Factoring Contract for Domestic Trade Agreement with Shishi Branch of Industrial and Commercial Bank of China (No.: 2009 (Shishi) No. 0532) for RMB10 million
Exhibit
10.43
[English
translation for reference only]
Factoring Contract for Domestic Trade
Agreement with Shishi Branch of Industrial and
Commercial Bank of China (No.:
2009 (Shishi) No. 0532) for
RMB10 million
Serial
No.: 2009 (Shishi) No.
0532
(Recourse/Non-recourse)
Stamp: Shishi Branch of Industrial and
Commercial Bank of China Limited
This
copy is proved to be the copy of the original
Special
reminder: This Contract is made and entered into by and between the two
parties on legal consultation, equality and willingness. The terms and articles
represent the true expression of the intention of the two parties. To protect
the legal rights of Party B, Party A reminds Party B to pay full attention to
the clauses regarding the rights and obligations of each party, especially those
in capital letters.
1
Party A:
Shishi Branch of
Industrial and Commercial Bank of China
Limited
Residence
(address): ICBC Tower,
Baqi Road,
Shishi
Person in
charge: Xxxxxxx
Xxxxxx
Party B:
Guanke (Fujian)
Electron Technological Industry Co.
Ltd.
Residence
(address): Xiaban
Industrial Zone, Shuanggou, Meiling Street, Jinjiang
Legal
Representative: Tin
Man
Or
WHEREAS,
as a seller, Party B uses the accounts receivable occurring between Party B and
its customers to apply to Party A for domestic trade recourse
(recourse/non-recourse) factoring service. To specify the
responsibilities and comply with credit, Party A and Party B enter into this
Contract based on equal consultation and agreement in accordance with the
Contract Law of the People’s Republic of China and related laws and
regulations.
Article
I Terminology and Definitions
Unless
otherwise specified, the definitions for terms used in this Contract shall be as
follows:
1.1
|
Recourse
factoring: Party B transfers the accounts receivable incurred from selling
commodity, providing service to the customers or from other reasons to
Party A, and Party A provides accounts receivable financing and related
general financing services to Party B. If the customer fails to make full
payment for the accounts receivable within the specified deadline, Party A
shall have the right to reclaim the unsatisfied financing amount from
Party B in accordance with the specifications in this
Contract;
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1.2
|
Non-recourse
factoring: Party B transfers the accounts receivable incurred from selling
commodity, providing service to the customers or from other reasons to
Party A, and Party A provides accounts receivable financing and related
general financing services to Party B. If the customer fails to make full
payment for the accounts receivable within the specified deadline due to
financial or credit reasons, Party A shall not have the right to reclaim
the unsatisfied financing amount from Party
B;
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2
1.3
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Purchase
or service contract: Contracts entered into by Party B and the customers,
concerning the accounts receivable under this
Contract;
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1.4
|
Accounts
receivable: The only, specific, designated and exclusive dispute-free
lawful creditors’ rights against the customer that Party B transfers to
Party A, as incurred based on the true and lawful trading and
debtor-creditor relationship between Party B and the
customer;
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1.5
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Actual
invoice amount of accounts receivable: The balance after the payment
collected by Party B has been deducted from the invoice
amount;
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1.6
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Factoring
financed amount: The financed amount for accounts receivable provided by
Party A to Party B under this
Contract;
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1.7
|
Interest
settlement date: For interests only in one payment, the interest
settlement date is the day on which the financing amount is granted; for
interest payment on a monthly basis, the settlement date shall be the
20th
day of each month; for interest payment on a quarterly basis, the
settlement date shall be the 20th
day of the last month in each
quarter;
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1.8
|
Factoring
balance: The residual fund after deducting the financing principal,
financing interests, overdue penalty and related costs from the actual
accounts receivable collected by Party
A;
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1.9
|
Factoring
account: The designated account that Party B opens under the Contract with
Party A for the purposes of collecting accounts receivable, deducting
factoring financing principal and interests and payment of factoring
balance; the only eligible account for collecting the accounts receivable
under this Contract;
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1.10
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Factoring
fee: The fee that Party A have the right to charge Party B for providing
Party B with financing and other services under the specifications of this
Contract.
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Article
II Statement and Promises by Party B
2.1
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As
a legal entity (or an affiliate legally authorized by an legal entity)
incorporated in accordance with laws, Party B has valid business license,
owns its assets pursuant to the law, and lawfully carry out business
operations.
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3
2.2
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Party
B is capable to perform the rights and obligations under the
Contract.
