Unassociated Document

Dear customer, in order to protect your right, please read the terms in detail (especially bolding caption) and acknowledge your right and obligation before you sign the contract.

Whereas, the Guarantor is willing to provide a guarantee of maximum amount for the Lender’s rights under a series of business contracts (hereinafter referred to as master contract) concluded by and between the Lender and Changxing Chisen Electric Co., Ltd. (hereinafter referred to as Borrower) in accordance with Article 1 of this Contract. In accordance with relevant national laws and regulations, all parties hereby conclude as follows through amicable negotiation:

1.	The Guarantor is willing to provide guarantee for the following Lender’s rights by and between the Lender and the Borrower, amounting to RMB 110,000,000.00. Foreign currency is converted according to the selling price on the date of the occurrence of the business under Item 1 of Article 1 herein.

(1)	The Lender will, from August 27, 2010 to August 26, 2012, transact Lender’s rights formed from agreed business together with the Borrower. The said period is the definite period of guaranteed Lender’s rights of maximum amount. The said business includes: (put “√”before the right answer)

þRMB/foreign currency loan	¨L/C for deposit abatement

¨Packing credit for exports	¨Commercial bill discounted

¨Commercial bill discounted	¨Inward documentary Bill

¨Bank Guarantee	þCommercial draft acceptance

¨Outward documentary Bill

¨Other business:_________________________________

(2)

The principal and interests of the following unpaid Lender’s rights under master contract between the Lender and the Borrower and relevant interest, penalty interest, compound interest and expenses. The relevant interest, penalty interest, compound interest and expenses will be counted according to master contract until the date of actual payment:

2.	Category, amount, interest rate and term of each business guaranteed by this Contract are subject to relevant legal instrument or voucher.

3.	Within the period and maximum amount under the Contract, the Lender needs not to carry out guarantee procedures one by one at the time of issuing the loan under the Contract or providing other bank credit.

4.	Currency is not limited in respect of the business occurred within the period and maximum amount under the Contract, and the Guarantor undertakes guarantee liabilities by the original currency.

The scope of guarantee includes all the expenses accrued to the Lender for realizing Lender’s rights, including principal and interests of principal Lender's rights, penalty interest, compound interest, penalty, liquidated damages, litigation (arbitration) fee and attorney fees.

The Guarantor is willing to undertake guarantee liabilities for the part exceeding the maximum amount due to the change of rate of exchange.

The guarantee herein is joint and several, namely, the guarantors under the Contract undertake joint and several liabilities for the Lender jointly.

2.	The period of guarantee of commercial draft acceptance, L/C for deposit abatement and bank guarantee is two years from the date of the Lender advances.

4.	If the Lender and the Borrower conclude a renewal agreement for the period of repaying debts under master contract, the Guarantor will continue to undertake the guarantee liabilities and the period of guarantee is two years from the expiration of the said renewal agreement.

In case the occurrence of events under laws or master contract results in the acceleration of maturity of Lender’s rights under master contract by the Lender, the period of guarantee is two years as of the date when the Lender confirms the acceleration of maturity of Lender’s rights under master contract.

1.	Having obtained the authorization for the guarantee under this Contract in accordance with relevant provisions and procedures.

2.	Having provided the Lender with true, complete and valid financial statements, articles of incorporation or other relevant data and information, and having accepted the Lender’s supervision and inspection against its production operations and financial status.

3.	The Guarantor is willing to fulfill guarantee liabilities in the event that the Borrower fails to repay debts as stipulated in master contract.

4.	In case the Guarantor fails to fulfill guarantee liabilities as stipulated in the Contract, the Lender has the right to deduct directly relevant amounts from the account that the Guarantor opens in the Lender’s bank.

(2)	The Guarantor changes it subordinate relationship, senior personnel, articles of incorporation or organizational structure;

(3)	The financial status or production operations of the Guarantor is in trouble, or having material lawsuit or arbitration to the Guarantor;

(4)	The Guarantor shuts down, goes out of business, suspends business for rectification, or files for bankruptcy or reorganization, etc.;

(5)	The business license of the Guarantor is cancelled or revoked, or it is ordered to close down, or other grounds for dissolution has occurred; or

6.	In the event of carrying out any of the following actions, the Guarantor shall notify the Lender 15 days in advance and obtain its written consent:

(1)	The Guarantor changes its capital structure or management system, including, but not limited to, contract, lease, shareholding reform, joint-operation, merger, division, joint venture, reduction of capital, transfer of assets, filing for reorganization, reconciliation or bankruptcy; or

(2)	The Guarantor provides guarantee to a third party or creates mortgage or pledge for the debts of it or a third party, which may impact its fulfillment of the guarantee liabilities under the Contract.

