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Exhibit 4.11

Wuxi Seamless Oil Pipe Co., Ltd.

(As Borrower)

Bank of China Limited Jiangsu Branch

(As Arranging Bank)

Bank of China Limited Wuxi Branch

Agricultural Bank of China Limited Wuxi
Branch

(As Co-lead Bank)

Bank of China Limited Wuxi Branch

Agricultural Bank of China Limited Wuxi
Branch

Nanyang Commercial Bank (China) Limited Wuxi
Branch

China Merchants Bank Co., Ltd. Wuxi Branch

Industrial and Commercial Bank of China
Limited Wuxi Branch

China CITIC Bank Corporation Limited Wuxi
Branch

Shanghai Pudong Development Bank Co., Ltd.
Wuxi Branch

China Everbright Bank Co., Ltd. Wuxi Branch

(As Participant Bank)

Bank of China Limited Wuxi Hi-tech
Industrial Development Zone Sub-branch

(As Credit Agent Bank, Guarantee Agent Bank)

Agricultural Bank of China Limited Wuxi New
District Sub-branch

(As Guarantee Agent Bank)

	
	Wuxi
Seamless Oil Pipe Co., Ltd.

Structured Bank Consortium 

Comprehensive Credit and Loan Agreement 

with an Amount Equivalent to RMB 3.5 Billion

August, 2011

Wuxi 

Contents

1.
Definition and Explanation: 

2. Credit
Line and Deadline 

3. Loan Line

4. Loan
Deadline

5. Usage of
Loan

6.
Withdrawal

7. Interest
Rate, Accrual and Payment

8. Payment

9. Repayment
Date 

10. Trade
Financing 

11.
Cancellation 

12.
Stipulations of Payment

13.
Guarantee 

14.
Statement and Guarantee 

15. Promise

16. Charges
and Taxes 

17. Cost
Increase 

18.
Financial Documents 

19. Default
Events 

20.
Relations of Bank Consortium 

21. Bank
Consortium Meeting 

22.
Apportionment 

23. Transfer

24.
Confidential and Information Disclosure 

25.
Liabilities Certificate 

26. Legal
Changes 

2.7
Deduction 

28. Extended Deadline and Partial Invalidity 

29.
Amendment and Supplement 

30.
Notification 

31. Original
of Agreement 

32.
Applicable Laws and Disputes Settlement 

33. Validity
and Termination 

Signing
pages 

Appendix 1

Initial Participant
Bank, Initial Loan Commitment Amount and Subscription Amount 

Appendix 2 

Subscription Letter
of Credit Line Balance (Form)

Appendix 3

Certificate of Legal
Representative (Form)

Appendix 4

Withdrawal
Notification (Form) 

Appendix 5

Syndicated Loan
Notification (Form) 

Appendix 6

Repayment
Notification (Form)

Appendix 7

Reimbursement
Notification (Form) 

Appendix 8

Payment Notification
(Form)

Appendix 9

Mortgage and Pledge
Property List 

Appendix 10

Maximum Amount
Property Mortgage Contract (Form) 

Appendix 11

Maximum Amount Stock
Right Pledge Contract (Form) 

Appendix 12

Accounts Receivable
Pledge Contract (Form) 

Appendix 13

Floating Mortgage
Contract (Form) 

Appendix 14

Transfer Certificate
(Form) 

Appendix 15

Transferred Loan
Commitments (Form) 

Appendix 16

Financial Indicator
Requirements of Borrower During Special Observation Period 

This
Agreement was signed by the following parties in Wuxi Hi-new Technical Industries Development Zone on August 29, 2011:

(1) Wuxi
Seamless Oil Pipe Co., Ltd. (WSP) is a limited liability company legally established and efficiently existing in China. The company
is located No. 235, Chengnan Road, Wuxi Hi-new Technical Industries Development Zone. The company serves as the borrower
(hereinafter called Borrower); 

(2) Bank of
China Limited Jiangsu Branch serves as arranging bank (hereinafter called “Arranging Bank”); 

(3) Bank of
China Limited Wuxi Branch, Agricultural Bank Limited Wuxi Branch are regarded as the co-lead Bank (hereinafter called “Co-lead
Bank”);

(4) Bank of
China Limited Wuxi Hi-tech Industrial Development Zone Sub-branch serves as credit agent bank (hereinafter called “Credit Agent
Bank”);

(5)
Agricultural Bank of China Limited Wuxi New District Sub-branch, Bank of China Limited Wuxi Hi-tech Industrial Development Zone
Sub-branch mutually serve as “Guarantee Agent Bank” (hereinafter called “Guarantee Agent Bank”); 

(6) Bank of
China Limited Wuxi Branch, Agricultural Bank of China Limited Wuxi Branch, Nanyang Commercial Bank (China) Limited Wuxi Branch,
China Merchants Bank Co., Ltd. Wuxi Branch, Industrial and Commercial Bank of China Limited Wuxi Branch, China CITIC Bank
Corporation Limited Wuxi Branch, Shanghai Pudong Development Bank Co., Ltd. Wuxi Branch, China Everbright Bank Co., Ltd. Wuxi Branch
together to be Initial Participant Bank (hereinafter called “Initial Participant Bank”). 

After
friendly and equal negotiation of both parties, based on the true will, the following agreement is hereby reached: 

1.
Definition and Explanation: 

1.1 In the
agreement: 

The
arranging bank refers to Bank of China Limited Jiangsu Branch.

This
agreement refers to WSP Structured Bank Consortium Comprehensive Credit and Loan Agreement with an Amount Equivalent to RMB 3.5
Billion and any other amendment and supplement. 

Validity of
Agreement refers to the period from the validity of agreement to the payment date of all the liquid capital loans under the bank
consortium, principal, interests and other understanding for trade financing. 

Financial
Statement refers to the financial documents provided by the borrower according to Article 18.1 of the agreement, including but not
limited to the original copies of balance sheet, profit & losses statement, cash flow statement, etc. 

Participant
bank refers to the Initial Participant Bank, newly-increased bank with subscribed credit line during the agreement and or
transferee’s bank. 

Special Account for Debt Payment refers to RMB account opened or appointed by the borrower in credit agent bank according to
Article 15.15 of agreement, which is special for the borrower to deposit the capital such as the principal, interests and charges of loan under this agreement. 

Cost
Increase refers to the definition appointed in Article 17 of this agreement. 

Loan
Commitment Proportion refers to the proportion of the temporal loan commitment sum of participant bank and temporal loan commitment
sum of all the participant banks at any time. 

The loan
commitment sum refers to: under the precondition of other appoints of this agreement, (1) for initial participant bank, the
initiation loan commitment sum of this initial bank + sum of newly-increased loan line of this participant bank during the
agreement-(a) the sum of this participant bank of all the loans granted according to this agreement; (b) sum of this participant
bank of the loan line sum cancelled as per this agreement;(c) any loan commitment sum transferred by this initial participant bank
as per Article 23 of this agreement; (2) For the participant bank with newly-increased subscribed loan line during the agreement,
the sum of loan line subscribed by the participant bank-(a) the sum of this participant bank of all the loans granted according to
this agreement; (b) sum of this participant bank of the loan line sum cancelled as per this agreement; (c) for 1 transferee’s
bank, any loan commitment sum transferred by the transferee’s bank as per Article 23 of this transferee’s bank-sum of
transferee’s bank of all the loan withdrawn-sum of transferee’s bank of loan line sum cancelled as per this agreement.

Pledgor
refers to WSP.  

Initial
participant bank refers to Bank of China Limited Wuxi Branch, Agricultural Bank of China Limited Wuxi Branch, Nanyang Commercial
Bank (China) Limited Wuxi Branch, China Merchants Bank Limited Wuxi Branch, Industrial & Commercial Bank of China Wuxi Branch,
China CITIC Bank Corporation Limited Wuxi Branch, Shanghai Pudong Development Bank Co., Ltd, China Everbright Bank Company Limited
Wuxi Branch. 

Initial loan
commitment sum refers to the initial loan commitment sum listed in the appendix 1 of the agreement and subscribed by the initial
participant bank on the validity date of the agreement, which is only for 1 Initial Participant Bank. 

Initial
Subscription Sum refers to the initial subscription sum for trade financing credit line listed in the appendix 1 of the agreement
and subscribed by the initial participant bank on the validity date of the agreement, which is only for 1 Initial Participant Bank.

Resign Agent
Bank has the definition appointed in Article 20.7 of this agreement. 

Agent Bank
refers the credit agent bank, guarantee agent bank and/or succession agent bank.

Loan Line
refers to the RMB loan line mentioned in Article 3.1 of this agreement. 

Balance of
Loan Line refers to the balance of total sum of initial credit subscribed by the participant bank on the validity date of the
agreement and RMB2,100,000,000. 

Loan Interest refers to the annual loan interest appointed in Article 7.1 (1) for each sum of loan with loan
line withdrawn by the borrower. 

Loan Period
refers to the period of liquid capital loan provided to the borrower by the participant bank according to the articles and condition
of this agreement, which is mentioned in Article 4.1 of this agreement and agreed by the participant bank. 

Loan Balance
refers to total loan fund of liquid capital loan granted as per the agreement and unpaid by the borrower at any time. 

Loan Fund
refers to the loan principal of any sum of liquid capital loan granted or to be granted to borrower under the loan line as per the
articles of the agreement. 

Guarantee
Agent Bank refers to Agricultural Bank of China Limited Wuxi Branch, Bank of China Limited Wuxi Hi-tech Industrial Development Zone
Sub-branch or any successor and /or transferee, who sign the guarantee contract and handle the guarantee matters with the guarantors
as the agents of bank consortium based on this agreement as main contract. 

Guarantee
Contract refers to mortgage contract, pledge contract and/or any guarantee documents signed by the borrower or any third party for
guaranteeing the borrower to fulfill the agreement. 

Guarantee
Interest refers to any agreement or arrangement with mortgage, pledge, detention, deposit or guarantee efficiency or purpose
(whatever this agreement or arrangement is correct or not, they must bed set or explained based on Chinese laws)

Guarantor
refers to pledgor, mortgagor any third party or successor and/or transferee who sign any guarantee documents with guarantee agent
bank for guaranteeing the borrower to fulfill the agreement.

The mortgage
contract refers to one or more copies of maximum sum assets mortgage contract drafted as per the form and contents listed in
Appendix 10 of this agreement by and between mortgagor and Agricultural Bank of China Wuxi New District Sub-branch-guarantee agent
bank, one or more floating mortgage contract Appendix 13 of this agreement by and between mortgagor and Bank of China Limited Wuxi
Hi-tech Industrial Development Zone Sub-branch-guarantee agent bank.

Mortgagor
refers to WSP. 

Majority
Participant bank refers to (1) when the loan balance under this agreement is zero, one or more participant banks whose credit sum in
the credit balance is more than 2/3 of the loan balance; or (2) when the loan balance is more than zero, one or more participant
banks whose credit sum in the credit balance is more than 2/3 of the loan balance.

Default
Interest Rate refers to the overdue default interest rate and /or default interest rate for personal use. 

Share Money
has the definition appointed in Article 22.1 of this agreement. 

Related
Party refers to the controlling shareholder of borrower, actual controller, directors, 

supervisors, superintendents, enterprises, entity and individual with direct or indirect controlling relations, another
enterprises, entity and individuals who may lead to the transfer of borrower’s interest. 

Payment Date
refers to the date listed in the payment date of withdrawal notification for each sum of loan. 

Accounting
Year refers to the period from Jan 1 of each calendar year (including this day) to Dec 31 of this calendar year (including this day)
for the borrower. 

Accounting
Norms refer to the accounting norms in conformity with Chinese laws and applicable in China. 

Base Rate
refers to RMB legal loan interest rate (shown by the annual interest rate) stipulated, adjusted and issued by People’s Bank of
China irregularly. 

Value date
refers to the definition appointed in Article 7.2 of this agreement. 

Succession
Agent Bank refers to the definition appointed in Article 20.8 of this agreement. 

Expiry Date
refers to each day of Mar 20, Jun 20, Sep 20 and Dec 20 and expiry date of each sum of capital and trade financing capital. The last
expiry date under this agreement is the last payment date or all the debts redemption date. The interest will be paid off together
with the principal. 

Borrower
refers to WSP. 

Shareholders
of borrower refer to all the investors of registered capital listed in the Articles of Incorporation of the borrower and another
successors or transferees. 

Independent
Pay of Borrower refers to: The borrower independently pay to the business objective of the borrower who is in conformity with the
loan usage appointed in Article 5.1 of this agreement after the credit agent bank mentioned in Article 12.18 of this agreement grant
the loan fund granted by the participant bank to special capital account of borrower based on the capital withdrawal application of
borrower. 

Available
Loan Commitment Sum refers to the balance between the loan commitment sum of this participant bank and the loan sum required for
withdrawal in any withdrawal notification and not withdrawn under the precondition of this agreement.

Interest
Adjustment Date refers to the next day of each day of Mar 20, Jun 20, Sep 20 and Dec 20 of each calendar year. 

Co-lead Bank
refers to Bank of China Limited Wuxi Branch and Agricultural Bank of China Limited Wuxi Branch. 

Liquid
Capital Loan refers to the loan granted by the participant bank to the borrower based on the agreement and used by the borrower for
liquid capital turnover or replacement of stock loan. The loan line of liquid capital loan under the agreement cannot be more than
RMB2,100,000,000.

Trade
Financing refers to the short financing applied by the borrower to the bank 

consortium based on this agreement and provided by the participant bank to the borrower. The trade financing credit way under this
agreement includes, but not limited to package loan, bank acceptance, export bill purchase, export discount, import bill purchase, L/C, shipping guarantee, commercial draft discount, L/G, factoring, forfeiting, etc. 

Trade
Financing Credit Line refers to the credit line balance between the trade financing sum applied by the borrower to the bank
consortium based on Article 10.1 of this agreement and guarantee sum provided by the borrower to the participant bank. 

Balance of
Trade Financing Credit Line refers to the balance between the total initial subscription sum subscribed on the validity of agreement
and sum equivalent to RMB1,400,000,000. 

Credit
Validity of Trade Financing refers to the credit validity of trade financing provided by the participant bank to the borrower as per
Article 10.3 of this agreement. 

Credit
Balance of Trade Financing refers to the total sum of trade financing granted by the participant bank, but unpaid or fulfilled by
the borrower. 

Default
Interest Rate for Personal Use has the definition appointed in Article 73.(2) of this agreement. 

Notification
Cancellation refers to a copy of written notification upon entirely or partially canceling the credit sum/subscription sum of
participant bank provided to the agent bank as per the appointment stated in Article 1.2 of this agreement. 

RMB refers
to the legal currency of China.

People’s Bank refers to People’s Bank of China or any branch according to the contents. 

The
subscription proportion refers to the proportion of subscription amount of participant bank accounting for the total subscription
amount of the participant bank. 

The
subscription amount refers to: under the precondition of other appointments of this agreement, at any time, (1) only for 1 Initial
Participant Bank, the initial subscription amount of initial participant bank+ amount with newly-increased trade financing credit
line during the validity of agreement-(a) the portion of this initial participant bank in all the trade financing amount granted as
per the agreement-(b) the portion of this initial participant bank in the trade financing amount cancelled as per the stipulations
of this agreement-(c) the subscription amount of any party transferred as per Article 23 of this agreement; (2) for the participant
bank with newly-increased trade financing credit line during the agreement, the subscribed amount with trade financing credit line
of participant bank-(a) the portion of the participant bank in all the trade financing capital granted as per the agreement -(b) the
portion of this initial participant bank in the trade financing amount cancelled as per the stipulations of this agreement-(c) the
shared amount of any party transferred as per Article 23 of this agreement; (3) only for 1 transferee’s bank, the subscription
amount of any party transferred as per Article 23 of this agreement-the portion of the transferee’s bank in all the trade
financing amount granted as per the agreement-the portion of the transferee’s bank in the trade financing amount cancelled as
per this agreement. 

Financing Documents refer to this agreement, guarantee contract, bank consortium agreement between borrower and participant banks,
liquidity management agreement, document related to the credit under the agreement and any document appointed by co-lead bank, participant bank, agent bank and borrower.  

The validity
date refers to the formal signing date of formal documents mentioned in Article 33.1 of this agreement and signed by the borrower,
arranging bank, co-lead bank, credit agent bank, guarantee agent bank and every participant bank. 

The
transferee’s bank has the definition appointed in Article 23.3 of this agreement. 

Credit agent
bank refers to Bank of China Limited Wuxi Hi-tech Industrial Development Zone Sub-branch or any other successor and/or transferee.

The
entrusted payment of credit agent bank refers to: as per Article 12.14 and 12.15 of this agreement, the credit agent bank pay the
loan fund to the business objective of borrower and financial institute with stock loan who are in conformity with the loan usage
appointed in Article 5.1 of this agreement via the special capital account of borrower based on the application and payment entrust
of borrower. 

The credit
line refers to the credit line of liquid capital loan and trade financing applied by the borrower to the bank consortium as per
Article 2.1 of this agreement. The credit line includes loan line and trade financing credit line. 

Balance of
Credit line refers to the balance among the loan commitment amount of loan line for the credit line subscribed by the participant
bank on the validity date, total subscription amount of trade financing credit line and amount equivalent to RMB 3,500,000,000. 

Credit
deadline refers to the period from the withdrawal date of first sum of capital to 36 months after the validity date (including this
day) of this agreement. During which, the participant bank agrees to provide the liquid capital loan and trade financing credit line
as per the articles and condition of this agreement. 

Credit
balance refers to the total credit capital granted by the participant bank under this agreement, but unpaid or fulfilled by the
borrower. 

Credit
capital refers to any sum of loan line granted by the participant bank and principal of trade financing credit line as per the
agreement. 

Taxes refer
to the taxes, fees, customs, withholding tax and other similar fees collected by the taxation, finance or other administration
organs under jurisdiction of the courts. 

Withdrawal
date refers to the actual granting date of each sum of loan fund. 

Withdrawal
notification refers to any withdrawal notification formally issued to the borrower as per the form of appendix 4 and contents of
this agreement and examined by the credit agent bank. 

Repayment
Notification refers to any repayment notification formally issued to the borrower as per the form of appendix 6 and contents of this
agreement and examined by the credit 

agent bank.

The default
event refers to any event listed in Article 19.1 of this agreement. 

Relevant
regulator refers to People’s Bank, China Banking Regulatory Commission (CBRC) and China Securities Regulatory Commission or any
branch based on the context. 

CBRC refers
to China Banking Regulatory Commission or any branch based on the context. 

Based on the
purpose of this agreement, Bank consortium (1) Bank of China Limited Jiangsu Branch serves as arranging bank; (2) Bank of China
Limited Wuxi Branch and Agricultural Bank of China Limited Wuxi Branch serves as co-lead bank (3) Bank of China Limited Wuxi Hi-tech
Industrial Development Zone Sub-branch serves as credit agent bank; (4) Agricultural Bank of China Wuxi New District Sub-branch and
Bank of China Limited Wuxi Hi-tech Industrial Development Zone Sub-branch as the guarantee agent bank (5) the bank listed in
Appendix 1 of this agreement and the bank providing the credit under the agreement to the borrower as per this agreement serve as
the participant bank group.

Bank
Consortium Agreement refers to WSP Structured Bank Consortium Comprehensive Credit and Loan Agreement with an Amount Equivalent
to RMB 3.5 Billion and any amendment and supplement signed by arranging bank, co-lead bank, initial participant bank, credit
agent bank and guarantee bank on Aug 29, 2011. 

The working
day refers to any working day of commercial bank in China (not including Saturday and Sunday and other legal holidays and
festivals). 

Overdue
Penalty Interest Rate has the definition appointed in Article 7.3.(1) of this agreement. 

Liability
includes, but not limited to the any liabilities related to the following items: (1) loan; (2) any company mortgage bond, bond,
cashier’s cheque, stock or other similar bills; (3) any acceptance or documentary credit (4) sold or discounted accounts
receivable (excluding the accounts without recourse);(5) purchase cost of any assets paid before or after obtained or occupied. The
prepaid or deferred payment serves as one of financing to the purchase of the assets; (6) financing for purchasing the leasing
assets; (7) Any fair price for any currency swap, interest swap, cap-and-trade and flooring trade and other derivative trade; (8)
Account financed by the loan or financing results in the other business; (9) Any guarantee, compensation or similar promise to the
financial losses of any person; (10) Liabilities related to any other contract. But, any liability cannot be doubly counted. 

Pledge
Contract refers to the pledge contract of maximum stock rights signed by and between the mortgagor and the guarantee
bank-Agricultural Bank of China Wuxi New District Sub-branch as per the form and contents listed in Appendix 11 of this agreement,
the pledge contract of accounts receivable signed by and between the mortgagor and the guarantee bank-Agricultural Bank of China
Wuxi New District Sub-branch as per the form and contents listed in Appendix 12 of this agreement. 

China refers to the People’s Republic of China. 

Critical
Adverse Effect refers to great changes happened with the legal status, assets condition, financial condition or operation condition
of the borrower, which has brought or will bring critical adverse effect to the capacity of borrower to fulfill all the duties under
the agreement based on the reasonable adjustment of major participant banks. 

The
transferee’s bank has the definition appointed in Article 23.3 of this agreement. 

The transfer
certificate refers to one copy of transfer document signed by the transfer bank, transferee’s bank or agent bank as per the
form and contents listed in Appendix 14 of this agreement. 

Special
Capital Account refers to the account opened or appointed by the credit agent bank as per Article 15.15 of this agreement, which is
special for depositing the loan fund granted by the bank consortium and normal operation expenditures of borrower. 

The
subsidiary refers to the enterprise entity whose similar rights of more than 50% of stock rights are directly or indirectly held or
the election of more than half of members of board of directors can be decided by others or actually controlled by others via the
agreement or other arrangement. 

The last
payment date refers to 36 months as of the withdrawal date (including this day) of first sum of loan, excluding another stipulations
of this agreement. 

1.2
Explanation 

(1) The
catalogue and topics of articles in the agreement are established only for convenient reading, which can be neglected when
explaining the agreement. 

(2)
“Assets” should be understood as the current and future, tangible or intangible assets, income, earning, account
receivable, intellectual property, trade name and any nature of property rights. 

(3)
“Person” should be understood as any natural person, enterprise legal person, institution legal person, partner, country,
governmental departments, international organizations, social corporations, groups or any other organization and legal entity. 

(4)
“One Party control other party” refers that one party has the right to decide or effect the management and decision-making
through holding the stock right with voting power or contract or any other way. 

(5)
Continuousness of one default event refers that this default event has happened and hasn’t been removed, which didn’t make
the bank consortium to provide the satisfactory and reasonable remedy or was exempted by the bank consortium.

(6)
“One month” refers to the period from one day of one calendar month to the corresponding day of the next calendar month.
But, if the next calendar month hasn’t the corresponding day, this period should be ended on the last day of next calendar
month.

(7)
“business Suspense”, “Dismiss”, “Liquidation”, “Bankruptcy”, “Reforming” or

“Readjustment” of any person should be understood as any same or similar legal procedures as per the
establishment place of
this person or business place. Enter into this

legal procedures include that this person has passed the decision or any person applies for this legal procedures. 

(8)
“Participant Bank” and “Agent Bank” mentioned in the agreement should be explained as any legal successor and
allowed transferee. 

(9) This
agreement, any other agreement or document should be understood as any amendment, modification, replacement or supplement made for
according with the appointments of the articles.

(10)
“The foregoing”, “no more than”, “in  days”, “in   working days”,
“expiry”, “as of” stated in the agreement include the basic number. 

(11)
Excluding another appointment in the agreement, when RMB or other foreign currency are converted under the agreement, the medium
price between RMB and equivalent foreign currency rate issued by China Sate Administration of Foreign Currency should be counted on
the same day. During the settlement and sales of exchange, the foreign exchange should be converted as per the foreign exchange rate
issued by the agent bank on the payment date. 

2. Credit
Line and Deadline 

2.1 The
participant bank separately agree to provide the credit line of principal equivalent to no more than RMB3,500,000,000 and no less
than RMB2,500,000,000 to the borrower as per this agreement. Of which, it includes:

(1) Loan
line with total principal no more than RMB2,100,000,000. 

(2) Trade
financing credit line with total principal no more than RMB1,400,000,000. 

2.2 On the
validity of this agreement, the limit of credit line subscribed by the initial participant bank is equivalent RMB2,860,000,000). The
portion subscribed by the initial participant bank on the validity date of this agreement should be listed in appendix 1 of this
agreement. On the validity of the agreement, the balance of credit line should be equivalent RMB640,000,000 to be subscribed by the
participant bank. The subscription period should be the shortest period between the validity period of this agreement and the period
from the effective date to the purchase date of full credit balance. If the amount in the credit line subscribed by the participant
bank during the agreement cannot reach equivalent RMB3,500,000,000, and the total financing amount of the borrower is no more than
equivalent RMB3,500,000,000 and the liquid fund loan is no more than RMB2,100,000,000, the borrower can apply for financing to the
financial institutions beyond the bank consortium. 

2.3 When any
participant bank purchases the credit line balance, the bank should submit the “Subscription letter of Credit Line
Balance” to the co-lead bank as per the form listed in appendix 2 of this agreement. When any participant bank purchases the
credit line balance, the participant bank should subscribe the credit line balance as per the
proportion of 60%:40% between the subscribed loan line and trade financing credit line. The credit line balance subscribed by the
participant bank and confirmed by the co-lead bank is the

amount of credit line balance finally subscribed by the participant bank. 

2.4 During
the credit, the sales income in the last year of the borrower shouldn’t be less than the equivalent RMB RMB4,000,000,000. After
the approval of bank consortium, the borrower can ask to increase the credit line of trade financing. The proportion of increased
trade financing credit line cannot exceed the proportion of increased sales income in last year. If the bank consortium agrees to
increase the credit line of trade financing, the participant bank has the prior subscription right under the same condition.
  

2.5 The
duties of each participant bank under the agreement are mutually independent. If any participant bank cannot fulfill the duties
under the agreement, any other participant bank or borrower cannot be exempted from fulfilling the duties under the agreement. It is
no necessary for any participant bank to bear any liability for other duties under this agreement. 

2.6 The
credit deadline under this agreement is 36 months as of the withdrawal date of first sum of loan fund. 

2.7
Considering that the borrower is during the business recovery, the special observation period of bank consortium:

(1) The
special observation period is 12 months as of the withdrawal date of first sum of loan fund. During the special observation period,
the bank consortium will check the business index of borrower. The check period is from Jul 1, 2011 to Jun 30, 2012. 

(2) The
check index set during the special observation period can see appendix 16 of this agreement. 

(3) The
borrower should submit the business analysis report during the special observation period to the credit agent bank before Jul 20,
2012. The credit agent bank should convene the bank consortium meeting in 3 days after receiving the t business analysis report
submitted by the borrower. The bank consortium should convene the bank consortium meeting before Aug 5, 2012 and discuss and decide
the continuousness of bank consortium after the special observation period;

(4) If the
business condition of the borrower is improved and can reach the check index listed in Appendix 16 of this agreement during the
special observation period, each participant bank of bank consortium should continue to provide the credit line, credit commitment
amount and subscription amount appointed in the agreement for the borrower as per the appointments of this agreement;

(5) If the
business condition of borrower obviously deteriorates and cannot reach the check index listed in Appendix 16 of this agreement
during the special observation period, the bank consortium has the right to terminate in advance in 12 months after the withdrawal
date of first sum of loan fund;

(6) During
special observation period, the interest for the liquid capital loan provided by
the participant bank should be calculated as per 5% more than the basic interest rate for the liquid capital loan from 1 year to 3 years
issued by People’s Bank of China. If the borrower

cannot reach the check index listed in Appendix 16 of this agreement during the special observation period
and cause the bank consortium is terminated in advance, the borrower will pay the loan
commitment charges to the participant bank as per the following: (5% more than basic interest rate for liquid capital loan from 6 months to 1 year issued by People’s Bank on the withdrawal date of first sum of loan fund-5%
more than basic interest
rate of liquid capital loan from 1 year to 3 years)*loan capital amount granted by the participant bank on the expiry date of special observation period. 

2.8 If the
business situation of the borrower is improved and requires the financing during the credit period, the bank consortium has right to
ask the borrower to delay the credit deadline in 3 months before the credit deadline expiries. The longest credit deadline cannot
exceed 2 years. The delay condition of credit deadline and credit line of each participant bank will be confirmed after negotiated
by bank consortium and borrower.

3. Loan
Line 

3.1 The
participant bank separately agrees to provide the loan line of liquid capital loan no more than the principal totaling
RMB2,100,000,000. The loan line can be withdrawn by the borrower for one or more times as per the agreement. The loan currency is
RMB. 

3.2 On the
validity of the agreement, the limit of liquid capital loan subscribed by the initial participant bank is RMB1,646,000,000. The
initial subscription amount of initial participant bank on the validity of the agreement is listed in Appendix 1 of this agreement.
On the validity of the agreement, the balance of loan line is RMB454,000,000, which is subscribed and shared by each participant
bank. The subscription period is the shortest period between the validity period and the period between the effective date of the
agreement to subscription date of all the loan line balance. During the subscription, the credit line amount, loan commitment amount
of each participant bank and proportion of loan commitment amount of each participant bank will base on the actual subscription
amount. After subscription period, the credit line bases on the credit line subscribed after the loan balance subscription period.
The loan commitment amount bases on the credit line finally subscribed by each participant bank after the loan balance subscription
period. The loan commitment proportion of each participant bases on the proportion between the loan commitment of each participant
bank and credit line finally subscribed after the loan balance subscription period.

3.3 Because
of the increasing requirement for the trade financing from the borrower, after approval of credit agent bank, the borrower can apply
to the participant bank to transfer the credit line of liquid capital loan subscribed by the participant bank under the agreement to
credit line of trade financing. If the participant bank cannot provide the appropriate trade financing products, the participant
bank can transfer the credit line of trade financing to liquid capital loan. The credit line of liquid capital loan transferred from
trade financing credit line cannot exceed RMB2,100,000,000. 

4. Loan
Deadline

4.1 The loan
deadline of liquid capital loan under the agreement adopts the conditional flexible loan deadline. The longest loan is
36 months from the withdrawal date of first sum

of loan fund to the last payment date. 

5. Usage
of Loan

5.1 The
borrower should specially use all the loan fund under the agreement to the liquid capital turnover or stock loan replacement for
normal business operation of the borrower. 

5.2 Without
the written approval of the entire participant bank, the borrower cannot change the loan usage of loan fund, including, but not
limited to: the borrower cannot use the loan fund to the fixed assets, stock right, stock and other securities investment,
production and operation prohibited by the laws, rules, relevant supervising institutions and state policies, projects prohibited to
enter by the state policy or project not approved by laws and invested projects prohibited with the name of bank loan. 

5.3 the
co-lead bank, each participant bank and agent bank will not bear any liability for the borrower how to use each sum of loan fund.

6.
Withdrawal

6.1 The
borrower should withdraw the loan fund during the withdrawal period as per the agreement. The borrower should withdraw the loan fund
as RMB. 

6.2 Before
the withdrawal date of first sum of loan fund, the borrower should submit a calculation report for the business operation fund
requirement to the credit agent bank. The calculation report should calculate the operation fund requirement as per the business
scale, business character, stock loan, trade financing open, cash, inventory, account receivable, accounts payable, capital cycling
period, etc of the borrower. 

6.3 The
borrower should submit the following document to the credit agent bank before withdrawing the first sum of loan fund:

(1) Original
copy of Resolution of Board of Directors from the borrower, include, but not limited to: approve the articles in the financing
documents and agree to sign each financing document; authorize 1 or more persons to sign each financing document on the behalf:
authorize 1 or more persons to sign and or send all the documents and notification related to the financing documents on the behalf;
the total loan commitment amount available for all the participant banks to be borrowed by the borrower cannot exceed the maximum
credit line; the signing copy of each authorizing persons;

(2) After
verification, they are the true copies of the following documents (one director of the borrower verifies and affix the official seal
of the borrower);

(i) Existing
Articles of Incorporation of borrower (including any amendment and supplement);

(ii)
Business License and Organization Code Certificate of prevailing and effective enterprise legal person of the borrower. 

(iii) Capital
Examination Report issued by China Certified Public
Accountant o which confirms the registered capital of the
borrower has been paid off on time by the shareholders of the borrower;

(iv) List,
status identification, signing sample, official seal, seals of present directors, legal representative of the borrower, status
identification and signing sample of authorized signing person of legal representative;

(v)
Prevailing and effective Taxation Register Certificate (Copy) of borrower;

(vi)
Prevailing and effective loan card issued by People’s Bank to the borrower;

(vii)
Certificate of Bank Account opened by the borrower as per the agreement or required by this agreement. During this agreement, if the
foregoing documents are altered and changed, the borrower should submit the copies of documents after identified and affixed with
the official seal of borrower to the credit agent bank for filing in 7 working days as of the change date.

(3)
“Certificate of Legal Representative” issued according to the form stated in Appendix 3 of this agreement;

(4)
Authorization Letter issued by the borrower, which authorize relevant persons to handle the matters of withdrawal, payment and other
matters;

(5) The
mortgagor and guarantee agent bank-Agricultural Bank of China Wuxi New District Sub-branch mortgage their own land use right, house
buildings, machine and devices listed in “Mortgage and Pledge Property List” of Appendix 9 of this agreement to the bank
consortium. Original of “Maximum Amount Property Pledge Contract” signed as per Appendix 10 of this agreement and original
copy of other right certificate after handling the mortgage register;

(6) The
mortgagor and guarantee agent bank-Agricultural Bank of China Wuxi New District Sub-branch pledge their own legal land use right,
house buildings, machine and devices listed in “Mortgage and Pledge Property List” of Appendix 9 of this agreement to the
bank consortium. Original of “Maximum Stock Rights Pledge Contract” signed as per Appendix 10 of this agreement and
original copy of other right certificate after handling the pledge register; 

(7) The
mortgagor and guarantee agent bank- Bank of China Wuxi Hi-tech Industrial Development Zone Sub-branch pledge their own legal
accounts receivable listed in “Mortgage and Pledge Property List” of Appendix 12 of this agreement to the bank consortium.
Original of “Accounts Receivable Pledge Contract” signed as per Appendix 12 of this agreement and original copy of
certificate after handling the mortgage register;

(8) The
mortgagor and guarantee agent bank- Bank of China Wuxi Hi-tech Industrial Development Zone Sub-branch mortgage their own legal
production equipment (excluding these mortgaged to the bank consortium), raw material, semi-products and finished products listed in
“Mortgage and Pledge Property List” of Appendix 9 of this

agreement to the bank consortium. Original of
“Floating Mortgage Contract” signed as per Appendix 13 of this agreement
and original copy of certificate after handling the mortgage register;

(9)
Certificate of “Charges Letter” stated in Article 16.1 of this agreement and confirmed with the official seal of borrower
and issued by the co-lead bank;

(10) Other
Documents required by Bank consortium or agent bank. 

6.4 Except
the approval of major participant banks, after the credit agent bank confirm to have received all the documents listed in Article 63
of this agreement and the form and contents of each document satisfy the credit agent bank, the borrower can submit the first
withdrawal notification.

6.5 The
borrower should submit the following documents before submitting the second or later withdrawal notification:

(1) The loan
fund used by the borrower should be in conformity with the certificates appointed in the agreement;

(2) Other
documents required by the bank consortium or agent bank. 

6.6 Except
other appointment in this agreement, after meeting all the following conditions, a sum of loan fund will be granted to the borrower
by the credit agent bank:

(1) A copy
of withdrawal notification, borrowing receipt, some background materials of money spending and documents listed in Article 6.3 of
this agreement issued for the sum of loan fund by the borrower and received before 11:00am of the fifth working day before the
withdrawal day set in the withdrawal notification;

(2) The
credit agent bank should check this withdrawal notification in 2 working days after receiving the withdrawal notification. If the
condition cannot be met, the bank will notify the borrower;

(3) The
borrower has provided the written certificate (the credit agent bank will decide as per the situation) of realized situation of
mortgage right to the credit agent bank, which will show if the mortgages mortgaged to the bank consortium are sealed up, detained
and frozen. 

(4) Based on
the honesty, the withdrawal notification date and withdrawal date set in the withdrawal notification

(i) As the
statement listed in Article 14 of this agreement, the borrower guarantee that all the facts and situation upon the withdrawal
notification and withdrawal date are true and authentic. 

(iii) No
default event happened and existing. 

6.7 Except
the appointment in the foregoing Article 6.6, the granting of each sum of loan fund under the credit line stipulated in Article 3.1
of this agreement must meet the following condition:

(1) The withdrawal date set in the withdrawal notification is a working day in the withdrawal period; 

(2) The
amount (except the last sum of loan fund with credit line) of the loan fund with credit line withdrawn in the withdrawal
notification cannot exceed the available loan commitments amount of credit line of all the participant banks on the submission date
of withdrawal

notification;

(3) The
borrower has no critical adverse events;

6.8 Under
the precondition of Article 6 of this agreement, after receiving the withdrawal notification of first sum of loan fund, the credit
agent bank should check the withdrawal notification as per the loan usage and business rules listed in the agreement in 2 working
days after receiving the withdrawal notification. When checking the withdrawal notification, the credit agent bank should check all
the documents and appendix documents of the withdrawal notification as per the loan usage listed in the agreement. If the credit
agent bank thinks this withdrawal notification isn’t in conformity with the withdrawal condition after check, the bank will
notify the borrower. Otherwise, the credit agent bank should notify each participant bank to participation in the granting the loan
fund and loan ports of each participant bank and provide the copies of withdrawal notification as per the withdrawal plan confirmed
by major participant banks and based on the form and contents of “Loan Notification” listed in Appendix 5 of this
agreement. Under the precondition of other appointments in the agreement, each participant bank should remit the loan fund granted
by the participant bank into the bank account appointed by the credit agent bank as per the withdrawal and loan notification issued
by the credit agent bank and stipulations stated in Article 12.1 of this agreement. 

6.9 Under
the precondition of receiving all or partial loan fund as per Article 12.1 of this agreement, the credit agent bank should grant the
loan fund to the borrower on behalf of each participant bank on the withdrawal date. 

6.10 After
the participant bank grants the loan fund of liquid capital loan under the initial commitment loans, the borrower should firstly
replace the loan fund into the stock loan. The borrower cannot continue to get the loan from this financial institution after
replacing the stock loan of non-participant bank. 

6.11 Any
withdrawal notification signed and sent by the borrower is irrevocable. Without the approval of credit agent bank, the borrower
cannot change the withdrawal notification submitted. With the scope of other appointments listed in the agreement, the borrower has
the duties to withdraw as per the withdrawal notification. 

6.12 The
withdrawal period of liquid capital loan under the initial loan of this agreement is 12 months as of the withdrawal date of the
first sum of loan fund. The withdrawal period of liquid capital loan under the initial loan balance of this agreement is 12 months
from the subscription date of relevant loan differences to the last payment date. 

6.13 Except
the written application of borrower and approval of withdrawal period delay of major participant banks, after the expiry of
withdrawal period, the available loan
commitment amount of each participant bank to be drawn by the borrower can decrease to zero automatically. 

7.
Interest Rate, Accrual and Payment

7.1 Interest
Rate

(1) For each
sum of loan fund with credit line under the liquid capital loan withdrawn by the borrower, the loan interest rate of this sum of
loan fund will be calculated as per 55 more than the basic interest rate of liquid capital loan from 1 year to 3 years issued by the
People’s Bank on the withdrawal date. 

(2) Except
special stipulations of People’s Bank, the loan interest rate of each sum of loan fund should be adjusted once on each
adjustment date of interest rate. The interest rate after adjustment will be calculated as per 5% more than basic interest rate of
liquid fund loan from 1 year to 3 years issued by People’s Bank on the adjustment date of interest rate, which will be used for
the loan interest rate suitable for next floating period. If the loan interest rate is adjusted like this, it is no necessary to get
the approval from the borrower firstly. 

(3) If
People’s bank opens the control to the basic interest rate, 

(i) With the
consent of major of participant banks, the borrower and credit agent bank confirm the new loan interest rate as per the decision to
the control open of People’s Bank to the basic interest by the signing of supplement agreement and 5% loan interest more than
RMB liquid loan rate at the same period in China;

(ii) After
the basic interest rate is open and before consistent opinion of new loan interest rate between borrower and major participant
banks, the loan interest rate should be applicable to 5% more than last basic interest rate issued before People’s Bank open
the control of basic interest rate. 

7.2 Interest
Accrual

(1) The
value date of each sum of loan capital is the withdrawal date of this sum of loan capital.

(2) Based on
360 days of each year, the loan interest under this agreement should be calculated as per the actual loan balance and occupying
days. The calculating formula of interest: Interest=Principal * Actual Days* Daily Interest Rate (Daily Interest Rate-Annual
Interest rate/360).

(3) Each
value date of each sum of loan fund under the agreement should be 3 months, but it must meet the following condition:

(i) The
first value date of each sum of loan capital should be calculated from the first withdrawal date to the first nearest expiry date.

(ii) The
interest accrual period of each sum of loan fund should be calculated from the second day of interest expiry date of the last
interest accrual to the interest expiry date. 

(iii) Although the foregoing stipulations, the interest accrual period shouldn’t exceed the last payment date.
If any interest accrual period exceeds the last payment date because of the stipulations of this Article, the last payment date or actual compensation date of loan fund should be regarded as the maturity date of interest accrual period. 

(4) If
People’s Bank adjusts the method of interest accrual, the participant bank should

execute as per the stipulations of
People’s Bank without the approval of borrower. 

7.3 Penalty
Interest and Compound Interest

(1) If the
borrower cannot return the loan fund of relevant amount on the payment date appointed in the agreement, the penalty interest will be
collected for the overdue part as per the overdue penalty interest as of the overdue date until the loan fund and interest are paid
off. The overdue penalty interest rate is 130% of the loan interest appointed in Article 7.1 (1) of this agreement. 

(2) If the
borrower cannot use the loan capital as per the usage stated in Article 5 of this agreement, the penalty interest will be collected
for the used part as per the penalty interest rate as of the using date until the loan fund and interest are paid off. The used
penalty interest rate is 150% of the loan interest appointed in Article 7.1 (1) of this agreement. 

(3) For the
overdue loan fund used, the penalty interest will be calculated as per the used penalty interest rate. 

(4) The loan
interest which cannot be paid by the borrower will be collected for compound interest as per the loan interest rate stated in
Article 7.1 (1) of this agreement. The compound interest will be collected for the overdue loan as per the penalty interest rate
stated in the agreement. 

(5) If the
loan interest rate is changed when penalty interest and compound interest are collected, the penalty and compound interest can be
calculated as per the loan interest rate after adjustment as of the adjustment date of interest rate. 

7.4 Interest
Payment

(1) Except
special stipulations in this agreement, the borrower should pay the interest and or penalty interest of each sum of loan fund on the
next working day of each maturity date. If any sum of loan fund expiries or the borrower makes the payment in advance, the interest
will be paid off together with the principal. 

(2) In 3
working days before the maturity date, the credit agent bank should notify the borrower for the interest and/or penalty interest
payable on next working day of maturity date. Even if the credit agent bank doesn’t send the notification of interest payment,
the borrower’s duties to pay the interest as per the agreement cannot be exempted or affected. The borrower should pay the
relevant interest in time. 

8.
Payment 

8.1 The
borrower should repay the loan capital under the credit line as per the following
the installments, payment date and principal payment amount:. 

			

	
Installment

	
Payment Date

	
Payment Amount

	
1

	
Withdrawal date of first sum of
loan capital is the interest maturity date of current month in the following 24 months.

	
20% of loan balance as the loan
capital when the withdrawal dates expiries.

	
2

	
Last payment date

	
80% of loan balance as the loan
capital when the withdrawal date expiries.

	
  Total 

	
  -- 

	
  100% of loan balance as the
  loan
capital when the withdrawal
  date expiries. 

8.2 Except
special stipulations of this agreement, when the borrower owes the principal and interest of liquid capital loan, major participant
banks have the right to decide the sequence to repay the principal or interest of liquid capital loan. If more sums of maturity loan
and overdue loan under this agreement, major participant banks have the right to decide the payment sequence of borrower. 

8.3 The
borrower cannot borrow the loan capital repaid as per Article 8 of this agreement again. 

8.4 The
borrower should repay all the loan balance and interests, compound interest, penalty interests and other charges unpaid on the last
payment date. 

9.
Repayment Date 

9.1 Under
the precondition of Article 9.2 of this agreement, in case of repayment, the borrower should submit the “repayment
notification” to the credit agent bank 10 working days in advance as per the form stated in Appendix 6 of this agreement. After
obtaining the written approval of bank consortium, the borrower can repay all or partial loan balance.

9.2 Any
repayment notification signed and sent by the borrower should list the repayment date and amount. The borrower has the duties to
notify the repayment date and amount as per the repayment notification. 

9.3 If any
of the followings happens and the amount for single items exceeds RMB50,000,000 or the amount for more items exceed RMB200,000,000,
the borrower should notify the credit agent bank in writing in 3 working days of happening date. The bank consortium has the right
to require the borrower to prepay all or partial loan balance with the obtained cash flow in 10 days after receiving the written
notification submitted by the borrower. 

(1) The
borrower obtains great profits by disposing the fixed assets as per the agreement. 

(2) The
borrower obtains great foreign profits in cash;

(3) The
borrower obtains other great cash flow. 

9.4 If the
credit line amount of all the participant banks is less than the equivalent
RMB2,500,000,000 during the credit period, the bank consortium decides not to provide the credit line for the borrower after
resolution of bank consortium meeting; or the business situation of borrowers during special observation period obviously deteriorates and cannot reach the check index set
in Article 16 of the agreement, which causes the risk for the continuousness
of bank consortium. After resolution of bank consortium meeting, the bank consortium decides not to provide the credit line to the borrower during special observation

period and has the right to adopt the following acts:

(1) If the
loan capital isn’t granted, notify the borrower in writing, announce to terminate the withdrawal of all or partial loan capital
to the borrower; after this announcement, this part of loan capital should immediately be terminated for withdrawal;

(2) If the
trade financing credit capital isn’t granted, notify the borrower in writing; announce to terminate the granting of all or
partial loan capital to the borrower; 

(3) Notify
the borrower in writing to announce all the loans not granted in the credit line are cancelled. So, the credit line should be
cancelled and the available loan commitment amount of each participant bank should automatically decrease to zero;

(4) Notify
the borrower in writing to announce all or partial credit balances together with all the accrued interests, charges and other
accounts under the agreement are due and payable immediately.; After announcement, this account becomes the due account payable and
it is no necessary for bank consortium to give further notification;

(5) Fulfill
the guarantee right under the guarantee contract;

(6) Fulfill
any of other rights stated in laws, rules, agreement or financing documents. 

