Document:

Unassociated Document

Exhibit 10.37

 

Contract No.: 0058841

 

Revised Loan Agreement Summary 

(for company client)

	
Borrower: Beijing Wowjoint Machinery Co.

	
Lender: China Minsheng Bank, Beijing Branch

	
Signing date: Mar. 29, 2011

 

Terms and Conditions of Loan Contract

 

Borrower: Beijing Wowjoint Machinery Co.

Organization code: 75961712-9                                               

Business license: 110102006704329

Legal representative/responsible person: Liu Yabin                 Position: Manager

Address: 1108 A Block TIANCHENG MANSION, 2# XINFENG Road 

DESHENGMENWAI Street, XICHENG Dist. Beijing P.R. China

Zip code: 100088                             

Telephone: 89579330                                Fax: 89579553

Contact person: Liu Yabin                         Position: Manager

Account No.: 

Account No.: 

Opening bank: Weigongcun Sub-Branch, Beijing Branch of China Minsheng Bank

 

Lender (hereinafter referred to as “China Minsheng Bank”): China Minsheng Bank, Beijing Branch

Legal representative/responsible person: Wang Jingyi           Position: Manager

Address: No 2 Fuxingmennei Street, Xicheng District, Beijing

Zip code: 100031                             

Telephone: 58560088                                  Fax: 58560001                                  

 

In accordance with the Law of the People’s Republic of China on Contract, the following contract conditions and General Terms and Conditions for Loan Contract, the Borrower and the China Minsheng Bank (hereinafter referred to as “both parties”) make this contract on the signing date stated on the cover at the place of domicile of the China Minsheng Bank through cooperative/friendly consultation.

 

A. Associated contract (fill when appropriate):

This contract is a specific business contract numbered [99012011295886] and signed between the accrediting party the China Minsheng Bank and the accredited party Beijing Wowjoint Machinery Co., under the Comprehensive Credit Contract.

 

  

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B. Loan amount and period:

B.1 The loan currency under this contract is Renminbi, and the loan amount is (in case of discrepancy of amounts in words and in figures, the amount in words shall prevail, the same below): (in words) five million Yuan only, (in figures): RMB 5,000,000.00 Yuan.

B.2 The period for this loan contract is Mar. 29, 2012;

B.3 The expiry date of loan shall be the date on which the loan period specified in B.2 expires.

 

C. Contract interest rate (mark √ in □ for an appropriate item and × for an inappropriate item, the same below):

C.1 In case of RMB loan, the contract interest rate shall be determined based on the base interest rate on the withdrawal date o upward [50%] o or 9.09% per annum. The contract interest rate during the loan period shall be adjusted as per month or per quarter

C.2 In case of foreign currency loan, the contract interest rate shall be determined based on the HIBOR (for HK currency) or LIBOR (for other foreign currencies) interest rate (which is the rate on the second working day before the withdrawal date) with a o 1 month o 3 moths o six months period, with increased base point not less than [   BP], for which the value stated in the loan receipt approved by the China Minsheng Bank shall prevail – NOT APPLICABLE

C.3 The above contract interest rate during the loan period shall float as per C.1. hereof.

 

D. Withdrawal plan:

The withdrawal period is as below, commencing on the signing date; the specific withdrawal plan is as follows:

Can withdraw up to 3 business days prior to expiry date.

 

E. Purpose of loan:

Fund short-term liquidity and working capital

 

F. Principal repayment plan:

All principal shall be repaid by the final maturity date, and will be repaid by installment during the loan period as agreed below:

o principal to be repaid in lump sum at maturity

 

  

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G. Interest repayment plan:

All interest shall be repaid as agreed below (can choose one of the options below):

o principal to be repaid in lump sum at maturity

o principal to be repaid in equal amount as per month, on the 21st day each month

o principal to be repaid in equal amount as per quarter, on the 21st day of the last month of each quarter

 

K. Borrower’s commitments on key financial indexes – NOT APPLICABLE:

(a) The ratio of tangible net assets (paid-up capital stock plus capital accumulation fund) to total liability does not exceed [                             ];

(b) Minimum net assets not less than RMB (in words) [                        ];

(c) Total annual pre-tax profits not less than RMB (in words) [                        ];

(d) The ratio of circulating assets to circulating liabilities (i.e. current ratio) not less than [                      ];

(e) The ratio of profits before tax and interest to interest expenses (interest coverage ratio) not less than [                      ].

 

M. Guarantee (the guarantee document shall prevail):

o Surety guarantee: name of guarantor: Mr. Liu Yabin (personal guarantee)

o Pledge guarantee, name of pledgeor:

o Security guarantee, name of mortgagor:

o Others: see special agreement column hereof or relevant guarantee documents.

 

N. Costs

N.1 Advance repayment compensation=advance repayment principal X [    %] (annual compensation rate) X advance years.

N.2 The Borrower shall, within  days after signing the contract (and no later than the first withdrawal date), pay to the China Minsheng Bank a loan arrangement fee in the amount of RMB (in words)                                                        .

 

U. Appendix (loan receipt and the following appendix are part hereof):

Loan application                                                                                      

 

W. Compulsory enforcement notarization

o A notarization agreement, which makes compulsory enforcement hereof effective, shall be made within  days after signing the contract, with notarization handling completed.

o No compulsory enforcement notarization is required for this contract.

