Unassociated Document


    Guarantee
006

     

    Guarantee
Contract

     

    China
Construction Bank

     

    Zhejiang
Branch


    
      
         


      

      
         


        
          

        

      

      
         


      

    

     

    Contract
No.: 64720092302010036

     

    Guarantor
(Party A): Chisen
Electric Co., Ltd., Xu Ke Cheng

     

    Identification
Number: 330522196208244514

     

    Domicile:
Changxing _____ Zip Code: 313100

     

    Tel.:

     

    Lender
(Party B): China Construction Bank Corporation Longxing Sub-branch

     

    Domicile:
No. 18, _____ Street,______Township,
Longxing __________  Zip Code: 313100

     

    Person in
Charge: WANG Wei

     

    Facsimile:                                               
                   Tel.:
6024028

     

    
      
         


      

      
         


        
          

        

      

      
         


      

    

     

    In order
to guarantee the fulfillment of bank acceptance agreement, No.
64720092302010036, (“Master Contract) of Changxing Chisen Electric co., Ltd
(hereinafter referred as Borrower). In order to protect the realization of
Lender’s right of Lender, the Guarantor is willing to provide guarantee to
Lender. Both Parties hereby agree as follows through negotiations on the basis
of equality.

     

    Article 1 Scope of
Guarantee                                                                

     

    1. The
scope of guarantee hereof is:

     

    1.1 All
liabilities of the debt. Including but not limited to principle, the interest
(including the compound interest and penalty interest), liquidated damage,
damages, other amount that Borrower shall pay to Party B (including but not
limited to the related handling charge, communication fee, miscellaneous fees
and the related bank fees that the foreign beneficiary under refuses to
undertake), any and all the fees incurred to Party B arising from the
realization of Lender’s right and guarantee right (including but not limited to
litigation fees, arbitration fees, fees for preservation of properties,
travelling expenses, enforcement fees, appraisal fees, auction fees, public
notarization fees, service fees, public announcement fees and attorney’s
fees).

     

    Article 2 Method of
Guarantee

     

    The
guarantee provided by Party A hereunder shall be the guarantee with several and
joint liability.

     

    Article 3 Term of
Guarantee

     

    The Term
of Guarantee hereunder shall be two years as from the effectiveness date of this
Contract until the expiration date of the term for fulfilling the debt under the
Master Contract. Where the term of the debt is extended, subject to the consent
of Guarantor, the Term of Guarantee shall last for the two years as from the
expiration date of the term for fulfilling the debt as stipulated in the
extension agreement. Provided that Party B announces to advance the maturity of
the debt pursuant to the Master Contract, the Term of Guarantee shall last for
the two years as from the date of the earlier maturity of the debt announced by
Party B. In the event that the debt under the Master Contract is fulfilled on
installments, then with respect to each debt, the Term of Guarantee shall be two
years as from the expiration date of the term for fulfilling the last
debt.

     

    Article 4 Independence of the
Guarantee Contract

     

    The
validity of this Contract is independent from the Master Contract. Failure of
the Master Contract to be established or effective or invalidity, partial
invalidity or revocation or rescission thereof shall not affect the
effectiveness of this Contract. If the Master Contract is determined as not
established or effective, invalid or partially invalid, or revoked or rescinded,
Party A shall be jointly and severally liable for the debts arising from
Borrower returning the property or compensating the losses.

     

    Article 5 Amendment of the
Master Contract

     

    1 If
party B and borrower agreed to amend the main agreement terms (including but not
limited to payment method, loan account no., repayment account no., loan plan,
repayment loan, value date, interest settlement date), Party A shall still
undertake guarantee liabilities

     

    2 The
guarantee liabilities of Party A shall not be mitigated due to any one of the
following events:

     

    
      
         


      

      
         


        
          

        

      

      
         


      

    

     

    (1)   Restructuring,
consolidation, merger, division, increase or decrease of the registered capital,
joint venture, joint operation, change of the name of Party B or
Borrower;

     

    (2)   Party
B entrusts a third party to fulfill its obligations under the Master
Contract.

     

    3. Where
the Lender’s rights under the Master Contract are transferred, the guarantee
hereunder shall be transferred therewith.

     

    Article 6 Responsibility of
Guarantee

     

    
      	
              1.

            	
              If
      the debts under the Master Contract matures or Party B announces the debts
      to be mature in advance pursuant to the provisions of the Master Contract
      or the law, where Borrower fails to fully repay the debts on time or
      Borrower violates other provisions of the Master Contract, Party A shall
      immediately undertake the guarantee liability within the Scope of
      Guarantee. Notwithstanding the foregoing, without the prior consent of
      Party A, where Party B and Borrower agree to extend the term for
      fulfilling the debt or increase the principal of the Lender’s right, Party
      A shall only be jointly and severally liable, pursuant to this Contract,
      for the debt under the Master Contract that has not been
      changed.

