Bank Loan Contract for Fixed Assets


 


No.: 2012 Zhen Zhong Yin Bu Jie Zi No. 00002


 


Borrower: Shenzhen Highpower Technology
Co., Ltd. (Hereafter referred to as Party A)


 


Business License No.: 440307503274740



 


Legal representative/principal: Dangyu
Pan 


 


Domicile:Building A2, Luoshan Industrial
Park, Pinghu Town, Longgang District, Shenzhen


 


Zip Code: 518111


 


Bank & account No.: Bank of China,
Pinghu Sub-branch 


 


Tel.: 89686236      Fax: 89686298


 


Creditor: Bank of China Limited, Shenzhen
Buji Sub-branch (Hereafter referred to as Party B)


 


Legal representative/Principal: Yong
Yang 


 


Domicile: No. 108, Buji Road, Buji Town,
Longgang District, Shenzhen


 


Zip Code: 518112 


 


Tel.: 28274825 


 


Fax: 28270847 


 


The Borrower and the Creditor reached the
following agreement after equal negotiation. The Creditor agrees to grant the borrower the loan for fixed assets.


 


Article 1: Amount of the loan


 


Currency: RMB 


 


Amount: FIFTY MILLION ONLY


 


 RMB50,000,000


 


Article 2: Term of the loan


 


Term of the loan: 60 months, effectiveness
date shall be the actual withdrawal date, if installment withdrawal, the first withdrawal date shall be the effectiveness date.


 


The borrower should strictly abide by the
agreed withdrawal timeline, in case the actual withdrawal date late than the agreed withdrawal time, the borrower’s repayment
date shall continue to be the agreed date in the contract.


 


Article 3: Use of the loan


 


Use of the loan: payment for construction
project


 


Without written approval of the lender,
the borrower could not change the agreed purpose of the use of the loan, including but not limited to that the borrower shall not
use the loan for investment in stocks or securities purpose, shall not use the loan for projects that forbidden by any state laws,
rules and regulations, or projects without legal approval, or project or purposes prohibited by funding with bank loans.


 



    	 



    	 



    

 


Article 4 interest rate and calculation
of interest


 


		1.	Interest rate



 


The interest rate shall be the
following  (2) .


 


		(1)	Fixed interest rate, annual interest rate ∥
%. The interest rate shall remain the same during the loan period.



 


		(2)	Floating interest rate, the starting date shall be the actual withdrawal date. The floating period
shall be every / month, re-price again. The re-pricing date shall be the first date of next floating period.



 


On each withdrawal:


 


		■	floating interest of RMB loan



 


		A.	The interest rate for the first period (from the actual withdrawal date to the expiration date
of the floating cycle) shall be the three to five years (including five years) benchmark lending rate promulgated by the
People’s Bank of China.



 


		B.	On the re-pricing date, the applicable floating interest rate shall be the benchmark lending rate
promulgated by the People’s Bank of China.



 


		2.	Interest calculation



 


Interest shall be calculated
from the actual withdrawal date, as per actual withdrawal amount and number of days.


 


Interest calculation formula:
Interest = principal * actual days * daily interest rate


 


Daily interest rate shall be
calculated on a 360-day basis,


 


Conversion formula: daily interest
rate = yearly interest rate / 360


 


		3.	Interest settlement method



 


Borrower shall settle the interest
according to the following (1).


 


		(1)	Settle the interest on quarterly basis, every 20th of the last month during the quarter
shall be the settlement date, and 21th shall be the payment date.



 


		(2)	Settle the interest on monthly basis, every 20th of the last month during the quarter
shall be the settlement date, and 21th shall be the payment date.



 


In case the last repayment date
of the loan principal is not the interest payment date, the interest payment date shall be the last settlement date of the principal,
the borrower should pay off all the interest payable.