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2.3
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The
signing and execution of this Contract will not violate or contradict with
the laws and administrative regulations that Party B shall comply with;
executing this Contract will not result in violation by Party B of other
contracts that Party B shall comply with, the documents that certify the
approval to its incorporation and articles of
association.
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2.4
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All
the data that Party B provided to Party A are true, correct and complete,
without any concealing, and there is no material debt or contingent debt
that should be disclosed to Party
A.
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2.5
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The
purchase or service contracts and the corresponding debtor-creditor
relationships on which the accounts receivable that Party B transfers to
Party A depends shall be true, lawful, valid and
dispute-free.
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2.6
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There
shall be no clauses that restrict the transfer of accounts receivable in
the purchase or service contracts between Party B and the
customer.
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2.7
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The
accounts receivable that Party B transfers to Party A shall have a clear
ownership and shall not have any defects; Party B shall have not
transferred the accounts receivable to any third party, and have not
assigned any pledge and other priority claim for any third party upon the
accounts receivable.
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2.8
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At
the time the Contract takes effect, there shall be no litigation,
arbitration or other potential material dispute that is raised against
Party B or pending and may result in any substantial adverse effects on
Party B.
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2.9
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The
updated financial statements provided to Party A shall be prepared in
compliance with applicable Chinese law, regulations and accounting
standards and completely, truly and fairly reflect the financial situation
and performance of Party B at the end the related financial period. After
the date of the financial statements thereof, there shall be no material
change in the business or financial situation of Party
B.
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2.10
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The
factoring account with account No. 1408019819007059357
that Party B opens with Party A (the same as below) shall be used for
receiving the corresponding accounts receivable and deducting the
factoring financing principal and interest, and without the agreement from
Party A, Party B shall not voluntarily draw any amount on the account and
shall not give any order to draw any amount on the account. The account
shall not be used as internet banking
account.
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4
2.11
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Party
B authorizes Party A to perform regular management and monitoring on the
factoring account, including but not limited to check and record the fund
income and expenditure on the account, and shall support Party A to check
every income on the account.
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2.12
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Party
A shall have the right to directly deduct the corresponding financing
principal, interest and related costs
if:
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(1)
|
Party
B fails to fully pay the due interests on the interest settlement date set
forth in the Contract;
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(2)
|
Party
B fails to fully pay the due principal on the financed fund settlement
date (including the acceleration of maturity declared by Party
A);
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(3)
|
The
accounts receivable corresponding to the financing is collected
early.
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2.13
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If
the amount on the factoring account cannot fully fund the principal and
interests corresponding to the factoring financing on the financing fund
settlement date, Party A shall have the right to deduct the corresponding
amount on any account that Party B opens with Party A or any other branch
of Industrial and Commercial Bank of China Limited for collection of total
financing fund principal and interests and other due costs. This
specification does not apply to non-recourse factoring with the exception
that Party A notifies Party B to purchase back the accounts receivable
according to specifications set forth in 6.3 of the
Contract.
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2.14
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The
purpose of the financing under the Contract is for Working
Capital. Party B shall not use the financed funds for other
purposes without written consent from Party
A.
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Article
III Amount and Period of Factoring Financing
3.1
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Party
B transfers the creditor’s rights for the accounts receivable and related
rights to Party A; after the audit and confirmation, Party A shall grant
Party B a financing fund totaling RMB 10,000,000.00
(TEN MILLION
YUAN ONLY) (when the amount in numbers is inconsistent with the
amount in words, the amount in words prevails) based on the sum of the
amounts of factoring financing fund (see Appendix for Accounts Receivable Transfer
List, and the same for below) corresponding to each accounts
receivable invoice under the
Contract;
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3.2
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The
period for each factoring financing fund granted by Party A to Party B
corresponding to each accounts receivable invoice shall start on the day
the fund is granted and end on the date of the repayment of the fund as
agreed by Party A and Party B; for details, see the Accounts Receivable Transfer
List.
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5
3.3
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The
actual fund granting date and repayment date shall subject to the records
in promissory note. The promissory note is a component of the Contract,
and has the same legal effects as the Contract. If the specifications for
factoring financing fund amount, time of repayment, etc. recorded in the
Accounts Receivable
Transfer List differ with those in the promissory note, the
promissory note shall prevail.
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Article
IV Interest Rates, Interests and Costs of Factoring
Financing
4.1
|
For
the interest rates of the factoring financing under the Contract, see
Accounts Receivable
Transfer List.
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4.2
|
The
interest rates of the factoring financing shall be determined according to
(1)
:
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(1)
|
The
three-month Shibor, which is issued on the working day prior to the
factoring financing fund granting day, plus 140 base points
(BP) (annual interest rate of 3.2114% or
monthly interest rate of ‰).
