Guaranty Contract of Maximum Amount Pledge signed by and between the Company and Development Bank
dated as of April 11, 2005.
>> Contract number: Shenfa Longgang edi zi NO.20050407001.
>> As guarantor, the Company has pledged all its machineries and equipments to Development Bank to secure
the indebtedness of the Company under Comprehensive Agreement 1 which include the loan principal, interest,
penalty interest, expenses for the Lender to realize its creditor's rights, and maximum secured amount for the loan
principal is RMB150 million. Purchase price of such machineries and equipments is RMB 97.16million while its
current value is RMB79.46 million.
>> During the term of Guaranty Contract, the pledged machineries and equipments shall be kept and maintained
by the Company; If value of such pledged machineries and equipments is reduced, Development Bank is entitled
to request the Company to restore the pledged value or provide additional collateral;
>> Title certificates of the pledged machineries and equipments shall be kept by Development Bank;
>> Without Development Bank's consent, the Company is not entitled to transfer registered pledge collaterals,
but if transfer consideration is less than the pledge value, Development Bank is entitled to request the Company
to provide additional collateral for the difference; otherwise the Company should not transfer the pledged
>> Proceeds for transfer of pledged collaterals shall be used in priority for advanced repayment of the debts
secured or be handed over to the escrow control of a third party agreed by Development Bank.
>> The Company should purchase insurance for the pledged collateral during the term of Guaranty Contract 3;
(Insurance has been purchased as required) >> Collaterals under this Contract should be registered with
competent authorities ;( Registration has been done.) >> Development Bank is entitled to dispose the pledge
collaterals by sale at a discounted price or aucti