Document:

posama3ex10xlv_keyuan.htm

Exhibit 10.45

 

Import Hui Li Da Contract

No.:026, Beilun E5-01-01, 2011

Party A(applicant): Ningbo Keyuan Plastics Co., Ltd

Business license No.:330200400023187

Legal representative/person in charge: Chunfeng Tao

Address: Qingshi Industrial Zone, Ningbo Postcode: 315803

Financial institution account and account No.:

Tel: 86232932                        Fax:

Party B: Bank of China Inc, Beilun Branch

Legal representative/ person in charge: Xiaoping Ying

Address: No.245, Huashan Road, Beilun District  Postcode: 315800

Tel: 86880639                   Fax:

According to the regulations of the related law, both parties sign this contract under the negotiation.

This contract belongs to the single arrangement under the item of The Arrangement of Credit Line or The General Arrangement of Credit Business signed by both sides.

Article1 Preconditions of the import financing

Under the articles of import financing of this contract, it must meet the demands of the following conditions:

1, the contract has already been effective;

2, party A obligates and signs the related company documents, receipts, signatures, related person’s names and samples of signatures for party B, and also fulfills the related certificates;

3, party A opens the account needed by this contract;

4, party A arranges the needed approval process of the law and the administration of the business properly, and submits the transcripts of the approval documents and the copies of the original documents according to party B’s requirement;

 

  

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5, the arranged guarantee of this contract has already been set up;

6, party B considers other conditions that party B should provides.

Article 2, related contents of import business

√Letter of Credit

Letter of Credit No.:

Name of Bank Issuing Document:

No. of Issued Document:

Receipt amount:

Collection

Invoice No.: /           Entrusted bank’s name: /

Issuing documents No.: /  Receipt amount: /

Remittance

TT:/      Receiver:/

Amount:/

Article 3, Financing currency and amount

Financing currency: USD

Financing amount: (Spell-Out) Sixteen Million Forty-four Thousand Nine Hundred and

Forty-Five Point Ninety-nine.

(Numeric)USD 16,044,945.99

Article 4, Financing duration

The financing duration is twelve months/ / days, starting from the day that party B pays for the foreign payments.

Article 5, Interest rate and interest settlement (Notes: complete with factual information.)

1, Interest rate

(1) Annual interest rate of %: fixed interest rate

(2) √ LIBOR/HIBOR for latest 12 months + 370 base point before 1 working day of Financing day .

 

  

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2, Calculation of interest

Interest is calculated according to the actual payment amount and days since the date of Party B made payment.

Calculation formula: Interest=Principal*Days*Daily interest rate.

Basis for calculating daily interest rate is of 360 days, the reduction formula is: daily interest rate=annual interest rate/360.

3, Method of interest settlement

Interest settlement is according to the following _third_ way:

	
(1)  

	
Settlement with quarter, 20th of each last month per quarter as the interest settlement day, and the 21st as the payment day.

	
(2)  

	
Settlement with month, 20th of each month as the interest settlement day, and the 21st as the interest payment day.

	
(3)  

	
Same as expiration date of principal.

	
(4)  

	
Receive the interest in advance and settle when expiration date.

On the condition that the final payment day of the financing principal is not the same date of interest payment day, then the final payment day is considered as interest payment day and Party A shall pay off the entire interest.

4, Default interest

	
(1)  

	
If Party A fails to return the principal amount of financing within the agreed term, as for the overdue payment, the default interest shall begin accruing according to the default interest rate starting from the date of late payment until both the principal and interest are paid off.

	
(2)  

	
If Party A fails to pay the interest and default interest in time, it can be penalized with compound interest per month/per quarter according to agreed default interest in this contract.

	
(3)  

	
Default interest rate

  

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A. Default interest rate is a floating rate, the floating period is  / month/ /year. In every floating period, the default interest shall be re-priced on the default date. The re-pricing date is the corresponding date in the month of the default date. If there is no corresponding date in the same month, then the last date of the month is the re-pricing date.

 

B. Default interest rate equals to the benchmark interest rate in the item C below plus 20%.

C. In the first floating period, the benchmark interest rate is the financing interest rate item 1 of this Article. After each full floating period, the benchmark interest rate shall be calculated as below:

Re-pricing according to benchmark interest rate issued by the People’s Bank of China in the re-pricing day.

√Re-pricing according to LIBOR/HIBOR for latest 12 months + 370 base point before 1 working day of Financing day .

Article 6, Financing fees

Party A shall pay the related fees produced under the business of this contract to party B in time. The calculating and paying basis, standard and method of these fees shall be carried out according to the regulations of party B.

Party A pays the above fees through the __second__ method:

	
A.  

