Contract of Guarantee with a MaximumAmount Contract No.: CX2012RB007

Contract of Guarantee with a Maximum Amount

Contract No.: CX2012RB007

Guarantor A: Zhejiang Changxing Chisen Xinguangyuan Co., Ltd.  

Business Lisence No. 330522000009387

Legal Representative: Xu Keyong

Domicile: Changxing

Domicile: Changxing Tel.: 6029148 Zip Code: 313100

Financial institution account: Bank of China : 374058357526

Facsimile: 6029148

Lender: Bank of China Ltd. Changxing County Sub-branch

Legal Representative: HE Jie Qin

Domicile: Changxing Zip Code: 313100

Tel.: 6026438 Facsimile: 6026791

In order to guarantee the fulfillment of the debt under the Master Contract as specified in Article 1 hereof, the Guarantor is willing to provide guarantee to Lender. Both Parties hereby agree as follows through negotiations on the basis of equality. Unless otherwise stipulated herein, the terms herein shall have the meanings as ascribed to them in the Master Contract.

Article 1 Master Contract

The Master Contract of this Contract is:

The contracts signed by and between Lender and Borrower Zhejiang Chisen Electric Co., Ltd. from Jan 11, 2012 to Jan 11, 2013 regarding the loan, trade financing, letter of guarantee, capital business and other credit business contract (together “Single Contracts) and the amendment or supplement thereto, which stipulate that they are the Master Contract under this Contract.

Article 2 Principal Lender’s Right and Its Term

Unless the term is otherwise stipulated or agreed in accordance with the law, during the following term, the debt actually occurred under the Master Contract constitutes the principal Lender’s right hereunder:

Jan 11, 2012 to Jan 11, 2013 as stipulated in Article 1 hereof.

Article 3 The Maximum Amount under the Guarantee

1. The maximum amount of the principal under the guarantee hereof is:

Currency: Renminbi

(In words): 100 Million Only

(In numbers): RMB100, 000,000

2. On the date of expiration of the term of the principal Lender’s right as specified in Article 2 of this Contract, where it is determined to belong to the principal Lender’s right guaranteed hereunder, the interest on the principal of such Lender’s right (including the statutory interest, agreed interest, compound interest, penalty interest), liquidated damages, damage, the fees for the fulfillment of the Lender’s right (including but not limited to litigation fees, attorney’s fees, arbitration fees, public notarization fees), enforcement fees, appraisal fees, auction fees, service fees, public announcement fees), the losses caused to Lender due to breach of Borrower and all the other payable fees shall also be the guaranteed Lender’s right. The specific amount shall be determined when it is settled.

The sum of the Lender’s right amount determined according to the two paragraphs above is the maximum Lender’s right amount guaranteed hereunder.

Article 4 Modes of Guarantee

The guarantee hereunder shall be the 1^st item.

Article 5 Occurrence of the Guarantee Liability

In the event that Borrower fails to make the settlement to Lender on any normal repayment date under the Master Contract or advance repayment date as agreed, Lender shall be entitled to require the Guarantor to undertake the guarantee liability.

The normal repayment date referred to in the previous paragraph refers to the date of principal repayment, interest payment as stipulated in the Master Contract, or the date on which Lender shall pay any amount to Lender as agreed in the said contract. The advance repayment date referred to in the previous paragraph refers to the date proposed by Borrower and as agreed by Lender to make the repayment in advance and the date on which Lender makes a request to Borrower in order to collect the principal and interest of the Lender’s right and/or any other amount in advance as per the contract.

Where there is any other real security or guarantee for the principal debts, any right of the Lender under this Contract and the exercise thereof shall not be affected and the Guarantor may not defense against the Lender for the existence of such other real security or guarantee.

Article 6 Term of Guarantee

The Term of Guarantee hereunder shall be two years as from the expiration of the term as specified in Article 2 of this Contract.

During the Term of Guarantee, Lender shall be entitled to require the Guarantor to undertake the guarantee liability, together or separately, for the whole or partial, several or single principal Lender’s right.

Article 7 Statute of Limitation of Guarantee Liabilities

If principal Lender’s right hasn’t been settled, under the condition of joint and several liabilities, Lender requires that the guarantor undertakes the responsibility before the expiration of the term as specified in Article 6 of this Contract. Guarantee liabilities and the statute of limitation begins to run when the guarantor undertakes the guarantee liabilities as per lender’s requirement,

Under the circumstance of general guarantee, lender applies to litigation or arbitration before before the expiration of the term as specified in Article 6 of this Contract, Guarantee liabilities and the statute of limitation begins to run when the judgment or verdict comes into effect.

