Exhibit 10.48


 


Executed
version


 




 





Receivables
Pledge Agreement


 


Between


 


Tianjin New
Highland Science Development Co., Ltd.





(as
Pledgor)


 


and


 


DB TRUSTEES (HONG KONG) LIMITED


(as
the Security Agent and the Pledgee)




 





 





 

















 


Table of contents


 


	
  CLAUSES

  	
   

  	
  PAGE NO.

  
	
   

  	
   

  	
   

  
	
  1

  	
  DEFINITION AND EXPLANATION

  	
   

  	
  3

  
	
   

  	
   

  	
   

  	
   

  
	
  2

  	
  PLEDGE

  	
   

  	
  5

  
	
   

  	
   

  	
   

  	
   

  
	
  3

  	
  PERFECTION OF THE PLEDGE

  	
   

  	
  7

  
	
   

  	
   

  	
   

  	
   

  
	
  4

  	
  DOCUMENTS TO BE DELIVERED BY THE PLEDGOR

  	
   

  	
  9

  
	
   

  	
   

  	
   

  	
   

  
	
  5

  	
  REPRESENTATION AND WARRANTY

  	
   

  	
  10

  
	
   

  	
   

  	
   

  	
   

  
	
  6

  	
  COMMITMENT

  	
   

  	
  11

  
	
   

  	
   

  	
   

  	
   

  
	
  7

  	
  CONTINUING SECURITY INTEREST

  	
   

  	
  14

  
	
   

  	
   

  	
   

  	
   

  
	
  8

  	
  ENFORCEMENT OF THE PLEDGE

  	
   

  	
  15

  
	
   

  	
   

  	
   

  	
   

  
	
  9

  	
  APPLICATION OF PROCEEDS

  	
   

  	
  16

  
	
   

  	
   

  	
   

  	
   

  
	
  10

  	
  THE SECURITY AGENT AND ITS AGENT

  	
   

  	
  17

  
	
   

  	
   

  	
   

  	
   

  
	
  11

  	
  POWER OF ATTORNEY

  	
   

  	
  18

  
	
   

  	
   

  	
   

  	
   

  
	
  12

  	
  COSTS AND EXPENSES

  	
   

  	
  19

  
	
   

  	
   

  	
   

  	
   

  
	
  13

  	
  COMPENSATIONS

  	
   

  	
  19

  
	
   

  	
   

  	
   

  	
   

  
	
  14

  	
  RELEASE

  	
   

  	
  20

  
	
   

  	
   

  	
   

  	
   

  
	
  15

  	
  NOTIFICATION

  	
   

  	
  20

  
	
   

  	
   

  	
   

  	
   

  
	
  16

  	
  APPLICABLE LAWS AND JURISDICTION

  	
   

  	
  20

  
	
   

  	
   

  	
   

  	
   

  
	
  17

  	
  OTHERS

  	
   

  	
  21

  
	
   

  	
   

  	
   

  	
   

  
	
  ATTACHMENT 1:      SPECIFICS
  OF THE UNDERLYING CONTRACTS

  	
   

  	
  23

  
	
   

  	
   

  	
   

  
	
  ATTACHMENT 2:      FORMAT
  OF ADDITIONAL PLEDGE COMMITMENTS

  	
   

  	
  25

  
	
   

  	
   

  	
   

  
	
  ATTACHMENT 3:      FORMAT
  OF THE REGISTRATION AGREEMENT

  	
   

  	
  28

  
	
   

  	
   

  	
   

  
	
  ATTACHMENT 4:      FORMAT OF THE PLEDGE
  NOTIFICATION AND THE LETTER OF ACKNOWLEDGEMENT

  	
   

  	
  31

  



 


1

















 


The
Receivables Pledge Agreement (hereinafter referred to as “the Agreement”) is entered into on 11
January 2010 by: :


 


A                                     Tianjin New Highland Science Development
Co., Ltd. , the pledgor (hereinafter referred to as the Pledgor), a company (registration number:
120109000004324) incorporated under the laws of the People’s Republic of China
(hereinafter referred to as China),
with its registered address at Dagang Economic Development Area (DEDA),
Tianjin, China; and


 


B                                       DB Trustees (Hong Kong)
Limited
(representing the Facility Agent , Security
Agent  , Calculation
Agent  , Arranger
, Lenders
 and Swap Counterparty
, and their respective future assignees
and successors from time to time under the Transaction
Finance Documents  , the Security
Agent and the pledgee (hereinafter referred to as the Security Agent), a company incorporated
under the laws of Hong Kong Special Administrative Region of China, with its registered address at 48/F,
Cheung Kong Center, 2 Queen’s Road Central, Hong Kong.


 


Whereas:


 


1                                The Pledgor, as the Borrower, and among others, Deutsche Bank
AG, Hong Kong Branch, as the Arranger,
Facility Agent and Calculation Agent, and DB Trustees (Hong
Kong) Limited, as the Security Agent,
have entered into a Facility Agreement (including amendments and restatements
of the Facility Agreement through an Amendment
Agreement, and other modifications, revisions, extensions,
additions, updates and restatements of the Facility Agreement from time to
time) (hereinafter collectively referred to as the “Loan Contract”), under which, the Lenders have agreed, as per the terms and conditions of the Loan Contract, to provide a loan to the Borrower of no more than USD65,000,000;


 


2                                The Borrower may enter
into a Hedging Agreement with a Hedging Counterparty;


 


3                                The Borrower and among
others, Deutsche Bank AG, Hong Kong Branch, as the Facility Agent, and DB Trustees (Hong Kong) Limited, as the Security Agent, have entered into a Security Trust Deed on 11
January 2010; and


 


4                                As a prerequisite for the Lenders
to extend the loan to the Borrower,
the Pledgor agrees to provide its
receivables under the terms and conditions of the Agreement to the Facility
Agent, Security Agent, Calculation Agent, Arranger, Lenders
and Hedging Counterparty as pledge
that the Borrower shall settle in
full and on time its obligations under the Transaction
Finance Documents.


 


2

















 


The
two parties have reached agreement as follows:


 


1                                                  Definition and Explanation


 


1.1                                          Definition


 


The Agreement constitutes the Pledge over
Receivables as defined in the Security Trust
Deed. Unless otherwise specifically stated, the terms used in this Agreement shall have the same meaning as
defined in the Security Trust Deed
(and the same applies to the Chinese translation). The Agreement defines the following terms as
follows:


 


The
Secured Obligations refer to
obligations specified under Clause 2.4 (Scope
of Pledge) of the Agreement.


 


The
“Underlying Contracts” refer to
the Material Sales Contracts between
the Pledgor and the Obligor, including the Current LHD Contracts and the Current MD Contracts, with specifics provided
under Attachment 1 (Specifics of the
Underlying Contracts) to the Agreement,
and New Underlying Contracts.


 


“New Underlying Contracts” refer to any Material Sales Contracts signed subsequent
to the date of signing of the Agreement.


 


The
“Receiving Account” refers to the Onshore Controlled Account set up by the Pledgor with the Account Manager (AM)
under the Loan Contract and
designated to receive all income from the Underlying
Contracts.


 


The
“Receivables” refer to any account
receivables pledged by the Pledgor
to the Security Agent and those
over which the Pledgor has the
right to claim payment from relevant Obligors
under the Underlying Contracts,
and any rights, interests and benefits to the Pledgor
on such receivables, including New
Receivables.


 


“New Receivables” refer to any account
receivables pledged by the Pledgor
to the Security Agent and those
over which the Pledgor has the
right to claim payment from relevant Obligors
under the New Underlying Contracts,
and any rights, interests and benefits to the Pledgor
on such receivables.


