Document:

f10q0912ex10i_kirininter.htm

Exhibit 10.1

 

Loan Agreement

 

No. 07102012832919

Borrower (Hereinafter referred to as Party A):

Xingtai Zhongding Kirin Real Estate Development Co., Ltd.

Lender (Hereinafter referred to as 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

(Collectively, the Parties)

Party B consists of eleven (11) county level unions, which all authorize Xingtai Chengjiao Rural Cooperative Union to be the lead arranger (the“Agent”). It is legally binding for all unions that the Agreement is performed by the Agent. All unions shall exercise the rights of this Agreement through the Agent.

Party A proposes to apply Loan from Party B and Party B intends to release the Loan to Party A. In accordance with related laws and regulations, Party A and Party B enter into this Agreement to abide by through negotiation.

 

  

  

  

 

	
Article 1  

	
Loan Amount

 

	
 

	

The amount lent by Party B to Party A is RMB 150,000,000.

	
Article 2  

	
Usage of the Loan

 

	
 

	

The Loan shall be solely used for the development of new dwelling houses in urban village (Project Kirin Bay) and without Party B’s written consent, Party A shall not use the Loan for any other purposes.

 

	
Article 3  

	
Term of the Loan

 

	
 

	

Term of the Loan will be from August 30, 2012 to August 29, 2014.The date on the receipt the first time the Loan is released shall be prevailing if any discrepancy of the date arises from this Agreement and the receipt. The receipt is part of this Agreement and has the same legal effect with this Agreement.

 

	
Article 4  

	
Interest Rate, Penalty Rate and Calculation and Settlement of Interest

 

	
  4.1

	
This Agreement shall apply the fixed monthly rate of 6.15‰.

 

	
  4.2  

	
Penalty Rate

 

	
  4.2.1

	
If the Loan is overdue, the penalty rate shall equal to 150% of the current applicable interest rate;

 

	
  4.2.2

	
If the Loan is misappropriated, the penalty rate shall equal to 200% of the interest rate.

 

	
  4.3  

	
The interest calculation date refers to the date that the initial Loan released is transferred to the account of Party A. Except otherwise agreed by the Parties, when the first installment of the Loan is released, the benchmark interest rate refers to the loan interest with the same level published by People’s Bank of China on the interest settlement day. If the Loan interest rate or penalty rate is adjusted pursuant to the above stipulation afterwards, the benchmark interest rate refers to the loan interest rate with the same level published by People’s Bank of China on the same day. If People’ Bank of China no longer publishes updated loan interest with the same level, the benchmark interest rate shall be the loan rate with the same level recognized by relative banks or the common one.

 

  

2

  

 

	
  4.4  

	
The interest shall be calculated as of the date when the Loan is transferred to the Party A’ account on a daily basis (daily interest rate=monthly interest rate/30=annually interest rate/360).  In case that Party A does not pay the interest on time, the interest paid by Party A shall be compounded from the following day.

 

	
  4.5  

	
Settlement of the Interest

 

	
4.5.1  

	
The interest shall be settled according to the above fixed rate.

 

	
4.5.2  

	
The interest under this Agreement shall be settled on a monthly basis and the settlement date is the 20th day per month.

	
Article 5  

	
Disbursement and Use of the Loan

 

	
  5.1  

	
Conditions Precedent to Disburse the Loan

 

	
5.1.1  

	
Party B shall disburse the proceeds when the following conditions are satisfied, provided that otherwise agreed by Party B:

 

	
1)  

	
Party A has completed related approvals, registrations, deliveries and other legal procedures regarding the Loan pursuant to relative laws and regulations;

 

	
2)  

	
The security agreement required by Party B, if any, has come into force;

 

	
3)  

	
Party A does not breach any articles of this Agreement;

 

	
4)  

	
Other conditions agreed by the Parties to release the Loan:

 

	
5.1.2  

	
Party B shall release the Loan within three (3) working days after the said conditions are satisfied.

 

	
  5.2  

	
Schedule of the Loan Use:

 

	
1)  

	
________, ___, amount: _____________;

 

	
2)  

	
________, ___, amount: _____________;

 

	
3)  

	
________, ___, amount: _____________;

 

	
4)  

	
________, ___, amount: _____________;

 

	
5)  

	
________, ___, amount: _____________;

 

	
6)  

	
________, ___, amount: _____________;

 

	
7)  

	
________, ___, amount: _____________;

 

  

3

  

 

	
  5.3  

	
Account

 

	
5.3.1  

	
As of the execution of this Agreement, Party A shall open a settlement account and a disbursement/drawdown account (if any), and designate a repayment account. Party A agrees to Party B to supervise the following accounts.

 

	
1)    

	
Settlement Account

 

Name of Bank: Xingtai Chengjiao Rural Credit Cooperative Union

Account Name: Xingtai Zhongding Kirin Real Estate Development Co., Ltd.

Account Number: 071020122000083317

 

	
2)    

	
Disbursement/Drawdown Account:

 

Name of Bank: Xingtai Chengjiao Rural Credit Cooperative Union

Account Name: Xingtai Zhongding Kirin Real Estate Development Co., Ltd.

Account Number: 071020122000083317

 

	
3)    

	
 Repayment Account

 

Name of Bank:

Account Name:

Account Number:

 

	
5.3.2  

	
The settlement account shall be used to check the disbursement and drawdown of the Loan. Party A hereby declares that Party B shall transfer the Loan to the settlement account.

 

	
5.3.3  

	
Party A hereby declares that the repayment account is the revenue and reserve account in this Agreement. The principal and interest shall be collected from the repayment account. Party B shall have right to supervise the account and require Party A to identify the issues and adopt corresponding measures when the cash flow is fluctuated abnormally.

 

Party B hereby guarantees that all project revenue will be deposited into the reimbursement account. The following requirements shall be satisfied if the project revenue is paid for any other purposes:

 

1.

 

2.

 

  

4

  

 

3.

 

Except the written consent by Party B, in principle, the means of consignment will be adopted for the payment.

 

	
  5.4  

	
Payment

 

	
5.4.1  

	
Party A agrees that as of the effectiveness of this Agreement, Party B has right to monitor and manage the disbursement of the Loan in the settlement account or disbursement/drawdown account by means of consignment and self payment in order to supervise the Loan used pursuant to this Agreement. Consignment shall specify that Party B credits the proceeds payable by Party A to corresponding parties through the settlement account or disbursement/drawdown account as applied and requested by Party A. Self payment shall has the meaning that Party B will credit the proceeds to the settlement account or disbursement/drawdown account per the drawdown application of Party A and Party A shall pay the proceeds to related parties.

 

	
5.4.2  

	
Consignment

 

	
1)    

	
Party A agrees that consignment shall be applied if any of the following condition occurs: a) single amount exceeds 5% of the total project investment and not less than RMB 0.5 million or such amount is more than RMB 5 million; b) __c) __d) __.

 

	
2)    

	
Party A shall file a drawback application, power of attorney and related transaction documents if consignment is adopted.

 

	
3)    

	
Party A shall submit the documents required to Party B if Party A intends to apply for repayment funds to any other party, including but not limited to:

 

	
a)  

	
documents to prove that the discharge purpose meets the requirement of this Agreement;

 

	
b)  

	
commercial agreements signed by and between Party A and any third party or documents related to payment by Party A;

 

	
c)  

	
corresponding invoices or receipts, Note: Party A shall provide the invoices or receipts, which cannot be obtained as transaction, in time after the payment is completed;

 

  

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d)  

	
lawful and valid payment instruments;

 

	
e)  

	
certificates proving that the reserve has been deposited in full amount; certificate that actual progress of the project matches the invested amount;

 

	
f)  

	
other documents required.

 

	
4)    

	
Party B shall review whether the corresponding party and amount are in line with the commercial agreement and other documents pursuant to the Loan purpose. Party B shall transfer the Loan to the party who meets the purpose of related agreements through the settlement account or disbursement/drawback account.