 

X. Special agreement:

	  
	
  

	
  

	
   

  

  

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Y. The Borrower hereby acknowledges that: his attention has been drawn to clauses relating to responsibility or rights limitations, full explanations and descriptions have been made for the contract, and that revision and addition (if any) agreed between both parties have been stated in the special agreement column or supplementary agreement; through full review and discussion with the China Minsheng Bank, the Borrower fully understands and agrees all contents hereof including Terms and Conditions of Loan Contract, General Terms and Conditions and Appendix of Contract, without doubts or objections.

 

Z. Signing of both parties

 

	
Borrower (seal)

	
Bank of Beijing (seal):

	  	  
	
Legal representative

	
Legal representative

	
Or Authorized representative

	
Or Authorized representative

 

General Terms and Conditions for Loan Contract

 

1. Definitions and explanations

 

1.1 Unless otherwise expressly noted, the following terms in this contract shall have the following meanings:

This contract: refers to the whole part consisting of all of the following documents: Terms and Conditions of Loan Contract (Clauses A-Z as main contents), General Terms and Conditions of Loan Contract, loan receipt signed by both parties, other appendixes of contract listed in Clause U hereof, and other documents (including, but not limited to, supplementary agreement, commitment letter, etc.) which legally and effectively determine both parties’ rights and obligations under this contract; however, it specially refers to the corresponding clauses of Terms and Conditions of Loan Contract and General Terms and Conditions of Loan Contract when clauses hereof are cited without different description.

 

Base interest rate: it refers to the legal base interest rate for Renminbi loan of corresponding period issued by the People’s Bank of China (if the legal base interest rate of such period is cancelled, then the base interest rate determined and issued by the China Minsheng Bank shall prevail); base interest rate over the same period refers to the base interest rate determined as per the agreed period as defined in Clause B.2.

 

LIBOR (HIBOR): it refers to the London (Hongkong) Interbank Offered Rate issued on relevant webpages of authoritative financial telecommunications such as Reuters or Bloomberg at about 11am of London (Hongkong) time on the very day. The data of the previous last day shall prevail if the above interest rate data is not available.

 

  

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Guarantee documents: they refer to any documents such as guarantee contracts, guarantee clauses and guarantee letter, and commitments signed or agreed by guarantor for setting guarantee.

 

Laws and regulations: they refer to the laws, administrative regulations and judicial interpretations by the Supreme People’s Court applicable to the mainland of the People’s Republic of China, other than Hongkong, Macao and Taiwan.

 

Financial rules: they refer to the rules, regulations and instructions given by the bank regulatory bodies, the People’s Bank of China and foreign exchange management department.

 

Working day: it refers to any day on which commercial banks in the city where the China Minsheng Bank is located provide services for corporate customers, excluding legal festivals and holidays, Saturday and Sunday, but including Saturday and Sunday on which the public shall work as per government’s temporary regulation.

 

1.2 Any terms having been defined in this contract shall have the same meaning in any document hereunder or made as per this contract, unless otherwise expressly specified in the document.

 

2. Loan

 

2.1 See Clause B hereof for the loan currency, amount and loan period under this contract. The specific amount of each loan which actually occurs hereunder shall be the amount stated on the loan receipt, which constitutes part hereof.

 

2.2 The Borrower may withdraw a loan in the withdrawal period agreed in Clause D hereof, and change of withdrawal plan shall be subject to the consent of the China Minsheng Bank. Any loan amount not withdrawn after expiry of the withdrawal period will be cancelled automatically and may not be withdrawn any more. Whenever the Borrower requests a withdrawal, the China Minsheng Bank shall not be obliged to grant a loan, unless all of the following conditions are met (excluding those which the China Minsheng Bank decides to waive at that time):

 

(1) The guarantee document specified in Clause M hereof has been made, with handover and registration procedures completed;

 

(2) The Borrower has completed account opening and other procedures reasonably required by the China Minsheng Bank, and has provided the China Minsheng Bank with documents and relevant certificates reasonably stating its specific capital use and capital flow arrangement, and the China Minsheng Bank has raised no objections after review. When this Contract is a credit contract as stated in Clause A, sufficient available limit shall be reserved for the Borrower hereunder;

 

  

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(3) No defaults hereunder are performed by the Borrower, and no defaults hereunder are performed by the guarantor;

 

(4) Laws and regulations, financial rules and national credit policy effective at that time neither impose significant influences on contract performance by one party hereto, nor prohibit or restrict loan granting or withdrawal hereunder.

 

(5) Other conditions as agreed herein or in laws and regulations and financial rules.

 

2.3 If the Borrower meets withdrawal conditions, the China Minsheng Bank shall grant a loan in full amount within 3 working days. The loan shall be deemed as having been withdrawn and used by the Borrower once the loan is transferred to the Borrower’s account, and the day shall be the withdrawal day of this loan and the loan interest shall commence from that day as per the contract interest rate. When an RMB loan is withdrawn in several times, the contract interest rate shall be determined for each withdrawal respectively based on the base interest rate over the same period on the very day and the floating range stated in Clause C.1 hereof. 

 

2.4 As the loan hereunder is a loan with floating interest rate, the contract interest rate shall float during the loan period in such a manner: (i) for an RMB loan, the contract interest rate shall be adjusted automatically and calculated in sub-stage in accordance with the base interest rate over the same period applicable at that time and the floating range as stated in C.1 hereof, from corresponding date (first day of each calendar month, first day of each calendar quarter, and Jan. 1 of each year) respectively, in the adjustment frequency (as per month, quarter and year) as agreed in C.1 hereof; (ii) in case of foreign currency loan, the contract interest rate for each interest period (including the first day and excluding the last day) shall be the LIBOR (HIBOR) rate (annual interest rate expressed in percentage) for corresponding currency and period on the second business day of such foreign currency one day prior to the starting day of such interest period, plus the increased base point value (100 BPs as 1%) agreed in C.2 hereof; automatic interest rate adjustment above shall not be deemed as change to the contract. When the contract interest rate is converted from annual interest rate to daily interest rate, Hongkong dollar shall be calculated as per 365 days a year, and Renminbi and other currencies shall be calculated as per 360 days a year.

