Exhibit 1 CNAM China Armco Metals Securites Fraud Lawsuit

8/8/2019 Exhibit 1 CNAM China Armco Metals Securites Fraud Lawsuit

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Crisnic Fund, S.A.www.crianfcf.und-com

STRUCTURED TRANSACTION AGREEMENTTHIS STRUCTURED TRANSACTION AGREEMENT (hereinafter ..Agreement')is. hereby entered into on June 11, 2010, by and between Crisnic Fund, S.A.. the(Fund,,), and Kexuan YSQ. whose address is One W8tefs Park Drive, Steffe 98.San Mateo, CA. 94403, the ("Borrowerj.This Agreement is made for file purpose of engaging the Fund to provide astructured lending transaction and custodial services to Borrower with re&J)eCt 10 one ormore pubfldy traded stocks to be pledged as security as part of a lending t r a ~ , ("Tranaaction1t)f the details of which are set forth in this Agreement and in variousTransaction and Terms Addenda rAddenda" or "Addendum"h which shall beincorporated into this Agreement by reference as wefl as in Exhibit A of this agreement

1. AUTHORIlY GRANTED TO THE FUNDBotrO\Ner hereby appoints. he Fund as custodian of all Pledged Collateral; asdefined below, and authoriZes the Fund to act on the Borrowefs behaff with respect.toPledged Collateral. This Agreement is made for the purpose of engaging the Fund toprovide .structured transaction S8rVfces to the Borrower With respect to cash asse1sandlor one or more publicly-traded stocks to be- pledged as security as part of a lendingtransaction ("Transactionj. the details of which en set forth in this Agreement and invarious Transaction and Terms Addenda (""Addenda" or "Addendum"), WhiCh shalf beincorporated into this Agreement by reference and to act on Borrowers behalf Withrespect to aQ Piedged Collateral for each Transaction for the purposes of:s. Providing or arranging structured Transactions.b. Holding cash. securities and other assets on behalf of the Borrower;:hereinafterdefined asf'Pfedged ColIateraJj.c. When appropriate. voting shares and receiving dividends Of interest onPledaed Collateral.The term Pledged Collateraf shaD include any and al of Borrower's securitiespledged to the Fund through one or more Addenda prior to the Borrower receiving. anyNet T ~ n Proceeds, as well as any securities substituU:td by the BorrowerPUFSUant"tO Section 4(b) herein.

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Case 8:10-cv-01299-AG -JCG Document 14-7 Filed 09/10/10 Page 2 of 20 Page ID#:533


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Crisnic Fund, S.A.2.. BORROWER REPRESENTATIONS AND WARRANTIES

Borrower represents and warrants to the Fund. on the date hereof and on eachdate on whiCh the Fund distributes Net Transaction Proceeds, as defined below, andcontinuing through the term of the Transaction. thats. All statements and associated documentation provided to the Fund inconnection with any Transactions are true and complete and do not omitany facts or information material to the evatuation of any Transactionrequest. and agrees that the Fund is fully justified in relying on any suchrepresentations. Accordingly, Borrower shall in al l cases fully indemnifythe Fund for any damages resulting from the Funds rermnce on any suchstatements or documentation, or resuJting from the Fund's ading, or-refraining from acting, in accordance with a request of the Borrower. Anyrequest of Borrower, and any action taken or omitted by the fund inaccordam::e with any request of Bormwer. shaD be binding upon Borrower.b. Borrower has full power and authority to execute and derIVer thisAgreement and to perform its obligations hereunder and, to the exteAtnecessary, the execution, delivery and perfonnance of this Agreementhave been duly approved by aft necessary corporate action- of theBorrower, including any necessllQY shareholder approval. The Borrowerhas duly executed this Agreement and in the event the Borrower is abusiness entity, the Agreement has been executed by a duly authorizedofficerof the Borrower and constitutes a legal, valid and binding obligationof Borrower, enforceable in accordance with its tenns.c. The Pledged Collatenll submHted is duly owned by the Borrower, free ofany adverse claim, lien or other right title or interest of any third party(other than the security interest in favor of the Fund). and is fteelytransferabfe.d. No parties other than the parties hereto have.. or shal have, any lien, claimor security interest in the Pledged Collateral. No financing statement underthe Uniform Commercial Code is on file In any jurisdiction claiming asecurity interest in or deSonbing (whether specifically or generally) thePredged Collateral, and the Borrower wilt pefform or cause to beperformed. any and a/l such further acts as may be rtecessaly toconsummate the Transaction(s) contemplated within this Agreement.

- - -8. In the event Borrower is a director. officet or principal shareholder (as suchtenns are used in Section 16 of the Securities Exchange Act of 1934) ofany of the companies that issued shares of capita! stock submitted asPledged CoDateral, the BorrQ.wer wilt abide by au regurations goveminghedging transactions conducted by directom. officers, or principalshareholders. including disclosure requirements and limits on transactior1Structured TransactiOn AgrementIFG/Y80

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Crisnic Fund, S.A.size. The Borrower further has secured competent legal counseJ certifyingBorrower's compfiance with such regulations.

