Exh 10-d
Midterm RMB Loan Contract
Number 10, Year 2003
Debtor: Hebei Aoxing Pharmaceutical Group Co. Ltd.
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License number: 1301841000054
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Authorized representative: Xxx, Xxxxx Xxxxx
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Address: East Industry Park, City of Lexing
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Bank with open accounts: Lexing Branch, Bank of China
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Contact number: 0000-0000000
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Creditor: Lexing Branch, Bank of China
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Authorized representative: Xxxxx, Xxx Xxxxx
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Address: Xian Ye Street, City of Lexing
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Contact number: 0000-0000000
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The creditor and the debtor have reached an agreement on this midterm
loan arrangement through their sincere and fair negotiation. The
purpose of this contact is to confirm this agreement.
I. Loan Amount
The loan under this contract is an amount of RMB forty million (RMB
40,000,000).
II. Period
The period of this loan is 60 months. As determined by the creditor
and the debtor, the period starts on the day of distribution of the
loan, and it ends on the day when the last payment is made. If the
distribution of the loan is determined by the creditor and the
debtor to be over a period of time, "the day of distribution" stated
above is referred to the first day of the distribution period.
III. The Usage of the Loan
The loan under this contract is solely for the construction of the
submitted projects and the investment needed for their equipments.
The debtor is not allowed to change the usage of the loan without
the formal written permission from the creditor.
IV. Interest Rate and its Calculation Method
The annual interest rate for this loan is currently at 5.58%, and it
will be reviewed and adjusted every year. On each anniversary of the
initial loan effective date, the annual interest rate for the
following year will be reviewed and adjusted according to the most-
updated interest rates at the time of the review. In the event of
any government-enforced adjustment on interest rates and their
calculation methods, the creditor has the responsibility to inform
the debtor prior to executing the adjustment.
Interest starts to accumulate on the first day of loan distribution
based on the actual amount distributed and the number of days the
loan is in effect. The interest calculation is based on a fiscal
year of 360 days.
Loan interest is scheduled to be paid by the debtor quarterly, on
March 20th, June 20th, September 20th, and December 20th during the
loan period. If the last scheduled payment of the loan principal is
not on the same day as the last scheduled payment of the loan
interest, the debtor should pay all remaining interest on the same
day the last scheduled payment of the loan principal is made.
V. Distribution Conditions
The creditor has the right to withhold any distribution to the
debtor if any of the following condition is not met by the debtor:
1. A formal written request for distribution and proofs of its
usages should be submitted three days prior to any distribution.
2. This contract and its appendixes are in effect.
3. The guarantees specified in Term IX of this contract are met.
4. The debtor has opened the bank account for loan distribution and
payment of loan principal, interest, and fee as required by the
creditor.
5. The debtor has submitted the following documents to the creditor:
a. A formal written authorization from the debtor's Board of
Directors to sign and execute this contract
b. A list of individuals who are authorized to sign this contract
and its related documents and a list of their signatures
c. A formal proof of the collected funds and budgets for the
projects funded by this loan
d. All approved documents for the projects' planning, land usage,
and construction plans.
e. Official permits for the projects
6. No violation as defined in Term XII of this contract occurs.
7. The debtor has complied with all related laws and regulations;
and all other distribution requirements set by the creditor and
the debtor have been met.
VI. Distribution Schedule
The debtor is required by the creditor to collect all loan
distributions as defined in this contract within 12 months from
December 31st, 2003.
VII. Distribution Method
The debtor is required by the creditor to submit a formal written
loan distribution request to the creditor at each distribution. All
standard loan distribution procedures at Bank of China are also
required.
VIII. Payments
The debtor has the responsibility to make the following scheduled
loan payments as defined by this contract:
Payment Date of Payment Payment Amount
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1 2005.12.31 RMB 3,000,000
2 2006.12.31 RMB 21,000,000
3 2007.12.31 RMB 16,000,000
If the debtor wants to make any change on any scheduled date of
payment, the debtor should submit a formal written request to the
creditor 15 days prior to the corresponding date of payment. Any
change on the loan payment schedule should be confirmed by a formal
written agreement between the creditor and the debtor unless this
change has been previously accepted.
If the debtor has more than one loan with the creditor which is due,
the creditor has the right to determine the order of payments for
all loans owed by the debtor.
The debtor is allowed to make an early loan payment prior to the a
scheduled date of payment, in which the debtor is required to submit
a formal written application seven days prior to the intended date
of early payment. The early payment amount will be credited to the
last scheduled payment as defined in this contract. Any early
payment approved by the creditor can't be re-accessed by the debtor.
IX. Collaterals and Guarantors
The following is the collateral and guarantor for the debt under
this contract:
Hebei Jiangong Construction Group, Inc.