9.5 Bank
consortium should get the consent from majority of participant banks if making the resolution of bank consortium meeting as per
Article 9.4 of this agreement. 

If bank
consortium announces all or partial credit balance together with accrued interests, charges and other accounts under this agreement
are due and payable immediately as per the appointment stated in Article 9.4 of this agreement and the borrower agrees and confirms
it, the borrower should immediately prepare the payment of relevant accounts and pay all the credit balances and unpaid interests,
compound interests, penalty interests, charges and other accounts to the participant bank as per the resolution of bank consortium
meeting. 

9.6 All the
rights stated in Article 9.4 of this agreement or the right of legal solution procedures of any disputes complained by the
participant banks to the borrower should be executed via the credit agent bank. But, if the credit agent bank cannot act as per the
resolution of bank consortium meeting or decisions of majority of participant banks, relevant participant banks can directly take
action. 

9.7 Under
the precondition of appointment stated in Article 9.4 of this agreement, the credit agent bank has right to adopt necessary or
reasonable action to protect the rights under this agreement of participant banks. 

9.8 If the
borrower disobeys the appointment stated in Article 9.5 of this agreement, based
on the requirement of credit agent bank, the borrower should compensate any losses, charges (including, but not limited to
investigation fee, auditing fee, evaluation fee, notary fee, lawyers’ fee, suitcase fee, etc) to participant bank and agent bank because the borrower doesn’t fulfill the duties stated in Article 9.5 of this agreement. 

9.9 The
borrower agrees and confirms that each participant bank and agent bank has right

to deduct the balance from any account opened by
the borrower in participant bank and agent bank (including any branches) and remit to the credit agent bank for apportionment as per
Article 22 of this agreement. The participant bank and/or agent bank should notify the borrower in writing in 2 working days after
deduction. 

9.10 Except
that the borrower pay off all the loan balance at one time, if the borrower repay parts of loan balance, the amount repaid cannot be
lower than RMB50,000,000, which should be integral multiples of RMB1,000,000. 

9.11 The
borrower can borrow the repaid amount again as per Article 9.1 and 9.2 of this agreement. 

9.12 For the
accounts to be repaid by the borrower as per Article 9.1 and 9.3 of this agreement, the borrower should pay the loan balance in
reverse order as per the payment date stated in Article 8 of this agreement. The payment plan before the payment day will keep
unchanged. The interest for repayment will be calculated to the prepayment date. Each participant bank will share the compensation
as per the loan balance proportion of repayment date. If the borrower makes the repayment as per Article 9.2 and 9.3 of this
agreement, the borrower needn’t bear the default liability for repayment. 

10. Trade
Financing 

10.1 Each
participant bank separately agrees to provide the trade financing credit line equivalent to RMB RMB1,400,000,000 to the borrower as
per the subscription amount listed in the Appendix 1 of this agreement during the trade financing credit deadline. The trade
financing credit line under this agreement can be recycled. Unless the participant bank transfer the credit line of liquid capital
loan into trade financing credit line as per the appointment of this agreement or the annual sales income of the borrower is more
than RMB4,000,000,000, the total trade financing credit line between the borrow and participant bank cannot exceed RMB1,400,000,000
at any time of trade financing credit deadline. 

10.2 The
limit of trade financing shared by initial participant bank is equivalent RMB1,214,000,000 on the effective date of this agreement.
The portion subscribed by initial participant bank on the effective date of this agreement is listed in Appendix 1 of this
agreement. On the effective date of this agreement, the trade financing credit line balance is equivalent RMB186,000,000, which is
subscribed by each participant bank. The subscription period is the shortest period between the validity of agreement and the period
from effective date of the agreement to date of full subscription of trade financing credit line balance. During the subscription,
the trade financing credit amount, subscription amount and subscription proportion of each participant bank should base on the
actual subscription amount. After subscription, the trade financing credit line will base on the
trade financing credit line subscribed when the subscription of trade financing credit line balance expiries. The subscription
amount of each participant bank bases on the trade financing credit line finally subscribed by each participant bank when the subscription of
trade financing credit line balance expiries. The subscription proportion of each participant bank bases
on the proportion of subscription amount of each participant bank and the trade financing credit line finally subscribed when the subscription
of trade financing credit line balance expiries.

Each participant bank cannot singly subscribe the trade
financing credit line during the subscription of trade financing credit line balance. 

10.3 The
trade financing credit line deadline under this agreement is 36 months as of the withdrawal date of first sum of loan fund. The
maturity date for the last sum of trade financing cannot exceed the last payment date. During the credit deadline, the use period
for the single trade financing applied by the borrower will be confirmed as per the deadline of trade financing products. The trade
financing credit line can be recycled during the credit deadline. 

10.4 The
trade financing credit way under this agreement includes, but not limited to package loan, bank acceptance bill, export documentary
bill, export discount, import documentary bill, L/C, shipping guarantee, commercial bill discount, L/G, Factoring, Forfaiting, etc.

10.5 Each
party of this agreement agrees and confirms that the proportion of the amount for trade financing handled by the borrower in the
participant bank and total amount for trade financing of participant bank should match the subscription proportion of each
participant bank. The borrower should submit the written report upon the settlement of trade financing of bank consortium to the
credit agent bank in each quarter. If the participant bank thinks the portion of trade financing of each participant bank is not
uniform, the bank can propose convening the bank consortium meeting for the distribution of trade financing to the credit bank
agent. 

10.6 Each
party of this agreement agrees and confirms that the trade financing credit under this agreement should be handled by each
participant bank based on prevailing laws, rules, trade management rules, business rules of each participant bank, the trade
financing agreement signed by borrower and participant bank. The trade financing agreement signed by the borrower and participant
bank is the minor agreement of this agreement, which cannot be contradictory to this agreement and damage the rights and interests
of other participant banks. Otherwise, the articles will base on this agreement.

10.7 Each
party of this agreement agrees and confirms that each participant bank will bear any risk and liabilities because providing the
trade financing credit to the borrower. But, the risk and liabilities will be finally borne by the borrower. 

10.8 Each
party of this agreement agrees and confirms that the bank consortium should sign “Agreement of Liquidity Management” with
the borrower upon the granting and management of trade financing credit. 

11.
Cancellation 

11.1 If the borrower suffers from the default event as per Article 19.1 of this agreement or another appointment is listed in
financing documents, the participant bank has right to cancel all the amounts not granted of credit line as per the agreement.

11.2 During
the withdrawal, the borrower should submit the cancellation notification to the credit agent bank 30 working days in advance. If the
borrower applies to cancel all or partial loan

commitment amount/subscription amount of participant bank can be canceled after the consent of bank consortium. The cancellation
amount and date should be listed in the cancellation notification. All or parties loan commitment amount cancelled cannot be
recovered. The cancellation notification is irrevocable. The cancellation of loan commitment amount/subscription amount will be
valid as of the date listed in the cancellation notification. 

11.3 If
canceling all or partial loan commitment/subscription amount, the amount cancelled should be no less than RMB 10,000,000, which
should be integral multiples of RMB 10,000,000. 

11.4 If the
borrower cancels loan commitment/subscription amount, loan commitment/subscription amount of each participant bank should decrease
as per the proportion of loan commitment/subscription amount before cancellation and the loan commitment/subscription amount of all
participant banks as of the cancellation date. 

12.
Stipulations of Payment

12.1 Under
the precondition of other appointments in the agreement, when each participant bank grants each sum of loan fund, the bank should
remit the granted amount of loan fund into the account appointed by credit agent bank by T/T or Transfer before 11:00 am of each
withdrawal date under the agreement. 

12.2 The
funds transfer between participant bank and credit agent bank should be finished via the account stated in Article 12.1 of this
agreement. The credit agent bank should transfer the loan fund actually received as per Article 12.1 of this agreement into the
account opened by the borrower in the credit agent bank or special fund account appointed. 

12.3 The
credit agent bank should send the repayment notification to the borrower as per the form and content stated in “Repayment
Notification” of Appendix 7 of this agreement before 10 working days when the borrower pays any due account to the co-lead
bank, agent bank an any participant bank as per the agreement, send the payment notification to each participant bank as per the
form and contents stated in “Repayment Notification” of Appendix 8 of this agreement. 

12.4 The
“Repayment Notification” sent by the credit agent bank to the borrower as per Article 12.3 of this agreement will not
consist of the precondition that the borrower pays any due account. Even if the credit agent bank doesn’t send the repayment
notification, the borrower cannot be exempted from the duties to pay any due account as per the agreement. The borrower should
organize the funds and repay the principal, interests and
relevant charges in time. 

12.5 If the
participant bank has objections to the amount at current period recorded in “Repayment Notification” sent by the agent
bank as per Article 12.3, the bank should submit the written objections to the agent bank in 1 working day after receiving the
“Repayment Notification”. Otherwise, it will be regarded that the bank accepts the matters recorded in “Repayment
Notification” from the agent bank. 

12.6 The
borrower should repay the principals, interests and charges of liquid fund loan as per the following ways:

(1) Remit
the interests of liquid fund loan into special account for debt repayment before 11:00am (Beijing Time) of first 3 working days
before maturity date of interest. 

(2) Remit
the principals of liquid fund loan into special account for debt repayment before 11:00am (Beijing Time) of first 3 working days
before repayment date. 

(3) Remit
relevant accounts of liquid fund loan into special account for debt repayment before 11:00am (Beijing Time) of first 3 working days
before payment date of other accounts payable. 

12.7 The
borrower irrevocably authorizes the credit agent bank to directly deduct the principals, interests, compound interests, penalty
interests and other charges due and payable under this agreement from the account of borrower to the special account for debt
repayment. If the fund in the special account for debt payment is not enough, the borrower irrevocably authorizes the credit agent
bank and each participant bank to deduct the principals, interests, compound interests, penalty interests and other charges due and
payable under this agreement from all the accounts opened. 

12.8 The
credit agent bank should remit the loan principals, loan interests and other charges into the accounts appointed by each participant
bank separately at 16:00 of repayment date, 16:00 of next working day after maturity day of the interest and 16:00 of the payable
date. The credit agent bank should send the account deduction certificate to the borrower in time. 

12.9 The
agent bank has no duties to pay for any accounts in advance for any party in the agreement. Any sum of account will be paid any
party under the agreement by the credit agent bank as per articles of this agreement. If the credit agent bank doesn’t receive
this amount on the payment date, other party under this agreement who received the amount from the borrower should return it to the
credit agent bank immediately in light of the requirement of credit agent bank. 

12.10 Except
another appointment in this agreement, If the payment date of funds payable is not a working day, the fund should be paid 1 working
day in advance.

12.11 The
borrower should pay the due fund payable in the following ways:

(1) The
charges under Article 16.1 should be paid in RMB. Other cost, compensation charges under the agreement should be paid in the actual
existing currency;

(3) The payment and repayment of any credit balance should be operated in the currency of credit balance;

(4) Other
funds payable under the agreement should be paid as per the currency appointed in the agreement. 

12.12
Without the default event, except that the borrower makes the payment as per Article 22.2 of this agreement and other appointment is
listed in the agreement; any funds

received by the agent bank from the borrower should be distributed in the following sequence:

(1) Pay any
reasonable charges unpaid under the agreement of the borrower to the agent bank and participant bank;

(2) Pay the
interests (including, but not limited to any interests, compound interests and penalty interests) of any liquid fund loan unpaid as
per the proportion of loan fund granted by the participant bank, but not paid by the borrower and the loan balance of all the
participant banks;

(3) Pay the
principals of any liquid fund loan unpaid as per the proportion of loan fund granted by the participant bank, but not paid by the
borrower and the loan balance of all the participant banks;

(4) Pay the
interests (including, but not limited to any interests, compound interests and penalty interests) of any trade financing fund unpaid
as per the proportion of trade financing fund granted by the participant bank, but not paid by the borrower and the trade financing
credit balance of all the participant banks;

(5) Pay the
principals of any trade financing fund unpaid as per the proportion of trade financing fund granted by the participant bank, but not
paid by the borrower and the trade financing credit balance of all the participant banks;

(6) Pay
other funds unpaid as per the proportion of credit fund granted by the participant bank, but not paid by the borrower and the credit
balance of all the participant banks;

12.13 After
default event happens, except the appointments stated in Article 13.6 of this agreement, any funds received by the agent bank from
the borrower should be distributed in the following sequences:

(1) Pay any
reasonable charges unpaid under the agreement of the borrower to the agent bank and participant bank;

(2) Pay the
principal and interest of liquid fund loan to each participant bank as per the proportion of loan fund (will be decided as per the
actual granting situation of loan fund) granted by each participant bank, but not paid by the borrower and loan fund granted by all
the participant banks, but not paid;

(3) Pay the
principal and interest of trade financing credit fund to each participant bank as per the proportion of trade financing credit fund
(will be decided as per the actual granting situation of trade financing credit fund) granted by each participant bank, but not paid
by

the borrower and trade financing credit fund granted by all the participant banks, but not paid;

(4) Pay
other funds to each participant bank as per the proportion of other funds granted by each participant bank, but not paid by the
borrower and other funds granted by all the participant banks, but not paid;

12.14 When
paying the loan fund from special fund account, if any of the following happens,

the entrusted way of credit agent should be
adopted:

(1) Clear
payment object and over RMB5,000,000 for single payment of loan fund;

(2) Other
situation confirmed by the credit agent bank.

12.15 If any
of the following happens, the credit agent bank has right to alter the payment way of loan fund stated in Article 12.18 or terminate
the payment and granting of loan fund as per the resolution of bank consortium meeting:

(1) The
credit of the borrower comes down;

(2) The
capacity of main-operating business of the borrower seriously decreases;

(3) Abnormal
use of loan use or the payment objective and account cannot match;

(4) The
borrower cannot pay or use the loan fund as per the appointments of the agreement;

(5) The
independent payment of borrower stated in the agreement is not valid or applicable;

(6) Other
situation confirmed by the credit agent bank;

(7) Other
situation stated in this agreement. 

If the
credit agent bank alters the payment way of loan fund as per Article 12.15 of this agreement, it is no necessary to get the approval
of the borrower. But, the bank should notify the borrower in writing ahead of 3 working days. 

12.16 If
adopting the entrusted way of the credit agent bank, the credit agent bank should check if the payment object and amount provided by
the borrower for the payment application is in conformity with business contract and other documents as per the loan usage stated in
Article 5.1 of this agreement. After check, the credit agent bank pays the loan fund to the business object of the borrower via
special fund account. The borrower should report the payment situation, use record and relevant documents of loan fund granted by
the credit agent bank to the credit agent bank once each 3 months. The agent bank should keep the detail record for the report
submitted by the borrower. The credit agent bank will not be responsible for the truth and legality of entrusted payment. If the
credit agent bank found the use certificate and relevant certificates provided by the borrower are not in conformity with the
appointments of the agreement and have some defects, the bank has right to ask the borrower to compensate, replace, explain or
resubmit relevant materials. Before the borrower submits the qualified business
documents, the credit agent bank has right to refuse the granting and payment of relevant funds. 

12.17
Because untrue, incorrect and incomplete entrusted payment information and relevant business documents provided by the borrower
cause that credit agent bank cannot finish the duties of entrusted payment in time, the credit agent bank will not bear any
liabilities. The payment duties of the borrower under the agreement will not be affected. The credit agent bank will pay the funds
to the account of business object as per the withdrawal notification, entrusted payment of borrower and payment certificate of
credit

agent bank. If
the opening bank of the business object returns the funds and the credit agent bank cannot pay the loan funds
to the business object as per the entrusted payment of the borrower, the credit agent bank will not bear any liabilities. The
payment duties of the borrower under the agreement will not be affected. For the funds returned from the account of business object,
the borrower should authorize the credit agent bank to freeze them. The borrower should resubmit the use certificates and relevant
business documents needed for the entrusted payment and check, after the check and consent of credit agent bank, the loan funds can
be paid to the business object of the borrower via special funds account of the borrower. 

12.18 Except
the appointments stated in Article 12.14 and 12.15, the payment of loan funds can be paid independently by the borrower. If adopting
this way, the borrower should submit the payment situation, use record and relevant documents of loan funds to the participant bank
and credit agent bank as per continuous requirement of participant bank and credit agent bank. The borrower should report the
payment situation, use record, relevant documents, payment or repayment situation of loan funds to the participant bank and credit
agent bank in each 3 months. The participant bank or credit agent bank can check if the payment of loan fund is in conformity
with the loan usage stated in Article 5.1 of this agreement by account analysis, voucher check or spot investigation. The borrower
should coordinate the participant bank or credit agent bank to check or investigate and provide relevant documents as per the
requirement of participant bank or credit agent bank. 

12.19 Any
payment made by the borrower under this agreement cannot be offset and counterclaimed or discounted for any offsetting and
counterclaiming. 

13.
Guarantee 

13.1 In
order to guarantee the borrower can enough repay the principals and relevant charges of credit balance under this agreement, the
borrower agrees to mortgage the land use right, house buildings, machines and devices legally held by the borrower and listed in
“Mortgaged and Pledged Assets List” of Appendix 9 of this agreement to the bank consortium. The borrower should sign
“Maximum Amount Property Mortgage Contract” with the guarantee agent bank-Agricultural Bank of China Wuxi New District
Sub-branch on behalf of bank consortium as per the form and contents stated in Appendix 10 of this agreement in 20 working days
after this agreement comes into effect. The borrower should handle the mortgage register and relevant formalities with guarantee
agent bank based on “Real Right Law of the People’s Republic of China” and “Security Law of the

People’s
Republic of China” during the deadline instructed by the guarantee agent bank- Agricultural Bank of China
Wuxi New District Sub-branch. The borrower should ensure the continuous effectiveness of the foregoing assets mortgaged during the
execution of this agreement. 

13.2 The
borrower agrees that the mortgage value for the mortgaged articles set in Article 13.1 of this agreement will base on the value
converted by fair mortgage rate confirmed by the guarantee agent bank.

13.3
 In order to guarantee the borrower can enough repay the principals and relevant charges of credit balance under this
agreement, the mortgagor agrees to mortgage the stock right legally held and listed in “Mortgaged and Pledged Assets List”
of Appendix 9 of this agreement to the bank consortium. In 20 working days after this agreement comes into effect and as per the
form and contents stated in Article 11 of this agreement, the mortgagor should handle the mortgage register and relevant formalities
with guarantee agent bank based on “Real Right Law of the People’s Republic of China” and “Security Law of the
People’s Republic of China” during the deadline instructed by the guarantee agent bank- Agricultural Bank of China
Limited. The borrower should ensure the continuous effectiveness of the foregoing assets mortgaged during the execution of this
agreement. 

13.4 In
order to guarantee the borrower can enough repay the principals and relevant charges of credit balance under this agreement, the
borrower agrees to mortgage the accounts receivable legally held and listed in “Mortgaged and Pledged Assets List” of
Appendix 9 of this agreement to the bank consortium. In 20 working days after this agreement comes into effect and as per the form
and contents stated in Article 11 of this agreement, the borrower should handle the mortgage register and relevant formalities of
account receivable with guarantee agent bank based on “Real Right Law of the People’s Republic of China” and
“Security Law of the People’s Republic of China” during the deadline instructed by the guarantee agent bank- Bank of
China Limited Wuxi Hi-tech Industrial Development Zone Sub-branch. The borrower should ensure the continuous effectiveness of the
foregoing assets mortgaged during the execution of this agreement. In order to guarantee the borrower can enough repay the
principals and relevant charges of credit balance under this agreement, the borrower should mortgage the account receivable obtained
after the effective date of this agreement to the bank consortium. The borrower should submit the list of accounts receivable under
the commercial contract signed by the borrower to the guarantee agent bank- Bank of China Limited Wuxi Hi-tech Industrial
Development Zone Sub-branch in the first 10 days of each month and coordinate the bank to handle the mortgage register and relevant
formalities of accounts receivable. 

13.5 n order
to guarantee the borrower can enough repay the principals and relevant charges of credit balance under this agreement, the borrower
agrees to mortgage the production equipment, raw material, semi-products and products legally held by the borrower and listed in
“Mortgaged and Pledged Assets List” of Appendix 9 of this agreement to the bank consortium. The borrower should handle the
floating mortgage
register and relevant formalities with the guarantee agent bank- Bank of China Limited Wuxi Hi-tech Industrial Development
Zone Sub-branch as per the form and contents stated in Appendix 13 of this agreement and Guarantee Law of Bank of China Limited Wuxi Hi-tech Industrial Development Zone Sub-branch in 20 working days after the agreement comes into effect. The
borrower should ensure the continuous effectiveness of the foregoing assets mortgaged during the execution of this agreement.

13.6 Each
party in the agreement agrees that the mortgaged articles, funds converted from mortgaged articles disposed by bank consortium as
per this agreement, mortgage contract, pledge contract and other guarantee contract should be use for paying off the principals,
interests, penalty interests, compound interests, charges and other funds payable of credit

balance of the borrower. The mortgaged
articles and pledged articles to be disposed by bank consortium should be executed via the guarantee agent bank. The guarantee agent
bank should pay any fund from disposing the mortgaged and pledged articles to each participant bank and agent bank in the following
ways:

(1) Pay the
charges paid by the participant bank and agent bank for realizing the creditor’s rights under this agreement and guarantee
rights under the guarantee contract, any other charges, default funds and damage compensate funds payable by the pledgor and
mortgagor under the guarantee contract to the participant bank and agent bank;

(2) Pay any
reasonable charges, default funds and damage compensate funds due and unpaid by the borrower to the participant bank and agent bank.

(3) Limited
by the funds receivable under the trade financing, fund from stock and receivables from funds receivable punished to the participant
bank and borrower, pay the interests (including, but not limited to any interest, compound interest and penalty interest), charges
and principals of any trade financing credit fund due and unpaid by the borrower to the participant bank;

(4) Pay the
interests (including, but not limited to any interest, compound interest and penalty interest) of liquid fund loan due and unpaid to
each participant bank as per the proportion of unpaid loan fund granted by the participant bank and loan balance of all the
participation banks;

(5) Pay the
principal of any liquid fund loan due and unpaid by the borrower to each participant bank as per the proportion of unpaid loan fund
granted by the participant bank and loan balance of all the participation banks;

(6) Pay the
interests and charges of credit fund of any bank acceptance bill due and unpaid by the borrower to each participant bank as per the
proportion of unpaid credit fund of bank acceptance bill accepted by each participant bank and total unpaid credit funds of
bank acceptance bills accepted by all the participation banks;

(7) Pay the
principals of credit fund of any bank acceptance bill due and unpaid by the borrower to each participant bank as per the proportion
of unpaid credit fund of bank acceptance bill accepted by each participant bank and total unpaid credit funds of bank
acceptance bills accepted by all the participation banks;

(8) Pay the interests
(including, but not limited to any interest, compound interest and penalty interest) and charges of any
trade financing credit funds due and unpaid by the borrower to each participant bank as per the proportion of unpaid trade financing credit
balance granted by the participant bank and trade financing credit balance of all the participation banks;

(9) Pay the
principals of any trade financing credit funds due and unpaid by the borrower to each participant bank as per the proportion of
unpaid trade financing credit balance granted by the participant bank and trade financing credit balance of all the
participation banks;

(10) Pay
other funds due and unpaid by the borrower to each participant bank as per the proportion of unpaid credit fund granted by the
participant bank and credit balance of all the participation banks;

14.
Statement and Guarantee 

14.1 The
borrower hereby makes the following statement and guarantee to the participant bank:

(1) The
borrower is a limited liability company legally established and effectively existing. 

(2) The
borrower has full capacity to have assets, operate the business, sign the agreement and execute the right and fulfill the duties as
per this agreement. 

(3) The
borrower has obtained all the authorization, consents, approval and permit necessary for the signing, execution and business
requirement of this agreement. This authorization, consents, approval or permit are irrevocable. The person to sign this agreement
on behalf of the borrower is the legal authorized representative of the borrower. The agreement signed by him is bond upon the
borrower. 

(4) The
borrower’s duties under this agreement are legal and effective duties, which is bond upon the borrower. The borrower should
fulfill the duties as per articles of the agreement. 

(5) The
borrower signs this agreement and executes the rights and fulfills the rights as per the agreement. The borrower will not break the
following contents and have conflicts with the following contents:

(i) Any
agreement, contracts or contractual documents binding upon the assets of the borrower;

(ii)
Articles of Incorporation and other basic documents of the borrower, or 

(iii) Any
applicable laws, rules, judgment, verdict and ruling to the borrower

(6) No
default event stated in Article 19.1 of this agreement happened ad was existing; the borrower doesn’t bring adverse influences
to the borrowing under the agreement because of breaking the applicable laws, rules, judgment, verdict and rulings.

(7) The
borrower doesn’t attend lawsuit, arbitration, administrative produces, justice or the
execution procedures administrative originations or other similar legal procedures, which will bring adverse influences. 

(8) The
borrower hasn’t entered into the business closing, suspending, recombination, liquidation, conciliation, reorganization,
bankruptcy, dismiss or similar legal procedures. 

(9) During
any justice procedures in China, the borrower and its assets will not enjoy the immunity and special rights for lawsuit, judgment,
execution, property preservation or other legal procedures. 

(10) The
borrower signs this agreement and executes the rights and fulfills the rights as per the agreement only for business, which is
bonded by complete civil and commercial laws. 

(11) The
audited financial statement submitted to agent bank and participant bank recently is made as per the accounting norms and
practices, which fairly, truly and completely shows the financial situation of borrower on the issue date of financial statement and
doesn’t miss any great liabilities, income or serious losses known by the borrower. After the issue of the financial statement,
no great adverse events happen with the financial situation of the borrower. 

14.2 The
foregoing statement and guarantee are made by the borrower on the effective date of the agreement. On each withdrawal notice date,
withdrawal date, interest maturity date, payment date, repayment notice date and repayment date, the foregoing statement and
guarantee will be regarded that the borrower makes the statement and guarantee for the exiting facts and situation on current day,
which are true and correct at that time. 

14.3 The
borrower hereby confirms that each participant bank signs the agreement and fulfill the duties fully based on the trust to the
foregoing statements and guarantee. 

15.
Promise 

The borrower
promises to each participant bank from the effective date of this agreement to the liquidation date of all the unpaid funds under
this agreement of the borrower:

15.1 The
borrower should ensure the duties of each participant bank can become direct and unconditional duties at any time. 

15.2 Once
any of the following happens, the borrower should immediately notify the credit agent bank after the events:

(1) Any
default event; 

(2) Any
lawsuits, arbitration or other legal procedures stated in Item 7 and 9 of Article 14.1 of this agreement; 

(3) The
borrower suffers from mergence, separation, assets transfer exceeding RMB 10,000,000 with single sum, reorganization, shareholding
reform, suspended business application, bankruptcy application, which enough effect the realization of creditor’s rights of
participation bank;

(4) The borrower
suffers from the changes of appellation, legal representative, address, serious accidents, business
stopping, business closing, register cancellation, suspended business license, illegal activities from legal representative or main
principle, serious lawsuits or arbitration, great difficulties for production and operation, bad financial situation;

(5) The
borrower is aware of serious adverse event to be happened. 

15.3 The
borrower should maintain the legal, continuous and effective position of legal person and ensure him/her have necessary capacity of
civil right and conducts to fulfill the agreement. 

15.4 The
borrower should obey all the applicable laws and rules and turn in all the taxes and charges to the government departments in time.

15.5 The
borrower cannot decrease the registered capital and should ensure no adverse changes of business nature and scope. 

15.6 The
borrower should ensure the related transaction between the borrower and related party in any way or contents is fair and equitable.
The borrower will not transfer the profit by non-fair related transaction to damage the legal rights and interest of participation
banks. 

15.7 Without
the written consent of bank consortium, the borrower cannot sell, rent, transfer or dispose 10% of the total assets value of the
borrower via one or more or serial sums in an accounting year (If there are a sum or serial sums of transaction, the total value can
be accumulated). 

15.8 Except
the guarantee stated in the agreement or external guarantee existing before the effective date of the agreement and recorded in the
credit agent bank, without the written consent of majority of participation banks, the borrower cannot set or permit the mortgage
and/or pledge guarantee in the name of other person as beneficiary on any assets and cannot provide any guarantee for the third
party during the execution of this agreement. 

15.9 Without
the written consent of bank consortium, the borrower cannot take any step to make the mergence, separation, business stopping,
reorganization, recombination, liquidation, bankruptcy, dismiss or other similar procedures. 

15.10 During
the execution of the agreement, if the borrower cannot enough pay the principal and interests of liquid fund loan due and payable,
the borrower cannot announce or make the cash bonus without the written consent of bank consortium. 

15.11 During
the execution of the agreement, without the written consent of bank consortium, the borrower cannot make the external equity
investment or fixed assets investment exceeding 5% of net assets of the borrower for single sum or 10% of net assets in 1
accumulative accounting year or creditor’s right investment. 

15.12 The
borrower guarantees that the loan fund used under the agreement cannot exceed the use scope or for other use in any way. 

15.13 According to the requirement of agent bank and written notification to the borrower ahead of 5 days, without the normal
operation of the borrower, the agent bank or majority of participation banks can enter into the business site of borrower or its holding subsidiaries and related companies to check the production and operation situation, assets situation, financial
situation and financial records of borrower or its holding subsidiaries and related companies. The borrower ensures its agent and/or employees to give timely and complete coordination. 

15.14 If the
borrower increases new loan or other types of financing to any financial institutions beyond the bank consortium, the borrower
should be prior to choose the finance business opened by the participant bank such as the loan, L/C, L/G, bank acceptance
bill, etc. 

15.15 The
borrower promises to open or operate relevant special accounts in the credit

agent bank as per the following appointments:

(1) Open or
appoint special RMB account (hereinafter called fund account) in 3 working days after the effective date of this agreement. All the
loan funds under this agreement will be remitted to this account and the fund will be paid via this account. 

(2) Open or
appoint debts payment account (hereinafter called debt payment account) in 3 working days after the effective date of this
agreement. The principal, interests and charges paid by the borrower to the bank consortium will be remitted into this account and
the fund will be paid via this account. 

15.16 The
borrower should open or appoint the fund collection account in the participant bank and timely provide the in-and-out
situation of funds in this account to the credit agent bank. 

15.17 If the
credit agent bank asks the borrower to repay the funds as per the fund collection situation of the borrower and appointment stated
in Article 9.3 of this agreement, the borrower should repay the funds in advance as per Article 9.3 of this agreement. 

15.18 During
the execution of this agreement, the borrower should submit the written report of business situation to the credit agent bank in 10
working days of each quarter. 

15.19
Calculated as per the financial statement in current accounting year after the execution of the agreement, the borrower should reach
the business index:

(1)
Debt-to-Assets ratio≤72%;

(2) Sales
income is no less than the equivalent RMB4,000,000,000; 

(3) Net
profit is no less than the equivalent RMB80,000,000; 

(4)
Circulating ratio≥170%

(5) Quick
ratio≥120%.

15.20
Calculated as per the financial statement in the year 2012, the borrower should reach the business index in 2012:

(1) Debt-to-Assets ratio≤71%;

(2) Sales
income is no less than the equivalent RMB4,500,000,000; 

(3) Net
profit is no less than the equivalent RMB150,000,000 

(4)
Circulating ratio≥180%

(5) Quick
ratio≥130%.

15.21
Calculated as per the financial statement in the year 2013, the borrower should reach the business index in 2013

(1)
Debt-to-Assets ratio≤67%;

(2) Sales
income is no less than the equivalent RMB5,500,000,000; 

(3) Net
profit is no less than the equivalent RMB350,000,000 

(4)
Circulating ratio≥180%

15.22 The
borrower should submit the written report to the credit agent bank in time during the execution of the agreement:

(1) Great
changes in the business management, investment, guarantee, finance of the borrower;

(2)
Important information disclosed by actual controller of the borrower as the listed company;

(3) Large
sum of funds collection of borrower;

(4) Relevant
situation required by participant bank or agent bank.

16.
Charges and Taxes 

16.1 The
borrower should pay various charges of bank consortium to bank consortium as per the “Charges Letter” mutually confirmed
by the borrower and co-lead bank. 

16.2 All the
reasonable charges (including, but not limited to the charges for investigation, auditing, evaluation, notary, lawyer, lawsuit, etc)
and expenditures happened for the negotiation, preparation, singing and repair of financing documents among the co-lead bank,
participant bank and agent bank will be borne by the borrower. 

16.3 All the
reasonable charges (including, but not limited to the charges for investigation, auditing, evaluation, notary, lawyer, lawsuit, etc)
and expenditures causing that any participant bank and agent bank execute or maintain the rights under the agreement at the
place under the jurisdiction of the justice will be borne by the borrower. 

16.4 Each
party of this agreement should separately bear all the current and future taxes and charges stated in the agreement and any
document. 

17. Cost
Increase 

17.1 If the
changes of Chinese laws, rules and policies lead to the cost increase of
participation bank, which definitely stipulates the increased cost will be borne by the borrower, the borrower and
participant bank should sign the supplement agreement to adjust the interest rates for loans, trade financing or service charges. If the borrower and participant bank cannot sign the supplement agreement in time to adjust the interest
rates for loans, trade financing or service charges, the borrower should directly compensate the increased cost to the participant bank as per the notification of credit agent bank. 

18.
Financial Documents 

18.1 The
borrower should ensure all the financial statement and other documents submitted to the agent bank or participant bank have been
verified to be correct, complete and latest documents by the financial executive. When providing the documents as per Article 18 of
the agreement, the borrower should provide enough copies which are verified to be true (one director of the borrower verify the
truth and affix the official seal of the

borrower) to the
agent bank so that the agent bank can distributes no less than 1 copy of
statement to the participation bank. 

18.2 Except
the financial statement in Dec of each accounting year, the borrower should provide the financial statement in current month to the
credit agent bank as per the accounting norms in 30 days after each month ends. The borrower should provide the financial statement
of Dec of this accounting year to the credit agent bank as per the accounting norms in 60 days after each accounting year ends. The
borrower should provide a copy of explanation upon the loan fund withdrawn to the credit agent bank in 30 days after all the
withdrawal ends. 

18.3 The
borrower should provide financial statement in current accounting to the credit agent bank as per the accounting norms in 180 days
after each accounting year ends.

18.4 When
submitting the financial statement stated in Article 18.3, the borrower must provide a professional audit report and correct copy,
which must be issued by the qualified CPA firm accepted by majority of participation banks. 

18.5 The
borrower should coordinate each participant bank to supervise the use of loan fund and provide the financial situation,
operation situation of main-operating business and use record of loan fund to the credit agent bank as per the requirement of each
participation bank.

19.
Default Events 

19.1 Any of
the following events will form the default event:

(1) The
borrower doesn’t pay any due funds payable as per the amount, currency, way and time stated in the agreement. The borrower
cannot make majority of participation banks provide satisfactory remedies on the informed date of the borrower or in 10 working days
as of the date of remedy notification issued by the credit agent bank to the borrower. 

(2) Except
the matters stated in Article 19.1(1), the borrower doesn’t properly and timely fulfill or obey any other duties under the
agreement or other financial document. The borrower cannot make majority of participation banks provide satisfactory remedies on the

informed date of the borrower or in 10 working days as of the date of remedy notification issued by the
credit agent bank to the borrower.

(3) During
the execution of the agreement, the financial status of borrower seriously deteriorates, which will affect the capacity of the
borrower to fulfill the agreement in the opinion of credit agent bank. The borrower cannot make majority of participation banks
provide satisfactory remedies on the informed date of the borrower or in 90 working days as of the date of remedy notification
issued by the credit agent bank to the borrower.

(4) Any
statement, guarantee or promise made by the borrower in the agreement is proved to be untrue, incorrect or misleading in any
essential aspect. The borrower cannot make majority of participation banks provide satisfactory remedies on the informed date of the
borrower or in 10 working days as of the date of remedy notification issued by the credit agent bank to the borrower.

(5) The
borrower doesn’t pay any of liabilities due and payable or break the documents related to the liabilities of borrower or the
default events related to the liabilities of borrower lead that the liabilities should be paid in advance or immediately paid or the
promise or consignment of the liabilities are canceled or terminated or the liabilities guarantee of any borrowing guarantor is
executed. The borrower cannot make majority of participation banks provide satisfactory remedies on the informed date of the
borrower or in 10 working days as of the date of remedy notification issued by the credit agent bank to the borrower. But, except
the foregoing liabilities totaling less than RMB50,000,000. 

(6) The
superintendent or directors of the borrower is suspected of corruption, bribe-taking or illegal operation, which has been
investigation as a case by the justice department. The borrower doesn’t notify the credit agent bank in writing in 3 working
days after the foregoing important event. 

(7) Without
the content of majority of participation banks, the borrower cannot (or regarded as impossible by any justice department) pay or
admit to be not able to pay any due financial liabilities over RMB10,000,000, and start to negotiate with one or more creditors to
reorganize or transfer liabilities. The borrower cannot make majority of participation banks provide satisfactory remedies on the
informed date of the borrower or in 10 working days as of the date of remedy notification issued by the credit agent bank to the
borrower.

(8) Without
the written consent of bank consortium, the borrower suffers from mergence, separation, assets transfer exceeding RMB 10,000,000
with single sum, reorganization, shareholding reform, suspended business application, bankruptcy application, which enough effect
the realization of creditor’s rights of participation bank;

(9) The
borrower suffers from the serious accidents, register cancellation, business license suspending, business stopping and closing.
Which bring adverse influences to the creditor’s right under the agreement. The borrower also suffers from serious lawsuits or
arbitration, great difficulties for production and operation. 

(10) The
borrower makes any company acts or any person takes any step or starts any
legal procedures and sends any orders or put forward to any requirement or makes any resolution to do the business
stopping, reorganization, liquidation, bankruptcy or dismiss to the borrower. Or appoint the liquidation officer, bankruptcy trustee or receiver for all or partial assets of borrower.

(11) Any
assets totaling over RMB 50,000,000 (if more events, it can be accumulatively calculated) of the borrower are sealed up, frozen,
detained, executed, expropriated, levied or put into similar legal procedures. The borrower cannot make majority of participation
banks provide satisfactory remedies on the informed date of the borrower or in 5 working days as of the date of remedy notification
issued by the credit agent bank to the borrower.  

(12) Any
events happened with the borrower and guarantee at any place make majority of participant bank think the events are similar
with those stated in Item (6) and (11) of Article 19.1 of this agreement. 

(13) The
borrower stops or threatens to stop all or essential business. 

(14) Any
duties fulfilled by the borrower become illegal. 

(15) The
borrower transfers the profit via the non-fair related operation, which seriously damage the legal rights and interests of
participation banks. 

(16) The
borrower breaks the statement and guarantee stated in Article 14 of this agreement or promise stated in Article 15. 

(17)
Majority of participant banks reasonably think the borrower or guarantor maybe suffer from the events which seriously affect the
execution of guarantee contract or the guarantee contract becomes invalid, canceled or terminated. The borrower or guarantor is
related to serious lawsuit or arbitration cased or the borrower suffers from other reasons which maybe seriously affect the capacity
to fulfill the guarantee contract; the damage, losses, sealed up, frozen, detained of guaranteed articles lead the guarantee value
decreases or disappears. The borrower doesn’t provide new guarantee and change the guarantor as per the requirement of bank
consortium. 

(18) The
borrower or guarantor has suffered/will suffer from any events or situation, which bring serious adverse influences. 

(19) Other
default event appointed in the agreement, guarantee contract or other financing documents. 

19.2 If the
foregoing default event stated in Article 19.1 happens, the credit agent bank can (must if majority of participant bank requires)
execute one or more rights as per the following orders and timely notify all the participation banks in writing. 

(1) Exempt
from relevant default events or agree on the remedy of relevant default events. 

(2) If the
loan fund isn’t granted, notify the borrower in writing and announce to terminate the withdrawal of all or partial withdrawals.
Terminate the withdrawal of the funds not withdrawn after announcement. 

(3) If the
trade financing credit fund isn’t granted, notify the borrower in writing and
announce to terminate granting all or partial trade financing credit fund to the borrower. 

(4) Notify
the borrower in writing and announce to cancel all the funds not granted of credit line. So, the credit line should be cancelled and
available loan commitment amount of each participant bank should automatically decrease to zero. 

(5) Notify
the borrower in writing and announce all or partial credit balance together with the accrued interests, charges and other funds
should be immediately paid. After announcement, these funds should become the due funds payable. It is no necessary for credit agent
bank to give further notification. 

(6) Execute
the guarantee right under the guarantee contract;

(7) Execute
any other rights stated in laws, rules, agreement or financial documents. 

19.3 Any
participant bank knows about a default event or reasonably thinks that it maybe form the fact or condition of a default event, the
bank should notify the credit agent bank in 

time. 

19.4 The
borrower notifies the credit agent bank to tell the default event happened or any participant bank sends the notification as per
Article 19.3 of this agreement, or the agent bank knows about the default event or reasonably think that it maybe form the fact or
condition of a default event, the bank should notify the participant bank in time. 

19.5 Any
right listed in Article 19.2 of this agreement or any right proposed by any participant bank to the borrower for the legal procedure
of any disputes settlement should be executed via the agent bank. But, if the agent bank cannot execute as per the decision of
majority of participation banks, relevant participation banks can directly take actions. 

19.6 During
the continuousness of default event, the agent bank has right to take necessary or reasonable actions to protect the rights of each
participant bank from influence. 

19.7 Except
special appointments in the agreement, each participant bank promises:

(1) Will not
adopt the contradictory way with the agreement to execute the rights under the agreement;

(2) Will not
require any person or accept any liability liquidation singly for liquidating any debts owed by the borrower to the participation
bank;

(3) Will not
independently require or accept any guarantee interests or financial support for any liabilities owed by the borrower to the
participation bank. 

19.8 The
borrower hereby agrees and confirms that all the accounts opened by the borrower in the participation bank, agent bank and any other
branches is under the control of the credit agent bank until the default events has obtained the reasonable remedies satisfying the
credit agent bank if the default events happen. When special funds account, special debts payment account and all other accounts of
the borrower are under the control, the borrower cannot make the reasonable remedies satisfying the credit agent bank for the
default events in 5 working days after the notification of credit agent bank, the
credit agent bank has right freeze or transfer any funds in special funds account, special debts payment account and all
other accounts of the borrowers according to the order of bank consortium. When the credit agent bank obtains the supervision right to the borrower’s accounts according to the stipulations stated in this Article, the borrower should get
the written approval from the credit agent bank if the borrower transfers each sum of funds from the special funds account and special debts payment account. 

During the
continuousness of a default event, each participant bank and agent bank have right to deduct the balance in any account opened
by the borrower in the participant bank and agent bank (including any branches) and transfer them to credit agent bank for
apportionment as per the stipulations stated in Article 22 of this agreement. The participant bank and/or agent bank should notify
the borrower in writing in 2 working days after deduction. 

19.9
Required by any participation bank, the borrower should compensate any losses and

charges (including, but not limited to charges for
investigation, audit, evaluation, notary, lawyer, lawsuit, etc) because the borrower suffers from default events or the borrower
doesn’t fulfill any duties under the agreement. 

19.10 Any of
the following events consists of the default events of participation bank:

(1) The
participant bank doesn’t grant the loan fund according to the amount, currency, way and time stated in the agreement. 

(2) Except
the matters stated in Article 19.10.(1) of the agreement, the participant bank doesn’t fulfill any other duties under
this agreement and/or other financing documents. The participant bank cannot make the remedies satisfying the borrower, agent bank
and/or other participation banks on the known date of participant bank or in 30 days as of the notification date of remedies sent by
borrower, agent bank and/or other participation banks. 

19.11 After
the default events related to the borrower’s benefit stated in Article 19.10 of this agreement happen, the borrower has right
to ask the default participant bank to correct the action within reasonable period. Otherwise, the borrower has right to
execute any rights stated in the laws and the agreement. Required by the borrower together with written proof, after verified by the
participation bank, this bank should compensate all the losses and charges (including, but not limited to reasonable lawyer charges
and lawsuit charges) or expenditures because any participant bank breaks the contract or doesn’t fulfill any duties under
the agreement. 

19.12 After
the default events related to the benefit of the agent bank or other participation banks stated in Article 19.10 of this agreement
happen, the agent bank or other participation banks have right to ask the default participant bank to correct the action
within reasonable period. Otherwise, the agent bank or other participation banks have right to execute any rights stated in the laws
and the agreement. The default participant bank should compensate all the losses because any participant bank breaks the contract.

20.
Relations of Bank Consortium 

20.1 During
the execution of this agreement, each participant bank should enjoy the rights and bear risk according to the
proportion of their own portion accounting for the credit balance and credit balance (if the credit fund isn’t granted, the
subscribed portion in the credit line and total credit line). If any participant bank doesn’t fulfill or
incompletely fulfill the duties stated in the agreement, this participant bank will independently bear the liabilities to the
borrower. Other participation banks will not bear any liabilities, but will not be exempted from the duties in the agreement. 

20.2 Each
participant bank hereby appoints the credit agent bank and guarantee agent bank to act as the agent related to the agreement
and authorizes the credit agent bank and guarantee agent to execute the rights, powers, discretion power and other reasonable
rights, powers and discretion powers stated in this agreement and bank consortium agreement. The conducts of credit agent bank and
guarantee agent bank is binding upon each participation bank. Each participant bank should execute each right stated in the
agreement via credit agent bank and guarantee agent bank. The agent bank will not act as

the agent of the borrower in any aspect.

20.3 The
agent bank will not bear any liabilities to any party under the agreement because any party in the agreement breaks this agreement.