	
Party A pays Party B the expense of financing under the contract: _. Party A authorizes Party B to withdraw directly from Party A’s account: Account No. 361058330713.

	
B.  

	
Other methods:____________________/_______________.

Article 7, Guarantee

1, Margin Pledge

According to the related covenants in < General Agreement of Margin Pledge>_signed by both parties. Party A provides the Margin Pledge for the financial right of party B under this contract, and fulfills the responsibilities according to the arrangements of this contract and the above < General Agreement of Margin Pledge>.

2, the guaranteed claim scope

 

The guaranteed claim scope contains financing principal, interest (including legal interest, arranged interest, compound interest and default interest), liquidated damages, compensation money, fees to realize claim right (including but not limiting in fees of litigation, lawyer, notarization and performance), fees produced from party A’s fault and any other payable ones.

 

  

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3,Amounts and payment

	
(1)  

	
Margin: (currency)__RMB__; (Spell-Out)__RMB One Hundred and Five Million_; (Numeric) _¥105,000,000.00__

Pledge effectiveness bases on the interest produced from Margin, and the pledgee has the right to use the interest produced from Margin to pay for the principal claims.

	
(2)  

	
the pledgee pays the above margin through the following methods:

Since the __first __ banking day of signing this contract, deduct/deposit the Margin to the Margin account opened in party B (account No.:35036108091001);

To authorize party B to have the right to delimit Margin directly from party A’s RMB account (account No.: ______/____) opened in party B to party A’s insurance account (account No.:______/______)opened in party B.

The guaranteed responsibilities of Margin deposited under the business whose number is __ __ managed in party B’s side has been assured to discharge, and authorize party B to delimit Margin directly from account opened in party B.

(Other methods)__________/_______________.

4, Occurrence of the guaranteed responsibilities

If party B doesn’t pay the arranged amount during any normal repayment day or repayment day in advance to party B under this contract, party B has the right, according to the arrangement of this contract, to change the pledge into cash to enjoy the priority repayment.

The normal repayment day in above is the regulated day to repay the principal, pay the interest or pay any payments to party B according to the regulations of this contract. And the repayment day in advance in above is the day put forward by party A and agreed by party B, or the day when party B demands party A to withdraw the principal and interest of the financing amount or any other payments.

5, Realization of the pledge

After the guaranteed responsibilities happening, if agreed by party B to release Margin, party A agrees party B to use the released Margin (including the principal and the interest) to the delivery of the long-term sales business under the Application of the Long-term Sales whose number is RMBFWD managed by party B, and use the foreign amount of delivery to repay the principal and the interest of import financing under this contract.

 

  

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If the foreign amount obtained from the due delivery can’t repay the financing principal and interest, party A authorizes party B to actively delimit any amount in the settlement account opened in party B’ side to complement, and the antedated money in the account is regarded as the expire in advance. As for the situation that the currency account is different from the currency of price of party B’s business, then convert according to the settlement price applicable in deducting to party B.

Article 9, Party A’s statements and promise

1, Party A registers and exists according to the law, and possess the complete capacity of civil rights needed to fulfill this contract;

2, That sign and fulfill this contract depending on party A’s true thought indicates that obtain the legal and effective authority according to the requirements of the regulations and its inner management documents while not go against any treaty, contract and other law documents having restraint to party A; party A has gained or will gain all the related approvals, permits, files or registers needed to sign and fulfill this contract;

3, All the documents and certificates provided by party A to party B is true, complete, accuracy and effective under this contract;

4,The trading background described by party A to party B is true and legal, and does not have the illegal purpose such as money laundering. Party A provides any documents to party B according to party B’s requirements, which can’t be explained that party B has the obligations and responsibilities of inspection towards the authenticity and legality of party A’s trade;

5, Party A will not hide any truths that may influence both parties’ financial situation and contract-fulfill capacity.

Party A’s promise is as following:

1, Provide the instructions of goods sales situation related to the import items in time to party B.

2, If party A has already signed or will sign counter-guarantee agreement or other similar agreements about the guaranteed obligations with the guarantor of this contract, then this agreement will not damage any rights owned by party B under this contract;

3,If the goods sales of the import items occur to serious difficulties, or situations that may influence both parties’ financial conditions and capacity to fulfill this contract, including but not limiting in the change of any business pattern of dismantlement, merger, affiliation, joint venture with foreign merchants, cooperation, contractual operation, reorganization, reformation and listing program, reduction of registered capital, assignment of significant property or stock right, commitment of significant liabilities, or installation of new significant liabilities on the pledge, or involvement to significant litigation or arbitration cases, party A shall inform party B in time;

 

  

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4, As for the unarranged items in this contract, party A agrees to manage with party B according to the international conventions.

Article10, Disclosure of the related party and the related transactions of party .

