Document:

Exhibit 10.47

 

 

 

Account
Control Agreement

 

Among

 

Tianjin
New Highland Science Development Co., Ltd.

(as the Borrower)

 

and

 

Deutsche
Bank AG, Hong Kong Branch

(as the Facility
Agent)

 

and

 

DB
Trustees (Hong Kong) Limited

(as the Security
Agent)

 

and

 

Tianjin
Dagang Branch of China Construction Bank Limited

(as the Account
Control Bank)

 

 

 

 

Table of Contents

 

	
  Clause

  	
   

  	
  Page No.

  
	
  1

  	
   

  	
  Definition and
  Explanation

  	
   

  	
  3

  
	
  2

  	
   

  	
  The Opening and
  Control Period of the Controlled Accounts

  	
   

  	
  4

  
	
  3

  	
   

  	
  Onshore
  Controlled Account

  	
   

  	
  7

  
	
  4

  	
   

  	
  Onshore USD
  Project Account and Onshore RMB Project Account

  	
   

  	
  18

  
	
  5

  	
   

  	
  Onshore Cash
  Collateral Account

  	
   

  	
  24

  
	
  6

  	
   

  	
  Onshore RMB
  Debt Service Reserve Account

  	
   

  	
  27

  
	
  7

  	
   

  	
  Payment and
  currency exchange

  	
   

  	
  27

  
	
  8

  	
   

  	
  The Borrower’s
  Representations and Warranties

  	
   

  	
  28

  
	
  9

  	
   

  	
  The Borrower’s
  Commitments

  	
   

  	
  28

  
	
  10

  	
   

  	
  Representations and Warranties of the Account Control Bank

  	
   

  	
  30

  
	
  11

  	
   

  	
  The Role of the Account Control Bank

  	
   

  	
  32

  
	
  12

  	
   

  	
  Confidentiality

  	
   

  	
  34

  
	
  13

  	
   

  	
  Fees and Other Expenses for the Account Control Bank

  	
   

  	
  36

  
	
  14

  	
   

  	
  The Security Agent’s Right of Compensation

  	
   

  	
  37

  
	
  15

  	
   

  	
  Breach and Remedies

  	
   

  	
  38

  
	
  16

  	
   

  	
  Communication of Notifications and Documents

  	
   

  	
  39

  
	
  17

  	
   

  	
  Applicable Laws and Jurisdiction

  	
   

  	
  40

  
	
  18

  	
   

  	
  Others

  	
   

  	
  41

  
	
  Attachment 1

  	
  The Controlled
  Account Checklist Form

  	
   

  	
  43

  
	
  Attachment 2

  	
  The Format of
  Opex Withdrawal Request

  	
   

  	
  44

  
	
  Attachment 3

  	
  The Format of
  Special Capex Withdrawal Request

  	
   

  	
  46

  
	
  Attachment 4

  	
  The Format of
  General Capex Withdrawal Request

  	
   

  	
  49

  
	
  Attachment 5

  	
  The Format of
  the Finance Document Withdrawal Request

  	
   

  	
  51

  
	
  Attachment 6

  	
  The Format of
  Dividend Withdrawal Request

  	
   

  	
  53

  
	
  Attachment 7

  	
  The Format of
  Transfer Request

  	
   

  	
  55

  
	
  Attachment 8

  	
  The Format of
  Transaction Expense Withdrawal Request

  	
   

  	
  57

  
	
  Attachment 9

  	
  The Format of
  USD Account Withdrawal Request

  	
   

  	
  59

  
	
  Attachment 10

  	
  The Format of Project Capex Withdrawal Request

  	
   

  	
  61

  
						

 

i

 

The Account Control Agreement (hereinafter
referred to as the Agreement) is
entered into on  January 13, 2010
among:

 

A                                   Tianjin New Highland Science Development Co., Ltd. , the
borrower (hereinafter referred to as the Borrower),
a company (registration number: 120109000004324) incorporated under the laws of
China, with its registered address
at Dagang Economic Development Area (DEDA), Tianjin, China;

 

B                                        Deutsche Bank AG, Hong
Kong Branch
(representing the Facility Agent , Security
Agent , Calculation
Agent  , Arranger
, Lenders
 and Swap
Counterparty  , and their respective future assignees
and successors from time to time under the Transaction
Finance Documents  , the Facility
Agent (hereinafter referred to as the Facility Agent), a company incorporated under the laws of Hong
Kong Special Administrative Region of China,
with its registered address at 48/F, Cheung Kong Center, 2
Queen’s Road Central, Hong Kong;

 

C                                     DB Trustees (Hong Kong) Limited (representing the Facility Agent, Security Agent, Calculation
Agent, Arranger, Lenders and Swap Counterparty) and their respective future assignees and
successors from time to time under the Transaction
Finance Document), the Security Agent (hereinafter referred to as
the Security Agent), a company
incorporated under the laws of Hong Kong Special Administrative Region of China, with its registered address at 48/F,
Cheung Kong Center, 2 Queen’s Road Central, Hong Kong; and

 

D                                    Tianjin Dagang Branch of China Construction Bank Limited, the
account control bank (hereinafter referred to as the Account Control Bank), a banking institution established under
the laws of China, with its
registered address at No. 98, Yingbing Street, Dagang District, Tianjin,
China.

 

Whereas:

 

1                                       The Borrower signed a Facility Agreement
(including the amendments and restatements through a signed Amendment Agreement and any other
modifications, revisions, extensions, additions, updates or restatements from
time to time)(collectively referred to as the Loan
Contract) on 8 January 2010 with, among others, Deutsche Bank
AG, Hong Kong Branch, as the Arranger,

 

2

 

Facility Agent and Calculation Agent, and DB Trustees (Hong
Kong) Limited as the Security Agent.
Under the Loan Contract, the Lenders agree to provide loans of no more than
USD65,000,000 to the Borrower in
accordance with the terms and conditions of the Loan Contract;

 

2                                       The Borrower may enter into a Hedging Agreement with a Swap Counterparty;

 

3                                       The Borrower signed a Security Trust Deed with the Finance Parties on 11 January 2010;
and

 

4                                       As a
precondition for the Lenders to
provide loans to the Borrower, the
Borrower agrees that in accordance
with the terms and conditions of the Agreement,
the Facility Agent and Security Agent, in the interests of the Facility Agent, Security Agent, Calculation
Agent, Arranger, Lenders and Swap Counterparty and their future respective assignees and
successors from time to time (collectively referred to as the Secured Parties), designate an Account Control Bank to monitor and control
the Controlled Account (as defined
below) of the Borrower in China to
ensure payment and settlement by the Borrower
on time and in full of the Secured Onshore
Obligations under the Transaction
Finance Documents (i.e. the Loan
Contract and the Swap Agreement).

 

The parties hereby have
reached the following agreements:

 

1                                                  Definition and Explanation

 

1.1                                          Definition

 

The Agreement constitutes the Account Control
Agreement as defined in the Security Trust
Deed. Unless otherwise expressly specified in the Agreement, the terms defined and referred
to in the Security Trust Deed and
the Loan Contract shall have the
same meanings in the Agreement. In
the Agreement:

 

The Controlled Accounts refer to any account
listed in Attachment 1 (The Controlled
Account Checklist Form) to the Agreement
set up and maintained by the Borrower
in the Account Control Bank. After
opening a controlled account, the Borrower
should provide the account’s details to 

 

3

 

the Security Agent in the format required under
Attachment 1 (The Controlled Account
Checklist Form) to the Agreement.

 

The Control Period refers to the control period
specified under Clause 2.5 (The Control
Period) of the Agreement. ”

 

Pledge
over Deposit Certificate refers to the security agreement
between the Borrower and the Security Agent for certificate of deposit
balances that exist from time to time in the Onshore
Cash Collateral Account.

 

1.2                                          Explanation

 

(a)                        The Clause
1.3 (Rule of explanation)
(as adjusted where necessary) of the Security
Trust Deed should apply to this Agreement.

 

(b)                       The use of
Borrower, Facility Agent, Security Agent and Account
Control Bank, unless the context specifically indicates otherwise,
shall include their respective successors and assignees and any and all those
who have acquired rights from the aforementioned.

 

(c)                        A month, unless specifically stated
otherwise, shall be a calendar month.

 

2                                                  The Opening and Control Period of the Controlled Accounts

 

2.1                                          Designation of the Account Control Bank

 

The Security Agent appoints the Account Control Bank as the bank to perform
the monitoring and control responsibilities and activities under the Agreement, and manage the payment into and
out of the Controlled Account.

 

2.2                                          Account management

 

(a)                        Upon
opening any accounts other than the Controlled
Account, the Borrower
should immediately notify the Facility Agent
and the Security Agent. Upon
singing of the Agreement, the Borrower should, within 10 Business Days of the last day of every
month, provide to the Facility Agent
and Security Agent information on 

 

4

 

any and all accounts it has opened with banks other than the Account Control Bank, including but not
limited to the credit balance and transaction records of such accounts.

 

(b)                       Application
to the Account Control Bank by the
Borrower to withdraw any amounts
from the Controlled Account shall
not affect or impair any rights and benefits of the Security Agent under the Security
Documents.

 

2.3                                          The opening of the Controlled Account

 

(a)                        The Borrower should, within 2 Business days upon signing of the Agreement, apply to set up the Controlled Account (however, the Onshore US Dollar Project Account may be
opened within 2 Business Days upon
approval of relevant foreign exchange administrative authorities or upon
signing of the Agreement
(whichever happens later)).

 

(b)                       The Borrower should, within 1 Business Day, notify the Security Agent in writing of the details of
every Controlled Account upon
opening of such Controlled Accounts,
and the written notifications should bear the seal of the Account Control Bank as confirmation.
During the Control Period, the Borrower must keep every Controlled Account.

 

2.4                                          Account control and management

 

(a)                        The Security Agent has the right to monitor and
verify (including but not limited to inquiry of relevant banks) the status of
the Borrower’s accounts (including
but not limited to the Controlled Accounts),
and the Borrower should, for this
purpose, provide all necessary authorization and permission to the Security Agent.

 

(b)                       The
parties agree that all amounts in the Controlled
Accounts shall only be used for the purposes specified in the Loan Contract and the Agreement and in the manner specified in
the Loan Contract and the Agreement. The Account Control Bank shall monitor and control the payment
into and out of the Controlled Accounts
in accordance with the Attachment 6 (The Banking
Accounts) of the 

 

5

 

Loan Contract (as per its format and
contents on the date of the Agreement),
terms and conditions of the Agreement
and the instructions of the Facility Agent
and the Security Agent, and the Borrower should use the funds in the Controlled Accounts in accordance with
requirements of the Loan Contract
and the Agreement.

 

2.5                                          The Control Period

 

The parties agree that
the Control Period during which
the Account Control Bank monitors
and controls the Controlled Accounts
shall commence on the date of signing of the Agreement
and end on the earlier of the following:

 

(a)                          60 days
after the Initial Utilization Date
under the Loan Contract; or

 

(b)                         The date
the Facility Agent confirms to the
bank in writing that all the debts of the Borrowers
to the lenders and Swap Counterparty
under the Transaction Finance Documents
have been unconditionally and irrevocably paid and settled in full and all its Commitments have expired.

 

On the precondition that
should the Facility Agent notify
the Account Control Bank at least
2 Business Days before the date
specified in (a) above that it elects to extend the Control Period from the date specified in
(a) above, and the date specified in (b) does not fall before the
date specified in (a), the Control Period
shall, from the date specified in (a) above, automatically extend 5 years
(unless the Facility Agent sends
to the Account Control Bank the
written confirmation described in (b) in advance, when the date such
written confirmation is made shall be the date the extension period ends), and
unless the parties agree otherwise, the terms and conditions of the Agreement shall continue to apply in the
extension period.

 

2.6                                          Interests

 

The interests on funds
in the Controlled Accounts shall
be calculated at the applicable demand deposit interest rates the Account Control Bank offers to its
customers from time to time.

 

6

 

3                                                  Onshore Controlled Account

 

3.1                                          Incoming amounts

 

(a)                        The Onshore Controlled Account should be the
principal operations account of the Borrower.
The Borrower should ensure that
during the Control Period, all
sales income and other amounts acquired under or in connection with the
contracts between the Borrower and
its customers (including but not limited to the LHD Contracts and the MD
Contracts) shall be directly paid to the Onshore Controlled Account.

 

(b)                       If,
through other means, the Borrower
acquires sales income or other amounts from its customers outside the Onshore Controlled Account, the Borrower should, within 3 Business Days upon receipt of such amounts,
transfer the amounts to the Onshore
Controlled Account.

 

3.2                                          Basic withdrawal conditions

 

Subject to the
provisions under Clause 3.3 (Withdrawal when
an event of default occurs) and Clause 3.4 (Priority of withdrawal) below, the Borrower should meet the following
conditions in order to apply for the utilization of funds in the Onshore Controlled Account:

 

(a)                        Any
withdrawal, transfer or other instructions in connection with the Onshore Controlled Account become effective
only after authorization in writing of the Account
Control Bank; and

 

(b)                       The Borrower should notify the Account Control Bank in writing (and cc the
notification to the Facility Agent
and the Security Agent) at least 3
Business Days in advance to apply
to the Account Control Bank for
authorization to withdraw funds from the Onshore
Controlled Account.

 

3.3                                          Withdrawal in a default event

 

(a)                        If an
event of default occurs and continues, at the instruction of an relevant Secured Party or the Secured Parties under the Security Trust Deed, the Security Agent has the right to notify the Account 

 

7

 

Control Bank that: without
instruction of the Security Agent
(acting in accordance with the instruction of the relevant Security party or the Secured Parties under the Security Trust Deed) to the Account Control Bank, the amounts in the Onshore Control Account cannot be withdrawn
or transferred.

 

(b)                       Upon
receipt by the Account Control Bank
of the above notification from the Security
Agent, without the instruction from the Security Agent (acting in accordance with the instruction of
the relevant Secured Party or Secured Parties under the Security Trust Deed), the amounts in the Onshore Control Account can not be
withdrawn or transferred, and the Account
Control Bank may not accept the instruction in connection with the Onshore Control Account from the Borrower or any other parties (other than
the Security Agent), nor
accordingly.

 

3.4                                          Priority of withdrawal

 

If the credit balance
of Onshore Control Account is not
enough to meet all the withdrawal or payment needs under Clause 3.5 (Use of the withdrawn funds), subject to
the provisions of Clause 3.3 (Withdrawal
when an event of default occurs), the requests to withdraw funds
from the Onshore Control Account
shall follow the following order of priority:

 

(a)                        First, the
funds shall be used for the purpose of Onshore
Cash Collateral Account as described in (e) under Clause 3.5 (Use of withdrawn funds);

 

(b)                       Secondly,
the funds shall be used for the purpose of Secured
Onshore Obligations as described in (c) under Clause 3.5 (Use of withdrawn funds);

 

(c)                        Thirdly,
the funds shall be used for the purpose of the Debt Service Reserve Account (DSRA Account) as described in (f) under Clause 3.5 (Use of withdrawn funds);

 

(d)                       Fourthly,
the funds shall be used for the purpose of Operating
Expenditures and/or Capital
Expenditures as described in (a) and/or (b) respectively
under Clause 3.5 (Use of withdrawn funds);

 

8

 

(e)                        Lastly,
the funds shall be used for the purpose of dividends as described in
(d) under Clause 3.5 (Use of withdrawn
funds).

 

3.5                                          Use of withdrawn funds

 

Funds withdrawn by the Borrower from the Onshore Control Account shall be used for
the following purposes.

 

(a)                        Operating Expenditures of the Borrower;

 

(b)                       Capital Expenditures of the Borrower;

 

(c)                        Secured Onshore Obligations under the Transaction Finance Document;

 

(d)                       Dividends
that the Borrower is allowed to
distribute to the Parentco in cash
under (c) of Clause 21.14 (Restricted
payments) of the Loan Contract
(as per its format and contents on the date of the Agreement);

 

(e)                        Transfer
to the Onshore Cash Collateral Account;

 

(f)                          Transfer to RMB DSRA
Account.

 

3.6                                          Withdrawal in connection with Operating Expenditures

 

With respect to the request of the Borrower
to withdraw funds for the purpose of Operating
Expenditures, upon meeting the following conditions, the Account Control Bank should authorize the
withdrawal:

 

(a)                        Conditions
under Clause 3.2 (Basic withdrawal
conditions), Clause 3.4 (Priority
of withdrawal) and Clause 3.5 (Use
of withdrawn funds);

 

(b)                       Opex Withdrawal Request properly filled out by
the Borrower as per the format and
contents of Attachment 2 (The Format of Opex
Withdrawal Request);

 

(c)                        Either of
the following conditions:

 

(i)                             In the
month of withdrawal request, the amount of the withdrawal 

 

9

 

request to be proposed and the amounts already withdrawn and/or amounts
of requests already applied to be withdrawn from the Onshore Control Account for the month (based on the Opex Withdrawal Request(s) already
submitted) collectively do not exceed the Permitted
Opex Limit of the month (excluding the approved withdrawal amount in
the second provision (i.e. that under (c)(ii)) of this clause); or

 

(ii)                          The Facility Agent (acting in accordance with
the instruction of the Majority Lenders)
has already approved the amount of the withdrawal request made by the Borrower in writing (at least 10 Business Days before the proposed
withdrawal date), which should state clearly: separate application for this
once-off withdrawal in the month the amount is proposed.

 

Upon meeting the above conditions, the Account Control Bank shall, in accordance with the payment
instruction in the Opex Withdrawal Request,
pay the requested amount from the Onshore
Control Account directly to the Opex
Payee specified in the Opex
Withdrawal Request. The Borrower
can be the Opex Payee.

 

3.7                                          Permitted Opex Limit

 

(a)                        The Permitted Opex Limit for each month is the
sum of the following two items:

 

(i)                             The total
of Opex approved to be disbursed
from the Onshore Control Account
for the month as set out in the Approved Opex
Budget for the month, and

 

(ii)                          Unused Opex Limit from the previous month.

 

For the month of the Initial
Utilisation Date under the Loan
Contract, the Unused Opex Limit
of the previous month is zero.

 

(b)                       From the Initial  Utilisation
Date of the Loan Contract,

 

(i)                             If in a
month, any amount has been withdrawn and/or transferred from the Onshore Control Account as per an Opex Withdrawal Request (not including
amounts withdrawn and/or

 

10

 

transferred in accordance
with Clause 3.6(c)(ii)), the Borrower
shall be deemed to have used that amount of the Permitted Opex Limit for the month (within the Permitted Opex Limit for the month, the Borrower shall be deemed to first use the Unused Opex Limit from the previous month,
and then Opex available from the Onshore Control Account for the month as
specified in the Approved Opex Budget
for the month); and

 

(ii)                          If at the end of a month, there are still
unused amounts in the Permitted Opex Limit
(the portion described in 3.7(a)(i) regarding the definition of Permitted Opex Limit), that unused portion
shall be the Unused Opex Limit for
that month. For avoidance of misunderstanding, the unused portion of the Permitted Opex Limit for the month as
described in 3.7(a)(ii) regarding the definition of Permitted Opex Limit shall not constitute
as part of the Unused Opex Limit
of the month.

