Document:

ex101.htm

EXHIBIT 10.1

 

Joint Loan and Joint Security Agreement

[unofficial translation]

Contract Number: EC20110693 (LH)

The Contract is concluded by and between following parties with premise of voluntariness via negotiation. Various parties promise to abide by and strictly perform.

Party A (Borrower A): Shenzhen AIV Technology Co., Ltd.

Address: Room 1305-A, 13F East High-Tech Plaza Phase II, Tian’An Cyber Park, Futian District, Shenzhen (office only)

Legal representative (responsible person): Guo Jinlin       Postal code:

Fax: Tel: 

Party B (Borrower B): Shenzhen Hua Foli Gilding Craft Co., Ltd.,

Address: Room 2306, Huafeng Building, Xinzhou Square, Shennan Boulevard, Futian District, Shenzhen

Legal representative (responsible person): Guo Huachao     Postal code:

Fax: Tel: 

Party C (Borrower C): Shenzhen SPA Moment Investment Development Co., Ltd.

Address: Podium B303-C, B Building, Lianhe Square at intersection of Binhe Road and Caitian Road, Futian District, Shenzhen

Legal representative (responsible person): Liu Xiangying     Postal code:

Fax: Tel: 

Party D (Borrower D): Shenzhen Donxon Mobile Communication Technology Co., Ltd.

Address: 6th Floor, C5 Building, Fuyuan Industry Park, No.111, Zhoushi Road, Xixiang Street, Bao’an District, Shenzhen

Legal representative (responsible person): Lin Zihong        Postal code:

Fax: Tel: 

Lender (full name): China Construction Bank Shenzhen Branch

Responsible person: Liu Jun              Postal code:

Domicile: Building A, Rongchao Business Center, No.6003, Yitian Road, Futian District, Shenzhen

Article 1  Financing Limit and Total Amount of Joint Loan and Joint Security

Financing limit of joint loan and joint security mentioned in the Contract refers to the limit of financing principal balance offered by Lender under certain conditions to Party A, Party B, Party C and Party D, respectively, within effective period of the limit set forth in the Contract. Both Borrowers shall bear joint liability to Lender under the Contract, meaning that either Borrower’s guarantee scope is the total amount of four Borrowers. Financing limit of joint loan and joint security refers to, within effective period set forth in the Contract, the maximum amount of joint loan and joint security can be released to Borrowers, namely Party A, Party B, Party C and Party D.

At any point within effective period of limit, as long as financing principal amount occupied or unpaid by Borrower under the Contract does not exceed financing limit granted by Lender, Borrower can, pursuant to the Contract provisions, apply for financing in succession without time or amount limit (unless otherwise specified). However, the total financing amount applied by Borrower and the outstanding balance shall not exceed financing limit. At any time point within effective period, total outstanding balance under the Contract shall not exceed financing limit of joint loan and joint security.

 

  

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Article 2  Definition

(I) The “Contract” refers to the Contract and all relevant appendixes. “Appendixes” to the Contract refer to relevant documents and vouchers issued or signed pursuant to the Contract when either Borrower uses financing limit under the Contract, including but not limited to application, notice, ancillary contract, L/G, vouchers and other legal documents for creditors’ right and debt relation.

(II) “Joint loan and joint security” means that Party A, Party B, Party C and Party D, jointly apply for loan from Lender and Lender will grant financing amount separately to Borrowers; each Borrower uses within range of financing limit granted by Lender. Each Borrower will assume associated guarantee responsibility for all three loans of other Borrowers under the Contract. During guarantee period, Lender separately calculates each financing business of Borrowers, starting from issuance day of each financing business to two years after expiration of performance period of the financing business. If extension agreement on performance period of single financing is settled by and between Lender and Borrowers, guarantee period ends after two years after expiration day of debt performance period renewed in extension agreement; if events ruled in laws and regulations occur, or the Contract and Lender declares debts due in advance, guarantee period ends after two years from that date.

Article 3  Type, Use and Amount of Financing Limit

Lender agrees to provide joint loan and joint security financing to various Borrowers in the Contract. Financing limits granted to Borrowers are: RMB nine million for Party A; RMB six million for Party B; RMB six million for Party C; RMB nine million for Party D. With written consent from other joint entity members of China Construction Bank, limit of single member can exceed approved loan limit but cannot exceed more than double amount, and shall be subject to the risk control of China Construction Bank. The total loan limits of all entities of entity shall be within approved total loan limit. Financing shall be only used for purchasing raw materials and daily operation need for cash.

Article 4  Effective Period of Financing Limit

I. Effective period of joint loan and joint financing limit under the Contract (hereinafter referred to as effective period of the limit) is the   (II)  way:

(I) One month since the Contract becomes effective;

(II) From October 17, 2011 to October 16, 2012.

II. Within limit effective period, if Borrowers use financing limit under the Contract, expiration day of debt performance shall be not influenced by expiration of limit effective period (unless otherwise specified).