1. Neither the borrowing by the Borrower hereunder not the execution anddelivery by Borrower of this Agreement and other Transaction documentsexecuted and to be executed by the Bonowet'. including Financing TermsAddendum(s). Wll conflict with or result in the breach of any agreement.mortgage or similar instrument under which the Borrower or any of theBorrower's properties are bound by any law, rule or regulation of anygovernmental agency applicable to the Borrower or said properties.g. There is no action or proceeding pending or, to th e knowledge of th&Borrower, contemplated or threatened against the Borrower before or byany court. arbitrator,. grand jury. administrative agency, governmentalauthority or instrumentality which contests the Borrowen ownership inPledged Collatemt.

h. The Borrower is not engaged in the business of extending credit for thepurpose at purchasing or carrying margin'stock (as defined in RegulationU issued by the Board of Govemors of the Federal Reserve System), andnone of the Net Transaction Proceeds (a s defined below) will be used topurchase or carry margin stock in violation of Regulation U.

i. If requested, the Borrower will complete, in connection with eachTransaction,' Form G-3 as required by Regulation U, specifying theBorrower's purpose(s) in entering into any Transaction. All Informationprovided by the Borrower on each Form G-3 shall be true and accurate inall respects. and sha8 not omit any material factj. The Borrower has reviewed the definition of "Accredited Investoi'" attachedhereto as Exhibit A and the Borrower qualifies as an Accred"1ted 'nvAStorunder one or more components of that definition..

k. The Borrower has not provided. and/or disclosed to the F!Jnd informationon Pledged Collateral. which could be deemed or construed as insiderinformation, and the Fund has not received or relied upon any suchinformation from the Borrower and/or any other source.3. TRANSACTION PROCEEDS AND TERMS OF FINANCING

B. Trapaaction ProC!lda. The terms of each Transaction shal becontained In the respective Transaction and Terms Addendum(s} to beindividually executed by both parties and shall thereafter be considered apart of and merged into this Agreement. The Pledged CollatefaJ valuemultiplied by the Discount(s). being defined as uGross Transac:ttonProceeds" and less fees being defined as '"Net Transaction Proceeds-,interest rates. duration of each Transaction and ather appJicabfe temI$Strut;Wred Transadlcn Agreement

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Crisnic FundI S.A.shall be detennined by the Fund based on a number of factors that willTransaction to Transaction and from time to time. The "valy fromTransadion Balance'" is defined as the unpaid principal Gross TransactionProceeds plus accrued and unpaid interest. All material terms for eachTransaction shan be attached as Addenda to this Agreement and signedby the Borrower prior to the funding and incorporated into this AgreementThe Net Transadion Proceeds may be distributed to designated accountsof tne Borrow as directed by the Funding Directive form at one time orsequential dates through one or more trancheS in accordance with theTransaction instructionS from the Borrower .

b. P!edae. The Borrower hereby pledges. grants, transfers and assigns tothe Fund a security interest in all of Borrower's right. title and interest inand to (":Pledge") the foltowing described Pledged Collateral. 'NI1ether nowowned by the Borrower or hereafter acquired and whether now existing orhereafter created:O} All of the shares of capital stock;(iO all cash, instruments, securities. equity interests or other propertyrepresenting a div.idend or other distribution on any of the securitieswhich Constitute Pledged Collateral. or representing a alStribution orreturn of capital upon or in respect of the Pledged Collateral orresulting from a split-up, merger. revision, recapitali2atio.reclassification or other similar change of the Pledged CoUateratrecelved or otherwise distributed in respl;!Ct of or in exchangetherefore, and any warrants, rights or ~ n s issued to the holderi&of. or otherwise in respect of the Pledged Collateral;(iii) all. proceeds or products of any of the property of the BorrowerdesCribed in subsections (i) and (jj) above of this SecHan 3(b) and.to the extent related to any property described in said clauses orsuch proceeds. all books. correspondence. r e c o r d s ~ certificates,instruments and other documents; and[tv) all instruments. securities. equity intetests or other property orrights purchased by the Borrower or the Fund with the proceedS orproducts of the property described in subsections (i) and (Ii) aboveof his Section 3(b). and all proceeds or p r o d ~ thereof.

c. Pledge Absolute- The Bottower hereby agrees that this Pledge shaI bebinding upon th e Borrower and that the Pledge of the Pledged Collateralhereunder shall be irrevocable and unconditional, irrespecti\le of 1Mvatidity, legality or enforceabUity of the Agreement. any Financing Tem'I$,Addendum or any other Transaction document. the abSence of any actiOnto enforce the same, the waiver or -consent by th8 Fund With respect toatr'f provision thereof, or any action to enforce the same or any otherStructured Transaction Agreement~ / ~ fPage4o f18 ./ f ..



