Contract Number: No. 2011 QZY723


 


Counter-Guarantee (Accounts Receivables
Pledge) Contract


 



    	 



    	 



    

 


Party A: Beijing Wowjoint Machinery Co.,
Ltd.


 


Legal Representative: Liu Yabin    
              Position: Chairman


 


Address: 1108, Block A, Tiancheng Mansion,
#2 Xinfeng Road, Deshengmenwai Street, Xicheng District, Beijing, China


 


Tel: 89579330                Fax: 89579553         Zip: 100088


 


Pledgee: Beijing Zhongguancun Sci-tech
Guaranty Co., Ltd.


 


Legal representative: Duan Hongwei              Position:
Chairman


 


Address: 30th floor, Block A,
Tianzhuo International Center, #12 Zhongguancun South Street, Haidian District, Beijing, China


 


Tel: 59705600         Fax: 59705610         Zip: 100081


 



    	 



    	 



    

 


INDEX


 


	Article 1	Guarantor’s representations and warranties
	 	 
	Article 2	Pledge of accounts receivables
	 	 
	Article 3	Scope of counter-guarantee pledge
	 	 
	Article 4	Duration of guarantee
	 	 
	Article 5	Transfer of accounts receivables information
	 	 
	Article 6	Public notice of guarantee
	 	 
	Article 7	Value realization of pledged assets
	 	 
	Article 8	Transfer of pledge
	 	 
	Article 9	Rights and obligations of Pledgor
	 	 
	Article 10	Rights and obligations of Pledgee
	 	 
	Article 11	Breach of contract
	 	 
	Article 12	Effectiveness, amendment and termination of contract
	 	 
	Article 13	Dispute resolution
	 	 
	Article 14	Other Terms
	 	 
	Article 15	Attachment
	 	 
	Article 16	Supplementary


 



    	 



    	 



    

 


Beijing Wowjoint Machinery Co., Ltd. (hereinafter referred
to as Guarantor or Pledgor) and Industrial & Commercial Bank of China, Beijing Zhongguancun Branch (hereinafter referred
to as Beneficiary) signed the “Small Business Loan Contract” code 2011 Zhongguancun 0356 (hereinafter referred
to as the Main Contract), for which the Guarantor signed with the Pledgee Contract No. 2011 WT723 "Guarantee
Contract". This guarantee contract obliges the Pledgee to provide a guarantee for the benefit of the Beneficiary to cover
all debt arising out of the Main Contract for a period of 2 years after the loan maturity date, for up to a maximum amount
of RMB 10 million.  In order to ensure the effective discharge of obligations by the Guarantor under the Main Contract,
the Guarantor is willing to provide accounts receivables to the Pledgee as counter-guarantee. To ensure that all parties are
clear with respect to the rights and obligations, based on China's "Contract Law", "Guarantee Security Law"
and other relevant laws and regulations, the parties through fair consultation and agreement, enter into this contract.


 


		Article 1	Guarantor’s representations and warranties



 


1.1 The accounts receivables to be
pledged is legally owned by the Guarantor, can be legally transferred and pledged, has not been pledged or transferred to any other
third party and has no defect in legal rights; therefore can be pledged without any restrictions.


 


1.2 The Guarantor has performed in
accordance with the underlying transaction contracts for the accounts receivables through delivery of goods or performance of services,
and there has been no breach of contract. The Guarantor shall continue to fulfill its obligations under the contracts.


 


1.3 The Guarantor represents that
the underlying transaction contracts for the accounts receivables do not contain provisions, which prohibit the transfer of title
and ownership, or have consignment sales terms.


 


1.4 The Guarantor represents that
there is no debt due to the buyers of the underlying transaction contracts for the accounts receivables and the accounts receivable
shall not be used to offset, counterclaim, pay for damages, retain, or for any other deductions.


 


1.5 The Guarantor represents that
there are no related party transactions between the Guarantor and the buyers of the underlying transaction contracts for the accounts
receivables. Related party includes but is not limited to subsidiaries, any entities in which either party maintains an ownership
interest and/or management control, or both parties under the same company or the same group company’s management and/or
ownership control.