            


    

     

    
      	
              2.

            	
              No
      matter whether Party B has other guarantee for the debts under the Master
      Contract (including but not limited to such guarantee modes: guarantee,
      mortgage, pledge, letter of guarantee or standby letter of credit), no
      matter when it is established, whether it is valid, whether Party B files
      a claim against other guarantors, whether a third party agrees to
      undertake the whole or partial debts under the Master Contract, or whether
      other guarantee is provided by Borrower itself, the guarantee liability of
      Party A hereunder shall not be mitigated or exempted, Party B may directly
      require Party A to undertake the guarantee liability within its scope of
      guarantee as stipulated herein and Party A shall not raise any
      objection.

            


    

     

    
      	
              3.

            	
              In
      the event that Party A only provides the guarantee for the partial debt
      under the Master Contract, Party A agrees that, even if the debt under the
      Master Contract is partially discharged due to the settlement of Borrower,
      Party B’s fulfillment of other guarantee right or for any other reason,
      Party A shall still undertake the guarantee liability for the debt that is
      not discharged within the scope of the guarantee pursuant to this
      Contract.

            


    

     

    
      	
              4.

            	
              Provided
      that Party A only provides the guarantee for the partial debt under the
      Master Contract, and the debt under the Master Contract fails to be fully
      settled after Party A undertakes the guarantee liability, Party A
      undertakes that, its claims to the right of subrogation or the right to
      seek compensation (including the advance exercise) against other borrower
      or guarantor shall not cause any harm to the interest of Party B and
      agrees that the settlement of the debts under the Master Contract is
      superior to the fulfillment of Party A’s right of subrogation or the right
      to seek compensation.

            


    

     

    To be
more specific, prior to the full settlement of Party B’s Lender’s
rights:

     

    (1) Party
A agrees not to claim for the right of subrogation or the right to seek
compensation against other borrower or guarantor; if for any reason whatsoever,
Party A fulfils the above rights, the amount it obtains shall be first used to
settle the outstanding Lender’s right of Party B;

     

    (2)
Provided that the debts under the Master Contract has a security for things,
Party A agrees not to file any claim for the security thing or the amount
obtained from the disposal thereof, which shall be first used to settle the
outstanding Lender’s right of Party B;

     

    (3)
Provided that Borrower or other guarantor provides counter-guarantee for Party
A, the amount that Party A obtains based on the above counter-guarantee shall be
first used to settle the outstanding Lender’s right of Party B.

     

    
      
         


      

      
         


        
          

        

      

      
         


      

    

     

    
      	
              5.

            	
              Party
      A has been fully aware of the interest rate risks. Provided that Party B
      adjusts the interest rate level, the method of calculating or settling the
      interests pursuant to the provisions of the Master Contract or the change
      to the interest policy of the State, which results in the increase of the
      interest, penalty interest or compound interest that Borrower shall repay,
      Party A shall be jointly and severally liable for the increased part.

            


    

     

    
      Article 7 Other Obligations of
Party A

    

     

    
      	
              1. 

            	
              Party
      A shall supervise the use of the loan by Borrower (including the
      purposes)

            


    

     

    
      	
              2.

            	
              Party
      A shall provide information regarding the personal financial status and
      credit information to Party B according to the request of Party B and
      ensure its accuracy, authenticity, integrity and validity thereof. Without
      the written consent of Party B, Party A shall not provide guarantee for a
      third party that is beyond its
capacity

            


    

     

    
      	
              3.

            	
              The
      occurrence of change of nationality, change of address, change of marriage
      situation, suffer major diseases, suffer administrative or criminal
      penalties, involve in significant civil law disputes, financial
      deterioration, unable to perform the normal duties, or losing or probably
      losing the guarantee capacity for any reason, Party A shall immediately
      inform Party B in writing and carry out the undertaking, transfer or
      commitment of the guarantee liability hereunder or provide a new guarantee
      for the performance of the Master Contract to be acknowledged by Party
      B.

            


    

     

    
      	
              4.

            	
              As
      the major shareholder or the actual controlling party, Party A should
      notify Party B if its enterprise exercise merger, splitting of entity,
      change of shareholders, increase of registered capital, joint venture or
      associating operating.

            


    

     

    Article 8
Miscellaneous

     

    2. Use of
Party A’s Information

     

    Party A
agrees Party B to inquire about the credit status of Party A in the credit
database established under the approval of the People’s Bank of China or credit
competent authority or inquire the related entity or department and agrees Party
B to provide Party A’s information to the credit database established under the
approval of the People’s Bank of China or credit authority.

     

    3. Public
Announcement and Collection

     

    With
respect to the defaults of Party A, Party B shall be entitled to notify the
related department or entity and to make public announcements for collection
through the news media.