 

3.8                                          Withdrawals in
connection with Capital Expenditures

 

For any withdrawal by the
Borrower from the Onshore Control Account for the purpose of
Capital Expenditure, if the Capital Expenditure constitutes a Project Capital Expenditure (meaning Capital Expenditure or payments under the Financed LHD Acquisition Agreement or the Upcoming LHD Acquisition Agreement), the Capital Expenditure Withdrawal Request
shall be a Special Capex Withdrawal Request,
and if the Capital Expenditure
does not constitute a Project Capital
Expenditure, the Capital
Expenditure Withdrawal Request shall be a General Capex Withdrawal Request.

 

3.8.1   If the following conditions are met, upon
request of the Borrower to apply
for Special Capex payment, the Account Control Bank should authorize the
withdrawal:

 

(a)                        Conditions under Clause 3.2 (Basic withdrawal conditions), Clause 3.4 (Priority of withdrawal) and Clause 3.5 (Use of withdrawn funds);

 

(b)                       The Borrower
properly fill out the Special Capex
Withdrawal Request as per the format and contents of Attachment 3 (The Format of Special Capex Withdrawal Request),
and the Special Capex 

 

11

 

Withdrawal
Request should
specify that the Capex Payee is
the LHD Vendor;

 

(c)                        Submit the following invoices:

 

(i)                             The invoice pertaining to the Financed LHD Acquisition Agreement or the Upcoming LHD Acquisition Agreement issued
by LHD Vendor to the Borrower, with an invoice amount no smaller
than that of the proposed withdrawal request; and

 

(ii)                          The invoice pertaining to the Power
Hydraulics Financed LHD Supply Contract (in
which case, provide the invoice in connection with the Financed LHD Acquisition Agreement as
described in (c)(i) above) or pertaining to the Power Hydraulics Upcoming LHD Supply Contract (in which case,
provide the invoice in connection with the Upcoming
LHD Acquisition Agreement as described in (c)(i) above) issued
by Power Hydraulics to the LHD Vendor,
with an invoice amount no smaller than that of the proposed withdrawal request,
or an equivalent amount in US dollars;

 

(d)                       Either of the following conditions:

 

(i)             In the month of requested withdrawal, the sum of the
requested amount plus all other amounts already withdrawn and/or requested to
be withdrawn from the Onshore Control Account
and the Onshore RMB Project Account
in that month (based on the Special Capex
Withdrawal Requests already submitted) (excluding the approved
amounts under (d)(ii) and Clause 4.6(c)(ii)) does not exceed the Permitted Project Capex Limit (See the
agreement in Clause 4.8 (Permitted Project
Capex Limit) of the Agreement)
for the month of the proposed withdrawal; or

 

(ii)          The Facility Agent
(acting in accordance with the instruction of the Majority Lenders) has approved the proposed withdrawal amount  that the Borrower
has applied in its written request (delivered at least 10 Business Days before the intended
withdrawal date), which should clearly state: separate application for this
once-off 

 

12

 

withdrawal in the month
the amount is proposed.

 

With the precondition
that unless the balance of both the Onshore
USD Project Account and the Onshore
RMB Project Account at the expected withdrawal date specified in the
Special Capex Withdrawal Request
is zero (but subject to Clause 4.5(a)(i) and for the purpose of Clause
3.8.1(d), in determining the balance of the Onshore
USD Project Account, the DSRA
Amount in that account before the last day of the first Interest Period of the first Loan under the Loan Contract as per Clause 4.5(a)(i) should not be
considered), the Borrower must not
withdraw any amount from the Onshore Control
Account based on the Special Capex
Withdrawal Request.

 

3.8.2 With respect
to the Borrower’s request for General Capex, i.e. Capex that does not constitute Project Capex, upon meeting the following
conditions the Account Control Bank
should authorize the withdrawal:

 

(a)                        Conditions under Clause 3.2 (Basic withdrawal conditions), Clause 3.4 (Priority of withdrawal) and Clause 3.5 (Use of withdrawn funds);

 

(b)                       The General
Capex Withdrawal Request properly completed by the Borrower as per the format and contents of
Attachment 4 (The Format of General Capex
Withdrawal Request);

 

(c)                        Either of the following conditions:

 

(i)                             In the month of requested withdrawal, the
requested withdrawal amount and the amounts already withdrawn and/or applied to
be withdrawn from the Onshore Control Account
in that month (based on the withdrawals requested through the General Capex Withdrawal Requests) do not
exceed the Permitted Capex Limit
for that month (excluding the amounts approved in the second condition (i.e.
that under (c)(ii)) of this clause); or

 

(ii)                          The
Facility Agent (acting in accordance with the instruction of the Majority Lenders) has approved the
withdrawal amount  that the Borrower has requested in its written
request (submitted at least 10 Business Days
before the intended withdrawal date), which should clearly state: separate
application for this once-off 

 

13

 

withdrawal in the month
the amount is proposed.

 

Upon meeting the
conditions specified in clause 3.8.1 and 3.8.2, the Account Control Bank should, in accordance with the payment
instruction of the Capex Withdrawal Request
(i.e. the Special Capex Withdrawal Request
or General Capex Withdrawal Request),
directly pay the requested amount from the Onshore
Control Account to the Capex Payee
specified in the Capex Withdrawal Request.
However, if the Capex Payee is the
LHD Vendor, the Account Control Bank should directly pay
the requested amount to the LHD Vendor Joint
Account.

 

3.8.3  Permitted Capex Limit

 

(a)                        The Permitted
Capex Limit for each month is the sum of the following two items:

 

(i)                             The total amount of approved Capex permitted to be disbursed from the Onshore Control Account as stated in the Approved Capex Budget for the month, and

 

(ii)                          The Unused
Capex Limit from the previous month.

 

For the month of the Initial Utilisation Date under the Loan Contract, the Unused Capex Limit of the previous month is
zero.

 

(b)                       From the Initial Utilisation Date of the Loan Contract:

 

(i)                             If in a month, any amount has been withdrawn
and/or transferred from the Onshore Control
Account as per an Capex Withdrawal
Request (not including amounts withdrawn and/or transferred in
accordance with Clause 3.8.2(c)(ii)), the Borrower
shall be deemed to have used that amount of the Permitted Capex Limit for the month (within the Permitted Capex Limit for the month, the Borrower shall be deemed to first use the Unused Capex Limit from the previous month,
and then Capex available from the Onshore Control Account for the month as
specified in the Approved Capex Budget
for the month); and

 

(ii)                          If at the end of a month, there are still
unused amounts in the Permitted Capex Limit
(the portion described in 3.8.3(a)(i) 

 

14

 

regarding the definition
of Permitted Capex Limit), that
unused portion shall be the Unused Capex
Limit for that month. For avoidance of misunderstanding, the unused
portion of the Permitted Capex Limit
for the month as described in 3.8.3(a)(ii) regarding the definition of Permitted Capex Limit shall not constitute
as part of the Unused Capex Limit
of the month.

 

3.9                                          Withdrawal for payments
under the Transaction Finance Document

 

With respect to the Borrower’s request for withdrawal from the Onshore Control Account to pay its matured Secured Onshore Obligations payable to the Facility Agent or any Swap Counterparty, upon meeting all the
following conditions, the Account Control
Bank should authorize the withdrawal:

 

(a)                        Conditions under Clause 3.2 (Basic withdrawal conditions), Clause 3.4 (Priority of withdrawal) and Clause 3.5 (Use of withdrawn funds);

 

(b)                       The Finance
Document Withdrawal Request properly completed by the Borrower as per the format and contents of
Attachment 5 (The Format of the Finance
Document Withdrawal Request).

 

Upon meeting the above
conditions, the Account Control Bank
should, in accordance with the payment instruction of the Finance Document Withdrawal Request,
directly pay the requested amount from the Onshore
Control Account to the Transaction
Finance Payee specified in the Finance
Document Withdrawal Request. If the Secured Onshore Debt should be paid to the Finance Parties, the Transaction Finance Payee should be the Facility Agent, and if the Secured Onshore Debt should be paid to any Swap Counterparty, then the Transaction Finance Payee should be the Swap Counterparty.

 

3.10                                    Withdrawal for dividends

 

With respect to the Borrower’s request for withdrawal from the Onshore Control Account to enable the Borrower to distribute dividends in cash to
the Parentco (i.e. International Petroleum Services Corporation 

 

15

 

Limited), upon meeting
the following conditions, the Account Control
Bank should authorize the withdrawal:

 

(a)                        Conditions under Clause 3.2 (Basic withdrawal conditions), Clause 3.4 (Priority of withdrawal) and Clause 3.5 (Use of withdrawn funds);

 

(b)                       The Dividend
Withdrawal Request properly completed by the Borrower as per the format and contents of
Attachment 6 (The Format of Dividend
Withdrawal Request).

 

Upon meeting the above
conditions, the request amount shall be directly paid from the Onshore Control Account to the Parentco Controlled Account at Deutsche
Bank AG, Hong Kong Branch in the name of INTERNATIONAL PETROLEUM SERVICES
CORPORATION LIMITED, with an account number of 0016212-05-0.

 

3.11                                    Transfer to the Onshore
Cash Collateral Account

 

With respect to the Borrower’s request to transfer funds from
the Onshore Control Account to the
Onshore Cash Collateral Account,
upon meeting of the conditions of Clause 3.2 (Basic
withdrawal conditions), Clause 3.4 (Priority
of withdrawal) and Clause 3.5 (Use
of withdrawn funds) and presenting of the transfer request properly
completed by the Borrower as per
the format and contents of Attachment 7 (The
Format of Transfer Request), the Account
Control Bank should authorize the withdrawal. Upon meeting the above
conditions, the Account Control Bank
should, in accordance with the payment instruction of the Transfer Request, directly transfer the
amount from the Onshore Control Account
to the Onshore Cash Collateral Account.

 

3.12                                    Transfer to the Onshore
RMB DSRA Account

 

With respect to the Borrower’s request to transfer funds to the
Onshore RMB DSRA Account, upon
meeting of the conditions of Clause 3.2 (Basic
withdrawal conditions), Clause 3.4 (Priority
of withdrawal) and Clause 3.5 (Use
of withdrawn funds) and presenting of the transfer request properly
completed by the Borrower as per
the format and contents of Attachment  7
(The Format of Transfer Request),
the Account Control Bank should
authorize the withdrawal. Upon meeting of the 

 

16

 

above conditions, the Account Control Bank should, in accordance
with the payment instruction of the Transfer
Request, directly pay the amount from the Onshore Control Account to the Onshore RMB DSRA Account.

 

3.13                                    Control

 

(a)                        The Account
Control Bank should, within 10 Business
Days from the end of every month, provide the Account Statement of that month for the Onshore Control Account to the Facility Agent and the Security Agent.

 

(b)                       Without prejudice to the foregoing
paragraph, the Account Control Bank
should state clearly in the Account
Statement for Onshore Control Account of the month that
ends on the last day of the Calculation period:
the total of all amounts deposited into the Onshore
Control Account during the Calculation
Period, and whether the total is smaller than 60% of the expected
cash inflow of the Borrower in the
Calculation Period as set out in
the Base Case Model.

 

(c)                        The Calculation
Period refers to every two months of a continuous period. The first Calculation Period starts on the first day
of the month immediately after the month of the Initial Utilisation Date of the Loan Contract (i.e. the Starting
Calendar Month), and ends on the last day of the month immediately
after the Starting Calendar Month.
Subsequently, every Calculation Period
starts on the day following the last day of the previous Calculation Period.

 

3.14                                    The Facility
Agent should pass to the Account
Control Bank, no later than the day before the Initial Utilisation Date, a Base Model of the Lenders group and the Approved Opex Budget and Approve Capex Budget for the Initial Budget Period, and within 2 Business Days after every approval of the Opex (non-Project
Capex) budget and Capex
budget (including any revisions to the budget, if any) of the Borrower, present to the Account Control Bank an Approved Opex Budget and an Approved Capex Budget.

 

17

 

3.15                                    The Facility
Agent should present to the Account
Control Bank, no later than the day before the Initial Utilisation Date of the Loan Contract, the Financed LHD Acquisition Agreement and the Power Hydraulics Financed LHD Supply Contract,
and the Upcoming LHD Acquisition Agreement
and the Power Hydraulics Upcoming LHD Supply
Contract.

 

4                                                  Onshore USD Project
Account and Onshore RMB Project Account

 

4.1                                          Basic withdrawal
conditions

 

Subject to the provisions
of Clause 4.2 (Withdrawal when an event of
default occurs) below, the Borrower
can only apply to withdraw funds from the Onshore
USD Project Account and the Onshore
RMB Project Account (collectively referred to as the Onshore Project Accounts) in accordance
with the provisions in clauses from Clause 4.3 (Withdrawal in connection with Transaction Expenses) to
Clause 4.7 (Withdrawal from the Onshore RMB
Project Account/the unused balance), and all withdrawals, transfers
or other instructions in connection with Onshore
Project Accounts must have written authorization.

 

4.2                                          Withdrawal when an event
of default occurs

 

(a)                        If an event of default occurs and is
continuing, with the instruction of the relevant Secured Party or Secured
Parties in accordance with the Security
Trust Deed, the Security Agent
has the right to notify the Account Control
Bank that: without the instruction of the Security Agent (acting as per the instruction of the relevant Secured Party or Secured Parties in accordance of the Security Trust Deed) to the Account Control Bank, no amount in the Onshore Project Accounts can be withdrawn
or transferred.

 

(b)                       Upon receipt by the Account Control Bank of the above
notification from the Security Agent,
without the instruction of the Security Agent
(acting as per instruction of the relevant Secured
Party or Secured Parties
in accordance with the Security Trust Deed),
no amount in the Onshore Project Accounts
can be withdrawn or transferred, and the Account
Control Bank shall not accept any instruction from the Borrower or any other parties (other than
the 

 

18

 

Security
Agent) in
connection with the Onshore Project Accounts,
nor act accordingly.

 

4.3                                          Withdrawals in
connection with Transaction Expenses

 

(a)                        Within 10 Business Days of the Initial
Utilisation Date of the Loan
Contract, the Borrower
should, at least 3 Business Days
in advance, properly fill out the Transaction
Expense Withdrawal Request and notify the Account Control Bank (and also cc the notification to the Facility Agent and the Security Agent) to apply to the Account Control Bank for authorization to
withdraw funds from the Onshore USD Project
Account to pay the Calculation
Agent, Facility Agent, Security Agent and Arranger all costs and expenses reasonably
incurred (including but not limited to legal expenses) that become due and
payable on or around the Initial Utilisation
Date.

 

(b)                       Subject to Clause 3.4 (Withdrawal when an event of default occurs),
if after properly completing the Transaction
Expense Withdrawal Request by the Borrower
as per the format and contents of Attachment 8 (The Format of Transaction Expense Withdrawal Request) and
when such withdrawal is made, the balance of the Onshore USD Project Account is no smaller than the DSRA Amount at the time, the Security Agent (acting in accordance with
the instruction of the Instructing Group
(the Instructing Group referred to in the Security
Trust Deed)) should issue the instruction to the Account Control Bank on whether the amount
can be withdrawn, and if positive, the amount shall be directly paid from the Onshore USD Project Account to the account
specified in the Transaction Expense
Withdrawal Request.

 

4.4                                          Withdrawals in
connection with interest payment 

 

(a)                        The Borrower should, at least 3 Business Days in advance, properly fill out
the USD Account Withdrawal Request
and notify the Account Control Bank
in writing (and also cc the notification to the Facility Agent and Security
Agent) to apply to the Account
Control Bank for authorization to withdraw funds from the Onshore 

 

19

 

USD Project Account to pay, on the last
day of the first Interest Period
in connection with the first Loan,
interests on any Loans that become
due and payable at the time.

 

(b)                       Subject to
the Clause 4.2 (Withdrawal when an event of
default occurs), upon presenting by the Borrower the USD Account
Withdrawal Request properly filled out as per Attachment 9 (The Format of USD Account Withdrawal Request),
the Account Control Bank should
authorize the withdrawal. The requested amount should be paid directly from the
Onshore USD Project Account to the
account specified in the USD Account
Withdrawal Request.

 

4.5                                          Withdrawal or transfer of the Onshore USD Project Account

 

(a)                        Upon
disbursement of any Loan to the Onshore USD Project Account as per the Loan Contract, the Borrower should ensure that:

 

(i)                             Firstly,
if it is the first Loan, it sets
aside the DSRA Amount (based on
the notification of the Facility Agent)
for the first Interest Period for
the purpose of Clause 4.4(a). This amount is not to be used before the first Interest Payment Date;

 

(ii)                          Secondly,
if it is the first Loan, it sets
aside the amount described in Clause 4.3 (Withdrawal
in connection with Transaction Expenses) for covering the expenses
described in Clause 4.3 (Withdrawal in
connection with Transaction Expenses);

 

(iii)                       Thirdly,
with the approval of relevant foreign exchange authorities, it converts the
amount approved by relevant foreign exchange authorities out of the balance of
the Onshore USD Project Account
(after appropriation of the two amounts as described above in this clause) to
Renminbi and pays the amount to the Onshore
RMB Project Account.

 

(b)                       The
Borrower should, at least 3 Business Days
in advance, properly fill out the USD Account
Withdrawal Request and notify the Account
Control Bank in writing (and also cc the notification to the Facility Agent and the Security Agent) to apply to the Account

 

20

 

Control
Bank for
authorization to withdraw funds from the Onshore
USD Project Account to cover the amounts under the Clause
4.5(a)(iii).

 

(c)                        Subject to Clause 4.2 (Withdrawal when an event of default occurs),
if the Borrower has properly
filled out the USD Account Withdrawal Request
as per the format and contents of Attachment 9 (The Format of USD Account Withdrawal Request) and (should
the withdrawal is made on or before the last day of the first Interest Period of the first Loan) the balance of the Onshore USD Project Account is no smaller
than the DSRA Amount after the
withdrawal, the Account Control Bank
should authorize the withdrawal.

 

(d)                       The requested amount should, after
conversion by the Account Control Bank,
be paid directly from the Onshore USD Project
Account to the Onshore RMB Project
Account.

 

4.6                                          Withdrawal of the
Onshore RMB Project Account/the Approved Project Capex Schedule

 

The Borrower should, at least 3 Business Days in advance, properly fill out
the Project Capex Withdrawal Request
and notify the Account Control Bank
in writing (and also cc the notification to the Facility Agent and the Security
Agent) to apply to the Account
Control Bank for authorization to withdraw funds from the Onshore RMB Project Account to pay the Project Capex.

 

Subject to Clause 4.2 (Withdrawal when an even of default occurs),
upon meeting the following conditions, the Account
Control Bank should authorize the withdrawal:

 

(a)                        The Borrower
properly fills out the Project Capex
Withdrawal Request as per the format and contents of Attachment 10 (The Format of Project Capex Withdrawal Request);

 

(b)                       Submit the following invoices at the same
time of the Project Capex Withdrawal Request
is made:

 

(i)                             The invoice issued by LHD Vendor to the Borrower pertaining 

 

21

 

to the Financed LHD Acquisition Agreement or Upcoming LHD Acquisition Agreement, with an
invoice amount of no less than the requested withdrawal amount; and

 

(ii)                         Invoice(s) issued by Power
Hydraulics to the LHD Vendor with
an invoice amount of no smaller than the requested withdrawal amount or an
equivalent amount in US dollars, which should pertain to the Power Hydraulics Financed LHD Supply Contract
(under which invoices pertaining to the Financed
LHD Acquisition Agreement as described in Clause (b)(i) above
should be submitted) or the Power Hydraulics
Upcoming LHD Supply Contract (under which invoices pertaining to the
Upcoming LHD Acquisition Agreement
as described in Clause (b)(i) above should be submitted); and

 

(c)                        Either of the following two conditions:

 

(i)                            The requested withdrawal amount and the
sum of all other amounts already withdrawn and/or requested to be withdrawn in
the month of the requested withdrawal from the Onshore RMB Project Account and from the Onshore Control Account as per the Special Capex Withdrawal Requests
(excluding the withdrawal amount approved in the second provision (i.e. as per
Clause (c)(ii) and the amount approved as per Clause 3.8.1(d)(ii)) do not
exceed the Permitted Project Capex Limit
for the month of the requested withdrawal; or

 

(ii)                         The Facility
Agent (acting in accordance with the instruction of the Majority Lenders) has approved the
requested withdrawal amount as per the Borrower’s
written request (made at least 10 Business
Days before the requested withdrawal date), which should state
clearly: separate application for this once-off withdrawal in the month the
amount is proposed.