 


1.6 Without consent of the Pledgee,
the Guarantor shall not discontinue, remove or amend the underlying transaction contracts.


 






    	 



    	 



    



 


1.7 The Guarantor fully understands
the rights and obligations as a Pledgor and has voluntarily provide collateral for the counter-guarantee. Furthermore the Guarantor
represents that everything expressed in this contract is true and correct.


 


		Article 2	Pledge of accounts receivables



 


2.1 Pledged accounts receivables include
Appendix of "Pledged Accounts Receivables List" as well as all other accounts receivables created before all debt under
the Main Contract is fully repaid.


 


The Pledgor shall submit to the Pledgee
a new "Pledged Accounts Receivables List" each quarter. After both parties confirm, the List shall become an appendix
to this contract.


 


2.2 The value as shown on the "Pledged
Accounts Receivables List" shall not form the valuation basis for the Pledgee at the time of disposing the accounts receivables,
nor constitute any restrictions on the Pledgee to exercise any rights with respect to the pledge.


 


2.3 Valid ownership and other relevant
information related to the pledged accounts receivables as stated in Article 5 shall be confirmed by both parties, after which
the Pledgor shall deliver to the Pledgee for safekeeping.


 


		Article 3	Scope of counter-guarantee pledge



 


3.1 Scope of counter-guarantee pledge
by Pledgor include: all debt arising from the Main Contract, principal, interest (including compound interest and
penalties interest), liquidated damages for breach of contract, compensatory damages, and all fees and expenses paid by the Pledgor
to the Pledgee such as assessment fee, guarantee fee, penalty interest, all costs incurred by the Pledgee when exercising
the claims under this contract (including but not limited to legal fees, notary fees, arbitration fees, legal fees, property
preservation fees, travel expenses, execution fees, assessment fees, auction fees, etc.).


 


    The Pledgor consents
that within the above mentioned time period, as long as the balance of the claims not yet recovered arising from the Main Contract,
which the Beneficiary can make to the Pledgor, does not exceed the maximum amount of the Main Contract, the Pledgor shall pledge
to provide counter-guarantee with asset pledge to correspond to the guarantee which the Pledgee makes to the Beneficiary, regardless
of the number of times and the dollar amount each time, regardless of whether the expiration date of each debt claim has exceeded
the above mentioned period.


 


3.2 When the Pledgor does not fulfill
its debt obligations, regardless of whether the Pledgor or third party provides other counter-guarantees to the Pledgee, the Pledgee
shall have the right to directly request the Pledgor to bear all guarantee liability within the scope of the counter-guarantee
pledge.


 






    	 



    	 



    



 


		Article 4	Duration of guarantee



 


4.1 Duration of guarantee is two years
after the expiration date of secured creditor’s statute of limitations.


 


		Article 5	Transfer of accounts receivables information



 


5. 1 The following information
related to the pledged accounts receivables under this contract shall be provided by the Pledgor to the Pledgee for safekeeping,
and the Pledgee shall give the Pledgor proper receipt after confirming acceptance:


 


5.1.1 The original underlying contracts
for the accounts receivables.


 


5.1.2 Copies of invoices, which the
Pledgor provides to the buyers of the underlying contracts.


 


5.1.3 All of the relevant files and documents
which the Pledgor provides during the performance of the contract (i.e. delivery of goods or performance of services), including
but not limited to import and export customs duty-paid certificates, invoices, receipts of goods, acceptance documents, etc.


 


5.1.4 Written consent letter by the
buyers of the underlying contracts to enable the Pledgor to provide accounts receivables pledge.


 


5.2 After the Pledgor fulfills all
of its debt obligations, the Pledgee shall promptly return all documents under Clause 5.1 to the Pledgor.


 


		Article 6	Public notice of guarantee



 


6.1 The notarization of this contract
by the Government Notary Public shall be deemed to be public notice of this guarantee.