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(2)
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For
interest rates determined based on the base interest rate plus a floating
element on the factoring financing fund granting day, wherein the base
interest rate shall be the RMB loan interest rate issued by People’s Bank
of China for the period and level corresponding to those of the time limit
for the financing fund as set forth in 3.2 of the Contract, and the
floating element shall be of / %
(up/down/zero).
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4.3
|
If
the financing fund interest rate is determined based on the method set
forth in 4.2 (2), the following method ( / ) shall be
used to respond to any base interest rate adjustment occurred after the
granting of the financing fund:
|
(1)
|
The
interest rate shall be adjusted for each period, and the period shall be
on the basis of / (1/3/6/12)
month(s). The interest rate for the first period shall be determined based
on the interest rate of the date on which the financing fund is granted,
and the interest rate for the second period shall be determined based on
the interest rate of the date corresponding to the end of the first period
after the granting of financing fund; other periods shall be determined by
the above method. If there is no date in the month in which the adjustment
is carried out corresponding to the financing fund granting date, the last
day of the month shall be used as the corresponding date. On each interest
rate determining date, the financing fund rate shall be adjusted based on
the base interest rate valid for the day and the floating element as set
forth above, and the interest shall be determined based on the periods
separated by adjustment.
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(2)
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The
interest rate shall be adjusted on each June 21 and December 21 after the
financing fund granting date and on the basis of the base interest rate
valid for the day and the floating element as set forth
above.
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6
(3)
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The
interest rate of the financing fund shall be undergone no adjustment for
the whole contract period.
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(4)
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Others:
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4.4
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If
Party B fails to make the repayment as specified in the Contract when the
time for the financing fund is expired, the above interest rate
determining method shall still apply to the overdue part of the financing
fund.
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4.5
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In
the event that the People’s Bank of China adjusts the loan interest rate
determining method, the related rules set by the People’s Bank of China
shall be followed.
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4.6
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The
settlement of interests for the financing fund under the Contract shall
use the method (1) as
follows:
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(1)
|
The
interests are settled once for all upon the granting of the financing
fund;
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(2)
|
After
granting the financing fund, interest rate shall be on a daily basis
(daily interest rate = annual interest rate/360) and interests shall be
settled on a monthly
(monthly/quarterly) basis. When the time for the financing fund expires,
the interests shall be all settled with the principal; for details, see
Accounts Receivable
Transfer List. The monthly interest settlement shall be on the
20th
day of each month; the quarterly interest settlement shall be on the
20th
day of the last month (i.e. March, June, September, and December) of each
quarter.
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4.7
|
For
the settlement of interest based on the method set forth in 4.6 (1), Party
A shall deduct the fund’s interest upon granting the financing fund; for
the settlement of interest based on the method set forth in 4.6 (2), Party
B shall deposit the due interest into the factoring account prior to the
date on which the interest rate is settled, and Party A shall directly
collect the interest by deduction on the account. Upon the expiring date
for the financing fund under the Contract, the unsettled interests shall
be paid off with the principal.
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Article
V Collection of Accounts
Receivable
5.1
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The
accounts receivable under the Contract shall be collected with the
following method (2); for
details see Accounts
Receivable Transfer List:
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(1)
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Party
A shall be fully responsible for the management and
collection;
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(2)
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Party
B shall urge the customer for collection, prompting the customer to
deposit the accounts receivable into the factoring
account.
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7
5.2
|
After
receiving the full amount of the payments from the customer, Party A shall
check the received accounts receivable with each corresponding financing
fund; if the amount is correct, the financing fund which corresponds to
the accounts receivable shall be cancelled off from the Accounts Receivable Transfer
List. Party A shall make prompt payment of any excessive factoring
amount to Party B.
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Article
VI Conditions, Manner and Steps for Buy-back of Accounts Receivable
6.1
|
If
Party B's false representation or guarantee has adverse effects on the
payment of accounts receivable under this Contract, Party B shall conduct
buy-back as Party A notices.
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6.2
|
In
addition to conditions in Paragraph 6.1, Party B shall also conduct
buy-back as Party A notices for recourse factoring business engaged in the
following conditions:
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|
(1)
|
Due
to goods loss or any other reasons, the Buyer raises objections to the
payment of accounts receivable under this Contract, thus rejecting to pay
all or part of accounts receivable;
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(2)
|
On
the due date of factoring financing, Party A does not receive payment from
the Buyer, or payment from the Buyer is not enough to cover financing
principal, interest, default interest and relevant
costs;
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(3)
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Due
accounts receivable financing as announced by Party A when there is a
breach as agreed in Article Ⅸ of this
Contract.