 

2.5 The Borrower warrants that this loan will be used for the purpose as stated in Clause E hereof, and warrants that such use purpose will not be in violation of provisions of laws and regulations and financial rules; the Borrower undertakes that it will not use this loan in items or services where use of commercial bank loans is prohibited by laws and regulations or financial rules. The Borrower shall obtain a written consent of the China Minsheng Bank prior to change of use purpose.

 

  

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2.6 The Borrower shall repay the principal of this loan as agreed in Clause F hereof, and repay loan interest as agreed in Clause G; an interest period shall commence from each interest repayment day (including) to the next interest repayment day (excluding) (the first interest period commences from the withdrawal date and the last interest period ends at maturity of the principal); When each loan principal is repaid, all interests incurred by such principal shall be settled, and all principal, interests and other amounts payable shall be settled on maturity. In case of non-working day, the Borrower shall deposit sufficient amount of money in its account in advance so that the China Minsheng Bank can deduct from its account on the very day or on the sequent first working day after extension. Interest will be calculated as per the contract interest rate during such extension.

 

2.7 In order to repay relevant the amounts payable in a timely manner, the Borrower shall open and always maintain in the China Minsheng Bank an account as stated hereof (in case of change of account, the changed account shall apply to this contract continually), and shall deposit full amount of money repayable to such account for deduction by the China Minsheng Bank. The Borrower may also directly transfer money to its China Minsheng Bank account for repayment, and shall timely notify the China Minsheng Bank of such service No. for the repayment. The China Minsheng Bank may, at its discretion, deduct any amount payable from any account the Borrower has opened in the China Minsheng Bank Company system, and will notify the Borrower of such deduction in the form of bank account or other forms.

 

2.8 Unless otherwise there are substantial and sufficient opposite evidences, the bank voucher generated by the China Minsheng Bank shall be effective evidence for loan granting and principal repayment hereunder.

 

3. Advance repayment and extension

 

3.1 The Borrower may not repay money during the withdrawal period. If the Borrower requests advance repayment after the withdrawal period, the Borrower shall, 30 days in advance, submit to the China Minsheng Bank an irrevocable written application stating the proposed principal amount for advance repayment and the repayment plan for the remaining loan principal; where the China Minsheng Bank consents in writing after review, the Borrower shall perform advance repayment on the advance repayment date, pay to the China Minsheng Bank advance repayment compensation as specified in Clause N.1 hereof (advance years shall be the quotient obtained by dividing the actual day number from advance repayment date to the agreed maturity date by 365, with two decimals reserved), and settle all interests incurred by advance repaid principal and other amounts overdue. The remaining principal (if any) shall be repaid as per the new repayment plan consented by the China Minsheng Bank (the last repayment date shall still be no later than the last maturity date). Where the Borrower fails to submit or both parties fail to reach a new repayment plan, reverse repayment shall apply (i.e. the advance repaid capital will be used to repay the amount that will be overdue at last); the contract interest rate shall not be adjusted by virtue of advance repayment or as per the period determined in the new repayment plan.

 

  

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3.2 Where the Borrower requests an extension, the Borrower shall, at least 30 days before the maturity date, submit to the China Minsheng Bank a written extension application stating extension reasons and repayment capital arrangement after such extension. After the China Minsheng Bank consents through review and the Borrower meets the conditions required by the China Minsheng Bank, both parties shall sign an extension agreement, with extension procedures handles as per such agreement. If the China Minsheng Bank does not agree on extension or both parties fail to sign an extension agreement, the Borrower shall still perform repayment as agreed herein.

 

4. Commitment and guarantee

 

4.1 Both parties hereby undertake and guarantees to the other party that: (1) The party has the qualification and ability to enter into and perform this contract, and the person who signs this contract on behalf of the party has been fully authorized to enter into this contract; (2) The conclusion and performance of this contract by the party are not in breach of organization documents such as regulation, laws and regulations and financial rules and other law documents it shall observe, and the party has obtained any necessary internal and external authorization, permission and filing so that this contract is legally binding to the party and lawfully enforceable.

 

4.2 The Borrower undertakes and guarantees to perform the following obligations before performance of this contract is completed:

 

(1) The Borrower is always a legal entity that is established lawfully and operates continually, and will handle legal procedures such as annual inspection. The borrower shall, prior to conclusion of this contract and application for withdrawal each time, submit to the China Minsheng Bank true and complete information regarding financial and operation conditions of the Borrower and other important information in connection with this contract; 

 

(2) The Borrower shall have sufficient and legal repayment sources that match with the repayment plan, and sufficient repayment capability, and ensure that relevant capital and resources support under the production and operation projects for which loan is used are in place timely and in full amount so that the projects can go on smoothly;

 

  

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(3) Production and operation comply with laws and regulations, environmental protection requirements, tax regulations set forth in laws and regulations and other provision, and necessary approval and permission documents are obtained timely and lawfully and effectively;

 

