Document:

WIZARD
WORLD, INC. 

NON-QUALIFIED
STOCK OPTION AGREEMENT

 

EMPLOYEE

 

THIS
NON-QUALIFIED STOCK OPTION AGREEMENT (the “Agreement”) entered into as of November 8, 2016, by and between
Wizard World, Inc. (the “Company”) and Randall S. Malinoff (the “Optionee”). 

 

WHEREAS,
pursuant to the authority of the Board of Directors (the “Board”), the Company has granted the Optionee the
right to purchase common stock, $0.0001 par value per share (“Common Stock”) of the Company pursuant to stock
options granted under an equity incentive plan approved by the Board;

 

WHEREAS,
the Company and Optionee are entering into that certain Employment Agreement of even date herewith (the “Employment Agreement”)
whereby, among other things, the Optionee shall serve as the Company’s Executive Vice President and Chief Operating Officer.

 

NOW
THEREFORE, in consideration of the mutual covenants and promises hereafter set forth and other good and valuable consideration,
the receipt and sufficiency of which is hereby acknowledged, the parties hereto agree as follows:

 

1.Grant
of Non-Qualified Options. The Company hereby irrevocably grants to the Optionee the right and option to purchase all or any
part of an aggregate of six hundred thousand (600,000) shares (the “Options”) of authorized but unissued or
treasury common stock of the Company (the “Common Stock”) on the terms and conditions herein set forth. The
Common Stock shall be unregistered under the Securities Act of 1933, as amended (the “Securities Act”), unless
the Company voluntarily files a registration statement covering such shares of Common Stock with the Securities and Exchange Commission.
The Options are not intended to be Incentive Stock Options as defined by Section 422 of the Internal Revenue Code of 1986, as
amended (the “Code”).

 

2.Price.
The exercise price of the shares of Common Stock subject to the Options granted hereunder shall be in accordance with Schedule
I attached hereto.

 

3.Vesting.

 

(a)The
Options shall vest in accordance with Schedule I attached hereto, subject to the Optionee continuing to perform services
for the Company in the capacity in which the grant was received on each applicable vesting date. In lieu of fractional vesting,
the number of Options shall be rounded up each time until fractional Options are eliminated.

 

(b)Subject
to Sections 3(c) and 4 of this Agreement, Options may be exercised by providing to the Company the Notice of Option Exercise in
the form attached hereto as Exhibit A after vesting and remain exercisable until 5:30 p.m. New York time on the date that
is the fifth (5th) year anniversary of the date first written on this Agreement.

 

    	 	1	 

    	 		 

    

 

(c)However,
notwithstanding any other provision of this Agreement, at the option of the Board in its sole and absolute discretion, all Options
shall be immediately forfeited in the event any of the following events occur:

 

(i)The
termination of the Optionee’s employment with the Company for Cause or without Good Reason, including, but not limited to,
Optionee’s voluntary termination of his employment, as such terms are defined in the Employment Agreement;

 

(ii)The
Optionee purchases or sells securities of the Company without written authorization in accordance with the Company’s insider
trading policy then in effect, if any;

 

(iii)The
Optionee (A) discloses, publishes or authorizes anyone else to use, disclose or publish, without the prior written consent of
the Company, any proprietary or confidential information of the Company, including, without limitation, any information relating
to existing or potential customers, business methods, financial information, trade or industry practices, sales and marketing
strategies, employee information, vendor lists, business strategies, intellectual property, trade secrets or any other proprietary
or confidential information or (B) directly or indirectly uses any such proprietary or confidential information for the individual
benefit of the Optionee or the benefit of a third party;

 

(iv)During
the Term (as defined in the Employment Agreement) of the Optionee’s employment under the Employment Agreement and for a
period of two (2) years thereafter, the Optionee disrupts or damages, impairs or interferes with the business of the Company or
its Affiliates by recruiting, soliciting or otherwise inducing any of their respective employees to enter into employment or other
relationship with any other business entity, or terminate or materially diminish their relationship with the Company or its Affiliates,
as applicable;

 

(v)During
the Term (as defined in the Employment Agreement) of the Optionee’s employment under the Employment Agreement and for a
period of one (1) year thereafter, the Optionee solicits or directs business of any person or entity who is (A) a customer of
the Company or its Affiliates at any time or (B) solicited to be a “prospective customer” of the Company or its Affiliates,
in any case either for such Optionee or for any other person or entity. For purposes of this clause (v), “prospective
customer” means a person or entity who contacted, or is contacted by, the Company or its Affiliates regarding the provision
of services to or on behalf of such person or entity; provided that the Optionee has actual knowledge of such prospective
customer;

 