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6.3
|
In
addition to conditions in Paragraph 6.1, Party B shall also conduct
buy-back as Party A notices for non-recourse factoring business engaged in
the following conditions:
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(1)
|
Due
to goods loss or any reasons other than finance or credit, the Buyer
raises objections to the payment of accounts receivable under this
Contract, thus rejecting to pay all or part of accounts
receivable;
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(2)
|
Due
to trade disputes (including but not limited to, disputes related to
quality, technique and service), debt disputes and debt recourse between
Party B and the Buyer or between Party B and other debtors, the Buyer
fails to pay the accounts receivable to Party A within the period under
the purchase-and-sale or service
contract;
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(3)
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After
the signing of this Contract, Party A finds that the accounts receivable
for nonrecourse factoring do not meet conditions agreed under this
Contract.
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8
6.4
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Party
B shall, within 3 days after receiving the written notice from Party A
requesting buy-back of the accounts receivable, buy back the remain
accounts receivable as required in the notice; if Party B buys back all of
the accounts receivable, Party A and Party B shall sign written documents
for the confirmation of buy-back of the accounts receivable, and this
Contract shall terminate when the money has been credited into
account.
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Article
VII Party B's Rights and Obligations
7.1
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Party
B shall have the following rights and obligations under this
Contract:
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(1)
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Party
B shall have the right to require Party A to provide financing under this
Contract;
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(2)
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Party
B shall pay fees of factoring business, interest of factoring financing,
overdue default interest and relevant costs under this Contract, and shall
fulfill the buy-back obligation under this
Contract;
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(3)
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Party
B shall agree with the Buyer upon the way (remittance, for example) in
which the Buyer will have the received payment of the accounts receivable
directly sent to the factoring account; when bills are used as the
settlement method through which the received payment of the accounts
receivable can not be directly sent to the factoring account, Party B
shall guarantee to send the received payment to the factoring account in
time;
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(4)
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Party
B shall fully cooperate when Party A makes a survey about Party B's
production, business and finance conditions, and shall provide accounting
and financial statements and other data in time as Party A
requires;
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(5)
|
Party
B shall provide the necessary assistance when Party A takes payment
collection measures or proceedings upon the
Buyer;
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(6)
|
Party
B shall provide satisfactory warrants for the fulfillment of its
obligations under this Contract as Party A requires. If the warrant Party
B provides is the maximum warrant, the name and code of the Maximum
Security Contract are (Code: ).
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(7)
|
Party
B shall notify Party A and provide related information within 5 days after
the occurrence of the following
events:
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l
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Any
breach events;
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9
l
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Anticipated
breach events or any events that may cause damages to Party A's rights
under this Contract;
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l
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Litigation,
arbitration or claims of any form related to an amount over RMB or
other currencies of equivalent value, requested by any
debtees;
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l
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Changes
of enterprise name, residence, registered capital, business scope and type
of company, revision of company's policies, joint-stock reformation,
contracting, leasing, merger, separation, joint venture or cooperation
with foreign investors, significant financial changes or equity changes
and other important events;
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(8)
|
If
the Buyer or any third party provides a warrant of any form for Party B's
accounts receivable, Party B shall transfer the transferrable part to
Party A, and for the non-transferrable part, shall assist Party A in
recourse when Party A requires;
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(9)
|
Except
for the accounts receivable and related rights transferred to Party A,
Party B shall continue fulfilling other obligations under the
purchase-and-sale or service
contract;
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(10)
|
After
this Contract comes into effect, Party B shall neither sign any agreement
or document that may harm Party A's benefits under this Contract, nor
conduct any actions that may harm Party A's
benefits.
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7.2
|
In
addition to provisions in Paragraph 7.1, Party B shall be responsible for
the final payment of funds under the recourse factoring business; even if
the accounts receivable can not be collected in due time and full amount
for any reasons, Party A can still exercise and achieve recourse right
from Party B.
