Pledge of Shares Agreement

This Pledge of Shares Agreement (Hereinafter referred to as “the agreement”) is
to be signed by the following parties in Harbin, People’s Republic of China
(Hereinafter referred to as “China”) on March 30, 2016.

 

Party A: Harbin Donghui Technology Co., Ltd. (hereinafter referred to as
“pledgee”) is a wholly foreign-owned company duly incorporated and validly
existing under Chinese law. Its registered address is No.15 Ruyi Court, Kunlun
Shopping Mall, No.26 Hengshan Road, Economic Development Area, Nangang District,
Harbin;

 

Party B: All the people listed in attached table I (hereinafter referred to as
“pledgors”); and

 

Party C: Harbin Dongxing Energy Saving Technical Service Co., Ltd., a limited
liability company duly incorporated and validly existing under Chinese laws. Its
registered address is No.183 Daxin Street, Daowai District, Harbin.

 

In this agreement, pledgee, pledgor and Party C are hereinafter referred to as
“one party” respectively or “all parties” collectively.

 

Whereas:

1 At the date of this agreement being signed, pledgors totally hold 100% shares
of Party C. As for share structure of each pledgor at that date, please see
attached table 1.

 

2 Party C is a limited liability company registered in China. Party C is
intended to confirm rights and obligations of pledgee and pledgors, and provides
necessary assistance of registering such pledge.

 

3 Pledgee is a wholly foreign-owned company registered in China. Pledgee and
pledgors who jointly own Party C sign Exclusive Business Cooperation Agreement
(whose definitions are as follows) in Harbin; pledgee, pledgors and Party C sign
Exclusive Purchase Right Agreement (whose definitions are as follows); pledgors
sign Letter of Authorization to authorize pledgor (whose definitions are as
follows).

 

4 In order to assure that Party C and pledgors fulfill the obligations under the
Exclusive Business Cooperation Agreement, Exclusive Purchase Right Agreement and
Letter of Authorization, pledgors carry out all their shares in Party C as a
pledge guarantee for pledgee to fulfill obligations under such agreements.

 

In order to execute terms of transaction files, all parties are agreed to sign
this agreement according to the following terms:

 

1 Definitions

Unless otherwise stipulated, the meaning of the following terms are:

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1.1 Pledge right refers to security interest which pledgors give to pledgee
under term 2 hereof, that is, priority for compensation pledgee enjoys and gains
from the depreciation, auction and disposal of pledge shares which is pledged
from pledgors to pledgee.

 

1.2 Pledge shares refer to the total shares’ equity pledgors hold or will hold
in Party C.

 

1.3 Pledge duration refers to the period designated in term 3 hereof.

 

1.4 Transaction files refer to Exclusive Business Cooperation Agreement
(“Exclusive Business Cooperation Agreement”) signed between Party C and pledgee
in Harbin on March 30, 2016; Exclusive Purchase Right Agreement (“Exclusive
Purchase Right Agreement”) signed among pledgors, Party C and pledgee on March
30, 2016; Letter of Authorization (“Letter of Authorization”) signed by pledgors
on March 30, 2016, and any amendment, revision and/or restatement of the
above-mentioned files.

 

1.5 Agreement obligations refer to all the obligations pledgors have to take
under Exclusive Purchase Right Agreement, Letter of Authorization and this
agreement, and all the obligations Party C has to take under Exclusive Business
Cooperation Agreement, Exclusive Purchase Right Agreement and this agreement.

 

1.6 Pledge liabilities refers to all the losses, direct or indirect, derivative
loss and loss of expected profit pledgee bears out of breach of pledgors and/or
Party C. The basis of such losses includes but is not limited to reasonable
business plan and expected profit of pledgors, payable service fee by Party C
under Exclusive Business Cooperation Agreement of Party C, and other fees
incurred when pledgee enforces pledgors and/or Party C to execute obligations
hereof.

 

1.7 Event of breach refers to any conditions described in term 7 hereof.

 

1.8 Notice of breach refers to notice, declaring the event of breach, issued by
pledgee under the agreement.

 

2 Pledge Right

2.1 Pledgors hereby agree to pledge such shares legally owned and entitled to
dispose by pledgors pursuant to the agreement as guarantee to fulfill
obligations and pay pledge liabilities. Party C hereby agrees that pledgors
pledge such shares to pledgee according to provisions hereof.

