Chapter 1 General Provisions
Article 1 To protect the interests of shareholders and investors of Kunlun Tech Co., Ltd. (hereinafter referred to as the "Company"), regulate the Company's external guarantee activities, control the Company's asset operational risks, and promote the Company's healthy and stable development, this System is formulated in accordance with the "Company Law of the People's Republic of China" (hereinafter referred to as the "Company Law"), the "Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited," and other relevant laws and regulations, as well as the Articles of Association of Kunlun Tech Co., Ltd. (hereinafter referred to as the "Articles of Association").
Article 2 This System applies to the Company and its holding subsidiaries (hereinafter collectively referred to as the "Company") providing guarantees to third parties for the following activities: where the guaranteed enterprise applies to the Company for a guarantee due to obtaining loans from financial institutions, bill discounts, financing leases, etc.
Guarantees provided by the Company for its holding subsidiaries are considered external guarantees and are subject to this System.
Article 3 The purpose of the Company in formulating this System is to strengthen the Company's internal control, improve the pre-evaluation, in-process monitoring, and post-recovery and disposal mechanisms for the Company's guarantee matters, to the greatest extent possible prevent potential debt risks caused to the Company due to the deteriorating financial condition of the guaranteed party, and to reasonably avoid and reduce possible losses.
Article 4 When the Company provides external guarantees, it shall, in accordance with the "Securities Law of the People's Republic of China," the securities regulatory rules of the Company's stock listing location, the "Articles of Association," and other relevant regulations, perform information disclosure obligations for external guarantees.
Chapter 2 Basic Principles of External Guarantees
Article 5 Scope of external guarantees provided by the Company: With the review and approval of the authorized institutions of the Company as stipulated in this System, the Company may provide guarantees for third parties meeting the conditions for obtaining loans from financial institutions, bill discounts, financing leases, and other financing matters.
The methods for the Company to provide external guarantees shall be guarantee, pledge, or mortgage.
Article 6 The Company's external guarantees must be reviewed and approved by the Board of Directors or the Shareholders' Meeting in accordance with legal procedures. Without the resolution of the Company's Shareholders' Meeting or Board of Directors, directors, supervisors, senior management personnel, and branches of the Company shall not arbitrarily sign guarantee contracts on behalf of the Company.
Article 7 For external guarantees provided by the Company, the Company shall require the guaranteed party to provide a counter-guarantee in the form of a pledge or mortgage to the Company, or a third party recommended by the guaranteed party and approved by the Company to provide a counter-guarantee in the form of a guarantee to the Company, and the provider of the counter-guarantee shall have actual repayment ability. This article does not apply to guarantees provided to holding subsidiaries.
Article 8 The Company shall truthfully provide all external guarantee matters to the audit firm that provides audit services to the Company in the annual report.
Article 9 The independent directors of the Company shall provide a special explanation in the annual report regarding the Company's cumulative and current period external guarantee situation and the implementation of this System.
Article 10 All directors and senior management personnel of the Company shall prudently approach and strictly control the debt risks arising from external guarantees, and shall bear joint and several liability for losses arising from non-compliant or improper external guarantees in accordance with the law.