Unassociated Document


    Exhibit 10.7

     

    Contract
No. Xi’an City Commercial Bank (Xincheng) Loan No. 【2009】24.

    


    Mortgage
Agreement

    


    Name:
Xi’an Yuansheng Industry Co., Ltd

    Account
Bank: Xi’an City Commercial Bank Xincheng Branch

    Signed
Date: 2009



    
      
         


      

      
         


        
          

        

      

      
         


      

    

    


    Xi’an
City Commercial Bank

    


    Mortgager
(Borrower or the third party): Xi’an Yuansheng Industry
Co., Ltd

    Mortgagee
(Lender): Xi’an City
Commercial Bank Xincheng Branch

    


    The
mortgage is willing to provide collateral mortgage to the mortgage for the
purpose of securing the realization of lender’s loan right. This Agreement is
formulated on the basis of friendly negotiation between the mortgager and
mortgagee.

    


    
      Article
1   The creditor’s right of collateral mortgage is the loan under
the Loan agreement No.【2009】24 of Xi’an City
Commercial Bank Xincheng Branch, which the Borrower-Xi’an Kingtone Information
Technology Co., Ltd had borrowed, with the amount of twenty three million five
hundred thousand RMB and term of one year, from September 28,
2009 to September 27, 2010

    


    
      
         


      

      
         


        
          

        

      

      
         


      

    

    


    
      Article
2   The mortgage scope herein includes the principal of the loan,
interest (also the compound interest and fine which arose due to the borrower’s
breach of loan contract.), liquidated damages, cost to execute the mortgage
right.

    

    


    
      Article
3   The mortgage should have fully disposition on the property
under mortgage, which will be listed on the mortgage form hereunder. The
mortgage form is considered to be an integral part of this
Agreement.

    

    


    Article
4   Commitments of the mortgager:

    
      	
               
      

            	
              1.

            	
              Fully
      known the contents of the mentioned Loan Contract; this Mortgage had truly
      expressed the willingness of the
mortgager.

            


    

    
      	
               
      

            	
              2.

            	
              Enjoying
      the ownership right or right of disposal to the collateral
      security;

            


    

    
      	
               
      

            	
              3.

            	
              During
      the mortgage period, the mortgage is liable to well keep, maintain and
      repair the collateral security. In case the mortgagee is willing to know
      more information of the mortgaged property, the mortgager shall cooperate
      on this issue and offer a truthful
report.

            


    

    
      	
               
      

            	
              4.

            	
              The
      mortgagor shall keep the original cope of property certificate hereunder
      listed upon the effective date herein (other laws and stipulations will be
      followed, if any.).

            


    

    
      	
               
      

            	
              1)

            	
              _____NONE_______________

            


    

    
      	
               
      

            	
              5.

            	
              The
      collateral mortgage, which the mortgagee requests to insure, the mortgager
      is liable to complete all insurance proceedings and also the extension
      period upon expiration. The insurance policy shall be under mortgagee’s
      custody.

            


    

    
      	
               
      

            	
              6.

            	
              The
      mortgager is liable to carry out the evaluation, notarization, insurance,
      appraisal, registration, transportation and storage of collateral mortgage
      and shall assume all costs arising from
above.

            


    

    


    
      Article
5   During the period of mortgage, the mortgager shall inform the
mortgagee the capital decrease raised by the mortgager and offer the mortgaged
property or other effective mortgage, equal in value, within ten days after the
decrease.

    


    
      
         


      

      
         


        
          

        

      

      
         


      

    

    


    
      Article
6   In case there is a loss of collateral mortgage within the
insured scope or a decrease in the value of collateral mortgage caused by the
third person during the period of mortgage, the insurance indemnity or damages
shall be 1) deposited into the account assigned by the mortgagee and can not be
utilized by the mortgager during the mortgage; 2) or repay the loan in advance
upon mortgager’s consent(choose one during signing the
contract).

    

    


    
      Article
7   In case the collateral mortgage is destroyed during the
mortgage, the mortgager shall inform the mortgagee in advance and offer the
collateral mortgage  again or other effective
guarantee.

    

    


    
      Article
8   In case the collateral mortgage is the rented property of the
mortgager, a written notice shall be sent to the mortgagee prior to making this
mortgage agreement. The mortgagee’s written consent shall be obtained in case
the mortgager rents the collateral mortgage during the mortgage
period.

    

    


    
      Article
9   During the period of mortgage, the mortgager can receive
certain amount of money by transferring the collateral mortgage, which, however,
1) shall be deposited to the account assigned by the mortgagee and can not by
utilized during the mortgage period; 2) or the borrower repay the loan in
advance upon mortgager’s consent(choose one during signing the
contract).

    

    


    
      Article
10   A timely written notice shall be issued to the mortgagee in
case of any of the following situations occur.

    

    


    
      	
               
      

            	
              1.

            	
              Change
      in operational system, such as undertaking, lease, joint operation, merge,
      system reform, separation, trusteeship, cooperation with foreign companies
      and etc.;

            


    

    
      	
               
      

            	
              2.

