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Exhibit 10.7  

1.
Adopted by the Board of Directors on May 1, 1993; Approved by the stockholders on June 25, 1993.

2.  Amended by the Board of Directors on February 7, 1995; Approved by the stockholders on May 19, 1995.

3.
Amended by the Board of Directors on March 3, 1997; Approved by the stockholders on May 28, 1997.

4.
Amended by the Board of Directors on March 1, 2000; Approved by the stockholders on May 24, 2000.

5.
Amended, restated and renamed by the Board of Directors on February 14, 2002.

 
 

GENZYME TRANSGENICS CORPORATION
  
    2002 Employee Stock Purchase Plan    
  

        l.    Purpose.    

        The
purpose of this 2002 Employee Stock Purchase Plan (the "Plan") is to provide employees of Genzyme Transgenics Corporation (the
"Company"), and its subsidiaries, who wish to become
shareholders of the Company an opportunity to purchase Common Stock of the Company directly from the Company. The Plan is intended to qualify as an "employee stock purchase plan" within the meaning of
Section 423 of the Internal Revenue Code of 1986, as amended (the "Code"). 

        2.    Eligible Employees.    

        Subject
to the provisions of Sections 7, 8 and 9 below, any individual who is a full-time employee (as defined below) of the Company, or any of its subsidiaries (as defined
in Section 424(f) of the Code) the employees of which are designated by the Board of Directors of the Company, or such committee to whom it delegates its authority hereunder (the
"Board of Directors"), as eligible to participate in the Plan, is eligible to participate in any Offering (as defined in Section 3 below) of
Shares (as defined in Section 7 below) made by the Company hereunder. Full-time employees shall include all employees whose customary employment is: 

                (a)  20 hours
or more per week and 

                (b)  more
than five months 

in
the calendar year during which said Offering Date occurs or in the calendar year immediately preceding such year. 

        3.    Offering Dates.    

        From
time to time, the Company, by action of the Board of Directors, will grant rights to purchase Shares to employees eligible to participate in the Plan pursuant to one or more
offerings (each of which is an "Offering" on a date or series of dates (each of which is an "Offering
Date") designated for this purpose by the Board of Directors. 

        4.    Prices.    

        The
price per share for each grant of rights hereunder shall be the lesser of: 

                (a)  eighty-five
percent (85%) of the fair market value of a Share on the Offering Date on which such right was granted; or 

                (b)  eighty-five
percent (85%) of the fair market value of a Share on the date such right is exercised. 

At
its discretion, the Board of Directors may determine a higher price for a grant of rights. 

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        5.    Exercise of Rights and Method of Payment.    

                (a)  Rights
granted under the Plan will be exercisable periodically on specified dates as determined by the Board of Directors. 

                (b)  The
method of payment for Shares purchased upon exercise of rights granted hereunder shall be through regular payroll deductions, by lump sum cash payment, by delivery
of shares of Common Stock valued at fair market value (as determined by the Board of Directors) on the date of delivery, or by some combination thereof, as determined by the Board of Directors. No
interest shall be paid upon payroll deductions unless specifically provided for by the Board of Directors. 

                (c)  Any
payments received by the Company from a participating employee and not utilized for the purchase of Shares upon exercise of a right granted hereunder shall be
promptly returned to such employee by the Company after termination of the right to which the payment relates. 

        6.    Term of Rights.    

        The
total period from an Offering Date to the last date on which rights granted on that Offering Date are exercisable (the "Offering
Period") shall in no event be longer than twenty-seven (27) months or such longer period as may then be consistent with Section 423 of the Code. The Board of
Directors when it authorizes an Offering may designate one or more exercise periods during the Offering Period. Rights granted on an Offering Date shall be exercisable in full on the Offering Date or
in such proportion on the last day of each exercise period as the Board of Directors determines. 