(vi)The
Optionee fails to reasonably cooperate to effect a smooth transition of the Optionee’s duties and to ensure that the Company
is apprised of the status of all matters the Optionee is handling or is unavailable for consultation after termination of employment
of the Optionee if such availability is a condition of any agreement to which the Company and the Optionee are parties;

 

(vii)The
Optionee fails to assign all of such Optionee’s rights, title and interest in and to any and all ideas, inventions, formulas,
source codes, techniques, processes, concepts, systems, programs, software, computer data bases, trademarks, service marks, brand
names, trade names, compilations, documents, data, notes, designs, drawings, technical data and/or training materials, including
improvements thereto or derivatives therefrom, whether or not patentable or subject to copyright or trademark or trade secret
protection, developed and produced by the Optionee used or intended for use by or on behalf of the Company or the Company’s
clients;

 

    	 	2	 

    	 		 

    

  

(viii)The
Optionee acts in a disloyal manner to the Company, such as making comments, whether oral or in writing, that tend to disparage
or injure (i) the reputation or business of the Company or its Affiliates, or is likely to result in discredit to, or loss of
business, reputation or goodwill of, the Company or its Affiliates or (ii) its directors, officers or stockholders; or

 

(ix)A
finding by the Board that the Optionee has acted against the interests of the Company or in a manner that has or may have a detrimental
effect on the Company.

 

(d)For
purposes of this Agreement, “Affiliate” means with respect to a person or entity, any other person or entity
controlled by, in control of or under common control with such person or entity, and “controlled,” “controlled
by,” and “under common control with” shall mean direct or indirect possession of the power to direct or cause
the direction of management or policies (whether through ownership of voting securities, by contract or otherwise) of a person
or entity.

 

4.Termination
of Relationship.

 

(a)If
for any reason, except death or disability as provided below, the Optionee ceases to perform the services for which the Options
were granted, all unvested options shall be automatically and irrefutably forfeited effective three months from the date the Optionee
ceases to perform such services, except as otherwise provided herein.

 

(b)If
the Optionee shall die while performing services for the Company, such Optionee’s estate or any Transferee (as defined hereinafter)
shall have the right within twelve (12) months from the date of death to exercise the Optionee’s vested Options, subject
to Section 3(c) hereof. For the purpose of this Agreement, “Transferee” shall mean an individual to whom such
Optionee’s vested Options are transferred by will or by the laws of descent and distribution.

 

(c)If
the Optionee shall become disabled while performing services for the Company within the meaning of Section 22(e)(3) of the Code,
the three-month period referred to in Section 4(a) of this Agreement shall be extended to one year.

 

5.Profits
on the Sale of Certain Shares; Redemption. If any of the events specified in Section 3(c) of this Agreement occur within one
(1) year from the last date the Optionee performed services for which the Options were granted (the “Termination Date”),
all profits earned from the sale of the Company’s securities, including the sale of shares of Common Stock underlying the
Options, during the two (2) year period commencing one (1) year prior to the Termination Date shall be forfeited and forthwith
paid by the Optionee to the Company within ten (10) days after the Optionee receives written demand from the Company for such
payment and a copy of the documentation of the sale, including, without limitation, the purchase price therefor. Further, in such
event, the Company may at its option redeem shares of Common Stock acquired upon exercise of the Options by payment of the exercise
price to the Optionee. The Company’s rights under this Section 5 do not lapse one year from the Termination Date, but are
a contract right subject to any appropriate statutory limitation period. 

 

    	 	3	 

    	 		 

    

 

6.Transfer.No
transfer of the Options by the Optionee by will or by the laws of descent and distribution shall be effective to bind the Company
unless the Company shall have been furnished with written notice thereof and a copy of the letters testamentary or such other
evidence as the Board may deem necessary to establish the authority of the estate and the acceptance by the Transferee or Transferees
of the terms and conditions of the Options.

 

7.Method
of Exercise. The Options shall be exercisable by a written notice in the manner and form identified on Exhibit A hereto
which information shall include:

 

(a)
state the election to exercise the Options, the number of shares to be exercised, the natural person in whose name the stock
certificate or certificates for such shares of Common Stock is to be registered and such person’s address and social security
number (or if more than one, the names, addresses and social security numbers of such persons);

 

(b)
contain such representations and agreements as to the holder’s investment intent with respect to such shares of Common
Stock as set forth in Section 11 hereof;

 

(c)
be signed by the person or persons entitled to exercise the Options and, if the Options are being exercised by any person
or persons other than the Optionee, be accompanied by proof, satisfactory to counsel for the Company, of the right of such person
or persons to exercise the Options; and

 

(d)
be accompanied by full payment of the purchase or exercise price in United States dollars in cash or by bank or cashier’s
check, certified check or money order or in the form of shares pursuant to the 2016 Stock Incentive and Award Plan of the Company
(the “2016 Plan”). 