20.4 Each
participant bank authorizes the credit agent bank and the bank confirms and guarantees to fulfill the following duties:

(1) After
signing this agreement and bank consortium agreement, submit the copies of this agreement and bank consortium agreement to local
banking regulatory commission and People’s bank for filing and reports to provincial trade association;

(2) Be
responsible for the organization and execution after signing of this agreement;

(3) Strictly
execute the appointments stated in this agreement, protect the interests of participant bank and doesn’t use the position of
credit agent bank to damage the legal interest of other participation banks;

(4) The loan
manger after signing of this agreement should appoint special person to be responsible for detail affairs of loan of bank consortium
and submitting the financial information and documents provided by the borrower to the participation bank;

(5) Strictly
handle the granting of principal of all liquid fund loans and collecting of principal and interests as per the appointment stated in
the agreement;

(6) Collect
the loan fund granted by each participation bank, loan commitment amount and principal and interests of loan of each participant
bank and record each sum;  

(7) Transfer
the interests paid by the borrower on schedule, returned principal and interests and other funds paid to each participant bank
 as per the proportion of portion of each participant bank accounting for the loan balance and loan balance (if the loan
funds are not granted, the loan commitment amount and total loan commitment amount of all participation banks). But, except other
appointments stated in the agreement;

(8) If the
borrower cannot enough return the loan on schedule, for the funds paid, the
agent bank should transfer them to each participant bank as per the proportion of portion of each participant bank accounting
for the loan balance and loan balance. For overdue funds, the agent bank will collect penalty and compound interests from the borrower according to relevant stipulations of People’s Bank and this agreement.

(9)
Supervise and check if borrower uses all loan funds to liquid capital requirements, replacement of stock loan or the fulfillment of
this agreement and other documents. 

(10) Send
the information, documents and certificates related to this agreement to each participant bank or borrower in 2 working days after
receiving them. If there is only 1 original of documents, the credit agent bank should keep well this original and provide the
copies of the documents to participant bank or borrower. But, the credit agent bank must note the copies of these documents are in
conformity with the original; Except other appointments stated in this agreement, the credit agent bank will not be responsible for
checking the completeness, correctness or sufficiency of contents of the documents stated

in the agreement; 

(11) In 20
working days after each half year ends, provide the “Work Report of Agent Bank” to bank consortium: if necessary, report
the use and management situation of the loan to the participation bank. If emergent, can report at any time.

(12) The
agent bank should establish the credit account of liquid fund loan. The credit account should include the statistics of each sum of
loan fund and amount of loan fund granted or to be granted by each participation bank. Before the 10th working day of each quarter
during the execution of the agreement, the credit agent bank should submit the credit account to each participation bank. If the
participant bank has any objection, the credit agent bank should make reasonable explanation in time. 

(13)
 For the default behavior of the borrower, the credit agent bank is responsible for sending the notification of deadline
correction. If the borrower doesn’t correct the default behaviors during the appointed period of correction, the credit agent
bank is responsible for convening the bank consortium meeting and take further measures to the borrower according to the resolution
of bank consortium meeting;

(14) Take
action according to the appointment stated in this agreement and resolution of bank consortium meeting;

(15) When
the credit agent bank is not clear to the authorization or power limit, the credit agent bank should take measure to protect the
rights and interests of participant bank based on the principle of honesty;

(16) Handle
other matters related to the credit of bank consortium and entrusted by participation bank.

20.5 Each
participant bank authorizes the guarantee agent bank and the guarantee agent bank confirms and guarantees to fulfill the following
duties:

(1) Handle
the formalities of mortgage and pledge register as per the appointment stated in the agreement and guarantee contract and be
responsible for the daily management of
mortgages and hostages;

(2)
Supervise and check if the guarantor under the guarantee contract fulfills the guarantee contract;

(3) Report
the guarantor’s situation and use and management situation of mortgage and hostages in writing to the participation bank. If
emergency, report at any time;

(4) Take
action according to the appointments of this agreement and guarantee contract and resolution of bank consortium meeting;

(5) When the
guarantee agent bank is not clear to the authorization or power limit, the bank should takes measures to protect the rights and
interests of participant bank based on the principle of honesty;

(6) Handle
other matters guaranteed under the bank consortium and entrusted by the participation bank. 

20.6
Required by any agent bank, each participant bank should compensate or repay any costs, claims, losses and charges (including, but
not limited to charges for investigation, audit, evaluation, notary, lawyer, lawsuit, etc) to the agent bank according to the
proportion of their own portion in the loan balance of bank consortium and loan balance of bank consortium (if the loan fund
isn’t granted, the subscribed portion in the credit line and total credit line). Except that any of the foregoing is caused
directly because of serious negligence or arbitrary conducts. 

20.7 The
agent bank can notify each party of this agreement to resign the post of agent ahead of 30 days at any time. As of the formal
succession date of other party notified by the successive agent bank, the resigning of the resigning agent bank (hereinafter called
“resigning agent bank”) and appointment of successive agent bank come into effect. 

20.8 If the
agent bank sends the resigning notification as per Article 20.7 of this agreement, with the consent of borrower, all the
participation banks can appoint a bank or financial department with good reputation and rich experience as the successor
(hereinafter called “Successive Agent Bank”) of resigning agent bank during the appointed period. Otherwise, with the
consent of borrower and majority of participation banks, the resigning agent bank can appoint a bank or financial department with
good reputation and rich experience as the successor on behalf of all the participation banks. 

20.9 If
appointing a successor of agent bank as per Article 20.8 of this agreement, so:

(1) Should
remove any further duties under the agreement of the resigning agent bank

(2)
Authorize the successive agent bank to have all rights, power, discretion power and duties;

(3) The
resigning agent bank should turn in all documents related to this agreement to the successive agent bank during the execution of
this agreement and fully expose relevant situation. 

20.10 If
appointing the successor of an agent bank as per Article 20.8 of this agreement,
the borrower should change the special funds account and special debts payment account, settle the foregoing accounts
opened in the agent bank and open new special funds account and special debts payment account in the successive agent bank in 3 working days after the successive agent bank is appointed.  

20.11 The
resigning agent bank should notify the borrower in writing, transfer all the documents and materials related to the agreement to the
successive agent bank and completely disclose all the familiar work situation to the successive agent bank and cannot delay the
account transaction and withdrawal of the borrower in 3 working days after the successive agent bank is appointed. 

20.12 The
co-lead bank, agent bank and successive agent bank should carefully and earnestly fulfill the duties under the agreement. If serious
losses or arbitrary misconducts of co-lead bank, agent bank and successive agent bank bring losses to other party under the
agreement, the co-lead bank, agent bank and successive agent bank will bear the compensation liabilities legally. 

21. Bank
Consortium Meeting 

21.2 The
bank consortium meeting legally executes the following powers and makes the decision:

(1) Alter
any supplement agreement signed for this agreement and bank consortium agreement;

(2) Agrees
the borrower to cancel the loan commitment amount/subscription amount of participation bank;

(3) Agrees
the borrower to change the usage of loan funds under this agreement;

(4) Agrees
to delay the withdrawal and credit deadline;

(5) Agrees
to increase the credit line;

(6) Agrees
the borrower to execute the mergence, separation, business stopping, reorganization, liquidation, bankruptcy, dismiss or other
similar procedures;

(7) Agrees
the borrower to distribute the profit;

(8) Agrees
the borrower to make the great investment, financing, alteration of stock right and other matters;

(9) Alter to
alter or cancel the guarantee under this agreement;

(10) Agrees
to appoint the successor of agent bank;

(11) Agrees
the bank consortium to continuously exist after special observation period;

(12)
Announce the default conducts of borrower and execute the rights and find out the default liabilities as per this agreement;

(13) Decide
to take proceedings/or arbitration and/or other justice procedures;

(14) Agrees the participant bank to deduct the debts of borrower as per the appointments stated in this agreement;

(15) Other
matters decided by bank consortium. 

21.3 The
matters stated from Item 1 to Item 5 of Article 21.2 of this agreement and the matters that must be unanimously approved by all the
participation banks in the opinion of participation bank, the matters come into effect after unanimous approval of the entire
participation banks. Except this, the vote of bank consortium meeting comes into effect after approved by majority of participation
banks.

21.4 It is
allowed for bank consortium not to convene the bank consortium meeting. The credit agent bank will collect the suggestions of
participation banks in writing. If the reply of each participant bank forms the resolution of bank consortium meeting as per the
appointments stated in Article 21.3 of this agreement, the credit agent bank should notify the borrower, each participant bank and
co-lead bank of the resolution of bank consortium meeting in writing. 

22.
Apportionment 

22.1 Except
the funds obtained by the participant bank by independently signing the deposit mortgage agreement or other guarantee
documents based on the trade financing provided by the participant bank to the borrower and other appointments stated in Article
22.3 of this agreement, if any participant bank will pay any due funds under the agreement with any funds collected or taken back
from the borrower, the funds aren’t collected or taken back as per Article 12.7 of this agreement, the participant bank should:

(1)
Immediately notify the credit agent bank to receive or take back these funds;

(2) Required
by credit agent bank, pay a sum of funs (hereinafter called “Apportionment Funds”) equal to the funds received or taken
back to the credit bank as soon as possible;

22.2 The
credit agent bank should regard the apportionment funds as the funds paid by the borrower and distributed among the participation
banks as per the appointments stated in Article 12.12 of this agreement. 

22.3 Any
funds received by any participant bank because the bank takes the proceedings, arbitration or other justice procedures to the
borrower about the disputes under the agreement are not be suitable for the appointments stated Article 22.1 of this agreement when
according with the following conditions:

(1) This
participant bank
 has
notified other participation banks in writing before taking the proceedings, arbitration or other justice procedures;

 

(2) Other
participation banks don’t send the written notification to this participant bank to definitely show them to attend the lawsuit,
arbitration or other justice procedures in 3 working days after receiving this notification. 

23. Transfer 

23.1 This
agreement is binding upon each party under this agreement, their own successors and transferees. 

23.2 The
borrower cannot transfer any rights or duties under this agreement. 

23.3 Each
party of this agreement hereby confirms and agrees that any participant bank (hereinafter called “Transferring Bank”) can
transfer all or partial rights and/or rights, duties to a bank or financial department (hereinafter called “Transferee
bank”) at any time under the precondition of Article 23.4 of this agreement. Under the same condition, the participation banks
in the bank consortium enjoy the preferential purchase right for the foregoing transfer. The transferee bank should notify bank
consortium and other participant bank of all or partial rights and duties under the agreement in writing. It will be granted as the
giving up of preferential purchase right if other participant bank cannot reply in 10 days after receiving the foregoing
notification. If more than 2 participation banks propose of executing the preferential purchase right, the participation banks to be
transferred decide

their own purchase
proportion by consultation. If not settled, the preferential purchase right will be executed
according to the proportion of their own loan balance of each participant bank to be transferred accounting all the loan
balance (if the loan funds are not granted, the proportion of loan commitment amount accounting for credit line) of all the
participation banks to be transferred. 

23.4 The
duties transfer of participation banks come into effect only after meeting the following conditions:

(1) The
transferring bank and transferee bank submit a copy of “Transfer Certificate” formally filled and signed to the agent bank
as per the form and contents stated in Article 14 of this agreement. 

(2) The
agent bank, borrower, transferring bank and transferee bank sign the “Loan Commitment Amount to Transferred” as per the
form and contents stated in Article 15 of this agreement. The transfer of rights needn’t the signature of the borrower. 

23.5 Each
participant bank (except the transferring bank and transferee bank) irrevocably authorizes the credit agent bank to sign any
transfer certificate formally filled on behalf of credit agent bank. 

23.6 Any
transfer executed and finished as per Article 23.3 of this agreement is binding upon each party of this agreement. 

23.7 As of
the transfer date after the credit agent bank signs the transfer certificate, with the scope of transfer object listed in the
transfer certificate:

(1)
Transferring bank will not bear any duties unfulfilled related to the transfer object under the agreement;

(2) The
transferee bank and other party under this agreement will bear all the rights and duties unfulfilled related to the transfer object
under the agreement;

23.8 The
transferee bank will not be responsible for the transferee bank for the following matters:

(1)
 Establishment, signing, authenticity, effectiveness and execution of any financing documents or any other documents;

(2)
Collection of funds payable under any financing documents;

(3)
Authenticity, accuracy or completeness of any statements (oral or written) under any financing documents;

23.9 The
transferee bank confirms to the co-lead bank, agent banks and other participation banks:

(1) have
made independent investigation and evaluation to the credit, financial and other situation of the borrower, which is independent to
any information related to the borrower and financing documents provided by the co-lead bank, agent bank or other participation
banks;

(2) Will
continue to make independent investigation and evaluation to the credit, financial and other situation of the borrower. 

23.10 The
transferring bank has no duties:

(1) Accept
any rights and/or duties transferred to the transferee bank as per Article 23.3 of this agreement from any transferee bank;

(2)
Compensate any losses of transferee bank because the borrower or other participation banks don’t fulfill any duties under this
agreement.

23.11 The
credit agent bank should record the directories of each party under this agreement and provide the dictionaries when required at any
place. 

24.
Confidential and Information Disclosure 

24.1 Each
participant bank must keep secrete for any information related to financing documents provided by the borrower or the authorized
representative of the borrower. But, any participant bank has right to:

(1) Disclose
the well-known information (excluding the well-known information because the participant bank breaks this article);

(2)
Disclosure the information for any lawsuit, arbitration or other justice procedures;

(3) Disclose
this information as per the laws;

(4) Disclose
this information when required by any governmental, financial, taxation or other relevant supervision departments;

(5) Disclose
the information to professional consultant under this agreement;

(6) Disclose
the information within the scope of Article 24.2 of this agreement;

(7) Disclose
the information after approved by the borrower. 

24.2 Any participant bank has right to disclose the following information to any related party or any person
(hereinafter called “Participant”) who may sign or have signed any transfer, loan or other agreements:

(1) Copies
of any financing documents;

(2) Any
information related to financial documents obtained by the participation bank. 

But, before
received any secrete information, the participant must submit the written promise to the participant bank to agree to fulfill the
secrete duties as per Article 24.1 of this agreement. 

24.3 The
appointments stated in Article 24.1 and 24.2 can substitute any secrete promise made by any participate bank before becoming the
party of this agreement. 

25.
Liabilities Certificate 

Each
participant bank and agent bank should keep the accounting statements and records

on the accounting books as per the business
operation practice. The participation bank, agent bank and borrower hereby confirms that the liabilities owed by the borrower to the
participant bank and agent bank will base on the records in the accounting voucher provided by the participant bank and
agent bank as per the business operation practice if there is no obvious mistakes.

26. Legal
Changes 

At any time
after the execution of this agreement, if the loan duties fulfilled by any participant bank become illegal because any
applicable laws, rules or explanation change and /or the bank must obey the borrowing conducts of regulatory departments or other
financial departments in order to meet the requirement of other governmental department with jurisdictional power, this participant
bank should submit a certificate to the credit agent bank as soon as possible after knowing about this information and
completely list the illegal reason and basis. The agent bank should notify the borrower and provide a copy of certificate to the
borrower in 2 working days after receiving this certificate. After the credit agent bank make the foregoing notification: 

(1) The
promise, available loan commitment amount and subscription amount of the credit funds granted by the participant bank will
automatically be cancelled;

(2) Except
special statement in laws and rules, the borrower should repay the amount and accrued interests of loan balance of this participant
bank to the participant bank during the deadline required in the notification (no less than 30 working days) after
receiving the notification sent by the credit agent bank on behalf of participation bank. 

(3) If
canceling the loan commitment amount and prepay the amount as per Article 26 of this agreement, the participant bank needn’t
pay any default money or charges to the borrower. 

2.7
Deduction 

27.1 The
credit funds under this agreement will not be influenced by the changes of
Chinese laws, policies, taxes and charges. The borrower and each participant bank cannot deduct the credit funds under
the agreement with increased taxes and charges because of the changes of Chinese laws, policies, taxes and charges.

27.2 After
the default events stated in Article 19.1 of this agreement happen, even if the balance and debts in the account are not in the same
currency, the participant bank has right to deduct the funds in the account opened by the borrower in the participant bank for the
payment of principal, interest, compound interest, penalty interest and relevant charges due and unpaid. Under this situation, this
participant bank should pay the funds to the credit agent bank as per Article 22 of this agreement after receiving these funds. The
credit agent bank will divide these funds. The participant bank and/or credit agent bank should notify the borrower in 2 working
days after deduction. 

28.
Extended Deadline and Partial Invalidity 

28.1 Any
participant bank and agent bank haven’t executed or delay to execute any rights

under this agreement, which will not be
regarded as the abandon of these rights. If any participant bank and agent bank independently or partially execute these rights, it
shouldn’t be excluded that they further execute these rights in other way or execute other right or special rights. The rights
and relief stated in this agreement shouldn’t be excluded from any rights or relief given by the laws and rules to any
participant bank and agent bank. 

28.2 If any
article under this agreement is illegal, invalid or unfulfilled at any time, the legality, validity or execution of other articles
under this agreement will be not affected or decreased. 

29.
Amendment and Supplement 

29.1 Based
on the appointment stated in Article 21.2. (1) of this agreement, the credit agent bank can amend the articles of this agreement by
continuously signing the written supplement agreement. Any amendment based on this is binding upon all the participation banks,
agent bank and borrower. But, without the approval of the concerned party, any amendment or abandonment cannot increase any new or
extra duties to the concerned party. 

29.2 The
matter not stated in this agreement will be negotiated by the borrower, co-lead bank, agent bank and each participation bank. The
supplement agreement can be signed as per Article 29.1 of this agreement, which will have same legal effect with this agreement.

30.
Notification 

30.1 All the
communications between any participant bank and borrower should be executed via the credit agent bank. 

30.2 Any
notification, request, instruments or other documents sent to any party under this agreement as per this agreement should be sent to
the recipient in writing based on the address or telex code or fax number appointed by the recipient. The address, telex code
and fax number and contact person appointed by each party should be listed in the signing page of this agreement. 

30.3 Any
communications executed by each party of this agreement should be regarded as the receiving of the recipient in the following
situation:

(1) When
actual delivered if sending by person;

(2) If
sending by telex or fax, receive the correct feedback or fax report after finishing the sending;

(3) If
mailing by the letter (including EMS), 12:00 am (Beijing Time) in 7 working days after sending register letter as per correct
address. 

30.4 After
each party of the agreement changes the contact person, address, telex code or fax number, the party should notify the alteration to
the credit agent bank in 2 working days after changes. After receiving the alteration notification sent by one party of this
agreement, the credit agent bank should immediately notify other party of this agreement of the alteration. 

31.
Original of Agreement 

31.1 The
appendix of this agreement is made and signed in Chinese. 

31.2 This
agreement is the master agreement of credit of bank consortium. Except liquid management agreement, if any financing documents are
not in conformity with this agreement, it will base on this agreement. 

31.3 The
appendix of this agreement is the effective part of this agreement. 

31.4 This
agreement should be made and signed in 30 originals. Each of original has same effect. 

32.
Applicable Laws and Disputes Settlement 

32.1 This
agreement is subject to Chinese laws (including, but not limited to Chinese prevailing effective laws, administrative laws and
rules, decisions and orders issued by State Council, local laws and rules issued by local People’s Congress, rules issued by
each department and commission of State Council and Local People’s Government. Based on this purpose, Chinese laws don’t
include the laws of Taiwan, HK Special Administrative Region and Macao Special Administrative Region) and is explained in light of
it. 

32.2 If any
dispute is arising during the execution of this agreement, each party should settle it by friendly consultation. If not settled,
this dispute will be subject to People’s Court at the signing place of this agreement. 

33.
Validity and Termination 

33.1 This
agreement comes into effect after formally signed and sealed by the authorized representatives of borrower, arranging bank, co-lead
bank, credit agent bank, guarantee agent bank and each participation bank. 

33.2 This
agreement will terminate after all the charges, penalty interests, compound interests, interests, principals and
other funds payable are enough paid. 

 

【This
page has no text, which is the sealing page for WSP Structured Bank Consortium Comprehensive Credit and Loan
Agreement with an Amount Equivalent to RMB 3.5 Billion】

Borrower:
Wuxi Seamless Oil Pipe Co., Ltd. 

Add: No.
235, Chengnan Road, Hi-new Technical Industries Development Zone, Wuxi 

PC: 21048

Legal
Representative: Pu Longhua 

Tel:
0510-85360216

Fax:
0510-85226351 

Contact
Person: Feng Jueying 

Authorized
signer: 

                                      
         
                          

Name: Pu Longhua
                              seal 

Date: August 29, 2011 

Arranging
Bank: Bank of China Limited Jiangsu Branch 

Add:

P.O.: 

Principal: 

Tel: 

Fax:

Contact Person: 

Authorized
signer: 

                                      
         
                          

Name:
                
                               seal 

Title: 

Date:

【This page has no text, which is the sealing page for WSP Structured Bank Consortium Comprehensive Credit and Loan
Agreement with an Amount Equivalent to RMB 3.5 Billion】

Co-lead
Bank: Bank of China Limited Wuxi Branch 

Add:

P.O.: 

Principal: 

Tel: 

Fax:

Contact Person: 

Authorized
signer: 

                                      
         
                          

Name:
                
                               seal 

Title: 

Date: Aug 29, 2011

Co-lead
Bank: Bank of China Limited Wuxi Branch 

Add:

P.O.: 

Principal: 

Tel: 

Fax:

Contact Person: 

Authorized
signer: 

                                      
         
                          

Name:
                
                               seal 

Title: 

Date: Aug 29, 2011

【This page has no text, which is the sealing page for WSP Structured Bank Consortium Comprehensive Credit and Loan
Agreement with an Amount Equivalent to RMB 3.5 Billion】

Participant
Bank: Bank of China Limited Wuxi Branch 

Add:

P.O.: 

Principal: 

Tel: 

Fax:

Contact Person: 

Authorized
signer: 

                                      
         
                          

Name:
                
                               seal 

Title: 

Date: Aug 29, 2011

Participant
Bank: Agricultural Bank of China Limited Wuxi Branch 

Add:

P.O.: 

Principal: 

Tel: 

Fax:

Contact Person: 

Authorized
signer: 

                                      
         
                          

Name:
                
                               seal 

Title: 

Date: Aug 29, 2011

【This page has no text, which is the sealing page for WSP Structured Bank Consortium Comprehensive Credit and Loan
Agreement with an Amount Equivalent to RMB 3.5 Billion】

Participant
Bank: Nanyang Commercial Bank (China) Limited Wuxi Branch 

Add:

P.O.: 

Principal: 

Tel: 

Fax:

Contact Person: 

Authorized
signer: 

                                      
         
                          

Name:
                
                               seal 

Title: 

Date: Aug 29, 2011

Participation Bank: China Merchants Bank Co., Ltd Wuxi Branch 

Add:

P.O.: 

Principal: 

Tel: 

Fax:

Contact Person: 

Authorized
signer: 

                                      
         
                          

Name:
                
                               seal 

Title: 

Date: Aug 29, 2011

【This page has no text, which is the sealing page for WSP Structured Bank Consortium Comprehensive Credit and Loan
Agreement with an Amount Equivalent to RMB 3.5 Billion】

Participant
Bank: Industrial and Commercial Bank of China Limited Wuxi Branch 

Add:

P.O.: 

Principal: 

Tel: 

Fax:

Contact Person: 

Authorized
signer: 

                                      
         
                          

Name:
                
                               seal 

Title: 

Date: Aug 29, 2011

Participant
Bank: China CITIC Bank Corporation Limited Wuxi Branch 

Add:

P.O.: 

Principal: 

Tel: 

Fax:

Contact Person: 

Authorized
signer: 

                                      
         
                          

Name:
                
                               seal 

Title: 

Date: Aug 29, 2011

【This page has no text, which is the sealing page for WSP Structured Bank Consortium Comprehensive Credit and Loan
Agreement with an Amount Equivalent to RMB 3.5 Billion】

Participant
Bank: Shanghai Pudong Development Bank Co., Ltd Wuxi Branch 

Add:

P.O.: 

Principal: 

Tel: 

Fax:

Contact Person: 

Authorized
signer: 

                                      
         
                          

Name:
                
                               seal 

Title: 

Date: Aug 29, 2011

Participant
Bank: China Everbright Bank Co., Ltd Wuxi Branch 

Add:

P.O.: 

Principal: 

Tel: 

Fax:

Contact Person: 

Authorized
signer: 

                                      
         
                          

Name:
                
                               seal 

Title: 

Date: Aug 29, 2011

【This page has no text, which is the sealing page for WSP Structured Bank Consortium Comprehensive Credit and Loan
Agreement with an Amount Equivalent to RMB 3.5 Billion】

Credit Agent
Bank and Guarantee Agent Bank: Bank of China Limited Wuxi Hi-tech Industrial Development Zone Sub-branch 

Add:

P.O.: 

Principal: 

Tel: 

Fax:

Contact Person: 

Authorized
signer: 

                                      
         
                          

Name:
                
                               seal 

Title: 

Date: Aug 29, 2011

Guarantee
Agent Bank: Agricultural Bank of China Wuxi New District Sub-branch 

Add:

P.O.: 

Principal: 

Tel: 

Fax:

Contact Person: 

Authorized
signer: 

                                      
         
                          

Name:
                
                               seal 

Title: 

Date: Aug 29, 2011 

Appendix 1

Initial
Participant Bank, Initial Loan Commitment Amount and Subscription Amount 

1. Initial
Participant Bank, Initial Loan Commitment Amount 

Unit: RMB yuan

				
	
No.

	
Name of Initial Participant bank

	
Amount

	
Proportion

	
1

	
Bank of China Limited Wuxi Branch 

	
RMB420,000,000

	
25.52%

	
2

	
Agricultural Bank of China Limited Wuxi
Branch

	
RMB300,000,000

	
18.23%

	
3

	
Nanyang Commercial Bank (China) Co.,
Ltd. Wuxi Branch 

	
RMB186,000,000

	
11.30%

	
4

	
China Merchants Bank Co., Ltd. Wuxi
Branch 

	
RMB180,000,000

	
10.93%

	
5

	
Industrial and Commercial Bank of China
Limited Wuxi Branch 

	
RMB170,000,000

	
10.33%

	
6

	
China CITIC Bank Corporation Limited
Wuxi Branch 

	
RMB180,000,000

	
10.93%

	
7

	
Shanghai Pudong Development Bank Co.,
Ltd. Wuxi Branch 

	
RMB120,000,000

	
7.29%

	
8

	
China Everbright Bank Co., Ltd. Wuxi
Branch 

	
RMB90,000,000

	
5.47%

	Total

	
RMB1,646,000,000

	
100%

2. Initial
Participant bank and Initial Subscription Amount 

Unit: RMB yuan

				
	
No. 

	
Name of Initial Participant bank 

	
Amount

	
Proportion 

	
1

	
Bank of China Limited Wuxi Branch

	
RMB380,000,000

	
31.30%

	
2

	
Agricultural Bank of China Limited Wuxi
Branch

	
RMB200,000,000

	
16.47%

	
3

	
Nanyang Commercial Bank (China) Co.,
Ltd. Wuxi Branch 

	
RMB124,000,000

	
10.21%

	
4

	
China Merchants Bank Co., Ltd. Wuxi
Branch 

	
RMB120,000,000

	
9.89%

	
5

	
Industrial and Commercial Bank of China
Limited Wuxi Branch 

	
RMB130,000,000

	
10.71%

	
6

	
China CITIC Bank Corporation Limited
Wuxi Branch 

	
RMB120,000,000

	
9.89%

	
7

	
Shanghai Pudong Development Bank Co.,
Ltd. Wuxi Branch 

	
RMB80,000,000

	
6.59%

	
8

	
China Everbright Bank Co., Ltd. Wuxi
Branch 

	
RMB60,000,000

	
4.94%

	Total

	
RMB1,214,000,000

	
100%

Appendix 2

Subscription Letter of Credit Line
Balance (Form) 

No.: WMLSJGHYTCERG( )No.( )

To:

Bank of China Limited
Wuxi Branch 

Agricultural Bank of
China Limited Wuxi Branch 

Act as the co-lead
bank (hereinafter called: Co-lead Bank”) appointed in credit agreement 

Case: WSP Structured Bank
Consortium Comprehensive Credit and Loan Agreement with an Amount Equivalent to RMB 3.5 Billion signed on Aug 29, 2011
 

Our bank hereby confirms WSP as the
borrower, Bank of China Limited Jiangsu Branch as the arranging bank, Bank of China Limited Wuxi Branch and Agricultural Bank of
China Limited Wuxi Branch as the co-lead bank, Bank of China Limited Wuxi Hi-tech Industrial Development Zone Sub-branch as credit
agent bank, Agricultural Bank of China Wuxi New District Sub-branch and Bank of China Limited Wuxi Hi-tech Industrial Development
Zone Sub-branch as mutual guarantee agent bank, the financial institution listed in Appendix 1 of credit agreement as participant
bank (hereinafter called “Participant Bank”), who signed WSP Structured Bank Consortium Comprehensive Credit and Loan
Agreement with an Amount Equivalent to RMB 3.5 Billion (hereinafter called “Credit Agreement”) on Aug 29, 2011. 

The vocabularies and terms defied in
the credit agreement have same meaning in the subscription letter. 

Our bank hereby notifies your banks:

1.

Our bank decides to
subscribe the credit line balance as per the credit agreement:

1.1. Limit for
subscribed credit line balance: RMB
                   ; 

1.2. Validity Date
for subscribed credit line balance:
                 ; 

1.3

                                       
                     

2.

Or bank decides to
subscribe the trade financing credit line balance as per the credit agreement:

2.1. Limit for
subscribed trade financing credit line balance: Equivalent RMB       ;

2.2. Validity Date
for subscribed trade financing credit line balance:
               ;

2.3

                                        
                                

Our bank further notifies your bank
that the statement and promises on the subscription letter are irrevocable. Our bank would like to be subject to the credit
agreement of participant bank. 

Bank of China
Limited Wuxi Branch (Official Seal)

Representative
(Signature): 

Date:

For the foregoing credit line balance,
our bank confirms as follows:

1. Subscription of credit line balance:

1.1. Limit for
subscribed credit line balance: RMB
                   ; 

1.2. Validity Date
for subscribed credit line balance:
                 ; 

1.3

                                         
                   

2. Subscription of trade financing
credit line balance: 

2.1. Limit for
subscribed trade financing credit line balance: Equivalent RMB       ;

2.2. Validity Date
for subscribed trade financing credit line balance:
               ;

2.3

                                         
                               

For current situation of bank
consortium, our bank confirms as follows:

1. Liquid Capital Loan: 

1.1. Subscribed Loan
Line: RMB
                                

1.2. Total Granted
Loan Funds: RMB
                              

1.3. Amount of
Creditor’s Right to be transferred by:           (bank)
            

1.4.

                                         
                                

2. Trade Financing Credit Line:

2.1. Subscribed Trade
Financing Credit Line: RMB
                              

2.2. Total Granted
Trade Financing Credit Funds: RMB
                          

2.3. Amount of
Creditor’s Right to be transferred by:           (bank)
            

1.4.

                                         
                                

Co-lead Banks o

Bank of China Limited Wuxi Branch
(Official Seal)

Representative:
   (Signature)

Date: 

Agricultural Bank of China Limited Wuxi
Branch (Official Seal)

Representative:
   (Signature)

Date:

Appendix 3 

Certificate of Legal Representative
(Form) 

To: Bank of China Limited Wuxi Hi-tech
Industrial Development Zone Sub-branch 

Act as the credit
agent bank appointed in credit agreement, as such term is defined hereinbelow. 

I, the legal representative of WSP-a
limited liability company (hereinafter called “Company”) established in China, hereby confirms WSP as the borrower, Bank
of China Limited Jiangsu Branch as the arranging bank, Bank of China Limited Wuxi Branch and Agricultural Bank of China Limited Wuxi
Branch as the co-lead bank, Bank of China Limited Wuxi Hi-tech Industrial Development Zone Sub-branch as credit agent bank,
Agricultural Bank of China Wuxi New District Sub-branch and Bank of China Limited Wuxi Hi-tech Industrial Development Zone
Sub-branch as mutual guarantee agent bank, the financial institution listed in Appendix 1 of credit agreement as participant bank
(hereinafter called “Participant Bank”), who signed WSP Structured Bank Consortium Comprehensive Credit and Loan
Agreement with an Amount Equivalent to RMB 3.5 Billion (hereinafter called “Credit Agreement”) on Aug 29, 2011. 

The vocabularies and terms defied in
the credit agreement have same meaning in the subscription letter. 

I, hereby certify: 

1. The following copies are the true,
correct and complete copies of the original, which have full effect on the date listed in the certificate:

1.1. Current Articles of Incorporation
(including any amendment and supplement) of the borrower;

1.2. Current effective Business License
and Organization Code Certificate of the borrower;

1.3. Capital Examination Report issued
by China CPA Firm, which confirms the registered capital of borrower has been paid off by the shareholders of the borrower;

1.4. List for incumbent directors of
the borrower, signing sample, official seal and seal of the company, copies of ID certificates of legal representative and
authorized signer;

1.5. Current valid taxation register
certificate (Duplicate) of the borrower;

1.6. Prevailing valid loan card issued
by People’s Bank to the borrower;

1.7. Audited financial statement in
last year of the borrower;

1.8. Certificate of account opening of
the borrower as per requirement stated in the credit agreement;

1.9. Resolution of board of directors
of the company (hereinafter called “Board of Directors”) dated on
                       . 

2. The resolution of board of director
of the borrower isn’t cancelled or substituted until the date in the certificate, which has complete effect. 

3. The borrower signs each financing
documents and bears the duties and borrow the loan line and loan fund under the credit agreement, which will not exceed the limit of
maximum loan line of the borrower or break any provision stated in Articles of Incorporation. 

4. The followings are the list of all
the incumbent directors as of the date in the certificate and list of director on the date of convening the meeting of board of
directors:

5. The following persons, acting as
relevant posts (has been acting as this post on the signing date of credit agreement and other financing documents), are those who
are authorized by Director’s Meeting to sign the financial documents and other documents. The relevant signatures are their
true signatures. 

Name
                  Post
               Signature 

                       
                      
                         

6. Unless the borrower sends the
opposite written notification to your bank, your bank can confirm the certificate is true and correct before each withdrawal date.

Borrower: WSP
(Official Seal)

Legal
Representative:    (Signature)   

Date:  

Appendix 4 

Withdrawal Notification (Form) 

No.: WMLSJGHYTSQ( )No.( )

To: Bank of China Limited Wuxi Hi-tech
Industrial Development Zone Sub-branch 

  Act as the credit agent
bank appointed in credit agreement 

Case: WSP Structured Bank
Consortium Comprehensive Credit and Loan Agreement with an Amount Equivalent to RMB 3.5 Billion signed on Aug 29, 2011
 

Our company hereby confirms WSP as the
borrower, Bank of China Limited Jiangsu Branch as the arranging bank, Bank of China Limited Wuxi Branch and Agricultural Bank of
China Limited Wuxi Branch as the co-lead bank, Bank of China Limited Wuxi Hi-tech Industrial Development Zone Sub-branch as credit
agent bank, Agricultural Bank of China Wuxi New District Sub-branch and Bank of China Limited Wuxi Hi-tech Industrial Development
Zone Sub-branch as mutual guarantee agent bank, the financial institution listed in Appendix 1 of credit agreement as participant
bank (hereinafter called “Participant Bank”), who signed WSP Structured Bank Consortium Comprehensive Credit and Loan
Agreement with an Amount Equivalent to RMB 3.5 Billion (hereinafter called “Credit Agreement”) on Aug 29, 2011. 

The vocabularies and terms defied in
the credit agreement have same meaning in the subscription letter. 

This notification is irrevocable. 

Our company hereby:

1. Notify your bank and ask your bank
to grant the loan funds under the loan line according to the following articles and conditions and articles and conditions stated in
the credit agreement: 

1.1. Amount of Loan
Fund: RMB:
                                   

1.2. Withdrawal
Application Date:
                                  

1.3. Appointed
repayment date for this sum of loan fund:
                      
.

This sum of loan funds will
automatically delay to
                     
(date) after our company finishes the business index during the special observation period stated in the credit agreement. 

2. According to the appointment stated
in credit agreement, our company directly pays the funds to the account of transaction competitor appointed by our company based on
the usage stated in credit agreement after transferring the loan funds into the account of our company. The payment amount totals
RMB. The payment amount entrusted: RMB . The detail payment information can see “Entrusted Payment List”:

Entrusted
Payment List 

Currency Type:
        

			
					
	
No.

	
Date

	
Amount

	
Payee

	
Receiving Bank

	
Payee’s A/C

	
Fund Usage

	
Remark

	
1

	 
	 
	 
	 
	 
	 
	 

	
2

	 
	 
	 
	 
	 
	 
	 

	
3

	 
	 
	 
	 
	 
	 
	 

	
4

	 
	 
	 
	 
	 
	 
	 

Note: When actually paying, the
foregoing single sum of payment amount and anticipated use period maybe change, our company promises single sum of payment will be
no more than the entrusted payment amount, which meet the condition of independent payment. 

3. Our company confirms that all the
loan funds will be used for the usage stated in the credit agreement. 

4. Our company confirms that statements
and guarantee stated in Article 14 of credit agreement are true and correct as of the notification date.

5. Our company confirms there is no
default event at the notification date. 

6. The articles and conditions stated
in credit agreement should be included into the withdrawal notification, which will consist of one part of credit agreement. 

7. The appendix of this withdrawal
notification is as follows:

7.1. One copy of funds use background
documents (attached relevant contracts, agreement, bills) satisfying the credit agent bank to explain the loan fund to be withdrawn
by the borrower is used for the liquid funds. The use amount of the funds in the fund use plan should be correct to RMB 100,000yuan.

7.2. Loan receipt

7.3. Fund use situation for previous
stage (excluding the first sum of withdrawal)

7.4. Others 

Borrower: WSP
(Official Seal)

Legal
Representative:   (signature) 

Date:

Appendix 5

Syndicated Loan Notification (Form) 

No.: SMLSJGHYTTK( )( )

TO:
                                        
          (bank) 

Act as the participant bank stated in
the credit agreement

Case: WSP Structured Bank
Consortium Comprehensive Credit and Loan Agreement with an Amount Equivalent to RMB 3.5 Billion signed on Aug 29, 2011
 

Our company hereby confirms WSP as the
borrower, Bank of China Limited Jiangsu Branch as the arranging bank, Bank of China Limited Wuxi Branch and Agricultural Bank of
China Limited Wuxi Branch as the co-lead bank, Bank of China Limited Wuxi Hi-tech Industrial Development Zone Sub-branch as credit
agent bank, Agricultural Bank of China Wuxi New District Sub-branch and Bank of China Limited Wuxi Hi-tech Industrial Development
Zone Sub-branch as mutual guarantee agent bank, the financial institution listed in Appendix 1 of credit agreement as participant
bank (hereinafter called “Participant Bank”), who signed WSP Structured Bank Consortium Comprehensive Credit and Loan
Agreement with an Amount Equivalent to RMB 3.5 Billion (hereinafter called “Credit Agreement”) on Aug 29, 2011. 

The vocabularies and terms defied in
the credit agreement have same meaning in the subscription letter. 

Our bank hereby: 

1. Our bank has notified your bank and
we have received the withdrawal notification date on
               with the No. SMLSJGHYTTK( ) (
 ) sent by the borrower. 

2. Please your bank to grant the loan
fund according to the articles and conditions of credit agreement. The amount of syndicated loan of your bank is RMB
                 only. 

3. The loan interest rate of these loan
funds is:
                      

4. The withdrawal date of the loan
funds is:
                         

5. The repayment plan of the loan funds
is:
                         

6. Please your bank to transfer the
loan funds into the following account before 11:00 am of the withdrawal date:

Account Name:

A/C No. 

Opening Bank:

Transfer Remark:  Loan of
Bank Consortium  --              (bank)

Bank of China
Limited Wuxi Hi-tech Industrial Development Zone Sub-branch (Official Seal)

Act as the
credit agent bank of participant bank 

Representative
(Signature):    

Date:

Appendix 6 

Repayment Notification (Form) 

No.: XMLSJGHYTTQHK( )( )

To: Bank of China Limited Wuxi Hi-tech
Industrial Development Zone Sub-branch

Act as the credit agent bank stated in
the credit agreement

Case: WSP Structured Bank
Consortium Comprehensive Credit and Loan Agreement with an Amount Equivalent to RMB 3.5 Billion signed on Aug 29, 2011
 

Our company hereby confirms WSP as the
borrower, Bank of China Limited Jiangsu Branch as the arranging bank, Bank of China Limited Wuxi Branch and Agricultural Bank of
China Limited Wuxi Branch as the co-lead bank, Bank of China Limited Wuxi Hi-tech Industrial Development Zone Sub-branch as credit
agent bank, Agricultural Bank of China Wuxi New District Sub-branch and Bank of China Limited Wuxi Hi-tech Industrial Development
Zone Sub-branch as mutual guarantee agent bank, the financial institution listed in Appendix 1 of credit agreement as participant
bank (hereinafter called “Participant Bank”), who signed WSP Structured Bank Consortium Comprehensive Credit and Loan
Agreement with an Amount Equivalent to RMB 3.5 Billion (hereinafter called “Credit Agreement”) on Aug 29, 2011. 

The vocabularies and terms defied in
the credit agreement have same meaning in the subscription letter. 

Our company hereby: 

1. Our company will repay your bank as
per the appointment stated in Article 9 of this agreement and send this irrevocable notification. The principal for repayment is RMB
                   only. The repayment date is
           . The detail arrangement is subject to the appointment stated
in Article 9 of this agreement. 

2. Confirm the statements and guarantee
stated in Article 14 of the credit agreement are true and correct on the notification date. 

3. Confirm there is no default event on
the repayment notification date. Our company further confirms that this kind of event will happen on the prepayment date. 

4. The articles and conditions stated
in the credit agreement should be included into the repayment notification, which consists of one part of prepayment notification.

Borrower: WSP
(Official Seal)

Representative
(Signature):         

Date:

Appendix 7 

Reimbursement Notification (Form) 

No. XMLSJGHYTHK( )( )

TO: WSP

Act as the borrower stated in the
credit agreement

Case: WSP Structured Bank
Consortium Comprehensive Credit and Loan Agreement with an Amount Equivalent to RMB 3.5 Billion signed on Aug 29, 2011

Our company hereby confirms WSP as the
borrower, Bank of China Limited Jiangsu Branch as the arranging bank, Bank of China Limited Wuxi Branch and Agricultural Bank of
China Limited Wuxi Branch as the co-lead bank, Bank of China Limited Wuxi Hi-tech Industrial Development Zone Sub-branch as credit
agent bank, Agricultural Bank of China Wuxi New District Sub-branch and Bank of China Limited Wuxi Hi-tech Industrial Development
Zone Sub-branch as mutual guarantee agent bank, the financial institution listed in Appendix 1 of credit agreement as participant
bank (hereinafter called “Participant Bank”), who signed WSP Structured Bank Consortium Comprehensive Credit and Loan
Agreement with an Amount Equivalent to RMB 3.5 Billion (hereinafter called “Credit Agreement”) on Aug 29, 2011. 

The vocabularies and terms defied in
the credit agreement have same meaning in the subscription letter. 

Our bank, as agent bank, hereby
notifies your company of the situation about the due funds payable of the loan:

(1)Type of Due Funds:
Principal/Interest/Charges

(2) Amount of Due Funds: RMB 

(3) Maturity Date:
                

 

Our bank hereby notifies your company
to transfer a sum of funds equal to the foregoing funds to the special reimbursement account opened in our bank. 

Our bank will directly deduct the
foregoing due funds from the special account on the maturity date according to the appointment stated in the credit agreement. 

 

Bank of China
Limited Wuxi Hi-tech Industrial Development Zone Sub-branch (Official Seal)

Act as Credit Agent
Bank

Representative
(Signature): 

Date:

Appendix 8 

Payment Notification (Form) 

No. XMLSJGHYTHK( )( )

TO:

Bank 

Act as the
participant bank stated in the credit agreement

Case: WSP Structured Bank
Consortium Comprehensive Credit and Loan Agreement with an Amount Equivalent to RMB 3.5 Billion signed on Aug 29, 2011
 

Our company hereby confirms WSP as the
borrower, Bank of China Limited Jiangsu Branch as the arranging bank, Bank of China Limited Wuxi Branch and Agricultural Bank of
China Limited Wuxi Branch as the co-lead bank, Bank of China Limited Wuxi Hi-tech Industrial Development Zone Sub-branch as credit
agent bank, Agricultural Bank of China Wuxi New District Sub-branch and Bank of China Limited Wuxi Hi-tech Industrial Development
Zone Sub-branch as mutual guarantee agent bank, the financial institution listed in Appendix 1 of credit agreement as participant
bank (hereinafter called “Participant Bank”), who signed WSP Structured Bank Consortium Comprehensive Credit and Loan
Agreement with an Amount Equivalent to RMB 3.5 Billion (hereinafter called “Credit Agreement”) on Aug 29, 2011. 

The vocabularies and terms defied in
the credit agreement have same meaning in the subscription letter. 

Our bank, as agent bank, hereby
notifies your bank of the situation about the due funds payable of the loan:

(1) Type of Due Funds:
Principal/Interest/Charges

(2) Amount of Due Funds: RMB
                        only 

(3) Maturity Date:
                                      

(4) Account Number of Your Bank:
                     
  

Our bank will pay the funds to your
bank on the maturity date according to the appointments stated in the credit agreement. 

Bank of China
Limited Wuxi Hi-tech Industrial Development Zone Sub-branch (Official Seal) 

Act as credit
agent bank: 

Representative
(Signature): 

Date:

Appendix 9

Mortgage and Pledge Property List

1. List of Mortgaged State-owned Land
Use Right and House Property

			
	
	
No.

	
Type

	
Certificate No.

	
Description

	
1

	
Use Right of State-owned Land 

	
XXGY(2001)1

	
Located at No. 61#-B land of Wuxi
National Hi-new Technical Industries Development Zone; Used for industry; Land Area: 20769.7 m2; Service Year: Until Dec 30,
2050.

	
2

	
Use Right of State-owned Land

	
XXGY(2001)92

	
Located at No. 61#-C land of Wuxi
National Hi-new Technical Industries Development Zone; Used for industry; Land Area: 9198.5 m2; Service Year: Until Feb 27,
2051.

	
3

	
Use Right of State-owned Land

	
XXGY(2004)206

	
Located at C07-10 and 13 of Second Phase
of Wuxi New District Industrial Garden; Land NO.: 6-03-017-005; Used for industry; Land Area: 210015.0 m2; Service Year: Until
Feb 14, 2054.

	
4

	
Use Right of State-owned Land

	
XXGY(2004)207

	
Located at C01-03 of Second Phase of Wuxi
New District Industrial Garden; Land NO.: 6-03-017-003; Used for industry; Land Area: 119627.4 m2; Service Year: Until Feb 14,
2054.

