EXHIBIT 10.2
FORM OF LIMITED-RECOURSE ACCOUNTS RECEIVABLE SELLING AGREEMENT
(Summary Translation)
SECTION I. CONTRACTING PARTIES
PARTY A (SELLER): Shenzhen GrenTech Co., Ltd.
Business address: Room 1001, 10th Floor, East Tower 4, Saige
Science & Technology Park, Futian District,
Shenzhen 518028, China
Authorized representative: Yingjie Gao
PARTY B (BUYER): China Construction Bank, Shenzhen Branch
Business address: Jianhang Building, East Block, Financial Center,
Hongling Road South, Shenzhen, China
Authorized representative: [specify]
Handling sub-branch: [specify]
The parties hereby enter into this Agreement on basis of voluntariness,
equality, mutual benefit and good faith through friendly negotiation.
SECTION II. DEFINITION
1. Sale of Accounts Receivable
Sale of Accounts Receivable, as used herein, refers to Party B buying and
accepting from Party A all rights of Party A relating to the Accounts
Receivable as provided in the relevant Business Contracts. So long as Party
A is not in breach of its obligations, undertakings and warranties herein,
Party B shall have no right of recourse against Party A.
2. Quota
Quota means the maximum amount of Accounts Receivable that Party A may sell
to Party B, and Party B may purchase from Party A, during the effectiveness
of such Quota in accordance with this Agreement; provided, that during the
effectiveness of the Quota, Party A may use the Quota on a revolving basis
so long as the aggregate outstanding Accounts Receivable under this
Agreement does not exceed the Quota at any time.
3. Debtor
Debtor refers to the party to a Business Contract with Party A that has the
obligation to make payments to Party A pursuant to the Business Contract.
4. Business Contract
Business Contract refers to the underlying purchase and sale agreement
between Party A and a Debtor pursuant to which any Account Receivable
subject to this Agreement has been generated.
5. Account Receivable
Account Receivable refers to the legally valid right of Party A to receive
payments from a Debtor pursuant to a Business Contract, such right to
include the right to receive repayment of the principal of indebtedness and
payment of interest thereon as well as default interest, penalty for
breach, damages, security interest and all other rights relating to the
indebtedness.
6. Normal Collection Period
Normal Collection Period refers to period of time determined in accordance
with the provisions in the relevant Business Contract and industry practice
and not to exceed [specify length of time] commencing on the date on which
Party B pays Party A the purchase price for the relevant Account Receivable
hereunder.
7. Grace Period
Grace Period refers to the additional time period, not to exceed [specify
length of time] following the expiry of the Normal Collection Period, as
may be approved by Party B on the basis of transaction records and the
relevant Debtor's credit profile provided by Party A, to allow Party A to
collect payments from the Debtor.
8. Term
Term refers to the aggregate of the Normal Collection Period and the Grace
Period.
9. Working Day
Working Day refers to any normal banking day other than statutory holidays.
10. force majeure
Force majeure refers to any of the acts or events that (i) is beyond the
control of the relevant party hereto, (ii) is unforeseen, unavoidable or
insurmountable, (iii) shall occur after this Agreement has come into effect
and (iv) causes delay or failure by any party hereto in its performance
hereunder, such as earthquakes, typhoons, floods, fires, wars and the like.
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SECTION III PURCHASE PRICE AND TERM
1. Party B shall commit to purchase from Party A an aggregate of Rmb [specify
amount] as the Quota hereunder during the Term commencing on [specify date]
and ending on [specify date]. During the Term, Party A may apply to
Accounts Receivable to Party B hereunder.
2. Upon the expiration of the Term, any unused Quota or portion thereof shall
automatically terminate.
3. Party A undertakes that, to the extent it needs to sell any Account
Receivable, Party A shall consider Party B as a preferred purchaser if the
terms and conditions of Party B and other purchasers are similar.
SECTION IV RESERVE DEPOSITS
Party A shall pledge to Party B a designated account with reserve deposits
therein at any time not less than [specify percentage] of the outstanding
Accounts Receivable that have been sold and transferred to Party B as a security
interest for the outstanding Accounts Receivable. Such pledged reserve deposits
shall be subject to the Pledge Agreement relating to Reserve Deposits between
the parties.
SECTION V APPLICATION TO USE QUOTA AND DISBURSEMENT OF PURCHASE PRICE
1. When Party A applies to use the Quota hereunder, it shall submit to Party B
the relevant application forms, Business Contracts and other information as
may be deemed necessary by Party B. All documents submitted by Party A must
be duly certified by Party A with its corporate seal attached thereto, and
Party A shall be responsible for the accuracy, completeness and
authenticity of the documents submitted.