 

The withdrawn amount should be paid directly from the Onshore RMB Project Account to the LHD Vendor Joint Account.

 

22

 

4.7                                          Withdrawal of the
Onshore RMB Project Account/the unused balance

 

Subject to Clause 4.2 (Withdrawal when an event of default occurs), upon completion
of all payments (not the payments under the Approved
Project Capex Schedule for a certain month) under the Approved Project Capex Schedule (the Capex schedule in a pre-agreed format
listing the Capex payable to LHD Vendor for LHD Units purchased under the Financed LHD Acquisition Agreement or to be purchased under
the Upcoming LHD Acquisition Agreement),
if there is still a credit balance in the Onshore
RMB Project Account, the Borrower
should request the Account Control Bank
to transfer that balance to the Onshore
Control Account and cancel the Onshore
RMB Project Account.

 

4.8                                          Permitted Project Capex
Limit

 

(a)                        The Permitted
Project Capex Limit for a month is the sum of the following items:

 

(i)                            The total amount of the Project Capex for that month as set out in
the Approved Project Capex Schedule,
and

 

(ii)                         The Unused
Project Limit from the previous month.

 

For the month of the Initial Utilisaiton Date of the Loan Contract, the Unused Project Capex Limit of the previous
month is zero.

 

(b)                       From the
Initial Utilisation Date:

 

(i)                            If in a month, any amount has been
withdrawn and/or transferred from the Onshore
RMB Project Account as per Project
Capex Withdrawal Requests (not including amounts withdrawn and/or
transferred in accordance with Clause 4.6(c)(ii)), and/or any amount has been
withdrawn and/or transferred from the Onshore
Control Account in that month as per Special Capex Withdrawal Requests (not including amounts
withdrawn and/or transferred in accordance with Clause 3.8.1(d)(ii)), the Borrower shall be deemed to have used that
amount of the Permitted Project Capex Limit
for the month; and

 

(ii)                         If at the end of the month, there is
still unused amount in the Permitted Project
Capex Limit (as per Clause 4.8(b)(i)), the 

 

23

 

 

unused amount shall be
the Unused Project Capex Limit of
that month.

 

(iii)                      For avoidance of misunderstanding, the Unused Project Capex Limit of a month can
be used in the following month.

 

4.9                                          Control

 

The Account Control
Bank should, within 10 Business
Days from the end of every month, provide the Account Statement on the Onshore Project Account to the Facility Agent and the Security Agent.

 

4.10                                    The Facility
Agent should, no later than the day before the Initial Utilisation Date of the Loan Contract, provide an Approved Project Capex Schedule to the Account Control Bank.

 

5                                                  Onshore Cash Collateral
Account

 

5.1                                          Sole authority

 

The Security Agent
has the sole authority over the Onshore Cash
Collateral Account, and any withdrawal, transfer or other instruction
in connection with that account must have the written instruction from the Security Agent (acting in accordance with
the instruction of the Instructing Group)
without the need for the Borrower’s
instruction.

 

5.2                                          Deposits

 

(a)                        The Borrower
should, 6 months after the Initial
Utilisation Date of the Loan
Contract or before that time, deposit RMB 25 million (RMB
twenty-five million) to the Onshore Cash
Collateral Account; in addition, 9 months after the Initial Utilisation Date or before that
time, the Borrower should make
another deposit of no less than RMB 25 million (RMB twenty-five million) to the
Onshore Cash Collateral Account;

 

(b)                       The Account
Control Bank should, upon the end of the 6 months or the 9 months
from the Initial Utilisation Date
of the Loan Contract, immediately
notify the Facility Agent and the Security Agent whether the amounts as
described in paragraph (a) above have been deposited 

 

24

 

 

before 3pm, Tianjin Time,
upon the end of the 6 months or the 9 months after the Initial Utilisation Date.

 

5.3                                          Withdrawal

 

(a)                        Without limiting the rights of the Security Agent under the Security Documents, if there is no Event of Default occurring or continuing
and the total amount deposited into the Onshore
Cash Collateral Account as per Clause 5.2 (Deposits) is not less than the minimum
amount required on the date after 9 months from the Initial Utilisation Date of the Loan Contract, when the Borrower
makes an early prepayment using funds other than those from Onshore Cash Collateral Account as per
Clause 8.5 (Voluntary early repayment)
of the Loan Contract, it may, at
least 3 Business Days in advance,
notify the Security Agent to apply
to the Security Agent for
permission to withdraw from the Onshore Cash
Collateral Account, for the purpose of early repayment, an
equivalent amount in Renminbi of no more than 15% of the early repayment
amount.

 

(b)                       The Security
Agent (acting in accordance with the instruction of the Instructing Group) should agree to the
withdrawal of such an amount by the Borrower
from the Onshore Cash Collateral Account,
and the withdrawn amount should be paid to the account designated by the Facility Agent.

 

5.4                                          Pledge

 

(a)                        Upon depositing any amount in the Onshore Cash Collateral Account, the Borrower should, on the date of the
deposit, save the amount in a 60-month time deposit; for the purpose of placing
that deposit as collateral to the Secured
Parties, the Security Agent,
on behalf of the Secured Parties,
entrusts the Borrower and the Account Control Bank to set up the
certificate of deposit. The Borrower
should, on the date of the deposit, apply to the Account Control Bank to issue a certificate of deposit for
that deposit; within 2 Business Days
upon accepting the Borrower’s application,
the Account Control Bank should
issue the certificate of deposit for that deposit.

 

25

 

(b)                       If for the purpose of early repayment,
the Borrower needs to withdraw
funds from the Onshore Cash Collateral
Account, it should, 3 Business
Days in advance, apply to the Security
Agent and request the Security
Agent for permission to withdraw the amount in advance (if the
certificate of deposit has not matured).

 

(c)                        If any amount is withdrawn from the
certificate of deposit, for the purpose of placing the remaining balance of
that certificate of deposit as pledge to the Secured
Parties, the Security Agent,
on behalf of the Secured Parties,
entrusts the Borrower and the Account Control Bank to set up new certificates
of deposit. The Borrower should,
on the day of the withdrawal, apply to the Account
Control Bank to set up new certificates of deposit for the
balance(s) of the one certificate of deposit or those from which amounts
have been withdrawn, and pledge the new certificate(s) of deposit to the Security Agent; within 2 Business Days upon accepting the Borrower’s application, the Account Control Bank should re-issue
certificate(s) of deposit for the balance(s). The above operations should
be in accordance with the Account Control
Bank’s internal management requirements with which the Borrower
should comply.

 

(d)                       In the Control
Period as described in Clause 2.5 (Control
Period) of the Agreement above, the Account Control Bank shall manage, in the interest and on
behalf of the Security Agent and
free of charge, the certificates of deposit described in Clause 5.4 (Pledge); upon request of the Security Agent, the Account Control Bank shall immediately hand
over the originals of the certificates of deposit to the Security Agent. The Account Control Bank should send to the Security Agent the scanned copies of the
certificates of deposit on a regular basis.

 

(e)                        Any interests on the certificates of
deposit shall be deposited in the Onshore Control Account.

 

5.5                                          Control

 

The Account Control
Bank shall, within 10 Business
Days from the end of every month, submit the Account Statement on the Onshore Cash 

 

26

 

 

Collateral Account for the month (including the balance of
every certificate of deposit) to the Facility
Agent and the Security Agent.

 

6                                                  Onshore RMB Debt Service
Reserve Account

 

6.1                                          Deposit

 

The Borrower
should, as per the Facility Agent’s
requirements with respect to the time and amount, apply to the Account Control Bank for transfer of funds
from the Onshore Control Account
or the Borrower’s non-control
account(s) to the Onshore RMB DSRA
Account. In determining and notifying the Borrower of the amount of the transfer, the Facility Agent shall use the result of the
multiplication of the DSRA Amount
(i.e. the DSRA Amount as defined in the Loan
Contract) and the applicable DSRA
Determination Exchange Rate (i.e. the DSRA Determination Exchange
Rate as defined in the Loan Contract).

 

6.2                                          Sole authority

 

The Security Agent
has the sole authority over the Onshore RMB
DSRA Account, and any withdrawal, transfer or other instruction in
connection with this account shall have the written instruction of the Security Agent (acting in accordance with
the instruction of the Instructing Group),
without the need of any instruction from the Borrower.

 

6.3                                          Withdrawal

 

Without limiting the rights of the Security Agent under the Security Documents, the Security Agent may, from time to time, use
the credit balance of the Onshore RMB DSRA
Account to pay any amounts due but not paid under the Transaction Finance Document.

 

7                                                  Payment and currency
exchange

 

7.1                                        The Borrower
agrees that outward payments from the Controlled
Accounts under the Agreement
shall be made through telegraphic transfer unless telegraphic transfer is
unavailable.

 

7.2                                        If a withdrawal is made, as per the
provisions of the Agreement, from
any Controlled Account to pay a
payable amount which is denominated in a 

 

27

 

currency other than the
one in which the Controlled Account
is denominated, the Account Control Bank
has the right to convert the amount withdrawn from the Controlled Account to the currency in which
the payable amount is denominated at the applicable exchange rate at the time
of conversion, the exchange gain or loss shall be assumed by the Borrower, and the amount received by the
payee should be the amount required in the payment instruction.

 

8                                                  The Borrower’s
Representations and Warranties

 

8.1                                        The representations and warranties made
by the Borrower under the Loan Contract are deemed made again on the
date of signing of the Agreement.

 

8.2                                        The Borrower
also warrants to the Security Agent
that its representations and warranties shall remain truthful and accurate at
any time during the effective term of the Agreement
on the basis of the facts and circumstances of the time (unless such
representations and warranties, as the context indicates, apply only to a
particular point of time.

 

9                                                  The Borrower’s
Commitments

 

9.1                                        The Borrower
hereby commits to the Security Agent that
during the Control Period, it
shall:

 

(a)                        Maintain its existence and operating
activities;

 

(b)                       Immediately notify the Facility Agent and the Security Agent of any account(s) it
opens other than the Controlled Accounts;

 

(c)                        Maintain the adequacy and validity of its
legal person status, authority and powers as a wholly foreign owned enterprise;

 

(d)                       Comply with all relevant laws;

 

(e)                        Obtain, in accordance with relevant laws,
all necessary authority, approvals, consent, certifications and permissions
from relevant government authorities, and maintain their adequacy and validity;

 

28

 

(f)                          Maintain all authority, approvals and
permissions necessary under the Agreement;
in the event other authority or permissions are required under the Agreement, take immediate actions to
acquire and maintain such authority or permissions.

 

(g)                       Accept the monitoring and control of the Controlled Accounts by the Security Agent and the Account Control Bank;

 

(h)                       Other than in accordance with the account
control and Pledge over Deposit Certificate
under the Agreement, without the
written permission of the Facility Agent
(in accordance with the Security Trust Deed),
not set up any pledge or other third-party interests on the Controlled Accounts (including but not
limited to the controlled accounts);

 

(i)                           Fully observe and fulfill the provisions
of the Agreement;

 

(j)                           Entrust the Account Control Bank to handle its payments and settlements
under the Controlled Accounts;

 

(k)                        As per reasonable requirements of the Security Agent, provide to the Security Agent all of its relevant
information, including but not limited to its financial and business
performance;

 

(l)                           Pay account control fees in full on time
in accordance with the agreement with the Account
Control Bank;

 

(m)                     Notify the Security
Agent in a timely manner in the event of the following
circumstances, including the state of the events, the nature of the events and
the measures taken or to be taken:

 

(i)                            Involvement in any litigation or  arbitration proceedings that may have Material Adverse Effect;

 

(ii)                         Occurrence of an Event of Default;

 

(iii)                      Receipt of any notifications, orders,
rulings, decisions or other documents in connection with the Controlled Accounts from Chinese
administrative authorities, judicial authorities or arbitrary bodies;

 

29

 

(iv)                      Changes of laws and regulations that may
have Material Adverse Effect on the Borrower; or

 

(v)                         Other information reasonably required by
the Security Agent.

 

10                                           Representations and
Warranties of the Account Control Bank

 

10.1                                  The Account
Control Bank makes the following representations and warranties to
the Securities Agent:

 

(a)                        It is a bank duly organized and validly
existing under the laws of China,
and in accordance with relevant laws, it has already performed all necessary
procedures and obtained relevant registrations and approvals for it to own
assets and conduct businesses;

 

(b)                       It has been fully authorized to sign this
Agreement and perform and observe
the obligations under the Agreement;
it has taken and completed all legal actions or procedures for its authorized
signatory to sign the Agreement;

 

(c)                        The Agreement
has been duly signed and delivered by the bank; upon entering into force, the Agreement, in accordance with the terms and
conditions under the Agreement,
constitutes legal, valid and enforceable obligations of the Account Control Bank;

 

(d)                       Its signing, delivery and performance of
the Agreement do not and will not
violate: (i) any provisions of its organizing documents; (ii) any
laws, regulations, orders or any governmental bodies’ authorizations or
approvals; or (iii) any agreements, contracts or other documents to which
it is a party or which is or may be binding on it or its assets;

 

(e)                        It has been and is operating lawfully;

 

(f)                          To its knowledge, as of the date of
signing of the Agreement, there is
no court attachment, court enforcement, distraint, dequestration, seizure or
expropriation by administrative authorities, or any civil or criminal
litigations or administrative penalties of any
Controlled Accounts or in connection with any Controlled Accounts;

 

30

 

 

(g)                       To its knowledge, other than the Agreement and the Pledge over Deposit Certificate, there is
no other restrictions, controls or collaterals over the Controlled Accounts (except the
restrictions or controls as a result of the mandatory orders binding on it from
judicial or administrative authorities or foreign exchange administrative
bodies, which, to its knowledge, do not exist as of the date of signing of the Agreement);

 

(h)                       To its knowledge, the Controlled Accounts may, legally in
accordance with the Agreement and
the Pledge over Deposit Certificate,
be placed under control or as pledge (except in the event when the control can
not be implemented or the pledge maintained as a result of mandatory orders
binding on it from judicial or administrative authorities or foreign exchange
administrative bodies, which, to its knowledge, do not exist as of the date of
signing of the Agreement);

 

(i)                           Its signing of the Agreement, exercising of rights under the Agreement and performance of obligations
under the Agreement constitute
private and commercial acts performed for private and commercial purposes, and
is entitled to or will claim any right of immunity in its jurisdiction of
incorporation from suit, execution, attachment or from any other legal process
with respect to this Agreement.

 

(j)                           It is not insolvent;

 

(k)                        There is no litigation, arbitration,
administrative proceeding or claim that threatens the Account Control Bank or any of its assets
and will have Material Adverse Effect on the financial position, operations of
the Account Control Bank or its
performance or observation of obligations under the Agreement;

 

(l)                           All information and material it provides
to the Security Agent as per the Agreement are truthful, accurate, complete and
not misleading in any aspect, and all photocopies and facsimiles of documents
and materials provided by the Account Control Bank conform to their originals.

 

31

 

10.2                                    The Account
Control Bank also warrants to the
Security Agent that its representations and warranties shall remain
true and accurate in any and all respects for the entire valid term of the Agreement.

 

10.3                                    The Account
Control Bank warrants to perform its control obligations as agreed
under the Agreement, but the Account Control Bank has the right to
refuse to perform the obligations if its performance of the Agreement may result in violation of
relevant laws or regulations or other administrative policies of China; the Account Control Bank should notify the Security Agent within 1 Business Day after the event that causes it
to refuse to perform its obligations.

 

10.4                                    The Account
Control Bank warrants to perform its control obligations as required
under the Agreement on the
condition that if the receipt and payment, transfer in foreign currencies or
remittance on any of the Controlled Accounts
is subject to approval of foreign exchange regulatory authorities, the Account Control Bank must obtain such
approvals before it can proceed with the receipt and payment, transfer and
remittance of the Controlled Accounts.

 

11                                           The Role of the Account
Control Bank

 

11.1                                  The Account Control Bank shall:

 

(a)                        Control the funds of the Controlled Accounts as required under the Agreement, assist the Security Agent to examine, monitor and
analyze the Borrower, including
but not limited the Borrower’s
cash flows and repayment ability, and process in a timely manner the payments
and settlements of the Borrower
and/or the Security Agent under
the Controlled Accounts as per the
instruction of the Security Agent;

 

(b)                       Designate specific departments and staff
members to take care of the matters under the Agreement,
set up archives for business activities under the Agreement, and properly file and archive the originals and
copies of all funds withdrawal requests and relevant documents and
certificates/notifications/permits provided by the Borrower, the original supporting documents for funds
transfers and other materials;

 

32

 

(c)                        In case of the following events or
situations, immediately notify the Security Agent and follow its instructions
to take relevant actions:

 

(i)             Violation of the provisions of the Agreement by the Borrower;

 

(ii)          The distraint, sequestration, freezing, seizure,
expropriation of or other compulsory measures taken against any Controlled Accounts, or any existing or
potential civil or criminal litigations or administrative sanctions in
connection with any Controlled Accounts
that it knows or should know;

 

(iii)       Any contract or agreement signed by the Borrower that it knows or should know that
imposes restrictions or control over the Controlled
Accounts or places the Controlled
Accounts as pledge; or

 

(iv)      Any other events or situations that it know or should
know that have Material Adverse Effect on
the Controlled Accounts and/or the
Borrower.

 

11.2                                  Except as per the Agreement or with the consent of the Security Agent, the Account Control Bank must not withdraw,
transfer, set off, deduct, dispose or allow others to withdraw, transfer or
dispose funds in the Controlled Accounts.

 

11.3                                  The Account
Control Bank should maintain its valid existence in good standing
during the Control Period, and if
the Account Control Bank or its
regulatory authorities institute administrative or legal procedures for the
receivership, bankruptcy or liquidation of the Account Control Bank, or its creditors start administrative or
legal procedures for the receivership, bankruptcy or liquidation of the Account Control Bank that have been
accepted or have not been rejected within 30 days, or there are other events or
situations that may have Material Adverse
Effect on the Controlled Account
or the ability of the Account Control Bank
to perform any of its obligation or responsibility under the Agreement, the Account Control Bank should immediately notify the Security Agent and follow the instructions
of the Security Agent to take
relevant measures.

 

33

 

11.4                                  The parties agree that the performance of
obligations under the Agreement by
the Account Control Bank shall be
subject to the mandatory orders of Chinese judicial or administrative
authorities that are binding on the bank, including but not limited to
mandatory orders of such judicial or administrative authorities with respect to
the inquiry, freezing or deduction/transfer of any account or the
notifications, requirements or instructions of foreign exchange administrative
bodies.

