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Exhibit 10.1
 
 
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Dear Sirs /Madam,
 
Re:      Facility Letter
 
We, China Merchants Bank Co., Ltd., Hong Kong Branch ( the "Bank" ), are pleased
to offer you ( the "Borrower" ) the general banking facilities ( "Facilities" )
on the following terms and conditions. In this facility letter, words importing
the plural shall include the singular and vice versa.
 
1. 
Facilities

 
1.1 
Facility I

 
The Facilities are available up to the earlier of (i) December 30, 2010 or (ii)
5 banking days before expiry date of the Bank Guarantee issued by China
Merchants Bank Co., Ltd., Shenzhen Branch ("Facility I Maturity Date") by way of
the following:-
 
Revolving Loan Facility up to (1) USD20,000,000.00 or (ii) the amount of the
Bank Guarantee issued by China Merchants Bank Co., Ltd., Shenzhen Branch,
whichever is lower.
 
Subject to the terms and conditions of this Facility Letter, an Advance
("Advance") may be drawn down by and made to the Borrower following receipt by
the Bank at least 2 banking days prior written notice with supporting purchase
order or invoice or trade contract. advance shall be repaid on the last day of
the applicable interest period. If a new advance is to be made on an interest
payment date, then no actual repayment shall be required on the date to the
extent of the amount redrawn.
 
Facility II
 
The Facilities are available from January 1, 2011 up to the earlier of (i)
October 8, 2011 or (ii) 5 banking days before expiry date of the Bank Guarantee
issued by China Merchants Bank Co., Ltd., Shanahan Branch ("Facility II Maturity
Date") by way of the following:-
 

 
a) 
Irrevocable Letters of Credit ( "LC" )

 
b) 
Loans against T/R (up to 180 days) ("TR" )

 
c) 
Invoice Financing Loan (up to 180 days) ( "1FL" )

 
with total facility amount of USD20,000,000.00 or the aggregate amount of the
Bank Guarantee, whichever is lower.
 
1.2
The Facilities will be subject to review periodically as the Bank deem fit at
the Bank's sole and absolute discretion. The Facilities shall expire and be
repayable forthwith as and when the Bank have given the Borrower notice of such.
Nevertheless, the Bank reserve the right at the Bank's sole and absolute
discretion to increase, reduce, cancel and / or demand repayment of the
Facilities or any part thereof at any time by notice to the Borrower.

 
 
 
 

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2.
Interest, Commissions and Conditions

 
2.1
Charges and Conditions of the Facilities are as follows ( "Contract Terms" )

 
Facility I
 

 
a)
Interest Period.The Interest Period applicable to each Advance shall have
duration of I or 2 months. No Interest Period shall extend beyond the Facility 1
Maturity Date, and if any Interest Period would extend beyond the Facility I
Maturity Date, it shall end on the Facility I Maturity Date.

 
 
 

 
b)
Rate and Calculation. Revolving Loan Facility applicable to each Advance or the
relevant part thereof for each Interest Period shall be the rate per annum
determined by the Bank to be the aggregate of LIBOR for that Interest Period or
the Bank's cost of fund, whichever is higher, plus 1.3% p.a..

 
Facility II
 

 
a)
L/C opening commission: first USD50,000.00 at 1/4% and afterwards at 1/32%

 

 
b) 
Acceptance commission: first USD50,000.00 at 1/4% and afterwards at 1/32%

 

 
c)
T/R Loan interest rate at 1.3% p.a. over (i) LIBOR or (ii) the Bank's cost of
fund, whichever is higher.

 

 
d)
Commission in lieu of exchange: first USD50,000.00 at 1/4% and afterwards at
I/32%

 

 
e)
Invoice Financing Loan interest rate at 1.3% p.a. over (i) LIBOR or (ii) the
Bank's cost of fund, whichever is higher.

 
2.2
Interest will accrue from day to day and be calculated on the basis of the
actual number of days elapsed and a 365-day year for Hong Kong Dollar or 360-day
year for US Dollar or according to the market practice for calculation of other
currencies.

 
2.3
Charges and commissions will be levied and payable as set out as above. Once
paid, such charges and commissions shall not be refundable under any
circumstances.

 
3.
Fees for Facility

 
3.1
Handling fee of 0.7% on drawdown amount shall be payable by the Borrower on the
first drawdown date.

 
3.2
Commissions and Fees shall be levied and payable as set out as above. Once paid,
such fees shall not be refundable under any circumstances.