III. When limit effective period expires, limit terminates automatically and unused limit automatically becomes void.

Article 5  Use of Limit

I. Condition precedent for using limit: unless Lender partially or completely gives up the limit, Borrowers can use financing limit under the Contract only when the following conditions are satisfied:

(I) All Borrowers have completed approvals, registrations, deliveries and other legal procedures related to financing limit under the Contract pursuant to provisions of relevant laws and regulations;

(II) Security contract or other means of security in conformity with Lender’s requirements has become effective;

(III) None of the Borrowers do have breached the Contract;

(IV) In the case that it says in the Contract that Borrower shall pay limit management fee to Lender, Borrower has paid limit management fee to Lender;

(V) Borrower shall sign relevant documents according to Lender’s requirements and provide with relevant certification documents and materials;

(VI) Other condition precedents on limit under the Contract ruled by both parties:

______________________________/_____________________________________________________________________/_____________________________________

II. Once financing limit under the Contract is used by Borrowers, it shall constitute Borrower’s debt to Lender as well as other Borrowers’ security and guarantee range to Lender. Creditor’s right of Lender to either Borrower refers to all due and undue payments under the Contract, including but not limited to principal, relevant interests (including penalty interest and compound interest), punitive damages and all expenses for Lender to realize creditor’s right (including but not limited to litigation fee, arbitration fee, property security fee, performing fee, assessment fee, auctioning fee, lawyer’s fee and travelling fee, etc.). Guarantee and security creditor’s right of Lender to Borrowers refers to the total creditor’s rights against any other Borrowers than the default Borrower.

III. When one Borrower uses financing limit to apply for loan from Lender, he shall submit loan-from-limit application to Lender in advance. Amount, starting and end days, expiration day, interest rate and use for Borrowers to use limit shall be recorded on loan transfer voucher, notice or appendixes of any ancillary contract.

IV. When Borrower wants to convert RMB to other currency, Lender reserves the right to decide the currency and amount used by Borrower. If Borrower uses other currency for financing, Lender converts into limit amount in ruled currency that can be used by Borrower under cost contract. Whereas Lender agrees to issue financing in other currency, both parties shall settle interest rate, penalty interest rate and others.

V. When credit standing level of either Borrower is downgraded, Lender reserves the right to regulate or cancel limit unused by all the Borrowers.

 

  

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Article 6  Interest Rate, Penalty Interest Rate and Calculation of Settlement Interest

I. Loan in RMB

(I) Loan interest rate

Monthly interest rate of single loan under the Contract shall be fixed interest rate or floating interest rate. Please refer to the provision of withdrawal notice of the loan:

1. If fixed interest rate is adopted, (float upwards/downwards) __ % upon benchmark rate. The interest rate shall be kept constant within loan period;

2. If floating interest rate is adopted, _20_ % (float up/ float down) upon benchmark rate. It shall be regulated once every 3 months since value date of the loan. Regulation date of interest rate is the corresponding day to value date in regulating month. Whereas there is not corresponding day to value date in the month, the last day shall be the regulating day of interest rate.

(II) Penalty interest rate

1. Penalty interest rate is accrued monthly;

2. If Borrower does not use single loan according to this Contract, penalty interest rate shall be fixed interest rate or floating interest rate. Please refer to the provision of withdrawal notice of the loan:

(1) If fixed interest rate is adopted, float 100% upwards upon the basis of loan interest rate ruled in the Contract;

(2) If floating interest rate is adopted, float /% upwards upon the basis of loan interest rate ruled in the Contract. It shall be regulated every __/__ months since the value date of the loan. Regulation date of penalty interest rate is the corresponding day to value date in regulating month. Whereas there is not corresponding day to value date in the month, the last day shall be the regulating day of penalty interest rate.

(III) Overdue penalty interest rate of single loan under the Contract shall be fixed interest rate or floating interest rate. Please be subject to the provision of withdrawal notice of the loan:

1. If fixed interest rate is adopted, (float upwards/downwards) _50_ % upon loan interest rate ruled in the Contract.

2. If floating interest rate is adopted, (float upwards/downwards) _/_ % upon loan interest rate ruled in the Contract. It shall be regulated once every _/_ months since value date of the loan. Regulation date of penalty interest rate is the corresponding day to value date in regulating month. Whereas there is not corresponding day to value date in the month, the last day shall be the regulating day of penalty interest rate.

The value date of single loan refers to the day when the firstly-issued loan under the loan is transferred into Party A’ s account.

When the first loan is released, benchmark interest rate refers to the same-level loan interest rate publicized by Bank of China on release date of the loan; from then on, when loan interest rate and penalty interest rate of single loan are regulated pursuant to proceeding paragraph, benchmark interest rate refers to the interest rate publicized by Bank of China; if Bank of China does not issue the same-level loan interest rate, benchmark interest rate refers to public-accepted or general same-level loan interest rate on that day, unless otherwise settled by both parties.