A Contract Guarantee has been signed between the debtor and the
guarantor. (Contract number 10, Year 2003)
If a collateral or guarantor suffers any major downfall in its
financial status, or a collateral or guarantor lost its ability to
provide the above guarantee, the creditor has the right to require
the debtor the replace this collateral or guarantor.
X. Insurance
The debtor is required to purchase insurance to cover perils on all
equipments, project construction, logistic, and business liability
related to this loan from an insurance company approved by the
creditor. The insurance coverage purchased must meet the
requirements set by the creditor, and the coverage amount must be no
less than the loan principal amount defined by this contract. The
debtor has the responsibility to transfer all insurance proceeds to
the creditor, and the debtor should submit all original insurance
policies to the creditor within 15 days after this contract becomes
effective. The debtor can't cancel any insurance policy before the
loan principal, interest, and fees under this contract are paid in
full. If any insurance policy is terminated by the debtor, the
creditor has the right to enforce the policy or replace it with
another insurance policy. In either case all expense and premium
will be paid by the debtor, and the debtor is also responsible for
any loss which the creditor might suffer from the termination of any
insurance policy.
The debtor has the responsibility to notify the creditor in a formal
written letter of any loss within three days after the debtor is
informed of such a loss. The debtor should also follow the
procedures in the insurance policy to file a claim to the insurance
carrier. Any loss the creditor suffers due to the lack of response
by the debtor in any insurance claim should be paid for by the debtor.
An insurance proceed will be credited to the principal, interest,
and other fees of this loan. However, the creditor has the right to
decide whether a proceed can be used to support any projects or
trades which this loan originally supports. Insufficient proceed to
credit the principal and interest of this loan is NOT a valid reason
to have this loan pardoned.
XI. Disclosures & Commitments
The debtor hereby states the following disclosures:
1. The debtor has registered legally and exists as a legal entity.
2. The debtor has obtained all necessary discretions to sign this
contract.
3. All documents, information, reports, and certificates which the
debtor provides to the creditor are accurate, actual, complete,
and effective.
4. The debtor has not concealed any of the following past or present
events, which can have some negative impact on the debtor's
ability to execute this contract:
a. Any legal or criminal proceeding, or any legal claim, of which
the debtor or any of the debtor's executive members is a party.
b. Any violation in which the debtor is responsible for in any other
contract.
c. Any current debt, potential debt, or any security for a loan to a
third party that the debtor is responsible for.
d. Any legal or criminal proceeding which is currently pending.
e. Any situation that can have a negative impact on the debtor's
financial strength or the debtor's ability to pay back this loan.
The debtor hereby states the following commitments:
1. The debtor will provide the most-updated financial statements to
the creditor as requested on a monthly base. The debtor has the
responsibility to provide the creditor its audited annual report
of the previous year in the first quarter of every year. As per
request from the creditor, the debtor will provide the creditor
reports on sales and finance sales data and information, and
related documents.
2. If the debtor and the guarantor of this contract have reached, or
will reach, an counter-agreement on the guarantor's duty under
this contract, such counter-agreement doesn't affect or alter any
right of the creditor as defined in this contract.
3. The debtor agrees to receive any credit investigation or audit
from the creditor, and the debtor will provide all necessary
assistance and cooperation.
4. The debtor has the responsibility to formally notify the creditor
before reducing its registered capital or making any business
decision which can either change the structure of the debtor's
business entity or affect the nature of the debtor's business
function, which includes any partnership or cooperation with a
foreign entity, any merger or reverse merger, any restructure of
the business, etc.
5. The debtor can't make any change in material to its asset by
reducing the debtor's ability to pay back this loan under this
contract.
6. This loan has priority over any loan offered by any of the
debtor's shareholders. The debtor bares no less responsibility to
this loan than to any loan.
7. The debtor will formally notify the creditor of any of the
following events:
a. Any violation of this contract or any violation of any contract
in which the debtor is a party.
b. Any change between the debtor and its subsidiary or parenting
entity, any change in the debtor's executive members, any change
of the debtor's business chapter, or any structural change of the
debtor's business function.
c. Any difficulty in the debtor's business or any negative impact on
the debtor's financial status.
d. Any major legal or criminal proceeding in which the debtor is a
party of.
e. Any event that might have any effect on the debtor's ability to
pay back this loan.
8. The debtor has the responsibility to deposit sufficient funds
into the debtor's account at Bank of China 5 days prior to each
principal payment's due date.
9. Any fiscal settlement of this loan should be performed at the
creditor's office or other branch of Bank of China. The result of
the settlement should meet the standard set by the creditor.
10. At the end of each fiscal settlement, if the after-tax net
profit is zero or negative, or the after-tax net profit is not
sufficient to compensate the fiscal loss from previous years, or
the before-tax net profit hasn't been credit to the principal,
interest, and fees which are due, or the before-tax net profit is
not sufficient to credit to the principal, interest, and fees
which will be due in the next scheduled payment, the debtor is
prohibited from distributing any dividend or bonus to any of its
shareholders.
