Comprehensive Credit Line Contract

EX-10.2 4 v378207_ex10-2.htm EXHIBIT 10.2

Comprehensive Credit Line Contract

Reference No. : 2014zhenzhongyinbuexiezi No.0000162

Party A: Shenzhen Highpower Technology (Shenzhen) Co., Ltd

Business License: 440307503274740

Legal Representative: Dangyu Pan

Address: Building A2, Luoshan Industrial Zone, Longgang District, Shenzhen

Postal code: 518111

Deposit A/C and financial institutions: Bank of China, Pinghu Sub-branch, Shenzhen,

Telephone: 8968 6236 ; Facsimile: 8968 6298

Party B: Bank of China, Buji Sub-branch.

Legal Representative: LI YANSHAN

Address: 108, Buji Road, Buji Town, Longgang District, Shenzhen; Postal code: 518112

Telephone: 2827 4825 ; Facsimile: 2827 0847

The parties agree as follow.

Clause 1 Scope of Business

Satisfied by condition precedent defined in this contract, Party A is allowed to apply for recurring, temporary or one-off credit line from Party B in the form of a short-term loan, deposit account overdraft, bank acceptance, trade finance, bank guarantee, or other monetary financing or credit authorization business (“Specific credit line business”).

The trade finance business under this contract is included and limited to: international letter of credit, domestic letter of credit, import bill advance, shipping guarantee, packing credit, export bill purchase, export bill discount, import bill advance under LC, negotiation credit and other international and domestic trade finance business.

The bank guarantee business under this contract is including bank guarantee, standby letter of credit and all sorts of bank guarantee business.

Clause 2 Types and amount of credit line

Party B agrees to offer the following:

Currency in: Renminbi

Amount:	Renmibi Seventy million
	RMB 70,000,000.00
Types:	1. Loans : RMB40,000,000.00
	2. Bank Acceptances: RMB30,000,000.00

Clause 3 Usage of credit lines

Within the credit line period, under the agreed upper limits on each type of credit line, Party A can use the credit line recurrently. If Party A needs to apply for the one-off credit line, a written application is required. And both parties should agree that Party B has the final say on whether and how the one-off credit line will be granted. Party B will notify Party A in written once the decision is made.

This contract will override all the credit line contracts previously signed by Party A and Party B. Upon the effective date of this contract, all the used and unused credit lines prior to this contract will be considered as used and unused credit lines under this contract

Unless otherwise agreed, the following business will not occupy the credit line under this contract.

Export bill purchase business with precisely matched bills, documents and certificates

Outwards letters of credit, bank guarantee and trade finance business which Party B agreed to act as confirming bank.

Any credit line business which guaranteed by Party A by deposits, government bonds, deposit certificates issued by Party B, bank acceptance, guarantee or standby letters of credit accepted by Party B

Any other business agreed by both parties.

The above defined businesses, although they will not occupy the credit limits under this contract, they will still be considered as inseparable part of the contract.

Clause 4 Application of specific credit line business

Written applications or separate contracts are required from Party A to apply for a specific credit line.

Clause 5 Period

The credit line defined in clause 2 under this contract will be started from the effective date and end on Mar 10th 2015.

Upon negotiation, both parties can extend the contract period by signing supplementary contracts. Party B will continue to provide credit lines under supplementary contracts. All terms and conditions under this contract have the equivalent legal effects and restrictions on the supplementary contracts.

The termination of a specific credit line will only occur when all the rights and obligations are fulfilled. The above period has no limitation on specific credit line under this contract.

Clause 6 Condition Precedents of specific credit line business

Party A should fulfill the following conditions precedent before applying for a specific credit line business

File the necessary documents, stamps and signatures in Party B in relating to this contract and all the specific credit line contract under this contracts

Open the necessary bank account

Make sure the required guarantee contracts are properly in place

Other conditions precedent required for specific credit line contracts

Other conditions precedent required by Party B

Clause 7 Guaranty

For all the liabilities occurred under this contract and the specific credit line contract affiliated to this contract should be guaranteed by the following:

Maximum Amount Guarantee provided by:

Springpower Technology Co. Ltd, a guarantee contract is signed separately;

Dangyu Pan, a guarantee contract is signed separately;

Collateral on the Maximum Amount

The collateral is provided by Party A, a collateral contract is signed separately;

Under certain circumstances that Party A or the Guarantor might be unable to fulfill or make Party B believe they are unable to fulfill the contractual capacity, e.g: Guarantee Contracts are invalid, Party A is or will be under significant business difficulties or risks: deteriorated financials, litigation issues which might affect its repayment ability, Guarantors were found default in other contracts with Party B, devaluation, dismissal or damage of collaterals which might cause the value of the collaterals slaked or losses. Party B reserves the right to and Party A has the obligation to additional or replace the guarantor.

Clause 8 Statement and Commitment

Party A’s statement:

Party A is legally registered and operating, and owning the full civil rights required by this contract.

Signing and performing the contract is the true will of Party A, Party A has been granted all necessary authorizations in effect before signing the contract. The contract does not form a default for other contracts signed and performed by Party A. It is Party A’s responsibility to complete all required approvals, registrations, permits and filings.

All documents and information provided by Party A to Party B are true, complete, accurate and effective.

All the transactions mentioned by Party A for apply specific credit line should be real and not for illegal purposes such as: money laundry.

No hidden events regarding Party A and guarantor’s financial and repayment abilities

Party A’s commitment:

Timely delivery of the financial statements and other relevant information, (including but not limited to annual, quarterly and monthly financial reports.

Cooperate in Party B’s exam and inspection on the utilization of the loan as well as Party A’s financials and operations

Any counter-guarantee agreement between the guarantors and Party A will not affect the Party B’s underlying rights under this contract

Under circumstances Party A or Guarantor’s capability of performing the contract might be affected, Party A should notify Party B in time. Those circumstances include but are not limited to significant organizational changes, e.g. business splitting, merger and termination, disposal of major assets, restructuring, reorganization, joint venture arrangement with foreign capitals, changing of controlling shareholders or de facto control of Party A, capital reduction, liquidation, re-pledge of the encumbered assets, withdrawal, bankruptcy, dissolution and involvement in significant lawsuits.

As for undefined business practice, Party A is committed to follow Party B’s regulation and normal practice in daily operation.

Party A committed not to distribute bonus during the credit period

Agreed by both parties, for the purpose to ensure the Party B’s claims on credit funds and Party B’s convenience to monitoring the repayment progress, Party A should guarantee the proportion of sales fund received in Party A’s account opened with Party B over Party A’s total sales should be matching to the proportion of Party A’s credit line received from Party B over Party A’s total credit line received from financial institution.