(IV) Loan interest starts since the day when loan is released to Party A. Various loans under the Contract shall be calculated by day. Daily interest rate = monthly interest rate/30. If Party A fails to pay interest on schedule, compound interest shall be charged beginning the next day.

(V) Interest settlement

1. If fixed interest rate is implemented to single loan, in settlement, interest shall be calculated according to ruled interest rate. As for single loan with floating interest rate, interest shall be calculated according to concurrently-affirmed interest rate of various floating period; whereas there are many times of floating interest rate within single interest settlement period, please calculate interests of various floating periods and summarize interests of various floating periods and calculate the interest within the interest settlement.

2. Interest of single loan under the Contract shall be settled monthly (monthly/quarterly) and monthly interest is payable on the 20th day of each month (month/the last month of a quarter).

II. Borrower shall pay limit management fee under the Contract to Lender, __% of loan amount.

Article 7  Repayment

I. Borrower shall, on due date agreed in each appendix under the Contract, pay off the debts. Repayment shall be made according to following principles:

(I)  For loans overdue for more than 90 days, loans interest defaulted for more than 90, loan not due or not exceed 90 days but production and operation of Borrower are stopped or project involving the loans is stopped, or loan ruled in laws, regulations or rules, repayment shall be made according to the principal first and interest second;

(II) As for loan in situations except that in (I), please repay according to principle of first principal and interest second or interest is repaid along with principal.

II. Where Borrower forecasts that repayment can not be made on schedule, he shall, on a one-month notice, apply for extension to Party A in writing and Lender reserves the right to decide whether it can be extended.

III. Borrower shall, before repayment day set forth in the Contract and contractual appendixes, pay full amount into account opened by Lender. Lender reserves the right to directly deduct money from the account.

IV. Repayment in Advance

(I) Borrower shall inform Lender if Borrower intends to pay the interest before due day.

(II) In repaying principal in advance, Borrower shall, on a thirty bank working days’ notice, get approval with written application from Lender.

Borrower shall calculate interests according to the Contract provisions.

If Borrower repays principal in advance, Lender reserves the right to demand Borrower to pay penalty. Penalty= principal amount repaid in advance x number of months for repayment in advance x penalty rate, rate of penal sum is 1 ‰. Period that is not sufficient to one month shall be considered as one month.

V. If Borrower and Lender conclude an installment plan, when partial loan is repaid in advance, anti-order of installment plan shall be adopted to write off. Whereas Borrower returns partial loan in advance, unpaid principal balance of the loan after repayment in advance shall be implemented according to interest rate ruled in the Contract.

 

  

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Article 8  Rights and Obligations of the Parties

I. Borrower has the right to demand Lender confidentiality obligation to financial materials and commercial materials such as production and operation provided by Borrower, however, unless otherwise specified in laws, regulations and rules;

II. Borrower shall, according to Lender’s requests, provide with financial and accounting materials and production and operation condition materials and guaranty the authenticity, completion and effectiveness of provided materials and shall not provide false materials or hide important operation financial facts;

III. Borrower shall settle with banks regarding the financing under the Contract via Lender or Lender’s branches;

IV. Borrower shall actively cooperate and consciously accept Lender’s inspection and supervision on production and operation, financial activities and use condition of limit under the Contract;

V. Borrower shall use limit according to the use purpose agreed by both parties and shall not use financing fund from Lender engaging in illegal and foul transactions;

VI. Borrower shall promptly liquidate debts according to the provisions of the Contract and appendixes;

VII. Borrower shall not give funds to avoid, transfer assets or adopt any means that may endanger its repayment ability to handle assets or adopt activity to avoid from debts to Lender;

VIII. Within effective period of the Contract, if Borrower wants to offer security to other’s debts, Borrower needs to get approval from Lender;

IX. If either Borrower of the Contract has situations such as production stop, out of business, registration cancellation, revocation of business license, cancellation, bankruptcy and business deficit resulting partial or complete inability to repay and mortgage and pledge as security of the Contract devalue or accidentally damaged or lost, other Borrowers shall have obligation to promptly offer securities approved by Lender;

X. Before debts are liquidated, if Borrower has change of items such as name, legal representative (responsible person), shareholder, equity, domicile, business scope and registered capital, Borrower shall promptly inform Lender and other Borrowers shall promptly inform Lender if they know;

XI. Before debts are liquidated, if any Borrower has situations that may influence the realization of Lender’s creditor’s right such as contracting, renting, share system reform, joint venture, merger, combination, separation, joint capital, application for reorganization, application for dissolution and application for bankruptcy, he shall, before five bank working days, get written approval from Lender. Other Borrowers shall inform Lender if they are informed. All Borrowers shall have obligation to implement liquidation and security of the debts according to Lender’s requests;

XII. Before debts are liquidated, if Borrower has situations such as production stop, out of business, registration cancellation, revocation of business license, illegal activities of legal representative or main responsible person, involvement in severe litigation activities, difficulties in production and operation and deterioration of financial situations and these situations generate severe influence to his debt liquidation ability, Borrower shall inform Lender in writing and other Borrowers shall inform Lender if they know. Meanwhile, Borrower and other Borrowers shall have obligation to implement liquidation and security of the debts according to Lender’s requirements;

XIII. Borrower shall bear expenses related to the Contract and contractual security such as lawyer’s fee, insurance, assessment fee, registration fee, custody fee, verification fee and notarization fee.