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Article
VIII Party A's Rights and Obligations
8.1
|
Party
A shall have the following rights and obligations under this
Contract:
|
(1)
|
From
the date this Contract becomes effect, the claims of the accounts
receivable are transferred to Party A, and Party A shall enjoy all the
rights related to the accounts
receivable;
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(2)
|
In
the event that Party B does not conduct buy-back obligation, Party A shall
have the right to conduct compensation and recourse, namely to directly
reduce the due bought-back accounts from an account Party B has set in
Party A or in other ICBC branches, or conduct recourse on the due
payment;
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10
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(3)
|
Party
A shall have the right to obtain the original invoices of the accounts
receivable Party B keeps under this Contract, and to keep them till the
fund principal and its interest under this Contract are fully paid back;
after the fund principal and its interest under this Contract are fully
paid back, Party A shall return the original invoices of the accounts
receivable to Party B;
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(4)
|
Party
A shall provide fund and other service to Party B under this
Contract;
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(5)
|
Party
A shall keep confidential all information Party B provides related to
debt, finance, production and business, unless otherwise specified under
this Contract or by laws;
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8.2
|
In
addition to 8.1, under the recourse factoring business, Party A shall have
the following rights:
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(1)
|
Before
the factoring fund principal and its interest are fully paid back, and if
Party B does not pay back the fund and relevant costs to Party A under
this Contract, Party A has the right to reduce the fund, factoring fees,
fund interest, overdue default interest and relevant costs directly from
the factoring account;
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(2)
|
Party
A has the right to know, inspect and supervise the plan conducting and
financial conditions of Party B's production and business
management;
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(3)
|
On
the financing due date, if the payment received by Party A is not enough
to cover financing principal, interest, default interest and relevant
costs, Party A has the right to decide by itself whether to conduct
recourse from the Buyer; Party A's decision to conduct recourse from the
Buyer shall not affect Party B's buy-back obligation; however, if Party A
has got part or all of the goods payment from the Buyer, Party B's
buy-back amount shall be reduced accordingly; Party A shall pay factoring
balance (if any) to Party B in
time.
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8.3
|
In
addition to 8.1, Party A shall also enjoy the following rights under the
non-recourse factoring business:
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|
(1)
|
When
the Buyer fails to pay the accounts receivable in due time continuously
for over twice (included), Party A has the right to stop the factoring
business for the accounts receivable due from the Buyer to Party B under
this Contract.
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(2)
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11
Article
IX Breach and Responsibilities
9.1
|
General
rule: Should either Party break any provision under this Contract, it will
be regarded as a breach of the Contract, and the Party in breach shall
bear its responsibilities for breach according to laws or this
Contract.
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9.2
|
Under
any of the following conditions, Party B shall be in
breach:
|
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(1)
|
Party
B fails to fulfill its obligations under this Contract or break its
statement, warranty or promise made under this
Contract;
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(2)
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Cross
breach events, including any of the following
situations;
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l
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Party
B has any other debt over Yuan
which need be paid and is announced as receivable before the specified due
date;
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l
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Party
B has any other debt which can not be paid on the specified due
date;
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l
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Any
other debtee obtain the ownership of all or part of Party B's business or
assets, or any decisions or judgments about Party B's any assets are
subject to enforcement, thus substantially harming Party B's ability to
fulfill the obligations under this
Contract;
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(3)
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Anticipated
breach events, include any of the following
situations:
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|
l
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Party
B stops or possibly stops running its business or any key part of its
business, or Party B disposes all or part of its business or assets, thus
substantially harming Party B's ability to fulfill the obligations under
this Contract;
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l
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Party
B has material adverse changes in its production, business or financial
conditions, or in its ability to fulfill the obligations under this
Contract;
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l
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Party
B causes responsible accidents due to the violation to relevant laws and
regulations about food security, safe production, environment protection,
etc., supervision regulations or industrial standards, thus substantially
harming Party B's ability to fulfill the obligations under this
Contract;
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12
|
l
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Party
B is involved or probably involved in great economic disputes, or has its
assets seized or enforced, thus substantially harming Party B's ability to
fulfill the obligations under this
Contract;
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|
l
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Warrant
under this Contract suffers from changes against Party A, and Party B does
not provide other warrant as Party A
requires;
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l
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Party
B will or possibly will substantially harm its ability to fulfill the
obligations under this Contract or substantially harm Party A's rights
under the following conditions: Party B or its related party is subject to
legal investigation or penalties by judicial departments or administrative
law-executing departments (such as taxation, industrial and commercial
bureau) or administrative management departments; the
controlling/controlled relationship between Party B and its related party
changes; Party B's related party is involved or probably involved in great
economic disputes, proceedings or arbitration; Party B's major investors
or key managers are changed unusually, under legal investigation or
confined for being suspects of criminal actions by judicial departments;
Party B's related party suffers from other events that may have adverse
effects on Party B.