 

The
certificate or certificates for shares of Common Stock as to which the Options shall be exercised shall be registered in the name
of the person or persons exercising the Options.

 

8.Sale
of Shares Acquired Upon Exercise of Options. If the Optionee is an officer (as defined by Section 16(b) of the Securities
Exchange Act of 1934, as amended (“Section 16(b)”), any shares of the Company’s Common Stock acquired
pursuant to Options granted hereunder cannot be sold by the Optionee, subject to Rule 144 promulgated under the Securities Act,
until at least six (6) months elapse from the date of grant of the Options, except in the case of death or disability or if the
grant was exempt from the short-swing profit provisions of Section 16(b).

 

9.Adjustments.
Upon the occurrence of any of the following events, the Optionee’s rights with respect to Options granted to such Optionee
hereunder shall be adjusted as hereinafter provided unless otherwise specifically provided in a written agreement between the
Optionee and the Company relating to such Options:

 

    	 	4	 

    	 		 

    

 

(a)If
the shares of Common Stock shall be subdivided or combined into a greater or smaller number of shares, respectively, or if the
Company shall issue any shares of its Common Stock as a stock dividend on its outstanding shares of Common Stock, the number of
shares of Common Stock deliverable upon the exercise of the Options shall be appropriately increased or decreased proportionately,
and appropriate adjustments shall be made in the exercise price per share to reflect such subdivision, combination or stock dividend,
as applicable;

 

(b)If
the Company is to be consolidated with or acquired by another entity pursuant to an acquisition, the board of directors of any
entity assuming the obligations of the Company hereunder (the “Successor Board”) shall either (i) make appropriate
provision for the continuation of such Options by substituting on an equitable basis for the shares then subject to such Options
the consideration payable with respect to the outstanding shares of Common Stock of the Company in connection with such acquisition
or (ii) terminate all Options in exchange for a cash payment equal to the excess of the fair market value of the shares of Common
Stock subject to such Options over the exercise price thereof;

 

(c)In
the event of a recapitalization or reorganization of the Company (other than a transaction described in Section 9(b) above) pursuant
to which securities of the Company or of another corporation are issued with respect to the outstanding shares of Common Stock,
the Optionee upon exercising the Options shall be entitled to receive for the purchase price paid upon such exercise, the securities
such Optionee would have received if such Optionee had exercised such Optionee’s Options prior to such recapitalization
or reorganization;

 

(d)Except
as expressly provided herein, no issuance by the Company of shares of Common Stock of any class or securities convertible into
shares of Common Stock of any class shall affect, and no adjustment by reason thereof shall be made with respect to, the number
or exercise price of shares subject to Options. No adjustments shall be made for dividends or other distributions paid in cash
or in property other than securities of the Company;

 

(e)No
fractional shares shall be issued and the Optionee shall receive from the Company cash based on the fair market value of the shares
of Common Stock in lieu of such fractional shares; or

 

(f)The
Board or the Successor Board shall determine the specific adjustments to be made under this Section 9, and its determination shall
be conclusive. If the Optionee receives securities or cash in connection with a corporate transaction described in Section 9(a),
(b) or (c) above as a result of owning such restricted Common Stock, such securities or cash shall be subject to all of the conditions
and restrictions applicable to the restricted Common Stock with respect to which such securities or cash were issued, unless otherwise
determined by the Board or the Successor Board.

 

10.
Necessity to Become Holder of Record. Neither the Optionee, the Optionee’s estate, nor the Transferee have any
rights as a shareholder with respect to any shares of Common Stock covered by the Options until such Optionee, estate or Transferee,
as applicable, shall have become the holder of record of such shares of Common Stock. No adjustment shall be made for cash dividends
or cash distributions, ordinary or extraordinary, in respect of such shares of Common Stock for which the record date is prior
to the date on which such Optionee, estate or Transferee, as applicable, shall become the holder of record thereof.

 

    	 	5	 

    	 		 

    

 

11.
Conditions to Exercise of Options. 

 

(a)In
order to enable the Company to comply with the Securities Act and relevant state law, the Company may require the Optionee, the
Optionee’s estate or any Transferee, as a condition of the exercising of the Options granted hereunder, to give written
assurance satisfactory to the Company that the shares of Common Stock subject to the Options are being acquired for such Optionee’s,
estate’s or Transferee’s, as applicable, own account, for investment only, with no view to the distribution of same,
and that any subsequent resale of any such shares of Common Stock either shall be made pursuant to a registration statement under
the Securities Act and applicable state law which has become effective and is current with regard to the shares of Common Stock
being sold, or shall be pursuant to an exemption from registration under the Securities Act and applicable state law.