 

2.2 Pledge subject and specific shares’ amount: pledge subject is the following
total shares’ equity of Party C held by each pledgors:

 

CHENG Zhao holds 97.5% shares of Party C which is 9,750,000 yuan of the
registered capital, and pledges all of them;

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SU Dianli holds 2.5% shares of Party C which is 250,000 yuan of the registered
capital, and pledges all of them;

 

2.3 The pledge effectiveness hereof will not be influenced by any modification
or change of transaction files, and the pledge effectiveness hereof will be
valid to obligations of pledgors and Party C under the transaction files after
the modification. If any transaction file becomes invalid, canceled or relieved
out of any reason, pledgee has right to execute pledge right immediately
pursuant to term 8 hereof.

 

2.4 In the period of pledge, pledgee is entitled to acquire dividend or
interests on pledge shares. In the condition of prior written consent, pledgors
can obtain dividend or interests on pledge shares. After deducted personal
income tax, according to requirements of pledgee, the dividend or interests on
pledge shares by pledgors should be: (1) saved in designated account under
supervision of pledgee and used to complete obligations hereof and pay pledge
liabilities first; or (2) bestowed to persons designated by pledgee or pledgors
without any conditions on the premise of not breaking Chinese laws.

 

2.5 Under the condition of prior written consent from pledgee, pledgors can
increase capital to Party C. The amount of contribution in registered capital
because of pledgors increasing capital belongs to pledge shares.

 

2.6 If Party C needs to dissolve or clear accounts pursuant to compulsive
provisions of Chinese laws. As pledgee requires, any profit pledgors obtain from
Party under the law after the dissolution or clearing of it should be (1) saved
in a designated account of pledgee under its supervision and used to complete
obligations hereof and pay liabilities of pledge first; or (2) bestowed to
persons designated by pledgee or pledgors without any conditions on the premise
of not breaking Chinese laws.

 

3 Pledge Duration

3.1 The pledge right will take effect as of the day when pledge shares hereof
are registered in business administration department, and its valid period will
end until all obligations hereof are fulfilled and all pledge liabilities are
paid. Pledgors and Party C should (1) register the pledge right hereof in
shareholders’ list of Party C within 3 days after the agreement is signed, and
(2) apply for registration of pledge right hereof in business administration
department within 30 days after the agreement is signed. All parties agree
jointly that all parties and other shareholders of Party C should deliver this
agreement or a pledge of share agreement which is signed according to
requirements of local business administration department and accurately reflects
pledge information of the agreement (hereinafter referred to as “business
registration pledge agreement”) to local business administration department in
order to handle business registration procedures of pledge shares. The unengaged
items in business registration pledge agreement are subject to the provisions
hereof. Pledgors and Party

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C should abide by Chinese laws, regulations and related requirements of business
administration, deliver all necessary files, handle all necessary procedures and
make sure the pledge right will soon get registered after submitting
application.

 

3.2 In the period of pledge, if pledgors and/or Party C fail to fulfill the
obligations hereof or pay pledge liabilities, pledgee has rights but not duty to
execute pledge right pursuant to the agreement.

 

4 The Safekeeping of Pledge Proof

4.1 In the period of pledge stipulated in the agreement, pledgors should deliver
Party C’s equity contribution proof and shareholders’ list which records pledge
right to pledgee for safekeeping. Pledgee shall keep these files in all pledge
period stipulated hereof.

 

5 Statement and Guarantee of Pledgors and Party C

As of the signing date, pledgors and Party C hereby jointly and partially state
and warrant:

5.1 Pledgors are the only legal owner of pledge shares.

 

5.2 Pledgee is entitled to dispose and transfer pledge shares in the way
stipulated hereof.

 

5.3 Except for the pledge right hereof, pledgors don’t set up any other pledge
right or security interest upon pledge shares.

 

5.4 Pledgors and Party C have already gained approval and permission (if needed)
from government entities and the third party to sign, deliver and fulfill the
agreement.

 

5.5 The signing, delivery and fulfillment of the agreement will not: (1) result
in violation of any related law of China; (2) conflict with organization
articles of Party C and files of other entities; (3) result in violation of any
agreement or file to which it is a party or by which it is bound, or lead to
breach of any agreement or file to which it is a party or by which it is bound;
(4) result in violation of any conferment and continuously effective condition
of permission and approval granted to any party; or (5) result in termination,
cancel or attachment of conditions of permission and approval granted to any
party.