        7.    Shares Subject to the Plan.    

        The
number of shares of Common Stock, par value $0.01, that may be sold pursuant to rights granted under the Plan may not exceed One Million Nine Hundred Thousand (1,900,000) shares (the
"Shares"). Appropriate adjustments in the above figure, in the number of Shares covered by outstanding rights granted hereunder, in the exercise price of the rights and in the maximum number of Shares
which an employee may purchase (pursuant to Section 9 below) shall be made to give effect to any mergers, consolidations, reorganizations, recapitalizations, stock splits, stock dividends or
other relevant changes in the capitalization of the Company occurring after the effective date of the Plan, provided that no fractional Shares shall be subject to a right and each right shall be
adjusted downward to the nearest full Share. Any agreement of merger or consolidation involving the Company will include appropriate provisions for protection of the then existing rights of
participating employees under the Plan. Either authorized and unissued Shares or issued Shares heretofore or hereafter reacquired by the Company may be made subject to rights under the Plan. If for
any reason any right under the Plan terminates in whole or in part, Shares subject to such terminated right may again be subjected to a right under the Plan. 

        8.    Limitations on Grants.    

                (a)  No
employee shall be granted a right hereunder if such employee, immediately after the right is granted, would own stock or rights to purchase stock possessing five
percent (5%) or more of the total combined voting power or value of all classes of stock of the Company, or of any subsidiary, computed in accordance with Section 423(b)(3) of the Code. 

                (b)  No
employee shall be granted a right which permits his right to purchase shares under all employee stock purchase plans of the Company and its subsidiaries to accrue at
a rate which exceeds twenty-five thousand dollars ($25,000) (or such other maximum as may be prescribed from time to time by the Code) of the fair market value of such Shares (determined
at the time such right is granted) for each calendar year in which such right is outstanding at any time in accordance with the provisions of Section 423(b)(8) of the Code. 

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                (c)  No
right granted to any participating employee under an Offering, when aggregated with rights granted under any other Offering still exercisable by the participating
employee, shall cover more shares than may be purchased at an exercise price equal to fifteen percent (15%) of the employee's annual rate of compensation on the date the employee elects to participate
in the Offering or such lesser percentage as the Board of Directors may determine. 

        9.    Limit on Participation.    

        Participation
in an Offering shall be limited to eligible employees who elect to participate in such Offering in the manner, and within the time limitations, established by the Board of
Directors when it authorizes the Offering. 

        10.    Cancellation of Election to Participate.    

        An
employee who has elected to participate in an Offering may cancel such election as to all (but not part) of the unexercised rights granted under such Offering by giving written notice
of such cancellation to the Company before the expiration of any Offering Period. Any amounts paid by the employee for the Shares or withheld for the purchase of Shares from the employee's
compensation through payroll deductions shall be paid to the employee, without interest, unless otherwise determined by the Board of Directors, upon such cancellation. 

        11.    Tax Withholding.    

        Each
participating employee shall pay to the Company or the applicable subsidiary, or make provision satisfactory to the Administrator for payment of, any taxes required by law to be
withheld in respect of the purchase or disposition of Shares no later than the date of the event creating the tax liability. In the discretion of the Board of Directors and subject to applicable law,
such tax obligations may be paid in whole or in part by delivery of Shares to the Company, including Shares purchased under the Plan, valued at fair market value (as determined by the Board of
Directors) on the date of delivery. The Company or the applicable subsidiary may, to the extent permitted by law, deduct any such tax obligations from any payment of any kind otherwise due to the
employee or withhold Shares purchased hereunder, which shall be valued at fair market value (as determined by the Board of Directors) on the date of withholding. 

        12.    Termination of Employment.    

        Upon
the termination of employment for any reason, including the death of the employee, before the date on which any rights granted under the Plan are exercisable, all such rights shall
immediately terminate and amounts paid by the employee for the Shares or withheld for the purchase of Shares from the employee's compensation through payroll deductions shall be paid to the employee
or to the employee's estate, without interest unless otherwise determined by the Board of Directors. 

        13.    Participants' Rights as Shareholders and Employees.    

                (a)  No
participating employee shall have any rights as a shareholder in the Shares covered by a right granted hereunder until such right has been exercised, full payment
has been made for the corresponding Shares and the Share certificate is actually issued. 

