PLATING PROCESSING AGREEMENT
This
PLATING PROCESSING AGREEMENT (this "Agreement”) is made as of December
31, 2007,
by and
among Shanghai Ding Hong Electronic Co., Ltd. (Party A- the
licensed subcontractor), with its registered address at Xx.000 Xxxxxxxx Xxxx,
Xxxxxxx Xxxx, Xxxxxxxxx, Xxxxxxxx, X.X.Xxxxx;
Shanghai Micro-Surface Co., Ltd. (Party B- the licensed
subcontractor), with its registered address at Xx.0 Xxxx 00 Xxx Xxxxxx Xxxx,
Xxxxxxxxx Export Processing Xxxx, Xxxxxxxx, Xxxxx; Shanghai Kai Hong Electronic
Co., Ltd. (Party C- the customer), with its registered address Xx.000 Xxxxxxxx
Xxxx, Xxxxxxx Xxxx, Xxxxxxxxx, Xxxxxxxx, X.X.Xxxxx; and Shanghai Kai Hong
Technology Co., Ltd. (Party D- the customer), with its registered address at
Xx.0 Xxxx 00 Xxx Xxxxxx Xxxx, Xxxxxxxxx Export Processing Zone, Shanghai, China.
Party A, Party B, Party C and Party D are collectively refer to as “all parties”
hereinafter.
Recital
WHEREAS,
Party A and Party B have an electric plating license to conduct plating for
certain products and sophisticated equipments for such plating processing,
and;
WHEREAS,
Party C and Party D have advanced technology in their possession,
and;
WHEREAS,
Party C wishes to contract with Party A to utilize Party A’s license capacity
and equipment for electric plating processing and they have already signed
the
relevant plating processing agreement on January
1, 2007;
Party D
wishes to contract with Party B to utilize Party B’s license capacity and
equipment for plating processing and they have already signed the plating
processing agreement on January
1, 2007;
the
nature of the service in the abovementioned two agreements is identical;
and;
WHEREAS,
Party A hereby agree to cooperate with Party C for the electric plating of
certain semiconductor products; Party B hereby agree to cooperate with Party
D
for the electric plating of certain semiconductor products. (Party A is the
relative party to Party C and vice versa, Party B is the relative party to
Party
D and vice versa) Because Party A and Party B were established by the same
investor, while Party C and Party D belong to the same Group, all parties agree
to enhance the cooperation among them, make full use of resource, and improve
the efficiency.
NOW,
THEREFORE, in consideration of the terms and conditions of this Agreement,
the
receipt and sufficiency of which is hereby mutual acknowledged, all parties
hereby unanimously agree to the following:
1.
Party A (Subcontractor) to Party C, Party B (Subcontractor) to Party D
Obligations and Responsibilities
1.1
Party
A and Party B shall provide the following as cooperation
conditions:
(a)
Party
A and Party B shall provide the necessary workshop and office (including
associated supporting area) within
Party A and Party B;
(b)
Party
A and Party B shall provide the electric plating capacity and all necessary
equipments for the plating process;
(c)
Party
A and Party B shall provide all necessary labor and material for the plating
process;
(d)
Party
A and Party B shall, provide all the necessary utilities, including water,
electricity supply and relevant facilities
for plating of the Products and for the convenience of the daily operation
of
all parties;
(e)
Party
A and Party B shall provide respectively qualified employees to insure the
technical standards provided by Party
C
and Party D are met;
(f)
Party
A and Party B shall be responsible for the compliance of the technology, labor,
waste treatment and environment
protection requirements in connection with plating of the Products;
1
(g)
Party
A shall be responsible for the compliance of the processing procedure stipulated
by Party C and without Party
C’s
previous written notice, Party A shall not make any change to such processing
procedure during the term
of
this Agreement; Party B shall be responsible for the compliance of the
processing procedure stipulated by
Party
D and without Party D’s previous written notice, Party B shall not make any
change to such processing procedure
during the term of this Agreement;
(h)
In
the event that additional equipment for increased production is needed, Party
A
and Party B shall provide necessary
premises and employees in response to that addition.
(i)
Party
A and Party B are responsible for all aspects of managing it’s plant facility
and operations, including supervision
of employees, managing the equipment operations and performance, facility and
equipment maintenance,
proper waste treatment, and respective implementation of recommendations
resulting from technical
audits by Party C and Party D or any other audit requiring quality
improvements.
1.2 Party
C (Customer) to Party A’s and Party D (Customer) to Party B’s Obligations and
Responsibilities
(a)
Party
C and Party D shall be responsible for providing technology specifications
to
assure quality;
(b)
Party
C and Party D shall be responsible for quality examination and technical audit
of plating processes;
(c)
Party
C and Party D shall pay the processing fees according to the provisions in
the
Appendix, attached hereto and made a part of this Agreement. However, either
party shall have the right to require in written form for adjustment of the
processing fee in the event that significant changes occur in the market
situation, processing procedure and raw material costs. After all parties'
negotiation and agreement upon such adjustment and according to the subsequent
written amendment executed by all parties, the processing fee can be increased
or decreased as the case may be.
