Stock Pledge Agreement
 
This Stock Pledge Agreement (the "Pledge Agreement") is made and entered into as
of June 29, 2012 by and among Bernard L. Kravitz (the "Pledgor"), Shangrao Bai
Hua Zhou Industrial Co., Ltd. (the “Pledgee”),and Eaton & Van Winkle LLP, as
collateral agent (the “Agent”).
 
Preliminary Statement
 
Dionics, Inc., a Delaware corporation (“Maker”), has issued its non-recourse
promissory note in the principal amount of $200,000 dated January 30, 2012 to
Pledgee to evidence its obligation to repay such indebtedness, on the terms and
conditions set forth therein (the “Note”) pursuant to a Share Exchange Agreement
by and among Maker, Pledgee and Li Xiaoling, the sole shareholder of Pledgee
(“Li”). The obligations of Maker under the Note will be assumed by an entity to
be formed by Pledgor (“Newco”) at or prior to the closing of the transactions
contemplated by the Share Exchange Agreement and the parties will extend the
Maturity Date (as defined in the Note) by one (1) year.
 
Pledgor, the President of Maker, has agreed to secure payment of the Note by the
pledge of 2,000,000 shares of the Maker’s common stock (the "Shares").
 
The Pledgor and the Pledgee desire to appoint the Agent as collateral agent with
respect to the pledge of the Shares, and the Agent is willing to accept such
appointment, on the terms and subject to the conditions set forth in this
Agreement.
 
NOW, THEREFORE, the parties agree as follows:
 
                   1.                Creation of Security Interest. Pursuant to
the provisions of the New York Uniform Commercial Code, Pledgor hereby grants to
the Pledgee, and the Pledgee hereby accepts, a first and present security
interest in (i) the Shares, (ii) all Dividends (as defined in Section 7 hereof),
and (iii) all Additional Securities (as defined in Section 8 hereof), if any, to
secure payment of the Note and performance of all Pledgor's obligations under
this Pledge Agreement. Pledgor herewith delivers to the Agent the certificate(s)
evidencing the Shares, together with one or more stock power(s) for each
certificate so delivered, duly executed (with the date and number of shares left
blank) by Pledgor. For purposes of this Pledge Agreement, the Shares, all
Dividends and all Additional Securities will hereinafter be collectively
referred to as the "Collateral”. The Agent will act solely for the Pledgee as
his agent in carrying out the terms of this Pledge Agreement. The Pledgor
understands and acknowledges that the Agent has acted and may continue to act as
counsel to Pledgee and its affiliates, including Li, in connection with the
transactions contemplated by the Share Exchange Agreement, including this
transaction.
 
                   2.                Representations and Warranties and
Covenants Regarding Collateral. Pledgor hereby represents and warrants to the
Pledgee that Pledgor has good title (both record and beneficial) to the
Collateral, free and clear of all claims, pledges, security interests, liens or
encumbrances of every nature whatsoever, other than any transfer restrictions
imposed by U.S. federal or state securities laws, and that Pledgor has the right
to pledge and grant the Pledgee the security interest in the Collateral granted
under this Pledge Agreement. Pledgor further agrees that, until all sums due
under the Note have been paid in full, and all of Pledgor's obligations under
this Pledge Agreement have been performed, Pledgor will not, without the Agent’s
prior written consent, (i) sell, assign or transfer, or attempt to sell, assign
or transfer, any of the Collateral, or (ii) grant or create, or attempt to grant
or create, any security interest, lien, pledge, claim or other encumbrance with
respect to any of the Collateral or (iii) suffer or permit to continue upon any
of the Collateral during the term of this Pledge Agreement, an attachment, levy,
execution or statutory lien.
 
 
 