 



    	 



    	 



    

 


		4.	Penalty interest



 


		(1)	Overdue or fails to use the loan in accordance with the contract, from overdue or misappropriate
date, the overdue or misappropriated parts shall be subject to penalty interest in accordance with the agreed penalty interest
rate under this article until the settlement of interest and principal.



 


		(2)	Overdue interest and penalty interest shall be levied compound interest according to the penalty
interest rate agreed in this article.



 


		(3)	Rate of penalty interest



 


Penalty interest rate for overdue
loan shall be 50% above the floating interest rate, and for misappropriation loan shall be 100% above the floating
interest rate.


 


Article 5 Terms of withdrawal


 


The borrower’s withdrawal shall meet
the following conditions:


 


		1.	This contract and its attachments have been in force.



 


		2.	Borrower has provided the lender with related files, documents, seals, list of signatory, specimen
signatures and filled out relevant documents.



 


		3.	Borrower has opened the account necessary to fulfill this contract in accordance with lender’s
requirements.



 


		4.	Submit to the lender written withdrawal application and relevant proof document on the purpose
of the loan for the withdrawal procedure 5 bank work days prior to any withdrawal.



 


		5.	Borrower has provided the lender Resolution and Power of Attorney approved by Board of Director
or other authorized department.



 


		6.	The capital in proportion to the loan to be issued is in place, actual progress of the project
is consistent with the investment.



 


		7.	For fixed assets investment project with significant funds, high technology and payment on installment,
the lender has the right to require borrower provide written documents on the progress of the project and quality signed by supervision,
evaluation and quality control departments.



 


		8.	The borrower has provide guarantee in accordance with the requirement
of the lender, and the guarantee contract has taken effect and completed statutory
approval, registration and filing procedures.



 


		9.	Other withdrawal conditions agreed by both parties or regulated by laws.



 


The lender has the right refuse
the application for withdrawal of the borrower if the above-mentioned conditions are not met except the lender agrees to issue
the loan.


 


Article 6 withdrawal
time and manner


 


The borrower shall withdraw
the entire loan within 180 days.


 



    	 



    	 



    

 


Article 7 payment of
the loan


 


1. The borrower open the following
account in the bank of the lender, and the issuance and payment of the loan shall be handled through this account.


 


Account
name: Shenzhen Highpower Technology Company Limited


 


Account
No.: 744557938816 


 


2. Loan payment manner


 


(1) The loan payment manner
shall be in accordance with laws and regulations and the agreements under this contract.


 


(2) The lender shall issue the
loan in accordance with the withdrawal application and pay the fund to the borrower for agreed use.


 


3. Specific requirements of the loan fund
payment


 


(1) Borrower shall specify the
necessary payment information in the withdrawal application.


 


(2) The borrower shall provide
the lender proof documents before any withdrawal and guarantee all the data provided are true, complete and valid.


 


(3) The performance of
the payment obligation of the lender


 


A. The lender pays the loan
to the borrower’s account after audit of the documents submitted by the borrower.


 


B. In case of the lender finds
out that the documents provided by the borrower are not in line with the contract or exist other defects, the lender shall have
the right to require the borrower to supplement, replace, explain or resubmit relevant documents. The lender has the right to refuse
the issuance and payment of related loan before the borrower provides qualified documents.


 


(4) The borrower shall
not circumvent the trust of the lender in a piecemeal way.


 


Article 8 repayment


 


1. Unless agreed otherwise by both sides,
the borrower shall repay the loan under the contract according to the following (3) 


 


(1) Pay off the loan under the contract
on the expiration date of the loan.


 


(2) Repay the loan under the contract as
per the following repayment plan


 


	Repayment time	 	Repayment amount
	 	 	 
	 	 	 


 


(3) Other repayment plan: installment
repayment plan, repay 2% of the actual withdrawal amount on September 30, 2012 and November 31, 2012, respectively, then repay
the principal once every quarter with the amount of 6% of actual withdrawal amount, pay off the loan on expiration date.


