Contract of mortgage of maximum amount
EXHIBIT
10.12
No.
: 2008002
Mortgagee:
Nanchang Branch,
Industrial Bank Co., Ltd.
Head:
▇▇▇▇▇
▇▇▇▇▇▇▇
Domicile:
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇,
▇▇▇▇▇▇▇▇ ▇▇▇▇
Post
Code: 330003
Telex:____________
Contact
Number: ▇▇▇▇-▇▇▇▇▇▇▇
Fax:____________
Mortgager:
Guixi Yixin Copper
Co., Ltd.
Legal
Representative: Hu
Shihong
Domicile:
Guixi Industrial
Zone
Post
Code: 335400
Telex:____________
Contact
Number: ▇▇▇▇-▇▇▇▇▇▇▇
Fax:
▇▇▇▇-▇▇▇▇▇▇▇
Signing
location:_________________________
In order
to ensure the settlement of the debts successively arising within particular
period between the mortgagee ( referred to as the “creditor”) and the debtor
Guixi Yixin Copper
Co., Ltd., the mortgager is voluntary to provide guarantee to the
mortgagee by its own property. Both parties hereof establish the contract after
negotiation in accordance with provisions of applicable laws.
Article
1 Definition and interpretation
Otherwise
indicated in the contract, or:
(1)
“Claims between the mortgagee and the mortgager” include the claims (including
principal, interest, penalty rate, compound interest, penalty, damage indemnity
and expense for the mortgager’s realization of claims, etc.) formed relating to
the financing operations such as local and foreign currency borrowing, loan,
trade financing (application for letter of credit, trust receipt, packing loan,
export ▇▇▇▇ purchase, export collection ▇▇▇▇ purchased and import documentary
credit), acceptance, discount, bills repurchase and guarantee,
etc.)
(2)
“Mortgage value period of validity” is an uninterrupted successive period fixed
expressly by both parities involving in the contract to specify the claim period
of mortgage and guarantee. During the proposed period, any claim arising,
irrespective of whether single liability of the creditor exceeds the period, the
mortgager promises to bear the obligation of mortgage and guarantee for all debt
balances under the maximum mortgage principal limit through the guaranty
hereof.
(3)
“Principal” means the debt principal caused when the debtor transacting the
business, which includes but not limited to the principal of local or foreign
currency borrowings, principal of trade financing, amount of bank acceptances,
amount of ▇▇▇▇ discount, advances arising under letter of credits and debt
principal led to guarantee obligation under the mortgager’s guarantee to the
debtor, etc.), but excludes guarantee deposit, deposit bills or national debts
provided by the creditor or third person to guarantee corresponding claim
principal and discount of bank acceptances or credit balance impawned
hereby.
(4)
“Mortgage maximum principal limit” means the maximum principal amount fixed
expressly by both signing parties in order to clarify the scope of the claim
under mortgage and guarantee. Under the principal limit, regardless the times of
the credits appearing between the mortgagee and the debtor, the mortgager will
bear the guarantee obligation for overall credit balance hereof (including the
principal, interest, penalty rate, compound interest, penalty, damage indemnity
and expenses for the mortgager’s realization of claims, etc.).
(5)
“Expenses for the mortgager’s realization of claim” includes but no limited to
lawsuit cost, arbitration expense, property preservation expense, execution
application cost, attorney fee, handling fee, announcement expense, evaluation
expense, identification expense, auction fee, realization expense, guaranty
disposal fee, transfer fee, communication fee and travel expense,
etc.
(6) The
mortgagee practices balance control to the credit of the debtor. The balance
means the debt balance sum of the debtor to the mortgagee within the period of
validity of mortgage and guarantee, which comprises the two parts, namely, the
unexpired balance and the due unpaid balance as follows:
1. The
unexpired balance means various to-be-paid debts formed when the debt
performance term is not expired yet.
2. The
due unpaid balance means the entire debt balance unsettled by the debtor and the
mortgager when the debt performance term is expired.
(7) “Main
contract” means the contract singed by the mortgagee and the debtor, within the
period of validity of the mortgage rate, to detail amount of each debt, debt
performance period and other rights and obligates, and the credit and debt
contract of mortgage guarantee at maximum amount which existed before
establishing the maximum amount hypothec and carried forward upon the approval
of the mortgager.
Article
2 The credit under mortgage guarantee
The
credit under mortgage guarantee of the contract is all claims incurred, under
the mortgage maximum principal limit, between the mortgagee and the debtor
within the Mortgage value period of validity.