XIV. If financing limit occupied by Borrower exceeds limit ruled in the Contract due to change of exchange rate, Borrower shall return payment excess over financing limit or provide security approved by Lender. Lender reserves the right to cease financing to increased limit due to the change of exchange rate.

XV. Before debts are liquidated, Borrower shall not use assets shaped by limit provided by Lender to any third party for security or guarantee purposes.

XVI. Before debts are liquidated, when operation income of various fiscal years is insufficient to liquidate Borrower’s due debts to Lender after contractual settlement in the fiscal year, Borrower shall not distribute dividend to its shareholders.

XVII. If Borrower’s credit standing level is downgraded or has situation that Lender considers may influence Borrower’s normal production and operation, Lender has right to regulate and cancel unused financing limit.

XVIII. Borrower shall not enter into any contracts with any third party that may damage Lender’s rights and benefits under the Contract.

XIX. Under necessary situations in Lender’s opinion, Lender has the right to take part in important events or important affiliates’ transactions such as foreign investment, assets refinancing to implement effective security and matters on repayment of principal and interest.

 

  

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Article 9  Liability for Breach of the Contract

I. Situations of breach

(I) Borrower’s breach

It constitutes breach of the Contract that Borrower breaches obligations set forth in the Contract or following situations occur:

1. Fail to liquidate debts on schedule;

2. Poor operation and financial situation and due debts can not be liquidated; or Borrower involves or has involved in severe litigation or arbitration procedure and other legal dispute, which in the opinion of Lender may influence or have influenced Lender’s rights or benefits under the Contract;

3. Shareholders or equity conditions change, which in the opinion of Lender may influence or have influenced Lender’s rights or benefits under the Contract;

4. Any debts have influenced or may influence the performance of the obligations to Lender under the Contract;

5. Other debts to China Construction Bank are defaulted;

6. Before debts are liquidated, Borrower implements activities to change operation or reorganization such as contracting, lease, merger, combination, joint capital, separation, joint venture, equity structure, which in the opinion of Lender may influence or have influenced Lender’s rights or benefits under the Contract;

7. Borrower intends to avoid from creditor’s right of Lender via affiliated transaction;

8. If Borrower uses sham contract with affiliated parties and transfer the financing proceeds from Lender with companies with no trading background;

9. Any Borrower’s breach obligations set forth in the Contract shall be deemed as breach of the Contract of all Borrowers;

10. Other situations that in the opinion of Lender may influence the realization of creditor’s right, including but not limited to Borrower’s breach of the Contract and relevant provisions of National General Loan Rules.

(II) Security contract or other security ways do not become effective, or become avoided or cancelled, or other situations where guarantee person loses partial or complete security ability or refuses to perform security obligation, and Borrower fails to implement new security according to Lender’s requirements, it shall be deemed that Borrower breaches the Contract.

II. Damages

In above breach situations, Lender reserves the right to claim one or several rights as follows:

(I) Adjust, cancel or terminate either Borrower’s use of financing limit under the Contract or shorten the effective period of the limit.

(II) Declare debts due have the right to demand each Borrower to repay all principal and interest and all other expenses, and demand other Borrowers to bear affiliated security liability for all debts to Lender.

(III) After Borrower breaches the Contract, Lender has right to disclose the facts to the public and list into Lender’s high-risk enterprise list and similar list of relevant departments.

(IV) Lender has the right to deduct any payment in any currency from every Borrower’s account opened in China Construction Bank. If currency in account payment is not the debt currency of the Contract, Lender has right to convert into debt currency according to national foreign exchange rate on that day.

(V) Demand each Borrower to provide with other securities approved by Lender to all debts under the limit.

(VI) Lender has the right to perform security right.

(VII) Lender has the right to dissolve the Contract.

(VIII) If Borrower breaches the Contract and causes loss to Lender, he shall compensate the loss of Lender and other Borrowers shall bear joint liability for damages.

(IX) Charge 15.744% of balance of financing principal from Borrower as penalty.

(X) Before Borrower uses loan limit of current fund and single loan expires, compound interest shall be charged to unpaid interest on schedule according to settled loan interest rate; if sing loan is defaulted, unpaid interest and compound interest to loan principal and interest (including whole or partial loan principal and interest that become due in advance under declaration of Lender) shall be charged according to settled penalty interest rate and interest settlement way from the overdue day to the liquidation day of all debts. Overdue behavior of single loan means that Borrower breaches the provisions and fails to liquidate the loan or repays the loan late in the installment plan.