 


The
“Obligors” refer to any purchasers
or other parties who, with respect to the Receivables,
have the obligation of payment under the Underlying
Contracts.


 


3

















 


An
“Obligor Event” refers to any of
the following with respect to the Receivables:


 


(a)                       The Obligor fails to make
payment of any amount payable under the relevant Underlying Contracts within 10 days upon the maturity date; or


 


(b)                      The Obligor becomes
insolvent; or


 


(c)                       The Obligor has stopped or
may stop its business operation; or


 


(d)                      The Obligor has filed for
bankruptcy or bankruptcy has been filed against the Obligor; or


 


(e)                       The performance of any obligation by the Obligor under an Underlying
Contracts is or has become illegal, or the Underlying Contracts have become invalid as
per their provisions or have been declared as invalid by the Obligor for any reason as per their
provisions, or there is evidence indicating that the Obligor is expected not to or plans not to comply with the Underlying Contracts; or


 


(f)                         The Underlying Contracts
are expected to be breached (subject to a breach), or are or become invalid or
unenforceable, or expected to be cancelled, or due to reasons other than the
completion of performance of the Underlying
Contracts, the Underlying
Contracts have terminated or become terminable or one of the parties
has issued a notice to terminate the Underlying
Contracts; or


 


(g)                      Any event that may become an Obligor
Event (as a result of issuing a notice or making any decisions under
the Underlying Contracts with the
passage of the grace period); or


 


(h)                      Any other events that have or may have substantial impact on the Obligor’s performance of its obligations to
pay the Receivables under the Underlying Contract.


 


“Additional Pledge” refers to pledge
provided by the Pledgor on the New Receivables in accordance with Clause
2.3 (Additional Pledge) of the Agreement.


 


“Additional Pledge Commitment” refers to a
letter of commitment or a document on the Additional
Pledge signed by the Pledgor
in accordance with the format and content specified in Attachment 2 (Format of Additional Pledge Commitments).


 


The
“Registration Agreement” refers to
the agreement signed by the Security Agent and
the Pledgor on the date of signing
of the Agreement in accordance
with the format and content of the Attachment 3 (Format of


 


4

















 


the Registration Agreement)
for the purpose of pledge registration under the Agreement.


 


The
“Pledge Registration Authority”
refers to regulatory or governmental bodies of China responsible for
registration of receivables pledge, and currently the Credit Reference Centre
of the People’s Bank of China.


 


The
“Security Registration Authority”
refers to the Tianjin Bureau of the State Administration of Foreign Exchange or
other relevant governmental bodies responsible for the registration of the
provision of security  for the pledge
established under the Agreement.


 


The
“Security Certificate” refers to
the security registration certificate or documents of similar status, with the Security Agent as the obligee, issued by
the Security Registration Authority
for the pledge established under the Agreement.


 


The
“Approving Authority” refers to
the Tianjin Municipal Commission of Commerce or other relevant governmental
bodies responsible for approving issues in connection with the pledge under the
Agreement.


 


The
“Pledge Certificate” refers to the
pledge registration certificate with the Security
Agent as the obligee issued by the Pledge
Registration Authority for the purpose of the Receivables.


 


“China” refers to the People’s Republic of
China and for the purpose of this Agreement,
does not cover the Hong Kong Special Administrative Region, Macao Special
Administrative Region and Taiwan.


 


1.2                                          Explanation


 


(a)                        The Clause 1.3 (Rule of
explanation) (as adjusted where necessary) of the Security Trust Deed should apply to this Agreement.


 


(b)                       The use of Security Agent,
Borrower, Pledgor and Secured Parties, unless the context specifically indicates
otherwise, shall include their respective successors and assignees and any and
all those who have acquired rights from the aforementioned.


 


2                                                  Pledge


 


2.1                                          The establishment of pledge


 


(a)                        As a means of security for payment and settlement on time and in full
of the Secured Obligations by the Borrower, the Pledgor establishes herein the first right of pledge on the Receivables for the Security Agent.


 


(b)                       In spite of the above provision, the Pledgor
should perform all of its obligations in connection with the Receivables, and the Security


 


5

















 


Agent shall not be
obligated to perform such obligations, or be liable to any party for any
consequences as a result of the failure to perform such obligations.


 


2.2                                          Notification of New Receivables


 


After
the signing of the Agreement,
should the Pledgor enter into any New Underlying Contract, the Pledgor should notify the Security Agent in writing as soon as
practicable and provide an authentic copy of the New Underlying Contract.


 


2.3                                          Additional pledge


 


(a)                        After entering into a New Underlying
Contract, the Pledgor
should pledge the New Receivables
under the New Underlying Contract
as a security interest to the obligations under the Transaction Finance Documents to the Security Agent who assumes the first
priority right of pledge.


 


(b)                       The Pledgor should, within
14 days upon the signing of the New
Underlying Contract or the completion of custom clearance procedures
for the LHD Units in connection of the New Underlying
Contract (whichever happens later), cause the Security Agent to acquire, for the purpose
of the New Receivables, the Additional Pledge Commitment signed by the Pledgor in accordance with substantially
the same format as required in Attachment 2 (Format
of Additional Pledge Commitments) to the Agreement, and the Pledge Certificate in connection with the New Receivables.


 


(c)                        The Pledgor should, within
90 days upon the signing of the New
Underlying Contract or the completion of custom clearance procedures
for the LHD Units in connection of the New
Underlying Contract (whichever happens later), make its best efforts
to cause the Security Agent to
acquire, for the purpose of the New
Receivables, the Security
Certificate, approval of the Approving
Authority, the pledge filing records from Tianjin Industrial and
Commercial Administrative Bureau and other approval, registration or supporting
documents, or supporting documents testifying


 


2.4                                          Scope of the pledge


 


The
debts covered by the pledge of the Pledgor
under the Agreement include the
following:


 


(a)                        The principals, interests (including interests, interests on overdue
debts and interests on late payment fines), costs, commitment fees, arranging
fees, agent fees, other fees, expenditures, compensations, default fines,
damages and expenses incurred to enforce the creditor’s rights (including but
not limited to litigation fees, lawyers’ fees, notary fees, enforcement
expenses, etc.) that the Borrower


 


6

















 


should
to the Secured Parties under the Transaction Finance Documents and other
amounts payable by the Borrower
(no matter whether the compensation or payment is due upon maturity of the
loans or becomes due under other conditions); and


 


(b)                       All expenses incurred by the Secured
Parties to enforce their secured rights and interests under the Agreement (including but not limited to
litigation fees, lawyers’ fees, notary fees and enforcement expenses, etc) and
other amounts payable by the Pledgor,
including any costs, expenses or compensations the Pledgor should pay to the Security
Agent under Clause 12 (Costs and
Expenses) and Clause 13 (Compensations)
of the Agreement.


 


3                                                  Perfection of the Pledge


 


3.1                                          Approval and registration


 


(a)                        To complete the registration under this Clause (Completion of the Pledge), the Pledgor should, upon the date of signing of
the Agreement, sign the Registration Agreement with the Security Agent;


 


(b)                       The Pledgor should, at its
own expenses and as soon as practicable, obtain, for the purpose of the pledge
established under the Agreement,
the approval from the Approving Authority
and complete the filing with Tianjin Industrial and Commercial Administrative
Bureau, and complete the security registration with the Security Registration Authority;


 


(c)                        The Pledgor commits herein
that, upon signing of the Agreement and any Additional
Pledge Commitments, the Pledgor
shall immediately make all efforts reasonably possible to assist the Security Agent (including other parties or
individuals entrusted by the Security Agent)
to complete the pledge registration procedures for the Receivables with the Pledge Registration Authority and obtain
the Pledge Certificate, and assume
the reasonable and appropriate costs and expenses incurred therefrom.