 



    	 



    	 



    

 


(4) In case of needs to change the above-mentioned
repayment plan, the borrower has to submit written application to the lender. The changes to the plan shall be confirmed by both
parties in written form.


 


2. Unless agreed otherwise by both parties,
the lender has the right to determine the repayment order of principal or interest under the circumstance that the borrower defaults
on both principal and interest at the same time.


 


3. Unless agreed otherwise, the borrower
can make the repayment ahead of expiration date, but shall inform the lender in written form 10 bank work days prior to
the repayment.


 


4. The borrower shall repay the loan by
depositing full amount in the following account 2 bank work days before maturity of each sum of principal and interest,
and the lender shall have the right to deduct the principal and interest from this account on every due date of each sum of principal
and interest.


 


Account name: Shenzhen Highpower Technology
Co., Ltd 


 


Account number: 744557938816


 


Article 9: Guarantee


 


1. The way of guarantee under this contract
shall be:


 


■
Springpower Technology (Shenzhen) Co., Ltd provides the maximum guarantee and sign corresponding Contract numbered 0001
on Maximum Guarantee; this contract is the principal contract under the guarantee contract.


 


■
Hong Kong Highpower Technology Co., Ltd provides the maximum guarantee and sign corresponding Contract numbered 0002 on
Maximum Guarantee; this contract is the principal contract under the guarantee contract.


 


■
Mr. Dangyu Pan provides the maximum guarantee and sign corresponding Contract numbered 0003 on Maximum Guarantee; this contract
is the principal contract under the guarantee contract.


 


■
Shenzhen Highpower tech. CO., Ltd. provides the maximum pledge and sign corresponding Contract numbered 0001 on Maximum
Pledge; this contract is the principal contract under the guarantee contract.


 


In case of any events occurred to Party
A or the guarantor which is deemed to be influencing the performance capacity of Party A or the guarantor, or in case the guarantee
contract turns to invalid, is cancelled or rescinded, or in case Party A or the guarantor seriously deteriorates in the financial
position or is involved in significant litigation or arbitration cases or any other conditions which may influence its performance
capacity hereunder, or in case the guarantor breaches the guarantee contract or any other contract executed between Party B, or
in case the collateral is depreciated, damaged, lost or sealed which weakens or eliminates the guarantee value, Party B shall have
the right to require Party A and Party A shall be obligated to provide new guarantee, to change guarantor etc to guarantee the
liabilities hereunder.


 



    	 



    	 



    

 


Article 10 Insurance (This article
is optional; the choice is 2: 1. applicable; 2. not applicable)


 


The borrower shall
insure the project or trade-related equipment, construction, transport of goods and risks during the operation period under this
contract in the specified insurance company, and the insurance shall meet the lenders requirements, the amount of the insurance
shall not less than the principal of the loan.


 


  The borrower shall
hand over the original policy to the lender after the contract came into force.


 


Article 11: Representations and commitments


 


1. Party A’s statements are as
follows:


 


		(1)	Party A is lawfully registered and validly existed and of the full capacity for private rights
and the full capacity for civil acts as needed for the execution and performance of the Agreement;



 


		(2)	Executing and performing the Agreement and single agreements shall be the declaration of Party
A's true intention with legal and valid authorization in accordance with the articles of association or other internal management
document. Execution and performance of the Agreement and single agreements will not breach any agreement, contract or other legal
documents binding Party A. Party A has acquired or will acquired all relevant approvals, permissions, filings or registrations
needed by the execution and performance of the Agreement;



 


		(3)	All documents, financial statements, certificates and other materials provided by Party A hereunder
and under any single agreement shall be true, complete, accurate and valid;



 


		(4)	The background of the transaction hereunder shall be true and legal, which will not be used for
illegal purposes like money laundering etc;



 


		(5)	Party A did not conceal from Party B any event which may influence the financial position and performance
capacity of itself and the guarantor.



