Document:

Working Capital Borrowing Contract

Contract No.: 2011 Jian Quan shi Dai Zi No.12

Borrower (“Party A”): Shishi Feiying Plastic Co., Ltd

Domicile (Address): Longshan Development Zone, Ganjiang Town, Shishi City

Postal Code: 362700

Legal Representative: Wu Licong

Tel:   88682818     Fax: 88682828_________________

Lender(“Party B”): China Construction Bank Shishi Branch

Domicile (Address): Gonghang Building, Baqi Road, Shishi City  Postal Code: 362700

Person Responsible: ChenFangxing

Tel:  0595-88595137     Fax:__0595-88595137_______________

  

1

 

Whereas, Party A applies to Party B for a borrowing, and Party B agrees to issue the loan to Party A. Therefore, this Contract is entered into by and between Party A and Party B in accordance with applicable laws, regulations and rules through negotiation for common compliance.

	
Article 1

	
Borrowed Amount

Party A will borrow RMB Ten Million (in words) from Party B.

	
Article 2

	
Use of Borrowing

Party A shall apply the borrowing to its working capitals.

Please refer to Attachment 1 about use of borrowing and repayment under this contract.

	
Article 3

	
Term of Borrowing

The term of borrowing hereunder shall be twelve months from January 4, 2011 to January 4, 2011.

If the commencement date and ending date of the borrowing hereunder are inconsistent with those on the loan dump voucher (borrowing IOU, the same below), the actual issuance date as recorded on the first-issuance loan dump voucher shall prevail, and the due date of the borrowing as set forth in the first paragraph of this Article shall be adjusted accordingly.

The loan dump voucher, being an integral part of this Contract, shall have the same force and effect with this Contract.

	
Article 4

	
Loan Rate, Penalty Rate, Interest Accruals, Interests Settlement

	
I.

	
Loan Rate

The loan rate hereunder is an annual rate as specified in  (II)  below:

	
(I)

	
Fixed rate, i.e.,   %, which will remain unchanged during the term of borrowing;

	
(II)

	
Fixed rate, i.e., down (“up” or “down”) by 10  % from prime rate of the Interests Commencement Date, which will remain unchanged during the term of borrowing;

	
(III)

	
Floating rate, i.e.,    (“up” or “down”) by   % from prime rate of the Interests Commencement Date, which will be adjusted according to the prime rate of the date when the rate is adjusted (“Rate Adjustment Date”) and the above up/down rate every   month from the Interests Commencement Date to the date when the borrowing hereunder is repaid in full. The Rate Adjustment Date, corresponding to the Interests Commencement Date, shall be the date in the month in which the rate is adjusted. If there is no such date in the month corresponding such Interests Commencement Date, the final day of such month shall be treated as the Rate Adjustment Date.

  

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(IV)

	_______________

	 	
II.

	
Penalty Rate

	
(I)

	
If Party A fails to use the loan pursuant to this Contract, the penalty rate will be increased by 100% based on the loan rate. If the loan rate is adjusted according to (III) of I of this Article, the penalty rate will be adjusted according to the adjusted loan rate and the above increase.

	
(II)

	
The penalty rate is increased by 50% based on the loan rate for the overdue repayment. If the loan rate is adjusted according to (III) of I of this Article, the penalty rate will be adjusted according to the adjusted loan rate and the above increase.

	
(III)

	
In the event of simultaneous overdue repayment and misappropriation, the penalties and compound interests shall be added according to the above rates, whichever is higher.

 

	
  

	
III.

	
The “Interests Commencement Date” as mentioned in this Article shall mean the date when the initial loan hereunder is transferred to the account as designated by Party A.

For issuance of the initial loan hereunder, the prime rate shall mean the loan rate at the same level in the same period as published by the People's Bank of China on the Interests Commencement Date. Thereafter, if the loan rate is adjusted subject to the preceding provisions, the prime rate shall mean the loan rate at the same level in the same period as published by the People's Bank of China on the date when such loan rate is adjusted. If the People's Bank of China does not publish the loan rate at the same level in the same period any longer, the prime rate shall mean the loan rate at the same level in the same period as generally accepted or acknowledged by the banks on the date when the loan rate is adjusted, unless otherwise as agreed by the parties hereto.

	
  

	
IV.

	
The loan interests will be added from the date when the loan is transferred to the account as designated by Party A. The loan interests hereunder will be added on a daily basis at the daily rate equaling to annual rate/360. If Party A fails to pay the interest accruals on the Interests Commencement Date as specified in this Contract, the compound interests will be added from the day following such Interests Commencement Date.

 

  

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V.

	
Interests Settlement

	
(I)

	
If the loan is granted at a fixed rate, the interest accruals will be added according to the rate as agreed by the parties when such interest accruals are settled. If the loan is granted at the floating rates, the interest accruals will be added according to a floating rate determined for a certain period; and if there is more than one floating rate in a single interest settlement period, it is required to figure out the interest accruals of each floating period in the first instances, and then to count the sum of interest accruals of all floating periods in such single interest settlement period on the Interests Commencement Date.

	
(II)

	
The loan hereunder will be added interest accruals according to the method as specified in  I  below:

i.           Monthly interests settlement: The Interests Settlement Date shall be the 20th day of each month;

ii.          Quarterly interests settlement: The Interests Settlement Date shall be the 20th day of the final month of each quarter;

iii.         Other methods Not Applicable.

	
Article 5

	
Issuance and Drawing of Borrowing

	
  

	
I.

	
Precedent Conditions for Issuance of Borrowing

Unless otherwise waived by Party B in whole or part, Party B shall be obligated to issue the borrowing provided that the following precedent conditions are satisfied:

	
(I)

	
Party A has obtained and/or completed approvals, registration, delivery, insurance and other legal formalities in relation to the loan hereunder.

	
(II)

	
If a guarantee is created in favor of this Contract, such guarantee meeting Party B's requirements has come into effect and will keep effective all the times.

	
(III)

	
Party A has opened an account to be used for drawing and repaying the loan at the request of Party B.

	
(IV)

	
Party A has not caused any breach as specified in this Contract, nor met any circumstance as specified in this Contract that may endanger the claims of Party B.

	
(V)

	
Party B is not prohibited or limited from issuing the borrowing hereunder by laws, administrative regulations, rules or competent authorities.

	
(VI)

	
The borrower should abide by the agreed financial indicators of attachment 2.

  

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II.

	
Plan of Use (“Use Plan”)

Please refer to Article 20 hereof.

The Use Plan is according to the method as specified in III below:

	
(I)

	
Use Plan as below:

/   (month)   /   (date)  /    (year),     /    (amount)

/   (month)   /   (date)  /    (year),     /    (amount)

/   (month)   /   (date)  /    (year),     /    (amount)

/   (month)   /   (date)  /    (year),     /    (amount)

	
(II)

	
Use Plan as below

/  (month)  /  (date)  /  (year) - /  (month)  /  (date)   / (year) , /    (amount)

/  (month)  /  (date)  /  (year) - /  (month)  /  (date)   / (year) , /    (amount)

	
(III)

	
At any time as need

	
(IV)

	_______________________

	
  

	
III.

	
Party A shall use the loan subject to the Use Plan as specified in II above. Unless otherwise agreed by Party B in writing, Party A shall not get in advance, delay, divide or cancel the drawing in any way.

	
  

	
IV.

	
If Party A use the loan by installment, the expiry date of the term of borrowing shall be determined subject to Article 3 hereof.

	
Article 6

	
Repayment

	
I.

	
Principles of Repayment

Party A shall repay the borrowing hereunder subject to the following principles:

  

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Party B shall be entitled to apply the repayment of Party A to satisfy all fees that have been advanced by Party B but shall be borne by Party A pursuant to this Contract, and the fees used for getting the claims by Party B. And the remaining shall be used for paying the interest accruals in the first instance, and then the principals. However, if the due principals are not repaid for more than 90 days, or if the due interest accruals are not paid for more than 90 days, or if the loan as otherwise provided by laws, regulations or rules is not repaid, Party A shall repay the principals in the first instance, and then pay the interest accruals thereon after paying the above fees.

	
II.

	
Payment of Interest Accruals

Party A shall pay to Party B the due interest accruals on the Interests Settlement Date. The first interests payment date shall be the first Interests Settlement Date upon the issuance of the borrowing, and all the interest accruals shall be paid in full when the final installment of the borrowing is repaid.

	
III.

	
Principals Repayment Schedule

The borrower shall repay the loan in the contract according to the following (I) means:

(I) January  (month) 4  (Date)  2012  (Year), Ten million  (amount)

__________(month) ___(Date) ________(Year), ____________(amount)

__________(month) ___(Date) ________(Year), ____________(amount)

(II) ______________

	
IV.

	
Repayment Method

Party A shall deposit money enough to repay the due borrowing for self-transfer repayment into the account opened with Party B before the due repayment date as specified in this Contract, and Party B shall be entitled to take the due amount from such account, or from other accounts of Party B that may be transferred for the repayment on the due repayment date as specified in this Contract.

	
V.

	
Advance Repayment

Party A may repay the principals in whole or part in advance upon consents of Party B by sending a written application to Party B thirty working days in advance.

If Party A repays the principals in advance, the interest accruals thereon shall be added according to number of actual days of the use of borrowing and the loan rate as specified in this Contract.

  

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If Party B agrees on the advance repayment made by Party A, it shall be entitled to get compensations from Party A, which will be determined subject to the method as specified in i below:

	
i.

	
Compensations = Principals repaid in advance x number of advance months x 1‰. In the event of less than one month, one month shall prevail for the purpose of such compensations.

	
ii.

	
Not  Applicable.

If Party A makes repayments by installment, and if it makes advance repayment in part, it shall repay the borrowing in reverse order as specified in the repayment schedule. Upon advance repayment, the loan rate hereunder shall be applicable to the outstanding borrowing.

	
Article 7

	
Rights and Obligations of Party A

	
I.

	
Rights of Party A

	
(I)

	
Party A shall be entitled to request Party B to issue the borrowing subject to this Contract.

	
(II)

	
Party A shall be entitled to use the borrowing subject to this Contract.

	
(III)

	
Party A shall be entitled to apply to Party B for extension of the borrowing provided that requirements of Party B have been satisfied.