 


3.2                                          Delivery of the registration documents


 


The
Pledgor commits to the Security Agent that immediately upon
completion of the registration required under Clause 3.1 (Approval and registration), the Pledgor shall deliver the approval from the
Approving Authority, pledge filing
certificate from Tianjin Industrial and Commercial Administrative Bureau and
the Security Certificate from the Security Registration Authority to the Security Agent.


 


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3.3                                          Notification and acknowledgement


 


The
Pledgor should, as per
requirements of the Security Agent,


 


(a)                        For Receivables other than
the New Receivables, before the
Initial Utilisation Date; or


 


(b)                       For the New Receivables,
within 3 Business Days upon signing of the Additional
Pledge Commitment;


 


Deliver
the relevant properly completed pledge notification (substantially in the same
format and of the same contents as shown in part one of Attachment 4 (Format of the Pledge Notification and the Letter of
Acknowledgement)) to the relevant Obligors,
and ensure that the Security Agent
receives from the Obligors
properly completed letters of acknowledgement for the pledge notification
(substantially in the same format and of the same contents as shown in part two
Attachment 4 (Format of the Pledge
Notification and the Letter of Acknowledgement)).


 


3.4                                          Further warranties


 


Before
the irrevocable settlement of the Secured
Obligations in full in a manner satisfactory to the Secured Parties and the termination of the Agreement in accordance with Clause 14 (Release of the Agreement), upon reasonable
request of the Security Agent, the
Pledgor shall, at any time and at
its own expenses, take any actions that the Security
Agent may reasonably require for the following purposes (including
but not limited to signing of documents, obtaining approvals and completion of
registration, filing or documentation):


 


(a)                        Establishment and perfection of the pledge under the Agreement;


 


(b)                       For the interests of the Security
Agent, perform the registration, alteration and extension of the
pledge under the Agreement with
the Approving Authority, Tianjin
Industrial and Commercial Administrative Bureau, Security Registration Authority and/or Pledge Registration Authority; and


 


(c)                        Implement the Agreement in
accordance with the terms and conditions of the Agreement, or exercise any rights, powers or discretion in
respect of the pledge under the Agreement.


 


3.5                                          Additional security


 


Should
the value of the Receivables
decreases due to an Obligor Event
or any action of the Pledgor, the Security Agent has the right to require the
Pledgor to stop such action or/and
require the Pledgor to take
remedial measures to restore the value of the Receivables,
or require the Pledgor to provide
additional security acceptable to the Security
Agent.


 


8

















 


4                                                  Documents to be delivered by the Pledgor


 


4.1                                          Without prejudice to the provisions of other Clauses of the Agreement, unless expressly waived by the Security Agent, the Pledgor should ensure that the Security Agent receives, no later than the Initial Utilisation Date as specified in
the Loan Contract and in a manner
that is satisfactory to the Security Agent
in terms of format and content, the originals or authenticated copies of
following documents:


 


(a)                        Documents to be provided by the Borrower
as specified in Section 1(a)(iii) of the Attachment 2 (Preconditions) to the Loan Contract (as per its format and
contents on the date of Agreement);


 


(b)                       Indebtedness registration certificates for the purpose of the Loan Contract;


 


(c)                        The originals of the Pledgor’s
board meeting resolutions for approving the signing and performance of the Agreement, the Registration Agreement and relevant Additional Pledge Commitments and authorizing the signer(s),
and the signature specimens of the authorized signer(s);


 


(d)                       Properly signed Loan Contract and
Agreement;


 


(e)                        Underlying Contracts;


 


(f)                          Registration Agreement
validly signed by the Pledgor;


 


(g)                       Supporting  documents
giving testimony to the Borrower’s
submission of materials for approval, registration and filing purposes to the Approving Authority and the Security Registration Authority;


 


(h)                       Supporting documents giving testimony to the Pledgor’s delivery of properly completed pledge notifications
to relevant Obligors under the Underlying Contracts (other than the New Underlying Contracts);


 


(i)                           Properly completed letters of acknowledgement of the pledge
notifications from relevant Obligors
under the Underlying Contracts (other
than the New Underlying Contracts);
and


 


(j)                           Other documents reasonably required by the Security Agent from time to time.


 


4.2                                          The Pledgor should ensure
that the Security Agent receives,
within 14 days from the Initial Utilisation Date, the corresponding Pledge Certificates for all Receivables that have arisen as of the date
of the Agreement in a manner
satisfactory to the Security Agent
with respect to format and contents, and make its best efforts to enable the Security


 


9

















 


Agent to receive,
within 90 days from the Initial Utilisation Date, the approval from the Approving Authority, the pledge filing
document from Tianjin Industrial and Commercial Administrative Bureau, the Security Certificate and other approval and
registration documents, or supporting documents testifying that relevant
approval or registration documents cannot be obtained.


 


4.3                                          Other documents to be delivered by the Pledgor as per reasonable requests of the Security Agent from time to time.


 


5                                                  Representation and Warranty


 


5.1                                          Representations and warranties


 


The
Pledgor herein makes the following
representations and warranties to the Security
Agent:


 


(a)                        It is a wholly foreign owned enterprise properly incorporated and
validly existing under the laws of China,
with the right to own property and carry out its current business activities;


 


(b)                       It has full rights to sign the Agreement,
Registration Agreement and Underlying Contracts, exercise its rights
under the Agreement, Registration Agreement and Underlying Contracts, perform its
obligations under the Agreement, Registration Agreement and Underlying Contracts, and has taken all
necessary internal actions within the Company and other actions to obtain
authorization or has obtained such authorization to sign and perform the Agreement, Registration Agreement and
Underlying Contracts;


 


(c)                        Other than the registration required under Clause 3.1 (Approval and registration) of the Agreement, it has obtained all
authorizations, approvals, consent, registration and filing from all government
bodies and other organizations required for the signing and performance of the Agreement and ensuring the validity of the Agreement;


 


(d)                       Its signing of the Agreement,
Registration Agreement and Underlying Contracts and its performance
of the obligations under the Agreement,
Registration Agreement and Underlying Contracts do not violate:
(i) its organizing documents; or (ii) any documents that are binding
on the Company, or the Receivables
or other properties owned by the Company; or (iii) any applicable laws;


 


(e)                        There is no litigation, arbitration or administrative proceedings
against it or the Receivables that
are taking place, pending, or to its knowledge, threatened, and which, once
unfavorable decisions are made, may have adverse impact on its performance of
obligations under the Agreement, Registration Agreement and Underlying Contracts;


 


10






 










 


(f)                          It has full
ownership over the Receivables,
there is no dispute over its rights with respect to the Receivables, there is no other pledge or
guarantee of the Receivables
(other than the pledge under the Agreement),
and the Receivables have not been
seized, confiscated or subject to other restrictions;


 


(g)                       There is no
provision in any Underlying Contract
that prohibits the pledge or transfer of any Receivables,
and the signing and performance of the Agreement
do not violate any provisions of the Underlying
Contracts;


 


(h)                       Neither the Obligors nor any other parties or
individual have any right to exercise any claim to any Receivables, including the right of
set-off;


 


(i)                           Once signed,
the Underlying Contracts
constitute obligations that are legally binding on all parties to these
contracts. The pledgor has
performed all obligations under the Underlying
Contracts as they fall due, and there is no outstanding dispute over
any Receivables or Underlying Contracts between the Pledgor and the Obligors; and


 


(j)                           All
information, documents and materials it has provided to the Security Agent in connection with the Agreement and Underlying Contracts are, in all respects, true and accurate
as of the date such information, documents and materials are provided or representations
on them are made, and all documents provided in photocopies conform to their
originals.