     

    4.
Evidence of Party A’s Records

     

    Unless
there is reliable and definite evidence to the contrary, the internal accounting
records of Party B regarding the principal, interest, fees and re-payment
records, documents, voucher prepared or kept by Party B that are generated
during such business procedures as withdrawal, re-payment, interest payment that
Borrower goes through and the records and vouchers of the loan-collection by
Party B shall all constitute the definite evidence to prove the Lender’s right
relationship under the Master Agreement. Party A shall not raise any objection
only on the ground that the aforesaid records, accounts, documents and vouchers
are unilaterally prepared or kept by Party B.

     

    
      
         


      

      
         


        
          

        

      

      
         


      

    

     

    5.
Reservations of Rights

     

    Party B’s
rights hereunder shall not affect and exclude any other rights it shall be
entitled to pursuant to the laws, regulations and other contracts. Any
tolerance, grace for any default or delay, or preference or suspension in
exercising any right hereunder shall not be deemed as a waiver of the rights and
interests hereunder or permission or approval of any breaches, nor shall it
affect, prevent or obstruct continuous exercise of such right or any other right
or result in Party B’s assumption of obligations and responsibilities to Party
A.

     

    In the
event that Party B fails to or delays in exercising any right under the Master
Contract or fails to exhaust any remedy under the Master Contract, the guarantee
responsibility of Party A hereunder shall not be mitigated or exempted. However,
provided that Party B exempts the debts under the Master Contract, the guarantee
responsibility of Party A hereunder shall be mitigated or exempted
accordingly.

     

    6.
Dissolution or Bankruptcy of Borrower

     

    Where
Party A obtain the information that Borrower enters into dissolution or
bankruptcy procedure, Party A shall inform Party B to file claims. In the
meantime, it shall take part in the dissolution or bankruptcy procedure promptly
and exercise the right to recourse first. Provided that Party A knows or should
know Borrower enters into dissolution or bankruptcy procedures but fails to
first exercise the right to recourse promptly, the losses thereof shall be
solely undertaken by Party A.

     

    Notwithstanding
the provisions in the second sub-paragraph of the fifth paragraph of this
clause, during the bankruptcy procedure of Borrower, in the event that Party B
enters into a reconciliation agreement with Borrower or agrees to the
re-construction plan, Party B’s rights hereunder shall not be damaged due to the
reconciliation agreement or re-construction plan and the guarantee
responsibility of Party A shall not be mitigated or exempted. Party A shall not
use the conditions as stipulated in the reconciliation agreement or
reconstruction plan to oppose the rights and claims of Party B. With respect to
the part of the Lender’s rights that Party B makes compromises to Borrower in
the reconciliation agreement or the re-construction plan and hence is not
settled, Party B shall still be entitled to request Party A to continuously
settle.

     

    7. Where
there is a change to the correspondence address or contact of Party A, Party A
shall immediately notify Party B. Any losses arising from failure to notify
Party B promptly shall be solely undertaken by Party A.

     

    8.
Settlement of Disputes

     

    Any
dispute arising from the performance of this Contract may be settled through
negotiations, failing which, it shall be settled in the 1st way as
follows.

     

    (1)   Bring
a lawsuit before the people’s court at Party B’s location.

     

    (2)   Submit
to intentionally left
blank Arbitration Commission (the place of arbitration is intentionally left
blank) for arbitration in accordance with rules in effect at the time of
applying for arbitration. The arbitration award shall be final and binding upon
both parties.

     

    During
the litigation or arbitration, the provisions of this Contract that are not in
dispute shall continue to be implemented.

     

    9.
Conditions for the Effectiveness of this Contract

     

    The
Contract shall come into force as soon as being signed or sealed by Party A or
Party’s authorized proxy and Party B’s principal or authorized
agent.

     

    10. This
Contract is in bipartite.

     

    11. Other
Provisions (Remain Blank)

     

    Article 9 Representation and
Warranty of Party A

     

    
      
         


      

      
         


        
          

        

      

      
         


      

    

     

    1. Party
A clearly knows the business scope and scope of authorization of Party
B.

     

    2. Party
A has already read all the clauses of this contract and the Master Contract.
Upon Party A’s request, Party B has already explained the clauses of this
Contract and the Master Contract. Party A is completely aware of and fully
understands the meaning and the corresponding legal consequences of the clauses
of this Contract and the Master Contract.

     

    3. Party
A has the legal qualification to be Guarantor.

     

    4. Party
A acknowledges that it fully understands the conditions of Borrower’s assets,
debts, operation, credit and credibility, whether Borrower has the subject
qualification and authority to sign the Master Contract and all the contents of
the Master Contract.

     

    Party A
or Authorized Proxy (Signature): Xu Kecheng and Zho Fangqin_____Oct 18,
2010

     

    Party B
(Company’s seal):

     

    Person in
Charge or Authorized Agent (Signature): ____________Oct 18, 2010