Document:

Document Code: CMBC-HT-363 (2011 Company
Version)

 

 

SME Financial Service Contract

(Appropriate for working capital loans)

Code: Public Debt #99012012296402

 

 

China Minsheng Bank

 

    	 

    	 	

    
 

Contract Parties

 

 

 

Borrower: Beijing Wowjoint Machinery
Co. Ltd.

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

Zip code: 100088

Legal representative/Responsible Person:
Liu Yabin                 

Telephone: 89579330

Fax: 89579553                               
  

                               

 

Party B: China
Minsheng Bank, Headquarter Branch Sales Department

Address: No 2 Fuxingmennei Street, Xicheng
District, Beijing, P.R. China

Zip code: 100031

Legal representative/Responsible Person:
Chen Jinzhong

Telephone: 58560088                                
 

Fax: 58560001                                
 

 

Both parties in accordance with relevant
state laws and regulations enter into this contract.

 

    	 

    	 	

    
 

Working Capital Loan Terms

 

Section 1: Loan purpose 

 

Article 1: The loan purpose
under the Contract is for: working capital for daily production and operation. Without the written consent of Party
B, Party A shall not change the loan purpose. 

 

Section 2: Loan amount and
terms 

 

Article 2: The loan amount
is 5 million. Currency is RMB. The above Loan amount refers to:

 

ý
Revolving line of credit under Integrated Credit Line, and credit terms are the same as the terms for the maximum credit amount.
Each loan terms shall conform to the terms on the Borrowing Certificate.

 

If Party A has signed the "Contract
for Joint Guarantee Credit", the validity, category and code number are           
  , which shall conform to those in the "Contract for Joint Guarantee Credit". Each loan terms shall
conform to the terms on the Borrowing Certificate. 

 

ý
Revolving line of credit under Non-Integrated Credit Line. Credit terms shall be from     Year     Month     Date
to     Year     Month     Date.
Each loan terms shall conform to the terms on the Borrowing Certificate.

 

þ
Single loan, is not a revolving credit line, the loan period from 2012.03.14 (the
first agreed loan drawdown date) to 2012.09.14 (the agreed loan maturity date). If the above dates are not
the same as those on the Borrowing Certificate, the dates on the Borrowing Certificate shall prevail.

 

Article 3: If the borrowing is drawn
under a revolving line of credit of Integrated Credit Line or Non-Integrated Credit Line, within the loan period and loan amount
limits Party A can apply for re-drawing of the repaid amount after obtaining approval from Party B. If Party A defaults, Party
B shall have the right to cancel any unused credit line. Once the line of credit expires, the unused amount is automatically cancelled. Party
A must apply for loan drawdown within the validity period, and the start date of each drawdown shall not exceed the last date of
the validity period. If validity period is adjusted, the last date of the validity period shall be adjusted accordingly. Prior
to each application for drawdown, Party A shall __ Business days in advance submit to Party B "Withdrawal / Payment
Application." After receipt of such application Party B shall decide whether to grant loans and notify Party B accordingly.

 

Section 3: Interest calculation 

 

    	 

    	 	

    
 

Article 4: Interest rates calculation

 

(A) ý
The annual loan interest rate is        %. The annual interest
rate is calculated using the applicable benchmark lending rate over the same period as published by the People's Bank of China
on the date of the Contract signing, plus a pre-determined floating rate.

 

þ
The annual loan interest rate is 7.93%, which
is the applicable benchmark lending rate over the same period as published by the People's Bank of China on the date of the Contract
signing þfloating
upward ýfloating
downward by 30%.

 

If the agreed interest rate and the actual
interest rate are different, the interest rate on the Borrowing Certificate shall prevail.

 

(B) Interest calculation should start
from the date Party B transfers the loan funds in accordance with Article 7, 8 and 9 in the Contract to the account, which Party
A opens at Party B’s branch. Party A shall pay to Party B on interest settlement date interest and principal payment due
from the drawdown date or last interest settlement date to this interest settlement date.

 

(C) Loan interest calculation and
interest settlement period:

 

þ Daily
accrual, monthly interest settlement, interest settlement date is the 20th day of each month, but the last interest
settlement date is the loan maturity date.

 

ý Daily
accrual, quarterly interest settlement, interest settlement date is the 20th day of each quarter or _____ date, but
the last interest settlement date is the loan maturity date.

 

ý If
the loan is less than one year, interest together with principal is paid on maturity date.

 

(D) For overdue loan principal, Party
B shall calculate overdue penalty interest at normal interest rate increased by 50%, starting from the first overdue
date. Party B shall calculate normal interest and overdue penalty interest monthly on the interest settlement date, based on the
actual number of days overdue and accrued monthly.

 

(E) If Party A uses loans not in accordance
with agreed loan purposes, Party B shall calculate default penalty interest at normal interest rate increased by 100%,
starting from the first default date (inclusive). Party B shall calculate normal interest and default penalty interest monthly
on the interest settlement date, based on the actual number of days overdue and accrued monthly. Party B shall reserve the right
to pursue Party A’s liabilities resulting from other breaches of contract and declare at any time all or part of the outstanding
loans due immediately.

 

(F) After loan drawdown, if the People's
Bank of China adjusts the benchmark lending interest rates, the loan interest rate shall be adjusted with the following methods:

 

    	 

    	 	

    
 

ý Not
be adjusted.

 

þ Automatically
adjusted using the new benchmark lending interest rates plus agreed floating rate in accordance with Article 4, Paragraph (A) of
the Contract. For the loan which has already been drawn down, the newly adjusted loan interest rate shall start to apply on the
next day after the first interest rate settlement date following the adjustment date of the benchmark lending rates.

 

Once the normal loan interest rate is adjusted,
the overdue penalty interest rate and the default penalty interest rate shall automatically adjust accordingly, and shall begin
to apply at the same time by period.

 

If the interest rate is adjusted in accordance
with Article 4, Paragraph (F), there is no need for both parties to sign an agreement, and no need to notify or seek consent of
the other party or the guarantor.

 

ý Other
interest rate adjustment method:                                                       

 

Section 4: Loan drawdown and payment 

 

Article 5: After this
contract takes effect, Party A shall drawdown loans using the following method:

 

þ One-time drawdown of all loans under this contract;

 

ý Draw
down working capital loans in phases in accordance with the terms of the agreement in Annex 1;

 

ý Other
methods:                                                

 

Article 6: Before each
loan drawdown, Party A must meet the following prerequisites; in addition prior to each drawdown Party A must at least three business
days in advance submit drawdown application to Party B, otherwise Party B shall reserve the right to refuse drawdown. Party B allows
drawdown even if Party A does not meet all of the following prerequisites, which does not constitute performance defect by Party
B:

 

(A) At the request of Party B, Party
A has provided including but not limited to the following documents:

 

1. Party A’s business license,
organization code certificate and tax registration certificate after annual inspection, articles of association, identification
and identity card copy of the legal representative of Party A currently in effect.

 

2. List of Party A’s board of
directors and senior management personnel related to the loans, and each person’s specimen signature.

 

    	 

    	 	

    
 

3. Board resolution / shareholders
resolution concerning the loans and authorization of related personnel to sign loan agreement and other related documents.

 

4. Signed drawdown application by
Party A.

 

5. For each self pay loan drawdown,
after the first drawdown Party A shall provide description of use of the previous self pay loan.

 

(B) Party A in accordance with relevant
laws, regulations and rules have completed loan-related administrative licensing, approval, registration and other statutory procedures.

 

(C) The security documents related
to loan guarantees are already in effect, mortgage and pledge have been established.

 

(D) No event of any default has occurred,
or event of default occurs but it has been satisfactorily resolved or received exemption from Party B.

 

(E) Any representations and warranties
made by Party A are true, accurate and effective.

 

(F) Until each drawdown, there has
been no significant adverse change in Party A’s financial position.   

 

Article 7: Issuance
of loan

 

For Party A’s each drawdown, Party
B shall transfer approved loan to Party A’s loan account, and shall accrue interest starting from the loan drawdown date. The
loan account is:

 

þ Lending
escrow account, Party B does not sell important blank certificates, cannot do deposit and withdrawal; and unless otherwise agreed
to by Party B, cannot open e-banking platform.