At any time credit balance does not exceed 10 million

Clause 9 Related party and related party transaction of Party A

Party A is not defined as Group Credit Customer by Party B in accordance with “Guidance of Risk Management by Commercial Banks for Granting Credit to Customer Groups”

Clause 10 Breach of Covenants

Any of the following situations would be considered as breach of contract covenant:

Party A did not perform the repayment obligation under this contract or the affiliated specific credit line contracts

Party A has not used the credit funds according to agreed purposes.

Party A’s statement in this contract or the affiliated specific contracts are untrue or in violation with Party A’s commitment in this or the affiliated specific contracts.

Under the circumstance defined in 2.4) in Clause 8, Party A refused to provide additional guarantee or replacement of new guarantor

Party B is or will be under significant business difficulties or risks: deteriorated financials, significant financial losses and loss of assets (including but not limited asset losses for fulfill guarantee obligations) or other financial crisis.

Party A is in violation with other rights and obligations agreed in this contract.

Party A breaches the covenants on other credit line contracts with Party B or other affiliated institutions of Bank of China.

Guarantors breach the covenants on other credit line contracts with Party B or other affiliated institutions of Bank of China.

When any of the above mentioned situation noticed, Party B will perform the following in separate or all at the same time:

Request Party A or Guarantor to rectify within a definite time.

Reduce, temporarily pause or permanently terminate Party A’s Credit limit in part or in all

Temporarily pause or permanently terminate in part or in all of Party A’s application on specific credit line under this contract.

Announce the immediate expiration on all the credit lines granted under this contract and affiliated specific credit line contracts.

Terminate or release this contract, terminate or release in part or in all of the affiliated specific credit line contracts as well as the other contracts signed between Party A and Party B.

Request compensation from Party A on the losses thereafter caused.

Party A’s deposit account in Party B will be hold in custody for debt pay off for the comprehensive credit line and specific credit line under this contract. All the undue liabilities were deeming due and entitled the immediate payoff from Party A’s restricted accounts. If the currency in deposit account is different from the currency of the liabilities, the exchange rate on the date of the hold in custody will be applied.

Real rights granted by way of security will be executed.

Assume the guarantee responsibility on Guarantors.

10)

Other necessary procedures on Party B’s concern

Clause 11 Rights reserved

Either party might reserve part of or all of the rights under this contract and the affiliated specific credit line contracts, this does not imply the party has surrendered or remitted the unperformed rights and obligations.

Either party might sometimes tolerate, extend or delay the execution of certain rights, this does not deem as the party has surrendered or remitted the rights.

Clause 12 Change, Modification, Termination and Partial invalidity

Upon negotiation and agreement by both parties, this contract can be changed and modified, the written record of the changes and modifications should form the inseparable part of this contract.

Unless ruled by law or both parties formed a separate agreement, the contract would not be terminated prior to all the rights and obligations defined are fulfilled.

Unless ruled by law or both parties formed a separate agreement, the void of single terms under this contract should no invalid other contract under this contract.

Clause 13 Applicable Law and Resolution for Dispute

This contract is entered into according with the People’s Republic of China, and applicable to the law of the People’s Republic of China.

The resolution of dispute should be appealed in Party B or other Bank of China subsidiaries defined in this contract or other affiliated contracts

Clause 14 Attachments

Below attachments are agreed by both parties, formed an inseparable part of this contract, thereafter in the same legal position as this contract.

Attachment 1: Appendix terms.

Clause 15 Other terms and conditions

Without Party B’s prior written approval, Party A is not allowed to transfer the rights and obligations under this contract to 3^rd Parties.

Party A should give the consent that, Party B might somehow authorize other affiliated institutions of Bank of China to perform the obligation. The performing party is entitled to all the rights and obligations under this contract and the affiliated credit line contracts, the performing party reserves the rights to appeal a resolution of dispute if necessary.

The contract has equivalent restrictions to the successors or inherits of both parties.

Unless otherwise agreed, the domicile addresses stated in this contract are for corresponding use; both parties should notify each other in writing about any changes of its domicile addresses.

The title and name of business product is for business purposes, will not used for interpretation of the contract terms and the rights and obligations.

If required by the governing institutions, Party B might not be able to perform the obligations agreed in this contract. Party is exempted from punishment under this circumstance.

Clause 16 Effectiveness of the contract

This contract is established and entered into effective upon signing or sealing by the legal representatives (or person-in-charge) of Party A and Party B or their duly authorized agents, together with sealing by the company chop.

This contract will be print and signed in seven copies, Party A and the guarantors hold one copy each, Party B holds three copies, collateral registry authority holds one copy, each copy has the same legal effect.

/s/ Dangyu Pan
Stamp of Party A
Signature of director or authorized representative
Mar 10, 2013

/s/ [COMPANY SEAL]
Stamp of Party B
Signature of legal representative or authorized representative
Mar 10, 2013

Attachment 1:

If there are discrepancies in contents in the attachment with this contract, this contract should prevail.

Specific to the 2^nd paragraph of Clause 3:” This contract will override all the credit line contracts previously signed by Party A and Party B. Upon the effective date of this contract, all the used and unused credit lines prior to this contract will be considered as used and unused credit lines under this contract”.

“all the credit line contracts previously signed” here means the contract signed with reference no of “2013zhenzhongyinbuexiezi No. 0000099.

Maximum Amount Guaranty Contract

Reference No. : 2014zhenzhongyinbubaoezi No.0013

Guarantor: Springpower Technology (Shenzhen) Co., Ltd

Business Licences: 440306503295562

Legal Representative: Dangyu Pan

Address: Factory A, Chaoshun Industrial Zone, Renmin Road, Fumin Residential Area, Guanlan, BaoAn District,

Postal code: 518000

Deposit A/C and financial institutions: Bank of China, Pinghu Sub-branch, Shenzhen,

Telephone: 2802 9923 ; Facsimile: 2802 9923

Creditor: Bank of China, Buji Sub-branch.

Legal Representative: LI YANSHAN

Address: 108, Buji Road, Buji Town, Longgang District, Shenzhen; Postal code: 518112

Telephone: 2827 4825 ; Facsimile: 2827 0847

To guarantee the performing of the principle contract stated in Clause 1, both parties agree the following:

Clause 1 Principle Contract

The principle contract is “Comprehensive credit contract (2014zhenzhongyinbuexiezi No 0000162)” and its supplements signed between Creditor and Debtor, Shenzhen Highpower Technology (Shenzhen) Co., Ltd

The principle contract is “Fixed asset loan contract (2012zhenzhongyinbujiezi No 00002)” and its supplements signed between Creditor and Debtor, Shenzhen Highpower Technology (Shenzhen) Co., Ltd

Clause 2 Principle Creditor’s rights and the period

Unless otherwise agreed, the creditor’s rights under the following contracts and the creditor’s rights occurred before the engagement of this contract constitutes the principle creditor’s rights of this contract.

The creditor’s right occurred under comprehensive contract starting from the date of effectiveness, and ends upon the expiration of all the specific creditor’s rights.

The creditor’s right occurred under fixed assets loan contract starting from the date of effectiveness, and ends upon the repayment date defined on the contract.

