Document:

No. ZB5202201100000010

 

SHANGHAI PUDONG DEVELOPMENT BANK

 

Contract of Guarantee of Maximum Amount

  

 

  

 

Contract of Guarantee of Maximum Amount

 

Guarantor: Zhejiang Chisen Glass Co., Ltd.

 

Lender: Shanghai Pudong Development Bank Huzhou Sub-branch

 

Whereas:

 

In order to ensure that the Borrower would fulfill all of its lender’s rights under the master contract (refer to Article 7 herein) in time and guarantees the realization of lender’s rights by the Lender, the Guarantor is willing to undertake guarantee liabilities against all debts of the Borrower under the master contract.

 

In order to clarify the respective rights and lender’s rights of both parties, through negotiation, the Guarantor and the Borrower hereby conclude this Contract and promise to abide by it.

 

Article 1   Guaranteed Principal Lender’s rights

 

The principal lender’s rights guaranteed under this Contract are shown in Article 7 herein.

 

Article 2  Liabilities of Guarantee

 

	
1.

	
Scope of guarantee

 

In addition to the principal lender’s rights, the guarantee herein also applies to the interest thereon (including interest, penalty interest and compound interest), penalty, liquidated damages, handling charges as well as other expenses arising on the execution or performance of this Contract, the expenses accrued to the Lender for realizing guarantee rights and lender’s rights (including but not limited to disposing expenses, taxes, legal costs, auction expenses, attorney fee and travel expenses), and the guarantee money that fails to be supplemented as required by the Lender after the master contract enters into effect.

 

	
2.

	
Method of guarantee

 

The guarantee herein is joint and several.

 

The Guarantor acknowledges that where the Borrower fails to perform its debt under the master contract, no matter whether the Lender owns any other guarantee (including but not limited to guarantee, mortgage and pledge) against the lender’s rights under the master contract, the Lender is entitled to require the Guarantor to undertake its guarantee liability within the said scope of guarantee, with no lender’s right to require any other guarantor to perform their guarantee liabilities first.

 

The Guarantor hereby waives the defense of first enforcing the security for things provided by the Borrower.

 

	
3.

	
Period of guarantee

 

The period of guarantee shall be calculated separately for each lender’s rights of the Lender against the Borrower. The period of guarantee for each lender’s right shall be from the date of expiration of each lender’s rights till two years after the date of expiration of the lender’s right.

 

The Guarantor shall bear guarantee liability respectively for repayment lender’s rights in installments under each contract during period of occurrence of the lender’s rights. The period of guarantee for each lender’s right shall be from the date of expiration of each debt till two years after the date of expiration of the last installment.

 

“Due” and “expiration” under this Contract includes the circumstance under which the Lender announces mature ahead of time.

  

 

  

 

Where the principal lender’s rights announced mature ahead of time are all or partial lender’s rights during the period of occurrence of lender’s rights, the date of maturity announced shall be the date of maturity of the said all or partial lender’s rights and the period of occurrence of lender’s rights is mature at the same time.

 

Where the Lender and the Borrower conclude a renewal agreement to prolong the period of debt, the period of guarantee shall remain till two years after the period of debt under the renewal agreement. Renewal need not be consented by the Guarantor, however, the Guarantor shall still undertake joint and several guarantee liabilities.

 

	
4.

	
Amendment of master contract

 

Neither forbearance or delay in repayment granted by the Lender to the Borrower nor any amendment, change or substitution of any terms of the master contract will in any way affect the rights and interests of the Lender under this Contract. Any of the said circumstances will be deemed as having been consented by the Guarantor and the guarantee liability of the Guarantor will not be relieved.

 

Where the Lender issuance letter of credit, bank guarantee or standby letter of credit for the benefit of the Borrower in accordance with the master contract, any amendment to the said letter of credit, bank guarantee or standby letter of credit made by and between the Lender and the Borrower need neither be approved by the Guarantor nor be otherwise informed to the Guarantor. Such amendment will be deemed as having been consented by the Guarantor and the guarantee liability of the Guarantor will not be relieved.

 

Article 3 Statements and Guarantees

 

The Guarantor hereby makes the following statements and guarantees to the Lender:

 

	
(1)

	
The Guarantor is an independent legal entity, has all necessary legal capacities and is able to fulfill lender’s rights and undertake liabilities under this Contract on its own.

 

	
(2)

	
The Guarantor is entitled to execute this Contract and completes all authorization and approvals necessary for executing this Contract and fulfilling its lender’s rights under this Contract. All the terms of this Contract are the authenticity declaration of will of the Guarantor and binding upon the Guarantor.

 

	
(3)

	
The Guarantor promises to comply with laws. The execution and performance of this Contract is neither inconsistent with laws (including laws, regulations, rules, local regulations and judicial interpretation), articles of association, documents of relevant organs, judgments and rulings that the Guarantor must comply with nor in conflict with any contract or agreement executed by the Guarantor or any other lender’s right undertaken by the Guarantor.

