Receivable Pledge Agreement

EXHIBIT 10.9     Conclusion Date: January 4, 2008   Receivable Pledge Agreement
Between
Zhengzhou Shenyang Technologies Co., Ltd., China, as Pledger
And
Austria Central Cooperation Bank Beijing Branch, as Pledgee  

 
The receivable pledge agreement, hereinafter referred to as “the Agreement”, is signed on the forth day of January 2008, by and between the both parties of 1. Zhengzhou Shenyang Technology, Inc., China, as Pledger, hereinafter referred to as “Pledger”, a limited company founded in accordance with the laws of the People’s Republic of China, whose registration address is 170, Gongren Road, Zhongyuan District, Zhengzhou, China And 2. Austria Central Cooperation Bank Beijing Branch, as pledge, hereinafter referred to as “Pledgee”.
WHEREAS Zhengzhou Shenyang Technologies Co., Ltd. as a borrower and the pledge as a lender has signed a “Letter of Quota” numbered 200801040012660001, hereinafter referred to as “Letter of Quota”, on January 4, 2008, under which the lender agreed to provide a quota of loan not exceeding RMB50,000,000 of loan principal, hereinafter referred to as “loan”. AND WHEREAS The Pledger agrees to sign the agreement with the pledge and to establish a security on the receivables, defined as bellow, with the pledge as beneficiary to warrantee that the Pledger shall fully pay the debt owe to the Pledgee under the Letter of Quota.
THEREFORE, it is agreed between both parties as follows:
Article 1 Definition and Explanation

The following terms defined in the Letter of Quota shall have the same meanings in the Agreement except where the context otherwise clearly defined:
“Sales contract” means product sales contract signed either before or after signing of the Agreement by and between the Pledger and one or more companies, hereinafter referred to as “the Buyer”, recognized and accepted by the pledge.
“Agreement of accounts” means “the agreement of account pledge and monitoring” signed on or before signing of the Agreement by and between the Pledger and Pledgee.
“Monitoring accounts” means the accounts used for receiving the receivables opened by the Pledger
“Registration authority” means the Credit Centre of the People’s Bank of China.
   

 
“Receivable(s)” means any existing and future rights and interests enjoyed by the Pledger under the sales contract over debtors, which includes but not is limited to (1) all creditor’s right of the Pledger under the sales contract, including any advance payment, installment payment, performance bond, and debtor’s right for any other sum of payments; and (2) all rights enjoyed by the Pledger under the sales contract to claim indemnification due to any breach of the contract.
“Debtor” means the debtor obliged to pay the receivables to the Pledger under the sales contract.

Article 2 Pledge
2.1 To secure that all secured debts are timely and fully paid or discharged and that the Pledger may timely and properly perform its obligations due on time, due in acceleration, or other situations under the financing documents, the Pledger agrees to pledge the receivables to the pledge. 2.2 In case the Pledger and pledge adjust the amount of the loans according to the stipulations of the Letter of Quota, secured debts under the Agreement shall be the amount of loans actual provided under the Letter of Quota.
Article 3 Scope of Security
3. 1 The scope of pledge under the Agreement includes: (1) All existing and future loans and accumulated interest, including but not limited to legal interests, agreed interests, overdue interests, and interests of punishment, handling charge and other charges, breach of contract damages, damages, expenses for realization of debtor’s rights, including but not limited to litigation expenses, attorney fee, notary fee, and execution fee, and other receivables, no matter they become receivables on expired date or under other conditions, the Pledger should pay the pledge under the financing documents;
   

 
(2) Any other items of payment the Pledger should pay the pledge due to or under the financing documents; (3) All fees and expenses incurred when the Pledger realizes its secured rights and interests under the Agreement, including but not limited to the litigation expenses, attorney fees, notary fees and execution expenses; and (4) Breach of contract damages and any other payments the Pledger should pay the pledge under the Agreement.
3.2 The certification issued by the Pledgee regarding any secured debt or receivables under the Agreement shall be final and bind the Pledger, unless there are any obvious errors.
Article 4 Registration of Pledge
4.1 The Pledgee and Pledger shall sign a Contract of Pledge Registration of Receivables based on the form in Annex 1 “Contract Form of Pledge Registration of Receivables” or any other form required or agreed upon by the pledge.
4.2 The Pledgee and Pledger agree the pledge registration of receivables shall be handled by the Pledgee in the registration authority, where the fees and expenses incurred shall be borne by the Pledger.
4.3 In case the Pledgee reasonably believes it is necessary to amend the pledge registration already done, the Pledger shall take all reasonable steps to assist the Pledgee to handle the amendment of pledge registration of receivables, where the fees and expenses incurred shall be borne by the Pledger.
4.4 Whenever the Pledgee requires, the Pledger shall, at any time, take the actions, including signing of any documents, acquiring any approvals and fulfilling any registrations, filing or recording, reasonably required by the Pledgee at his own charges to: (1) Improve or protect the securities established under or according to the Agreement; or (2) Assist the Pledgee or any other assignee to realize the pledge or any part of it established under the Agreement, or assist the Pledgee to exert any of his rights, powers, or discretions according to the Agreement.
Article 5 Performance of Sales Contract
5.1 The Pledger is obliged to continue to perform all obligations under the sales contract. The Pledgee has no responsibility or legal obligations to the sales contract, and is not obliged to implement responsibility undertaken by the Pledger to sales contract. The Pledgee has no responsibility to take actions concerning accounts receivable. In condition not affecting rights of the Pledgee under this agreement, the Pledger is not accountable or legally liable to any other parties concerning accounts receivable.
   

 
5.2 In spite of above regulations, if the Pledger and /debtor does not carry out obligations under sales contract properly and has done harm to rights enjoyed by the Pledgee under this agreement, the Pledgee has the right (but no obligations) to implement it in the name of Pledger or lodge a suit against debtor, refer to arbitration or take other measures. The Pledger agrees and authorizes the Pledgee to take actions mentioned above and provide coordination necessary. Expenses incurred as a result of any actions taken by Pledgee under this regulation should be compensated by the Pledger wholly.
Article 6 Monitoring of Accounts
6.1 The Pledger shall open monitored account at the place of pledge and guide debtor to deposit all accounts receivable into the account.
6.2 Without prior written consent of Pledgee, the Pledger is not allowed to indicate debtor to deposit account receivable into any other account except monitored account. If the Pledger, on any account, receives account receivable from any other means, he should notify immediately Pledgee and transfer the above sum of money into the monitored account.
Article 7 Representations and Warranties
7.1 The Pledger makes the following representations and warranties to the Pledgee: (1) The Pledger is a limited company established in accordance with laws of the People’s Republic of China, and with independent legal person status. It has effective business license and is able to bring a suit and respond to a charge.
(2) The Pledger has legal qualifications and necessary rights to sign this agreement, to exercise rights and carry out obligations under this agreement.
(3) The sales contract is signed by the Pledger and debtor legally and effectively, and is legally binding to both parties. Accounts receivable of the Pledger in sales contract can be transferred according to relevant laws and regulations and nature of the sales contract.
(4) At present the debtor has no right of offsetting or counterargument in terms of the Pledger, which may affect guaranteed rights of the Pledgee under this agreement
(5) The Pledger has the sole right to account receivable, except guarantee set in this agreement, the Pledger does not have other guarantee of any nature in terms of account receivable. The Pledger has undisputable right to account receivable, and can be taken as the object of pledge security.
   

 
(6) The Pledger has carefully read, wholly understand and accept content of this agreement and document of financing, the Pledger signs and implements this agreement of his own free will. What are expressed i