Clause 3 The maximum amount guaranteed

	1.	The maximum amount assumed guaranteed is:
		Currency: Renminbi
		Amount (Capital letter): One hundred and six million
		Amount (in numbers): 106,000,000

The principle creditor’s rights under the principle contract constitute the principle creditor’s rights under this contract, which includes: loan principle, interest, compound interest, punitive interest, liquidated damage, the cost for realization of the creditor’s right (includes but not limited to the announcement fee, delivery fees, appraisal fees, legal fees, travel expenses, assessment fees, auction fees, the property preservation fee, compulsory execution fee and etc), as well as the Pledgee’s loss due to the breach of covenants.

The sum of the above terms constitutes the maximum amount of guaranteed for this contract.

Clause 4 Types of guaranty

Joint responsibility guaranty.

Clause 5 The guarantee responsibilities

Under the circumstance that, the debtor of principle contract failed to pay off the creditor’s rights when due (on due date or early termination date), the guaranty is assumed to be responsible in accordance with this contract.

The due date in the previous sentence means the repayment date agreed in the principle contract. The early termination date is the termination date request by creditor per law or per agreements under the principle contracts.

Creditor’s rights on other guarantee contracts or collateral contracts should not have an impact on the performing of this contract. Guarantor should assume responsibility under this contract rather than plea with the execution in order.

Clause 6 The responsible period

The responsible period for this contract is two years after the establishment of the creditor’s rights under Clause 2

During the period, Creditor is entitled to the right to request the assumption of responsibility from Guarantor in full or in part on one or on all creditor rights.

Clause 7 The duration of action

During the period that the creditor’s rights have not been paid off when due, Guarantor is assumed responsible under the joint responsibility guarantee. Creditor is entitled to claim the rights within the responsible period defined in Clause 6, the duration of action started upon the request.

Clause 8 The relationship between this contract and the principle contract

Upon the termination or early termination of the principle contract, Guarantor assumes guarantee responsibility on occurred debt.

The change of principle contract will not be informed to the Guarantor unless under the following circumstances, change of currency, interest rate, amount, period, or other terms which might affect the increase of the amount of the principle creditor’s rights or extend the effective period of the principle contract. Guarantor remains obligated to assume the guarantee responsibility to the changed principle contract.

Under the previous stated circumstance which Guarantor‘s consent is required, Pledgor Guarantor is entitled to the right to reject to assume the guarantee responsibility on the incremental portion.

Under the circumstances that, Creditor provide the letter of credit, trade financing services to debtor under the principle contract, Guarantor won’t be notified but assumed guarantee responsibility. It is the Creditor’s responsibility to registry for the incremental business contract.

Clause 9 Statements and Commitments

Guarantor’s statement:

1. Guarantor is legally registered and operating, and owns the full civil rights required by this contract.

2. Signing and performing the contract is the true will of Guarantor, Guarantor has been granted all necessary authorizations in effect before signing the contract. The contract does not form a default for other contracts signed and performed by Guarantor. It is Guarantor’s responsibility to complete all required approvals, registrations, permits and filings.

3. All document and information provided by Guarantor to Creditor are true, complete, accurate and effective.

4. Guarantor is willing to cooperate in the check and inspection on its financial conditions performed by Creditor.

5. Guarantor did not conceal any existing liability upon the signing of the contract

6. Inform the Creditor in time for any issues might affect Guarantor’s performing capability, which including but not limited to business splitting, merger and termination, disposal of major assets, restructuring, reorganization, joint venture arrangement with foreign capitals, changing of controlling shareholders or de facto control of Party A, capital reduction, liquidation, re-pledge the encumbered assets, withdrawal, bankruptcy, dissolution and involved in significant law suits.

Clause 10 Breach of covenants

Any of the following situations would be considered as breach of contract covenant:

1. Guarantor is in violation with the previous terms of the contract.

2. The statements of the Guarantor is untrue or in violation with its commitments

3. The occurrence of issues defined under the point 6 of clause 9 which might affect the Guarantor’s financial position and performing capability.

4. Experiencing the termination of operation or bankruptcy.

5. In violation with other rights and obligations agreed in this contract.

6. Guarantor breaches the covenants on other credit line contracts with Party B or other affiliated institutions of Bank of China.

When any of the above mentioned situations noticed, Creditor will perform the following in separate or all at the same time:

1) Request Guarantor to rectify within a definite time.

2) Reduce, temporarily pause or permanently terminate Guarantor’s Credit limit in part or in all

3) Temporarily pause or permanently terminate in part or in all of Guarantor’s application on specific credit line under this contract.

4) Announce the immediate expiration on all the credit lines granted under this contract and affiliated specific credit line contracts.

5) Terminate or release this contract, terminate or release in part or in all of the affiliated specific credit line contracts as well as the other contracts signed between Guarantor and Creditor

6) Request compensation from Guarantor on the losses thereafter caused.

7) Assume the guarantee responsibility on Guarantors.

8) Other necessary procedures on Party B’s concern

Clause 11 Rights reserved

Either party might sometimes tolerate, extend or delay the execution of certain rights, this does not deem as the party has surrendered or remitted the rights.

Clause 12 Change, Modification, Termination and Partial invalidity

Upon negotiation and agreed by both parties, this contract can be changed and modified, the written record of the changes and modifications should form the inseparable part of this contract.

Unless ruled by law or both parties formed a separate agreement, the contract would not be terminated prior to all the rights and obligations defined are fulfilled.

Unless ruled by law or both parties formed a separate agreement, the void of single terms under this contract should no invalid other contract under this contract.

Clause 13 Applicable Law and Resolution for Dispute

1. This contract is entered into according with the People’s Republic of China, and applicable to the law of the People’s Republic of China.

2. The resolution of dispute should be appealed in Party B or other Bank of China subsidiaries defined in this contract or other affiliated contracts

Clause 14 Attachments

Not applicable

Clause 15 Other terms and conditions

1. Without Creditor’s prior written approval, Guarantor is not allowed to transfer the rights and obligations under this contract to 3^rd Parties.

2. Guarantor should give the consent that, Creditor might somehow authorize other affiliated institution of Bank of China to perform the obligation. The performing party entitles all the rights and obligations under this contract and the affiliated credit line contracts, the performing party reserves the rights to appeal a resolution of dispute if necessary.

3. The contract has equivalent restrictions to the successors or inherits of both parties.

4. Unless otherwise agreed, the domicile addresses stated in this contract are for corresponding use; both parties should notify each other in writing about any changes of its domicile addresses.

5. The title and name of business product is for business purposes, will not used for interpretation of the contract terms and the rights and obligations.

Clause 16 Effectiveness of the contract

This contract is established and enters into effective upon signing or sealing by the legal representatives (or person-in-charge) of Guarantor and Creditor or their duly authorized agents, together with sealing by the company chop.

The pledge is established upon the effectiveness of this contract.