 

	
(4)

	
The Guarantor guarantees that all of its financial statements (if any) comply with the laws of the People’s Republic of China (excluding Hong Kong, Macao and Taiwan), are authenticity and complete, and fairly represent the financial status of the Guarantor, and that all information and documents involved in this Contract are authenticity, effective, accurate and complete with no omission.

 

	
(5)

	
The Guarantor promises to complete filing, registration or other procedures necessary for the effectiveness and performance of this Contract and pay relevant taxes and expenses.

 

	
(6)

	
Since the issuance of the latest audited financial statement, no substantial adverse change has happened to the operation status or financial status of the Guarantor.

 

	
(7)

	
The Guarantor has disclosed to the Lender facts and status that the Guarantor knows or should know and are necessary for the Lender to determine whether to grant financing under the master contract.

 

	
(8)

	
On the date of the execution of this Contract and during the performance of this Contract, the Guarantor has not defaulted and will not default any wage, medical or disability allowance, pension or compensation.

 

  

 

  

 

	
(9)

	
The Guarantor suffers from no situation or fact which causes or may cause substantial adverse influence to the ability of the Guarantor to fulfill contract.

 

Article 4 Covenants

 

	
1.

	
Commitment of the Guarantor

 

	
(1)

	
The Guarantor promises that without obtaining the written consent of the Lender, the Guarantor will not engage in any of the following activities:

 

 ̈ Sell, gift, lease, lend, transfer, mortgage or otherwise dispose of all or substantial part of its major assets;

 

 ̈ Make substantial change in its operating system or company structure, including but not limited to contracting, leasing, joint venture, corporate restructuring, joint stock restructuring, equity transfer, consolidation (merger), joint investment (or cooperation), division, establishment of subsidiary, transfer of title and decrease in capital;

 

 ̈ Amend the Articles of Association of the company or change the scope of business or principal business;

 

 ̈ Provide guarantee for any third party, which causes substantial adverse influence to its financial status or ability of fulfilling the lender’s rights under this Contract;

 

 ̈ Apply for reconstruction, bankruptcy or dissolution; or

 

 ̈ Execute any contract/agreement or undertake any lender’s right which is substantially adverse to the ability of the Guarantor in fulfilling the lender’s rights under this Contract.

 

	
(2)

	
The Guarantor promises that when any of the following events occurs, the Guarantor will, on the date of the occurrence, inform the Lender of such event, and within five banking days as of the date of the occurrence, send the original of the said notice (if the Guarantor is a natural person, the notice shall be signed; otherwise, it shall be sealed) to the Lender:

 

 ̈ The occurrence of any event causes any of the statements and warranties of the Guarantor under this Contract to become inveracity or inaccurate;

 

 ̈ The Guarantor or its controlling shareholder, actual controller or connected person is involved in lawsuit or arbitration, or any of their assets are seized, closed down, frozen or enforced compulsorily or suffers from any other measure with equivalent effect, or its legal representative, director, supervisor or officer is involved in lawsuit, arbitration or any other compulsory measure;

 

 ̈ Any change happens to the legal representative or authorized representative, principal, chief financial officer, address, name or office of the Guarantor, or the Guarantor changes its domicile, habitual residence, working unit or name or leaves for another city for a long time or the Guarantor’s income reduces substantially; or

 

 ̈ The Guarantor is revoked by the competent authority or required to restructure or bankrupt by any other lender.

 

	
(3)

	
The Guarantor promises that during the execution and performance of this Contract, the Guarantor will provide relevant financial information or income certificate from time to time upon the requirement of the Lender.

 

	
(4)

	
Where the Lender issues letter of credit, bank guarantee or standby letter of credit for the benefit of the Borrower in accordance with the master contract, the Guarantor promises that when the Borrower fails to supplement (or supplement in advance) the guarantee money in full according to relevant requirements, the Guarantor shall bear joint and several liability to supplement the guarantee money. The supplement of guarantee money by the Guarantor shall not relieve the Guarantor of the guarantee liability of the Guarantor under this Contract. Any losses (including interest losses) occurred to the Guarantor when it supplements the guarantee money shall be borne by the Guarantor itself.

 

	
(5)

	
The Guarantor confirms that before the Borrower pays off all the debts under the master contract to the Lender, the Guarantor may not exercise recourse or any related right against the Borrower.

 

  

 

  

 

	
(6)

	
Where the Borrower repays all or part of its debts in advance or the Borrower only pays debts to the Lender, but such repayment in advance or solely is revoked, the Guarantor shall continue to undertake joint and several liabilities.

 

	
2.