2. The parties hereto shall execute and deliver this Agreement after Party A
shall have completed the establishment of the reserve account and shall
have deposited the relevant amount of funds into such reserve account in
accordance with Section IV.
3. Concurrent with the execution and delivery of this Agreement (in case of
initial Accounts Receivable) or a supplement hereto (in case of subsequent
Accounts Receivable), Party A shall, or shall jointly with Party B, deliver
notice to each Debtor informing of the transfer of the Accounts Receivable.
4. Within [specify number] Working Days of execution of this Agreement or a
supplement hereto, Party B shall disburse its purchase price for the
Accounts Receivable, less its expenses as agreed between the parties, to an
account established by Party A for such purpose with Party B's handling
sub-branch. All payments with respect to any Account Receivable hereunder
shall be in Renminbi.
SECTION VI COMMISSION FEE AND MANAGEMENT FEE
1. Calculation and payment of commission fee
Party A shall pay a commission fee with respect to any Account Receivable
that become subject to this Agreement, calculated on basis of the number of
days between the day of payment of the purchase price therefor and the full
collection of payment under such Account Receivable. The annual commission
fee shall be at the rate of [specify percentage] of the relevant purchase
price and any daily commission fee shall be the annual commission fee
divided by 360.
2. Party A agrees to pay a one-off management fee to Party B at the rate of
[specify percentage] of the Accounts Receivable purchased by Party B
hereunder.
3. The management fee shall be paid in a lump sum and may be deducted by Party
B from its purchase price to Party A.
4. The commission fee and the management fee paid by Party A shall not be
refundable.
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SECTION VII COLLECTION OF PAYMENTS FROM ACCOUNTS RECEIVABLE
1. Party A and Party B shall agree on a designated account for the purpose of
collection of payments from the Accounts Receivable. If it is necessary to
change the account information under any Business Contract for the
collection of payments from any Account Receivable, Party A shall notify
the relevant Debtors of such change and provide copies of the
acknowledgements thereof from the Debtors to Party B.
2. Party A shall urge the Debtors to make full payments with respect to the
Accounts Receivable to the designated account on time prior to the
expiration of the Normal Collection Period. If any Debtor fails to make
such payments within the Normal Collection Period, Party A shall
communicate and coordinate with the Debtor to procure such payment by the
Debtor within the Term.
3. Party B shall notify Party A within [specify number] Working Days of
receipt of any payment from any Debtor into the designated account, and
Party A shall advise Party B with respect to the identity of the Accounts
Receivable to which such payment relates within [specify number] Working
Days of the receipt of Party B's notice.
4. If a Debtor fails to pay any amount under any Account Receivable to Party B
within the Term, Party B shall have the right to withdraw such amount
directly from the reserve account pledged by Party A to Party B. Should the
Debtor pay any such amount into the designated account subsequent to the
expiration of the Term, Party B shall refund such amount to Party A.
5. If a Debtor fails to pay any amount under any Account Receivable to Party B
within the Term and there are insufficient funds standing to the credit of
the reserve account for Party B to withdraw to make up for the deficiency,
to the extent that Party B proposes to file for arbitration or pursue legal
actions against the Debtor, Party A shall fully cooperate with Party B,
including but not limited to, providing evidence in response to
counter-claims raised by the Debtor reasonably promptly as required by
Party B.
6. If any Debtor makes any payment under any Account Receivable into any
account other than the designated account hereunder, Party A shall notify
Party B immediately and transfer the relevant payment to the designated
account within [specify number] Working Days of receipt of such payment.
Party A shall, in addition, notify the Debtor to make such payments to the
designated account in the future.
SECTION VIII REPRESENTATIONS AND WARRANTIES OF PARTY A
Party A represents and warrants to Party B that:
1. its rights to the Accounts Receivable are true, lawful and validly
existing, without any security, mortgage, pledge or lien attached thereto;
2. there is no agreement between itself and any Debtor to offset any Accounts
Receivable or to place any restriction on the transfer the Account
Receivable;
3. it has not transferred, not has it agreed to transfer, any Account
Receivable to any third party;
4. each Account Receivable is derived from its ordinary course of business,
that the underlying transactions of the Account Receivable are true, bona
fide, within the scope of business of Party A and in agreement with the
payment provisions in the relevant Business Contract. Party A has no
dispute with the relevant Debtor in relation to any Account Receivable when
Party A applied for sale of the Account Receivable;
5. its title to the Accounts Receivable is not subject to any offsetting,
counterclaim, damages, liabilities, liens or rights or claims of any third
parties;
6. it will not dispose of or transfer any Account Receivable hereunder without
Party B's permission; nor will it transfer this Agreement or enter into any
amendment hereto or supplement hereof without Party B's permission;
7. it has performed all its obligations under the Business Contracts properly
and can obtain and produce inspection certificates and other supporting
documents to prove the validity of its rights under the Accounts Receivable
prior to the expiration of the Normal Collection Period;
8. the transfer of any Account Receivable hereunder shall not violate any
resolution of its board of directors or similar body of authority or
violate any provisions of its articles of association.
