IndustrialBanks Short-term Loan Contract

A.

Fixed interest rate which will not be influenced by the change of interest rate made by the central bank, and the annual interest is _____ %;

B.

The floating interest rate of type b below will be adopted, which will be adjusted according to the change of benchmarking interest rate of the same period and same type of loan made by the central bank:

a.

The interest rate will be adjusted every month. The annual interest rate will be ____% higher or ____% lower than the benchmarking interest rate of the same period and same type of loan launched by the central bank;

b.

The interest rate will be adjusted every three months. The annual interest rate will be ____% higher or ____% lower than the benchmarking interest rate of the same period and same type of loan launched by the central bank;

c.

The interest rate will be adjusted every six months. The annual interest rate will be ____% higher or ____% lower than the benchmarking interest rate of the same period and same type of loan launched by the central bank;

d.

The interest rate will be adjusted every twelve months. The annual interest rate will be ____% higher or ____% lower than the benchmarking interest rate of the same period and same type of loan launched by the central bank;

A.

The interest will be calculated every month, and the 20th day of each month will be the due date to pay the interest, on which the Borrower shall pay the interest to the Lender every month and discharge the residual interest on the date of expiry.

B.

The interest will be calculated every three months, and the 20th day of the last month of each quarter will be the due date to pay the interest, on which the Borrower shall pay the interest to the Lender and discharge the residual interest on the date of expiry.

C.

The Borrower shall discharge all the interest on the date of expiry.

D.

Other manner(s): _________________________________________________.

A.

If the fixed rate is adopted as the interest rate of the loan, the penalty and compound interest of the delayed period will be charged according to a fixed rate also, which is ___% higher than the interest rate of the loan;

B.

If the floating rate is adopted as the interest rate of the loan, the penalty and compound interest of the delayed period will be charged according to a flowing rate also, which is 50% higher than the interest rate of the loan, and the floating period during the delayed period is still the same.

A.

If the fixed rate is adopted as the interest rate of the loan, the penalty and compound interest of the misuse period will be charged according to a fixed rate also, which is ___% higher than the interest rate of the loan;

B.

If the floating rate is adopted as the interest rate of the loan, the penalty and compound interest of the misuse period will be charged according to a flowing rate also, which is 100% higher than the interest rate of the loan, and the floating period during the delayed period is still the same.

1)

The Borrower is of an entity of juridical person or other economic organization registered subject to laws and exists and will exist legally with the right to sign and implement this Contract.

2)

The Borrower has obtained authorization by its Directorate or corresponding top power division for the loan under the Contract and complied with laws, regulations, policies, and its Constitution applicable to the Borrower. In case the Borrower signs this Contract by breaching the Constitution or other regulations of the company, the Borrower will take the full obligation which is irrelative to the Lender.

3)

Except for those described in the materials provided to the Lender, the Borrower neither has any mortgage, impawn, lien, or other debt related to its assets or benefits, nor involves in on-going lawsuit, arbitration, or bankruptcy procedure.

4)

The Borrower does not hide from the Lender any of the following matters that have occurred or will occur and would incur Lender’s refuse to issue the loan:

¨

Significant default to regulation, default to law, or claim of compensation charged by a third party related to the Borrower or its major leaders;

¨

On-going lawsuit or arbitration;

¨

Borrower’s debt, or guarantee, mortgage, impawn, or guarantee of Borrower’s debt or any of those provided to a third party;

¨

Borrower’s default to a Contract signed with a creditor;

¨

Other conditions that would affect the Borrower’s financial condition or ability to discharge debts.

1)

The Borrower will provide true documents, sheets, and vouchers and other materials according to the requirement of the Lender;

2)

The Borrower will open bank account for settlement at the Lender’s office and receive the loan and pay the payable through such bank account;

3)

The Borrower will use the loan according to the usage regulated in the Contract and will not use it for other purposes, including equity investment, or buying or selling of securities, futures, or realties or so on, or lending to other companies or illegal activities banned by the government; or other types of misuse of the loan.

4)

The Borrower will accept and assist the Lender’ supervision and inspection to the Borrower’s use of the loan and conditions of operations, financial activities, inventory, assets and liabilities, bank deposit, and cash reserves and so on.

5)

The Borrower will provide sufficient and effective guarantee acceptable to the Lender;

6)

The Borrower will not decrease the registered capital through any manner;

7)

The Borrower will not transfer the debt under the Contract to a third party partially or wholly without prior written consent of the Lender;

8)

The Borrower will communicate with the Lender for approval prior to its significant change of equity structure or adjustment of business types, including but not limited to signing of contract with foreign companies, or those from Hong Kong SAR, Macau SAR, or Taiwan province for joint venture or partnership; dismiss or close of the company, stop of production, or change of product types; split, merger, acquisition, or being acquired; restructure or construction of or reconstruction to a stock limited company; investment of fixed assets like houses or machines or intangible assets like trademarks, patents, proprietary technologies, or land use right to a third party stock limited company or investment company; or transaction of equity or business right through leasing, contracting, joint-operations, or committed custody.

1)

The Borrower fails to pay principal or interest due according to the provisions of the Contract;

2)

The Borrower fails to follow the declarations or promises made under Article 8 of the Contract;

3)

The Borrower breaches other terms included in the Contract.

1)

require the Borrower to make up the default within regulated period;

2)

stop to provide loan to the Borrower;

3)

dismiss this Contract and require the Borrower to discharge the principal due or undue and interest not paid;

4)

require the Borrower to pay penalty in case of payment delay;

5)

require the Borrower to pay penalty in case of misuse of the loan;

6)

require the Borrower to pay compound interest for the interest not paid;

7)

deduct the principal and interest owed from any of the Borrower’s bank accounts; and the Lender has the right to determine the amount of principal and interest in the currency the same as currency of the loan according to the exchange rate of the day if the Borrower’s deposit is not in the such currency;

8)

claim for payment of principal and interest by legal means; and the Borrower shall bear all the expenses related to legal procedures.

1)

The warrantor breaches the Guarantee Contract, or the warrantor’s credit is deteriorated, or the warrantor’s ability of guarantee is weakened;

2)

The mortgager breaches the Mortgage Contract or damages the mortgaged subject purposely, or the value of the mortgaged subject would decrease or has decreased considerably, or the mortgager’s activity damages the right of the Lender towards the mortgage;

3)

The impawning person the Impawning Contract, or the value of impawned subject would decrease or has decreased considerably, or the right of impawning must be met before discharge of the loan, or the impawning person’s activity damages the right of the Lender towards the mortgage.

1)

If letter, the registered letter is deemed as arrival on the fifth ‘working day’ after sending;

2)

If telefax, it is deemed as arrival when receiving the confirmation of the other party;

3)

If sending by person, it is deemed as arrival on the day the receiver signs.