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                   3.                Rights on Default. Upon an occurrence of an
Event of Default (as defined in the Note), the Agent will have full power to
sell, assign and deliver or otherwise dispose of the whole or any part of the
Collateral at any broker's exchange or elsewhere, at public or private sale, at
the option of the Agent, and in a commercially reasonable manner, in order to
satisfy any part of the obligations of Maker or Newco now existing or
hereinafter arising under the Note or under this Pledge Agreement; provided,
however, that (i) at least ten (10) days’ notice of the time and place of any
such sale shall be given to Pledgor, and (ii) in the case of any private sale,
such notice shall also contain the terms of the proposed sale and Pledgee shall
sell the Collateral proposed to be sold to any purchaser procured by Pledgor who
is ready, willing and able to purchase, and who prior to the time of such sale
tenders the purchase price of, such Collateral on terms more favorable to
Pledgee than the terms contained in such notice; provided, further, the Pledgor
acknowledges that the Pledgee may be unable to effect a public sale of all or
part of the Collateral by reason of certain prohibitions contained in the
Securities Act of 1933, as amended, and may be compelled to resort to one or
more private sales to a restricted group of purchasers who will be obligated to
agree, among other things, to acquire such securities for their own account, for
investment, and not with a view to the distribution or resale thereof.  The
Pledgor acknowledges that any such private sale may be at prices and on terms
less favorable to the seller than if sold at public sales and that private sales
shall be deemed to be made in a commercially reasonable manner notwithstanding
that such a private sale may result in a lower sale price.  On any such sale,
the Pledgee or his assigns may purchase all or any part of the Collateral.
Pledgor agrees at the request of the Agent, to cooperate with the Agent in
connection with the disposition of any and all of the Collateral and to execute
and deliver any documents which the Agent shall reasonably request to permit
disposition of the Collateral.
 
                   4.                Additional Remedies. The rights and
remedies granted to the Agent herein upon a default under the Note or this
Pledge Agreement will be in addition to all the rights, powers and remedies of
the Agent on behalf of the Pledgee under the New York Uniform Commercial Code
and applicable law and such rights, powers and remedies will be exercisable by
the Agent with respect to all of the Collateral. Pledgor agrees that the Agent’s
reasonable expenses of holding the Collateral, preparing it for resale or other
disposition, and selling or otherwise disposing of the Collateral, including
attorneys' fees and other legal expenses, will be deducted from the proceeds of
any sale or other disposition and will be included in the amounts Pledgor must
tender to redeem the Collateral. All rights, powers and remedies of the Agent on
behalf of the Pledgee will be cumulative and not alternative. Any forbearance or
failure or delay by the Agent in exercising any right, power or remedy hereunder
will not be deemed to be a waiver of any such right, power or remedy and any
single or partial exercise of any such right, power or remedy hereunder will not
preclude the further exercise thereof.
 
 
           5.           Option to Deliver Shares. Notwithstanding anything to
the contrary contained elsewhere herein, at any time until the occurrence of an
Event of Default (as defined in the Note), the Pledgor may exercise an option
(the “Option”) to deliver Shares to the Pledgee in payment of all sums due under
the Note.  The Option shall be exercised by a written and dated notice (the
“Written Notice”) to the Agent and the Pledgee from the Pledgor requesting that
the Agent deliver to Pledgee certificates representing such number of Shares
(and executed stock power(s) or other documents satisfactory to Agent permitting
transfer of such Shares to Pledgee) equal to the lesser of (A) all of the
Shares, or (B) the quotient obtained by dividing (i) the amount owing under the
Note, by (ii) the Transferred Share Value.  The Transferred Share Value shall be
equal to the Current Market Price (as hereinafter defined) of the Maker’s Common
Stock multiplied by 0.70.  The Current Market Price as of a given date shall be
the average of the closing prices of the Maker’s Common Stock for sixty-five
(65) consecutive trading days immediately preceding the date of the Written
Notice.  Upon receipt of the Written Notice from the Pledgor, the Agent shall
promptly deliver such certificates to Pledgee, and return to Pledgor any
remaining Shares in the event less than all of the Shares have been delivered to
Pledgor pursuant to this Section.  Upon delivery of such Shares pursuant hereto,
Pledgor shall be relieved of any further liability under this Agreement and
thereupon neither Maker, Newco nor Pledgor shall have any further personal
liability in any other respect for the payment of any amount due under the Note.
 
 
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6.           Non-Recourse.    THE PARTIES ACKNOWLEDGE AND AGREE THAT THE
PLEDGEE’S RECOVERY AGAINST THE MAKER, NEWCO OR PLEDGOR, AS THE CASE MAY BE, FOR
FAILURE TO PAY ANY AMOUNT OWING UNDER THE NOTE AND THIS PLEDGE AGREEMENT, SHALL
BE LIMITED SOLELY TO THE COLLATERAL.  THE MAKER, NEWCO AND THE PLEDGOR SHALL NOT
BE LIABLE OR HAVE ANY PERSONAL LIABILITY IN ANY OTHER RESPECT FOR ANY AMOUNT
OWING UNDER THE NOTE OR THE OBLIGATIONS UNDER THIS PLEDGE AGREEMENT.
 