                (b)  Each
participating employee is an employee-at-will (that is to say that either the employee or the Company or any subsidiary may terminate the
employment relationship at any time for any reason or no reason at all) unless and only to the extent provided in a written employment agreement for a specified term executed by the chief executive
officer of the Company or his duly authorized designee or the authorized signatory of any subsidiary. Neither the adoption, maintenance, nor operation of the Plan nor any grant of rights hereunder
shall confer upon any employee any right with respect to the continuance of his/her employment with the Company or any subsidiary nor shall they interfere with the rights of the Company or subsidiary
to terminate any employee at any time or 

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otherwise change the terms of employment, including, without limitation, the right to promote, demote or otherwise re-assign any employee from one position to another within the Company
or any subsidiary. 

        14.    Rights Not Transferable.    

        Rights
under the Plan are not assignable or transferable by a participating employee and are exercisable only by the employee. 

        15.    Amendments to or Discontinuation of the Plan.    

        The
Board of Directors shall have the right to amend, modify or terminate the Plan at any time without notice, provided, however, that the then existing rights of all participating
employees shall not be adversely affected thereby, and provided further that, subject to the provisions of Section 7 above, no such amendment to the Plan shall, without the approval of the
shareholders of the Company, increase the total number of Shares which may be offered under the Plan. 

        16.    Effective Date and Approvals.    

        The
Plan was initially adopted by the Board of Directors as the "1993 Employee Stock Purchase Plan" and became effective on May 13, 1993. The Plan was initially approved by the
shareholders of the Company on June 25, 1993. The Plan was amended and restated and renamed the "2002 Employee Stock Purchase Plan" by the Board of Directors on February 14, 2002. 

        Any
Offering Periods commencing hereunder prior to February 14, 2002 shall be governed by the terms and conditions of the Plan in effect immediately prior to such date, except for
Section 7 hereof, which shall govern such Offering Period in the amended form set forth herein. 

        The
Company's obligation to offer, sell and deliver the Shares under the Plan is subject to (i) the approval of any governmental authority required in connection with the
authorized issuance or sale of the Shares, (ii) satisfaction of the listing requirements of any national securities exchange on which the Shares are then listed and (iii) compliance, in
the opinion of the Company's counsel with, all applicable federal and state securities and other laws. 

        17.    Term of Plan.    

        No
rights shall be granted under the Plan after February 1, 2012. 

        18.    Administration of the Plan.    

        The
Board of Directors or any committee or person(s) to whom it delegates its authority (the "Administrator") shall administer, interpret and apply all provisions of the Plan as it deems
necessary to meet special circumstances not anticipated or covered expressly by the Plan. Nothing contained in this Section shall be deemed to authorize the Administrator to alter or administer the
provisions of the Plan in a manner inconsistent with the provisions of Section 423 of the Code. Determinations made by the Board of Directors with respect to any provision of the Plan or matter
arising in connection therewith shall be final, conclusive and binding upon the Company and upon all participants, their heirs or legal representatives. 

        19.    Governing Law.    

        Subject
to overriding federal law, the Plan shall be governed by and interpreted consistently with the laws of the Commonwealth of Massachusetts. 

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GENZYME TRANSGENICS CORPORATION 2002 Employee Stock Purchase PlanEXHIBIT
10.72

 

Comprehensive
Credit-Extension Agreement

No.(2001)YBCBC(105-2001-006)

 

Creditor:    Beijing
City Commercial Bank, Yuhaiyuan Road Branch (hereinafter referred to Party A)

Address: No.59, Fuxing
RD, Haidian District, Beijing 100036

Legal Representative:
Wang Jianliang

Tel.: 6821 4551

Fax: 6828 6861

 

Credit Receiver: 
UTSTARCOM (CHINA) LTD. (hereinafter referred to Party B)

Address: 11/F CNC
Manhattam Bldg, Dongcheng District, Beijing 100027

Legal
Representative: Lu Hongliang

Tel.: 65542030

Fax: 65542058

 

WHEREAS, In light of “Act
on Commercial Bank of People’s Republic of China”, “Contract Law” and “Interim
Administration on Authorization and Credit Extension of Commercial Bank”,
through equal negotiation under the principle of goodwill and equality, both
parties reach the Agreement as follows and agree it is binding on them both:

 

Chapter One: Maximum Credit Margin and Specific Credit
Margin

 

Article 1: At the duration of the credit extension, Maximum
credit extension margin Party B can apply for is SAY: RMB One Hundred
Million Yuan   (RMB 100,000,000
Yuan)            

 

Article 2: Within maximum credit extension margin, specific
credit margin regarding specific transaction is as such:

RMB:  1. Common loan: SAY RMB Fifty Million Yuan
(RMB 50,000,000Yuan)

            2. Discount of commercial invoice: SAY
RMB Fifty Million Yuan (RMB 50,000,000Yuan)

 

Chapter Two: Term of Credit Extension

 

Article 3: Validity term of maximum credit extension margin is:
from December 20 of 2001 to December 20 of 2002.

 

 

Article
4:  Party A has the right to check up the usage
of the credit extension of this contract periodically. Party A has the right to
change the term of the credit extension provided that the issues set forth in
Chapter six occurred.

 

Chapter
Three: Usage of Maximum Credit Margin and Specific Credit Margin

 

Article
5: The credit
capital herein can only be used for the current capital loan and discount of
commercial notes.

 

Article 6: During the term of credit extension
agreed on in the Agreement and within the maximum credit margin, Party A may
apply to Party B for usage of specific credit extension on one lump sum or by
items on different occasions. In the event Party A think the application
complies with this contract by examination and its own determination, Party A
shall go through the relevant formalities with Party A.

 

Article 7: In the event Party B applies to Party A for loan,
Parties shall not otherwise sign the loan contract, the amount, term, interest
rate, species and usage of loan shall be accorded to the loan receipt.

         In the event Party B applies to Party A for other specific
credit margin other than set forth in article 2, Parties shall otherwise sign
the specific contract/agreement under the relevant credit extension (the
relevant credit extension hereinafter referred to as: “Other Specific
Transaction”; the specific contract/agreement hereinafter referred to as
“Specific Transaction Contract”).

         Any Specific Transaction Contract or loan receipt concluded
between Party A and Party B under every specific transaction is made a part of
and subject to this Agreement, together form a single integrated Agreement.

 

Article
8: Summation of
credit margin (that is the outstanding capital sum of debt) already used by
Party B shall not exceed the maximum credit margin. During the term of credit
extension, Party B may re-apply for the usage of the specific credit margin
under which the debt is paid up. The unused specific credit margin within the
term of credit extension shall be automatically cancelled on expiration of the
term of credit extension.

 

Article
9: Party B must
apply for using the credit margin within the term of credit extension. The
commencement of every credit margin shall not exceed the expiration date of the
term of credit extension, such expiration date includes such day of the changed
term of credit extension.

 

 

 

Article 10: The Specific Transaction Contract or loan receipt
shall prevail if this contract conflicts with the Specific Transaction Contract
or loan receipt concluded by Party A and Party B.

 

Article 11:  The interest rate, expenses charged by Party A in
the business of bank accepted draft, comfort letter or letter of guarantee and
international trade financing etc., the discount rate, and the interest rate
and foreign exchange rate needed in the secured loan of import and export are
determined as follows by Party A and Party B:

 1 The interest rate of current capital loan
is base rate (4.875‰ per year, 4.65‰ per half a year)

 2. The discount rate of notes is 3.5‰.

 

Article
12: Within the term
of this contract, in the event the central bank adjusts the interest rate,
expense rate and the criteria of commission charge in the relevant businesses,
Party A and Party B shall re-determine the new rate and criteria of this
contract through negotiation.

 

 Chapter Four: Party
A’s Commitment

 

Article 13: Party A shall approve Party B’s application and
execute in due course pursuant to the Specific Transaction Contract or loan
receipt on the ground that Party B’s application for usage of credit margin complies
with this contract.

 

Article 14: Party A shall not take the liberty to adjust maximum
credit margin and term of credit extension to the extent of being unfavorable
to Party B, unless otherwise set forth in chapter six of this contract.