	
5

	
House Property 

	
XFQZXZ65039813, 65039814,

65039815,65039816 

	
Located at Building 16, Area C, Phase 2,
Wuxi Xinan Industrial Zone; Used for industrial warehouse; total floorage: 107285.84 m2

	
6

	
House Property

	
XFQZXZ 65039809, 65039810 ,

65039811,65039812

	
Located at Building 18, Area C, Phase 2,
Wuxi Xinan Industrial Zone; Used for industrial warehouse; total floorage: 56757.13 m2

	
7

	
House Property

	
XFQZXZ 60002540 

	
Located at Building 5, Block 61, Wuxi New
District Development Zone; Used for industrial warehouse; total floorage: 14057.62 m2

2. List of Mortgaged Stock Right

				
	
No.

	
Target Company

	
Investment Sum

	
Investment Proportion

	
1

	
Inner Mongolia Togtoh County Mengfeng
Special Steel Co., Ltd. 

	
RMB200,000,000

	
100%

	
2

	
Paraiba Seamless Special Pipe
Manufacturing Co., Ltd. 

	
RMB300,000,000

	
100%

	
3

	
Chaoyang Seamless Steel Piping Co., Ltd.
 

	
RMB51,000,000

	
51%

	
4

	
Songyuan Seamless Special Pipe
Manufacturing Co., Ltd. 

	
RMB40,000,000

	
100%

3.
Mortgaged Machine and Equipment List

The machines and equipment in the
mortgaged machines and equipment list are these listed in “Detail Table for Check and Evaluation of Machines and
Equipment” of “Evaluation Report of Partial Assets of WSP” with No. YYZP[2001]043 issued by Yiyang Yangxian Assets
Evaluation Firm on Mar 28, 2011. 

4. List for Mortgaged Accounts
Receivable

The accounts receivable in the list of
mortgaged account receivable are these stated in “Detail List for Check of Accounts Receivable” of “Evaluation Report
of Accounts Receivable and prepayments of WSP) with the No. YYZP[2011] 66 issued by Yiyang Yangxian Assets Evaluation Firm on Mar
28, 2011. 

5. List for Floating Mortgaged Raw
Materials, Semi-products and Finished Products 

The floating mortgaged raw materials,
semi-products and finished products in the list of floating mortgaged raw materials, semi-products and finished products are these
stated in “Detail List for Check of Accounts Receivable” of “Evaluation Report of Accounts Receivable and prepayments
of WSP) with the No. YYZP[2011] 45 issued by Yiyang Yangxian Assets Evaluation Firm on Mar 28, 2011.

Appendix 10 

Wuxi Seamless Oil Pipe Co., Ltd.

(as the Mortgagor) 

and

Agricultural Bank of China Wuxi New
District Sub-branch 

(as the Guarantee Agent Bank) 

	
	Wuxi
Seamless Oil Pipe Co., Ltd.

Structured Bank Consortium Comprehensive
Credit and Loan Agreement with an Amount
Equivalent to RMB 3.5 Billion

Maximum Amount Property Mortgage Contract
(Form) 

Date:
                

The Maximum Property Mortgage Contract (No. XMLSJGHYTDY( ) is signed by and between the following parties in Wuxi Hi-new
Technical Industries Development Zone on            . 

1. WSP is a
limited liability company legally established in Wuxi City, China. Its registered address is No. 235, Chengnan Road, Hi-new
Technical Industries Development Zone, Wuxi City. WSP acts as the Mortgagor (hereinafter called “Mortgagor”);

2.
Agricultural Bank of China Wuxi New District Sub-branch acts as the mortgage agent (hereinafter called “Guarantee Agent
Bank”). 

Whereas:

WSP as the
borrower, Bank of China Limited Jiangsu Branch as the arranging bank, Bank of China Limited Wuxi Branch and Agricultural Bank of
China Limited Wuxi Branch as the co-lead bank, Bank of China Limited Wuxi Hi-tech Industrial Development Zone Sub-branch as credit
agent bank, Agricultural Bank of China Wuxi New District Sub-branch and Bank of China Limited Wuxi Hi-tech Industrial Development
Zone Sub-branch as mutual Guarantee Agent Bank, the financial institution listed in Appendix 1 of Credit Agreement as Participant
Bank (hereinafter called “Participant Bank”) signed WSP Structured Bank Consortium Comprehensive Credit and Loan
Agreement with an Amount Equivalent to RMB 3.5 Billion (hereinafter called “Credit Agreement”) on Aug 29, 2011. 

2. The
Mortgagor would like to mortgage all relevant assets to Bank of China Limited Wuxi Branch, Agricultural Bank of China Limited Wuxi
Branch, Nanyang Commercial Bank (China) Limited Wuxi Branch, China Merchants Bank Co., Ltd Wuxi Branch, Industrial and Commercial
Bank Limited Wuxi Branch, China CITIC Bank Corporation Limited Wuxi Branch, Shanghai Pudong Development Bank Co., Ltd Wuxi Branch,
China Everbright Bank Co., Ltd Wuxi Branch, Bank of China Limited Wuxi Hi-tech Industrial Development Zone Sub-branch, Agricultural
Bank of China Wuxi New District Sub-branch (hereinafter called “Mortgagee”) to guarantee the borrower to fulfill the
Credit Agreement;

3. According
to Article 13 of Credit Agreement, the Mortgagor shall sign the Maximum Amount Property Mortgage Contract with the Guarantee Agent
Bank acting as the bank consortium agent. 

For this
purpose, both parties hereby make the following:

Article 1

Definition and
Explanation 

Except other
appointments in the Maximum Amount Property Mortgage Contract, the definition and explanation of terms in the Credit Agreement has
same definition with those in the Maximum Amount Property Mortgage Contract. 

Article 2

Mortgaged Articles

2.1 The
Mortgagor shall provide the property guarantee in all the properties stated in the appendix of Maximum Amount Property Mortgage
Contract. The Mortgagor and guarantor shall sign a mortgaged articles list (hereinafter called “Mortgaged Articles List” on the date 

confirmed by the
Guarantee Agent Bank, which shall be in conformity with the appendix of Maximum Amount Property Mortgage Contract in form and content. Relevant situations about the mortgaged articles (hereinafter called “Mortgaged Articles” for
mortgage guarantee under the Maximum Amount Property Mortgage Contract shall be listed in the list in details. 

2.2 If the
mortgaged articles include the articles limited by laws, the Mortgagor shall remark in the mortgaged articles list. Otherwise, if
the Mortgagee suffers form the losses in the course of realizing the mortgage, the Mortgagor shall make the compensation. The
compensation liabilities shall not be limited to mortgage guarantee liabilities. 

2.3 The
value of mortgaged articles on             is RMB
         . The value of the foregoing mortgaged articles 

2.4 During
the execution of Maximum Amount Property Mortgage Contract, if the mortgaged articles suffer from the damage, loss or collection,
the Mortgagee enjoys the preferential compensation right for the insurance fund and compensation money. If the liabilities
guaranteed don’t expiry, the Mortgagee can draw the insurance fund and compensation money.

Article 3

Guarantee Scope

3.1 The
master contract of Maximum Amount Property Mortgage Contract is single agreement and contract (hereinafter called “Master
Contract”) signed or to be signed of the Credit Agreement and amendment or supplement agreement. 

3.2 The
Primary Creditor’s Rights under this agreement is that realized within the validity of Credit Agreement with maximum principal
not exceeding the amount equivalent to RMB3,500,000,000, which is established because the participant bank provides the liquid
capital loan and trade financing to the borrower, as well as the creditor’s rights to the borrower that is obtained by the
participant bank as per the Credit Agreement (hereinafter called primary creditor’s right). 

3.3 The
maximum amount of creditor’s rights guaranteed as per the Maximum Amount Property Mortgage Contract (hereinafter called
“Guaranteed Liabilities”) is the sum of the followings:

(1) Primary
creditor’s right;

(2)
Interests (including legal interests, appointed interests, compound interests, penalty interests) causing from the principal of
primary creditor’s right; 

(3) Charges
unpaid by the borrower as per the provisions stated in the Credit Agreement during the execution of the agreement;

(4)
Compensation funds, default funds and damage compensation because the borrower cannot obey any provisions stated in Credit
Agreement;

(5) Expenses
(including, but not limited to the charges for lawsuits, property preservation, traveling, evaluation, auction, lawyer, notary, execution) paid by the Participant Bank and 

its Guarantee Agent Bank for
realizing the creditor’s rights under the Credit Agreement and guaranteed rights and interests under the Maximum Amount Property Mortgage Contract. 

3.4 The loan
deadline of liquid fund loan under the Credit Agreement is 36 months as of the withdrawal date of first sum of loan funds. The
credit deadline of trade financing is 36 months as of the withdrawal date of first sum of loan funds. The Mortgagee shall execute
the mortgage right under the Maximum Amount Property Mortgage Contract during the limitation of legal proceedings of primary
creditor’s right. 

Article 4

Efficacy of
Mortgage Guarantee 

4.1 The
guaranteed duties of Mortgagor under the Maximum Amount Property Mortgage Contract are continuous. The efficacy has continued to the
date when the borrower pays off the principals, interests and other funds payable of liquid fund loan and trade financing owed to
the bank consortium under the Credit Agreement to the Mortgagee, which will be influenced because the Mortgagor or borrower or other
person makes the liquidation, mergence, separation, reorganization and bankruptcy and changes other organization or makes other
arrangement to the borrower’s debts. 

4.2 The
Maximum Amount Property Mortgage Contract will not be affected because the bank consortium and borrower amends, replenishes and
alters all or partial articles of Credit Agreement. When the Mortgagee and borrower agree to prolong or delay the repayment of any
due creditor’s rights under the Credit Agreement, the Maximum Amount Property Mortgage Contract will continue to be valid. 

4.3 The
efficacy of the Maximum Amount Property Mortgage Contract is independent of the Credit Agreement and will not be invalid because of
invalidity of Credit Agreement. If the Credit Agreement is invalid or cancelled, the Mortgagor shall compensate all the losses of
Mortgagee with the scope of guaranteed debts. 

4.4 The
mortgage under the Maximum Amount Property Mortgage Contract is that beyond any guarantee, rights, powers and other remedies held by
the Mortgagee and agent bank as per the laws or other guarantee documents, which is accumulative with the foregoing rights, powers
and remedies and independent of them. 

4.5 If
guaranteed debt under the Maximum Amount Property Mortgage Contract is paid off, however, such liquidation is confirmed to be
invalid or cancelled by the authority department. The Mortgagor shall continue to bear the guarantee liabilities, which will be not
limited by the guarantee period and lawsuit efficacy.    

4.6 The
Mortgagor and Mortgagee confirm and agree that if any Participant Bank transfers any right and duties under its Credit Agreement to
other transferee bank as per the appointment stated in the Credit Agreement, rights and duties under this agreement that are related
to the above transferred rights and duties are transferred to this transferee bank together. The Mortgagor agrees to bear the
guarantee liability to the transferee bank and coordinate them to complete the alteration formalities of relevant mortgage register based on Maximum Amount Property Mortgage Contract.

Article 5

Mortgage Register

 

5.1 The
Guarantee Agent Bank and Mortgagor shall finish handling the mortgage register formalities as per Chinese laws and rules in 20
working days after signing the list of mortgaged articles. If the Mortgagor cannot finish handling the mortgage register formalities
during the foregoing period because of the reason of relevant register departments, the foregoing period shall be relatively
delayed. 

5.2 If the
foregoing mortgaged articles list is successively signed because of the mortgage condition, the Mortgagor has duties to firstly
handle the mortgage register formalities to the signed part based on continuous requirement of Guarantee Agent Bank and provisions
stated in Article 5.1 of the Maximum Amount Property Mortgage Contract. 

5.3 The
Mortgagor shall transfer all the ownership certificate, use right certificate, other right certificate and relevant property right
certificate of the mortgaged articles stated in the mortgaged articles list to the Guarantee Agent Bank for keeping. Within 10 days
after all the guaranteed debts are paid off and the Mortgagor submitted the written application, the Guarantee Agent Bank shall
return the original of the foregoing documents to the Mortgagor and help the Mortgagor to handle relevant formalities of mortgage
register cancellation. The charges arising from this will be borne by the Mortgagor. 

5.4 If the
mortgage register matters happen and the alteration register is needed, the Mortgagor and Guarantee Agent Bank shall go to relevant
register authority to handle the alteration register in 15 days after the alteration of register matters. 

Article 6

Effect of Mortgage

6.1 This
Maximum Amount Property Mortgage Contract becomes valid after singed by the Mortgagor and Guarantee Agent Bank. The mortgage right
for the articles in the mortgaged articles list is set as of the signing date of this agreement. Except that the mortgage right for
some mortgaged articles in the mortgaged articles list is set as per Chinese laws and rules as of the mortgage register date.

Article 7

Insurance of
Mortgaged Articles

7.1 The
Mortgagor shall insure the mortgaged articles in 3 days after having the insured condition. The insurance premium will be borne by
the Mortgagor. The insured company of the Mortgagor shall be the insurance company with rich strength and good prestige. The insured
type and scope shall meet relevant provisions of trade standard and national insurance. The insured amount cannot be less than the
market value of the mortgaged articles. The Mortgagor shall notify the Guarantee Agent Bank in 3 days after insured. 

During the
execution of Maximum Amount Property Mortgage Contract, the Mortgagor cannot discontinue any insurance required by the Guarantee
Agent Bank. Otherwise, the Mortgagee has right to continue the insurance or insured instead of the Mortgagor. All the charges
arising from this will be borne by the Mortgagor. The Mortgagor will bear all the liabilities to the Mortgagee because discontinuing
the insurance. 

7.2 The original of insurance policy for the insurance handled as per Article 7.1 of the Maximum Amount Property Mortgage
Contract shall show the Guarantee Agent Bank as the first beneficiary. The Mortgagor shall transfer the original of insurance policy to the

Mortgagee
in 7 days after insurance (or renewal of insurance). 

If the
Mortgagor has insured the mortgaged articles before signing the Maximum Amount Property Mortgage Contract, the Mortgagor shall
handle the transfer formalities of insurance rights and interests of mortgaged articles insured to guarantee bank and transfer the
original of relevant vouchers to Guarantee Agent Bank in 7 days after signing the Maximum Amount Property Mortgage Contract.

If the
insured property is damaged, the Guarantee Agent Bank has right to use the insurance compensation for the repair of damaged parts of
mortgaged articles. If not repaired, the insurance compensation as the increased earnest money shall be directly transferred into
the special debts reimbursement account opened by the borrower in the Guarantee Agent Bank. 

7.3 If the
Mortgagor cannot insure the mortgaged articles as per Article 7.1 and 7.2 of the Maximum Amount Property Mortgage Contract, the
Guarantee Agent Bank has right to choose the insurance company for insurance as per the insurance type and amount stated in Article
7.1 of the Maximum Amount Property Mortgage Contract if the Guarantee Agent Bank notifies the Mortgagor in writing and the Mortgagor
cannot correct the conducts during the deadline stated in the written notification. The insurance premium will be borne by the
Mortgagor. 

Article 8

Declaration and
Guarantee of Mortgagor 

8.1 The
Mortgagor hereby makes the following statement and guarantee to the Mortgagee:

(1) The
Mortgagor is a limited liability company legally established and effectively existing in China;

(2) The
Mortgagor has full capacity of civil rights and conducts to develop the business, sign the Maximum Amount Property Mortgage
Contract, execute the rights and fulfill the duties as per the Maximum Amount Property Mortgage Contract;

(3) The
internal procedures of company needed when the Mortgagor signs the Maximum Amount Property Mortgage Contract and executes the rights
and fulfills the duties as per the contract has been accomplished; the person who signs the Maximum Amount Property Mortgage
Contract on behalf of the Mortgagor is the effective authorized representative of Mortgagor. The Maximum Amount Property Mortgage
Contract signed by this person is binding upon the Mortgagor;

(4) The
duties of Mortgagor under the Maximum Amount Property Mortgage Contract are the legal and effective duties, which are binding upon
the Mortgagor. The duties can be fulfilled as per the articles stated the Maximum Amount Property Mortgage Contract. 

(5) The
Mortgagor signs the Maximum Amount Property Mortgage Contract and executes
the rights and fulfills the duties as per the contract, which cannot and will not disobey the following documents or conflict
with the following documents:

(i) Any
agreement, contract or any other contractual documents constraint to the property, which shows the Mortgagor as one party;

(ii)
Articles of Incorporation and other essential documents of Mortgagor;

(iii) Any
laws, rules, regulations, normative documents, judgment, verdict and adjudication; 

(6) The
Mortgagor has obtained the establishment, performance and execution of the Maximum Amount Property Mortgage Contract and all the
authorization, approval and permit required by exchange under the contract. The authorization, approval or permit is legal and
effective;

(7) The
Mortgagor signs the Maximum Amount Property Mortgage Contract, executes the rights and fulfill the duties as per the contract, which
is the commercial conducts for the commercial purpose and is subject to the civil and commercial laws;

(8) During
any justice procedures continued in China, the Mortgagor or Mortgagor’s property will not enjoy the immunity or special right
during the lawsuit, verdict, execution, property preservation or other legal procedures;

(9) The
Mortgagor doesn’t attend any lawsuit, arbitration or similar legal procedures with great adverse influences;

(10) No
person takes any legal procedures to execute the business stopping, liquidation, reorganization, bankruptcy, dismiss or similar
procedures to the Mortgagor;

(11) The
Mortgagor legally has the ownership and disposal right of mortgaged articles. The ownership of mortgaged articles without any
dispute can be legally regarded as the subject of mortgage guarantee. If the mortgaged articles belong to the mortgaged property
which must be approved by relevant departments, the Mortgagor shall guarantee to have obtained the legal and effective approval or
consent;

(12) Except
the guarantee stated in the Maximum Amount Property Mortgage Contract, the mortgaged articles have no problems such as any type of
share, rights and interests of any third party, any ownership dispute or any adverse influence for the Mortgagee to execute the
mortgage rights. 

8.2
Mortgagor hereby confirms that Mortgagee authorizes Guarantee Agent Bank to sign this agreement and executes its obligations under
this agreement on the basis that it fully believes the above declaration and guarantee. 

8.3 The
foregoing statements and guarantee made by the Mortgagor must be correct during the execution of the Maximum Amount Property
Mortgage Contract. The Mortgagor guarantees to provide more documents as per the requirement of Guarantee Agent Bank. 

Article 9

Promise of
Mortgagor 

From
the valid date of the Maximum Amount Property Mortgage Contract to the termination date of rights and duties under this
agreement, the Mortgagor promises to the Mortgagee: 

9.1 The
Mortgagor shall maintain legal and effective continuousness of status of legal person of the enterprise and obey all applicable laws
and rules. 

9.2 The
Mortgagor shall ensure the business nature and scope will not have changes with great adverse influences. 

9.3 Except
disposing the mortgaged articles as per the appointment stated in the Maximum Amount Property Mortgage Contract, the mortgaged
articles listed in the appendix of the contract will be owned and kept by the Mortgagor and will continue to be owned and kept by
the Mortgagor during the execution of the contract. 

9.4 Once the
followings happen, the Mortgagor shall notify the Guarantee Agent Bank in 3 days after the events happen:

(1) Default
events stated in Article 10.1 of the Maximum Amount Property Mortgage Contract;

(2) Any
lawsuit, arbitration or legal procedures stated in Article 8.1.(8) of the Maximum Amount Property Mortgage Contract;

(3) Some
disputes happen with the ownership of mortgaged articles or the preservation measures have been taken;

(4)
Mortgaged articles are most, or totally or partially damaged; 

(5) Any
great adverse events happen or will happen in the opinion of Mortgagor. 

9.5 The
Mortgagor provides all the documents and materials related to the mortgaged matters under the Maximum Amount Property Mortgage
Contract to the Guarantee Agent Bank and guarantee the foregoing documents are true, correct and complete. 

9.6 The
Mortgagor shall truly show the defects of mortgaged articles stated in the appendix of the Maximum Amount Property Mortgage Contract
to the Guarantee Agent Bank and make the repair or supplement for the defects as per the requirements of Guarantee Agent Bank. 

9.7 If the
mortgaged articles include the property limited for circulation by laws, the Mortgagor has duties to show in the appendix of the
Maximum Amount Property Mortgage Contract. Otherwise, if the losses are caused when the Guarantee Agent Bank realizes the mortgage
rights, the Mortgagor shall provide the compensation. 

9.8 The
mortgaged articles under the Maximum Amount Property Mortgage Contract will be kept by the Mortgagor. The Mortgagor shall keep well
the mortgaged articles and be responsible for repairing and maintaining and ensure the completeness of mortgaged articles and
coordinate the Guarantee Agent Bank and employed agency to investigate and check the situation of mortgaged articles and take some
measures for the suggestion put forward by the Guarantee Agent Bank for the purpose of completeness of mortgaged
articles during the investigation and check. The Mortgagor shall submit the check report of mortgaged articles to the Guarantee
Agent Bank on schedule and provide the certificate for the situation of mortgaged articles according to continuous reasonable requirement of Guarantee Agent Bank. 

9.9 The
Mortgagor shall be responsible for handling the evaluation, notary, verification and

keeping of mortgaged articles stated in the
Maximum Amount Property Mortgage Contract and cooperate with the Guarantee Agent Bank to handle the register formalities of
mortgaged articles stated in the contract. The Mortgagor shall bear all the charges for the foregoing matters. Relevant evaluation,
notary and verification institutions shall be firstly approved by the Guarantee Agent Bank. 

9.10 Without
the written consent of Guarantee Agent Bank, the Mortgagor cannot sell, rent, transfer, contract, donate, re-mortgage, buy the share
in kind or dispose all the mortgaged articles listed in the mortgaged article list of Appendix of the Maximum Amount Property
Mortgage Contract. 

9.11 After
the written consent of guarantee agent, the amount obtained by the Mortgagor via transferring any mortgaged articles stated in
mortgaged articles list of appendix of the Maximum Amount Property Mortgage Contract shall be executed according to the appointment
stated in Article 11 of this agreement or disposed through consistent consultation of Guarantee Agent Bank and Mortgagor. If the
Guarantee Agent Bank thinks the amount obtained for mortgaged articles to be transferred by the Mortgagor is obviously lower than
the value of mortgaged articles, the Mortgagor shall provide relevant guarantee as per the requirement of Guarantee Agent Bank. 

Under any
situation, the Mortgagor cannot damage the interests of Mortgagee if transferring any mortgaged articles listed in the appendix of
the Maximum Amount Property Mortgage Contract. 

9.12 If any
mortgaged articles stated in the mortgaged article list of appendix of the Maximum Amount Property Mortgage Contract are lost,
entirely or partially damaged because of the conducts of the Mortgagor, the Mortgagor shall immediately stop the conducts and notify
the Guarantee Agent Bank of the situation of mortgaged articles in time and restore the value of mortgaged articles during
reasonable period or provide the property mortgage equal to the value of lost and damaged articles to the Guarantee Agent Bank or
provide the approval guarantee to the Guarantee Agent Bank, handle relevant evaluation and register formalities. If the Mortgagor
cannot provide, the Mortgagee can sell the mortgaged articles at auction or dispose them and prepay or draw the guaranteed debts
with the amount obtained by auction and disposal after negotiation with the Mortgagor. 

9.13 If the
third party who provides the guarantee (including, but not limited to the guarantee ways such as the guarantee, mortgage and pledge)
for the primary creditor’s right stated in Article 3 of the Maximum Amount Property Mortgage Contract sets the mortgage
and/pledge for the interests of Mortgagee in its own property and the Mortgagee gives up the mortgage right provided by the third
party, syn-position of mortgage right or
change the mortgage right or mortgage right provided by the third party, the guarantee scope of Mortgagor will not decrease
and still keep same with those stated in Article 3 of the Maximum Amount Property Mortgage Contract. The foregoing conducts of the
Mortgagee will not affect and exempt from any duties and guarantee liabilities of Mortgagor under this agreement.
The Mortgagor cannot require of alleviating the responsibilities of the Mortgagor within the scope of giving up of the Mortgagee.
Meanwhile, the Mortgagor

gives up requiring the Mortgagee to firstly execute the defense right of mortgaged and/or
pledged articles of the third party. 

Article 10

Default Events

10.1 Each of
the following events will consist of the default events under the Maximum Amount Property Mortgage Contract:

(1) Any
default events stated in Credit Agreement;

(2) Any
default events for applicable guarantee contract or contract happens with the third party who provides the guarantee (including, but
not limited to the guarantee ways such as the guarantee, mortgage and pledge) for the primary creditor’s right stated in
Article 3 of the Maximum Amount Property Mortgage Contract, except that the debts guaranteed by the third party under the guarantee
agreement or contract is nor more than RMB RMB10,000,000; 

(3) The
Mortgagor disobeys the statements and guarantee stated in Article 8 of the Maximum Amount Property Mortgage Contract or promise
stated in Article 9 and cannot make the remedies satisfying the Guarantee Agent Bank on the informed date of the Mortgagor or in 10
working days as of the notification date when the Guarantee Agent Bank requires the Mortgagor to make the remedies;

(4) The
Mortgagor doesn’t truly show the defects of mortgaged articles stated in the appendix of Maximum Amount Property Mortgage
Contract and cannot make the remedies satisfying the Guarantee Agent Bank on the informed date of the Mortgagor or in 10 working
days as of the notification date when the Guarantee Agent Bank requires the Mortgagor to make the remedies;

(5) The
Mortgagor doesn’t handle the insurance formalities of mortgaged articles as per the appointments stated in the appendix of
Maximum Amount Property Mortgage Contract and cannot make the remedies satisfying the Guarantee Agent Bank in 10 working days as of
the notification date when the Guarantee Agent Bank requires the Mortgagor to make the remedies;

(6) The
Mortgagor doesn’t handle the register formalities of mortgaged articles as per the appointments stated in the appendix of
Maximum Amount Property Mortgage Contract and cannot make the remedies satisfying the Guarantee Agent Bank in 5 working days as of
the notification date when the Guarantee Agent Bank requires the Mortgagor to make the remedies;

(7) The
Mortgagor arbitrarily sells, rents, transfers, contracts, donates, re-mortgages, buys the share in kind or disposes all the
mortgaged articles listed in the mortgaged article list
of Appendix of the Maximum Amount Property Mortgage Contract;

(8) The
Mortgagor conceals the existing problems of mortgaged articles such as share, ownership dispute, sealed up, frozen, detained or set
for mortgage, etc;

(9) Any
mortgaged articles owned and kept by the Mortgagor are lost and damaged. The insurance of the mortgaged articles cannot be workable
or insurance company refuses to

compensate in any reason;

(10) The
Mortgagor hinders (including act or negative act) the Guarantee Agent Bank to dispose the mortgaged articles as per the appointment
stated Article 11 of Maximum Amount Property Mortgage Contract in any way. 

(11) The
Mortgagor doesn’t fulfill other duties under the Maximum Amount Property Mortgage Contract. 

(12) Other
events which will bring great adverse influences in the opinion of Mortgagee. 

10.2 After
any default events stated in Article 10.1 of the Maximum Amount Property Mortgage Contract, the Guarantee Agent Bank has right (must
if required by the majority of Participant Bank) to adopt one or more following actions:

(1) If the
credit funds are not granted, notify the borrower in writing and announce the credit funds required in all or partial withdrawal
notification, but not withdrawn or granted; After announcement, this part of credit fund will immediately terminate being withdrawn
or granted;

(2) Notify
the borrower in writing and announce all or partial credit balance together with all accrued interests, charges and other funds
under the agreement shall be immediately on maturity and payable;

(3) Notify
the Mortgagor in writing and announce to dispose the mortgaged articles in the way of auction, disposal and discount. The amount
will be executed as per Article 10 of the Maximum Amount Property Mortgage Contract.(4) Notify the borrower in writing and require
the borrower to provide the guarantee for the primary creditor’s right under the creditor’s right;

(5) Notify
the Mortgagor in writing and require the Mortgagor to pay the compensation for compensating all direct and indirect losses
(including, but not limited to guaranteed debts) of the Guarantee Agent Bank because the default of the Mortgagor;

(6) Take the
proceedings to the People’s Court of signing place of the Maximum Amount Property Mortgage Contract;

(7) Execute
other rights stated in laws and the Maximum Amount Property Mortgage Contract.

10.3 The
compensation stated in Item (5), Article 10.2 of the Maximum Amount Property Mortgage Contract will consist of an independent debts
of Mortgagor to the Mortgagee that is payable upon request. 

10.4 In light of requirement and written proof of any Participant Bank, the Mortgagor shall compensate any losses and charges
(including, but not limited to the lawyer’s fee and lawsuit fee) or expenditures because any default events happen or the Mortgagor doesn’t fulfill any duties under the Maximum Amount Property Mortgage Contract to the Participant Bank. 

Article 11

Realization of
Mortgage Right 

11.1 If any
default events under Article 10.1 of the Maximum Amount Property Mortgage Contract happen, the Guarantee Agent Bank has right to
legally dispose the mortgaged articles by auction, disposal and discount. The amount obtained by the disposal of mortgaged articles
will be used to liquidate the guarantee debts. To dispose the mortgaged articles shall be done via the Guarantee Agent Bank. The
Guarantee Agent Bank shall pay any funds obtained by disposing the mortgaged articles to each Mortgagee and agent bank as per the
following way and orders:

(1) Pay the
charges paid by the Mortgagee and agent bank for realizing the creditor’s right under the Credit Agreement and guarantee
interests under the Maximum Amount Property Mortgage Contract and any other charges, default money and damage compensation payable
by the Mortgagor under the Maximum Amount Property Mortgage Contract to the Mortgagee and agent bank;

(2) Pay any
reasonable charges, default money and damage compensation due and unpaid by the borrower under the Credit Agreement to each
Participant Bank and agent bank;

(3) Pay the
interests (including, but not limited to interests, compound interests and penalty interests) of liquid funds loan due and unpaid by
the borrower to each Participant Bank under the Credit Agreement according to the proportion of unpaid loan funds granted by each
Participant Bank accounting for the loan balance of all the Participant Banks;

(4) Pay the
principal of any liquid funds loan due and unpaid by the borrower to each Participant Bank under the Credit Agreement according to
the proportion of unpaid loan funds granted by each Participant Bank accounting for the loan balance of all the Participant Banks;

(5) Pay the
interests and charges for credit funds of any bank acceptance bill due and unpaid by the borrower to each Participant Bank under the
Credit Agreement according to the proportion of unpaid credit funds of bank acceptance bill accepted by each Participant Bank
accounting for total unpaid credit funds of bank acceptance bill accepted by all the Participant Banks.

(6) Pay the
principal for credit funds of any bank acceptance bill due and unpaid by the borrower to each Participant Bank under the Credit
Agreement according to the proportion of unpaid credit funds of bank acceptance bill accepted by each Participant Bank accounting
for total unpaid credit funds of bank acceptance bill accepted by all the Participant Banks;

(7) Pay the
accrued interests (including, but not limited to interests, compound interests and penalty interests) and charges of
any trade financing credit funds due and unpaid by the borrower to each Participant Bank under the Credit Agreement according to the
proportion of unpaid trade financing credit balance granted by each Participant Bank accounting for the total trade
financing credit balance of all the Participant Banks;

(8) Pay the
principal of any trade financing credit funds due and unpaid by the borrower to each Participant Bank under the Credit Agreement
according to the proportion of unpaid

trade financing
credit balance granted by each Participant Bank accounting for the total trade
financing credit balance of all the Participant Banks;

(9) Pay any
other funds due and unpaid by the borrower to each Participant Bank under the Credit Agreement according to the proportion of unpaid
credit funds granted by each Participant Bank accounting for the total credit balance of all the Participant Banks;

11.2 When
disposing the mortgaged articles as per the provisions stated in Article 11.1 of the Maximum Amount Property Mortgage Contract, the
Guarantee Agent Bank has right to legally take the following actions: 

(1) Within
the scope of laws, according to the requirement of Guarantee Agent Bank, has right to dispose the mortgaged articles by the way of
auction, disposal and discount in the proper and fair market price at proper time. 

(2) Require
the Mortgagor to pay the necessary charges paid by the Guarantee Agent Bank for executing any right under the laws and the Maximum
Amount Property Mortgage Contract;

(3) Settle
and harmonize any right assertion related to the mortgaged article, submit the arbitration or lawsuit proceedings or execute in
other ways or permit others to execute; 

(4) In order
to realize any right under the Maximum Amount Property Mortgage Contract, execute other rights or take legal actions. 

The
Guarantee Agent Bank has right to choose all or partial foregoing right or temporarily postpone to execute any right. 

11.3 If the
amount obtained after the Guarantee Agent Bank disposes the mortgaged articles under the Maximum Amount Property Mortgage Contract
as per the appointment stated in Article 11.1 of this agreement cannot enough pay the guaranteed debts, the Guarantee Agent Bank has
right to pursue to the borrower. If exceeding the guarantee scope stated in Article 3 of the Maximum Amount Property Mortgage
Contract, the exceeding party shall be owned by the Mortgagor. 

11.4 If any
third party proposes any assertion or any objection to the mortgaged articles with any reason, all the results and liabilities will
be borne by the Mortgagor. The foregoing assertion and objection of the third party will not affect the Guarantee Agent Bank to
dispose the mortgaged articles as per the appointment stated in the Maximum Amount Property Mortgage Contract.  

Article 12

Taxes and Charges

12.1 All the taxes and charges (including, but not limited to the charges of lawyer, notary, register and stamp under the Maximum
Amount Property Mortgage Contract and charges for insurance, transport, storage, evaluation, repair and maintenance of mortgaged articles) related to this agreement and mortgaged articles under this agreement shall be borne by the Mortgagor.

12.2
According to the requirement of Guarantee Agent Bank, the Mortgagor shall

immediately enough compensate all reasonable expenditures
and charges, including, but not limited to the financial charges, lawyer charges and lawsuit charges paid for disposing mortgaged
articles stated in Article 11 of the Maximum Amount Property Mortgage Contract paid by the Guarantee Agent Bank for executing the
rights under the Maximum Amount Property Mortgage Contract or any documents at any place of jurisdictions to the Guarantee Agent
Bank. 

12.3 The
Mortgagor shall pay all the current and future register charges and other taxes and charges collected from the Mortgagor for the
Maximum Amount Property Mortgage Contract and any documents at any time. 

12.4 Any
funds paid by the Mortgagor to Mortgagee and Guarantee Agent Bank shall be enough paid as per the Maximum Amount Property Mortgage
Contract. The Mortgagor cannot propose any assertion of offsets and anti-reimbursement, as well as any limitation or condition. 

Article 13

Changes of Subject
 

The Maximum
Amount Property Mortgage Contract is binding upon each party of the contract and their own successors and transferees.  

Article 14

Information
Disclosure 

14.1 The
Guarantee Agent Bank has right to keep secrete for any information related to all the documents (including, but not limited to the
evaluation report, insurance documents and mortgage register documents, etc) under the Maximum Amount Property Mortgage Contract
provided by Mortgagor or its representative. But, the Guarantee Agent Bank and Mortgagee have right:

(1) Disclose
the well-known information (excluding the well-known information because the Guarantee Agent Bank breaks this article); 

(2)
Disclosure the information during any lawsuit and arbitration procedures;

(3) Disclose
this information as per the requirement of laws;

(4) Disclose
this information to co-lead bank or any Participant Bank; 

(5) Disclose
this information to any governmental, financial, taxation or other relevant supervision departments;

(6) Disclose
the information to its professional consultant;

(7) Disclose
the information within the scope of Article 14.2 of the Maximum Amount
Property Mortgage Contract;

(8) Disclose
the information after approved by the Mortgagor. 

14.2 The
Mortgagor has right to disclose to any related party and/or any person (hereinafter called “Participant”) related to any
transfer or other agreement of the Maximum Amount Property Mortgage Contract that may be or already signed by Mortgagee; 

(1) Copies
of any documents (including, but not limited to the evaluation report, insurance documents, mortgage register documents, etc)
related to the Maximum Amount Property Mortgage Contract;

(2) Any
other information related to the above documents that Mortgagor has obtained. 

But, before
the participant receives any secrete information, this participant must submit the written promise upon agreeing to keep secret as
per Article 14.1 of the Maximum Amount Property Mortgage Contract to the Guarantee Agent Bank. 

14.3 The
appointments stated in Article 14.1 and 14.2 substitute for any secret promise made by the Mortgagor before becoming the party of
the Maximum Amount Property Mortgage Contract. 

Article 15

Amendment and
Supplement 

15.1 The
Guarantee Agent Bank can amend the articles in the Maximum Amount Property Mortgage Contract in writing together with the Mortgagor.
If the amendment refers to the alteration of registered matters stated in this agreement, the Mortgagor has duties to help the
Guarantee Agent Bank to handle the alteration register in the register authority. Any amendment on basis of this is binding upon all
the Mortgagees, Guarantee Agent Banks and Mortgagors. 

15.2 If the
borrower and bank consortium amends the Credit Agreement as per the appointment stated in the agreement and the amendment of Credit
Agreement involves in the alteration of registered matters stated in the Maximum Amount Property Mortgage Contract, the Mortgagor
has duties to help the Guarantee Agent Bank to handle the alteration register in the register authority. 

15.3 In
order to meet the requirement for handling the mortgage register, after proposal of Guarantee Agent Bank, the Mortgagor has duties
to sign the supplement agreement of the Maximum Amount Property Mortgage Contract with the Guarantee Agent Bank or any mortgage
agreement in conformity with the content of this agreement and qualified in the register authority. 

Article 16

Notification
 

16.1 Any
notification, request, instruments or other documents sent to any party under the Maximum Amount Property Mortgage Contract as per
this agreement shall be sent to the recipient in writing based on the address or telex code or fax number appointed by the
recipient. The address, telex code and fax number and contact person appointed by each
party shall be listed in the signing page of this agreement. 

16.2 Any
communications executed by each party of the Maximum Amount Property Mortgage Contract shall be regarded as the receiving of the
recipient in the following situation:

(1) When
actual delivered if sending by person;

(2) If
sending by telex or fax, receive the correct feedback or fax report after finishing the

sending;

(3) If
mailing by the letter (including EMS), 12:00 am (Beijing Time) in 7 working days after sending register letter as per correct
address. 

16.3 After
each party of the Maximum Amount Property Mortgage Contract changes the contact person, address, telex code or fax number, the party
shall notify the alteration to the credit agent bank in 2 working days after changes. 

Article 17

Extended Deadline
and Partial Invalidity 

17.1 Any
Mortgagee and/or Guarantee Agent Bank haven’t executed or delay to execute any rights under the Maximum Amount Property
Mortgage Contract, which will not be regarded as the abandon of these rights. If the Mortgagee and/or Guarantee Agent Bank
independently or partially execute these rights, it shall not be excluded that they further execute these rights in other way or
execute other right or special rights. The rights and relief stated in Maximum Amount Property Mortgage Contract shall not be
excluded from any rights or relief given by the laws and rules to the Mortgagee and/or Guarantee Agent Bank. 

17.2 If any
article under the Maximum Amount Property Mortgage Contract is illegal, invalid or unfulfilled at any time, the legality, validity
or execution of other articles under this agreement will be not affected or decreased. 

Article 18

Applicable Laws
and Jurisdiction 

18.1 This
Maximum Amount Property Mortgage Contract is subject to Chinese laws (including, but not limited to Chinese prevailing effective
laws, administrative laws and rules, decisions and orders issued by State Council, local laws and rules issued by local
People’s Congress, rules issued by each department and commission of State Council and Local People’s Government. Based on
this purpose, Chinese laws don’t include the laws of Taiwan, HK Special Administrative Region and Macao Special Administrative
Region) and is explained in light of it. 

18.2 If any
dispute is arising during the execution of the Maximum Amount Property Mortgage Contract, each party shall settle it by friendly
consultation. If not settled, this dispute will be subject to People’s Court at the signing place of this agreement.

Article 19

Contract Text
 

19.1 This
agreement is established and signed in Chinese. 

19.2 The matter not stated in this agreement will be negotiated by the Mortgagor, co-lead bank and Guarantee Agent Bank. The
supplement agreement can be signed by the Mortgagor and Guarantee Agent Bank. If the supplement agreement refers to the alteration of registered contents in the contract, the alteration register formalities shall be handled based on the supplement
agreement. The supplement agreement will have same legal effect with this agreement. 

19.3 The
appendix of this Maximum Amount Property Mortgage Contract is the effective

part of this agreement. 

19.4 The
Maximum Amount Property Mortgage Contract shall be signed in ( ) originals. Each of Mortgagor, Mortgagee and Guarantee Agent
Bank hold one. Other originals shall be kept in the Guarantee Agent Bank for the mortgage register of this agreement. Each original
has the same effect. 

(The
remainder of this page is intentionally left blank.) 

Page of Signature 

Mortgagor: 

Wuxi Seamless Oil
Pipe Co., Ltd. 

Add:

P.O.: 

Principal: 

Tel: 

Fax:

Contact Person: 

Authorized
signer: 

                            
         
                       

Name:
                                   seal 

Title: 

Date:

Guarantee Agent Bank:

Agricultural Bank
of China Wuxi New District Sub-branch

Add:

P.O.: 

Principal: 

Tel: 

Fax:

Contact Person: 

Authorized
signer: 

                            
         
                       

Name:
                                   seal 

Title: 

Date:

Appendix of Maximum Amount Property Mortgage Contract 

Mortgaged
Articles List 

The
Mortgaged Articles List is signed by and between the following parties in Wuxi Hi-new Technical Industries Development Zone on
           . 

1. WSP is a
limited liability company legally established in Wuxi City, China. Its registered address is located at No. 235, Chengnan Road,
Hi-new Technical Industries Development Zone, Wuxi City. WSP acts as the Mortgagor (hereinafter called “Mortgagor”);

2.
Agricultural Bank of China Wuxi New District Sub-branch acts as the Guarantee Agent Bank (as this status, hereinafter called
“Guarantee Agent Bank”). 

Whereas:

The
Mortgagor and Guarantee Agent Bank signed WSP Structured Bank Consortium Comprehensive Credit and Loan Agreement with an Amount
Equivalent to RMB 3.5 Billion (hereinafter called “Mortgage Contract” with the No. XMLSJGHYTDY ( ) on
        , 2011. According to the mortgage contract, the Mortgagor set the mortgage
guarantee on the assets for the interests of Mortgagee. 

Now, both
parties confirm the assets used by the Mortgagor for the guarantee under the mortgage contract are:

										
	
No.

	
Name

	
Ownership Certificate & No.

	
Quantity & Unit

	
Location

	
Register Authority

	
Insurance

	
Mortgaged Property Value

	
Mortgage Evaluation

	
Remark

	
1

	 
	 
	 
	 
	 
	 
	 
	 
	 

	
2

	 
	 
	 
	 
	 
	 
	 
	 
	 

	
3

	 
	 
	 
	 
	 
	 
	 
	 
	 

	
...

	 
	 
	 
	 
	 
	 
	 
	 
	 

Mortgagor:
WSP

Legal
Representative or Authorized Representative: (Signature)

Guarantee
Agent Bank: Agricultural Bank of China Wuxi New District Sub-branch 

Principal or
Authorized Representative: (Signature) 

Appendix 11

Wuxi Seamless Oil Pipe Co., Ltd. 

(as the Pledgor) 

and

Agricultural Bank of China Wuxi New
District Sub-branch 

(as Guarantee Agent Bank) 

	
	Wuxi
Seamless Oil Pipe Co., Ltd.

Structured Bank Consortium Comprehensive
Credit and Loan Agreement with an Amount
Equivalent to RMB 3.5 Billion

Maximum Amount Stock Right Pledge Contract
(Form) 

Date:
                

The Maximum Amount Stock Right Pledge Contract (No. SMLSJGHYTGQZY( )) was signed by and between the following parties in Wuxi
Hi-new Technical Industries Development Zone on               , 2011. 

1. WSP is a
limited liability company legally established in Wuxi City, China. Its registered address is located at No. 235, Chengnan Road,
Hi-new Technical Industries Development Zone, Wuxi City. WSP acts as the Pledgor (hereinafter called “Pledgor”);

2.
Agricultural Bank of China Wuxi New District Sub-branch acts as the Guarantee Agent Bank (as this status, hereinafter called
“Guarantee Agent Bank”). 

Whereas:

1.WSP as the
borrower, Bank of China Limited Jiangsu Branch as the arranging bank, Bank of China Limited Wuxi Branch and Agricultural Bank of
China Limited Wuxi Branch as the co-lead bank, Bank of China Limited Wuxi Hi-tech Industrial Development Zone Sub-branch as credit
agent bank, Agricultural Bank of China Wuxi New District Sub-branch and Bank of China Limited Wuxi Hi-tech Industrial Development
Zone Sub-branch as mutual Guarantee Agent Bank, the financial institution listed in Appendix 1 of Credit Agreement as participant
bank (hereinafter called “Participant Bank”) signed Structured Bank Consortium Comprehensive Credit and Loan Agreement
with an Amount Equivalent to RMB 3.5 Billion (hereinafter called “Credit Agreement”) on Aug 29, 2011. 

2. The
Pledgor would like to pledge the stock right for the investment amount (accounting for    % of the
registered capital) valuing RMB of      Co., Ltd to Bank of China Limited Wuxi Branch, Agricultural
Bank of China Limited Wuxi Branch, Nanyang Commercial Bank (China) Co., Ltd Wuxi Branch, China Merchants Bank Co., Ltd Wuxi Branch,
Industrial and Commercial Bank of China Co., Ltd Wuxi Branch, Bank of China Limited Wuxi Hi-tech Industrial Development Zone
Sub-branch, Agricultural Bank of China Wuxi New District Sub-branch (hereinafter called “Pledgee”) in order to guarantee
the borrower can fulfill the Credit Agreement:

3. According
to Article 13 of Credit Agreement, the Pledgor should sign the Maximum Amount Stock Right Pledge Contract with the Guarantee Agent
Bank of Bank Consortium’s agent. 

In view of
this, the following articles are hereby reached by both parties:

Article 1

Definition and
Explanation 

Except
special appointment stated in this Maximum Amount Stock Right Pledge Contract, the terms defined and explained in the Credit
Agreement should has same meaning when applied into this Maximum Amount Stock Right Pledge Contract. 