 

11.5                                  In the event of situations specified in
Clause 4.3 (Withdrawals in connection with
Transaction Expenses), Clause 5.3 (Withdrawals),
Clause 5.4 (Pledge) and Clause
6.3 (Withdrawal) of the Agreement, or situations not clearly
defined in the Agreement, the Account Control Bank shall require the Security Agent to give relevant instructions,
and carefully and faithfully perform its duties by following the instruction of
the Security Agent.

 

12                                           Confidentiality

 

12.1                                  All parties to this Agreement should maintain confidentiality
of any information they receive in connection with the Transaction Finance Documents.

 

12.2                                  The Borrower/Account Control Bank agrees that the Security Agent/Facility Agent has the right to disclose such information in
the following circumstances:

 

(a)                        Disclosure of information that is known
to the public not as a result of violation of the provisions of the Agreement
by the Security Agent/Facility Agent.

 

(b)                       Disclosure in the course of any legal or
arbitrary proceedings;

 

(c)                        Disclosure required by any laws and
regulations;

 

(d)                       Disclosure to the government, trust industry,
banking industry, foreign exchange administration, tax or other regulatory
authorities, tribunals or courts;

 

34

 

(e)                        Disclosure to the professional advisory
bodies engaged by it (including but not limited to the lawyers and financial
advisors);

 

(f)                          Disclosure to the Secured Parties or their Affiliates, or the officers, board
directors, employees or professional advisory bodies of the Secured Parties or their Affiliates for purposes in connection with the
exercise of its rights and/or performance of its obligations under any Transaction Finance Documents.

 

(g)                       Disclosure within the scope set out in
Clause 12.4 below, and/or within the scope permissible under the Security Trust Deed and/or Loan Contract;

 

(h)                       Disclosure with the consent of the
Borrower.

 

12.3                                  The Security
Agent agrees that the Borrower/Account Control Bank has the right to
disclose information in the following circumstances:

 

(a)                        Disclosure of information that is known
to the public not as a result of violation of the provisions of the Agreement
by the Borrower/Account Control Bank;

 

(b)                       Disclosure in the course of any legal or
arbitrary proceedings;

 

(c)                        Disclosure required by any laws and
regulations;

 

(d)                       Disclosure to governmental bodies or a
court of justice;

 

(e)                        Disclosure with the consent of the Security Agent.

 

12.4                                  With respect to any assignment, transfer,
participation, transfer of participation ,
securitization, hedging or other agreements and arrangements concerning the Loan Contract or the Borrower that the Facility Agent may enter into or has
entered into or any payments under such agreements or arrangements, if it is
necessary to use the Transaction Finance
Documents as reference, the Facility
Agent may disclose the following information to relevant parties:

 

(a)                        Any Transaction Finance Documents;

 

35

 

(b)                       Any
information under the Transaction Finance
Documents or in connection with the Transaction Finance Documents that the Facility Agent has already acquired.

 

However, before any
confidential information is made available to such relevant parties, they must
commit to the Facility Agent to
maintain confidentiality of such information, or sign confidential commitment
with the Facility Agent.

 

12.5                                  This
Clause shall supersede any confidentiality commitments made in connection with
the Agreement (other than the Security Trust Deed and/or Loan Contract) before the signing of the Agreement.

 

13                                           Fees and Other Expenses for the Account Control Bank

 

13.1                                  The Borrower should pay the account control
fees for the Control Period as
described in Clause 2.5 (Control Period)
to the Account Control Bank on an
annual basis at RMB 400,000 per year (which shall be 365 days) (or
proportionally based on the calendar days of the actual control if the period
is less than a year) for all Controlled
Accounts set up under the Agreement
in the Account Control Bank. The
account control fees for the first account control year shall be calculated
from the date of signing of the Agreement.

 

13.2                                  The above
account control fees shall be paid by the Borrower
to a bank account designated by the Account
Control Bank from time to time within 10 Business Days after the beginning of each calendar year using
a method acceptable to the Account Control
Bank. However, the account control fees for the first account
control year shall be paid by the Borrower
within 30 Business Days upon
opening of any Controlled Account
to a bank account designated by the Account
Control Bank from time to time using a method acceptable to the Account Control Bank. If funds need to be
withdrawn from the Onshore Control Account
to pay the above account control fees, the Borrower
should, in accordance with the requirements of Clause 3.6 (Withdrawals in connection with Operating Expenditures)
of the Agreement, pay the relevant
amount from the Onshore Control Account
by submitting an Opex Withdrawal Request.
For avoidance of misunderstanding, the Borrower
cannot pay account control fees 

 

36

 

from any other Controlled Accounts other than the Onshore Control Account.

 

13.3                                  Other than
under Clause 13.4 of the Agreement,
the Account Control Bank hereby
irrevocably waive its rights to receive, by setting off or any other methods,
the account control fees from the remaining balance of any Controlled Account or the rights to receive
compensation for the account control fees.

 

13.4                                  In the
event the Borrower fails to pay
the account control fees as agreed, the Account
Control Bank shall notify the Security
Agent to seek assistance; if the Borrower
fails to pay the account control fees within 90 days after the beginning of
each calendar year, the Account Control Bank
shall automatically deduct the unpaid account control fees from the Onshore Control Account and immediately
notify the Security Agent.

 

13.5                                  The Account Control Bank has the right to
receive fees from the Borrower for
payment, settlement and currency exchange services under the Agreement or in connection with the Agreement at the applicable rates for
similar services it provides from time to time, and has the right to deduct
such service fees from the Controlled Accounts
(other than the Onshore Cash Collateral
Account).

 

14                                           The Security Agent’s Right of Compensation

 

14.1                          The Borrower should, within 3 Business Days upon request, make
compensations to the Security Agent
or its agents, board directors, management and employees for costs, losses or
liabilities to the Security Agent
as a result of the following causes:

 

(a)                          Investigations
of any events that the Security Agent
considers a violation of the Agreement;

 

(b)                         Acting in
reliance of any notification, request or instruction the Security Agent considers to be true,
accurate and duly authorized.

 

14.2                          The Borrower should immediately make compensations to the Security Agent or its agents, board
directors, management and employees for costs, losses or liabilities as a
result of the following:

 

37

 

(a)                          The acquisition,
holding, maintenance or execution of Transaction Security;

 

(b)                         The
exercise by the Security Agent or
its designated representatives of any rights, powers, right of independent
decision-making or right of remedy to which the Security Agent or its designated representatives are entitled
under any Finance Documents or any
laws; and

 

(c)                          Breach of
obligations or commitments under any Finance
Documents by any Obligor
under the Loan Contracts.

 

14.3                          The Security Agent has the right to, before
distribution by the Secured Parties,
use the Charged Property to
compensate itself, and has the right to pay and retain all amounts until its
right of compensation under Clause 14 (The
Security Agent’s Right of Compensation) has been satisfied.

 

14.4                          The
validity of Clause 14 (The Security Agent’s
Right of Compensation) shall not be affected by the termination of
any Finance Documents.

 

15                                           Breach and Remedies

 

15.1                                  In the
event of any Event of Default
under the Loan Contracts, the Security Agent (acting in accordance with
the instructions of the Instructing Group)
may exercise any or all remedies in accordance with relevant provisions of the Transaction Finance Documents, and the Account Control Bank should take
corresponding measures regarding the
Controlled Accounts in accordance with the instructions of the Security Agent, including but not limited
to stopping outward payments from the Controlled
Accounts, or following the instructions of the Security Agent to pay the balances of the Controlled Accounts to the account(s) designated
by the Security Agent, while the Borrower hereby irrevocably authorizes the Account Control Bank to take such measures.

 

15.2                                  If the Account Control Bank fails to perform any
provisions of the Agreement in
accordance with requirements of the Agreement,
without affecting other rights and remedies of the Security Agent under the Chinese laws, the Security Agent (acting in accordance with
the instructions of the Instructing Group)
has the right to replace the Account Control
Bank at its discretion, and for this purpose, the 

 

38

 

 

Account Control Bank and the Borrower should sign all necessary
documents and take all necessary actions.

 

16                                           Communication of Notifications and Documents

 

16.1                                  Unless specified
otherwise, any notification in connection with the Agreement shall be made in writing and may be sent through
facsimile, email or postal mail. If sent through facsimile, the delivery is
deemed done upon the receipt by the addressee of clearly readable documents
sent through facsimile; if by email, the delivery time shall be the send time
recorded on the mail send server; if by post, the delivery is deemed done upon
the notification being placed at the relevant address or 5 Business Days after the notification is
deposited into the mailbox in a pre-paid envelope with clearly marked address.

 

16.2                                  For
avoidance of misunderstanding, the parties agree that only the scanned copies
of account statements and the deposit certificates as described in Clause 5.4 (Pledge) of the Agreement may be sent
through email, and other notifications or documents must be sent through
facsimile or postal mail. The instructions or requests made any party in
accordance with the Agreement must
be signed by authorized signatories and sent through facsimile or post mail. In
a time of an emergency, the parties may send instructions or requests through
email, but must immediately send the instructions or requests duly signed by
authorized signatories through facsimile or post mail. The receiving party only
acts in accordance with instructions or requests duly signed by authorized
signatories and delivered through facsimile or post mail.

 

16.3                                  Upon
receipt of any instruction or notification from the Security Agent through facsimile or email, the Account Control Bank may act accordingly
without assuming any responsibility for the authenticity of the instruction or
notification either in form or in essence, unless the Account Control Bank is explicitly aware of
any contrary or inconsistent instruction or notification. Any budgets or plans
from the Security Agent or Facility Agent to the Account Control Bank should be delivered by
postal mail and signed by authorized signatories. Any requests or notifications
sent by the Borrower should 

 

39

 

also bear the company seal, and the Account
Control Bank should perform its reasonable duty of care and conduct
formality examination.

 

16.4                                  The
contact details of the Borrower, Facility Agent, Security Agent and the Account
Control Bank are provided in the signature pages of the Agreement.

 

16.5                                  The email
addresses of the Borrower, Facility Agent, Security Agent and the Account
Control Bank for communication purposes are as follows:

 

(a)                        Borrower: amoonguo@yahoo.com.cn

 

(b)                       Facility Agent: rowena.yue@db.com, kari.cheng@db.com,
shu.duan@db.com

 

(c)                        Security Agent: patrick.hwa@db.com, joseph.lo@db.com

 

(d)                       Account Control Bank:
tj_dg_yyb/tj/ccb@ccb.com

 

16.6                                    Any party
may notify the others of any change to its contact methods no later than 5 Business Days in advance.

 

17                                           Applicable Laws and Jurisdiction

 

17.1                                  The Agreement is governed and construed under
the laws of China.

 

17.2                                  The
parties to this Agreement commit
to resolve, to the extent of their reasonable best efforts and in the principle
of mutual understanding and friendly negotiation, any disputes arising from the
Agreement or in connection with
the Agreement, with the
precondition that the aforementioned obligations shall not impair any rights or
remedies available to them under the Agreement
with respect to such disputes.

 

17.3                                  In the
event of any disputes under the Agreement
or in connection with the Agreement,
the parties agree to refer the disputes to China International Economic and
Trade Arbitration Commission and resolve the disputes in Beijing in accordance
with the prevailing arbitration rules.

 

40

 

 

18                                           Others

 

18.1                                    Separability

 

The Agreement is a separate
document, and the validity, legality and enforceability of the Agreement shall
not be affected in the following circumstances:

 

(a)                        The Transaction Finance Documents are modified
or altered or the Transaction Finance
Documents become entirely or partially invalid or unenforceable;

 

(b)                       One or more
than one of the Secured Parties
waive(s) the rights and interests available to it (them) under the Agreement or Transaction Finance Documents; or

 

(c)                        Dissolution,
liquidation, bankruptcy, merger and split-up, and reorganization of the Borrower.

 

18.2                                    Severability

 

If any provisions of the Agreement are or have become illegal, void
or unenforceable in any jurisdiction, the validity or enforceability of other
provisions of the Agreement in
that jurisdiction and the validity or enforceability of those provisions and
other provisions of the Agreement
in other jurisdictions shall not be impaired.

 

18.3                                    Waiver

 

The Security Agent’s failure to exercise or
delay in exercising any right, power or remedy under the Agreement shall not diminish such rights,
powers or remedies, or constitute a waiver of such rights, powers or remedies;
single or partial exercise by the Security
Agent of such rights, powers or remedies shall not prevent it from
further exercising such rights, powers or remedies or exercising any other
rights, powers or remedies. All rights, powers and remedies under the Agreement are cumulative, and not exclusive
of any other rights, powers or remedies provided by law.

 

41

 

18.4                                    Amendments

 

Any amendment to the Agreement shall only be made by the parties
in writing, with the Facility Agent
subject to the Loan Contract and
the Security Agent subject to the Security Trust Deed.

 

18.5                                    Languages

 

The Agreement is drafted and signed in Chinese,
with an English version translated from Chinese at the expense of the Borrower.

 

Notifications in connection
with the Agreement between and
among the Borrower, Account Control Bank, Facility Agent and the Security Agent should be drafted and
prepared in English.

 

Documents provided by the Borrower and Account Control Bank under the Agreement to the Security Agent or other document provided
in connection with the Agreement should
be drafted and prepared in English, or if drafted and prepared in languages
other than English, such documents should attach an English translation that
has been verified by the Borrower
to be truthful, accurate and complete and such that the Security Agent may act in accordance with
the English translation.

 

18.6                                    Entry into force

 

The Agreement enters into force upon signing by
the Borrower, Facility Agent, Security Agent and Account
Control Bank, but if according to the laws and regulations of China, the Agreement (for parties or any party to the Agreement) may not enter into force before
completion of any registration procedures, the Agreement (for parties or any party to the Agreement) shall enter into force upon the
date of completion of such registration procedures.

 

In witness whereof, the Agreement has been officially executed by
the authorized representatives of the parties hereto on the date stated at the
beginning of the Agreement.

 

42

 

Attachment 1        The
Controlled Account Checklist Form

 

	
  Account

  	
   

  	
  Bank of

  deposit

  	
   

  	
  Account number

  	
   

  	
  Currency

  
	
  Onshore
  Control Account

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Onshore
  USD Project Account

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Onshore
  RMB Project Account

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Onshore
  Cash Collateral Account

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Onshore
  RMB DSRA Account

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

43

 

Attachment 2        The
Format of Opex Withdrawal Request

 

From: Tianjin New Highland
Science Development Co., Ltd. ()

To:  [Name of Account Control Bank]

cc:
[Deutsche Bank AG, Hong Kong Branch]
as the Facility
Agent

[DB Trustees
(Hong Kong) Limited] as the Security Agent

 

Date:

 

Dear
sirs:

 

This
letter refers to the Account Control
Agreement dated [  ]
[  ]
[  ]
(DD/MM/YY) (including its amendments or
additions from time to time) (collectively referred to as the Account Control Agreement) among Tianjin
New Highland Science Development Co., Ltd. as the Borrower, Deutsche Bank AG, Hong Kong Branch as the Facility Agent, DB Trustees (Hong Kong)
Limited as the Security Agent and [  ]
as the Account Control Bank, and
the terms used in this letter have the same meanings as defined under the Account Control Agreement.

 

1.                   We
wish to withdraw the following amount from the Onshore Control Account:

 

	
  Expected date of
  withdrawal:

  	
  [         ]
  (If this date is not a Business Day, than it shall
  be the next Business Day)

  
	
   

  	
   

  
	
  Withdrawal amount:

  	
  [         ]

  
	
   

  	
   

  
	
  Name of the Payee:

  	
  [         ]

  
	
   

  	
   

  
	
  Bank of the Payee:

  	
  [         ]

  
	
   

  	
   

  
	
  Account Number of the Payee:

  	
  [         ]

  

 

44

 

2.                   We
hereby confirm that:

 

1)                  This
amount shall be used to pay the Operating
Expenditures incurred by the Borrower;

 

2)                  The
Borrower has not withdrawn or
transferred any amount from the Onshore
Control Account to pay the aforesaid Operating Expenditures.

 

o  We apply to the Facility Agent for separate approval of
this withdrawal and that the above withdrawal amount shall not be included in
the Permitted Opex Limit of this
month, and the Facility Agent has
already approved this withdrawal (and the approval is attached to this letter).

 

o  We request that the Account Control Bank directly pay the
amount to the Payee from the Onshore Control
Account.

 

Once
submitted, the withdrawal request is irrevocable.

 

Note:
please tick the box where applicable.

 

	
  Tianjin New Highland Science Development
  Co., Ltd. (company seal)

  
	
   

  
	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  [Name of the authorized signatory]  

  

 

45

 

Attachment 3        The Format of Special Capex Withdrawal
Request

 

From:
Tianjin New Highland Science Development Co., Ltd. ()

To:  [Name of Account Control Bank]

cc:
[Deutsche Bank AG, Hong Kong Branch]
as the Facility Agent

[DB Trustees
(Hong Kong) Limited] as the Security Agent

 

Date:

 

Dear
sirs:

 

This
letter refers to the Account Control Agreement
dated [  ]  [
]  [  ]
(DD/MM/YY) (including its amendments or
additions from time to time) (collectively referred to as the Account Control Agreement) among Tianjin
New Highland Science Development Co., Ltd. as the Borrower, Deutsche Bank AG, Hong Kong Branch as the Facility Agent, DB Trustees (Hong Kong)
Limited as the Security Agent and [  ]
as the Account Control Bank, and
the terms used in this letter have the same meanings as defined under the Account Control Agreement.

 

1.                   We
wish to withdraw the following amount from the Onshore Control Account:

 

	
  Expected date of withdrawal:

  	
  [         ] (If this date is not a Business Day, than it shall be the next Business Day)

  
	
   

  	
   

  
	
  Withdrawal amount:

  	
  [         ]

  
	
   

  	
   

  
	
  Name of the LHD Vendor:

  	
  [         ]

  
	
   

  	
   

  
	
  Bank of the LHD Vendor Joint
  Account:

  	
  [         ]

  
	
   

  	
   

  
	
  Number of LHD Vendor Joint Account:

  	
  [         ]

  

 

46

 

	
  Specifics of relevant contract(s)

  	
  [         ]

  

 

2.                   We
hereby confirm:

 

1)                  This
amount shall be used to pay the Capital
Expenditures incurred by the Borrower;

 

2)                  The
Capital Expenditures are Project Capex in nature;

 

3)                  The
Borrower has not withdrawn or
transferred any amount from the Onshore
Control Account or Onshore Project
Accounts to pay the aforesaid Capital
Expenditures.

 

o   We apply to the Facility Agent for separate approval of
this withdrawal and that the above withdrawal amount shall not be included in
the Permitted Project Capex Limit of
this month, and the Facility Agent
has already approved this withdrawal (and the approval is attached to this
letter).

 

o   We request that the Account Control Bank directly pay the
amount from the Onshore Control Account
to the LHD Vendor Joint Account.

 

Once
submitted, the withdrawal request is irrevocable.

 

Attachment:

 

1.                   Invoices
issued by the LHD Vendor to the Borrower

 

2.                   Invoices
issued by Power Hydraulics to the LHD Vendor

 

Note:
please tick the box where applicable.

 

Tianjin New Highland Science Development Co., Ltd.
(company seal)

 

47

 

	
   

  	
   

  
	
   

  	
   

  
	
  [Name of the authorized signatory]  

  

 

48

 

Attachment 4    The Format of General
Capex Withdrawal Request

 

From: Tianjin New Highland
Science Development Co., Ltd. 