Both parties are applicable to the __first _ item:

1, party A does not belong to the group guests of party B according to the Management Guidance of Credit Extension Business Risk of Commercial Bank Group (short for Guidance).

2, party A belongs to the group guests of party B according to Guidance. Party A shall report the situation of related trade whose pure assets is over 10 percentages to party B in time, including the related relationship, trading projects, trading properties, trading amount, relevant proportion and price policy among the trading aspects (including the trade with no capital but only proportion capital).

Article 10, Default events

Party A will be regarded as breaking this contract once one event of the following ones happens:

1, party A does not fulfill his obligations to pay and repay to the party B according to this contract;

2, the statements made in this contract by party A is untrue or go against the promise that have been made in this contract by party A.

3, party A stop the business or something serious happens;

 

4, party A goes against other arrangements related to the party’s obligations and rights;

5, party A breaks the arrangements under other contracts with party B, Bank of China or any other institutes.

When one item of the above situation happens, party B has the right to take action relatively or in the meantime according to the actual situation:

1, request party A to correct his nonperformance during the duration;

2, all terminate, partly terminate or just terminate the business application with party B in this contract or other contract: as for the not-issued loan and not-managed trade financing, all terminate, partly terminate or just terminate the management;

3, the unpaid loan/financing capital under this contract or other contract between party A and party B is declared to become due both or partly;

 

  

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4. stop this contract, and all terminate, partly terminate or stop other contracts between party A and party B;

5. demand party A to pay for the damages of party B because of party A’s fault;

6. it just need announcement before or after the situation happening, delimit the amount in the account in party B’s side opened by party A to pay off all or part debt to party B. The undue capital in this account will be regarded as the acceleration of maturity. As for the situation that the account currency is different from the business invoicing currency of party B, convert according to the price applicable to party B.

7. perform the right to guarantee the goods;

8, other arrangement needed by party B.

Article 11, Retain of right

If one party fails to fulfill entire or part rights under this contract or request the other party to fulfill, undertake entire or part obligations, responsibilities, it shall not be considered to waive the obligations or responsibilities.

Any party’s tolerance or extension or delay execution of the rights under this contract towards another party shall not affect the rights under this contact and laws and regulations, also not considered to waive the rights.

Article 12, Amendment, Modification and Termination

This contract can be amended or modified in writing  mutual agreement. Any amendments or modifications are inseparable parts of this contract.

Unless otherwise specified by laws or regulations or covenants, this contract is not allowed to terminate till the rights and obligations are completely executed.

Unless otherwise specified by laws or regulations or covenants, invalidation of any items under this contract will never affect the other items’ legal effectiveness.

Article 13, Applicable Laws and Settlement

This contract shall be governed by the laws of PRC.

After this contract becomes effective, all disputes concerning this contract should be settled through friendly negotiation. When negotiation fails, any party can settle with following second method;

 

  

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1.  

	
Submit to ___________________Arbitration Committee to arbitrate.

	
2.  

	
Submit to the People’s court located in the domicile of Party B or other corresponding institutions of Bank of China, Inc.

	
3.  

	
Prosecute the People's Courts with jurisdiction.

During the settlement period, if this dispute does not affect the performance of this other items, the other items shall continue to performance,

Article 14, Attachment

The following attachments and other attachments ensured by both parties makes up the inseparable parts of this contract, and possess the equal legal validity.

1,__________/_______;

2,__________/_______;

Article 15.  Other Covenants

	
1.  

	
Without Party B’s written consent, Party A is not allowed to transfer rights or obligations to the third parties.

	
2.  

	
If Party B entrusts any other institutes of Bank of China to execute the rights and obligations under this contract, Party A shall agree. Party B or its designees are entitled to exercise all the rights under this agreement and to file a lawsuit in the People's Courts or submit to the Arbitration Committee to arbitrate.

	
3.  

	
In case of not affecting the other covenants of this contract, this contract has the legal binding to the heirs and transferees.

	
4.  

	
Apart from the other covenants, the address specified in this contract by both parties is regarded as the contract address, and also promise that when the contract address changes, then information will sent to the party in written form in time.

	
5.  

	
The titles and business names in this contract are just used for the purpose of convenience, and can’t be used for the purpose to explain the clause content, and obligations and rights of the party.

	
6.  

	
Per the changes of laws and regulations or regulatory process or the requirements of regulatory authority, Party B is unable to execute this agreement or execute according to covenants, Party B has the right to terminate or amend this agreement or single agreement according to the changes of laws and regulations or regulatory process or the requirements of regulatory authority and exemption from liability.

 

  

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Article 16.  Conditions for effectiveness

This contract becomes effective upon the signature and seal of the legal representatives of both parties, principals or the authorized persons.