	
Agreement on deduction

 

	
  

	
(1)

	
Where the Guarantor fails to pay any debts due or shall supplement the guarantee money fully, the Lender may directly deduct from any accounts of the Guarantor in Shanghai Pudong Development Bank.

 

	
  

	
(2)

	
Unless otherwise provided by relevant authorities, the money deducted shall be used to repay debts according to the following order of preference: (a) due expenses payable by the Guarantor and the Borrower; (b) interest due; and (c) principal due. Where several lender’s rights are due and unpaid, the order of preference shall be determined by the Lender.

 

	
  

	
(3)

	
Where the currency of money deducted is not the currency of repayment, the Lender is entitled to settle/purchase exchange according to the exchange rate determined by itself. The risks in connection with exchange rate shall be undertaken by the Guarantor.

 

	
3.

	
Certificate of lender’s rights

 

The valid credence of the lender’s rights guaranteed by the Guarantor is the accounting document issued and recorded by the Lender according to its own rules.

 

	
4.

	
Notices and service

 

	
  

	
(1)

	
Any notice under this Contract shall be sent to the address mentioned in the page of signature until and unless such address is changed through written notice. Any notice sent to the said address will be deemed as received on the following date: if by letter, the seventh banking day after delivery; if by hand, the date of receipt; if by fax or email, the date when the fax or email is delivered. However, all notices, requirements or communication sent or delivered to the Lender will be deemed as received when such notices, requirements or communication are received by the Lender. All notices or requirements sent to the Lender by fax or email must be confirmed by delivering the original (if the Guarantor is a natural person, it shall sign the original, otherwise, it shall be sealed) to the Lender by hand or postal.

 

	
  

	
(2)

	
The Guarantor agrees that any summons or notice will be deemed as received as long as they are delivered to the domicile stated in the page of signature herein. No change of such domicile is valid unless the Guarantor informs the Lender in writing in advance.

 

	
5.

	
Effectiveness, amendment and termination

 

	
(1)

	
This Contract enters into effect after being sealed by the Guarantor and the Lender and signed or sealed by the legal representative/principal or authorized representative of both parties (if the Guarantor is a natural person, this Contract shall be only signed by the natural person) and terminates when all the lender’s rights guaranteed under this Contract are settled.

 

	
(2)

	
This Contract is independent of the master contract. Its validity is not affected even if the master contract is invalid or revoked.

 

	
(3)

	
After this Contract enters into effect, no party is allowed to amend or terminate this Contract in advance without the consent of the other party. Both parties may conclude written agreement through negotiation to amend or terminate this Agreement.

 

Article 5 Events of Breach and Disposal

 

	
1.

	
Events of breach

 

Where any of the following circumstances occurs, the Guarantor constitutes breach of this Contract:

 

	
(1)

	
Any statement, acknowledgement or guarantee of the Guarantor under this Contract or any notice, authorization, approval, consent, certificate or any other document made under this Contract or in connection with this Contract is inaccurate or misleading, or confirmed to be inaccurate or misleading, or verified to be invalid or have been revoked;

 

  

 

  

 

	
(2)

	
The Guarantor breaches of any item under Article 4 herein;

 

	
(3)

	
The Guarantor winds up, stops production, is under restructuring, liquidation, receivership or trusteeship, is dissolved or bankrupt, or has its business license revoked or cancelled;

 

	
(4)

	
The Guarantor is dead or declared dead;

 

	
(5)

	
The Guarantor transfers or tries to transfer assets by excuse of change of marital relationship;

 

	
(6)

	
The financial status of the Guarantor worsens, or its operation is in great difficulty, or any event or circumstance adverse to its operation, financial status or repayment ability occurs;

 

	
(7)

	
The Guarantor or its controlling shareholder, actual controller or connected person is involved in major lawsuit or arbitration, or any of their major assets are seized, closed down, frozen or enforced compulsorily or suffers from any other measure with equivalent effect, or its legal representative, director, supervisor or officer is involved in lawsuit, arbitration or any other compulsory measure so that the repayment ability of the Guarantor is affected adversely; or

 

	
(8)

	
The Guarantor breaches of this Contract in any other way so that the normal performance of this Contract is affected, or engages in any other activity damaging the legitimate interest of the Lender.

 

	
2.

	
Disposal

 

Where any above event occurs, the Lender is entitled to declare the maturity of the period of occurrence of principal lender’s right and/or lender’s right, require the Guarantor to undertake guarantee liability or the Borrower to supplement the guarantee money, and ask the Guarantor to pay the penalty (the method for calculating penalty is shown in Article 7 herein). Where the penalty is insufficient to make up the losses of the Lender, the Guarantor shall compensate the total losses suffered by the Lender.

 

Article 6 Other Provisions

 

	
1.

	
Governing law

 

This Contract is governed by the laws of the People’s Republic of China (excluding Hong Kong, Macao and Taiwan).

 

	
2.