(4) The Borrower accepts and actively coordinates the China Minsheng Bank’s inspection and supervision concerning its financial and operation conditions, and the use of loan hereunder, including, but not limited to: (i) reasonably stating the capital flow of each loan hereunder as required by the China Minsheng Bank, providing relevant repayment voucher and evidence, and proving conformance to this contract; (ii) by the end of April each year, submitting to the China Minsheng Bank complete audited financial statements (including notes) of previous year and audit reports, and submitting, the first month of each quarter, to the China Minsheng Bank copies of financial statements such as balance sheet, profit and loss statement, and cash flow statement (in case of audited half-year or quarterly financial statements, the complete audited statements and audit reports shall be provided);

 

(5) All application information, financial statements and other information provided to the China Minsheng Bank are true, complete, lawful and effective, without any fraud, significant omission or misleading;

 

(6) Where the Borrower performs merger, division, reduces registered capital, applies for close of business for rectification/ takeover / disbanding / bankruptcy or items that affect the existence of the applicant or its continual operations, the Borrower shall, at least 30 days in advance, notify the China Minsheng Bank of such item and obtain the Bank’s written consent; if a third party requests or an administrative/judicial organ orders the Borrower to close its business for rectification / takeover / disbanding / bankruptcy, or suspend or cancel its operation license for main operating business or major business, the Borrower shall notify in writing the China Minsheng Bank of such condition as soon as possible (no later than 3 working days) after notification, and take measures timely for remedy;

 

(7) When the Borrower makes any changes to industrial and commercial registrations, top ten shareholders, directors, financial officer, or contact address, it shall notify the China Minsheng Bank of such item as soon as possible (no later than 5 working days);

 

(8) Where the Borrower provides any guarantee (or liability responsibility or similar arrangement of guarantee nature) for a third party or reaches with a third party partner / contracting operation, waiver of significant creditor’s rights, acquisition for restructuring, transfer of main business or similar significant transaction that may reduce the Borrower’s repayment capability, the Borrower shall obtain written consent from the China Minsheng Bank in advance, except that the above items will not impose significant adverse influences on the Borrower’s capability to perform this contract and that the total amount or total guarantee amount of the above-mentioned significant transaction does not exceed 30% of total assets of the Borrower and 50% of its net assets;

 

  

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(9) The Borrower shall notify timely in writing the China Minsheng Bank of any affiliated transaction with a total amount up to or exceeding more than 10% of its net assets (affiliated parties and affiliated transaction shall be identified in accordance with Chinese accounting standards or international accounting standards lawfully applicable to the Borrower), including: affiliating relations of transaction parties, transaction items and property, transaction amount or corresponding proportion, pricing policy (including transactions with no amount or with only symbolistic amount), etc. and the Borrower shall not perform affiliated transaction in which registered capitals are withdrawn, bank capital or credit is obtained through fictitious transaction, liabilities are evaded through asset transfer, or transactions that severely impair its repayment capability or illegal transactions such as money laundering;

 

(10) The Borrower shall always observe the commitment as stated in Clause K hereof, and will maintain in agreed scope relevant financial indexes (calculated in accordance with Chinese accounting standards or international accounting standards lawfully applicable to the Borrower);

 

(11) The Borrower will not distribute dividend or bonus to shareholders in any form when the net profit after tax of an accounting year is zero or negative, or the net profit after tax is not sufficient to cover the accumulative losses of previous accounting years, or when the profit before tax is not sufficient to settle next loan principal repayable;

 

(12) The Borrower shall, no later than the first withdrawal date, provide the China Minsheng Bank with the Guarantee as agreed in Clause M hereof, see guarantee document for details. The Borrower warrants to maintain the pledge rate and mortgage rate thereunder in the range (if any) as agreed thereunder; the Borrower undertakes that it fully understands, agree and accepts the clauses and contents contained in relevant guarantee documents, and warrants that all guarantees submitted to the China Minsheng Bank based on relevant guarantee documents are lawful, effective and lawfully enforceable.

 

  

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5. Expenses of taxation

 

The Borrower and the China Minsheng Bank shall bear the stamp tax payable hereunder respectively. The taxes and administrative fees imposed by the government or organs exercising administrative management authority (except those taxes the China Minsheng Bank shall bear lawfully on its own) and notarial fees (if any), and guarantee fees (if any) shall be borne by the Borrower. In addition, the Borrower shall pay to the China Minsheng Bank loan arrangement fee as agreed in Clause N.2 hereof.

 

6. Default and remedy measures

 

6.1 The occurrence of any one or more of the following shall constitute default of the Borrower:

 

(1) The Borrower fails to use the loan as agreed herein, or fails to repay, on schedule and in full amount, the interest, principal or other amounts payable;

 

(2) The Borrower fails to (or states expressly or indicates by act that it will not) completely perform any commitment, guarantees, obligations or responsibilities hereunder in an appropriate way;

 

(3) Any guarantor fails to completely perform any commitment, guarantees, obligations or responsibilities under the guarantee document in an appropriate way, or other default events under the guarantee document occur, or the mortgage / pledge (if any) experiences damage, loss, transfer of ownership, seal up / freezing / seizure or enforcement, or the guarantee document or the guarantee right of the China Minsheng Bank is identified as invalid, cancelled or rescinded without written consent of the China Minsheng Bank;

 

(4) Any significant credit financing, guarantee, indemnification or other repayment obligation of the Borrower cannot be performed at maturity, or the operating license for the main business or major business is suspended or cancelled, or the Borrower is involved in procedures such as close of business for rectification / takeover / disbanding / declaration of bankruptcy;

 

(5) The Borrower’s financial or operating conditions experience significant adverse changes, or produce bad credit records, or are involved in disputes or administrative penalty that may impose significant adverse influences on its repayment capability or the performance of this contract, or other conditions occur that may impose severe adverse influences on the creditor’s right or security interest.