This contract is made in duplicates, each party has one copy, both having the same legal effects.

Party A: Ningbo Keyuan Plastics Co., Ltd Party  B: Bank of China Beilun Branch Ltd

The authorized person:                 The authorized person: _unable to identify_________

 

 

 10posama3ex10xlvi_keyuan.htm

Exhibit 10.46

 

Current Fund Loan Contract

 

China Construction Bank

Ningbo Branch

 

 

  

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Contract Number: G1230-2011-079

Loanee (Party A ): Ningbo Keyuan Plastics Co., Ltd.

Address: Qingzhi Industrial Zone, Xiaogang, Beilun

Zip code: 315803

Legal representative (Principal): Chunfeng Tao

Fax: 86232618   Tel: 86232939

Lender (Party B): China Construction Bank Inc, Ningbo Beilun Branch

Address: No.251, Xinda Road, Beilun, Ningbo   Zip code: 315800

Principal : Jiangen Han

Fax: 86882154     Tel:86884361

WHEREAS, Party B agrees Party A’s loan application for normal business operation. Both parties agree to enter into this agreement according to applicable laws and regulations.

Article 1. Amount of loan

Amount: RMB (Spell-Out) Seventy-five Million .

Article 2. Purpose and repayment

Party A shall use this loan into normal business operation,

Article 3. Term of loan

The term under this contract is 12 months, from March 31, 2011 to March 30, 2012.

If the beginning date of the term under this contract is different from the loan voucher (a certificate of indebtedness, the same below), it shall be applied for factual loan date recorded in voucher for first time, and the expiration date in item 1 shall be adjusted.

The loan voucher is a part of this contract and has the same legal validity as this contract.

 

  

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Article 4. Interest rate of loan, default interest rate and calculation, settlement

	
1.  

	
Interest rate of loan

The interest rate of loan under this contract is annual interest rate, which is the following third one:

	
A.  

	
Fixed rate, which is %. This rate will not change during the term of loan.

	
B.  

	
 Fixed rate, that is the benchmark rate of value date (“floating upward” or “floating downward”) %. This rate will not change during the term of loan.

	
C.  

	
Floating rate, that is the benchmark rate of value date ___(“floating upward” or “floating downward”) __%, which shall be adjusted per three months according to benchmark rate on the adjustment day and the ratio of mentioned floating upward/ floating downward from the value date to paid off date. The adjustment date is the corresponding date in the month of the value date. If there is no corresponding date in the same month, then the last date of the month is the adjustment date.

	
2.  

	
Default interest rate

	
A.  

	
If Party A failed to se the loan as the contract stated, the default interest rate is the rate which loan’s interest rate + 100%. If the loan’s interest rate revised according to the third point of the first article, the default interest rate should be revised corresponding.

	
B.  

	
Default interest rate under this contract is the loan interest rate + 50%, the loan interest rate shall be adjusted according to Item 3 in Article 1.

	
C.  

	
If Party A diverts the loan as well as cannot repay on time, the default interest rate shall be calculated according the greater one.

	
3.  

	
The value date under this contract is the date which the loan firstly issued to the specified account of Party A.

The benchmark rate of the first issued loan is the rate which issued by People’s Bank of China on the value date. After that, when the loan’s rate is revised according to the above articles, the benchmark rate is the rate which issued by People’s Bank of China on that day. If People’s Bank of China does not distribute the interest rate of loan, the benchmark rate is the rate which is recognized in bank industry or the common rate. It will not be chosen if the two parties have other arrangement.

 

  

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4.  

	
The loan interest will be calculated since the loan has been transferred to the specified account of Party A. The loan interest will be calculated per day. Daily interest rate =annual interest rate /360. If Party A failed to pay the interest on time, the compound interest will be calculated since the second day.

	
5.  

	
Interest settlement

	
A.  

	
With fix rate, it will be settled with this agreed rate. With floating rate, it will be settled with the rate of that period. If there are more than one interest floating, firstly calculate the interest of each period, and then add them together on the final settlement date.

	
B.  

	
The loan interest under this contract shall be settlement with following first way:

1). Monthly Settlement, the settlement date is the twentieth day of every month.

2). Quarterly Settlement, the c settlement date is the twentieth day of last month of each quarter.

3). Others

Article 5. Issuance of loans and disbursement

	
1.  

	
Precondition

Party B has the responsibility to issue the loan only when the below conditions are continuously satisfied ,with exception of Party B giving up it entirely or partly.

	
A.  

	
Party A has completed the approval, registration, payment, insurance and other regulated procedures.

	
B.  

	
There is a qualified and effective guaranty corresponding to this contract.

	
C.  

	
Party A has opened an account for withdraw and repayment based on Party B’s requirements.

	
D.  