7.             Dividends; Voting. All dividends hereinafter declared on or
payable with respect to any Collateral during the term of this Pledge Agreement
(the "Dividends") will be immediately delivered to the Agent to be held in
pledge under this Pledge Agreement. Notwithstanding this Pledge Agreement, so
long as Pledgor owns the Shares and no Event of Default has occurred under the
Note, Pledgor will be entitled to vote any shares comprising the Collateral,
subject to any proxies granted by Pledgor.
 
8.             Adjustments. In the event that during the term of this Pledge
Agreement, any stock dividend, reclassification, readjustment, stock split or
other change is declared or made with respect to the Collateral, or if warrants
or any other rights, options or securities are issued in respect of the
Collateral (the "Additional Securities") then all new, substituted and/or
additional shares or other securities issued by reason of such change or by
reason of the exercise of such warrants, rights, options or securities, will be
delivered to Pledgor, immediately surrendered to the Agent and pledged for the
benefit of the Pledgee to be held under the terms of this Pledge Agreement as
and in the same manner as the Collateral is held hereunder.
 
9.             Redelivery of Collateral; No Release For Partial Payment.
 
9.1           Until all obligations of Maker or Newco under the Note and of
Pledgor under this Pledge Agreement have been satisfied in full, all Collateral
will continue to be held in pledge under this Pledge Agreement.
 
9.2           Upon payment by Maker or Newco of all of amounts payable under the
Note and the performance of all obligations of Pledgor under this Pledge
Agreement, the Agent will immediately redeliver the Collateral to Pledgor and
this Pledge Agreement will terminate.
 
 
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10.           Further Assurances. Pledgor shall, at the Agent’s request, execute
and deliver such further documents and take such further actions as the Agent
shall reasonably request to perfect and maintain the Pledgee’s security interest
in the Collateral, or in any part thereof.
 
11.           Exculpation and Indemnification of Agent.

11.1         The Agent shall have no duties or responsibilities other than those
expressly set forth herein.  The Agent shall have no duty to enforce any
obligation of any person to make any payment or delivery, or to direct or cause
any payment or delivery to be made, or to enforce any obligation of any person
to perform any other act.  The Agent shall be under no liability to the other
parties hereto or to anyone else by reason of any failure on the part of any
party hereto or any maker, guarantor, endorser or other signatory of any
document or any other person to perform such person’s obligations under any such
document.  Except for amendments to this agreement referred to below, and except
for instructions given to the Agent by the Pledgor and the Pledgee relating to
the Collateral under this Agreement, the Agent shall not be obligated to
recognize any agreement between any and all of the persons referred to herein,
notwithstanding that references hereto may be made herein and whether or not it
has knowledge thereof.

11.2         The Agent shall not be liable to Pledgor, the Pledgee or to anyone
else for any action taken or omitted by him, or any action suffered by him to be
taken or omitted, in good faith and in the exercise of his own best
judgment.  The Agent may rely conclusively and shall be protected in acting upon
any order, notice, demand, certificate, opinion or advice of counsel (including
counsel chosen by the Agent), statement, instrument, report or other paper or
document (not only as to its due execution and the validity and effectiveness of
its provisions, but also as to the truth and acceptability of any information
therein contained), which is believed by the Agent to be genuine and to be
signed or presented by the proper person or persons.  The Agent shall not be
bound by any notice or demand, or any waiver, modification, termination or
rescission of this agreement or any of the terms thereof, unless evidenced by a
writing delivered to the Agent signed by the proper party or parties and, if the
duties or rights of the Agent are affected, unless he shall give his prior
written consent thereto.

11.3         The Agent shall not be responsible for the sufficiency or accuracy
or the form of, or the execution, validity, value or genuineness of, any
document or property received, held or delivered by him hereunder, or of any
signature or endorsement thereon, or for any lack of endorsement thereon, or for
any description therein; nor shall the Agent be responsible or liable to the
other parties hereto or to anyone else in any respect on account of the
identity, authority or rights of the persons executing or delivering or
purporting to execute or deliver any document or property or this
Agreement.  The Agent shall have no responsibility with respect to the use or
application of any funds or other property paid or delivered by the Agent
pursuant to the provisions hereof.

11.4           The Agent shall have the right to assume in the absence of
written notice to the contrary from the proper person or persons that a fact or
an event by reason of which an action would or might be taken by the Agent does
not exist or has not occurred, without incurring liability to the other parties
hereto or to anyone else for any action taken or omitted, or any action suffered
by him to be taken or omitted, in good faith and in the exercise of its own best
judgment, in reliance upon such assumption.
 