 

6.2 Where the Borrower fails to repay, on schedule and in full amount, any loan principal and interests payable or other amounts payable, additional penalty interest for the unpaid amounts shall be paid as per day at 150% of contract interest rate applicable for the same period (overdue penalty interest rate); where the Borrower uses a loan for a purpose that does not comply with contract provisions or provisions set forth in laws and regulations or financial rules, it shall immediately repay the principal and interest for the above loan used in breach of contract, and additional penalty interest for such loan shall be paid as per day for the breach period at 200% of contract interest rate applicable for the same period (appropriation penalty interest rate); where the loan is used in breach of contract and is also overdue, appropriation penalty interest rate shall apply. Penalty interest as state above does not influence other breach remedy rights of the China Minsheng Bank.

 

  

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6.3 Should any breach event hereunder occur to the Borrower, the China Minsheng Bank shall have the right to exercise its breach remedy rights as agreed herein or in accordance with provisions set forth in laws and regulations and financial rules, including, but not limited to, requirement for correction of breach, stopping granting loan, payment of penalty interest, exercise of security interest and right of lien according to law, declaration of immediate maturity of whole or part debt hereunder, declared collection, requirement for compensation of loss and payment of all expenses and fees (including, but not limited to, law expenses/arbitration expenses, disposal expenses such as evaluation / appraisal/auction, attorney fee, investigation fee, travel expenses and other reasonable fees) to the China Minsheng Bank incurred in connection with realization of creditor’s right and security right.

 

6.4 Where the currency of amount collected by the China Minsheng Bank for exercising rights differs from the currency of the amount unpaid by the Borrower, such amount shall be exchanged at the exchange rate issued by the China Minsheng Bank for the currency of amount sold and unpaid and currency of amount purchased and collected, to settle creditor’s right of Bank, and any exchange rate loss and fees for exchange so incurred shall be borne by the Borrower. The Borrower shall be obliged to coordinate in handling exchange procedures.

 

6.5 The amounts collected by the China Minsheng Bank for exercising rights shall settle its creditor’s rights in the following sequence: (1) expenses and fees for realization of creditor’s rights and security interest, and other fees that the Borrower shall bear, (2) damages, compensation and penalty, (3) penalty interest, (4) loan interest, (5) principal, (6) other amounts payable; however, the China Minsheng Bank may change the said settlement sequence. If the Borrower has many amount payable, the settlement sequence determined by the China Minsheng Bank shall prevail.

 

6.6 Where one party undergoes force majeure and has provided the other party with evidence issued by authoritative organ within 5 working days after occurrence, corresponding liabilities for breach of contract may be exempted according to laws, however, in order to avoid doubt, both parties hereby conform that corresponding liabilities for breach of contract may be exempted when the Borrower undergoes force majeure, however, the Borrower shall still have the obligation to repay the principal of loan withdrawn, loan interest calculated as per contract interest rate and fees for realization of creditor’s rights and security interest.

 

  

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7. Governing laws and dispute settlement

 

7.1 This contract shall be governed by the laws and regulations of the People’s Republic of China; and all disputes hereunder and in connection with this contract shall be settled through friendly consultation. If no agreement is reached, the dispute may be referred to the people’s court of the place where the China Minsheng Bank is located.

 

7.2 Where the guarantee document contains express written agreement regarding law application and dispute settlement thereunder, such agreement applies. If there is not written agreement, or written agreement is not express, or the agreement is invalidated or cancelled according to laws, the laws and regulations of the People’s Republic of China apply and the disputes may be referred to the people’s court of the place where the China Minsheng Bank is located.

 

8. Supplementary articles

 

8.1 This contract is a specific business contract under relationship contract (if any) as stated in Clause A hereof. Items not mentions herein shall be subject to provisions under the relation contract. In case of any discrepancy between the two, this contract shall prevail. Where there are discrepancies between the special agreement in Clause U hereof and other clauses of body hereof, the special agreement shall prevail; the appendixes as listed in Clause U hereof shall constitute part of this contract. Unless otherwise expressly agreed in writing in the body of this contract or appendixes hereof, the body of this contract shall prevail in case of any discrepancy between such appendixes and the body of this contract.

 

8.2 Where any party sends a notice or document hereunder: (1) in form of personal delivery or entrusted delivery, the delivery date shall be the date on which the notified party or its receipt agent signs for receipt; (ii) in form of express mail service or intracity registered mail (including municipal area and suburb), the delivery date shall be the third day after the mail is sent; (iii) in other mail methods, the delivery date shall be the seventh day after the mail is sent; if there is discrepancy between the delivery date as determined as per provisions above and the actual receiving date or formal signing date of the notified party, the earlier date shall prevail. However, in order to avoid any doubt, both parties hereby confirm that any document which the China Minsheng Bank requires the Borrower to submit personally shall be directly submitted by a designated person to the person authorized by the China Minsheng Bank. Any party who changes its contact way shall notify the other party, otherwise the other party shall still have the right to deem the contact way prior to such change as valid.

 

  

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8.3 The China Minsheng Bank may provide information regarding this contract to the credit system and information base established through powerful government departments.