	
 Party A has not occurred any violated matter agreed by this contract.

	
E.  

	
Any conditions may endanger Party B’s claims have not been occurred.

	
F.  

	
The regulation and law, rules or some powerful departments do not prohibit and restrict the issuance of loan.

	
G.  

	
Party A’s financial index has met related clause’s requirement.

	
H.  

	
Party A has submitted related documents before issuance of loan.

 

  

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I.  

	
The documents provided by Party A are legal, authentic, accurate, effective and qualified.

	
J.  

	
Others.

	
2.  

	
The plan of using the loan

The plan of using the loan as followed the first way:

	
I.  

	 

	
A.  

	
The plan of using the loan is as following:

	
1)  

	
March 31, 2011 Amount: Seventy-five Million

	
2)  

	
.

	
3)  

	 

	
B.  

	
                   /

	
3.  

	
Party A shall use the loan according to Item 2 and shall not advance, postpone or cancel the draw of money without Party B’s written consent.

	
4.  

	
If Party A uses the money separately, the repayment date should still based on the Article 3 under this contract.

	
5.  

	
Documents shall be provided by Party A

Both parties agreed to use the first item regarding Party A’s documents.

	
A.  

	
If only satisfied with the first condition:

	
(1)  

	
Amount for single loan withdraw is over RMB 10 million and any external payment under this plan is over RMB 10 million.

	
(2)  

	
 

Party A shall provide following documents no later 1 work day after single loan withdraw:

	
a.  

	
Loan archived documents and payment settlement documents sealed by Party A.

	
b.  

	
Transaction documents.

	
c.  

	
Other documents requested by Party B.

With exception of Item A, Party A shall provide following documents no later 1 work day after single loan withdraw:

	
a.  

	
The plan of using loan.

	
b.  

	
Loan archived documents sealed by Party A

	
c.  

	
Other documents requested by Party B.

 

  

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II.  

Party A shall provide following documents no later 1 work day after single loan withdraw:

	
a.  

	
Loan archived documents and payment settlement documents sealed by Party A.

	
b.  

	
Transaction documents.

	
c.  

	
Other documents requested by Party B.

When amount for single loan withdraw is over RMB 10 million and any external payment under this plan is over RMB 10 million, and Party B agreed to it accord with payment objection after review corresponding documents provided by Party A, which can be applied for entrusted payment by Party B. Otherwise, it shall be paid by Party A directly.

Article 6. Account Usage and Supervision

	
1.  

	
Loans account

Loans account under this contract shall be defined with the second way:

	
A.  

	
Party A shall open a specific loan account since  working day from signing this contract to issuance of first loan, which shall be only used to issue and pay loans under this contract.

	
B.  

	
Party A shall open other account (Account:                                              ).

	
2.  

	
Principal recovery account

	
A.  

	
Party A shall open a principal recovery account within 1 working day after signing this contract or use existed account (Account:                              )in Party B as the principal recovery account.

	
B.  

	
Party A shall report the status of principal recovery to Party B per month. Party B report the status of principal recovery of last cycle to Party A no later than the third working day of current cycle.

	
C.  

	
Party B has the right to supervise the status of principal recovery.

 

  

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Article7. Repayment

	
1.  

	
The principle of repayment

Party A shall repay the loan as following the principles:

Party B has the right to apply the repayment to the costs which should be undertaken by Party B and paid by Party A in advance. The left money should be repaid follows the principle of repaying the interest first and repaying the principal second. However, for the loan which its principal cannot be repaid over ninety days or the interest cannot be paid over ninety days, or there is other stipulations of the loan according to the law, regulation, and rules, the repayments of Party A can be used to repay the principal first and repay the interest second.

	
2.  

	
Interest payment

Party A shall pay the interest to Party B at the expiration date for interest. The first interest payment date is the first expiration date for interest after the issuance of loan. The interest will be paid off as well as the principal is wholly repaid.

	
3.  

	
The plan of principal repayment

The plan of principal repayment shall be according the first way:

	
A.  

	
The plan of principal repayment as following:

1. March 30, 2012   Amount: Seventy-five Million

2_______________________________________

3________________________________________

4________________________________________

5__________________________________________

6__________________________________________

	
4.  

	
 Repayment Method

Party A shall deposit the enough money on the account opened in Party B before the repayment date. The money will be used to pay for the loan and will be transferred to pay automatically. (Party B also has the right to take off the money to pay for the loan). Or Party A can transfer the money from other account to pay for the loan.

	
5.  

	
Repayment in advance

If the loan intends to be repaid in advance, Party A must provide written application to Party B no later 30 wording days. Only when Party B has approved, Party A can repay the part or whole principal in advance.