 

	
5)    

	
Party B has right to deduct the commission fee arising from the Loan transfer when such fee occurs.

 

	
5.4.3  

	
Self Payment

 

If self payment is applied, Party A is subject to submit a written schedule regarding the Loan use. The Loan can be withdrawn at Party A’s willing on the condition that the drawdown meets the Loan purpose. Party A shall report the drawdown information monthly. Party B has right to check whether the Loan usage matches the purpose stipulated in this Agreement and the payment method.

 

	
5.4.4  

	
Party A is subject to submit the drawdown application prior to one (1) working day when Party A proposes to draw the Loan and put forward whether to choose consignment or self payment. Party A agrees that Party B has right to check whether the related documents provided by Party A conform to the payment terms stipulated in this Agreement and to determine the payment method.

 

	
5.4.5  

	
When the Loan is released and paid to other parties, Party B has right to require Party A to supplement withdrawal and payment conditions, or change payment method, or terminate the release and payment of the Loan if any of the following circumstances occur:

 

	
1)    

	
credit status declines;

 

	
2)    

	
profitability of main business is low;

 

	
3)    

	
the use of the proceeds is fluctuated abnormally;

 

  

6

  

 

	
4)    

	
the Loan is not used pursuant to this Agreement, the project progress falls behind the funds usage schedule and Party A circumvents consignment by means of Breaking up the Whole into Parts which breaches the Agreement;

 

	
5)    

	
others

	
Article 6  

	
Repayment

 

	
  6.1  

	
Repayment Schedule

 

	
 

	

Party A shall repay the principal according to the following schedule:

 

	
1)   

	
March 29, 2014, Amount RMB 15,000,000;

 

	
2)   

	
April 29, 2014, Amount RMB 15,000,000;

 

	
3)   

	
May 29, 2014, Amount RMB 20,000,000;

 

	
4)   

	
June 29, 2014, Amount RMB 20,000,000;

 

	
5)   

	
July 29, 2014, Amount RMB 30,000,000;

 

	
6)   

	
August 29, 2014, Amount RMB 50,000,000.

 

	
  6.2  

	
Repayment Method

 

	
 

	

Party A shall deposit sufficient funds in the account opened in Party B prior to the repayment day, or transfer the funds to the account from any other Party A’ account. If Party A does not make the repayment according to the schedule, Party A agrees that Party B has right to collect the proceeds from all accounts opened in any branches of Hebei Rural Credit Cooperative.

 

	
  6.3  

	
Interest Settlement

 

	
 

	

Party A shall pay the interest due to Party B on the settlement day. The initial interest payment day refers to the first day when the interest is settled. When the last repayment occurs, such interest shall be paid together with the principal.

 

	
  6.4  

	
Repayment in Advance

 

	
 

	

In case that Party A intends to repay the principal, Party A shall file an application to Party B ten (10) days in advance. Upon the consent of Party B, Party A can repay all or part of the principal in advance. In case of the repayment in advance, the interest which has been collected shall not be adjusted. When Party A makes the repayment in installment and intends to repay part of the principal, the proceeds which shall be reimbursed as in Repayment Schedule shall be repaid firstly and the interest rate shall be applied in accordance with this Agreement. The outstanding installment shall adopt the Loan interest as stipulated in this Agreement. In case that all installments are repaid, the interest shall be collected based on the actual term and the agreed interest rate. The interest which has been collected shall not be adjusted when the Loan is repaid in advance.

 

  

7

  

 

	
Article 7  

	
Security and Insurance

 

	
 

	

Party B and the mortgagor will execute a security agreement otherwise. Party A shall purchase insurances for its invested fixed assets as required by Party B. The insurance company shall maintain legal qualification and good reputation. The insurance policy shall indicate clearly: Party B has the priority to obtain the insurance indemnities; the alteration of the insurance policy shall be subject to approval in written form; the insurance company shall credit the indemnities to the account designated by Party B directly in the event any accidents occur.

	
Article 8  

	
Rights and Obligations of Party A

 

	
  8.1  

	
Party A’s Rights

 

	
1)   

	
require Party B to disburse the Loan timely;

 

	
2)   

	
use the Loan as stipulated in this Agreement;

 

	
3)   

	
apply for extension of the Loan if related conditions required by Party B are satisfied;

 

	
4)   

	
require Party B to keep confidential on relative financial documents and trade secret regarding operation and management, except otherwise stipulated by laws and regulations.

 

	
  8.2  

	
Party B’s Obligations

 

	
1)   

	
provide related financial documents as well as operation and management files, including but not limited to the balance sheet, income statement of last quarter prior fifteen(15) days of the first month per quarter, and cash flow statement at the end of each year, and guarantee such documents and files authentic, complete and effective;

 

  

8

  

 

	
2)   

	
use the Loan as stipulated in this Agreement but not misappropriate the Loan, and pay the proceeds as agreed in this Agreement;

 

	
3)   

	
cooperate with Party A to examine and supervise the operation, management and financial activities of Party B as well as the usage of the Loan;

 

	
4)   

	
repay the principal and interest on time as stipulated in this Agreement;

 

	
5)   

	
not spirit funds or transfer the assets (including Party A’s investors) to avoid the repayment to Party B;

 

	
6)   

	
not guarantee to any third party by using the assets developed from the Loan hereunder without Party B’s consent, prior to paying off the principal and interest of the Loan;

 

	
7)   

	
In the event that Party A intends to provide guarantee for any third party’s debt during the term of this Agreement, which may affect repayment hereunder, Party A shall inform Party B in written in advance and obtain the consent of Party B;

 

	
8)   

	
In the event that the guarantor hereunder has closure, suspension, registration of cancellation, cancellation of business license, bankruptcy, operating loss and any other condition, so that will lose the ability of guarantee hereunder wholy or partly, or has reduction in value or accidental damage or loss occurred to collaterals and pledge properties hereunder, Party A shall provide other guarantees approved by Party B in a timely manner.

 

	
9)   

	
Party A shall notify Party B in a timely manner if Party A’s name, legal representative (responsible person), residence, business scope, and registered capital are changed during the term of this Agreement;

 

	
10)  

	
In the event that Party A has contract, leasing, joint-stock reform, affiliation, merger and acquisition, separation, joint venture, application for suspension or dissolution or bankruptcy, and any other action that will affect the repayment of the debt during the effective period of this Agreement, Party A shall inform Party B in written form one hundred and eighty (180) days in advance and obtain the consent of Party B, and implement the repayment and guarantee hereunder as requested by Party B.

 

  

9

  

 

	
11)  

	
In the event that Party A has closure, suspension, cancellation of business license, legal representative or major responsible person engaged in illegal activities, involvedness in significant litigation activities, serious difficulties in production and management, financial deterioration and any other condition that will have material adverse influence in the repayment of the debt hereunder during the effective period of this Agreement, Party A shall inform Party B in written form eighteen days in advance and obtain the consent of Party B, and implement the repayment and guarantee hereunder as requested by Party B.

 

	
12)  

	
bear the expenses of legal service, insurance, appraisal, registration, storage, identification, and notarization;

 

	
13)  

	
Party A shall reduce the risks regarding construction by means of signing general contracts, buying commercial insurance, establishing deposit of completion, providing securities of completion and performance, etc.

	
Article 9  

	
Rights and Obligations of Party B

 

	
  9.1

	
Party B’s Rights

 

	
1)   

	
know Party A’s operation, management and financial activities, and require Party A to provide related documents and materials about statistics and financial accounting;

 

	
2)   

	
With regard to any amount that Party A shall pay Party B in accordance with this Agreement, Party A agrees that Party B has the right to collect the proceeds from all accounts opened in any branches of Hebei Rural Credit Cooperative.