	
(IV)

	
Party A shall be entitled to request Party B to keep confidential relevant financial information and trade secrets concerning the production and operation as provided by Party A, unless otherwise as provided by laws and regulations, or as required by competent authorities, or as agreed by the parties hereto.

	
(V)

	
Party A shall be entitled to reject any bribes as requested by Party B and its work personnel, and to report to competent authorities any such request or violation of laws and regulations concerning applicable credit loan rate and service charges by Party B.

	
II.

	
Obligations of Party A

	
(I)

	
Party A shall draw the borrowing and pay the principals and interest accruals thereon in full subject to this Contract, as well as bear all applicable fees hereunder.

 

  

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(II)

	
Party A shall provide all information concerning its finance and accounting, production and operation at the request of Party B, including but not limited to providing Party B with its balance sheets, profit and loss statements (income and expenditure statements in the event of a public institution) as at the end of the immediately preceding quarter within the first twenty working days in the beginning of the first month of each quarter, as well as providing its cash flow statements of the year at the end of such year in a timely manner. Furthermore, Party A shall ensure that all the information provided by it is lawful, true, complete, accurate and valid, free of false information, or without concealing material operating and financial matters.

	
(III)

	
If Party A changes or replaces its name, legal representative (responsible officer), registered address, scope of business, registered capitals or articles of association by completing any such change and/or replacement in the registration with the Administration for Industry and Commerce, it shall send a written notice to Party B together with the information concerning such change or replacement within five working days upon occurrence of any such change or replacement.

	
(IV)

	
Party A shall use the borrowing according to this Contract other than engaging in any transactions in violation of laws and rules by embezzling, misusing or misappropriating the borrowing; meanwhile, it shall coordinate and accept the inspection and monitoring by Party B over its production, operation, financial activities and use of borrowing hereunder. And it shall not avoid its obligations owed to Party B by taking out capitals, transferring assets or taking advantage of related transactions, nor make banking discount or create charges for getting capitals or credits from a bank by taking advantage of false contracts with its related parties, or receivable notes and receivables lack of actual transactions.

	
(V)

	
Party A shall comply with applicable environment protection regulations of the PRC if it conducts manufacture and engineering construction by using the borrowing hereunder.

	
(VI)

	
Before paying the principals and interest accruals thereon to Party B, Party A shall not create a guarantee in favor of a third party on the assets created by using the borrowing hereunder without prior consents of Party B.

	
(VII)

	
If Party A is a group company, it shall report to Party B its related transactions accounting for more than 10% of its net assets in a timely manner, including (i) related relationships among trading parties; (ii) trading projects and nature; (iii) trading amount or corresponding proportions; (iv) pricing policies (including transactions lack of consideration or nominal transactions).

 

  

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(VIII)

	
If the loan hereunder is issued as the fixed-asset loan or project loan, Party A shall ensure that (i) the proposed project has been obtained with approvals of relevant government authorities and will not violate any laws and regulations, (ii) capitals or other raisings will be contributed in full subject to the specified deadline and proportions, and (iii) the project will be completed according to the schedule.

	
Article 8

	
Rights and Obligations of Party B

	
I.

	
Party B shall be entitled to request Party A to pay the principals, interest accruals thereon and fees therefrom as scheduled, and to exercise other rights hereunder, and to request Party A to perform other obligations hereunder.

	
II.

	
Party B shall issue the loan subject to this Contract, unless otherwise delayed for the reasons attributed to Party A or other reasons not attributed to Party B.

	
III.

	
Party B shall keep confidential relevant financial information and trade secrets concerning the production and operation as provided by Party A, unless otherwise as provided by laws and regulations, or as required by competent authorities, or as agreed by the parties hereto.

	
IV.

	
Party B shall not bring, nor get or accept any bribe to and from Party A and its work personnel.

	
V.

	
Party B shall not create any bad faith that may damage the legal benefits of Party A.

	
Article 9

	
Breaching Liability, Remedies in the event of circumstances that may endanger Party B's claims

	
I.

	
Breach by and Breaching Liability of Party B

	
(I)

	
Party A may request Party B to continue to issue the loan subject to this Contract provided that Party B fails to issue the loan subject to this Contract without any justified reasons.

	
(II)

	
In the event Party B charges any interest accruals and fees from Party A by violating laws, regulations or limitations of the PRC, Party A shall be entitled to request Party B to refund any such interest accruals and fees.

  

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II.

	
Breach by Party A

	
(I)

	
Party A has breached any provision hereof, or any of its legal obligations.

	
(II)

	
Party A will not perform any of its obligations hereunder by express or through other acts.

	
III.

	
Circumstances that may endanger Party B's claims

	
(I)

	
Party B may consider that its claims are endangered under any of the following circumstances in relation to Party A: contracting, trusts (take-over), release, shareholding reforms, reduction of registered capitals, investments, joint operation, consolidation, merger, acquisition and restructuring, division, joint venture, petition (or being petitioned) for shut-down for reorganization, dissolution, cancellation and/or bankruptcy, replacement of controlling shareholders/actual controllers, transfer of material assets, suspension of production, out-of-business, penalties in high amount by competent authorities, cancellation of registration, withdrawal of business license, involvement in material legal disputes, material difficulty in manufacture and operation, or  worse conditions of finance, incapability of performing their duties by legal representative or main responsible officer.

	
(II)

	
Party B may consider that its claims hereunder are endangered under any of the following circumstances: Party A fails to perform other due obligations (including the obligations due and payable to all institutions of China Construction Bank or other third parties); or it transfers its properties in a low price or without any consideration, or reduces or releases the obligations of a third party; or it fails to exercise its credit rights or other rights, or grants a guarantee in favor of a third party.

	
(III)

	
Party A's shareholders avoid the obligations by abusing the independent standing of the legal person or the limited liability of shareholders, according to which Party B considers that its claims hereunder are endangered.

	
(IV)

	
Any of the precedent conditions hereunder for issuance of the borrowing has not been satisfied at any time.

	
(V)

	
Party B may consider that its claims hereunder are endangered under any of the following circumstances of the guarantor:

 

  

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i.

	
The guarantor has breached any provision hereof, or any of its statements and warranties is false, wrong or missing.

	
ii.

	
The guarantor has met any of the followings: contracting, trust (take-over), release, shareholding reforms, reduction of registered capitals, investments, joint operation, consolidation, merger, acquisition and restructuring, division, joint venture, petition (or being petitioned) for shut-down for reorganization, dissolution, cancellation and/or bankruptcy, replacement of controlling shareholders/actual controllers, transfer of material assets, suspension of production, out-of-business, penalties in high amount by competent authorities, cancellation of registration, withdrawal of business license, involvement in material legal disputes, material difficulty in manufacture and operation, or  worse conditions of finance, incapability of performing their duties by legal representative or main responsible officer that may affect its guarantee capability.

	
iii.

	
Other circumstances in which the guarantor loses or may lose its guarantee capability.

	
(VI)

	
Party B may consider that its claims hereunder are endangered if the mortgage and/or pledge meets any of the following circumstances:

	
i.

	
The mortgaged and/or pledged properties are damaged or lost, or their values are reduced by virtue of acts of a third party, or expropriation, forfeit, confiscation, withdrawal without any consideration and/or removal by the State, or changes of marketing conditions or any other reasons.

	
ii.

	
The mortgaged and/or pledged properties are sealed, detained, frozen, deducted or created with a lien, or under the monitoring of administrative authorities, or under disputes concerning the titles of the same.

	
iii.

	
The mortgagor and/or pledger have breached any provision of the mortgage and/or pledge contract, or any of their statements and warranties is false, wrong or missing.

	
iv.

	
Other circumstances that may endanger the mortgage or pledge rights of Party B.

 

  

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(VII)

	
The guarantee is not created, does not come into effect, becomes null and void, or is cancelled or rescinded, or the guarantor breaches this Contract or will not perform its guarantee liability through its express acts, or the guarantor loses its guarantee capability in part or whole, or the value of collaterals is reduced, according to which Party B considers that its claims hereunder are endangered; or

	
(VIII)

	
Other circumstances in which Party B considers that its claims hereunder may be endangered.

	
IV.

	
Remedies by Party B

Under any of the circumstances as specified in II or III of this Article, Party B shall be entitled to exercise one or more of the rights as follows:

	
(I)

	
Cease the issuance of loan;

	
(II)

	
Declare the loan to become due with immediate effect, and request Party A to immediately pay all due and undue principals, interest accruals thereon and fees therefrom under this Contract;

	
(III)

	
Party B shall be entitled to request Party A to pay liquidated damages at 0.1 % of the borrowed amount that has not been used pursuant to this Contract, and reject any borrowing that has not been issued to Party A, provided always that, Party A fails to use the borrowing pursuant to this Contract.

	
(IV)

	
Charge interest accruals and compound interests at the penalty rate and according to the interests settlement methods as specified in this Contract for the borrowing misappropriated by Party A from the date when the loan is not used pursuant to this Contract, to the date when all principals and interest accruals thereon have been paid in full, provided always that, Party A fails to use the borrowing pursuant to this Contract;

	
(V)

	
In the event of overdue repayment, charge interest accruals and compound interests at the Penalty Rate and according to the interests settlement methods as specified in this Contract for the principals and interest accruals thereon that have not been paid by Party A as scheduled (including such principals and interest accruals thereon as are declared by Party B to become due earlier in whole or part), from the date of such overdue repayment, to the date when all principals and interest accruals thereon have been paid in full. “Overdue Repayment” shall mean that Party A fails to repay the borrowing as scheduled or repays the principals by going beyond the repayment schedule for each installment.

 

  

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Before the borrowing becomes due, the interest accruals unpaid by Party A shall be added compound interests at the loan rate and according to the interests settlement method as specified in this Contract.

	
(VI)

	
Other remedies, including but not limited to:

	
i.

	
Take applicable amount in RMB or other currencies from accounts of Party A opened with China Construction Bank, without any further advance notice to Party A;

	
ii.

	
Exercise its rights on the guarantees;

	
iii.

	
Request Party A to provide new guarantees conforming to Party B's requirements for all of its obligations hereunder;

	
iv.

	
Terminate this Contract.

	
Article 10

	
Miscellaneous

	
I.

	
Bearing of Fees

Party A shall pay for legal services, insurance, appraisals, evaluation, registration, safekeeping, identification, public notary and other fees in relation to this Contract and the guarantees hereunder, unless otherwise as agreed by the parties hereto.

