MAXIMUM PLEDGE AGREEMENT
Contract
No.: Max Collateral 2008-0001
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Pledgee
(full name):
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Agricultural
Bank of China Lanxi Branch
|
|
Debtor
(full name):
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Heilongjiang
Lanxi Sunrise Linen Textile Industry Co.
Ltd
|
|
Pledgor
(full name):
|
Heilongjiang
Lanxi Sunrise Linen Textile Industry Co.
Ltd
|
Whereas
the Debtor and the Pledgee will enter a series of credit/debt agreements (the
“Master Contract”), the Pledgor is willing to provide guarantee on the debt
obligations that the Debtor bears pursuant to the aforementioned Master
Contract. In order to insure the realization of the Pledgee’s right,
the Parties, through friendly negotiations and consultations, have entered into
this Agreement (the “Agreement”) in accordance with our country’s “Guarantee
Law” and other relevant laws and regulations of China.
Article
I Maximum
Principal Debt Obligation Guaranteed
1. The
Pledgor shall willingly provide guarantee, from March 21, 2008 to March 21,
2011, on the debt obligation, incurred in the stipulated transactions conducted
by the Debtor on the location of the Pledgee to a maximum of RMB
30,000,000. The aforementioned period refers only to the period
during which the debt obligation occurred, excluding the due period of the debt
obligation. Transaction in foreign currency shall be converted
according to the exchange offer rate on the day of the
transaction. The aforementioned businesses
include:
(x)
wiring of RMB/Foreign currency
(x)
reduction or waiver of security deposit for issuing credit
certificate
2. During the period and within the
maximum provided for herein, the Debtor may apply to use the aforementioned
credit funds and bank credit on a revolving basis. The commencement date, due
date, interest rate and amount shall be based on the loan certificate or a debt
claims under the Master Contract. The due date for all transactions
that occur during the period stipulated herein shall not be beyond March 21,
2011.
3. During the period and within the
maximum provided for herein, the Pledgee need not process guarantee procedures
each time when issuing loan and providing other bank credit.
4. The Pledgor shall assume guarantor’s
responsibility for all transactions, irrespective of which currency, that occur
during the period and within the maximum provided for herein.
Article
II Scope of
Guarantee
The scope
of the guarantee shall include the principal amount as well as the interests,
penalty interests, compound interests, damages for breach of the contract and
indemnifications and any and all costs and expenses, including fees
for litigation, legal counsel and disposition of pledged property, incurred in
realizing the Pledgee’s creditor right.
The
Pledgor shall be responsible for all amount in excess of the maximum due to
foreign exchange effect.
Article
III The Pledged
Items
1. The
Pledgor agree to have ___Machinery Equipment and Real
Estate Property__ as pledged items; the list of the aforementioned
pledged items is the integral part hereof.
2. The aforementioned pledged items
have the provisional assessed value of RMB 48,287,900, and their final value
shall be determined by the net proceeds when they are actually disposed to
realize the Pledgee’s right.
Article
IV Effect of the Pledgee
Right
The effect of pledgee right extends to
the subordinate items, subordinate rights, subrogation rights, attached items,
co-mingled items, processed items and yield of the pledged items.
Article
V Possession of the
Pledged Items
1. The
pledged items remain in the possession of the Pledgor. The Pledgor
has the responsibility to properly maintain the pledged items and the Pledgee
has the right to inspect the management of the pledged items.
2. During the term of effectiveness
hereof, the Pledgor shall not gift, transfer, sell, lease, repledge or dispose
of the pledged items in any other form without the written consent of the
Pledgee. The proceeds from the transfer, lease and sale of the
pledged items after obtaining the consent from the Pledgee shall be used to
repay the debt under the Master Contract or shall be placed in escrow with a
third party mutually agreed to by the two parties hereto.
3. The Pledgor must take all effective
measure to control the damage or mitigate loss of the pledged items, should it
occur, during the terms of effectiveness hereof and must at the same time
promptly notify the Pledgee; all the compensation received by the Pledgor in
connection with such damage or loss shall be used first to satisfy the debt
obligation under the Master Contract.