2.
Agreement Term
The
term
of the agreement is 17 years, commencing on January 1, 2007 and terminating
on
January 17, 2024. The term of this Agreement shall be of the same term with
the
operation term of Party C and Party D. In the event that the terms of Party
C
and Party D’s operation are extended beyond January 17, 2024, the term of this
Agreement shall be extended accordingly.
3.
Payment
For
the
plating under this Agreement, Party C shall make the payment to Party A and
Party D shall make the payment to Party B. And the calculation of the payment
shall be based on the aggregate volume of qualified plated products provided
by
Party A and Party B to determine the unit price in accordance with the way
set
forth in the Appendix.
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3.1
|
The
payment shall be made according to the way as set forth
below:
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Party
A
and Party B shall deliver respectively to Party C and Party D within three
(3)
working days after the end of each calendar month a written report setting
forth
in reasonable detail, the calculation of the monthly qualified volume of the
plated Products for such calendar month, after the confirmation in three (3)
working days of Party C and Party D, the aggregate monthly qualified volume
confirmed shall be used as the basis to determine the unit price for calculation
of the payment. The Parties agree that the monthly payment shall be made within
ninety (90) days as of Party A and Party B’ s issuance of invoice. All payments
due hereunder shall be made in U.S. dollars, and shall be made through
Telegraphic Transfer (T/T). In the event that any payments that are not paid
without cause on the day such payments are due under this Agreement, Party
C and
Party D shall bear interest at a rate of one-half percent (0.5%) per month
respectively, calculated on the number of days commencing from the 15th day
after such payments are delinquent.
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3.2
|
All
parties agree that the unit price listed in the Appendix, attached
hereto
and made a part of this Agreement, shall be reviewed by all Parties
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2
every
year during the term of this Agreement. In the event all Parties cannot reach
a
new unit price
for
the subsequent year, the unit price which is in effect in the current year
shall
still be applicable in the subsequent year.
4.
Daily Management and Quality Control
Party
A
and Party B shall be responsible for the overall management of the operations
under this Agreement.
The
quality control of the plating shall follow the rules and standards as set
forth
by Party C and Party D respectively. Party A and Party B shall not change the
rules and standards of the quality control without Party C and Party D’s
respective prior written consent.
5.
Party A and Party B' s Representation and Warranty
5.1 Party
A
and Party B have lawful and full rights and authority to provide all of the
conditions (workshop, plating license, equipments, employees and necessary
utilities) under this Agreement.
5.2 The
aforementioned rights and authority of Party A and Party B to all the agreement
conditions are, at present, free and clear of any mortgages, liens, security
interests, or other encumbrances that would nullify this Agreement.
5.3 There
shall be no order or decision by a judicial or administrative body to seal
up or
to limit the rights to Party A and Party B' s agreement terms and conditions
in
any way.
5.4 All
operational conditions are in accordance with the safety standard set by the
government.
5.5 The
execution of this Agreement will not (i) violate any constitution, statute,
regulation, rule, injunction, judgment, order, decree, ruling, charge, or other
restriction of any government, governmental agency, or court to which such
Party
A or Party B is subject or any provision of the articles of association of
Party
A or Party B, or (ii) conflict with, result in a breach of; constitute a default
under, result in the acceleration of, or create in any party the right to
accelerate, terminate, modify, or cancel, or require any notice under any
material agreement, contract, lease, license, permit, authorization, approval,
consent, instrument, or other arrangement to which Party A or Party B is a
party
or by which it is bound or to which any of its conditions under this agreement
are subject.
5.6 Party
A
and Party B have full right and authority to operate all of their equipments
and
facilities and processing conditions and to carry on their business as they
are
presently being conducted and have all necessary government approval to carry
on
their business. There is no order, action, investigation or proceeding pending
against Party A or Party B that may reasonably be expected to adversely affect
such licenses, permits, authorizations, approvals and consents, and Party A
and
Party B have not received notice of any such investigation or pending
proceeding.
5.7 Party
A
and Party B have duly complied in all material respects with, and all of their
facilities, business assets, property, leaseholds and equipment used in the
conduct of their business are in compliance with, the provisions of all
applicable environmental laws and all rules and regulations thereunder, as
well
as all similar local laws, rules and regulations. Party A and Party B have
all
of the required environmental permits and are not in default thereunder and
there have been no outstanding citations, notices or orders of non-compliance
issued to Party A or Party B relating to their business under any such laws,
rules or regulations.