To:  [Name
of Account Control Bank]

cc:
[Deutsche Bank AG, Hong Kong Branch] as the Facility
Agent

[DB
Trustees (Hong Kong) Limited] as the Security
Agent

 

Date:

 

Dear
sirs:

 

This
letter refers to the Account Control
Agreement dated [  ][ ][  ](DD/MM/YY) (including its amendments or
additions from time to time) (collectively referred to as the Account Control Agreement) among Tianjin New
Highland Science Development Co., Ltd. as the Borrower, Deutsche Bank AG, Hong Kong Branch as the Facility Agent, DB Trustees (Hong Kong)
Limited as the Security Agent and [  ] as the Account
Control Bank, and the terms used in this letter have the same
meanings as defined under the Account Control
Agreement.

 

1.                   We
wish to withdraw the following amount from the Onshore Control Account:

 

	
  Expected date of withdrawal:

  	
   

  	
  [         ] (If this date is
  not a Business Day, than it
  shall be the next Business Day)

  
	
   

  	
   

  	
   

  
	
  Withdrawal amount:

  	
   

  	
  [         ]

  
	
   

  	
   

  	
   

  
	
  Name of the Payee:

  	
   

  	
  [         ]

  
	
   

  	
   

  	
   

  
	
  Bank of the Payee:

  	
   

  	
  [         ]

  
	
   

  	
   

  	
   

  
	
  Account Number of the Payee:

  	
   

  	
  [         ]

  

 

49

 

	
  Specifics of relevant contract(s)

  	
   

  	
  [         ]

  

 

2.                   We
hereby confirm:

 

1)                  This
amount shall be used to pay the Capital
Expenditures incurred by the Borrower;

 

2)                  The Capital Expenditures are General Capex in nature;

 

3)                  The
Borrower has not withdrawn or
transferred any amount from the Onshore Control
Account or Onshore Project
Accounts to pay the aforesaid Capital
Expenditures.

 

o  We apply to the Facility Agent for separate approval of this withdrawal and
that the above withdrawal amount shall not be included in the Permitted Capex Limit of this month, and
the Facility Agent has already
approved this withdrawal (and the approval is attached to this letter).

 

o  We request that the Account Control Bank directly pay the amount to the Payee
from the Onshore Control Account.

 

Once
submitted, the withdrawal request is irrevocable.

 

Note:
please tick the box where applicable.

 

	
  Tianjin New
  Highland Science Development Co., Ltd. (company seal)

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  [Name of the authorized signatory]

  

 

50

 

Attachment 5    The Format of the Finance Document Withdrawal

Request

 

From:
Tianjin New Highland Science Development Co., Ltd. 

To:  [Name
of Account Control Bank]

cc:
[Deutsche Bank AG, Hong Kong Branch] as the Facility
Agent

[DB
Trustees (Hong Kong) Limited] as the Security
Agent

 

Date:

 

Dear
sirs:

 

This
letter refers to the Account Control
Agreement dated [  ][ ][  ](DD/MM/YY) (including its amendments or
additions from time to time) (collectively referred to as the Account Control Agreement) among Tianjin
New Highland Science Development Co., Ltd. as the Borrower, Deutsche Bank AG, Hong Kong
Branch as the Facility Agent, DB
Trustees (Hong Kong) Limited as the Security
Agent and [  ] as the Account Control Bank, and the terms used in
this letter have the same meanings as defined under the Account Control Agreement.

 

1.                   We
wish to withdraw the following amount from the Onshore Control Account:

 

	
  Expected date of withdrawal:

  	
   

  	
  [         ] (If this date is
  not a Business Day, than it
  shall be the next Business Day)

  
	
   

  	
   

  	
   

  
	
  Withdrawal amount:

  	
   

  	
  [         ]

  
	
   

  	
   

  	
   

  
	
  Name of the Payee:

  	
   

  	
  [         ]

  
	
   

  	
   

  	
   

  
	
  Bank of the Payee:

  	
   

  	
  [         ]

  

 

51

 

	
  Account Number of the Payee:

  	
   

  	
  [         ]

  

 

2.                   We
hereby confirm:

 

1)                  This
amount shall be used to pay:

 

o  the Secured
Onshore Obligations due and payable under the Finance Documents to the Finance Parties;

 

o  the Secured
Onshore Obligations due and payable under the Swap Agreement(s) to the Swap Counterparty (Counterparties);

 

2)                  The
Borrower has not withdrawn or
transferred any amount from the Onshore
Control Account to pay the aforesaid Secured Onshore Obligations.

 

We
request that the Account Control Bank
directly pay the amount from the Onshore
Control Account to:

 

o  Facility
Agent.

 

o  The above Swap
Counterparty (Counterparties).

 

Once
submitted, the withdrawal request is irrevocable.

 

Note:
please tick the box where applicable.

 

	
  Tianjin New
  Highland Science Development Co., Ltd. (company seal)

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  [Name of the authorized signatory]

  

 

52

 

Attachment 6    The
Format of Dividend Withdrawal Request

 

From:
Tianjin New Highland Science Development Co., Ltd. 

To:  [Name
of Account Control Bank]

cc:
[Deutsche Bank AG, Hong Kong Branch] as the Facility
Agent

[DB
Trustees (Hong Kong) Limited] as the Security
Agent

 

Date:

 

Dear
sirs:

 

This
letter refers to the Account Control
Agreement dated [ ][ ][ ](DD/MM/YY) (including its amendments or
additions from time to time) (collectively referred to as the Account Control Agreement) among Tianjin
New Highland Science Development Co., Ltd. as the Borrower, Deutsche Bank AG, Hong Kong
Branch as the Facility Agent, DB
Trustees (Hong Kong) Limited as the Security
Agent and [ ] as the Account
Control Bank, and the terms used in this letter have the same
meanings as defined under the Account Control
Agreement.

 

1. We wish to withdraw the following amount
from the Onshore Control Account:

 

	
  Expected date of withdrawal:

  	
   

  	
  [       ] (If this date is not
  a Business Day, than it shall be
  the next Business Day)

  
	
   

  	
   

  	
   

  
	
  Withdrawal amount:

  	
   

  	
  [       ]

  
	
   

  	
   

  	
   

  
	
  Name of the Payee:

  	
   

  	
  [International Petroleum Services Corporation Limited]

  
	
   

  	
   

  	
   

  
	
  Bank of the Payee:

  	
   

  	
  [Deutsche Bank AG, Hong Kong Branch]

  
	
   

  	
   

  	
   

  
	
  Account Number of the Payee:

  	
   

  	
  [0016212-05-0]

  

 

53

 

2.                   We
hereby confirm:

 

The
amount requested shall be used to enable the Borrower
to pay to the Parentco, in cash, dividends available under Clause 21.14 of the Loan Contract (as per the format and
contents on the date of the Account Control
Agreement).

 

We
request that the Account Control Bank directly
pay the amount from the Onshore Control
Account to the above Parentco
Controlled Account.

 

Once
submitted, the withdrawal request is irrevocable.

 

	
  Tianjin New
  Highland Science Development Co., Ltd. (company seal)

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  [Name of the authorized signatory]

  

 

54

 

 

Attachment 7    The Format of
Transfer Request

 

From: Tianjin New Highland
Science Development Co., Ltd. 

To:  [Name of Account Control Bank]

cc: [Deutsche Bank AG, Hong
Kong Branch] as the Facility Agent

[DB Trustees (Hong Kong)
Limited] as the Security Agent

 

Date:

 

Dear sirs:

 

This letter refers to the Account Control Agreement dated [  ][ ][ 
](DD/MM/YY) (including its amendments or additions from time to time)
(collectively referred to as the Account
Control Agreement) among Tianjin New Highland Science Development
Co., Ltd. as the Borrower,
Deutsche Bank AG, Hong Kong Branch as the Facility
Agent, DB Trustees (Hong Kong) Limited as the Security Agent and [  ] as the Account
Control Bank, and the terms used in this letter have the same
meanings as defined under the Account Control
Agreement.

 

1.                   We wish to
withdraw the following amount from the Onshore
Control Account:

 

	
  Expected date of
  withdrawal:

  	
   

  	
  [       ] (If this date is not a Business Day, than it shall be the next Business Day)

  
	
   

  	
   

  	
   

  
	
  Withdrawal amount:

  	
   

  	
  [       ]

  
	
   

  	
   

  	
   

  
	
  Name of the Payee:

  	
   

  	
  [       ]

  
	
   

  	
   

  	
   

  
	
  Bank of the Payee:

  	
   

  	
  [       ]

  
	
   

  	
   

  	
   

  
	
  Account Number of the
  Payee:

  	
   

  	
  [       ]

  

 

55

 

2.                   We request that
the Account Control Bank transfer
the amount from the Onshore Control Account
to:

 

o  The Onshore Cash Collateral Account.

 

o  The Onshore RMB DSRA Account.

 

Once submitted, the
withdrawal request is irrevocable.

 

Note: please tick the box
where applicable.

 

	
  Tianjin New Highland Science Development Co., Ltd.
  (company seal)

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  [Name
  of the authorized signatory]

  

 

56

 

Attachment 8    The Format of
Transaction Expense Withdrawal Request

 

From: Tianjin New Highland
Science Development Co., Ltd. 

To:  [Name of Account
Control Bank]

cc:
[Deutsche Bank AG, Hong Kong Branch] as the Facility
Agent

[DB
Trustees (Hong Kong) Limited] as the Security
Agent

 

Date:

 

Dear
sirs:

 

This
letter refers to the Account Control
Agreement dated [  ][ ][  ](DD/MM/YY) (including its amendments or
additions from time to time) (collectively referred to as the Account Control Agreement) among Tianjin
New Highland Science Development Co., Ltd. as the Borrower, Deutsche Bank AG, Hong Kong
Branch as the Facility Agent, DB
Trustees (Hong Kong) Limited as the Security
Agent and [  ] as the Account Control Bank, and the terms used in
this letter have the same meanings as defined under the Account Control Agreement.

 

1.               We wish to withdraw the following amount from the Onshore USD Project Account:

 

	
  Expected date of withdrawal:

  	
   

  	
  [         ] (If
  this date is not a Business Day,
  than it shall be the next Business Day)

  
	
   

  	
   

  	
   

  
	
  Withdrawal amount:

  	
   

  	
  [         ]

  
	
   

  	
   

  	
   

  
	
  Name of the Payee:

  	
   

  	
  [Deutsche Bank AG, Hong Kong Branch]

  
	
   

  	
   

  	
   

  
	
  Bank of the Payee:

  	
   

  	
  [         ]

  
	
   

  	
   

  	
   

  
	
  Account Number of the Payee:

  	
   

  	
  [         ]

  

 

57

 

2.
We hereby confirm:

 

The
amount requested shall be used to pay all costs and expenses due and payable as
of the Initial Utilisation Date reasonably,
incurred by the Calculation Agent,
Facility Agent, Security Agent and Arranger.

 

The
Security Agent has approved the
above withdrawal request (and the approval is attached to the letter), and We
request that the Account Control Bank
directly pay the above amount from the Onshore
USD Project Account to the Facility
Agent.

 

Once
submitted, the withdrawal request is irrevocable.

 

	
  Tianjin
  New Highland Science Development Co., Ltd. (company seal)

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  [Name of the authorized
  signatory]

  

 

58

 

Attachment
9    The Format of USD Account Withdrawal Request

 

From:
Tianjin New Highland Science Development Co., Ltd. 

To:  [Name of Account
Control Bank]

cc:
[Deutsche Bank AG, Hong Kong Branch] as the Facility
Agent

[DB
Trustees (Hong Kong) Limited] as the Security
Agent

 

Date:

 

Dear
sirs:

 

This
letter refers to the Account Control
Agreement dated [ ][ ][ ](DD/MM/YY) (including its amendments or
additions from time to time) (collectively referred to as the Account Control Agreement) among Tianjin
New Highland Science Development Co., Ltd. as the Borrower, Deutsche Bank AG, Hong Kong
Branch as the Facility Agent, DB
Trustees (Hong Kong) Limited as the Security
Agent and [ ] as the Account
Control Bank, and the terms used in this letter have the same
meanings as defined under the Account Control
Agreement.

 

1. We wish to withdraw the
following amount from the Onshore USD Project
Account:

 

	
  Expected date of withdrawal:

  	
   

  	
  [         ] (If
  this date is not a Business Day,
  than it shall be the next Business Day)

  
	
   

  	
   

  	
   

  
	
  Withdrawal amount:

  	
   

  	
  [         ]

  
	
   

  	
   

  	
   

  
	
  Name of the Payee:

  	
   

  	
  [         ]

  
	
   

  	
   

  	
   

  
	
  Bank of the Payee:

  	
   

  	
  [         ]

  
	
   

  	
   

  	
   

  
	
  Account Number of the Payee:

  	
   

  	
  [         ]

  

 

59

 

2.
We hereby confirm:

 

o  The
amount requested shall be used for payment to the Onshore RMB Project Account of the amount approved by relevant
foreign exchange administrative authorities after conversion to Renminbi.

 

o  The
amount requested shall be used to pay the interests on any Loans due and payable on the last day of
the first Interest Period of the
first Loan.

 

o  We
request that the Account Control Bank
directly pay the amount from the Onshore USD
Project Account, after conversion to Renminbi, to the Onshore RMB Project Account (the approval
documents of foreign exchange administrative authorities for exchange of the
amount are attached blow).

 

o  We
request that the Account Control Bank
directly pay the above amount from the Onshore
USD Project Account to the account of Facility Agent.

 

Once
submitted, the withdrawal request is irrevocable.

 

Note:
please tick the box where applicable.

 

	
  Tianjin
  New Highland Science Development Co., Ltd. (company seal)

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  [Name of the authorized signatory]

  

 

60

 

 

Attachment 10 The Format of Project Capex
Withdrawal Request

 

From:
Tianjin New Highland Science Development Co., Ltd. ()

To:    [Name of Account Control Bank]

cc:     [Deutsche
Bank AG, Hong Kong Branch] as the Facility
Agent

[DB Trustees (Hong Kong) Limited] as the Security Agent

 

Date:

 

Dear sirs:

 

This letter refers to the Account Control Agreement dated [  ] [  ] [  ] (DD/MM/YY) (including its amendments or
additions from time to time) (collectively referred to as the Account Control Agreement) among Tianjin
New Highland Science Development Co., Ltd. as the Borrower, Deutsche Bank AG, Hong Kong
Branch as the Facility Agent, DB
Trustees (Hong Kong) Limited as the Security
Agent and [  ] as the Account Control Bank, and the terms used in
this letter have the same meanings as defined under the Account Control Agreement.

 

1.               We wish to withdraw the following amount from the Onshore RMB Project Account:

 

	
  Expected date of
  withdrawal:

  	
   

  	
  [      ]
  (If this date is not a Business Day,
  than it shall be the next Business Day)

  
	
  Withdrawal
  amount:

  	
   

  	
  [      ]

  
	
  Name of the
  Payee:

  	
   

  	
  [LHD Vendor]

  
	
  Bank of the
  Payee:

  	
   

  	
  [LHD Vendor Joint Account]

  
	
  Account Number
  of the Payee:

  	
   

  	
  [      ]

  

 

61

 

2. We hereby confirm:

 

1)                  The amount requested shall be used to pay the Project Capex incurred by the Borrower
under the Financed LHD Acquisition Agreement
or Upcoming LHD Acquisition Agreement;

 

2)                  The Project Capex
Payee of the above amount is the LHD
Vendor of the Financed LHD
Acquisition Agreement or Upcoming
LHD Acquisition Agreement;

 

3)                  The Borrower
has not withdrawn or transferred any amount from the Onshore Control Account or Onshore
RMB Project Account to pay the aforementioned Capital Expenditures;

 

o   We apply to the Facility Agent for separate approval of this withdrawal and
that the above withdrawal amount shall not be included in the Permitted Project Capex Limit of this
month, and the Facility Agent has
already approved this withdrawal (and the approval is attached to this letter).

 

o   We request that the Account Control Bank directly pay the amount to the LHD Vendor from the Onshore Control Account.

 

Once submitted, the withdrawal request is irrevocable.

 

Attachment:

 

1.                   Invoices issued by LHD
Vendor to the Borrower  LHD

 

2.                   Invoices issued by Power Hydraulics to the LHD Vendor

 

Note: please tick the box where applicable.

 

Tianjin New Highland
Science Development Co., Ltd. (company seal)

	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  [Name of the authorized
  signatory ]

  

 

62

 

Borrower: Tianjin New Highland Science Development
Co., Ltd. (company seal)

 

Address: Floor 4, Business Center
21-B, Innovations Park, Xinbei Road No.4668, Tanggu District, Tianjin
City, PRC.

Telephone: +86-22-6635-1181

Facsimile: +86-22-6635-1181

 

Contact Person: Liu Qingzeng

 

 

	
  /s/ Liu Qingzeng

  	
   

  
	
   

  	
   

  
	
  (Name of Authorized Signatory)

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  Name: Liu Qingzeng

  	
   

  

 

63

 

Facility Agent:
DEUTSCHE  BANK AG, HONG KONG BRANCH

 

Address: 48/F, Cheung Kong Center, 2 Queen’s Road
Central, Hong Kong

Facsimile: +852 2203 7320/7323

Telephone: +852 2203 8888

Contact Person: Trust and Securities Services

 

 

	
  /s/ Chiu Kin Wing
  Edward                  /s/
  Choi Siu Ling

  	
   

  
	
   

  	
   

  
	
  (Name of Authorized
  Signatory)

  	
   

  
	
   

  	
   

  
	
  Name: Chiu Kin Wing
  Edward           Choi
  Siu Ling

  	
   

  
	
   

  	
   

  
	
  Position:

  	
   

  

 

64

 

Security Agent: DB Trustees (Hong Kong) Limited

 

Address: 48/F, Cheung Kong Center, 2 Queen’s Road
Central, Hong Kong

Facsimile: +852 2203 7320/7323

Telephone: +852 2203 8888

Contact Person: Managing Director

 

 

	
  /s/ Chiu Kin Wing
  Edward                      /s/
  Choi Siu Ling

  	
   

  
	
   

  	
   

  
	
  (Name of Authorized
  Signatory)

  	
   

  
	
   

  	
   

  
	
  Name: Chiu Kin Wing
  Edward               Choi
  Siu Ling

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  Position: Authorized
  Signatory          Director

  	
   

  

 

65

 

Account Control Bank: Tianjin Dagang Branch of China
Construction Bank Limited (Company Seal)

 

Address: No. 98, Yingbing Street, Dagang
District, Tianjin City, PRC.

Telephone: +86-22-2599-3714

Facsimile: + 86-22-2599-4780

 

Contact Person: Wang Jing

 

 

	
  /s/ Zhao Hongling

  	
   

  
	
   

  	
   

  
	
  (Name of Authorized Signatory)

  	
   

  
	
   

  	
   

  
	
  Name: Zhao Hongling

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  Position: Branch Manager Assistant

  	
   

  

 

66Exhibit 10.48

 

Executed
version

 

 

Receivables
Pledge Agreement

 

Between

 

Tianjin New
Highland Science Development Co., Ltd.

(as
Pledgor)

 

and

 

DB TRUSTEES (HONG KONG) LIMITED

(as
the Security Agent and the Pledgee)

 

 

 

 

Table of contents

 

	
  CLAUSES

  	
   

  	
  PAGE NO.