	
Settlement of dispute

 

Any dispute in connection with this Contract shall be settled through amicable negotiation. Where negotiation fails, the dispute is subject to the non-exclusive jurisdiction of the people’s court in the place where the domicile of the Lender is. During the period of dispute, both parties shall continue to perform terms not in dispute.

 

	
3.

	
Miscellaneous

 

	
(1)

	
Where there is any inadequacy herein, both parties may negotiate to supplement in Article 7 herein or otherwise conclude written agreement as appendix to this Contract. Any appendix to this Contract (refer to Article 7 of this Contract) is an integral part of this Contract and has the same legal effect with this Contract.

 

	
(2)

	
Unless otherwise stated in this Contract, the terms and expressions under this Contract have the same meaning with those under the master contract.

 

Article 7 Essential Terms

 

	
1.

	
The master contract guaranteed by this Contract [corresponding to the Whereas clause herein]

 

	
(1)

	
The master contract is concluded by the Borrower and the Lender on or a series of contracts from March 31, 2011 to March 31, 2014. The Lender under this Contract is Shanghai Pudong Development Bank Huzhou Sub-branch under the master contract.

 

	
(2)

	
The Borrower under the master contract is Zhejiang Chisen Electric Co., Ltd. whose domicile is Changxing.

 

  

 

  

 

	
2.

	
The principal lender’s rights guaranteed by this Contract [corresponding to Article 1 herein]

 

The principal lender’s rights guaranteed under this Contract are one or more kinds of credit extensions provided by the Lender to the Borrower from March 31, 2011 to March 31, 2014. (“the period of occurrence of lender’s rights), including but not limited to various kinds of loan and contingent liabilities formed due to the provision of bank acceptance, domestic L/C and paying on another’s behalf. The maximum balance of the principal lender’s rights during the period of occurrence of lender’s rights shall be RMB 40,000,000.00 (or equivalent foreign currency). Where the principal lender’s right is expressed in foreign currency, it shall be converted according to the exchange rate determined by the Lender.

 

	
3.

	
Settlement for breach [corresponding to Paragraph 2 of Article 5 herein]

 

Penalty: Equivalent to 1% of the principal lender’s rights.

 

	
4.

	
The appendices to this Contract include: [corresponding to Item 1 of Paragraph 3 of Article 6 herein]

 

	
(1)

	
.

	
(2)

	
.

	
(3)

	
.

	
(4)

	
.

	
(5)

	
.

 

	
5.

	
Other matters agreed upon by both parties [corresponding to Item 1 of Paragraph 3 of Article 6 herein]

 

	  	  
	  	  
	  	  
	  	  

 

	
6.

	
This Contract is in duplicate. The Guarantor and the Lender each hold one copy. Each copy has the same legal effect.

 

(No text below)

  

 

  

 

(This page is for signature with no text)

 

This Contract is signed by the following Guarantor and Lender on March 31, 2011 The Guarantor confirms that upon the signature of this Contract, both parties have discussed all the terms of this Contract, have no doubt about any term of this Contract and have accurately comprehended the legal meaning of rights and lender’s rights of both parties and limitation or exclusion of liability.

   

	
The Guarantor:

	
The Lender:

	
Zhejiang Chisen Glass

	
Special Seal for Corporate Banking of Shanghai

	
Co., Ltd. (seal)

	
Pudong Development Bank Huzhou Sub-branch (seal)

 

Legal or authorized representative (sign or seal) Legal or authorized representative (sign or seal)

(The above applies to legal person)

 

The Guarantor (sign)

 

Type and Number of Valid Identity Certificate

 

	  	  
	
(The above applies to natural person)

 

	
Domicile:

	
Principal Place of Business:

	
Post Code:

	
Post Code:

	
Tel:

	
Tel:

	
Fax:

	
Fax:

	
Email:

	
Email:

	
Contact:

	
Contact:

 

  

 

  

 

Format of Letter of Commitment That the Spouse Agrees to Dispose of Common Properties (this format applies when the Guarantor is a natural person)

 

Appendix:

 

Letter of Commitment on Consent to Enforce Common Properties

 

                                                            No.

 

To Shanghai Pudong Development Bank                       Branch/Sub-branch,

 

                              (I.D. card number:                              ) is the legal spouse of the Guarantor                        . For the purpose of the execution and performance of the Contract of Guarantee of Maximum Amount (No.                        ), I hereby make the following commitment:

 

I’ve fully informed of the execution of the said Contract of Guarantee by     , agree with the execution and performance of the Contract, and agree that when the Guarantor undertakes guarantee liabilities under the Contract, the Lender is entitled to dispose of our common properties.

 

	  	
Promisor:

	  	
Dated:

 

Appendices:

	
  

	
1.

	
Copy of I.D. card

	
  

	
2.

