Entrusted Supervision Contract of Personal
Property


 


No.:
[P2012M11SCSDQ0001-0005]


 


	Trustor (Party A): CITIC Trust Co., Ltd.
	 
	Domicile: F/13, Capital Mansion, No.6, Xinyuan South Road, Chaoyang District, Beijing	Post Code: 100004
	 	 
	Legal representative: Pu Jian
	 
	Financial Institution for Deposit: Beijing Capital Mansion Branch, China CITIC Bank
	 
	Account No.: 7110210186800061319
	 
	Tel: 010-84861327	Fax: 010-84861380
	 	 
	Supervisor (Party B): Chaowei Power Supply Co., Ltd.
	 
	Domicile: Xinxing Industrial Park, Zhicheng, Changxing, Zhejiang Province	Postal code: 313100
	 	 
	Legal representative: Zhou Mingming
	 
	Financial Institution for Deposit: Changxing Jiefang East Road Branch, China Construction Bank
	 
	Account No.: 330647242012210000000120
	 
	Tel: 0572-6115081	Fax: 0572-6115081


 


	Supervisee (Party C): Chisen Electric Jiangsu Co., Ltd.
	 
	Domicile: Jinyuan Road, Xuyi Economic Development Zone, Jiangsu	Post Code: 211700
	 	 
	Legal representative: Xu Kecheng
	 
	Financial Institution for Deposit: Xuyi Xinhua Branch, Industrial and Commercial Bank of China
	 
	Account No.: 1110090309200077630
	 
	Tel: 0517-88555599	Fax: 0517-88556166


 



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WHEREAS:


 


1. Party A (as the Trustee) accepts the
entrustment of Party B hereto, namely the principal under 1201 Period Capital Trust Contract of Loan Project Between Chaowei
Power Supply-Jiangsu Chisen numbered [P2012M11SCSDQ0001-0001] (hereinafter referred to as the Capital Trust Contract)
the entrustment by the Trustor, i.e. Party B under the Contract, to release the trust loan to Party C by using the trust fund under
Capital Trust Contract.


 


2.
Party A and the Borrower hereto entered into the RMB Capital Loan Contract (hereinafter referred to as Loan
Contract) numbered [P2012M11SCSDQ0001-0003] on  December 17, 2012, where Party B shall provide the trust loan no
exceeding RMB Two Hundred Million Yuan Only (in figure: ¥200,000,000.00 yuan), with
the annual interest rate of 8% and loan term of three years. 


 


Party A, Party C and Zhejiang Chisen
Electric Co., Ltd. (the co-payer) hereto entered into Joint Repayment Contract numbered [P2012M11SCSDQ0001-0012] on  December
17, 2012, where Party C and the Borrower shall jointly assume the obligation of paying off the principal and interest under
the Loan Contract.


 


The Loan Contract and Joint Repayment
Contract collectively constitute the Main Creditor’s Right Contract (hereinafter referred to as the “Main Contract”).


 


3. In order to guarantee Party
A’s creditor’s right under the Main Contract, Party A and Party C under the Contract entered into Contract for
Personal Property Mortgage in Maximum Amount numbered [P2012M11SCSDQ0001-0011] on  December 17, 2012, and Party C
shall, with its owned inventory, arrange the guaranty for maximum amount floating mortgage for Party A.


 


4. Party A is willing
to entrust Party B with the supervision of the mortgaged personal property under Contract for Personal Property Mortgage in
Maximum Amount (No. P2012M11SCSDQ0001-0011) by the means and conditions agreed in the Contract; Party B is willing to accept
Party A’s entrustment to supervise the mortgaged personal property under Contract for Personal Property Mortgage in Maximum
Amount (No. P2012M11SCSDQ0001-0011); and Party C, aware of and agreeing with such entrust relationship between Party A and
Party B as well as the related issues arising therefrom, is willing to accept the management of Party B with respect to the supervision
of mortgaged personal property under Contract for Personal Property Mortgage in Maximum Amount (No. P2012M11SCSDQ0001-0011)
in such ways and under such conditions as agreed upon herein.


 


The three parties hereby enter into this
Contract in respect to the supervision, entrusted supervision and other related matters of the mortgaged personal property under
Contract for Personal Property Mortgage in Maximum Amount (No.P2012M11SCSDQ0001-0011) upon consultation based on relevant
laws, administrative regulations and terms of Capital Trust Contract for joint observance.


 


Article 1Supervision of Personal
Property


 


Clause 1.1The personal property
under supervision herein refers to the inventories provided by Party C (as the Mortgagor) for Party A (as the Mortgagee) as the
floating mortgage of personal property under Contract for Personal Property Mortgage in Maximum Amount numbered as [P2012M11SCSDQ0001-0011].