 


		(6)	Program and issues of the loan shall in line with the nation’s industrial, land, environment
protection laws, rule and regulations and related policies.



 


		(7)	Party A is up to the nation’s environment protection standards, and no pollution risks exist.



 


		(8)	Other issues represented by Party A: ∥.



 


2. Party A makes the commitment as follows:


 


		(1)	Party A will submit the financial statements (including but not limited to annual statements, quarterly
statements and monthly statements) on a regular basis or in a timely manner as required;



 


		(2)	The withdrawal, payment and use of the loan shall be in accordance with the contract.



 



    	 



    	 



    

		(3)	In case Party A have or shall enter into any counter-guarantee agreement or similar agreement on
guarantee obligation with the guarantor, the agreement shall not impair any rights of Party B under this contract.



 


		(4)	Party A will accept and cooperate with Party B’s inspection and monitor over the use condition
of the line of credit and relevant production and operation, financial activities;



 


		(5)	In case of any conditions which may influence the financial position and performance capacity of
Party A or the guarantor hereunder, including but not limited to the split-up, merging, pooling, joint venture with foreign investors,
cooperation, contract operation, reconstruction, transformation, planning for listing etc of its business manner in any form, reduction
of registered capital, significant asset or equity transfer, bearing of significant indebtedness, setup of new significant liability
on the collateral, seal-up of the collateral, wind-up, revocation or (being applied) application for bankruptcy etc, or engaging
in any significant litigation or arbitration cases, Party A shall have to get Party B’s written approval in advance.



 


		(6)	As to debt liquidation order, Party B takes precedence over the share holders of Party A.



 


		(7)	In case the net income is zero or a negative number. Party A shall not pay any dividends to share
holders.



 


■
Party A shall not pay any dividends to shares holders during the period from the effectiveness date of the contract to the date
Party A pay off principal and interest and related costs.


 


		(8)	Party shall not dispose its own assets in a reduce solvency way, and commit the total amount for
external guarantees shall not exceed one time its net assets.



 


		(9)	Apart from in line with the usage agreed in this contract or agreed by Party B, Party A shall not
transfer the funds to accounts of the same name or accounts of related parties’.



 


In case Party A transfer funds
under the contract to accounts of the same name or related parties, relevant supporting documents shall be provided.


 


		(10)	Others committed by Party A: Huizhou industrial park shall be collateral to Party B after receiving
real estate certificate, or else Party B shall have the right to recover the loan ahead of schedule.



 


Article 12: Internal related transaction
and disclosure thereof in Party A’s Group


 


Both parties agreed to follow the item
1 as mentioned hereunder:


 


1. Party A does not fall into the customer
group as determined in Guidelines for the Risk Management by Commercial Banks for Granting Credit to Customer Groups (“Guidelines”);


 


2. Party A falls into the category of customer
group as defined by Party B in compliance with Guidelines. Party A shall, subject to provisions of Article 17 of Guidelines, timely
report to Party B the conditions of any related transaction over 10% of Party A’s net assets, including the related relation
of parties concerned, transaction items, transaction nature, sum or respective ratio, pricing policies (incl. transaction without
any sum or with only symbolic sum).


 



    	 



    	 



    

 


 


Article 13: Defaults and treatment


 


1. Any of the following conditions
shall constitute or be deemed as an event of default of Party A hereunder:


 


		(1)	Party A fails to perform the payment and settlement obligations to Party B as agreed in the Agreement.



 


		(2)	Party A fails to use the funds acquired for agreed purposes as stated in the agreement.



 


		(3)	The representations made by the borrower in the agreement are untrue or breached the commitment
made in the contract.



 


		(4)	In case of the condition stated in Article 11, item 2 (5) which is deemed by Party B as influencing
Party A’s financial position and performance capacity, or influencing the guarantor’s financial position and performance
capacity, while Party A fails to provide new guarantee and replace guarantor as agreed in the agreement.