 

	
  9.2  

	
Party B’s Obligations

 

	
1)   

	
disburse the Loan on time and in full amount, except that the delay caused by Party A;

 

	
2)   

	
keep confidential the financial materials and trade secret on operation and management, except as otherwise provided by laws and regulations.

	
Article 10  

	
Representations and Warranties of Party A

 

	
1)   

	
The obligation hereunder signed and performed by Party A conforms to laws, regulations, rules and Party A's charter or the internal organization documents, and has permitted by Party A’s internal organs of authority and/or state approval power;

 

  

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2)   

	
During signing and performing this Agreement, Party A abides by the code of good faith, and all the materials, documents and information of Party A and the Guarantor provided to Party B are real, effective, accurate, complete and are without any concealment or omission;

 

	
3)   

	
Party A guarantees good credit and no significant adverse record;

 

	
4)   

	
Party A guarantees that the Loan Project and borrowing items are in accordance with laws and regulations;

 

	
5)   

	
Party A confirms that actions such as equity transfer, foreign investment, substantial increase in debt financing won’t be taken without Party B’s written consent;

 

	
6)   

	
Party B has the right to take on-site or off-site due diligence to check Party A’s operating conditions, financial conditions and the conditions of use and repayment after loan, Party A has the obligation to actively cooperate with Party B for the management of disbursement, management after loan, and related inspections;

 

	
7)   

	
Party B has the right to recover the Loan in advance according to the condition of Party A’s withdrawal of funds from circulation;

 

	
8)   

	
Party B will be informed timely when material adverse matters which could affect the ability of repayment occur.

	
Article 11  

	
Default

 

	
11.1  

	
Default

 

	
11.1.1  

	
Party A’s Default

 

	
1)    

	
not provide the authentic, complete, and valid materials of finance, operation, management, etc. required by Party B;

 

	
2)    

	
not use the Loan in accordance with this Agreement;

 

	
3)    

	
fail to repay the principle and interest on time;

 

	
4)    

	
reject or impede Party B to supervise or examine the usage of the Loan;

 

	
5)    

	
transfer assets and spirit funds to avoid the repayment to Party B;

 

	
6)    

	
the operating and financial situation is deteriorated not to make the due repayment; involved with or will be involved with material litigation, arbitration proceedings or any other legal disputes that Party B considers it has been influenced or will likely influence the rights and benefits stipulated in this Agreement;

 

  

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7)    

	
any other debt outstanding has influenced or will likely to influence the performance of Party B’s obligation in this Agreement;

 

	
8)    

	
fail to repay other debt due to related rural credit cooperative unions;

 

	
9)    

	
proceed in contracting, leasing, merger, acquisition, joint venture, separation, affiliation, shareholding reform, and any other change of operating mode or transformation of operating mechanism during the term of this Agreement, which Party B considers it has been influenced or will likely influence the rights and benefits stipulated in this Agreement;

 

	
10)   

	
other situations that will influence the repayment as considered by Party B;

 

	
11)   

	
be against other obligations as stipulated in this Agreement.

 

	
11.1.2  

	
If any of the following circumstances regarding the guarantor occurs, it will be deemed that Party A breaches this Agreement if Party A fails to provide new securities which are in line with the requirement of Party B:

 

	
1)    

	
conduct contracting, leasing, merger, acquisition, joint venture, separation, affiliation, shareholding reform, bankruptcy, withdrawal, etc., which could be sufficient to affect the guarantor to undertake joint responsibility;

 

	
2)    

	
provide guarantee to the third party which is beyond his own burden ability;

 

	
3)    

	
have lost or will lose the ability to guarantee;

 

	
4)    

	
others.

 

	
11.1.3  

	
If any of the following circumstances regarding the mortgagor occurs, it will be deemed that Party A breaches this Agreement if Party A fails to provide new securities which are in line with the requirement of Party B:

 

	
1)    

	
not purchase insurance for collaterals as required by the Party B, or not dispose of the insurance indemnity in accordance with the mortgage agreement after the insurance accident occurs;

 

	
2)    

	
not deal with damages in accordance with the mortgage agreement in the event that the collaterals are damaged, lost, devalued due to the third party;

 

  

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3)    

	
dispose of collaterals by means of donating, transferring, leasing, overlapping mortgaging, moving, etc., without the written consent of Party B;

 

	
4)    

	
dispose of collaterals upon the consent of Party B, but the proceeds are not utilized according to the mortgage agreement;

 

	
5)    

	
neither recover the value of collaterals nor provide other guarantees approved by the Party B in the event that the collaterals are damaged, lost or reduced in value, which could be sufficient to affect the repayment of the debt hereunder;

 

	
6)     

	
others.

 

	
11.1.4  

	
If any of the following circumstances regarding the pledgor occurs, it will be deemed that Party A breaches this Agreement if Party A fails to provide new securities which are in line with the requirement of Party B:

 

	
1)    

	
not purchase insurance for the pledged property as required by the Party B, or not dispose of the insurance indemnity in accordance with the mortgage agreement after the insurance accident occurs;

 

	
2)    

	
not handle the damages in accordance with the pledge agreement in the event that the pledged property is damaged, lost or devalued;

 

	
3)    

	
dispose of the pledged property upon the consent of Party B, but the proceeds are not utilized according to the pledge agreement;

 

	
4)    

	
neither recovers the value of pledged properties nor provides other guarantees approved by the Party B in the event that the pledged properties are damaged, lost or reduced in value, which could be sufficient to affect the repayment of the debt hereunder;

 

	
5)    

	
others.

 

	
11.1.5  

	
In the event that the security agreement or any other way of guarantee is ineffective, invalid, or revoked, or the guarantor wholly or partly loses the ability of guarantee or refuses to perform the obligation of guarantee, and Party A does not provide new security as required by Party B, Party A shall be deemed to breach this Agreement.

 

  

13

  

 

	
11.2  

	
Remedies

 

	
 

	

When any of the above occurs, Party B will have right to exercise one or more of the following rights:

 

	
1)   

	
terminate to disburse the Loan, declare the Loan due and require Party A to repay all principles, interest and expenses due and undue;

 

	
2)   

	
charge the damages at the amount equivalent to the Loan principle multiplied 1%;

 

	
3)   

	
charge interest and compound interest according to the penalty rate and the interest rate hereunder for Party A’s misused part of the Loan in any unauthorized projects, from the date of misuse of the Loan till the date that all outstanding due amounts is fully paid off.

 

	
4)   

	
charge the compound interest in accordance with Article 4 hereunder for the due interest which is not paid on time.

 

	
5)   

	
in the event that Party A has not fully repay the Loan due(including the principle and interest  declared wholly or partly due by Party B), Party A shall pay the interest and compound interest according to the penalty rate and the provision hereunder from the overdue date. Due Loan means Party A does not repay the debt on time.

 

	
6)   

	
Party A agrees that Party B has the right to deduct amounts from Party A’s account of Hebei Province Rural Credit Cooperatives banking system.

 

	
7)   

	
demand Party A for new guarantees as requested by Party B for the debt hereunder.

 

	
8)   

	
exercise the security right.

 

	
9)   

	
terminate the Agreement.

	
Article 12  

	
Miscellaneous

 

	
1)   

	
Party B has right to collect the principal and interest if Party A cannot settle the interest on time.

 

	
2)   

	
 

 

	
3)   

	
 

 

	
4)   

	
 

 

  

14

  

 

	
Article 13  

	
Disputes Settlement

 

	
 

	

Any dispute arising from the performance of this Agreement shall be settled by consultation. If the consultation fails, the dispute shall be settled according to 1).

 

	
1)   

	
submit the people's court where Party B is located.

 

	
2)   

	
submit to the arbitration commission which shall arbitrate in accordance with the arbitration rules in force. The arbitration award shall be final and binding on the Parties. During the litigation or arbitration, the provisions hereunder which are not involved in such dispute shall still be performed.