Party A shall pay for all of Party B's out-of-pockets for getting its claims (including but not limited to court fees, arbitration fees, property preservation fees, travel expenses, execution fees, appraisal fees, auction fees, public notary fees, service fees, publicity fees, and attorney fees).

	
II.

	
Use of Party A's Information

Party A accepts and acknowledges that (i) Party B may search Party A's credit standing information in the credit database established upon approval of the People's Bank of China and the competent credit standing departments or via relevant entities or departments, and (ii) Party B may provide Party A's credit standing information to such credit database established upon approval of the People's Bank of China and the competent credit standing departments. Meanwhile, Party A agrees that Party B may reasonably use and disclose Party A's information as well based on its business.

 

  

13

 

	
III.

	
Collection by Announcement

If Party A defaults in paying the borrowed principals and interest accruals thereon or has other breaches, Party B shall be entitled to report to relevant departments or entities, and to announce the collection via news medias.

	
IV.

	
Validity of Evidences of Party B's Records

Except for reliable and affirmative contrary evidences, Party B's internal accounting records in relation to the principals, interest accruals thereon, fees therefrom and repayment records, documents and vouchers in relation to drawing, repayment, payment of interest accruals by Party A but produced or kept by Party B, collection records and vouchers of Party B, shall constitute effective and affirmative evidences for the obligations and claims between the parties hereto. And Party A shall not have any objection only based on the facts that the above records, documents and vouchers are produced or kept by Party B unilaterally.

	
V.

	
Reservation of Rights

Party B's rights under this Contract shall be without any prejudice to any of its other rights as provided in laws, regulations and other contracts. Any tolerance, grace, favor to any breach, delay, or any extension for exercise of its rights hereunder shall not be deemed to waive any rights or benefits hereunder, nor to acknowledge or accept any breach of this Contract, nor affect, prevent or hinder any further exercise of such rights or exercise of any other rights, nor cause Party B to bear obligations or liabilities to Party A.

	
VI.

	
If Party A bears other due obligations to Party B in addition to the obligations hereunder, Party B shall be entitled to take any amount in RMB or other currencies from the accounts of Party A opened with China Construction Bank for paying any due obligations in the first instance, to which Party A has agreed to have no objection.

	
VII.

	
Party A shall promptly notify Party B in writing of its changed mailing address or contact details, and shall bear the losses arising out of its failure to send the above notice in a timely manner.

 

  

14

 

	
VIII.

	
Drawing of Payables

As for all the payables by Party A under this Contract, Party B shall be entitled to draw corresponding money in RMB or other currencies from Party A's accounts opened with China Construction Bank without any further prior notice to Party A. If foreign exchange settlement or purchase-and-sale of foreign exchanges is required, Party A shall be obligated to assist Party B to complete the same at the exchange rate risks of Party A.

	
IX.

	
Conditions for Effectiveness

This Contract comes into effect after it is signed, or affixed with common seal, by Party A's legal representative (responsible officer) or authorized agent, and signed, or affixed with common seal, by Party B's responsible officer or authorized agent.

	
X.

	
Party A represents that it has not conducted any activity or met any circumstance in violation of any laws, regulations and rules concerning environmental protection, energy savings or emission reduction, pollution reduction as at the execution of this Contract, and undertakes to strictly comply with such laws, regulations and rules after this Contract is signed. If any of the above representations is false or if any of the above undertakings is not performed, or if Party A may meet energy consumption or pollution risks, Party B shall be entitled to cease its credits to Party A (including but not limited to rejecting in issuing the loan, providing finances, opening L/G or L/C or bank acceptance drafts), or to declare the loaned principals and interest accruals thereon (including but not limited to loans, finances, advances that have been or may be made) to become due earlier, or to take other remedial measures as provided in this Contract or laws.

	
Article 11

	
Other Provisions

The claims hereunder shall be guaranteed subject to the Maximum Guarantee Contract (2009 Jian Quan Shi Gao Bao Zi No. 28) and Maximum Guarantee Contract(2010 Jian Quan Shi Gao Bao Zi No. 12).

	
Article 12

	
Representations

	
I.

	
Party A has clearly known and understood the scope of business, and authorized powers, of Party B.

	
II.

	
Party A has already read all the terms of this Contract. Meanwhile, Party B has made interpretation for certain terms of this Contract at the request of Party A. And Party A has known well and understood the meanings of, and legal consequences that may arise from, the terms of this Contract.

 

  

15

 

	
III.

	
Execution of this Contract and performance of its obligations hereunder by Party A meet laws, administrative regulations, rules or its articles of association or internal organization documents, and have been obtained with approvals from its internal authorized department and/or competent authorities of the State.

 

  

16

 

	
Party A (common seal): Shishi Feiying Plastic Co., Ltd.

	  	
Party B (common seal): China Construction Bank Shishi Branch

	 	 	 
	
Signed by Legal Representative (Responsible Officer) or Authorized Agent: Wu Licong

	  	
Signed by Responsible Officer or Authorized Agent: Chen Yixin

	 	 	 
	

	  	

	  	  	  
	
January 4, 2010

	  	
January 4, 2010

	  	  	  
	

	  	

  

17

 

Attachment

Financial indicator restriction terms

The financial indicators of the company should satisfy the conditions below, Within the period limitation, Liability/ Assets ratio is no more than 50%; current ratio is no less than 1.4; the balance of contingent liability is no more than RMB 60 million; contingent liability ratio is no more than 30%; the total of long-term investment should be less than 30% of net assets.

  

18

 

 

Maximum Mortgage Contract

 

	

	
  

	
China Construction Bank Fujian Branch

 

  

  

  

This Maximum Mortgage Contract (“Contract”) is entered into by and between:

Mortgagor (“Party A”): please refer to Article 14 hereof

Mortgagee (“Party B”): please refer to Article 14 hereof

	
Article 1

	
Collaterals

	
  

	
I.

	
Party A will create mortgages on the properties listed in the Collaterals List as attached hereto.

	
  

	
II.

	
After new ownership or other title certificates (certifications) are issued for the Collaterals, any discrepancy between the Collaterals List or other title (mortgage) certificates or mortgage certification documents accepted by Party B, and such new title certificates (certifications) or relevant records on the register of registration authority, shall not procure Party A to reject bearing the guarantee liability.

	
  

	
III.

	
Unless otherwise as agreed by the parties or provided in laws, any new additions on the Collaterals due to any accessories, mixing, processing and improvement shall be applied to guarantee Party B's claims as well, and Party A shall complete necessary mortgage registration at the request of Party B.

	
  

	
IV.

	
If Party B's claims are adversely impacted because the values of the Collaterals have been or may be reduced, Party A shall provide new guarantees at the request of Party B.

	
Article 2

	
Guaranteed Scope and Maximum Claims

	
  

	
I.

	
The Maximum Mortgage covers all the obligations under the principal contracts, including but not limited to all the principals, interests accruals (including compound interests and penalties), liquidated damages, damages, other payables to Party B by the debtor (including but not limited to relevant service fees, telecommunication fees and incidental expenses advanced by Party B, relevant banking service fees under L/C rejected by the beneficiary), the fees arising out of realization of claims and guarantees by Party B (including but not limited to court fees, arbitration fees, property preservation fees, travel expenses, enforcement fees, appraisal fees, auction fees, service fees, announcement fees, attorney's fees, etc.)

	
  

	
II.

	
Please refer to Article 15 hereof.

	
  

	
III.

	
Loans, advances, interest accruals, fees or Party B's other claims under the principal contracts shall be governed by the Maximum Mortgage hereunder, irrespective of whether their actual creation goes beyond the Period for Determining Claims (defined below). The due date of obligations under the principal contracts shall not be limited by expiry date of the Period for Determining Claims.

  

  

  

	
Article 3

	
Registration of Collaterals

The parties hereto shall complete the mortgage registration with appropriate registration department within five business days after this Contract is signed. Party A shall submit to Party B the originals of other title certificates of Collaterals, mortgage registration documents, and other title certificates before the mortgage registration is completed.

	
Article 4

	
Modifications to Principal Contracts

	
  

	
I.

	
Party A agrees that it is not required to inform it if Party B and the debtor sign principal contracts or make any modification to the same (including but not limited to extension of performance of obligations or additions to the principals). And Party A shall still bear the guarantee liability under the Maximum Mortgage and the guaranteed scope hereunder as before.

	
  

	
II.

	
Replacement of Parties

Party A's guarantee liability hereunder shall not be reduced or released under any of the following circumstances:

	
  

	
(I)

	
Party B or the debtor conducts restructuring, consolidation, merger and/or division, or increases or reduces capitals, or conducts joint venture, joint operation, or changes its name;

	
  

	
(II)

	
Party B entrusts a third party to perform its obligations under the principal contracts.

	
  

	
III.

	
If the claims under the principal contracts are transferred to a third party, the guarantees hereunder shall be transferred as well. In such case, Party A shall assist Party B and such a third party to complete the changes in mortgage registration as required by laws.

	
  

	
IV.

	
Party A shall still bear joint and several liability to Party B pursuant to this Contract if any transfer of claims or obligations under principal contracts fails to come into effect, becomes null and void, or is canceled or rescinded.

	
Article 5

	
Possession and Custody of Collaterals

	
  

	
I.

	
Party A shall possess, keep, repair and maintain the Collaterals in a proper manner, reasonably use the same and keep the same in good conditions; meanwhile, it shall pay for all applicable taxes in relation to the Collaterals. Party B shall be entitled to inspect the Collaterals, and to request Party A to submit the originals of title certificates of Collaterals to Party B for keeping.

	
  

	
II.

	
If Party A entrusts a third party to possess, keep and use the Collaterals, or agrees on doing so by a third party, it shall inform such third party of the mortgages on such Collaterals in favor of Party B, and request such third party to keep the Collaterals in good conditions, to allow Party B to inspect the Collaterals, and not to prevent Party B from realizing the mortgages. Meanwhile, Party A shall not be released from its obligations as specified in the preceding paragraph, and shall be liable for acts of such third party simultaneously.

	
  

	
III.

	
Party A shall be liable for injury or damage to properties caused by the Collaterals, if any. And Party B shall be entitled to make recourse against Party A if it suffers claims or makes an advance for damages due to any such injury or damage.

  

  

  

	
Article 6

	
Insurance for Collaterals

	
  

	
I.