(XI) If Borrower fails to use financing in the ways specified above, interest and compound interest shall be charged to the part diverted by Borrower according to ruled penalty interest rate.

(XII) Other measures that Lender has the right to adopt.

 

  

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Article 10  Preservation of Lender’s Rights

In the performance of the Contract, if Borrower’s late performance of the obligations or extension granted to Borrower for any breach or delay performance of the Contract, shall not be deemed as permit or approval from Lender to waive damage.

Article 11  Applicable Laws and Settlement of Contract Disputes

The Contract is applicable to laws of the People’s Republic of China.

Disputes arising from the performance of the Contract shall be settled via negotiation and mutual agreement; if negotiation fails, please adopt I  way to resolve;

I. Submit litigation to People’s Court where Lender is located;

II. Submit arbitration to arbitration committee (arbitration location is __/__) and carry out arbitration according to existing arbitration rules when arbitration application is made.

During litigation or arbitration period, clauses not related to the Contract or dispute shall be performed.

Article 12  Execution

The Contract shall become effective after execution and seal of legal representatives or authorized agent of Party A, Party B, Party C and Party D and the execution and seal (or special seal for contract) responsible person or authorized agent of Lender.

Article 13  Seal of Lender

Affirmation of Borrowers: after the Contract becomes effective, as for matters such as actual performance of the Contract (whole part or partial), urgent collection of the debts, litigation/arbitration and performance, Lender has the right to stamp its seal on relevant materials or vouchers, special seal for relevant businesses or contract.

Article 14  Others

I. Any modification or supplementation to the Contract shall be made in writing and constitute part of the Contract;

II. The Contract shall be in eight copies, four for Borrowers, two for Lender, respectively one for security persons in security contract, eight in total with same legal effect.

Article 15  Other Matters under the Rule

(I) Repayment method of Party A, Party C and Party D is monthly interest payment and principal repayment on schedule.

(II) The period for Party B’s current loan is one year.

(III) Party B’s repayment way is monthly interest repayment and principal of RMB150, 000 is repaid monthly since the seventh month after issuance. Balance shall be paid off once on due.

(IV) Full amount is paid with entrustment.

 

  

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Article 16  Statement of Borrowers

Statement of all Borrowers to Lender:

I. Borrowers clearly know Lender’s business scope and limited authority.

II. Borrowers have read all clauses of the Contract. Upon Borrowers’ requests, Lender has made clarification to corresponding clauses of the Contract. Borrowers have fully understanding of the contractual clauses and corresponding legal effects and have no objections.

III. Borrowers have the authority to execute the Contract.

Borrowers:

Party A (full name): Shenzhen AIV Technologic Co., Ltd. (seal)

Legal representative or authorized signer (signature): /s/

October 17, 2011

 

Party B (full name): Shenzhen Hua Foil Gilding Craft Co., Ltd. (seal)

Legal representative or authorized signer (signature):  /s/

October 17, 2011

Party C (full name): Shenzhen SPA Moment Investment Development Co., Ltd.(seal)

Legal representative or authorized signer (signature): /s/

October 17, 2011

Party D (full name): Shenzhen Donxon Mobile Communications Technologies Company Ltd.

(seal)

Legal representative or authorized signer (signature): /s/

October 17, 2011

Lender: Shenzhen Branch of China Construction Bank Limited Liability Company

 (seal)

Responsible person or authorized signer (signature): /s/

October 17, 2011

 

 

 

 

 

7ex102.htm

EXHIBIT 10.2

 

Maximum Security Deposit Pledge Agreement

[unofficial translation]

Contract No.: Q.C.20110693 (Luohu)-4

Pledger (Party A): Shenzhen Donxon Mobile Communications Technology Co., Ltd

Domicile: 6F, Building C5, Fuyuan Industrial City, No. 111 Daozhoushi Road, Xixiang Street, Bao’an District, Shenzhen

Legal Representative (person in charge):  Lin Zihong    Postal Code: _________

Fax: ________________Tel: _________________

Pledgee (Party B): China Construction Bank Corp. Shenzhen Branch

Domicile: Building A, Rongchao Business Center, No. 6003 Yitian Road, Futian District, Shenzhen

Legal Representative (person in charge):  Liu Jun     Postal Code:     518010

Fax:   82246144     Tel:     82488189

If Party A is willing to provide guaranty of maximum amount pledge for series of debts of the Debtors in E.C. 20110693 (Luohu) Syndicated Loan and Joint Mortgage Financing Contract (hereinafter referred to as “The Syndicated Loan and Joint Mortgage Financing Contract”) signed by Party B with the Shenzhen Aivtech Co., Ltd, Shenzhen Hua Foil Gilding Crafts Co., Ltd, Shenzhen SPA Moment Investment Development Co., Ltd. and Shenzhen Donxon Mobile Communications Technology Co., Ltd (hereinafter referred to as the “Debtors”) , both parties, through friendly consultation, hereby enter into this contract according to relevant laws and regulations to comply with.