	
Article 14  

	
Effectiveness of Agreement

 

	
 

	

This Agreement shall become effective after signed and sealed by the legal representatives (responsible persons) or authorized representatives of the Parties.

	
Article 15  

	
This Agreement shall be executed in eleven originals.

	
Article 16  

	
Declaration

 

	
1)   

	
Party A clearly understands the business scope and the authorization of Party B.

 

	
2)   

	
Party A has fully read the entire Agreement. Party B has made explanations of provisions under this Agreement as required by Party A. Party A understands all the meanings and legal consequences of contractual terms hereunder and agrees to execute this Agreement.

 

	
3)   

	
Party A has obtained the execution to sign this Agreement.

 

  

15

  

 

	
PartyA(Seal):

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

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

 

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

 

	
1  

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

 

Legal Representative or Authorized Representative (SIGNATURE): DONG, Jingliang

 

	
2  

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

 

Legal Representative or Authorized Representative (SIGNATURE): QI, Hua

 

	
3  

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

 

Legal Representative or Authorized Representative (SIGNATURE): LIU, Guowang

 

	
4  

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

 

Legal Representative or Authorized Representative (SIGNATURE): TANG, Zhenling

 

	
5  

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

 

Legal Representative or Authorized Representative (SIGNATURE): CHEN, Shuguo

 

	
6  

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

 

Legal Representative or Authorized Representative (SIGNATURE): YAN, Xiaoshu

	
7  

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

 

Legal Representative or Authorized Representative (SIGNATURE): WEI, Baozhang 

 

	
8  

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

 

Legal Representative or Authorized Representative (SIGNATURE): LIU, Lei 

 

	
9  

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

 

Legal Representative or Authorized Representative (SIGNATURE): FAN, Changrong

 

  

16

  

 

	
10  

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

 

Legal Representative or Authorized Representative (SIGNATURE): REN, Lijun

	
11  

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

 

Legal Representative or Authorized Representative (SIGNATURE): HAO, Jianxia

Signing Date: August 30, 2012

 

  

17

  

 

Financing Service Charges Agreement

Party A: Xingtai Zhongding Kirin Real Estate Development Co., Ltd.

Legal representative/person in charge: HU, Longlin

Attention to: SHI, Lixia

Tel/Fax: 18631916622

Address: South east of intersection of Yongjun Street and Gang Tie Bei Rd., Qiaoxi District, Xingtai City, 054000

 

Party B: Xingtai Chengjiao Rural Credit Cooperative Union

Legal representative/person in charge: DONG, Jingliang

Tel: 2260001

Address: #406, Guo Shou Jing Bei Rd., Qiaoxi District, 054000

Based on the principle of quality, honesty, reciprocity and long-term cooperation and after friendly negotiation, the parities hereto have reached the following agreement (the “Agreement”) on financing service and relevant charges:

Article 1.  Party B shall provide financing arrangement services, including financing consulting, and terms structuring, which will be completed before ______, 2012 to Party A;

Article 2.  The Agreement is a supplement of and has equal legal effect as the Loan Agreement (code: _________) entered into by and between the parties hereto. The obligations and rights of the parties with respect to the loan are subject to the Loan Agreement;

Article 3.  As consideration of the services as abovementioned that Party B provides to Party A, Party A agrees to pay financing service fee of RMB 12,159,062.50, which will be deducted from the settlement account by Party B in installments as follows:

 

Party A shall deposit sufficient funds in the following designated account and authorize Party B to deduct the funds in three times (RMB 6,000,000 each in the first two times and RMB 159,062.50 on the maturity date of the loan.

Name of the settlement account: Xingtai Zhongding Kirin Real Estate Development Co., Ltd.

Account number: 071020122000083317

Opening bank: Xingtai Chengjiao Rural Credit Cooperative Union

It shall be deemed as occurrence of default of the Loan Agreement (code: __________) by Party A If Party A fails to pay the financing service fees provided in the Agreement and Party B may request Party A to undertake the liabilities of default of the Loan Agreement. In such event, Party B has right to terminate the follow-up financing service to Party A and request Party A to compensate Party B for the service that Party B has provided at the amount that equals to 1% of the Loan and collect the Loan in advance.

Article 4.  The dispute arising from the performance of this Agreement shall be solved through negotiation by the parties. The governing law and dispute settlement of this Agreement are subject to the provisions of the Loan Agreement (code: __________) executed by the parties.

 

  

18

  

Article 5.  The provisions that are not involved in the disputes shall continue to be performed in the litigation or arbitration period.

Article 6.  This Agreement is executed in duplicate with the equal effect and each party shall hold one.

Articles 7.  The Agreement shall be effective upon signing by the legal representatives or authorized representative and stamping by the parities.

Party A (seal) : Xingtai Zhongding Kirin Real Estate Development Co., Ltd.

HU, Longlin (Stamp)

Authorized representative: SHI, Lixia (signature and stamp)

Execution Date:

Party B (stamp) :  Xingtai Chengjiao Rural Credit Cooperative Union

Authorized representative:

Execution Date:

 

 

19f10q0912ex10ii_kirininter.htm

Exhibit 10.2

 

NO. 04060003-2012(Yeban)Zi 0026

Real Property Loan Agreement

(2012 Version)

Note: This loan agreement (this “Agreement”) is entered into by and between the lender and the borrower (as defined below) based on equity and voluntariness pursuant to relative laws and regulations. All the provisions hereunder are the true expressions of the Parties’ (as defined below) intentions. To protect the legal rights and benefits of the Borrower, Lender hereby suggests that the Borrower could fully understand all terms concerning rights and obligations of the Parties, especially the part written in boldface.

 

  

  

  

 

Lender: Xingtai Yejing Branch of Industrial and Commercial Bank of China (the “Lender”)

Responsible Person: QI, Ruixia    Contact Person: DONG, Ying

Residence (Address): Yejing South Road No. 128, Xingtai City

Postcode: 054000

Tel: 2209100

Fax: 2209092

Email:

Borrower: Hebei Zhongding Real Estate Development Co., Ltd. (the “Borrower”)

Legal Representative: Guo, Jianfei    Contact Person: SHI, Lixia

Residence (Address): South-eastern Corner of Gangtiebei Road and Yongjun Street, Xingtai City

Postcode: 054000

Tel: 5908806

Fax:

Email:

[Collectively, the Parties]

Part I Basic Agreements

Article 1 the Type of the Loan

 

The Loan in this Agreement shall be categorized as (1)

 

	(1) residential real estate development loan 	

(2) commercial real estate development loan

	 	 
	(3) land reserve loan	(4) urban shanty towns transformation loan
	 	 
	

(5) other loans:____________

	 

 

Article 2 Use of the Loan

 

The Loan hereunder shall be solely used for the construction purpose of the No.79 Courtyard Project (the “Project”). Without the written consent of the Lender, Borrower shall not be utilized for any other purposes. Lender has right to supervise the use of the Loan.

 

  

2

  

 

(1) Name of the Project: the first phase of No.79 Courtyard

 

(2) Address of the Project: No.74 Bayi Street, West Bridge Strict, Xingtai

 

(3) Approval of the Project:

  

  State-owned land use right No.: Xing Shi Guo Yong (2010) No.687

  Construction Land Planning Permits No.: Di Zi No. 130501201101002

  Construction Work Planning Permits No.: Jian Zi No. 130501201101057

  Construction Work Commencement Permits No.: 130501S110700001

Article 3 Amount and Term of the Loan

 

	
3.1  

	
The amount of the Loan is RMB 188,000,000(the “Loan”);

 

	
3.2  

	
The term of this Agreement is 36 months (the “Term”), which will start from actual withdrawal date, as set forth in the Loan Receipt (The first withdrawal date shall be deemed to be the actual withdrawal date if the Loan is withdrawn in installment.)