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Crisnic Fund, S.A.similar clrcumstances. The Borrower hereby waives diligence.presentment, demand of payment, filing of claims wKh a court in 9\6 6VAftlof merger Of' bankruptcy of Borrower, any notice to require a proceedingfirst against Borrower or any other person, protest or notice with respect tothe T ~ c t i o n or any oU1er evidences of indebtedness secured herebyorthe Indebtedness evidenced thereby and all demands whatsoever, andcovenants that this Agreement Will remain in tuB force and effect so tongas any Transactions remain unpaid.

d. Fund-Appoin1!d AttDmey..fn-Fac:t. The Borrower hereby appoints theFund as the Borrower'S attorney-in-fact, with fun power of substitution, forthe purpose of carrying out the provisions of this Agreement and takingany actiOn and executing any' instrument that the Fund may deemoecessary or adVisable to accomplish the purposes hereof, whichappointment is- irrevocable and coupled with an interest Without limiting1he generality of the foregoing, the fund shall have the right and power tosign the name of the Borrower to any financing statements. continuationstatements or other documents under the Uniform Commercial Coderelating to the Pledged Collateral and shalf have the right and power toreceive, endorse and collect all checks Clnd other mders for the paymentof money made payable to the Borrower representing any dividend.interest payment or other distrfbution pilyable or d"JStributabI& in respect ofthe Pledged. Cotlateral or any part thereOf and to give fuB dischargetherefore.

4. TReATMENT OF PLEDGED COLLATERALa. Upon transferring Pledged Collateral to the designated account of theFund as Collatetal for the Transaction, the Borrower hereby grants theFund the absolute right to pledge, transfer, assign, hypothecate, lend,encumber, seu Short, or selt outright Pledged CoRaterai. as needed toprocure a T ansaetion or hedge against adverse market movements. TheFund is ~ n d e r no obligation to sequester the Pledged CoHiatefat apart fromany other assets of the Fund, and the Fund may combine the PledgedCollateral, in whole- or in part. with any other assets. The Borrower maynot bOYT sen, self short or engClgf! in derivative transactions related toShares in any of the companies Pledged as Collateral at any time 0) within30 days after receiving Net Transaction. Proceeds 'for the applicableTransaction or (iJ) within 30 days of TJ"an$BCtion maturity.b. For purposes of determining the maximum Transaction value of the

Pledged Collatenil per.mitted by Regulation U, the maximum value d thePledged Collateral on the day of the substitution shall be used. Any suchSUbstitution shalt require that a request for sub8titution be made by theBorrower. The Fund shall have 30 days to evaluate 1he request prior todenying or approving the requestStructured Transaction Agreement

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Crisnic Fundi S.A .5-. HEDG1NG THE PLEDGED COlLATERAL SHARES

. The Fund shaD confirm by fax, phone. or electronic mail the receipt and currentmarket value of the Pledged CoDateraL Once confirmed. the Fund may proceed withhedge arrangements and remit to the Borrower the Net Transaction Proceeds which iscalculated based I ) f l the Pledged Collateral discount percentage ("DiScounf'). as set outin the applicable Addendum, multipfied by the Pledged conateral value less appfieablefees. The Net Transaction Proceeds shall be remitted by wire transfer to the account(s)designated by the Borrower and .may CCCU1 at one time or in multiple cflSbursements asindicated on the c o ~ n d i n g Addendum. The hedging process is designed to reduceth$ exposure of both the Fund and the Borrower from adVerse Colateral valuationchanges. including vofatility. declines in Collateral 'Value and changes in th e market fo r'the Pledged Collateral.6. TRANSACnON CONTINGENCIES

Borrower understands that the Fund's ability to provide financing may depend onthe Fund's secunng a hedge on the Pledged Collateral. The Fund will exercisereasonable beSt efforts to procure a hedge within twenty-four (24) hours of receiving thesecurities comprising the Pledged Collateral ina form acceptable to the Fund. In casesof Securities with low trading volumes or markets that -are not well developed, theexecution of these contracts may take longer than one (1) bUSiness day. Durin9 thistimei the marf


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Crisnic Fund1 S.A.8. PLEDGeDCOllATERAL DlVlOENOS (VOTING

AU dividends declared and paid with respect to the Pledged Collatetal fat eacnTransaction. and/or tranche in the applicable Addendum(s) will either be (0 credited toth e Borrower, either for payment in cash or as credit against simple interest or (ii)retained by the Fund for its own account, as specified in the applicable Addendum,regardless ofwhether the Fund. pursuant to this Agreement has pledged, transferIa:f.assigned. hypothecated. lent. encumbered, sold short,- or sold outright such PledgedCollateral as part of itS hedging efforts.