Article I Party A provides the pledge guarantee of security deposit in the special deposit account agreed in this contract.

Article II Special Deposit Account

Party A shall deposit (currency) RMB two million and seven hundred thousand only (in words) into the special account as the security deposit within thirty business days as of the execution date of this contract. Without the permission of Party B, Party A shall not use or transfer the funds from the special account.

Name of special deposit account: Shenzhen Donxon Mobile Communications Technology Co., Ltd

Account No.: 44201505900049021434

Opening Bank: East City District Branch

Both parties agreed that the interest of security deposit is settled by the following interest standard: as per the interest rate of one-year fixed deposit. The interest is transferred into the special deposit account of Party A by Party B and it also provides pledge guarantee for creditor’s rights of Party B.

 

If the special deposit account is frozen or controlled by judicial agencies or other authorized entities, Party A shall provide other kinds of guarantee approved by Party B.

 

 

  

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Article III Main Contract, Scope of Guarantee and Maximum Limit

I. Under the Syndicated Loan and Joint Mortgage Financing Contract, Party B will execute (and/or have signed) relevant appendixes, business applications and other legal documents within the credit limit validity period (hereinafter referred to as “creditor determination period”), to carry out the credit businesses agreed in the Contract for the Debtors.

The main contract under this guaranty includes but not limited to the above Syndicated Loan and Joint Mortgage Financing Contract and its relevant appendixes, business applications, notices, agreements, various certificates, guarantee letters, bills and other legal documents related to creditor’s rights and debts.

II. The scope of this guaranty of maximum security deposit pledge includes all debts in this contract, including but not limited to all the principal, interests (including compound interest and default interest), breach penalty, and other items paid by the Debtors to Party B (including but not limited to relevant advance commission charges, telecommunication charges and sundry charges paid by Party B, and relevant bank charges that the beneficiary in the letter of credit refused to undertake), the expenses occurred to Party B to realize the creditor’s rights and guarantee right (including but not limited to the legal fee, arbitration fee, property preservation fee, travel expense, execution fee, assessment fee, auction charge, notary fee, service fee, notice fee and counsel fee).

III. The maximum guarantee limit under this maximum security deposit pledge is (currency) RMB thirty million only (in words). If Party A performs its guarantee obligation in this contract, the maximum amount will decrease progressively.

IV. The determination period of creditor’s rights for this maximum amount pledge is the valid period of main contract.

V. As for the advances, interests and charges in the main contract or the actual formation time of any other right of Party B which exceeds the creditor’s rights determination period, they are also within the guarantee scope of this maximum security deposit pledge contract. The time limit of debts payment in this main contract is not restricted by the determination expiration date of creditor’s rights.

Article IV Modification of Main Contract

 

I. If Party B makes an agreement with the Debtors to modify the clauses in main contract (including but not limited to the repayment currency, repayment method, loan account, repayment account, fund use plan, value date, settlement date, and the starting date or closing date of debt performance period when the debt performance period isn’t prolonged), Party A agrees to undertake the guarantee obligation of debts in the main contract after the modification. If Party B, without prior permission of Party A, makes an agreement with the Debtors to prolong the debt performance period or increases the debt principal, Party A will only guarantee for debts in main contract in accordance with the agreements herein.

II. The guarantee obligation of Party A shall not be exempted in any of the following conditions:

	
(I)  

	
Where Party B or the Debtors reforms, merges, splits, increases or decreases its capital, ventures, allies in capital and operation, or changes its name;

	
(II)  

	
Party B entrusts a third party to perform its obligations in the main contract.

III. Where the creditor’s rights in the main contract are transferred to the third party, the guaranty in this contract will also be transferred. Party A shall assist Party B to handle with relevant procedures for the third party.

 

IV. If the transfer of creditor’s rights or debts in the main contract takes no effect, becomes null or is canceled or terminated, Party A shall still takes the guaranty responsibility for Party B according to this contract.

 

  

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Article V Realization of Pledge

I. If the Debtors fails to fulfill the matured debt in the main contract or the declared early matured debts, or violate other regulations in the main contract, Party B has the right to deduct corresponding amount from the above special security deposit account.

II. Party A shall not interfere with Party B’s action to realize its right of pledge in any form (action or inaction).

III. No matter whether Party B maintains other guarantee for the creditor’s rights in the main contract (including but not limited to guarantee, mortgage, pledge, letter of guarantee, standby letter of credit), and no matter when the above guarantee take effect or whether they take effect or not, or whether Party B claims for rights to other guarantors, whether there is a third party that agrees to take all or part of debts in the main contract, or whether the guaranty is provided by the Debtors or not, Party A’s guarantee obligation in this contract shall not be exempted. Party B has the right to deduct corresponding amount from the above special deposit account directly and Party A shall not raise any objection.