 


5.2                                          Repetition of representations and warranties


 


The Pledgor further represents and warrants to
the Security Agent that the above
representations and warranties shall remain true and accurate at any time
during the effective term of the Agreement
on the basis of the facts and circumstances of the time.


 


6                                                  Commitment


 


6.1                                          Positive commitment


 


The Pledgor commits to the Security Agent that within the valid term
of the Agreement, the Pledgor shall:


 


(a)                        Ensure that the
whole or any part of the Receivables
shall not be confiscated, seized, placed in custody or subject to any
litigation, judicial or administrative enforcements or restrictions;


 


(b)                       Immediately
notify the Security Agent of any
events that may have impact on the Security
Agent’s rights under the Agreement,
including but not limited to Events of
Default under the Transaction
Finance Document, or any litigation, arbitrary and administrative


 


11

















 


proceedings involving the Pledgor, the Receivables or other assets of the Pledgor;


 


(c)                        Notify the Security Agent as soon as practicably
possible of any Obligor Events
when they occur (and to take remedial measures);


 


(d)                       With respect to
any claims or disputes over the Receivables,
take actions as soon as practicably possible to remedy the situation or contest
the claims or disputes, and notify the Security
Agent of any such claims or disputes involving more than
RMB10,000,000 (RMB ten million)(or an equivalent amount);


 


(e)                        Should the Security Agent enforce the pledge under the
Agreement, provide the Security Agent with all assistance required
and support and carry out all procedures in connection with the enforcement;


 


(f)                          Fully observe
and perform all its obligations under any Underlying
Contracts;


 


(g)                       Take all
necessary measure (including but not limited to instituting and/or maintaining
any potential or suitable legal proceedings) to ensure the full validity of the
Underlying Contracts and reserve
or protect the interests of the Pledgor
and Security Agent with respect to
the Receivables, cause all Obligors to fully perform their respective
obligations under the relevant Underlying
Contracts, and notify the Security
Agent in a timely manner the details of the Obligor’s performance of such obligations;


 


(h)                       Adequately
maintain its account records and books for the business activities under the Underlying Contracts, which should be
prepared under the generally accepted accounting standards of China, allow review, inspection, copy and
verification of such records and books by the Security
Agent and/or any professional advisors appointed by the Security Agent, and shall provide all
necessary assistance for these exercises;


 


(i)                           Immediately
notify the Security Agent of any
events that may cause or result in the Underlying
Contracts to become void or be terminated;


 


(j)                           Set up and
maintain the Receiving Account as
per the Agreement;


 


(k)                        Ensure all
income from the Receivables is
deposited into the Receiving Account or
other accounts that the Security Agent
may designate from time to time. Without prejudice to the aforementioned
provisions, should the Obligors pay
any income on the Receivables to
the Pledgor and not into the Receiving Account, the Pledgor should immediately transfer the
income to the Receiving Account;


 


12

















 


(l)                           Strictly
observe the laws and regulations of China
applicable to the Receivables, and
obtain from governmental bodies or other organizations the authorization,
approvals, consents, registration and filings required for the singing,
validation and enforcement of the Agreement
(including but not limited to the approval and registration procedures required
under Clause 3.1 (Approval and registration )
of the Agreement);


 


(m)                     Without the
need of obtaining prior consent of the Pledgor,
the Secured Parties may assign
their obligee’s right under the Agreement
in accordance with the requirements of the Transaction
Finance Document, with their right of the pledge under the Agreement transferred to the third parties
at the same time, and the Pledgor
should complete relevant legal procedures for this purpose; and


 


(n)                       Upon request of
the Security Agent, immediately provide
to the Security Agent any other
information on the Agreement or Receivables.


 


6.2                                          Negative commitment


 


The Pledgor commits to the Security Agent that during the life of the
Agreement, unless otherwise agreed by the Security
Agent, the Pledgor
shall not:


 


(a)                        Close the Receiving Account;


 


(b)                       Allow or agree
to the release, cancellation or termination of any Underlying Contract, or make any revisions to any Underlying Contract that may have negative
impact on the interests of the Security Agent;
Waive or release any claims in connection with the Receivables or under the Underlying
Contracts or effect a settlement of any claims in connection with
the Receivables or under the Underlying Contracts, carry out or
intentionally do not carry out any other actions or events that may have
substantial impact on the recovery in full of all amounts in connection with
the Receivables payable upon
maturity, grant any exemption to any Obligor
or reach a compromise that relieves the obligation or responsibility of any Obligor;


 


(c)                        Establish
pledge or other security rights (other than the pledge established under the Agreement) over the whole or any part of
the Receivables or Receiving Account;


 


(d)                       Dispose the
whole or any part of the Receivables
via sale, grant, transfer, exchange or other means;


 


(e)                        Take actions or
allow any other parties or individuals to take actions that may reduce the
value of the Receivables in any
respect; or


 


13

















 


(f)                          Commit, cause
or allow the commission of any events that may be harmful to the rights and
interests of the Security Agent
under the Agreement.


 


7                                                  Continuing security interest


 


7.1                                          Continuing security interest


 


The pledge under the Agreement is a continuous security
interest, and shall remain in full force until all Secured Obligations have been settled in full, each and every Lender is no longer bound by any
obligations under the Loan Contract
and all transactions under the Swap Agreement
have been completed, without regard to whether there have been any settlements
or release in whole or in part in the interim.


 


7.2                                          Restitution


 


If, in reliance on certain
payments, security interests or other dispositions, the Secured Parties have released the
obligations in whole or in part or have made arrangements for these
obligations, but the payments, security interests or dispositions have become
void or must be restored due to insolvency, liquidation, judicial
administration or other causes, the obligations of the Pledgor under the Agreement shall continue to exist or be
restored, as if there had not been any such release or arrangements.


 


7.3                                          Non-diminishment


 


The pledge under the Agreement or the relevant right of remedy
of the Security Agent shall not be
diminished as a result of the following:


 


(a)                        Any other
security interests, warranties or compensations assumed currently by the Security Agent or any other parties or
assumed after the signing of the Agreement
in relation to the Secured Obligations
or any other debts;


 


(b)                       Waiver,
release, enforcement or non-enforcement of any other security interests,
warranties or compensations;


 


(c)                        Perfection or
non-perfection of rights in any other security interests, warranties or
arrangements, or full or partial realization of the value of the security interests
in security arrangements;


 


(d)                       Any revisions
to any other security interests, warranties or compensations or any revisions
to any Transaction Finance Documents;


 


(e)                        Grace extended
to the Pledgor or any other
parties in term of time or other respects;


 


14

















 


(f)                          Any debts that
any other parties require or do not require the Pledgor to meet;


 


(g)                       Situations
where any party becomes incapable, disempowered, unauthorized, disqualified as
a legal entity or is dissolved, or there is change to the members or legal
status of any party;


 


(h)                       Any bankruptcy
or similar proceedings;


 


(i)                           Situations
where, to the extent allowed by applicable laws, any obligation of any party
under the Transaction Finance Document
or any other documents or the security interests has become unenforceable,
illegal, void or unverifiable;


 


(j)                           Release of the
obligations of any party in accordance with settlement agreements or
arrangements; or


 


(k)                        Any action,
event or situation that would have diminished or released the rights of the
Security Agent under the Agreement without the provisions of this provision,


 


7.4                                          Execution of the security interests


 


To the extent permissible
under applicable laws, the Pledgor
waives its rights to require the Security
Agent to claim or execute any other rights, security interests or
rights to demand payments before the Security
Agent can exercise any of its rights under the Agreement.