 

(b)The
Options are subject to the requirement that, if at any time the Board shall determine, in its sole and absolute discretion, that
the listing, registration or qualification of the shares of Common Stock subject to the Options upon any securities exchange or
under any state or federal law, or the consent or approval of any governmental regulatory body, is necessary as a condition of,
or in connection with the issue or purchase of such shares of Common Stock under the Options, the Options may not be exercised
in whole or in part unless such listing, registration, qualification, consent or approval shall have been effected. 

 

12.
Duties of Company. The Company will at all times during the term of the Options:

 

(a)
Reserve and keep available for issue such number of shares of its authorized and unissued shares of Common Stock as will be
sufficient to satisfy the requirements of this Agreement;

 

(b)
Pay all original issue taxes with respect to the issue of shares of Common Stock pursuant hereto and all other fees and expenses
necessarily incurred by the Company in connection therewith; and

 

(c)
Use its best efforts to comply with all laws and regulations which, in the opinion of counsel for the Company, shall be applicable
thereto.

 

13.Severability.
In the event any parts of this Agreement are found to be void, the remaining provisions of this Agreement shall nevertheless be
binding with the same effect as though the void parts were deleted.

 

14.Arbitration.
Any controversy, dispute or claim arising out of or relating to this Agreement, or its interpretation, application, implementation,
breach or enforcement which the parties hereto are unable to resolve by mutual agreement, shall be settled by submission by either
party of the controversy, claim or dispute to binding arbitration in New York County, New York (unless the parties agree in writing
to a different location), before a single arbitrator in accordance with the rules of the American Arbitration Association then
in effect. The decision and award made by the arbitrator shall be final, binding and conclusive on all parties hereto for all
purposes, and judgment may be entered thereon in any court having jurisdiction thereof.

 

    	 	6	 

    	 		 

    

 

15.Benefit.
This Agreement shall be binding upon and inure to the benefit of the parties hereto and their legal representatives, successors
and assigns.

 

16.Notices
and Addresses. All notices, offers, acceptance and any other acts under this Agreement (except payment) shall be in writing,
and shall be sufficiently given if delivered to the addressees in person, by FedEx or similar receipted delivery as follows:

 

	 	The
    Optionee:	 	Randall
    S. Malinoff
	 	 	 	25262 Prado De
    La Puma
	 	 	 	Calabasas, CA
    91302 
	 	 	 	 
	 	The Company:	 	Wizard World,
    Inc.
	 	 	 	662 N. Sepulveda
    Blvd., Suite 300
	 	 	 	Los Angeles,
    CA 90049
	 	 	 	Attn: John D.
    Maatta

 

or
to such other address as either of them, by notice to the other, may designate from time to time. The transmission confirmation
receipt from the sender’s facsimile machine shall be evidence of successful facsimile delivery. Time shall be counted to,
or from, as the case may be, the delivery in person or by mailing.

 

17.Attorneys’
Fees. In the event that there is any controversy or claim arising out of or relating to this Agreement, or to the interpretation,
breach or enforcement thereof, and any action or proceeding is commenced to enforce the provisions of this Agreement, the prevailing
party shall be entitled from the non-prevailing party to its reasonable attorneys’ fee, costs and expenses.

 

18.Governing
Law. This Agreement and any dispute, disagreement, or issue of construction or interpretation arising hereunder whether relating
to its execution, its validity, the obligations provided herein or performance, shall be governed or interpreted according to
the laws of the State of New York without regard to choice of law considerations. 

 

19.Oral
Evidence. This Agreement, along with the 2016 Plan and the Employment Agreement, constitute the entire agreement between the
parties hereto and supersedes all prior oral and written agreements between the parties hereto with respect to the subject matter
hereof. Neither this Agreement nor any provision hereof may be changed, waived, discharged or terminated except by a statement
in writing signed by the party or parties against which enforcement or the change, waiver discharge or termination is sought.

 

20.Counterparts.
This Agreement may be executed in one or more counterparts, each of which shall be deemed an original but all of which together
shall constitute one and the same instrument. The execution of this Agreement may be made by facsimile signature, which shall
be deemed to be an original.

 

21.Section
Headings. Section headings herein have been inserted for reference only and shall not be deemed to limit or otherwise affect,
in any matter, or be deemed to interpret in whole or in part, any of the terms or provisions of this Agreement.

 

[-signature
page follows-]

 

    	 	7	 

    	 		 

    

  

IN
WITNESS WHEREOF the parties hereto have set their hand the day and year first above written.

 

	 	WIZARD
    WORLD, INC.
	 	 	 