Article 4 Interest Rate and Interest

 

	
4.1  

	
The interest rate of the Loan shall be applied to the method of (2):

 

(1) Fixed interest rate: the annual interest rate shall be__% and not changed in the Term;

 

(2) Floating interest rate: the float interest rate shall be calculated on the benchmark rate plus a floating rate. The benchmark rate is the benchmark lending rate determined by the People’s Bank of China on the actual withdrawal date of the Loan as described in Article 3.2, and the floating rate is +30%. The floating rate will maintain the same throughout the term of this Agreement.  Upon the first withdrawal of the Loan, the interest rate shall be subject to adjustment every 12 months.  From the second interest rate, the rate shall be determined by the benchmark rate, on the first day after 12 months from the last withdrawal, plus a floating rate.  If there is no benchmark rate on the first day after 12 months from the last withdrawal, the benchmark rate on the last day of on the last withdrawal period shall be used.  If during the 12 months, the Borrower withdraws the loan more than once, during this 12 months period, the interest rate for each withdrawal shall remain the same as set forth by the above.

 

	
4.2  

	
The interest will be calculated from the date of actual withdrawal of the Loan on a monthly basis. Upon the expiration of the Term, the Borrower shall pay off the principals with interests.  Daily interest rate equals to annual interest divided by 360.

 

  

3

  

 

	
4.3  

	
Late payment of interest equals to 30% in additional to the borrowing rate set forth above.  The penalty rate for misuse of the Loan for unauthorized purposes equals to 50% in additional to the borrowing rate set forth above.

 

	
4.4  

	
Except for the interest, the Borrower shall pay commitment fee to the Lender. The amount of commitment fee is equal to 0.5‰/year on the basis of the difference between the amount of the Loan under Article 3 and the part of the Loan that the Borrower has withdrawn, and the commitment fee shall be paid at one time to the Lender as of the expiration date of Billing Cycle.

 

The Billing Cycle means the period between the execution date of this Agreement and the date of last installment of the Loan as required in Article 6 hereunder. In the event that the commitment fee is paid in installment, if the Borrower fails to pay the commitment fee on time, the Lender has the right to stop issuing the Loan, or has the right to cancel the part of or the entire amount which has not been withdrawn by the Borrower.

Article 5 Special Account for Fund Supervision

 

Borrower shall open a general deposit account for special use of project fund supervision in Lender’s bank (“Special Account”), the account number is: 0406000319300173335.

Article 6 Withdrawal

 

Borrower shall withdraw the Loan subject to its actual demand of proceeds, among which the first installment is required to be withdrawn prior to December 31, 2012 and the last installment is required to be withdrawn prior to July 25, 2013. Otherwise, the Lender has right to terminate all or part of the Loan.

Article 7 Repayment

 

	
7.1  

	
Borrower shall repay the Loan to the Lender according to __(2)___:

 

(1) make the repayment in full amount when the Loan is due;

 

  

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(2) make the repayment pursuant to agreed percentage of the Loan, details of which are as follows:

 

In the event that the sales rate achieves 50%, the loan to be repaid shall not be less than 50% of the full amount of the Loan;

Before the sales rate achieves 80%, all the amount of the Loan and interest shall be repaid.

 

	
7.2  

	
In the event that the Borrower make the repayment in advance, Borrower shall pay the compensation to the Lender calculated with 1% multiplied the amount paid in advance, except as otherwise herein provided.

 

	
7.3  

	
The Loan under this Agreement is used for development of houses which are for sale or for commerce, the Borrower shall repay the Loan in time subject to the project selling progress, and the Loan shall be repaid at the beginning when the project selling progress achieves 20%, and the Loan shall be repaid no less than 50% of the full amount when the sales rate (the proportion of  the sold area in total available area) achieves 50%, and before the sales rate achieves 80% (for the sales rate of commercial house development shall achieves 70%), all the amount of the Loan and interest shall be repaid (except otherwise agreed by the Lender).

Article 8 Securities

 

There is a separate security agreement entered into by the Parties for this Agreement and if the security is the maximum security, the maximum security agreement shall be executed as follows:

 

Name of the maximum security agreement: Maximum Security Agreement

[No.: 04060003-2012 Nian Ye Ban (Di) Zi No.0038]

Mortgagor: Hebei Zhongding Real Estate Development Co., Ltd.

Article 9 Dispute Settlement

 

Any dispute arising from this Agreement shall be settled through__(2)___:

 

	
(1)    

	
the dispute shall be submitted to________, which will be arbitrated pursuant to the effective arbitration rules of such Committee. The arbitration place shall be_______. The award of such arbitration shall be final and binding for the Parties;

 

	
(2)    

	
the dispute shall be filed to the People’s Court where the Lender is located.

Article 10 Miscellaneous

 

	
10.1  

	
This Agreement shall be in four (4) copies. The Lender, the Borrower and the mortgage register department shall hold one copy respectively with the same legal effect.

 

  

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10.2  

	
The following Exhibits and other Exhibits as agreed by the Parties mutually shall be the integral parts of the Agreement and have the same legal effect with this Agreement:

 

Exhibit 1: Withdrawal Notice (standard form)

Exhibit 2: Entrusted Payment Agreement

Article 11 Other Matters agreed by the Parties

 

	
11.1  

	
The Borrower secures the legal, adequate and effective mortgage.

 

	
11.2  

	
(1) The development fund, down payment, pre-sale payment and other self-raised funds shall be supervised by the Lender in the project special account; (2) the project that under construction which meets the mortgage conditions shall be added for mortgage in time ; (3) no dividend shall be distributed before the Loan is paid off; the project funds shall be forbidden to be appropriated and spirited; in the event that the Borrower may have difficulties in repaying the Loan, the Borrower shall secure other financings for the repayment purpose on a timely basis; the Borrower shall guarantee that the Project shall be completed on time, and in the event that the Project cost exceed the budget, the Borrower shall raise necessary funds; (4) without the consent of the Lender, the Borrower shall not increase the finance, provide mortgage or make external investment; (5) relevant insurance of the Borrower under this Project and Loan shall be handled by the Lender, and the Lender shall be confirmed to be the first beneficiary in the formalities of insurance; (6) in the event that the sales rate achieves 50%, the loan to be repaid shall not be less than 50% of the full amount of the Loan, and before the sales rate achieves 80%, all the amount of the Loan and interest shall be repaid; (7) the Lender shall be the exclusive mortgage bank for the residential mortgage.

 

	
11.3  

	
The Shareholder’s Meeting of the Borrower and their spouse make commitment as follows: they provide joint and several liability assurance by all of their personal properties for this project Loan.

 

	
11.4  

	
The project funds shall be fully prepared and invested in the Project prior to the withdrawal of the Loan.

 

	
11.5  

	
The Borrower opens project fund special account in the bank of the Lender, and comes into agreements with the Lender, including Account Supervision Agreement, Entrusted Payment Agreement and Fund Deposit Agreement.

 

	
11.6  

	
The land use right certificate of project land records that the land use right is owned jointly by the Borrower and Huada Company, and Huada Company issues certificate in accordance with its articles of association for the mortgaged land use right approving the mortgage.

  

6

  

 

Section II Specific Terms and Conditions

Article 1 Interest Rate and Interest

 

	
1.1  

	
In case the Loan under this Agreement adopts float interest rate, the adjustment rules concerning the interest rate shall be carried out according the original method as agreed in this Agreement if the Loan is overdue.

 

	
1.2  

	
If the interest is settled on a monthly basis, the settlement date shall be the 20th day of each month; If the interest is settled on a quarterly basis, the settlement date shall be the 20th day of the last month of each quarter; If the interest is settled on a semi-annual basis, the settlement dates shall be June 20 and December 20 of each year.