In the eVent that any Pfedged Collateral requires that a vote be- submitted relatingto the management of a CoDateral affiliated company and the Fund has ownershipand/or possession of the Pledged Collateral. the Fund shalt exercise such rights. Whenthe Fund is presented with the abiity to. and in accordance with the proxy voting poticyof the Fund. proxy votes submitted on behalf of-the Borrower shall always be voted withth e company. management9. RIGHTS OF SUBSTITUTION

The Borrower understands that during the 1enn of each Transaction p r e p ~ are permissible only as approved by the Fund in writing. which approval shaD be gmntedin the- Fundis sole discr-etion. In the event that th e Fund accepts the Borrower's requestfor early termination or prepayment. the Borrower shall be responsible for all earlytermination fees and transaction costs. At any time during the term of a Transaction,may. with the consentof the Fund pledge additional Collateral to The Fund insubstitution of any Pledged -Collateral then included in the Pledged CoIaterat. Suchsubstituted CollateraJ must be deemed by the Fund to be of substantially similar natureand character, including. but not limited to, similarity in terms of value, volatility, andmaJket outlook, economic environment. trading volume, transaction costs and marketmaker diversffication. SubstitUtion costs and fees shall be determined at the time of theBorrower's request for substitution. In no event may a proposed substitution:(i) cause the credit extended under the Transaction to exceed themaximum Tl3nsadion value of the Pledged- Collateral, asprescribed by Regulation It. or(ii) Increase the amount by which the credit extended under theTransaction exceeds the Maximum Transaction value of thePledged Collateral. as prescribed by Regulation U.

10. evENTS OF DEFAULT AND REMEDIES -a. Eytnfs of Default An Event d Default (-event of Defautr) Shall exist ifanyone or more of the following shan occur.

Structured Tnmsaction AgreementIFGI Yao

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Crisnic Fund, S.A.- failure by the Borrower to pay1he outstandin9 principaJ and interest

{"Transaction Balancej withln five (5) buSitle$$ days of the dateWhen due; or( i ~ If any representation or warranty made by the Borrower in -this

Agreement or in any documentor Addendum furnished or executedat the time of Closing or pursuant to this Agreement Of any otherTransaction document, including any Terms Addendum and shaIprove to have been knowingly untrue or misleading in any materialrespect at the time made; or(iii) Default by the Borrower in the performance or observance of anycovenant or agreement contained in this Agreement -or default inany ather Transaction document Which is not cured within anyapplicable grace perlad set forth therein, ifany; or(Iv) Afinalludgment for the payment of money in excess of $1.000,000shall be rendered against the Borrower, and such judgment shaft

remain un.discharged for a period of thirty (30) days from the dateci entry thereof unless within such thirty-day period such judgmentshall be stayed, and appeal taken there from and the eKeCUtfonthereon stayed during such appeal; or(v) If the Borrower shall make a general_ assignment for the benefit ofcreditors or consent to the appointment af a receiver, -liquidator, -custodian. or similar official of al l or substantially of all of itsproperties, or any such offiCial is placed in controf of suchproperties. Of the Borrower admits in writing its inability to pay its-debts as they mature, or the Borrower shall commence any- action proceeding or take advantage of or file under any federat or sfateInsolvency statute, including. without rmilation. the United States

Bankruptcy Code. seeking to have an order for relief entered withrespect to the Borrower or seeking adjudication as a bankrupt orinsolvent, or seeking reorganization, arrangement. adjustment,liquidation. dlssolutfon. or other relief with respect to the Borroweror the 8orroweta debts; or

(vi) The Transaction shall be in defauJt and cease at any time after itsexecution and delhlery and for any reason to create a yarra andperfected first-pnority security interest in and to the PledgedCollateral or the valkftty or priority of such security interest shall becontested by the Borrower or by any other person; or any of theotherTransaction documents shaJl at any time after their executionand delivery for any reason cease to be in full force and e1fect orshall be declared nuB or void, or the validity or enforceabWty thereofshan be contested by the Borrower or by any other person; OfStructured TransactiOnAgreement

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(Vil)Crisnic Fund, SA.

The fair market value of the Pledged CoHatetaI shaI at .any time .beless than seventy (70%) Percent of lh& (}t6lt TmMAMnnProceeds (regardless of whether the Fund, pursuant to thisAgreement. has pfedged, transferred, assigned. h y p o ~ r lent,encumbered. sold short. or sold outright any of the securitiescomprising .the Pledged Collateral as part of Its hedging efforts)and, upon five (5) business-days' written notice f'Default Noticejfrom the Fund to the Borrower. the Borrower has not pfedgedadditional Collateral to the Fund such that the fair tnarket value ofthe Pledged Collateral is equal to or greater "'an the originalPledged Collateral value.