	 	By:	/s/
                                         John D. Maatta

	 	 	 John
    D. Maatta 
	 	 	 President
    & Chief Executive Officer
	 	 	 
	 	OPTIONEE
	 	 	 
	 	By:	/s/
                                         Randall S. Malinoff

	 	 	 Randall
    S. Malinoff 

  

    	[Signature page to Non-Qualified Stock Option Agreement]

    	 		 

    

 

EXHIBIT
A

 

FORM
OF NOTICE OF OPTION EXERCISE

 

To:Wizard
World, Inc. (the “Company”)

 

(1)The
undersigned hereby elects to purchase __________ shares of Common Stock of the Company (the “Shares”) pursuant to
the terms of the Option Agreement by and between the Company and the undersigned dated as of __________ ___, 20__, and tenders
herewith payment of the exercise price in full as set forth below.

 

(2)Payment
shall take the form of (check applicable box):

 

[  ]
in lawful money of the United States in the form of a check made payable by the undersigned to the Company; or

 

[  ]
in lawful money of the United States in the form of a wire transfer to the account specified by the Company;

 

[  ]
in the form of shares of Common Stock pursuant to Section 5(d) of the Plan.

 

(3)Please
issue a certificate or certificates representing the Shares in the name of the undersigned or in such other name as is specified
below:

 

____________________________________

 

The
Shares shall be delivered via overnight courier (with tracking information to be provided to the undersigned) to the following
address:

 

_____________________________

_____________________________

_____________________________

Attn:
________________________

Tel:
_________________________

 

OPTIONEE

 

                                                  __________________________________

  

    	[Exhibit A to Non-Qualified Stock Option Agreement]

    	 		 

    

 

SCHEDULE
I

 

VESTING
AND EXERCISE PRICE OF OPTIONS

 

	Number
of Options: 
	 	Exercise
    Price:	 	Vesting
    Date*:
	75,000	 	$0.50	 	**
	75,000	 	$0.50	 	December
    31, 2016
	75,000	 	$0.55	 	March
    31, 2017
	75,000	 	$0.55	 	June
    30, 2017
	75,000	 	$0.55	 	September
    30, 2017
	75,000	 	$0.60	 	December
    31, 2017
	75,000	 	$0.60	 	March
    31, 2018
	75,000	 	$0.60	 	June
    30, 2018

 

*
All options vest upon a “Change in Control” during the Term of the Employment Agreement. “Change in Control”
has the meaning assigned to in the Employment Agreement.

 

**
Such options shall vest upon the execution of this Agreement.

  

    	[Schedule I to Non-Qualified Stock Option Agreement]Exhibit 10.1

 

 

Commercial Banking-GTRF Receivables Finance Division

(CARM 160727 & CM 160715)

 

CONFIDENTIAL

 

THE DIRECTORS

HONG KONG HIGHPOWER TECHNOLOGY COMPANY LIMITED

UNIT 12 15/F TECHNOLOGY PARK

18 ON LAI STREET SHEK MUN

SHATIN

	NEW TERRITORIES	26 August 2016

 

Dear Sirs

 

Offer Letter - Invoice Discounting / Factoring Agreement

 

With reference to our recent discussions,
we are pleased to advise that we have reviewed and revised the debts purchase services provided to you.

 

The Bank has introduced a new Standard
Conditions For Invoice Discounting / Factoring. The attached new Standard Conditions For Invoice Discounting / Factoring shall
replace the previous version of the Bank’s Standard Conditions For Invoice Discounting / Factoring and shall apply to all
debts purchase services provided by the Bank to you. Any reference in the Invoice Discounting / Factoring Agreement to “Standard
Conditions For Invoice Discounting / Factoring” or “these Conditions” or “the Conditions” shall be
deemed to be a reference to the attached new Standard Conditions For Invoice Discounting / Factoring which is expressly incorporated
in the Invoice £iscounting / Factoring Agreement by reference.

 

We offer to continue to provide you with
the debt purchase services on the terms and subject to conditions set out in this letter as well as the Invoice Discounting / Factoring
Agreement between you and us (incorporating, amongst other things, our new Standard Conditions For Invoice Discounting / Factoring
(“Standard Conditions’) (together constituting the “Invoice Discounting / Factoring Agreement’)).
These services are subject to review at any time and, in any event by 15 July 2017.

 

This is the Offer Letter referred to in
the Invoice Discounting / Factoring Agreement between you and us. An expression used in this letter shall have the meaning given
to it in the Invoice Discounting / Factoring Agreement, if such expression appears there.

 

 

The Hongkong and Shanghai Banking Corporation Limited

Commercial Banking Hong Kong

GTRF Receivables Finance Division

9/F, HSBC Building MongKok, 673 Nathan Road, MongKok, Kowloon

Tel; 3941 6211 Fax; 3418 4982 SWIFT; HSBCHKHH

Web Site: www.hsbc.com.hk

    	Page 1 of 8

     

    

	HONG KONG HIGHPOWER TECHNOLOGY COMPANY LIMITED	 26 August 2016  

 

 

		A.	SERVICES OFFERED BY THE BANK

 

		*	Credit Management - we provide services in respect
of the collection of Debts and/or maintenance of a sales ledger in the manner from time to time determined by the Bank.