	
Unless otherwise agreed by the parties, Party A shall insure the Collaterals according to applicable laws and types of insurance, insurance period and insured amount as designated by Party B. The insurer shall have legal qualifications and good reputations as required.

	
  

	
II.

	
The policies shall conform to Party B's requirements without any attached restrictive conditions that may damage Party B's benefits. In particular, the policies shall be noted as follows: Party B shall be the preferred beneficiary (the first beneficiary) of the insurance proceeds; any modification to the policies can only be made upon prior written consents of Party B; the insurer shall directly pay insurance proceeds to the account designated by Party B upon occurrence of insured accidents. Appropriate remarks or modifications shall be made on the policies if the Collaterals have been insured but the above contents are not marked on the policies.

	
  

	
III.

	
Party A shall ensure consecutive and effective insurances on the Collaterals. It is not allowed to cease, cancel or invalidate the insurances for any reasons, or procure the insurer to be reduced or released from indemnification, or modify the policies without prior consents of Party B. If the claims guaranteed by Party A are not paid in full after the insurance period is expired, Party A shall renew the insurance and the insurance period shall be extended accordingly.

	
  

	
IV.

	
Party A shall submit originals of policies of the Collaterals to Party B within five business days from the date of conclusion of this Contract (or the date of renewal of insurance if the Collaterals are renewed for insurance), and leave documents in relation to insurance claims and necessary to transfer of insurance benefits at Party B.

	
  

	
V.

	
Party B shall be entitled to dispose insurance proceeds from the Collaterals as follows, and Party A shall assist to complete all applicable formalities:

	 	
(I)

	
To apply such proceeds to repair the Collaterals for recovering values of the same upon prior consents of Party B;

	 	
(II)

	
To apply such proceeds to pay principals, interest accruals thereon and relevant fees under the principal contracts, or to do so in advance;

	 	
(III)

	
To create pledge guarantee for obligations under the principal contracts;

	 	
(IV)

	
To be disposed by Party A at its own discretions provided that Party A provides new guarantees conforming to Party B's requirements.

  

  

  

	
Article 7

	
Limitations on Disposal of Collaterals by Party A

	
  

	
I.

	
Without prior written consents of Party B, Party A shall not dispose the Collaterals in any way, including but not limited to any waiver, lease (including renewed lease upon expiry of original lease contract), gift, transfer, contribution, repeated guarantees, assignment, changes for public benefits, additions to other objects, or restructuring and/or division.

	
  

	
II.

	
Upon prior written consents of Party B, Party A shall deposit the proceeds from disposal of the Collaterals or other money into the account as designated by Party B. Party B shall be entitled to dispose such proceeds or money through any of the methods as specified in (II) to (IV) of Paragraph V of Article 6, for which Party A shall assist to complete applicable formalities.

	
Article 8

	
Encumbrance by A Third Party

	
  

	
I.

	
If the Collaterals are levied, requisitioned, removed, forfeited, withdrawn without any compensation, by the State, or if they are sealed, frozen, seized, monitored, created a lien, sold by auction, possessed in force, damaged or otherwise disposed by a third party, Party A shall promptly inform Party B, as well as take precautious, elimination or recovery remedial measures for preventing losses from being expanded. If required by Party B, Party A shall provide new guarantees conforming to Party B's requirements.

	
  

	
II.

	
Upon occurrence of the circumstances as provided in the preceding paragraph, the remaining values of the Collaterals shall be applied to guarantee Party B's claims. Party A shall deposit damages or compensations obtained due to the above reasons into the account as designated by Party B. Party B shall be entitled to dispose such damages or compensations through any of the methods as specified in (I) to (IV) of Paragraph V of Article 6, for which Party A shall assist to complete applicable formalities.

	
Article 9

	
Realization of Mortgage

	
  

	
I.

	
Party B shall be entitled to dispose the Collaterals if the debtor fails to perform its due obligations under the principal contracts or such obligations as declared to become due earlier, or if it breaches other provisions of the principal contracts.

	
  

	
II.

	
The values of the Collaterals as recorded on the Collaterals List or as otherwise agreed by the parties (“Interim Values”) shall not mean final values of the Collaterals, and their final values shall be the net price from disposal of the Collaterals by Party B after all applicable taxes are deducted.

  

  

  

If the Collaterals are applied to offset Party B's claims, the above Interim Values shall not be deemed as the grounds for offsetting Party B's claims by the Collaterals, and values of the Collaterals shall be determined through negotiation by the parties or fair evaluation to be conducted according to law for the time being.

	
  

	
III.

	
Proceeds from disposal of the Collaterals by Party B shall be applied to pay off obligations under the principal contracts, and the remaining shall be refunded to Party A after the expenses or fees (including but not limited to custody fees, appraisal fees, auction fees, transfer fees, taxes, considerations for grant of state-owned land use right) arising out of sale or auction of the Collaterals are paid.

	
  

	
IV.

	
If Party A and the debtor is the same person, Party B may apply for enforcement against Party A's properties beyond the Collaterals, which is not conditional upon waiver of the mortgages hereunder or prior disposal of the Collaterals.

	
  

	
V.

	
Party B shall not create any encumbrance (including action or non-action) against realization of mortgages by Party B in any way.

	
  

	
VI.

	
Party A's guarantee liability hereunder shall not be reduced or released, and Party A shall not have any objection if Party B directly requests Party A to bear the guarantee liability pursuant to this Contract, irrespective of other guarantees (including but not limited to warranty, mortgage, charge, letter of guarantee, standby L/C) created in favor of Party B's claims under the principal contracts, or of the time of creation of or validity of the above guarantees, or of claims against other guarantors by Party B, or of agreeing to bear the whole or part of obligations under principal contracts by a third party, or of other guarantees granted by the debtor.

	
  

	
VII.

	
If the maximum guarantee hereunder is less than the balance of the actual claims under the principal contracts, and if the claims under principal contracts are not satisfied in full after Party A performs its guarantee liability, Party A shall undertake not to damage Party B's benefits in any way if it claims (and/or pre-exercises) subrogation or pay-off rights against the debtor or other guarantors. Meanwhile, Party A agrees that the pay-off of obligations under the principal contracts is prior to its subrogation or pay-off rights.

As specifically, before Party B's claims are not satisfied in full,

	 	
(I)

	
Party A agrees not to claim its subrogation or pay-off rights against the debtor or other guarantors; if Party A realizes such rights for any reasons, the proceeds generated from realization of such rights shall be applied to satisfy unpaid claims of Party B with priority;

	 	
(II)

	
If collaterals are given for securing the obligations under the principal contracts, Party A agrees not to exercise its subrogation or bring claims against such collaterals or proceeds from disposal of the same for any reasons. Such collaterals and proceeds shall be applied to satisfy unpaid claims of Party B with priority;

  

  

  

	 	
(III)

	
If the debtor or other guarantors grant counter guarantees in favor of Party A, the proceeds gained by Party A from such counter guarantees shall be applied to satisfy unpaid claims of Party B with priority.

	 	
VIII.

	
If principal contracts are not concluded, do not come into effect, become null and void in whole or part, or are canceled or rescinded, and if Party A and the debtor are not the same person, Party A shall, to the extent of guarantee scope as specified hereunder, bear joint and several liability together with the debtor for the obligations arising out of the return of properties by or the indemnification of losses by the debtor.

	 	
IX.

	
Party A has fully recognized risks from exchange rates. If interest accruals, penalties and compound interests payable by the debtor are increased after Party B adjusts the rates, the interest bearing or settlement methods pursuant to principal contracts or based on changes of national rate policies, Party A shall bear joint and several liability for the extra part as well.

	 	
X.

	
If the debtor, in addition to the obligations under the principal contracts, bears other due obligations to Party B, Party B shall be entitled to apply the debtor's funds in RMB or other currencies under its accounts opened with China Construction Bank to satisfy any obligations due to Party B in the first instance, and whereby Party A's guarantee liability shall not be reduced or released.

	
Article 10

	
Breaching Liability

	
  

	
I.

	
Breaching Liability of Party A

	 	
(I)

	
If Party A breaches any provision hereof, or if any of its representations or warranties is false, wrong or misunderstanding, Party B shall be entitled to take one or more of the following measures:

	
  

	
i.

	
Request Party A to correct its breaches within the given time limit;

	
  

	
ii.

	
Request Party A to provide new guarantees;

	
  

	
iii.

	
Request Party A to indemnify losses;

	
  

	
iv.

	
Dispose the Collaterals;

	
  

	
v.

	
Take other remedial measures as permitted by laws.

	
  

	
II.

	
Party B shall be entitled to dispose proceeds from the disposal of the Collaterals through any of the methods as specified in (II) to (IV) of Paragraph V of Article 6, for which Party A shall assist to complete applicable formalities.

	
  

	
III.

	
Party B shall be entitled to request Party A to bear the joint and several liabilities within the mortgages as specified in this Contract with the debtor if the mortgages are not created or values of the Collaterals are reduced or Party B fails to realize the mortgages in full or in a timely manner for Party A's reasons, and if Party A and the debtor are not the same person.

  

  

  

	
  

	
IV.

	
Breaching Liability of Party B

If title certificates of the Collaterals delivered by Party A are lost due to default of Party B, or if Party B fails to return such certificates in a timely manner after the obligations under the principal contracts are paid, or if Party B fails to assist to cancel mortgage registration according to law as requested by Party A, Party A shall be entitled to take one or more of the following measures:

	
  

	
(I)

	
Request Party B to bear fees for re-obtaining title certificates of the Collaterals;

	
  

	
(II)

	
Request Party B to return title certificates of the Collaterals within the given time limit, or assist Party A to cancel the mortgage registration.

	
Article 11

	
Miscellaneous

	
  

	
I.

	
Bearing of Fees

Unless otherwise as agreed by the parties, all fees (including but not limited to such fees arising out of possession, management, disposal, registration, public notary, insurance, transport, storage, custody, appraisal, repairs, maintenance, auction and transfer) in relation to this Contract and the Collaterals hereunder shall be borne by Party A.

	
  

	
II.

	
Drawing of Payables

As for all the payables by Party A under this Contract, Party B shall be entitled to draw corresponding money in RMB or other currencies from Party A's accounts opened with China Construction Bank without any further prior notice to Party A. If foreign exchange settlement or purchase-and-sale of foreign exchanges is required, Party A shall be obligated to assist Party B to complete the same at the exchange rate risks of Party A.