b. Rights. Upon the oocurrence of an Event of DefauH, the Transaction8afance together with ........ oM intet'est thenean ShaH be immedistalu. 1 any ..... ......... I --3due and payable without notice or demand, presentment or protest, all ofwhich are hereby EepreSSly waived.At any t!me after the oc:currettCeof an Event of Default or app6cable noticeperiod, the Fund shaH thereupon have the rights. benefits. and remediesafforded to- it under any of the Transaction documents with respect to thePledged Cotlateral and may take. use, sen or otheMise. encumber ordispose of the Pledged Collateral as if it were the Fund's own property.The Borrower agrees that the Fund may or may not proceed. as itdetermines in its sole discretion, with any or all other rights. benefits. andremadie$- which it may have against the Borrower. Anything herein to the-- '. contrary notwithstanding. (but except as provided belo!Nl. the Fundagreest for itsetf, its representatives. successors. endorsees and assigns,thatNeither the Borrower, nor any representatives, successors, 8$Signs oraffiliates of the Borrower. shall be personally or corporately (i f theBorrower is a COIpOfate entity) Hable for the Transaction Balance; and (ii)the Fund (and any such representative, successor. endorsee or assignee)shall look to the Pledged Collateral and/or the other instruments ofsecurity, including an option contract that gives the Fund the right to sell acertain quantity of 1I1e urrderMn9 security to the writer of the optiOn at aspecified price up to a specified date hereafter referred to as a rPut") andthe hedging transaQions of tt1e Fund, that secure th e Transaction forpayment of the Net Transaction Proceeds. and will not make any cfaim orinstiMe any action or proceeding against th e Borrower (or anyrepresentatives. successors. assigns or affiliates. eX BorrOllJer) for- anydeficiency remaining after . ollection ,upon the Pledged Collateral,provided. however, and notwithstanding the foregoing. the Borrower is andwill rsmain personaUy or corporately liable for any deficiency remainingafter collection of the Pledged CoJJateraI to the extent of any sufferedby the Fund, or its representatives, successors. endorsees or assigns, ifsuch loss is caused by the Borrower based in whole or In part upon:Structured Transadion Agreement~ / ~ fage gona ./

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Crisnic Fund, S.A.(Q Damage arising from any fraud l misrepresentations or th e breach atany material covenant or agreement;(ii) Damage to the Pledged Collateral resulting from gross negligence

or intentional acts;(iii) Failure to pay taxes Of other property-related liens; or(iv) Damages arising from the f a ~ u r e to comply with any and aU Jaws.

11. BORROWER OPTIONS AT END OF TRANSACTION TERMAt the end of the teRn of the T snsaction. the Borrower may exercise any of thefollowing options:a. Pay the Transaction Balance in full by paying (i) the prii1dpal TransactionBalance. (i ) any and all interest and charges that have accrued as of thatdate. Upon payment of the Transaction Balance Amount in full inaecordance with this agreement and/or as outlined in the ~ l n a l

A d d e n d u m ~ at closing, Fund wit defiver to Borrower the PledgedCollateral. In the event that Pledged Collateral includes one or morestacks, the number of shares of each stock pledged as Pledged C o B a t e r a ~ shall be adjusted for any stock- sptitsj reverse splits, mergers. spin-offs. orsimilarchanges affecting the Borrower's.position as benefiCial owner of thesecurities. When Pledged Collateral includes stock. th e ("PortfoliO MarketValue' is Ihe amount equal to the sum of th e amounts detemlined bymultiplying (x) the number of shares of each stock which constitutes pa1of the Pledged Coltateral by the closing of that sfDck on the maturitydate of the Transaction as defined in the Transaction and TermsAddendum(s):

b.

c.

tnfonn the Fund in writing by registered maR of the Borrower's intent not torepay the Transaction Balance, choosing instead to forfeit the entirePledged Collateral Portfolio to the Fund, including aU embedded Puts andother hedging transactions which were transacted by the Fund withrespect to the Transaction, with no contingent liability; orUpDn mutual consent of the Botrower and the Fund. renew this Agreement. for an additional period of time as provided in section 13 below.In addition to the above there are prepayment option windows beginning inmonth 24, 36 and 48 with 60 dayswritten notice.On the. 24th month of the loan term (36 months before the loan amountbecomes due). Borrower shaft have the right to prepay the totaloutstanding loan amount along with any and aU interest and charges thatStnJctunid Transoiction Agreement

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....,p. . .

Crisnic Fund, S.A.have accrued. of th.n date. Thi; right Is absOlutely conditional on theBomrNer to notify 1he Fund. in writing, 60 days before the 2411\ rnontn. 01their intention to repay the full lOan amount The f a ~ u r e of the Borrower togive thiS notification at least 60 days before the 24th month of the loanterm, and thereafter whenever the Borrower intend$ to repay the totaloutstanding loan amount along with any and aU interest and.charges thathave accrued as of that date wiD result In a loss of the Borrower to prepaythe loan amount at that time. Upon prepayment in accordance with thissection Borrower shall have the right to the deliverance of the PledgedCollateral in accordance with this agreement.

12. NOTICE AT END Of TRANSACTION TERMThe Borrower agrees to inform the Fund in WItting and by registered mail of theBorrower's decision either with respect to the options described in Section 11 above.Should the Borrower desire not to repay the Transaction Balance. the Borrower shallnotify the fund in writing. by registered mall of its intention to forfeit the PledgedCollateral no Jess than thirty (30) days prior to the end of the specified Transaction term.