Article 2

Pledged Stock
Right 

2.1 The
Pledgor will pledge the stock right for the investment amount (accounting for % of the registered capital) valuing RMB of
   Co., Ltd to the Pledgee in order to provide the pledge guarantee for the borrower to fulfill the Credit Agreement:

2.2 The pledged stock rights include the following contents:

(1) The
Pledgor has right to collect all stock dividends, profit distribution, bonus, shares allotment and any nature of other funds and
relevant rights and interests from   company now or in future;

(2) The
Pledgor enjoys any rights and interests related to the guarantee, confirmation and promise made under the agreement and Articles of
Incorporation of   company;

(3) The
Pledgor enjoys the rights to require any default compensation because of any defaults under the agreement and Articles of
Incorporation of   company;

(4) The
Pledgor enjoys the right to agree or object to cancel, amend or terminate the agreement or Articles of Incorporation set by
  company and agree to solve any dispute under the agreement or Articles of Incorporation set by  company;

(5) Enjoy
the right to assign and change the directors and managers;

(6) The
Pledgor enjoys any other rights and interests under the agreement or the agreement or Articles of Incorporation set by
  company;

2.3 The
Pledgee has right to collect the yields arising from the pledged stock rights, including stock dividend, bonus, coupon distribution,
shares allotment, etc. 

The yields
colleted should be used as per the following orders:

(1) Collect
the charges of yields;

(2) As one
part of pledged stock right. 

Article 3

Guarantee Scope

3.1 The
Master Contract of this Maximum Amount Stock Right Pledge Contract is the single agreement and contract (hereinafter called
“Master Contract”) signed or to be signed of Credit Agreement and amendment or supplement agreement. 

3.2 The
pledged stock right under this agreement is that realized within the validity of Master Contract with maximum principal not
exceeding the amount equivalent to RMB3,500,000,000, which is established because the participant bank provides the liquid capital
loan and trade financing to the borrower, as well as the creditor’s rights to the borrower that is obtained by the participant
bank as per the Credit Agreement (hereinafter called primary creditor’s right). 

3.3 The
pledged stock right is the sum of the following items based on the maximum creditor’s right (hereinafter called
“Guaranteed Debts”) guaranteed in the Maximum Amount Stock Right Pledge Contract:

(1) Primary
Creditor’s Rights; 

(2)
Interests (including legal interests, appointed interests, compound interests, penalty interests) arising from the principal of
primary creditor’s rights;

(3) Charges
not paid by the borrower as per the stipulations stated in the Credit Agreement 

during the execution of the agreement;

(4)
Compensation, default money, damage compensation because the borrower cannot obey any provisions stated in the Credit Agreement;

(5) All
expenses (including, but not limited to the charges of lawsuits, property preservation, traveling, evaluation, auction, lawyer,
notary and execution) paid by the Pledgor and Pledgee via the Guarantee Agent Bank for realizing the creditor’s right under the
Credit Agreement and guarantee interests under Maximum Amount Stock Right Pledge Contract and any other funds to be paid by the
Pledgor. 

3.4 The loan
deadline of liquid fund loan under the Credit Agreement is 36 months as of the withdrawal date of first sum of loan funds. The
credit deadline of trade financing under the Credit Agreement is 36 months as of the withdrawal date of the first sum of loan funds.
The Pledgor should execute the pledge right under the Maximum Amount Stock Right Pledge Contract during the validity period of
lawsuit of primary creditor’s rights. 

Article 4

Nature and
Efficacy of Guarantee 

4.1 The
guarantee duties of the Pledgor under the Maximum Amount Stock Right Pledge Contract are of continuousness. The guarantee liability
of the Pledgor continues until all the guaranteed debts are paid off. The guarantee liability of the Pledgor will be affected by the
liquidation, mergence, separation, reorganization, bankruptcy or change of other organization of Pledgor, borrower or any other
person or any arrangement made for the borrower’s debts. 

4.2 The
efficacy of the Maximum Amount Stock Right Pledge Contract is independent of the Credit Agreement, which will be invalid because of
invalidity of Credit Agreement. If the Credit Agreement is invalid or cancelled, the Pledgor should bear the guarantee liability as
per the Maximum Amount Stock Right Pledge Contract. If the Maximum Amount Stock Right Pledge Contract becomes invalid or canceled
not because of bank consortium, the Pledgor should compensate all the losses of Pledgee within the scope of guaranteed debts. 

4.3 The
Maximum Amount Stock Right Pledge Contract will not be affected because of any amendment and supplement of articles stated in the
Credit Agreement or any guarantee contract and financing documents signed as per the Credit Agreement.

4.4 The
pledge under the Maximum Amount Stock Right Pledge Contract is beyond any other guarantee, rights, powers and remedies hold by the
Pledgor and Guarantee Agent Bank as per the laws or other guarantee documents, which can be accumulative with the foregoing rights,
powers and remedies and independent of the foregoing rights, powers and remedies. 

4.5 The
guaranteed debts under the Maximum Amount Stock Right Pledge Contract have been paid off. But, this liquidation has been confirmed
to be invalid or cancelled by the authority department. The Pledgor should continue to bear the guarantee liabilities, which will be
not limited by the guarantee period and lawsuit efficacy.  

4.6 The Pledgor and pledge confirm and agree that if any Participant Bank transfers any right and duties under its Credit
Agreement to other transferee bank as per the appointment stated in the Credit Agreement, rights and duties under this agreement that are related to the above transferred rights and duties are transferred to this transferee bank together. The
Pledgor agrees to bear the guarantee liability to the transferee bank and coordinate them to complete the alteration formalities of relevant pledge register based on maximum amount property pledge contract. 

Article 5

Pledge Register

5.1 The
Maximum Amount Stock Right Pledge Contract will be valid after signed by the Pledgor and Guarantee Agent Bank. The pledge right of
pledged stock right is set after the register formalities are handled for the pledged stock rights. The Guarantee Agent Bank and
Pledgor should finish handling the pledge register formalities as per Chinese laws and rules in 20 working days after signing the
Maximum Amount Stock Right Pledge Contract. If the Pledgor cannot finish handling the pledge register formalities during the
foregoing period because of the reason of relevant register departments, the foregoing period should be relatively delayed. 

5.2 The
Pledgor should transfer the ownership certificate, and relevant property right certificate of the pledged stock rights to the
Guarantee Agent Bank for keeping when handling the pledge register of pledged stock rights as per the appointments stated in the
Maximum Amount Stock Right Pledge Contract. Within 10 days after all the guaranteed debts are paid off and the Pledgor submitted the
written application, the Guarantee Agent Bank should return the original of the foregoing documents to the Pledgor and help the
Pledgor to handle relevant formalities of pledge register cancellation. The charges arising from this will be borne by the Pledgor.

5.3 If the
pledge register matters under the Maximum Amount Stock Right Pledge Contract or name of   company happen and the
alteration register for pledge of stock rights is legally needed, the Pledgor and Guarantee Agent Bank should go to relevant
register authority to handle the alteration register in 15 days after the alteration of register matters. 

Article 6

Execution of
Shareholder’s Rights and Fulfillment of Shareholder’s Duties 

6.1 Except
the requirement or notification of plegee, the Pledgor should continue to execute all the shareholders’ rights under the
agreement and Articles of Incorporation set by the company and fulfill the shareholder’s duties. 

6.2 As the
shareholder of the  company, the Pledgor should notify the Guarantee Agent Bank of any decision or resolution of the
company and submit the copies of decision or resolution to the Guarantee Agent Bank. If the Pledgor agrees to make the foregoing
resolution related to important events of the company (including, but not limited to distribution of dividend and bonus or shares
allotment, mergence or separation of company, the Pledgor should firstly get the written consent of Guarantee Agent Bank.6.3 The
Pledgor should continue to obey and fulfill all the duties and liabilities related to the pledged stock rights and shareholders of company. The Guarantee Agent Bank or Pledgee needn’t fulfill 

any duties or
liabilities borne by the Pledgor for the pledged stock rights. The Guarantee Agent Bank or Pledgee has no duties to take any action for the pledged stock right. The Guarantee Agent Bank or plegee will not bear any duties or liabilities for the
pledged stock right because of the Maximum Amount Stock Right Pledge Contract. 

Article 7 

Documents Provided
by Pledgor 

7.1 The
Pledgor should ensure the Guarantee Agent Bank receive the following documents in 20 working days after signing the Maximum Amount
Stock Right Pledge Contract:

(1) Copies
of Articles of Incorporation and Latest Business License after Annual Renewal of Pledgor;

(2) Original
of Board of Directors that the board of directors of Pledgor agrees the Pledgor pledge the pledged stock rights to the plegee; 

(3) Copies
of of Articles of Incorporation and Latest Business License after Annual Renewal of Company;

(4)
Investment Certificate issued by  Company for the Pledgor’s investment and Capital Examination Report issued by CPA
to  Company for investment;

(5)
Financial Statement in Latest Year audited of Company;

(6) Relevant
certificates that the Pledgor has recorded the pledged stock right under the Maximum Amount Stock Right Pledge Contract in the
Shareholders’ Register of  Company;

(7)
Certificate that the pledge under the Maximum Amount Stock Right Pledge Contract has been registered in relevant administration for
industry and commerce;

(8) Other
documents required by the Guarantee Agent Bank. 

If the
foregoing documents submitted by the Pledgor are copies, they must be signed by the authorized representative of Pledgor for
confirming they are true and complete and affixed the official seal same with that remained by the Pledgor in the Guarantee Agent
Bank. 

Article 8

Statement and
Guarantee of Pledgor 

8.1 The
Pledgor hereby makes the following statement and guarantee to the pledge:

(1) The
Pledgor is a limited liability company legally established and effectively existing in China; 

(2) The
Pledgor has full capacity of civil rights and conducts to develop the business, sign the maximum amount property pledge contract,
execute the rights and fulfill the duties as per the maximum amount property pledge contract;

(3) The internal procedures of company needed when the Pledgor signs the maximum amount stock right pledge contract and executes
the rights and fulfills the duties as per the 

contract
has been accomplished; the person who signs the maximum amount stock right pledge contract on behalf of the Pledgor is the effective authorized representative of Pledgor. The maximum amount stock
pledge contract signed by this person is binding upon the Pledgor;

(4) The
duties of Pledgor under the maximum amount stock right pledge contract are the legal and effective duties, which are binding upon
the Pledgor. The duties can be fulfilled as per the articles stated the maximum amount stock right pledge contract. 

(5) The
Pledgor signs the maximum amount stock right pledge contract and executes the rights and fulfills the duties as per the contract,
which cannot and will not disobey the following documents or conflict with the following documents:

(i) Any
agreement, contract or any other contractual documents constraint to the property, which shows the Pledgor as one party;

(ii)
Articles of Incorporation and other essential documents of Pledgor;

(iii) Any
laws, rules, regulations, normative documents, judgment, verdict and adjudication; 

(6) The
Pledgor has obtained the establishment, performance and execution of the maximum amount stock pledge contract and all the
authorization, approval and permit required by exchange under the contract. The authorization, approval or permit is legal and
effective;

(7) The
Pledgor signs the maximum amount stock right pledge contract, executes the rights and fulfill the duties as per the contract, which
is the commercial conducts for the commercial purpose and is subject to the civil and commercial laws;

(8) During
any justice procedures continued in China, the Pledgor or Pledgor’s property will not enjoy the immunity or special right
during the lawsuit, verdict, execution, property preservation or other legal procedures;

(9) The
Pledgor doesn’t attend any lawsuit, arbitration or similar legal procedures with great adverse influences;

(10) Any
person takes any legal procedures to execute the business stopping, liquidation, reorganization, bankruptcy, dismiss or similar
procedures to the Pledgor;

(11) The
Pledgor legally has the ownership and disposal right of pledged articles. The ownership of pledged articles without any dispute can
be legally regarded as the subject of pledge guarantee. If the pledged stock rights belong to the pledged stock rights which must be
approved by relevant departments, the Pledgor should guarantee to have obtained the legal and effective approval or consent;

(12) Except
the guarantee stated in the maximum amount stock right pledge contract, the pledged articles haven’t any problem such as any
type of share, rights and interests of any third party, any ownership dispute or any adverse influence for the Pledgee to execute the pledge rights. 

(13) All the
materials, documents and vouchers provided by the Pledgor to the Pledgee

must be true, correct, complete and valid. The copies of
the documents provided must be in conformity with the original. 

8.2 The
Pledgor hereby confirms that the Pledgee authorizes the Guarantee Agent Bank to sign Maximum Amount Stock Right Pledge Contract and
fulfill the duties under the contract based on believing in the foreign statements and guarantee. 

8.3 The
foregoing statements and guarantee made by the Pledgor must be correct during the execution of the maximum amount property pledge
contract. The Pledgor guarantees to provide more documents as per the requirement of Guarantee Agent Bank. 

Article 9

Promise of Pledgor

From the
valid date of the maximum amount property pledge contract to the termination date of rights and duties under this agreement, the
Pledgor promises to the pledge: 

9.1 The
Pledgor should maintain legal and effective continuousness of status of legal person of the enterprise and obey all applicable laws
and rules. 

9.2 The
Pledgor should ensure the business nature and scope will not have changes with great adverse influences. 

9.3 Except
disposing the pledged stock rights as per the appointment stated in the maximum amount stock right pledge contract, the pledged
stock rights listed in the appendix of the contract will be owned and kept by the Pledgor and will continue to be owned and kept by
the Pledgor during the execution of the contract. 

9.4 Once the
followings happen, the Pledgor should notify the Guarantee Agent Bank in 3 days after the events happen:

(1) Default
events stated in Article 10.1 of the maximum amount stock right pledge contract;

(2) Any
lawsuit, arbitration or legal procedures stated in Item (9) and (10) of Article 8.1 of the maximum amount stock right pledge
contract;

(3) Some
disputes (but not limited to sealing up, detained, frozen, supervised) happen with the ownership of pledged stock rights or the
preservation measures have been taken;

(4) The
pledged stock is lost or entirely or partially damaged;

(5) Any
great adverse events happen or will happen in the opinion of Pledgor. 

9.5 The
Pledgor should notify the Guarantee Agent Bank of any important events of  Company and any event that may affect the
pledged stock right or value or damage or delay any party to fulfill the shareholders’ duties of  Company. The
Pledgor should notify the Guarantee Agent Bank of resolution to alter the agreement or Articles of Incorporation set by
         Company. Without the previous consent of Guarantee Agent Bank, the
Pledgor cannot the amendment that may affect the Pledgor to set agreement and Articles of Incorporation of
          Company. 

9.6 The
Pledgor provides all the documents and materials related to the pledged matters

under the maximum amount stock right pledge contract
to the Guarantee Agent Bank and guarantee the foregoing documents are true, correct and complete. 

9.7 The
Pledgor should truly show the defects of pledged stock rights stated in the appendix of the maximum amount stock right pledge
contract to the Guarantee Agent Bank and make the repair or supplement for the defects as per the requirements of Guarantee Agent
Bank. 

9.8 During
the pledge, when shares allotment happens with the pledged stock rights, the Pledgor should purchase the shares sold in time. The
shares sold will automatically become one part of the pledged stock rights. The Pledgor should finish relevant legal formalities.

9.9 The
Pledgor should be responsible for handling the evaluation, notary, verification and keeping of pledged articles stated in the
maximum amount stock pledge contract and cooperate with the Guarantee Agent Bank to handle the register formalities of pledged
articles stated in the contract. The Pledgor should bear all the charges for the foregoing matters. Relevant evaluation, notary and
verification institutions should be firstly approved by the Guarantee Agent Bank. 

9.10 Without
the written consent of Guarantee Agent Bank, the Pledgor cannot sell, rent, transfer, contract, donate, re-pledge, buy the share in
kind or dispose all the pledged articles listed in the pledged article list of Appendix of the maximum amount stock right pledge
contract. 

9.11 After
the written consent of guarantee agent, the amount obtained by the Pledgor via transferring any pledged stock rights should be
executed according to the appointment stated in Article 11 of this agreement or disposed through consistent consultation of
Guarantee Agent Bank and Pledgor. If the Guarantee Agent Bank thinks the amount obtained for pledged articles to be transferred by
the Pledgor is obviously lower than the value of pledged articles, the Pledgor should provide relevant guarantee as per the
requirement of Guarantee Agent Bank. 

Under any
situation, the Pledgor cannot damage the interests of pledge if transferring any pledged stock rights listed in the appendix of the
maximum amount stock rights pledge contract. 

9.12 If any
pledged stock rights are lost, entirely or partially damaged because of the conducts of the Pledgor, the Pledgor should immediately
stop the conducts and notify the Guarantee Agent Bank of the situation of pledged stock rights in time and restore the value of
pledged stock rights during reasonable period or provide the stock rights pledge equal to the value of lost and damaged stock rights
pledge to the Guarantee Agent Bank or provide the approval guarantee to the Guarantee Agent Bank, handle relevant evaluation and
register formalities. If the Pledgor cannot provide, the Pledgee can sell the
pledged stock rights at auction or dispose them and prepay or draw the guaranteed debts with the amount obtained by
auction and disposal after negotiation with the Pledgor. 

9.13 If the
third party who provides the guarantee (including, but not limited to the

guarantee ways such as the guarantee, pledge and pledge)
for the primary creditor’s right stated in Article 3 of the maximum amount stock right pledge contract sets the pledge
and/pledge for the interests of pledge in its own property and the Pledgee gives up the pledge right provided by the third party,
syn-position of pledge right or change the pledge right or pledge right provided by the third party, the guarantee scope of Pledgor
will not decrease and still keep same with those stated in Article 3 of the maximum amount property pledge contract. The foregoing
conducts of the Pledgee will not affect and exempt from any duties and guarantee liabilities of Pledgor under this agreement. The
Pledgor cannot require of alleviating the responsibilities of the Pledgor within the scope of giving up of the Pledgee. Meanwhile,
the Pledgor gives up requiring the Pledgee to firstly execute the defense right of pledged and/or pledged articles of the third
party.

Article 10

Default Events
 

10.1 Any of
the following events is a breach to this agreement: 

(1) Any
breach agreed under Credit Agreement; 

(2) Any
default events for applicable guarantee contract or contract happens with the third party who provides the guarantee (including, but
not limited to the guarantee ways such as the guarantee, mortgage and pledge) for the primary creditor’s right stated in
Article 3 of this agreement, except that the debts guaranteed by the third party under the guarantee agreement or contract is nor
more than RMB RMB10,000,000; 

(3) Pledgor
violates the statement and guarantee provisions as stipulated in Article 8 herein and the promise provisions as stipulated in
Article 9 herein; and within ten (10) working days starting from the earlier of a) the date when Pledgor learns about such violation
and b) the date when Guarantee Agent Bank notifies the Pledgor for remedy, Pledgor fails to make remedy satisfactory to the
Guarantee Agent Bank; 

(4) Pledgor
does not truthfully show the defects of pledged stock right to Guarantee Agent Bank; and within ten (10) working days starting from
the earlier of a) the date when Pledgor learns about such defects and b) the date when Guarantee Agent Bank notifies the Pledgor for
remedy, Pledgor fails to make remedy satisfactory to the Guarantee Agent Bank; 

(5) Pledgor
does not make pledge register or register to changes according to this agreement, and Pledgor fails to make remedy satisfactory to
the Guarantee Agent Bank within ten (10) working days starting from the date when Guarantee Agent Bank notifies the Pledgor for
remedy. 

(6) Pledgor
or “[*] corporation” suspends or terminates operation or is under bankruptcy, liquidation, and recession, etc.; or Pledgor
or “[*] corporation” is applied for bankruptcy or liquidation, or its operation is terminated or suspended by competent
department; 

(7) Pledgor violates this agreement to transfer, confer, re-pledge, contribute by equity, or dispose equity by other methods; 

(8) Pledgor
hides the truth that equity is jointly hold, has dispute, is under attachment, is

blocked, is detained or is already under pledge;

(9)
Guarantee Agent Bank regards that the intention or consent to change company establishment agreement or articles of association of
“[*] corporation” will be seriously adverse the rights of Pledgee under this agreement; 

(10) Pledgor
hiders Guarantee Agent Bank to dispose equity according to Article 11 herein in any way (including act or negative act); 

(11) Pledgor
fails to fulfill its other obligations herein; 

(12) Other
events which Pledgee considers may be seriously adverse to its rights under this agreement. 

10.2
Guarantee Agent Bank is entitled to implement one or several methods as follows when breach as stipulated in Article 10.1
hereinabove occurs: 

(1) If the
credit fund is not granted, send the Borrower a written notification, announce the credit fund which is demanded by all or any
Advice of Drawing but not yet drawn or granted. After the announcement, drawing or issuing of such credit fund is immediately
stopped; 

(2) Send the
Borrower a written notification to announce that all or part of the credit balances, including all accrued interest, costs and other
payments under this agreement are due and shall be payable immediately; 

(3) Notify
the Pledgor in writing and announce to dispose the pledged stock rights in the way of auction, disposal and discount. The amount
will be executed as per Article 11 of this agreement. 

(4) Send the
Borrower a written notification to require that Borrower shall additionally provide guarantee for primary creditor’s right
under Credit Agreement; 

(5) Send the
Pledgor a written notification to require that Pledgor shall make compensations for all direct or indirect losses (including but not
limited to the secured debt) occurred to Guarantee Agent Bank due to breach by Pledgor; 

(6)
Institute a legal proceeding to the people’s court located at the place where this agreement is signed; 

(7) Execute
other rights bestowed by laws and this agreement. 

10.3
Compensation as specified in item (5) of Article 10.2 shall constitute an independent debt owed by Pledgor to Pledgee that shall be
payable upon request. 

10.4 At the
request of any participant bank and with written evidence, Pledgor shall compensate for any losses, expenses (including but not
limited to legal expenses and expense in litigation, etc.) or costs caused to such participant bank due to its breach or
failure of obligation fulfillment under this agreement; however, the participant bank can only exert such rights
through the Guarantee Agent Bank. 

Article 11

Realization of Pledge Right 

11.1 In
case that any events prescribed in Article 10.1 herein occurs, Guarantee Agent Bank is entitled to dispose the stock by direct
auction, selling off or converting into money, and the money obtained thereby is used to clear the secured debt. Guarantee Agent
Bank is responsible to dispose equity, and it shall pay the money obtained by equity disposal to all Pledgees and Guarantee Agent
Banks in the ways and sequences as follows: 

(1) Pay
to Pledgee and Guarantee Agent Bank their costs made for realizing creditor’s right under Credit Agreement and for the rights
and interests secured under this agreement, as well as other costs, liquidated damages and indemnification for losses that are
payable by Pledgor under this agreement. 

(2) Pay
to Pledgee any reasonable costs, default money and damage compensation that are due but not payable by Borrower under Credit
Agreement. 

(3)
 Pay the interests (including, but not limited to interests, compound interests and penalty
interests) of liquid funds loan due and unpaid by the borrower to each participant bank under the Credit Agreement according to the
proportion of unpaid loan funds granted by each participant bank accounting for the loan balance of all the participant banks;
   

(4) Pay
the principal of any liquid funds loan due and unpaid by the borrower to each participant bank under the Credit Agreement according
to the proportion of unpaid loan funds granted by each participant bank accounting for the loan balance of all the participant
banks; 

(5) Pay
the interests and charges for credit funds of any bank acceptance bill due and unpaid by the borrower to each participant bank under
the Credit Agreement according to the proportion of unpaid credit funds of bank acceptance bill accepted by each participant bank
accounting for total unpaid credit funds of bank acceptance bill accepted by all the participant banks. 

(6) Pay
the principal for credit funds of any bank acceptance bill due and unpaid by the borrower to each participant bank under the Credit
Agreement according to the proportion of unpaid credit funds of bank acceptance bill accepted by each participant bank accounting
for total unpaid credit funds of bank acceptance bill accepted by all the participant banks; 

(7) Pay
the accrued interests (including, but not limited to interests, compound interests and penalty interests) and charges of any trade
financing credit funds due and unpaid by the borrower to each participant bank under the Credit Agreement according to the
proportion of unpaid trade financing credit balance granted by each participant bank accounting for the total trade financing credit
balance of all the participant banks; 

(8) Pay
the principal of any trade financing credit funds due and unpaid by the borrower to
each participant bank under the Credit Agreement according to the proportion of unpaid trade financing credit
balance granted by each participant bank accounting for the total trade financing credit balance of all the participant banks; 

(9)
 Pay any other funds due and unpaid by the borrower to each participant bank under the 

Credit
Agreement according to the proportion of unpaid credit funds granted by each participant bank accounting for the total credit
balance of all the participant banks; 

11.2 When
disposing the mortgaged articles as per the provisions stated in Article 11.1 herein, the Guarantee Agent Bank has right to legally
take the following actions: 

(1) dispose
pledged stock right by direction auction, selling off and converting into money at the fair market value and time as it considered
appropriate, and it bears no liability for any losses thereby incurred to Pledgor; 

(2) Require
the Pledgor to pay the necessary charges paid by the Guarantee Agent Bank for executing any right under the laws and this agreement;

(3) decide
how to execute the rights of Pledgor acting as the shareholder of “[*] corporation”; 

(4) Resolve,
compromise, apply for arbitration or institute any legal proceedings against any equity-related rights claimed by any other party,
or perform or allow others to perform in the way as it considers appropriate; 

(5) In order
to realize any right under this agreement, execute other rights or take legal actions. 

The
Guarantee Agent Bank has right to choose all or partial foregoing right or temporarily postpone to execute any right.  

11.3 Once
required by Guarantee Agent Bank, Pledgor shall assist Guarantee Agent Bank and Pledgee to obtain all approval and consent necessary
for Pledgee to realize its pledge right, or assist Guarantee Agent Bank and Pledgee to handle other necessary procedures. 

11.4 If
money received by Guarantee Agent Bank by way of equity disposal under this agreement according to Article 11.1 herein is not
sufficient for satisfaction of secured debt, Guarantee Agent Bank is still entitled to claim from Borrower; while if such money
exceeds the guarantee scope agreed by Article 3 herein, then the excessive part belongs to Pledgor. 

11.5 If any
third party proposes any assertion or any objection to the mortgaged articles with any reason, all the results and liabilities will
be borne by the Pledgor. The foregoing assertion and objection of the third party will not affect the Guarantee Agent Bank to
dispose the pledge stock right as per the appointment stated herein. 

Article 12

Costs 

12.1 All
taxes and charges (including but not limited to stamp tax, attorney consultation fees, notary costs and register costs of this
agreement, as well as insurance,

transportation, storage, custody, evaluation, and maintenance, etc. of pledged property) concerning this agreement or
pledge stock right under this agreement shall be paid or compensated by Pledgor. 

12.2
According to the requirement of Guarantee Agent Bank, the Pledgor shall immediately enough compensate all reasonable expenditures
and charges, including, but

not limited to the financial charges, lawyer charges and lawsuit charges paid for disposing pledged
stock right stated in Article 11 of this agreement paid by the Guarantee Agent Bank for executing the rights under this agreement or
any documents at any place of jurisdictions to the Guarantee Agent Bank. 

12.3 The
Pledgor shall pay all the current and future register charges and other taxes and charges collected from Pledgor by this agreement
or any document referred herein at any time. 

12.4 Any
funds paid by the mortgagor to Guarantee Agent Bank shall be enough paid as per this agreement. The Pledgor cannot propose any
assertion of offsets and anti-reimbursement, as well as any limitation or condition. 

Article 13

Changes of Subject 

This
agreement is binding upon all parties of this agreement as well as their respective successors and assignees. 

Article 14

Information Disclosure 

14.1
Guarantee Agent Bank is entitled to keep confidential of any information provided by or on behalf of Pledgor concerning all
documents related to this agreement (including but not limited to evaluation report, insurance documents and pledge register
document, etc. of pledged stock right); But, the Guarantee Agent Bank and Pledgor have right: 

(1) Disclose
the well-known information (excluding the well-known information because the Guarantee Agent Bank breaks this article); 

(2)
Disclosure the information during any lawsuit and arbitration procedures; 

(3) Disclose
this information as per the requirement of laws; 

(4) Disclose
this information to co-lead bank or any participant bank; 

(5) Disclose
this information to any governmental, financial, taxation or other relevant supervision departments; 

(6) Disclose
the information to its professional consultant; 

(7) Disclose
the information within the scope of Article 14.2 of this agreement; 

(8) Disclose
the information after approved by Pledgor. 

14.2 Pledgee
has right to disclose to any related party or any person (hereinafter called “Participant”) related to any transfer or
other agreement of this agreement that may be or already signed by pledge: 

(1) Copies of all documents related to this agreement (including but not limited to evaluation report and pledge register
document, etc. of pledged stock right); and 

(2) Any
other information related to the above documents that Pledgee already obtains. 

However,
before receiving any confidential information, such participating party must

provide a written guarantee proving that it agrees to
keep confidential of the information pursuant to Article 14.1 of this agreement. 

14.3 The
above Article 14.1 and 14.2 replace any confidentiality promise made related to this agreement by any Pledgee before it becomes one
party of this agreement. 

Article 15

Amendment and Supplement 

15.1
Guarantee Agent Bank may modify the provisions of this agreement with Pledgor in written form. If such modification may change the
register contents of this agreement, then Pledgor is obliged to assist Guarantee Agent Bank to handle change register to register
authority, and any modification made hereby shall be binding to all Pledgees, Guarantee Agent Banks and Pledgors. 

15.2 In case
that Borrower and Bank Consortium change Credit Agreement pursuant to the provisions of Credit Agreement, if modification of Credit
Agreement may change the register contents of this agreement, Pledgor is obliged to assist Guarantee Agent Bank to handle change
register to register authority. 

15.3 If
there is necessity to handle pledge register, upon the request of Guarantee Agent Bank, Pledgor is entitled to enter into
supplementary agreement to this agreement with Guarantee Agent Bank, or any other pledge agreement with the contents corresponding
to this agreement while meeting the standards of register authority. 

Article 16
Notification 

16.1 Any
notification, request, instrument or other documents submitted to any party involved in this agreement pursuant to this agreement
shall be sent in written form by the address, telex number and fax number, with contact personnel clearly indicated (if any). The
original address, telex number, fax number and contact personnel (in any) are indicated in the signature page of this agreement.

16.2 Any
communication transacted pursuant to this agreement between all parties of this agreement shall be regarded as received when: 

(1)

upon actual handing over if sent through personnel; 

(2)

upon accomplishment of the transmission and receipt of the correct reply or fax transmission report if sent
through telex or fax; 

(3)

at 12:00 o'clock (Beijing time) of the midday of the seventh (7th) working day after the registered
letter is sent as per the correct address if mailed through letter. 

16.3 Any
change to its contact personnel, address, telex number or fax number of any party of this agreement shall be notified to the other
party within two (2) days starting from
the date of change. 

Article 17

Extended Deadline and Partial Invalidity  

17.1 No
enforcement or delayed enforcement of its/their rights under this agreement by Pledgee or/and Guarantee Agent Bank shall not be
regarded as waiver of rights under this

agreement. Individual or partial enforcement of such rights by Pledgee and/or Guarantee
Agent Bank shall not remove its/their right to be enforced in other ways or to be enforced further, nor shall it affecting its/their
enforcement of other rights. Rights and relieves agreed by this agreement shall not remove any rights or relieves bestowed by laws
to Pledgee and/or Guarantee Agent Bank. 

17.2 If any
term of this agreement is held to be illegal, invalid or unenforceable in any way and at any time, the legality, effectiveness and
enforcement of other terms of this agreement shall not be affected or decreased thereby. 

Article 18

Applicable Laws and Jurisdiction  

18.1 This
Agreement shall be governed by and construed in accordance with the laws of People’s Republic of China (including but not
limited to the current effective Chinese laws, administration regulations, decisions and orders granted by the State Council, local
regulations granted by People's Congress at each level, and regulations granted by each ministry and commission of State Council and
local people’s government, excluding the laws of Hongkong Special Administrative Region, Macao Special Administrative Region
and Taiwan). 

18.2 Any
disputed rising from this agreement shall be settled by friendly negotiation. If no agreement is achieved, the dispute shall be
handed to the people’s court located at the place where this agreement is signed. 

Article 19

Contract Text 

19.1 This
agreement is constituted and signed in Chinese. 

19.2 Any
matters uncovered herein shall be additionally agreed by Pledgor, Pledgee and Guarantee Agent Bank, and Pledgor shall sign
additionally agreement with Guarantee Agent Bank. If such additional agreement involves the variation of the register content of
this agreement, the variation of such additional agreements shall be registered in relevant authority as per law, and such
additional agreement enjoys the same legal force with this agreement. 

19.3 The
appendix of this agreement is an effective integral part of this agreement. 

19.4 This
agreement is signed in (   ) copies, each for Pledgor, Pledgee and Guarantee Agent Bank. Other copies of instruments
are temporarily reserved at Guarantee Agent Bank for handling pledge register of this agreement. Each copy of the original
instrument has the same legal force. 

 (The
remainder of this page intentionally left blank) 

Page of
Signature 

Pledgor: 

Wuxi Seamless Oil
Pipe Co., Ltd. 

Add:

P.O.: 

Principal:

Tel: 

Fax:

Contact
Person: 

Authorized
signer: 

                  
         
                  

Name:
                           seal 

Title: 

Date:

Guarantee Agent Bank: 

Agricultural Bank
of China Wuxi New District Sub-branch 

Add:

P.O.: 

Principal:

Tel: 

Fax:

Contact
Person: 

Authorized
signer: 

                  
         
                  

Name:
                           seal 

Title: 

Date: 

Appendix 12
 

Wuxi Seamless Oil Pipe Co., Ltd.

(as the Pledgor)

and

Bank of China Limited Wuxi Hi-tech
Industrial Development Zone Sub-branch

(as the Guarantee Agent Bank) 

	
	Wuxi
Seamless Oil Pipe Co., Ltd.

Structured Bank Consortium Comprehensive
Credit and Loan Agreement with an Amount
Equivalent to RMB 3.5 Billion

Accounts Receivable Pledge Contract (Form)

Date:
                

This
Accounts Receivable Pledge Contract (No.: WSP Structured Bank Consortium Accounts Receivable Pledge No. ( )) is signed by and
between the following parties in Wuxi Hi-new Technical Industries Development Zone on
         . 

(1)

Wuxi Seamless Oil
Pipe Co., Ltd. (WSP) is a limited liability company legally established and efficiently existing in China. The company is located
No. 235, Chengnan Road, Wuxi Hi-new Technical Industries Development Zone. The company serves as the Pledgor (hereinafter called
“Pledgor”); 

(2)

Bank of China Limited
Wuxi Hi-tech Industrial Development Zone Sub-branch serves as Guarantee Agent Bank (hereinafter called “Guarantee Agent
Bank”). 

Whereas:

1.

WSP as Borrower
(hereinafter called “Borrower”); Bank of China Limited Jiangsu Branch as Arranging Bank; Bank of China Limited Wuxi Branch
and Agricultural Bank of China Limited Wuxi Branch together as Co-lead Bank; Bank of China Limited Wuxi Hi-tech Industrial
Development Zone Sub-branch as Credit Agent Bank; Agricultural Bank of China Wuxi New District Sub-branch and Bank of China Limited
Wuxi Hi-tech Industrial Development Zone Sub-branch together as Guarantee Agent Bank; and all financial institutions listed in
Appendix 1 as the Participant Bank (hereinafter called “Participant Bank”) entered into a WSP Structured Bank
Consortium Comprehensive Credit and Loan Agreement with an Amount Equivalent to RMB 3.5 Billion on August 29, 2011 (hereinafter
called “Credit Agreement”); 

2.

Pledgor has entered
into a Basic Trade Contract, as such term is defined hereinbelow, with Obligor, as such term is defined hereinbelow, on the date of
            . 

3.

Pledgor intends to
pledge its accounts receivable (as such term defined hereinbelow) under Basic Trade Contract to Bank of China Limited Wuxi Branch,
Agricultural Bank of China Limited Wuxi Branch, Nanyang Commercial Bank (China) Limited Wuxi Branch, China Merchants Bank Co., Ltd.
Wuxi Branch, Industrial and Commercial Bank of China Limited Wuxi Branch, China CITIC Bank Corporation Limited Wuxi Branch, Shanghai
Pudong Development Bank Co., Ltd. Wuxi Branch, China Everbright Bank Co., Ltd. Wuxi Branch, Bank of China Limited Wuxi Hi-tech
Industrial Development Zone Sub-branch, Agricultural Bank of China Wuxi New District Sub-branch (hereinafter called
“Pledgee”) to guarantee borrower to implement Credit Agreement; 

4.

According to Article
13 of Credit Agreement, Pledgor shall enter into this Accounts Receivable Pledge Contract with Guarantee Agent Bank acting as the
agent for participant bank. 

In witness
thereof, Pledgor and Pledgee enter into the following contract after negotiation: 

Article 1

Definition and
Explanation 

1.1

Terms as defined and
explained in Credit Agreement shall have the same meaning when used herein unless otherwise specified. 

1.2

The following terms
shall have the respective meanings set forth below unless otherwise specified herein: 

(1) Basic
Trade Contract refers to all contracts listed in the appendix of this agreement, Basic Trade Contract List, signed by and
between Pledgor and Obligor and / or commercial contracts signed by and between Pledgor and Obligor after this agreement enters into
force. According to this commercial contract, Pledgor may obtain the Creditor's right to Obligor for pledge of accounts receivable.

(2) Accounts
Receivable Special Account refers to the bank account established at Pledgee or its branch according to this agreement, which is
especially used to receive accounts receivable.

(3) Credit
Investigation Institute refers to the credit register management department designated by People’s Bank of China. 

(4) Accounts
Receivable refers to legal Creditor’s right and related rights and interests rising from Basic Trade Contract that is free of
any dispute. Related rights and interests of the above Creditor’s right are legally transferable with all appointments under
Basic Trade Contract according to its nature and related laws. 

(5) Obligor
refers to any Obligor listed in Appendix 1, List of Basic Trade Contract, and/or that enters into a Basic Trade Contract with
Obligor after this agreement enters into force and has the obligation to pay accounts receivable under the Basic Trade Contract.

Article 2

Pledge and Scope

2.1

Whereas Pledgee
agrees to provide liquid capital loan and trade financing to Borrower according to Credit Agreement, and Pledgor agrees to pledge
accounts receivable to Pledgee as a guarantee for borrower to fulfill its debt under Credit Agreement, and Pledgee agrees to accept
that this pledge acts as a guarantee for borrower to fulfill its debt under Credit Agreement. Once breach of this agreement occurs,
Pledgee is obliged to execute its guarantee rights under this agreement. 

2.2

Accounts receivable
under pledge enjoys the rights as follows: 

(1) All
Creditor’s right that is entitled to Pledgor under Basic Trade Contract; 

(2) All
rights to claim for liquidated damages that Pledgor is entitled if Obligor violates Basic Trade Contract; 

(3) Other
rights and interests that Pledgor is entitled under Basic Trade Contract. 

2.3 The
Master Contract of this agreement is Credit Agreement and its amendment or supplementary agreement, as well as single agreement and
contract that have been or are to be entered into according to Credit Agreement (hereinafter called “Master Contract”).

The Primary Creditor’s Rights
under this agreement is that realized within the validity of Credit Agreement with maximum principal not exceeding the amount
equivalent to RMB3,500,000,000, which is established because the participant bank provides the liquid
capital loan
and trade financing to the borrower, as well as the creditor’s rights to the 

borrower that is obtained by the participant bank
as per the Credit Agreement (hereinafter called primary creditor’s right). 

2.5 The maximum
amount (hereinafter called “Guaranteed Debts”) of creditor’s rights guaranteed as per this agreement is the sum of
the followings: 

(1) Primary
creditor’s right;

(2)
Interests (including legal interests, appointed interests, compound interests, penalty interests) causing from the principal of
primary creditor’s right; 

(3) Charges
unpaid by the borrower as per the provisions stated in the Credit Agreement during the execution of the agreement;

(4)
Compensation funds, default funds and damage compensation because the borrower cannot obey any provisions stated in Credit
Agreement;

(5) Expenses
(including, but not limited to the charges for lawsuits, property preservation, traveling, evaluation, auction, lawyer, notary,
execution) paid by the Participant Bank and its Guarantee Agent Bank for realizing the creditor’s rights under the Credit
Agreement and guaranteed rights and interests under this agreement. 

2.6 The loan
deadline of liquid fund loan under the Credit Agreement is 36 months as of the withdrawal date of first sum of loan funds. The
credit deadline of trade financing is 36 months as of the withdrawal date of first sum of loan funds. The Pledgee shall execute the
pledge right under this agreement during the limitation of legal proceedings of primary creditor’s right. 

2.7 Any evidence
that is used by Pledgee to prove any secured debt or any accounts receivable under this agreement shall be final for creditor and
Obligor relationship of both parties is binding to Pledgee unless it is proved to be incorrect by Pledgee after providing full and
effective evidence. 

Article
3

Efficacy of Pledge
Guarantee 

3.1 The
guaranteed duties of Pledgor under this agreement are continuous. The efficacy continues to the date when the borrower pays off the
principals, interests and other funds payable of liquid fund loan and trade financing owed to the bank consortium under the Credit
Agreement to the Pledgee, which will be influenced because the Pledgor or borrower or other person makes the liquidation, mergence,
separation, reorganization and bankruptcy and changes other organization or makes other arrangement to the borrower’s debts.

3.2 This
agreement will not be affected because the bank consortium and borrower amends, replenishes and alters all or partial articles of
Credit Agreement. When the Pledgee and borrower agree to prolong or delay the repayment of any due creditor’s rights under the
Credit Agreement, this agreement will continue to be valid. 

3.3 The efficacy
of this agreement is independent of the Credit Agreement and will not be invalid because of invalidity of Credit Agreement. If the
Credit Agreement is invalid or cancelled, Pledgor shall still bear guarantee duties based on this agreement. If this 

agreement is invalid or cancelled not due to
bank consortium’s fault, Pledgor shall compensate all the losses of Pledgee with the scope of guaranteed debts. 

3.4 If
guaranteed debt under this agreement is paid off, however, such liquidation is confirmed to be invalid or cancelled by the authority
department. The Pledgor shall continue to bear the guarantee liabilities, which will be not limited by the guarantee period and
lawsuit efficacy. 

3.5 The Pledgor
and Pledgee confirm and agree that if any Participant Bank transfers any right and duties under its Credit Agreement to other
transferee bank as per the appointment stated in the Credit Agreement, rights and duties under this agreement that are related to
the above transferred rights and duties are transferred to this transferee bank together. The Pledgor agrees to bear the guarantee
liability to the transferee bank and coordinate them to complete the alteration formalities of relevant pledge register based on
this agreement. 

Article
4

Pledge Register
 

4.1

Pledgor shall
cooperate with Pledgee to go through accounts receivable pledge register procedure at credit investigation institute or its
designated website within ten (10) working days starting from the date when this agreement is entered into. Register costs (if any)
shall be born by Pledgor. 

4.2

This agreement enters
into force when Pledgor and Guarantee Agent Bank attaches their signature; and right of pledge under this agreement is established
when pledge register is handled at credit investigation institute. 

4.3

If pledge register
events have any change and require a change register, Pledgor and Guarantee Agent Bank shall go through change register at the
credit investigation institute within fifteen (15) days starting from the date when such change occurs. 

Article
5

Execution of Basic
Trade Contract 

5.1

Pledgor is obliged to
continue to observe and fulfill all obligations under Basic Trade Contract. Pledgee does not bear any obligations or legal
responsibilities to Basic Trade Contract, and do not bear any Pledgor’s obligation under Basic Trade Contract. Pledgee is not
obliged to take any actions to accounts receivable, and shall not bear any obligations or legal responsibilities to any third party
related to accounts receivable based on this agreement under the pre-condition that rights of Pledgee under this agreement will not
be affected. 

5.2

Notwithstanding
anything hereinabove regulated, if Pledgor and / or Obligor fails to properly fulfill its obligations under Basic Trade Contract and
thus cause damage to any rights and interests that Pledgee are entitled under this agreement, Pledgee is entitled (but not obliged)
for execution on behalf of Pledgor or is entitled to institute lawsuit, arbitration or any other actions to Obligor. Pledgor hereby
agrees and authorizes Pledgee to take the above actions and agrees to provide full assistance. Any expenses occurred to Pledgee
during the execution of this provision shall be fully compensated by Pledgor. 

Article
6

Instruments to be
submitted by Pledgor 

6.1

Pledgor shall provide
the following instruments to Guarantee Agent Bank: 

(1) This
Accounts Receivable Pledge Contract effectively signed by legal representative or authorized signer of Pledgor; 

(2) The copy of
the updated Articles of Association of Pledgor and the copy of the business license which is subject to the latest annual
inspection; 

(3) Resolution
of Board of Directors in writing proving that the directors of Pledgor agree to use accounts receivable for pledge; 

(4) Basic Trade
Contract effectively signed by and between Pledgor and Obligor; 

(5) Effective
documentary evidence proving that Pledgor has already notifies Obligor with issues regarding using accounts receivable for pledge;

(6) Other
documents required by Guarantee Agent Bank and credit investigation institute. 

6.2 If the above
documents provided by the Obligor are duplicates, then these documents shall be signed by the authorized signer of Pledgor to prove
its authenticity, completeness and effectiveness, and shall be chopped with the seal the same as that reserved by Pledgor at the
Pledgee’s. 

Article
7

Declaration and
Guarantee of Pledgor 

7.1 The Pledgor
hereby makes the following statement and guarantee to the Pledgee: 

(1) The Pledgor
is a limited liability company legally established and effectively existing in China; 

(2) The Pledgor
has full capacity of civil rights and conducts to develop the business, sign this agreement, execute the rights and fulfill the
duties as per this agreement; 

(3) All internal
procedures of the company necessary for Pledgor to sign this agreement and to execute rights and obligations according to this
agreement are completed. The personnel to sign this agreement on behalf of the Obligor is the effective authorized representative of
Obligor, and this agreement signed by such personnel is binding to Obligor. 

(4) That the
Obligor signs this agreement and executes rights and obligations according to this agreement is the commercial activities carried
out for its commercial purpose, which is fully regulated by civil law and commercial law. Obligations of Pledgor under this
agreement are legal and effective, and bind Pledgor and may be implemented according to the terms of this agreement. 

(5) The Pledgor
signs this agreement and executes the rights and fulfills the duties as per the contract, which cannot and will not disobey the
following documents or conflict with the following documents: 

(i) Any
agreement, contract or any other contractual documents constraint to the property, which shows the Pledgor as one party; 

(ii)
Articles of Incorporation and other essential documents of Pledgor; 

(iii) Any
laws, rules, regulations, normative documents, judgment, verdict and adjudication;

(6) During any
justice procedures continued in China, the Pledgor or Pledgor’s property will not enjoy the immunity or special right during
the lawsuit, verdict, execution, property preservation or other legal procedures; 

(7) No person
takes any legal procedures to execute the business stopping, liquidation, reorganization, bankruptcy, dismiss or similar procedures
to the Pledgor; 

(8) Basic Trade
Contract is already effectively signed by and between Pledgor and Obligor and constitutes a legal document biding both parties.
Accounts receivable of Pledgor under Basic Trade Contract may be legally transferred and pledged according to related laws and
regulations, Basic Trade Contract and its related provisions. 