This contract will be printed and signed in five copies, Guarantor and the debtor hold one copy each, Creditor holds three copies; each copy has the same legal effect

[COMPANY SEAL]
Stamp of Guarantor (if Guarantor is a corporation)
Signature of Authorized Representative
Mar 10, 2014

/s/ [COMPANY SEAL]
Stamp of Creditor (if Creditor is a corporation)
Signature of legal representative or authorized representative
Mar 10, 2014

Maximum Amount Guaranty Contract

(Applicable if guarantor is natural person)

Reference No. : 2014zhenzhongyinbubaoezi No.0014

Guarantor: Dangyu Pan

Type of certification: identification card

Certification number:

Address: Building A2, Luoshan Industrial Zone, Longgang District, Shenzhen

Postal code: 518111

Telephone: 8968 6236 ; Facsimile: 8968 6298

Creditor: Bank of China, Buji Sub-branch.

Legal Representative: LI YANSHAN

Address: 108, Buji Road, Buji Town, Longgang District, Shenzhen; Postal code: 518112

Telephone: 2827 4825 ; Facsimile: 2827 0847

To guarantee the performing of the principle contract stated in Clause 1, both parties agree the following:

Clause 1 Principle Contract

1. The principle contract is “Comprehensive credit contract (2014zhenzhongyinbuexiezi No 0000162)” and its supplements signed between Creditor and Debtor, Shenzhen Highpower Technology (Shenzhen) Co., Ltd

2. The principle contract is “Fixed asset loan contract (2012zhenzhongyinbujiezi No 00002)” and its supplements signed between Creditor and Debtor, Shenzhen Highpower Technology (Shenzhen) Co., Ltd

Clause 2 Principle Creditor’s rights and the period

1. The creditor’s right occurred under comprehensive contract starting from the date of effectiveness, and ends upon the expiration of all the specific creditor’s rights.

2. The creditor’s right occurred under fixed assets loan contract starting from the date of effectiveness, and ends upon the repayment date defined on the contract.

Clause 3 The maximum amount guaranteed

The maximum amount assumed guaranteed is:

Currency: Renminbi

Amount (Capital letter): One hundred and six million only

Amount (in numbers): 106,000,000

The sum of the above terms constitutes the maximum amount of guaranteed for this contract.

Clause 4 Types of guaranty

Joint responsibility guaranty.

Clause 5 The guarantee responsibilities

Clause 6 The responsible period

The responsible period for this contract is two years after the establishment of the creditor’s rights under Clause 2

During the period, Creditor is entitled to the right to request the assumption of responsibility from Guarantor in full or in part on one or on all creditor rights.

Clause 7 The duration of action

Clause 8 The relationship between this contract and the principle contract

Upon the termination or early termination of the principle contract, Guarantor assumes guarantee responsibility on occurred debt.

Under the previous stated circumstance which Guarantor‘s consent is required, Pledgor Guarantor is entitled to the right to reject to assume the guarantee responsibility on the incremental portion.

Clause 9 Statements and Commitments

Guarantor’s statement:

Guarantor is a natural person who possesses the capacity for civil rights and civil conducts in People’s Republic of China to perform this contract. Party A can perform the civil conduct independently, no bad credit records such as debt overdue, overdue interest, malicious overdraft on credit card, no criminal records, qualified to be a legal guarantor.

Guarantor has full understanding about the terms and conditions set forth in the contract. It is Guarantor’s true will to provide guarantee to debtor.

The establishment of this contract will not constitute a breach of covenant of any other previous contract Guarantor engaged in.

All documents and information provided by Guarantor to Creditor are true, complete, accurate and effective.

Guarantor is willing to cooperate in the checking and inspection of its financial conditions performed by Creditor.

Guarantor did not conceal any existing liability upon the signing of the contract

Inform the Creditor in time for any issues might affect Guarantor’s performing capability, which including but not limited to losses of assets, transfer, donation, assume responsibility on liabilities, involved in significant law suits or disputes.

If the Guarantor is married, make sure the sponsor’s consent is obtained.

Clause 10 Authorization of access to personal information

Guarantor authorizes the access of personal information in the personal credit information database in the People’s Bank of China to Creditor under the following circumstances.

Reference check on the Guarantor’s credit status.

Reference check on the Guarantor’s guarantee status.

After-loan management on the personal credit and guarantee status

Accept the credit line application of which the Guarantor guaranteed or to be legal representative or one of the funders.

Clause 11 Breach of covenants

Any of the following situations would be considered as breach of contract covenant:

1. Guarantor is in violation with the previous terms of the contract.

2. The statements of the Guarantor is untrue or in violation with its commitments

3. The occurrence of issues defined under the point 7 of clause 9 which might affect the Guarantor’s financial position and performing capability.

4. In violation with other rights and obligations agreed in this contract.

5. Guarantor breaches the covenants on other credit line contracts with Party B or other affiliated institutions of Bank of China.

When any of the above mentioned situations noticed, Creditor will perform the following in separate or all at the same time:

1) Request Guarantor to rectify within a definite time.

2) Reduce, temporarily pause or permanently terminate Guarantor’s Credit limit in part or in all

3) Temporarily pause or permanently terminate in part or in all of Guarantor’s application on specific credit line under this contract.

4) Announce the immediate expiration on all the credit lines granted under this contract and affiliated specific credit line contracts.

5) Terminate or release this contract, terminate or release in part or in all of the affiliated specific credit line contracts as well as the other contracts signed between Guarantor and Creditor

6) Request compensation from Guarantor on the losses thereafter caused.

7) Assume the guarantee responsibility on Guarantors.

8) Other necessary procedures on Party B’s concern

Clause 12 Rights reserved

Either party might sometimes tolerate, extend or delay the execution of certain rights, this does not deem as the party has surrendered or remitted the rights.

Clause 13 Change, Modification, Termination and Partial invalidity

Upon negotiation and agreement by both parties, this contract can be changed and modified, the written record of the changes and modifications should form the inseparable part of this contract.

Unless ruled by law or both parties formed a separate agreement, the contract would not be terminated prior to all the rights and obligations defined are fulfilled.

Unless ruled by law or both parties formed a separate agreement, the void of single terms under this contract should no invalid other contract under this contract.

Clause 14 Applicable Law and Resolution for Dispute

1. This contract is entered into according with the People’s Republic of China, and applicable to the law of the People’s Republic of China.

2. The resolution of dispute should be appealed in Party B or other Bank of China subsidiaries defined in this contract or other affiliated contracts

Clause 15 Attachments

Sponsor’s consent.

Clause 16 Other terms and conditions

Without Creditor’s prior written approval, Guarantor is not allowed to transfer the rights and obligations under this contract to 3^rd Parties.

Guarantor should give the consent that, Creditor might somehow authorize other affiliated institutions of Bank of China to perform the obligation. The performing party is entitled to all the rights and obligations under this contract and the affiliated credit line contracts, the performing party reserves the rights to appeal a resolution of dispute if necessary.

