B and the registration department holding one original respectively, and each original shall have the same force and effect with the other originals.

 

  

7

  

 

Article 16 Other Provisions

 

	
16.1

	
The total investment of such project is RMB 329,320,000, and RMB 305,120,000 is invested (including RMB 97,530,000 has been paid as land transferring fee), representing 92.66% of the total investment. The construction fees for 2# - 4#, 7# - 10#, 13# - 16#, 19# - 22#, 24# - 27# and underground garage are RMB 189,980,000, and RMB 189,820,000 is invested, representing 99% of the total construction fees. 133,449 square meters of the construction are completed. Construction Land Planning Permit (Di Zi No. 130501201101002), Construction Working Planning Permit (Jian Zi No. 130501201101057), Work Commencement Permits (No. 130501S110700001), Pre-sale Permits (Xing Fang Yu Shou Zheng No.2011028) are obtained.

 

	
16.2

	
N/A

 

Appendix: Collaterals List

Party A: Industrial and Commercial Bank of China, (Xingtai Yejin Branch) (seal)

Authorized Signatory: QI, Ruixia (sign or seal)

 

Party B: Hebei Zhongding Real Estate Development Co., Ltd. (seal)

Legal Representative (Authorized Agent): GUO, Jianfei (sign or seal)

 

Co-owners of Collaterals: Hebei Shahe Huada Mining Industry Co., Ltd. (sign or seal)

Date: September 17, 2012.

 

  

8

  

 

Appendix:

 

Collateral List

 

	
Name

	
Title Certificates

	
Location

	
Appraised Values

	
Completion Date

	
Others

	
Land

	
Xing Shi Guo Yong (2010) No. 687, Xing Shi Guo Yong (2010) No. 688

	
No. 74 Bayi Rd., Xingtai

	
RMB 235,040,000

	 	
RMB 16,450,000 of claim is secured by land use right

	
House properties (construction work in progress)2#, 3#, 4#, 7#, 10#, 14#, 19#, 22#, 24#, 25# and underground garage (see collateral list of CWIP for details)

	 	
No. 74 Bayi Rd., Xingtai

	
RMB 76,120,000

	
2013.8.12

	
RMB 53,300,000 of claim is secured by CWIP

 

Mortgagor:Hebei Zhongding Real Estate Development Co., Ltd. (seal)

 

Co-owners of Collaterals (if applicable): Hebei Shahe Huada Mining Industry Co., Ltd. (sign or seal)

 

Mortgagee: Industrial and Commercial Bank of China, (Xingtai Yejin Branch) (seal)

 

 

9

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