Should the Borrower fail to provide such timely notice of the Borrowers intent, the FundshaH automatically liquidate the Pledged Collateral and any embedded Put or hedgeinstrument which was transacted by the Fund to cover any unpaid prtncipal and interest13.. RENEWAL OPTIONS AT ENDOF TRANSACTION TERM

At maturity. and by mutum consent of the Borrower and the Fund. the partiesmCIY renew this Agreement for a period r.I time no tess .than twenty three (23) monthS orgreater than five (5) years. This Agreement may be renewed multiple times for VSlYtngTransaction terms, subject to the foRowtng conartions:S. if the market value of the Pledged CoIlaterat is greater than all .amounts

due under this Agreement and both th e Borrower and the Fund consent torenewal, the Borrower will reQeive new Net Transaction Proceeds basedon the appreciated Pledged CoJfateraI value at the time of renewal. TheFund Will then retain outstanding principal under the Transaction and anyCap Differential Amount, and retum any excess fund$ to the Borrowerrb. If the Il'I8I1


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erisnie Fund, S.A.d. If the Borrower and the Fund ace unable to agree upon a renewal fee orother renewal Transaction terms-, Sonower shall elect one of he additionaloptions setforth in Section 11(8).

14. ADDITIONAL ASSURANCESa. The Fund agrees to return aU securities which constitute the PledgedCollateral. as set out and defined in the appRcabie Addendum. upon theBorrower's satisfying in full aU outstanding Transaction balances, includingprincipal, interest and any cap Differential Amountb. The .Fund's obligation to retum Pledged CoUateral at Transaction maturttymay be secondarily guaranteed by one or more private third partyguarantors. The guarantors have represented and evidenced to the Fundthat they have sufficient aesets to provide additional financial support toth e Fund and an additional guarantee of the redelivery of PledgedCollateral at Transaction maturity, if necessary. Guaramot'S are priv8telyowned entities and as such file no pubjic financial intorrnation, are notrequired to ~ i s t e r with any State or federal regulator and do not publishaud"1ted financial statements. AlthOugh the Fund's management believesthat guarantors can provide this additional guarantee. the Borrower shouldconsider- that these third parties have additional. investment relationshipsand aedit o b f i g ~ s that may impede their ability to provide financialsupport to the Fund reQUired to re-detiver Pledged Collateral in the eventthat such support is needed. .further, in addition to the assets of theguarantors. addltiona) substantial support in providing this secondaryguaranty 10 the Fund exists because of one or more third party bankingrelationships, certain credit facilities and Fund business relationships.

15. lNDEMNIFICAnONWhether or not the Transactions contemplated hereby are consummated. theBom:lwer hereby agrees to indemnify the Fund, any affiliate of the Fund and theirrespective managers, directors, officers, employees, agents, counsel and other advisors(each an -Indemnified Person") against, and hold each of them harmless from, any andall liabilities, obligations, losses. claims. damages. penalties, actions, judgments. suits;costs, expenses or disbursements of any kind or nature whatsoever, including thereasonable fees and disbursaments of counaej to an Indemnified Person (Including

alocated costs of i'rtemal courisel), which may be impOsed on, incurred by, or asserted .against any Indemnified Person. (i) in any way relating to or ariSing out of any of this.Agreement and other T-ransaction dOCUments executed and to be executed by the.Borrower, the use or intended use of the proceeds of the Transaction, or theTransactions contemplated hereby or thereby, or (ii) with respect 10 any investigation.litigation or other proceeding relating to any of the foregoing, irrespective of whether1heJ n d e m n ~ . P e ~ ~ h a n be designated a party thereto (collectively, the ItfndemnifiedLlabilities-): provided that the Borrower shaH not be liable to any Indemnified Person for, Situctured Ttansadio!'1 Agtaement .

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Crisnie Fund. S.A.anyportion of sucI1 tndemrrified Liabitifies to th& extent they are found by a final decisfonof a court of competent jurisdiction to have resulted from such Indemntned. Person'sgross negligence or wijllful misconduct. If and to the extent ,that the foregoingindemnifiCation is for any reason hekJ unenforceable, the Borrower agrees to make themaximum contribution to the payment and satisfaction of each of the IndemnifiedLiabilities which is permissible under applicabfe law.16. TAX TREATMENT

The Fund. including Its managers, directors, officers, employees. escrow agents,affiliates. counsel and other advisors, makes no representation as to hOW theTransaction(s) might be treated for federal, state or local tax purposes. TheTransaction(s.) mayor may not be considered a taxable event. The Borroweracknowledges 'that the Fund has not offered the Borrower any tax advice and that theBorrower has the sole responsibility for consulting i n d e p e ~ tax advice and shafl notrely on the Fund for such purposes. Since. theBorrower retains SOle responsibility for thedetermination of federal, state and !ocal tax consequences of any Transaction to whichthe BorraNer is a party, the Borrower agrees tb release the Fund and hold it hannlessagainst any and all dalms relating to such tax consequences.17. LEGAL ADVICE

Borrower acknowledges that the Fund. including its m ~ . directors, offICers.employees. affiliate&. counsel and other advisors, has not offered or provided theBorrower with any legal counsel and that the Borrower has the sole responsibility forobtaInUtg its own independent legal advice before proceeding with any Transaction orexecuting this Agtaement.18. tNYESTMENT ADVICE