	
  

	
III.

	
Use of Party A's Information

Party A accepts and acknowledges that (i) Party B may search Party A's credit standing information in the credit database established upon approval of People's Bank of China and the competent credit standing departments or via relevant entities or departments, and (ii) Party B may provide Party A's credit standing information to such credit database established upon approval of People's Bank of China and the competent credit standing departments. Meanwhile, Party A agrees that Party B may reasonably use and disclose Party A's information as well based on its business.

	
  

	
IV.

	
Collection by Announcement

In the event of any breach by Party A, Party B shall be entitled to report any such breach to relevant departments or entities, or to announce the collection via news medias.

  

  

  

	
  

	
V.

	
Validity of Evidences of Party B's Records

Save for reliable and determinable contrary evidences, Party B's internal accounting records on principals, interest accruals, expenses and repayment, its documents and vouchers produced or remained by Party B in the business of drawing, repayment and payment of interest accruals by the debtor, and its records and vouchers on collection of loans by it, shall constitute definite evidences for claims under the principal contracts. And Party A shall not have any objection only based on the facts that the above records, documents and vouchers are produced or remained by Party B unilaterally.

	
  

	
VI.

	
Reservation of Rights

Party B's rights under this Contract shall be without any prejudice to any of its other rights as provided in laws, regulations and other contracts. Any tolerance, grace, favor to any breach, delay, or any extension for exercise of rights hereunder shall not be deemed to waive any rights or benefits hereunder, nor to acknowledge or accept any breach of this Contract, nor affect, prevent or hinder any further exercise of such rights or exercise of any other rights, nor cause Party B to bear obligations or liabilities to Party A.

Even if Party B fails to exercise or delays in exercising any rights under principal contracts or fails to exhaust any remedies under principal contracts, Party A's guarantee liability hereunder shall not be reduced or released. However, Party A's guarantee liability hereunder shall be reduced or released accordingly if Party B reduces or releases the obligations under principal contracts.

	
  

	
VII.

	
Party B shall be well notified promptly if Party A is divided or dissolved, or goes into bankruptcy proceedings, or its registration is withdrawn or cancelled, or its business license is cancelled, or the Collaterals are destroyed, lost, damaged or apart from Party A's control due to natural factors or a third party's acts, or ownership of the Collaterals is under dispute or the title certificates (certifications) are cancelled.

	 	
VIII.

	
Dissolution or Bankruptcy of Debtor

If Party A becomes aware of dissolution or bankruptcy proceedings against the debtor, it shall promptly inform Party B to report is claims. Meanwhile, it shall take part in such dissolution or bankruptcy proceedings in a timely manner for pre-exercising its recourse rights. If Party A becomes aware of, or should have become aware of, such dissolution or bankruptcy proceedings, but if it fails to pre-exercise its recourse rights in a timely manner, it shall bear losses caused to it arising therefrom.

  

  

  

Notwithstanding the provision of the second paragraph of VI of this Article, if Party B and the debtor enter into an arrangement or agree on restructuring plans in the bankruptcy proceedings against the debtor, Party B's rights hereunder shall not be damaged by virtue of any such arrangement or restructuring plans, and whereby Party A's guarantee liability hereunder shall not be reduced or released. Party A shall not defense against Party B's claims based on any such arrangement or restructuring plans. Party B shall have the right to request Party A to pay off the claims that have been compromised by Party B in any such arrangement or restructuring plans, but not paid by the debtor.

	
  

	
IX.

	
Dissolution or Bankruptcy of Party A

If Party A is dissolved or becomes bankrupt, Party B shall be entitled to take part in dissolution or bankruptcy proceedings against Party A, and to report its claims, even if Party B's claims under the principal contracts do not become due.

	
  

	
X.

	
Party A shall send a timely written notice to Party B specifying any change of its mailing address or contact methods, and shall bear losses arising out of its failure to send such notice in a timely manner.

	
  

	
XI.

	
If Party A or the debtor fails to comply with laws, regulations or rules concerning environmental protection, energy savings or emission reduction, pollution reduction, or may meet energy consumption or pollution risks, Party B shall be entitled to perform its guarantees hereunder in advance, and to take other remedial measures as provided in this Contract or laws.

	
  

	
XII.

	
Effectiveness

This Contract comes into effect after it is signed, or affixed with common seal, by Party A's legal representative (responsible officer) or authorized agent, and signed, or affixed with common seal, by Party B's responsible officer or authorized agent.

	
Article 12

	
Collaterals List

Please refer to Article 19 hereof.

	
Article 13

	
Representations and Warranties by Party A

	
  

	
I.

	
Party A has clearly known and understood the scope of business, and authorized powers, of Party B.

	
  

	
II.

	
Party A has already read this Contract and all terms of principal contracts. Meanwhile, Party B has made interpretation for certain terms of this Contract and principal contracts at the request of Party A. And Party A has fully known and understood the meanings of, and legal consequences that may arise from, the terms of this Contract and principal contracts.

  

  

  

	
  

	
III.

	
Party A is eligible to act as a guarantor, and its guarantees hereunder conform to laws, administrative regulations, rules, and its articles of association or internal organization documents. Meanwhile, its guarantees hereunder have been approved by its internal authoritative organizations and/or authoritative authorities of the State. Party A shall be liable for all liabilities arising out of unauthorized execution of this Contract by it, including but not limited to full indemnifications for losses caused to Party B.

	
  

	
IV.

	
Party A confirms that it has fully known and understood assets, obligations, operation, credit and reputation of the debtor, and eligibility and authorities of the debtor to sign the principal contracts, and all contents contained in principal contracts.

	
  

	
V.

	
Party A owns and has the right to dispose the Collaterals according to law. The Collaterals are not the public facilities, which are not allowed to be circulated or transferred; and no dispute on the ownership of the Collaterals exists.

	
  

	
VI.

	
The Collaterals are not co-owned, or the mortgages hereunder have been agreed on by other co-owners in writing if the Collaterals are co-owned.

	
  

	
VII.

	
The Collaterals are free of any defect or encumbrance that has not been notified to Party B in writing, including but without limitation as follows: the Collaterals are limited for circulation, sealed, seized, monitored, leased or created a lien; or the acquisition prices, repair and maintenance fees, construction prices, national taxes, considerations for the grant of land use right, damages, of and arising out of the Collaterals are owed in arrears; or any guarantees are created on the Collaterals in favor of a third party.

	 	
VIII.

	
All data and information provided to Party B by Party A in relation to the Collaterals is true, lawful, accurate and complete.

	
  

	
IX.

	
The grant of the mortgages by Party A shall not damage legal benefits of any third party, nor go against legal and agreed obligations of Party A.

 

  

  

  

Special Terms and Conditions

 

This Maximum Mortgage Contract is numbered as “2009 Jian Quan Shi Gao Di Zi, No. 28”.

	
Article 14

	
Particulars of Contractors

Mortgagor (Party A): Shishi Feiying Plastic Co., Ltd.

Residence: Longshan Development Area, Hanjiang Town, Shishi City

Zip Code: 362700

Legal Representative (Responsible Officer): Wu Licong

Fax: 88682828

Tel: 88681828

Creditor (Party B): China Construction Bank Shishi Branch

Residence: No. 1865, 87 Road, Shishi City

Zip Code: 362700

Responsible Officer: Chen Yixin

Fax: 0595-88595137

Tel: 0595-88595195

Whereas, Party B and the Debtor will sign and/or have signed RMB borrowing contracts, foreign exchange borrowing contracts, bank acceptance agreements, L/C opening contracts, L/G issuance agreements and/or other legal documents for consecutive credit business under (I), (II), (III) and (V) below in favor of Shishi Feiying Plastic Co., Ltd. (“Debtor”) from December 02, 2009 to December 02, 2011 (“Period for Determining Claims”). The above contracts, agreements and/or other legal documents signed in the Period for Determining Claims shall be collectively referred as “Principal Contracts”.

	
(I)

	
Issue loans in RMB/foreign exchanges;

	
(II)

	
Accept commercial drafts;

	
(III)

	
Open L/C;

	
(IV)

	
Issue L/G;

	
(V)

	
Other credit business: domestic factoring, trade financing facility.

Party A is willing to grant the Maximum Mortgage for all of the Debtor's obligations under the Principal Contracts. This Contract is entered into by Party A and Party B in accordance with applicable laws, regulations and rules through negotiation for common compliance.

	
Article 15

	
Provisions for II of Article 2

The maximum amount under the Maximum Mortgage hereunder shall be RMB Thirty-five Million (in words) only. If Party A has performed its guarantee obligations pursuant to this Contract, such maximum amount shall be reduced accordingly based on the amount paid.

  

  

  

	
Article 16

	
Other Provisions

	
i.

	
Not Applicable

	
Article 17

	
Dispute Resolutions

Any dispute arising out of performance of this Contract may be resolved through negotiation by the parties; if not reached, any such dispute shall be resolved subject to the method as specified in i below. During the lawsuit or arbitration, the terms not involved in the dispute shall be continued to be performed.

	
  

	
(I)

	
To be judged and resolved by the People's Court at the location of Party B;

	
  

	
(II)

	
To be arbitrated by        arbitration commission in        in accordance with its rules in force and effect at the time of applying for arbitration; the awards shall be final and binding upon the parties.

	
Article 18

	
This Contract is made in three counterparts.

	
Article 19

	
Provisions for Article 12

The Collaterals List under this Contract is as follows:

 

Collaterals List

	
Name of

Collaterals

	  	
Numbers of Title

Certificates and Other

relevant Certificates

	  	
Location

	  	
Areas or

Quantity

	  	
Values of

Collaterals

(RMB 10

Thousand)

	  	
Mortgaged

Amount

for Other

Claims

(RMB 10

Thousand)

	  	
Remarks

	
Properties

	
  

	
Property Title Certificates numbered as Shi Jian Fang Quan Zheng Han Zi No. 00103, 00104, 00105 and 00106; Land Certificate Number of State-owned Land Use Right Certificate: Shi Han Guo Yong (2005) No. 0046

	
  

	
Building A, B, C and D on Land Parcel A of Jiulongshan Development Zone, Hongjue Village, Hanjiang Town, Shishi City

	
  

	
Land areas: 32,203.27 m2; building areas: 21,283.76 m2

	
  

	
4021.70

	
  

	
0

	
  

	
Blank

 

  

  

  

	
Party A (common seal): Shishi Feiying Plastic Co., Ltd.