	
Copy of marriage certificateNo. ZB5202201100000013

 

SHANGHAI PUDONG DEVELOPMENT BANK

 

Contract of Guarantee of Maximum Amount

  

 

  

 

Contract of Guarantee of Maximum Amount

 

Guarantor: Zhejiang Changxing Chisen XingGuangYuan Co., Ltd.

 

Lender: Shanghai Pudong Development Bank Huzhou Sub-branch

 

Whereas:

 

In order to ensure that the Borrower would fulfill all of its lender’s rights under the master contract (refer to Article 7 herein) in time and guarantees the realization of lender’s rights by the Lender, the Guarantor is willing to undertake guarantee liabilities against all debts of the Borrower under the master contract.

 

In order to clarify the respective rights and lender’s rights of both parties, through negotiation, the Guarantor and the Borrower hereby conclude this Contract and promise to abide by it.

 

Article 1   Guaranteed Principal Lender’s rights

 

The principal lender’s rights guaranteed under this Contract are shown in Article 7 herein.

 

Article 2   Liabilities of Guarantee

 

	
1.

	
Scope of guarantee

 

In addition to the principal lender’s rights, the guarantee herein also applies to the interest thereon (including interest, penalty interest and compound interest), penalty, liquidated damages, handling charges as well as other expenses arising on the execution or performance of this Contract, the expenses accrued to the Lender for realizing guarantee rights and lender’s rights (including but not limited to disposing expenses, taxes, legal costs, auction expenses, attorney fee and travel expenses), and the guarantee money that fails to be supplemented as required by the Lender after the master contract enters into effect.

 

	
2.

	
Method of guarantee

 

The guarantee herein is joint and several.

 

The Guarantor acknowledges that where the Borrower fails to perform its debt under the master contract, no matter whether the Lender owns any other guarantee (including but not limited to guarantee, mortgage and pledge) against the lender’s rights under the master contract, the Lender is entitled to require the Guarantor to undertake its guarantee liability within the said scope of guarantee, with no lender’s right to require any other guarantor to perform their guarantee liabilities first.

 

The Guarantor hereby waives the defense of first enforcing the security for things provided by the Borrower.

 

	
3.

	
Period of guarantee

 

The period of guarantee shall be calculated separately for each lender’s rights of the Lender against the Borrower. The period of guarantee for each lender’s right shall be from the date of expiration of each lender’s rights till two years after the date of expiration of the lender’s right.

 

The Guarantor shall bear guarantee liability respectively for repayment lender’s rights in installments under each contract during period of occurrence of the lender’s rights. The period of guarantee for each lender’s right shall be from the date of expiration of each debt till two years after the date of expiration of the last installment.

 

“Due” and “expiration” under this Contract includes the circumstance under which the Lender announces mature ahead of time.

  

 

  

 

Where the principal lender’s rights announced mature ahead of time are all or partial lender’s rights during the period of occurrence of lender’s rights, the date of maturity announced shall be the date of maturity of the said all or partial lender’s rights and the period of occurrence of lender’s rights is mature at the same time.

 

Where the Lender and the Borrower conclude a renewal agreement to prolong the period of debt, the period of guarantee shall remain till two years after the period of debt under the renewal agreement. Renewal need not be consented by the Guarantor, however, the Guarantor shall still undertake joint and several guarantee liabilities.

 

	
4.

	
Amendment of master contract

 

Neither forbearance or delay in repayment granted by the Lender to the Borrower nor any amendment, change or substitution of any terms of the master contract will in any way affect the rights and interests of the Lender under this Contract. Any of the said circumstances will be deemed as having been consented by the Guarantor and the guarantee liability of the Guarantor will not be relieved.

 

Where the Lender issuance letter of credit, bank guarantee or standby letter of credit for the benefit of the Borrower in accordance with the master contract, any amendment to the said letter of credit, bank guarantee or standby letter of credit made by and between the Lender and the Borrower need neither be approved by the Guarantor nor be otherwise informed to the Guarantor. Such amendment will be deemed as having been consented by the Guarantor and the guarantee liability of the Guarantor will not be relieved.

 

Article 3   Statements and Guarantees

 

The Guarantor hereby makes the following statements and guarantees to the Lender:

 

	
(1)

	
The Guarantor is an independent legal entity, has all necessary legal capacities and is able to fulfill lender’s rights and undertake liabilities under this Contract on its own.

 

	
(2)

	
The Guarantor is entitled to execute this Contract and completes all authorization and approvals necessary for executing this Contract and fulfilling its lender’s rights under this Contract. All the terms of this Contract are the authenticity declaration of will of the Guarantor and binding upon the Guarantor.

 

	
(3)

	
The Guarantor promises to comply with laws. The execution and performance of this Contract is neither inconsistent with laws (including laws, regulations, rules, local regulations and judicial interpretation), articles of association, documents of relevant organs, judgments and rulings that the Guarantor must comply with nor in conflict with any contract or agreement executed by the Guarantor or any other lender’s right undertaken by the Guarantor.