(9) Obligor
currently has no and will have no offset rights or right to defense against Pledgor that may affect the guarantee rights and
interests enjoyed by Pledgee under this agreement. 

(10) Pledgor is
the only legal holder of accounts receivable, and it does not establish any other guarantee in any form and by any nature on
accounts receivable except that on this agreement. The ownership of this agreement is under no dispute, and can be taken as the
subject for pledge guarantee according to Chinese law. 

(11) Pledgor and
Obligor have no actual and potential breach of this agreement under Basic Trade Contract. 

(12) Currently
there is no existing or, to the Pledgor’s knowledge, potential arbitration, lawsuit or administrative procedures that are
related to Pledgor or accounts receivable and may constitute critical adverse effect to financial conditions of Pledgor and Obligor,
the value of accounts receivable, or the capacity of Pledgor in fulfilling this agreement. 

7.2 Pledgor
hereby confirms that Pledgee authorizes Guarantee Agent Bank to sign this agreement and executes its obligations under this
agreement on the basis that it fully believes the above declaration and guarantee.

7.3 The
foregoing statements and guarantee made by the Pledgor must be correct during the execution of this agreement. The Pledgor
guarantees to provide more documents as per the requirement of Guarantee Agent Bank. 

Article
8

Promise of Pledgor

From the valid
date of this agreement to the termination date of rights and duties under this agreement, the Pledgor promises to the Pledgee: 

8.1 The Pledgor
shall maintain legal and effective continuousness of status of legal person of the enterprise and obey all applicable laws and
rules. 

8.2 The Pledgor
shall ensure the business nature and scope will not have changes with great adverse influences. 

8.3 Pledgor
shall observe all laws and regulations related to this agreement and Basic Trade Contract, strictly observe and execute
responsibilities and obligations under this agreement and Basic Trade Contract, and shall take all necessary measures to ensure
that accounts receivable are always legal and effective, including but not limited to ensure 

that Pledgee is always entitled to
enjoy the guarantee rights and interests to accounts receivable. 

8.4 Pledgor
shall open an accounts receivable special account at Guarantee Agent Bank, its branch or the participant bank designated by
Guarantee Agent Bank. Pledgor shall instruct Obligor to remit all accounts receivable into that special account. Accounts receivable
will be specially designated once remitted into and will be transformed into guarantee deposit to guarantee that Pledgor implements
the Credit Agreement. 

8.5 Except using
the accounts receivable to its normal business operation and production, Pledgor shall not withdraw any money from accounts
receivable special account without the previous written agreement from Guarantee Agent Bank. If Pledgor receives any accounts
receivable by any other way for any other reason, it shall notify Guarantee Agent Bank immediately and remit the above fund into the
special account. 

Pledgor shall
notify Guarantee Agent Bank if it will apply accounts receivable to its normal business operation and production. If Guarantee Agent
Bank regards that Pledgor withdraws accounts receivable not for the same purpose, Guarantee Agent Bank is entitled to require
Pledgor to provide support document of using such fund (related contract, agreement and voucher, etc.) and the description of its
purpose to withdraw accounts receivable. If Guarantee Agent Bank, after reviewing those documented provided by Pledgor, still
considers that the money is not withdrawn for the purpose of normal business operation and production, Guarantee Agent Bank is
entitled to decline and take reasonable measures to stop Pledgor to withdraw money from accounts receivable special account. 

8.6 If there is
any important lawsuit, arbitration or administrative procedures related to or between Pledgor and Obligor, whether it is potential
but to the knowledge of Pledgor or is already existing, Pledgor shall notify the Guarantee Agent Bank with the detail within two (2)
working days after it learns such information. 

8.7 In case of
any breach of this agreement, or any events related to Pledgor or Obligor that may affect accounts receivable or its value, or may
affect Pledgor’s capacity in fulfilling its obligation under this agreement, or may affect Pledgor’s capacity in
fulfilling its obligations under Basic Trade Contract occur, Pledgor shall notify the detail of Guarantee Agent Bank within two (2)
days after it learns such information. 

8.8 Pledgor
shall cooperate with Pledgee to obtain and go through all approval, notarization, register and filing procedures that are necessary
to ensure the legality and effectiveness of this agreement to maintain that such approval, notarization, register and filing are
always legal and effective, and shall complete all other necessary procedures. 

8.9 Without the
instruction or previous approval of Guarantee Agent Bank, Pledgor shall not agree or propose to modify or carry out other major
changes (major changes refer to the change of payment terms, major assurance technical index, the change of contract price of over
5% or any other changes that Pledgee considers important under the Basic Trade Contract) to Basic Trade Contract, and shall not
establish any other securities on accounts receivable except that established under this agreement. 

8.10 Pledgor
shall not take any actions that may change or damage any rights of Pledgee 

to accounts receivable or under this agreement. 

8.11 If the
third party who provides the guarantee (including, but not limited to the guarantee ways such as the guarantee, mortgage and pledge)
for the primary creditor’s right stated in Article 2 of this agreement sets the mortgage and/pledge for the interests of
Pledgee in its own property and the Pledgee gives up the mortgage right provided by the third party, syn-position of mortgage right
or change the mortgage right or mortgage right provided by the third party, the guarantee scope of Pledgor will not decrease and
still keep same with those stated in Article 2 of this agreement. The foregoing conducts of the Pledgee will not affect and exempt
from any duties and guarantee liabilities of Pledgor under this agreement. The Pledgor cannot require of alleviating the
responsibilities of the Pledgor within the scope of giving up of the Pledgee. Meanwhile, the Pledgor gives up requiring the Pledgee
to firstly execute the defense right of mortgaged and/or pledged articles of the third party. 

8.12 If
creditor’s right and other rights of Pledgor under Basic Trade Contract are lost and will damage the rights of Pledgee, Pledgee
is entitled to require Pledgor to provide corresponding guarantee; if Pledgor rejects, Pledgee can directly deduct or transfer
accounts receivable to pay off the secured debt or implement auction to or sell off accounts receivable, and use the money from the
auction and selling off to prepay or draw the debts. 

8.13

 In order to
ensure that borrower make a full payment to the principal and interest and related costs of credit balance under credit agreement,
Pledgor shall pledge the accounts receivable that are obtained after this agreement enters into force to Pledgee, and shall
cooperate with Guarantee Agent Bank to go through related procedures such as the pledge register of accounts receivable. 

Article
9

Default Events
  

9.1 Any of the
following event or events is a breach to this agreement: 

(1)

Any default events
stated in Credit Agreement; 

(2)

Borrower does not
make full satisfaction to any debt owe to Pledgee according to Credit Agreement; 

(3)

Pledgor transfers
accounts receivable without permission or have it disposed in any other way, or establish or try to establish any guarantee interest
on any part of accounts receivable; 

(4)

Pledgor violates the
statement and guarantee provisions as stipulated in Article 7 herein and the promise provisions as stipulated in Article 8 herein;
and within ten (10) working days starting from the earlier of a) the date when Pledgor learns about such violation and b) the date
when Guarantee Agent Bank notifies the Pledgor for remedy, Pledgor fails to make remedy satisfactory to the Guarantee Agent Bank;

(5)

Any lawsuit,
arbitration or administrative proceedings related to accounts receivable which under reasonable consideration of Pledgor may exert a
critical adverse effect to the
value of accounts receivable; 

(6)

Pledgor agrees or
proposes without previous written agreement of Pledgee to modify

the Basic Trade Contract, causing substantial effect or damage to
the rights of Pledgee; 

(7)

Pledgor or Obligor
violates any obligations under Basic Trade Contract, and such violation, while under the reasonable consideration of Pledgee, may
damage the guarantee interests of Pledgee under this agreement; 

(8)

Pledgor violates any
other obligations under this agreement or any other events which Pledgee considers may cause critical adverse effect. 

9.2

Guarantee Agent Bank
is entitled to (must, if required by the majority of participant banks) implement one or several methods as follows when breach as
stipulated hereinabove occurs: 

(1) If
the credit fund is not issued, send the borrower a written notification, announce the credit fund which is demanded by all or any
Drawing notification but not yet drawn or issued. After the announcement, drawing or issuing of such credit fund is immediately
stopped;

(2) Send the borrower a
written notification to announce that all or part of the credit balances, including all accrued interest, costs and other payments
under this agreement are due and shall be payable immediately; 

(3)
Send the Pledgor a
written notification to announce the implementation of creditor’s rights under this agreement; 

(4) Send the borrower a
written notification to require that borrower shall additionally provide guarantee for principal creditor’s right under credit
agreement; 

(5) Send the
Pledgor a written notification to require that Pledgor shall make compensations for all direct or indirect losses (including but not
limited to the secured debt) occurred to Guarantee Agent Bank due to breach by Pledgor; 

(6) Institute a legal
proceeding to the people’s court located at the place where this agreement is signed;

(7) Execute other rights bestowed by laws and this agreement. 

9.3
Compensation as specified in item (5) of Article 9.2 shall constitute an independent debt owed by Pledgor to Pledgee that shall be
payable upon request. 

9.4 At the
request of any participant bank and with written evidence, Pledgor shall compensate for any losses, expenses (including but not
limited to legal expenses and expense in litigation, etc.) or costs caused to such participant bank due to its breach or failure of
obligation fulfillment under this agreement; however, the participant bank can only exert such rights through the Guarantee Agent
Bank. 

Article 10

Realization of Pledge Right 

10.1

In case that any
breach prescribed in Article 9.1 hereinabove occurs, Pledgee is entitled to realize pledge right under this agreement according to
the provisions herein prescribed, and during such realization, Pledgee and Guarantee Agent Bank is entitled to take the following
actions: 

(1)

Deduct and transfer
corresponding money from accounts receivable special account. Pledgor hereby irrevocably authorizes Pledgee and Guarantee Agent Bank
to implement such deduction and transfer; 

(2)

Instruct its
designated participant bank to deduct or transfer the corresponding money from the accounts receivable special account of such
participant bank, and Pledgor hereby irrevocably authorizes such participant bank to implement such deduction and transfer; 

(3)

Claim or collect
accounts receivable or all funds related to it that shall be payable to pay off secured debt by such fund; 

(4)

Implement property
rights that Pledgor is entitled on accounts receivable on behalf of Pledgor; 

(5)

Take or carry out all
lawsuits or arbitration procedures related to all or any accounts receivable in the way that Pledgee and Guarantee Agent Bank
considers reasonable, and implements, compromise, release or make concessions to all or any accounts receivable or related rights
claim. 

(6)

Comprise, arrange
creditor’s right, make concessions to any accounts, rights claim, issues or disputes that are related to accounts receivable,
that may occur, or that are related to this agreement in any way, and sign any related obligation release instrument. 

(7)

Apply for
arbitration, take any legal actions or institute lawsuit, etc. (whether civil or criminal) to matters related to accounts
receivable. 

(8) Sign all
documents or take any related actions that pledgee or Guarantee Agent Bank considers necessary, proper or related to the above
objects. 

Pledgee and
Guarantee Agent Bank are entitled to implement all or part of the above rights, or to suspend the implementation of any rights. 

10.2

Once requested by
Pledgee or Guarantee Agent Bank, Pledgor shall assist Pledgee and Guarantee Agent Bank to receive all approval or consent necessary
for pledgee to realize its right of pledge, or assist Pledgee or Guarantee Agent Bank to handle all other necessary procedures. 

10.3

Money obtained by
Pledgee and Guarantee Agent Bank in disposing accounts receivable shall be paid in the following sequence: 

(1)

Within the limitation
of accounts receivable under the trade financing between participant bank and borrower and the limitation of the money obtained from
disposing accounts receivable, pay the interests (including but not limited to any interest, compound interest and default
interest), costs and principals of any credit fund by trade financing that is due but not yet paid by borrower to the participant
bank under the trade financing between the borrower and such participant bank; 

(2)

Pay to Pledgee and
Guarantee Agent Bank their costs made for realizing creditor’s right under Credit Agreement and for the rights and interests
secured under this agreement, as well as other costs, default money and damage compensation that shall be
paid by Pledgor under this agreement. 

(3)

Pay to each
participant bank and agent bank any reasonable costs, default money and damage compensation that are due but not yet paid by
borrower under Credit Agreement. 

(4)

Pay the interests
(including, but not limited to interests, compound interests and penalty interests) of liquid funds loan due and unpaid by the
borrower to each participant bank under the Credit Agreement according to the proportion of unpaid loan funds granted by each
participant bank accounting for the loan balance of all the participant banks; 

(5)

Pay the principal of
any liquid funds loan due and unpaid by the borrower to each participant bank under the Credit Agreement according to the proportion
of unpaid loan funds granted by each participant bank accounting for the loan balance of all the participant banks; 

(6)

Pay the interests and
charges for credit funds of any bank acceptance bill due and unpaid by the borrower to each participant bank under the Credit
Agreement according to the proportion of unpaid credit funds of bank acceptance bill accepted by each participant bank accounting
for total unpaid credit funds of bank acceptance bill accepted by all the participant banks; 

(7)

Pay the principal for
credit funds of any bank acceptance bill due and unpaid by the borrower to each participant bank under the Credit Agreement
according to the proportion of unpaid credit funds of bank acceptance bill accepted by each participant bank accounting for total
unpaid credit funds of bank acceptance bill accepted by all the participant banks; 

(8)

Pay the accrued
interests (including, but not limited to interests, compound interests and penalty interests) and charges of any trade financing
credit funds due and unpaid by the borrower to each participant bank under the Credit Agreement according to the proportion of
unpaid trade financing credit balance granted by each participant bank accounting for the total trade financing credit balance of
all the participant banks; 

(9)

Pay the principal of
any trade financing credit funds due and unpaid by the borrower to each participant bank under the Credit Agreement according to the
proportion of unpaid trade financing credit balance granted by each participant bank accounting for the total trade financing credit
balance of all the participant banks; 

(10)

Pay any other funds
due and unpaid by the borrower to each participant bank under the Credit Agreement according to the proportion of unpaid credit
funds granted by each participant bank accounting for the total credit balance of all the participant banks; 

10.4

If the amount
obtained after the payment made according to Article 10.3 is not sufficient to clear off secured debt, Pledgee and Guarantee Agent
Bank is entitled to the recourse right against the Borrower; and if there are residue, Pledgee and Guarantee Agent Bank shall give
the residue money to Pledgor and other personnel entitled for disposing accounts receivable. 

10.5

When Pledgee is
executing rights under this agreement, unless it is due to its deliberate or major failure, Pledgee is not responsible for any loss
occurred to Pledgor, Obligor or accounts receivable due to its right fullfillment. 

Article 11

Costs and
Compensations 

11.1

Pledgor shall bear
all costs (including but not limited to legal expenses and expense in litigation, notary costs and implementation costs, etc.) that
are necessary for the conclusion of this agreement, for handling the necessary register or filing or notary procedures, and for
fulfilling and compulsory execution. 

11.2

Once requested by
Pledgee, Pledgor shall compensate for the costs and losses occurred to Pledgee as follows: 

(1)

All costs incurred
from the exercise of Pledgee’s guarantee rights under this agreement (including but not limited to expense in litigation, legal
expenses, notary costs and implementation costs, etc.) 

(2)

Any other cost
payable to Pledgee by Pledgor under this agreement. 

11.3

Any amount that
Pledgor owes to Guarantee Agent Bank shall be fully paid according to this agreement, and Pledgor shall not propose any set-off or
counterclaim, and no restrictions or requirements may be put forward. 

Article 12

Release of Pledge

12.1

Pledgee agrees to
release the pledge under this agreement in case any of the following happens, and assist Pledgor to apply for pledge cancellation
register to Credit Investigation Institute. Pledgor shall be liable for all costs incurred: 

(1)

All secured debt is
cleared off; 

(2)

Other situations
agreed in written form by Pledgee. 

Article 13

Change of Subjects
 

This
agreement is binding upon all parties of this agreement as well as their respective successors and assignees. 

Article 14

Amendment and
Supplement 

14.1

Guarantee Agent Bank
may modify the provisions of this agreement with Pledgor in written form. If such modification may change the register contents of
this agreement, Pledgor is obliged to assist Guarantee Agent Bank to handle change register to credit investigation institute, and
any modification made hereby shall be binding to all pledgees, Guarantee Agent Banks and Pledgors. 

14.2

In case that Borrower
and Bank Consortium change Credit Agreement pursuant to the provisions of Credit Agreement, if modification of Credit Agreement may
change the register contents of this agreement, Pledgor is obliged to assist Guarantee Agent Bank to handle change register to
register authority. 

Article 15

Notification 

15.1

Any notification,
request, instrument or other documents submitted to any party involved in this agreement pursuant to this agreement shall be sent in
written form by the address, telex number and fax number, with contact person clearly indicated (if any). The original address,
telex number, fax number and contact person (in any) are indicated in the

signature page of this agreement. 

15.2

Any communication
transacted pursuant to this agreement between all parties of this agreement shall be regarded as received when: 

(1) upon actual handing
over if sent through personnel; 

(2) upon accomplishment
of the transmission and receipt of the correct reply or fax transmission report if sent through telex or fax; 

(3) at 12:00 o'clock
(Beijing time) of the midday of the seventh (7th) working day after the registered letter is sent as per the correct
address if mailed through letter. 

15.3 Any
change to its contact person, address, telex number or fax number of any party of this agreement shall be notified to the other
party within two (2) days starting from the date of change. 

Article 16

Extended Deadline
and Partial Invalidity  

16.1

No enforcement or
delayed enforcement of its/their rights under this agreement by Pledgee or/and Guarantee Agent Bank shall not be regarded as waiver
of rights under this agreement. Individual or partial enforcement of such rights by Pledgee and/or Guarantee Agent Bank shall not
remove its/their right to be enforced in other ways or to be enforced further, nor shall it affecting its/their enforcement of other
rights. Rights and relieves agreed by this agreement shall not remove any rights or relieves bestowed by laws to Pledgee and/or
Guarantee Agent Bank. 

16.2

If any term of this
agreement is held to be illegal, invalid or unenforceable in any way and at any time, the legality, effectiveness and enforcement of
other terms of this agreement shall not be affected thereby. 

Article 17

Applicable Laws
and Jurisdiction 

17.1

This Agreement shall
be governed by and construed in accordance with the laws of People’s Republic of China (including but not limited to the
current effective Chinese laws, administration regulations, decisions and orders issued by the State Council, local regulations
issued by People's Congress at each level, and regulations issued by each ministry and commission of State Council and local
people’s government, excluding the laws of Hongkong Special Administrative Region, Macao Special Administrative Region and
Taiwan). 

17.2

Any disputed rising
from this agreement shall be settled by friendly negotiation. If no agreement is achieved, the dispute shall be handed to the
people’s court located at the place where this agreement is signed. 

Article 18

Contract Text
 

18.1

This agreement is
constituted and signed in Chinese. 

18.2

Any matters uncovered
herein shall be additionally agreed by Pledgor, Pledgee and Guarantee Agent Bank, and Pledgor shall sign additionally agreement with
Guarantee

Agent Bank. If such additional
agreement involves the variation of the register content of this agreement, the variation
of such additional agreements shall be registered in relevant authority as per law, and such additional agreement enjoys the same
legal force with this agreement. 

18.3

The appendix of this
agreement is an effective integral part of this agreement. 

18.4

This agreement is
signed in (   ) copies, each for Pledgor, Pledgee and Guarantee Agent Bank. Other copies of instruments are
temporarily reserved at Guarantee Agent Bank for handling pledge register of this agreement. Each copy of the original instrument
has the same legal force. 

(The
remainder of this page is intentionally left blank.) 

Page of Signature 

Pledgor: 

Wuxi Seamless Oil
Pipe Co., Ltd. 

Add:

P.O.: 

Principal: 

Tel: 

Fax:

Contact Person: 

Authorized
signer: 

                          
         
                          

Name:
                                   seal 

Title: 

Date:

Guarantee Agent Bank: 

Bank of China
Limited Wuxi Hi-tech Industrial Development Zone Sub-branch 

Add:

P.O.: 

Principal: 

Tel: 

Fax:

Contact Person: 

Authorized
signer: 

                          
         
                          

Name:
                                   seal 

Title: 

Date:

Appendix for Accounts Receivable Pledge
Contract: 

List of Basic Trade Contract 

					
	
Contract name

	
Time for signature

	
Name of obligor

	
Contract amount

	
Remark

	
 
	 

	 
	 
	 

	
 
	 

	 
	 
	 

	
 
	 

	 
	 
	 

Appendix 13 

Wuxi Seamless Oil Pipe Co., Ltd.

(as the Mortgagor)

and

Bank of China Limited Wuxi Hi-tech
Industrial Development Zone Sub-branch

(as the Guarantee Agent Bank) 

	
	Wuxi
Seamless Oil Pipe Co., Ltd.

Structured Bank Consortium Comprehensive
Credit and Loan Agreement with an Amount
Equivalent to RMB 3.5 Billion

Floating Mortgage Contract (Form) 

Date:
                

This Floating Mortgage Contract (No.: WSP Structured Bank Consortium Accounts Receivable Pledge No.( )) was signed by
the following parties in Wuxi Hi-new Technical Industries Development Zone on          . 

(1)

Wuxi Seamless Oil
Pipe Co., Ltd. (WSP) is a limited liability company legally established and efficiently existing in China. The company is located
No. 235, Chengnan Road, Wuxi Hi-new Technical Industries Development Zone. The company serves as the Pledgor (hereinafter called
“Pledgor”); 

(2)

Bank of China Limited
Wuxi Hi-tech Industrial Development Zone Sub-branch serves as Guarantee Agent Bank (hereinafter called “Guarantee Agent
Bank”). 

Whereas:

1.

WSP as Borrower
(hereinafter called “Borrower”); Bank of China Limited Jiangsu Branch as Arranging Bank; Bank of China Limited Wuxi Branch
and Agricultural Bank of China Limited Wuxi Branch together as Co-lead Bank; Bank of China Limited Wuxi Hi-tech Industrial
Development Zone Sub-branch as Credit Agent Bank; Agricultural Bank of China Wuxi New District Sub-branch and Bank of China Limited
Wuxi Hi-tech Industrial Development Zone Sub-branch together as Guarantee Agent Bank; and all financial institutions listed in
Appendix 1 as the Participant Bank (hereinafter called “Participant Bank”) entered into a WSP Structured Bank
Consortium Comprehensive Credit and Loan Agreement with an Amount Equivalent to RMB 3.5 Billion on August 29, 2011 (hereinafter
called “Credit Agreement”);

2.

Mortgagor intends to
mortgage its related assets to Bank of China Limited Wuxi Branch, Agricultural Bank of China Limited Wuxi Branch, Nanyang Commercial
Bank (China) Limited Wuxi Branch, China Merchants Bank Co., Ltd. Wuxi Branch, Industrial and Commercial Bank of China Limited Wuxi
Branch, China CITIC Bank Corporation Limited Wuxi Branch, Shanghai Pudong Development Bank Co., Ltd. Wuxi Branch, China Everbright
Bank Co., Ltd. Wuxi Branch, Bank of China Limited Wuxi Hi-tech Industrial Development Zone Sub-branch, Agricultural Bank of China
Wuxi New District Sub-branch (hereinafter called Mortgagee) to guarantee borrower to implement Credit Agreement; 

3.

According to Article
13 of Credit Agreement, Mortgagor shall enter into this Floating Mortgage Contract with Guarantee Agent Bank acting as the agent for
participant bank. 

Article 1

Definition and
Explanation 

1.1

Terms as defined and
explained in Credit Agreement shall have the same meaning when used herein unless otherwise specified. 

Article 2

Mortgaged Articles

2.1

Mortgaged Articles
under this agreement refers to all and any production equipment, raw materials, semi-finished products and / or products that are
currently or will be legally owned by Mortgagor (hereinafter called “Mortgaged Articles”): 

(1)

For the purpose of
this agreement, “production equipment” refers to all machines, 

equipment and facilities that are used by Mortgagor for its production and any other purposes within its business scope
(except those already mortgaged to Bank Consortium), whether they are already fixed to any real property; 

(2)

For the purpose of
this agreement, “raw material” refers to all raw materials, materials and auxiliary materials, etc. that are used by
Mortgagor for its production and any other purposes within its business scope; 

(3)

For the purpose of
this agreement, “semi-finished products” refer to any articles that are not in the final form of products; 

(4)

For the purpose of
this agreement, “products” refer to any product in stock that are not sold by Mortgagor, and those still owned by
Mortgagor although sales contract and other agreement are entered into. 

2.2

If the mortgaged
articles include the articles limited by laws, Mortgagor shall give a written description to Guarantee Agent Bank. If Mortgagee
suffers from losses during exercise of mortgage rights because Mortgagor fails to give such written description, Mortgagor shall
make compensation with the liability not limited to its mortgaged guarantee responsibility. 

2.3 During
the execution of this agreement, if the mortgaged articles suffer from the damage, loss or collection, the Mortgagee enjoys the
preferential compensation right for the insurance fund and compensation money. If the liabilities guaranteed don’t expiry, the
Mortgagee can draw the insurance fund and compensation money. 

Article 3

Guarantee Scope

3.1 The
master contract of this agreement is single agreement and contract (hereinafter called “Master Contract”) signed or to be
signed of the Credit Agreement and its amendment or supplement agreement. 

3.2 The
Primary Creditor’s Rights under this agreement is that realized within the validity of Credit Agreement with maximum principal
not exceeding the amount equivalent to RMB3,500,000,000, which is established because the participant bank provides the liquid
capital loan and trade financing to the borrower, as well as the creditor’s rights to the borrower that is obtained by the
participant bank as per the Credit Agreement (hereinafter called primary creditor’s right). 

3.3 The
maximum amount of creditor’s rights guaranteed as per this agreement (hereinafter called “Guaranteed Liabilities”)is
the sum of the followings: 

(1) Primary
creditor’s right;

(2)
Interests (including legal interests, appointed interests, compound interests, penalty interests) causing from the principal of
primary creditor’s right; 

(3) Charges
unpaid by the borrower as per the provisions stated in the Credit Agreement during the execution of the agreement; 

(4)
Compensation funds, default funds and damage compensation because the borrower 

cannot obey any provisions stated in Credit Agreement;

(5) Expenses
(including, but not limited to the charges for lawsuits, property preservation, traveling, evaluation, auction, lawyer, notary,
execution) paid by the Participant Bank and its Guarantee Agent Bank for realizing the creditor’s rights under the Credit
Agreement and guaranteed rights and interests under this agreement. 

3.4 The loan
deadline of liquid fund loan under the Credit Agreement is 36 months as of the withdrawal date of first sum of loan funds. The
credit deadline of trade financing is 36 months as of the withdrawal date of first sum of loan funds. The Mortgagee shall execute
the mortgage right under this agreement during the limitation of legal proceedings of primary creditor’s right. 

Article 4

Efficacy of
Mortgage Guarantee 

4.1 The
guaranteed duties of Mortgagor under this agreement are continuous. The efficacy has continued to the date when the borrower pays
off the principals, interests and other funds payable of liquid fund loan and trade financing owed to the bank consortium under the
Credit Agreement to the Mortgagee, which will be influenced because the Mortgagor or borrower or other person makes the liquidation,
mergence, separation, reorganization and bankruptcy and changes other organization or makes other arrangement to the borrower’s
debts. 

4.2 This
agreement will not be affected because the bank consortium and borrower amends, replenishes and alters all or partial articles of
Credit Agreement. When the Mortgagee and borrower agree to prolong or delay the repayment of any due creditor’s rights under
the Credit Agreement, this agreement will continue to be valid. 

4.3 The
efficacy of this agreement is independent of the Credit Agreement and will not be invalid because of invalidity of Credit Agreement.
If the Credit Agreement is invalid or cancelled, the Mortgagor shall compensate all the losses of Mortgagee with the scope of
guaranteed debts. 

4.4 The
mortgage under this agreement is that beyond any guarantee, rights, powers and other remedies held by the Mortgagee and agent bank
as per the laws or other guarantee documents, which is accumulative with the foregoing rights, powers and remedies and independent
of them.

4.5 If
guaranteed debt under this agreement is paid off, however, such liquidation is confirmed to be invalid or cancelled by the authority
department. The Mortgagor shall continue to bear the guarantee liabilities, which will be not limited by the guarantee period and
lawsuit efficacy. 

4.6 The
Mortgagor and Mortgagee confirm and agree that if any Participant Bank transfers any right and duties under its Credit Agreement to
other transferee bank as per the appointment stated in the Credit Agreement, rights and duties under this agreement that are related
to the above transferred rights and duties are transferred to this transferee bank together. The Mortgagor agrees to bear the
guarantee liability to the transferee bank and coordinate them to complete the alteration formalities of relevant mortgage register based

on this agreement. 

Article 5

Mortgage Register

5.1 The
Guarantee Agent Bank and Mortgagor shall finish handling the mortgage register formalities at the industrial and commercial
administrative department located at the place of Mortgagor as per Chinese laws and rules in 20 working days after signing the list
of mortgaged articles. If the Mortgagor cannot finish handling the mortgage register formalities during the foregoing period because
of the reason of relevant register departments, the foregoing period shall be relatively delayed. 

5.2 This
agreement becomes valid after singed by the Mortgagor and Guarantee Agent Bank. The mortgage right for the articles in the mortgaged
articles list is set as of the signing date of this agreement. Except that the mortgage right for some mortgaged articles in the
mortgaged articles list is set as per Chinese laws and rules as of the mortgage register date. 

5.3 When
Mortgagor shall handle registration of mortgaged articles according to this agreement, other right certificate and relevant property
right certificate of mortgaged shall be handed to Guarantee Agent Bank for keeping. Within 10 days after all the guaranteed debts
are paid off and the Mortgagor submitted the written application, the Guarantee Agent Bank shall return the original of the
foregoing documents to the Mortgagor and help the Mortgagor to handle relevant formalities of mortgage register cancellation. The
charges arising from this will be borne by the Mortgagor. 

5.4 If the
mortgage register matters happen and the alteration register is needed, the Mortgagor and Guarantee Agent Bank shall go to relevant
register authority to handle the alteration register in 15 days after the alteration of register matters. 

Article 6

Application and
Transfer of Mortgaged Articles 

6.1 The
Mortgagor is entitled to use the mortgaged articles for its normal production and operation and for the intended purpose of
mortgaged articles. The mortgage right under this agreement will not affect Mortgagor to use mortgaged articles for purposes within
its business scope or the intended purpose of mortgaged articles. 

If Guarantee
Agent Bank has reasonable reasons to believe that Mortgagor uses its mortgaged articles out of its normal production and operation
scope or out of the scope of the intended purpose of mortgaged articles, Guarantee Agent Bank has the right to require Mortgagor to
provide related documents showing the application of mortgaged articles. If Guarantee Agent Bank still considers that the
application is out of the above scope after reviewing those documents, Guarantee Agent Bank is entitled to take reasonable measures
to stop Mortgagor to withdraw or use all or partial mortgaged articles. 

6.2
Mortgagor shall provide List of Mortgaged Articles and description of current values to Guarantee Agent Bank upon request from time
to time. 

6.3
Guarantee Agent Bank has the right to stop any conducts of Mortgagor which may cause damage or loss to mortgaged articles.

6.4 On the
signing date of this agreement, Mortgagor shall hand the details of mortgaged articles to Guarantee Agent Bank, and confirms that
except those listed (if any), Mortgagor does not rend, transfer, assign, abandon or dispose in any way any part of the mortgaged
articles. 

6.5
Notwithstanding any mortgage established under this agreement, Mortgagor can still render, transfer mortgaged articles, or dispose
in any way, or change renter during its normal production and operation activities before any breach of this agreement which causes
Mortgagee notifies Mortgagor the frozen of mortgaged articles based on this agreement occur; however, Mortgagor shall timely notify
Guarantee Agent Bank in case any of the disposal incurred to mortgaged articles. 

6.6 Within
the validity of this agreement, except Mortgagor transfers mortgaged articles for the purpose of its normal production and operation
or for the intended purposes of mortgaged articles, other transfer shall be approved by Guarantee Agent Bank. If Mortgagor transfers
mortgaged articles upon the approval of Guarantee Agent Bank, the amount obtained from such transfer shall prepay or withdraw
“guaranteed debt” to Mortgagee. 

If Guarantee
Agent Bank considers that the proposed price for transferring mortgaged articles is evidently less than the value of such mortgaged
article, Mortgagor shall provide additional corresponding guarantee according to the requirements of Guarantee Agent Bank. If under
such situation, the transfer of mortgaged articles by Mortgagor according to this agreement shall not negatively affect the rights
and interests of Mortgagee. 

Article 7

Insurance of
Mortgaged Articles 

7.1 The
Mortgagor shall insure the mortgaged articles in 3 days after having the insured condition. The insurance premium will be borne by
the Mortgagor. The insured company of the Mortgagor shall be the insurance company with rich strength and good prestige. The insured
type and scope shall meet relevant provisions of trade standard and national insurance. The insured amount cannot be less than the
market value of the mortgaged articles. The Mortgagor shall notify the Guarantee Agent Bank in 3 days after insured. 

During the
execution of this agreement, the Mortgagor cannot discontinue any insurance required by the Guarantee Agent Bank. Otherwise, the
Mortgagee has right to continue the insurance or insured instead of the Mortgagor. All the charges arising from this will be borne
by the Mortgagor. The Mortgagor will bear all the liabilities to the Mortgagee because discontinuing the insurance.

7.2 The
original of insurance policy for the insurance handled as per Article 7.1 of this agreement shall show the Guarantee Agent Bank as
the first beneficiary. The Mortgagor shall transfer the original of insurance policy to the Mortgagee in 7 days after insurance (or
renewal of insurance).

If the
Mortgagor has insured the mortgaged articles before signing this agreement, the Mortgagor shall handle the transfer formalities of
insurance rights and interests of mortgaged articles insured to guarantee bank and transfer the original of relevant vouchers 

to Guarantee Agent Bank in 7 days
after signing this agreement.

If the
insured property is damaged, the Guarantee Agent Bank has right to use the insurance compensation for the repair of damaged parts of
mortgaged articles. If not repaired, the insurance compensation as the increased earnest money shall be directly transferred into
the special debts reimbursement account opened by the borrower in the Guarantee Agent Bank.

7.3 If the
Mortgagor cannot insure the mortgaged articles as per Article 7.1 and 7.2 of this agreement, the Guarantee Agent Bank has right to
choose the insurance company for insurance as per the insurance type and amount stated in Article 7.1 of this agreement. If the
Guarantee Agent Bank notifies the Mortgagor in writing and the Mortgagor cannot correct the conducts during the deadline stated in
the written notification. The insurance premium will be borne by the Mortgagor. 

Article 8

Declaration and
Guarantee of Mortgagor

8.1 The
Mortgagor hereby makes the following statement and guarantee to the Mortgagee:

(1) The
Mortgagor is a limited liability company legally established and effectively existing in China; 

(2) The
Mortgagor has full capacity of civil rights and conducts to develop the business, sign this agreement, execute the rights and
fulfill the duties as per this agreement; 

(3) The
internal procedures of company needed when the Mortgagor signs this agreement and executes the rights and fulfills the duties as per
the contract has been accomplished; the person who signs this agreement on behalf of the Mortgagor is the effective authorized
representative of Mortgagor. This agreement signed by this person is binding upon the Mortgagor;

(4) The
duties of Mortgagor under this agreement are the legal and effective duties, which are binding upon the Mortgagor. The duties can be
fulfilled as per the articles stated this agreement.

(5) The
Mortgagor signs this agreement and executes the rights and fulfills the duties as per the contract, which cannot and will not
disobey the following documents or conflict with the following documents: 

(i) Any
agreement, contract or any other contractual documents constraint to the property, which shows the Mortgagor as one party; 

(ii)
Articles of Incorporation and other essential documents of Mortgagor; 

(iii) Any
laws, rules, regulations, normative documents, judgment, verdict and adjudication; 

(6) The
Mortgagor has obtained the establishment, performance and execution of this agreement and all the authorization, approval and permit
required by exchange under the
contract. The authorization, approval or permit is legal and effective; 

(7) The
Mortgagor signs this agreement, executes the rights and fulfill the duties as per the

contract, which is the commercial conducts for
the commercial purpose and is subject to the civil and commercial laws; 

(8) During
any justice procedures continued in China, the Mortgagor or Mortgagor’s property will not enjoy the immunity or special right
during the lawsuit, verdict, execution, property preservation or other legal procedures; 

(9) The
Mortgagor doesn’t attend any lawsuit, arbitration or similar legal procedures with great adverse influences; 

(10) No
person takes any legal procedures to execute the business stopping, liquidation, reorganization, bankruptcy, dismiss or similar
procedures to the Mortgagor; 

(11) The
Mortgagor legally has the ownership and disposal right of mortgaged articles. The ownership of mortgaged articles without any
dispute can be legally regarded as the subject of mortgage guarantee. If the mortgaged articles belong to the mortgaged property
which must be approved by relevant departments, the Mortgagor shall guarantee to have obtained the legal and effective approval or
consent; 

(12) Except
the guarantee stated in this agreement, the mortgaged articles have no problems such as any type of share, rights and interests of
any third party, any ownership dispute or any adverse influence for the Mortgagee to execute the mortgage rights. 

8.2
Mortgagor hereby confirms that Mortgagee authorizes Guarantee Agent Bank to sign this agreement and executes its obligations under
this agreement on the basis that it fully believes the above declaration and guarantee. 

8.3 The
foregoing statements and guarantee made by the Mortgagor must be correct during the execution of this agreement. The Mortgagor
guarantees to provide more documents as per the requirement of Guarantee Agent Bank. 

Article 9

Promise of
Mortgagor 

From the
valid date of this agreement to the termination date of rights and duties under this agreement, the Mortgagor promises to the
Mortgagee: 

9.1 The
Mortgagor shall maintain legal and effective continuousness of status of legal person of the enterprise and obey all applicable laws
and rules. 

9.2 The
Mortgagor shall ensure the business nature and scope will not have changes with great adverse influences. 

9.3 Except
disposing the mortgaged articles as per the appointment stated in this agreement, the mortgaged articles will be owned and kept by
the Mortgagor and will continue to be owned and kept by the Mortgagor during the execution of the contract. 

9.4 Once the
followings happen, the Mortgagor shall notify the Guarantee Agent Bank in 3 days after the events happen: 

(1) Default events stated in Article 10.1 of this agreement; 

(2) Any
lawsuit, arbitration or legal procedures stated in Article 8.1.(8) of this agreement; 

(3) Some
disputes happen with the ownership of mortgaged articles or the preservation measures have been taken; 

(4)
Mortgaged articles are most, or totally or partially damaged; 

(5) Any
great adverse events happen or will happen in the opinion of Mortgagor. 

9.5 The
Mortgagor provides all the documents and materials related to the mortgaged matters under this agreement to the Guarantee Agent Bank
and guarantee the foregoing documents are true, correct and complete. 

9.6 The
Mortgagor shall truly show the defects of mortgaged articles stated in the appendix of this agreement to the Guarantee Agent Bank
and make the repair or supplement for the defects as per the requirements of Guarantee Agent Bank. 

9.7 If the
mortgaged articles include the property limited for circulation by laws, the Mortgagor has the duty to give a written description to
Guarantee Agent Bank. If Mortgagor fails to give written description and causes losses to Mortgagee during its exercise of mortgage
right, Mortgagor shall make compensation. 

9.8 The
Mortgagor shall keep well the mortgaged articles and be responsible for repairing and maintaining and ensure the completeness of
mortgaged articles and coordinate the Guarantee Agent Bank and employed agency to investigate and check the situation of mortgaged
articles and take some measures for the suggestion put forward by the Guarantee Agent Bank for the purpose of completeness of
mortgaged articles during the investigation and check. The Mortgagor shall submit the check report of mortgaged articles to the
Guarantee Agent Bank on schedule and provide the certificate for the situation of mortgaged articles according to continuous
reasonable requirement of Guarantee Agent Bank.  

9.9 The
Mortgagor shall be responsible for handling the evaluation, notary, verification and keeping of mortgaged articles stated in this
agreement and cooperate with the Guarantee Agent Bank to handle the register formalities of mortgaged articles stated in the
contract. The Mortgagor shall bear all the charges for the foregoing matters. Relevant evaluation, notary and verification
institutions shall be firstly approved by the Guarantee Agent Bank. 

9.10 If any
mortgaged articles stated in the mortgaged article list of appendix of this agreement are lost or damaged because of the conducts of
the Mortgagor, the Mortgagor shall immediately stop the conducts and notify the Guarantee Agent Bank of the situation of mortgaged
articles in time and restore the value of mortgaged articles during reasonable period or provide the property mortgage equal to the
value of lost and damaged articles to the Guarantee Agent Bank or provide the approval guarantee to the Guarantee Agent Bank, handle
relevant evaluation and register formalities. If the Mortgagor cannot provide, the Mortgagee can sell the mortgaged articles at
auction or dispose them and prepay or draw the guaranteed debts with the amount obtained by
auction and disposal after negotiation with the Mortgagor. 

9.11 If the
third party who provides the guarantee (including, but not limited to the guarantee ways such as the guarantee, mortgage and pledge)
for the primary creditor’s

right stated in Article 3 of this agreement sets the mortgage and/pledge for the interests of
Mortgagee in its own property and the Mortgagee gives up the mortgage right provided by the third party, syn-position of mortgage
right or change the mortgage right or mortgage right provided by the third party, the guarantee scope of Mortgagor will not decrease
and still keep same with those stated in Article 3 of this agreement. The foregoing conducts of the Mortgagee will not affect and
exempt from any duties and guarantee liabilities of Mortgagor under this agreement. The Mortgagor cannot require of alleviating the
responsibilities of the Mortgagor within the scope of giving up of the Mortgagee. Meanwhile, the Mortgagor gives up requiring the
Mortgagee to firstly execute the defense right of mortgaged and/or pledged articles of the third party. 

Article 10

Default Events

10.1 Each of
the following events will consist of the default events under this agreement:

(1) Any
default events stated in Credit Agreement; 

(2) Any
default events for applicable guarantee agreement or contract happens with the third party who provides the guarantee (including,
but not limited to the guarantee ways such as the guarantee, mortgage and pledge) for the primary creditor’s right stated in
Article 3 of this agreement, except that the debts guaranteed by the third party under the guarantee agreement or contract is nor
more than RMB RMB10,000,000; 

(3) The
Mortgagor disobeys the statements and guarantee stated in Article 8 of this agreement or promise stated in Article 9 and cannot make
the remedies satisfying the Guarantee Agent Bank on the informed date of the Mortgagor or in 10 working days as of the notification
date when the Guarantee Agent Bank requires the Mortgagor to make the remedies; 

(4) The
Mortgagor doesn’t truly show the defects of mortgaged articles stated in the appendix of this agreement and cannot make the
remedies satisfying the Guarantee Agent Bank on the informed date of the Mortgagor or in 10 working days as of the notification date
when the Guarantee Agent Bank requires the Mortgagor to make the remedies; 

(5) The
Mortgagor doesn’t handle the insurance formalities of mortgaged articles as per the appointments stated in the appendix of this
agreement and cannot make the remedies satisfying the Guarantee Agent Bank in 10 working days as of the notification date when the
Guarantee Agent Bank requires the Mortgagor to make the remedies; 

(6) The
Mortgagor doesn’t handle the register formalities of mortgaged articles as per the appointments stated in the appendix of this
agreement and cannot make the remedies satisfying the Guarantee Agent Bank in 5 working days as of the notification date when the
Guarantee Agent Bank requires the Mortgagor to make the remedies; 

(7) The Mortgagor arbitrarily sells, rents, transfers, contracts, donates, re-mortgages, buys the share in kind or disposes
all the mortgaged articles listed in the mortgaged article list of Appendix of this agreement; 

(8) The
Mortgagor conceals the existing problems of mortgaged articles such as share,

dispute, sealed up, frozen, detained or set for
mortgage, etc;

(9) Any
mortgaged articles owned and kept by the Mortgagor are lost and damaged. The insurance of the mortgaged articles cannot be workable
or insurance company refuses to compensate in any reason; 

(10) The
Mortgagor hinders (including act or negative act) the Guarantee Agent Bank to dispose the mortgaged articles as per the appointment
stated Article 11 of this agreement in any way. 

(11) The
Mortgagor doesn’t fulfill other duties under this agreement. 

(12) Other
events which will bring great adverse influences in the opinion of Mortgagee. 

10.2 After
any default events stated in Article 10.1 of this agreement, the Guarantee Agent Bank has right (must if required by the majority of
Participant Bank) to adopt one or more following actions: 

(1) If the
credit funds are not granted, notify the borrower in writing and announce the credit funds required in all or partial withdrawal
notification, but not withdrawn or granted; After announcement, this part of credit fund will immediately terminate being withdrawn
or granted; 

(2) Notify
the borrower in writing and announce all or partial credit balance together with all accrued interests, charges and other funds
under the agreement shall be immediately on maturity and payable; 

(3) Notify
the Mortgagor in writing and announce to dispose the mortgaged articles in the way of auction, disposal and discount. The amount
will be executed as per Article 10 of this agreement. 

(4) Notify
the borrower in writing and require the borrower to provide the guarantee for the primary creditor’s right under the
creditor’s right; 

(5) Notify
the Mortgagor in writing and require the Mortgagor to pay the compensation for compensating all direct and indirect losses
(including, but not limited to guaranteed debts) of the Guarantee Agent Bank because the default of the Mortgagor; 

(6) Take the
proceedings to the People’s Court of signing place of this agreement; 

(7) Execute
other rights stated in laws and this agreement. 

10.3 The
compensation stated in Item (5), Article 10.2 of this agreement will consist of an independent debts of Mortgagor to the Mortgagee
that is payable upon request. 

10.4 In
light of requirement and written proof of any Participant Bank, the Mortgagor shall compensate any losses and charges (including,
but not limited to the lawyer’s fee and
lawsuit fee) or expenditures because any default events happen or the Mortgagor doesn’t fulfill any duties under this
agreement to the Participant Bank. 