 
4.
Security

 
4.1
The Facilities are granted against the following security(ies) ("the Security"):

 
 
 
 

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·
the Bank Guarantee up to an amount of RMB140,000,000.00 issued by China
Merchants

 
·
Bank Co., Ltd., Shenzhen Branch in favour of the Bank.

 
4.2
The Bank reserve the right to request for any additional securities as the Bank
may deem fit at the Bank's sole and absolute discretion from time to time.

 
4.3
Nothing in this facility letter shall release, terminate or invalidate any
security given or security document signed before the date of this facility
letter. If there is any such security or security document, the same shall
continue to secure the Facilities granted or to be granted under this facility
letter.

 
5.
Conditions Precedent

 
The Facilities will be available for drawing after the Bank have received the
following documents in form and substance satisfactory to the Bank :-
 

 
a) 
The Bank's standard General Commercial Agreement duly executed by the Borrower.

 

 
b) 
This Facility Letter duly executed by the Borrower and the Bank.

 

 
c) 
Certified true copies of the resolutions of the board of directors of the
Borrower approving the borrowing on the terms of this Facility Letter and
authorising a person or persons to execute Facility Letter, the notice of
drawing and any other notices or documents required in connection herewith.

 

 
d) 
The Bank Guarantee

 

 
e) 
Such other documents, items or evidence as the Bank may require.

 
6.
Default Interest

 
6.1
The Bank reserve the right to collect default interest on any sum (whether
principal or interest) overdue and not paid under any of the Facilities at 5%
over and above the Contract Terms.

 
6.2
Default interest shall be calculated on the basis of the actual number of days
elapsed and a 365-day year for Hong Kong Dollar or 360-day year for US Dollar or
according to the market practice for calculation of other currencies.

 
7.
Payments

 
Any payment to be made by the Borrower or which is otherwise due on a business
day on which commercial banks are not open for business in Hong Kong /or New.
York (including Saturday, Sunday and pubic holidays) shall instead be due on the
next buiiness day in the same calendar month and, if none, on the immediately
preceding business day.
 
8. 
Set Off

 
The Bank shall have the right without notice to the Borrower or any other
person, to se( off and apply any credit balance on any account (whether subject
to notice or not and whether matured or not and in whatever currency) of the
Borrower with the Bank against the liabilities of the Borrower under the
Facilities, and the Bank are authorized to purchase with the monies standing to
the credit of any such account such other currencies as may be necessary for
this purpose.
 
 
 
 

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9.
Expenses

 
The Borrower shall pay to the Bank upon all costs, charges and expenses
(including legal expenses on a full Indemnity basis, stamp, courier fee or other
duties) incurred by the Bank in connection with the Facilities.
 
10.
Taxes and Other Deductions

 
No Deductions or Withholdings. All sums payable by the Borrower under this
Facility Letter shall be paid in full without set-off or counterclaim or any
restriction or condition and free and clear of any tax or other deductions or
withholdings of any nature. If the Borrower or any other person is required by
any law or regulation to make any deduction or withholding (on account of tax or
otherwise) from any payment for the account of the Bank, the Borrower shall,
together with such payment, pay such additional amount as will ensure that the
Bank receives (free and clear of any tax or other deductions or withholdings)
the full amount which it would have received if no such deduction or withholding
had been required. The Borrower shall promptly forward to the Bank copies of
official receipts or other evidence showing that the full amount of any such
deduction or withholding has been paid over to the relevant taxation or other
authority.
 
11.
General Commercial Agreement

 
The provisions of the General Commercial Agreement shall also apply to this
Facility Letter as if incorporated herein. If there is any conflict between
them, this Facility Letter shall prevail.
 
12.
Governing LAW

 
This facility letter shall be governed by the Laws of Hong Kong SAR. The
Borrower hereby irrevocably submits to the non-exclusive jurisdiction of the
courts of Hong Kong SAR or arbitration (as decided solely by the bank) as
regards any claims or matter arising hereunder.
 
Please signify your agreement and acceptance of this offer by signing and
returning to us the duplicate of this facility letter within 2 weeks from the
date of this letter, failing which this offer shall lapse at our discretion.
 
Should you have any queries, please do feel free to contact our Mr. Jay Ng at (
852 ) 3118 8881.
 
 
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