 

8.4 Unless otherwise agreed herein, any party shall be obliged to keep confidential any commercial secrets procured during conclusion and performance of this contract and belonging to the other party, and other undisclosed information the party expressly requires to keep confidential before the above information loses privacy. Without written permit of the other party, such information shall not be publicly disclosed or disclosed to any third party; However, disclosure by one party of such information in accordance with provisions of relevant laws and regulations or as required by powerful organs or the exchange where listing is made, shall not be deemed as default of confidentiality obligation.

 

8.5 The effect of this contract is independent of guarantee document, relationship contract (if any) and any contract / agreement / commitment, without being influenced by the validity and enforceability of the above documents. Where any clauses or contents hereof are cancelled or identified as being invalid according to laws, the effect of other clauses and contents shall not be influenced and still remain valid. Failure to exercise corresponding remedy rights by the other party in case of default by one party shall not be deemed as waiver of such rights or permit of such default.

 

8.6 This contract is entered into by and between the Borrower and the China Minsheng Bank on the contract signing date at the place of domicile of the China Minsheng Bank, and shall take effect after it is signed by the legal representative / responsible person / authorized representative and sealed with company seal (or contract seal recognized by a document with company seal). This contract is made in three originals (corresponding number of originals shall be signed if notarization is required or if guarantee registration procedures are handled), with the China Minsheng Bank holding two originals and the Borrower holding one original. Each original has equal legal effect. In case of guarantor, the Borrower shall be responsible for provide a copy of this contract for the guarantor, however, failure to do so by the Borrower will not impose adverse influences on the China Minsheng Bank’s creditor’s rights and security interests.

 

(No additional contents below)

  

14Unassociated Document

Exhibit 10.38

 

Contract Number: No. 2010 QZY592 

 

 

 

 

 

 

Maximum Counter-Guarantee (Accounts Receivables Pledge) Contract

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Party A: Beijing Wowjoint Machinery Co., Ltd.

 

Legal Representative: Liu Yabin                   Position: Chairman

 

Address: 1108, Block A, Tiancheng Mansion, #2 Xinfeng Road, Deshengmenwai Street, Xicheng District, Beijing, China

 

Tel: 89579330                                           Fax: 89579553                                 Zip: 100088 

 

Pledgee: Beijing Zhongguanchun Sci-tech Guaranty Co., Ltd.

 

Legal representative: Zhang Lisheng              Position: Chairman

 

Address: 11th floor, Block C, Zhongguancun Science and Technology Development Building, 34 Zhongguancun South Street, Haidian District, Beijing, China

 

Tel: 59705600                                 Fax: 59705603                                 Zip: 100081 

 

 

 

 

 

INDEX

 

	
Article 1

	
Guarantor’s representations and warranties

	  	  
	
Article 2

	
Pledge of accounts receivables

	  	  
	
Article 3

	
Scope of counter-guarantee pledge

	  	  
	
Article 4

	
Duration of guarantee

	  	  
	
Article 5

	
Transfer of accounts receivables information

	  	  
	
Article 6    

	
Public notice of guarantee

	  	  
	
Article 7    

	
Value realization of pledged assets

	  	  
	
Article 8    

	
Transfer of pledge

	  	  
	
Article 9     

	
Rights and obligations of Pledgor

	  	  
	
Article 10

	
Rights and obligations of Pledgee

	  	  
	
Article 11   

	
Breach of contract

	  	  
	
Article 12  

	
Effectiveness, amendment and termination of contract

	  	  
	
Article 13   

	
Dispute resolution

	  	  
	
Article 14   

	
Other Terms

	  	  
	
Article 15   

	
Attachment

	  	  
	
Article 16  

	
Supplementary 

 

 

 

 

 

Beijing Wowjoint Machinery Co., Ltd. (hereinafter referred to as Guarantor or Pledgor) and Industrial & Commercial Bank of China, Beijing Zhongguancun Branch (hereinafter referred to as Beneficiary) signed a series of loan agreements for the term of November 15, 2010 to November 14, 2012  (hereinafter referred to as the Main Contract), for which the Guarantor signed with the Pledgee Contract No. 2010 WT592 "Maximum Guarantee Contract".  This guarantee contract obliges the Pledgee to provide a guarantee for the benefit of the Beneficiary to cover all debt arising out of the Main Contract from the period of November 15, 2010 to November 14, 2012 for up to a maximum amount of RMB 40 million.  In order to ensure the effective discharge of obligations by the Guarantor under the Main Contract, the Guarantor is willing to provide accounts receivables to the Pledgee as counter-guarantee. To ensure that all parties are clear with respect to the rights and obligations, based on China's "Contract Law", "Guarantee Security Law" and other relevant laws and regulations, the parties through fair consultation and agreement, enter into this contract.

 

Article 1                      Guarantor’s representations and warranties

 

1.1 The accounts receivables to be pledged is legally owned by the Guarantor, can be legally transferred and pledged, has not been pledged or transferred to any other third party and has no defect in legal rights; therefore can be pledged without any restrictions.

 

1.2 The Guarantor has performed in accordance with the underlying transaction contracts for the accounts receivables through delivery of goods or performance of services, and there has been no breach of contract. The Guarantor shall continue to fulfill its obligations under the contracts.

 

1.3 The Guarantor represents that the underlying transaction contracts for the accounts receivables do not contain provisions, which prohibit the transfer of title and ownership, or have consignment sales terms.

 

1.4 The Guarantor represents that there is no debt due to the buyers of the underlying transaction contracts for the accounts receivables and the accounts receivable shall not be used to offset, counterclaim, pay for damages, retain, or for any other deductions.