 

		*	Debts shall be purchased on a disclosed basis as set
out in Section E below.

 

		*	Debts are purchased on a With Recourse basis.

 

		*	Finance - we may give you the benefit of Prepayments.

 

		B.	BASIC TERMS OF FINANCE SERVICE

 

	1.           Funds
    In Use Limit (FIU Limit):	 	USD4,000,000.-
    or its equivalent (previously USDS,000,000.-)
	2.           Discounting
    Charge (on Funds In Use):	 	At
        2% per annum over 3 months LIBOR (London Interbank Offered Rate) which will be charged on a monthly basis or such other
        basis as the Bank may notify you from time to time.

         

        For
        details of benchmark interest rates, please refer to the attached Appendix.

         

	3.           Prepayment
    Percentage / Funding Limit:	 	As
    specified in a Customer Limit Advice issued in respect of the relevant Customer.
	4.           Concentration
    Percentage:	 	100%.
	5.           Eligible
    Debt Grace Period:	 	60
    days, unless otherwise specified in a Customer Limit Advice issued in respect of the relevant Customer.

 

		C.	BASIC TERMS OF CREDIT PROTECTION SERVICE

 

	1.           Credit
    Cover Percentage(s) / Credit Cover Limit(s) / Credit Protection Events:	 	As
    specified in a Customer Limit Advice issued in respect of the relevant Customer.
	2.           First
    Loss:	 	Nil

 

We may in our own name take out credit insurance and/or appoint
Correspondent Factor(s) to collect payment of the Debts.

 

    	Page 2 of 8

     

    

	HONG KONG HIGHPOWER TECHNOLOGY COMPANY LIMITED	 26 August 2016  

 

 

		D.	BASIC TERMS APPLICABLE TO ALL SERVICES

 

	1.          
      Customer(s)	 	To
    be approved by the Bank from time to time and as advised by the Bank to the Client.
	2.            Service
    Charge:	 	0.15%
    flat on the face value of the invoice for each Debt.
	3.             Maximum
    Terms of Payment:	 	120
    days unless otherwise specified in a Customer Limit Advice issued in respect of the relevant Customer.
	4.          
     Maximum     Invoicing Period:	 	30
    days after the date of delivery of the Goods unless otherwise specified in a Customer Limit Advice issued in respect of the
    relevant Customer.

 

		E.	NOTICE OF ASSIGNMENT FOR DEBTS AND COLLECTION

 

		1.	The Debts of all Customers will be purchased on a disclosed basis (that is, giving the notices
of assignment for the Debts) except as otherwise agreed by us in writing.

 

		2.	The Debts shall be collected and paid into the designated account maintained by you with us and
held on trust for us. However, we have the overriding right at any time to direct any Debt to be paid directly to us.

 

		F.	DOCUMENTS REQUIRED

 

		1.	You shall provide us with the following documents in each case in the form and substance satisfactory
to us:-

 

		(a)	all security documents referred to in Section G below; and

 

		(b)	such other documents, terms or evidence that we may require from time to time.

 

No request for any Prepayment
may be submitted prior to our receipt of the above documents.

 

		2.	The following supporting documents are required in relation to each Debt:-

 

		(a)	A copy of the confirmed purchase order (if applicable);

 

		(b)	A copy of the invoice endorsed with and/or accompanied by a note in the form approved by us stating
our interest as assignee; and

 

		(c)	Evidence of Delivery of the Goods satisfactory to us.

 

		3.	If we agree, you may provide us with the lists of the Debts (which shall include the names of Customers,
invoices numbers, invoices amounts, due dates of the Debts as well as such other information as required by us) in lieu of the
copies of the invoices in respect of the Debts. Notwithstanding this, you shall at any time, upon request by us, promptly provide
us with the copies of the invoices evidencing the Debts.

 

		G.	SECURITY AND OTHER DOCUMENTATION

 

As security for your obligations
and liabilities to us under, inter alia, this letter and the Invoice Discounting / Factoring Agreement, we are holding the following:-

 

		1.	The Invoice Discounting / Factoring Agreement executed by you under seal supported by Board Minutes
both dated 28 October 2015.

 

		2.	Tri-party agreement executed by China Export & Credit Insurance Corporation (“Sinosure”),
Shenzhen Highpower Technology Co Ltd, Hong Kong Highpower Technology Company and The Hongkong and Shanghai Banking Corporation
Ltd dated I January 2016 regarding the rights to the claim payment proceeds. Any changes to insurer’s cover must be notified
us immediately.