 
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11.5           In the event the Agent shall be uncertain as to its duties or
rights hereunder, or shall receive instructions from any party hereto with
respect to the Collateral,  or whether an Event of Default exists, which, in its
opinion, are in conflict with any of the provisions of this Pledge Agreement, it
shall be entitled to refrain from taking any action until such time as there has
been a final determination of the rights of the Pledgor or the Pledgee with
respect to the Collateral (or relevant portion thereof), or alternatively, it
may deposit the Collateral with a court of competent jurisdiction in an
interpleader action. For purposes of this Section 11.5, there shall be deemed to
have been a final determination of the rights of the Pledgor and the Pledgee
with respect to the Collateral (or relevant portion thereof) at such time as the
Agent shall receive joint written instructions from the Pledgor and Pledgee or a
copy of a final judgment rendered by a court of competent jurisdiction which is
not subject to appeal.

11.6           Pledgor and the Pledgee agree to defend, indemnify and hold the
Agent harmless from and against any and all expenses, including reasonable
counsel fees and disbursements, or loss suffered by the Agent in connection with
any action, suit or other proceeding involving any claim, or in connection with
any claim or demand, which in any way, directly or indirectly, arises out of or
relates to this Pledge Agreement, the services of the Agent hereunder, the
monies or other property held by it hereunder.  The Agent shall have a lien for
the amount of any such expenses or loss on the monies and other property held by
it hereunder and shall be entitled to reimburse itself from such monies or
property or the amount of any such expense or loss.  Promptly after the receipt
by the Agent of notice of any demand or claim or the commencement of any action,
suit or proceeding, the Agent shall, if a claim in respect thereof is to be made
against the Pledgor or the Pledgee (each, a “Party”), notify the Party thereof
in writing, but the failure by the Agent to give such notice shall not relieve
the Party from any liability which the Party may have to the Agent
hereunder.  Notwithstanding any obligation to make payments and deliveries
hereunder, the Agent may retain and hold for such time as it deems necessary
such amount of monies or property as it shall, from time to time, in its sole
discretion, deem sufficient to indemnify itself for any such loss or expense and
for any amounts due it under Section 11.

11.7           For the purposes hereof, the term “expense or loss” shall include
all amounts paid or payable to satisfy any claim, demand or liability, or in
settlement of any claim, demand, action, suit or proceeding settled with the
express written consent of the Agent, and all costs and expenses, including, but
not limited to, reasonable counsel fees and disbursements, paid or incurred in
investigating or defending against any such claim, demand, action, suit or
proceeding.

12.           Termination of Agreement and Resignation of Agent

12.1           This Agreement shall terminate on the final disposition of the
Collateral, provided that the rights of the Agent and the obligations of the
other parties hereto under Sections 10 and 12 shall survive the termination
hereof.

12.2           The Agent may resign at any time and be discharged from its
duties as Agent hereunder by giving the Pledgor and the Pledgee at least 30
days’ prior written notice thereof.  As soon as practicable after its
resignation, the Agent shall turn over to a successor collateral agent appointed
by the Pledgor and the Pledgee the Collateral upon presentation of the document
appointing the successor collateral agent and its acceptance thereof.  If a
successor collateral agent has not been so appointed within the 60-day period
following such notice of resignation, the Agent may deposit the aforesaid monies
and property with any court it deems appropriate.
 
 
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13.           Compensation of Agent.  The Agent will be compensated by the
Pledgee for its services hereunder at its hourly rates.  The Agent also shall be
entitled to reimbursement for all reasonable expenses paid or incurred by it in
the administration of its duties hereunder, including, but not limited to, all
counsel, advisor’s and Agent’s fees and disbursements and all reasonable taxes
or other governmental charges.

14.           Notices.  All notices, requests, demands and other communications
provided for herein shall be in writing, shall be delivered by hand or by
first-class mail, certified or registered with postage prepaid, or recognized
overnight courier, or sent by facsimile copy or email and confirmed, and shall
be deemed given upon receipt and shall be addressed to the parties hereto at
their respective addresses listed below or to such other persons or addresses as
the relevant party shall designate as to itself from time to time in writing
delivered in like manner.