The contract has equivalent restrictions to the successors or inherits of both parties.

Unless otherwise agreed, the domicile addresses stated in this contract are for corresponding use; both parties should notify each other in writing about any changes of its domicile addresses.

The title and name of business product is for business purposes, will not used for interpretation of the contract terms and the rights and obligations.

Clause 17 Effectiveness of the contract

This contract is established and entered into effective upon signing or sealing by the legal representatives (or person-in-charge) of Pledgor and Pledgee or their duly authorized agents, together with sealing by the company chop.

The pledge is established upon the effectiveness of this contract.

This contract will be printed and signed in five copies, Guarantor and the debtor hold one copy each, Creditor holds three copies; each copy has the same legal effect

/s/ Dangyu Pan
Signature of Guarantor and Sponsor
Mar 10, 2014

/s/ [COMPANY SEAL]
Stamp of Creditor (if Pledgee is a corporation)
Signature of legal representative or authorized representative
Mar 10, 2014

Collateral Contract

Reference No. : 2014zhenzhongyinbudiezi No.0015

Pledgor: Shenzhen Highpower Technology (Shenzhen) Co., Ltd

Business License: 440307503274740

Legal Representative: Dangyu Pan

Address: Building A2, Luoshan Industrial Zone, Longgang District, Shenzhen

Postal code: 518111

Deposit A/C and financial institutions: Bank of China, Pinghu Sub-branch, Shenzhen,

Telephone: 8968 6236 ; Facsimile: 8968 6298

Pledgee: Bank of China, Buji Sub-branch.

Legal Representative: LI YANSHAN

Address: 108, Buji Road, Buji Town, Longgang District, Shenzhen; Postal code: 518112

Telephone: 2827 4825 ; Facsimile: 2827 0847

To guarantee the performing of the principle contract stated in Clause 1, both party agrees the following:

Clause 1 Principle Contract

The principle contract is “Comprehensive credit contract (2014 zhenzhongyinbuexiezi No 0000162)” and its supplements signed between Creditor and Debtor, Shenzhen Highpower Technology (Shenzhen) Co., Ltd

The principle contract is “Fixed asset loan contract (2012zhenzhongyinbujiezi No 00002)” and its supplements signed between Creditor and Debtor, Shenzhen Highpower Technology (Shenzhen) Co., Ltd

Clause 2 Principle Creditor’s rights and the period

Unless otherwise agreed, the creditor’s rights under the following contracts and the creditor’s rights occurred before the engagement of this contract constitute the principle creditor’s rights of this contract.

The creditor’s right occurred under comprehensive contract starting from the date of effectiveness, and end upon the expiration of all the specific creditor’s rights.

The creditor’s right occurred under fixed assets loan contract starting from the date of effectiveness, and end upon the repayment date defined on the contract.

Clause 3 The maximum amount guaranteed

The maximum amount assumed guaranteed is:

Currency: Renminbi

Amount (Capital letter): thirty five million three hundred and twenty five thousand nine hundred and seventy eight only

Amount (in numbers): 35,325,978

The sum of the above terms constitutes the maximum amount of guaranteed for this contract.

Clause 4 The Collateral

For details of the collateral please refer to the appendix” Details of the underlying assets”.

During the period of collateral, if the Collateral is broken or damaged, Pledgee is entitled to the primary rights for compensation from insurance, compensation or subsidy, Pledgee can withdraw the compensation amount even thought the collateral period is undue

If the Collateral is buildings, Pledgor should notify the Pledgee immediately after the Pledgor acknowledged the removal of the building. If the compensation of the removal is through change of property, Pledgor should coordinate the paid off of the principle of creditor’s rights with debtor and Pledgee per Pledgee’s request, or replace the Collateral with the new building or new collateral per Pledgee’s request. After the original Collateral is lost and the new Collateral is not yet registered, Pledgor should provide additional guarantee by qualified guarantor. For the compensation that is in the form of cash, Pledgee is entitled to the primary rights from compensation, and entitled to the right to request the Pledgor to deposit the cash into the appointed custody accounts, and subsequent security by deposit contract should be signed and effected.

Clause 5 The registration

With 30 days after the sign-off of this contract, Pledgor and Pledgee should finish the registry in the authorities.

Pledgor and Pledgee should file a change in registry with the authorities within 30 days after the change.

Clause 6 The possession and management of the Collateral

The possession and management of the Collateral will be on the Pledgor, however, the certifications of rights should be under the custody of the Pledgee. Pledgor should accept the inspection and check from time to time.

Pledgor should properly maintain the Collateral to ensure the safety and well-being of the Collaterals, Pledgor should take responsibility on daily maintenance and repairs.

Without the written consent of the Pledgee, Pledgor is not allowed to transfer, lend, invest, or restructure the Collateral. With Pledgee’s written consent, the proceedings of disposal should be deposited in the appointed accounts.

Clause 7 The circumstances that the value of the Collaterals is diminished

Before the creditor’s rights has been fully paid off, Pledgee is entitled to the right to stop Pledgor’s behavior, if such behavior is diminishing the value of the underlying assets. Pledgee is entitled to the right to request Pledgor to recover the value of the asset or provide additional guarantee to secure the proportion of lost.

If the Pledgor failed to recover the value of the asset nor can it provide addition guarantee, Pledgee might request early pay-off of the creditor’s rights. Pledgee might execute the rights to assume guarantee responsibility if the Pledgor refused the above.

If the diminished value is due to the irresistible reason, Pledgor should take action to avoid further deteriorate and notify the Pledgee in writing immediately

Clause 8 Interest generated from the account receivables

The interest generated from the pledged account receivables should be assumed responsible to the creditor’s rights after the deduction of the cost of collecting those interests.

Clause 9 Insurance of the underlying assets (Optional)

Not applicable

Clause 10 The guarantee responsibilities

Under the circumstance that, the debtor of principle contract failed to pay off the creditor’s rights when due (on due date or early termination date), the pledge is assumed to be responsible in accordance with this contract.

Clause 11 The realization of the pledgee’s rights

Once guarantee responsibility established, Pledgee is entitled to the right to request the execution of the assumption of the guarantee ‘s responsibility in accordance to law and regulation.

Pledgee should execute the rights within the duration of action.

Clause 12 The realization of the pledgee’s rights

Once guarantee responsibility is assumed, Pledgee is entitled to the right to request the execution immediately. The execution action includes but is not limited to compromise for discount, sale the assets through auction, etc. Pledgor should cooperate on the above mentioned actions. The proceeds received after the cost of execution, should be use to pay off the principle creditor’s rights under the principle contracts.

Under the circumstance that, the expiration of account receivables is earlier than the expiration of the principle creditor’s rights, the amount collected from the pledged account receivables by Pledgor should be deposited in the appointed account. And the deposit should still assume the guarantee responsibility for the undue principle creditor’s rights.