            	
              Involving
      significant economic disputes or lawsuit (the involving amount over 1/2 of
      the loan amount or the case is the first instance carried through by
      intermediate people's court or
above);

            


    

    
      	
               
      

            	
              3.

            	
              Disputes
      in ownership of the collateral
mortgage;

            


    

    
      	
               
      

            	
              4.

            	
              Recession,
      dismissal, suspension of business for rectification, application for
      auction, suspension of business license, application for bankruptcy, or
      revocation;

            


    

    
      	
               
      

            	
              5.

            	
              Change
      of registered capital, residing address, telephone, or legal
      representative;

            


    


    
      
         


      

      
         


        
          

        

      

      
         


      

    

    


    In case
the Item 1 occurs, the mortgager shall notify the mortgagee thirty days in
advance; in terms of other items, the notice shall be given to the mortgagee
within three days.

    


    
      Article
11   The mortgager shall compensate the loss to the mortgagee due
to the mortgager’s breach of Agreement herein.

    

    


    
      Article
12   In the event of collecting the loan ahead of time stipulated
in the Loan agreement and failure to fully pay off the debt under the Loan
Contract, the mortgagee has the right to legally dispose the collateral mortgage
in advance so as to collect the principal and interest.

    

    


    
      Article
13   The written notice from the mortgager shall be received in
advance upon the effectiveness of the Agreement herein. The mortgager is liable
to report the change to the register organ.

    

    


    
      Article
14   In the event of failure to pay off the debt by the borrower
upon the expiration of the Loan Agreement, the mortgage shall specify the
auction institution to conduct the bottomless auction, or sell off in accordance
with the law.

    

    


    
      Article
15   This Agreement is separated from the Loan Agreement, that
is, this Mortgage Agreement still prevails even if the Loan Agreement is null
and void.

    

    


    
      Article
16   In case of failure to repay the debt in accordance with the
Loan Agreement upon the expiration of loan, the borrower or mortgager shall
voluntarily accept the forcible execution by the people's court of
law.

    

    


    
      Article
17   The disputes arising during execution of the Agreement
herein by the mortgager and mortgagee shall be solved through friendly
negotiation. Otherwise, the lawsuit can be brought to the local people's court
of law.

    

    
      Article
18   Other items negotiated by the two
parties:

    

    The
mortgager shall not set the mortgage plan on the collateral mortgage without the
written notice from the mortgagee.

     

    
      
         


      

      
         


        
          

        

      

      
         


      

    

    


    
      Article
19    The Agreement herein is made into five copies, two
copies to the mortgagee herein.

    

    


    
      
        	
                Mortgager’s
      Address:

              	
                Mortgagee’s
      Address:

              
	
                Room
      1201, Unit 4, 2F Gaoke Garden,

              	
                No.139,
      North Avenue, Xi’an City

              
	
                Gaoxin
      District, Xi’an

              	 
      
	 
      	 
      
	
                Issuing
      Bank: Xi’an Beilin Rural Credit Cooperation North Wenyi
    Branch

              
	
                Account:04020112011108701

              	 
      
	
                Telephone:
      029-88231591

              	
                Telephone:029-87232274

              
	
                Fax:029-88231590

              	
                Fax:029-87232274

              
	
                Postcode:710065

              	
                Postcode:710003

              
	
                Annex:
      Mortgage List

              	 
      
	 
      	 
      
	
                Mortgager:
      (Seal)

              	
                Mortgagee:
      (Seal)

              
	 
      	 
      
	
                Legal
      Representative: (Signature) /s/ Xiu Yiang
      Zhang        

              	
                Legal
      Representative: (Signature) /s/ An Hua Wang       

              
	 
      	 
      
	
                Date:
      September 14, 2009

              	
                Date:
      September 14, 2009

              


      

    

     

    
      
         


      

      
         


        
          

        

      

      
         


      

    

    


    
      Mortgage
List

    

    


    
      
        
          
            
              
                
                  	
                          Name

                        	 
      	
                          Quantity

                        	 
      	
                          Location

                        	 
      	
                          Certificate

                        	 
      	
                          Estimated
      Value

                        	 
      	
                          Notes

                        
	
                          Land

                        	 
      	
                          201.53
      acreage

                        	 
      	
                          East
      Part of Caotan Farm, Weiyang District, Xi’an

                        	 
      	
                          No.011【2009】State-owned
      Weiyang District, Xi’an

                        	 
      	
                          99.16million

                        	 
      	 
      
	
                          Land

                        	 
      	
                          29.61
      acreage

                        	 
      	
                          East
      Part of Caotan Farm, Weiyang District, Xi’an

                        	 
      	
                          No.012【2009】State-owned
      Weiyang District, Xi’an

                        	 
      	
                          15.55million

                        	 
      	 
      


                

              

            

          

        

      

    

    


    
      
        	
                Mortgager:
      (Seal)

              	
                Mortgagee:
      (Seal)

              
	 
      	 
      
	
                Legal
      Representative: (signature) /s/
      Xiu Yiang Zhang        

              	
                Legal
      Representative: (signature) /s/ An Hua Wang      

              
	 
      	 
      
	
                Date:
      Sept. 14, 2009

              	
                Date:
      Sept. 14, 2009