5.8 Party
A
or Party B has not received any notice of expropriation of all or any of
its
operating conditions. And Party
A
or Party B is not aware of any expropriation proceedings pending or threatening
against or affecting any
of
Party A or Party B's conditions and terms of this
agreement.
6.
Responsibility of Party A and Party B
3
6.1 Party
A
and Party B shall provide all the workshops, equipments and their accessory
facilities in reasonably good condition and with all systems in good working
order. In the event that an overhaul to the workshops, equipments and the
related accessory facilities by Party A and/or Party B are necessary to keep
a
proper working condition, Party A and/or Party B shall inform Party C and/or
Party D respectively of the overhaul plan in reasonable detail forty-five (45)
days prior to the proposed overhaul to allow Party C and/or Party D to make
necessary arrangement and to provide Party C and/or Party D necessary assistance
respectively if requested.
6.2 Party
A
and Party B shall maintain necessary electric plating capacity for the
performance of this Agreement during the term of this Agreement. Unless
otherwise agreed by Party C and/or Party D’s previous written consent, Party A
and/or Party B shall not use the plating specifications, know-how or other
similar technical and/or trade secrets provided by Party C and/or Party D during
the term of this Agreement for the purposes that may be beyond the purposes
of
this Agreement.
6.3 Party
A
and Party B shall be responsible for real estate taxes and insurance associated
with the buildings.
6.4 Party
A
and Party B shall be solely responsible to deal with waste materials and other
environmental issues at their own sole expense, in accordance with all
applicable laws and regulations. However, during the term of this Agreement,
should the environmental expenses substantially increase due to the compliance
with new People’s Republic of China laws governing waste management and
regulations or the special requirement by Party C and/or Party D, relative
parties shall negotiate in good faith for adjustment of the unit price of the
plated products for the increased expenses subject to Section 3.2.
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6.5
|
Party
A and Party B shall be responsible for providing repairs and maintenance
at their expense for all equipments and facilities under normal
usage.
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|
6.6
|
Party
A and Party B shall follow the ISO-9000 requirements for Party A
and Party
B' s quality control system. And Party A and Party B further agree
that in
the event there exists higher technical requirements than the aforesaid
ISO-9000, they will make all efforts required to follow the higher
requirements.
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6.7 Party
A
and/or Party B shall compensate Party C and/or Party D respectively for actual
damages suffered due to unqualified and defective products as a result of the
mistakes or mis-operation by Party A and/or Party B's staff during the process
of production.
6.8 Party
A
and Party B hereby promise that if during the term of this Agreement there
is
any transfer of any kinds in all or partial shares or assets of Party A or
Party
B, this Agreement shall be binding to the assignee and the assignee shall
continue to perform this Agreement.
7.
Responsibility of Party C and Party D
7.1 Party
C
and Party D shall make the payment set forth in Section 3 of this
Agreement.
8.
Termination and Cancellation
8.1 Party
C
and Party D shall inform Party A and Party B respectively of the intention
to
renew this Agreement three (3) months before the expiration of this Agreement.
Party C and Party D have the right of first refusal to renew this agreement
under the same terms and conditions.
8.2 In
the
event that one party wants to terminate this Agreement during the term for
special reasons, the terminating party shall notify the other relevant parties
by written notice six (6) months before the proposed termination date. Unless
based on all parties' multilateral written agreement or because of an event
of
Force Majeure, any sooner termination by any party shall consist a breach of
this Agreement.
9.
Breach of Agreement and Compensation
4
9.1 Party
A
and Party B agree to indemnify Party C and Party D respectively all their
losses, including but without limitation, any and all reasonable profits,
out-of-pocket costs, legal fees, accounting fees and removal or relocation
fees,
in relation to, arising from or in connection with the following matters:
(a) any
breach of any representation or warranty of such Party A or Party B as contained
herein; and
(b) any
failure by such Party A or Party B to comply with any of its obligations
herein.
Party
A
and/or Party B shall also pay punitive damages equivalent to 10% of the
above-mentioned costs and fees; however, the damages shall not be lower than
ten
thousand RMB (RMB 10,000).
9.2 Should
Party C and/or Party D breach this Agreement during the term of this Agreement,
Party C and Party D shall compensate Party A and Party B respectively for their
actual losses and also pay punitive damages equivalent to 10% of the actual
losses. The punitive damages amount shall not be lower than ten thousand RMB
(RMB 10,000).
9.3 The
provisions of
Section 9 herein are valid only between relative parties.
10. Force
Majeure
Neither
party shall be liable for any failure of performance of this Agreement caused
by
Force Majeure. Each party shall bear the respective economic losses caused
by
the Force Majeure during this Agreement. Party A and/or Party B, except for
a
re-construction of the premises, shall repair the damaged part of the premises
and facilities to a usable condition to Party C and/or Party D's satisfaction
within thirty (30) days after the event of Force Majeure occurs, otherwise
Party
C and/or Party D may suspend the performance of this Agreement or terminate
this
Agreement.