Pledgor’s rights on other guarantee contracts or collateral contracts should not have an impact on the performing of this contract. Pledgor should assume responsibility under this contract rather than plea with the execution in order.

Clause 13 The relationship between this contract and the principle contract

Upon the termination or early termination of the principle contract, Pledgor assumed guarantee responsibility on occurred debt.

The change of principle contract will not be informed to the Pledgor unless under the following circumstances, change of currency, interest rate, amount, period, or other terms which might affect the increase of the amount of the principle creditor’s rights or extend the effective period of the principle contract. Pledgor remains to assume the guarantee responsibility to the changed principle contract.

Under the previous stated circumstance which Pledgor’s consent is required, Pledgor is entitled to the right to reject the assumption of the guarantee responsibility on the incremental portion.

Under the circumstances that, Pledgee provide the letter of credit, trade financing services to debtor under the principle contract, Pledgor won’t be notified but assumed guarantee responsibility. It is the Pledgee’s responsibility to register for the incremental business contract.

Clause 14 Statements and Commitments

Pledgor’s statement:

Pledgor is legally registry and operating, and owning the full civil rights required by this contract.

Pledgor committed that no joint owner attached on the Collateral, or if any, written consents has been obtained. Pledgor agreed to hand over the written consent to Pledgee for custody.

Signing and performing the contract is the true will of Pledgor, Pledgor has been granted all necessary authorizations in effect before signing the contract. The contract does not form a default for other contracts signed and performed by Pledgor. It is Pledgor’s responsibility to complete all required approvals, registrations, permits and filings.

All documents and information provided by Pledgor to Pledgee are true, complete, accurate and effective.

Pledgor did not conceal all the other creditor’s rights, factoring and financing attached to the underlying assets.

Under the circumstances that new creditor’s rights are attached on the underlying assets or significant argue and dispute on the underlying contracts, Pledgor should notify Pledgee immediately.

If the Collateral is construction in process, Pledgor committed that no other creditor’s rights is attached, if any, a written consent of abortion is obtained. Pledgor agreed to hand over the written consent to Pledgee for custody.

Clause 15 Default of the contract

Pledgor’s absent or delay in the registration procedure will be considered the event of default. Pledgee’s loss from the default should be compensated by Pledgor.

Clause 16 Breach of covenants

Any of the following situations would be considered as breach of contract covenant:

Pledgor is in violation with the previous terms of the contract, transferred or disposed all or part of the assets.

Pledgor impeded in any form Pledgee’s execution the rights.

Under the clause 7 of this contract that diminished of the value of the accounts receivables, and Pledgor cannot provide additional guarantee.

The statements of the Pledgor are untrue or in violation with its commitments

Pledgor is in violation with other rights and obligations agreed in this contract.

Pledgor is or will be under significant business changes such as termination of operation, dismissal or bankruptcy.

Pledgor breaches the covenants on other credit line contracts with Party B or other affiliated institutions of Bank of China.

When any of the above mentioned situations noticed, Pledgee will perform the following in separate or all at the same time:

Request Pledgor to rectify within a definite time.

Reduce, temporarily pause or permanently terminate Pledgor’s Credit limit in part or in all

Temporarily pause or permanently terminate in part or in all of Pledgor’s application on specific credit line under this contract.

Announce the immediate expiration on all the credit lines granted under this contract and affiliated specific credit line contracts.

Terminate or release this contract, terminate or release in part or in all of the affiliated specific credit line contracts as well as the other contracts signed between Pledgor and Pledgee

Request compensation from Pledgor on the losses thereafter caused.

Assume the guarantee responsibility on Guarantors.

Other necessary procedures on Party B’s concern

Clause 17 Rights reserved

Either party might sometimes tolerate, extend or delay the execution of certain rights, this does not deem as the party has surrendered or remitted the rights.

Clause 18 Change, Modification, Termination and Partial invalid

Upon negotiation and agreed by both parties, this contract can be changed and modified, the written record of the changes and modifications should form the inseparable part of this contract.

Unless ruled by law or both parties formed a separate agreement, the contract would not be terminated prior to all the rights and obligations defined are fulfilled.

Unless ruled by law or both parties formed a separate agreement, the void of single terms under this contract should no invalid other contract under this contract.

Clause 19 Applicable Law and Resolution for Dispute

1. This contract entered into according with the People’s Republic of China, and applicable to the law of the People’s Republic of China.

2. The resolution of dispute should be appealed in Party B or other Bank of China subsidiaries defined in this contract or other affiliated contracts

Clause 20 Attachments

Details of underlying assets.

Clause 21 Other terms and conditions

1. Without Pledgee’s prior written approval, Pledgor is not allowed to transfer the rights and obligations under this contract to 3^rd Parties.

2. Pledgor should give the consent that, Pledgee might somehow authorize other affiliated institutions of Bank of China to perform the obligation. The performing party is entitled to all the rights and obligations under this contract and the affiliated credit line contracts, the performing party reserves the rights to appeal a resolution of dispute if necessary.

3. The contract has equivalent restrictions to the successors or inherits of both parties.

4. Unless otherwise agreed, the domicile addresses stated in this contract are for corresponding use; both parties should notify each other in writing about any changes of its domicile addresses.

5. The title and name of business product is for business purposes, will not used for interpretation of the contract terms and the rights and obligations.

6. Special agreements between Pledgor and Pledgee, If the realization value of the underlying assets excesses the maximum amount of guarantee specified in Clause 3, Pledgor agree that the primary compensation to Pledgee will not restricted to the amount defined in Clause 3 and Clause 10.Pledgee entitled the compensation from the full proceeds from disposal.

Clause 22 Effectiveness of the contract

This contract is established and enters into effective upon signing or sealing by the legal representatives (or person-in-charge) of Pledgor and Pledgee or their duly authorized agents, together with sealing by the company chop.

The pledge is established upon the effectiveness of this contract.

This contract will be printed and signed in six copies, Pledgor and the debtor hold one copy each, Pledgee holds three copies, the registration authority holds one copy, each copy has the same legal effect

Stamp of Pledgor
Signature of director or authorized representative
Mar 10, 2014

/s/ [COMPANY SEAL]
Stamp of Pledgee (if Pledgee is a corporation)
Signature of legal representative or authorized representative
Mar 10, 2014

Attachment:

Details of the underlying assets (Ref No: 2014zhenzhongyinbudiezi No.0015)

Underlying asset: Land use right of industrial land

Amount

Valuation amount: 35,325,978

Certification of rights: “Certification of land use right of state-owned land” huifuguoyong(2007) No.13021920300

Location: Shangliao County Ma’an Town Huizhou city

Collateral Contract

Reference No. : 2014zhenzhongyinbudiezi No.0016

Pledgor: Shenzhen Highpower Technology (Shenzhen) Co., Ltd

Business License: 440307503274740

Legal Representative: Dangyu Pan

Address: Building A2, Luoshan Industrial Zone, Longgang District, Shenzhen

Postal code: 518111

Deposit A/C and financial institutions: Bank of China, Pinghu Sub-branch, Shenzhen,

Telephone: 8968 6236 ; Facsimile: 8968 6298

Pledgee: Bank of China, Buji Sub-branch.

