EXHIBIT 10.1
GUARANTEE CONTRACT
BETWEEN
SHIJI RUICHENG GUARANTY AND INVESTMENT CO. LTD.
AND
XXXXX 0X GROUP
Dated on the 21st day of December, 2005
Contract serial number:
LUBAO ZI NO. 1201, 2005
GUARANTOR:
SHENZHEN SHIJI RUICHENG GUARANTY AND INVESTMENT CO. LTD.
0000-00 Xxxxx 0xx Xxxx. Center Commercial Tower. Futian Area, Shenzhen. China
Tel: 0000-000-00000000
Fax: 0000-000-00000000
Zip code: 518048
GUARANTEE:
CHINA 3C GROUP (FORMERLY KNOWN AS SUN OIL & GAS CORP)
0000 Xxxx Xxxxxxxx Xxxxxx, Xxxxx 0000, Xxxxxxxxx XX, Xxxxxx
Tel: (000) 000-0000
IN CONSIDERATION OF THE FOLLOWING FACTS:
1. Xxxxx 0X Group and YX Acquisition Corp (collectively as "Guarantee") signed a
Agreement And Plan Of Merger ("Agreement", Exhibit A) with Capital Future
Development Limited and Xxxxxxxxx Xxxx, Xxxxx Xxxxx, Xxxxx Lv, Xxxxxxxx Xxxx,
Xxxxxxxxxx Xxx, Simple (HK) Investment & Management Company Limited, First
Capital Limited, Shenzhen Dingyi Investment & Consulting Limited and China US
Bridge Capital Limited (collectively described as follows "Third Party"), which
owns 100% shares of Capital Future Developments Ltd. . The Agreement stipulates
that Guarantee will issue 35,000,000 shares of its stock and a $500,000
promissory note made to Third Party in exchange for 100% shares of Capital
Future Developments Ltd. owned by Third Party;
2. Guarantee pledges the legality of its business activity;
3. Guarantee promises to irrevocably carry out its terms as stipulated in the
Agreement;
4. Guarantee requests Guarantor to provide contract guarantee with regard to
Third Party's fulfillment of its terms in the Agreement.
After reviewing Guarantee's request and all related documents including the
Agreement, Guarantor agrees to guarantee the execution of Third Party's terms
according to the Agreement. Guarantor and Guarantee hereby enter into this
contract pursuant to the relevant laws and regulations of the People's Republic
of China.
ARTICLE 1 MEANS OF GUARANTEE
1.1. Guarantor agrees to provide regular contract guarantee, as defined in the
Law of Guarantee in the People's Republic of China, to Guarantee;
1.2. Guarantor may enter into any other guarantee contract with any party of
Third Party. Guarantor may also unilaterally provide guarantee to any party of
Third Party. Guarantee may not raise objection to Guarantor's additional
guarantee contract.
ARTICLE 2 CONDITIONS FOR GUARANTEE SERVICE
2.1 Guarantee has already provided the complete documentation and all relevant
material to Guarantor, as stipulated in Article 6 of this contract;
2.2 Guarantor has already reviewed and verified all the facts in the
documentation and in all related material provided by Guarantee;
2.3 Guarantor considers the guarantee request by Guarantee valid, according to
Article 8 of this contract;
2.4 Guarantee has already paid Guarantor expenses for guarantee and document
processing, according to Article 5 of this contract;
2.5 Guarantee has already provided Guarantor with enough resources for reverse
guarantee according to Article 7 of this contract.
ARTICLE 3 THE CONTENT OF GUARANTEE REQUEST
3.1 Guarantor guarantees that Third Party will fulfill its obligations as
stipulated in the Agreement between Third Party and Guarantee;
3.2 Guarantor guarantees that Guarantee will, according to the Agreement, issue
35,000,000 shares and made a $500,000 promissory note in exchange for 100%
shares of Capital Future Developments Ltd owned by Third Party (excluded the fee
should be paid for Guarantor);
ARTICLE 4 DEFAULT OF THE AGREEMENT
4.1 In case of default on the part of Third Party ("default" includes but is not
limited to mistakes, negligence and deliberate postponement) which causes the
termination of the Agreement, Guarantor will pay Guarantee USD $3,500,000 within
three months from the day when the Agreement is terminated.
4.2 In case of default on the part of Third Party ("default" includes but is not
limited to mistakes, negligence and deliberate postponement) which delays the
execution of the Agreement, Guarantor will pay Guarantee USD $3,500 per day for
every day the Agreement cannot be executed. But Guarantor shall pay no more than
USD $1,000,000 in this scenario.
4.3 In case of Guarantee's purchase price for Third Party (35,000,000 new
shares) being insufficient for all the shares of Third Party, Guarantor will
make up the difference in shares.
4.4 In case of default on the part of Guarantee ("default" includes but is not
limited to mistakes, negligence and deliberate postponement) which causes the
termination or delay of the Agreement, Guarantor, starting from the day the
Agreement is terminated or delayed, may take action as it sees fit (including
but not limited to resale, transfer, etc.) with the shares and cash which
Guarantee has put up for reverse guarantee. Guarantee may not raise any
objection.
4.5 In case of Guarantee engaging in illegal business activity, Guarantee will
pay Guarantor a default fee of USD $1,000,000.