 

	
1.3  

	
The first interest period is from the first date of actual withdrawal of the Loan to the first interest settlement date; the last interest period is from the next day of the termination date of the previous interest period to final repayment date; other interest period is from the next day of the termination date of the previous interest period to the following interest settlement date.

 

	
1.4  

	
In the event that the People’s Bank of China revise the calculation method of the interest rate, such rate shall be implemented per the revised calculation method and the Lender shall not otherwise inform of the Borrower concerning the revision.

 

	
1.5  

	
The borrowing rate determined as of the date of this Agreement is lower a certain rate than the benchmark loan rate of the People’s Bank of China, and the Lender has the right to assess the preferential interest rate every year, and on the basis of the change of national policy, the Borrower’s credit condition and guarantee for loan, to determine to cancel part of or the entire preferential treatment and inform the Borrower in a timely manner.

Article 2 Release and Repayment of the Loan

 

	
2.1  

	
Borrower shall satisfy the requirements of withdrawal as agreed in this Agreement in order to withdraw the Loan. Otherwise the Lender shall not be obligated to release any installment of the Loan, except as agreed by the Lender.

 

	
2.2  

	
The requirement of the first withdrawal:

 

(1) the Project has been approved, authorized by the relevant competent departments or recorded in such competent departments;

 

  

7

  

 

(2) the Project funds and other required funds has been prepared in full amount subject to agreed time and proportion and been used in the Project construction prior to the release of the Loan;

 

(3) the Borrower has obtained the real estate development certificates as required by the development of the Project;

 

(4) the Borrower has obtained the State-owned Land Use Right Certificate, Construction Land Planning Permit, Construction Work Planning Permit and Construction Work Commencement Permit for the Project;

 

(5) the Borrower has provided corresponding securities as requested by the Lender and fulfilled relative securities procedures;

 

(6) the Borrower has submitted the Withdrawal Notice to the Lender pursuant to the provisions of the Agreement.

 

	
2.3  

	
Prior to each withdrawal, the following conditions shall be satisfied besides the satisfaction of the requirements of the first withdrawal:

 

(1) the cost overrun has not occurred or such has been handled through financing by the Borrower;

 

(2) the Borrower has achieved the progress per the Project schedule, and the actual progress meets the arrangement of the invested funds;

 

(3) the Project has been supervised according to related stipulation;

 

(4) the Borrower has provided Written Schedule of the Loan Use and valid proof( including, but not limited to proof of the supervision company, payment notices of construction and supporting funds, construction contracts, purchase agreements, purchase invoice, payment documents, etc.). The proof materials of the Loan use meet the agreed requirements of the Loan;

 

(5) no breaching circumstance occurs under this Agreement and other agreements executed by and between the Lender and the Borrower.

 

	
2.4  

	
The written documents provided by the Borrower to the Lender as of the withdrawal shall be original copies. Once the original once cannot be provided, the photocopies stamped by the Borrower can be furnished with the consent of the Lender.

 

	
2.5  

	
The Borrower shall file the Withdrawal Notice to the Lender at least 5 bank working days in advance. In case such Notice is filed, the Notice shall not be revoked without the written consent of the Lender.

 

  

8

  

 

	
2.6  

	
After the aforesaid requirements and conditions of the Loan withdrawal are satisfied or the Loan is released in advance per the consent of the Lender, the Lender shall remit the Loan to the designated bank account of the Borrower, which shall be deemed that the Lender has released the Loan according to the provisions of this Agreement.

 

	
2.7  

	
In accordance with the relative supervising stipulations and the management requirements of the Lender, the Loan exceeding certain amount or satisfy certain conditions shall be employed the entrusted payment method, namely that the Lender shall transfer the Loan to designated parties, which shall meet the use of the Loan, per the withdrawal application and payment entrustment by the Borrower. For such purposes, the Borrower shall execute the Entrusted Payment Agreement as the Exhibit of this Agreement with the Lender, and open or designate a special account to make such payment.

Article 3 Repayment

 

	
3.1  

	
The Borrower shall repay the due principles, interests and other payables in full amount on time as set forth in this Agreement. On the previous bank working date per each repayment date and interest settlement date, the Borrower shall deposit sufficient funds in the repayment account opened in the Lender to pay off the due principles, interests and other payables.  The Lender shall have right to collect the total due amount on the repayment date or the interest settlement date or require the Borrower to cooperate to handle related collection procedures. In the event that the balance in the above account is not sufficient to cover the total due amount, the Lender shall have right to decide the liquidation sequence.

 

	
3.2  

	
In the event that the Borrower repay the loan in advance, the Borrower shall submit the written application 10 bank working days in advance to obtain the consent from the Lender, and the Borrower shall make the compensation to the Lender according to the provisions of this Agreement.

 

	
3.3  

	
The Borrower shall pay off all due principles, interests and other payables on the date of repayment in advance if agreed to repay the loan by the Lender.

 

	
3.4  

	
The interest rate shall not change under this Agreement in the event of repayment in advance resulting in the shortening of the actual Term.

 

	
3.5  

	
The Loan is used for urban shantytowns transformation, and the Borrower shall repay the principles and interests at least twice a year.

 

  

9

  

 

Article 4 Guarantees and Collaterals

 

	
4.1  

	
The Borrower shall provide legal collaterals approved by the Lender. A separate collateral agreement shall be signed.

 

	
4.2  

	
If the collaterals are damaged, depreciated, involved with property rights disputes, sealed up or distrained, or the mortgagor deals with the collaterals without authorization, or the guarantor has adverse changes in financial position or any other changes that make the Lender at disadvantage position, the Borrower should notify the Lender in a timely manner, and provide other collateral for approval.

Article 5 Management of the Account

 

	
5.1  

	
The fund supervised by the Special Account including:

 

	
(1)    

	
Project capital fund which is fully funded but not invested into the construction of the Loan Project.

 

	
(2)    

	
The rental income and self-supporting income from the Loan Project.

 

	
(3)    

	
Personal mortgage loan, initial payment and other sale fund that from the Loan Project.

 

	
(4)    

	
Other self-raised fund that used for the construction of the Loan Project.

 

	
5.2  

	
The Borrower shall put the non-cash payments received as the sales income in the Special Account.

 

	
5.3  

	
The Lender shall have right to supervise the Special Account, including, but not limited to, supervise each income and expense and the Borrower shall provide full assistance and coordination with such supervision.

 

	
5.4  

	
The Lender shall have right to deduct the due principles, interests and other payables directly from the Special Account upon the receipt of the incomes from sales, transfer or leasing of the Project.

 

	
5.5  

	
The Borrower shall fill out the Special Account Fund Use Application to withdraw the fund in Special Account, and if the withdrawn fund is used for construction of the Project, the fund use plan and project construction schedule shall be submitted as required by the Lender to explain the use and reason of the withdrawal.

 

  

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Article 6 Representations and Warranties

 

The Borrower makes the representations and warranties as follows, which will remain valid during the Term of this Agreement:

 

	
6.1  

	
the Project and the Loan meets the requirements of laws and regulations;

 

	
6.2  

	
Qualified to be a borrower, to sign and perform this Agreement;

 

	
6.3  

	
Authorized or approved to sign this Agreement. Signing and performance of this Agreement will not violate the Articles of Association of the company and relevant laws and regulations, and will not conflict with its obligations under any other agreements;

 

	
6.4  

	
Any of other outstanding due has been paid off in a timely manner. No malicious payment of principles and interest in arrears is recorded;

 

	
6.5  

	
Has sound organization and financial management system. No material non-compliance action regarding the business or operation was taken within one year. There is no material bad record of current management of the company;

 

	
6.6  

	
All the documents and information provided to the Lender are true, accurate, complete and valid. There is no false record, material omission or misrepresentation;

 

	
6.7  

	
The financial accounting reports provided to the Lender are drawn up in accordance with China Accounting Standards, and has truly, fairly, completely reflected the Borrower’s operations and indebtedness. Borrower’s financial condition did not change in any significant adverse since the deadline of the latest financial report;

 

	
6.8  

	
Has not concealed any lawsuit, arbitration or claim event;

 

	
6.9  

	
Has obtained approvals from relevant government authorities concerning the Project, and has obtained related approvals and construction permits;

 

	
6.10  

	
The Loan Project has been approved by competent environmental authority and meets the national environmental policy.