Legal Representative: LI YANSHAN

Address: 108, Buji Road, Buji Town, Longgang District, Shenzhen; Postal code: 518112

Telephone: 2827 4825 ; Facsimile: 2827 0847

To guarantee the performing of the principle contract stated in Clause 1, both party agrees the following:

Clause 1 Principle Contract

The principle contract is “Comprehensive credit contract (2014 zhenzhongyinbuexiezi No 0000162)” and its supplements signed between Creditor and Debtor, Shenzhen Highpower Technology (Shenzhen) Co., Ltd

Clause 2 Principle Creditor’s rights and the period

2. The period is from Jan 13 2012 to Jan 21 2017.

Clause 3 The Collateral

For details of the collateral please refer to the appendix” Details of the underlying assets”.

Clause 4 The registration

With 30 days after the sign-off of this contract, Pledgor and Pledgee should finish the registry in the authorities.

Pledgor and Pledgee should file a change in registry with the authorities within 30 days after the change.

Clause 5 The possession and management of the Collateral

Pledgor should properly maintain the Collateral to ensure the safety and well-being of the Collaterals, Pledgor should take responsibility on daily maintenance and repairs.

Clause 6 The circumstances that the value of the Collaterals is diminished

If the diminished value is due to the irresistible reason, Pledgor should take action to avoid further deteriorate and notify the Pledgee in writing immediately

Clause 7 Interest generated from the account receivables

The interest generated from the pledged account receivables should be assumed responsible to the creditor’s rights after the deduction of the cost of collecting those interests.

Clause 8 Insurance of the underlying assets (Optional)

Not applicable

Clause 9 The guarantee responsibilities

Clause 10 The realization of the pledgee’s rights

Once guarantee responsibility established, Pledgee is entitled to the right to request the execution of the assumption of the guarantee ‘s responsibility in accordance to law and regulation.

Pledgee should execute the rights within the duration of action.

Clause 11 The realization of the pledgee’s rights

Clause 12 The relationship between this contract and the principle contract

Upon the termination or early termination of the principle contract, Pledgor assumed guarantee responsibility on occurred debt.

Under the previous stated circumstance which Pledgor’s consent is required, Pledgor is entitled to the right to reject the assumption of the guarantee responsibility on the incremental portion.

Clause 13 Statements and Commitments

Pledgor’s statement:

Pledgor is legally registry and operating, and owning the full civil rights required by this contract.

Pledgor committed that no joint owner attached on the Collateral, or if any, written consents has been obtained. Pledgor agreed to hand over the written consent to Pledgee for custody.

All documents and information provided by Pledgor to Pledgee are true, complete, accurate and effective.

Pledgor did not conceal all the other creditor’s rights, factoring and financing attached to the underlying assets.

Under the circumstances that new creditor’s rights are attached on the underlying assets or significant argue and dispute on the underlying contracts, Pledgor should notify Pledgee immediately.

Clause 14 Default of the contract

Pledgor’s absent or delay in the registration procedure will be considered the event of default. Pledgee’s loss from the default should be compensated by Pledgor.

Clause 15 Breach of covenants

Any of the following situations would be considered as breach of contract covenant:

Pledgor is in violation with the previous terms of the contract, transferred or disposed all or part of the assets.

Pledgor impeded in any form Pledgee’s execution the rights.

Under the clause 7 of this contract that diminished of the value of the accounts receivables, and Pledgor cannot provide additional guarantee.

The statements of the Pledgor are untrue or in violation with its commitments

Pledgor is in violation with other rights and obligations agreed in this contract.

Pledgor is or will be under significant business changes such as termination of operation, dismissal or bankruptcy.

Pledgor breaches the covenants on other credit line contracts with Party B or other affiliated institutions of Bank of China.

When any of the above mentioned situations noticed, Pledgee will perform the following in separate or all at the same time:

Request Pledgor to rectify within a definite time.

Reduce, temporarily pause or permanently terminate Pledgor’s Credit limit in part or in all

Temporarily pause or permanently terminate in part or in all of Pledgor’s application on specific credit line under this contract.

Announce the immediate expiration on all the credit lines granted under this contract and affiliated specific credit line contracts.

Terminate or release this contract, terminate or release in part or in all of the affiliated specific credit line contracts as well as the other contracts signed between Pledgor and Pledgee

Request compensation from Pledgor on the losses thereafter caused.

Assume the guarantee responsibility on Guarantors.

Other necessary procedures on Party B’s concern

Clause 16 Rights reserved

Either party might sometimes tolerate, extend or delay the execution of certain rights, this does not deem as the party has surrendered or remitted the rights.

Clause 17 Change, Modification, Termination and Partial invalid

Upon negotiation and agreed by both parties, this contract can be changed and modified, the written record of the changes and modifications should form the inseparable part of this contract.

Unless ruled by law or both parties formed a separate agreement, the contract would not be terminated prior to all the rights and obligations defined are fulfilled.

Unless ruled by law or both parties formed a separate agreement, the void of single terms under this contract should no invalid other contract under this contract.

Clause 18 Applicable Law and Resolution for Dispute

1. This contract entered into according with the People’s Republic of China, and applicable to the law of the People’s Republic of China.

2. The resolution of dispute should be appealed in Party B or other Bank of China subsidiaries defined in this contract or other affiliated contracts

Clause 19 Attachments

Details of underlying assets.

Clause 20 Other terms and conditions

1. Without Pledgee’s prior written approval, Pledgor is not allowed to transfer the rights and obligations under this contract to 3^rd Parties.

3. The contract has equivalent restrictions to the successors or inherits of both parties.

4. Unless otherwise agreed, the domicile addresses stated in this contract are for corresponding use; both parties should notify each other in writing about any changes of its domicile addresses.

5. The title and name of business product is for business purposes, will not used for interpretation of the contract terms and the rights and obligations.

Clause 21 Effectiveness of the contract

The pledge is established upon the effectiveness of this contract.

Stamp of Pledgor
Signature of director or authorized representative
Mar 10, 2014

/s/ [COMPANY SEAL]
Stamp of Pledgee (if Pledgee is a corporation)
Signature of legal representative or authorized representative
Mar 10, 2014

Attachment:

Details of the underlying assets (Ref No: 2014zhenzhongyinbudiezi No.0016)

Collateral Contract

Reference No. : 2014zhenzhongyinbudiezi No.0016B

Pledgor: Shenzhen Highpower Technology (Shenzhen) Co., Ltd

Business License: 440307503274740

Legal Representative: Dangyu Pan

Address: Building A2, Luoshan Industrial Zone, Longgang District, Shenzhen

Postal code: 518111

Deposit A/C and financial institutions: Bank of China, Pinghu Sub-branch, Shenzhen,

Telephone: 8968 6236 ; Facsimile: 8968 6298

Pledgee: Bank of China, Buji Sub-branch.

