Agreement on Line of Credit


 


No.: 2012 Zhen Zhong Yin Bu E Xie Zi No.
000127


 


Party A: Shenzhen Highpower Technology
Co., Ltd. 


 


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


 


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


 


Legal representative/Principal: Yong
Yang 


 


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


 


Zip Code: 518112 


 


Tel.: 28274825 


 


Fax: 28270847 


 


Party A and Party B, in order to develop
friendly and mutual benefit cooperation relationship, reached the following agreement through negotiation pursuant to principles
of voluntariness, equality, mutual benefit and honesty.


 


Article 1: Scope of business


 


Party B will provide Party A the line of
credit as agreed in the Agreement. Party A may, subject to the preconditions as agreed herein and in relevant single agreement,
apply to Party B for revolving use, adjustment or one-time use of the line of credit for the purpose of RMB short-term loan, foreign
currency short-term loan, trade financing, Letter of Guarantee, funding business and other credit business (collectively referred
to as “single loan business”).


 


Trade financing, as mentioned herein, includes
opening international L/C, opening domestic L/C, import bill advance, loading guarantee, packing credit, export bill advance, discounting
acceptance draft under time L/C, buyer bill advance for domestic L/C, seller bill advance for domestic L/C, negotiation of domestic
L/C and other international and domestic trade financing businesses.


 



    	 



    	 



    

 


The letter of guarantee businesses referred
to in this agreement includes all kinds of international and domestic businesses.


 


Article 2: Types and Sum of Line of
Credit


 


Party B agrees to provide the following
line of credit to Party A:


 


Currency: RMB


 


Sum: (in words) RMB FIFTY MILLION ONLY



 


 (in figures) RMB50,000,000.00


 


The detailed types and sum are as follows:


 


1. Line of credit for loan RMB TWENTY
MILLION ONLY (RMB 20,000,000.00), which includes:


 


(1) Line of credit for current capital
loan RMB TWENTY MILLION ONLY (RMB 20,000,000.00).


 


2. Line of bank acceptances:
RMB THIRTY MILLION ONLY (RMB30,000,000.00), which includes:


 


(1) Line of credit for bank acceptances
RMB THIRTY MILLION ONLY (RMB30,000,000.00).


 


Article 3: Use of the line of credit


 


1. Within the use period of the line of
credit as agreed in the agreement, Party A may, without exceeding the scope of line regarding respective single loan business as
agreed herein, use the respective line of credit by the following (1) manner:


 


(1) Revolving use: the detailed types of
line of credit are Line of credit for current capital loan and line of credit for bank acceptances 


 


(2) One-time
use: the detailed types of line of credit are:          ∥        .


 


In case Party A intends to adjust the use
of line of loan of credit as agreed in Article 2, it shall apply to Party B in written form, subsequent to which Party B shall
determine whether or not grant and the details of the adjustment and inform Party A in written form accordingly.


 


2. As of the effective date of the Agreement,
the balance of credit based on Agreement on Line of Credit or similar agreement and single agreement thereof previously effective
shall be deemed the credit generated hereunder.


 


In which, the balance of credit in the
line of credit shall be deemed the line of credit hereunder.


 



    	 



    	 



    

 


3. Unless otherwise agreed, the following
businesses shall not be incorporated into the line of credit:


 


(1) Export bill advance where the L/C is
consistent with documents;


 


(2) Bill advance or financing based on
the export L/C acceptable by Party B and accepted/ honored/ confirmed for payment/ confirmed by the opening bank or confirming
house, or based on the bill of exchange or sum under domestic L/C;


 


(3) Where Party A would provide deposit,
national debt, or deposit receipt issued by Party B, or the acceptance bill, letter of guarantee and standing L/C acceptable to
Party B, the sum of credit corresponding to the said guarantee will not be incorporated into the line of credit;


 


(4) Other businesses not incorporated into
the line of credit otherwise confirmed by both parties in written form.


 


Though the said items will not be incorporated
into the line of credit, the business agreements thereof shall still constitute the single agreement hereunder and the integral
part hereof and shall be bound by the Agreement hereof, unless otherwise agreed in the said business agreements.


 


Article 4: Agreements Executed in Single
Loan Business


 


Party A shall, in case of applying to Party
B for the single loan business hereunder, submit respective application and/or execute respective contract/agreement (collectively
referred to as “single agreement”) with Party B.


 


Article 5: Use period of the line of
credit


 


The use period of the line of credit as
stated in Article 2 hereof shall be from the effective date to January 13, 2013.


 


At the expiration of the aforesaid use
period, where Party B provides the line of credit to Party A through negotiation, both parties may execute supplemental agreement
in written form, define clearly the new line of credit and use period etc. The said supplemental agreement shall constitute integral
part of the Agreement hereof, and any items uncovered in supplemental agreement shall be subject to provisions herein. The supplemental
agreement shall be of the equal force effect as of the Agreement hereof.


 


Expiration of the use period as aforementioned
shall not influence the force effect of the Agreement and shall not constitute the cause of terminating the Agreement. Single loan
business executed between Party A and Party B in light of the Agreement will be performed as per the agreements in the Agreement
and in relevant single agreement. Any rights and obligations already generated shall be performed completely.