 

Bank branch: China Minsheng Bank,
Weigongcun Branch                                                 .

 

Account number: 012101C910000182                                                        .

 

ý Settlement
Account

 

Bank branch:                                                        .

 

Account number:                                                 
        .

 

ý Other:                                                       . 

 

Article 8: Borrower's payment management
solutions

 

    	 

    	 	

    
 

(A) This loan shall take the following
payment option:

 

þ All
entrust payment.

 

ý All
self payment.

 

ý Entrust
payment if meeting the following criteria, otherwise self payment:

 

Entrust payment conditions: 

 

1. Party A’s single payment
amount is greater than RMB N/A Million, excluding the number.

 

2.             N/A                              
  .

 

(B) In the above agreed payment
management solutions:

 

Entrust payment refers to Party A based
on Annex 3 to the working capital loan terms submit to Party B "Withdrawal / Payment Application",
business contracts and other related documents. After passing Party B’s examination, Party B shall, according to Party A's
payment application and payment entrustment instruction, transfer the loan funds through the loan account to the transaction party
for the agreed purpose.

 

Self payment refers to Party A based on
Annex 3 to the working capital loan terms submit to Party B "Withdrawal / Payment Application". After
passing Party B’s examination, Party B shall according to Party A's payment application transfer the loan funds to the loan
account, and Party A shall directly pay to the transaction party for the agreed purpose.

 

If using self-payment, Party A shall ☐
monthly ☐ quarterly submit periodic reports to Party B for loan usage records and information; furthermore, if
Party B has other requests, Party A shall provide timely loan usage records and information based on Party B’s requests.
If both parties further agree to other forms of monitoring, Party A shall perform other monitoring requirements as requested by
Party B.

 

(C) If during the loan payment process
Party A experiences credit decline, business profitability not being strong and unusual usage of loans, Party B shall have the
right to reduce the applicable payment amount and suspend the issuance of loans and payment. In this case, Party B shall timely
notify Party A and negotiate additional loan and payment conditions. 

 

Article 9: Payment of loans

 

Loan funds in the loan account shall be
paid in accordance with the agreed payment management solution for entrust payment or self payment. Party A shall apply for
each payment by submitting in advance to Party B "Withdrawal / Payment Application" and related documents,
after approval Party B shall pay in accordance with Party A’s payment application; if Party B believes that Party A’s
application is not qualified, Party B has the right to adjust or reject Party A's payment application, the resulting payment delays,
other consequences and liabilities shall be borne by Party A, and Party B shall not bear any liabilities. 

 

    	 

    	 	

    
 

Section 5: Repayment of loans 

 

Article 10: Repayment
of loans

 

(A) Party A shall repay loan principal
in the following ways:

 

þ Repay
all principal on maturity date;

 

ý
Repay in phases based on Annex 2 to working capital loan terms: “Party A Loan Repayment Timetable (Amount and Time)”.

 

(B) Party A hereby designates the
following account for loan repayment: 

 

Bank branch: China Minsheng Bank,
Weigongcun Branch                                                .

 

Account number: 0121014180000804                                                        .

 

This account shall be used to collect funds
for loan repayment as well as make loan repayment. Party A shall provide timely information on money inflow and outflow in the
account as requested by Party B. If requested by Party B, Party A shall sign a separate account management agreement on this
loan repayment account with Party B. Party B shall have the right to recover the loan in advance based on fund collection
for repayment.

 

(C) If the agreed drawdown date and
the actual drawdown date are different, the date on the Borrowing Certificate shall prevail. If the actual first drawdown
date differs from the agreed first drawdown date, the loan maturity date shall be determined as follows:

 

1. If Party A repays all loan principal
on maturity date, maturity date shall adjust automatically in accordance with the agreed loan period and the actual first drawdown
date.

 

2. If Party A repays loan principal
in phases, maturity date shall adjust automatically in accordance with the agreed loan period and the actual first drawdown date.
The remaining principal installment payment dates shall not change duet to the actual first drawdown date, and shall follow Annex 2
to working capital loan terms: “Party A Loan Repayment Timetable (Amount and Time)”.

 

(D) If the principal repayment date
falls on a statutory holiday, then it shall be postponed to the first business day after the principal repayment date and the corresponding
interest shall be calculated to the new date. If the interest settlement date falls on a statutory holiday, the corresponding
interest shall be calculated to the original date, but the interest payment date is postponed to the first business day after the
interest settlement date.

 

    	 

    	 	

    
 

(E) If Party A’s loan repayment
account has insufficient amount to repay loan principal and interest, Party B shall have the right to directly deduct from Party
A’s other accounts opened at any of China Minsheng Bank’s branches to pay loan principal, interest, penalty interest,
compound interest, liquidated damages and other fees payable. Party B shall not be liable for any resulting loss of interest and
other losses.

 

(F) Party A shall be allowed to do
early repayment if there are no overdue loans, and shall 10 business days in advance submit written application to Party B. For
Party A's written application for early repayment:

 

þ Party
B agrees to Party A’s early repayment and shall not charge prepayment penalty.

 

ý Party
B agrees to Party A’s early repayment, in addition to charge loan interest based on the actual days of fund use and agreed
interest rate, shall have the right to charge prepayment penalty in accordance with the following formula:

 

Prepayment penalty for early repayment = early
repayment amount × (agreed loan period - actual loan period) × daily liquidated damages ratio                     ;

 

ý Party
A shall not be allowed to do early repayment.

 

(G) If Party A believes that an extension
is necessary, Party A shall at least 30 days in advance of the maturity date submit application to Party B. If Party B examines
and approves, both parties shall sign a separate loan extension agreement. If Party B does not agree, Party A shall repay the loan
in full following the agreed repayment schedule. 

 

Section 6: Events of default

 

Article 11: Occurrence of any
of the following conditions is regarded as event of default by Party A:

 

(A) Party A fails to do drawdown procedures
at Party B at the agreed time, and the overdue time reaches or exceeds the agreed drawdown date by thirty calendar days. Party
B shall have the right to charge default interest based on the actual number of overdue days and overdue interest rate, and
the right to terminate this contract.

 

(B) Party A fails to pay the agreed
principal repayment amount when due.

 

(C) Party A fails to use loans in
accordance with agreed purposes, or fails to drawdown and repay the loan in accordance with this contract.

 

(D) Party A uses piecemeal method
to avoid drawdown as entrust payment.

 

    	 

    	 	

    
 

(E) Party A’s loan account and repayment
account is frozen or deducted by the relevant authorities, or Party A is involved in litigation, arbitration, administrative penalties
and other judicial and administrative procedures, which may adversely affect Party A’s performance of this contract.

 

(F) Significant changes in financial
position of Party A, or fails to meet the financial covenants in this contract.

 

(G) Other significant adverse change
in Party A, and Party A cannot remedy ​​within the time required by Party B.

 

Upon the occurrence of an Event of Default
by Party A, Party B shall have the right to exercise the appropriate rights in accordance with this contract, declare all or part
of the loan immediately due, recover the loan ahead of schedule, and stop lending. 

 

Article 12: Annexes to working
capital loan terms are as follows:

 

Annex 1: Party A Loan Drawdown Timetable
(Amount and Time)

 

Annex 2: Party A Loan Repayment
Timetable (Amount and Time)

 

Annex 3: “Withdrawal / Payment
Application"

 

Annex 4: Agreed Financial Covenants 

 

    	 

    	 	

    
 

Annexes

 

Section 1: Guarantee 

 

Article 1: In addition to collateral,
security deposit and other guarantee methods agreed under different terms in this contract, the claims under this contract have
the following guarantees:

 

ý Guarantee,
numbered                 "Guarantee
Contract",

 

ý Mortgage,
numbered                  "Mortgage
Contract",

 

ý Pledge,
numbered                  "Pledge
Contract",

 

þ Guarantee,
numbered  99012011296041 "Maximum Guarantee Contract",

 

ý Mortgage,
numbered                 "Maximum
Mortgage Contract",

 

ý Pledge,
numbered                "Maximum
Collateral Contract",

 

ý Other:                                                     

 

Section 2: Commitments and
guarantees 

 

Article 2: Party A’s commitments
and guarantees

 

(A) Party A was established by law,
is an independent legal entity in continued existence, has appropriate qualifications and full capacity to enter into and perform
this contract and any other related documents; has been duly authorized to sign, deliver, receive and perform the above mentioned
legal documents.