The
following credits, existing prior to the establishment of the maximum amount
hypothec, are approved by the mortgager to be carried forward into the credit
scope of mortgage guarantee at maximum specified in the contract.
Article
3 Mortgage value period of validity
(1) The
mortgage value period of validity is from June 26, 2008 to May 27,
2009.
(2)
Otherwise indicated in the contract, the occurrence date of the debts guaranteed
by the guaranty shall be within the mortgage value period of validity. The date
of expiration of each debt is allowed to exceed the date of expiration of the
mortgage value period of validity, which means no matter unit debt of the debtor
exceeds the date of expiration of the mortgage value period of validity or not,
the mortgager promises to bear the obligation of mortgage and guarantee for all
debt balances under the maximum mortgage principal limit through the guaranty
hereof.
Article
4 Mortgage maximum principal limit
i. In the
contract, the mortgage maximum principal limit applies the currency of _RMB______, with an
amount (in word) of _five million yuan
only.
ii. In
the mortgage maximum principal limit, irrespective of the time and each amount
of the credits between the mortgagee and the debtor, the obligation of mortgage
guarantee covers all credit balances under the mortgage maximum principal limit
(including the principal, interest, penalty rate, compound interest, penalty,
damage indemnity and expenses for the mortgager’s realization of claims,
etc.).
Article
5 Guaranty
The
mortgager is voluntary to set the mortgage by land. See the Guaranty List (Annex) for details of the
guaranty. The efficacy of the guaranty covers the accessory items of the
guaranty from right, subrogation right, attachments, mixtures, processed items
and yields.
During
the duration of the mortgage, the efficacy of the hypothec covers the yields
generated by the guaranty (including natural yields separated from the guaranty
and legal yields that can be received by mortgager upon the
guaranty.
Article
6 Guarantee scope
The
guarantee scope of mortgage covers all credit balances arising within the
mortgage valve period of validity and under the mortgage maximum principal limit
( including but not limited to the principal, interest, penalty rate, compound
interest, penalty, damage indemnity and expenses for the mortgager’s realization
of claims, etc.).
The
credits of the mortgage guarantee at maximum amount which existed before
establishing the maximum amount hypothec and carried forward into the contract
upon the approval of the mortgager.
Regardless
of various guarantees (including mortgage, hypothecation and warranty) under the
items of the main contract, the mortgage shall guarantee for the debt above by
all guaranties hereof. In case that the mortgage registration authority requires
to make the guaranty guarantee partial debts of the main contract, the
requisition has no legal efficacy to the mortgager and the mortgagee and will
not be deemed as modification to the agreed scope of mortgage guarantee in the
contract.
Article
7 Mortgage period
(i) The
hypothec exists simultaneously with the debt under guarantee. The hypothec is
eliminated only after the s the debt is settled.
(ii)
Under the requisition of the mortgage registration authority, the mortgage
period is registered from June 26, 2008 to May 27, 2009. When the mortgage
period expires but the debtor does not clear the debt:
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1.
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The
hypothec possessed by the mortgagee according to laws in unchanged;
and
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2.
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The
mortgager shall complete the registration procedures for continued
mortgage.
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Article
8 Occupation of guaranty
1. The
mortgaged property under the contract should be occupied and preserved by
mortgager, and the mortgager agrees to receive the inspection on mortgaged
property from mortgagee at any time.
2. The
mortgager should keep, maintain and protect the mortgaged property well, and
adopt effective measures to guarantee the safety and integrity of the mortgaged
property. If the mortgaged property is needed to be repaired, the mortgager
should immediately repair it, and bear the expense incurred.
3. During
the mortgage period, the mortgagee is entitled to levy and occupy the yields of
guaranty.
Article
9 Insurance of guaranty
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1.
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Before
the guaranty is delivered to the mortgagee by mortgager, if the
guaranty is required to be insured by mortgagee, the guaranty should be in
full insurance according to the insurance type required by
mortgagee.
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2.
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In
the period of validity for the contract, mortgager should keep the
insurance continuity. If the mortgager discontinues the insurance, the
mortgagee has the right to continue insurance, and the related expenses
will be paid by mortgager, and mortgager will take full responsibility for
all losses due to discontinued
insurance.
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3.
