Document:

Exhibit 10.11

The information that is marked [REDACTED] herein has been omitted pursuant to a request for confidential treatment and that the redacted information has been filed with the SEC separately

 

BUSINESS OPERATION AGREEMENT

 

This Business Operation Agreement (hereinafter referred to as “this Agreement”) is entered into among the following parties in Dalian, People’s Republic of China (“China” or “PRC”) as of Oct. 12, 2010:

 

Party A: Dalian Xinding New Material Technology Consultancy Inc., with the registered address of Rm# 2122, Unit one, No. 112 Youhao Road, Zhongshan District, Dalian; and the legal representative of Liang Hai-yan;

Party B: Dalian Tongda Equipment and Technology Development Co., Ltd., with the registered address of  Youjia Village, Xinzhaizi Street, Ganjingzi District, Dalian; and the legal representative of Wang Yu-kai.

 Party C: Yu-kai Wang, with the address of 1-3-3 No. 22 Jinxin Road, Ganjingzi District,Dalian; and ID number of 21020419621229143X. 

 

 Party D: Di Wang, with the address of No. 2-5 Shenyang Road, Xigang District, Dalian; and ID number of 210204198211055784. 

 Party E: Li-zhi Fei, with the address of 1-2-2 No.11 Jinghui Street, Ganjingzi District, Dalian; and ID number of 210211195401121421. 

WHEREAS:

	
1.

	
Party A is a wholly foreign-owned enterprise duly incorporated and validly existing under the PRC law, which has the technology expertise and the practical experience on the R&D, manufacturing of equipment for new materials, especially the bimetal composite materials, and rich experience and professional technicians on that;

	
2.

	
Party B is a limited liability company duly incorporated and validly existing under the PRC law;

	
3.

	
Party C is a PRC citizen and the shareholder of Party B, holding 51% equity interests of Party B;

	
4.

	
Party D is a PRC citizen and the shareholder of Party B, holding 41.2% equity interests of Party B;

	
5.

	
Party E is a PRC citizen and the shareholder of Party B, holding 7.8% equity interests of Party B;

	
6.

	
The parties hereby agree to further clarify, through this Agreement, the matters in connection with Party B’s operation pursuant to provisions herein.

 

  

  

  

 

NOW, THEREFORE, through friendly negotiations and abiding by the principle of equality and mutual benefit, the Parties hereby agree as follows:

 

	
1.

	
To assure the performance of the various agreements between Party A and Party B and the payment of the payables accounts by Party B to Party A, Party B together with its shareholders Party C, Party D , and Party E hereby jointly agree that Party B shall not conduct any transaction which may materially affects its assets, obligations, rights or the company’s operation (excluding the business contracts, agreements, sell or purchase assets during Party B’s regular operation and the lien obtained by relevant counter parties due to such transactions) unless the obtainment of a prior written consent from Party A, including but not limited to the following contents:

	
 

	
1.1

	
to borrow money from any third party or assume any debt;

	
  

	
1.2

	
to sell to or acquire from any third party any asset or right, including but not limited to any intellectual property right;

	
  

	
1.3

	
to provide real guarantee for any third party with its assets or intellectual property rights;

	
  

	
1.4

	
to assign to any third party its business agreements.

	
2.

	
Party C ,Party D , and Party E, as Party B’s shareholders, further covenant that

	
 

	
2.1

	
not sell, transfer, pledge, dispose in any other manners of their equity interests of Party B or other interests, or not allow to create other security interests on it without Party A’s prior written consent, except for Party A and/or its designated person;

	
 

	
2.2

	
not to approve the shareholders’ resolution which may result in the Party B’s merger or combination with, buy or investment in, be purchased (other than Party A or its designated person) any other person without Party A’s prior written consent;

	
  