 

  

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If Party A repays the principal in advance, the interest should be calculated based on the real days and the loan’s interest rate signed in the contract.

If Party B agrees Party A to repay the principal in advance, he has the right to ask Party A to pay for compensation. The compensation shall be defined as following 1 way:

	
A.  

	
Compensation = Principal repaid in advance × the months in advance × one ‰. It will be calculated as one month whether it has been one month or not.

	
B.  

	
 _______________________________________________________

On condition of that Party A repay the loan separately, if he repay part of the principal in advance, the order of repayments should be opposite. The remaining loan shall still execute according to the loan’s interest rate signed in the contract.

Article8. The rights and obligations of Party A

	
1.  

	
The rights of Party A

	
A.  

	
Having the right to ask Party B to issue the loan according to this contract;

	
B.  

	
Having the right to use the loan according to this contract;

	
C.  

	
Having the right to extend the time of borrowing the money on the condition that meets Party B’s requirements.

	
D.  

	
Having the right to ask Party B keep Party A ’s financial documents and things about its production secret, except the stipulations of law, regulation and rules, or the demand of powerful departments, or the two parties has other agreements.

	
E.  

	
 Having the right to reject the request of bribery by Party A and to report Party B’s activity which against the national laws and regulations about loan’s interest rate, charge of service etc.

	
2.  

	
The obligations of Party A

	
A.  

	
Drawing the money according to the stipulations of this contract, repaying the principal and the interest, and undertaking the charge which stipulated in this contract;

	
B.  

	
Providing the relative financial documents and production and management information to Party A, including but not restricted to providing balance sheet, income statement (income payment table for public institutes) of the last quarter on 10 work days ago and current flow statement at the end of the year. Party A should be responsible for the information’s reality, integrity and effectiveness and do not provide false information and hide important financial facts;

 

  

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C.  

	
If Party A changes its business registration, such as name, legal representative, address, business range, registered principal, articles of association etc., he shall inform Party B on paper within 30 work days after changing. The relative documents should be delivered to Party B at the same time;

	
D.  

	
Party A shall use the loan according to the stipulation of the contract and cannot squeeze, misappropriate or use the loan to do some illegal things. Party A should cooperate and accept Party A’s inspection and supervision of its production, management, financial activities and the usage of the loan. Party A cannot surreptitiously withdraw the funds, transfer the assets or make use of other transactions to escape its obligations;

	
E.  

	
If Party A makes use of the loan to do production, construction of project, it shall comply with the national regulations about environmental protection;

	
F.  

	
Before repaying the whole principal and interest, Party A cannot provide guarantee by using the assets which come from the loan unless on the agreements of Party A;

	
G.  

	
If Party A is group client, it shall timely inform Party B of the situation of associated transaction of over 10% of Party A’s net assets, which include 1) the association of each transaction party; 2)transaction project and transaction nature; 3) the transaction amount or corresponding proportion; 4) price fixing policy (including the transaction without amount or only with symbolizing amount);

	
H.  

	
Party A shall inform and obtain written consent of Party B before merger, spin-off, option transfer, and investment, increase of debt financing and so. And the written consent shall not affect Party B’s right to apply for remedy measure under this contract when endangered by aforementioned behaviors;

	
I.  

	
When Party A repaid directly, he shall report the status of loans to Party B per month. Party B reports the status of loans of last month to Party A no later than the third working day of current month.

 

	
J.  

	 

 

Article 9. The rights and obligations of Party B

	
1.  

	
Party B has the right to ask Party A to repay the principal, interest and costs, to complement the rights signed in this contract, and to ask Party A to perform the obligations signed in this contract.

 

  

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2.  

	
Party B has the right to take part in wholesale funding of Party A, asset sales and merger, spin-off, shareholding reform, bankrupt and so on. The specific methods as following:

	
A.  

	
Party A shall obtain Party B’s written consent while taking aforementioned behaviors;

	
B.  

	
Party B arrange the wholesale funding for Party A;

	
C.  

	
The price and receiver of Party’s asset shall meet following agreement:

 

	
D.  

	
Other methods agreed by Party B.

	
3.  

	
 Issuing the loan according to the stipulations of the contract; expect the delay which caused by Party A or other caused which are not Party B’s faults.

	
4.  

	
Keep secrets on the information which Party A provided, except the stipulation of law and regulation, relative powerful departments’ requirements or the other agreements of the two parties.

	
5.  

	
Party B cannot provide or ask for bribery from Party A.

	
6.  

	
Party B cannot be dishonest and harms the Party A’s rights.

Article 10. Responsibility of breaching a contract and remedy for the conditions of harming Party B’s claims

	
1.  

	
The conditions and responsibility for Party B when it breaches the contract

	
A.  

	
 If Party B does not issue the loan without any reasonable reasons, Party A can ask Party B to issue the loan according to the contract.