XII. Violations and Penalties
If the debtor doesn't make a scheduled payment on the loan principal
on time, and hasn't previously reached an agreement on postponing
this scheduled payment, the creditor has the right to charge
interest on the overdue amount at an interest rate of 0.021% per
day. In the event of interest rate change, this interest rate will
be calculated coordinately.
If the debtor doesn't make a scheduled payment on the loan interest
in full on time, the creditor has the right to charge monthly or
quarterly interest on the past-due interest on the annual interest
rate defined by this contract. If a scheduled payment is past-due
after such incident, this interest rate will be adjusted to 0.021%
per day. After the principal is paid in fall, the creditor will
charge interest on the remaining interest due on the annual interest
rate defined by this contract. In the event of interest rate change,
this interest rate will be calculated coordinately.
If the debtor applies any portion of this loan to any usage other
than the usage defined in Term III of this contract, the creditor
has the right to charge a penalty on this portion at an interest
rate of 0.05% per day. In the event of interest rate change, the
penalty will be calculated coordinately.
In any of the following event, the creditor has the right to
prohibit the debtor from receiving any further distribution of this
loan or to cancel any remaining portion of this loan which has not
been distributed, and the creditor has the right to demand an
immediate full payment of the distributed amount and its interest.
1. No payment on the loan principal or interest is made by the
debtor 15 days after its due date.
2. The past-due payment of this loan and the misused amount of this
loan combined reaches a total of RMB 1,000,000.
3. The debtor makes any fault statement in Term XI or violate any
commitment as defined in Term XI.
4. Any violation committed by the debtor in any other contract in
which a debtor is a party.
5. Any violation committed by the guarantor, which affects the
debtor's ability to commit to the responsibilities as defined by
this contract.
6. Termination, liquidation, or bankruptcy of the debtor's business
practice.
7. Any major downfall of the debtor's or the guarantor's financial
status.
8. The debtor can't provide the new asset for guarantee for this
loan, as required by the creditor, after the original asset for
guarantee is depreciated, damaged, lost, or confiscated.
9. The construction project funded by this loan has major delay, or
its construction expense exceeds the budget approved by the
creditor.
10. The quality of the construction project can't meet the
national quality standard.
XIII. Direct Transfer
The debtor agrees that the creditor can use Direct Transfer to
obtain necessary funds from the debtor's accounts at Bank of China
to pay for any fee or any portion of this loan owed by the debtor
under this contract.
XIV. Tax
Any tax or expense associated with the creation, the execution, or
the resolution of dispute of this contract should be paid by the
debtor, which includes stamp tax, interest reserve tax, expense on
litigation, legal expense, etc.
XV. Compromise, Transfer, and Reserve of Rights
The debtor has the responsibility to make all loan payments defined
by this contract. The debtor should not make any compromise offer
unless this offer is approved by the creditor.
The debtor should not transfer any responsibility to any third party
without a formal written authorization by the creditor.
Any extension, compromise, or pardon of the loan given to the debtor
by the creditor, or any temporary suspension of rights voluntarily
conducted by the creditor, doesn't affect, alter, or restrict the
rights of the creditor which are defined by this contract and
protected by all related laws and regulations. Such extension,
compromise, pardon, or temporary suspension of rights is neither an
indication of surrender of rights and benefits under this contract
by the creditor, nor an indication of pardon of responsibility under
this contract to the debtor.
XVI. Amendments and Termination
This contract can be altered, amended, or terminated by a formal
written statement endorsed by both the creditor and the debtor. Any
alternation or amendment to this contract is a inseparable addition
to this contract.
The termination of any single term of this contract doesn't affect
the remaining terms.
XVII. Dispute and Implementation of Law
This contract is governed under the laws or regulations of The
People's Republic of China.
Any dispute occurs during the period of this contract or any dispute
associated with the execution of this contract should be resolved
through negotiation between the creditor and the debtor. If no
resolution can't be achieved between the creditor and the debtor,
both parties have the right to present the case through legal
proceeding.
XVIII. Appendixes
The creditor and the debtor have agreed that the following
appendixes and any other appendix approved by both parties are
inseparable from this contract. They have the same legal binding
power as this contract itself.
1. Contract Guarantee submitted by Hebei Jiangong Construction
Group, Inc. (Contract number 10, Year 2003)
XIX. Effective Date
This contract becomes effective with signatures of the authorized
personals from the creditor and the debtor.
This contract has three original copies. The creditor, the debtor,
and the guarantor have one original copy of their owns. All copies
have the same legal binding power.
XX. Notes
The debtor and the creditor have undergone full negotiation for all
terms in this contract.
The creditor has recommended the debtor to pay very close attention
to the terms defining the rights and responsibilities of both
parties and to reach an accurate and complete understanding of these
terms. The creditor, as required by the debtor, has provided full
definition to these terms.
All signing parties of this contract have reached the same
understanding of this contract.