 

(B) All documents, information and
evidence provided to Party B in connection with signing of the contract and any other related documents are true, complete,
accurate and effective; all financial statements and other documents reflecting the operating condition of Party A accurately reflect
Party A’s true financial condition and operating condition up till the issuance date of the documents, and furthermore since
the issuance dates of the statements or documents, there are no material adverse change in Party A’s operation and financial
condition. Party A’s signing and performance of this contract do not conflict with its existing statutes, internal regulations,
or any binding contracts, agreements and other documents.

 

(C) Information contained in the applications
under the contract for various loan types are true, legitimate and effective. Party A does not miss or conceal any important
facts.

 

(D) At the time of contract signing,
it has not occurred nor is in existence any litigation, arbitration, administrative proceedings, judicial or administrative enforcement
procedures, or other potential major disputes, which may adversely impact Party A’s performance of this contract.

 

    	 

    	 	

    
 

Before all debts owed ​​to
the bank under this contract have been fully repaid, if any major litigation or legal proceeding against Party A has occurred,
or events which may materially and adversely affect Party A’s fulfillment of obligations under this contract have occurred,
or any events of default under this contract have occurred, Party A shall inform such event or events with written notice to Party
B within five working days from the date of possible occurrence, and shall in accordance with Party B’s requirements and
within permission of the laws endeavor to take measures to remedy or make appropriate arrangements to protect B's interests.

 

(E) Party A does not have any significant
liabilities and contingent liabilities which it has not notified Party B. At the time of contract signing, no event of default
listed in Article 5 of this Annex has occurred or is continuing, and Party A is not in breach of any contracts, applicable laws,
rules, regulations, decisions and rulings related to its assets, or any agreements, contracts or other contractual documents to
which Party A is a counterparty; furthermore the signing of this contract or any documents under this contract to which Party A
is a counterparty, or performance of the above mentioned agreements and obligations under these documents, shall not lead to any
breach under any other agreements or documents.

 

(F) Party A shall completely and appropriately
perform all the commitments, guarantees, obligations and responsibilities under this contract, and shall keep confidential Party
B’s financial information, technical data or information, information or documents related to its business or operational
aspects, including but not limited to the text of this contract and other business secrets which should be kept confidential according
to the laws, except otherwise provided or disclosed in accordance with laws, regulations and administrative and judicial requirements.

 

(G) Party A shall ensure that all
matters have obtained the required government and / or other approval, authorization, permission and consent, and that
such approval, authorization, permission and consent continue to be legal and valid.

 

(H) Party A shall accept Party B’s
investigation, understanding and monitoring of the use of loans drawn under this contract.

 

(I) Party A shall actively cooperate and
consciously accept Party B’s inspection and supervision of its production, operation and financial condition, and in accordance
with Party B’s requirement promptly submit financial statements, explanation of its fulfillment of business contracts, and
related evidence.

 

(J) In the event of a major threat to Party
A’s normal operations or its ability to perform the repayment obligation under this contract, including but not limited to
events under Clause (D) of this section, Party A shall promptly notify Party B in writing.

 

    	 

    	 	

    
 

(K) If Party A conducts foreign investment,
substantial increase in debt financing, merger, division, acquisition, stock transfer, outsource, lease, transfer of assets, joint
venture, apply for stop order, dissolution, settlement, restructuring, bankruptcy as well as other acts which are sufficient to
cause changes to the contract claims and liabilities or impact Party B’s rights, Party A shall give advance notice to and
obtain written consent from Party B, otherwise Party A shall not carry out such acts.

 

(L) If Party A provides security for other
party’s debt, Party A shall notify and obtain prior written consent from Party B.

 

(M) Party A guarantees that it shall not
by single transaction or series of transactions sale, transfer or otherwise dispose of any of its major assets, unless agreed to
by Party B.

 

(N) During the term of the contract, if
Party A changes domicile, name, legal representative, responsible person and other important matters, or senior management personnel
changes occur, Party A shall notify Party B in writing within seven days after the occurrence of the changes.

 

(O) If Party A needs to transfer its obligations
under this contract to a third party, Party A must obtain prior written consent from Party B.

 

(P) If other major adverse events which
may affect Party A’s solvency occur, Party A shall promptly notify Party B.

 

(Q) Party A commits to use the loans
for the purposes in accordance with this contract, applicable laws and regulations, and shall not use for purposes not listed in
this contract. 

 

Section 3: Other rights and obligations 

 

Article 3: Other rights and
obligations

 

(A) Party A shall fulfill its obligations
in accordance with legal requirements and agreements of specific loan types; Party B shall have the right at any time to inspect
Party A’s payment management, loan management and other specific operating conditions, and request Party A to provide information
on performance of business contracts and related evidence. Party A shall cooperate with such management and inspection by
Party B.

 

(B) During the contract performance period,
Party A shall submit to Party B as requested its true financial statements, and information on all of its bank accounts, balance
of deposits and loans and so on.

 

(C) In case the Guarantor breaches
any obligation or commitment under the guarantee contract or loses its guarantee abilities, or the value of collateral is damaged
or significantly reduced, Party A commits to immediately provide a new guarantee in accordance with Party B’s requirements
to ensure its satisfaction or prepay its debt.

 

    	 

    	 	

    
 

(D) Prior to Party A or Guarantor
establishes effective guarantee contracts and completes the procedures for establishing the mortgage or pledge in accordance with
Party B's requirement, Party B shall have no obligation to perform contractual obligations under the contract.

 

(E) Unless otherwise agreed by both
parties, Party A shall bear all costs relating to this contract and guarantees under this contract, including but not limited to
legal fees, arbitration fees, attorney fees, assessment fees, registration fees, custodial fees, appraisal fees, notary fees, travel
claims and other costs for implementation of debt claims and security rights.

 

Section 4: Credit line adjustment
and accelerated payment of debt 

 

Article 4: During the contract
term, under any of the following circumstances, Party B shall have the right to adjust the credit amount, stop payment of unused
amount or request Party A to prepay in whole or in part of its debts:

 

(A) Party A is experiencing significant
deterioration in its business or has experienced major operational difficulties.

 

(B) Relevant markets of Party A’s
business is experiencing significant changes.

 

(C) Major national policy adjustments.

 

(D) Party A is in breach of contracts,
agreements, unilateral commitments or guarantees, debt claims which Party A signed as a counterparty with others; acceleration
of debt maturity has been declared or may be declared by other creditors due to such breach. 

 

Section 5: Events of default 

 

Article 5: Occurrence of any
of the following conditions is regarded as event of default by Party A:

 

(A) Party A cannot
fully and appropriately fulfill any of its commitment, guarantee, obligation or responsibility.

 

(B) The Guarantor cannot fully and
appropriately fulfill any of its commitment, guarantee, obligation or responsibility, or any guarantor which provide guarantees
to Party A cannot fully and appropriately fulfill any of its commitment, guarantee, obligation or responsibility, under other guarantee
documents.

 

(C) In the event of Party A having
any other loans, guarantees, indemnities, undertakings or other debt obligations which are overdue, or having entered litigation,
arbitration or enforcement proceedings, Party B believes that Party A’s ability to perform the contract has been or may be
adversely affected.

 

    	 

    	 	

    
 

(D) There has been adverse change
to the guarantees under the contract which may impact Party B’s claims, including but not limited to guarantees or other
security methods under the contract have not been effective, is ineffective, or have been declared to be withdrawn, the guarantors
have experienced partial or complete loss of ability to perform guarantees or have expressly declared that they will not perform
guarantee obligations, or mortgaged and pledged properties have experienced damages, losses and diminution in value, while Party
A fails to provide new guarantees as requested by Party B.

 

(E) During the contract term, Party
A or the Guarantor expressly or by their actions declares that they will not fulfill their respective contractual obligation.

 

(F) Party A provides to Party B false or
conceals important facts of the balance sheet, income statement and other important materials, or refuses to accept Party B’s
supervision of its use of credit line, production, management and financial activities.

