Document:

Exhibit
      10.17

     

    RMB
      Capital Loan Agreement

    Contract
      No: LD2008119

    Loan
      type: Industry liquid capital

    

    the
      Borrower (Party A): Danyang Lihua Electron Co., Ltd.

    Address:
      Danyang City Hougang County Five Star Industry Development District

    Postal
      Code: 212312

    Legal
      Person: Jianhua Zhu

    Tel:
      82229628

    

    the
      Lender (Party B): China Construction Bank, Danyang Branch

    Address:
      1Yunyang Road, Dangyang City

    Postal
      Code: 212300

    Legal
      person: Leiping Zhang

    Tel:
      86526069

    

    Party
      A
      applies to borrow from Party B, and Party B agrees to loan the capital to Party
      A. According to the relevant laws and regulations, the parties reach the
      following agreement through negotiations. The parties memorializes the
      contact so that they both abide by its terms. 

    

    Clause
      1 Loan Amount

    Party
      A
      borrows RMB FOUR MILLION (4,000,000) from Party B

    

    Clause
      2 Use of Proceeds

    Party
      A
      will use the loan for manufacture cash flow. Party A shall not change the use
      of
      the loan without written permission from Party B. 

    

    Clause
      3 Term of the Loan 

    The
      term
      of the loan is 12 months, from 4/30/2008 to 4/29/2009.

    

    If
      the
      loan effective date under this contract does not agree with the loan deposit
      certificate, the effective date shall be the date on the loan deposit
      certificate, and the due date shall be adjusted accordingly. 

    

    The
      Loan
      deposit certificate is incorporated into and part of the contract. It has the
      same legal effect as this contract. 

    

    Clause
      4 Loan Interest Rate, Penalty Rate and the Calculation and Payment of
      Interest

    

    1.
      Loan
      Interest Rate

    The
      interest rate of the loan under this contract is APY. For this loan, it is
      the
third
      category
      below:

    i)
      Fixed
      rate, which means the rate stays the same during the term of the
      loan;

    ii)
      Fixed
      rate, which means the Base Rate plus or minus certain percentage, and the rate
      stays the same during the term of the loan;

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    iii)
      Floating rate, the Base Rate of the Interest Starting Date plus 10%. The rate
      is
      adjusted every six months according to that date’s Base Rate plus 10% during the
      period from the Interest Starting Date to the date when the principal and
      interest of the loan are paid off. Rate Adjusting Date is the corresponding
      date
      of the Interest Starting Date in the adjusting month. If there is not
      corresponding date in the rate adjusting month, then the last date of the
      adjusting month shall be the Rate Adjusting Date.

    

    2.
      Penalty Rate

    1)
      If
      Party A does not use the loan as specified in this contract, the Penalty Rate
      will be Loan Interest Rate plus 100%. If the Loan Interest Rate were to be
      adjusted according to Clause 4.1(iii), the Penalty Rate will be adjusted
      according to the adjusted Loan Interest Rate and the above upward
      adjustment.

    

    2)
      If the
      loan is not paid off on time, then the Penalty Rate is the Loan Interest Rate
      plus 50%. If Loan Interest Rate were to be adjusted according to Clause
      4.1(iii), the Penalty Rate will be adjusted according to the adjusted Loan
      Interest Rate and the above upward adjustment.

    

    3)
      If the
      loan is not used as specified in the contract and the loan is not paid off
      on
      time, the Penalty Rate should be the higher one and interest is compounding.
      

    

    3.
      The
      Interest Starting Date shall be the date when the loan is transferred to Party
      A’s bank account. When the loan is disbursed, the Base Rate is the rate
      published by China People’s Bank for loans of the same terms and category on the
      Interest Starting Date. After that, when the Loan Interest Rate is adjusted
      according to the above conditions, the Base Rate is the rate published by China
      People’s Bank for loans of same term and category on the Rate Adjusting Date. If
      China People’s Bank no longer publishes rates for loans with the same period and
      same category, the Base Rate shall be set according to the rate for loans of
      the
      same term and category and which is commonly accepted by the banking industry
      on
      the Rate Adjusting Date, except that parties may have other arrangement in
      relation thereto. 

    

    4.
      The
      calculation of loan interest starts when the loan is transferred to a bank
      account designated by Party A. The interest is calculated daily; daily interest
      is annual interest divided by 360. If Party A cannot pay interest on the
      interest payment date, then the interest starts to compound the next
      day.

    

    5.
      Payment of interest

    1)
      For
      the fixed rate loan, when calculating the interest, the interest shall be
      calculated according to the rate agreed. For the float rate loan, the interest
      shall be calculated according to the rate set for that floating period. If
      there
      are multiple changes of rate in one interest payment period, the total interest
      shall be the sum of the interests of all the floating periods.

    2)
      The
      payment of interest is monthly, and the payment date is the 20th
      day of
      each month.

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    Clause
      5 Distribution and Use of the Loan

    

    1.
      The
      condition precedents for distribution of the loan

    Unless
      Party B waives in whole or in part, Party B is obligated to disburse the loan
      only when the following conditions are satisfied:

    1)
      Party
      A has obtained all loan-related approvals, registration, insurance, payments
      and
      other legal procedures;

    2)
      If
      there are collaterals under the contract, the liens on such collaterals shall
      meet Party B’s requirements and have been perfected and effective and shall
      remain perfected and effective;

    3)
      Party
      A has established a bank account for the service of the loan;

    4)
      Party
      A is not in breach of the contract or causes or permits to exist any event
      or
      circumstances which may adversely affect the security of Party B’s loan;

    5)
      There
      exist no laws and regulations or other authorities which may prohibit or limit
      Party B from making the loan; and

    6)
      ___(left
      blank)_____________

    

    2.
      Use of
      the Loan Proceeds

    The
      loan
      shall be for one time use only.

    

    3.
      Party
      A shall use the loan according to Clause 5.2. Party A shall not advance, delay
      or cancel the withdrawal of the loan, without the written consent of Party
      B.