	
2.3

	
not do anything that may materially affect the assets, business and liabilities of Party B without Party A’s prior written consent; not, upon the execution of this Agreement, to sale, transfer, mortgage or dispose, in any other form, any asset, legitimate or beneficial interest of business or income of Party B, or to approve any other security interest set on it without prior written consent by Party A;

	
  

	
2.4

	
not to request Party B or approved at shareholder’s meeting to distribute dividends or profits to shareholders without Party A’s prior written consent;

	
 

	
2.5

	
not to supplement, amend or modify its articles of association, or to increase or decrease its registered capital, or to change the capital structure of Party B in any way without Party A’s prior written consent; and

	
  

	
2.6

	
agree to execute the Power of Attorney attached hereto as requested by Party A upon the execution of this Agreement and within the term of this Agreement.

 

  

  

  

 

	
 3.

	
In order to ensure the performance of the various agreements between Party A and Party B and the payment of the various payables by Party B to Party A, Party B together with its shareholders Party C , Party D , and Party E hereby jointly agree to accept, from time to time, the corporate policy advise and guidance provided by Party A in connection with the employment and dismissal of the company’s employees, company’s daily operating, financial management and so on.

 

	
4.

	
Party B together with its shareholders Party C , Party D , and Party E hereby jointly agree that Party C, Party D, and Party E shall appoint the person recommended by Party A as the directors of Party B, and Party B shall appoint Party A’s senior managers as Party B’s General Manager, Chief Financial Officer, and other senior officers. If any of the above senior officers leaves or is dismissed by Party A, he or she will lose the qualification to take any position in Party B and Party B shall appoint other senior officers of Party A recommended by Party A to assume such position. In this circumstance, the person recommended by Party A should comply with the stipulation on the statutory qualifications of directors, General Manager, chief financial controller, and other senior officers pursuant to applicable law.

	
 5.

	
Party B together with its shareholders Party C, Party D, and Party E hereby jointly agree and confirm that Party B shall seek the guarantee from Party A first if it needs any guarantee for its performance of any contract or loan of flow capital in the course of operation. In such case, Party A shall have the right but not the obligation to provide the appropriate guarantee to Party B on its own discretion. If Party A decides not to provide such guarantee, Party A shall issue a written notice to Party B in a timely manner and Party B shall seek a guarantee from other third party.

	
 6.

	
In the event that any of the agreements between Party A and Party B terminates or expires, Party A shall have the right but not the obligation to terminate all agreements between Party A and Party B.

	
7.

	
Any amendment and supplement of this Agreement shall be made in writing. The amendment and supplement duly executed by all parties shall be deemed as a part of this Agreement and shall have the same legal effect as this Agreement.

	
8.

	
If any clause hereof is judged as invalid or non-enforceable according to relevant laws, such clause shall be deemed invalid only within the applicable area of the laws without affecting other clauses hereof in any way.

	
9.

	
Party B shall not assign its rights and obligations under this Agreement to any third party without the prior written consent of Party A; Party B hereby agrees that Party A may assign its rights and obligations under this Agreement as it needs and such transfer shall only be subject to a written notice sent to Party B by Party A, and no any further consent from Party B will be required.

	
10.

	
All parties acknowledge and confirm that any oral or written materials communicated pursuant to this Agreement are confidential documents. All parties shall keep secret of all such documents and not disclose any such documents to any third party without prior written consent from other parties unless under the following conditions: (a) such documents are known or shall be known by the public (excluding the receiving party discloses such documents to the public without authorization); (b) any documents required to be disclosed in accordance with applicable laws or rules or regulations of stock exchange; or (c) if any documents required to be disclosed by any party to its legal counsel or financial consultant for the purpose of the transaction of this Agreement by any party, such legal counsel or financial consultant shall also comply with the confidentiality as stated hereof. Any disclosure by employees or agencies employed by any party shall be deemed the disclosure of such party and such party shall assume the liabilities for its breach of contract pursuant to this Agreement. This Article shall survive whatever this Agreement is void, amended, cancelled, terminated or unable to perform.

