Attached files
Loan
Agreement
This
agreement is entered into between and amongst the following parties on November
10th , 2009.
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1.
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Shi
Quanling (the “Lender”), a citizen of the People’s Republic of China,
resides at Suite 2401, 24th
floor, China Insurance Group Building, 141 Des Voeux Road, Central, Hong
Kong.
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2.
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Dongguan
CHDITN Printing Co., Ltd. (the "Borrower"), a corporation organized under
the laws of the People’s Republic China, with headquarters at No.6
Economic Zone, Wushaliwu, Chang’an Town, Dongguang, Guangzhou Province,
China.
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In
accordance to the terms and conditions herein, the Lender hereby agrees to
provide the Borrower with a loan of total two million dollars
(USD$2,000,000.00), of which one million dollars (USD$1,000,000.00) will be paid
in RMB 6,827,500.00 based on the current exchange rate of $1=RMB6.8275 (the
“Loan”).
NOW,
THEREFORE, in consideration of the premises and the agreements herein, the
Lender hereby agrees with the Borrower, as follows:
Section 1
Loan
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1.
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Loan
Amount:
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RMB SIX
MILLION EIGHT HUNDRED TWENTY SEVEN THOUSAND FIVE HUNDRED (RMB
6,827,500.00);
ONE
MILLION DOLLARS (USD$1,000,000.00)
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2.
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Use
of Proceeds: Set up new printing production
lines
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3.
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Duration
of the Loan: one year, from the 10th day
of November, 2009 through the 10th day of
November, 2010 (the “Maturity
Date”)
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4.
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Lender
and Borrower agree to enter a separate Escrow Agreement to retain an
escrow agent to supervise the deposit and distribution of the
Loan.
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Section 2
Interest
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5.
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The
interest rate of the Loan shall be 8% per annum.
The calculation of daily interest rate is based on 360 days per
year.
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6.
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The
interest shall be incurred from November 10, 2009, paid per quarter. The
principal of the Loan shall be due on the Maturity
Date.
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7.
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With
consent of the Lender, the Borrower could pay off the loan in full prior
to the Maturity Date. The interest shall be incurred until the pay date,
based on the daily interest rate
herein.
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8.
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The
interest shall be withdrawn automatically from the Borrower’s account at
the interest due date.
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Section 3
Guaranty
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9.
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The
principal, interest, default interest, and any expenses incurred due to
the collection of the Loan shall be secured by the total assets owned by
the Borrower and her associates. A separate guaranty agreement shall be
entered into between the Lender and the
Borrower.
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10.
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The
Loan shall be secured by the common shares of Décor Products International
Inc. (Symbol: DCRD.OB) (the “Shares”) held by the Borrower, the
certificates of which shall be delivered to JPF Securities Law, LLC., a
legal firm assigned by the Lender (A Pledge Agreement shall be signed
separately). The Lender shall have a lien on the Shares pursuant to the
security law of the People’s Republic of China. When the Event of Default
occurred, the Lender shall have the preemptive right to the
Shares.
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Section 4
Agreement
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11.
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Borrower
agrees:
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（1）
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Use
of proceeds shall remain unchanged pursuant to this
Agreement;
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（2）
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The
proceeds shall not be used in any illegitimate
operation;
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（3）
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Any
material changes in the Borrower’s business, including subcontract,
leasing, merger, split off, reform, joint venture, and so forth, before
the Maturity Date, the Borrower shall notify the Lender with 30 days prior
written notice regarding such changes, and the principal and interest of
the Loan shall become immediately due and
payable;
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（4）
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The
principal and interest of the Loan shall become immediately due and
payable when the Borrower’s business is dissolved, dismissed, suspended,
or the business license is revoked.
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（5）
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Any
material changes, including lawsuits for significant amount, deterioration
in financial status, and so on, cause the loan at high risk, the Borrower
shall notify the Lender with a written notice within 3
days upon the event occurring, and the principal and interest of the Loan
shall become immediately due and
payable;
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（6）
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Provide
the Lender with necessary information, including balance sheets, income
statements, all bank accounts information, and so on, on timely basis;
assist the Lender in due diligence, auditing and inspecting the
production, operation and assets in connection with the use of
proceeds.
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12.
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Lender
agrees:
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（1）
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Deposit
the Loan in its full amount;
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（2）
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Keep
confidential to the Borrower’s debt financials, production and
operation.
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Section 5
Payment Terms
The
Lender is entitled to take one of the following payment terms set forth in Item
13 and Item 14:
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13.