    

    Clause
      6 Repayment of the loan

    

    1.
      Principles of Repayment

    Under
      this contract, the repayment by Party A shall be distributed according to the
      following order of priority:

    Party
      B
      has the right to use the repayment by Party A to offset Party B’s cost which
      Party A should be responsible for under the contract and Party B’s cost in
      perfecting its creditor’s rights. The balance shall be repaid according to the
      following principle: interest shall be paid prior to principal and interest
      shall stop accumulating only when the principal is paid off. 

    For
      loans, the principals of which are not repaid in full 90 days after the maturity
      date, or loans, the interests of which are not repaid within 90 days after
      the
      due date, or other types of loans specified by relevant laws and regulations,
      Party A’s repayment funds, after clearing the costs described above, shall be
      applied to principal first and then to interest.

    

    2.
      Payment of Interest

    Party
      A
      shall pay interest to Party B on Interest Payment Date. The first Interest
      Payment Date is the first payment date after the loan is disbursed. The interest
      and principal shall be paid off on the last repayment of the loan.

    

    3.
      Principal Repayment Plan

    The
      principal shall be repaid all at once.

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    4.
      The
      Method of Repayment

    Party
      A
      shall transfer enough funds to repay the amount due for the current period
      to a
      bank account set up by Party B before the due date. Party A shall transfer
      the
      funds to repay the loan (Party B also has the right to repay the loan from such
      account), or Party A shall transfer enough funds to repay the loan from other
      accounts on the repayment date.

    

    5.
      Prepayment of the Loan

    If
      Party
      A wishes to prepay the loan, it shall submit a written application to Party
      B
      ten days before the prepayment. After the approval of Party B, Party A can
      prepay the loan in part or in whole.

    If
      Party
      A prepays the loan, the interest shall be calculated according to the actual
      loan term and the Loan Interest Rate agreed in the contract. 

    If
      Party
      B permits Party A to prepay the loan, Party B has the right to ask Party A
      to
      pay compensation, which shall be calculated in the following way:

    Compensation
      = loan principal prepaid times number of month before the loan due date
      times1‰

    

    Clause
      7 Party A’s Rights and Obligations

    1.
      Party
      A’s rights

    i)
      Party
      A has the right to ask Party B to disburse the loan according to the
      contract;

    ii)
      Party
      A has the right to use the loan proceeds according to the contact;

    iii)
      Party A has the right to apply for an extension of the loan if it meets the
      conditions set by Party B;

    iv)
      Party
      A has the right to ask Party B to keep confidential all the financial data
      and
      business secrets provided by Party A, except those covered by other laws,
      regulations and other authorities or parties agree to otherwise;

    v)
      Party
      A has the right to refuse to pay Party B any bribery and has the right to report
      to relevant government agencies any of Party B’s action to demand a bribery and
      any Party B’s action which violates relevant law and regulation regarding loan
      interest and service fee. 

    

    2.
      Party
      A’s obligation

    i)
      Party
      A shall withdraw funds according to the contract and repay the loan and
      interest. Party A shall also pay all the costs according to the
      contract.

    ii)
      Party
      A shall provide data on its financial situation and business operations
      according to Party B’s requirements, including but not limited to provide last
      quarter’s asset balance sheet, income statement within 10 business days of the
      first month of every quarter, and annul cash flow chart at the end of the fiscal
      year. Party A shall be responsible for the truthfulness, comprehensiveness,
      validity of the materials provided. Party A shall not provide false or
      misleading information or omit important financial information.

    iii)
      If
      Party A changes its name, legal person, address, scope of business, registered
      capital or corporate charter and the changes require Industry and Commerce
      registration, Party A shall notify Party B in writing within three business
      days
      of the change and send Party B all the materials after the change.

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    iv)
      Party
      A shall use the loan proceeds according to the contract. Party A shall not
      use
      the funds for any illegal transaction; shall cooperate with Party B to examine
      and supervise the use of the loan proceeds; Party A shall not withdraw the
      funds, transfer asset or use related-party transactions to evade its liability
      to Party B; Party A shall not use fake contracts with related parties, fake
      receipts without any trading background or amount due as collateral in exchange
      for capital and credit award from banks.

    

    v)
      If
      Party A uses the loan proceeds to engage in manufacturing or construction,
      it
      should obey relevant laws regarding to the environmental
      protection.

    

    vi)
      Before Party A repays the interest and principal of the loan in full to Party
      B,
      Party A shall not use the asset purchased with this loan as collateral to any
      third party.

    

    vii)
      If
      Party A is a corporate client, Party A shall report to Party B any transactions
      which involve over ten percent of its assets, including: 

    a)
      the
      relationship between the transaction parties;

    b)
      the
      project of the transaction and nature of the transaction;

    3)
      the
      transaction amount or its corresponding ratio;

    4)
      pricing policy (including transactions with no or nominal monetary
      values)

    

    viii)
      The
      loan under this contract is fixed asset loan or project level loan. Party A
      shall guarantee that the proposed project has already been approved by the
      governmental authority and does not violate any laws or regulations; that
      sufficient capital or other funds shall be readily available according to the
      contract. Party A shall also guarantee the project will be developed as planned.
      

    

    Claus
      8 Party B’s rights and obligations

    1
      Party B
      has the right to demand Party A to repay the principal, interest and fees on
      schedule. Party B can also exercise other rights according to the contract
      and
      demand Party A to perform its obligations in this contract.

    2
      Party B
      shall disburse the loan proceeds as specified in the contract, except when
      any
      delay is caused by Party A or when such delay is not due to Party B’s fault.

    3.
      Party
      B should keep confidential all the financial data and business secrets provided
      by Party A unless otherwise covered by laws or regulations, or demanded by
      governmental authority or parties hereto otherwise agreed.

    4.
      Party
      B shall not bribe Party A or ask and accept any bribery from Party
      A.

    5.
      Party
      B shall not be dishonest, and shall not engage in any action which may harm
      Party A’s interest.

    

    Clause
      9 Event of Default and Make-Good Clause if Party A’s Action Jeopardizes Party
      B’s Creditor Rights.