 

Chapter Five: Party B’s Commitment

 

Article 15: Party B shall use the capital in conformity with
law, Specific Transaction Contract or loan receipt and subject to Party A’s
examination at any time.

 

Article 16: During the term of credit extension, Party B
promises to duly provide Party A true financial statements, all of its banks of
deposit, accounts, balance held on deposits and credits and other related
financial materials.

 

Article
17: Party B shall
notify Party A in writing immediately in the event of the occurrence of any
affair threatening Party B’s ordinary operation and repayment obligation under
this contract.

 

Article 18:  Party
B shall give prior notice to Party A in the event that Party B conducts such 

 

 

activities as merger,
division, acquisition, changing company style into company limited by share,
contract, lease, transfer, joint management, investment, applying for the
ceasing operation for consolidation, dissolution and bankruptcy, and other
activities which can affect the credit and debt under this contract or the
equity of Party A, otherwise Party B shall not carry out the above activities
before repaying all of the debt hereunder.

 

Article 19:  During the term of this contract, Party B shall notify Party A within 15 statutory
working days after change or modification in event of change of name, address
or legal representatives.

 

Article
20: Before
repaying all the debt hereunder, Party B shall not tender guarantee for the
Third Party beyond Party B’s liquidity. Party B shall notify Party A in writing
provided that Party B tendered guarantee for the Third Party.

 

Article 21: Party B promise to repay the principal and interests
of the debts due on schedule and pay all the expenses receivable due on
schedule.

 

Article 22: The average balance of each day at the account of
settlement opened at Party A shall not be less than 15% of the summation of
used credit margins.

 

Chapter
Six: Adjustment of Credit Margin

 

Article 23: In the duration of execution of this contract, Party
A has the right to adjust or terminate the credit extension (recall in advance
all the loan and cease making loans) in the event of the following:

1.               The State’s monetary policies undergo a
material change;

2.               There is occurrence or threatening
occurrence of grave financial risks in Party B’s area;

3.               The market relevant to Party B’s
transaction undergoes a material change;

4.               Party B is being or to be exposed to
grave transactional difficulties or risks;

5.               Party B undergoes material system
changes;

6.               The guaranty ability of guarantor in this
contract is substantially insufficient, or the security is lost or its value is
apparently decreased;

7.               Party B uses the fund under credit
extension or loan receipt in the manner contradicting with the provision
concerned;

8.               Party B loses its business credit
standing;

9.               Party B has such acts as property
transfer, flight of capital and debt evasion or other acts infringing Party A’s
interests;

 

 

 

10.         Party B uses the fund in the manner
contradicting with the provision set forth in article 5 ;

11.         Party B breaks the promises set forth in
chapter 5;

12.         The occurrence of any other event or
situation has already caused or has the possibility to cause the deterioration
of

Party B’s ability to pay debts.

 

Chapter Seven: Security

 

Article 24: To ensure the prompt repayment of the debt under
this Agreement, the following means of security are adopted:

1. Surety: UTStarcom
(Hangzhou) Communication Co., Ltd.; which signed the Maximum Margin Guarantee
Contract with the contract no. as (2001)YBCBC(105-2001-006) “CEB Chao Max
Surety”.

 

Chapter Eight: Responsibility of breach

 

Article 25: After going into effect of this contract, Party A
and Party B shall execute the responsibilities under this contract, Specific
Transaction Contract or loan receipt. In the event any party does not execute
such responsibilities, such party shall undertake the relevant responsibilities
of breach and compensate the counter party all the losses caused by the breach.

 

Article
26: Party A has
the right to announce the mature of this contract, Specific Transaction
Contract or loan receipt in advance, and recall in advance any financing fund
under comprehensive credit margin in the event of Party B’s breach. Party B
shall pay all the losses caused by Party B’s breach to Party A.

 

Article 27: In the event
Party B does not refund the principals of loan and other credit capitals in the
term set forth in the loan receipt under this contract or Specific Transaction
Contract, Party A shall charge the punitive interest at the rate of 0.21‰ per day pursuant to the delayed
amount and time. In the event Party B does not use the loan and other credit
capitals as set forth, Party A shall charge the punitive interest at the rate
of 0.5‰ per day
pursuant to used amount and time.