In any of the following situations, the Lender’s rights of the guarantee of maximum amount under this Contract are confirmed:

The definite period of Lender’s rights expires. “The definite period of Lender’s rights expires” includes the expiration of the definite period of Lender’s rights under Article 1 hereof, and acceleration of maturity of definite period of the Lender’s rights by the Lender in accordance with relevant national law and regulations or the provisions herein. In case the Borrower violates its obligations under master contract or the Guarantor violates its obligations under the Contract, the Lender has the right to accelerate the maturity of definite period of the Lender’s rights;

In any of the following situations, the Lender has the right to require the Guarantor to fulfill guarantee liabilities. In case the amount paid by the Guarantor is insufficient to pay off the Lender’s rights guaranteed under this Contract, the Lender may apply this amount to repay the principal, interests, penalty interest, compound interest or fees, etc.;

(1)

The Lender is not repaid upon the expiration of the period of repaying debts under master contract. “The period of repaying debts under master contract expires” includes the expiration of the period of repaying debts under master contract, and acceleration of maturity of definite period of the Lender’s rights by the Lender in accordance with relevant national law and regulations or the provisions herein;

(3)	The business license of the Borrower and Guarantor is cancelled or revoked, or they are ordered to close down, or other grounds for dissolution has occurred;

The lender’s right is guaranteed by pledged property and guarantor’s guarantee. Lender can achieve the lender’s right by pledged property or request guarantor to bear the guarantee obligation. For lender who has chosen one of the way to achieve the lender’s right, it can request other way to partially or fully to achieve the lender’s right as well.

If the Borrower provides property as guarantee, the Guarantor, in case of abandonment of such security interest by the Lender, cis-position of the security interest or change of the security interest, agrees to provide joint and several guarantee liabilities for the Lender’s rights under master contract as specified herein. “The security interest” refers to the security interest formed when the Borrower provides material guarantee for the Lender’s rights under master contract.

4.	Guarantor guarantee for the borrower consist of but not limited to the loans pursuing to this contract. If the guarantor’s payment cannot fully cover all liability, the order of settlement is determined by the lender.

According to legal obligation or the terms of this contract, exercise of the set-off right against guarantor; the order of set-off liability is determined by lender. Lender exercises the right of subrogation according to law, the order of repayment or set-off from sub-class borrower for the liability is determined by lender.

1.	In case the Lender fails to fulfill its obligations agreed results in loss to the Guarantor after the effectiveness of the Contract, it shall bear relevant liabilities for damages.

2.	In any of the following actions taken by the Guarantor, it shall pay penalty to the Lender according to 1 % of the maximum amount of the Lender’s rights guaranteed by the Contract; in case of any loss to the Lender by the Guarantor, the latter shall compensate fully at the same time:

(2)

Failing to provide true, complete and valid financial statements, articles of incorporation or other relevant data and information;

(4)

Having not obtained the Lender’s consent in advance prior to the implementation of the acts described in Item 6 of Article 5 of this Contract; or

Lender exercise set-off right or right of relief according to legal regulation; guarantor got 7 days of objection period, from the day borrower notify guarantor by written, verbal or other forms.

In the event of any dispute arising out during the performance of this Contract, all parties may solve through negotiation, or settle by the following 1 way:

2.	Arbitration, submitting to (full name of arbitration institution) for arbitration according to its arbitration rules.

1.	The Guarantor shall comprehend the operating status of the Borrower and the occurrence and fulfillment of all business hereunder. The master contract and relevant instrument of vouchers for the occurrence of the business hereunder will not be sent to the Guarantor again.

Article 13 This Contract is in triplicate of equal force, one for the Lender, the Guarantor and the Borrower respectively.

The Lender has called the attention (especially in bold letter) of the Guarantor to understanding fully and correctly all provisions herein and, at the request of the Guarantor, has made corresponding explanations for the provisions herein. The parties hereto agree on the meanings of this Contract.

Name of contract	No. of contract	Unpaid principal and interests	Currency
Refer to note