 

(G) Party A transfers properties,
withdraws funds, avoids debt obligations, and commits other acts, which breach Party B’s rights and interests.

 

(H) Party A breaches other obligations
under the contract. 

 

Article 6: Upon Party A’s
default, Party B shall have the right to unilaterally decide to adjust the unused credit line amount, stop releasing the unused
amount, request debt prepayment in whole or in part, request Party A in accordance with this contract to bear penalty interest,
compound interest, default interest, liquidated damages, payment of compensation and damages, and other responsibilities. 

 

Article 7: If Party A and Guarantor
are overdue in performing any obligation or liability, Party B shall have the right at any time to directly deduct any of Party
A’s accounts in China Minsheng Bank to repay debt, and at the same time have the right to dispose any properties which Party
A has ownership, disposition rights or income rights of and are in the possession or custody of China Minsheng Bank, and to use
the proceeds to settle debt. Party B shall not need to bear responsibility for any loss caused to Party A arising out of such cash
conversion, sale, transfer and disposal. 

 

Article 8: Unless otherwise
provided in the Specific Business Terms under the contract, any payment received by Party B in exercising its rights shall discharge
Party B’s claims in the following order: (1) the cost of exercising claims and security rights; (2) damages
and compensation; (3) liquidated damages; (4) compound and penalty interest; (5) overdue interest; (6) interest; (7) principal; and
(8) other payables. 

 

Party B shall have the right to unilaterally
change the liquidation order. 

 

Section 6: Serving of notices 

 

Article 9: Unless otherwise
agreed, all notices shall be considered duly served on the following dates to the notified party: (1) if delivery, the
date served shall be the date of receipt by any staff or agents of the recipient; (2) if by registered mail, courier or express
mail from the same city, the date served shall be the next working day after the mailing date; and (3) if by registered
mail, courier or express mail from a different city, the date served shall be the third working day after the mailing date. However,
if the foregoing dates differ from the actual dates of receipts or signed receipts, the date served shall be the earliest date. 

 

    	 

    	 	

    
 

Article 10: If Party A changes information
and fails to fulfill the notification obligation, any notices or documents issued by Party B in accordance with the information
recorded in this contract, regardless of whether Party A receives such info, shall be considered as duly delivered. In addition,
Party A shall bear corresponding liability for breach of contract. 

 

Section 7: Settlement of disputes 

 

Article 11: Both parties shall
resolve all disputes arising from this contract through consultation; if consultation fails, shall litigate at the People's Court
of Party B’s domicile. 

 

Section 8: Effectiveness of contract 

 

Article 12: The contract shall
take effect after signing by both parties’ authorized signatories (including legal representatives, responsible persons or
authorized agents) via signature or seal, in addition to affixing the official seals or contract seals of both parties. 

 

Article 13: "Contract
Parties", "Specific Business Terms" and "Annexes" together constitute full terms of this contract.

 

Specific Business Terms must include at
least one of the following terms: "Comprehensive Credit Terms", "Working Capital Loan Terms", "Terms of
Bankers' Acceptances", "Terms of Discounted Commercial Bills ", ​​"Terms of Guarantees", "Terms
of Corporate Account Overdraft", "Terms of Factoring Lines" and respective annexes. If the contract main body
and the Specific Business Terms are inconsistent, the Business Terms shall prevail. 

 

Section 9: Other terms 

 

Article 14: Any term preceding
by "□" can be selected or non-selected. For the selected terms, "□" shall be replaced by "√";
for non-selected terms, "□" shall be replaced by "×".

 

If the information under this contract,
which is required to be completed and selected, has already been included in the "Elements of SME Financial Service Contracts
Table", both parties do not have to fill in or select in this contract. The format of the Table has to be recognized
by Party B. If both parties choose to use the Element Table, it shall become an integral part of this contract. 

 

    	 

    	 	

    
 

Article 15: Contract name and
the title of each article is used for reading convenience only and as such do not cause any restriction or impact on the content
or interpretation thereof. 

 

Article 16: In signing
of this contract, Party B shall have carried out a detailed description and interpretation of all the terms of the contract to
Party A. Both parties shall have raised no objections to any of the terms, and have accurate understanding of the lawful definitions
of the rights, obligations and limitation of liability of both parties, and exemption of terms.

 

Article 17: Party
A agrees that Party B shall have the right, in accordance with Chinese laws and requirement from financial regulatory agencies,
to provide relevant information and other information provided by Party A to the People's Bank of China’s and other legitimate
credit institutions’ credit information database so that institutions and individuals with appropriate qualifications can
check and use such info. In the event of Party A’s defaults under the contract, Party B shall have the right to decide whether
to publicly disclose such defaults based on review of such non-compliance; and for the purpose of debt collection shall have the
right to make available relevant information to debt collection agencies.

 

Article 18: Except the specific
loan types as agreed in this contract, if Party B grants other loan types to Party A, both parties shall sign separate loan agreement
specific to the particular loan type, if the new agreement is inconsistent with this contract, the new agreement shall prevail. 

 

Article 19: Other matters agreed
by both parties:

 

ý 1. Before
Party A fully repays the debt under this contract, without the written consent of Party B, Party A shall not reduce its registered
capital.

 

ý 2. Before
Party A fully repays the debt under this contract, without the written consent of Party B, Party A shall not distribute dividends.

 

ý
3. Before Party A fully repays the debt under this contract,
without the written consent of Party B, Party A shall not repay any shareholder or related party loans.

 

ý 4. At
the request of Party B, Party A shall before               
complete capital increase to                million.

 

ý 5. At
the request of Party B, Party A shall maintain average daily deposit at the accounts opened at Party B of no less than               million.

 

ý 6. The
maximum amount of discounted commercial bills by Party A under this contract shall be                ,
denominated in                . Any
third parties listed under the "Confirmation of Maximum Discounted Commercial Bills Credit Line Amount" signed by Party
A may use the credit line.

 

    	 

    	 	

    
 

ý 7. Party A shall allow all wholly owned or majority owned
companies of Party A which are set out in the annex to use the line of credit under the contract. The said companies and Party
B shall separately sign the related loan contracts. If the said companies do not fulfill contract obligations, Party A shall fulfill
instead.

 

ý 8. Based
on the                            line
of credit granted by Party B, and the signed "SME financial service contracts" of code no.                ,
all wholly owned or majority owned companies of Party A which are set out in the annex shall use the line of credit under the contract.

 

ý 9. Mandatory
contract notarization.

 

þ 10. Other: service
scope listed under SME Financial Service Contract No. 99012011296041.

 

Article 20: Original of this
contract consists of 4 copies in total, and each party keeps 1 copy. All copies have the same legal
effect. 

 

Article 21: Supplementary Appendix:
"List of companies on which fiduciary (Party A) permits to use its comprehensive line of credit"

 

    	 

    	 	

    
 

(This page is "SME Financial Service
Contract" signature page) 

 

Party A (seal): 

 

Authorized Signatory (signature or seal): Liu
Yabin

 

2012.03.14

 

 

 

Party B (seal): 

 

Authorized Signatory (signature or seal): Zhang
Xihong

 

2012.03.14

 

    	 

    	 	

    
 

Annex 1 to Working Capital Loan Terms:

 

Party A Loan Drawdown Timetable (Amount
and Time)

 

Number: ___________ 

 

	Frequency	Drawdown time	Drawdown Amount
	1	 	 
	2	 	 
	3	 	 
	4	 	 
	5	 	 
	6	 	 
	7	 	 
	8	 	 
	9	 	 
	10	 	 

 

If the drawdown time and amount are different
from those on the Borrowing Certificate, the time and amount on the Borrowing Certificate shall prevail.

 

    	 

    	 	

    
 

Annex 2 to Working Capital Loan Terms: 

 

Party A Loan Repayment Timetable (Amount
and Time)

 

Number: ___________ 

 

	Frequency	Drawdown time	Drawdown Amount
	1	 	 
	2	 	 
	3	 	 
	4	 	 
	5	 	 
	6	 	 
	7	 	 
	8	 	 
	9	 	 
	10	 	 

 

If the actual loan due date is changed,
the due date on the Borrowing Certificate shall prevail. 