    1.
      Party
      B’s breach and its liability

    i)
      If
      Party B refuses to disburse the loan without valid reason, Party A can demand
      Party B to continue to disburse the loan according to the contract;

    ii)
      If
      Party B violates the laws or regulations against the taking of any fees or
      interests from Party A, Party A has the right to demand the return of such
      fees
      or interests.

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    2.
      Situations which cause Party A’s breach

    i)
      Party
      A breaches any covenants in the contract or violates any legal
      obligation;

    ii)
      Party
      A clearly repudiates or repudiates with its action the contract.

    

    3.
      Situations which jeopardize Party B’s rights as creditor

    i)
      Any
      event or circumstance below which may be deemed by Party B as will jeopardize
      its creditor’s rights: contracting, leasing, entrusting, share restructuring,
      reduction of registered capital, investment, business alliance, merger,
      acquisition, spin-off, joint-venture, (involuntary) filing of halting of
      business operation, dissolution, revocation, bankruptcy, change of control
      or
      major asset sale by controlling shareholder or de facto controller, halt of
      business activity, levy of hefty fines by governmental authority , revocation
      of
      business registration or license, major legal dispute, business in significant
      trouble or worsening of financial situation, or when the legal person or major
      management personnel cannot perform duty normally.

    

    ii)
      Any
      event or circumstance below which may be deemed by Party B as will jeopardize
      its creditor’s rights: Party A defaults under other loans, including loans made
      by China Construction Bank or other third party; Party A conveys its asset
      for
      little or no consideration; Party A reduces liability owed to it by third
      parties or is not diligent in exercising its creditor right, or provides
      guaranty for a third party.

    

    iii)
      Party A abuses its status as corporation legal person or limited liability
      status for shareholder, or is unable to pay its debts, when such action may
      be
      deemed by Party B as will jeopardize its creditor rights. 

    

    iv)
      Any
      condition precedent for the loan in the contract is not met
      continuously.

    

    v)
      Any
      event or circumstance below of the Guarantor which may be deemed by Party B
      as
      will jeopardize its creditor’s rights:

    a)
      Breach
      any term in the Guaranty, or any representation or warranty is false, wrong
      or
      misleading.

    b)
      contracting, leasing, entrusting, share restructuring, reduction of registered
      capital, investment, business alliance, merger, acquisition, spin-off,
      joint-venture, (involuntary) filing of halting of business operation,
      dissolution, revocation, bankruptcy, change of control or major asset sale
      by
      controlling shareholder or de facto controller, halt of business activity,
      levy
      of hefty fines by governmental authority , revocation of business registration
      or license, major legal dispute, business in significant trouble or worsening
      of
      financial situation, when the legal person or major management personnel cannot
      perform duty normally, or any other event or circumstance which may adversely
      affect the Guarantee.

    c)
      Any
      situation which may cause it unable to guarantee the loan.

    

    vi)
      Any
      situation below of the pledge or collateral which may be deemed by Party B
      as
      will jeopardize its creditor rights:

    a)
      Because of third party’s action, government taking, confiscation, unpaid
      recovery, demolition, change of market conditions or any other reasons , the
      pledged asset is damaged, lost or its value is diminished.

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    b)
      The
      pledged asset is seized, attached, frozen, detained, auctioned, or supervised
      by
      administrative agencies, or its title is in dispute.

    c)
      The
      Pledgor or Guarantor breaches any terms in the relevant contract or any
      representation or warranty is false, wrong or misleading.

    d)
      Other
      situations which may adversely affect Party B’s lien on the pledged assets or
      collateral.

    

    vii)Any
      event or circumstance below may be deemed by Party B as will jeopardize its
      creditor rights: Guaranty is not valid, not effective, invalidated, revoked,
      cancelled, the Guarantor breaches the Guaranty, repudiates or repudiates with
      action the Guaranty, or the Guarantor loses all or part of his capability to
      perform his obligations or the value of the Guaranty is diminished;
      or

    

    viii)
      Any
      other events or circumstances which may be deemed by Party B as will jeopardize
      its creditor rights. 

    

    4.
      Party
      B’s Damage Control Measures 

    Party
      B
      has the right to take the following one or more actions once any event or
      circumstance under Clause 9.2 or Clause 9.3 occur:

    

    i)
      Stop
      further disbursement of loan proceeds; 

    

    ii)
      Accelerate the loan and make it due and payable immediately and demand Party
      A
      to pay all principal, interest and fees.

    

    iii)
      If
      Party A has not withdrew the loan proceeds as specified in the contract, Party
      B
      has the right to ask Party A to pay a penalty of 0.1% of the undrawn amount.
      Party B also has the right to stop disbursing the remaining balance of the
      loan.

    

    iv)
      If
      Party A does not use the loan proceeds according to the contract, as to the
      mis-used portion of the loan, starting from the date of the breach to the end
      of
      the term, Party B has the right to ask Party A to pay back the funds at the
      Penalty Rate as defined in the contract, pay compounding interest and other
      interests in one of the ways as defined in the contract.

    

    v)
      If the
      loan is overdue, as to the overdue portion of the loan, including principal
      and
      interest (include those principal and interest accelerated by Party B), starting
      from the date of the breach to the end of the term, Party B has the right to
      ask
      Party A to pay back at the Penalty Rate as defined in the contract, pay
      compounding interest and other interests in one of the ways as defined in the
      contract. The loan is overdue if Party A does not repay it on time or does
      not
      repay the loan according to the schedule specified in the contract.

    Before
      the loan is due, Party A shall pay back the overdue interests according to
      the
      principles set forth in the contract, including pay compounding interest and
      other interests in one of the ways as defined in the contract. 

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    vi)
      Other
      measures to diminish the damage, including but not limited to:

    a.
      Without prior notice to Party A, withdraw RMB or other currency in equivalent
      value from its bank account in China Construction Bank system 

    b.
      Exercise right on the collateral;

    c.
      Ask
      Party A to provide new guarantee which meets the requirements specified in
      this
      contract;

    d.
      Cancel
      this contract.