Article 7 Borrower’s Commitment

 

	
7.1  

	
The Borrower shall withdraw and use the Loan according to the time limit and use hereunder. The Loan shall not be used in securities market, future market, or for any other use restricted or prohibited by relevant laws and regulations.

 

  

11

  

 

	
7.2  

	
The Borrower shall repay the Loan, interest and other expenses according to the provisions hereunder.

 

	
7.3  

	
The Borrower shall accept and actively cooperate with the Lender for the inspection and supervision of the Loan by account analysis, receipt examination, on-site investigation and any other methods, and periodically report the use of loan funds in summary in accordance with the requirements of the Lender.

 

	
7.4  

	
Accept the examination of credits conducted by the Lender and provide the Lender the required financial statements including the Balance Sheet, Income Statement and any other materials which reflect the Borrower’s solvency; Actively assist and cooperate with the Lender for the investigation, understanding and Supervision of the Borrower’s production, operation and financial conditions.

 

	
7.5  

	
The Borrower shall actively assist and cooperate with the Lender in connection with the inspection of the project and security status, and the Borrower agrees that the Lender can review pre-sale contracts, invoices, receipts, lists of sale, financial statements, bank statements and relevant materials.

 

	
7.6  

	
In the event that the loan hereunder is land reserve loan, the Borrower shall provide financial statements, the status of the purchase and reservation of land, the progress of the project, the transfer of land and other relevant materials as per the Lender’s request.

 

	
7.7  

	
In the event that the loan hereunder is land reserve loan, the land revenue shall be prior to repay the loan hereunder.

 

	
7.8  

	
In the event that the loan hereunder is shanty town reconstruction loan, the Borrower shall provide the demolition progress, the usage of loan, the financial statements of the Borrower and other relevant materials as per the Lender’s request, and the Borrower shall conduct relevant procedures for the land use right certificate, and the Borrower shall compete the guarantee procedures for the land use right in a timely manner as per the Lender’s request. Without the Lender’s consent, the Borrower shall not transfer the project under this loan or create any other security on this project.

 

	
7.9  

	
No dividends before full repayment of the Loan.

 

	
7.10  

	
The Borrower shall obtain the Lender’s prior written consent or make arrangements to the Lender’s satisfaction concerning the repayment of the loan before the Borrower’s merge and separation, decrease of registered capital, change of share structure, transfer of material assets or creditor’s right, material external investment, substantial increase of debt financing, and any other actions that will adversely impact the Lender’s interest.

 

  

12

  

 

	
7.11  

	
Informs the Lender with the participation of related matters concerning the loan project, including review of the Estimates, Budgets and Accounts, project bidding, project completion and acceptance, etc, and provides final report of the project to the Lender after the completion of the project.

 

	
7.12  

	
In the event any of the following circumstances is occurred, the Borrower shall notify the Lender in a timely manner:

 

(1) change of the article of association, business scope, registered capital, legal representative.

 

(2) recession, dismissal, liquidation, suspension, license being cancelled, being canceled, or bankruptcy.

 

(3) has been(or will) involved in material economic dispute, lawsuit, arbitration or assets sealed, detained or supervised by relevant departments according to the law.

 

(4) Current shareholder, director or management of the Borrower has involved in material lawsuit or economical dispute.

 

(5) other material changes in connection with the operations or matters.

 

	
7.13  

	
The Borrower shall disclose complete and accurate affiliates relationship and related party transaction in a timely manner to the Lender.

 

	
7.14  

	
The Borrower shall accept the Lender’s notice sent by mail or other ways in a timely manner.

 

	
7.15  

	
The Borrower shall not dispose its assets by way of worsening its capability to repay the loan. The Borrower shall not provide guarantee by the assets which are formed by the loan hereunder to any third party without the Lender’s consent.

 

	
7.16  

	
The Borrower shall bear all the expenses for signing and performance of this Agreement, and expenses for the Lender to collect the loan and interest hereunder, including but not limited to expenses of lawyer, appraisal, auction, etc.

 

	
7.17  

	
The repayment of the loan is prior to the Borrower’s debt to its shareholder, and at least at the same sequence with the Borrower’s other debt to other creditors.

 

	
7.18  

	
Enhances the management of environment and social rick, and agrees to accept the inspection of the Lender regarding this issue. The Borrower should provide reports of environment and social risks if required by the Lender.

 

  

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Article 8 Lender’s Commitment

 

	
8.1  

	
The Lender shall release the Loan to the Borrower according to this Agreement.

 

	
8.2  

	
The Lender shall keep the Borrower’s non-public materials and information confidential, unless as required by laws or regulations or otherwise provisions hereunder.

Article 9 Breach of Agreement

 

	
9.1  

	
In the event that any following circumstance occurs, the Borrower constitutes a breach of contract:

 

(1) the Borrower fails to repay the Loan and interest or other outstanding hereunder, or perform the other obligations, or comply with the representations, warrants or commitment hereunder;

 

(2) in the event that the guarantee hereunder has change which is not in favor of the Lender, but the Borrower fails to provide supplementary guarantee as approved by the Lender;

 

(3) the Borrower fails to repay any other debt due(including due announced in advance), or perform or comply with other obligations under other agreements, which has impacted or will impact the Borrower’s performance hereunder;

 

(4) any of the Borrower’s profitability, ability to repay the debt, operation ability, cash flow is lower than the agreed standard, or worsening, which has impacted or will impact the Borrower’s performance hereunder;

 

(5) any of the Borrower’s shareholding structure, operation, external investment has changed materially and adversely, which has impacted or will impact the Borrower’s performance hereunder;

 

(6) the Borrower or any of the Borrower’s has been involved or will involve in material economical dispute, litigation, arbitration, assets sealed-up, detained or enforced, investigation or punishment by judiciary or government, or disclosure of the Borrower’s breach of laws or regulations by media, which has impacted or will impact the Borrower’s performance hereunder;

 

(7) abnormal changes, missing, investigation or restriction of personal freedom by judicial organs according to the law of the Borrower’s main investors, key management personnel, which has impacted or will impact the Borrower’s performance hereunder;

 

(8) the Borrower gets the loan with related party by fake contract, takes the money or credit of the Lender by using transaction without actual trade, or avoids to repay the loan through related transaction intentionally;

 

  

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(9) the Borrower has (or will) wound up, dismissed, liquidated, business suspension, been cancelled the business license, bankrupted;

 

(10) the Borrower has caused liability accident by violating any of the relevant laws and regulations, regulatory requirements, or industry standards on production safety, environmental protection, which has impacted or will impact the Borrower’s performance hereunder;

 

(11) the Borrower fails to get project capital in place as planned or in proportion, or fails to make up a deficiency within the specified time required by the Lender.

 

(12) the project construction does not complete on schedule, or the project construction and the operation environment or conditions have material adverse changes.

 

(13) the Borrower provides false materials, use the loan not in compliance with this Agreement or transfer from the designated account.

 

(14) the Borrower violates relevant regulations including but not limited to land reserve, speculation of land, selling at main chance, hoarding the supply of houses, arrears of land transfer fee.

 

(15) the completion rate of the project or the progress of the project does not match with the use of the loan, which might be suspected of misuse of loan.

 

(16) the Borrower intentionally conceals the sales progress of project or funds of other project, or does not put the money into designated account for management as provided in this Agreement.

 

(17) lack of sufficient funds for the projects, and cannot find any financial source.