Legal Representative: LI YANSHAN

Address: 108, Buji Road, Buji Town, Longgang District, Shenzhen; Postal code: 518112

Telephone: 2827 4825 ; Facsimile: 2827 0847

To guarantee the performing of the principle contract stated in Clause 1, both party agrees the following:

Clause 1 Principle Contract

The principle contract is “Comprehensive credit contract (2014 zhenzhongyinbuexiezi No 0000162)” and its supplements signed between Creditor and Debtor, Shenzhen Highpower Technology (Shenzhen) Co., Ltd

Clause 2 Principle Creditor’s rights and the period

The creditor’s right occurred under comprehensive contract starting from the date of effectiveness, and end upon the expiration of all the specific creditor’s rights.

Clause 3 The maximum amount guaranteed

The maximum amount assumed guaranteed is:

Currency: Renminbi

Amount (Capital letter): thirty million six hundred twenty nine thousand four hundred and forty three only

Amount (in numbers): 30,629,443

The sum of the above terms constitutes the maximum amount of guaranteed for this contract.

Clause 4 The Collateral

For details of the collateral please refer to the appendix” Details of the underlying assets”.

Clause 5 The registration

With 30 days after the sign-off of this contract, Pledgor and Pledgee should finish the registry in the authorities.

Pledgor and Pledgee should file a change in registry with the authorities within 30 days after the change.

Clause 6 The possession and management of the Collateral

Pledgor should properly maintain the Collateral to ensure the safety and well-being of the Collaterals, Pledgor should take responsibility on daily maintenance and repairs.

Clause 7 The circumstances that the value of the Collaterals is diminished

If the diminished value is due to the irresistible reason, Pledgor should take action to avoid further deteriorate and notify the Pledgee in writing immediately

Clause 8 Interest generated from the account receivables

The interest generated from the pledged account receivables should be assumed responsible to the creditor’s rights after the deduction of the cost of collecting those interests.

Clause 9 Insurance of the underlying assets (Optional)

Not applicable

Clause 10 The guarantee responsibilities

Clause 11 The realization of the pledgee’s rights

Once guarantee responsibility established, Pledgee is entitled to the right to request the execution of the assumption of the guarantee ‘s responsibility in accordance to law and regulation.

Pledgee should execute the rights within the duration of action.

Clause 12 The realization of the pledgee’s rights

Clause 13 The relationship between this contract and the principle contract

Upon the termination or early termination of the principle contract, Pledgor assumed guarantee responsibility on occurred debt.

Under the previous stated circumstance which Pledgor’s consent is required, Pledgor is entitled to the right to reject the assumption of the guarantee responsibility on the incremental portion.

Clause 14 Statements and Commitments

Pledgor’s statement:

Pledgor is legally registry and operating, and owning the full civil rights required by this contract.

Pledgor committed that no joint owner attached on the Collateral, or if any, written consents has been obtained. Pledgor agreed to hand over the written consent to Pledgee for custody.

All documents and information provided by Pledgor to Pledgee are true, complete, accurate and effective.

Pledgor did not conceal all the other creditor’s rights, factoring and financing attached to the underlying assets.

Under the circumstances that new creditor’s rights are attached on the underlying assets or significant argue and dispute on the underlying contracts, Pledgor should notify Pledgee immediately.

Clause 15 Default of the contract

Pledgor’s absent or delay in the registration procedure will be considered the event of default. Pledgee’s loss from the default should be compensated by Pledgor.

Clause 16 Breach of covenants

Any of the following situations would be considered as breach of contract covenant:

Pledgor is in violation with the previous terms of the contract, transferred or disposed all or part of the assets.

Pledgor impeded in any form Pledgee’s execution the rights.

Under the clause 7 of this contract that diminished of the value of the accounts receivables, and Pledgor cannot provide additional guarantee.

The statements of the Pledgor are untrue or in violation with its commitments

Pledgor is in violation with other rights and obligations agreed in this contract.

Pledgor is or will be under significant business changes such as termination of operation, dismissal or bankruptcy.

Pledgor breaches the covenants on other credit line contracts with Party B or other affiliated institutions of Bank of China.

When any of the above mentioned situations noticed, Pledgee will perform the following in separate or all at the same time:

Request Pledgor to rectify within a definite time.

Reduce, temporarily pause or permanently terminate Pledgor’s Credit limit in part or in all

Temporarily pause or permanently terminate in part or in all of Pledgor’s application on specific credit line under this contract.

Announce the immediate expiration on all the credit lines granted under this contract and affiliated specific credit line contracts.

Terminate or release this contract, terminate or release in part or in all of the affiliated specific credit line contracts as well as the other contracts signed between Pledgor and Pledgee

Request compensation from Pledgor on the losses thereafter caused.

Assume the guarantee responsibility on Guarantors.

Other necessary procedures on Party B’s concern

Clause 17 Rights reserved

Either party might sometimes tolerate, extend or delay the execution of certain rights, this does not deem as the party has surrendered or remitted the rights.

Clause 18 Change, Modification, Termination and Partial invalid

Upon negotiation and agreed by both parties, this contract can be changed and modified, the written record of the changes and modifications should form the inseparable part of this contract.

Unless ruled by law or both parties formed a separate agreement, the contract would not be terminated prior to all the rights and obligations defined are fulfilled.

Unless ruled by law or both parties formed a separate agreement, the void of single terms under this contract should no invalid other contract under this contract.

Clause 19 Applicable Law and Resolution for Dispute

1. This contract entered into according with the People’s Republic of China, and applicable to the law of the People’s Republic of China.

2. The resolution of dispute should be appealed in Party B or other Bank of China subsidiaries defined in this contract or other affiliated contracts

Clause 20 Attachments

Details of underlying assets.

Clause 21 Other terms and conditions

1. Without Pledgee’s prior written approval, Pledgor is not allowed to transfer the rights and obligations under this contract to 3^rd Parties.

3. The contract has equivalent restrictions to the successors or inherits of both parties.

4. Unless otherwise agreed, the domicile addresses stated in this contract are for corresponding use; both parties should notify each other in writing about any changes of its domicile addresses.

5. The title and name of business product is for business purposes, will not used for interpretation of the contract terms and the rights and obligations.

Clause 22 Effectiveness of the contract

The pledge is established upon the effectiveness of this contract.

Stamp of Pledgor
Signature of director or authorized representative
Mar 10, 2014

/s/ [COMPANY SEAL]
Stamp of Pledgee (if Pledgee is a corporation)
Signature of legal representative or authorized representative
Mar 10, 2014

Attachment:

Details of the underlying assets (Ref No: 2014zhenzhongyinbudiezi No.0016B)