 

6 Commitment of Pledgors and Party C

6.1 In the valid period of the agreement, pledgors and party C jointly and
partially promise pledgee:

6.1.1 Without prior written consent of pledgee, except for the fulfillment of
transaction files, pledgors shouldn’t transfer pledge shares or any part of
them, set up or allow any guarantee or liability upon pledge shares;

 

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6.1.2 Pledgors and Party C abide by and execute all laws and regulations related
to pledge. When receiving any notice, decree or suggestion from authorities
concerned, they have to show the above-mentioned notice, decree or suggestion to
pledgee within 5 days, meanwhile, follow the above-mentioned notice, decree or
suggestion, or put forward opposed suggestions and statements according to
reasonable requirements of pledgee or agreed by pledgee;

 

6.1.3 Pledgors and Party C shall inform pledgee of any event and notice received
which may result in influence on pledge shares or any part of them, and any
event or notice received which may change any warrant or obligation of pledgors
hereof, or influence pledgee in fulfilling this agreement.

 

6.1.4 Party C shall complete register procedures to extend its operation period
within 3 months before the expiration of its operation period.

 

6.2 Pledgors agree that the pledge right enjoyed by pledgee pursuant to the
terms hereof shouldn’t be harmed or disturbed by pledgors, their heirs, their
agents or any other person via legal procedures.

 

6.3 Pledgors promise pledgee that to protect or perfect the guarantee for
obligations and guarantee liability hereof, pledgors will honestly sign and
prompt others who have a stake in the pledge right to sign all certificates and
contracts and/or fulfill or prompt others who have a stake in the pledge right
to fulfill the actions required by pledgee, provide advantages to the execution
of pledge right and authorization entitled to pledgee, sign all files related to
pledge of shares’ equity with pledgee or its designated person (natural/legal
person) and provide pledgee with notices, orders and decisions with respect to
pledge right pledgee considers as necessity in reasonable period.

 

6.4 Pledgors promise pledgee that they will abide by and fulfill all warrants,
promises, agreements, statements and conditions hereof. If pledgors fail to
fulfill or don’t fulfill their warrants, promises, agreements, statements and
conditions, pledgors should pay pledgee all the losses out of that.

 

7 Events of Breach

7.1 The following events can be considered as breach:

7.1.1 Breach of any obligation under transaction files and/or the agreement made
by Pledgors;

 

7.1.2 Breach of any obligation under transaction files and/or the agreement made
by Party C.

 

7.2 If acknowledging or finding out that any event described at term 7.1 or
events which may result in the above-mentioned events have happened, pledgors
and Party C

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should immediately inform pledgee in written.

 

7.3 Unless events of breach under term 7.1 have been remedied within 20 days as
pledgee requires after pledgee issues a notice of remedying this breach to
pledgors and/or Party C, pledgee can issue a written notice for breach to
pledgors in any following time and ask for executing pledge right under term 8.

 

8 The execution of Pledge Right

8.1 When executing pledge right, pledgee should issue a written notice for
breach to pledgors.

 

8.2 Being limited to the provision of term 7.3, pledgee is entitled to execute
disposal right of pledge at any time after issuing such notice pursuant to term
8.1. When pledgee decides to execute disposal right of pledge, pledgors will no
longer have any rights or benefits related to pledge shares.

 

8.3 After issuing a notice for breach according to term 8.1, pledgee has right
to execute right of remedies, including but not limited to prior compensation
via the depreciation, auction and disposal of pledge shares pursuant to Chinese
laws, transaction files and the terms hereof. Pledgee doesn’t take
responsibility of any loss created by executing such rights and power.

 

8.4 The fund which pledgee gains via executing pledge right should be firstly
used to cover taxation payable for disposing pledge shares obligations which
should be fulfilled to pledgee, and guarantee liabilities. If there is spare
money left after deducting such fund, pledgee shall deliver that spare money to
pledgors or other persons who are entitled to obtain that money pursuant to
related laws and regulations, or place in escrow to local notary office while
any fee incurred should be covered by pledgors; under the approval of Chinese
law, pledgors should grant pledgee or its designated person without any
condition according to the above-mentioned fund.