Article 8 Relationship between this Contract and the Master Contract

Provided that the Master Contract contains the Credit Line Agreement/the Credit Master Agreement, where the term for using the credit line/the term of business cooperation therein is extended, it shall be subject to the written consent of Guarantor. Without the consent of Guarantor or provided that Guarantor refuses it, Guarantor shall only undertake the guarantee liability within the maximum amount of the guaranteed Lender’s right as stipulated in Article 3 hereof for the principal Lender’s right occurred during the original term for using the credit line/the term of business cooperation and the term of guarantee is still the original term.

Change to another content or issues of the Credit Line Agreement/the Credit Master Agreement, and to other single agreement thereunder, or to the single Master Contract has not to be subject to the consent of Guarantor, who shall still undertake the guarantee liability for the changed Master Contract within the maximum amount of the guaranteed Lender’s right as stipulated in Article 3 hereof.

Subject to the agreement between Lender and Guarantor through negotiations, the maximum amount of the guaranteed Lender’s right as stipulated in Article 3 hereof may be changed in writing.

Where Lender entrusts the whole or partial rights and obligations hereunder to other agency of the Bank of China Limited to fulfill or transfer the principal Lender’s right to a third party, it has not to obtain the consent of Guarantor and the guarantee liability of Guarantor shall not be mitigated or exempted thereby.

Article 9 Representation and Warranty

Guarantor A makes the following representation and warranty:

1. Guarantor has the full civil legal capacity and civil conduct capacity;

2. Guarantor fully understands the contents of the Master Contract, and execution and performance of this Contract is based on the true meaning of Guarantor and has obtained legal and effective authorization as per the requirements of by-laws or other legal documents that is binding upon Guarantor;

In case the company acts as the guarantor, please provide with the guarantee which has been approved by Board’s meeting or shareholder’s meeting as per the memorandum of the company; the memorandum sets limitation on the total guarantee amount and single guarantee amount, the guarantee amount in this Contract hasn’t exceed the limitation.

3. Any and all the documents and materials provided by Guarantor A to Lender are accurate, authentic, complete and valid;

4. Guarantor accepts the supervision and examination of Lender on the operating condition, financial status of Guarantor and provides assistance and cooperation;

5. Guarantor fails to conceal the major liability it has undertaken until the date of execution of this Contract to Lender;

6. In the event that a situation happens that may probably affect the financial status of Guarantor and the ability of performing the Contract, including but not limited to division, consolidation, joint operation, Chinese-foreign joint venture, cooperation, contracting, restructuring, system transformation, plan to go public, decrease of registered capital, transfer of major assets or share transfer, assumption of major liabilities, applying for dissolution, being revoked, applying for or being applied for bankruptcy, involvement in material litigation or arbitration, Guarantor shall promptly notify Lender.

Article 9 Authorization of Personal Credit Information

Guarantor hereby authorizes: Lender may inquire about the personal credit report of Guarantor in the personal credit information basic database of the People’s Bank of China in the occurrence of any of the following circumstances in relation to Guarantor.

1. To review the personal loan application of Guarantor;

2. To review the personal guarantee application of Guarantor;

3. To conduct after-loan management of the personal loan or guarantee under the name of Guarantor;

4. In order to accept and handle the loan application of a legal person or other entity or the legal person or other entity as a guarantor, it is required to inquire about the credit status of Guarantor as a legal representative or contributor.

Meanwhile, Guarantor authorizes Lender to submit its personal credit information to the personal credit information basic database of the People’s Bank of China.

Article 10 Disclosure of Related Party in Guarantor’s Group and Related Party Transaction

Both Parties apply to the 1^st item hereunder:

Article 11 Default Events and Handling

The occurrence of any of the following situations shall constitute, or be deemed as, breach of contract by Guarantor under this Contract:

1. failure to fulfill the guarantee responsibility on time pursuant to this Contract;

2. the statement made herein is untrue or violation of the commitments made herein;

3. occurrence of the event as specified in paragraph 6 of Article 8 hereof, which seriously affects Guarantor’s financial status and the ability to perform this Contract;

4. Guarantor becoming a person with the restricted civil conduct capacity or without the civil conduct capacity;

5. violation of other provisions in relation to the rights and obligations of the Parties herein;

6. occurrence of a default event under other contract between Guarantor and Lender or other agency of the Bank of China Limited.