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|
l
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Party
B transacts factoring business with notes and accounts receivable without
real trade support through false contracts between Party B and its related
party, to cheat Party A out of fund or credit extension, or Party B evades
Party A's credit rights intentionally through related
trades;
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(4)
|
In
addition to conditions in 9.2 (3), anticipated breach events under
recourse factoring business, also include any of the following
situations:
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|
l
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Party
B or the Buyer has such bad actions as overdue, advances and evasion of
interest upon credit business with Party
A;
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l
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The
bad debt rate of the accounts receivable due from the Buyer to Party B is
increased in two continuous months;
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l
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The
unpaid accounts receivable due from the Buyer to Party B accounts for over
5% of the remain accounts receivable due from the
Buyer;
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|
l
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Party
B has failed to buy back the accounts receivable in due time and amount
continuously for over twice;
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l
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Any
other situations that may harm or probably harm Party B's fulfillment of
the obligations under this
Contract;
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13
9.3
|
In
any breach event above, Party A has the right to take one or more of the
following measures:
|
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(1)
|
To
demand Party B to correct the breach actions within a certain
period;
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(2)
|
To
stop the factoring business for Party
B;
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(3)
|
To
announce that the finished factoring business is due instantly, and demand
Party B to immediately buy back the unpaid accounts
receivable;
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(4)
|
To
reduce a certain amount of payment from an account Party B has set in
Party A or in other ICBC branches, to pay all fund principal, its interest
and other accounts payable;
|
|
(5)
|
To
ask Party B to add a legal, effective and moderate warrant acceptable for
Party A;
|
|
(6)
|
To
ask for the repayment of the accounts receivable directly from the Buyer
in due date;
|
|
(7)
|
Other
necessary measures as is ruled by relevant laws and regulations, this
Contract or Party A's request;
|
9.4
|
If
Party B fails to pay back the fund principal and its interest (including
those announced in advance due) under this Contract for recourse factoring
business, or if Party B fails to buy back the accounts receivable under
this Contract for nonrecourse factoring business, Party A has the right to
ask for default interest at the rate adding 30% (30%-50%)
to the original fund interest rate from the overdue day, and to ask for
compound interest for the overdue interest at the rate of default interest
specified in this paragraph.
|
9.5
|
If
Party B uses the fund for the purpose other than that under this Contract,
Party A has the right to ask for default interest at the rate adding 50% (50%-100%)
to the original fund interest rate from the diverting day, and to ask for
compound interest for the overdue interest during the fund diverting day
at the rate of default interest specified in this
paragraph.
|
9.6
|
In
order to realize the credit rights under this Contract, Party A has the
right to reduce proper accounts for payment from a domestic/foreign
currency account Party B has set in Party A or in other ICBC branches. If
the reduced accounts are in currency different from that of this Contract,
follow the exchange rate applied by Party A on the day of reduction for
conversion. Party B shall pay the interest and other costs incurred as
well as the imbalance resulting from exchange rate changes during the
period from the day of reduction to day of payment (the day when Party A
converts the reduced payment into the currency of this Contract according
to the national foreign exchange management policies and really pays off
Party B's debts).
|
14
Article
X Miscellaneous
10.1
|
Party
A shall record the capitals, interests, costs and any other funds that
should be paid by Party B under this contract and the payment collection
from buyer in Party A’s internal financial books; the above-mentioned
record and the receipts and documents being raised and kept during the
business process between Party A and Party B constitute the valid
evidences with respect to the performance under this contract between
Party A and Party B.
|
10.2
|
Without
the prior written consent of Party A, Party B should not transfer any
right and obligation under this contract to any third
Party.
|
10.3
|
Party
A can transfer the entire or a portion of rights under this contract to a
third Party.
|
10.4
|
Party
A’s failure or delay performance of any right or decision-making power
under this contract shall not be deemed as a waiver of such right or
decision-making power; any single or partial performance of the
above-mentioned right or decision-making power shall not hinder Party A’s
further performance of this right or decision-making power. Any right and
relief measure agreed in this contract is accumulated with no exception of
any other rights and relief measures provided for by
law.
|
10.5
|
Party
A is entitled to provide relevant information of this contract and other
relevant information of Party B to the Credit Reference Center of the
People’s Bank of China and other credit information databases set up by
law according to requirements of relevant laws and regulations or
financial regulators, for properly qualified organizations and individual
to inquire and use. For the formation and fulfillment of this contract,
Party A also has the right to inquire relevant information of Party B
through the Credit Reference Center of the People’s Bank of China and
other credit information database set up by
law.
|
10.6
|
Party
A shall notify the matters about the transfer of creditor’s rights of
account receivable to buyer in writing, and Party A can directly submit
the written notice to buyer without consent of Party
B.