 

    	 

    	 	

    
 

Annex 3 of Working Capital Loan
Terms:

 

Withdrawal / Payment Application

 

Code: _______________

 

China Minsheng Bank, Headquarter
Branch Sales Department: 

 

In accordance with the "SME Financial
Service Contract" code of Public Debt #99012012296402 signed by both our company and your bank, we hereby apply:

 

1.
þ Loan amount:
5 million. Currency: RMB. Loan period: 6 months. Purpose: working capital for daily
operation. Interest: 7.93%. If the above information is inconsistent with the actual, the Borrowing Certificate
shall prevail.

 

Our company intends to draw down on the
following date: 2012.03.14.

 

2.
ý Application
for payment using the withdrawal funds under the contract as follows:

 

(A)
ý pay out all
amount drawn under clause 1 above in the same loan amount, currency type, loan period and purpose.

 

(B)
ý pay out part
of the amount drawn under clause 1 above in the same loan amount, currency type, loan period and purpose. Loan amount:  .
Currency:  . 

 

(C)
ý pay out amount
already drawn. Loan amount: . Currency  . Loan period:  . Purpose:  . Interest: 
.. If the above information is inconsistent with the actual, the Borrowing Certificate shall prevail.

 

This application shall adopt the following
____ method of payment:

 

1. Entrust payment

 

(1) The applicant shall provide commercial
contracts and other documents required by your bank, warrant that these documents are true and valid, in addition the amount applied
and entrusted to pay shall be consistent with commercial contracts.

 

(2) The applicant unconditionally
and irrevocably consents to entrust your bank to pay out the loan funds under this application using the following details: 

 

    	 

    	 	

    
 

	
        Order

         

        No.

         
	Account Name
 (Payee name)	Bank Branch	Account Number	Amount
 (to decimal points)	Use of Proceeds	Remarks
	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 	 	 	 	 	 	 

 

2. Self Payment

 

(1) The applicant promises to use the loan
funds under this application in accordance with the stated loan purposes. The applicant shall not be free to change the above loan
purposes. If the applicant intends to change the loan purposes, the applicant shall obtain the written consent of your bank; otherwise
the applicant shall be liable for breach of contract.

 

(2) The applicant unconditionally
and irrevocably consents to entrust your bank to transfer the loan funds under this application to the following bank account of
the applicant that was opened at your bank:

 

Account name: _______________________________________________________

Account number: _______________________________________________________

Opening bank branch: _____________________________________________________ 

 

The applicant has fulfilled its contractual
obligations in accordance with the above-mentioned "SME Financial Service Contract" and has provided all documents related
to this application as requested by your bank. We warrant that the above documents are true and valid; otherwise the applicant
shall be liable for breach of contract. We hereby apply for your bank’s approval.  

 

The applicant (stamped seal):

 

Authorized signatory (signature or seal): Liu
Yabin

 

Date of Application: 2012.03.14

 

Attachments:

 

□ Business Contracts:________________________(
contract name and number).

 

□ Details of previous
self payment.

 

□ Other documents requested
by your bank:                           
                      

 

    	 

    	 	

    
 

Annex 4 of Working Capital Loan
Terms:

 

 

 

Agreed Financial Covenants

 

                                     

 

Code: ___________Appendix 4

 

Loan Contract

 

Code: Year 2011, #014-01

 

 

þ This
contract lists specific contract terms under “Credit Contract” with code Year 2011, #014 (if appropriate, use
þ)

 

Lender: China
Merchants Bank, Beijing Yuquan Road Branch (herein referred as “Party A”)

Responsible Person: Qu Jing

 

Borrower: Beijing Wowjoint Machinery
Co. Ltd. (herein referred as “Party B”)

Legal representative/Responsible Person: Liu Yabin

 

Due to working capital needs, Party
B applies to Party A for a working capital loan. After review, Party A agrees to give this loan. Both
parties in accordance with relevant laws and after sufficient negotiation reach consensus on the below terms and therefore enter
into this contract.

 

Article 1: Loan currency and
amount

 

RMB 7 million.

 

Article 2: Loan purpose

 

This loan is a working capital loan and
shall only be used for working capital. Without the written consent of Party A, Party B shall not change the loan purpose.

 

Article 3: Loan term

 

Term is one year, which is from
2011.7.22 to 2012.7.21. If the actual borrowing date is not the same as the above starting date, the start date on
the Borrowing Certificate shall prevail and the repayment date shall accordingly be pushed back.

 

 ̈ During the loan term, Party A can lend in installments
based on actual needs of Party B. Each loan amount and loan periods shall conform to those on the Borrowing Certificate. (If
appropriate, use þ)

 

 ̈ During the loan term, Party A shall have the right
to demand Party B to repay loan in installments. (If appropriate, use þ):

 

____________________________________

 

    	 

    	 

    

 

Article 4: Prerequisites to borrowing:

 

Before each loan drawdown under this contract,
Party B must meet the following prerequisites, otherwise Party A shall reserve the right to refuse drawdown:

 

4.1 According to this contract’s
requirement, Party B has provided relevant information.

 

4.2 According to this contract’s
requirement, Party B has cooperated with Party A’s supervision and inspection.

 

4.3 For the loans that have been drawn
down, Party B has fully fulfilled the repayment obligation on time.

 

4.4 Party B has had no events of default
under this agreement.

 

4.5 Party B has not breached of any other
terms under this agreement.

 

Prerequisites are set up to protect Party
A’s rights and interests, Party A can unilaterally lower the requirements for the prerequisites.

 

Article 5: Loan interest rate and
interest

 

5.1 Interest rate:

 

5.1.1
This loan uses (choose 1 out of the below 2 options with þ):

 

 ̈ Fixed
rateþ Floating
rate 

 

5.1.2 During loan term, fix the interest
rate in the following way:

 

For
RMB loans, use the applicable __ month / one year benchmark lending rate as published by the People's Bank of China on the
loan drawdown dates as base rate, þ floating
upward  ̈ floating downward (choose 1 out 2 options with þ)
by 30%.

 

For
foreign currency loans, use the applicable same currency, __ month / __ year (choose 1 out 2 options with þ)
benchmark lending rate as published by the People's Bank of China on the loan drawdown dates, 1 or 2 business days before the loan
drawdown dates as base rate,  ̈ plus  ̈ minus (choose 1 out 2 options with þ)
__ basis points (BPs). It is up to Party A to determine whether to use loan drawdown dates, 1 or 2 business days before the loan
drawdown dates based on international customs.

 

The rate-setting date is used to set the
term of the loan or to set the benchmark lending rate. If the loan is a fixed rate loan, the rate-setting date is the actual loan
drawdown date. If the loan is a floating rate loan, the rate-setting date is in accordance with clause 5.1.3.

 

    	 

    	 

    
 

The
above mentioned benchmark lending rate þfloating
upward  ̈ floating downward by 30% (herein referred as “Floating Rate Range”), or  ̈ plus  ̈
minus __ basis points (BPs) (herein referred as “BPs”), refers to the Floating Rate Range and/or BPs set at the time
of signing of this contract. Party A shall have the right to change on a regular or irregular basis the Floating Rate Range and/or
BPs, based on changes of related national policy, changes in the price of the credit markets inside China or Party A’s change
of its own credit policy. If Party A decides to adjust, it shall notify Party B at least 5 business days in advance in writing.

 

The adjustment shall take effect as soon
as Party A notifies Party B. Any new loan applications by Party B and any loan drawdown which has already taken place before the
effective date and not yet been repaid shall adjust to the new Floating Rate Range and/or BPs, however the benchmark lending rate
and the floating cycle shall be in accordance with this contract.

 

5.1.3 If this loan uses floating rates,
it shall use 3 months / __ days as floating cycle, the benchmark lending rate used in every floating cycle shall be in accordance
with clause 5.1.2.

 

The actual loan drawdown date shall be
the first rate-setting date during the first floating cycle. Thereafter the first date during each floating cycle shall be the
rate-setting date for such cycle.

 

5.1.4 If Party B uses loans not in accordance
with agreed loan purposes, for the proportion of the loan not used as agreed, starting from the first default date the interest
rate shall be calculated at original interest rate increased by 100%.