 



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The inventory mentioned in previous paragraph
include the finished products or commodities held by Party C and ready for sale (hereinafter referred as the “finished products”),
the unfinished products still in process (hereinafter referred as the “unfinished product”) and the materials used
and consumed during production (hereinafter referred as the “raw materials”).


 


Clause 1.2The supervision period
under the Contract falls in a time from the effective date of the Contract and the Contract for Personal Property Mortgage in
Maximum Amount (numbered as [P2012M11SCSDQ0001-0011]) to the settlement date of all liabilities and debts under the Main Contract.


 


Clause 1.3The supervision scope
of personal property under the Contract shall cover both the initial supervision scope and dynamic supervision scope.


 


The initial supervision scope previously
mentioned refers to the all inventory listed in Clause 17-“Mortgage Property List” of the Contract for Personal
Property Mortgage in Maximum Amount (numbered as [P2012M11SCSDQ0001-0011]).


 


The dynamic supervision scope provided
in paragraph 1 of this clause refers to the changed inventory resulting from the daily business of Party C, and such changes include
inventory type change (inventory of raw materials is changed to that of unfinished products or finished products, or inventory
of unfinished products is changed to that of finished products), inventory increase caused by purchase of raw materials or inventory
decrease caused by sales of products, inventory disposition with rational reasons and inventory short or inventory profit pursuant
to financial and accounting system.


 


Article 2Entrusted Supervision


 


Clause 2.1Party A is willing to entrust
Party B to supervise the personal property under the Contract in such ways and under such conditions as agreed upon in the Contract,
and Party B is willing to accept such entrustment, and Party C, aware of and agreeing with such entrustment relationship between
Party A and Party B as well as the related issues arising therefrom, is willing to accept the management of Party B with respect
to the supervision of personal property under the Contract in such ways and under such conditions as agreed upon herein.


 


Clause 2.2As regards the supervision
of personal property falling in the initial supervision scope, Party B shall confirm with Party C the details, entitlement (right
defect or limitation included), acquired value, book value and storage location in view of such supervision, and shall employ competent
evaluator to assess the value of the personal property under such supervision.


 


With respect to the personal property supervision
details of “Mortgage Property List” confirmed through such supervision as described above as well as the value of mortgaged
properties listed thereon and the assessment reports provided by the evaluator employed by Party B which have been accepted by
Party B, Party A shall directly adopt without any obligation to review. Party B shall, on its own, bear any legal and/or economic
responsibility for the authenticity of the inventory together with the value presented on the Mortgage Property List.


 



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Clause 2.3Party B shall observe
the Management Manual of Mortgage Property when performing supervision of personal property falling in such dynamic supervision
scope as provided in paragraph 3 of Clause 1.3, and Party A is not obligated to review such manual. As opposed to Party A, Party
B shall, on its own, bear any legal and/or economic liability for any legal defect of such manual and any action together with
all results arising therefrom taken for the purpose of such manual. As opposed to Party C, both parties shall on their own settle
down any dispute arising from and/in connection with the establishment, execution, entry into force, effect, performance and interpretation
of such manual, with nothing to do with Party A.


 


The Management Manual of Mortgage Property
previously mentioned shall constitute an attachment to the Contract.


 


Clause 2.4For the purpose of
dynamic supervision, on March 31, June 30, September 30 and December 31 in each year following the effective date of the Contract
and the Contract for Personal Property Mortgage in Maximum Amount (numbered as [P2012M11SCSDQ0001-0011]), Party B shall
verify with Party C the details, entitlement (right defect or limitation included), acquired value, book value and storage location
in view of the personal property supervision then, and shall employ competent evaluator to assess the value of the supervised personal
property if required.


 


Any updated details of personal property
of Mortgage Property List confirmed through such supervision as described in last paragraph shall serve as an appendix to the Contract
and replace the previous Mortgage Property List. With respect to such list together with the value of mortgaged properties listed
thereon and all assessment reports provided by the evaluator employed by Party B (if any) which have been accepted by Party B,
Party A shall directly adopt without any obligation to review. Party B shall, on its own, bear any legal and/or economic responsibility
for the authenticity of the inventory together with the value presented on the updated Mortgage Property List. Party B shall also
on its own bear any legal liability and responsibility for any resulted change to and value decrease of the mortgaged properties
under the Contract for Personal Property Mortgage in Maximum Amount (numbered as [P2012M11SCSDQ0001-0011]) without any obligation
to Party A.