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Mortgagee
is the first beneficiary for the insurance of guaranty. If the insurance
compensation is not enough for the settlement of the guaranty mortgage
loan at maximum amount, the mortgagee will have the right of recourse
against the debtor.
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Article
10 Mortgage registration
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1.
Within 1 working days
after signing the contract, mortgager should transact the mortgage
registration procedures in related authority along with the contract in
accordance with Property
Law of the People's Republic of China and Guarantee Law of the People's
Republic of China.
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2.
After the registration procedure for mortgaged property is transacted by
mortgager, the related registration documents will be occupied by
mortgagee.
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3.
The mortgager will transact the mortgage registration at maximum amount
for guaranty, which is effective for each debt in the maximum amount, and
the mortgager will not transact the mortgage registration procedure one by
one, except as otherwise stipulated by two Parties or mortgage
registration department.
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4.
If the guaranty yield is needed to transact the mortgage registration
procedure, the mortgager should transact the mortgage registration
procedure for the guaranty yield
well.
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Article
11 Expenses
All the
expenses under the contract (including but not limited to mortgage registration
fee, contract survey’s fee, and the expenses for insurance, transportation,
storage, keeping, evaluation, maintenance and punishment of the mortgage
property,) will be assumed by mortgager, except as otherwise stipulated by
contracting parties.
Article
12 Realization of hypothec
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1.
If one of the following circumstances occurs, the mortgagee will be
authorized to directly dispose the guaranty by the mortgager (including
but not limited to guaranty discount or direct auction, and guaranty
sales), and the obtained money will be used to pay for the
debts.
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(1) The
debtor does not pay off the mortgaged debts according to the main contract
(including the interest on principal for debts which is declared to come to end
because of the violation of debtor and mortgager):
(2) The
value of guaranty is reduced or will be reduced due to the factors like market
changes;
(3) The
operation condition of the debtor becomes seriously worse, and the debtor loses
the business honor or has the possibility or probably looses the
performance ability, the mortgagee is needed to collect the mortgaged debts
in advance;
(4) Other
situations that the mortgagee has right to dispose the guaranty in accordance
with the laws and regulations or the contract.
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2.
If there are more than two mortgagers, the mortgagee will have right to
dispose any or each mortgager’s guaranty when implementing the
hypothec.
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Article
13 Statement and promise of the
mortgager
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1.
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Mortgager
is a legal entity, legally registered and established and validly
existing, and has legal guarantor qualification and is capable of settling
debts, which is voluntary to assume and carry out the guarantee
liability.
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2.
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The
mortgager has been already approved by the governing units such as upper
authority or company’s board of directors to sign the contract, and has
obtained all necessary
authorizations.
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3.
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The
mortgager signs and implements the contract, not violating any provision
or agreement which has restraining force to the assets, not violating any
guarantee agreement and other agreements signed by mortgager and other
people, and not violating any other document, agreement and promise
contents which have restraining force to
mortgager.
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4.
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The
mortgager will provide all exact, true, complete and valid documents,
data, reports and vouchers to the mortgagee, and will receive mortgagee’s
inspection and supervision on the business activities and financial
conditions.
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5.
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Leasing,
mortgage, pledge or other right limitations are not settled for the
guaranty, and the currency for guaranty is not limited by law and the
agreement. The property, which is not in accordance with the law or the
agreement having restraining force to the mortgager, can not be circulated
or is limited to be circulated.
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6.
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Mortgager
has complete ownership for the guaranty. If the guaranty belongs to joint
property, the joint owners have already agreed the mortgage at maximum
amount under the contract in written, and the mortgager shall take full
legal responsibilities caused by the right disputes of the
guaranty.
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7.
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The mortgager clearly knows the
business scope and the limits to authorization of the
debtor.
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8.
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The
mortgager has already recognized all the items of the contract fully, and
has paid more attention to the items in boldface of the contract. The
mortgagee has provided necessary interpretations to the articles of the
contract on the require of mortgager, and the mortgager has already knew
and fully understood the definitions of the contract items and the
corresponding legal consequences, and is voluntary to provide guaranty
mortgage for the main contract’s debtor and carry out the joint settlement
liability in accordance with the
contract.
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9.
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If
the event of causing the guaranty value reduced occurs, such as market
change, and natural disaster etc, the mortgager will immediately notify
the mortgagee in written within 3 days after the happening of the event.
If the mortgager does not notify the mortgagee in time, the mortgagee will
have right to require the mortgager to assume the responsibility of breach
to contract.