 

  

  

  

 

	
11.

	
This conclusion, validity, performance and interpretation of Agreement shall be governed by the PRC law.

	
12.

	
The parties hereto shall strive to settle any dispute arising from the interpretation or performance of this Agreement through friendly consultation. In case no settlement can be reached through consultation within thirty (30) days after such dispute is raised, each party can submit such matter to Shenyang Arbitration Commission in accordance with its then effective rules. The arbitration award shall be final conclusive and binding upon both parties. If there is any dispute is in process of arbitration, other than the matters in dispute, the Parties shall perform the other rights and obligation pursuant to this Agreement.

	
 13.

	
This Agreement shall be executed by a duly authorized representative of each party as of the date first written above and become effective simultaneously.

	
 14.

	
Notwithstanding Article 13 hereof, the parties confirm that this Agreement shall constitute the entire agreement of the parties with respect to the subject matters therein and supersedes and replaces all prior or contemporaneous verbal and written agreements and understandings.

	
 15.

	
The term of this agreement is ten (10) years unless early termination occurs in accordance with relevant provisions herein or in any other relevant agreements reached by all parties. This Agreement may be extended only upon Party A’s written confirmation prior to the expiration of this Agreement and the extended term shall be determined by Party A. During the aforesaid term, if Party A or Party B is terminated at expiration of the operation term (including any extension of such term) or by any other reason, this Agreement shall be terminated upon such termination of such party, unless such party has already assigned its rights and obligations in accordance with Article 9 hereof.

	
16.

	
This Agreement shall be terminated on the expiring date unless it is renewed in accordance with the relevant provision herein. During the valid term of this Agreement, Party B shall not terminate this Agreement. Notwithstanding the above stipulation, Party A shall have the right to terminate this Agreement at any time by issuing a thirty (30) days prior written notice to Party B.

	
17.

	
The original of this Agreement is in five (5) copies, each party holds one and all original are equally valid.

 

  

  

  

 

IN WITNESS THEREOF each party hereto have caused this Agreement duly executed by itself or a duly authorized representative on its behalf as of the date first written above.

 

	
Party A: Dalian Xinding New Material Technology Consultancy Inc.  (seal)

	
Authorized Representative:

	
Name:

	
Position:

	  
	
Party B: Dalian Tongda Equipment and Technology Development Co., Ltd. (seal)

	
Authorized Representative:

	
Name:

	
Position:

	  
	
Party C: Yu-kai Wang

	
Signature: /s/ Yu-kai Wang

	  
	
Party D: Di Wang

	
Signature: /s/ Di Wang

	  
	
Party E: Li-zhi Fei

	
Signature: /s/ Li-zhi Fei

 

  

  

  

 

Form of Power of Attorney

 

I , _________________, a PRC citizen and ID number of _________________, is the shareholder of Dalian Tongda Equipment and Technology Development Co., Ltd. (“Domestic Company”) holding ____% equity interest of Domestic Company, hereby irrevocably appoint _________________ with the following powers and rights during the term of this Power of Attorney:

 

I hereby appoint _________________ to exercise, on my behalf, all shareholder’s rights corresponding to the ____% equity interests of Domestic Company in accordance with PRC laws and Domestic Company’s Articles of Association at the shareholders’ meetings of Domestic Company, including but not limited to the right to call the shareholder’s meeting, accept the notice regarding the shareholder’s meeting and its agenda, participate in the shareholder’s meeting and exercise the voting right (including elect, designate or appoint the director, general manager, financial controller or other senior management personnel, the matters of distribution of dividend), to sell or transfer any or all of equity interests of Domestic Company.