 


		Article 7	Value realization of pledged assets



 


7.1 After the Pledgee repays debt
on behalf of the Pledgor, the Pledgee has the right to negotiate with the Pledgor to apply a discount of the pledged accounts receivables
to repay the debt owed ​​by the Pledgor, in addition to have the right to dispose the pledged accounts receivables
through sale, auction and other disposition methods. Any proceeds from the disposition shall first be applied to repay the
Pledgee. When the Pledgor transfers accounts receivables to the Pledgee, the Pledgor shall transfer ownership and all other rights at
the same time (including but not limited to the right of defense and appeal, etc.). After transfer of the accounts
receivables, the Pledgor shall continue to fulfill all obligations and liabilities under the underlying contracts.


 


7.2 When the Pledgee disposes the
pledged accounts receivables in accordance with this contract, the Pledgor shall give appropriate assistance and shall not set
any obstacles.


 






    	 



    	 



    



 


		Article 8	Transfer of pledge & prepayment



 


8.1 If agreed to by the Pledgee, the
Pledgor is allowed to transfer the accounts receivables pledged in this contract. However, all proceeds from the transfer
shall be applied to the prepayment of debt.


 


		Article 9	Rights and obligations of Pledgor



 


9.1 The Pledgor shall bear all costs
related to this contract, including but not limited to legal services, appraisal, valuation, registration, transfer, safekeeping
and litigation expenses.


 


9.2 During the valid period of this
contract, without the consent of the Pledgee, the Pledgor shall not dispose any pledged accounts receivables under this contract
via gifting, transferring and other forms of disposition methods.


 


9.3 When the rights of pledge are
or may be infringed by any third party, the Pledgor is obliged to notify and assist the Pledgee against such infringement.


 


9.4 The legal representative of the
Pledgor shall give 30 working days advanced written notice to the Pledgee under any one of the following circumstances:


 


9.4.1 Change of business operation,
such as the implementation of contracting, leasing, joint venture, merger, acquisition, division, joint-stock reform, and joint
venture with foreign partners, etc.;


 


9.4.2 Change of business scope,
registered capital and ownership;


 


9.4.3 Deterioration of financial conditions
or involving in major financial disputes;


 


9.4.4 Bankruptcy, going out of business,
dissolution, was ordered to stop business operations, revocation of business license;


 


9.4.5 Change of address, telephone
and legal representative.


 


9.5 After the Pledgor pays off all
debt, the Pledgor shall not bear any guarantee responsibility.


 


9.6 When the Pledgee pays off the
debt on behalf of the Pledgor, the Pledgor is obliged to dispose accounts receivables and apply any proceeds to repay any amount
due to the Pledgee.


 


		Article 10	Rights and obligations of Pledgee



 


10.1 Under any one of the following
circumstances, the Pledgee shall have the right to dispose the pledged accounts receivable in advance and apply the proceeds to
repay itself:


 









    	 



    	 



    
 


10.1.1 The termination of the Main
Contract due to clauses under the Main Contract or the law causes the Pledgee to pay off debt on behalf of the Pledgor or results
in economic losses for the Pledgee.


 


10.1.2 During the Main Contract’s
validity period, declaration of bankruptcy by the Pledgor, dissolution of the Pledgor, Pledgor’s unauthorized change of corporate
structure resulting in failure of credit claims, the Pledgor has been involved or will be involved in major litigations, arbitration
proceedings and/or other legal disputes, occurrence of other events which can affect the ability and sincerity of the Pledgor to
repay debt.


 


10.2 The Pledgee has the right to
request the Pledgor to help prevent the infringement of pledge rights from third party.


 


10.3 The Pledgee is entitled to receive
any yields generating from the accounts receivables.


 


10.4 The Pledgee is obligated to safekeeping
all the documents related to the rights of the accounts receivables.


 


10.5 After paying off all debt within
the scope of this counter guarantee, the Pledgee shall return any remaining proceeds to the Pledgor.