    

    Clause
      10. Other Terms

    1.
      Payment of fees:

    Except
      otherwise agreed to by parties hereto, Party A shall pay the following fees
      related to the contract and the collateral/guaranty: attorneys’ costs,
      insurance, valuation, registration, safe keeping, and notarization.

    Party
      A
      shall cover all of Party B’s actual costs and expenses to perfect and exercise
      its creditor rights (including but not limited to, cost related to litigation,
      arbitration, property insurance, travel, execution, evaluation, notarization,
      delivery, public notice and legal service. ) 

     

    2.
      The
      use of information provided by Party A:

    Party
      A
      agrees that Party B may check Party A’s credit condition with China People’s
      Bank or via the credit database established by credit administration authority
      under the permission of China People’s Bank, or may inquire related entity and
      department about Party A’s credit condition. Party A also agrees that Party B
      may furnish Party A’s credit information to the above-mentioned credit database.
      Party A also agrees that Party B may reasonably use and disclose Party A’s
      information for business purposes.

    

    3.
      Public
      notice to urge Party A’s repayment of the loan

    If
      Party
      A delays the repayment of the loan or breaches the contract in other ways,
      Party
      B has the right to notify related entities or departments and has the right
      to
      make public notice through news media to urge Party A’s repayment of the
      loan.

    

    4.
      The
      effect of Party B’s evidence

    Unless
      Party A can show reliable and clear evidence to the contrary, Party B’s internal
      financial records on principal, interest, fee, repayment, receipts which are
      made and kept by Party B on Party A’s withdrawal, repayment of principal and
      interest, and record which shows Party B has urged Party A to repay the loan
      shall all constitute effective evidence of the creditor-debtor relationship.
      Party A shall not raise any objection merely because the above-mentioned record,
      receipts and certificates are made and kept by Party B unilaterally.

     

    5.
      Reserved Rights

    Party
      B’s
      rights under this contract shall not affect other rights Party B may have
      according to laws, regulations or other contracts. Any waiver, extension or
      delay to exercise the rights under this contract shall not operate as a waiver
      of any rights and interest under this contract or as permission to the default,
      hence it shall not limit, prohibit or hinder Party B’s exercise of its rights
      under the contract or other any rights it may have and it shall not lead any
      obligation and liability on the part of Party B to Party A.

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    6.
      If
      Party A has other debts to Part B besides this contract, Party B has the right
      to withdraw RMB or other currency with equal value from Party A’s bank account
      in China Construction Bank system to pay any debts due. Party A agrees not
      to
      raise any objections.

    

    7.
      Party
      A shall notify Party B of any change of mailing address or contact information
      in writing as soon as possible. Party A shall cover any losses caused by any
      delayed notification.

    

    8.
      Transfer of the amount due

    As
      to all
      of the Party A’s amount due under this contract, Party B has the right to
      withdraw corresponding RMB or other currency with equal value from Party A’s
      bank account in China Construction Bank system without prior notice to Party
      A.
      Party A has the obligation to help Party B with the foreign exchange procedure
      if there is such a need. Party A shall bear all the risks of currency exchange
      rate fluctuations.

    

    9.
      Dispute Resolution 

    If
      a
      dispute arises under this contract, the parties hereto shall resolve the dispute
      through negotiation. The following procedure shall be adopted if the negotiation
      fails:

    To
      file a
      lawsuit in court with jurisdiction over Party B.

    

    10.
      Precondition to the effectiveness of this contract

    The
      contract shall be effective once executed and sealed by both parties or their
      representatives.

    

    11.
      This
      contract has five copies.

    

    12.
      Other
      agreed matters

    i)
      The
      lien under this contract is covered by the Maximum Collateral Contract with
      contract number: ZGEBZ2007186. 

    ii)
      The
      lien under this contract is covered by the Maximum Collateral Contract with
      contract number: ZGEBZ2008045.

    

    Clause
      11 Declarations 

    1.
      Party
      A is fully aware of Party B’s scope of business and limits of
      authority.

    

    2.
      Party
      A has read all the clauses under this contract. As required by Party A, Party
      B
      has already explained the corresponding clauses of this contract. Party A has
      fully understood the meaning of the contract and its corresponding legal
      consequences.

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    3.
      Party
      A’s execution and performance of this contract comply with all laws,
      regulations, Party A’s charter and internal organizational document, and is
      approved by Party A’s internal authority and/or government
      authority.

    

    Party
      A:
      Seal 

    

    Signature
      by Legal Person or Authorized Representative: Zhu, JianHua

    Date:
      April 30, 2008

    

    Party
      B:
      Seal

    

    Signature
      by Legal Person or Authorized Representative: ________ (illegible)

    Date:
      April 30 ,2008Exhibit
      10.18

     

    Contract
      No. Year 2008 H7n0370

     

    Commercial
      Financing Contract

     

    Important
      remainder: This contract is executed by both parties, as equals, according
      to
      relevant laws and regulations after voluntary negotiations. All the clauses
      reflect both parties’ true intentions. To insure the security of the Lender’s
      lien, the Borrower is willing to provide collateral to the loan. In order to
      fully protect the Lender’s lawful interests, the Lender hereby reminds the
      Borrower to read the provisions in bold of the contract carefully, and pay
      sufficient attention to its content.

    

    Party
      A:
      (Lender/Pledgee) Industrial and Commercial Bank of China. (“ICBC”)

    Address:
      

    Legal
      Person: Xiangxue Fang 

    

    Party
      B:
      (Borrower/Pledgor): Danyang Lihua Electron Co., Ltd

    Address:

    Legal
      Person: Jianhua Zhu 

    

    As
      specified in Clause 1.1, Party B hereby applies to Party A for the loan. To
      insure that the Borrower shall fully perform its obligations under this
      contract, Party B is willing to provide collateral to Party A. Through equal
      negotiations, both parties reached the following agreement. They hereby
      memorialize the contract and agree to abide by its terms.

     

    Clause
      1. Use of the Loan Proceeds, Loan Amount and Term

    

    1.1
      The
      loan proceeds shall be used to purchase raw materials. Party B shall not use
      the
      loan proceeds for other purposes without written consent from Party
      A.