	
B.  

	
If Party B against the law, regulation and rules to ask Party A to pay for the interest and cost more than it should, Party A has the right to ask Party B to return the money.

	
2.  

	
The conditions for Party A to breach a contract

	
A.  

	
Party A against any agreements of this contract or against any legal obligations.

	
B.  

	
Party A clearly indicates that it will not fulfill the obligations which signed in the contract or its action indicates that.

 

  

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3.  

	
The conditions that may harm Party B’s claims

	
A.  

	
Any of the following conditions can be considered as may harm the safety of Party B’ rights: Party A happens to contract, mandate, lease, shareholding reform, decrease registered principal, invest, join operation, merge, restrict, separate, joint venture, apply for suspending business for rectification, apply for dismissing, be revoked, apply for going bankrupt, the controlling shareholder or the real controller changed, large assets been transferred, stop production, close a business, be imposed a large quantity fine or be cancelled registration by powerful government departments, be revoked license, be involved in big legal dispute, have serious difficulties in production and management, the financial condition worsened, the legal representative or main responsible person cannot fulfill its duties.

	
B.  

	
Any of the following conditions can be considered as may harm the safety of Party B’ rights: Party A does not fulfill its other debts, including the branch of China Construction Bank and other third side’s due debts. Party A transfers its assets in very low price or with no charge, cancels or decreased the third party’s debt, do not want to exercise its rights, or offer security for the third party.

	
C.  

	
Party A’s shareholders abuse the independent state of company’s legal representative or shareholders’ limited responsibilities. Party A’s shareholders evade the debts which Party B thinks can harm the safety of its rights under this contract.

	
D.  

	
The pre-conditions of issuing the loan signed in this contract are not be continuously satisfied.

	
E.  

	
If the guarantor has the following conditions, Party B can think the safety of its claims may be hurt:

1  Violation of any conventions of the contract or the statements and the things its assuring are mendacious, wrong and incomplete;

2 Occurrence of contract, mandate, lease, shareholding reform, decrease registered principal, invest, join operation, merge, restrict, separate, joint venture, apply for suspending business for rectification, apply for dismissing, be revoked, apply for going bankrupt, the controlling shareholder or the real controller changed, large assets been transferred, stop production, close a business, be imposed a large quantity fine or be cancelled registration by powerful government departments, be revoked license, be involved in big legal dispute, have serious difficulties in production and management, the financial condition worsened, the legal representative or main responsible person cannot fulfill its duties and may influence the assuring ability of the guarantor;

 

  

11

  

 

3 other conditions that will lose or may lose guaranty ability:

	
F.  

	
 If one of the following situations happens to pledge and collateral, Party B thinks it may harm the safety of its rights under this contract:

1   Because of the third person’s action, country’s levy, confiscation, taking over for use, taking back without compensation and removing, changes of the market, or any other reasons that leads the pledge and collateral be destroyed, lose or value decreased.

2 Pledge and collateral be sealed up, detained, frozen, remained, auctioned, supervised by executive authority or disputes occurs to the prosperity.

3 The mortgagor against the contract. Any convention of the contract or the statements and the issuing things are mendacious, false and incomplete.

4 Other situations that may harm Party B’s hypothec or pledge rights’ fulfillments.

	
G.  

	
The guarantee is false, unenforced, invalid, being revoked, being relieved. The guarantor against the contract or clearly indicates that it will not fulfill the guarantee responsibility or its action indicates that. Other situations like the guarantee lose part or whole guaranteed ability or the value of the thing pledged decreased, Party B thinks may harm the safety of its rights under this contract.

	
H.  

	
Other situations that may harm Party B’s claims safety.

	
4.  

	
Party B’s remedy measures

If the second clause or third clause of this article has happened, Party B has the rights to exercise one or some of the following rights:

	
1.  

	
Cease of loans issuance;

	
2.  

	
Supplement conditions for loans issuance and payment;

	
3.  

	
Change of payment method comply with this contract;

	
4.  

	
Declare that the loan is due and ask Party A to return the principal and interests immediately.

 

  

12

  

 

	
5.  

	
If Party A do not use the loan as the contract required, Party B has the right to ask Party A pay the penalty which equals to the 9.09 % of the money that misused by Party B. Also, Party A has the right to refuse Party B use the money do not withdraw;

	
6.  

	
If Party A do not use the loan as the contract required, the calculation of interest from that time on should be based on the default interest rate and the calculation ways signed in this contract;

	
7.  

	
If Party A cannot repay the loan on time, the calculation of interest from that time on should be based on the default interest rate and the calculation ways signed in this contract.

	
8.  

	
Other remedy measures including but not limited as :

	
A.  