 

1.5 The Guarantor represents that there are no related party transactions between the Guarantor and the buyers of the underlying transaction contracts for the accounts receivables. Related party includes but is not limited to subsidiaries, any entities in which either party maintains an ownership interest and/or management control, or both parties under the same company or the same group company’s management and/or ownership control.

 

1.6 Without consent of the Pledgee, the Guarantor shall not discontinue, remove or amend the underlying transaction contracts.

 

 

 

 

 

1.7 The Guarantor fully understands the rights and obligations as a Pledgor and has voluntarily provide collateral for the counter-guarantee. Furthermore the Guarantor represents that everything expressed in this contract is true and correct. 

 

Article 2                      Pledge of accounts receivables

 

2.1 Pledged accounts receivables include Appendix of "Pledged Accounts Receivables List" as well as all other accounts receivables created before all debt under the Main Contract is fully repaid.

 

The Pledgor shall submit to the Pledgee a new "Pledged Accounts Receivables List" each quarter. After both parties confirm, the List shall become an appendix to this contract.

 

2.2 The value as shown on the "Pledged Accounts Receivables List" shall not form the valuation basis for the Pledgee at the time of disposing the accounts receivables, nor constitute any restrictions on the Pledgee to exercise any rights with respect to the pledge.

 

2.3 Valid ownership and other relevant information related to the pledged accounts receivables as stated in Article 5 shall be confirmed by both parties, after which the Pledgor shall deliver to the Pledgee for safekeeping. 

 

Article 3                      Scope of counter-guarantee pledge

 

3.1 Scope of counter-guarantee pledge by Pledgor include: from November 15, 2010 to November 14, 2012 each bank acceptance bill arising from the Main Contract or other forms of debt evidenced by legal agreements signed by the parties, from which arise principal, interest (including compound interest and penalties interest), liquidated damages for breach of contract, compensatory damages, and all fees and expenses paid by the Pledgor to the Pledgee such as assessment fee, guarantee fee, penalty interest, all costs incurred by the Pledgee when exercising the claims under this contract (including but not limited to legal fees, notary fees, arbitration fees, legal fees, property preservation fees, travel expenses, execution fees, assessment fees, auction fees, etc.).

 

    The Pledgor consents that within the above mentioned time period, as long as the balance of the claims not yet recovered arising from the Main Contract, which the Beneficiary can make to the Pledgor, does not exceed the maximum amount of the Main Contract, the Pledgor shall pledge to provide counter-guarantee with asset pledge to correspond to the guarantee which the Pledgee makes to the Beneficiary, regardless of the number of times and the dollar amount each time, regardless of whether the expiration date of each debt claim has exceeded the above mentioned period.

 

3.2 When the Pledgor does not fulfill its debt obligations, regardless of whether the Pledgor or third party provides other counter-guarantees to the Pledgee, the Pledgee shall have the right to directly request the Pledgor to bear all guarantee liability within the scope of the counter-guarantee pledge. 

 

 

 

 

 

Article 4                      Duration of guarantee

 

4.1 Duration of guarantee is two years after the expiration date of secured creditor’s statute of limitations. 

 

Article 5                      Transfer of accounts receivables information

 

5. 1 The following information related to the pledged accounts receivables under this contract shall be provided by the Pledgor to the Pledgee for safekeeping, and the Pledgee shall give the Pledgor proper receipt after confirming acceptance:

 

5.1.1 The original underlying contracts for the accounts receivables.

 

5.1.2 Copies of invoices, which the Pledgor provides to the buyers of the underlying contracts.

 

5.1.3 All of the relevant files and documents which the Pledgor provides during the performance of the contract (i.e. delivery of goods or performance of services), including but not limited to import and export customs duty-paid certificates, invoices, receipts of goods, acceptance documents, etc.

 

5.1.4 Written consent letter by the buyers of the underlying contracts to enable the Pledgor to provide accounts receivables pledge.

 

5.2 After the Pledgor fulfills all of its debt obligations, the Pledgee shall promptly return all documents under Clause 5.1 to the Pledgor. 

 

Article 6                          Public notice of guarantee

 

6.1 The notarization of this contract by the Government Notary Public shall be deemed to be public notice of this guarantee. 

 

Article 7                          Value realization of pledged assets

 

7.1 After the Pledgee repays debt on behalf of the Pledgor, the Pledgee has the right to negotiate with the Pledgor to apply a discount of the pledged accounts receivables to repay the debt owed ​​by the Pledgor, in addition to have the right to dispose the pledged accounts receivables through sale, auction and other disposition methods. Any proceeds from the disposition shall first be applied to repay the Pledgee. When the Pledgor transfers accounts receivables to the Pledgee, the Pledgor shall transfer ownership and all other rights at the same time (including but not limited to the right of defense and appeal, etc.). After transfer of the accounts receivables, the Pledgor shall continue to fulfill all obligations and liabilities under the underlying contracts.

 

7.2 When the Pledgee disposes the pledged accounts receivables in accordance with this contract, the Pledgor shall give appropriate assistance and shall not set any obstacles. 

 

 

 

 

 

Article 8                          Transfer of pledge & prepayment

 

8.1 If agreed to by the Pledgee, the Pledgor is allowed to transfer the accounts receivables pledged in this contract. However, all proceeds from the transfer shall be applied to the prepayment of debt. 

 

Article 9                           Rights and obligations of Pledgor

 

9.1 The Pledgor shall bear all costs related to this contract, including but not limited to legal services, appraisal, valuation, registration, transfer, safekeeping and litigation expenses.