The Borrower acknowledges that the Fund is not, and has not offered to act as,the Borrowers investment adviSOr and that the Borrower has not looked to the Fund assuch. -Specifically, the Fund has not recommended that the Borrower p u r c h a s e ~ sell orpledge any particular Pledged Coflateraf incfuding stocks, bonds or other securities.19. CURRENCY

Unless otherwise specified in a Financing Terms Addendum,' the base currency, for-any transaction pUrsuant to this Agreement is the ~ n i t e d states Dollar (USO).20. 'ASSIGNMENT

The Fund may assign or ptedge this Agreement as necessary to -perfonn normalbusiness functions. The Borrower agrees to asslst in completing documents. ifnecessary, to 'effect such assignment or to otherwise complete this transaction. TheBorrower may not assign its rights or intere&t in this AgreementWithout the prior-writtenconsairt of the Fund which consentmay be withheld for any reason.Stnlctw'ed Transaction AgreementIFG/Yao

Page 130118



14/19

Crisnic Fund, S.A.21. PROPER LAW

This Agreement shall be interpreted in accordanCe with the laws of the State atGeorgia, unless both parties mutuany agree on another jurisdiction.22. WAIVER OF1MMUHtTIES

The Borrower irrevocablywaives, to the fuUest extent permitted by applicable law.with respect to itself and its revenues and assets (irrespective of their use or intendeduse). all immunitY on the grounds of sovereignty or other similar grounds from Q} suit, (ii)jurisdiction of any court, (iii) relief by way of injunction. order for ~ f f i c performance orfor recovery of property. {iv} attachment of its assets (whether before or after judgment)and (v) execution or enforcement of any judgment to which it or its ~ v e n u e s orassetsmight f:)thelWfse be entitled in any proceeding in the courts of anyjurisdiction and irrevocably agrees. to the extentpermitted byapplicable law, thafit Willnot clam any such immunity in any such proceeding. -23. IIODIFICAnON BY MUTUAL CONSENT

This Agreement may be modified by mutual wmt6n consent of -both parties.including s u ~ u e n t Transaction Addenda.24. SEVERASU..ITY

To the extenteny.. provision of this Agreement is prohibited by or invafid u ~ e ( applicable- t a w ~ such provision shall be -ineffective to the extent of such prohibition. orinvalidity, without invalidating tOe remainder of such provision or the remainingprovisions of this Agreement25. BINDING EFFECT

All of the terms of this Agreement, as amended from time to time. shall be bindingupon, inure 10 the -benefit of and be enforceable by the respective heirs, successors,and assigns of the Fund and Borrower.26. EXECUTION IN COUNTERPARTS

This Agreement and any joint written dimction, such as Addenda may beexecUted in c o ~ r t s . which When so executed shail constitute one and the sameagreement or direction.27. OFFICIAL ADDRESSES

-The Botrower's official address, telephone and facsimile numbers for notificationsregarding this Agreement and related 1ransadions is:Structured Transaction Agreement

lFG/YaoPage 140118



15/19

Crisnic Fund, S.A.KexuanYaoOne Waters Drive Suite 98San Mateo, CA. 94403Tefephone: 650-212-7620The Funcfs administrative office address, telephone and facsimile numberS torregarding this Agreement and related transactions is:Crisnic Fund. SA C/O lexperts AbogadOsConHoteI Office Center Office 5Sabana Norte. San Jose, Costa RicaTelephone: 506-2282-7352Fax: 506-2291-4951

28. ARSfTRATION CLAUSEIn the event that a dispute or controversy regarO'mg this Agreement or theaccomplishment of transactions hereunder is not resolved by good faith discussionbetween the parties, then the matter shaH be feSOfved by binding arbitration conductedin accordance with the current rules of the American Arbitration Association whicharbitration shalf be conducted In Atlanta. Georgia or at such other location as may beagreed to by the patties. .No person shaD bring a punitive or certified class action to arbitration, nor seek toenfOrce any pr&-dispute arbitration agreement against any person who has initiated in.court. punitive class action; orWho is s' member of a punitive class who._ not optedout ofthe class with (espect to any claims encompassed by the punitive actionuntil: {i) the class certification Is denied; or the cfass. is decertified; or (ii) It1&Borrower is .excluded fi'Dm the class by the court. Such f o r b e a r a n ~ to enforce anagreement to arbitrate shan not conatitUt& a waiver of any rights under thiS Agreementexcept to the extent $fated herein.

29. ENnRE AGREEMENTThis Agreement and the Addendurn(a) hereto constitute the entire Agl'88mentbetween the parties relating to the Funding of a Transaction and sets forth in its entiretythe obligations and duties of the respectiVe parties.