 


7.5                                          Additional security interests


 


The Agreement and the pledge under the Agreement constitute the supplement to any
other security interests currently held or to be held by the Security Agent, and shall not, in any way,
be affected by other such security interests.


 


8                                                  Enforcement of the pledge


 


8.1                                          Enforceability of the pledge


 


(a)                        Upon
enforcement notification of the Security
Agent, the security interests under the Agreement become immediately enforceable.


 


(b)                       Upon request of
the Security Agent after the
delivery of the execution notification, the Pledgor
shall, in accordance with the requirements of the Security Agent, take all legal and appropriate actions to
enable the Security Agent to
execute the security interests under the Agreement.
In order for the Security Agent to
forcibly execute the security interests, the Pledgor
shall sign all necessary agreements, transfer, notification, authorization,
decisions,


 


15

















 


commitments and other
relevant documents reasonably required by the Security
Agent.


 


8.2                                          Verification of the amounts of Secured Obligations


 


The verifications issued by
the Secured Parties with respect
to the amounts of Secured Obligations,
unless there are obvious mistakes, shall be binding on the Pledgor.


 


8.3                                          Rights of the Security Agent


 


When the pledge under the Agreement becomes executable, the Security Agent has the right to, pursuant
to the instructions of the Instructing Group,
immediately execute and exercise all powers and remedial measures available to
it as the Obligee of the Receivables, including but not limited to
(the Security Agent shall notify
the Pledgor when it adopts any
such measures):


 


(a)                        Exercising all
or part of the powers vested by the laws of China
in this areas through public auction or sale to sell and realize all or any
part of the Receivable;


 


(b)                       Direct
deduction or appropriation of relevant amounts from the Receiving Account to settle the Secured
Obligations;


 


(c)                        Requiring the Obligors to pay the Receivables directly to the accounts
designated by the Security Agent;


 


(d)                       Instituting (or
instructing the Pledgor to
institute as per its requirements) all litigation, arbitration or legal
proceedings in connection with all or any Receivables,
and the execution, settlement or release of any rights and claims in connection
with the Receivables;


 


(e)                        Exercising any
rights in connection with the Receivables
under the Underlying Contract;
and/or


 


(f)                          For the above
purposes, adopting and signing all relevant actions, contracts and items that
the Security Agent deems
reasonably necessary or appropriate.


 


9                                                  Application of Proceeds


 


All proceeds received from
time to time or recovered by the Security
Agent under the Agreement
should be used and distributed in the order as specified under Clause 7 (Application of Proceeds) of the Security Trust Deed.


 


16

















 


10           The Security Agent and its Agent


 


10.1                                    Agents


 


(a)                        The Security Agent may, at any time it deemed
appropriate, delegate all or any of its rights, powers, authority and
decision-making right vested in the Security
Agent under the Agreement
to any agent through a power of attorney or other means. The delegation may be
done in terms and conditions deemed appropriate by the Security Agent in the interests of the Secured Parties, but the terms and
conditions must not be inconsistent with any provisions of the Agreement; and


 


(b)                       Without
prejudice to Clause 10.3 (The
responsibilities of the Security Agent and its Agents), the Security
Agent does not need to supervise litigation proceedings involving any of its agents,
and shall not be liable for any loss incurred by any of its agents, unless by
law, the agent(s) should be responsible for its material negligence or
intentional misconducts.


 


10.2                                    The rights of the Security Agent and its Agents


 


To the extent specified in
Clause 10.3, the Pledgor and the Security Agent herein make express
representations as follows:


 


(a)                        The Security Agent and any of its designated
agents may carry out conducts in connection with the Agreement based on the recommendations and opinions of and
information obtained from any lawyers, valuers, accountants, bankers, brokers
or other professionals, without regard to whether such recommendations,
opinions or information have been obtained by the Pledgor, any Secured Parties
or any other parties, and shall not be liable for any loss as a result of such
conducts;


 


(b)                       The Security Agent and any of its designated
agents have the right to accept the certificate documents signed by any
authorized representatives of the Pledgor
and affixed with the stamp of the Pledgor,
and use these certificates as sufficient evidence for any transaction or the
facts, substance or interests of anything. In this case, the Security Agent or any of its designated
agents do not need further evidence and shall not be held liable for any loss
as a result of conducts based on the certificate documents;


 


(c)                        The Security Agent or any of its designated
agents do not need to take any measures to determine whether any event has
occurred that may cause the pledge established under the Agreement to become enforceable. Unless the
Security Agent or any of its
designated agents have become aware or there is express notice to the contrary,
the Security Agent and any of its
agents shall have the right to assume nothing of the sort has happened, and
that the Pledgor is


 


17

















 


observing and performing all
its obligations under the Agreement
and Transaction Finance Document;
and


 


(d)                       The Security Agent or any of its designated
agents shall not be liable for the invalidity, flaw or insufficiency of the Agreement or the pledge under the Agreement or the ownership of any Receivables.


 


10.3                                    The responsibilities of the Security Agent and its Agents


 


The Security Agent and any of its designated
agents, or the directors of the board, management or employees of the Security Agent, shall in no event, be
liable for any costs, expenses, losses, debts or expenditures as a result of
the pledge under the Agreement or
any enforcement of the pledge, or any action or inaction of the Security Agent or its agents, directors,
management or employees in connection of the Receivables,
or the exercise or non-exercise of any exercisable rights under the Agreement by the Security Agent or its agents, directors, management or
employees, unless the above costs, expenses, losses, debts or expenditures have
been incurred as a result of the material negligence or intentional misconduct
of the Security Agent or its
agent, directors, management or employees.


 


11                                           Power of Attorney


 


11.1                                    Designation


 


The Pledgor herein irrevocably designates the Security Agent (and the Security Agent’s agents) as its agents (via
power of attorney) to, on its behalf, in its name or through other means, and
in a manner and at the time deemed appropriate by the Security Agent (and the Security Agent’s agents), within the scope
permissible under the laws of China:


 


(a)                        Perform
anything that the Pledgor is
obligated to perform under the Agreement
but has not properly performed, including but not limited to signing document
necessary for the perfection, protection and (after the issue of enforcement
notice,) realization of the security interests under the Agreement; and


 


(b)                       Exercise any
rights vested in the Security Agent
under the Agreement.


 


11.2                                    Acknowledgement and notification


 


The Pledgor herein acknowledges and confirms
anything done by the Security Agent
(and its agents) for the exercise of its rights in the power of attorney under
Clause 11.1 (Designation). Anyone
who takes any action or signs any document as per the above power of attorney
should notify the Pledgor, and
after the event, should, as soon as reasonably possible, provide the copies of
any such documents to the Pledgor.