  
	
   

  	
   

  	
   

  
	
  1

  	
  DEFINITION AND EXPLANATION

  	
   

  	
  3

  
	
   

  	
   

  	
   

  	
   

  
	
  2

  	
  PLEDGE

  	
   

  	
  5

  
	
   

  	
   

  	
   

  	
   

  
	
  3

  	
  PERFECTION OF THE PLEDGE

  	
   

  	
  7

  
	
   

  	
   

  	
   

  	
   

  
	
  4

  	
  DOCUMENTS TO BE DELIVERED BY THE PLEDGOR

  	
   

  	
  9

  
	
   

  	
   

  	
   

  	
   

  
	
  5

  	
  REPRESENTATION AND WARRANTY

  	
   

  	
  10

  
	
   

  	
   

  	
   

  	
   

  
	
  6

  	
  COMMITMENT

  	
   

  	
  11

  
	
   

  	
   

  	
   

  	
   

  
	
  7

  	
  CONTINUING SECURITY INTEREST

  	
   

  	
  14

  
	
   

  	
   

  	
   

  	
   

  
	
  8

  	
  ENFORCEMENT OF THE PLEDGE

  	
   

  	
  15

  
	
   

  	
   

  	
   

  	
   

  
	
  9

  	
  APPLICATION OF PROCEEDS

  	
   

  	
  16

  
	
   

  	
   

  	
   

  	
   

  
	
  10

  	
  THE SECURITY AGENT AND ITS AGENT

  	
   

  	
  17

  
	
   

  	
   

  	
   

  	
   

  
	
  11

  	
  POWER OF ATTORNEY

  	
   

  	
  18

  
	
   

  	
   

  	
   

  	
   

  
	
  12

  	
  COSTS AND EXPENSES

  	
   

  	
  19

  
	
   

  	
   

  	
   

  	
   

  
	
  13

  	
  COMPENSATIONS

  	
   

  	
  19

  
	
   

  	
   

  	
   

  	
   

  
	
  14

  	
  RELEASE

  	
   

  	
  20

  
	
   

  	
   

  	
   

  	
   

  
	
  15

  	
  NOTIFICATION

  	
   

  	
  20

  
	
   

  	
   

  	
   

  	
   

  
	
  16

  	
  APPLICABLE LAWS AND JURISDICTION

  	
   

  	
  20

  
	
   

  	
   

  	
   

  	
   

  
	
  17

  	
  OTHERS

  	
   

  	
  21

  
	
   

  	
   

  	
   

  	
   

  
	
  ATTACHMENT 1:      SPECIFICS
  OF THE UNDERLYING CONTRACTS

  	
   

  	
  23

  
	
   

  	
   

  	
   

  
	
  ATTACHMENT 2:      FORMAT
  OF ADDITIONAL PLEDGE COMMITMENTS

  	
   

  	
  25

  
	
   

  	
   

  	
   

  
	
  ATTACHMENT 3:      FORMAT
  OF THE REGISTRATION AGREEMENT

  	
   

  	
  28

  
	
   

  	
   

  	
   

  
	
  ATTACHMENT 4:      FORMAT OF THE PLEDGE
  NOTIFICATION AND THE LETTER OF ACKNOWLEDGEMENT

  	
   

  	
  31

  

 

1

 

The
Receivables Pledge Agreement (hereinafter referred to as “the Agreement”) is entered into on 11
January 2010 by: :

 

A                                     Tianjin New Highland Science Development
Co., Ltd. , the pledgor (hereinafter referred to as the Pledgor), a company (registration number:
120109000004324) incorporated under the laws of the People’s Republic of China
(hereinafter referred to as China),
with its registered address at Dagang Economic Development Area (DEDA),
Tianjin, China; and

 

B                                       DB Trustees (Hong Kong)
Limited
(representing the Facility Agent , Security
Agent  , Calculation
Agent  , Arranger
, Lenders
 and Swap Counterparty
, and their respective future assignees
and successors from time to time under the Transaction
Finance Documents  , the Security
Agent and the pledgee (hereinafter referred to as the Security Agent), a company incorporated
under the laws of Hong Kong Special Administrative Region of China, with its registered address at 48/F,
Cheung Kong Center, 2 Queen’s Road Central, Hong Kong.

 

Whereas:

 

1                                The Pledgor, as the Borrower, and among others, Deutsche Bank
AG, Hong Kong Branch, as the Arranger,
Facility Agent and Calculation Agent, and DB Trustees (Hong
Kong) Limited, as the Security Agent,
have entered into a Facility Agreement (including amendments and restatements
of the Facility Agreement through an Amendment
Agreement, and other modifications, revisions, extensions,
additions, updates and restatements of the Facility Agreement from time to
time) (hereinafter collectively referred to as the “Loan Contract”), under which, the Lenders have agreed, as per the terms and conditions of the Loan Contract, to provide a loan to the Borrower of no more than USD65,000,000;

 

2                                The Borrower may enter
into a Hedging Agreement with a Hedging Counterparty;

 

3                                The Borrower and among
others, Deutsche Bank AG, Hong Kong Branch, as the Facility Agent, and DB Trustees (Hong Kong) Limited, as the Security Agent, have entered into a Security Trust Deed on 11
January 2010; and

 

4                                As a prerequisite for the Lenders
to extend the loan to the Borrower,
the Pledgor agrees to provide its
receivables under the terms and conditions of the Agreement to the Facility
Agent, Security Agent, Calculation Agent, Arranger, Lenders
and Hedging Counterparty as pledge
that the Borrower shall settle in
full and on time its obligations under the Transaction
Finance Documents.

 

2

 

The
two parties have reached agreement as follows:

 

1                                                  Definition and Explanation

 

1.1                                          Definition

 

The Agreement constitutes the Pledge over
Receivables as defined in the Security Trust
Deed. Unless otherwise specifically stated, the terms used in this Agreement shall have the same meaning as
defined in the Security Trust Deed
(and the same applies to the Chinese translation). The Agreement defines the following terms as
follows:

 

The
Secured Obligations refer to
obligations specified under Clause 2.4 (Scope
of Pledge) of the Agreement.

 

The
“Underlying Contracts” refer to
the Material Sales Contracts between
the Pledgor and the Obligor, including the Current LHD Contracts and the Current MD Contracts, with specifics provided
under Attachment 1 (Specifics of the
Underlying Contracts) to the Agreement,
and New Underlying Contracts.

 

“New Underlying Contracts” refer to any Material Sales Contracts signed subsequent
to the date of signing of the Agreement.

 

The
“Receiving Account” refers to the Onshore Controlled Account set up by the Pledgor with the Account Manager (AM)
under the Loan Contract and
designated to receive all income from the Underlying
Contracts.

 

The
“Receivables” refer to any account
receivables pledged by the Pledgor
to the Security Agent and those
over which the Pledgor has the
right to claim payment from relevant Obligors
under the Underlying Contracts,
and any rights, interests and benefits to the Pledgor
on such receivables, including New
Receivables.

 

“New Receivables” refer to any account
receivables pledged by the Pledgor
to the Security Agent and those
over which the Pledgor has the
right to claim payment from relevant Obligors
under the New Underlying Contracts,
and any rights, interests and benefits to the Pledgor
on such receivables.

 

The
“Obligors” refer to any purchasers
or other parties who, with respect to the Receivables,
have the obligation of payment under the Underlying
Contracts.

 

3

 

An
“Obligor Event” refers to any of
the following with respect to the Receivables:

 

(a)                       The Obligor fails to make
payment of any amount payable under the relevant Underlying Contracts within 10 days upon the maturity date; or

 

(b)                      The Obligor becomes
insolvent; or

 

(c)                       The Obligor has stopped or
may stop its business operation; or

 

(d)                      The Obligor has filed for
bankruptcy or bankruptcy has been filed against the Obligor; or

 

(e)                       The performance of any obligation by the Obligor under an Underlying
Contracts is or has become illegal, or the Underlying Contracts have become invalid as
per their provisions or have been declared as invalid by the Obligor for any reason as per their
provisions, or there is evidence indicating that the Obligor is expected not to or plans not to comply with the Underlying Contracts; or

 

(f)                         The Underlying Contracts
are expected to be breached (subject to a breach), or are or become invalid or
unenforceable, or expected to be cancelled, or due to reasons other than the
completion of performance of the Underlying
Contracts, the Underlying
Contracts have terminated or become terminable or one of the parties
has issued a notice to terminate the Underlying
Contracts; or

 

(g)                      Any event that may become an Obligor
Event (as a result of issuing a notice or making any decisions under
the Underlying Contracts with the
passage of the grace period); or

 

(h)                      Any other events that have or may have substantial impact on the Obligor’s performance of its obligations to
pay the Receivables under the Underlying Contract.

 

“Additional Pledge” refers to pledge
provided by the Pledgor on the New Receivables in accordance with Clause
2.3 (Additional Pledge) of the Agreement.

 

“Additional Pledge Commitment” refers to a
letter of commitment or a document on the Additional
Pledge signed by the Pledgor
in accordance with the format and content specified in Attachment 2 (Format of Additional Pledge Commitments).

 

The
“Registration Agreement” refers to
the agreement signed by the Security Agent and
the Pledgor on the date of signing
of the Agreement in accordance
with the format and content of the Attachment 3 (Format of

 

4

 

the Registration Agreement)
for the purpose of pledge registration under the Agreement.

 

The
“Pledge Registration Authority”
refers to regulatory or governmental bodies of China responsible for
registration of receivables pledge, and currently the Credit Reference Centre
of the People’s Bank of China.

 

The
“Security Registration Authority”
refers to the Tianjin Bureau of the State Administration of Foreign Exchange or
other relevant governmental bodies responsible for the registration of the
provision of security  for the pledge
established under the Agreement.

 

The
“Security Certificate” refers to
the security registration certificate or documents of similar status, with the Security Agent as the obligee, issued by
the Security Registration Authority
for the pledge established under the Agreement.

 

The
“Approving Authority” refers to
the Tianjin Municipal Commission of Commerce or other relevant governmental
bodies responsible for approving issues in connection with the pledge under the
Agreement.

 

The
“Pledge Certificate” refers to the
pledge registration certificate with the Security
Agent as the obligee issued by the Pledge
Registration Authority for the purpose of the Receivables.

 

“China” refers to the People’s Republic of
China and for the purpose of this Agreement,
does not cover the Hong Kong Special Administrative Region, Macao Special
Administrative Region and Taiwan.

 

1.2                                          Explanation

 

(a)                        The Clause 1.3 (Rule of
explanation) (as adjusted where necessary) of the Security Trust Deed should apply to this Agreement.

 

(b)                       The use of Security Agent,
Borrower, Pledgor and Secured Parties, unless the context specifically indicates
otherwise, shall include their respective successors and assignees and any and
all those who have acquired rights from the aforementioned.

 

2                                                  Pledge

 

2.1                                          The establishment of pledge

 

(a)                        As a means of security for payment and settlement on time and in full
of the Secured Obligations by the Borrower, the Pledgor establishes herein the first right of pledge on the Receivables for the Security Agent.

 

(b)                       In spite of the above provision, the Pledgor
should perform all of its obligations in connection with the Receivables, and the Security

 

5

 

Agent shall not be
obligated to perform such obligations, or be liable to any party for any
consequences as a result of the failure to perform such obligations.

 

2.2                                          Notification of New Receivables

 

After
the signing of the Agreement,
should the Pledgor enter into any New Underlying Contract, the Pledgor should notify the Security Agent in writing as soon as
practicable and provide an authentic copy of the New Underlying Contract.

 

2.3                                          Additional pledge

 

(a)                        After entering into a New Underlying
Contract, the Pledgor
should pledge the New Receivables
under the New Underlying Contract
as a security interest to the obligations under the Transaction Finance Documents to the Security Agent who assumes the first
priority right of pledge.

 

(b)                       The Pledgor should, within
14 days upon the signing of the New
Underlying Contract or the completion of custom clearance procedures
for the LHD Units in connection of the New Underlying
Contract (whichever happens later), cause the Security Agent to acquire, for the purpose
of the New Receivables, the Additional Pledge Commitment signed by the Pledgor in accordance with substantially
the same format as required in Attachment 2 (Format
of Additional Pledge Commitments) to the Agreement, and the Pledge Certificate in connection with the New Receivables.

 

(c)                        The Pledgor should, within
90 days upon the signing of the New
Underlying Contract or the completion of custom clearance procedures
for the LHD Units in connection of the New
Underlying Contract (whichever happens later), make its best efforts
to cause the Security Agent to
acquire, for the purpose of the New
Receivables, the Security
Certificate, approval of the Approving
Authority, the pledge filing records from Tianjin Industrial and
Commercial Administrative Bureau and other approval, registration or supporting
documents, or supporting documents testifying

 

2.4                                          Scope of the pledge

 

The
debts covered by the pledge of the Pledgor
under the Agreement include the
following:

 

(a)                        The principals, interests (including interests, interests on overdue
debts and interests on late payment fines), costs, commitment fees, arranging
fees, agent fees, other fees, expenditures, compensations, default fines,
damages and expenses incurred to enforce the creditor’s rights (including but
not limited to litigation fees, lawyers’ fees, notary fees, enforcement
expenses, etc.) that the Borrower

 

6

 

should
to the Secured Parties under the Transaction Finance Documents and other
amounts payable by the Borrower
(no matter whether the compensation or payment is due upon maturity of the
loans or becomes due under other conditions); and

 

(b)                       All expenses incurred by the Secured
Parties to enforce their secured rights and interests under the Agreement (including but not limited to
litigation fees, lawyers’ fees, notary fees and enforcement expenses, etc) and
other amounts payable by the Pledgor,
including any costs, expenses or compensations the Pledgor should pay to the Security
Agent under Clause 12 (Costs and
Expenses) and Clause 13 (Compensations)
of the Agreement.

 

3                                                  Perfection of the Pledge

 

3.1                                          Approval and registration

 

(a)                        To complete the registration under this Clause (Completion of the Pledge), the Pledgor should, upon the date of signing of
the Agreement, sign the Registration Agreement with the Security Agent;

 

(b)                       The Pledgor should, at its
own expenses and as soon as practicable, obtain, for the purpose of the pledge
established under the Agreement,
the approval from the Approving Authority
and complete the filing with Tianjin Industrial and Commercial Administrative
Bureau, and complete the security registration with the Security Registration Authority;

 

(c)                        The Pledgor commits herein
that, upon signing of the Agreement and any Additional
Pledge Commitments, the Pledgor
shall immediately make all efforts reasonably possible to assist the Security Agent (including other parties or
individuals entrusted by the Security Agent)
to complete the pledge registration procedures for the Receivables with the Pledge Registration Authority and obtain
the Pledge Certificate, and assume
the reasonable and appropriate costs and expenses incurred therefrom.

 

3.2                                          Delivery of the registration documents

 

The
Pledgor commits to the Security Agent that immediately upon
completion of the registration required under Clause 3.1 (Approval and registration), the Pledgor shall deliver the approval from the
Approving Authority, pledge filing
certificate from Tianjin Industrial and Commercial Administrative Bureau and
the Security Certificate from the Security Registration Authority to the Security Agent.

 

7

 

3.3                                          Notification and acknowledgement

 

The
Pledgor should, as per
requirements of the Security Agent,

 

(a)                        For Receivables other than
the New Receivables, before the
Initial Utilisation Date; or

 

(b)                       For the New Receivables,
within 3 Business Days upon signing of the Additional
Pledge Commitment;

 

Deliver
the relevant properly completed pledge notification (substantially in the same
format and of the same contents as shown in part one of Attachment 4 (Format of the Pledge Notification and the Letter of
Acknowledgement)) to the relevant Obligors,
and ensure that the Security Agent
receives from the Obligors
properly completed letters of acknowledgement for the pledge notification
(substantially in the same format and of the same contents as shown in part two
Attachment 4 (Format of the Pledge
Notification and the Letter of Acknowledgement)).

 

3.4                                          Further warranties

 

Before
the irrevocable settlement of the Secured
Obligations in full in a manner satisfactory to the Secured Parties and the termination of the Agreement in accordance with Clause 14 (Release of the Agreement), upon reasonable
request of the Security Agent, the
Pledgor shall, at any time and at
its own expenses, take any actions that the Security
Agent may reasonably require for the following purposes (including
but not limited to signing of documents, obtaining approvals and completion of
registration, filing or documentation):

 

(a)                        Establishment and perfection of the pledge under the Agreement;

 

(b)                       For the interests of the Security
Agent, perform the registration, alteration and extension of the
pledge under the Agreement with
the Approving Authority, Tianjin
Industrial and Commercial Administrative Bureau, Security Registration Authority and/or Pledge Registration Authority; and

 

(c)                        Implement the Agreement in
accordance with the terms and conditions of the Agreement, or exercise any rights, powers or discretion in
respect of the pledge under the Agreement.

 

3.5                                          Additional security

 

Should
the value of the Receivables
decreases due to an Obligor Event
or any action of the Pledgor, the Security Agent has the right to require the
Pledgor to stop such action or/and
require the Pledgor to take
remedial measures to restore the value of the Receivables,
or require the Pledgor to provide
additional security acceptable to the Security
Agent.

 

8

 

4                                                  Documents to be delivered by the Pledgor

 

4.1                                          Without prejudice to the provisions of other Clauses of the Agreement, unless expressly waived by the Security Agent, the Pledgor should ensure that the Security Agent receives, no later than the Initial Utilisation Date as specified in
the Loan Contract and in a manner
that is satisfactory to the Security Agent
in terms of format and content, the originals or authenticated copies of
following documents:

 

(a)                        Documents to be provided by the Borrower
as specified in Section 1(a)(iii) of the Attachment 2 (Preconditions) to the Loan Contract (as per its format and
contents on the date of Agreement);

 

(b)                       Indebtedness registration certificates for the purpose of the Loan Contract;

 

(c)                        The originals of the Pledgor’s
board meeting resolutions for approving the signing and performance of the Agreement, the Registration Agreement and relevant Additional Pledge Commitments and authorizing the signer(s),
and the signature specimens of the authorized signer(s);

 

(d)                       Properly signed Loan Contract and
Agreement;

 

(e)                        Underlying Contracts;

 

(f)                          Registration Agreement
validly signed by the Pledgor;

 

(g)                       Supporting  documents
giving testimony to the Borrower’s
submission of materials for approval, registration and filing purposes to the Approving Authority and the Security Registration Authority;

 

(h)                       Supporting documents giving testimony to the Pledgor’s delivery of properly completed pledge notifications
to relevant Obligors under the Underlying Contracts (other than the New Underlying Contracts);

 

(i)                           Properly completed letters of acknowledgement of the pledge
notifications from relevant Obligors
under the Underlying Contracts (other
than the New Underlying Contracts);
and

 

(j)                           Other documents reasonably required by the Security Agent from time to time.

 

4.2                                          The Pledgor should ensure
that the Security Agent receives,
within 14 days from the Initial Utilisation Date, the corresponding Pledge Certificates for all Receivables that have arisen as of the date
of the Agreement in a manner
satisfactory to the Security Agent
with respect to format and contents, and make its best efforts to enable the Security

 

9

 

Agent to receive,
within 90 days from the Initial Utilisation Date, the approval from the Approving Authority, the pledge filing
document from Tianjin Industrial and Commercial Administrative Bureau, the Security Certificate and other approval and
registration documents, or supporting documents testifying that relevant
approval or registration documents cannot be obtained.

 

4.3                                          Other documents to be delivered by the Pledgor as per reasonable requests of the Security Agent from time to time.