IIIIII

Structured Tran&aCtion AgreementIFGfY80Page 1$of18



16/19

Crisnic Fund, SA.N WITNESS WHeREOf, the parties have caused this Agreement to be executed by1.tletr respective offIcer's thereunto duty authorized, as of thedate first aboVe written.FUND

~ ~ ~ ~ ame: 'faTttJe: Portfolio ManagerBORROWERKaxuanYao

WITNeSSBy:

... '

Name:_ ...._____

TntrlsactionAgreementIFG/Yao

Page 16of18

Date: ___



17/19

I CALIFORNIA ALL-Pl.1RPOSE ACKNOWLEDGEMENT, Stateore.Wanda! County ofS.. ~ t e o

I

On 111t tilly of Jmae, 1010 before me,4ltgn 411nnri (theNotaryPublic), pmonaJ.ly appean:dXmn Xao.. proved tD-me on the basis ofsatisfactmymdence to be the whose name issubseribed 10 the within instrument and aclmow1edged 10 me that he executed the same in hisauthoriHd capacity. and thatby hissignature on the instnn'nent the person. or the entity upon beba1fofwhich the person icted. executed the instnJment.

DoeummtlBxecutionDate: Joe 21, 20UtSigns(s) Ot:het Than Named A b o v ~ Nt"c.-padty{lea)CbiiDed bySfperS lp r sNIIIIII:I l Corporateomecr- Titlc(s)__Q Partner-I l..imitm 0 Oenenlu AUomey in Facta TrusteeIJ Guantian or ConservatorQ ~ - - - - - - - - - - - - - - - - - -

:Notary Semee.Provtdeci]ly:

certifyunder' PenaltyofPerjwy UDder thelaws oflbe Stale.ofCalifumia that theforegoing parasraph is true and com:clWITNESS myhand and official seal.

. . . . . . , _F_O I y I l k 1 l . , S dd l .......... C ~ , C U + l o l M T..t:(69).'MI.... F_t658f34141le- - - - - - ------ - - - - - - ----- - - - - - .------ -_ .-



18/19

Crisnic Fund! S.A.EXHIBIT A

Definition of Accredited IOYitOrThe Borrower represents that Borrower fa qualified . . an Ac:creditild Investor."Accredited Investor" shall mean any person who comes within any of the foJloWingcategories.- or Who the issuer reasonabty believes comes within any of the followingc a t e g ~ at the time of the sale of the securities to that person:

1. Any bank. as defined in sedion 3(a){2) of the securities Act. or anysavings and Transaction association or other institution as defined in section 3(a)(5)(A)of- the Securities Act whether acting in its individual or fiduciary capacity; any broker ordealer registered pursuant to section 15 of the Securities Exchange Act of 1934; anyinsurance company as defined in section 2{13) of the Securities Act; any tnvestmentcompany registered under the Investment Company ACt of 1940 or a businessdevefopment company as defined in section 2(a)(48) of that Act; any Small Business_Investment Company licensed by the U.S. Small Business Administration under sectiOil301(c) 0,. (d) of the Small Business 1nvestmentAd of 1958; any pJan estabfl6hed andmaifltained by a state, its political subdivisions., or any agency or instrumentality of astate or Its pOJlticaI subdivisions for the benefit of its- emptoyeeS. if such plan has totaJassets in excess of $5,000,000; any e m p l o ~ benefit plan within 1he ~ f t i n 9 of theEmployee retirement Income Security Act of 1974 if the inves1ment decisioi1lS made bya ptan fiduciary, as defined in section 3(21) of such Act, which is either a bank. savingsand Transaction association, Insurance company, or registered investment adviser, or ifthe employee benefit plan has total assets-in excess of 15,000,000 or, if a seIf-directedpJan, with- inVestment decisions made solely by persons that are accredited investcn;2. Any private business development company. as defined in section 202(a}(22) of the I n v e s ~ Adv$e1's Actof 1940;3. Any organization described in Section 501ee) (3) of the Jntemat RevenueCOde. limited liability company. Massachusetts or similar busil'le$S-trust, or partnership.not formed for the specffic purpose of acquiring the securities offered. with total assetsin excess 01-$5,000,000;4. Any director, executive officer, ot general partner of the issuer of thesecurities being offered or sold, or any director. executiVe officer, or general partner of ageneral partner of that issuer; -5. My natural person whose individual net WQI1h, or joint net worth with thatpersOn's spouse._ at the time of his purchase exceed $1,000,000;6. Any natural person who had an incfMduat income in excess of $200.000 ineach of the two most recent years or joint income with that person's spouse-In excess of$3O{),OOO-in eachof those

StrucbJred Transaction AgreementIFG/YaoPage 17of18

J ~



19/19

Crisnic Fund, S .A.years and has a reasonable expectation of reaching the same income level in thecurrent year; .

7. Any trust, wiUl total assets in excess of $5,000,000, not formed for the$peCifjc purpose of acquiring the securities offered whose purchase is directed by asophisticated person as described in 17 C.F.R. 2 3 0 . 5 G 6 ( b ) ( 2 ) ( i i ) ~ and

8. Any entity in which all of the equity owners are accredited investors.1/1

S1ructuredTransaction AgreementlfG/Yao

Page 18 of18


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