 

Such authorization and appointment are based upon the precondition that _________________ is acting as an employee of Dalian Xinding New Material Technology Consultancy Inc. (“Wholly Foreign owned  Company”) and Wholly Foreign owned Company agrees in written such authorization and appointment. Once _________________ loses his title or position in Wholly Foreign owned Company or Wholly Foreign owned Company notifies of the termination of such authorization and appointment, I shall withdraw such authorization and appointment to him immediately and designate/authorize the other individual nominated by Wholly Foreign owned Company to exercise the full aforesaid rights on behalf of us at the shareholders’ meetings of Domestic Company.

 

The initial term of this Power of Attorney is from the execution date of this Power of Attorney through the duly existing term of Domestic Company unless the early termination of Operation Agreement jointly executed by Wholly Foreign owned Company and Domestic Company by any reason. If the term expires, upon the request by Wholly Foreign owned Company, I will extend the term of this Power of Attorney. Within the term of this Power of Attorney, this Power of Attorney shall not be revised or terminated without the consent of Wholly Foreign owned Company.

 

(Signature):

Date:Exhibit 10.26

 

No.ED750009000515

 

Financing limit agreement

 

(Large and medium enterprise)

 

Client (party A): Dalian TOFA New Materials Development Co., Ltd.

 

Address: South area, Lingang Industrial Area of Dalian Economic and Technology Development Zone, Dalian

 

Legal representative:  Zheng Chuan-tao

 

Financing bank (party B): Shanghai Pudong Development Co.,Ltd, Dalian Branch

 

Address: Dalian Zhongshan District Zhongshan square, #3

 

Legal representative: Wang Xinhao

 

In view of the fact that party B applied comprehensive credit limit (hereinafter referred to as “credit line”).This agreement is approved by the two sides based on the constitution of People’s Republic of China, in the spirit of equality, voluntaries and the principle of good faith.

 

Article 1. Credit limit

 

Credit limit means the ceiling value of sheet credit business (hereinafter referred to as sheet credit business) and bank acceptance like short term loans, packing loans, import and export documentary credit, ticket discount business , off sheet credit business contract  import letter of credit, letter of guarantee that Party B provide to party A.

 

The credit limit party B provides to party A is RMB (Capital letter) 20 million.  The exposing credit is RMB 20 million after the conduction of margin.

 

The credit limit upon includes other equivalent currencies. The exchange rate can be calculated by the exchange rate published by party B based on the actual practice.

 

The sheet credit limit and off sheet credit limit mentioned upon can be changed to each other, but The balance of credit business an not exceed the exposing credit limit at any time.

 

Article 2. Credit period

 

Credit period is 1 year, namely from September 1, 2009 to September 1, 2010. During the period party A should apply for service application .Party B don’t accept any cases party A proposed out of credit period.

 

Article 3. Use of credit line

 

During the credit period, party A can circulate to use the credit limit, but he should apply for it one after one. And party B should approve one by one. The two parties should sign packing loans agreement, import and export documentary credit agreement, ticket discount business contract, Bank acceptance agreement, imports of the issuing protocol, credit business contract (hereinafter referred to as “the specific contract”)

 

  

 

  

 Article 4. Interest and fees 

 

The interest of sheet credit business costs of off sheet credit business within the credit line, should based on the specific provisions of the contract.

 

Article 5. Warranty

 

 5.1 All the debt owed by party B to party A under this agreement should be pay back by   Chuan Tao Zheng  (sponsor), as the party who bear joint and several responsibilities, this company should provide << Maximum Guarantee Contract>>* 

 

 5.2 All the debt owed by party B to party A under this agreement should be pay back by Dalian TOFA New Material Development Co., Ltd    (mortgager/plegor) with the collateral like real estate, lands, facilities that he owed. The two parties should also sign <<Maximum Real Estate Mortgage Contract >>* and <<Maximum Mortgage Contract of Movables>>* 

 

Article 6 Rights and responsibilities of party A

 

6.1 Party A have the right to use the credit limit under this contract

 

6.2 Party A have the authority to require Party B to keep the manufacture, operation and property confidentially.

 

6.3 party A should provide the wanted documents, opening bank, account ant the balance conditions of deposits and loans required by party B.