 

5                                                  Representation and Warranty

 

5.1                                          Representations and warranties

 

The
Pledgor herein makes the following
representations and warranties to the Security
Agent:

 

(a)                        It is a wholly foreign owned enterprise properly incorporated and
validly existing under the laws of China,
with the right to own property and carry out its current business activities;

 

(b)                       It has full rights to sign the Agreement,
Registration Agreement and Underlying Contracts, exercise its rights
under the Agreement, Registration Agreement and Underlying Contracts, perform its
obligations under the Agreement, Registration Agreement and Underlying Contracts, and has taken all
necessary internal actions within the Company and other actions to obtain
authorization or has obtained such authorization to sign and perform the Agreement, Registration Agreement and
Underlying Contracts;

 

(c)                        Other than the registration required under Clause 3.1 (Approval and registration) of the Agreement, it has obtained all
authorizations, approvals, consent, registration and filing from all government
bodies and other organizations required for the signing and performance of the Agreement and ensuring the validity of the Agreement;

 

(d)                       Its signing of the Agreement,
Registration Agreement and Underlying Contracts and its performance
of the obligations under the Agreement,
Registration Agreement and Underlying Contracts do not violate:
(i) its organizing documents; or (ii) any documents that are binding
on the Company, or the Receivables
or other properties owned by the Company; or (iii) any applicable laws;

 

(e)                        There is no litigation, arbitration or administrative proceedings
against it or the Receivables that
are taking place, pending, or to its knowledge, threatened, and which, once
unfavorable decisions are made, may have adverse impact on its performance of
obligations under the Agreement, Registration Agreement and Underlying Contracts;

 

10

 

 

(f)                          It has full
ownership over the Receivables,
there is no dispute over its rights with respect to the Receivables, there is no other pledge or
guarantee of the Receivables
(other than the pledge under the Agreement),
and the Receivables have not been
seized, confiscated or subject to other restrictions;

 

(g)                       There is no
provision in any Underlying Contract
that prohibits the pledge or transfer of any Receivables,
and the signing and performance of the Agreement
do not violate any provisions of the Underlying
Contracts;

 

(h)                       Neither the Obligors nor any other parties or
individual have any right to exercise any claim to any Receivables, including the right of
set-off;

 

(i)                           Once signed,
the Underlying Contracts
constitute obligations that are legally binding on all parties to these
contracts. The pledgor has
performed all obligations under the Underlying
Contracts as they fall due, and there is no outstanding dispute over
any Receivables or Underlying Contracts between the Pledgor and the Obligors; and

 

(j)                           All
information, documents and materials it has provided to the Security Agent in connection with the Agreement and Underlying Contracts are, in all respects, true and accurate
as of the date such information, documents and materials are provided or representations
on them are made, and all documents provided in photocopies conform to their
originals.

 

5.2                                          Repetition of representations and warranties

 

The Pledgor further represents and warrants to
the Security Agent that the above
representations and warranties shall remain true and accurate at any time
during the effective term of the Agreement
on the basis of the facts and circumstances of the time.

 

6                                                  Commitment

 

6.1                                          Positive commitment

 

The Pledgor commits to the Security Agent that within the valid term
of the Agreement, the Pledgor shall:

 

(a)                        Ensure that the
whole or any part of the Receivables
shall not be confiscated, seized, placed in custody or subject to any
litigation, judicial or administrative enforcements or restrictions;

 

(b)                       Immediately
notify the Security Agent of any
events that may have impact on the Security
Agent’s rights under the Agreement,
including but not limited to Events of
Default under the Transaction
Finance Document, or any litigation, arbitrary and administrative

 

11

 

proceedings involving the Pledgor, the Receivables or other assets of the Pledgor;

 

(c)                        Notify the Security Agent as soon as practicably
possible of any Obligor Events
when they occur (and to take remedial measures);

 

(d)                       With respect to
any claims or disputes over the Receivables,
take actions as soon as practicably possible to remedy the situation or contest
the claims or disputes, and notify the Security
Agent of any such claims or disputes involving more than
RMB10,000,000 (RMB ten million)(or an equivalent amount);

 

(e)                        Should the Security Agent enforce the pledge under the
Agreement, provide the Security Agent with all assistance required
and support and carry out all procedures in connection with the enforcement;

 

(f)                          Fully observe
and perform all its obligations under any Underlying
Contracts;

 

(g)                       Take all
necessary measure (including but not limited to instituting and/or maintaining
any potential or suitable legal proceedings) to ensure the full validity of the
Underlying Contracts and reserve
or protect the interests of the Pledgor
and Security Agent with respect to
the Receivables, cause all Obligors to fully perform their respective
obligations under the relevant Underlying
Contracts, and notify the Security
Agent in a timely manner the details of the Obligor’s performance of such obligations;

 

(h)                       Adequately
maintain its account records and books for the business activities under the Underlying Contracts, which should be
prepared under the generally accepted accounting standards of China, allow review, inspection, copy and
verification of such records and books by the Security
Agent and/or any professional advisors appointed by the Security Agent, and shall provide all
necessary assistance for these exercises;

 

(i)                           Immediately
notify the Security Agent of any
events that may cause or result in the Underlying
Contracts to become void or be terminated;

 

(j)                           Set up and
maintain the Receiving Account as
per the Agreement;

 

(k)                        Ensure all
income from the Receivables is
deposited into the Receiving Account or
other accounts that the Security Agent
may designate from time to time. Without prejudice to the aforementioned
provisions, should the Obligors pay
any income on the Receivables to
the Pledgor and not into the Receiving Account, the Pledgor should immediately transfer the
income to the Receiving Account;

 

12

 

(l)                           Strictly
observe the laws and regulations of China
applicable to the Receivables, and
obtain from governmental bodies or other organizations the authorization,
approvals, consents, registration and filings required for the singing,
validation and enforcement of the Agreement
(including but not limited to the approval and registration procedures required
under Clause 3.1 (Approval and registration )
of the Agreement);

 

(m)                     Without the
need of obtaining prior consent of the Pledgor,
the Secured Parties may assign
their obligee’s right under the Agreement
in accordance with the requirements of the Transaction
Finance Document, with their right of the pledge under the Agreement transferred to the third parties
at the same time, and the Pledgor
should complete relevant legal procedures for this purpose; and

 

(n)                       Upon request of
the Security Agent, immediately provide
to the Security Agent any other
information on the Agreement or Receivables.

 

6.2                                          Negative commitment

 

The Pledgor commits to the Security Agent that during the life of the
Agreement, unless otherwise agreed by the Security
Agent, the Pledgor
shall not:

 

(a)                        Close the Receiving Account;

 

(b)                       Allow or agree
to the release, cancellation or termination of any Underlying Contract, or make any revisions to any Underlying Contract that may have negative
impact on the interests of the Security Agent;
Waive or release any claims in connection with the Receivables or under the Underlying
Contracts or effect a settlement of any claims in connection with
the Receivables or under the Underlying Contracts, carry out or
intentionally do not carry out any other actions or events that may have
substantial impact on the recovery in full of all amounts in connection with
the Receivables payable upon
maturity, grant any exemption to any Obligor
or reach a compromise that relieves the obligation or responsibility of any Obligor;

 

(c)                        Establish
pledge or other security rights (other than the pledge established under the Agreement) over the whole or any part of
the Receivables or Receiving Account;

 

(d)                       Dispose the
whole or any part of the Receivables
via sale, grant, transfer, exchange or other means;

 

(e)                        Take actions or
allow any other parties or individuals to take actions that may reduce the
value of the Receivables in any
respect; or

 

13

 

(f)                          Commit, cause
or allow the commission of any events that may be harmful to the rights and
interests of the Security Agent
under the Agreement.

 

7                                                  Continuing security interest

 

7.1                                          Continuing security interest

 

The pledge under the Agreement is a continuous security
interest, and shall remain in full force until all Secured Obligations have been settled in full, each and every Lender is no longer bound by any
obligations under the Loan Contract
and all transactions under the Swap Agreement
have been completed, without regard to whether there have been any settlements
or release in whole or in part in the interim.

 

7.2                                          Restitution

 

If, in reliance on certain
payments, security interests or other dispositions, the Secured Parties have released the
obligations in whole or in part or have made arrangements for these
obligations, but the payments, security interests or dispositions have become
void or must be restored due to insolvency, liquidation, judicial
administration or other causes, the obligations of the Pledgor under the Agreement shall continue to exist or be
restored, as if there had not been any such release or arrangements.

 

7.3                                          Non-diminishment

 

The pledge under the Agreement or the relevant right of remedy
of the Security Agent shall not be
diminished as a result of the following:

 

(a)                        Any other
security interests, warranties or compensations assumed currently by the Security Agent or any other parties or
assumed after the signing of the Agreement
in relation to the Secured Obligations
or any other debts;

 

(b)                       Waiver,
release, enforcement or non-enforcement of any other security interests,
warranties or compensations;

 

(c)                        Perfection or
non-perfection of rights in any other security interests, warranties or
arrangements, or full or partial realization of the value of the security interests
in security arrangements;

 

(d)                       Any revisions
to any other security interests, warranties or compensations or any revisions
to any Transaction Finance Documents;

 

(e)                        Grace extended
to the Pledgor or any other
parties in term of time or other respects;

 

14

 

(f)                          Any debts that
any other parties require or do not require the Pledgor to meet;

 

(g)                       Situations
where any party becomes incapable, disempowered, unauthorized, disqualified as
a legal entity or is dissolved, or there is change to the members or legal
status of any party;

 

(h)                       Any bankruptcy
or similar proceedings;

 

(i)                           Situations
where, to the extent allowed by applicable laws, any obligation of any party
under the Transaction Finance Document
or any other documents or the security interests has become unenforceable,
illegal, void or unverifiable;

 

(j)                           Release of the
obligations of any party in accordance with settlement agreements or
arrangements; or

 

(k)                        Any action,
event or situation that would have diminished or released the rights of the
Security Agent under the Agreement without the provisions of this provision,

 

7.4                                          Execution of the security interests

 

To the extent permissible
under applicable laws, the Pledgor
waives its rights to require the Security
Agent to claim or execute any other rights, security interests or
rights to demand payments before the Security
Agent can exercise any of its rights under the Agreement.

 

7.5                                          Additional security interests

 

The Agreement and the pledge under the Agreement constitute the supplement to any
other security interests currently held or to be held by the Security Agent, and shall not, in any way,
be affected by other such security interests.

 

8                                                  Enforcement of the pledge

 

8.1                                          Enforceability of the pledge

 

(a)                        Upon
enforcement notification of the Security
Agent, the security interests under the Agreement become immediately enforceable.

 

(b)                       Upon request of
the Security Agent after the
delivery of the execution notification, the Pledgor
shall, in accordance with the requirements of the Security Agent, take all legal and appropriate actions to
enable the Security Agent to
execute the security interests under the Agreement.
In order for the Security Agent to
forcibly execute the security interests, the Pledgor
shall sign all necessary agreements, transfer, notification, authorization,
decisions,

 

15

 

commitments and other
relevant documents reasonably required by the Security
Agent.

 

8.2                                          Verification of the amounts of Secured Obligations

 

The verifications issued by
the Secured Parties with respect
to the amounts of Secured Obligations,
unless there are obvious mistakes, shall be binding on the Pledgor.

 

8.3                                          Rights of the Security Agent

 

When the pledge under the Agreement becomes executable, the Security Agent has the right to, pursuant
to the instructions of the Instructing Group,
immediately execute and exercise all powers and remedial measures available to
it as the Obligee of the Receivables, including but not limited to
(the Security Agent shall notify
the Pledgor when it adopts any
such measures):

 

(a)                        Exercising all
or part of the powers vested by the laws of China
in this areas through public auction or sale to sell and realize all or any
part of the Receivable;

 

(b)                       Direct
deduction or appropriation of relevant amounts from the Receiving Account to settle the Secured
Obligations;

 

(c)                        Requiring the Obligors to pay the Receivables directly to the accounts
designated by the Security Agent;

 

(d)                       Instituting (or
instructing the Pledgor to
institute as per its requirements) all litigation, arbitration or legal
proceedings in connection with all or any Receivables,
and the execution, settlement or release of any rights and claims in connection
with the Receivables;

 

(e)                        Exercising any
rights in connection with the Receivables
under the Underlying Contract;
and/or

 

(f)                          For the above
purposes, adopting and signing all relevant actions, contracts and items that
the Security Agent deems
reasonably necessary or appropriate.

 

9                                                  Application of Proceeds

 

All proceeds received from
time to time or recovered by the Security
Agent under the Agreement
should be used and distributed in the order as specified under Clause 7 (Application of Proceeds) of the Security Trust Deed.

 

16

 

10           The Security Agent and its Agent

 

10.1                                    Agents

 

(a)                        The Security Agent may, at any time it deemed
appropriate, delegate all or any of its rights, powers, authority and
decision-making right vested in the Security
Agent under the Agreement
to any agent through a power of attorney or other means. The delegation may be
done in terms and conditions deemed appropriate by the Security Agent in the interests of the Secured Parties, but the terms and
conditions must not be inconsistent with any provisions of the Agreement; and

 

(b)                       Without
prejudice to Clause 10.3 (The
responsibilities of the Security Agent and its Agents), the Security
Agent does not need to supervise litigation proceedings involving any of its agents,
and shall not be liable for any loss incurred by any of its agents, unless by
law, the agent(s) should be responsible for its material negligence or
intentional misconducts.

 

10.2                                    The rights of the Security Agent and its Agents

 

To the extent specified in
Clause 10.3, the Pledgor and the Security Agent herein make express
representations as follows:

 

(a)                        The Security Agent and any of its designated
agents may carry out conducts in connection with the Agreement based on the recommendations and opinions of and
information obtained from any lawyers, valuers, accountants, bankers, brokers
or other professionals, without regard to whether such recommendations,
opinions or information have been obtained by the Pledgor, any Secured Parties
or any other parties, and shall not be liable for any loss as a result of such
conducts;

 

(b)                       The Security Agent and any of its designated
agents have the right to accept the certificate documents signed by any
authorized representatives of the Pledgor
and affixed with the stamp of the Pledgor,
and use these certificates as sufficient evidence for any transaction or the
facts, substance or interests of anything. In this case, the Security Agent or any of its designated
agents do not need further evidence and shall not be held liable for any loss
as a result of conducts based on the certificate documents;

 

(c)                        The Security Agent or any of its designated
agents do not need to take any measures to determine whether any event has
occurred that may cause the pledge established under the Agreement to become enforceable. Unless the
Security Agent or any of its
designated agents have become aware or there is express notice to the contrary,
the Security Agent and any of its
agents shall have the right to assume nothing of the sort has happened, and
that the Pledgor is

 

17

 

observing and performing all
its obligations under the Agreement
and Transaction Finance Document;
and

 

(d)                       The Security Agent or any of its designated
agents shall not be liable for the invalidity, flaw or insufficiency of the Agreement or the pledge under the Agreement or the ownership of any Receivables.

 

10.3                                    The responsibilities of the Security Agent and its Agents

 

The Security Agent and any of its designated
agents, or the directors of the board, management or employees of the Security Agent, shall in no event, be
liable for any costs, expenses, losses, debts or expenditures as a result of
the pledge under the Agreement or
any enforcement of the pledge, or any action or inaction of the Security Agent or its agents, directors,
management or employees in connection of the Receivables,
or the exercise or non-exercise of any exercisable rights under the Agreement by the Security Agent or its agents, directors, management or
employees, unless the above costs, expenses, losses, debts or expenditures have
been incurred as a result of the material negligence or intentional misconduct
of the Security Agent or its
agent, directors, management or employees.

 

11                                           Power of Attorney

 

11.1                                    Designation

 

The Pledgor herein irrevocably designates the Security Agent (and the Security Agent’s agents) as its agents (via
power of attorney) to, on its behalf, in its name or through other means, and
in a manner and at the time deemed appropriate by the Security Agent (and the Security Agent’s agents), within the scope
permissible under the laws of China:

 

(a)                        Perform
anything that the Pledgor is
obligated to perform under the Agreement
but has not properly performed, including but not limited to signing document
necessary for the perfection, protection and (after the issue of enforcement
notice,) realization of the security interests under the Agreement; and

 

(b)                       Exercise any
rights vested in the Security Agent
under the Agreement.

 

11.2                                    Acknowledgement and notification

 

The Pledgor herein acknowledges and confirms
anything done by the Security Agent
(and its agents) for the exercise of its rights in the power of attorney under
Clause 11.1 (Designation). Anyone
who takes any action or signs any document as per the above power of attorney
should notify the Pledgor, and
after the event, should, as soon as reasonably possible, provide the copies of
any such documents to the Pledgor.

 

18

 

12           Costs and Expenses

 

Upon request, the Pledgor shall, from time to time, pay to
the Security Agent:

 

(a)                        All costs and
expenses incurred by the Security Agent
as a result of preparing, signing, performing and perfecting the Agreement and any other relevant documents,
any revision or extension of the Agreement,
or any consent or waiver under the Agreement;
and

 

(b)                       All costs,
expenses ad expenditures (including legal fees and all other actual
expenditures) incurred by the Security Agent
as a result of exercising any of its rights or powers under the Agreement, instituting legal proceedings in
connection with and recovering overdue payments under the Agreement, preserving or enforcing its
rights under the Agreements in
other means, contesting any claims against it in connection with the Agreement, or releasing the Agreement and the pledge under the Agreement upon full settlement of all
amounts secured under the Agreement.

 

13                                           Compensations

 

13.1                                    The Pledgor shall make compensations to the Security Agent, its agents, directors,
management and employees for all verifiable losses, liabilities, damages, taxes
(if any), costs and expenses incurred by the Security
Agent as a result of signing or performing the Agreement, and all litigations, legal
proceedings, claims, requests, costs, expenses and expenditures that may be
caused by, suffered or incurred from the failure of the Pledgor to perform or observe any of its
commitments and agreements as stated under Agreement,
except those incurred as a result of frauds, intentional misconducts or
material negligence of the Security Agent.

 

13.2                                    All amounts
payable by the Pledgor under the Agreement when they fall due shall be paid
in full without imposing set-off, counter-claim or any other restrictions or
conditions, and should be exempt from taxes, deductions or withholding. If as
per laws or regulations that the Pledgor
or any other parties should deduct or withhold any amounts from any payments to
the Security Agent (for tax or
other purposes), the Pledgor shall
make an additional payment on top of the above payments so as to ensure that
the total amounts (not subject to further taxes or deductions or withholding)
actually received by the Security Agent
should be the same as the Security Agent
would have received without the deductions or withholding. The Pledgor shall, after making the payments,
immediately hand over the official documentations or the photocopies of other
documentations to prove that it has already paid the deducted or withheld
amounts to relevant tax authorities or other competent authorities.

 

19

 

14           Release

 

The
obligations of the Pledgor under
the Agreement shall terminate on
the date the Secured Obligations
have been irrevocably and unconditionally paid and settled in full, the Lenders are no longer bound by any
obligations under the Loan Contract
and all transactions under the Swap
Agreements have been completed, and at the same time:

 

(a)                        All rights of
the Security Agent under the Agreement shall terminate, and the security
interests arising from the Agreement
or established under Agreement
shall be released;

 

(b)                       The Pledgor and the Security Agent (or its entrusted agents) shall, as soon as
practically possible and at the expense of the Pledgor, cancel the Agreement
and the approval and/or registration of the pledge established by the Agreement at relevant authorities in
accordance with the laws and regulations of China; and

 

(c)                        Upon written
request of the Pledgor, the Security Agent shall, as soon as
practically possible, take actions or allow the taking of actions that may be
required by the Pledgor for the
purpose of the release of the security interests arising from the Agreement or established under the Agreement, and shall, at the expense of the
Pledgor, sign and deliver or cause
the signing and delivery of any and all of the additional papers and documents
that may be required by the Pledgor
for the purpose of the release of the security interests arising from the Agreement or established under the Agreement.