	  	
Party B (common seal): China Construction Bank Shishi Branch

	 	 	 
	
Signed by Legal Representative: Wu Licong

	  	
Signed by Responsible Officer:

	 	 	 
	

	 	

	 	 	 
	
December 02, 2009

	  	
December 02, 2009General Financing Agreement for Export Order

(Contract No.: ORDER355551000015)

Party A: Industrial and Commercial Bank of China Limited Shishi Branch

Business address or working place: ICBC Building, Baqi Road, Shishi City

Principal: Zhuang Wencong

Tel. and fax: 0595-68885222

Party B (Full name): ShishiFeiying Plastic Co., Ltd.

Business address or working place: Longshan Development Zone, Hanjiang Town, Shishi City

Legal representative (or the trustee): Wu Licong

Tel. and fax:

In view that the ShishiFeiying Plastic Co., Ltd. (hereinafter referred to as Party B) applies to the Industrial and Commercial Bank of China Limited Shishi Branch (hereinafter referred to as Party A) for handling the financing business for the export order, and for defining the liabilities clearly and abiding by the credit, Party A and Party B sign this agreement on November 15th, 2010 and both sides agree on the following items:

Article I The “financing for the export order” in this agreement means that the Party B signs the orders with the overseas importers and they agree that the methods of settlement not by letter of credit shall be adopted. Due to its need for funds, Party B shall tender guarantee measures at Party A’s request. Under such conditions, Party A shall provide financing to the Party B with the expected export earnings in the order as the main source for repayment. Party B agrees to repay the above fund as well as the incurred interests, commissions, fees, late charge, etc. within the agreed deadline.

Under the above situation, all risks of the export goods shall be undertaken by Party B.

Article II This agreement is applicable for all the financing businesses for the export order handled by Party A for Party B. Each financing business shall have the Application for the Financing Business for Export Order provided by Party B and all the businesses shall be applied one by one. Party A shall decide whether to handle such business according to the actual condition of this business, and shall determine the amount of financing, the deadline, the interest rate, etc. as required by Party A.

 

  

  

  

 

Article III For the order financing, Party B agrees to transfer√/pledge the expected accounts receivable under the items of the corresponding contract of each Application for the Financing Business for Export Order to Party A, and guarantee that the received loan will be remitted to the account specified by Party A (Account No. 1408019819007040411) so as to repay the financing funds borrowed by Party B from Party A as well as the related interests and expenses etc. If the method of expected accounts receivable pledge is adopted, Party A and Party B shall sign the Contract for Accounts Receivable Pledge and the Agreement for the Register of the Accounts Receivable Pledge and then complete the register of the accounts receivable pledge. For all the financing of Party B under this agreement that becomes due, Party A shall have the right to deduct from the specified account directly.

Article IV Before Party B applies to Party A for handling each order financing business, the following materials shall be submitted one by one:

	
1.

	
Application for the Financing Business for Export Order

	
2.

	
Valid order or trade contract of the foreign purchaser

	
3.

	
The other materials required by our bank

Article V Party A shall have the right to check and monitor Party B’s operating management, financial activities as well as the inventory and sale situation of the goods and materials. Party B shall submit the financial statements and related plans and statistical statements to Party A monthly and provide convenience for Party A to carry out the financing management.

Article VI To guarantee that Party A can recover all the financing amount, interests and costs as scheduled, Party B agrees to provide the guarantee measures as required by Party A. The ] (guarantor) and Party A sign the maximum guarantee contract (Contract No.: [])

Article IX After Party B receives the export order financing provided by Party A, the export trade financing or the export settlement business of the subsequent links of the order shall be handled by Party A.

Article X Before the order financing is due, if Party B handles the export invoice financing, export factoring or export documentary credit businesses in Party A, then such financing fund shall be prior used to repay the order financing of Party A, except for the repayment for the financing of Party A by Party B with its own funds.

Article XI If the financing after shipment is not handled by Party B and Party A receives the remitted payment for goods under such export order of Party B, and when the date of the receipt of proceeds is earlier than the due date of the order financing, then Party A shall have the right to call in the financing in advance.

Article XII Party B shall undertake the losses and consequences caused by the loss, delay, errors and omissions or other force majeure of the letters and telegrams as well as the receipts under the corresponding contract or invoice of this general agreement in the process of telegraphic dispatch.

Article XIII 1. Statement and guarantee of Party B. Party B makes the following statements and guarantees to Party A, and these statements and guarantees will be valid during the whole period of validity of this agreement.

 

  

  

  

 

	
(1)

	
Have the right as the principal to be the financing applicator and the qualification and capacity to sign and execute this agreement according to law.

	
(2)

	
The basic trades under this agreement are true, legal and valid. Signing this agreement has obtained all the necessary authorization and approval. The signing and executing of this agreement shall not break our company’s regulations or relevant laws and regulations. This agreement shall not conflict with any other contract that has been signed or is being executed by Party B.

	
(3)

	
All the documents, statements, materials as well as other file information about the basic trade provided by Party A are true, accurate, complete and valid, without any false record, gross omissions or misleading statements.

	
(4)

	
Operate according to the laws and regulations with good credit. There is no credit default, evasion of repayment of bank loans or other poor records.

2. Promises of Party B. Party B shall give Party A the following promises:

	 	
(1)

	
Draw and use the financing in accordance with the deadline and usage specified by this agreement and it is not allowed for the financing funds to be pooled into the stock market, the futures market or to be used for the equity capital investment as well as other usages prohibited or restricted by relevant laws and regulations.

	 	
(2)

	
Pay off the financing capital, interests and other payables according to this agreement.

	 	
(3)

	
Accept the Party A to investigate and monitor the usage of the financing under this agreement and support Party A to ask for information about the financing. And accept the supervision by Party A on the reexchange account specified by this agreement.

	 	
(4)

	
According to the requirements of Party A, provide the statement of assets and liabilities, the incomestatement, the cash flow statement and other accounting materials, and coordinate with Party A to investigate and ask for the information about the related production, sale, operation and financial affairs.

	 	
(5)

	
Disclose the relation with the related party and the related trade to the Party A timely, roundly and accurately.

	 	
(6)

	
Without the written consent of Party A, it is not allowed to pledge or mortgage the receipts or the goods represented by the receipts under the basic trade.

	 	
(7)

	
Before paying off all the financing funds under this agreement (including the capital and interests), if Party B provides any guarantee to a third party, then it is not allowed to impair Party A’s obligatory right.

	 	
(8)

	
Without the written consent of Party A, it is not allowed to alter the basic contract.

 

  

  

  

 

	 	
(9)

	
It is not allowed to impair Party A’s obligatory right with the dispute about the basic contract.

	 	
(10)

	
If the following situations happen, then the Party A shall be informed in written timely:

	 	
A

	
Modification about the articles of incorporation, scope of business, registered capital, legal representative and the significant change about the equity;

	 	
B.

	
Closure of the business, dismission, settlement, suspension of business for bringing up to standard, cancellation and withdrawal of the business license or the application for bankruptcy;

	 	
C.

	
The members of the board of directors and the present executives are suspected of being involved in important cases or economic disputes;

	 	
D.

	
The goods under the basic trade are in danger, or are detained, sealed up, distrained or enforced by the customs department;

	 	
E.

	
Some disputes or other changes happen to the basic trade, which may impact or has impacted Party A’s obligatory right negatively;

	 	
F.

	
Some situations or events or other events of default specified by this agreement that have significant adverse impact for Party B to carry out the obligations under this agreement happen to Party B.

Article IV If one of the following situations happens, the Party B will be deemed to have breaching the agreement:

	
1.

	
Party B fails to repay any sum of the financing fund and its interests as well as other payables under this agreement according to this agreement, fails to use the financing funds to the agreed usage, fails to carry out any other obligations under this agreement, and after the interpellation of Party A, fails to carry out the obligations during the reasonable period as before, and breaches the any statement, guarantee or promise under this agreement.

	
2.

	
Some changes that are adverse to Party A’s obligatory right happen to the guarantee under this agreement, and other guarantees that are accepted by Party A are not provided by Party B separately.

	
3.

	
Any other debts that shall be undertaken by Party B are not paid off after they become due (including the ones announced to become due ahead of time), or the obligations under other agreements are not carried out or are breached, which has impacted or may impact the performance of the obligations under this agreement.

	
4.

	
The situation that has significant adverse impact for Party B to perform the obligations under this agreement happens to Part B, including but not limited to the worsening of the production and management as well as the financial position, being involved in the gross economic disputes or other liability accidents caused by breaching the relevant laws and regulations of the food safety, safety in production and environment protection as well as the regulatory regulations or industrial standards.

 

  

  

  

 

	
5.

	
Closure of the business, dismission, settlement, suspension of business for bringing up to standard, cancellation and withdrawal of the business license or the application for bankruptcy happen to Party B.

	
6.

	
The goods under a certain order financing are in danger, or are detained, sealed up, distrained or enforced by the customs department;

	
7.

	
During financing, the buyer cancels the order or the basic contract between the Party B and the buyer is terminated ahead of time.

	
8.

	
The payment for the goods sold by Party B is refused by the buyer.

	
9.

	
The trade disputes (including but not limited to the trade disputes in terms of the quality, technology and service) and the disputes over obligation happen between the Party B and the buyer or other third parties, which may result in the failure of recovering the sales loans.

	
10.

	
After receiving the payment by the buyer for selling goods under certain order, Party B fails to pay the sum of money into the account for returned money according to this agreement in time.

	
11.

	
Party B uses the false contract between the related parties to defraud the Party A of the capital or credit without the actual trade background, or evades the Party A’s obligatory right through related trades.

	
12.

	
Without the written consent of the Party A, Party B establishes the mortgage (pledge) to others with its properties or provides guarantee to others, which causes the increase of risks for Party A; or without the written consent of the Party A, Party B establishes the mortgage (pledge) with the receipts or goods under the basic contract.

	
13.

	
Other situations that are reasonably regarded by the Party A to have potential adverse impact on its obligatory right under this agreement

If the above situations happen, Party B shall inform Party A in written timely.

Article XV For any breach on the part of Party B, if Party A thinks it’s redeemable, Party B shall carry out remedial measures that satisfy Party A within specified reasonable period; otherwise, Party A shall have the right to adopt one or more of the following measures:

	
1.