 

9.2 During the valid period of this contract, without the consent of the Pledgee, the Pledgor shall not dispose any pledged accounts receivables under this contract via gifting, transferring and other forms of disposition methods.

 

9.3 When the rights of pledge are or may be infringed by any third party, the Pledgor is obliged to notify and assist the Pledgee against such infringement.

 

9.4 The legal representative of the Pledgor shall give 30 working days advanced written notice to the Pledgee under any one of the following circumstances:

 

9.4.1 Change of business operation, such as the implementation of contracting, leasing, joint venture, merger, acquisition, division, joint-stock reform, and joint venture with foreign partners, etc.;

 

9.4.2 Change of business scope, registered capital and ownership;

 

9.4.3 Deterioration of financial conditions or involving in major financial disputes;

 

9.4.4 Bankruptcy, going out of business, dissolution, was ordered to stop business operations, revocation of business license;

 

9.4.5 Change of address, telephone and legal representative.    

 

9.5 After the Pledgor pays off all debt, the Pledgor shall not bear any guarantee responsibility.

 

9.6 When the Pledgee pays off the debt on behalf of the Pledgor, the Pledgor is obliged to dispose accounts receivables and apply any proceeds to repay any amount due to the Pledgee. 

 

Article 10                      Rights and obligations of Pledgee

 

 

 

 

 

10.1 Under any one of the following circumstances, the Pledgee shall have the right to dispose the pledged accounts receivable in advance and apply the proceeds to repay itself:

 

10.1.1 The termination of the Main Contract due to clauses under the Main Contract or the law causes the Pledgee to pay off debt on behalf of the Pledgor or results in economic losses for the Pledgee.

 

10.1.2 During the Main Contract’s validity period, declaration of bankruptcy by the Pledgor, dissolution of the Pledgor, Pledgor’s unauthorized change of corporate structure resulting in failure of credit claims, the Pledgor has been involved or will be involved in major litigations, arbitration proceedings and/or other legal disputes, occurrence of other events which can affect the ability and sincerity of the Pledgor to repay debt.

 

10.2 The Pledgee has the right to request the Pledgor to help prevent the infringement of pledge rights from third party.

 

10.3 The Pledgee is entitled to receive any yields generating from the accounts receivables.

 

10.4 The Pledgee is obligated to safekeeping all the documents related to the rights of the accounts receivables.

 

10.5 After paying off all debt within the scope of this counter guarantee, the Pledgee shall return any remaining proceeds to the Pledgor. 

 

Article 11                         Breach of contract

 

11.1 If the Pledgor makes false representations and warranties in Article 1, which cause losses to the Pledgee, the Pledgor shall make appropriate compensation.

 

11.2 After this contract takes effect, both parties shall fully fulfill obligations stipulated in this contract. Any party who does not fully fulfill its contractual obligations shall bear the liability for breach of contract and make appropriate compensation for the losses caused to the other party.

 

11.3 If the Pledgor’s mistakes cause this contract to be null and void, the Pledgor shall compensate the Pledgee for the total loss within the scope of the guarantee. 

 

Article 12                        Effectiveness, amendment and termination of contract

 

l2.1 This contract shall take effect as soon as each party’s respective legal representatives or authorized agents sign and put official seals on the document.

 

 

 

 

 

l2.2 Even if the Main Contract and the “Maximum Guarantee Contract” are null and void, this contract is still valid and the Pledgor shall continue to bear guarantee obligations under this contract.

 

12.3 After the contract takes effect, neither party may change or terminate the contract without consent of the other party. If there is a need to change or terminate the contract, both parties shall reach consensus via written agreements. Prior to the said written agreement, this contract is still valid.

 

12.4 If the Pledgor fails to provide notice to the Pledgee in accordance with Article 9.4.5, the Pledgee shall consider letters and other communication sent to the original address duly delivered.  

 

Article 13                         Dispute resolution

 

13.1 Any contract disputes occurred during the course of performance of this contract shall first be resolved through mutual negotiation. If negotiation fails, litigation shall be under the jurisdiction of the local courts of the Pledgee .

 

Article 14                         Other Terms

 

14.1 Any accounts receivables ownership dispute occurred during the pledged period shall not affect the validity of this contract.

 

14.2 During the pledged period, if there is a loss of accounts receivables due to any reasons including coerced measures by the government authorities, the Pledgor shall provide to the Pledgee other collateral to replace the lost accounts receivables.

 

14.3 The Pledgor shall provide to the Pledgee updated "Pledged Accounts Receivables List" every quarter in triplicate. After confirmation by both parties, all three copies shall be sealed and signed by both parties, of which two copies shall be kept as attachment to "The Maximum Counter-Guarantee (Accounts Receivables Pledge) Contract" and the third copy shall be sent to the Government Notary Public for recordkeeping.  The Pledgor has no objection on this provision. 

 

Article 15                         Attachment

 

15.1 Any attachment is an integral part of this contract, and has the same legal enforcement rights as the main body of the contract.

 

15.2 Appendix to the contract includes “Pledged Accounts Receivables List".

 

Article 16                        Supplementary 

 

16.1 This contract shall be signed in triplicate, all of which have the same legal enforcement rights.

 

 

 

 

 

The Guarantor (seal): 

 

Legal representative (or authorized agent) signature:    Liu Yabin

 

Date:           2010-11-01

 

 

The Pledgee (seal): 

 

Legal representative (or authorized agent) signature:    Zhang Lisheng

 

Date:           2010-11-01

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