Measures for the Administration of the Registration of Debt-for-equity Swaps of Companies

(Promulgated by the State Administration for Industry and Commerce on November 23 2011 and effective as of January 1 2012.)

Order of the SAIC No.57

Article 1: These Measures have been formulated pursuant to laws and administrative regulations such as the Company Law and the Regulations for the Administration of Company Registration in order to regulate the administration of the registration of debt-for-equity swaps of companies.

Article 2: For the purposes of these Measures, the term “debt-for-equity swap” means the act whereby a creditor converts a lawful claim that it has against a limited liability company or a company limited by shares established in China (a Company) into equity of such Company thereby increasing the registered capital of such Company.

Article 3: These Measures shall govern the administration of the registration of a debt-for-equity swap if:

(1) in the course of the operation of the Company, the contract debt arising between a creditor and the Company is transformed into equity in the Company, the creditor has performed the contractual obligations corresponding to the claim and the same does not violate laws, administrative regulations, State Council decisions or prohibitory provisions of the Company's articles of association;

(2) a claim confirmed in an effective ruling or judgment of a people's court is converted into equity of the Company; or

(3) during the bankruptcy and restructuring of the Company or during conciliation efforts, the claim included in the restructuring plan approved by the people's court or the settlement agreement approved in a ruling of the people's court is converted into equity of the Company.

Article 4: If there are two or more creditors of a claim that is to be converted into equity, the creditors shall have divided the claim.

Article 5: If laws, administrative regulations or a State Council decision specifies that a debt-for-equity swap is subject to approval, such approval shall be secured in accordance with the law.

Article 6: The total of the valuation of a capital contribution made in the form of a debt-for-equity swap and the valuations of other capital contributions made in the form of non-monetary property may not be greater than 70% of the Company's registered capital.

Article 7: A claim that is to be converted into equity shall be appraised by a lawfully-established asset appraisal institution.

The valuation of a capital contribution to be made in the form of a debt-for-equity swap may not be greater than the appraised value of the claim.

Article 8: A debt-for-equity swap shall be subject to a capital verification by a lawfully-established capital verification institution, which shall issue a capital verification certificate therefor.

A capital verification certificate shall include the following information:

(1) the basic particulars of the claim, including the date on which the claim arose and the reason therefor, the names of the parties to the contract, the subject matter of the contract and details of the performance of the obligations corresponding to the claim;

(2) the details of the appraisal of the claim, including the name of the appraisal institution, the number of the appraisal report, the appraisal reference date and the appraised value;

(3) the details of the completion of the debt-for-equity swap, including the executed debt-for-equity swap agreement, the creditor's discharging of the Company from the corresponding debt and the Company's relevant accounting treatment; and

(4) if, in accordance with the law, the debt-for-equity swap is subject to approval, details of the approval.

Article 9: When a debt-for-equity swap is effected, the Company shall apply to the company registry in accordance with the law to carry out the procedures for the change of registration of registered capital and paid-in capital. If changes in other registered particulars of the Company are involved, the Company shall also carry out the procedures for change of such registration.

Article 10: When a Company applies for change of registration, it shall, in addition to acting in accordance with the Regulations for the Administration of Company Registration and the provisions of the State Administration for Industry and Commerce on the materials to be submitted for enterprise registration, submit the following materials, as the case may be;

(1) in the circumstance specified in Item (1) of Article 3 hereof, the debt-for-equity swap undertaking executed by the creditor and the Company under which the parties undertake that the claim to be converted into equity complies with said provision;

(2) in the circumstance specified in Item (2) of Article 3 hereof, the judgment or ruling of the people's court; or

(3) in the circumstance specified in Item (3) of Article 3 hereof, the restructuring plan approved by the people's court or the settlement agreement approved in the ruling by the people's court.

The resolution of the shareholders' (general) meeting submitted by the Company shall confirm the valuated amount of the capital contribution made in the form of the claim and comply with the Company Law and the Company's articles of association.

Article 11: When a capital contribution is made in the form of a debt-for-equity swap, the company registry shall register the method of such capital contribution as a “capital contribution in the form of a debt-for-equity swap”.

Article 12: If a company registry and its working personnel violate a law or regulations in the course of registering a debt-for-equity swap, the liability of the supervisor directly in charge and other responsible personnel shall be pursued in accordance with relevant provisions.

Article 13: If a creditor, Company, appraisal institution or capital verification institution violates the Company Law, the Regulations for the Administration of Company Registration or these Measures, the company registry shall impose penalties in accordance with relevant provisions such as the Company Law and the Regulations for the Administration of Company Registration.

Article 14: The company registry shall, in accordance with the law, make company registration information relating to a debt-for-equity swap accessible to the public.

Article 15: The company registry shall publicly announce the results of the administrative penalties imposed for the following violations of the law:

(1) a violation by a creditor or Company relating to the registration of a debt-for-equity swap; or

(2) a violation by an appraisal institution or capital verification institution relating to the registration of a debt-for-equity swap.

The company registry shall publicly announce the list of appraisal institutions and capital verification institutions mentioned in the preceding paragraph that have been subjected to administrative penalties.

Article 16: An administration for industry and commerce shall promptly make a record of a creditor, Company, capital verification institution or appraisal institution, etc. involved in a violation of the law relating to a debt-for-equity swap and subject it to oversight differentiated based on corporate integrity.

Article 17: In the event that a law, administrative regulations or State Council decision provides otherwise in respect of a matter specified herein, such provisions shall prevail.

Article 18: If an enterprise legal person organised in a form other than a company is converted into a Company and carries out the change of registration, and a debt-for-equity swap is involved, matters shall be handled with reference to these Measures. If administration of state-owned assets is involved, matters shall be handled in accordance with relevant provisions.

Article 19: These Measures shall be effective as of January 1 2012.