 

Article 28: Party A has the
right to receive the compound interests for unpaid interests from Party B.

 

Article 29: Party A has the
right to deduct receivable principle of loan, interests, punitive interests 

 

 

for delayed payment, compound interests and other expensive
receivable from Party B.

 

Chapter Nine: Force Majeure

 

Article 30: In the event any force majeure causes Party B fails
to execute the contract, Party B shall notify Party A within 3 legal working
day after the incurrence of the force majeure and provide the written proof
about such occurrence of force majeure issued by the local notarial department.

 

 

Chapter Ten: Settlement of Disputes

 

Article 31: Both Parties shall settle through friendly
negotiation any disputes arising out of or relating with the performance of
this Agreement. If negotiation fails, the jurisdiction of Party A shall
prevail.

 

Chapter Eleven: Effect, Change and Dissolution of the
Contract

 

Article
32: The contract
comes into force at the date both parties’ legal representative or main principals,
or the entrusted agents sign it and seal it by company chop.

 

Article
33: After the
effectiveness of this contract, any party shall not presume on change or
termination in advance of this contract. Parties shall make a consensus about
any change or termination and reach an written agreement.

 

Chapter Twelve: Appendix

 

Article 34: The appendix of this contract is: Nill

 

Article
35: The appendix
is an indiscerptible parts of this contract and has the same effectiveness with
the originals.

 

Chapter Thirteen: Miscellaneous

 

Article 36: Any notice given or made by telex and facsimile
shall be deemed to have been received at the date of transmission; if sent by
mail, shall be deemed to have received within 3 days after the date of mailing.

 

Article
37: Other issues
stipulated by parties: Nill

 

Article
38: Any term and
conditions which are not stipulated in this Agreement can be otherwise set
forth in writing.

 

 

Article 39:  This Agreement has three originals with same effectiveness and Party A,
Party B and the guarantor respectively holds one.

 

Article 40: This Agreement is signed in
Beijing as of February 20, 2002.

 

 

 

 

	
  Party A(stamp)

  	
   

  	
  Party B(Stamp)

  
	
  Legal representative:

  	
   

  	
  Legal representative:

  
	
  (or entrusted agent):

  	
   

  	
  (or entrusted agent):

  

 

Translation Certification

 

I hereby certify that the
foregoing represents a fair and accurate English translation of the original
Chinese document.

 

Dated:  April 29, 2002

 

	
   

  	
  By:

  	
  /s/ Michael J. Sophie

  
	
   

  	
   

  	
  Michael J. Sophie

  
	
   

  	
   

  	
  Chief Financial Officer

  

 

 

 

 

 

 

 

Beijing
City Commercial Banking Co., Ltd.

 

Maximum Amount Guaranty Contract

 

Serial number: (2001) bei
shang yin gao bao zi

No. (105-2001-006)

 

Guarantor:
UTStarcom (Hangzhou) Telecommunication Co., Ltd. (hereinafter referred to as
Party A)

Domicile: Building 2 and 3,
Yile Industrial Park, No. 129 Wenyi Road, Hangzhou, Zhejiang Province

Postcode: 310012

Legal Representative:
Wuying

Tel: 0571-88856112  88862342

Fax: 0571-88855203

Account Opening Bank:
Zhejiang Province Branch of Bank of China

Account Number: 4518252011617

 

Creditor:  Beijing City Commercial Banking Co., Ltd.,
Yuhaiyuan Road Branch (hereinafter referred to as Party B)

Domicile: 59 Yi Fuxing
Road, Haidian District, Beijing

Postcode: 100036

Legal
Representative/Person in Charge: Wang Jianliang

Tel: 68214551

Fax: 68286861

 

Party A voluntarily
provides security guaranty for all creditor’s right under the Comprehensive
credit granting Contract (hereinafter referred to as the principal contract)
which is numbered as (2001) Bei shang yin ZHONG SHOU zi No. (105-2001-006)
signed by UTStarcom (China) Co., Ltd. (hereinafter referred to as debtor) and
Party B of this Contract.