 

	
(4)

	
The Guarantor guarantees that all of its financial statements (if any) comply with the laws of the People’s Republic of China (excluding Hong Kong, Macao and Taiwan), are authenticity and complete, and fairly represent the financial status of the Guarantor, and that all information and documents involved in this Contract are authenticity, effective, accurate and complete with no omission.

 

	
(5)

	
The Guarantor promises to complete filing, registration or other procedures necessary for the effectiveness and performance of this Contract and pay relevant taxes and expenses.

 

	
(6)

	
Since the issuance of the latest audited financial statement, no substantial adverse change has happened to the operation status or financial status of the Guarantor.

 

	
(7)

	
The Guarantor has disclosed to the Lender facts and status that the Guarantor knows or should know and are necessary for the Lender to determine whether to grant financing under the master contract.

 

	
(8)

	
On the date of the execution of this Contract and during the performance of this Contract, the Guarantor has not defaulted and will not default any wage, medical or disability allowance, pension or compensation.

 

  

 

  

 

	
(9)

	
The Guarantor suffers from no situation or fact which causes or may cause substantial adverse influence to the ability of the Guarantor to fulfill contract.

 

Article 4   Covenants

 

	
1.

	
Commitment of the Guarantor

 

	
(1)

	
The Guarantor promises that without obtaining the written consent of the Lender, the Guarantor will not engage in any of the following activities:

 

o Sell, gift, lease, lend, transfer, mortgage or otherwise dispose of all or substantial part of its major assets;

 

 ̈ Make substantial change in its operating system or company structure, including but not limited to contracting, leasing, joint venture, corporate restructuring, joint stock restructuring, equity transfer, consolidation (merger), joint investment (or cooperation), division, establishment of subsidiary, transfer of title and decrease in capital;

 

 ̈ Amend the Articles of Association of the company or change the scope of business or principal business;

 

 ̈ Provide guarantee for any third party, which causes substantial adverse influence to its financial status or ability of fulfilling the lender’s rights under this Contract;

 

 ̈ Apply for reconstruction, bankruptcy or dissolution; or

 

 ̈ Execute any contract/agreement or undertake any lender’s right which is substantially adverse to the ability of the Guarantor in fulfilling the lender’s rights under this Contract.

 

	
(2)

	
The Guarantor promises that when any of the following events occurs, the Guarantor will, on the date of the occurrence, inform the Lender of such event, and within five banking days as of the date of the occurrence, send the original of the said notice (if the Guarantor is a natural person, the notice shall be signed; otherwise, it shall be sealed) to the Lender:

 

 ̈ The occurrence of any event causes any of the statements and warranties of the Guarantor under this Contract to become inveracity or inaccurate;

 

 ̈ The Guarantor or its controlling shareholder, actual controller or connected person is involved in lawsuit or arbitration, or any of their assets are seized, closed down, frozen or enforced compulsorily or suffers from any other measure with equivalent effect, or its legal representative, director, supervisor or officer is involved in lawsuit, arbitration or any other compulsory measure;

 

 ̈ Any change happens to the legal representative or authorized representative, principal, chief financial officer, address, name or office of the Guarantor, or the Guarantor changes its domicile, habitual residence, working unit or name or leaves for another city for a long time or the Guarantor’s income reduces substantially; or

 

 ̈ The Guarantor is revoked by the competent authority or required to restructure or bankrupt by any other lender.

 

	
(3)

	
The Guarantor promises that during the execution and performance of this Contract, the Guarantor will provide relevant financial information or income certificate from time to time upon the requirement of the Lender.

 

	
(4)

	
Where the Lender issues letter of credit, bank guarantee or standby letter of credit for the benefit of the Borrower in accordance with the master contract, the Guarantor promises that when the Borrower fails to supplement (or supplement in advance) the guarantee money in full according to relevant requirements, the Guarantor shall bear joint and several liability to supplement the guarantee money. The supplement of guarantee money by the Guarantor shall not relieve the Guarantor of the guarantee liability of the Guarantor under this Contract. Any losses (including interest losses) occurred to the Guarantor when it supplements the guarantee money shall be borne by the Guarantor itself.

 

	
(5)

	
The Guarantor confirms that before the Borrower pays off all the debts under the master contract to the Lender, the Guarantor may not exercise recourse or any related right against the Borrower.

 

  

 

  

 

	
(6)

	
Where the Borrower repays all or part of its debts in advance or the Borrower only pays debts to the Lender, but such repayment in advance or solely is revoked, the Guarantor shall continue to undertake joint and several liabilities.

 

	
2.

	
Agreement on deduction

 

	
  

	
(1)

	
Where the Guarantor fails to pay any debts due or shall supplement the guarantee money fully, the Lender may directly deduct from any accounts of the Guarantor in Shanghai Pudong Development Bank.