All
parties hereby acknowledge and agree that any expropriation by any government
authority of the cooperation condition shall not be regarded as a Force Majeure
event under this Agreement.
11.
Disputes
In
the
event that any disputes arise concerning the performance of this Agreement,
all
parties may settle the disputes through friendly negotiation. Should no
settlement be reached within thirty (30) working days from the commencing date
of such negotiation, the dispute shall be submitted to the competent People's
Court to be settled by litigation.
12.
Miscellaneous
| 12.1 |
The
provisions related to liability contained herein only bind on relative
parties, which means they are only valid between relative parties.
There
will not be joint liability between Party A and Party B, nor will
there be
any joint liability between Party C and Party
D.
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| 12.2 |
This
Agreement comes into effect upon being jointly signed by all parties.
This
Agreement shall not be modified, amended, canceled or altered in
any way,
except by an instrument in writing signed by all
parties.
|
| 12.3 |
In
connection with matters that are not set forth in this Agreement,
all
parties may reach a supplementary agreement through friendly negotiation,
in accordance with the relevant regulations the People' s Republic
of
China.
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| 12.4 |
Severability.
Should any term, clause or provision of this Agreement be judged
to be
invalid for any reason whatsoever, such invalidity shall not affect
the
validity or operation of any other term, clause or provision, and
such
invalid term, clause or provision shall be deemed to have been deleted
from this Agreement.
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| 12.5 |
Governing
Law. This Agreement is governed by, and shall be construed in accordance
with, the law of the People’s Republic of
China.
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5
| 12.6 |
Integrity.
This Agreement and all of the attachments, amendments, and modifications
hereunder constitutes the complete and only contract among all parties
on
the subject matter of this Agreement. This Agreement and all of the
attachments, amendments, and modifications replace all previous oral
or
written agreements, contracts, understandings, and communications
of all
parties in respect to the subject matter of this Agreement and all
of the
attachments, amendments, and
modifications.
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| 12.7 |
No
Partnership or Agency. No party shall have the right, power or authority
to create or assume any obligation or duty, expressly or implied,
on
behalf of any other parties.
|
| 12.8 |
This
Agreement is written in Chinese and English and has four originals
for
each language. Each party shall keep one Chinese version and one
English
version and both languages are equally
authentic.
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| Party A: Shanghai Dinghong Electronic Co., Ltd. | Party B: Shanghai Micro-Surface Co., Ltd. | |
| Signature:_________________ | Signature:___________________ | |
| Date:_____________________ | Date:_______________________ |
| Party C: Shanghai Kaihong Electronic Co., Ltd. | Party D: Shanghai Kai Hong Technology Co., Ltd. | |
| Signature:_________________ | Signature:___________________ | |
| Date:_____________________ | Date:_______________________ |
6
APPENDIX
All
parties unanimously agreed that the unit price is as
follows:
From
January 1st, 2007
Normal
products: The output volume is less than 700 million pcs/month, the unit price
should be ü0.5281/Kpcs;
The
output volume exceeds 700 million pcs/month, the unit price should be
$0.4693/Kpcs
Special
products: The output volume is less than 100 million pcs/month, the unit price
should be ü0.3786/Kpcs;
The
output volume is between 100 and 300 million pcs/month, the unit price should
beü0.3522/Kpcs;
From
July
1st, 2007
Normal
products: The output volume is less than 700 million pcs/month, the unit price
should be ü0.5202/Kpcs;
The
output volume exceeds 700 million pcs/month, the unit price should be
$0.4623/Kpcs
Special
products: The output volume is less than 100 million pcs/month, the unit price
should be ü0.3786/Kpcs;
The
output volume is between 100 and 300 million pcs/month, the unit price should
beü0.3522/Kpcs;
From
January 1st, 2007
Products
other than above:
TO-220
Unit price should be ü4.09/Kpcs
TO-252
Unit price should beü0.86/Kpcs
TO-223
Unit price should beü0.81/Kpcs
SIP4
Unit
price should beü1.27/Kpcs
PM3
Unit
price should be $2.30/ Kpcs
PD5
Unit
price should be $0.85/ Kpcs
SO8
Unit
price should be $0.69/ Kpcs
| Party A: Shanghai Dinghong Electronic Co., Ltd. | Party B: Shanghai Micro-Surface Co., Ltd. | |
| Signature:_________________ | Signature:___________________ | |
| Date:_____________________ | Date:_______________________ |
| Party C: Shanghai Kaihong Electronic Co., Ltd. | Party D: Shanghai Kai Hong Technology Co., Ltd. | |
| Signature:_________________ | Signature:___________________ | |
| Date:_____________________ | Date:_______________________ |
7