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10.
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Mortgager
has the right to claim repayment from the debtor on the basis of not
affecting the further debts repayment of the debtor after implementing the
mortgage liability. However, if the debtor simultaneously faces repayment
from mortgager and any payment requirement from the mortgagee under the
contract, the mortgager will agree the debtor to pay mortgagee’s debts
preferentially.
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11.
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If
the debtor and the mortgager has already signed or will sign the
counter-guarantee agreement on the guarantee obligations under the
contract, the counter-guarantee agreement should not damage any right
enjoyed by the mortgagee under the contract legally or
actually.
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12.
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If
the mortgaged property is lost or it’s value is obviously reduced, which
is caused by natural disaster, accident, violation or other situations,
the mortgager should immediately adopt measures to prevent the loss from
further enlargement, and in time notify the mortgagee in
written.
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13.
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Before
completing the settlement of mortgaged debts, if the guaranty value is
obviously reduced, the mortgager will adopt effective measures to make up
the guaranty value or provide new full-amount and effective mortgage
according to mortgagee’s
requirement.
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14.
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Before
completing the settlement of mortgaged debts, the mortgager shall ensure
to keep, use and maintain the guaranty well, and will ensure not to
dispose the guaranty in the manner of renting, lending, re-mortgaging,
pledge, and sales without the agreement from the
mortgagee.
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15.
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When
the main debtor does not carry out the debts legally, no matter whether
the mortgagee has other mortgages on the debts under the main contract
(including but not limited to guarantee, mortgage, pledge, letter of
guarantee, standby and any other assure means), the mortgager will take
full security liabilities.
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Article
14 Mortgagee’s rights
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1.
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Mortgagee
has right to require the mortgager to provide the financial report,
financial statement and other data reflecting the business circumstance
and credit circumstance at any
time.
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2.
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If
there are more than two mortgagers, the mortgagee has right to dispose any
or each mortgager’s guaranty when implementing the
hypothec.
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3.
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When
the main debtor does not carry out the debts legally, no matter whether
the mortgagee has other mortgages on the debts under the main contract
(including but not limited to guarantee, mortgage, pledge, letter of
guarantee, standby and any other assure means), mortgagee shall have right
to directly require the mortgager to take full security liabilities under
the mortgage contract, and is not needed to firstly carry out other
guarantee rights.
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4. |
Before confirming the obligatory right mortgaged and guaranteed at maximum amount, the mortgager has right to transfer partial or full obligatory rights and the corresponding hypothec without the prior consent of mortgager. |
Article
15 Alteration of main contract under mortgage
The
mortgager confirms that the alteration of main contract agreed by the mortgagee
and debtor is regarded as having obtained prior consent with mortgager without
notification of the mortgager, and the liability to guarantee for the mortgager
shall not be reduced thereby.
Article
16 Liability for breach of contract
In case
that the mortgager violates any term herein, the mortgagee reserves the right to
adopt one or several measures listed below:
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(1)
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Request
the mortgager to correct contract violation in a limited
period;
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(2)
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Request
the mortgager to provide new, sufficient and effective
guarantee;
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(3)
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Withdraw
partial or all guaranteed liabilities in advance, process the guaranty and
settle the guaranteed liabilities with the
proceeds;
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(4)
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Request
the mortgager to compensate for
losses;
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(5)
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Deduct
payment from any account of the mortgager and pay the mortgager indemnity
and other expenses due.
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Article
17 Independence of warrantor’s obligations
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(1)
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The
mortgager guarantees that the debtor performs all obligations stipulated
in the main contract, and in case of any violation of terms of the main
contract (including but not limited to the usage of liability fund by the
debtor not in accordance with the term of the main contract), the
performance of guarantee obligations under the contract conducted by the
mortgager shall not be affected.
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(2)
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The
obligations of the mortgager under the contract is independent and not be
affected by relationship between any party of the contract and a third
party, unless otherwise agreed
herein.
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Article
18 Governing, applicable law and dispute settlement
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(1)
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The
laws of the People's Republic of China apply to the conclusion, validity,
interpretation, performance and dispute settlement under the
contract.
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(2)
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Any
dispute or controversy incurring in the
performance of the contract or relevant to the contract shall be settled
through negotiation; in case that negotiation fails, it shall be settled
according to ①
method:
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①
File a lawsuit to the people’s court in the location of the
mortgagee.