 

15                                           Notification

 

15.1                                    Unless
specified otherwise, any notifications or other documents in connection with
the Agreement should be prepared
in writing and may be delivered by facsimile or postal mail. If by facsimile,
the delivery is deemed done upon the receipt by the addressee of clearly
readable documents sent through facsimile; and if by post, the delivery is
deemed done upon the notification being placed at the relevant address or 5 Business Days after the notification is
deposited into the mailbox in a pre-paid envelope with clearly marked address.

 

15.2                                    The contact
information of the Pledgor and the
Security Agent is listed on the
signing page of the Agreement.

 

15.3                                    Any party may
change its contact information by issuing notification to the other party 5 Business Days in advance.

 

16                                           Applicable laws and jurisdiction

 

The
Agreement is governed and
construed under the laws of China.
In case of any dispute under the Agreement
or any dispute in connection with the Agreement,
both parties agree to refer the disputes to China International

 

20

 

 

Economic
and Trade Arbitration Commission and resolve the disputes in Beijing in
accordance with the prevailing arbitration rules.

 

17                                           Others

 

17.1                                    Severability

 

If any provisions of the Agreement are or have become illegal, void
or unenforceable in any jurisdiction, the validity or enforceability of other
provisions of the Agreement in
that jurisdiction and the validity or enforceability of those provisions and
other provisions of the Agreement
in other jurisdictions shall not be impaired.

 

17.2                                    Waiver

 

The Security Agent’s failure to exercise or
delay in exercising any right, power or remedy under the Agreement shall not diminish such rights,
powers or remedies, or constitute a waiver of such rights, powers or remedies;
single or partial exercise by the Security
Agent of such rights, powers or remedies shall not prevent it from
further exercising such rights, powers or remedies or exercising any other
rights, powers or remedies. All rights, powers and remedies under the Agreement are cumulative, and not exclusive
of any other rights, powers or remedies provided by law.

 

17.3                                    Amendments

 

Any revisions to the Agreement can only be made in writing by
the Security Agent and the Pledgor.

 

17.4                                    Languages

 

The Agreement is drafted and signed in Chinese,
with an English version translated from Chinese at the expense of the Pledgor.

 

Notifications in connection
with the Agreement between the Pledgor and the Security Agent should be drafted and prepared in English.

 

Documents provided by the Pledgor under the Agreement to the Security Agent or other document provided in connection with
the Agreement should be drafted
and prepared in English, or if drafted and prepared in languages other than
English, such documents should attach an English translation that has been verified
by the Pledgor to be truthful,
accurate and complete and such that the Security
Agent may act in accordance with the English translation.

 

17.5                                    Entry into force

 

The Agreement enters into force upon signing by
the Security Agent and the Pledgor, but if according to the laws and
regulations of China, the Agreement
(for parties or any party to the Agreement)
may not enter

 

21

 

into force before completion
of any approval and or registration procedures, the Agreement (for parties or any party to the Agreement) shall enter into force upon the
date such approval and/or registration procedures are completed.

 

In witness whereof, the Agreement has been executed by both parties
on the date stated at the beginning of the Agreement,

 

22

 

Attachment 1:                                         Specifics of
the Underlying Contracts

 

1.               Pledgor:  Tianjin
New Highland Science Development Co., Ltd.

 

2.               Security Agent: DB Trustees (Hong Kong) Limited

 

3.               Specifics of
the Underlying Contracts (other
then the New Underlying Contracts)

 

	
  Contract
  name,

  No./invoice No.

  	
   

  	
  Date of

  signing

  	
   

  	
  Maturity

  date

  	
   

  	
  Obligors

  	
   

  	
  Total contractual

  consideration

  
	
  Technical service
  contract, No.: DGYT - 2006 - JS - 003

  	
   

  	
  1 January 2006

  	
   

  	
  31 December 2010

  	
   

  	
  PetroChina Dagang Oilfield
  Company

  	
   

  	
  Technical service fees are
  charged based on the quantity of crude oil commodities actually produced at a
  rate of RMB480 per ton.

  
	
  Technical service contract
  (Fault Block Wen-120 Nanoscale MD Filming Flodding) No.: HBYT - CY1 - 2008 -
  JS - 147

  

  	
   

  	
  17 July 2008

  	
   

  	
  1 January 2012

  	
   

  	
  PetroChina Huabei Oilfield Company

  	
   

  	
  Technical service fees are charged based on the actual oil production
  output from the Fault Block Wen-120 at a rate of RM330 per ton of oil
  produced (and no charge on any quantity less than a ton)

  
	
  Technical service contract

  	
   

  	
  1 January 2007

  	
   

  	
  31 December 2010

  	
   

  	
  PetroChina Liaohe Oilfield Company

  	
   

  	
  Total settlement amount shall be based on the actual crude oil
  production at a rate of RMB680 per ton.

  
	
  Coal bed methane hydraulic radial drilling technical service contract

  

  	
   

  	
  26 October 2009

  	
   

  	
  26 October 2011

  	
   

  	
  Liaoning Euro-Asia Dongdi Coal Bed Methane Technology Development
  Company

  

  	
   

  	
  The drilling footage charge is calculated based on the footage at a
  footage rate of RMB900 per meter if the actual footage is smaller than the
  designed footage, and based on the designed footage at a footage rate of
  RMB900 per meter if the actual footage is larger than the designed footage.

  

 

23

 

	
  Daqing Oilfield hydraulic radial jet drilling technical service
  contract

  

  	
   

  	
  3 November 2009

  	
   

  	
  3 November 2011

  	
   

  	
  Daqing Rong’s Oil Lifting Technology Development Company 

  

  	
   

  	
  Technical service fees shall be charged based on the actual
  horizontal footage at a rate of RMB2,500 per meter.

  

 

24

 

Attachment 2:                                       Format of Additional Pledge Commitments

 

Format
of Additional Pledge Commitments

 

To: [DB Trustees (Hong Kong)
Limited] as the Security Agent

 

[date]

 

Dear sirs:

 

We refer to the
receivables pledge agreement dated [date] between
Tianjin New Highland Science Development Co., Ltd. (the Pledgor) and DB Trustees (Hong Kong)
Limited (the Security Agent),
including their revisions and additions from time to time (the Pledge Agreement). This document is the Additional Pledge Commitments referred to
in Clause [ - ] (additional pledge)
of the Pledge Agreement. The terms
in bold used but not defined in the Additional
Pledge Commitments shall have the same meanings as defined in the Pledge Agreement. 

 

With respect to the New Receivables that haven’t been
effectively pledged under the Pledge
Agreement and which serve as the consideration for the Secured Parties to continue to provide or
maintain the loan limits or sign or maintain various related agreements and
arrangements and as the security interests for securing the payment of all Secured Obligations by the Pledgor on time and its performance of all
its other obligations under the Transaction
Finance Document, in accordance with the Real Right Law of the
People’s Republic of China , the
Guarantee Law of the People’s Republic of China and other laws and regulations
of China, the Pledgor, as the
rightful owner of the New Receivables
arising from the New Underlying Contracts
(with specifics listed below), pledge the New
Receivables to the Security Agent
that represents the interests of the Secured
Parties, which are the beneficiaries of the pledge interests and
rights under the Additional Pledge
Commitments.

 

The Pledgor shall cause the Security Agent to, within 14 days upon the
signing of the New Underlying Contracts
or completion of the custom clearance procedures for LHD Units associated with
the New Underlying Contracts
(whichever happens later), receive the Additional
Pledge Commitments and Pledge
Certificate for the pledge of the New
Receivables; within 90 days upon the signing of the New Underlying Contracts or completion of
the custom clearance procedures for LHD Units associated with the New 

 

25

 

Underlying
Contracts (whichever happens later), make its best
efforts practicably possible to cause the Security
Agent to receive, for the purpose of the New Receivables, the Security
Certificate, approval documents from the Approving Authority and the filing documents from Tianjin
Industrial and Commercial Administrative Bureau or documents testifying that
relevant approval, registration or filing documents cannot be obtained.

 

Within 3 Business Days
upon signing of the Additional Pledge
Commitments, the Pledgor
shall deliver to all relevant Obligors
properly completed pledge notification (substantially in the same format and of
the same contents as specified in part one of Attachment 4 (Format of the Pledge Notification and the Letter of
Acknowledgement) to the Pledge
Agreement), and ensure the Security
Agent receives from these Obligors
properly completed letters of acknowledgement (substantially in the same format
and of the same contents as specified in part two of Attachment 4 (Format of the Pledge Notification and the Letter of
Acknowledgement) to the Pledge
Agreement).

 

All terms and
conditions included in the Pledge Agreement
apply to the Additional Pledge Commitments,
as if the Additional Pledge Commitments
had provided all the terms and conditions (including all necessary contextual
modifications).

 

The Additional Pledge Commitments are governed
and construed by the Laws of China.

 

Pledgor:
Tianjin New Highland Science Development Co., Ltd. (company seal)

 

	
  Authorized signatory

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Name:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Position:

  	
   

  	
   

  

 

26

 

Attachment
to the Additional Pledge Commitments

 

Specifics
of the Underlying Contracts:

 

	
  Contract
  name,

  No./invoice No.

  	
   

  	
  Date of

  signing

  	
   

  	
  Maturity date

  	
   

  	
  Obligors

  	
   

  	
  Total

  contractual

  consideration

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

27

 

Attachment 3:                                       Format of
the Registration Agreement

 

Format of the Receivable Pledge Registration Agreement

 

The receivable pledge
registration agreement (the Registration
Agreement) is signed on [date] between:

 

A                                      Tianjin
New Highland Science Development Co., Ltd. , the
pledgor (“the Pledgor”), a company
(registration number: 120109000004324) incorporated under the laws of China,
with its registered address at Tianjin Economic Development Area (DEDA),
Tianjin, China; and

 

B                                        DB
Trustees (Hong Kong) Limited, the Security
Agent and pledge (the “Security
Agent”), a company incorporated under the laws of Hong Kong Special
Administrative Region of China,
with its registered address at, 48/F, Cheung Kong Center, 2 Queen’s Road Central,
Hong Kong.

 

Whereas:

 

1                                          Both
parties to the Registration Agreement
acknowledge that the two parties have signed the receivable pledge agreement
dated [date], including the revisions and additions
from time to time (collectively the “Pledge
Agreement”), and shall sign the Additional
Pledge Commitments for the New
Receivables in accordance with the Pledge
Agreement.

 

2                                          The two
parties agree hereby to complete the registration and filing (“Pledge Registration”) of the Pledge Agreement with the Pledge Registration Authority in accordance
with the requirements of the Pledge
Registration Authority.

 

The terms in bold used
but not defined in the Registration Agreement
shall have the same meanings as defined in the Pledge Agreement.

 

For the purpose of the Pledge Registration, the two parties have
reached the following agreements:

 

1                                The Pledge Registration shall be placed in the
care of the Security Agent. The Security Agent may entrust the Pledge Registration to others (including
but not limited to its external lawyers).

 

28

 

If the Security Agent refers the Pledge Registration to other parties, the
commitments made by the Pledgor as
included in Clause 2 of the Registration
Agreement shall also apply to the other parties entrusted by the Security Agent.

 

2                                The Pledgor commits herein that:

 

(a)                           The Pledgor has provided all the names its has
used in the four months immediately before the date of Pledge Registration, and upon request of
the Security Agent, the Pledgor shall provide to the Security Agent all documents in connection
with its change of names registered and filed with competent authorities.

 

(b)                          It shall
provide to the Security Agent the
changed information and supporting documents within 3 Business Days upon change of registered
contents, including but not limited to:

 

(i)                               The
registered legal name of the Pledgor;

 

(ii)                            The
registered address, legal representative, organization code, business license
number of the Pledgor;

 

(iii)                         Other
registered contents about the Pledgor;

 

(c)                           In the
event of change of registered contents, or omission or errors in the registered
contents, the Pledgor shall assist
the Security Agent in the
registration of changes;

 

(d)                          It agrees
that the Security Agent may,
within 90 days before the expiration of the initial registration or the
previous extension registration, perform the registration of the extension of
the Pledge Registration. The term
of the new registration shall be determined by the Security Agent in accordance with the Pledge Agreement.

 

(e)                           It
confirms that in carrying out the registration of any changes or extensions,
the Security Agent does not need
further authorization from the Pledgor.
In order to avoid any misunderstandings, the Pledgor
and the Security Agent confirm
herein that the terms and conditions of the Registration
Agreement constitute the agreements the two parties have reached in
advance for the  change registration and
extension registration;

 

29

 

(f)                             It
confirms that the Security Agent shall
fill out registration items based on the documents and information provided by
the Pledgor, and if in the event
the registration information contained in any materials provided by the Pledgor that is fraudulent, erroneous,
incomplete or has not been updated has caused damages or losses to any parties
including the Security Agent, the Pledgor shall assume all legal liabilities
and make full compensations for such damages or losses; and

 

(g)                          It waives,
to the extent allowable under the laws of China,
its rights to raise objection to the Pledge
Registration by the Security Agent.
Also, to the extent of its knowledge, it shall immediately notify the Security Agent of any objections to
registration that are filed or to be filed by any other parties.

 

3                                The Registration Agreement enters into force
upon signature and affixation of company seal by the authorized signatories of
the Pledgor and the Security Agent.

 

4                              The Registration Agreement shall be governed
and construed under the laws of China.
In the event of any disputes under the Registration
Agreement or in connection with the Registration  Agreement,
both parties agree to refer the disputes to China International Economic and
Trade Arbitration Commission and resolve the disputes in Beijing in accordance
with the prevailing arbitration rules.

 

5                                The Registration Agreement is made in duplicate
with one copy for with each party. The two copies have the same legal force.
The Security Agent (or any other
parties entrusted by the Security Agent
to handle the Pledge Registration)
has the right to post the electronic version of the Registration Agreement to the Receivable Pledge Registration public announcement system of
the Pledge Registration Authority.

 

30

 

Attachment 4:                                       Format of
the Pledge Notification and the Letter of Acknowledgement

 

Part one

 

Format
of the Pledge Notification

 

To: [name of
the obligee]

 

Address:

 

Contact person:

 

Telephone:

 

Facsimile:

 

cc: DB Trustees (Hong Kong) Limited

 

Address: 48/F, Cheung
Kong Center, 2 Queen’s Road Central, Hong Kong

 

Contact person: Managing
Director

 

Telephone:         +852 2203 8888

 

Facsimile:           +852 2203 7320/7323

 

[date]

 

Dear sirs:

 

We refer to the
receivable pledge agreement dated [date] between us
and DB Trustees (Hong Kong) Limited (the “Security
Agent”) and the revisions and additions (collectively the “Pledge Agreement”). The terms in bold in
this letter shall have the same meanings as defined in the Pledge Agreement.

 

31

 

We notify you through
this letter that the with respect to [specifics
of the underlying contract] (numbered [              ]) between you and us, including
any revisions and additions from time to time (collectively the “Underlying Contract”), we have placed as
pledge the Receivables and all our
rights, ownership and interests under or in connection with the Underlying Contract for the interest of the
Security Agent.

 

We confirm herein that:

 

(a)                        We shall
continue to assume and perform all our obligations under the Underlying Contract; and

 

(b)                       The Security Agent and its agents, any
successors or any other parties shall in no event assume any obligation or
responsibility to you under the Underlying
Contract or in connection with the Underlying
Contract.

 

You shall, upon or before the maturity of any of the Receivables under the Underlying Contract, effect a payment in
the amount sufficient to settle your payables under the matured Receivables to the following account or any
other accounts that the Security Agent
has notified you of from time to time:

 

[specifics
of the receiving account]

 

Please note that, without prior consent in writing of the Security Agent, we cannot modify or waive
any provisions of the Underlying Contract
or terminate the Underlying Contract.

 

Without prior consent in writing of the Security Agent, the
instructions in this letter cannot be cancelled or modified.

 

We confirm that you can
act in accordance with the instructions of this letter without the need of our
further authorization and consultation with respect to the adequacy or validity
of any request, notification or instruction.

 

The letter is governed
by the laws of China.

 

Please send a letter of
acknowledgement to the Security Agent and carbon copy it to us to acknowledge
that you agree to the above provisions and further confirm the commitments in
the letter of acknowledgement.

 

32

 

	
  Yours sincerely

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  

 

[name of the authorized signatory]

 

Tianjin New Highland
Science Development Co., Ltd.  (company seal)

 

33

 

Part two

 

Format of the letter of acknowledgement of the pledge notification

 

To:          [DB Trustees (Hong Kong) Limited] as the Security Agent

 

Address: 48/F, Cheung Kong Center, 2 Queen’s Road
Central, Hong Kong

 

cc: Tianjin New Highland Science Development Co., Ltd.
()

 

Address:

 

Dear sirs:

 

We hereby confirm that we have received from Tianjin
New Highland Science Development Co., Ltd. ()
(the Pledgor) the notification
dated [      ] that the Pledgor has placed as pledge all of its rights, ownership and
interests of or in connection with the Receivables
under the [specifics of the underlying
contract] , including any revisions and additions from time to time (collectively
the “Underlying Contract”).

 

We confirm herein that:

 

(a)                        We accept the instructions in the
notification and agree to observe the provisions in the notification.

 

(b)                       We haven’t received any notification from
any third party regarding any interest in connection with the Underlying Contract;

 

(c)                        We commit that we shall pay the amounts
payable under the Underlying Contract directly
to the account specified in the notification or any other account you have
designated separately;

 

(d)                       We commit that without the need of
further instruction or further authorization from the Pledgor, we shall disclose to you any
information you may request at any time in connection with the Underlying Contract;

 

34

 

(e)                        We commit to notify you of any
non-compliance by the Pledgor with any provisions of the Underlying Contract,
and allow you to remedy the situation within a reasonable period of time
(though, you are not obligated to do so);

 

(f)                          We commit that without your prior consent
in writing, we shall not alter or terminate the Underlying Contract.

 

This letter is governed by the laws of China.

 

 

Yours sincerely,

 

	
   

  	
   

  	
   

  

 

[name of the authorized signatory]

 

[name of the
obligor] (company seal)

 

35

 

Pledgor: Tianjin New Highland Science Development
Co., Ltd. (company seal)

 

Address: Floor 4, Business Center
21-B, Innovations Park, Xinbei Road No.4668, Tanggu District, Tianjin
City, PRC.

Telephone: +86-22-6635-1181

Facsimile: +86-22-6635-1181

 

Contact Person: Liu Qingzeng

 

 

	
  /s/ Liu Qingzeng

  	
   

  
	
   

  	
   

  
	
  (Name of Authorized Signatory)

  	
   

  
	
   

  	
   

  
	
  Name: Liu Qingzeng

  	
   

  

 

36

 

Security Agent: DB Trustees (Hong Kong) Limited

 

Address: 48/F, Cheung Kong Center, 2 Queen’s Road
Central, Hong Kong

Facsimile: +852 2203 7320/7323

Telephone: +852 2203 8888

Contact Person: Managing Director

 

	
  /s/ Chiu Kin Wing Edward

  	
  /s/ Choi Siu Ling

  	
   

  
	
   

  	
   

  	
   

  
	
  (Name of Authorized Signatory)

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Name: Chiu Kin Wing Edward

  	
  Choi Siu Ling

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Position: Authorized Signatory

  	
  Director

  	
   

  

 

37

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