    

    1.2
      The
      currency for the loan is RMB, and the amount is 10 MILLION.

    

    1.3
      The
      term of the loan is 6 months, starting from the date the loan is first
      withdrawn.

    

    1.4
      The
      actual withdrawal date and repayment date shall be determined according to
      the
      certificates of borrowing. Certificates of borrowing shall be part of the
      contract and have the same legal effect as this contract.

    

    Clause
      2 Loan Rate and Interest

    

    2.1
      If
      the currency of the loan is RMB, then the Loan Rate shall be set in the
      following way:

    

    2.1.1
      The
      Loan Rate is the Base Rate plus a Float Rate. The Base Rate is defined as RMB
      loan rate published for loans of same term and category by China People’s Bank
      on the withdrawal date of the loan. The Float Rate is 10%.

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    2.1.2
      If
      the Base Rate is adjusted after Party B’s withdrawal of loan proceeds, then the
      Loan Rate shall be adjusted in the following way: 

    

    Loan
      Rate
      shall be adjusted in every period, three month constituting one period. The
      rate
      setting date for the first period is the first withdrawal date. The following
      rate setting date shall be the corresponding date of the first withdrawal date,
      the following rate shall be set by the Base Rate published for loans with same
      term and category by China People’s Bank on the corresponding date and the
      Floating Rate specified in Clause 2.1.1. The interest is calculated separately
      in different periods. If there is no corresponding withdrawal date in the
      adjusting month, then the last date of the adjusting month shall be the
      corresponding date.

    The
      corresponding date of the withdrawal date is the corresponding date after one
      period, for example, if the withdrawal date is May 9th,
      then
      the corresponding date for the second period of a three-month period is August
      9th
      of the
      same year, the corresponding date for the second period of a six-month period
      is
      November 9th
      of the
      same year.

    

    2.3
      If
      Party B does not repay the loan after the maturity date, the rate of the overdue
      portion is set by the same method above.

    

    2.4
      If
      China People’s Bank adjusts its method in setting the rate of loans, then the
      rate of this Loan shall be adjusted accordingly.

    

    Clause
      3. Collateral and Guaranty

    3.1
      Party
      B will provide collateral to guarantee its performance of this
      contract.

    

    3.2
      The
      guaranty will cover the difference between the loan amount under this contract
      and the deposit Party B has already paid to Party A, the amount is RMB 10
      MILLION (hereinafter, the “Principal”).

    

    3.3
      The
      guaranty covers: Principal, interest, penalty interest, compounding interest,
      damages, keeper’s fee, and all the other costs incurred by Party B to realize
      its creditor’s rights.

    

    3.4
      The
      parties agree on the following regarding the collateral:

    

    3.4.1
      The
      collateral shall be supervised by China National Foreign Trade Transportation
      Corporation, Jiangsu subsidiary. The detailed information about the collateral
      could be found under the “ Collateral Information” (or “List of Collaterals”)
      Section of the Commodity Financing Collateral Supervision Agreement No.
      TS-G5-05309. 

    

    3.4.2
      When Party B pledged the collateral, the value of the collateral is only used
      to
      calculate the collateral ratio under this contract. This value shall not be
      used
      to estimate the value of the collateral when Party A disposes the collateral.
      It
      shall not limit Party A’s rights with regards to the collateral. 

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    3.4.3
      While the lien on the collateral continues, Party A has the right to adjust
      the
      value of the collateral according to the change of its market value. If the
      ratio of collateral over the unpaid loan balance is less than 125% (the range
      is
      125%-200%, the lowest is 125%), Party B shall within five business days after
      receiving a notice from Party A, add more collateral or submit more deposits
      to
      restore the collateral ratio back to its original level. Otherwise, Party A
      shall have the right to dispose the collateral according to this contract and
      has priority in repayment from such funds. If the ratio of the collateral is
      over the unpaid loan balance is less than 120% (the range is 120%-180%, the
      lowest is 120%), Party A shall have the right to dispose the collateral
      according to this contract and has priority in repayment from such
      funds.

    

    3.5
      Both
      parties reach the following agreement regarding to the transfer and supervision
      of the collateral:

    

    3.5.1
      The
      transfer of collateral under this contract shall be governed by the Commodity
      Financing Collateral Supervision Agreement signed by Party A, Party B, and
      the
      Supervisor. Party A and Party B shall send a Collateral Notice (or a Notice
      of
      the Minimum Requirements of the Type and Price of Collateral) to the Supervisor
      and the Supervisor shall issue a custody certificate to Party A and Party B
      after verifying the accuracy of the information contained therein. The custody
      related fees and method of payment shall be governed by the Commodity Financing
      Collateral Supervision Agreement.

    

    3.5.2
      The
      List of the Collateral under this contract shall be issued to Party A by the
      supervisor. The property title certificate of the collateral, receipts, and
      other related materials shall be confirmed and sealed by both parties, and
      then
      kept by Party A.

    

    3.5.3
      If
      Party B fully performs its obligation after the loan matures or Party B prepays
      the loan, Party A shall notify the Supervisor to return the collateral to Party
      B according to the Commodity Financing Collateral Supervision
      Agreement.

    

    3.6
      Both
      parties reach the following agreement regarding to the safe keeping and
      withdrawal of the collateral:

    

    3.6.1
      If
      Party A cannot keep the collateral properly and causes the damage or loss
      thereof, Party B can ask Party A to deposit the collateral with a third party
      for safe keeping. The related expenses shall be borne by Party B. 

    

    3.6.2
      If
      the collateral provided by Party B is damaged or the value of the pledged goods
      may be diminished significantly so as to potentially jeopardize the rights
      of
      Party A, and Party B refuses to provide the sufficient guaranty thereof, Party
      A
      can auction or sell the collateral to realize its creditor’s rights under this
      contract with the proceeds from the auction or sale, or Party A may choose
      to
      deposit the collateral with a third party. The related expenses shall be borne
      by Party B.