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②
Submit to arbitration
committee (arbitration place: ____)
for arbitration, which shall be conducted in accordance with the existing
effective arbitration provisions. The arbitration ruling is final and
binding on all parties.
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③
Other methods:
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Article
19 Notice
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(1)
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Any
notice or communication under the mortgage contract shall be delivered to
the other party in writing as the communication address recorded on the
cover the contract.
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(2)
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Any
alteration of the communication address of any party of the contract shall
be notified to the other party within 3 days after the date of alteration,
otherwise the party shall undertake all legal
consequences.
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(3)
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Any
notice or communication delivered as the aforesaid address shall be
regarded as being delivered on the following
date:
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①
The fifth working day upon the delivery of registration in case of
letter;
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②
The date on which the other party receives, confirms and feeds it
back in case of telex;
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③
The date on which the addressee signs in in case of special-purpose
delivery by
a worker.
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(4)
In case that any alteration of the mortgager name, legal representative, address
and other matters is not notified to the mortgagee in writing, that the
mortgagee delivers all notices or documents to the mortgager per the materials
recorded in the contract shall be regarded having delivered.
Article
20 Execution of the contract and miscellaneous
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(1)
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The
contract shall go into effect upon signing or sealing of both
parties.
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(2)
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In
accordance with rules and regulations in China, in case of any mortgage in
need of registration under the contract, the mortgager shall handle
legitimate registration procedure in conjunction with the mortgagee
immediately upon signing the
contract.
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(3)
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During
the effectiveness of the contract, any tolerance, grace, preference or
delayed execution of the rights and interests under the contract offered
by the mortgagee to the debtor and warrantor shall not harm, affect or
limit all rights and interests enjoyed by the mortgagee in accordance with
relevant laws, stipulations of administrative rules and regulations, and
terms of the contract, shall not be regarded as abandonment of any right
and interest of the mortgagee under the contract, and shall not affect any
obligation of the mortgager under the
contract.
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(4)
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Annexes
herein are the integral part of the contract and shall have the same legal
effect as the text of the contract.
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(5)
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“Working
day” in the contract refers to the business day of the bank. During
execution of the contract, in case of a certain withdrawal or payment date
is a non-business day, it shall apply to the next business
day.
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(6)
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The
contract shall terminate upon liquidation of all liabilities guaranteed
under the contract. Upon termination of the contract, the mortgagee shall
return the ownership certificate of the guaranty in store to the
mortgager.
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(7)
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During
the period agreed in Article 3 (1) of the contract, any contract,
agreement and other legal documents signed for the formation of
debtor-creditor relationship of the mortgagee and debtor, if not confirmed
in relevant contract, agreement and other legal document for the usage of
guaranty mortgage herein, shall be deemed as guaranty mortgage for the
contract.
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(8)
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The
contract original is made in three copies
held by the mortgagee, mortgager and the registration department
respectively with equal legal
force.
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Article
21 Supplementary provision
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Mortgagee
(official seal):
Industrial
Bank Co., Ltd. Nanchang Branch
Head
or authorized agent (seal): ▇▇▇▇▇ ▇▇▇▇▇▇▇
Date:
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Mortgager
(official seal): Guixi Yixin Copper Co., Ltd.
Legal
representative or authorized agent (seal): Hu Shihong
Date:
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Registration
department (official seal):
Head
(seal):
Date:
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Annex 1
:
Uner the
No.____________ Mortgage Contract at Maximum Amount:
Guaranty
List (Real Estate)
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Guaranty
name
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||||||||
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Owner
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Guixi
Yixin Copper Co., Ltd.
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User
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||||||||
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Type
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Service
life
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|||||||
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Domicile
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||||||||
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Metes
and bounds
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East
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West
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South
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North
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Floor
area
(square
meter)
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46904.52m2
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Building
area
(square
meter)
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Structure
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Floor
number
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Level
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Construction
cost (RMB Yuan)
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Present
value (RMB Yuan)
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93.809
thousand Yuan
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Property
certificate number
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||||||||
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Issuing
authority
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Housing
Administrative Bureau of Guixi City
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Issuing
date
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Insurance
type
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||||||||
Mortgager
(seal): Guixi Yixin Copper Co., Ltd.
Mortgagee
(official seal): Industrial Bank Co., Ltd. Nanchang Branch
Bank
operator (signature):
Filling date:
_____________
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000160/09953
BFLODOCS 2383776v1
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