 

    	Page 3 of 8

     

    

	HONG KONG HIGHPOWER TECHNOLOGY COMPANY LIMITED	 26 August 2016  

 

 

		3.	The Guarantee (limited to USD8,000,000.-) together with default interest and other costs and expenses
from Shenzhen Highpower Technology Co Ltd together with Board Resolution both dated 28 October 2015.

 

		4.	The Guarantee (limited to USDS,000,000.-) together with default interest and other costs and expenses
from Huizhou Highpower Technology Co. Ltd together with Board Resolution both dated 28 October 2015.

 

		5.	The Guarantee (limited to USD8,000,000.-) together with default interest and other costs and expenses
from Springpower Technology (Shenzhen) Co Ltd together with Board Resolution both dated 28 October 2015.

 

		6.	The Guarantee (limited to USD8,000,000.-) together with default interest and other costs and expenses
dated 28 October 2015 from Mr Pan Dangyu.

 

To comply with
the Code of Banking Practice and guidance given by the Courts, the Bank needs to obtain your consent before it can provide a copy
or summary of the facility, or information on your outstanding liabilities to the Bank, to any guarantor or other third party providing
security (the “Surety”) or to the Surety’s advisors. In addition, if the Bank is obliged to make any formal
demand for repayment because you have failed to settle an amount due following our customary reminder, the Bank will also need
to provide the Surety with a copy of its demand letter. Whether or not the Bank has made the demand, the Bank will also need to
provide the Surety with a copy of the latest statement of account and/or to give the Surety details of your outstanding liabilities
to the Bank, whether actual or contingent. By accepting this letter, you are deemed to have consented to the Bank providing any
of the aforesaid documents or information to the Surety, to the Surety’s solicitors and other professional advisers. Please
note that if this consent is not given, the Bank will be unable to proceed with the transaction.

 

    	Page 4 of 8

     

    

	HONG KONG HIGHPOWER TECHNOLOGY COMPANY LIMITED	 26 August 2016  

 

 

		G.	SECURITY AND OTHER DOCUMENTATION (CONT’D)

 

Please note that all costs and
expenses (including legal fees) incurred by us in connection with the extension of these facilities
and any matters arising therefrom are to be reimbursed by you on demand.

 

		H.	SPECIAL TERMS

 

		1.	Please note that Section 83 of the Banking Ordinance has imposed on us as a bank certain limitations
on transactions with persons related to our directors or employees. In acknowledging this letter, you should advise us whether
you are in any way related to any of our directors or employees within the meaning of Section 83 and in the absence of such advice
we will assume that you are not so related. We would also ask, should you become so related subsequent to acknowledging this letter,
that you immediately advise us in writing.

 

		2.	Unless expressed in writing from you to the contrary, we may provide any information relating to
any of your accounts with us and any facilities we may provide to you from time to time or their conduct or any other information
concerning your relationship with us to any other company or office which at the relevant time belongs to or is part of the HSBC
Group.

 

		3.	Please note that our standard service charges are stipulated in the Bank’s Tariff which is
accessible at https://www.commercial.hsbc.com.hk/1/2/commercial/customer-service/ tariffs. We will provide you with a hard copy
of the Tariff at your request.

 

		4.	This letter is governed by and construed in accordance with the laws of Hong Kong.

 

		5.	No person other than you and us will have any right under the Contracts (Rights of Third Parties)
Ordinance to enforce or enjoy the benefit of any of the provisions of this letter.

 

		6.	In the event from time to time that the actual amount of Prepayment (as defined in the Invoice
Discounting/ Factoring Agreement) exceeds the Availability, we may, at our sole and absolute discretion, debit such excess amount
from your account(s) maintained with us.

 

		7.	First drawdown is subject to successful pre-ledger debt verification with buyers or first buyer
payment to the trustee account, whichever is earlier.

 

		8.	Acknowledgement of notification letter from your customer(s) is required.

 

		9.	All invoices billed to the factored buyers must bear our standard assignment clause.

 

		10.	Copies of all invoices billed to the factored buyers must be submitted to HSBC within 30 days after
issuance, along with the relevant Proof of Delivery (POD) and Purchase Orders (if any).

 

		11.	No selective assignment, i.e. all invoices including credit notes and debit notes to the proposed
factoring buyers have to be assigned to HSBC.

 

		H.	SPECIAL TERMS (CONT’D)

 

		12.	Sample invoices/ tooling invoices and debit notes will be excluded for financing.

 

		13.	Contacts (valid email addresses and mailing addresses) of the factored buyers must be provided
to us for debt verification and collection purposes.

 

		14.	Notification letters (format and wording to be supplied by us) to your customer(s) shall be prepared
under your company’s letterhead and returned to us for our despatch.