    

    3.7
      Both
      parties reach the following agreement regarding the insurance of the
      collateral:

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    3.7.1
      Before the collateral is transferred to the Supervisor and the issuance of
      the
“List of the Collaterals”, Party B shall obtain basic property insurance and any
      additional insurance from certain insurance agencies. The term of the insurance
      shall not be shorter than that of this contract. The amount insured shall not
      be
      less than the sum of the Principal and interest under this contract.

    3.7.2
      Party B shall specify in the insurance policy that the Party A is the first
      beneficiary of the insurance. The insurance policy shall not contain any clause
      which may limit Party A’s rights. The insurance certificate shall be kept by
      Party A. Once the insurance policy is triggered, the insured party shall
      transfer the insurance compensation to an account designated by Party A; if
      before the insurance policy is triggered and Party B has performed its
      obligations under this contract, Party A shall return the insurance certificate
      back to Party B.

    3.7.3
      When the contract is still effective, Party B shall not discontinue or revoke
      the insurance for any reason. If insurance is stopped or revoked, Party A has
      the right to insure the goods for Party B. Party B shall cover all the related
      expenses.

    3.7.4
      As
      to the insurance compensation, Party B agrees the Party A has the right to
      choose the following way to dispose it and agrees to provide necessary
      help:

    A.
      Repay
      or repay in advance the Principal and interest of the loan under this contract
      and the related expenses;

    B.
      Transformed to a CD, the CD is used as pledge;

    C.
      With
      Party A’s agreement, to repair the collateral to restore its value;

    D.
      Deposited with a third party designated by Party A;

    E.
      Party
      B can dispose the insurance compensation freely after providing a new pledge
      meets the requirement of Party A.

    

    Claude
      4.
      Withdrawal

    

    4.1
      Party
      B must meet the following condition to withdraw the loan, otherwise, Party
      A
      does not have the obligation to provide the loan to Party B:

    A.
      Complete the loan application as required by Party A;

    B.
      Party
      B has completed pledge process as required by Party A;

    C.
      Party
      A receives the List of the Collateral from the supervisor;

    D.
      Party
      B submitted all the legal document related to this loan contract to Party A,
      including but not limited to the property right certificate of the collateral,
      receipts, insurance policy and other related materials;

    E.
      There
      is no breach of this contract.

    4.2
      Party
      B shall submit a withdrawal application three days in advance of the withdrawal.
      Once the application is submitted, it can not be revoked without a written
      approval of Party A.

    

    4.3
      After
      Party B meets all the condition set by Party A, Party A shall wire the loan
      amount into a bank account owned or designated by Party B in Party A’s banking
      system.

    Name
      of
      the account: Danyan Lihua Electron Co., Ltd.

    Account
      No.: 1104025019200107461

    Bank:
      Danyang ICBC

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    Clause
      5
      Repayment 

    

    5.1
      Party
      B shall pay full amount of the interest according to this contract, and it
      will
      pay 

    the
      Principal all at once.

    

    5.2
      One
      business day before the interest or Principal is due, Party B shall wire enough
      fund into its bank account opened in Party A’s bank system to cover the due
      Principal, interest and other related expense, and shall authorized Party A
      to
      withdraw the fund on the due date.

    

    5.3
      If
      the fund in Party B’s bank account is not sufficient to cover all the Principal,
      interest and related expenses, Party A has the right to decide the order of
      payment. 

    

    5.4
      If
      Party B wants to pay off all or part of the loan in advance, it shall notify
      Party A in writing 10 business days before the repayment.

    

    5.6
      When
      repay the loan in advance, Party B shall pay all the Principal, interest and
      other related expenses under this contract up to the repayment date. The repaid
      amount shall not be re-withdrawal.

    

    5.7
      Any
      repayment or the advance repayment of the loan shall be in the same currency
      as
      the loan.

    

    Clause
      6
      the Realization of the pledge right

    

    6.1
      If
      Party B does not repay the loan when it is due or when Party A announce the
      loan
      is due before the original due date according to the terms of this contract,
      Party A has the right to dispose the collateral and get compensated from the
      fund derived.

    

    6.2
      When
      Party A disposes the collateral, Party B shall fully corporate and not to set
      any obstacles.

    

    6.3
      If
      Party B does not repay the loan Principal, interest or other related expenses
      at
      the due date, Party A has the right to dispose the collateral.

    

    6.4
      Party
      A has the right to dispose the collateral if any situation under 3.4.3
      happens.

    

    6.5
      Under
      the following situations, Party A can dispose the collateral in advance, and
      get
      compensated from the fund derived:

    6.5.1
      If
      under this contract, the liability has been partially or fully generated and
      the
      contract has not yet been fully performed, the contract is dissolved according
      to the contract law. 

    6.5.2
      If
      Party A wants to retract the loan according to this contract and its lien has
      not been fully realized.

    6.5.3
      If
      the situations under 8.11 , 8.12 happen and Party B does not provide other
      collateral.

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    6.5.4
      If
      Party A can exercise its pledge rights under the terms of this
      contract.

    

    6.6
      The
      pledge under this contract includes the interest generated by the collateral,
      and the insurance compensation generated because of the damage of the
      goods.

    

    Clause
      7
      Statement and Warranty of Party B

    Party
      B
      makes the following statements and warrants to Party A and they shall remain
      effective during the contract period.

    

    7.1
      Party
      B shall have legal right to borrow, shall have the qualification and ability
      to
      sign and perform the contract.

    

    7.2
      All
      the documents provided to Party A are true, accurate, complete and effective
      in
      all aspects. There is no false record, material overlook or misleading
      statement.

    

    7.3
      Party
      B has gained the authority and approval to sign this contract. Signing and
      performing of this contract shall not violate Party B’s charter or any related
      law and regulation. This contract does not contradict with any contract Party
      B
      already signed or still under negotiation.

    

    7.4
      Party
      B does not withhold any information regarding litigation, arbitration
      matters.

    

    7.5
      Party
      B makes the following statement and warranty regarding its pledge under this
      contract:

    7.5.1
      Party B is the sole, valid, and legal owner of the collateral under this
      contract. There is no dispute regarding to the ownership or administration
      right
      of the collateral.