 

	
  

	
(2)

	
Unless otherwise provided by relevant authorities, the money deducted shall be used to repay debts according to the following order of preference: (a) due expenses payable by the Guarantor and the Borrower; (b) interest due; and (c) principal due. Where several lender’s rights are due and unpaid, the order of preference shall be determined by the Lender.

 

	
  

	
(3)

	
Where the currency of money deducted is not the currency of repayment, the Lender is entitled to settle/purchase exchange according to the exchange rate determined by itself. The risks in connection with exchange rate shall be undertaken by the Guarantor.

 

	
3.

	
Certificate of lender’s rights

 

The valid credence of the lender’s rights guaranteed by the Guarantor is the accounting document issued and recorded by the Lender according to its own rules.

 

	
4.

	
Notices and service

 

	
  

	
(1)

	
Any notice under this Contract shall be sent to the address mentioned in the page of signature until and unless such address is changed through written notice. Any notice sent to the said address will be deemed as received on the following date: if by letter, the seventh banking day after delivery; if by hand, the date of receipt; if by fax or email, the date when the fax or email is delivered. However, all notices, requirements or communication sent or delivered to the Lender will be deemed as received when such notices, requirements or communication are received by the Lender. All notices or requirements sent to the Lender by fax or email must be confirmed by delivering the original (if the Guarantor is a natural person, it shall sign the original, otherwise, it shall be sealed) to the Lender by hand or postal.

 

	
  

	
(2)

	
The Guarantor agrees that any summons or notice will be deemed as received as long as they are delivered to the domicile stated in the page of signature herein. No change of such domicile is valid unless the Guarantor informs the Lender in writing in advance.

 

	
5.

	
Effectiveness, amendment and termination

 

	
(1)

	
This Contract enters into effect after being sealed by the Guarantor and the Lender and signed or sealed by the legal representative/principal or authorized representative of both parties (if the Guarantor is a natural person, this Contract shall be only signed by the natural person) and terminates when all the lender’s rights guaranteed under this Contract are settled.

 

	
(2)

	
This Contract is independent of the master contract. Its validity is not affected even if the master contract is invalid or revoked.

 

	
(3)

	
After this Contract enters into effect, no party is allowed to amend or terminate this Contract in advance without the consent of the other party. Both parties may conclude written agreement through negotiation to amend or terminate this Agreement.

 

Article 5   Events of Breach and Disposal

 

	
1.

	
Events of breach

 

Where any of the following circumstances occurs, the Guarantor constitutes breach of this Contract:

 

	
(1)

	
Any statement, acknowledgement or guarantee of the Guarantor under this Contract or any notice, authorization, approval, consent, certificate or any other document made under this Contract or in connection with this Contract is inaccurate or misleading, or confirmed to be inaccurate or misleading, or verified to be invalid or have been revoked;

 

  

 

  

 

	
(2)

	
The Guarantor breaches of any item under Article 4 herein;

 

	
(3)

	
The Guarantor winds up, stops production, is under restructuring, liquidation, receivership or trusteeship, is dissolved or bankrupt, or has its business license revoked or cancelled;

 

	
(4)

	
The Guarantor is dead or declared dead;

 

	
(5)

	
The Guarantor transfers or tries to transfer assets by excuse of change of marital relationship;

 

	
(6)

	
The financial status of the Guarantor worsens, or its operation is in great difficulty, or any event or circumstance adverse to its operation, financial status or repayment ability occurs;

 

	
(7)

	
The Guarantor or its controlling shareholder, actual controller or connected person is involved in major lawsuit or arbitration, or any of their major assets are seized, closed down, frozen or enforced compulsorily or suffers from any other measure with equivalent effect, or its legal representative, director, supervisor or officer is involved in lawsuit, arbitration or any other compulsory measure so that the repayment ability of the Guarantor is affected adversely; or

 

	
(8)

	
The Guarantor breaches of this Contract in any other way so that the normal performance of this Contract is affected, or engages in any other activity damaging the legitimate interest of the Lender.

 

	
2.

	
Disposal

 

Where any above event occurs, the Lender is entitled to declare the maturity of the period of occurrence of principal lender’s right and/or lender’s right, require the Guarantor to undertake guarantee liability or the Borrower to supplement the guarantee money, and ask the Guarantor to pay the penalty (the method for calculating penalty is shown in Article 7 herein). Where the penalty is insufficient to make up the losses of the Lender, the Guarantor shall compensate the total losses suffered by the Lender.

 

Article 6   Other Provisions

 

	
1.

	
Governing law

 

This Contract is governed by the laws of the People’s Republic of China (excluding Hong Kong, Macao and Taiwan).

 

	
2.