 

		15.	You will be required for so long as these facilities are available to you to comply with the following
undertaking(s)/covenant(s). Your compliance or otherwise with the following undertaking(s) /covenant(s) will not in any way prejudice
or affect our right to suspend, withdraw or make demand in respect of the whole or any part of the facilities made available to
you at any time. By signing this letter, you expressly acknowledge that we may suspend, withdraw or make demand for repayment of
the whole or any part of the facilities at any time notwithstanding the fact that the following undertaking(s)/covenant(s)are included
in this letter and whether or not you are in breach of any such undertaking(s)/covenant(s).

 

    	Page 5 of 8

     

    

	HONG KONG HIGHPOWER TECHNOLOGY COMPANY LIMITED	 26 August 2016  

 

 

The Borrower, Hong Kong Highpower Technology Company
Limited, hereby undertakes factored turnover of no less than USD 10,000,000.- per annum. Otherwise, commitment fee equal to the
shortfall amount (i.e. USD 10,000,000.- minus factored invoice volume) times service charge of 0.15% on invoice value will be borne
by the Client and calculated on pro-rata basis at the end of each quarter. Any applicable commitment fee will be added to the FIU
balance not later than 15th day of the following month. Refund of commitment fee will be arranged if the minimum undertaking requirement
for USD 10,000,000.- can be met in 12 months from the facility commencement.

 

		16.	Any payment and/or prepayment of the Purchase Price under or pursuant to the Invoice Discounting
/ Factoring Agreement shall, at our discretion, first be applied to pay and settle all sums of money, obligations and liabilities
due or owing by you to the Bank in respect of any account whatsoever between you and the Bank (including, but without limitation,
all moneys and liabilities owing by you in respect of the Invoice Discounting / Factoring Agreement, all general banking facilities
and any other advances and facilities granted by the Bank to you and all interest thereon). (new)

 

A review fee of USD2,000.- will be charged
to the debit of your current current account upon receipt of your acceptance to this offer letter.

 

Please arrange for your authorised signatories
to sign and return to us the duplicate copy of this letter with Appendix to signify your understanding and acceptance of the terms
and conditions under which debts purchase services are offered.

 

This offer will remain open for acceptance
until the close of business on 26 September 2016 and if not accepted by that date will be deemed to have lapsed.

 

We are pleased to be of continued assistance.

 

    	Page 6 of 8

     

    

	HONG KONG HIGHPOWER TECHNOLOGY COMPANY LIMITED	 26 August 2016  

 

 

Yours faithfully For and on behalf of

The Hongkong and Shanghai Banking Corporation Limited

 

/s/ Eric Cheung

 

Eric Cheung

Assistant Vice President

/SS

Encl

 

We agree to and accept all the terms and
conditions set out above. For and on behalf of Hong Kong Highpower Technology Company Limited

 

                                                                                                          

Name:

Title:

Date:

 

    	Page 7 of 8

     

    

	HONG KONG HIGHPOWER TECHNOLOGY COMPANY LIMITED	 26 August 2016  

 

 

 

APPENDIX : DETAILS OF BENCHMARK RATES

 

	Benchmark	Applicable Currency	Definition of Benchmark

	London Interbank Offered Rate (LIBOR)* and 1	USD	
        “LIBOR” means, in relation
        to any advance, the applicable Screen Rate at or around 11:00 am London time two Business Days (or such other time or day as determined
        by the Bank if the market practice differs) before the proposed date of advance and, if any such rate is below zero, LIBOR will
        be deemed to be zero.

         

        “Business Day” means
        a day other than a Saturday or Sunday on which banks are open for general business in London.

         

        “Screen Rate” means
        the Relevant Administrator’s Interest Settlement Rate for the relevant currency and period displayed on the appropriate page
        of the Reuters screen provided that (a) if in the Bank’s sole determination its funding cost is in excess of LIBOR, the Bank
        may specify the cost of funding any facility or financial arrangement; or (b) if the screen page is replaced, not available or
        such service ceases to be available, the Bank may specify another page or service displaying the appropriate rate.

         

        “Relevant Administrator”,
        means ICE Benchmark Administration Limited or any other person to whom the administrator function of the LIBOR fixing process is
        transferred from time to time.

         

 

Note:

 

		1	Interpolated rates, which refers to rate calculated using
linear interpolation method as recommended by The International Swaps and Derivatives Association (ISDA) for situation where there
is no current quote available for below maturities:-

• LIBOR: 2 weeks, 4 months,
5 months, 7 months, 8 months, 9 months, 10 months and 11 months

 

		*	For tenors where fixing is not published by the relevant
administrator and the interpolated rate does not apply, the benchmark rate shall be the rate as specified by the Bank in its sole
discretion as its cost of funding the relevant facility or financial arrangement.

 

 

    	Page 8 of 8

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