 


		Article 11	Breach of contract



 


11.1 If the Pledgor makes false representations
and warranties in Article 1, which cause losses to the Pledgee, the Pledgor shall make appropriate compensation.


 


11.2 After this contract takes effect,
both parties shall fully fulfill obligations stipulated in this contract. Any party who does not fully fulfill its contractual
obligations shall bear the liability for breach of contract and make appropriate compensation for the losses caused to the other
party.


 


11.3 If the Pledgor’s mistakes
cause this contract to be null and void, the Pledgor shall compensate the Pledgee for the total loss within the scope of the guarantee.


 


		Article 12	Effectiveness, amendment and termination of contract



 


l2.1 This contract shall take effect
as soon as each party’s respective legal representatives or authorized agents sign and put official seals on the document.


 


l2.2 Even if the Main Contract and
the “Maximum Guarantee Contract” are null and void, this contract is still valid and the Pledgor shall continue to
bear guarantee obligations under this contract.


 


12.3 After the contract takes effect,
neither party may change or terminate the contract without consent of the other party. If there is a need to change or terminate
the contract, both parties shall reach consensus via written agreements. Prior to the said written agreement, this contract
is still valid.


 






    	 



    	 



    



 


12.4 If the Pledgor fails to provide
notice to the Pledgee in accordance with Article 9.4.5, the Pledgee shall consider letters and other communication sent to the
original address duly delivered.


 


		Article 13	Dispute resolution



 


13.1 Any
contract disputes occurred during the course of performance of this contract shall first be resolved through mutual negotiation. If
negotiation fails, litigation shall be under the jurisdiction of the local courts of the Pledgee .


 


		Article 14	Other Terms



 


14.1 Any accounts receivables ownership
dispute occurred during the pledged period shall not affect the validity of this contract.


 


14.2 During the pledged period, if
there is a loss of accounts receivables due to any reasons including coerced measures by the government authorities, the Pledgor
shall provide to the Pledgee other collateral to replace the lost accounts receivables.


 


		Article 15	Attachment



 


15.1 Any attachment is an integral
part of this contract, and has the same legal enforcement rights as the main body of the contract.


 


15.2 Appendix to the contract includes
“Pledged Accounts Receivables List".


 


		Article 16	Supplementary






 


16.1 This contract shall be signed in duplicate,
all of which have the same legal enforcement rights.


 


The Guarantor (seal):


 


Legal representative (or authorized agent)
signature:                Liu Yabin


 


Date:     2011-12-06


 


The Pledgee (seal):


 


Legal representative (or authorized agent)
signature:         Zhang Qi


 


Date:     2011-12-06


 



    	 



    	 



    

 


Appendix – Pledged Accounts Receivables
List 


 


	Sales
 Contract
 No.	 	Buyer of Sales Contract	 	Amount of Sales
 Contract (in
 RMB10,000)	 	 	Amount of
 Accounts
 Receivables (in
 RMB 10,000)	 
	G06	 	Shenzhen City Land Investment & Development Center	 	 	262	 	 	 	79	 
	F27	 	Eden Technology SRL	 	 	1,179	 	 	 	167	 
	F28	 	Eden Technology SRL	 	 	1,179	 	 	 	154	 
	F29	 	Eden Technology SRL	 	 	1,179	 	 	 	146	 
	F30	 	Eden Technology SRL	 	 	1,179	 	 	 	586	 
	B05	 	Chengdu Huachuan Import and Export Co., Ltd.	 	 	65,562	 	 	 	603	 
	F38	 	China Railway Fangshan Bridge Ltd.	 	 	666	 	 	 	167	 
	D24	 	China Railway 22nd Bureau Group Co., Ltd.	 	 	976	 	 	 	116	 
	E09/E19	 	China Railway 16th Bureau Group Co., Ltd.	 	 	590	 	 	 	156	 
	Total:	 		 	 	72,771	 	 	 	2,173	 



 


The Guarantor (seal):


Legal representative (or authorized agent) signature:         Liu
Yabin


 


The Pledgee (seal):


Legal representative (or authorized agent) signature:         Zhang
Qi