ARTICLE 5 COMPENSATION AND OTHER FEES
5.1 Guarantee agrees to pay Guarantor 2,256,795 restricted common shares (6 % of
its total existing outstanding shares), upon the completion of the Agreement
between Guarantee and Third Party. These shares based payment is valued at
$0.10/share with the sum of $225,679.50 to compensate Guarantor for its
guarantee of Third Party's fulfillment of its obligations as stipulated in the
Agreement (Guarantor will decide the means of share transfer in this
transaction).
5.3 Miscellaneous fees incurred during the guarantee provided by Guarantor will
be covered by Guarantee. Guarantee shall pay the amount as advised by Guarantor
or any related department and institution.
5.4 Guarantee agrees that after the start of the guarantee according to this
contract, Guarantor has the right to demand, in the means as it sees fit, its
full compensation and fees from Guarantee, in the event that the Agreement
between Guarantee and Third Party is modified, terminated, cancelled or
invalidated. Guarantee may not ask for a refund or reduction in compensation and
fees.
ARTICLE 6 DOCUMENTS PROVIDED BY GUARANTEE
6.1 Guarantee shall provide sufficient documents and other material, at
Guarantor's request, in order to state the facts such as its qualification, its
financial condition, its investment projects, etc.
6.2 Documents to be provided by Guarantee shall include but not be limited to:
(1) Business license;
(2) Proof of Normal Commercial Information
(3) Company charter and bylaws;
(4) Reviewed or audited financial statements as of October 31, 2005 and audited
financial statements of Year 2004;
(5) Names of creditors and loan-related documents;
(6) Balance sheet;
(7) Documents stating investment projects and letters of approval;
(8) Approval of Agreement from the shareholders' meeting and the meeting of the
board of directors;
(9) Any other documentation which has significant influence on this contract.
ARTICLE 7 REQUESTS OF RELATED BUSINESS/SERVICES
7.1 Guarantee shall sign an Assignment Contract with Guarantor if Guarantee
wishes to request or engage additional services with Guarantor.
ARTICLE 8 TERMINATION OF THE GUARANTEE
8.1 The guarantee provided by Guarantor is a "Guarantee of Contract". When the
Agreement between Guarantee and Third Party has been executed, the guarantee
service provided by Guarantor to Guarantee will be terminated.
8.2 In case of failure on the part of Guarantee to fulfill its obligations in
the Agreement or to fulfill its obligations as stipulated in this contract
(except for its failure as a result of Third Party 's default in the first
place), the guarantee service provided by Guarantor to Guarantee will be
terminated.
8.3 Regardless of cause, in case of the Agreement between Guarantee and Third
Party being modified, terminated, cancelled or invalidated, the guarantee
provided by Guarantor to Guarantee will be terminated.
8.4 Guarantee shall provide assistance during the process of Guarantor
terminating its guarantee service. Guarantee shall not use any excuse to raise
any objection or create obstacles.
ARTICLE 9 TERMINATION OF THIS CONTRACT
9.1 Guarantor and Guarantee agree that Article 410 of the Contract Law of the
People's Republic of China, which states "guarantor and guarantee may terminate
the contract any time", does not apply to this contract.
9.2 Guarantor may terminate the contract in the event of any of the following:
(1) Documents provided by Guarantee contain any false information or Guarantee
has concealed any truth or facts; (2) Guarantee has not paid Guarantor
compensation and fees according to this contract.
9.3 When Guarantor terminates the contract pursuant to 9.2, Guarantor shall no
longer service Guarantee. Guarantee may not request a refund or fees from
Guarantor.
ARTICLE 10 DEFAULT OF THIS CONTRACT
10.1 Guarantee shall fully fulfill the obligations of the Agreement and of this
contract. If the deal falls apart as a result of Guarantee's failure to fulfill
all or part of the obligations as stipulated in the Agreement and in this
contract, Guarantor has the right to take away the full amount of the cash and
the shares put up by Guarantee as reverse guarantee.
10.2 In case of Guarantor refusing the guarantee service to guarantee outside
the scenarios listed in 9.2, Guarantee may obtain full refund of its
compensation paid.
ARTICLE 11 DISPUTES AND RESOLUTION
11.1 In case of disputes, both parties shall negotiate to resolve differences.
11.2 In case of unsuccessful negotiation between themselves, the two parties
shall litigate the case in the Shenzhen Zhongji People's Court.
ARTICLE 12 MISCELLANEOUS
12.1 This contract shall take effect after the two parties or their
representatives sign their names.
12.2 This contract shall be quadruplicated, two copies for each signing party.
12.3 All correspondence sent between the two parties to fulfill obligations of
this contract shall be in written form.
12.4 All correspondence sent between the two parties shall become a part of this
contract after they are acknowledged in writing. In case of inconsistence among
notices, the most recent one shall override the previous ones.
12.5 Any addendum or modification to this contract shall follow the rule of most
recent one overriding the previous ones.
[Signature Pages Follow]
GUARANTOR: Shenzhen Shiji Richeng Guaranty and Investment Co. Ltd.
Legal rep. (agent): Xxxxxxx Xx
Sign (Seal): /s/ Xxxxxxx Xx
GUARANTEE: China 3C Group
Legal rep. (agent): Xxxxxxxxx Xxxx, Chairman of the Board & Chief Executive
Officer
Sign (Seal): /s/ Xxxxxxxxx Xxxx