Article 11

Realization of
Mortgage Right 

11.1 If any
default events under Article 10.1 of this agreement happen, the Guarantee Agent Bank has right to legally dispose the mortgaged
articles by auction, disposal and discount. The amount obtained by the disposal of mortgaged articles will be used to liquidate the
guarantee debts. To dispose the mortgaged articles shall be done via the Guarantee Agent Bank. The Guarantee Agent Bank shall pay
any funds obtained by disposing the mortgaged articles to each Mortgagee and agent bank as per the following way and orders: 

(1) Limited
by the amount obtained from disposing of raw materials, semi-finished products, finished products under trade financing between
participant bank and borrower, pay any interests (including, but not limited to interests, compound interests and penalty
interests), costs and principals that are due but not paid by borrower under such trading financing to participant bank. 

(2) Pay the
charges paid by the Mortgagee and agent bank for realizing the creditor’s right under the Credit Agreement and guarantee
interests under this agreement and any other charges, default money and damage compensation payable by the Mortgagor under this
agreement to the Mortgagee and agent bank; 

(3) Pay any
reasonable charges, default money and damage compensation due and unpaid by the borrower under the Credit Agreement to each
Participant Bank and agent bank; 

(4) Pay the
interests (including, but not limited to interests, compound interests and penalty interests) of liquid funds loan due and unpaid by
the borrower to each Participant Bank under the Credit Agreement according to the proportion of unpaid loan funds granted by each
Participant Bank accounting for the loan balance of all the Participant Banks; 

(5) Pay the
principal of any liquid funds loan due and unpaid by the borrower to each Participant Bank under the Credit Agreement according to
the proportion of unpaid loan funds granted by each Participant Bank accounting for the loan balance of all the Participant Banks;

(6) Pay the
interests and charges for credit funds of any bank acceptance bill due and unpaid by the borrower to each Participant Bank under the
Credit Agreement according to the proportion of unpaid credit funds of bank acceptance bill accepted by each Participant Bank
accounting for total unpaid credit funds of bank acceptance bill accepted by all the Participant Banks. 

(7) Pay the
principal for credit funds of any bank acceptance bill due and unpaid by the borrower to each Participant Bank under the Credit
Agreement according to the proportion of unpaid credit funds of bank acceptance bill accepted by each Participant Bank accounting
for total unpaid credit funds of bank acceptance bill accepted by all the
Participant Banks; 

(8) Pay the
accrued interests (including, but not limited to interests, compound interests and penalty interests) and charges of any trade
financing credit funds due and unpaid by the borrower to each Participant Bank under the Credit Agreement according to the

proportion
of unpaid trade financing credit balance granted by each Participant Bank accounting for the total trade financing credit
balance of all the Participant Banks; 

(9) Pay the
principal of any trade financing credit funds due and unpaid by the borrower to each Participant Bank under the Credit Agreement
according to the proportion of unpaid trade financing credit balance granted by each Participant Bank accounting for the total trade
financing credit balance of all the Participant Banks; 

(10) Pay any
other funds due and unpaid by the borrower to each Participant Bank under the Credit Agreement according to the proportion of unpaid
credit funds granted by each Participant Bank accounting for the total credit balance of all the Participant Banks; 

11.2 When
disposing the mortgaged articles as per the provisions stated in Article 11.1 of this agreement, the Guarantee Agent Bank has right
to legally take the following actions: 

(1) Within
the scope of laws, according to the requirement of Guarantee Agent Bank, has right to dispose the mortgaged articles by the way of
auction, disposal and discount in the proper and fair market price at proper time. 

(2) Require
the Mortgagor to pay the necessary charges paid by the Guarantee Agent Bank for executing any right under the laws and this
agreement; 

(3) Settle
and harmonize any right assertion related to the mortgaged article, submit the arbitration or lawsuit proceedings or execute in
other ways or permit others to execute; 

(4) In order
to realize any right under this agreement, execute other rights or take legal actions. 

The
Guarantee Agent Bank has right to choose all or partial foregoing right or temporarily postpone to execute any right. 

11.3 If the
amount obtained after the Guarantee Agent Bank disposes the mortgaged articles under this agreement as per the appointment stated in
Article 11.1 of this agreement cannot enough pay the guaranteed debts, the Guarantee Agent Bank has right to pursue to the borrower.
If exceeding the guarantee scope stated in Article 3 of this agreement, the exceeding party shall be owned by the Mortgagor. 

11.4 If any
third party proposes any assertion or any objection to the mortgaged articles with any reason, all the results and liabilities will
be borne by the Mortgagor. The foregoing assertion and objection of the third party will not affect the Guarantee Agent Bank to
dispose the mortgaged articles as per the appointment stated in this agreement. 

Article 12

Taxes and Charges

12.1 All the
taxes and charges (including, but not limited to the charges of lawyer, notary, register and stamp under this agreement and charges
for insurance, transport, storage,
evaluation, repair and maintenance of mortgaged articles) related to this agreement and mortgaged articles under this agreement
shall be borne by the Mortgagor. 

12.2
According to the requirement of Guarantee Agent Bank, the Mortgagor shall immediately enough compensate all reasonable expenditures
and charges, including, but

not
limited to the financial charges, lawyer charges and lawsuit charges paid for disposing mortgaged
articles stated in Article 11 of this agreement paid by the Guarantee Agent Bank for executing the rights under this agreement or
any documents at any place of jurisdictions to the Guarantee Agent Bank. 

12.3 The
Mortgagor shall pay all the current and future register charges and other taxes and charges collected from the Mortgagor for this
agreement and any documents at any time. 

12.4 Any
funds paid by the Mortgagor to Mortgagee and Guarantee Agent Bank shall be enough paid as per this agreement. The Mortgagor cannot
propose any assertion of offsets and anti-reimbursement, as well as any limitation or condition. 

Article 13

Changes of Subject

This
agreement is binding upon each party of the contract and their own successors and transferees.  

Article 14

Information
Disclosure 

14.1 The
Guarantee Agent Bank has right to keep secrete for any information related to all the documents (including, but not limited to the
evaluation report, insurance documents and mortgage register documents, etc) under this agreement provided by Mortgagor or its
representative. But, the Guarantee Agent Bank and Mortgagee have right:

(1) Disclose
the well-known information (excluding the well-known information because the Guarantee Agent Bank breaks this article);

(2)
Disclosure the information during any lawsuit and arbitration procedures;

(3) Disclose
this information as per the requirement of laws;

(4) Disclose
this information to co-lead bank or any Participant Bank;

(5) Disclose
this information to any governmental, financial, taxation or other relevant supervision departments;

(6) Disclose
the information to its professional consultant;

(7) Disclose
the information within the scope of Article 14.2 of this agreement;

(8) Disclose
the information after approved by the Mortgagor. 

14.2 The
Mortgagor has right to disclose to any related party and/or any person (hereinafter called “Participant”) related to any
transfer or other agreement of this agreement that may be or already signed by Mortgagee; 

(1) Copies
of any documents (including, but not limited to the evaluation report, insurance
documents, mortgage register documents, etc) related to this agreement;

(2) Any
other information related to the above documents that Mortgagor has obtained. 

But, before
the participant receives any secrete information, this participant must submit

the written promise upon agreeing to keep secret as
per Article 14.1 of this agreement to the Guarantee Agent Bank. 

14.3 The
appointments stated in Article 14.1 and 14.2 substitute for any secret promise made by the Mortgagor before becoming the party of
this agreement. 

Article 15

Amendment and
Supplement 

15.1 The
Guarantee Agent Bank can amend the articles in this agreement in writing together with the Mortgagor. If the amendment refers to the
alteration of registered matters stated in this agreement, the Mortgagor has duties to help the Guarantee Agent Bank to handle the
alteration register in the register authority. Any amendment on basis of this is binding upon all the Mortgagees, Guarantee Agent
Banks and Mortgagors. 

15.2 If the
borrower and bank consortium amends the Credit Agreement as per the appointment stated in the agreement and the amendment of Credit
Agreement involves in the alteration of registered matters stated in this agreement, the Mortgagor has duties to help the Guarantee
Agent Bank to handle the alteration register in the register authority. 

15.3 In
order to meet the requirement for handling the mortgage register, after proposal of Guarantee Agent Bank, the Mortgagor has duties
to sign the supplement agreement of this agreement with the Guarantee Agent Bank or any mortgage agreement in conformity with the
content of this agreement and qualified in the register authority. 

Article 16

Notification
 

16.1 Any
notification, request, instruments or other documents sent to any party under this agreement as per this agreement shall be sent to
the recipient in writing based on the address or telex code or fax number appointed by the recipient. The address, telex code and
fax number and contact person appointed by each party shall be listed in the signing page of this agreement. 

16.2 Any
communications executed by each party of this agreement shall be regarded as the receiving of the recipient in the following
situation:

(1) When
actual delivered if sending by person;

(2) If
sending by telex or fax, receive the correct feedback or fax report after finishing the sending;

(3) If
mailing by the letter (including EMS), 12:00 am (Beijing Time) in 7 working days after sending register letter as per correct
address. 

16.3 After
each party of this agreement changes the contact person, address, telex code or fax number, the party shall notify the alteration to
the credit agent bank in 2 working days after changes. 

Article 17

Extended Deadline
and Partial Invalidity 

17.1 Any
Mortgagee and/or Guarantee Agent Bank haven’t executed or delay to execute any rights under this agreement, which will not be
regarded as the abandon of these rights.

If the Mortgagee and/or Guarantee Agent Bank independently or partially execute these
rights, it shall not be excluded that they further execute these rights in other way or execute other right or special rights. The
rights and relief stated in this agreement shall not be excluded from any rights or relief given by the laws and rules to the
Mortgagee and/or Guarantee Agent Bank. 

17.2 If any
article under this agreement is illegal, invalid or unfulfilled at any time, the legality, validity or execution of other articles
under this agreement will be not affected or decreased. 

Article 18

Applicable Laws
and Jurisdiction 

18.1 This
agreement is subject to Chinese laws (including, but not limited to Chinese prevailing effective laws, administrative laws and
rules, decisions and orders issued by State Council, local laws and rules issued by local People’s Congress, rules issued by
each department and commission of State Council and Local People’s Government. Based on this purpose, Chinese laws don’t
include the laws of Taiwan, HK Special Administrative Region and Macao Special Administrative Region) and is explained in light of
it. 

18.2 If any
dispute is arising during the execution of this agreement, each party shall settle it by friendly consultation. If not settled, this
dispute will be subject to People’s Court at the signing place of this agreement.

Article 19

Contract Text
 

19.1 This
agreement is established and signed in Chinese. 

19.2 The
matter not stated in this agreement will be negotiated by the Mortgagor, co-lead bank and Guarantee Agent Bank. The supplement
agreement can be signed by the Mortgagor and Guarantee Agent Bank. If the supplement agreement refers to the alteration of
registered contents in the contract, the alteration register formalities shall be handled based on the supplement agreement. The
supplement agreement will have same legal effect with this agreement. 

19.3 The
appendix of this agreement is the effective part of this agreement. 

19.4 This
agreement shall be signed in ( ) originals. Each of Mortgagor, Mortgagee and Guarantee Agent Bank hold one. Other originals
shall be kept in the Guarantee Agent Bank for the mortgage register of this agreement. Each original has the same effect. 

(The
remainder of this page is intentionally left blank.) 

Page of
Signature 

Pledgor: 

Wuxi Seamless Oil
Pipe Co., Ltd. 

Add:

P.O.: 

Responsible personnel: 

Tel: 

Fax:

Contact personnel: 

Authorized
personnel for signature: 

                          
         
                       

Name:
                                   seal 

Title: 

Date:

Guarantee Agent Bank: 

Bank of China
Limited Wuxi Hi-tech Industrial Development Zone Sub-branch 

Add:

P.O.: 

Responsible personnel: 

Tel: 

Fax:

Contact personnel: 

Authorized
personnel for signature: 

                          
         
                       

Name:
                                   seal 

Title: 

Date: 

Appendix 14 

Transfer
Certificate (Form) 

No.:
WMLSJGHYTCERG( )No.( )

To:

Bank of China Limited
Wuxi Hi-tech Industrial Development Zone Sub-branch 

As the credit agent
bank agreed in the credit agreement (defined as follows) 

Wuxi Seamless Oil
Pipe Co., Lt. 

As the borrower
(hereafter the "borrower") defined in the credit agreement (defined as follows) 

Case: 
WSP Structured Bank Consortium Comprehensive Credit and Loan Agreement with an Amount Equivalent to RMB 3.5 Billion
signed on Aug 29, 2011  

Our bank
hereby confirms WSP as the borrower, Bank of China Limited Jiangsu Branch as the arranging bank, Bank of China Limited Wuxi Branch
and Agricultural Bank of China Limited Wuxi Branch as the co-lead bank, Bank of China Limited Wuxi Hi-tech Industrial Development
Zone Sub-branch as credit agent bank, Agricultural Bank of China Wuxi New District Sub-branch and Bank of China Limited Wuxi Hi-tech
Industrial Development Zone Sub-branch as mutual guarantee agent bank, the financial institution listed in Appendix 1 of credit
agreement as participant bank (hereinafter called “Participant Bank”), who signed WSP Structured Bank Consortium
Comprehensive Credit and Loan Agreement with an Amount Equivalent to RMB 3.5 Billion (hereinafter called “Credit
Agreement”) on Aug 29, 2011. 

The
vocabularies and terms defied in the credit agreement have same meaning in the subscription letter.

The transfer bank and the transferee
bank hereby agree that the transfer bank shall transfer its all of or part of the rights and obligations listed in the Credit
Agreement to the transferee bank According to Article 23. 

The transferring date shall be
____________________.

The address of the handling institution
of the transferee bank shall be listed in the Transferred Loan Commitments filled and singed according to the form of
Appendix 15. 

Article 23 of the Credit Agreement
shall constitute an integral part of this conveyance and is binding to the transferee party. 

The relevant clauses under the credit
agreement shall be binding to the transferee bank upon coming into force of the credit agreement. 

This transfer certificate is governed
by Chinese law. 

Transfer bank:

(seal) of the bank

Representative (signature):

Transferee bank:

(seal) of the bank

Representative (signature): 

Date:

Appendix 15 

Transferred Loan
Commitments (Form) 

(Including
the relevant rights and liabilities under the Credit Agreement)

		
	Loan
commitments of transfer bank

RMB

	
Loan commitments
transferred

RMB

	Proportion of transfer bank in the loan balance

RMB

	
Amount
transferred

RMB 

Transferee
bank

Name of the transferee bank:

Handling institution: 

Address to which the notice is sent

Tel:

Telex: 

Fax:

Contact person: 

		
	
Transfer
bank: (seal) of the bank

	
Transferee
bank: (seal) of the bank

	
Representative (signature):

	
Representative (signature):

	 
	 

	
[•]
bank (seal)

	
[Wuxi
Seamless Oil Pipe Co., Ltd.]

	 
	 

	
Representative (signature):

	
Representative (signature):

	 
	 

	 
	
Signing
date:

Appendix 16 

Financial
Indicator Requirements of Borrower During Special Observation Period

The
borrower's business indicator during special observation period defined in Article 2.7 of the credit agreement shall: 

(1)
Asset-liability ratio shall be ≤70%; 

(2) Sales
revenue shall not be less than the value equivalent to RMB 4,200,000,000; 

(3) Net
profit shall not be less than the value equivalent to RMB 100,000,000; 

(4) Flow
ration shall be ≥170%; 

(5) Quick
ratio shall be ≥120%.ex_10-1.htm

EXHIBIT 10.1

 

 

PREFERRED STOCK PURCHASE AGREEMENT

 

 

 

This Preferred Stock Purchase Agreement (“Agreement”) is made and entered into as of September 12, 2011 (“Execution Date”), by and between ULURU Inc., a Nevada corporation (“Company”), and Ironridge Global III, LLC, a Delaware limited liability company (“Purchaser”).

 

Recitals

 

A. The parties desire that, upon the terms and subject to the conditions herein, Purchaser will purchase $650,000 in shares of convertible, redeemable Series A Preferred Stock of Company, convertible into shares of Common Stock at a price per common share equal to the higher of (i) $0.70 per share, and (ii) 130% of the Closing Price of the Common Stock on the Trading Day immediately preceding the Announcement Date; and

 

B. The offer and sale of the Shares provided for herein are being made pursuant to exemptions from registration under Section 4(2) of the Act as a transaction by an issuer not involving any public offering, and a private placement of restricted securities pursuant to Rule 506 of Regulation D promulgated under the Act.

 

Agreement

 

In consideration of the foregoing, and other good and valuable consideration the receipt and adequacy of which are hereby acknowledged, Company and Purchaser agree as follows:

 

I. Definitions.  In addition to the terms defined elsewhere in this Agreement and the Transaction Documents, capitalized terms that are not otherwise defined herein have the meanings set forth in the Glossary of Defined Terms attached as Exhibit 1, incorporated herein by reference.

 

II. Purchase and Sale.

 

A. Agreement to Purchase.  Subject to the terms and conditions herein and the satisfaction of the conditions to each Closing set forth in this Section II:

 

1. Preferred Shares.  Company will sell to Purchaser for the aggregate sum of $650,000.00 (“Purchase Amount”), and Purchaser hereby agrees to purchase from Company 65  shares of Series A Preferred Stock (“Preferred Shares”), at a price of $10,000.00 per Preferred Share, to be paid
in cash by wire transfer of immediately available funds, in accordance with Section II.C.3 hereof.  Company may not sell fractional Preferred Shares.

 

2. Issuance.  Company will issue and deliver to Purchaser the Shares as provided herein.

 

B. Effectiveness of Agreement.

 

1. Effectiveness.  This Agreement will be deemed effective when it has been duly executed by both Purchaser and Company and the conditions to effectiveness set forth in Section II.B.2 have been met.

 

2. Conditions to Effectiveness.  As a condition precedent to the effectiveness of this Agreement, all of the following conditions will have been satisfied:

 

a. The following documents have been delivered to Purchaser:

 

i. This Agreement, executed by Company;

 

ii. A Secretary’s Certificate, certifying as to and attaching copies of:  (1) the resolutions of Company’s board of directors authorizing this Agreement and the Transaction Documents, and the transactions contemplated hereby and thereby, (2) Company’s current Articles of Incorporation, and (3) Company’s current Bylaws;

 

iii. Executed Transfer Agent Instructions, in the form attached hereto as Exhibit 3; and

 

iv. The Certificate of Designations, executed by Company, filed and accepted by the Secretary of State of the State of Nevada.

 

b. The representations and warranties of Company in this Agreement will be true and correct in all material respects and Company will have delivered an Officer’s Certificate to such effect to Purchaser, signed by an officer of Company; and

 

c. Any Required Approval has been obtained.

 

C. Purchase Obligation.

 

1. Announcement and Notice.  Subject to the Ownership Limitation, the Purchase Amount and the other conditions and limitations set forth in this Agreement, at any time on or after the Trading Day by which the Company has widely publicly disclosed prior to 8:30 a.m. Eastern time all material terms of the Transaction Documents and the transactions contemplated thereby, in accordance with Regulation FD (“Announcement
Date”), Company may, in its sole and absolute discretion, elect to give written notice to Purchaser in the form attached hereto as Exhibit 2 (“Notice”).  Purchaser will acknowledge the Notice by delivering the Acknowledgement to Company in the form contained within Exhibit 2, providing delivery instructions for the Preferred Shares.

 

2. Closings.  Purchaser will purchase and make payment for the following portions of Preferred Shares, in cash by wire transfer of immediately available funds to an account designated by Company, and Company will deliver the Preferred Shares to Purchaser by reputable overnight courier (each, a “Closing”), on each of the following Trading Days (each a “Closing
Date”):

 

a. 15 Preferred Shares for $150,000.00 on the earlier of (i) 3 Trading Days after the Notice Date; and (ii) the Trading Day that aggregate trading volume of the Common Stock on the Trading Market after the Notice Date, as reported by Bloomberg, equals or exceeds $300,000.00; in each case excluding any Trading Day on which the Common Stock has traded below the Floor Price;

 

b. 25 Preferred Shares for $250,000.00 on the earlier of (i) 20 Trading Days after the first Closing Date; and (ii) the Trading Day that aggregate trading volume of the Common Stock on the Trading Market after the prior Closing Date, as reported by Bloomberg, equals or exceeds $750,000.00; in each case excluding any Trading Day on which the Common Stock has traded below the Floor Price; and

 

c. 25 Preferred Shares for $250,000.00 on the earlier of (i) 20 Trading Days after the second Closing Date; and (ii) the Trading Day that aggregate trading volume of the Common Stock on the Trading Market after the prior Closing Date, as reported by Bloomberg, equals or exceeds $750,000.00; in each case excluding any Trading Day on which the Common Stock has traded below the Floor Price.

 

3. Restrictions.

 

a. Authorized Shares.  Each Closing may occur to the extent that the total number of authorized and unreserved shares of Series A Preferred Stock and Common Stock are sufficient to cover the number of Preferred Shares issuable in exchange for the Purchase Amount and upon conversion of the Preferred Shares to Common Shares, respectively.

 

4. Conditions Precedent.  The right of Company to deliver the Notice is subject to the satisfaction, on the date of delivery of such Notice, of each of the following conditions, and Company will certify to Purchaser in the Notice that each such condition precedent has been satisfied:

 

a. The Common Stock will be listed for and currently trading on the Trading Market, and there is no notice of any suspension or delisting with respect the trading of the shares of Common Stock on such Trading Market;

 

b. The representations and warranties of Company set forth in this Agreement are true and correct in all material respects as if made on such date, and

 

c. No default has occurred under this Agreement,

 

d. There is not then in effect any law, rule or regulation prohibiting or restricting the transactions contemplated in this Agreement or any other Transaction Document, or requiring any consent or approval which will not have been obtained, nor is there any pending or threatened proceeding or investigation which may have the effect of prohibiting or adversely affecting any of the transactions contemplated by this Agreement; no statute, rule, regulation, executive order, decree, ruling or injunction will have been enacted, entered, promulgated or adopted by any court or
governmental authority of competent jurisdiction that prohibits the transactions contemplated by this Agreement, and no actions, suits or proceedings will be in progress, pending or, to Company’s knowledge threatened, by any person, other than Purchaser or any Affiliate of Purchaser, that seek to enjoin or prohibit the transactions contemplated by this Agreement;

 

e. Company is in compliance with all requirements to continue trading on a Trading Market; and

 

f. Company has a sufficient number of duly authorized shares of Common Stock reserved for issuance in such amount as may be required to fulfill its obligations pursuant to the Transaction Documents, including without limitation all Common Shares issuable upon conversion of the Preferred Shares.

 

5. Conditions to Closings.  Notwithstanding any other provision, as a condition precedent to each Closing, all of the following conditions will have been satisfied:

 

a. The Common Stock has been trading on a Trading Market on and since the Notice Date, trading has not been suspended, and the Company is in compliance with all requirements to continue trading on a Trading Market;

 

b. No uncured event of default exists under any Transaction Document;

 

c. The representations and warranties of Company in this Agreement will be true and correct in all material respects;

 

d. All Shares will have been timely delivered to Purchaser and any Affiliate of Purchaser in accordance with any contractual requirements, time being of the essence;

 

e. All documents, instruments and other writings required to be delivered by Company to Purchaser pursuant to any provision of this Agreement or in order to implement and effect the transactions contemplated herein have been delivered.

 

6. Company Election.  In the event that the Common Stock trades below the Floor Price, notwithstanding any other provision, the Company may, at its sole option, elect to close up to $150,000 of the Purchase Amount on the original first Closing Date, in which case the Price per Preferred Share will be equal to the higher of:  (a) the amount the Company elects to close, divided by 65; and (b) the lesser of (i)
$10,000, and (ii) an amount equal to $10,000 multiplied by 85% of the average of the daily VWAPs from the Announcement Date to the first Closing Date, divided by the Floor Price.

 

7. Closing Deliveries.  Subject to such delivery and the satisfaction of the conditions set forth above, at or before each Closing Date, all of the following will occur:

 

a. Company will deliver to Purchaser an Opinion and Officer’s Certificate, each executed and updated as of the Closing Date;

 

b. Purchaser will pay the Purchase Amount for the Preferred Shares to Company, by wire transfer of immediately available funds to an account designated in writing by Company; and

 

c. Company will deliver to Purchaser, or to Company’s counsel to be held in escrow, original certificates representing the Preferred Shares in the name of Purchaser, bearing an appropriate restrictive legend.

 

III. Termination.

 

A. This Agreement will automatically terminate upon the occurrence of any of the following:

 

1. If, at any time, either Company or any director or executive officer of Company has engaged in a transaction or conduct related to Company that has resulted in (a) a Commission enforcement action, including without limitation such director or executive officer being sanctioned by the Commission, or (b) a civil judgment or criminal conviction for fraud or misrepresentation, or for any other offense that, if prosecuted criminally, would constitute a felony under applicable law;

 

2. On any date after a Delisting Event that lasts for an aggregate of 20 Trading Days;

 

3. If at any time Company has filed for or is subject to any bankruptcy, insolvency, reorganization or liquidation proceedings or other proceedings for relief under any bankruptcy law or any law for the relief of debtors instituted by or against Company or any Subsidiary of Company;

 

4. Either  party is in material breach or default of this Agreement, any Transaction Document, or any agreement between Company and Purchaser or any Affiliate of Purchaser, following 10 days written notice and opportunity to cure; and

 

5. Upon the occurrence of a Fundamental Transaction.

 

B. Company Termination.  Company may at any time prior to a Notice in its sole discretion terminate this Agreement by providing 30 days written notice to Purchaser.

 

C. Effect of Termination, Except as otherwise provided herein, the termination of this Agreement will have no effect on any Shares or DWAC Shares previously issued, delivered or credited.

 

IV. Representations and Warranties.

 

A. Representations Regarding Transaction.  Except as set forth under the corresponding section of the Disclosure Schedules, if any, which will be deemed a part hereof, Company hereby represents and warrants to, and as applicable covenants with, Purchaser as of each Closing:

 

1. Organization and Qualification.  Each of Company and each Subsidiary is an entity duly incorporated or otherwise organized, validly existing and in good standing under the laws of the jurisdiction of its incorporation or organization, as applicable, with the requisite power and authority to own and use its properties and assets and to carry on its business as currently conducted.  Neither Company nor any
Subsidiary is in violation or default of any of the provisions of its respective certificate or articles of incorporation, bylaws or other organizational or charter documents.  Each of Company and each Subsidiary is duly qualified to conduct business and is in good standing as a foreign corporation or other entity in each jurisdiction in which the nature of the business conducted or property owned by it makes such qualification necessary, except where the failure to be so qualified or in good standing, as the case may be, could not have or reasonably be expected to result in a Material Adverse Effect and no proceeding has been instituted in any such jurisdiction revoking, limiting or curtailing or seeking to revoke, limit or curtail such power and authority or qualification.

 

2. Authorization; Enforcement.  Company has the requisite corporate power and authority to enter into and to consummate the transactions contemplated by each of the Transaction Documents and otherwise to carry out its obligations hereunder or thereunder.  The execution and delivery of each of the Transaction Documents by Company and the consummation by it of the transactions contemplated hereby or thereby have been
duly authorized by all necessary action on the part of Company and no further consent or action is required by Company other than the filing of the Certificate of Designations.  Each of the Transaction Documents has been, or upon delivery will be, duly executed by Company and, when delivered in accordance with the terms hereof, will constitute the valid and binding obligation of Company, enforceable against Company in accordance with its terms, except (a) as limited by general equitable principles and applicable bankruptcy, insolvency, reorganization, moratorium and other laws of general application affecting enforcement of creditors’ rights generally, (b) as limited by laws relating to the availability of specific performance, injunctive relief or other equitable remedies and (c) insofar as indemnification and contribution provisions may be limited by applicable
law.  Neither Company nor any Subsidiary is in violation of any of the provisions of its respective certificate or articles of incorporation, by-laws or other organizational or charter documents.

 

3. No Conflicts.  The execution, delivery and performance of the Transaction Documents by Company, the issuance and sale of the Shares and the consummation by Company of the other transactions contemplated thereby do not and will not (a) conflict with or violate any provision of Company’s or any Subsidiary’s certificate or articles of incorporation, bylaws or other organizational or charter documents, (b) conflict
with, or constitute a default (or an event that with notice or lapse of time or both would become a default) under, result in the creation of any Lien upon any of the properties or assets of Company or any Subsidiary, or give to others any rights of termination, amendment, acceleration or cancellation (with or without notice, lapse of time or both) of, any agreement, credit facility, debt or other instrument (evidencing a Company or Subsidiary debt or otherwise) or other understanding to which Company or any Subsidiary is a party or by which any property or asset of Company or any Subsidiary is bound or affected, (c) conflict with or result in a violation of any material law, rule, regulation, order, judgment, injunction, decree or other restriction of any court or governmental authority to which Company or a Subsidiary is subject (including federal and state securities laws and
regulations), or by which any property or asset of Company or a Subsidiary is bound or affected, or (d) conflict with or violate the terms of any material agreement by which Company or any Subsidiary is bound or to which any property or asset of Company or any Subsidiary is bound or affected; except in the case of each of clauses (b), (c) and (d), such as could not have or reasonably be expected to result in a Material Adverse Effect.

 

4. Litigation. There is no action, suit, inquiry, notice of violation, proceeding or investigation pending or, to the knowledge of Company, threatened against or affecting Company, any Subsidiary or any of their respective properties before or by any court, arbitrator, governmental or administrative agency or regulatory authority (federal, state, county, local or foreign) (collectively, an
“Action”), which could adversely affect or challenges the legality, validity or enforceability of any of the Transaction Documents or the Shares.  The Commission has not issued any stop order or other order suspending the effectiveness of any registration statement filed by Company or any Subsidiary under the Exchange Act or the Act.

 

5. Filings, Consents and Approvals.  Neither Company nor any Subsidiary is required to obtain any consent, waiver, authorization or order of, give any notice to, or make any filing or registration with, any court or other federal, state, local or other governmental authority or other Person in connection with the execution, delivery and performance by Company of the Transaction Documents, other than the filing of the
Certificate of Designations and required federal and state securities filings and such filings and approvals as are required to be made or obtained under the applicable Trading Market rules in connection with the transactions contemplated hereby, each of which has been, or if not yet required to be filed will be, timely filed.

 

6. Issuance of Shares.  The Shares are duly authorized and, when issued and paid for in accordance with the applicable Transaction Documents, will be duly and validly issued, fully paid and nonassessable, free and clear of all Liens.  Company has reserved from its duly authorized capital stock a number of shares of Common Stock for issuance of the Shares at least equal to the number of Shares which could be issued
pursuant to the terms of the Transaction Documents.

 

7. Disclosure; Non-Public Information.  Except with respect to the information that will be, and to the extent that it actually is timely publicly disclosed by Company pursuant to Section
II.B.2E, and notwithstanding any other provision in this Agreement or the other Transaction Documents, neither Company nor any other Person acting on its behalf has provided Purchaser or its agents or counsel with any information that constitutes or might constitute material, non-public information, including without limitation this Agreement and the Exhibits and Disclosure Schedules hereto.  No information contained in the Disclosure Schedules constitutes material non-public information, unless Company will publicly disclose such information prior to the Announcement Date.  There is no adverse material information regarding Company that has not been publicly disclosed prior to the
Execution Date.  Company understands and confirms that Purchaser will rely on the foregoing representations and covenants in effecting transactions in securities of Company.  All disclosure provided to Purchaser regarding Company, its business and the transactions contemplated hereby, including the Disclosure Schedules to this Agreement, furnished by or on behalf of Company with respect to the representations and warranties made herein are true and correct in all material respects and do not contain any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements made therein, in light of the circumstances under which they were made, not misleading.

 

8. No Integrated Offering,   Neither Company, nor any of its Affiliates, nor any Person acting on its or their behalf has, directly or indirectly, made any offers or sales of any security or solicited any offers to buy any security, under circumstances that would cause this offering of the Shares to be integrated with prior offerings by Company that cause a violation of the Act or any applicable stockholder approval
provisions, including, without limitation, under the rules and regulations of the Trading Market.

 

9. Financial Condition.    Based on the financial condition of Company as of the date of the Commitment Closing:  (a) the fair saleable market value of Company’s assets exceeds the amount that will be required to be paid on or in respect of Company’s existing debts and other liabilities (including known contingent liabilities) as they mature; (b) Company’s assets do not constitute
unreasonably small capital to carry on its business for the current fiscal year as now conducted and as proposed to be conducted including its capital needs taking into account the particular capital requirements of the business conducted by Company, and projected capital requirements and capital availability thereof; and (c) the current cash flow of Company, together with the proceeds Company would receive, were it to liquidate all of its assets, after taking into account all anticipated uses of the cash, would be sufficient to pay all amounts on or in respect of its debt when such amounts are required to be paid.  Company does not intend to incur debts beyond its ability to pay such debts as they mature, taking into account the timing and amounts of cash to be payable on or in respect of its debt.  Company has no knowledge of any facts or circumstances, which lead
it to believe that it will file for reorganization or liquidation under the bankruptcy or reorganization laws of any jurisdiction within one year from the date of the Commitment Closing.  The Public Reports set forth as of the dates thereof all outstanding secured and unsecured Indebtedness of Company or any Subsidiary, or for which Company or any Subsidiary has commitments.  Neither Company nor any Subsidiary is in default with respect to any Indebtedness.

 

10. Section 5 Compliance. No representation or warranty or other statement made by Company in the Transaction Documents contains any untrue statement or omits to state a material fact necessary to make any of them, in light of the circumstances in which it was made, not misleading.  Company is not aware of any facts or circumstances that would cause the transactions contemplated by the Transaction Documents, when consummated, to violate Section 5 of the Act or other federal
or state securities laws or regulations.

 

11. Investment Company.  Company is not, and is not an Affiliate of, and immediately after receipt of payment for the Shares, will not be or be an Affiliate of, an “investment company” within the meaning of the Investment Company Act of 1940, as amended.  Company will conduct its business in a manner so that it will not become subject to the Investment Company Act.

 

B. Representations Regarding Company.  Except as set forth in the Public Reports or under the corresponding section of the Disclosure Schedules, if any, which will be deemed a part hereof,  Company hereby represents and warrants to, and as applicable covenants with, Purchaser as of each Closing:

 

1. Capitalization.  The capitalization of Company is as described in Company’s most recently filed Public Report and Company has not issued any capital stock since such filing.  No Person has any right of first refusal, preemptive right, right of participation, or any similar right to participate in the transactions contemplated by the Transaction Documents which has not been waived or
satisfied.  Except as a result of the purchase and sale of the Shares, there are no outstanding options, warrants, script rights to subscribe to, calls or commitments of any character whatsoever relating to, or securities, rights or obligations convertible into or exchangeable for, or giving any Person any right to subscribe for or acquire, any shares of Common Stock, or contracts, commitments, understandings or arrangements by which Company or any Subsidiary is or may become bound to issue additional shares of Common Stock or securities convertible into or exercisable for shares of Common Stock.  The issuance and sale of the Shares will not obligate Company to issue shares of Common Stock or other securities to any Person, other than Purchaser, and will not result in a right of any holder of Company securities to adjust the exercise, conversion, exchange, or reset
price under such securities.  All of the outstanding shares of capital stock of Company are validly issued, fully paid and nonassessable, have been issued in material compliance with all federal and state securities laws, and none of such outstanding shares was issued in violation of any preemptive rights or similar rights to subscribe for or purchase securities.  No further approval or authorization of any stockholder, the Board of Directors of Company or others is required for the issuance and sale of the Shares.  There are no stockholders agreements, voting agreements or other similar agreements with respect to Company’s capital stock to which Company is a party or, to the knowledge of Company, between or among any of Company’s stockholders.

 

2. Subsidiaries.  Company owns, directly or indirectly, all of the capital stock or other equity interests of each Subsidiary, and all of such directly or indirectly owned capital stock or other equity interests are owned free and clear of any Liens.  All the issued and outstanding shares of capital stock of each Subsidiary are duly authorized, validly issued, fully paid, non-assessable and free of preemptive and
similar rights to subscribe for or purchase securities.

 

3. Public Reports; Financial Statements.  Company has filed all required Public Reports for the one year preceding the Execution Date.  As of their respective dates or as subsequently amended, the Public Reports complied in all material respects with the requirements of the Act and the Exchange Act and the rules and regulations of the Commission promulgated thereunder, as applicable, and none of the Public Reports,
when filed, contained any untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading.  The financial statements of Company included in the Public Reports, as amended, comply in all material respects with applicable accounting requirements and the rules and regulations of the Commission with respect thereto as in effect at the time of filing.  Such financial statements have been prepared in accordance with GAAP, except as may be otherwise specified in such financial statements or the notes thereto and except that unaudited financial statements may not contain all footnotes required by GAAP, and fairly present in all material respects the financial position of Company and its consolidated subsidiaries
as of and for the dates thereof and the results of operations and cash flows for the periods then ended, subject, in the case of unaudited statements, to normal, immaterial, year-end audit adjustments.

 

4. Material Changes.  Since the date of the latest audited financial statements included within the Public Reports, except as specifically disclosed in the Public Reports, (a) there has been no event, occurrence or development that has had, or that could reasonably be expected to result in, a Material Adverse Effect, (b) Company has not incurred any liabilities (contingent or otherwise) other than (i) trade payables and
accrued expenses incurred in the ordinary course of business consistent with past practice, and (ii) liabilities not required to be reflected in Company’s financial statements pursuant to GAAP or required to be disclosed in filings made with the Commission, (c) Company has not altered its method of accounting, (d) Company has not declared or made any dividend or distribution of cash or other property to its stockholders or purchased, redeemed or made any agreements to purchase or redeem any shares of its capital stock, and (e) Company has not issued any equity securities to any officer, director or Affiliate, except pursuant to existing Company equity incentive plans.  Company does not have pending before the Commission any request for confidential treatment of information.

 

5. Litigation. There is no Action which could reasonably be expected to result in a Material Adverse Effect.  Neither Company nor any Subsidiary, nor to the knowledge of Company any director or officer thereof, is or has been the subject of any Action involving a claim of violation of or liability under federal or state securities laws or a claim of breach of fiduciary duty.  There has not been, and to the knowledge
of Company, there is not pending or contemplated, any investigation by the Commission involving Company or any current or former director or officer of Company.

 

6. Labor Relations.  No material labor dispute exists or, to the knowledge of Company, is imminent with respect to any of the employees of Company, which could reasonably be expected to result in a Material Adverse Effect.

 

7. Compliance.  Neither Company nor any Subsidiary (a) is in material default under or in material violation of (and no event has occurred that has not been waived that, with notice or lapse of time or both, would result in a default by Company or any Subsidiary under), nor has Company or any Subsidiary received notice of a claim that it is in material default under or that it is in material violation of, any indenture, loan
or credit agreement or any other similar agreement or instrument to which it is a party or by which it or any of its properties is bound (whether or not such default or violation has been waived), (b) is in violation of any order of any court, arbitrator or governmental body, or (c) is or has been in violation of any statute, rule or regulation of any governmental authority, including without limitation all foreign, federal, state and local laws applicable to its business except in each case as could not reasonably be expected to result in a Material Adverse Effect.

 

8. Regulatory Permits.  Company and each Subsidiary possess all certificates, authorizations and permits issued by the appropriate federal, state, local or foreign regulatory authorities necessary to conduct their respective businesses as described in the Public Reports, except where the failure to possess such permits could not, individually or in the aggregate, have or reasonably be expected to result in a Material Adverse
Effect (“Material Permits”), and neither Company nor any Subsidiary has received any notice of proceedings relating to the revocation or modification of any Material Permit.

 

9. Title to Assets.  Company and each Subsidiary have good and marketable title in fee simple to all real property owned by them that is material to the business of Company and each Subsidiary and good and marketable title in all personal property owned by them that is material to the business of Company and each Subsidiary, in each case free and clear of all Liens, except for Liens that do not materially affect the value of
such property and do not materially interfere with the use made and proposed to be made of such property by Company and each Subsidiary and Liens for the payment of federal, state or other taxes, the payment of which is neither delinquent nor subject to penalties.  Any real property and facilities held under lease by Company and each Subsidiary are held by them under valid, subsisting and enforceable leases of which Company and each Subsidiary are in compliance.

 

10. Patents and Trademarks.  Company and each Subsidiary have, or have rights to use, all patents, patent applications, trademarks, trademark applications, service marks, trade names, copyrights, licenses and other similar rights that are necessary or material for use in connection with their respective businesses as described in the Public Reports and which the failure to so have could have a Material Adverse Effect
(collectively, “Intellectual Property Rights”).  Neither Company nor any Subsidiary has received a written notice that the Intellectual Property Rights used by Company or any Subsidiary violates or infringes upon the rights of any Person. To the knowledge of Company, all such Intellectual Property Rights are enforceable and there is no existing infringement by another Person of any of the Intellectual Property Rights of Company or each Subsidiary.

 

11. Insurance. Company and each Subsidiary are insured by insurers of recognized financial responsibility against such losses and risks and in such amounts as are prudent and customary in the businesses in which Company and each Subsidiary are engaged, including but not limited to directors and officers insurance coverage at least equal to the Purchase Amount.  To Company’s knowledge, such insurance contracts and
policies are accurate and complete in all material respects.  Neither Company nor any Subsidiary has any reason to believe that it will not be able to renew its existing insurance coverage as and when such coverage expires or to obtain similar coverage from similar insurers as may be necessary to continue its business without a significant increase in cost.

 

12. Transactions With Affiliates and Employees.  Except as set forth in the Public Reports, none of the officers or directors of Company and, to the knowledge of Company, none of the employees of Company is presently a party to any transaction with Company or any Subsidiary (other than for services as employees, officers and directors), including any contract, agreement or other arrangement providing for the furnishing of
services to or by, providing for rental of real or personal property to or from, or otherwise requiring payments to or from any officer, director or such employee or, to the knowledge of Company, any entity in which any officer, director, or any such employee has a substantial interest or is an officer, director, trustee or partner, in each case in excess of $120,000 other than (i) for payment of salary or consulting fees for services rendered, (ii) reimbursement for expenses incurred on behalf of Company and (iii) for other employee benefits, including stock option agreements under any equity incentive plan of Company.

 

13. Sarbanes-Oxley; Internal Accounting Controls.  Company is in material compliance with all provisions of the Sarbanes-Oxley Act of 2002, which are applicable to it as of the date of the Commitment Closing.  Company presented in its most recently filed periodic report under the Exchange Act the conclusions of the certifying officers about the effectiveness of Company’s disclosure controls and procedures
based on their evaluations as of the evaluation date.  Since such date, there have been no significant changes in Company’s internal accounting controls or its disclosure controls and procedures or, to Company’s knowledge, in other factors that could materially affect Company’s internal accounting controls or its disclosure controls and procedures.

 

14. Certain Fees.  No brokerage or finder’s fees or commissions are or will be payable by Company to any broker, financial advisor or consultant, finder, placement agent, investment banker, bank or other Person with respect to the transactions contemplated by this Agreement.  Purchaser will have no obligation with respect to any fees or with respect to any claims made by or on behalf of other Persons for fees
of a type contemplated in this section that may be due in connection with the transactions contemplated by this Agreement or the other Transaction Documents.

 

15. Registration Rights.  No Person has any right to cause Company to effect the registration under the Act of any securities of Company.

 

16. Listing and Maintenance Requirements.  The Common Stock is registered pursuant to Section 12 of the Exchange Act, and Company has taken no action designed to, or which to its knowledge is likely to have the effect of, terminating the registration of the Common Stock under the Exchange Act nor has Company received any notification that the Commission is contemplating terminating such registration.  Company has
not, in the 12 months preceding the Execution Date, received notice from any Trading Market on which the Common Stock is or has been listed or quoted to the effect that Company is not in compliance with the listing or maintenance requirements of such Trading Market. Company is, and has no reason to believe that it will not in the foreseeable future continue to be, in compliance with all such listing and maintenance requirements.

 

17. Application of Takeover Protections.  Company and its Board of Directors have taken all necessary action, if any, in order to render inapplicable any control share acquisition, business combination, poison pill (including any distribution under a rights agreement) or other similar anti takeover provision under Company’s Articles of Incorporation (or similar charter documents) or the laws of its state of
incorporation that is or could become applicable to Purchaser as a result of Purchaser and Company fulfilling their obligations or exercising their rights under the Transaction Documents, including without limitation Company’s issuance of the Shares and Purchaser’s ownership of the Shares.

 

18. Tax Status.  Company and each of its Subsidiaries has made or filed all federal, state and foreign income and all other tax returns, reports and declarations required by any jurisdiction to which it is subject (unless and only to the extent that Company and each of its Subsidiaries has set aside on its books provisions reasonably adequate for the payment of all unpaid and unreported taxes) and has paid all taxes and other
governmental assessments and charges that are material in amount, shown or determined to be due on such returns, reports and declarations, except those being contested in good faith and has set aside on its books provisions reasonably adequate for the payment of all taxes for periods subsequent to the periods to which such returns, reports or declarations apply.  There are no unpaid taxes in any material amount claimed to be due by the taxing authority of any jurisdiction, and the officers of Company know of no basis for any such claim.  Company has not executed a waiver with respect to the statute of limitations relating to the assessment or collection of any foreign, federal, statue or local tax.  None of Company’s tax returns is presently being audited by any taxing authority.

 

19. Foreign Corrupt Practices.  Neither Company, nor to the knowledge of Company, any agent or other person acting on behalf of Company, has (a) directly or indirectly, used any corrupt funds for unlawful contributions, gifts, entertainment or other unlawful expenses related to foreign or domestic political activity, (b) made any unlawful payment to foreign or domestic government officials or employees or to any foreign or
domestic political parties or campaigns from corporate funds, (c) failed to disclose fully any contribution made by Company, or made by any person acting on its behalf of which Company is aware, which is  in violation of law, or (d) violated in any material respect any provision of the Foreign Corrupt Practices Act of 1977, as amended.

 

20. Accountants.  Company’s accountants are set forth in the Public Reports and such accountants are an independent registered public accounting firm as required by the Act.

 

21. No Disagreements with Accountants or Lawyers.  There are no material disagreements presently existing, or reasonably anticipated by Company to arise, between Company and the accountants or lawyers formerly or presently employed by Company, and Company is current with respect to any fees owed to its accountants and lawyers.

 

22. No General Solicitation.  Company has not filed any registration statements with the Commission regarding the Shares, and has not published any advertisement, article, notice or other communication regarding the Shares in any newspaper, magazine or similar media or broadcast over television or radio or presented at any seminar or any other general solicitation or general advertisement regarding the
Shares.  Company had a substantive, pre-existing relationship with Purchaser prior to the Execution Date.