 



    	 



    	 



    

  


Article 6: Preconditions for single
loan business


 


Party A shall comply with the following
conditions regarding single loan business as required by Party B:


 


1. Reserve for Party B relevant Company
file, document, seal, name list of relevant staff, specimen signature relevant to the Agreement and single agreement, and fill
in relevant certificates;


 


2. Open the account required by single
loan business;


 


3. The guarantee agreed in the Agreement
and single agreement has been effectively established;


 


4. Other preconditions required of the
single business agreed in single business agreement;


 


5. Other conditions to be met by Party
A deemed necessary by Party B.


 


Article 7: Guarantee


 


With respect to the liabilities of Party
A to Party B arising from the Agreement and any single agreements, both parties agree to guarantee the liabilities by the following
methods:


 


(1) Springpower Technology (Shenzhen)
Co., Ltd provides the maximum guarantee and sign corresponding Contract on Maximum Guarantee;


 


(2) Hong Kong Highpower Technology Co.,
Ltd provides the maximum guarantee and sign corresponding Contract on Maximum Guarantee;


 


(3) Mr. Dangyu Pan provides the
maximum guarantee and sign corresponding Contract on Maximum Guarantee;


 


Maximum pledge:


 


		(1)	Shenzhen Highpower tech. CO., Ltd. provides the maximum pledge and sign corresponding Contract
on Maximum Pledge.



 


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 8: Representations and commitments


 


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.


 


Party A makes the commitments 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. 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;


 


3. In case Party A executes with the guarantor
hereunder any counter-guarantee contract or similar contract, it shall not impair any rights of Party B hereunder;


 


4. 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 timely inform Party B;


 


5. Party A agrees to follow Party B’s
relevant regulations and business practices regarding any items not covered in the Agreement and in any single agreement.


 


6. Other agreement: (1) Party is not
allowed to distribute profit without Party B’s consent.


 


		(2)	The funds Party A deposits in Party B’s bank shall not less than the line of credit granted
by Party B. In case the borrower fails to perform the above mentioned terms, Party B has the right to raise the interest rate by
10% above the actual lending interest rate, or declare an early maturity of the loan. 



 



    	 



    	 



    

 


Article 9: 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 10: Defaults and treatment


 


Any of the following conditions shall constitute
or be deemed as the default of Party A hereunder or under any single agreement:


 


1. Party A fails to perform the payment
and settlement obligations to Party B as agreed in the Agreement and single agreement;


 


2. Party A fails to use the funds acquired
for agreed purposes as stated in the Agreement and single agreement;


 


3. The representations made by Party A
in the Agreement and single agreement are untrue or breached the commitment in the Agreement and single agreement.


 


4. In case of the condition provided in
Article 8, item 2 (4) 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 terminates the business or is
engaged in any wind-up, cancellation or bankruptcy issues.


 


6. Party A breaches any other agreements
regarding involving party's obligations in the agreement or in single agreement.


 


7. Party A was engaged in any default issues
under any other contract with Party B or other organizations under Bank of China Limited;


 


8. 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.


 



    	 



    	 



    

 


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 the Agreement, single agreement or any other agreement 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 and
letter of guarantee business not handled;


 


4. Declare that the loan, trade financing
sum, principal and interest of advanced sum for letter of guarantee not repaid and other payables under the Agreement, single agreement
or any other agreement between Party A and Party B shall be in whole or in part be mature immediately;


 


5. Terminate or cancel the Agreement, terminate
or cancel single agreements and other agreements between Party A and Party B in whole or in part;


 


6. Require Party A to indemnify the losses
caused to Party B thereby;


 


7. 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;


 


8. Exercise the security interest;


 


9. Require the guarantors to undertake
the guarantee responsibilities;


 


10. Any other measures deemed necessary
by Party B.


 


Article 11: Rights reservation


 


Any party’s failure in performing
the rights under the Agreement, single agreement 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 Agreement or single agreement shall not affect any of its rights
under the Agreement, single agreement, laws or regulations and shall not be deemed as the waiver of the rights.


 



    	 



    	 



    

 


Article 12: Modification, alteration,
termination and partial invalidity


 


The Agreement may be subject to modification
or alteration with both parties’ negotiation and consensus, 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 13: Applicable laws and dispute
settlement


 


Unless otherwise agreed by parties concerned,
the Agreement and single agreement shall be governed by laws of the People’s Republic of China.


 


Unless otherwise agreed by parties concerned,
upon the coming into force of the Agreement and single agreement, any and all disputes arising from or in connection with the execution
and performance of the Agreement and single agreement shall be subject to negotiation between both parties, failing which any party
hereto may solve the dispute under question by the 2 manner mentioned below:


 


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 performing rights and undertaking obligations
under the Agreement or single agreement reside.


 


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 as well.


 


Article 14: 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 force effect with the Agreement.


 


Attachment 1: terms of individual cases.


 


Article 16: Other agreements


 


1. Party A, without the consent of Party
B in written, shall not transfer any rights and obligations hereunder or under any single agreement 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 single agreement and shall have the right to appeal
to the people’s court or to arbitration institution for any dispute under the Agreement or single 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 and in
single agreement.


 


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. 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.


 


6. 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 16: 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 eight
copies, out of which Party A shall hold two, Party B shall hold two , the Guarantor shall hold three and
the pledge registration authority shall hold one. The eight originals shall be of the same legal force.


 


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