In the occurrence of the default event as listed in the above paragraph, Lender shall be entitled to take the following measures, separately or simultaneously, as the case may be:

1. to require Guarantor to correct its breach of contract within the specified time limit;

2.to decrease, suspend or terminate the credit line to Guarantor, wholly or partially;

3.to suspend or terminate the acceptance and handling the business application of Guarantor under other contracts, wholly or partially; to suspend or terminate the grant and handling of the loan, wholly or partially, that has not been granted;

4. to announce the whole or partial principal and interest of Guarantor’s loan under other contract and other payables mature immediately;

5. to terminate and rescind this Contract, and other contract, wholly or partially, between Guarantor and Lender;

6. to require Guarantor to compensate the loss caused to Lender due to its breach of contract;

7. subject to prior or post notice, to deduce and allocate the amount in the account opened by Guarantor with Lender to settle the whole or partial debt that Guarantor owes to Lender. The outstanding amount in the account shall be deemed mature in advance. Provided that the currency in the account is different from that used in the business of Lender, the amount shall be calculated by the settlement and sale listed foreign exchange rate that Lender applies in the deduction and collection;

8. other measures as considered necessary by Lender.

Article 12 Reservations of Rights

Either Party’s failure to exercise partial or whole right, or failure to require the other Party to fulfill and undertake partial or whole obligation hereunder shall not constitute the Party’s waiver of such right or exemption of such obligation and liability.

Any tolerance, extension or delay of either Party in exercising the rights hereunder to the other Party shall not affect any right it shall be entitled in accordance with the law and regulation, nor shall it be deemed as the waiver of such right.

Article 13 Modification, Amendment and Termination

This Contract may be modified or amended in writing subject to the agreement of both Parties through negotiation. Any modification or amendment shall constitute integral part of this Contract.

Unless otherwise stipulated in the law and regulation agreed between the Parties concerned, this Contract shall not be terminated before the rights and obligations hereunder are fully implemented.

Unless otherwise stipulated in the law and regulation agreed between the Parties concerned, invalidity of any clause of this Contract shall not affect the legal force of other clauses hereof.

Article 14 Applicable Law and Settlement of Dispute

This Contract shall be governed by and construed in accordance with the law of the People’s Republic of China.

Any dispute and controversy arising from the performance of this Contract may be first settled through negotiations, failing which, the Parties agree to resolve it in the same way identical to the way of settlement of disputes as stipulated in the Master Contract.

During the period of settling the dispute, provided that such dispute will not affect the performance of other provisions hereof, such other provisions shall continue to be performed.

Article 15 Fees

Unless otherwise determined in accordance with the law or agreed by the Parties concerned, any fees arising from the conclusion, performance of this Contract and the settlement of disputes (including the attorney’s fees) shall be undertaken by Guarantor.

Article 16 Appendix

The appendix subject to the mutual confirmation of both Parties is integral part of this Contract and has the equal legal force to this Contract.

Article 17 Miscellaneous

1. Without the consent of Lender in writing, Guarantor shall not transfer any right or obligation hereunder to a third party.

2. Provided that Lender needs to entrust other agency of the Bank of China Limited to fulfill the right and obligation hereunder as required for the business needs, Guarantor shall accept it. The said agency of the Bank of China Limited entrusted by Lender shall be entitled to exercise all the rights hereunder and bring a lawsuit to the court with respect to any dispute hereunder or submit it to the arbitration commission for an arbitral award.

3. Provided that other provisions hereof will not be affected, this Contract is legally binding upon the Parties or successor and assignee generated in accordance with the law.

4. Unless otherwise agreed, both Parties designate the domiciles as specified herein as the correspondence and contact addresses and undertakes to promptly notify the other Party in writing where the correspondence and contact address is changed.

5. The headings and name of the business herein are used for the convenience of reference only and shall not be used to interpret the contents of the clauses and the rights and obligations of the party concerned.

Article 18 Effectiveness of Contract

This Contract shall come into effective when it is signed by Guarantor, responsible person of Lender or its authorized signatory together with the company’s seal being affixed onto it.

This Contract is in triplicate, with each Party and Borrower holding One copy, all of which shall have the equal legal force.