 


18

















 


12           Costs and Expenses


 


Upon request, the Pledgor shall, from time to time, pay to
the Security Agent:


 


(a)                        All costs and
expenses incurred by the Security Agent
as a result of preparing, signing, performing and perfecting the Agreement and any other relevant documents,
any revision or extension of the Agreement,
or any consent or waiver under the Agreement;
and


 


(b)                       All costs,
expenses ad expenditures (including legal fees and all other actual
expenditures) incurred by the Security Agent
as a result of exercising any of its rights or powers under the Agreement, instituting legal proceedings in
connection with and recovering overdue payments under the Agreement, preserving or enforcing its
rights under the Agreements in
other means, contesting any claims against it in connection with the Agreement, or releasing the Agreement and the pledge under the Agreement upon full settlement of all
amounts secured under the Agreement.


 


13                                           Compensations


 


13.1                                    The Pledgor shall make compensations to the Security Agent, its agents, directors,
management and employees for all verifiable losses, liabilities, damages, taxes
(if any), costs and expenses incurred by the Security
Agent as a result of signing or performing the Agreement, and all litigations, legal
proceedings, claims, requests, costs, expenses and expenditures that may be
caused by, suffered or incurred from the failure of the Pledgor to perform or observe any of its
commitments and agreements as stated under Agreement,
except those incurred as a result of frauds, intentional misconducts or
material negligence of the Security Agent.


 


13.2                                    All amounts
payable by the Pledgor under the Agreement when they fall due shall be paid
in full without imposing set-off, counter-claim or any other restrictions or
conditions, and should be exempt from taxes, deductions or withholding. If as
per laws or regulations that the Pledgor
or any other parties should deduct or withhold any amounts from any payments to
the Security Agent (for tax or
other purposes), the Pledgor shall
make an additional payment on top of the above payments so as to ensure that
the total amounts (not subject to further taxes or deductions or withholding)
actually received by the Security Agent
should be the same as the Security Agent
would have received without the deductions or withholding. The Pledgor shall, after making the payments,
immediately hand over the official documentations or the photocopies of other
documentations to prove that it has already paid the deducted or withheld
amounts to relevant tax authorities or other competent authorities.


 


19

















 


14           Release


 


The
obligations of the Pledgor under
the Agreement shall terminate on
the date the Secured Obligations
have been irrevocably and unconditionally paid and settled in full, the Lenders are no longer bound by any
obligations under the Loan Contract
and all transactions under the Swap
Agreements have been completed, and at the same time:


 


(a)                        All rights of
the Security Agent under the Agreement shall terminate, and the security
interests arising from the Agreement
or established under Agreement
shall be released;


 


(b)                       The Pledgor and the Security Agent (or its entrusted agents) shall, as soon as
practically possible and at the expense of the Pledgor, cancel the Agreement
and the approval and/or registration of the pledge established by the Agreement at relevant authorities in
accordance with the laws and regulations of China; and


 


(c)                        Upon written
request of the Pledgor, the Security Agent shall, as soon as
practically possible, take actions or allow the taking of actions that may be
required by the Pledgor for the
purpose of the release of the security interests arising from the Agreement or established under the Agreement, and shall, at the expense of the
Pledgor, sign and deliver or cause
the signing and delivery of any and all of the additional papers and documents
that may be required by the Pledgor
for the purpose of the release of the security interests arising from the Agreement or established under the Agreement.


 


15                                           Notification


 


15.1                                    Unless
specified otherwise, any notifications or other documents in connection with
the Agreement should be prepared
in writing and may be delivered by facsimile or postal mail. If by facsimile,
the delivery is deemed done upon the receipt by the addressee of clearly
readable documents sent through facsimile; and if by post, the delivery is
deemed done upon the notification being placed at the relevant address or 5 Business Days after the notification is
deposited into the mailbox in a pre-paid envelope with clearly marked address.


 


15.2                                    The contact
information of the Pledgor and the
Security Agent is listed on the
signing page of the Agreement.


 


15.3                                    Any party may
change its contact information by issuing notification to the other party 5 Business Days in advance.


 


16                                           Applicable laws and jurisdiction


 


The
Agreement is governed and
construed under the laws of China.
In case of any dispute under the Agreement
or any dispute in connection with the Agreement,
both parties agree to refer the disputes to China International


 


20






 










 


Economic
and Trade Arbitration Commission and resolve the disputes in Beijing in
accordance with the prevailing arbitration rules.


 


17                                           Others


 


17.1                                    Severability


 


If any provisions of the Agreement are or have become illegal, void
or unenforceable in any jurisdiction, the validity or enforceability of other
provisions of the Agreement in
that jurisdiction and the validity or enforceability of those provisions and
other provisions of the Agreement
in other jurisdictions shall not be impaired.


 


17.2                                    Waiver


 


The Security Agent’s failure to exercise or
delay in exercising any right, power or remedy under the Agreement shall not diminish such rights,
powers or remedies, or constitute a waiver of such rights, powers or remedies;
single or partial exercise by the Security
Agent of such rights, powers or remedies shall not prevent it from
further exercising such rights, powers or remedies or exercising any other
rights, powers or remedies. All rights, powers and remedies under the Agreement are cumulative, and not exclusive
of any other rights, powers or remedies provided by law.


 


17.3                                    Amendments


 


Any revisions to the Agreement can only be made in writing by
the Security Agent and the Pledgor.


 


17.4                                    Languages


 


The Agreement is drafted and signed in Chinese,
with an English version translated from Chinese at the expense of the Pledgor.


 


Notifications in connection
with the Agreement between the Pledgor and the Security Agent should be drafted and prepared in English.


 


Documents provided by the Pledgor under the Agreement to the Security Agent or other document provided in connection with
the Agreement should be drafted
and prepared in English, or if drafted and prepared in languages other than
English, such documents should attach an English translation that has been verified
by the Pledgor to be truthful,
accurate and complete and such that the Security
Agent may act in accordance with the English translation.


 


17.5                                    Entry into force


 


The Agreement enters into force upon signing by
the Security Agent and the Pledgor, but if according to the laws and
regulations of China, the Agreement
(for parties or any party to the Agreement)
may not enter


 


21

















 


into force before completion
of any approval and or registration procedures, the Agreement (for parties or any party to the Agreement) shall enter into force upon the
date such approval and/or registration procedures are completed.


 


In witness whereof, the Agreement has been executed by both parties
on the date stated at the beginning of the Agreement,


 


22

















 


Attachment 1:                                         Specifics of
the Underlying Contracts


 


1.               Pledgor:  Tianjin
New Highland Science Development Co., Ltd.


 


2.               Security Agent: DB Trustees (Hong Kong) Limited


 


3.               Specifics of
the Underlying Contracts (other
then the New Underlying Contracts)


 


	
  Contract
  name,

  No./invoice No.

  	
   

  	
  Date of

  signing

  	
   

  	
  Maturity

  date

  	
   

  	
  Obligors

  	
   

  	
  Total contractual

  consideration

  
	
  Technical service
  contract, No.: DGYT - 2006 - JS - 003

  	
   

  	
  1 January 2006

  	
   

  	
  31 December 2010

  	
   

  	
  PetroChina Dagang Oilfield
  Company

  	
   

  	
  Technical service fees are
  charged based on the quantity of crude oil commodities actually produced at a
  rate of RMB480 per ton.

  
	
  Technical service contract
  (Fault Block Wen-120 Nanoscale MD Filming Flodding) No.: HBYT - CY1 - 2008 -
  JS - 147

  

  	
   

  	
  17 July 2008

  	
   

  	
  1 January 2012

  	
   

  	
  PetroChina Huabei Oilfield Company

  	
   

  	
  Technical service fees are charged based on the actual oil production
  output from the Fault Block Wen-120 at a rate of RM330 per ton of oil
  produced (and no charge on any quantity less than a ton)

  
	
  Technical service contract

  	
   

  	
  1 January 2007

  	
   

  	
  31 December 2010

  	
   

  	
  PetroChina Liaohe Oilfield Company

  	
   

  	
  Total settlement amount shall be based on the actual crude oil
  production at a rate of RMB680 per ton.