 


Article 3Agreements on Special Power
and Obligations of Each Party


 


Clause 3.1Party B hereby particularly
confirm and agree to be entrusted by Party A to perform, in such ways and under such conditions as agreed upon herein, the supervision
of personal property. Although such supervision is a re-entrusted one under the Capital Trust Contract, Party A is not obliged
to inspect and/or monitor the trustee in view of the entrusted supervision, which explains that any unfavorable legal result (including
decrease or loss of quantity or benefit of the trust property) shall be born by Party B (as the Trustor under Capital Trust
Contract and the Supervisor under the Contract) on its own, without nothing to do with Party A (as the Trustee under Capital
Trust Contract and the Trustor under the Contract).


 


Clause 3.2Party C hereby particularly
undertakes and ensures that it will provide Party B with authentic, well-prepared and complete documents, strictly follow the covenants
provided in Management Manual of Mortgage Property which is an appendix to the Contract, and proactively support Party B
in its supervision work, in respect of the supervision herein.


 


Clause 3.3Party B shall submit
any legal document it received in relation to the supervision herein (including but not limited to the Mortgage Property List together
with the follow-up updates made from time to time and the assessment reports) to Party A within ten (10) days as of the date of
receipt.


 



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Clause 3.4Both Party B and Party
C shall work together to proactively support Party A to complete the competent legal registration procedures for any change to
the mortgage as agreed in the Contract for Personal Property Mortgage in Maximum Amount (numbered as [P2012M11SCSDQ0001-0011]),
with respect to all updates to the Mortgage Property List.


 


Clause 3.5Both Party B and Party
C particularly confirm that, for the purpose of the supervision herein, Party A is entitled to request Party B and/or Party C to
provide related files, documents and written reports on the supervision situation, and to access their sites for inspection.


 


Clause 3.6All parties of the
Contract confirm that, for the purpose of the entrusted supervision and supervision herein, any party is not obliged to pay any
expense to any other party.


 


Article 4Liability for Breach of
Contract


 


Clause 4.1Any failure to perform
any obligation herein or any incompliance of any performance with any covenant herein shall be deemed as a breach. The breaching
party shall bear liability for breach by continuing to fulfill the performance, taking remedial measures and/or indemnifying for
the loss incurred etc.


 


In case of breach by all parties, each
party shall assume their respective liabilities accordingly.


 


Article 5Confidentiality Obligations


 


Each party hereto agrees that it shall
keep all information relating to this Contract and the important aspects of the transaction under this Contract signed by the parties
and/or the information contained in this Contract confidential, including relevant pricing information, but excluding those certified
to be received, disclosed or publicized by any third party duly authorized, and agrees that without written consent of other parties,
it shall not disclose such information to any third party outside this Contract, except to the employees, officers and directors
of the disclosing party in connection with the proposed transaction under this Contract and with a need to know such information,
except that:


 


(1)The disclosure is made to the investors
for purpose of the proposed transaction under this Contract;


 


(2)The disclosure is made to the lawyers,
accountants, advisers and consulting staff in connection with the transaction and with a need to know such information and subject
to the non-disclosure agreement;


 


(3)The disclosure is made to relevant
government departments or administration authorities in accordance with by applicable laws;


 


(4)The disclosure is made in accordance
with applicable laws, provided that the disclosing party shall notify the other parties of the proposed disclosure and the content
to be disclosed prior to such disclosure. Without prior written consent of the other parties, any party shall not disclose in public
the proposed transaction under this Contract to any news media or make any statement.


 


Article 6Governing Law and Dispute
Settlement


 


Clause 6.1The conclusion, validation,
performance, validity, interpretation, amendment, termination and dispute settlement of this Contract shall be governed by the
laws of the People’s Republic of China.


 


Clause 6.2Any dispute arising
from or in connection with this Contract shall be settled by the parties through negotiation. If the dispute cannot be settled
through consultation within 30 days, any party may bring it to the local people’s court with the jurisdiction where Party
A is located.


 



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Clause 6.3Except for the dispute
matters, each party shall continue to perform its obligations under this Contract in good faith.