    7.5.2
      Party B voluntarily provide the collateral under this contract, all the
      expression made under this contract is real.

    7.5.3
      All
      the collateral under this contract are pledgeable and does not have any
      limitation on them. 

    7.5.4
      Party B shall provide a full and reasonable explanation to any deficiency of
      the
      pledged goods under this contract.

    7.5.5
      The
      pledged goods are not pledged, transferred before the signing of this
      contract.

    7.5.6
      If
      Party B does not perform its liability under this contract, with other pledge
      contract or not, Party A has the right to ask Party B to should its pledge
      responsibility within the scope of this pledge contract, and Party B has given
      up the right to raise objections.

    

    Clause
      8
      Party B’s promise

    Party
      B
      makes the following promises:

    

    8.1
      Party
      B shall use the loan according to the loan period and usage of the loan
      specified in this contract. The borrowed fund shall not be used in any ways
      in
      securities market, futures market, or other investment related to the stock.
      The
      fund shall not be used in any way which is prohibited by law and
      regulation.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    8.2
      Party
      B shall pay the principle, interest and other amount due as specified under
      this
      contract. 

    

    8.3
      Party
      B shall provide financial accounting material such as the balance sheet, cash
      flow chart, and income statement as required by Party A. Party B shall actively
      corporate with Party A to enable Party A to better understand its production,
      management and financial situations.

    

    8.4
      Party
      B shall not engage in the following activities unless it has notified Party
      A 30
      days in advance and obtained a written approval from Party A or has made a
      satisfactory arrangement for Party A’s creditor right: leasing, share structure
      change, alliance, merger, acquisition, joint venture, split, capital reduction,
      major asset transfer, transfer of debt or other activities which might affect
      Party A’s right as creditor.

    

    8.5
      Party
      B shall notify Party A of the following changes as soon as
      possible:

    A.
      There
      is a change in Party B’s Charter, scope of business, registered capital, legal
      person, address, telephone number;

    B.
      There
      is a halt of the business, dissolution, winding, revocation of license,
      application to bankruptcy;

    C.
      Party
      B is involved or possibly involved in a significant economic dispute,
      litigation, arbitration, or its asset is seized, attached, or
      supervised.

    D.
      Member
      of the board of directors or the management is involved in a economic crime
      or
      dispute;

    E.
      There
      is a dispute as to the property ownership of the pledged goods.

    

    8.6
      Party
      B shall notify Party A of any major transactions as soon as
      possible.

    

    8.7
      Party
      B shall sign the notice to pay the loan sent by Party A in a timely
      manner.

    

    8.8
      During the effective period of the contract, Party B shall not harm Party A’s
      interest by providing pledge to a third party.

    

    8.9
      Party
      B shall not transfer or give away the pledged goods under this contract as
      long
      as the contract is still effective.

    

    8.10
      Party B shall be responsible for all the cost related to this contract. The
      costs include but are not limited to legal service, evaluation, examination,
      storage, supervision, trade or litigation.

    

    8.11
      If
      Party B’s action will reduce the value of the pledged goods, Party B shall stop
      its action. If Party B causes the reduction of the value of the pledged goods,
      it has the obligation to restore the value, or provide a new warranty with
      the
      equivalent value of the reduced value.

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    8.12
      while the lien is continuing, if the value of the collateral is diminished
      or
      the collateral is damaged or lost due to third party’s actions, the compensation
      received shall be deposited into an account designated by Party A. If Party
      B
      can not provide new collateral satisfactory to Party A, Party B agrees that
      the
      compensation received shall become part of the collateral, together with the
      undamaged portion of the collateral. If Party B provides new collateral
      satisfactory to Party A, Party A shall return the compensation to Party
      B.

    

    8.13
      If
      Party A’s lien is jeopardized or potentially jeopardized by any third party,
      Party B is obligated to notify Party A immediately and assist Party
      A.

    

    8.14
      After the effectiveness of this contract, If Party A transfers the collateral
      to
      a third party, Party B shall continue to perform its obligation under the
      contract.

    

    8.15
      After the repayment in full by Party B under the contract, Party B is no longer
      obligated to provide the collateral. If Party B’s repayment is adjudicated to be
      invalid, Party B shall continue to perform its obligation under the contract.
      

    

    8.16
      Without the written consent from Party A, Party B shall not transfer in whole
      or
      in part its rights or obligations under the contract. 

    

    Clause
      9
      Party A’s Covenants

    Party
      A
      covenants the following with Party B:

    

    9.1
      Party
      A is obligated to disburse the fund to Party B.

    

    9.2
      Party
      A shall keep confidential such materials and information provide by Party B
      as
      related to Party B’s credit, finance, manufacture and business operation, unless
      otherwise covered by this contract or exempt by laws and
      regulations.

    

    9.3
      Party
      A is obligated to keep the collateral in good repairs. For details, please
      refers to Commodity Financing Pledge Supervision Agreement executed by Party
      A,
      Party B and supervisor. 

    

    9.4
      During the term of the contract, when Party A is transferring the lien, it
      shall
      notify Party B in a timely manner.

    

    9.5
      For
      the disposition of the collateral, the proceeds received shall be first applied
      to the payment and the balance shall be returned to Party B. 

    

    Clause
      10
      Events of Default

    

    10.1
      It
      shall be a Party B event of default if one of the following occurs:

    A.
      Party
      B fails to pay any principal, interest or any other amount due; misuses the
      loan
      proceeds; fails to perform its obligations under this contract; or breaches
      any
      representation, warranty or covenants;

    B.
      There
      is material adverse change affecting Party A’s lien and Party B fails to provide
      any additional collateral satisfactory to Party A;

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    C.
      Party
      B fails to pay any debt due (including accelerated debts), or fails to perform
      or breaches obligations under other contracts, such that such failure has or
      may
      adversely affect its performance under this contract.

    D.
      There
      are major adverse changes in the business operation of Party B, such that such
      change has or may adversely affect its performance under this
      contract.