	
Settlement of dispute

 

Any dispute in connection with this Contract shall be settled through amicable negotiation. Where negotiation fails, the dispute is subject to the non-exclusive jurisdiction of the people’s court in the place where the domicile of the Lender is. During the period of dispute, both parties shall continue to perform terms not in dispute.

 

	
3.

	
Miscellaneous

 

	
(1)

	
Where there is any inadequacy herein, both parties may negotiate to supplement in Article 7 herein or otherwise conclude written agreement as appendix to this Contract. Any appendix to this Contract (refer to Article 7 of this Contract) is an integral part of this Contract and has the same legal effect with this Contract.

 

	
(2)

	
Unless otherwise stated in this Contract, the terms and expressions under this Contract have the same meaning with those under the master contract.

 

Article 7   Essential Terms

 

	
1.

	
The master contract guaranteed by this Contract [corresponding to the Whereas clause herein]

 

	
(1)

	
The master contract is  concluded by the Borrower and the Lender on   or a series of contracts from March 31, 2011 to March 31, 2014. The Lender under this Contract is Shanghai Pudong Development Bank Huzhou Sub-branch under the master contract.

 

	
(2)

	
The Borrower under the master contract is Zhejiang Chisen Electric Co., Ltd. whose domicile is Changxing.

 

  

 

  

 

	
2.

	
The principal lender’s rights guaranteed by this Contract [corresponding to Article 1 herein]

 

The principal lender’s rights guaranteed under this Contract are one or more kinds of credit extensions provided by the Lender to the Borrower from March 31, 2011 to March 31, 2014.  (“the period of occurrence of lender’s rights), including but not limited to various kinds of loan and contingent liabilities formed due to the provision of bank acceptance, domestic L/C and paying on another’s behalf. The maximum balance of the principal lender’s rights during the period of occurrence of lender’s rights shall be RMB 40,000,000.00 (or equivalent foreign currency). Where the principal lender’s right is expressed in foreign currency, it shall be converted according to the exchange rate determined by the Lender.

 

	
3.

	
Settlement for breach [corresponding to Paragraph 2 of Article 5 herein]

 

Penalty: Equivalent to 1% of the principal lender’s rights.

 

	
4.

	
The appendices to this Contract include: [corresponding to Item 1 of Paragraph 3 of Article 6 herein]

 

	
(1)

	
.

	 	 
	
(2)

	
.

	 	 
	
(3)

	
.

	 	 
	
(4)

	
.

	 	 
	
(5)

	
.

 

	
5.

	
Other matters agreed upon by both parties [corresponding to Item 1 of Paragraph 3 of Article 6 herein]

 

	  	 
	  	 
	  	 
	  	 

 

	
6.

	
This Contract is in duplicate. The Guarantor and the Lender each hold one copy. Each copy has the same legal effect.

 

(No text below)

  

 

  

 

(This page is for signature with no text)

 

This Contract is signed by the following Guarantor and Lender on March 31,2011 The Guarantor confirms that upon the signature of this Contract, both parties have discussed all the terms of this Contract, have no doubt about any term of this Contract and have accurately comprehended the legal meaning of rights and lender’s rights of both parties and limitation or exclusion of liability.

 

	
The Guarantor:

	
The Lender:

	
Zhejiang Changxing Chisen

	
Special Seal for Corporate Banking of Shanghai

	
Xingguangyuan Co., Ltd. (seal)

	
Pudong Development Bank Huzhou Sub-branch (seal)

 

Legal or authorized representative (sign or seal) Legal or authorized representative (sign or seal)

(The above applies to legal person)

 

The Guarantor (sign)

 

Type and Number of Valid Identity Certificate

 

	  	  
	
(The above applies to natural person)

 

	
Domicile:

	
Principal Place of Business:

	
Post Code:

	
Post Code:

	
Tel:

	
Tel:

	
Fax:

	
Fax:

	
Email:

	
Email:

	
Contact:

	
Contact:

 

  

 

  

 

Format of Letter of Commitment That the Spouse Agrees to Dispose of Common Properties (this format applies when the Guarantor is a natural person)

 

Appendix:

 

Letter of Commitment on Consent to Enforce Common Properties

 

                              No.

 

To Shanghai Pudong Development Bank           Branch/Sub-branch,

 

                    (I.D. card number:                       ) is the legal spouse of the Guarantor                  . For the purpose of the execution and performance of the Contract of Guarantee of Maximum Amount (No.           ), I hereby make the following commitment:

 

I’ve fully informed of the execution of the said Contract of Guarantee by     , agree with the execution and performance of the Contract, and agree that when the Guarantor undertakes guarantee liabilities under the Contract, the Lender is entitled to dispose of our common properties.

	  	
Promisor:

	  	
Dated:

Appendices:

	
  

	
1.

	
Copy of I.D. card

	
  

	
2.

	
Copy of marriage certificate

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