IV. If the maximum guarantee limit agreed in this contract is lower than the actual debt balance in the main contract and if the creditor’s rights are not completely liquidated in the main contract after Party A undertakes the responsibility, Party A promises that, the subrogated right or right of recourse (including those previously exercised ones) claimed by it to other guarantors shall not cause any harm to the Party B’s benefits, and it agrees that the debt liquidation in the main contract should take priority over Party A’s subrogated right or right of recourse.

Specifically, before all Party B’s rights are liquidated,

(I) Party A agrees not to claim the subrogated right or right of recourse to the Debtors or other guarantors: if Party A realizes the above right for any reason, the amount acquired shall be used to liquidate the rights of Party B in priority.

(II) If there is object guarantee for debts in the main contract, Party A agrees not to claim for the collateral or cash equivalent for subrogated right or any other reasons. The above collateral and the cash equivalent acquired shall be used to liquidate the creditor’s rights of Party B in priority.

(III) If the Debtors or other guarantors provide the counter guarantee for Party A, the amount acquired by Party Abased on that shall be used to liquidate the creditor’s rights of Party B in priority.

V. Party A has fully realized the interest rate risk. If Party B adjusts the interest rate level, interest accrual or interest settlement according to the agreements in the main contract or change in national interest rate policies, and this increases the payable interest, default interest and compound interest of the Debtors, Party A shall also undertakes the guarantee for the addition.

VI. If the main contract doesn’t exist, takes no effect, is completely or partially canceled and terminated or if Party A isn’t the Debtor, Party A shall take the joint liability with the Debtors for debts caused by return of property or loss compensation of Debtors within the guarantee scope specified above.

VII. In addition to the debts in the main contract, if the Debtors hold other debts to Party B, Party B has the right to deduct the money (in RMB or other currencies) from account of Debtors in the China Construction Bank (CCB) to liquidate any matured debt, but Party A’s guarantee obligation would not be reduced.

Article VI Liability for Breach

I. If Party A violates any provisions in this contract or provides any untrue information, mistake or omission in its description and guarantee, Party B has the right to take the following one or more measures:

1. Ask Party A to correct the noncompliance within the time limit;

2. Ask Party A to provide new guaranty;

3. Ask Party A to compensate the loss;

4. Deduct corresponding amount from the above special security deposit account;

5. Other remedial measures allowed by the law.

 

  

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II. If the pledge right isn’t effectively established or the special deposit account is frozen or deducted, or Party B does not realize the pledge right immediately and fully because of Party A, and Party A is not the Debtor, then Party B has the right to demand Party A take joint responsibility for the guaranteed debts with the Debtors within the guarantee scope of this contract and Party B has the right to deduct corresponding amount from the above special security deposit account.

Article VII Other Clauses

I. Collection of payables

As for all the payables of Party A in this contract, Party B has the right to deduct the corresponding amount (in RMB or other currencies) from the CCB account of Party A without prior notice. If the procedures on the exchange, settlement and sales and foreign exchange are required, Party A is obligated to assist Party B to clear those procedures and Party A shall undertake the exchange rate risk.

II. Use of Party A’s information

Party A approves Party B to check its credit status at the credit database established and approved by the People’s Bank of China (PRC) and credit information competent authorities or relevant organizations and departments, and it also approves Party B to provides its information to credit database. Party A agrees that Party B can reasonably use or disclose Party A’s information for business purposes.

III. Collection By Notice

If Party A breaches the contract, Party B is entitled to report to relevant departments or units and carry out Collection by Notice through the news media.

IV. Effectiveness of data recorded by Party B

Unless specified otherwise by reliable certain data, Party B’s internal account records on principal, interests, charges, repayment history, etc., and receipts and evidence retained by Party B during the process of repayment and interest payment, as well as the records and evidence on collection of Party B shall constitute effective determined proofs for the Debtor-creditor relationship in the main contract. Party A shall not raise an objection on the ground that the above records, receipts and evidences are made or remained by Party B only.

V. Reservation of rights

Party B’s rights in this contract do not affect or eliminate any of its rights in accordance with the laws, regulations or other contracts. Any performance of discharge, grace period, privilege or delayed execution for any breach or delay shall not be regarded as waiving the rights or benefits in this contract or as permission or recognition of any breach, and that does not affect, prevent or impede the continuous execution of the right or any other right, as a result, Party B shall not take obligation and responsibility for Party A.

If Party B does not exercise or delays exercising any right in the main contract or does not use up the remedial measures in main contract, Party A’s guarantee responsibility in this contract wouldn’t be exempted. However, if Party B reduces its debts in main contract, Party A’s guarantee responsibility in this contract would be exempted accordingly.

VI. If Party A splits, dissolves, goes bankrupt, or it is cancelled, its industrial and commercial registration is cancelled, its business license is revoked, or other dispute on the ownership of funds in special deposit account occurs, Party B shall be noticed immediately.