9. it shall not amend or otherwise modify any provision of any Business
Contract that relates to or would affect payment or collection of the
relevant Accounts Receivable, such as the amount of receivable, due date
and payment account, without the prior written consent of Party B.
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SECTION IX EVENTS OF DEFAULT
1. Party A shall refuse or hinder Part B's supervision or inspection of Party
A's performance of its obligations under any Business Contract;
2. Party A shall fail to perform its obligations hereunder to notify the
Debtors of the change in the ownership with respect to the Accounts
Receivable and in the designated bank account to receive payments under the
Accounts Receivable;
3. During the effectiveness of this Agreement, any Debtor shall undergo any
merger, spin-off or restructure, or shall experience any disposal of major
assets, cessation of production, suspension of business activities,
deregistration, suspension of business license, dissolution, liquidation or
deterioration of financial conditions, as a result of which the Debtor
would claim its right not to pay under any Account Receivable, and such
claim shall have been accepted as valid by any judicial or arbitral
tribunal;
4. Party A shall have breached any of its covenants herein;
5. Party A shall have failed to perform, or fail to fully or properly perform,
its obligations under any Business Contract or under this Agreement.
SECTION X REMEDIES
In the event of the occurrence of any of the events of default set forth in
Section IX, Party B shall have the right to take one or more of the following
remedies:
1. to adjust, suspend or terminate the Quota hereunder;
2. to adjust the Term of any Quota;
3. to stop purchasing any additional Accounts Receivable hereunder;
4. to claim damages against Party A with respect to, without limitation, any
purchase price paid for Accounts Receivable, any commission fee and
management fee relating to Accounts Receivable and Party B's expenses
incurred with respect to such claims and realization of such claims;
5. to withdraw, without prior notice to Party A, from the reserve deposit
account in an amount equal to that due and payable by Party A hereunder.
SECTION XI FORCE MAJEURE
1. In the event of a force majeure, the party that claims the occurrence of a
force majeure shall promptly notify the other party hereto of such
occurrence and shall, within 10 days of such notice, further provide such
other party sufficient documentary evidence to prove the occurrence of such
force majeure and a description in reasonable detail of its inability of,
or delay in, the performance of all or part of this Agreement.
2. In the event of the occurrence of a force majeure, the parties shall (i)
promptly consult with each other with a view to finding a reasonable
solution thereto, and (ii) use their reasonable best efforts to mitigate
the extent of that delay or failure and the adverse consequences caused by
such force majeure.
3. No party shall be liable to the other for any delay or failure to perform
any of its obligations hereunder which is due to a force majeure.
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SECTION XII HANDLING SUB-BRANCH
Party B has authorized its [specify sub-branch name] as the handling sub-branch
hereunder. The handling sub-branch shall be entitled to handle in its own name
the actual performance of this Agreement, including collection of any Account
Receivable, institution of any lawsuit or arbitration and the execution
otherwise hereof.
SECTION XIII DISPUTE RESOLUTION
This Agreement shall be governed by the laws of the People's Republic of China.
Any disputes under or in relation to this Agreement shall first be resolved
through friendly negotiations, failing which, to be resolved through legal
proceedings in the competent local People's Court where Party B is located.
SECTION XIV NOTICES
All written notices and correspondences hereunder to any party hereto or to any
Debtor shall be delivered to the addresses set out below. If there is any change
to any such contact information, the relevant party shall notify the other party
promptly in writing.
Party A: Room 1001, 10th Floor, East Tower 4, Saige Science & Technology
Park, Futian District, Shenzhen 518028, China [specify additional
details]
Party B: [specify details]
SECTION XV MISCELLANEOUS
1. This Agreement shall come into effect after being duly signed and stamped
by the legal representative (authorized persons) of both parties.
2. Any amendment and supplement to this Agreement shall be evidenced by a
written agreement to that effect duly signed and stamped by the legal
representative (authorized persons) of both parties.
3. This Agreement shall be executed in four counterparts and each party shall
hold two counterparts.
Party A (Seal): Party B (Seal):
Legal Representative or authorized Legal Representative or authorized
person: person:
Date: [specify] Date: [specify]
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