	
Announce that part or all of the financing under the items hereof expires ahead of time and require the Party B to repay at once;

	
2.

	
Surcharge the interest penalty for the overdue debt as per the interest rate of the financing;

 

  

  

  

 

	
3.

	
Stop handling the additional application of Party B for the financing business of the payment in advance;

	
4.

	
Require Party B to compensate for the direct losses of Party A, including but not limited to the counsel fee, costs and other fees for ensuring the obligatory right;

	
5.

	
Deduct the debt from any account opened by Party B in Party A or execute any other rights of set-off;

	
6.

	
Dispose the objects given as a pledge or require the guarantor to carry out his obligations in guaranty;

	
7.

	
For any debt after the pledge offset or disposition and the guarantee compensation, Party A shall have the right to continue to demand repayment by Party B until the debt is paid off;

	
8.

	
Adopt any other measures which could safeguard the rights and interests of Party A under the items hereof.

Adopting the above measures will not affect any other rights of Party A under the items hereof.

Article XVI During the execution of this agreement, the failure or delay to execute any rights under the items hereof by Party A shall not be deemed as the waiver of any right, and shall not affect any obligation under the items hereof that shall be undertaken by Party B.

Article XVII Any amendment and supplement for this agreement shall be signed with the written consent of both sides. The amendment and supplement signed by both sides form an impartible part hereof, having the equal legal validity with this agreement. The original agreement is still in force before the amendment and supplement come into effect.

Article XVIII When carrying out the mergence, separation or restructuring, Party B shall inform Party A in advance. In the case of performing any mergence or reduction of capital for Party B, Party A shall have the right to ask Party B to pay off the debts ahead of time or to provide guarantee; In the case of performing any separation for Party B, Party B shall guarantee that all companies shall undertake the joint responsibilities after separation, or the debts shall be paid off in advance or provide any other guarantee.

Article XIX This agreement shall come into effect after the signature and seal by the two parties. Both sides have the right to terminate this agreement, and the party that claims termination must inform the other party 15 days ahead of time in written. The order financing business that has been handled before the expiration date shall not be affected by the act of termination and the rights and obligations relation between the two parties are still bound by this agreement.

Article XX The Application for the Financing Business for Export Order submitted by Party B and approved by Party A shall be an effective part hereof and binding upon both parties.

Article XXI Settlement of the dispute

 

  

  

  

 

For any dispute in the process of performing this agreement, both parties shall negotiate with each other for settlement; in case of negotiation failure, the first of the following methods shall be adopted;

	
1.

	
Arbitrate by the China International Economic and Trade Arbitration Commission in accordance with its arbitration rules;

	
2.

	
By means of litigation for settlement in the local court where Party A is located.

During litigation or arbitration, the terms and conditions hereof that are not involved in the dispute shall be still performed.

Party A (official seal)

Principal of Party A:

 

Or the authorized person for signature:

Party B (official seal):

Legal representative of Party B

Or the authorized person for signature:

General Financing Agreement for Export Order

(No.: ORDER355551000015)

Supplemental Agreement

Party A: Industrial and Commercial Bank of China Limited Shishi Branch

Principal: (Or the authorized person for signature): Zhuang Wencong

Address: ICBC Building, Baqi Road, Shishi City

Party B: ShishiFeiying Plastic Co., Ltd.

Legal representative: Wu Licong

Address: Longshan Development Zone, Hanjiang Town, Shishi City

 

  

  

  

 

Party A and Party B sign the General Financing Agreement for Export Order with the No. of ORDER355551000015 on November 15th 2010, and on the basis of honesty and trustworthiness, both sides reach an agreement and sign this supplemental agreement.

Article I Party B agrees to pay Party A the fee for dealing with the trade financing in the way of (£sum payment £monthly payment £quarterly payment □yearly payment) when applying to Party A for the international trade financing business. Each sum of the fee for dealing with the trade financing is each sum of business amount multiplied by the rate and multiplied by the actual deadline for financing. Thereinto, the rate shall be collected with the following method: the fee for dealing with the trade financing business in domestic currency shall be collected as per 0.76510.

Method of payment: Party B authorizes Party A to deduct from the settlement account opened by the Party A directly.

Article II When drawing money, the borrower shall submit the notice of drawdown which shall not be cancelled without the written consent of the lender after being submitted.

Article III After audit, if the lender agrees the borrower to draw the money, he should transfer the loan to the specified account of the borrower, which will be immediately deemed as the completion of the offering of the load from the lender to the borrower according to the contract.

Article IV According to the relevant supervisory rules and the management requirements of the accommodator, the loan more than a certain sum or that satisfies certain conditions shall adopt the manner that the loan is paid by the lender on behalf of the borrower, that is, following the withdrawal application and the payment order of the borrower, the loan funds shall be paid to the object to be paid that conforms to the agreed purpose of the contract. To this end, the borrower shall sign a contract for entrusted payment to be the appendix hereof with the lender separately, and open or specify a special account used for dealing with the things and matters about the entrusted payment.

Article V This supplemental agreement shall come into effect with the signature and seal by the parties.

Article VI As part of the original general agreement, this supplemental agreement shall have the equal legal validity with the original one, and in case of some discrepancies, this supplemental agreement shall prevail.

Article VII This supplemental agreement is in duplicate. Party A and Party B hold one respectively that has the equal legal validity with the other.

Party A (official seal)

Principal:

(Or the authorized person for signature)

November 15th, 2010

 

Party B (official seal):

Legal representative

November 15th, 2010

 

  

  

  

 

Contract No.: 2010, Shishi (Bao) Zi, No. 0054

Maximum Guarantee Contract

Important Notes: This Contract is entered into by and between the parties on the basis of equal footing and willingness in accordance with applicable laws and regulations through negotiation. All terms hereof reflect true intents of the parties hereto. In order to secure legal rights of the Guarantor, the Creditor hereby reminds the Guarantor of reading the terms in boldface in a careful manner, and of paying close attention to the meanings of such terms.

 

  

  

  

 

This Maximum Guarantee Contract (“Contract”) is entered into by and between:

	
Creditor:

	
Shishi Branch of Industrial and Commercial Bank of China (“Party A”)

Responsible Officer: Zhuang Wencong                                             

Business Address: ICBC Building, 87 Road, Shishi City                  

Tel and Fax:                                                                                        

And

	
Guarantor:

	
Shishi Lixiang Foods Co., Ltd.             (“Party B”)

Legal Representative: Wu Pingjing                                                 

Business Address or Residence: Gold Coast Industrial Zone, Yongning Town, Shishi City

Tel and Fax:                                                                                      

For ensuring Party A's claims, Party B is willing to provide a guarantee (counter guarantee) in favor of Party A. This Contract is entered into by and between Party A and Party B in order to define their respective rights and obligations, through negotiation based on equal footing, in accordance with the Contract Law, the Guarantee Law and other applicable laws and regulations.

Article 1      Guaranteed Principal Claims

	
1.1

	
Principal claims guaranteed by Party B shall be the claims against the Debtor under domestic and foreign currency borrowing contract, foreign lending contract, bank acceptance agreement, L/C opening agreement/contract, guarantee opening agreement, international and domestic trade financing agreement, forward foreign exchange agreement and other financing documents (“Principal Contract”) between Party A and Shishi Feiying Plastic Co., Ltd. (“Debtor”), for the maximum balance to the extent of RMB 30,000,000.00 (RMB Thirty Million, in words) (the amount in words shall prevail in the event of any difference between the amount in words and number), from November 15, 2010 to November 14, 2012 (including commencement date and expiry date) (“Effective Term”), irrespective of whether such claims become due during the above period.

	
1.2

	
The above “Maximum Balance” shall mean the total balances of the claims in RMB converted from different foreign exchanges at the middle price of foreign exchange published by Party A on the date when the Principal Claims under Party B's guarantee liability is determined.

Article 2      Method of Guarantee

Party B shall bear a joint and several liability.

 

  

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Article 3      Guaranteed Scope

 

Party B's Maximum Guarantee covers principals of Principal Claims, interest accruals thereon, compound interests, penalties, liquidated damages, damage awards,exchange losses (related losses caused by exchange rate movement) and fees used for realization of the guarantees (including but not limited to court fees, attorney's fees, etc.). However, the fees used for realization of the claims shall not be included in the Maximum Balance under Article 1.1 hereof.

Article 4      Period of Guarantee (“Guarantee Period”)

	
4.1

	
If the Principal Contract is a borrowing contract, the guarantee period hereunder shall be two years from the date following expiry of borrowing period hereunder; if Party A declares the borrowings to become due earlier according to the Principal Contract, such guarantee period shall be two years from such earlier due date.

	
4.2

	
If the Principal Contract is a bank acceptance agreement, the guarantee period hereunder shall be two years from the date following acceptance made by Party A.

	
4.3

	
If the Principal Contract is a guarantee opening agreement, the guarantee period hereunder shall be two years from the date following performance of guarantee obligations by Party A.

	
4.4

	
If the Principal Contract is a L/C opening agreement/contract, the guarantee period hereunder shall be two years from the date following payment of L/C by Party A.

	
4.5

	
If the Principal Contract is a financing document, the guarantee period hereunder shall be two years from the date following expiry or earlier expiry of the claims under the Principal Contract.

Article 5      Representations and Warranties by Party B

Party B hereby represents and warrants to Party A as follows:

	
5.1

	
Party B, being an incorporated entity, has obtained authorization or approvals necessary to the guarantees in favor of Party A pursuant to procedures and authority as set forth in its articles of association, without any violation of laws, regulations and other provisions.

	
5.2

	
If it is a listed company or a subsidiary controlled by a listed company, it shall disclose the guarantees in a timely manner as required by the Securities Law, the Listing Rules of Stock Exchange, and other applicable laws, regulations and rules.

	
5.3

	
It has sufficient capability to bear the guarantee liability, which shall not be impaired or exempted due to any directive, change of financial conditions, any agreement with any third party.

	
5.4

	
It has a full understanding for use of the obligations under the Principal Contract, and it is willing to provide the guarantees in favor of the Debtor, and all of its intents hereunder is its true intends. With respect to international and domestic trade financing, Party B undertakes that the basic transaction in relation to the financing is true without any fraud.