  
	
  Coal bed methane hydraulic radial drilling technical service contract

  

  	
   

  	
  26 October 2009

  	
   

  	
  26 October 2011

  	
   

  	
  Liaoning Euro-Asia Dongdi Coal Bed Methane Technology Development
  Company

  

  	
   

  	
  The drilling footage charge is calculated based on the footage at a
  footage rate of RMB900 per meter if the actual footage is smaller than the
  designed footage, and based on the designed footage at a footage rate of
  RMB900 per meter if the actual footage is larger than the designed footage.

  



 


23

















 


	
  Daqing Oilfield hydraulic radial jet drilling technical service
  contract

  

  	
   

  	
  3 November 2009

  	
   

  	
  3 November 2011

  	
   

  	
  Daqing Rong’s Oil Lifting Technology Development Company 

  

  	
   

  	
  Technical service fees shall be charged based on the actual
  horizontal footage at a rate of RMB2,500 per meter.

  



 


24














 


Attachment 2:                                       Format of Additional Pledge Commitments


 


Format
of Additional Pledge Commitments


 


To: [DB Trustees (Hong Kong)
Limited] as the Security Agent


 


[date]


 


Dear sirs:


 


We refer to the
receivables pledge agreement dated [date] between
Tianjin New Highland Science Development Co., Ltd. (the Pledgor) and DB Trustees (Hong Kong)
Limited (the Security Agent),
including their revisions and additions from time to time (the Pledge Agreement). This document is the Additional Pledge Commitments referred to
in Clause [ - ] (additional pledge)
of the Pledge Agreement. The terms
in bold used but not defined in the Additional
Pledge Commitments shall have the same meanings as defined in the Pledge Agreement. 


 


With respect to the New Receivables that haven’t been
effectively pledged under the Pledge
Agreement and which serve as the consideration for the Secured Parties to continue to provide or
maintain the loan limits or sign or maintain various related agreements and
arrangements and as the security interests for securing the payment of all Secured Obligations by the Pledgor on time and its performance of all
its other obligations under the Transaction
Finance Document, in accordance with the Real Right Law of the
People’s Republic of China , the
Guarantee Law of the People’s Republic of China and other laws and regulations
of China, the Pledgor, as the
rightful owner of the New Receivables
arising from the New Underlying Contracts
(with specifics listed below), pledge the New
Receivables to the Security Agent
that represents the interests of the Secured
Parties, which are the beneficiaries of the pledge interests and
rights under the Additional Pledge
Commitments.


 


The Pledgor shall cause the Security Agent to, within 14 days upon the
signing of the New Underlying Contracts
or completion of the custom clearance procedures for LHD Units associated with
the New Underlying Contracts
(whichever happens later), receive the Additional
Pledge Commitments and Pledge
Certificate for the pledge of the New
Receivables; within 90 days upon the signing of the New Underlying Contracts or completion of
the custom clearance procedures for LHD Units associated with the New 


 


25

















 


Underlying
Contracts (whichever happens later), make its best
efforts practicably possible to cause the Security
Agent to receive, for the purpose of the New Receivables, the Security
Certificate, approval documents from the Approving Authority and the filing documents from Tianjin
Industrial and Commercial Administrative Bureau or documents testifying that
relevant approval, registration or filing documents cannot be obtained.


 


Within 3 Business Days
upon signing of the Additional Pledge
Commitments, the Pledgor
shall deliver to all relevant Obligors
properly completed pledge notification (substantially in the same format and of
the same contents as specified in part one of Attachment 4 (Format of the Pledge Notification and the Letter of
Acknowledgement) to the Pledge
Agreement), and ensure the Security
Agent receives from these Obligors
properly completed letters of acknowledgement (substantially in the same format
and of the same contents as specified in part two of Attachment 4 (Format of the Pledge Notification and the Letter of
Acknowledgement) to the Pledge
Agreement).


 


All terms and
conditions included in the Pledge Agreement
apply to the Additional Pledge Commitments,
as if the Additional Pledge Commitments
had provided all the terms and conditions (including all necessary contextual
modifications).


 


The Additional Pledge Commitments are governed
and construed by the Laws of China.


 


Pledgor:
Tianjin New Highland Science Development Co., Ltd. (company seal)


 


	
  Authorized signatory

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Name:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Position:

  	
   

  	
   

  



 


26

















 


Attachment
to the Additional Pledge Commitments


 


Specifics
of the Underlying Contracts:


 


	
  Contract
  name,

  No./invoice No.

  	
   

  	
  Date of

  signing

  	
   

  	
  Maturity date

  	
   

  	
  Obligors

  	
   

  	
  Total

  contractual

  consideration

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  



 


27

















 


Attachment 3:                                       Format of
the Registration Agreement


 


Format of the Receivable Pledge Registration Agreement


 


The receivable pledge
registration agreement (the Registration
Agreement) is signed on [date] between:


 


A                                      Tianjin
New Highland Science Development Co., Ltd. , the
pledgor (“the Pledgor”), a company
(registration number: 120109000004324) incorporated under the laws of China,
with its registered address at Tianjin Economic Development Area (DEDA),
Tianjin, China; and


 


B                                        DB
Trustees (Hong Kong) Limited, the Security
Agent and pledge (the “Security
Agent”), a company incorporated under the laws of Hong Kong Special
Administrative Region of China,
with its registered address at, 48/F, Cheung Kong Center, 2 Queen’s Road Central,
Hong Kong.


 


Whereas:


 


1                                          Both
parties to the Registration Agreement
acknowledge that the two parties have signed the receivable pledge agreement
dated [date], including the revisions and additions
from time to time (collectively the “Pledge
Agreement”), and shall sign the Additional
Pledge Commitments for the New
Receivables in accordance with the Pledge
Agreement.


 


2                                          The two
parties agree hereby to complete the registration and filing (“Pledge Registration”) of the Pledge Agreement with the Pledge Registration Authority in accordance
with the requirements of the Pledge
Registration Authority.


 


The terms in bold used
but not defined in the Registration Agreement
shall have the same meanings as defined in the Pledge Agreement.


 


For the purpose of the Pledge Registration, the two parties have
reached the following agreements:


 


1                                The Pledge Registration shall be placed in the
care of the Security Agent. The Security Agent may entrust the Pledge Registration to others (including
but not limited to its external lawyers).


 


28

















 


If the Security Agent refers the Pledge Registration to other parties, the
commitments made by the Pledgor as
included in Clause 2 of the Registration
Agreement shall also apply to the other parties entrusted by the Security Agent.


 


2                                The Pledgor commits herein that:


 


(a)                           The Pledgor has provided all the names its has
used in the four months immediately before the date of Pledge Registration, and upon request of
the Security Agent, the Pledgor shall provide to the Security Agent all documents in connection
with its change of names registered and filed with competent authorities.


 


(b)                          It shall
provide to the Security Agent the
changed information and supporting documents within 3 Business Days upon change of registered
contents, including but not limited to:


 


(i)                               The
registered legal name of the Pledgor;


 


(ii)                            The
registered address, legal representative, organization code, business license
number of the Pledgor;


 


(iii)                         Other
registered contents about the Pledgor;


 


(c)                           In the
event of change of registered contents, or omission or errors in the registered
contents, the Pledgor shall assist
the Security Agent in the
registration of changes;


 


(d)                          It agrees
that the Security Agent may,
within 90 days before the expiration of the initial registration or the
previous extension registration, perform the registration of the extension of
the Pledge Registration. The term
of the new registration shall be determined by the Security Agent in accordance with the Pledge Agreement.