VII. Debtors’ Dissolution and Bankruptcy

 

  

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After Party A is informed that Debtors are going to dissolve or go bankrupt, it shall inform Party B immediately and declare its creditor’s rights. Meanwhile, it shall go through dissolution or bankruptcy procedure immediately to exercise the right of recourse in advance. If Party A knows or should have known the Debtors are in the dissolution or bankruptcy procedure but fails to exercise the right of recourse immediately, the loss shall be borne by Party A itself.

Despite of the regulations in term II of clause V in this article, if Party B and  Debtors reach a settlement agreement or it agrees to make a plan in the bankruptcy procedure with Debtors, Party B’s rights in this contract shall not be damaged by the settlement agreement or re-planning and Party A’s guaranty responsibility shall not be exempted. Party A shall not withhold Party B’s right claim with the conditions specified in settlement agreement or re-planning. If Party B makes a concession for the Debtors in the settlement agreement or re-planning but isn’t liquidated, then it still has the right to ask Party A to undertake its guarantee responsibility.

VIII. Party A’s Dissolution or Bankruptcy

If Party A dissolves or goes bankrupt, Party B has the right to participate in the liquidation or bankruptcy procedure so as to declare its rights even though Party B’s rights in the main contract have not been matured yet.

IX. If Party A or Debtors do not comply with the laws, regulations or rules on environmental protection, energy conservation and emission reduction as well as pollution reduction, or there is energy consumption or pollution risk, Party B is entitled to exercise the guarantee right in this contract in advance and take other remedial measures specified in this contract or allowed by the laws.

X. If Party A’s address or contact information changes, it shall inform Party B in writings immediately, and it shall be responsible for all losses occurred due to failure of notice.

XI. Others:

 _________________________________/   ______________________

    ______________________       /____________________________

XII. Solutions to disputes

If dispute occurs during the execution process of this contract, it might be solved through consultation. If negotiation fails, the 1st method will be adopted. During the period of litigation or arbitration, clauses not involving the dispute in this contract shall be performed.

(I) Submit the case to the People’s Court where Party B is domiciliary.

(II) Submit     /     to the arbitration committee (which is located at     /   ), the arbitration is conducted according to the present effective arbitration regulations when applying the arbitration. The arbitration result shall be final and binding on both parties.

XIII. Effectiveness of Contract

This contract shall take effect after execution of legal representatives (responsible person) or authorized agents of both parties affixed with official seals (or special stamp for contract).

XIV. This contract shall be in quadruplicate.

Article VIII Handling Bank and Seal of Party B

Party A confirms that, after the contract takes effect, Party B can entrust one or more branching organizations of China Construction Bank Shenzhen Branch as the handling bank of this contract. The handling bank has the right to perform the obligations herein, sign relevant legal documents and enjoy the rights herein in its own name, including but not limited to the actual performance of this contract (wholly or partially), debt collection, law suit/arbitration, and execution of this contract. Where the handling bank performs the obligations of Party B in this contract, it is regarded as Party B performing this contract and Party A’s obligations and responsibilities wouldn’t be exempted. Party B or handling bank has right to affix its official seal, or special stamp for relevant business or for contract on relevant materials or evidences.

 

  

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Article IX Presentation and Warranty of Party A

I. Party A fully understands the business scope and limit of authority of Party B.

II. Party A has read all clauses in this contract and main contract, thus fully understands all provisions of main contract. As requested by Party A, Party B has already made corresponding clause clarification for this contract and main contract. Party A has already read and fully understands the meaning of all clauses in this contract and main contract as well as corresponding legal consequences.

III. Party A has the qualification as a guarantor, and its guarantee behaviors in this contract are in accordance with the regulations of laws, administrative laws and regulations, rules and Party A’s regulations or internal procedures, and it has already approved by internal authorized agencies in the company/national authorized agencies. All outcomes, occurred because Party A is not authorized to sign this contract, shall be borne by Party A, including but not limited to full compensation for Party B’s loss.

IV. Party A affirms its own and Debtors’ assets, debts, operation, credit, reputation, etc. and affirms that it has the main qualification and right of signing the main contract and whether it fully understands all provisions of the main contract.

V. The pledge guaranty provided by Party A doesn’t damage the legal benefits of any third party or violate the legal and agreed obligations of its own.

VI. The funds in special deposit account are legally owned by Party A, and there exists no ownership dispute.

VII. There is no co-owner of funds in special deposit account, or if there are other co-owners, the pledge guaranty has already gained the written permission of them.

VIII. Relevant data and information on security deposit pledge provided by Party A to Party B are authentic and legal, accurate and complete.

Party A (Official seal):

Shenzhen Donxon Mobile Communications Technology Co., Ltd (Seal)

Legal representative (responsible person) or authorized agent (signature): Lin Zihong

Oct. 17, 2011

Party B (Official seal): China Construction Bank Corp. Shenzhen Branch (Seal)

Legal representative (responsible person) or authorized agent (signature):

Oct. 17, 2011

 

 

 

 

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