 

(18) the Borrower participates in mortgage fraud to defraud loan from bank.

 

(19) the Borrower circumvents the consignment by using the method of “breaking up the whole number into parts”, which breaches this agreement.

 

(20) other events that may cause the negative effects on the Lender’s rights under this Agreement.

 

	
9.2  

	
In the event the Borrower has breached the contract, the Lender has right to take one or more of the following actions:

 

(1) requiring the Borrower to correct its performance hereunder;

 

(2) stopping to release the loan or any other amount under this Agreement or other agreements between the Lender and the Borrower, partially or entirely cancel the Loan balance not withdrawn by the Borrower and other related amounts.

 

  

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(3) declaring that the undue outstanding loan or any other amount under other agreements is due, and immediately withdraw the outstanding amounts.

 

(4) requiring the Borrower to compensate the Lender’s damages and losses due to its breach;

 

(5) any other actions provided by this Agreement, laws or regulations or deemed as necessary by the Lender.

 

	
9.3  

	
In the event that the Borrower has not fully repay the loan due(including the declared immediate due), the Borrower shall pay a penalty according the provision hereunder to the Lender from the overdue date on. In the event that the Borrower has not fully pay the interest due, the Borrower shall pay a penalty with compound interest rate.

 

	
9.4  

	
In the event that the Borrower has used the loan for purpose other than that provided hereunder, the Borrower shall pay a penalty interest with penalty interest rate from the date when the Borrower used the loan for purpose other as provided hereunder. If the Borrower has not fully pay the interest during the period when the Borrower used the loan for purpose other as provided hereunder, the Borrower shall pay a penalty with compound interest rate.

 

	
9.5  

	
If the Borrower has breached the provisions in Article 9.3 and Article 9.4, the penalty interest rate shall be the higher one, but not the combined.

 

	
9.6  

	
In the event that the Borrower has not fully repay the loan due, pay the interest due, pay the penalty and compound interest, or any other outstanding, the Lender shall have right to disclose it to the media.

 

	
9.7  

	
In the event that the Borrower and its affiliates have changed their controlling relationship, or the Borrower’s affiliates have involved in any circumstances provided in Article 9.1 (except for item 1 and 2), which has impacted or will impact the Borrower’s performance hereunder, the Lender shall have right to take any action provided hereunder.

Article 10 Collection

 

	
10.1  

	
In the event that the Borrower has not fully repaid the loan due(including the declared immediate due), the Lender shall have right to collect the same amount from all Borrower’s domestic or foreign currency bank accounts in Lender or any other branches in ICBC until the entire loan due has been paid off.

 

  

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10.2  

	
If the currency of the collected money is different from the currency of the loan hereunder, the exchange rate shall be applied to the exchange rate circulated by the Lender. The interest, other expenses and exchange rate difference incurred from the date of collection to settlement date (the day when the Lender exchanges the collected amounts into the currency hereunder in accordance with the foreign exchange management policy) shall be borne by the Borrower.

 

	
10.3  

	
If the money collected by the Lender is not enough to pay off the loan due, the Lender shall have right to determine the repayment sequence.

Article 11 Transfer of Right and Obligation

 

	
11.1  

	
The Lender shall have right to transfer all its rights and obligations to any third party without consent of the Borrower. The Borrower shall not transfer any of its rights or obligations to any third party without the Lender’s written consent.

 

	
11.2  

	
The Borrower agrees that the Lender or ICBC may authorize or entrust other branch to perform the rights and obligations hereunder, or manage the loan hereunder, as the operation and management needed. The authorized branch shall have rights to perform this Agreement and file law suit, arbitration or enforcement in the name of itself for any dispute hereunder.

Article 12 Validity, Modification and Termination

 

	
12.1  

	
This Agreement shall take effect upon execution, and shall be terminated until the Borrower has completed all obligations hereunder.

 

	
12.2  

	
Any change of this Agreement shall be made in written based on mutual consultation. Any change will be part of this Agreement with the same validity. The provisions other than the change shall continue be effective, and the original provisions before the change takes effect shall be effective.

 

	
12.3  

	
The change or termination of this Agreement shall not impact the Parties’ rights to claim for damages and losses hereunder. The termination of this Agreement shall not impact the validity of the provisions on dispute settlement.

Article 13 Governing Law and Dispute Settlement

 

This Agreement shall be governed and construed by laws of PRC. Any dispute hereunder shall be settled by consultation. If the consultation fails, the dispute shall be settled according to the provisions hereunder.

 

  

17

  

 

Article 14 Entire Agreement

 

Part I and Part II of this Agreement shall constitute the entire agreement, and the terminology therein shall have the same meaning. The Borrower shall be borne by the entire agreement.

Article 15 Notice

 

	
15.1  

	
Any notice hereunder shall be sent in written. The Parties’ address hereunder shall be the mail and contact address for the notice, if there is no other provision. If any Party’s address has been changed, the Party shall notice the other Party in written.

 

	
15.2  

	
In the event that any Party refuses to accept the mail of the notice or the notice cannot be delivered for any other reason, the other Party shall have right to notice the Party through notarization or public announcement.

Article 16 Miscellaneous

 

	
16.1  

	
The Lender’s non-performance of any rights hereunder shall not be deemed as waive or change of the rights, or impact its future performance of the said rights.

 

	
16.2  

	
If any of provisions hereunder is deemed as invalid or unenforceable, validity of the other provisions or the entire agreement shall not be impacted.

 

	
16.3  

	
The Lender shall have right to provide the Borrower’s information to credit information system of Central Bank of China as required by laws or rules of financial regulators, which will be inquired and used by qualified institutions and individuals. The Lender shall have right to inquire the Borrower’s information from the credit information system on purpose of this Agreement.

 

	
16.4  

	
The definition of “affiliates”, “affiliates relationship”, “related transaction”, “main individual investor”, “key management” are the same with that in “Accounting Standards 36 – Related Party Disclosure” (Cai Kuai [2006] No.3) and amendments, circulated by the Ministry of Finance.

 

	
16.5  

	
Environmental and social risks under this Agreement shall mean the potential risks to the environment and society, which arising from the construction, production and operation by the borrower and/or its material affiliates. These risks including environmental and social issues related to energy dissipation, pollution, land, health, safety, relocation of residents, protection of ecosystem, climatic variation, etc.

 

  

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16.6  

	
Any receipts and documents under this Agreement produced according to the Lender’s operation rules shall constitute the proof of the debtor-creditor relationship between the Lender and the Borrower, which bind the Borrower.

 

	
16.7  

	
In this Agreement, (1) anywhere “this Agreement” is mentioned, any amendment shall be included; (2) the headlines hereunder are just for reference, not explanations of the provisions, which shall not restrict the content and scope of the provisions thereunder; (3) if the Withdrawal Date and the Repayment Date fail to the non-banking business day, the date shall be defer to the next banking business day.

 

The Parties hereby confirm: the Parties have full consultation for all provisions hereunder. The Lender has reminded the Borrower to pay full attention to and accurately understand all provisions regarding the Parties’ rights and obligations, and explained all relevant provision as required by the Borrower. The Borrower has fully read and understood all provisions (including the Part I “Basic Agreement” and Party II “Specific Terms and Conditions”). The Parties have unanimous understandings to the content of this Agreement.

 

The Lender (Stamp): Xingtai Yejin Branch of Industrial and Commercial Bank of China,

	 	 	 
	
By: 

	/s/ QI, RUIXIA	 
	 	QI, RUIXIA	 
	 	Authorized Signatory	 
	 	 	 

The Borrower (Stamp): Hebei Zhongding Real Estate Development Co., Ltd.

	 	 	 
	
By: 

	GUO, Jianfei	 
	 	Guo, Jianfei	 
	 	Authorized Signatory	 
	 	 

Signing Date: September 17, 2012

 

 

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