4. During the term of effectiveness
hereof, the Pledgor shall restore the reduction of the value of the pledged
items, should it occur, or provide additional guarantee on an amount determined
by the Pledgee corresponding to the reduction of the value of the pledged
items.
Article
VI Insurance on the Pledged
Items
1. The pledged items must be carry
adequate insurance with the Pledgee as the primary beneficiary. The
Pledgor must place the original documents of the insurance policies on the
pledged items into the care of the Pledgor.
2. During the term of effectiveness
hereof, the Pledgor shall not suspend or cancel such insurance for any
reason. If such insurance is suspended, the Pledgee shall have the
right to apply for insurance policies on behalf of the Pledgor and the Pledgor
shall bear responsibility for all the fees.
3. If any risk event occurs to the
pledged items during the terms of the insurance policies, all insurance
compensation shall be used first to satisfy the debt obligation under the Master
Contract or be placed in escrow with a third party mutually agreed to by the two
parties hereto.
Article
VII Registration of
Pledge
The Pledgor must process pledge
registration with the relevant registration organization within 5 days after the
execution hereof and hand over to the care of the Pledgee the original copies of
the associated right certificates and pledge registration documents on the
pledged items and all other rights certificates.
Article
VIII Realization of the Pledgee’s
Rights
1, If at the end of the term of
fulfilling the debt obligations under the Master Contract, the Pledgee has not
been paid in full, the Pledgee shall have the right to be compensated first by
the proceeds from discounting the value of the pledged items in accordance with
the law or from auctioning or selling the pledged items. The
aforementioned “the end of the term” includes circumstances in which the Pledgee
announces, pursuant to the provisions of the Master Contract or to the State
laws and regulation, to move forward the due date of the debt obligations under
the Master Contract.
2, The Pledgee has the right to dispose
of the pledged items of any Pledgor if there are more than one
Pledgor.
Article
IX Breach of
Contract
1. If, effectuation hereof, the Pledgee
and the Pledgor shall both carry out the obligations herein. If any
one party that fails to carry out the obligations herein shall bear the
liability for the breach of contract and compensate the other party for all the
resulting loss.
2. In the event of the occurrence of
any of the following, on the part of the Pledgor, that result in economic loss
to the Pledgee, the Pledgor shall make full compensation:
(1) Withholding information on joint
ownership of, disputes on, seizure of, custodianship of and existing pledge on
the pledged items.
(2) Disposing of the pledged items
without prior written consent from the Pledgee.
(3) Other acts in violation of the
provisions herein.
Article
X Responsibility for
the Fees
All the fees associated with the
registration, assessment, insurance, inspection and notary of the pledged items
hereunder shall be born by the Pledgor.
Article
XI Resolution of
Disputes
Any
dispute arising out of the performance hereof may be settled through
consultation; if it needs to be submitted to legal proceedings, it shall be in
the jurisdiction of the Pledgee.
Article
XII Miscellaneous
The Master Contract, loan certificates
or other relevant claims certificate hereunder need not be delivered to the
Pledgor.
Article
XII Effectuation of the
Contract
This
Contract shall be established when duly signed or sealed by the parties hereto
and shall become effective on the day of completion of the pledge
registration.
Article
XIV
This
Agreement is made in three duplicates with equal binding power. Each of the
Pledgee, Debtor and Pledgor shall hold one copy.
Article
12 Notice
The
Pledgee has caused the Pledgor and the Debtor to thoroughly and accurately
understand the provisions printed herein and has explained the provisions upon
the request of the Pledgor and the Debtor. The Parties have the same
understanding of the meaning herein.
Pledgee: Agricultural
Bank of China, Lanxi Branch (seal):
Representative
or authorized agent: ZHAO Yongyang (signature)
Pledgor: Heilongjiang
Lanxi Sunrise Linen Textile Industry Co. Ltd
Representative
or authorized agent: GAO Ren (signature)
Date of
Execution: March 21,
2008
Place of
Execution: Lanxi County
Branch