 

Party B agreed to accept
the security provided by Party A after examination. This contract is drawn up
in order to make clear the rights and obligations of both parties in accordance
with relevant laws and rules of the state.

 

 

 

 

Chapter 1    Type and
Amount of the Principal

 Creditor’s Right to
be guaranteed

 

Article 1        The
type and amount of the principal creditor’s right guaranteed by Party A are the
type and amount of the principal creditor’s right under the principal contract,
and the maximum amount of the principal creditor’s right to be guaranteed is
the maximum credit granting amount agreed in the principal contract, that is
ONE HUNDRED MILLON RMB(writing in large form), 100,000,000 RMB(writing in small
form); foreign currency              

(writing in large form),             
 (writing in small form).

 

 

Chapter 2    Time
Limit for debt performed by debtor

 

Article 2        The
time limit for debt performed by debtor shall comply with what’s agreed in each
specific business contract or bill of debt under principal contract.

 

 

Chapter 3    Guaranty
Form

 

Article 3    The guaranty form of this contract is a
joint liability guaranty.

 

 

Chapter 4    Scope of security guaranty

 

Article 4      The
scope of security guaranty includes principal creditor’s right, interest,
overdue penalty interest, compound interest, contractual fine, payment for
damages, fees to realize creditor’s right (including but not limited to court
costs, attorney fees and business trip cost) and all other necessary fees which
are agreed in Article 1 under this contract.

 

 

Chapter 5    Duration
of Guaranty

 

Article 5         The duration of guaranty for Party A to bear guaranty
liability is 2 years, that is, within 2 years as of the expiration of expiry
date for debt agreed in each specific business contract or bill of debt. The
duration of guaranty of each specific business is calculated separately.

If the debt is
expirated in advance of time according to the principal 

 

 

 

 

contract or
specific business contract, the advanced expiry date is regarded as the expiry
date of debt.

 

Chapter 6    Rights
and Obligations of Both Parties

 

Article 6 Rights
and Obligations of Both Parties:

6.1           Party A shall guarantee that it is a lawful Chinese
legal person or other organization according to laws of People’s Republic of
China and has the necessary capacity of civil rights and capacity of civil
disposition to sign and perform this contract;

6.2           Party A shall know and agree all articles of the
principal contract, voluntarily provides guaranty for Party B and all proposals
in this contract are truthful.

6.3           In case there is the third party providing another
guaranty, all guarantors shall be jointly and severally liable for the debt.
Party B may require any one of the guarantors to bear relevant security
liabilities.

6.4           Should the debtor pay all debts under the principal
contract and relevant specific business contract or bill of debt on schedule,
then Party A may not bear the security liabilities under this contract any
more.

6.5           If principal creditor’s right amount guaranteed by
Party A is not increased, the modification of the principal contract by debtor
and Party B through agreement needs not obtain Party A’s consent and Party A
shall not be exempted from joint and several liability for the amendment.

6.6           During the performance of this contract, if the
People’s Bank of China adjusts loan interest rates, it shall be performed
according to the regulations of the People’s Bank of China, which shall not be
regarded as the modification of the principal contract and this contract. Party
B is not required to notice Party A and Party A shall continue to bear the
security liability.

6.7           Party A shall ensure that its credit information,
financial report and other materials, documents are truthful, legal and valid;

6.8           In case the debtor fails to pay debt according to
what’s agreed in specific business contract or bill of debt, Party B may ask
Party A to bear security liability and Party A shall pay Party B on the date of
receiving Party B’s written notice without delay.

6.9           When performing its security liability, Party A shall
pay to Party B according to the following sequence except as otherwise agreed
upon in this contract: (1) fees to realize the creditor’s right; (2) payment
for damages; (3) contractual fines; (4) compound interest of principal
creditor’s right; (5) overdue interest penalty for principal creditor’s right;
(6) interest of principal creditor’s right; (7) the principal of principal
creditor’s right.

 

 

6.10     Should Party A fails to perform the security liability
agreed in Article 6.8 of this contract, Party B may deduct directly from any
accounts opened by Party B or exercise right of disposition of Party A’s
property or property right lawfully possessed and managed by Party B to off the
debtor’s right guaranteed by Party A.