 


(e)                           It
confirms that in carrying out the registration of any changes or extensions,
the Security Agent does not need
further authorization from the Pledgor.
In order to avoid any misunderstandings, the Pledgor
and the Security Agent confirm
herein that the terms and conditions of the Registration
Agreement constitute the agreements the two parties have reached in
advance for the  change registration and
extension registration;


 


29

















 


(f)                             It
confirms that the Security Agent shall
fill out registration items based on the documents and information provided by
the Pledgor, and if in the event
the registration information contained in any materials provided by the Pledgor that is fraudulent, erroneous,
incomplete or has not been updated has caused damages or losses to any parties
including the Security Agent, the Pledgor shall assume all legal liabilities
and make full compensations for such damages or losses; and


 


(g)                          It waives,
to the extent allowable under the laws of China,
its rights to raise objection to the Pledge
Registration by the Security Agent.
Also, to the extent of its knowledge, it shall immediately notify the Security Agent of any objections to
registration that are filed or to be filed by any other parties.


 


3                                The Registration Agreement enters into force
upon signature and affixation of company seal by the authorized signatories of
the Pledgor and the Security Agent.


 


4                              The Registration Agreement shall be governed
and construed under the laws of China.
In the event of any disputes under the Registration
Agreement or in connection with the Registration  Agreement,
both parties agree to refer the disputes to China International Economic and
Trade Arbitration Commission and resolve the disputes in Beijing in accordance
with the prevailing arbitration rules.


 


5                                The Registration Agreement is made in duplicate
with one copy for with each party. The two copies have the same legal force.
The Security Agent (or any other
parties entrusted by the Security Agent
to handle the Pledge Registration)
has the right to post the electronic version of the Registration Agreement to the Receivable Pledge Registration public announcement system of
the Pledge Registration Authority.


 


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Attachment 4:                                       Format of
the Pledge Notification and the Letter of Acknowledgement


 


Part one


 


Format
of the Pledge Notification


 


To: [name of
the obligee]


 


Address:


 


Contact person:


 


Telephone:


 


Facsimile:


 


cc: DB Trustees (Hong Kong) Limited


 


Address: 48/F, Cheung
Kong Center, 2 Queen’s Road Central, Hong Kong


 


Contact person: Managing
Director


 


Telephone:         +852 2203 8888


 


Facsimile:           +852 2203 7320/7323


 


[date]


 


Dear sirs:


 


We refer to the
receivable pledge agreement dated [date] between us
and DB Trustees (Hong Kong) Limited (the “Security
Agent”) and the revisions and additions (collectively the “Pledge Agreement”). The terms in bold in
this letter shall have the same meanings as defined in the Pledge Agreement.


 


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We notify you through
this letter that the with respect to [specifics
of the underlying contract] (numbered [              ]) between you and us, including
any revisions and additions from time to time (collectively the “Underlying Contract”), we have placed as
pledge the Receivables and all our
rights, ownership and interests under or in connection with the Underlying Contract for the interest of the
Security Agent.


 


We confirm herein that:


 


(a)                        We shall
continue to assume and perform all our obligations under the Underlying Contract; and


 


(b)                       The Security Agent and its agents, any
successors or any other parties shall in no event assume any obligation or
responsibility to you under the Underlying
Contract or in connection with the Underlying
Contract.


 


You shall, upon or before the maturity of any of the Receivables under the Underlying Contract, effect a payment in
the amount sufficient to settle your payables under the matured Receivables to the following account or any
other accounts that the Security Agent
has notified you of from time to time:


 


[specifics
of the receiving account]


 


Please note that, without prior consent in writing of the Security Agent, we cannot modify or waive
any provisions of the Underlying Contract
or terminate the Underlying Contract.


 


Without prior consent in writing of the Security Agent, the
instructions in this letter cannot be cancelled or modified.


 


We confirm that you can
act in accordance with the instructions of this letter without the need of our
further authorization and consultation with respect to the adequacy or validity
of any request, notification or instruction.


 


The letter is governed
by the laws of China.


 


Please send a letter of
acknowledgement to the Security Agent and carbon copy it to us to acknowledge
that you agree to the above provisions and further confirm the commitments in
the letter of acknowledgement.


 


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  Yours sincerely

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  



 


[name of the authorized signatory]


 


Tianjin New Highland
Science Development Co., Ltd.  (company seal)


 


33














 


Part two


 


Format of the letter of acknowledgement of the pledge notification


 


To:          [DB Trustees (Hong Kong) Limited] as the Security Agent


 


Address: 48/F, Cheung Kong Center, 2 Queen’s Road
Central, Hong Kong


 


cc: Tianjin New Highland Science Development Co., Ltd.
()


 


Address:


 


Dear sirs:


 


We hereby confirm that we have received from Tianjin
New Highland Science Development Co., Ltd. ()
(the Pledgor) the notification
dated [      ] that the Pledgor has placed as pledge all of its rights, ownership and
interests of or in connection with the Receivables
under the [specifics of the underlying
contract] , including any revisions and additions from time to time (collectively
the “Underlying Contract”).


 


We confirm herein that:


 


(a)                        We accept the instructions in the
notification and agree to observe the provisions in the notification.


 


(b)                       We haven’t received any notification from
any third party regarding any interest in connection with the Underlying Contract;


 


(c)                        We commit that we shall pay the amounts
payable under the Underlying Contract directly
to the account specified in the notification or any other account you have
designated separately;


 


(d)                       We commit that without the need of
further instruction or further authorization from the Pledgor, we shall disclose to you any
information you may request at any time in connection with the Underlying Contract;


 


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(e)                        We commit to notify you of any
non-compliance by the Pledgor with any provisions of the Underlying Contract,
and allow you to remedy the situation within a reasonable period of time
(though, you are not obligated to do so);


 


(f)                          We commit that without your prior consent
in writing, we shall not alter or terminate the Underlying Contract.


 


This letter is governed by the laws of China.


 


 


Yours sincerely,


 


	
   

  	
   

  	
   

  



 


[name of the authorized signatory]


 


[name of the
obligor] (company seal)


 


35

















 


Pledgor: Tianjin New Highland Science Development
Co., Ltd. (company seal)


 


Address: Floor 4, Business Center
21-B, Innovations Park, Xinbei Road No.4668, Tanggu District, Tianjin
City, PRC.


Telephone: +86-22-6635-1181


Facsimile: +86-22-6635-1181


 


Contact Person: Liu Qingzeng


 


 


	
  /s/ Liu Qingzeng

  	
   

  
	
   

  	
   

  
	
  (Name of Authorized Signatory)

  	
   

  
	
   

  	
   

  
	
  Name: Liu Qingzeng

  	
   

  



 


36

















 


Security Agent: DB Trustees (Hong Kong) Limited


 


Address: 48/F, Cheung Kong Center, 2 Queen’s Road
Central, Hong Kong


Facsimile: +852 2203 7320/7323


Telephone: +852 2203 8888


Contact Person: Managing Director


 


	
  /s/ Chiu Kin Wing Edward

  	
  /s/ Choi Siu Ling

  	
   

  
	
   

  	
   

  	
   

  
	
  (Name of Authorized Signatory)

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Name: Chiu Kin Wing Edward

  	
  Choi Siu Ling

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Position: Authorized Signatory

  	
  Director

  	
   

  



 


37