 


		(5)	Party A is engaged in any default issues under any other contract with Party B or other organizations
under the Bank of China Limited; occurrence of an event of default under credit contracts with other financial institutions.



 


		(6)	The guarantor breaches the agreement in guarantee contract, or is engaged in any default issues
under any other contract with Party B or other organizations under Bank of China Limited.



 


		(7)	Party A terminates the business or is engaged in any wind-up, cancellation or bankruptcy issues.



 


		(8)	Party A is involved or may be involved in significant economic disputes, litigation,
arbitration or its assets are confiscated or seized, or subjects to other judicial proceedings, administrative punishment procedures
executed by administration authorities such as tax authorities, which have affected or may affect its capacity to perform the liabilities
under the contract. 



 


		(9)	Major individual investor, key management member of Party A changes abnormally, missing, or subject
to investigation or restriction by judiciary, which have or may affect Party A’s performance of obligation under the contract.



 


		(10)	The project capital isn’t put into the construction according to the schedule or proportion.



 


		(11)	Project progress falls behind the schedule in the use of fund.



 


		(12)	The progress of the project construction lags far behind the schedule, or project construction
costs exceed the proportion of the budget recognized by Party B; or project construction and operating environment, condition experiences
material adverse changes.



 


		(13)	The quality of the project is not in line with the national or industry standards.



 


		(14)	Party A experiences credit status decline, or deterioration in financial indicators such as profitability,
solvency, operating capacity and cash flow, and exceed the restriction of indicators agreed in this contract or other financial
agreement.



 






    	 



    	 



    
 


		(15)	Party B reviews the financial position and performance capacities of Party A on a yearly basis,
and find out situations that may affect the financial position or performance capacities of Party or the guarantor.



 


		(16)	Party A breaches other agreement on rights and obligations of Party B under this contract.



 


		2.	Party B shall, according to the actual situation, have the right to take the following measures
jointly or respectively regarding the aforesaid default issues:



 


		(1)	Require Party A and the guarantor to correct the default action within required duration;



 


		(2)	Reduce, suspend or terminate in whole or in part the line of credit granted to Party A;



 


		(3)	Suspend or terminate in whole or in part any business application of Party A under this contract
or any other contract between Party A and Party B; suspend or terminate in whole or in part the issuance and handling of any loan
not issued, any trading financing business not handled;



 


		(4)	Declare that the principal and interest of loan, trade financing and other payables under the contract
or any other contract between Party A and Party B shall be in whole or in part be mature immediately;



 


		(5)	Modify the terms of loan granting and payment according to Party A’s credit status.



 


		(6)	Terminate or cancel this contract, terminate or cancel other contract between Party A and Party
B in whole or in part;



 


		(7)	Require Party A to indemnify the losses caused to Party B thereby;



 


		(8)	With prior or after notice, deduct the sum in the account opened in Party B to discharge all or
part liabilities of Party B attributable to Party A. Any premature sum in the account shall be deemed mature in advance. Where
the currency of the account is different from the pricing currency of Party B’s business, the settlement exchange rate applicable
to Party B at the time of deduction shall be followed for the translation;



 


		(9)	Require the guarantors to undertake the guarantee responsibility;



 


		(10)	Any other measures deemed necessary by Party B.



 


Article 14: Rights reservation


 


Any party’s failure in performing
the rights under the contract in whole or in part or in requiring the other party to perform and undertake partial or whole liabilities
and obligations shall not constitute the waiver of the rights or release of the liabilities or obligations.


 


Any party’s allowance or extension
to the other party or delay in performing the rights under the contract shall not affect any of its rights under the contract,
laws or regulations, and shall not be deemed as the waiver of the rights.


 


Article 15: Modification, alteration,
termination and partial invalidity


 


The Agreement may be subject to written
modification or alteration with both parties’ negotiation and consent, and any modification or alteration made thereby shall
constitute integral part of the Agreement.