 

If Party B does not repay on time, for
the proportion of the loan not yet repaid as agreed, starting from the first default date the interest rate shall be calculated
at original interest rate increased by 50%.

 

Original interest rate refers to the rate
used on the loan repayment date (including early repayment date), if it is a floating rate loan the loan repayment date shall be
the last floating cycle before the loan repayment date (including early repayment date).

 

If Party B simultaneously does not repay
loans on time and not use loans in accordance with agreed loan purposes in the contract, rate is set on whichever higher rates
as calculated above.

 

5.1.5 During the loan term, if the People's
Bank of China adjusts the benchmark lending interest rates, the loan interest rate shall be adjusted accordingly.

 

5.2 Interest calculation: interest calculation
should start from the date which loan fund is transferred into Party B’s account and shall be based on actual loan drawdown
amount and actual drawdown period. Interest is calculated every quarter, interest calculation date is the 20th
day of each quarter end. Daily accrual method is based on related rules by the People’s Bank of China or international
customs.

 

    	 

    	 

    
 

5.3 Interest settlement: Party B shall
pay on the date of each interest calculation date. Party A shall be allowed to deduct directly from Party B’s deposit account.
If Party B does not pay interest on time, Party A shall have the right to collect interest payment based on the same period interest
rate on the unpaid interest portion.

 

Article
6: Guarantee terms (choose þ
based on actual situations)

 

 ̈ 6.1 Principal and interest under this contract and all related expenses shall be guaranteed by ______ designated by Party B.
This guarantor shall issue non-cancellable guarantee in favor of Party A, and/or

 

 ̈ 6.2 Loan under this contract shall
be collateralized by ______, which is owned by or given the right to be disposed by ______. Both parties shall execute a separate
collateral contract.

 

 ̈ 6.3 Other guarantee method: __________.

 

This contract lists specific contract terms
under “Credit Contract”, therefore this term is not appropriate to use. Loans under this contract shall be automatically
included in the Maximum Counter Guarantee / Collateral Contract signed with Party A or in the Maximum Non-Cancellable guarantee
contract issued by the guarantor.

 

If the guarantor does not sign the guarantee
contract or complete the guarantee procedure as agreed, Party A shall have the right to refuse lending to Party B.

 

Article 7: Rights and obligations
of Party B

 

7.1 Party B shall have the following rights:

 

7.1.1 has the right to drawdown and use
all the loans under this contract as agreed;

 

7.1.2 after receiving approval from Party
A, shall have the right to transfer its loan obligation to a third party;

 

7.2 Party B agrees to the following obligations:

 

7.2.1 shall accurately provide documents
requested by Party A, including all banks, bank account information, lending and deposit balances, etc. as well as cooperate with
Party A’s investigation, examination and inspection;

 

7.2.2 shall accept Party A’s monitoring
of its use of loans, its production, operation and financial activities, in addition to taking reasonable measures based on Party
A’s recommendation and requests;

 

    	 

    	 

    
 

7.2.3 shall use loans in accordance with
this contract, and comply with loan repayment request by Party A;

 

7.2.4 shall repay principal and interest
fully and on time in accordance with this contract;

 

7.2.5 shall receive written approval from
Party A before transferring fully or partially its loan obligation under this contract;

 

7.2.6 If the following situation arises,
Party B shall notify Party A immediately, and shall fulfill all obligations to repay loan principal, interest and other fees on
time as requested by Party A;

 

7.2.6.1 experiences significant financial
losses, damages to assets or other financial crises;

 

7.2.6.2 provide loans or guarantees for
third parties to protect their rights or protect them against losses, or use own assets (rights) as collaterals for guarantees;

 

7.2.6.3 experiences credit quality decline,
profitability of main operating business weakens;

 

7.2.6.4 suspension of business, revocation
or cancellation of business licenses, filing for bankruptcy or being filed for bankruptcy or dissolution, etc.;

 

7.2.6.5 its controlling shareholders, actual
controlling people and their related companies experience major crises in its operation and financial performance, which affects
its normal operation;

 

7.2.6.6 have related transactions with
its controlling shareholders and their related companies, which affect its normal operation;

 

7.2.6.7 Any litigation, arbitration, judicial
or administrative enforcement procedures, which may adversely impact Party B’s operation or financial situation.

 

7.2.6.8 Movement of Borrower’s legal
representative, director or important senior management staff, or restriction of personal freedom due to violation of laws and
discipline of relevant government authorities, which may affect normal operation; and

 

7.2.6.9 Other important matters which may
affect its repayment ability;

 

7.2.7 can’t neglect the management
and collection of mature debt, or dispose of major assets with free of charge or other inappropriate methods;

 

7.2.8 Party B must obtain prior written
consent from Party A before conducting merger, division, restructuring, stock transfer, joint venture (cooperation), assets transfer,
shareholding reform, outside investment, substantial increase in debt financing and other acts;

 

    	 

    	 

    
 

7.2.9
Party B shall do the following according to Party A’s request (choose þ
based on actual situations):

 

 ̈ guarantee
its core assets, and designate Party A as first beneficiary;

 ̈ before
full loan repayment, can’t sell or collaterize ______ assets designated by party A;

 ̈ while
loan is still outstanding, restriction on dividend ratio to shareholders based on Party A’s request:

 

 

 

 

  ̈ Others: _____________

 

Article 8: Rights and obligations
of Party A

 

8.1 Party A shall have the following rights:

 

8.1.1. has the right to demand that Party
B repay principal and interest on time and fully;

 

8.1.2 has the right to request that Party
B provide relevant info on the loans;

 

8.1.3 has the right to understand Party
B’s production, operation and financial activities;

 

8.1.4 has the right to monitor whether
Party B uses loans as agreed;

 

8.1.5 has the right to monitor the bank
accounts which Party B opens at Party A, or authorize other financial institutions to monitor other bank accounts opened there,
in addition shall control payment of loan funds in accordance with loan usage and payment scope agreed by both parties;

 

8.1.6 has the right to directly deduct
loan principal, interest and other related fees from Party B’s account;

 

8.1.7 has the right to transfer Party B’s
debt obligations, and to use appropriate methods to notify Party B the transfer and help collection from Party B, including but
not limited to fax, mail, hand delivery, notice on public media, etc.

 

8.1.8 Party A has the right to refuse lending
to Party B before Party A receives “Interest Payment Commitment Letter” submitted by buyer/seller in the buyer's credit
interest-bearing business or seller’s credit interest-bearing business;

 

8.1.9 has the right to demand early repayment
based on Party B’s return of funds;

 

    	 

    	 

    
 

8.1.10 if Party B cannot fulfill obligations
under this contract, Party A has the right to take measures in accordance with contract;

 

8.1.11 other rights specified in this contract.

 

8.2 Party A agrees to the following obligations:

 

8.2.1 lend to Party B in accordance with
terms of this contract;

 

8.2.2 keep confidential of Party B’s
financial, production and operation, except required by law or regulatory bodies.

 

Article 9: Party B’s special
guarantees:

 

9.1 Party B was established by Chinese
law, is an independent legal entity in continued existence, has appropriate civil qualifications and full capacity to enter into
and perform this contract;

 

9.2 has obtained sufficient authorization
from the Board of Directors or other relevant regulatory bodies to sign and perform this contract. From the date of the signing,
this contract shall be legally valid and binding on Party B;

 

9.3 The loan borrowing is in accordance
with laws and regulations, shall not use the loans to invest in fixed assets and stocks, shall not use illegally to speculate on
marketable securities, futures and real estate; shall not loan to others to obtain illegal income; shall not use on industries
and purposes which have a national ban on production and operation; shall not use on other purposes outside of this contract;

 

9.4 if loan payment method is self payment
by borrower, Party B shall regularly (at least quarterly) report to Party A its usage of loans, and Party A shall have the right
to investigate whether the loan is used in accordance with agreed purpose in the contract using analysis of accounts, inspection
of supporting documents, field investigation and other methods.