 

8.5 Pledgee is entitled to choose and enjoy any remedies for breath
simultaneously or in sequence. Before executing its priority for compensation
from the money gained through depreciation, auction and disposal of pledge
shares, pledgee needn’t execute other remedy for breach.

 

8.6 Pledgee is entitled to designate other lawyers or agents to execute pledge
right on its behalf in written, while pledgors or Party C can’t raise an
objection.

 

8.7 When pledgee handles pledge right pursuant to the agreement, pledgors and
Party C shall provide necessary assistance in order to realize the pledge right
of pledgee.

 

9 Obligation for Breach of the Agreement

9.1 If pledgors or Party C substantially breaks any term of this agreement,
pledgee is

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entitled to terminate the agreement and/or claims compensation for damages; term
9 shouldn’t get in the way of any other rights of pledgee under this agreement.

 

9.2 Unless otherwise stipulated by law, pledgors or Party C has no rights to
terminate or rescind this agreement.

 

10 Transfer

10.1 Unless gaining prior approval from pledgee, pledgors and Party C have no
right to grant or transfer obligations under terms hereof.

 

10.2 The agreement has binding force to pledgors, their successors and their
designated assignees, and has effect to any successor or assignee of pledgee.

 

10.3 Pledgee can deliver all or any right and obligation under transaction files
and the agreement to designated person at any time. Under such circumstance,
assignee shall enjoy and undertake rights and obligations of pledgee under
transaction files and the agreement same as the original party.

 

10.4 After the transfer results in the change of pledgee, as pledgee requires,
pledgors and/or Party C should sign a new Pledge of Shares Agreement with new
pledgee. Such agreement whose content is in accordance with this one should be
registered in related business administration.

 

10.5 Pledgors and Party C should strictly abide by the provisions hereof and
other related agreements respectively or jointly signed by all parties,
including transaction files, fulfill obligations under such agreements, and do
not take actions or negative actions enough to influence the effectiveness and
enforceability of such agreements. Unless required by written notice from
pledgee, pledgors shouldn’t execute its rights left to pledge shares.

 

11 Termination

11.1 After pledgors and Party C fully and completely fulfill all obligations
hereof and pay all liabilities, pledgee should follow requirements of pledgors,
release the pledge of pledge shares hereof within reasonable period, and assist
pledgors in canceling the register for pledge shares in shareholders’ list of
Party C and handling pledge cancel register in related business administration.

 

11.2 The provisions under term 9, 13, 14 and 11.2 hereof still are effective
after the termination of the agreement.

 

12 Service Fee and Other Fees

All fees and actual expenses related to the agreement including but not limited
to law fee, cost of production, stamp duty and other taxation and fees should be
covered by Party C.

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13 Non-disclosure Obligation

All parties admit and confirm that any oral or written exchange information
concerning this agreement and the content of the agreement for preparing or
fulfilling the agreement should be considered as non-disclosure information. The
following information is excepted: (a) any information which has been known or
will be known by the public (isn’t disclosed without authorization by one of the
parties who takes the non-disclosure information); (b) any information which
needs to be disclosed pursuant to applicable laws and regulations, security
exchange rules or orders from government departments or courts; or (c) the
information concerning this agreement which needs to be disclosed to its
shareholders, directors, employees, law or financial consultant who should take
similar responsibility to keep it secret. If shareholders, directors, employees
or hired agencies of any party let out the non-disclosure information, they have
to take responsibility for breach of contract.

 

14 Applicable Law and Dispute Resolution

14.1 The formation, effect, explanation, fulfillment, amendment, termination and
dispute resolution of this agreement should adopt Chinese law.

 

14.2 Any dispute created in the course of explanation and fulfillment of the
agreement should be solved via friendly negotiation among all parties. If the
dispute doesn’t get solved within 30 days after one party issues written notice
for negotiation, each party can deliver it to Harbin Arbitration Office who will
solve it via arbitration pursuant to its rules. The arbitration results are
final and bound to all parties.

 

14.3 When any dispute is created in the course of explanation and fulfillment of
the agreement, or any dispute is under arbitration, all parties of the agreement
should continue to execute other rights under the agreement and fulfill other
obligations under the agreement respectively, putting the dispute aside.