|
15
Article
XI Dispute Resolution
11.1
|
Formation,
validity, explanation, performance and dispute resolution of this contract
apply to laws of the People’s Republic of China. During performance of
this contract, with respect to all the disputes and controversies arising
from or relevant to this contract, both Parties involved should resolve
the disputes by negotiation at first; if the negotiation fails, resolve
the disputes and controversies according to the following method (2):
|
(1)
|
Submit
disputes to / arbitration
committee, and conduct the arbitration at /
(Seat of arbitration) according to the valid arbitration rules when
arbitration application is submitted. The arbitration award is final and
binding on both Parties.
|
(2)
|
Resolved
by lawsuit through the court of Party A’s
area.
|
Article
XII Contract Validation, Change, Dissolution and
Termination
12.1
|
This
contract is valid from the date of signature and shall terminate till the
day Party B fulfills all the obligations under this
contract.
|
12.2
|
Unless
otherwise specified in the contract, once become valid, either Party shall
unilaterally change or terminate this contract; any modification or change
of this contract is subject to consensus and written agreement between
Party A and Party B.
|
12.3
|
If
the entire or parts of provisions are not in accordance with requirements
of the national laws, regulations and policies due to changes of national
laws, regulations and policies, Party A and Party B should negotiate
timely and modify the relevant provisions
soon.
|
12.4
|
Any
invalid or unenforceable provision of this contract shall not affect the
effectiveness and enforceability of other provisions, neither the validity
of the whole contract.
|
12.5
|
Change
and termination of this contract shall not affect contracting parties’
rights to require loss compensation. Termination of this contract shall
not affect the validity of provisions relevant to dispute resolution under
this contract.
|
Article
XIII Supplementary
Provisions
13.1
|
Unless
otherwise specified in the context, under this contract: (1) this contract
and its appendix, and any change, modification or supplementary documents
of this contract shall be included as long as this contract is referred
to; (2) any provision, article and appendix mentioned herein only means
provisions, articles and appendix under this contract; (3) The contract
headings herein are provided for convenient reference only, and shall not
be any explanation to this contract and place restrictions on the contents
below it.
|
16
13.2
|
Any
appendix, supplement, modification and change which has the same legal
effect as the contract is an integral part of this
contract.
|
13.3
|
Words
mentioned in this contract such as “affiliated parties”, “relationship of
affiliated parties”, “affiliated parties transactions”, “main individual
investors” and “key managers” have the same meanings as the same words in
Accounting Standards for
Business Enterprises No.36 – Disclosure of Affiliated Parties (Accounting [2006] No.3)
issued by Ministry of Finance and its modification
thereafter.
|
13.4
|
Appendix
under this Contract includes: Account Receivable Transfer
List.
|
13.5
|
Any
other issues unmentioned in this Contract shall be negotiated by Party A
and Party B or executed according to relevant rules of national laws and
regulations.
|
13.6
|
Originals
of the Contract which have the same legal effect are in duplicate,
one for
Party B, and
one for Party A.
|
17
Party A: (Official
seal)

Shishi
Branch of the Industrial and Commercial Bank of China Ltd. (Seal)
Principal (authorized)
representative: (Signature)

Xxxxxxx
Xxxxxx (Seal and signature)
Party B: (Official
seal)

Guanke (Fujian) Electron Technological Industry Co Ltd (Seal)
Principal (authorized)
representative: (Signature)

Tin Man
Or (Seal and signature)
Date of
signature: December
15, 2009.
18
Appendix
2:
Accounts
Receivable Transfer List
According
to Party B’s application for factoring business of recourse (repurchase)
[recourse (repurchase)/non-recourse (outright purchase)], after approved
by both Parties, Party B transfers the account receivable debt and other
relevant rights formed with buyer to Party A, and Party A provides Party B with
the factoring financing worthy of RMB 10,000,000.00 Yuan
(RMB TEN
MILLION YUAN ONLY), by mutual consultation, the following agreements are
made with respect to relevant matters of this Account Receivable Assigned List
(hereinafter referred to as list):
Ⅰ. This
list, together with Factoring
Contract for Domestic Trade and other appendixes constitute this complete
Contract with binding force on both Parties.
Ⅱ. When
applied to this list, the provisions and terms agreed in Factoring Contract for Domestic
Trade by both Parties shall remain to have the same
meanings.
Ⅲ. Any
other issues unmentioned in this list shall comply with provisions of Factoring Contract for Domestic
Trade agreed by both Parties.
Ⅳ. When
there are too many account receivable invoices under provisions of this list,
sheets which have the same legal effect as this list after being affixed the
official seals of both Parties can be attached.
Ⅴ.