 

9.5 With Party A’s approval, if Party
B needs to use on-line banking to use loan funds, Party B shall have the obligation to accept Party A’s restriction on pre-set
payment counterparty list, single payment limit, installment payment limit, etc.;

 

9.6 All documents, information and evidence
provided by Party B regarding Party B, guarantor, warrantor, collateral and so on are true, complete, accurate and effective, which
does not contain major mistakes, contradiction to facts, or conceal any important matters.

 

9.7 At the time of contract signing, there
are no major litigation, arbitration, legal or administrative proceeding which may have significant adverse consequence on Party
B or Party B’s major assets. Furthermore, there will be no such litigation, arbitration, legal or administrative proceeding
during the contract period. If any such event takes place, Party B shall notify Party A immediately;

 

    	 

    	 

    
 

9.8 shall strictly follow national laws
and regulations in its operation, strictly adhere to the business scope listed under the “Company Legal Representative Business
License” and complete its annual inspection and registration procedures;

 

9.9 shall maintain and improve current
level of operation and management to ensure current assets’ value preservation and appreciation. Shall not give up collection
of any overdue debt, and shall not dispose current major assets with free of charge or other inappropriate methods.

 

9.10 Party B shall ensure that its financial
ratios during loan term are no lower than:

 

_____________________

 

9.11 At the time of contract signing, there
have not occurred any major events, which may adversely affect Party B’s fulfillment of obligations under this contract.

 

Article
10: Loan drawdown and usage (choose þ
based on actual situations, can only choose one option, can’t choose more than one; if no option is selected, clause 10.1.2
shall apply automatically):

 

þ
10.1.1 Self payment.

 

Self payment refers to Party A based on
Party B’s loan withdrawal application transferring the loan funds to Party B’s loan account, and Party B then directly
pays to the transaction parties for the agreed purpose.

 

 ̈ 10.1.2 Entrust payment.

 

Entrust payment refers to Party A based
on Party B’s loan withdrawal application and entrust payment instruction transfers the loan funds through Party B’s
loan account to the transaction parties for the agreed purpose.

 

If using entrust payment, after loan drawdown
Party B must obtain Party A’s approval before making payment to outside parties. Party B shall not use on-line banking, returned
checks, piecemeal and other methods to avoid Party A’s monitoring.

 

 ̈ 10.1.3 Combination of self and
entrust payment

 

If using this method, when Party B applies
for loan drawdown to pay the same beneficiary in a single transaction of more than RMB_____ (or foreign currency equivalent), Party
B must apply 10.1.2 entrust payment method. When Party B applies for loan drawdown to pay the same beneficiary in a single transaction
of less than the above amount, Party B automatically applies 10.1.1 self payment method.

 

    	 

    	 

    
 

10.2 When Party B withdraws loan, it shall
submit to Party A “Loan Drawdown Application”, Borrower’s IOU and other information which Party A shall request
based on the self payment or entrust payment methods. Otherwise, Party A shall have the right to refuse the drawdown application.

 

10.3 After Party A receives above documents
and after examination agrees to lend, each loan drawdown date, term, amount and so on must be listed on the Borrower’s IOU.

 

If using entrustment payment, Party B authorizes
Party A on the loan drawdown date (or the next business day) transfers the loan funds through Party B’s loan account to its
transaction parties.

 

Article 11: Early loan repayment

 

11.1 Party B can apply for early loan repayment,
but needs to obtain Party A’s approval;

 

11.2 When Party B repays loan early, the
interest rate shall continue to be calculated in accordance with this contract.

 

Article 12: Loan repayment extension

 

If Party B cannot repay the loans in this
contract on time and needs to extend loan repayment term, Party B shall at least 1 month in advance of the maturity date submit
application to Party A. If Party A examines and approves, both parties shall sign a separate loan extension agreement. If Party
A does not agree, this contract remains valid. Party B shall repay the outstanding loan principal and interest in accordance with
this contract.

 

Article 13: Fees

 

Party B shall bear all costs relating to
this contract such as credit checks, examination and notary fees, as well as legal fees, arbitration fees, travel claims and all
other costs which Party A incurs for implementation of debt claims and security rights and are due to Party B’s inability
to repay loan principal, interest and other fee payables on time and fully. Party B authorizes Party a to directly deduct from
its bank accounts. If the bank account balance is insufficient, Party B guarantees that it will fully repay Party A after receiving
Party A’s notice and it is no need for Party A to provide any evidence.

 

Article
14: Loan drawdown account (choose þ
based on appropriateness)

 

14.1 All loan drawdown and loan payment
have to go through the below account under this contract:

 

The detailed information on this account
is as followed:

 

Account name: Beijing Wowjoint Machinery
Co. Ltd.;

 

Account number: 110907713310501;

 

Bank branch: China Merchants Bank, Beijing
Yuquan Road Branch.

 

    	 

    	 

    
 

14.2 If using entrust payment and if necessary,
Party A shall have the right to restrict such account’s payment via on-line banking, telephone banking or other non-counter
payment and voucher channels.

 

Article 15: Monitoring of
Party B’s return of funds

 

15.1 After this contract takes effective
and before Party B repays fully all loans under this contract, both parties agree to designate the below account as Party B’s
return of funds account.

 

Account name: Beijing Wowjoint Machinery
Co. Ltd.;

 

Account number: 110907713310501;

 

Bank branch: China Merchants Bank, Beijing
Yuquan Road Branch.

 

15.2 This account’s monitoring requirement
is as followed: ________

 

Party A shall have the right to demand
early loan repayment based on Party B’s return of funds, which means when this account receives funds the loan amount equivalent
to the fund amount can be seen as the early loan repayment amount. Party A shall have the right to directly deduct from this account
such amount to repay the loans.

 

15.3 If using entrust payment and if necessary,
Party A shall have the right to restrict such account’s payment via on-line banking, telephone banking or other non-counter
payment and voucher channels.

 

15.4 Party B shall provide quarterly fund
inflow and outflow information in order to assist Party A’s monitoring of the related accounts and return of funds.

 

Article 16: Events of default
and remedies

 

16.1 Occurrence of any of the following
conditions is regarded as event of default by Party B:

 

16.1.1 Party B breaches clause 7.2.1, provides
to Party A false information or conceals important facts, not cooperate with Party A’s investigation, review and inspection.
Party A requests Party B to correct within a reasonable period, but Party B is past due with correction;

16.1.2 Party B breaches clause 7.2.2, does
not accept or avoid Party A’s monitoring of its usage of loans, production, operation and financial activities.

 

    	 

    	 

    
 

16.1.3 Party B breaches clause 7.2.3,
does not use the loans in accordance with agreed purposes in this contract, or does not comply with Party A’s requests regarding
management and reporting of loan payment;

16.1.4 Party B breaches clause 7.2.4, does
not repay loans on time and fully in accordance with this contract;

  

16.1.5 Party B breaches clause 7.2.5,
transfer its debt obligation under this contract to third party unilaterally; or breaches clause 7.2.7, does not manage and collect
overdue debt, or disposes of core assets free of charge or using other inappropriate methods;

 

16.1.6 Party B breaches clause 7.2.6,
Party B does not notify Party A in a timely manner when such events occur; or after Party A was notified by party B, Party A requests
that Party B take additional measures to ensure repayment of loans under this contract, Party B does not cooperate, for which
Party A believes will affect the safe return of Party A’s loan;

 

16.1.7 Party B breaches clause 7.2.8,
Party B does not obtain Party A’s approval before occurrence of these major events;

 

16.1.8 Party B breaches clause 9.1, 9.2, 9.6, or 9.3, 9.4, 9.5, 9.7, 9.8, 9.9, 9.10, 9.11 and does not correct immediately in
accordance with Party A’s requests;

 

16.1.9 Party B does not withdraw and use
loans in accordance with clause 10, or Party B breaches clause 15, does not use the returned funds, or does not accept Party A’s
monitoring, and does not correct immediately in accordance with Party A’s requests;

 

16.1.10 Party B experiences major breach
in the legally valid contracts signed with other creditors and cannot resolve satisfactorily within 3 months of such breach;

The above mentioned major breach refers to the fact that Party B’s breach leads to its creditors having the right to demand
payment up to RMB________;

 

16.1.11 Party B breaches other obligations under the contract, or Party A’s reasonable assessment
that Party B experiences decline in credit quality or other circumstances, which may affect the realization of Party A’s
debt claims;

 

16.1.12 Party A’s reasonable assessment
that Party B experiences other circumstances, which may affect Party A’s lawful rights.