6.11       During the period of validity of principal contract,
Party A shall take measures actively to realize its security liability and
inform Party B within 3 statutory working days if it is under any of the
following circumstances:

(1)         Litigation, arbitration involving Party
A, or other events which may have an effect on its capacity of guaranty;

(2)         Party A modify its name, domicile or
legal representative;

(3)         Merger, division, annexation, stock
system reform, contracting out, leasing, capital transfer, economic
association, investment, application for closing down for rectification,
application for dissolution, application for bankruptcy or other changes occurs
to Party A.

6.12        Should Party B and the debtor sign specific credit
granting contract or bill of debt under the specific credit business of
principal contract, it is not necessary to inform Party A.

6.13        Party B has the right to investigate and check Party
A’s business and property situation and Party A shall coordinate actively and
provide relevant materials to Party B without delay.

 

 

Chapter 7   Liability
for Breach of Contract

 

Article 7         Both parties shall perform the obligations prescribed
by this contract after the effectiveness of it. Should either party fails to
perform or partially perform the obligations prescribed by this contract, that
party shall bear relevant liabilities for breach of contract and compensate for
losses therefor.

 

 

Chapter 8    Force
Majeure

 

Article 8      Should
Party A be prevented from executing its obligations by force majeure, Party A
shall notify Party B within 3 statutory working days from the occurrence date
of force majeure and thereafter provide a written document for evidence about
the occurrence of force majeure issued by the local public notary organization.

 

 

Chapter 9   
Settlement of Dispute

 

Article 9      Any
disputes arising from the execution of the contract, the contract shall be
settled through consultations between both parties. In case no settlement can
be reached through consultations, the parties may seek recourse to the law
court of the district of Party B’s domicile.

 

 

Chapter 10   Validity,
Alteration and dissolution of the Contract

 

Article 10          This contract shall go into effect upon signature and
official seal by legal representatives/ persons in charge or entrusted agents
of both parties.

Article 11          This contract is separate from the principal contract
and does not become invalid because of the invalidity of the principal
contract.

Article 12          Neither party shall alter or dissolve this contract
ahead of time arbitrarily. When any alteration or dissolution is necessary, a
written agreement shall be reached through consultations between both parties.

 

 

Chapter 11    Appendix

 

Article 13  The appendix of this contract includes none.

Article 14  The appendix of this contract is an
inseparable part of this contract and are equally valid as the main body of the
contract.

 

 

Chapter 12    Supplementary
Provisions

 

Article 15          Notices agreed in this contract shall be made in the
form of telegram, fax and once they are sent out it is regarded as delivered;
where the notice is made in a letter, it is regarded as delivered within 3 days
from the date of mailing.

Article 16          other matters agreed by both parties: none

Article 17          “The
specific business contracts” called in this contract refer to the contract or
agreement signed separately by debtor and Party B on each specific credit
granting business during credit granting period.

Article 18          As to the uncovered matters of this contract, both
parties may agreed upon separately and reach written agreements.

 

 

Article 19          The original of this contract has three copies. Party
A, Party B and debtor holds one respectively and they are equally valid.

Article 20          The contract is signed in Hangzhou, Zhejiang Province
by both parties on 20 February 2002.

 

 

 

	
  For Party A:

  	
   

  	
   

  
	
  Legal Representative:

  	
   

  	
  (seal)

  
	
  (or Entrusted Agent)

  	
   

  	
  (signature)

  
	
   

  	
   

  	
   

  
	
  For Party B:

  	
   

  	
   

  
	
  Legal Representative:

  	
   

  	
  (seal)

  
	
  (or Entrusted Agent)

  	
   

  	
  (signature)

  

 

 

 

Translation
Certification

 

I hereby certify that the
foregoing represents a fair and accurate English translation of the original
Chinese document.

 

Dated:  April 29, 2002

 

	
   

  	
  By:

  	
  /s/ Michael J. Sophie

  
	
   

  	
   

  	
  Michael J. Sophie

  
	
   

  	
   

  	
  Chief Financial Officer

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