 

15 Notice

15.1 All notices and correspondences required or issued pursuant to the
agreement should be delivered by specific personnel, mailed via registered
letter, or processed by prepaid postage or business courier service or fax to
the following address. Each notice should be delivered again via e-mail. The
date of notice being delivered and considered as effectiveness should be
confirmed as following ways:

 

15.2 If the notice is sent by specific personnel, carrier service, registered
mail or prepaid postage, the delivery date should be considered as the day when
it is received or rejected at the designated address.

 

15.3 If the notice is sent by fax, the delivery date should be considered as the
day when it is successfully faxed (the automatically generated confirm
information could be the testimonial).

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15.4 For the sake of being informed, the addresses of all parties are as
follows:

 

Party A: Harbin Donghui Technology Co., Ltd.

Address: No.15 Ruyi Court, Kunlun Shopping Mall, No.26 Hengshan Road, Economic
Development Area, Nangang District, Harbin

Receiver: WANG Ximing

Tel.: 13654523613

E-mail: 672635766@qq.com

 

Party B: See the attached table 1

 

Party C: Harbin Dongxing Energy Saving Technical Service Co., Ltd.

Address: No.183 Daxin Street, Daowai District, Harbin

Receiver: CHENG Zhao

Tel.: 13946000887

E-mail: litian-001@163.com

 

15.3 Each party can inform the other one of changing its address of receiving
notices at any time according to this term.

 

16 Divisibility

If one or several stipulations of this agreement have been adjudged as invalid,
illegal or unenforceable according to any law or regulation, other valid, legal
or enforceable stipulations of the agreement shouldn’t be influenced or damaged
by that in any aspect. All parties should conduct sincere negotiation in order
to replace these invalid, illegal or unenforceable stipulations with effective
ones to the most extent of both parties’ expectations and approval of law. And
the economic effect created by those valid stipulations should be similar to the
economic effect created by those invalid, illegal or unenforceable terms.

 

17 Attached File

The attached file listed hereof is an integral part of the agreement.

 

18 Taking Effect

18.1 The agreement takes effect as of the date of all parties officially signing
it.

 

18.2 Any amendment, supplement or change of the agreement should be conducted in
a written form, signed or sealed by all parties and registered in government (if
needed) as required, and then it will take effect.

 

19 Language and Duplicates

This agreement is written in Chinese and in five copies. Each party, including
pledgee, pledgors and Party C, holds one. The last copy left is for register.

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In witness whereof, the corporate parties hereto have caused this Pledge of
Shares Agreement to be signed by their respective officers, hereunto duly
authorized, and take immediate effect as of the date first-above written.

 

Party A: Harbin Donghui Technology Co., Ltd.(Seal)

Signature: /s/ WANG Ximing (Signature)

Name: WANG Ximing

Position: Legal Person

 

 

 

In witness whereof, the corporate parties hereto have caused this Pledge of
Shares Agreement to be signed by their respective officers, hereunto duly
authorized, and take immediate effect as of the date first-above written.

 

Party B: CHENG Zhao

Signature: /s/ CHENG Zhao (Signature)

 

 

 

In witness whereof, the corporate parties hereto have caused this Pledge of
Shares Agreement to be signed by their respective officers, hereunto duly
authorized, and take immediate effect as of the date first-above written.

 

Party B: SU Dianli

Signature: /s/ SU Dianli (Signature)

 

 

 

In witness whereof, the corporate parties hereto have caused this Pledge of
Shares Agreement to be signed by their respective officers, hereunto duly
authorized, and take immediate effect as of the date first-above written.

 

Party C: Harbin Dongxing Energy Saving Technical Service Co., Ltd. (Seal)

Signature: /s/ CHENG Zhao (Signature)

Name: CHENG Zhao

Position: Legal Person

 

 

 

 

 

 

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Attached Table 1

Shareholder’s Name ID Card No./Register No. Amount of Contribution Shareholding
Ratio Residence Contact Address CHENG Zhao 230102197503121617 9,750,000 97.5%
Room 601, Unit 5, A107 Building, Zhengyi Huayuan Residential Area, Nangang
Dist., Harbin Room 601, Unit 5, A107 Building, Zhengyi Huayuan Residential Area,
Nangang Dist., Harbin SU Dianli 230106195604272517 250,000 2.5% Room 501, Unit
1, No.32 Liaoyang Street, Nangang District, Harbin Room 501, Unit 1, No.32
Liaoyang Street, Nangang District, Harbin Total   10,000,000 100%    

 

 

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