 

6.4 Party A should accept the supervision of Party on the relevant financing practice that may affect debts.

 

6.5 Party A should use the specific sheet credit business and off sheet credit business under the contract.

 

6.6 Party A should pay the debt back of sheet credit business and off sheet credit business or other promises under the contract.

 

6.7 Party A should notice party B immediately after these events occur and make sure the relevant fees can be paid back successfully with party B:

 

1. Significant financial loss, losses of assets and other financial crisis

 

2. Providing guarantee to the third party who lead to the adverse effects on the mortgage’s finance and the mortgage’s capacity to carry out obligations.

 

3. Emerges, discretion, reorganizations, jointing of other ventures, proper / stock transfer, joint –stock reform.

 

Closure of the company or apply for bankruptcy or the like situation occur

 

5. Big crisis hit the shareholder or the other relevant operations which lead to unhealthy operation.

 

6. Significant business practices with other companies that affect normal operation.

  

*  Note that (i) the Maximum Guarantee Contract referenced herein is separately filed with the Securities and Exchange Commission (“SEC”) as Exhibit 10.29 to Amendment No 4 to TODA International Holdings Inc.’s Current Report on Form 8-K, filed on September 30, 2011, (ii) the Maximum Mortgage Contracts of Moveables referenced herein herein is separately filed with the SEC as Exhibit 10.27 to Amendment No 5 to TODA International Holdings Inc.’s Current Report on Form 8-K, filed on November 7, 2011 and (iii) the Maximum Real Estate Mortgage Contracts referenced herein is separately filed with the SEC as Exhibit 10.28 to Amendment No 5 to TODA International Holdings Inc.’s Current Report on Form 8-K, filed on November 7, 2011 

 

 

  

 

  

7. Any lawsuit (seal, detention, freeze or the like), arbitration, criminal penalties that may affect the production or finance.

 

8. Other significant events that may affect the paying ability.

 

Article 7. Rights and responsibilities of party B

 

7.1 Have the authority to ask party A to pay back the principle and interest under the agreement.

 

7.2 Have the authority to ask party A to provide the relevant materials that is connected to the use of credit limit.

 

7.3 Have the authority to find out the operation and finance practice of party A.

 

7.4    Have the Authority to supervise party A to use sheet credit business and off shit credit business under the agreement the specific contract.

 

7.5    Have the authority to deduct the due principle and interests under sheet credit business and off sheet credit from the account of party A.

 

7.6    If party A doesn’t comply with part or several responsibilities of the agreements, party B has the authority to postpone to providing the unused service to it.

 

7.7    When accidents like clause 6.8 happen, party B has the authority to ask party A to pay back the principle and interests and other relevant fees in and off sheet.

 

7.8    Providing loans and other credit according to the agreement and the promised conditions under the contract.

 

7.9    Keeping manufacture, operation and property confidential. Except those provided by law.

 

Article 8 party A provide the following specific promises

 

8.1 Party A is an enterprise that is legally exists bases on Chinese law or objects that enjoy the qualification of being cooperation and enjoy full civil penalty right to sign and comply with the contract.

 

8.2 It has been authorized to sign the contract by the board of shareholders.

 

8.3 The sponsor, mortgagor, documents, materials, and other evidence are real exact complete and effective provided by party A.

 

8.4 Lawsuit, arbitration criminal penalties and the like don’t happen when the agreement is signed. Other it should be noticed to party B.

 

8.5 comply with national laws and regulations. Run the business under 《business license》 and, finish registering annual inspection procedures.

 

8.6 maintain and improve the existing management level and to make sure the increasing of the value of property.

  

 

  

8.7 No big accident that may influence party B’s capacity to comply with the agreement when it is signed.

 

Article 9. Other fees

 

Fees cause by the credit investigation, inspection and the debt party A doesn’t pay back in time are paid by party A. Also, the fees of employing lawyer, issuing, insurance, transports are beard by party A.