 



    	 



    	 



    

 


 


Unless otherwise provided by laws or regulations
or otherwise agreed by both parties concerned, the Agreement shall not be terminated prior to the complete performance of the rights
and obligations hereunder and under single agreement.


 


Unless otherwise provided by laws or regulations
or otherwise agreed by both parties concerned, the invalidity of any provisions herein shall not influence the validity of any
other provisions herein.


 


Article 16: Applicable laws and dispute
settlement


 


This contract shall be governed by laws
of the People’s Republic of China.


 


Upon the coming into force of the contract,
any and all disputes arising from or in connection with the execution and performance of the contract can be solved through negotiation.
In case the negation fails, either party may take the following (2) manner:


 


1. Submit to        /           arbitration committee
for arbitration.


 


2. Appeal to the people's court in the
place where Party B resides or where any other organizations under Bank of China Limited in accordance with laws.


 


3. Appeal to the people’s court with
jurisdiction.


 


During the dispute settlement period, any
other articles not affected by the dispute shall be performed continually.


 


Article 17: Attachments


 


The following attachments and any other
attachments and single agreements jointly confirmed by both parties shall constitute integral part of the Agreement and be of the
same legal effect as the contract.


 


Attachment 1: Withdraw form (template).


 


Attachment 2: ....


 


Article 18: Other agreements


 


1. Party A, without written consent of
Party B, shall not transfer any rights and obligations hereunder to any third party.


 


2. In case Party B shall, as required by
business, entrust other organizations under Bank of China Limited to exercise the rights and undertake obligations under the Agreement
and single agreement, Party A shall agree with the arrangement. Other organizations under Bank of China Limited as authorized by
Party B shall have the right to exercise all rights under the Agreement and shall have the right to appeal to the people’s
court or to arbitration institution for any dispute under the Agreement.


 



    	 



    	 



    

 


3. The Agreement shall be binding upon
both parties and successors and assignees legally generated of both parties without affecting any other provisions herein under
this contract.


 


4. Unless otherwise agreed, domicile designated
by both parties herein shall be the address of both parties for communication. Both parties commit to inform the other party in
written form in case of changing the said domicile.


 


5. Transactions under this contract are
based on respective interests. If in accordance with laws, regulations and regulatory requirement, other parties of the transaction
constitutes the related party of Party B, all related parties shall not seek to affect the fairness of the transaction with the
relationship.


 


6. Headings and business names as mentioned
herein shall be used only for the convenience of reference, which shall not be regarded as the interpretation of provisions contained
herein or rights and obligations of parties hereto.


 


7. Party B has the right, in accordance
with laws, rules and regulations, to submit the information relating to this contract and other relevant information of Party A
to the credit system of the People’s Bank of China and other legally established credit information database for qualified
institution or individual use. Party B also has the right, for the purpose of entering into and performing this contract, to check
relevant information of Party A through credit system of the People’s Bank of China and other legally established credit
information database.


 


8. In case of legal holidays, the withdrawal
date, repayment date shall be postponed to the first work day after the holidays.


 


9. In case Party B can’t perform
the agreement due to the changes of laws, rule and regulations, Party B has the right to terminate or perform the agreement or
single agreement according to the changes of laws, rule and regulations. Party B shall be exempt from responsibilities resulted
from these reasons in case the situations appears.


 


Article 19: Effectiveness of the agreement


 


The Agreement shall come into force with
the signature of both parties’ legal representatives, principals or authorized signatories and with both parties’ official
seals.


 


The Agreement shall be made in sextuplicate,
each of Party A and Party B shall hold three, each original shall be of the same legal force.


 


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


 


	Signatory: 	/s/ Dang Yu Pan	     (Official Seal)


 


January 13, 2012


 


Party B: Bank of China Limited, Shenzhen
Buji Sub-branch


 


	/s/ [SEAL]	 


 


	Signatory: 	Yong Yang	     (Official Seal)


 


January 13, 2012