Guarantee Contract


 


S/N: 37100120120038921-2


 


(This is a summary translation to be
used for reference only)


 


		Creditor:	Agricultural Bank of China, Jinan Hi-Tech Development Zone Branch



 


		Guarantor:	HOU Wanchun



 


To ensure the performance of Domestic Factoring
Contract (with Recourse) (“Master Contract”) between the Creditor and Trunkbow Asia Pacific (Shandong) Co. Limited
(the “Debtor”), the Guarantor is willing to provide the following guarantee.


 


Article 1              Master
Debt under the Guarantee and Amount of the Principal


 


The type of master debt under the guarantee
is factoring with recourse, the principal amount of which is RMB 18,000,000.


 


Article 2              Scope
of the Guarantee


 


The scope of this pledge guarantee includes
the loan principal hereunder and interest, penalty interest, compound interest, default damages and other fees incurred by the
creditor to realize the creditor claims.


 


Article 3              Guarantee
Method


 


The guarantee method hereunder is joint
and several liability guarantee. If there are more than one guarantors, each guarantor will bear joint and several liabilities
with respect to the Creditor.


 


Article 4              Term
of the Guarantee


 


1.          The
term of the guarantee provided by the Guarantor is 2 years starting from the expiration of the performance period under the Master
Contract.


 



    	1



    	 



    

 


2.          The
term of the guarantee under acceptance of commercial bills and issuance of relief margin and letter of credit is 2 years starting
from the date on which the Creditor makes such advance payment.


 


3.          The
term of the guarantee under discounted commercial bills is 2 years starting from the due date of such bills.


 


4.          If
the Creditor and the Debtor extend the performance period of the Master Contract and the Guarantor continues its guarantee, the
term of the guarantee is 2 years starting from the expiration of such extension.


 


5.          If
the debt under the Master Contract is declared due in advance by the Creditor in accordance with the Master Contract, the term
of the guarantee is 2 years starting from such earlier due date.


 


Article 5              The
Guarantor’s Warranties


 


1.          The
Guarantor has obtained all authorization necessary for the guarantee.


 


2.          The
Guarantor has provided true, complete and effective financial statements, company charter or other relevant documents to the Creditor
and will accept the Creditor’s supervision in its operation and financial condition.


 


3.          If
the Debtor fails to perform its debt obligations, the Guarantor will perform its guarantee responsibility.


 


4.          If
the Guarantor fails to perform its guarantee responsibility, the Creditor has the right to make deductions of such amount directly
from the Guarantor’s account with the Creditor.


 


5.          During
the period of the guarantee, the Guarantor will notify the Creditor immediately in writing upon the occurrence of any of the following:


 


(1)         Change
in the name, address, contact information and legal representative of the Guarantor;


 


(2)         Change
in the affiliate relationship, senior management, company charter and organization of the Guarantor;


 


(3)         Experience
of material difficulty in the operations and financial condition;


 


(4)         The
Guarantor files, or is forced to file, for bankruptcy, restructuring;


 


(5)         The
Guarantor is dissolved, having its license cancelled or is ordered to shut down;


 


(6)         Other
situations that will affect the realization of the creditor’s right;


 



    	2



    	 



    

 


6.           Before
undertaking any of the following, the Guarantor must notify the Creditor in writing within 15 days and obtain the Creditor’s
approval:


 


(1)         The
Guarantor changes its capital or business structure, including but not limited to contracting, lease, merger, spin-off, reorganization,
joint venture or joint capital, transfer of assets and filing for reorganization, settlement or bankruptcy;


 


(2)         The
Guarantor provides guarantee to a third party or any other guarantee for its other debts.


 


Article 6              Assumption
of the Responsibility for Guarantee


 


1.            Upon
the occurrence of any of the following, the Creditor has the right to demand the Guarantor to assume its responsibility for guarantee:


 


(1)         The
debt under the Master Contract is due and the Creditor has not been fully repaid;


 


(2)         The
Debtor or the Guarantor is involved in the bankruptcy or settlement proceedings ordered by a court;


 


(3)         The
Debtor’s, or the Guarantor’s, license is revoked, or the Debtor or the Guarantor is ordered to shut down or dissolved;


 


(4)         The
Debtor or the Guarantor is dead or declared missing or dead;


 


(5)         The
Guarantor violates its obligations hereunder;


 


(6)         Other
situations that will adversely affect the realization of the Creditor’s right.


 


2.            If
the claims under the guarantee are also guaranteed by using property as security, the Creditor may use such property to realize
its claim and may also ask such guarantor to assume responsibility.


 


3.            If
the Debtor has provided guarantee by using property as security and the Creditor waives such guarantee, the Guarantor agrees to
continue to bear joint and several liability for guarantee.


 


4.            If
the Guarantor has provided guarantee for multiple debts (including the debt under the Master Contract) and the payment from the
Guarantor is insufficient to repay all the debts due, the Creditor has the right to decide the order of applying such payment with
regard to the debts.


 


5.            The
Creditor has the right to decide the order when exercising its right to offset or its right of subrogation


 



    	3



    	 



    

 


Article 7              Liability
for Breach


 


1.            If
the Debtor fails to repay the Creditor, the Guarantor must be responsible for all the resulting loss suffered by the Creditor.


 


2.            Upon
the occurrence of any of the following on the part of the Guarantor, the Guarantor must pay default damages and compensate the
Creditor for any resulting loss:


 


(1)         Failure
to obtain valid authorization necessary for the pledge guarantee;


 


(2)         Failure
to provide true, complete and effective financial statements, company charter or other relevant information;


 


(3)         Failure
to notify the Creditor of the situation set forth in Section 5.5 herein;


 


(4)         Engaging
in activities in Section 5.6 herein without obtaining the Creditor’s prior approval;


 


(5)         Other
acts in violation of the provisions herein.


 


Article 8              Offset
Right and the Dissolution Right Objection Period


 


If the Creditor exercises its offset right
or dissolution right in accordance with the law or with the provisions herein, the Guarantor has 7 days (starting from the day
when the Creditor notifies the Guarantor either orally or in writing) to raise objections.


 


Article 9              Dispute
Resolution


 


Any dispute arising from this contract must
be resolved through consultation; if such consultation fails, the dispute may be submitted to the local people’s court.


 


During the period of the legal proceedings,
the obligations hereunder not in dispute must continue to be carried out.


 


Article 10             Other
Matters


 


The Guarantor has already received and read
the Master Contract under the guarantee.


 


Article 11             Contract
Effectiveness


 


This contract becomes effective upon execution.


 


Article 12             This
contract is in duplicates, with one to each party.


 



    	4



    	 



    

 


		Creditor:	/seal/ Agricultural Bank of China, Jinan Hi-Tech Development Zone



Legal Representative:ZHANF Guiying


 


		Guarantor:	/s/ HOU Wanchun



 


April 26, 2012


 



    	5