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The
Borrower agrees herein and accepts, in any day before the maturity date,
the Loan shall be converted into the common shares of Décor Products
International Inc. (symbol: DCRD.OB) in part or in full, per the Lender’s
written notice, pursuant to the terms as
follows:
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（1）
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The
conversion price is US$1 per share, based on the current exchange rate of
$1=RMB6.8275;
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（2）
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Total
converted shares shall be 2,000,000
shares;
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（3）
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The
Lender cannot convert more than $25,000 within one week, with the
exception when the share price is over US$2.00, the Lender can convert up
to US$500,000 within one week;
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（4）
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Prior
to the Maturity Date, the Borrower is entitled to redeem the shares
converted by the Lender, in cash, at the price of 150% of the principal,
plus the interest incurred and payable to the
date;
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（5）
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The
Lender is entitled to exercise 2,000,000 Warrants at the price of $1.00
per share within five years, which is defined in a separate
agreement.
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14.
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The
interest of the Loan shall be paid every quarter starting from November
10, 2009. The principal and the interest incurred during the last quarter
prior to the Maturity Date shall be due and payable on the Maturity
Date.
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If the
Loan are not paid in full on the Maturity Date, the Lender shall have the right
to convert the Loan into the common shares of Décor Products International Inc.
(Symbol: DCRD.OB) at the price of 50% of the weighted average price during the
past 20 trading days prior to the Maturity Date. This right shall be waived in
the event that the conversion price is above $2.00 per share.
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15.
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Lender’s
option to payment terms set forth under Item 13 shall not have effect or
impact on the obligations and enforcement set forth under other items in
this Agreement. In the event that the conversion fails to be completed,
the Borrower shall make payments of interest and principal of the Loan in
accordance to the terms and conditions of this
Agreement.
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Section 6
Amendment
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16.
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If
the Borrower intends to extend the Loan, the Borrower shall notify the
Lender with 60 days prior
written notice before the Maturity Day and receive a written consent by
the Lender.
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17.
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If
the Borrower intends to transfer the Loan to a third party (the
“Transferee”), the Borrower shall receive a written consent by the Lender.
This Agreement remains valid until a new loan agreement is signed between
and amongst the Transferee and the
Lender.
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18.
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The
Lender shall have a right to transfer the rights set forth in this
Agreement to a third party without consent of the Borrower. The Lender
shall notify the Borrower with a written
notice.
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19.
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Any
amendments to this Agreement shall be notified each other with a written
notice. The amendments shall be finalized in writing upon mutual
consents.
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Section 7
Event of Default
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20.
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If
the Borrower fails to make payments of the interest set forth under
Section 2, the default interest rate shall be 16%, starting from the
signing date of this Agreement.
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21.
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If
the Borrower fails to make payments of the interests and principal on the
Maturity Date, the default interest rate shall be 16%, starting from the
signing date of this Agreement.
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22.
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If
the Borrower fails to make payments of the interests and principal on the
Maturity Date, the Lender shall have rights to keep the proceeds from the
sales of the pledge and the Shares to the extent of the unpaid interest
and principal of Loan. The Lender shall have recourse for the outstanding
balance.
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Section 8
Settlement of Disputes
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23.
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All disputes
arising out of or in connection with this agreement, both parties
shall seek for
the solution by negotiation. If fail in negotiation, the dispute
shall only be heard in any competent court residing in the Lender’s
residence.
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Section 9
Miscellaneous
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24.
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This
Agreement shall be effective upon signing date by the authorized
representative with corporate seal,
respectively.
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25.
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This
Agreement shall end upon the full payments for all the outstanding
interests, principal, default interest, if any, and expenses incurred due
to the collection of the Loan.
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26.
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The
Borrower may have changes in the location, mailing address, business
scope, legal representative, registered
capital, and so forth. The Borrower shall notify the Lender with a
written notice within 5
days upon the event occurring.
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27.
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Any
other matters that are not covered in this Agreement shall be settled in
compliance with the applicable laws, rules and
regulations.
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28.
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This
Agreement shall two original copies, each of which shall be held by the
Lender and the Borrower,
respectively.
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November
10th,
2009
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At
Guangzhou
1. Lender:
Shi Quanling
(Seal)
(Signature)
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Address:
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Suite
2401, 24th
floor, China Insurance Group
Building,
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141
Des Voeux Road, Central, Hong Kong
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2.
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Borrower:
Dongguan CHDITN Printing Co.,Ltd.
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(Seal)
(Signature)
Address: No.6
Economic Zone, Wushaliwu, Chang’an Town,
Dongguang,
Guangzhou Province, China