	
Party B can deduct RMB or other currency from Party A ’s account in China Construction Bank without informing in advance;

	
B.  

	
Execution of the guarantee rights;

	
C.  

	
Request Party A to offer new guarantee of all debts according to Party B’s requirements;

	
D.  

	
Rejection of Party A to handle corresponding deposit from the account opened in China Construction Bank

	
E.  

	
Termination of this contract.

Article 11. Other covenants

	
1.  

	
The undertaking of costs

The cost regarding counsel, insurance, evaluation, registration, keeping, identification, and notarization should be undertaken by Party A except the two parties have other conventions.

All the costs for Party A to fulfill its obligatory rights, including but not limited of legal cost, arbitration fee, property preservation cost, travel expense, fulfillment cost, evaluation cost, auctioneers fee, notarization cost, lawyer’s fee etc., should be undertaken by Party A .

	
2.  

	
The usage of Party A’s information

Party A agrees Party B to provide its information to the People’s Bank of China to set the credit data base. Party A agrees Party B to use its information for the need of business.

 

  

13

  

 

	
3.  

	
Announcement

If Party A does not repay the principal and interests on time, Party B has the right to notify the relative departments and publish getting advisements through media.

	
4.  

	
The force of the evidence recorded by Party B

Unless having reliable and certain opposite evidence, Party A cannot raise an objection on the Party A ’s record of principal, interest, costs and repayment records, the documents, proof and getting records of Party A ’s action of drawing, repaying and pay the interests.

	
5.  

	
Reservation of right

The rights Party A have in this contract do not influence its other rights according to the law, regulation and rules. Any tolerance, concessions or postpone the rights under the contract cannot be regarded as giving up the rights or the confirmation of the active. It will not limit, prevent, block the continuously exercise the rights.

	
6.  

	
If Party A has other due debts to Party B despite the debts under this contract, Party B has the right to get the money from the account which Party B opened in China Construction Bank to pay for the due debts first. Party A should agree with it.

	
7.  

	
If Party A’s address or contract information changed, it should notice Party B in written form immediately. The losses caused by late advice should be undertaken by Party B.

	
8.  

	
Deduct of the account payable

For the money that Party A should pay under this contract, Party B has the right to get the money from the account which Party B opened in China Construction Bank without advance advisements. If it is need to deal with money exchange or forward exchange transaction, Party A has the obligation to help Party A, the risk of exchange rate should be taken by Party A.

	
9.  

	
Settlement of disputes

If the disputes occur during the performance of the contract, it can be solved through negotiation. If it is failed, than should be solved according to the first method below:

	
A.  

	
Proceed to the People's Court of the domicile of Party B

 

  

14

  

 

	
B.  

	
Submit   to arbitration commission (address________ ________), it should base on the arbitration rules. The last results have the constraining force to two parties.

During the arbitration, the parties shall continue to perform the terms which is not covered by dispute.

	
10.  

	
Execution of contract

The contract shall come into force when the legal representative (principal) of Party A and Party B have signed and stamped.

	
11.  

	
This contract is in four copies.

	
12.  

	
Others

1____________________

2______________________

3_______________________

4______________________

Article 12. Statements

	
1.  

	
Party A clearly understands Party B’s scope of business and rights.

	
2.  

	
Party A has read all the articles of the contract. Party B has explained the articles which Party A do not clearly understand. Party A has fully known and understood the meaning of each articles and its legal consequence.

	
3.  

	
The obligations of Party A are meet the stipulation of law, regulation and rules as well as of Party A’s inner regulations and files. It has obtained the approval of Party A’s company.

	
4.  

	
Business operation of Party A is legal compliance.

	
5.  

	
Party B has capability to remain operation and repay legally.

	
6.  

	
Party A promise to loan basing on real requirement, rather exceeding factual requirement.

	
7.  

	
Party A and control shareholders are in good credit status.

	
8.  

	
Party B has the right to entrust other institutions of CCB to execute, fulfill Party B’s rights and obligations under this contract.

 

  

15

  

 

	
9.  

	
Party A states that at the time of executing the contract there is no violation of any laws and regulations related to environmental protection, energy conservation and emission reduction; and promises to comply with those laws and regulations throughout the term of this contract. If Party A’s above statement is false or it fails to perform, or there is potential risk of waste of energy and pollution from the part of Party A, Party B has the right to stop issuing loan to Party A, or announce the claims is acceleration of maturity, or using other reliefs allowed by this contract or laws.

 

Party A (stamp): Ningbo Keyuan Plastics Co., Ltd.

Legal representative (principal) authorized agent (sign):___________

Date: March 31, 2011

Party B (stamp):

Legal representative (principal) authorized agent (sign):___________

Date: March 31, 2011

 

 

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