If to the Pledgor:

Bernard L. Kravitz
110-11 Queens Boulevard, Apt. 3-K
Forest Hills, New York 11375
Telephone: (516) 997-7474
Facsimile:  (516) 997-7479
E-mail:  diblk@dionics-usa.com

With a copy to:

Kaye Cooper Fiore Kay & Rosenberg, LLP
30A Vreeland Road, Suite 230
Florham Park, New Jersey 07932
Telephone: (973) 443-0600
Facsimile: (973) 443-0609
E-mail: dmkaye@kcfkr.com

If to the Pledgee:

Shangrao Bai Hua Zhou Industrial Co., Ltd.
No. 8 Xin Yang Road
Shangrao City, Jiangxi Province, China
Telephone: (    )    -
Facsimile:
E-mail:

If to the Agent:

Eaton & Van Winkle, LLP
Three Park Avenue, 16th Floor
New York, NY 10016
Attention: Vincent J. McGill Esq.
Telephone: (212) 779-9910
Facsimile:  (212) 779-9928
E-mail: vmcgill@evw.com
 
 
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15.           Miscellaneous.

15.1           This Agreement and the rights and obligations of the parties
hereunder may not be assigned.  This Agreement shall be binding upon and inure
to the benefit of each party’s respective successors, heirs and permitted
assigns.  No other person shall acquire or have any rights under or by virtue of
this Agreement.
 
15.2           This Pledge Agreement, together with the Note, and any UCC-1
financing statements filed by the Agent, constitute the entire agreement of the
parties hereto with respect to the subject matter hereof and supersedes all
prior agreements and understandings related to such subject matter. This Pledge
Agreement may not be changed orally or modified, amended or supplemented without
an express written agreement executed by the Pledgor, the Pledgee and the Agent.
 
15.3           This Agreement shall be governed by and construed in accordance
with the internal laws of the State of New York excluding that body of law
relating to conflicts of law. Any lawsuit or action brought by any party
hereunder shall be brought only in the Supreme Court of the State of New York
located in New York County. THE PARTIES EXECUTING THIS AGREEMENT AND OTHER
AGREEMENTS REFERRED TO HEREIN OR DELIVERED IN CONNECTION HEREWITH AGREE TO
SUBMIT TO THE EXCLUSIVE JURISDICTION OF SUCH COURT AND WAIVE TRIAL BY JURY.
Should one or more of the provisions of this Pledge Agreement be determined by a
court of law to be illegal or unenforceable, the other provisions nevertheless
will remain effective and will be enforceable.

15.4           The representations and warranties contained in this Pledge
Agreement shall survive the execution and delivery hereof and any investigations
made by any party.

15.5           The headings in this Agreement are for purposes of reference only
and shall not limit or otherwise affect any of the terms hereof.

15.6           This Pledge Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original as against any
party whose signature appears thereon, and all of which shall together
constitute one and the same instrument.  This Pledge Agreement shall become
binding when one or more counterparts hereof, individually or taken together,
shall bear the signature of all of the parties reflected hereon as the
signatures.

15.7           This Pledge Agreement shall be construed without regard to any
presumption or other rule requiring construction against the party causing such
instrument to be drafted.  The terms “hereby,” “hereof,” “hereto,” “hereunder,”
and any similar terms, as used in this agreement, refer to the agreement in its
entirety and not only to the particular portion of this agreement where the term
is used.  The word “person” shall mean any natural person, partnership, company,
government and any other form of business or legal entity.  All words or terms
used in this agreement, regardless of the number or gender in which they are
used, shall be deemed to include any other number and any other gender as the
context may require.  This Pledge Agreement shall not be admissible in evidence
to construe the provisions of any prior agreement.  The rule of ejusdem generis
shall not be applicable herein to limit a general statement, which is followed
by or referable to an enumeration of specific matters, to matters similar to the
matters specifically mentioned.
 
 
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IN WITNESS WHEREOF, the parties hereto have executed this Pledge Agreement as of
the date and year first above written.
 
PLEDGOR
 
PLEDGEE
 
 
 
/s/Bernard L. Kravitz
  Bernard L. Kravitz
   
Shangrao Bai Hua Zhou Industrial Co., Ltd.
 
 
By: /s/ Li Xiaoling
       Li Xiaoling
       President
     
 
Eaton & Van Winkle LLP, as the Collateral Agent hereunder agrees and accepts the
obligations and responsibilities created hereunder as of the date first written
above.
 
By: /s/ Vincent J. McGill
       Vincent J. McGill
       Partner
   

 
 
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