 

  

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5.5

	
Any material or information provided to Party A is true, accurate and complete in all respects without false records, material omission or misleading statements.

	
5.6

	
If the Principal Claims hereunder are international trade financings provided to the Debtor by Party A, Party B acknowledges and accepts relevant international practices in relation to relevant business.

	
5.7

	
If Party B is an natural individual, it shall simultaneously make the representations and warranties as follows:

	
  

	
A.

	
It has full capability for civil affair rights and civil conducts;

	
  

	
B.

	
It has legal income sources and sufficient compensatory capability;

	
  

	
C.

	
It has not defaulted in paying banking loans and interests intentionally, nor have had malicious overdraft;

	
  

	
D.

	
It has no bad act or criminal record such as gambling or drug-taking;

	
  

	
E.

	
Its guarantee to Party A has been agreed by its spouse.

Article 6      Undertakings by Party B

Party B hereby undertakes to Party A as follows:

	
6.1

	
Party B shall unconditionally perform its guarantee liability hereunder within five business days upon receipt of a notice from Party A under any of the following circumstances:

	
A.

	
The Debtor defaults in paying the due (and/or earlier due) Principal Claims;

	
B.

	
Party B or the Debtor is petitioned for bankruptcy or is out of business, or dissolved or comes into liquidation, or suspended for reorganization, or its business license is canceled or withdrawn.

	
6.2

	
If the collaterals are provided in favor of the Principal Claims of Party A, irrespective of whether such collaterals are provided by the Debtor or a third party, Party A shall have the right to request Party B to bear guarantee liability in advance, to which Party B shall not bring an objection. Guarantee liability of Party B shall not become void or be exempted but keep effective if Party A waives, changes or loses its security interests in the guarantee.

	
6.3

	
Upon request of Party A, Party B shall provide its financial information, tax payment receipts and other relevant information reflecting its financial conditions on a timely basis.

	
6.4

	
Party B shall continue to perform its guarantee liability hereunder without its further consents under any of the following circumstances:

	
  

	
A.

	
Obligations of Party B are not added or performance of such obligations is not extended even if Party A and the Debtor negotiate on changing the Principal Contract;

	
  

	
B.

	
Obligations of the Debtor under the L/C are not added or payment of such obligations is not extended even if Party A and the Debtor make modifications on L/C in relation to the Principal Contract under financial and domestic trading financing.

 

  

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C.

	
Party A transfers the Principal Claims to a third party.

	
6.5

	
Any security to be provided in favor of a third party shall not damage the rights of Party A.

	
6.6

	
Without written consents of Party A or unless the guarantee liability satisfactory to Party A is arranged, none of combination, division, reduction of capital, change of share, transfer of material assets or claims, material external investment, material additional debt financing, and any other activity that may adversely affect rights and benefits of Party A, shall be conducted.

	
6.7

	
Party B shall inform Party A in a timely manner under any of the following circumstances:

	
  

	
A.

	
It changes or replaces its articles of association, scope of business, registered capitals or legal representative;

	
  

	
B.

	
It is out of business, or it is dissolved or comes into liquidation, or it is suspended for reorganization, or its business license is canceled or withdrawn, or it is petitioned for bankruptcy;

	
  

	
C.

	
It is being or may be involved in material economic disputes, suits and arbitrations, or its properties have been sealed, seized or monitored according to law;

	
  

	
D.

	
If Party B is a natural individual, its address, employer and contact methods are changed.

	
  

	
E.

	
Its obligations are added by issuing enterprise bonds, corporate debentures, short-term financing bonds or through other direct financing;

	
  

	
F.

	
It occurs other borrowings or provides security in favor of others in a large amount.

	
6.8

	
Party B shall accept and sign written notices from Party A in a timely manner.

	
6.9

	
With respect to domestic L/C, buyer’s financing under L/C, import L/C and import bill/import paying on behalf, Party B shall bear incontestable guarantee liability, and shall not claim exemption or bring objection even if any judicial or administrative authority issues payment stop order, injunction in relation to payment under the L/C, or seals, seizes or freezes relevant properties under the L/C or takes other similar measures, under any of the following circumstances:

	
  

	
A.

	
A person named or authorized by Party A has made payment with a bona fide according to directions of Party A;

	
  

	
B.

	
Party A or a person named or authorized by it has issued a payment confirmation for price of goods under a domestic L/C with a bona fide, or has accepted the documents under an import L/C with a bona fide;

	
  

	
C.

	
The confirming bank of a L/C has made payment with a bona fide;

	
  

	
D.

	
The negotiating bank of a L/C has made payment by negotiation with a bona fide.

 

  

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6.10 

	
Under delivery-taking security, endorsement of B/L and authorized delivery-taking, Party B shall not ask for exemption or bring an objection due to rejecting payment for the L/C by the Debtor.

Article 7      Undertakings by Party A

Undertakings by Party A: unless otherwise as provided in laws, regulations and rules or by this Contract, Party A shall keep confidential relevant documents, financial information, and other undisclosed information in relevant materials, submitted by Party B in performance of its obligations hereunder.

Article 8      Determination of Principal Claims

The claims under the Maximum Guarantee shall be determined under any of the following circumstances:

	
A.

	
Effective Term under Article 1.1 expires;

	
B.

	
It is impossible for new claims to occur;

	
C.

	
The Debtor and/or Party B has been declared as bankrupt or has been cancelled;

	
D.

	
Other circumstances as provided for determination of claims by the laws.

Article 9      Breach

	
9.1

	
Any party shall be deemed to breach this Contract if it fails to perform any of its obligations hereunder or breaches any of its representations, warranties and undertakings hereunder after this Contract comes into effect. In such case, it shall indemnify the losses caused to the other party.

	
9.2

	
Party A shall be entitled to deduct any amounts under all of Party B’s accounts opened with ICBC and its branches for satisfying the obligations under the Principal Contract provided that Party B defaults in performing its guarantee liability hereunder. In the event of any inconsistency between currency of deducted money and the currency under the Principal Contract, the deduction shall be made at applicable exchange rate to be published by Party A on the date of such deduction. Interests and other fees from date of deduction to payment date (when Party A converts those deducted amount into an amount in the currency under the Policy of Administration of Foreign Exchange and applies to the obligations under the Principal Contract), and any discrepancy caused by fluctuation of exchange rate during such period, shall be under the account of Party B.

	
9.3

	
Unless otherwise as provided in this Contract, the other party shall be entitled to take any other measures as specified in laws, regulations and rules of the PRC if any party breaches this Contract.

Article 10      Effectiveness, Modification and Termination

	
10.1

	
This Contract comes into effect from the date of the signing of it.

 

  

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10.2

	
Any modification to this Contract shall be negotiated, made in writing, and agreed on by the parties. Any such modification terms or agreements shall be integral to this Contract, and shall have the same force and effect with this Contract. Except for those terms as modified, the remaining provisions hereof shall remain effective. However, original terms hereof shall remain effective before those modified terms come into effect.

	
10.3

	
If any provision of this Contract becomes void or unenforceable, the validity or enforcement of the remaining provisions hereof, or the validity of the whole Contract shall not be affected in any way.

	
10.4

	
Any modification to and/or any termination of this Contract shall not affect either party's rights to claim indemnification. And any termination of this Contract shall not affect the validity of the terms in relation to the dispute resolutions.

Article 11      Dispute Resolutions

Conclusion, validity, interpretation, performance of, and dispute resolutions arising out of, this Contract shall be governed by the laws of the PRC. Any controversy or dispute arising out of or in relation to this Contract shall be resolved through negotiation by the parties hereto; if not reached, any such dispute shall be resolved according to the method as set forth in A below:

	
A.

	
To be arbitrated by Xiamen Arbitration Commission; and the arbitration will be conducted in   Xiamen  (place of arbitration) in accordance with the arbitration rules in force and effect at the time of applying for such arbitration. The awards shall be final and binding upon the parties.

	
B.

	
To be judged and resolved by the court at the location of Party A.

Article 12      Miscellaneous

	
12.1

	
Without prior written consents of Party A, Party B shall not transfer the whole or part of its rights or obligations hereunder.

	
12.2

	
Any failure to exercise in whole or part, or any delay to exercise any of its rights hereunder by Party A, shall not constitute a waiver or change of such rights or any other rights, nor affect further exercise of such rights or any other rights by it.

	
12.3

	
Party A shall be entitled, in accordance with relevant laws, regulations or other regulatory documents or requirements of finance regulatory institutes, to provide information in relation to this Contract and other relevant information to the basic credit information database of People's Bank of China or other credit database established according to law for search and use by eligible institutes or individuals. Meanwhile, Party A shall be entitled to search relevant information of Party B through basic credit information database of People's Bank of China or other credit database established according to law for purpose of conclusion and performance of this Contract.

	
12.4

	
This Contract is made in duplicate originals with Party A and Party B holding one original respectively, and each original shall have the same force and effect with the other one.

 

  

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Article 13      Other Provisions

 

	
13.1

	
The Maximum Balance hereunder is independent, and is exclusive of the maximum claim balance under those maximum guarantee contracts between the parties before or after the signing of this Contract, and is not included in the maximum balance under those maximum guarantee contracts between the parties before or after the signing of this Contract.

	
13.2

	
The Guarantor represents that the guarantee granted by it meets its articles of association, procedures and authorities thereunder, without violating laws, regulations or other equivalents;It shall bear all liabilities arising out of any of the above false or misleading representations.

	
13.3

	
The parties agree that a summary proceeding will be applied in the event of an arbitration, and relevant legal documents (including legal instruments of arbitration) shall be deemed to be served if they are sent to the address of one party recorded under this Contract by post, express or in person. Any change in such address shall be notified to the other party and the arbitration commission in writing.

	
13.4

	
The parties agree that a prior arbitration shall be made if both claims and obligations can be determined upon the bringing of such arbitration. If there is only a mortgage in favor of Party A, and if no other mortgage or seizure exists, the parties authorize the arbitration tribunal to appoint an auction agency to sell the collaterals by auction, and the proceeds from such auction shall be applied to the obligations hereunder.

Party A: Shishi Branch of Industrial and Commercial Bank of China (common seal)

Authorized signatory: Zhuang Wencong   (sign or seal)

Party B: Shishi Lixiang Foods Co., Ltd. (common seal)

Legal representative (authorized agent): Wu Pingjing (sign or seal)

Date of signing: November 15, 2010

 

  

8

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