 


Article 7Validation, Validity and
Miscellaneous


 


Clause 7.1Notice


 


Clause 7.1.1Except where telephone
instructions or notices are otherwise specified in this Contract, all notices, requests, instructions and other communications
required or permitted to be given by one party to any other party under this Contract shall be in writing and signed by the sending
party or its representative. Notices shall be delivered personally, sent by facsimile transmission or by registered mail (postage
prepaid) or courier service to the respective address or fax number set forth in Clause 7.1.2 (or other address or fax number formally
noticed in accordance with this clause). The time when such notices shall be deemed to have been effectively given shall be determined
as follows:


 


(1)Notices given by personal delivery
shall be deemed effectively given at the time of personal delivery;


 


(2)Notices sent by facsimile transmission
shall be deemed effectively given at the time of transmission if the notice has been telecopied or the facsimile machine produces
a transmission report that the facsimile was successfully sent;


 


(3)Notices sent by registered mail
(postage prepaid) shall be deemed effectively given at 5 p.m. on the fifth day after the date on which they were mailed (return
receipt requested);


 


(4)Notices sent by courier shall be
deemed effectively at 9 a.m. on the third day after they were sent.


 


Clause 7.1.2The addresses and fax numbers
of the parties for the purpose of receiving the notices under Clause 7.1.1 are as follows:


 


To Party A:


 


Address: Room 4602, Capital Mansion, No.6,
Xinyuan South Road, Chaoyang District, Beijing


 


Contact: Hao He


 


Tel: 010-84861259


 


Fax: 010-84861355


 


Post Code: 100004


 


To Party B:


 


Address: Xinxing Industrial Park, Zhicheng,
Changxing, Zhejiang Province


 


Contact: Cheng Xing


 


Tel: 0572-6115081


 


Fax: 0572-6115081


 



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Post Code: 313100


 


To Party C:


 


Address: Jinyuan Road, Xuyi Economic Development
Zone, Jiangsu


 


Contact: Zhao Feng


 


Tel: 0517-88555599


 


Fax: 0517-88556166


 


Post Code: 211700


 


Clause 7.1.3Any party may waive receipt
of any notice under this Contract by giving a written notice. Failure or delay in delivery of any notice, requirement, request,
agreement, approval, statement or any other communications within any company or entity shall not affect the validity of such notice,
requirement, request, agreement, approval, statement or any other communications.


 


Clause 7.2Validation


 


This Contract shall come into effect upon
signing by the legal representatives or authorized representatives of the parties and affixing with official seals of the parties.


 


Clause 7.3Severability


 


The parts of this Contract shall be severable.
If any of the terms, commitments, conditions or provisions contained in this Contract becomes illegal, invalid or unenforceable
for any reason, such illegality, invalidity or unenforceability shall not affect the remaining parts of this Contract, and the
remaining part of this Contract shall be still valid and enforceable and fully in force, as no illegal, invalid or unenforceable
content has been included in this Contract.


 


Clause 7.4Amendment


 


No amendment to this Contract shall become
effective unless made in writing and signed by each party or a duly authorized representative of each of the parties. Amendments
shall include any amendment, supplement, deletion or replacement. Any amendment shall constitute an integral part of this Contract.


 


Clause 7.5Waiver


 


Unless by express written waiver or change,
rights of the parties under this Contract shall not be waived or changed. Failure or delay on the part of any party to exercise
any right shall not operate as a waiver or change thereof or of any other rights. Any defective or partial exercise of any right
shall not preclude further exercise thereof or exercise of any other right. Any act, implementation process or negotiation of any
party shall in no manner preclude exercise thereof by such party, nor be construed as interruption or change thereof.


 


Clause 7.6Heading


 


The headings of clauses hereof and appendixes
hereto are for convenience of reading and shall not affect the meaning and interpretation of any provisions under this Contract.


 



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Clause 7.7Appendix


 


The appendix hereto is an integral part
of this Contract and shall be equally authentic with this Contract.


 


The appendix to the Contract includes:


 


(1)Management Manual of Mortgage
Property.


 


Clause 7.8Counterparts


 


This Contract shall be executed in six
counterparts with same legal force, with two held by each party. (The remainder of this page is intentionally left blank)


 


Signature page for the Entrusted
Supervision Contract of Personal Property numbered [P2012M11SCSDQ0001-0005] (this page is intentionally left blank)


 


	 
	 
	Party A: CITIC Trust Co., Ltd. (official seal)
	 
	 
	 
	Legal representative/Authorized representative (signature/seal)  /s/ Authorized Representative
	 
	 
	Signed on: December 17, 2012
	 
	 
	 
	Party B: Chaowei Power Supply Co., Ltd. (official seal)
	 
	 
	Legal representative/Authorized representative (signature/seal)  /s/ Authorized Representative
	 
	 
	Signed on: December 17, 2012
	 
	 
	 
	Party C: Chisen Electric Jiangsu Co., Ltd. (official seal)
	 
	 
	Legal representative/Authorized representative (signature/seal)  /s/ Authorized Representative
	 
	 
	Signed on: December 17, 2012


 








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