    E.
      Assets
      of Party B have been attached, confiscated, or seized such that such action
      has
      or may adversely affect its performance under this contract. 

    F.
      Party
      B is involved or may getting involved in major economic disputes, litigation
      or
      arbitration, such that such proceeding has or may adversely affect its
      performance under this contract;

    G.
      Party
      B is investigated or fined by the law enforcement agencies, tax authorities,
      or
      other government authorities, such that such penalty has or may adversely affect
      its performance under this contract;

    H.
      The
      abnormal change in the major investor in Party B oir its key management
      personnel, or when such person is under criminal investigation such that such
      action has or may adversely affect its performance under this contract;

    I.
      The
      cease of operation, dissolution, accounting, reorganization, revocation of
      license, involuntary filing of bankruptcy of Party B;

    J.
      Any
      false representation and warranty in Clause 7 of this contract;

    K.
      The
      invalidation of the contract is due to the fault of Party B;

    L.
      Any
      other event or circumstances that may adversely affect Party A’s perfection of
      its lien under this contract.

    

    10.2
      If
      Party B breaches and Party A wants to cure, Party B shall take such measures
      that are satisfactory to Party A within the time period specified by Party
      A.
      Otherwise, Party A shall have the right to take any of the action by itself
      or
      in combination below:

    A.
      Stop
      disbursing loan proceeds to Party B and cancel the balance of the loan in whole
      or in part;

    B.
      Accelerate the loan in whole or in part and make it due and payable
      immediately;

    C.
      Dispose directly the collateral and apply funds received for payment of the
      loan
      under this contract;

    D.
      Demand
      Party B to pay Party A’s damages, including but not limited to, attorney’s cots,
      legal fees, and other expenses related to the realization of the
      lien;

    E.
      Any
      other remedies available under the laws and the regulations or this
      contract.

     

    10.3
      When
      the loan is due (including acceleration of the loan) and Party B fails to pay
      the loan, Party A shall have the right to add a 40% penalty interest to the
      original loan interest rate from the due date. For any overdue interest, the
      interest shall be compounded at the penalty rate.

    

    10.4
      For
      any misuse of the loan proceeds of Party B, Party A shall have the right to
      add
      a 50% penalty interest to the original loan interest rate from the date of
      misuse. For any overdue interest during the period of misuse, the interest
      shall
      be compounded at the penalty rate.

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    10.5
      If
      the event described in 10.3 and 10.4 occur simultaneously, the penalty rate
      shall be the higher one. 

    

    10.6
      When
      the loan is due (including acceleration of the loan) and Party B fails to pay
      the loan principal, interest, or other fees, Party A has the right to offset
      corresponding amount from Party B’s bank accounts established with Party A or
      ICBC or its branches. If the currency of the offset amount is different from
      that under this contact, the offset amount shall be determined according to
      the
      foreign exchange purchase rate published by Party A on the date of the setoff.
      Any interest and fees accrued from the offset date to the repayment date (Party
      A according to the national foreign currency management policy, coverts the
      currency of the offset amount in to the currency of this contract), together
      with any difference caused by the fluctuation of the foreign exchange rate
      shall
      be borne by Party B.

    

    Clause
      11
      Effectiveness, amendment, cancellation and termination

    11.1
      This
      contract shall be established as the date of execution by the signatures (
      or
      seals) of the legal persons of Party A and Party B (authorized representative
      or
      authorized signatory) and the affixation of the official seals of the parties
      hereto. The contract shall be effective from the verification of the collateral
      by the supervisor and issuance of related certificates and shall terminate
      when
      Party B performs in full all of its obligations under this
      contract.

    

    11.2
      Any
      amendment of the contract shall be in writing and agreed to by both parties.
      Such amendments shall become part of the contract and have the same legal effect
      of this contract. Other provisions of the contract unaffected by any amendment
      shall continue to be valid. Before the effectiveness of any amendments, the
      existing provisions shall be continue to be valid. 

    

    11.3
      After Party B performs in full all of its obligations under this contract,
      Party
      A shall notify the supervisor to free the collateral.

    

    11.4
      The
      amendment and cancellation of this contract shall not affect any remedies
      entitled by the parties. The dispute resolution provision shall survive the
      cancellation or termination of the contract. 

    

    Clause
      12
      Dispute resolution

    12.1
      The
      laws of the People’s Republic of China shall apply to the establishment,
      validity, interpretation, performance and dispute resolution of this contract.
      Both parties shall resolve any dispute arising from or related to this contract.
      If such negotiation is not successful, the dispute shall be resolved by
      litigation at the district court having jurisdiction over Party A.

    

    Clause13
      Other terms

    13.1
      If
      Party A does not exercise, exercise in part or delay in exercising any rights
      under this contract, it shall not constitute waiver or amendment of such right
      or any other right and it shall not affect its exercising of this right or
      other
      right in the future.

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    13.2
      Any
      invalidity or inapplicability of a provision of this contract shall not affect
      the validity or applicability of any other provision of this contract, or the
      validity of this contract as a whole. 

    13.3
      The
      terms in this contract: “related party”, “related party‘s relations”, ‘related
      party transactions’, “major investor”, “key management personnel” shall have the
      same meaning as those in the Corporate Accounting Guidelines- the Disclosure
      of
      the Related Party Relations and Transactions.

    

    13.4
      This
      contract has two counterparts, Party A and Party B shall each hold a copy with
      the same legal effects.

    

    Clause
      14
      Miscellaneous

    14.1___________________________

    14.2___________________________

    

    Clause
      15
      Annexes

    15.1
      The
      Annexes of this contract is an inalienable part of the contract, have the same
      legal effect as the contract.

    15.2
      the
      Annexes of the contract include:

    

    Party
      A:
      ICBC Seal

    

    Signature
      by Authorized Representative: ________ (illegible)

    Date:
      April 28 ,2008

    

    Party
      B:
      Danyang Lihua Electron Co., Ltd. Seal 

    

    Signature
      by Legal Person or Authorized Representative: Zhu, JianHua

    Date:
      April 28, 2008

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