 

Article 10 Defaults and solutions

 

10.2 Any of the following occurs to party A is viewed as defaults:

 

1. Violate to clause 6.3, provide fake information or hide important facts. Don’t cooperate with the investigation of party B.

 

2. Violate to clause 6.4, don’t accept or escape the supervision of party B on finance and operation practice.

 

3. Violate to 6.5, don’t use the sheet and off sheet credit as is ruled to.

 

4. Violate to clause 6.6, don’t pay principle and interest in time

 

5. Violate to clause 6.7, don’t notice party when accidents listed happen.

 

6. Violate to clause 8.1, 8.2, and 8.3 which cause great losses to party B. Or violate clause 8.3, 8.5, 8.6.8.7. Or don’t require correction when faults occur.

 

7. Other accidents happens that may effect the legal rights of part A’s

 

10.4 When accidents listed in clauses 10.1, 10.2, and 10.3 happen, party B enjoy the right to take the following actions. Part A should have no right to challenge it.

 

1. Stop providing the unused sheet credit within the credit limit

 

2. Countermand the principle and interest and relevant fees before the due day.

 

3. To the bill of exchanges that have been accepted or the opening credit letter, guarantee, no matter whether party B have paid the advances, party B can require party A to add additional guarantee.

 

4. Deduct the deposits from party A’s settlement account or from other accounts in order to pay the debt party A owed under the agreement.

 

5. Excusing recourse based on clause 13

 

Article 11 Exchanges and removes

 

This agreement can be changed or get removed by the consensus of the two parties. Before the paper work come out, this agreement is still effective. Any of the two parties have no rights to change the agreement by one side.

  

 

  

Article 12 Others

 

12.1 During the period this agreement come into effect, when party is tolerant with the defaults of the other party, all the rights and benefits of party A cannot be suffered.

 

12.2 Part A should pay foe all the debt owed to party B under the contract no matter it is ineffective in part or whole. Otherwise, party B can terminate the agreement and require party B to pay for the debt immediately.

 

12.3 Party B should provide the relevant paper work of notice, requirements to party A. Any telex and telegraph sent by party A means it has arrived . The postal letters are viewed as arrival when it is posted.

 

 12.4 A supplemental agreement should be included in this contract if there is any unsettled issue or change of this agreement. This supplemental agreement should be attached, becoming the integral part of this contract. 

 

12.5 Other promised articles

 

Article 13 Laws and solutions to disputes

 

13.1 The set, explanations, solutions to disputes are based on constitution of PRC. The right od party A and B are protected by PRC.

 

13.2 Disputes occurred which are not solved during the practice of the agreement can get settled by issuing it to the people’s court of party A’s side. After the agreement and the specific contract are notarized with enforced right by the two parties, party B can recourse the unpaid debt by applying for enforcement to the local court.

 

Article 14 .Protocol validation

 

This agreement should be signed or sealed by the one in power from both parties. After complete the guarantee procedure required as article 5 it comes into effect. It cease to be in force automatically when party A paid back all the debt and the relevant fees.

 

Article 15. The agreement is prepare in duplicate. Each of the two parties holds one.

 

After signing the agreement, both of the two parties have no doubts of relevant rights, responsibilities.

 

Article 16. The unpaid practice of financing credit limit Code number ED75082008282895 should be restricted by this agreement, it engrosses the credit limit of the contract.

 

Party A (Seal) Dalian TOFA New Material Development Co. Ltd

Legal representatives or authorized representatives (signature and seal): /s/ Chuan Tao Zheng

 

Party B (seal) Shanghai Pudong Development Co.,Ltd, Dalian Branch

Legal representatives or authorized representatives (signature and seal): /s/ Xin Hao Wang

 

Date: August 14, 2009

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