This list is valid from the date of affixture of both Parties’ official seals
and signatures and seals of the legal representatives or authorized
representatives or principals, till the date that Party A recovers all the
financing capitals and interests and relevant costs granted under Factoring Contract for Domestic
Trade.

Guanke
(Fujian) Electron Technological Industry Co Ltd (Seal)
Tin Man
Or (Seal and signature)
Accounts
Receivable Transfer List
Unit: RMB Yuan
No.
|
Full Name of
Purchaser
|
Accounts Receivable
Invoice No.
|
Accounts
Receivable
Invoice
Actual
Amount
|
Accounts
Receivable
Payment
Due Date
|
Financed
Factoring
Amount
|
After
issuing
Financed
Factoring
|
Maturity of
Financed
Factoring
|
Lending
Rate
(%)
|
Interest
Settling
Method
|
Accounts
Receivable
Collection
Method
|
Handling
Fee
Amount
|
|||||||||||||||||||
1
|
Fujian
Shishi Yulong International Trade Co., Ltd.
|
No.00340440-00340458
|
13306505.00 | 20090519 | 10,000,000 |
December
15, 2009
|
June
6, 2010
|
3.2114 | % |
Per
month
|
Collected
by Party B
|
30,000.00 | ||||||||||||||||||
2
|
||||||||||||||||||||||||||||||
Total
amount of the financing fund
|
10,000,000 |
Total
handling fee
|
Note:
|
1.Accounts
Receivable Payment Due Date is the account collection date that was
contracted under purchase and sales or service contract by the two Parties
under this list, and the form is XXXX Year XX Month XX Date;
2.The
form of Financed Factoring issuing date and due date is XXXX Year XX Month
XX Date;
3.Collecting
of Accounts Receivable is either by Party B or Party A.
4.Interest
settlement shall be in a one-off payment, or payment on a daily, monthly
or quarterly basis.
|
Party
A (Official Seal): Shishi Branch of The
Industrial and Commercial Bank of China Ltd. (Seal)
|
Party
B (Stamp for Contract or Official Seal): Guanke (Fujian) Electron
Technological Industry Co., Ltd (Seal)
|
Legal
Representative (Signature): Xxxxxxx Xxxxxx (Seal and
signature)
|
Legal
Representative (Signature): Tin Man Or (Seal and
signature)
|
(Authorized
Agent)
|
(Or
Person in Charge)
|
F-1
Exhibits update / Sept 1 2010
Appendix
1: (Credit
Loan)
This
Appendix is the agreed term of the thirteenth clause
“Other things agreed by both Parties” under Factoring
Contract for Domestic Trade with the contract No. of 2009 (Shishi) No. 0532
signed on Dec
15th 2009:
I.
|
The
borrower shall report external guarantee situation to the lender
regularly, and promise that the information and external guarantee amount
provided to the lender is full, true and
accurate.
|
II.
|
The
borrower shall report every loan purpose to the lender faithfully, and
promise that the loan borrowed from the lender would not flow to stock
market and forward market, and it shall be used for equity capital
investment without breaching any relevant state
provision.
|
III.
|
In
event of any cases as below within the credit period, the lender has the
right to bring forward the due time of loan, stop to issue the unissued
loan, and ask the borrower to return part or full of the issued loan ahead
of time, or ask the borrower to provide lawful and effective guarantee
recognized by the lender:
|
1.
|
The
borrower set up mortgage (impawn) for others or provide a loan to others
through his own effective operating asset which result in loaning risk
increase for the lender without previous written consent of the
lender
|
2.
|
The
index of credit rate, profitability, asset-liability ratio and operating
activities cash flow etc. of the borrower do not meet the conditions of
credit for borrower, or there is substantial change to his operation,
production and financial condition, which will have significant negative
affect to the lender’s loan safety.
|
IV.
|
Others
|
1._________________________________________________________________________________________
__________________________________________________________________________________________
2._________________________________________________________________________________________
__________________________________________________________________________________________
-1-
F-1
Exhibits update / Sept 1 2010
3._________________________________________________________________________________________
__________________________________________________________________________________________
Party A (Official
Seal):
|
Party B (Official
Seal):
|
Shishi
Branch of The Industrial and Commercial Bank of China Ltd.
(Seal)
|
Guanke
(Fujian) Electron Technological Industry Co., Ltd
(Seal)
|
Legal Representative (Or
Authorized Agent):
|
Legal Representative (or Person
in Charge)
|
Xxxxxxx
Xxxxxx (Seal and signature)
|
(Or Authorized
Agent):
|
Tin
Man Or (Seal and signature)
|
|
Date:
|
Date: 15th
Dec. 2009
|
-2-