 

16.2Occurrence of any of the below
events to the guarantor, which Party A believes may affect the guarantee capacity of guarantor, leads Party A to request the guarantor
to eliminate the unfavorable effects caused by such, or requests that Party B increase or change guarantee conditions. If the guarantor
and Party B do not cooperate, it shall be construed as events of default:

    	 

    	 

    
 

16.2.1 Occurrence similar to clause 7.2.6,
7.2.7 and 7.2.8;

 

16.2.2 When issue non-cancellable guarantee,
conceal the actual ability to assume guarantee responsibilities, or has not obtained authorization from relevant authorizes;

 

16.2.3 does not complete the annual exam
and registration procedures on time;

 

16.2.4 does not manage and collect overdue
debt, or disposes of core assets free of charge or using other inappropriate methods;

 

16.3 Occurrence of any of the below events
to the mortgagor (pledgor), which Party A believes may cause the mortgage (pledge) to not hold or not have sufficient value, leads
Party A to request the mortgagor (pledgor) to eliminate the unfavorable effects caused by such, or requests that Party B increase
or change guarantee conditions. If the mortgagor (pledgor) and Party B do not cooperate, it shall be construed as events of default:

 

16.3.1 does not have ownership or disposal
rights of the mortgage (pledge), or has disputes;

 

16.3.2 conceal the facts that the mortgage
(pledge) has already been co-owned, leased, seized, monitored, or has legal priority rights ahead of the mortgage;

 

16.3.3 The mortgagor without Party A’s
written approval, unilaterally transfer, lease, re-mortgage or use other inappropriate methods to deal with the mortgage;

 

16.3.4 The mortgagor does not give proper
care, maintenance and repair to the mortgage, which causes the mortgage value to clearly decrease; or actions of the mortgagor
directly endangers the mortgage, which causes the mortgage value to decline; or insure not in accordance with Party A’s request
during the mortgage period;

 

16.3.5 The mortgage may be levied, demolitized,
or experience other matters which may impact the value of the mortgage or impact Party A’s mortgage rights.

 

16.4 If any of the breach under clause
16.1, 16.2 and 16.3 occurs, Party A shall have the right to simultaneously or separately adopt the following measures:

 

16.4.1 Change payment conditions for the
loan entrust payment method, cancel Party B’s “self payment” method;

 

16.4.2 stop giving unused loans to Party
B;

 

16.4.3 call in early repayment of loan
principal, interest and related fees;

 

16.4.4 directly deduct from deposits of
Party B’s clearing account or other accounts, in addition to authorize China Merchants Bank’s other institutions to
deduct Party B’s deposits there, in order to repay all of Party B’s outstanding loans under this contract.

 

16.4.5 demand payment in accordance with
clause 19.

 

    	 

    	 

    
 

Article 17: Amendment and cancellation
of contract

 

This contract can be amended and cancelled
after both parties’ consultation and reaching consensus in writing. Before reaching such consensus in writing, this contract
remains valid. Neither party can change, amend or cancel this contract unilaterally.

 

Article 18: Others

 

18.1 Change of circumstances and force
majeure

 

18.1.1 If change of laws or policies causes
Party A’s lending activity to become illegal, Party A shall have the right to terminate this contract and announce that all
the outstanding loans are due and Party B shall repay the loans immediately in accordance with Party A’s request.

 

18.1.2 If change of laws or policies causes
the costs of Party A’s lending obligation to increase, Party B shall compensate Party A for the increased cost in accordance
with Party A’s request.

 

18.1.3 If either party or both parties
experience force majeure during the performance of this contract, the affecting party does not need to compensate the other party
for its losses; but it is obligated to notify the other party in a timely manner and adopt appropriate measures to prevent the
losses to increase; otherwise it is obligated to compensate the other party for the increased losses.

 

18.2 Reservation of rights

 

During the term of this contract, if Party
A shows any tolerance and allowance to any of Party B’s breach of contract or delayed performance of contract, or delays
execution of Party A’s rights and interests, these acts shall not damage, effect or restrict Party A’s rights and interests
in accordance with being a creditor under applicable laws and regulations. These acts shall not be construed as Party A’s
permission and authorization of any of Party B’s breach of contract, and furthermore shall not be construed as Party A’s
waiver of its current or future right to take measures against such breach of contract.

 

18.3 Partial ineffectiveness

 

If this contract becomes legally invalid
or part of the terms become legally invalid due to any reasons, Party B shall still have the obligation to repay all loans. If
the above mentioned situation occurs, Party A shall have the right to terminate this contract, and can immediately demand payment
of loan principal, interest and other fees under this contract from Party B.

 

    	 

    	 

    
 

18.4 Notices

 

Any notices, requests and so on related
to this contract must be served in writing between both parties. If hand delivery, it is considered delivered when the recipient
signs for it (or on the date when recipient refuses to sign for it). If by mail, it is considered delivered 7 days after the mailing
date. If by fax, it is considered delivered when the recipient’s fax system receives it. If Party A uses public media to
notify Party B the transfer of party B’s debt obligations to third party or the collection of debt claims, it is considered
delivered on the announcement date.

 

Party A address: 83 Fuxing Road, Haidian 
District, Beijing

 

Party B address: Dushi Industrial Park,
Songzhuang Town, Tongzhou District, Beijing.

 

If either party changes contact address,
the changed party shall inform the other party on a timely manner, otherwise it shall bear responsibility for possible losses.

 

18.5 Both parties after consultation reach
consensus on the Borrower’s IOU, incomplete terms and amended terms in writing, which can be supplements to this contract
and become an inseparable parts of this contract.

 

18.6 _________________

 

18.7 _________________

 

18.8 _________________

 

Article 19: Applicable laws and
settlement of disputes

 

19.1 The applicable laws to be used for
this contract’s establishment, explanation and settlement of disputes shall be those of the People’s Republic of China.
Both parties’ rights are protected under the laws of the People’s Republic of China.

 

19.2
Both parties shall resolve all disputes arising from performance of this contract through consultation; if consultation fails,
either party shall choose (choose one out of three with þ):

 

þ
19.2.1 litigate at the People's Court of Party A’s domicile. 

 

 ̈ 19.2.2 apply for arbitration through
the Arbitration Commission.

 

 ̈ 19.2.3 submit (if this option is chosen, choose one out of the
below two with þ):

 

 ̈ The
International Economic & Trade Arbitration Commission of China

 

 ̈ The
International Economic & Trade Arbitration Commission of China _____ Branch

 

Arbitrate based on arbitration
rules applicable to financial disputes.

 

    	 

    	 

    
 

19.3 If both parties complete the enforceable
notary on this contract, Party A can directly apply for enforcement of the contract to the People’s Court with jurisdiction
in order to recover the overdue debt owed by Party B.

 

Article 20: Validity of contract:

 

This contract shall be valid after the
legal representative (responsible person) or authorized signatory from both parties sign (or sealed) plus add the respective company
seals/contract seals. All the terms under this contract concerning principal and interest of all loans plus all related fees shall
automatically terminate on the date when they are fully repaid.

 

Article 21: Supplement:

 

Original of this contract consists of 2
copies in total, and each party keeps 1 copy. All copies have the same legal effect.

 

Special notice:

 

All the terms in this contract have been
sufficiently negotiated between both parties. Party A has specifically requested that the Party B pay particular attention to the
terms concerning cancelling or curtailing Party A’s obligations, some rights owned by Party A only, adding to Party B’s
obligations or curtailing Party B’s rights, as well as fully and accurately understand these terms. Party A has given corresponding
explanation on the above terms based on Party B’s requests. Both parties have the same understanding of each term in this
contract.

 

    	 

    	 

    

 

Party A (seal):

 

Responsible Person/Authorized Signatory
(signature or seal): Wang Yi

 

2011.07.22

 

 

 

Party B (seal):

 

Legal Representative/Responsible Person or Authorized Signatory
(signature or seal): Liu Yabin

 

2011.07.22

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