 

23. Acknowledgments Regarding Purchaser.  Company’s decision to enter into this Agreement has been based solely on the independent evaluation of Company and its representatives, and Company acknowledges and agrees that:

 

a. Purchaser is acting solely in the capacity of arm’s length purchaser with respect to this Agreement and the transactions contemplated hereby;

 

b. Purchaser does not make or has not made any representations or warranties with respect to the transactions contemplated hereby other than those specifically set forth in  Section IV.C below; and

 

c. Purchaser is not acting as a financial advisor or fiduciary of Company, or in any similar capacity, with respect to this Agreement and the transactions contemplated hereby and any statement made by Purchaser or any of its representatives or agents in connection with this Agreement and the transactions contemplated hereby is not advice or a recommendation and is merely incidental to Purchaser’s purchase of the Shares.

 

C. Representations and Warranties of Purchaser.  Purchaser hereby represents and warrants as of the Execution Date as follows:

 

1. Organization; Authority.  Purchaser is an entity validly existing and in good standing under the laws of the jurisdiction of its organization with full right, company power and authority to enter into and to consummate the transactions contemplated by the Transaction Documents and otherwise to carry out its obligations thereunder.  The execution, delivery and performance by Purchaser of the transactions
contemplated by this Agreement have been duly authorized by all necessary company or similar action on the part of Purchaser.  Each Transaction Document, including any promissory note issued by the Purchaser, to which it is a party has been, or will be, duly executed by Purchaser, and when delivered by Purchaser in accordance with the terms hereof, will constitute the valid and legally binding obligation of Purchaser, enforceable against it in accordance with its terms, except (a) as limited by general equitable principles and applicable bankruptcy, insolvency, reorganization, moratorium and other laws of general application affecting enforcement of creditors’ rights generally, (b) as limited by laws relating to the availability of specific performance, injunctive relief or other equitable remedies, and (c) insofar as indemnification and contribution provisions may be
limited by applicable law.

 

2. Purchaser Status. At the time Purchaser was offered the Shares, it was, and at the Execution Date it is an “accredited investor” as defined in Rule 501(a) under the Act.

 

3. Experience of Purchaser.  Purchaser, either alone or together with its representatives, has such knowledge, sophistication and experience in business and financial matters so as to be capable of evaluating the merits and risks of the prospective investment in the Shares, and has so evaluated the merits and risks of such investment.  Purchaser is able to bear the economic risk of an investment in the Shares and,
at the present time, is able to afford a complete loss of such investment.

 

4. Ownership. Purchaser is acquiring the Shares as principal for its own account.  Purchaser is acquiring the Shares hereunder in the ordinary course of its business.  Prior to the Execution Date, neither the Purchaser nor any of its Affiliates owned or had the right to acquire any shares of capital stock or voting power of the Company. General Solicitation.

 

5. No General Solicitation.  Purchaser is not purchasing the Shares as a result of any registration statements filed by Company with the Commission, any advertisement, article, notice or other communication regarding the Shares published in any newspaper, magazine or similar media or broadcast over television or radio or presented at any seminar or any other general solicitation or general advertisement.  Purchaser
had a substantive, pre-existing relationship with Company prior to the Execution Date.

 

6. No Short Sales.  Purchaser and its Affiliates (a) do not hold any short position in the Common Stock, and (b) have never engaged in any Short Sales of the Common Stock, prior to the Execution Date.

 

7. Legend.  The certificates representing the Preferred Shares will be issued with the following restrictive legend:

 

THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR QUALIFIED UNDER APPLICABLE STATE SECURITIES LAWS. THESE SECURITIES MAY NOT BE SOLD OR OTHERWISE PLEDGED OR TRANSFERRED UNLESS A REGISTRATION STATEMENT UNDER THE SEDURITIES AT OF 1933, AS AMENDED, IS IN EFFECT WITH RESPECT TO THE TRANSFER OF SUCH SECURITIES OR THE COMPANY HAS RECEIVED AN OPINION IN FORM AND SUBSTANCE SATISFACTORY TO THE COMPANY PROVIDING THAT AN EXEMPTION FORM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT OF 1933, AS AMENDED, IS AVAILABLE.

 

V. Securities Provisions.

 

A. Furnishing of Information.  As long as Purchaser owns any Shares, Company covenants to timely file, or obtain extensions in respect thereof and file within the applicable grace period, all reports required to be filed by Company after the Execution Date pursuant to the Exchange Act.  As long as Purchaser owns any Shares, if Company is not required to file reports pursuant to such laws, it will prepare and furnish
to Purchaser and make publicly available in accordance with Rule 144(c) such information as is required for Purchaser to sell the Shares under Rule 144.  Company further covenants that it will take such further action as any holder of Shares may reasonably request, all to the extent required from time to time to enable such Person to sell such Shares without registration under the Act within the limitation of the exemptions provided by Rule 144.

 

B. Integration.  Company will not sell, offer for sale or solicit offers to buy or otherwise negotiate in respect of any security, as defined in Section 2 of the Act, that would be integrated with the offer or sale of the Shares in a manner that would be integrated with the offer or sale of the Shares to Purchaser for purposes of the rules and regulations of any Trading Market such that it would require stockholder approval
prior to the closing of such other transaction unless stockholder approval is obtained before the closing of such subsequent transaction.

 

C. Disclosure and Publicity.  Company and Purchaser will consult with each other in issuing any press releases with respect to the transactions contemplated hereby, and neither Company nor Purchaser will issue any such press release or otherwise make any such public statement without the prior consent of Company, with respect to any such press release of Purchaser, or without the prior consent of Purchaser, with respect to
any such press release of Company, which consent will not unreasonably be withheld or delayed, except if such disclosure is required by law or Trading Market regulations, in which case the disclosing party will promptly provide the other party with prior notice of such public statement or communication.  Notwithstanding the foregoing, Company will not publicly disclose the name of Purchaser, or include the name of Purchaser in any filing with the Commission or any regulatory agency or Trading Market, without the prior written consent of Purchaser, except to the extent such disclosure is required by the Act, Exchange Act or Trading Market regulations, in which case Company will provide Purchaser with prior notice of such disclosure.

 

D. Shareholders Rights Plan. No claim will be made or enforced by Company or, to the knowledge of Company, any other Person that Purchaser is an “Acquiring Person” under any shareholders rights plan or similar plan or arrangement in effect or hereafter adopted by Company, or that Purchaser could be deemed to trigger the provisions of any such plan or arrangement, by virtue of receiving Shares under the Transaction Documents
or under any other agreement between Company and Purchaser. Company will conduct its business in a manner so that it will not become subject to the Investment Company Act of 1940, as amended.

 

E. No Non-Public Information.  Company covenants and agrees that neither it nor any other Person acting on its behalf will, provide Purchaser or its agents or counsel with any information that Company believes or reasonably should believe constitutes material non-public information.  On and after the Announcement Date, neither Purchaser nor any Affiliate of Purchaser will have any duty of trust or confidence that is
owed directly, indirectly, or derivatively, to Company or the stockholders of Company, or to any other Person who is the source of material non-public information regarding Company.  Company understands and confirms that Purchaser will be relying on the foregoing in effecting transactions in securities of Company, including without limitation sales of the Shares.

 

F. Indemnification of Purchaser.

 

1. Obligation to Indemnify.  Subject to the provisions of this Section V.F, Company will indemnify and hold Purchaser, their Affiliates, and each of their directors, officers, shareholders, partners, employees, agents and attorneys, and any person who controls Purchaser within the meaning of Section 15 of
the Act or Section 20 of the Exchange Act (collectively, “Purchaser Parties” and each an “Purchaser Party”), harmless from any and all losses, liabilities, obligations, claims, contingencies, damages, reasonable costs and expenses, including all judgments, amounts paid in settlements, court costs and reasonable attorneys’ fees and costs of investigation (collectively, “Losses”) that any Purchaser Party may suffer or incur as a result of or relating to (a) any breach of any of the representations, warranties, covenants or agreements made by Company in this Agreement or in the other Transaction Documents, (b) any action instituted against any Purchaser Party, or any of them or their
respective Affiliates, by any stockholder of Company who is not an Affiliate of an Purchaser Party, with respect to any of the transactions contemplated by the Transaction Documents, unless such action is based upon a breach of Purchaser’s representations, warranties or covenants under the Transaction Documents or any agreements or understandings Purchaser may have with any such stockholder or any violations by Purchaser of state or federal securities laws or any conduct by Purchaser which constitutes fraud, gross negligence, willful misconduct or malfeasance, (c) any untrue statement or alleged untrue statement of a material fact contained in a Registration Statement, or in a Registration Statement as amended by any post-effective amendment thereof by Company, or arising out of or based upon any omission or alleged omission to state a material fact required to be stated therein
or necessary to make the statements therein not misleading; or (d) any Purchaser Party becoming involved in any capacity in any proceeding by or against any Person who is a stockholder of Company, except as a result of sales, pledges, margin sales and similar transactions by Purchaser to or with any current stockholder, solely as a result of Purchaser’s acquisition of the Shares under this Agreement; provided, however, that Company shall not be obligated to indemnify any Purchaser Party for any Losses finally adjudicated to be caused solely by (i) the Purchaser Party’s material breach of this Agreement or any Transaction Documents, or (ii) the Purchaser Party’s willful misconduct or intentional violation of law.

 

2. Procedure for Indemnification.  If any action will be brought against an Purchaser Party in respect of which indemnity may be sought pursuant to this Agreement, such Purchaser Party will promptly notify Company in writing, and Company will have the right to assume the defense thereof with counsel of its own choosing.  Purchaser Parties will have the right to employ separate counsel in any such action and
participate in the defense thereof, but the fees and expenses of such counsel will be at the expense of Purchaser Parties except to the extent that (a) the employment thereof has been specifically authorized by Company in writing, (b) Company has failed after a reasonable period of time to assume such defense and to employ counsel or (c) in such action there is, in the reasonable opinion of such separate counsel, a material conflict with respect to the dispute in question on any material issue between the position of Company and the position of Purchaser Parties such that it would be inappropriate for one counsel to represent Company and Purchaser Parties.  Company will not be liable to Purchaser Parties under this Agreement (i) for any settlement by an Purchaser Party effected without Company’s prior written consent, which will not be unreasonably withheld or delayed;
or (ii) to the extent, but only to the extent that a loss, claim, damage or liability is either attributable to Purchaser’s breach of any of the representations, warranties, covenants or agreements made by Purchaser in this Agreement or in the other Transaction Documents.

 

3. No Purchaser Party will have any liability to Company or any Person asserting claims on behalf of or in right of Company as a result of acquiring the Shares under this Agreement.

 

G. Reservation of Shares.  Company will maintain a reserve from its duly authorized shares of Common Stock for issuance pursuant to the Transaction Documents in such amount as may be required to fulfill its obligations in full under the Transaction Documents.

 

H. Required Approval.  No transactions contemplated under this Agreement or the Transaction Documents will be consummated for an amount that would require approval by any Trading Market or Company stockholders under any approval provisions, rules or regulations of any Trading Market applicable to Company, unless and until such approval is obtained.  Company will use reasonable efforts to obtain any required approval
as soon as practicable.

 

I. Activity Restrictions.  For so long as Purchaser or any of its Affiliates holds any Shares, neither Purchaser nor any Affiliate will:  (i) vote any shares of Common Stock owned or controlled by it, solicit any proxies, or seek to advise or influence any Person with respect to any voting securities of Company; (ii) engage or participate in any actions, plans or proposals which relate to or would result in (a)
acquiring additional securities of Company, alone or together with any other Person, which would result in beneficially owning or controlling more than 9.99% of the total outstanding Common Stock or other voting securities of Company, (b) an extraordinary corporate transaction, such as a merger, reorganization or liquidation, involving Company or any of its subsidiaries, (c) a sale or transfer of a material amount of assets of Company or any of its subsidiaries, (d) any change in the present board of directors or management of Company, including any plans or proposals to change the number or term of directors or to fill any existing vacancies on the board, (e) any material change in the present capitalization or dividend policy of Company, (f) any other material change in Company’s business or corporate structure, including but not limited to, if Company is a registered closed-end
investment company, any plans or proposals to make any changes in its investment policy for which a vote is required by Section 13 of the Investment Company Act of 1940, (g) changes in Company’s charter, bylaws or instruments corresponding thereto or other actions which may impede the acquisition of control of Company by any Person, (h) causing a class of securities of Company to be delisted from a national securities exchange or to cease to be authorized to be quoted in an inter-dealer quotation system of a registered national securities association, (i) a class of equity securities of Company becoming eligible for termination of registration pursuant  to Section 12(g)(4) of the Act, or (j) any action, intention, plan or arrangement similar to any of those enumerated above; or (iii) request Company or its directors, officers, employees, agents or representatives to
amend or waive any provision of this section.

 

J. No Restrictive Covenants.  Company will not within one year of the Execution  Date enter into any agreement, understanding or arrangement directly or indirectly blocking or restricting in any manner the terms of any existing or potential transaction with Purchaser or any Affiliate of Purchaser, including without limitation the issuance of any form of securities, or which provides for
any reset, adjustment or change to any terms of any agreement with any other Person or any securities issued to any other Person based upon, arising out of, or relating to any future transaction with Purchaser or any Affiliate of Purchaser, or any issuance of any form of security to Purchaser or any Affiliate of Purchaser, and any such agreement shall be void ab initio and ineffective for any purpose whatsoever.

 

K. No Shorting.  Purchaser and its Affiliates will not engage in or effect, directly or indirectly, any Short Sale that results in a net short position of the Common Stock within one year of the Execution Date.

 

VI. General Provisions.

 

A. Notice.  Unless a different time of day or method of delivery is set forth in the Transaction Documents, any and all notices or other communications or deliveries required or permitted to be provided hereunder will be in writing and will be deemed given and effective on the earliest of:  (a) the date of transmission, if such notice or communication is delivered via facsimile or electronic mail prior to 5:00 p.m.
Eastern time on a Trading Day and an electronic confirmation of delivery is received by the sender, (b) the next Trading Day after the date of transmission, if such notice or communication is delivered later than 5:00 p.m. Eastern time or on a day that is not a Trading Day, (c) the next Trading Day following the date of mailing, if sent by U.S. nationally recognized overnight courier service, or (d) upon actual receipt by the party to whom such notice is required to be given.  The addresses for such notices and communications are those set below, or such other address as may be designated in writing hereafter, in the same manner, by such Person.

 

If to Purchaser:                                                                If to Company:

Ironridge Global III, LLC                                                                ULURU Inc.

425 California Street, Suite 1010                                                      4452 Beltway Drive

San Francisco, California 94104                                                       Addison, Texas 75001

Attn:  Brendan O’Neil                                                                     Attn:  Kerry Gray

B. Amendments; Waivers.  No provision of this Agreement may be waived or amended except in a written instrument signed by Company and Purchaser.  No waiver of any default with respect to any provision, condition or requirement of this Agreement will be deemed to be a continuing waiver in the future or a waiver of any subsequent default or a waiver of any other provision, condition or requirement hereof, nor will any
delay or omission of either party to exercise any right hereunder in any manner impair the exercise of any such right.

 

C. Successors and Assigns.  This Agreement will be binding upon and inure to the benefit of the parties and their successors and permitted assigns.  Neither party may assign this Agreement or any rights or obligations hereunder.

 

D. No Third-Party Beneficiaries.  This Agreement is intended for the benefit of the parties hereto and their respective successors and permitted assigns and is not for the benefit of, nor may any provision hereof be enforced by, any other Person, except as
otherwise set forth in Section V.J.

 

E. Fees and Expenses.  Company will pay the reasonable fees and costs of Purchaser’s counsel incurred in connection with this Agreement, the other Transaction Documents, each Closing, and the transactions contemplated hereby and thereby.  Except as otherwise provided in this Agreement, each party will pay the fees and expenses of its own advisers, counsel, accountants and other experts, if any, and all other
expenses incurred by such party incident to the negotiation, preparation, execution, delivery and performance of the Transaction Documents.  Company acknowledges and agrees that Purchaser’s counsel solely represents Purchaser, and does not represent Company or its interests in connection with the Transaction Documents or the transactions contemplated thereby.  Company will pay all stamp and other taxes and duties levied in connection with the sale of the Shares, if any.

 

F. Severability.  If any provision of this Agreement is held to be invalid or unenforceable in any respect, the validity and enforceability of the remaining terms and provisions of this Agreement will not in any way be affected or impaired thereby and the parties will attempt to agree upon a valid and enforceable provision that is a reasonable substitute therefor, and upon so agreeing, will incorporate such substitute
provision in this Agreement.

 

G. Replacement of Certificates.  If any certificate or instrument evidencing any Shares is mutilated, lost, stolen or destroyed, Company will issue or cause to be issued in exchange and substitution for and upon cancellation thereof, or in lieu of and
substitution therefor, a new certificate or instrument, but only upon receipt of evidence reasonably satisfactory to Company of such loss, theft or destruction and customary and reasonable indemnity, if requested.  The applicants for a new certificate or instrument under such circumstances will also pay any reasonable third-party costs associated with the issuance of such replacement certificates.

 

H. Governing Law.  All questions concerning the construction, validity, enforcement and interpretation of the Transaction Documents will be governed by and construed and enforced in accordance with the laws of the State of New York, without regard to the principles of conflicts of law that would require or permit the application of the laws of any other jurisdiction.  The parties hereby waive all rights to a trial
by jury.  If either party will commence an action or proceeding to enforce any provisions of the Transaction Documents, then the prevailing party in such action or proceeding will be reimbursed by the other party for its reasonable attorneys’ fees and other costs and expenses reasonably incurred in connection with the investigation, preparation and prosecution of such action or proceeding.

 

I. Arbitration.  Any dispute, controversy, claim or action of any kind arising out of or relating to this Agreement, or in any way involving Company and Purchaser or their respective Affiliates, will be resolved by final and binding arbitration before a retired judge at JAMS (www.jamsadr.com), or its successor, in Santa Monica, California, pursuant to its most Streamlined Arbitration Rules and Procedures and the Final Offer
(or Baseball) Arbitration Option.  Any interim or final award may be entered and enforced by any court of competent jurisdiction.  The final award will include the prevailing party’s reasonable arbitration, expert witness and attorney fees, costs and expenses.

 

J. Remedies.  In addition to being entitled to exercise all rights provided herein or granted by law, including recovery of damages, each of Purchaser and Company will be entitled to specific performance under the Transaction Documents, and injunctive relief to prevent any actual or threatened breach under the Transaction Documents, to the full extent permitted under federal and state securities laws.

 

K. Payment Set Aside.  To the extent that Company makes a payment or payments to Purchaser pursuant to any Transaction Document or Purchaser enforces or exercises its rights thereunder, and such payment or payments or the proceeds of such enforcement or exercise or any part thereof are subsequently invalidated, declared to be fraudulent or preferential, set aside, recovered from, disgorged by or are required to be refunded,
repaid or otherwise restored to Company, a trustee, receiver or any other person under any law, including, without limitation, any bankruptcy law, state or federal law, common law or equitable cause of action, then to the extent of any such restoration the obligation or part thereof originally intended to be satisfied will be revived and continued in full force and effect as if such payment had not been made or such enforcement or setoff had not occurred.

 

L. Headings.  The headings herein are for convenience only, do not constitute a part of this Agreement and will not be deemed to limit or affect any of the provisions hereof

 

M. Time of the Essence. Time is of the essence with respect to all provisions of this Agreement that specify a time for performance.

 

N. Survival. The representations and warranties contained herein will survive each Closing and the delivery of the Shares.

 

O. Construction. The parties agree that each of them and/or their respective counsel has reviewed and had an opportunity to revise the Transaction Documents and, therefore, the normal rule of construction to the effect that any ambiguities are to be resolved against the drafting party will not be employed in the interpretation of the Transaction Documents or any amendments hereto. The language used in this Agreement will be deemed to
be the language chosen by the parties to express their mutual intent, and no rules of strict construction will be applied against any party.

 

P. Execution.  This Agreement may be executed in two or more counterparts, all of which when taken together will be considered one and the same agreement and will become effective when counterparts have been signed by each party and delivered to the other party, it being understood that both parties need not sign the same counterpart.  In the event that any signature is delivered by portable document format,
facsimile or electronic transmission, such signature will create a valid and binding obligation of the party executing (or on whose behalf such signature is executed) with the same force and effect as if such signature page were an original thereof.

 

Q. Entire Agreement.  This Agreement, together with the Exhibits hereto which are incorporated herein by reference, contains the entire agreement and understanding of the parties, and supersedes all prior and contemporaneous agreements, term sheets, letters, discussions, communications and understandings, both oral and written, which the parties acknowledge have been merged into this Agreement.  No party,
representative, attorney or agent has relied upon any collateral contract, agreement, assurance, promise, understanding or representation not expressly set forth hereinabove.  The parties hereby expressly waive all rights and remedies, at law and in equity, directly or indirectly arising out of or relating to, or which may arise as a result of, any Person’s reliance on any such assurance.

 

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed by their respective authorized signatories as of the Execution Date.

 

 

Company:

 

ULURU INC.

a Nevada corporation

	  	  	  	  
	  	
Signed:

	
/s/ Kerry P. Gray

	  
	  	
Name:

	
Kerry P. Gray

	  
	  	
Title:

	
President & Chief Executive Officer

	  

Purchaser:

 

IRONRIDGE GLOBAL III, LLC,

a Delaware limited liability company

 

	  	  	  	  
	  	
Signed:

	
/s/ John C. Kirkland

	  
	  	
Name:

	
John C. Kirkland

	  
	  	
Title:

	
Managing Director

	  

 

  

  

  

Exhibit 1

 

Glossary of Defined Terms

 

 

“Act” means the Securities Act of 1933, as amended, and the rules and regulations promulgated by the Commission thereunder.

 

“Action” has the meaning set forth in Section IV.A.4.

 

“Affiliate” means any Person that, directly or indirectly through one or more intermediaries, controls, is controlled by, or is under common control with a Person, as such terms are used in and construed under Rule 144 under the Act.

 

“Agreement” means this Preferred Stock Purchase Agreement.

 

“Announcement Date” means the Trading Day by which the Company has widely publicly disclosed prior to 8:30 a.m. Eastern time all material terms of the Transaction Documents and the transactions contemplated thereby, in accordance with Regulation FD.

 

“Bloomberg” means Bloomberg Financial Markets, or its successor performing similar functions.

 

“British Pound Sterling Exchange Rate” means 1.5981.

 

“Certificate of Designations” means the certificate to be filed with the Secretary of State of the State of Nevada, in the form attached hereto as Exhibit 4.

 

 “Closing Price” means, for any security as of any date, the last closing bid price for such security on the Trading Market, as reported by Bloomberg, or, if the Trading Market begins to operate on an extended hours basis and does not designate the closing bid price, then the last bid price of such security prior to 4:00 p.m. Eastern time, as reported by Bloomberg, or, if the Trading Market is not the principal securities exchange or trading market for such security, the last closing bid price of such security on the principal securities exchange or trading market where such security is listed or traded as reported by Bloomberg, or if the
foregoing do not apply, the last closing bid price of such security in the over-the-counter market on the electronic bulletin board for such security as reported by Bloomberg, or, if no closing bid price is reported for such security by Bloomberg, the average of the bid prices of any market makers for such security as reported in the “pink sheets” by Pink Sheets LLC (formerly the National Quotation Bureau, Inc.).  If the Closing Price cannot be calculated for a security on a particular date on any of the foregoing bases, the Closing Price of such security on such date will be the fair market value as mutually determined by Purchaser and Company.  All such determinations to be appropriately adjusted for any stock dividend, stock split, stock combination or other similar transaction during the applicable calculation period.

 

“Commission” means the U.S. Securities and Exchange Commission.

 

“Commitment Closing” has the meaning set forth in Section II.B.1.

 

“Common Shares” includes the Shares of Common Stock issuable upon conversion of the Preferred Shares.

 

 “Common Stock” means the common stock, par value $0.001 per share, of Company and any replacement or substitute thereof, or any share capital into which such Common Stock will have been changed or any share capital resulting from a reclassification of such Common Stock.

 

“Company” has the meaning set forth in the first paragraph of the Agreement.

 

“Delisting Event” means any time during the term of this Agreement, that the Common Stock is not listed for and actively trading on a Trading Market, or is suspended or delisted with respect to the trading of shares of the Common Stock on a Trading Market.

 

“Disclosure Schedules” means the disclosure schedules of Company delivered concurrently herewith, attached hereto, and incorporated herein by reference.  The Disclosure Schedules will contain no material non-public information that will not be publicly disclosed prior to the Announcement Date.

“DTC” means The Depository Trust Company, or any successor performing substantially the same function with respect to the Common Stock.

 

“DWAC Shares” means all Shares or other shares of Common Stock issued or issuable to Purchaser or any Affiliate, successor or assign of Purchaser pursuant to any of the Transaction Documents, all of which will be (a) issued in electronic form, (b) freely tradable and without restriction on resale, and (c) timely credited by Company to the specified Deposit/Withdrawal at Custodian (DWAC) account with DTC under its Fast Automated Securities Transfer (FAST) Program or any similar program hereafter adopted by DTC performing substantially the same function, in accordance with irrevocable instructions issued to and countersigned by the Transfer Agent,
in the form attached hereto as Exhibit 5 or in such other form agreed upon by the parties.

 

“Exchange Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated by the Commission thereunder.

 

“Execution Date” has the meaning set forth in the first paragraph of the Agreement.

 

“Floor Price” means an amount equal to 70% of the Closing Price of the Common Stock on the Trading Day immediately preceding the Announcement Date

 

“Fundamental Transaction” means and will be deemed to have occurred at such time upon any of the following events:

 

A. A consolidation, merger or other business combination or event or transaction following which the holders of Common Stock immediately preceding such consolidation, merger, combination or event either (a) no longer hold a majority of the shares of Common Stock or (b) no longer have the ability to elect a majority of the board of directors of Company;

 

B. The sale or transfer of all or substantially all of Company’s assets, other than in the ordinary course of business; or

 

C. A purchase, tender or exchange offer made to the holders of the outstanding shares of Common Stock.

 

“GAAP” means U.S. generally accepted accounting principles applied on a consistent basis during the periods involved.

 

“Indebtedness” means (a) any liabilities for borrowed money or amounts owed in excess of $100,000, other than trade accounts payable incurred in the ordinary course of business, (b) all guaranties, endorsements and other contingent obligations in respect of Indebtedness of others, whether or not the same are or should be reflected in Company’s balance sheet, or the notes thereto, except guaranties by endorsement of negotiable instruments for deposit or collection or similar transactions in the ordinary course of business; and (c) the present value of any lease payments in excess of $100,000 due under leases required to be capitalized in
accordance with GAAP.

 

“Intellectual Property Rights” has the meaning set forth in Section IV.B.10.

 

“LIBOR Rate” means 0.815%.

 

“Liens” means a lien, charge, security interest, encumbrance, right of first refusal, preemptive right or other restriction.

 

“Material Adverse Effect” includes any material adverse effect on (a) the legality, validity or enforceability of any Transaction Document, (b) the results of operations, assets, business, prospects or financial condition of Company and the Subsidiaries, taken as a whole, or (c) a Company’s ability to perform in any material respect on a timely basis its obligations under any Transaction Document.

 

“Material Permits” has the meaning set forth in Section IV.B.8.

 

“Notice” has the meaning set forth in Section II.C.2.

 

“Notice Date” means the Trading Date on which the Notice is delivered by fax or electronic mail, with confirming copy by overnight carrier, and received by Purchaser prior to 8:30 a.m. Eastern time.  A Notice delivered after 8:30 a.m. Eastern time on any Trading Day, or at any time on a non-Trading Day, will be deemed delivered on the next Trading Day.

 

 “Officer’s Certificate” means a certificate in customary form reasonably acceptable to Purchaser, executed by an authorized officer of Company, the form of which is attached as Exhibit 7.

 

“Opinion” means an opinion from Company’s independent legal counsel, in the form attached as Exhibit 6 or in such other form agreed upon by the parties, to be delivered in connection with each Closing.

 

 “Person” means an individual or corporation, partnership, trust, incorporated or unincorporated association, joint venture, limited liability company, joint stock company, government, or an agency or subdivision thereof, or other entity of any kind.

 

“Preferred Shares” means shares of Series A Preferred Stock, par value $0.001 per share, of Company provided for in the Certificate of Designations, to be issued to Purchaser pursuant to this Agreement.

 

 “Public Reports” includes all reports required to be filed by Company under the Act or the Exchange Act, including pursuant to Section 13(a) or 15(d) thereof, for the two years preceding the Execution Date.

 

“Purchase Amount” has the meaning set forth in Section II.A.1.

 

“Purchaser” has the meaning set forth in the first paragraph of the Agreement.

 

“Rate Factor” means 2.3778.

 

“Required Approval” means any approval of the Trading Market or Company’s stockholders required to be obtained by Company prior to issuing the Shares pursuant to any applicable rules of the Trading Market.

 

“Secretary’s Certificate” means a certificate, the form of which is attached as Exhibit 8, signed by the secretary of Company.

 

“Shares” include the Preferred Shares and the Common Shares.

 

“Share Price” means the Closing Price of the Common Stock on the Trading Day immediately preceding the Announcement Date.

 

“Short Sales” means short sales as defined in Rule 200 of Regulation SHO of the Exchange Act.

 

“Subsidiary” means any Person Company owns or controls, or in which Company, directly or indirectly, owns a majority of the capital stock or similar interest that would be disclosable pursuant to Regulation S-K, Item 601(b)(21).

 

“Trading Day” means any day on which the Common Stock is traded on the Trading Market; provided that it will not include any day on which the Common Stock is (a) scheduled to trade for less than 5 hours, or (b) suspended from trading.

 

“Trading Market” means the Pink Sheets, OTC Bulletin Board, OTCQB, OTCQC, NASDAQ Capital Market, NASDAQ Global Market, NASDAQ Global Select Market, NYSE Amex, or New York Stock Exchange, whichever is at the time the principal trading exchange, quotation service or market for the Common Stock.

 

“Transaction Documents” means this Agreement, the other agreements and documents referenced herein, and the exhibits, schedules and appendices hereto and thereto.

 

“Transfer Agent” means Continental Stock Transfer & Trust Company, or any successor transfer agent for the Common Stock.

 

“VWAP” means, for any Trading Day, the volume-weighted average price, calculated by dividing the aggregate value of Common Stock traded on the Trading Market during regular hours (price per share multiplied by number of shares traded) by the total volume (number of shares) of Common Stock traded on the Trading Market for such Trading Day.

 

                                                                                                                                         Page 

  

  

  

Exhibit 2

 

Form of Certificate of Designations

ULURU INC.

CERTIFICATE OF DESIGNATIONS OF PREFERENCES,

RIGHTS AND LIMITATIONS

OF

SERIES A PREFERRED STOCK

The undersigned, Kerry P. Gray and Terrance K. Wallberg, hereby certify that:

 

1.           They are the Chief Executive Officer and Chief Financial Officer, respectively, of ULURU Inc., a Nevada corporation (the “Corporation”).

 

2.           The Corporation is authorized to issue 20,000 shares of preferred stock, none of which are issued or outstanding.

 

3.           The following resolutions were duly adopted by the Board of Directors:

 

WHEREAS, the Articles of Incorporation of the Corporation provides for a class of its authorized stock known as preferred stock, comprised of 20,000 shares, $0.001 par value per share (the “Preferred Stock”), issuable from time to time in one or more series;

 

WHEREAS, the Board of Directors of the Corporation is authorized to fix the dividend rights, dividend rate, voting rights, conversion rights, rights and terms of redemption and liquidation preferences of any wholly unissued series of Preferred Stock and the number of shares constituting any Series and the designation thereof, of any of them;

 

WHEREAS, it is the desire of the Board of Directors of the Corporation, pursuant to its authority as aforesaid and as set forth in this Certificate of Designations of Preferences, Rights and Limitations of Series A Preferred Stock, to designate the rights, preferences, restrictions and other matters relating to the Series A Preferred Stock, which will consist of up to 1,000 shares of the Preferred Stock which the Corporation has the authority to issue, as follows:

 

NOW, THEREFORE, BE IT RESOLVED, that the Board of Directors does hereby provide for the issuance of a series of Preferred Stock for cash or exchange of other securities, rights or property and does hereby fix and determine the rights, preferences, restrictions and other matters relating to such series of Preferred Stock as follows:

 

I. Terms of Preferred Stock.

 

 A.Designation, Amount and Par Value.  The series of Preferred Stock will be designated as the Corporation’s Series A Preferred Stock (the
“Series A Preferred Stock”) and the number of shares so designated will be 1,000, which will not be subject to increase without any consent of the holders of the Series A Preferred Stock (each a “Holder” and collectively, the “Holders”) that may be required by applicable law.  Each share of Series A Preferred Stock will have a par value of $0.001 per share.

 

B.     Ranking and Voting.

           1. Ranking.  The Series A Preferred Stock will, with respect to dividend rights and rights upon liquidation, winding-up
or dissolution, rank: (a) senior with respect to dividends  and pari passu in right of liquidation with the Corporation’s common stock, par value $0.001 per share (“Common Stock”); (b) pari passu with respect to dividends and junior in right of liquidation with respect to any other class or series of Preferred Stock of the Corporation; and (c) junior to all existing and future indebtedness of the Corporation.

 

2. Voting.  Except as required by applicable law or as set forth herein, the holders of shares of Series A Preferred Stock will have no right to vote on any matters, questions or proceedings of this Corporation including, without limitation, the election of directors.

 

C. Dividends and Other Distributions.  Commencing on the date of the issuance of each share of Series A Preferred Stock (each respectively an “Issuance Date”), Holders of Series A Preferred Stock will be entitled to receive dividends on each outstanding share of Series A Preferred Stock (“Dividends”), which will
accrue in shares of Series A Preferred Stock at a rate equal to 7.5% per annum from the Issuance Date.  Accrued Dividends will be payable upon redemption of the Series A Preferred Stock in accordance with Section I.F.

 

1. Any calculation of the amount of such Dividends payable pursuant to the provisions of this Section I.C. will be made based on a 365-day year and on the number of days actually elapsed during the applicable calendar quarter, compounded annually.

 

2. So long as any shares of Series A Preferred Stock are outstanding, no dividends or other distributions will be paid, declared or set apart with respect to any Common Stock.  The Common Stock will not be redeemed while the Series A Preferred Stock is outstanding.

 

D. Protective Provision.  So long as any shares of Series A Preferred Stock are outstanding, the Corporation will not, without the affirmative approval of the Holders of a majority of the shares of the Series A Preferred Stock then outstanding (voting as a class), (i) alter or change adversely the powers, preferences or rights given to the Series A Preferred Stock or alter or amend this Certificate of Designations, (ii) authorize or create any
class of stock ranking as to distribution of dividends senior to the Series A Preferred Stock, (iii) amend its Articles of Incorporation or other charter documents in breach of any of the provisions hereof, (iv) increase the authorized number of shares of Series A Preferred Stock, (v) liquidate, dissolve or wind-up the business and affairs of the Corporation, other than in connection with a Deemed Liquidation Event (as defined below), or (vi) enter into any agreement with respect to the foregoing.

 

1. A “Deemed Liquidation Event” will mean:  (a) a merger or consolidation in which the Corporation is a constituent party or a subsidiary of the Corporation is a constituent party and the Corporation issues shares of its capital stock pursuant to such merger or consolidation, except any such merger or consolidation involving the Corporation or a subsidiary in which the shares of capital stock of the Corporation outstanding immediately prior to such merger or consolidation continue to represent, or are converted into
or exchanged for shares of capital stock that represent, immediately following such merger or consolidation, at least a majority, by voting power, of the capital stock of the surviving or resulting corporation or if the surviving or resulting corporation is a wholly owned subsidiary of another corporation immediately following such merger or consolidation, the parent corporation of such surviving or resulting corporation; or (b) the sale, lease, transfer, exclusive license or other disposition, in a single transaction or series of related transactions, by the Corporation or any subsidiary of the Corporation of all or substantially all the assets of the Corporation and its subsidiaries taken as a whole,  or the sale or disposition (whether by merger or otherwise) of one or more subsidiaries of the Corporation if substantially all of the assets of the Corporation and its
subsidiaries taken as a whole are held by such subsidiary or subsidiaries, except where such sale, lease, transfer, exclusive license or other disposition is to a wholly owned subsidiary of the Corporation.

 

2. The Corporation will not have the power to effect a Deemed Liquidation Event referred to in Section I.D.1 unless the agreement or plan of merger or consolidation for such transaction provides that the consideration payable to the stockholders of the Corporation will be allocated among the holders of capital stock of the Corporation in accordance with Section I.E.

 

E. Liquidation.

 

1. Upon any liquidation, dissolution or winding up of the Corporation, whether voluntary or involuntary, after payment or provision for payment of debts and other liabilities of the Corporation, pari passu with any distribution or payment made to the holders of Common Stock by reason of their ownership thereof, the Holders of Series A Preferred Stock will be entitled to be paid out of the assets of the Corporation available for distribution to its stockholders an amount with respect to each share of Series A Preferred Stock equal to $10,000.00 (the
“Original Series A Issue Price”), plus any accrued but unpaid Dividends thereon (collectively, the “Series A Liquidation Value”), and the holders of Series A Preferred Stock shall thereafter be entitled to no further distributions.  If, upon any liquidation, dissolution or winding up of the Corporation, whether voluntary or involuntary, the amounts payable with respect to the shares of Series A Preferred Stock are not paid in full, the holders of shares of Series A Preferred Stock will share equally and ratably with the holders of shares of Common Stock in any distribution of assets of the Corporation in proportion to the liquidation preference and an amount equal to all accumulated and
unpaid Dividends, if any, to which each such holder is entitled

 

2. If, upon any liquidation, dissolution or winding up of the Corporation, the assets of the Corporation will be insufficient to make payment in full to all Holders, then such assets will be distributed among the Holders at the time outstanding, ratably in proportion to the full amounts to which they would otherwise be respectively entitled.

 

F. Redemption.

 

1. Corporation’s Redemption Rights. Upon or after the seventh anniversary of the initial Issuance Date, the Corporation will have the right, at the Corporation’s sole option in its absolute discretion, to redeem all or a portion of the shares of Series A Preferred Stock, at a
price per share equal to 100% of the Series A Liquidation Value (the “Corporation Redemption Price”).

 

2. Corporation’s Early Redemption Rights.  Prior to redemption pursuant to Section I.F.1 hereof, the Corporation will have the right, at the Corporation’s sole option in its absolute discretion, to redeem all or a
portion of the shares of Series A Preferred Stock at any time or times after (but not on or before) the six-month anniversary of the issuance date of such Series A Preferred Stock, at a price per share (the “Early Redemption Price”) equal to:   (a) the Corporation Redemption Price, divided by (b) the British Pound Sterling Exchange Rate, multiplied by (c) one plus the LIBOR Rate, multiplied by (d) the Rate Factor, for the first calendar month after the issuance date, and decreasing each calendar month thereafter by an amount equal to 0.595% of the Early Redemption Price for the first month.

 

3. Mandatory Redemption.  If the Corporation determines to liquidate, dissolve or wind-up its business and affairs, or effect any Deemed Liquidation Event, the Corporation will redeem the Series A Preferred Stock at the applicable Early Redemption Price set forth in Section I.F.2.

 

4. Mechanics of Redemption.  If the Corporation elects to redeem any of the Holders’ Series A Preferred Stock then outstanding, it will deliver written notice thereof via facsimile and overnight courier (“Notice of Redemption at Option of Corporation”) to each Holder, which Notice of Redemption at Option of Corporation will indicate (a) the number of shares of Series A
Preferred Stock that the Corporation is electing to redeem and (b) the applicable Early Redemption Price or Corporation Redemption Price.

 

5. Payment of Redemption Price.  Upon receipt by any Holder of a Notice of Redemption at Option of Corporation, the Holder will promptly submit to the Corporation such Holder’s Series A Preferred Stock certificates.  Upon receipt of such Holder’s Series A Preferred Stock certificates, the Corporation will pay the applicable Corporation Redemption Price or Early Redemption Price to the Holder in cash.

 

G. Corporation’s Conversion Rights.

 

1. Mechanics of Conversion.

 

a. Subject to the terms and conditions hereof, one or more of the Series A Preferred Stock may be converted into shares of Common Stock, at any time or times after (but not on or before) the six-month anniversary of the issuance date of such Series A Preferred Stock, at the sole option of the Corporation in its absolute discretion, by delivery of a written notice to Holder (each a “Conversion Notice”), of the Corporation’s election to convert the Series A Preferred Stock.  On the same Trading Day on which the
Corporation has issued the Conversion Notice the Corporation shall transmit by facsimile or electronic mail a confirmation of issuance of the Conversion Notice to the Holder and the Corporation’s transfer agent (the “Transfer Agent”) and shall authorize the immediate credit by the Transfer Agent of such aggregate number of Conversion Shares to which the Holder is entitled pursuant to such Conversion Notice to Holder’s or its designee’s balance account with The Depository Trust Corporation (DTC) Fast Automated Securities Transfer (FAST) Program, through its Deposit/Withdrawal at Custodian (DWAC) system, time being of the essence.

 

b. Notwithstanding any other provision:  (i) no fractional shares of Common Stock are to be issued upon conversion of Series A Preferred Stock, but rather the Corporation shall issue to Holder scrip or warrants in registered form (certificated or uncertificated) which shall entitle Holder to receive a full share upon the surrender of such scrip or warrants aggregating a full share; (ii) the Holder shall not be required to deliver the original certificates for the Series A Preferred Stock in order to effect a conversion hereunder; (iii)
the delivery of a Conversion Notice and the issuance and delivery of Conversion Shares to Holder shall be subject to the Equity Conditions, and (iv) the Corporation shall pay any taxes which may be payable with respect to the issuance and delivery of Conversion Shares to Holder, other than Holder’s income or capital gains taxes.

 

2. Conversion.

 

a. In the event of a conversion of any Series A Preferred Stock pursuant to a Conversion Notice, the Corporation shall issue to the Holder of such Series A Preferred Stock a number of Conversion Shares equal to (i) the Early Redemption Price multiplied by (ii) the number of such Series A Preferred Stock subject to the Conversion Notice divided by (iii) the lower of (A) the Conversion Price with respect to such Series A Preferred Stock and (B) 85% of the average of the daily VWAPs of the Common Stock, as reported by Bloomberg, for the 20 Trading Days following Holder’s receipt of the
Conversion Notice; provided, however, in no event shall the lower of (A) and (B) be less than $0.001.

 

b. As an alternative to a conversion under Section I.G.2(a) above, in the event that the Closing Price of the Common Stock exceeds 150% of the Conversion Price with respect to a Series A Preferred Stock for any 20 consecutive Trading Days, upon a conversion of any Series A Preferred Stock pursuant to a Conversion Notice, the Corporation shall issue to the Holder of such Series A Preferred Stock a number of Conversion Shares equal to (i) the Early Redemption Price multiplied by (ii) the number of such Series A Preferred Stock subject to
the Conversion Notice divided by (iii) the Conversion Price with respect to such Series A Preferred Stock.

 

3. Stock Splits.  If the Corporation at any time on or after the date of issuance of any Preferred Stock subdivides (by any stock split, stock dividend, recapitalization or otherwise) one or more classes of its outstanding shares of Common Stock into a greater number of shares, the Conversion Price in effect immediately prior to such subdivision will be proportionately reduced and the number of Conversion Shares will be proportionately increased.
If the Corporation at any time on or after such issuance date combines (by combination, reverse stock split or otherwise) one or more classes of its outstanding shares of Common Stock into a smaller number of shares, the Conversion Price in effect immediately prior to such combination will be proportionately increased and the number of Conversion Shares will be proportionately decreased. Any adjustment under this Section I.G.3 shall become effective at the close of business on the date the subdivision or combination becomes effective.

 

4. Rights.  In addition to any adjustments pursuant to Section I.G.4, if at any time the Corporation grants, issues or sells any options, convertible securities or rights to purchase stock, warrants, securities or other property pro rata to all of the record holders of any class of shares of Common Stock (the “Purchase
Rights”), then Holder will be entitled to acquire, upon the terms applicable to such Purchase Rights, the aggregate Purchase Rights which Holder could have acquired if Holder had held the number of shares of Common Stock acquirable upon conversion of all Preferred Stock held by Holder immediately before the date on which a record is taken for the grant, issuance or sale of such Purchase Rights, or, if no such record is taken, the date as of which the record holders of shares of Common Stock are to be determined for the grant, issue or sale of such Purchase Rights.

 

5. Definitions. For purposes of this Section I.G, the following terms shall have the following meanings:

 

a. “Announcement Date” with respect to a share of Series A Preferred Stock shall mean the Announcement Date established for the issuance of such Series A Preferred Stock under the Preferred Stock Purchase Agreement pursuant to which such Series A Preferred Stock was issued to the Holder thereof.

 

b. “British Pound Sterling Exchange Rate” with respect to a share of Series A Preferred Stock shall mean the British Pound Sterling Exchange Rate established for such Series A Preferred Stock under the Preferred Stock Purchase Agreement pursuant to which such Series A Preferred Stock was issued to the Holder thereof.

 

c. “Conversion Price” means a price per share of Common Stock equal to the higher of (i) $0.70 per share of Common Stock, or (ii) 130% of the Closing Price of a share of Common Stock on the Trading Day immediately preceding the date of the applicable Announcement Date, subject to adjustment as otherwise provided herein.

 

d. “Conversion Shares” means shares of Common Stock issuable upon conversion of Series A Preferred Stock.

 

e. “Closing Price” means, for any security as of any date, the last closing bid price for such security on the Trading Market, as reported by Bloomberg, or, if the Trading Market begins to operate on an extended hours basis and does not designate the closing bid price, then the last bid price of such security prior to 4:00 p.m., Eastern time, as reported by Bloomberg, or, if the Trading Market is not the principal securities exchange or trading market for such security, the last closing bid price of such security on the
principal securities exchange or trading market where such security is listed or traded as reported by Bloomberg, or if the foregoing do not apply, the last closing bid price of such security in the over-the-counter market on the electronic bulletin board for such security as reported by Bloomberg, or, if no closing bid price is reported for such security by Bloomberg, the average of the bid prices of any market makers for such security as reported in the “pink sheets” by Pink Sheets LLC (formerly the National Quotation Bureau, Inc.).  If the Closing Price cannot be calculated for a security on a particular date on any of the foregoing bases, the Closing Price of such security on such date shall be the fair market value as mutually determined by the Corporation and the holder.

 

f. “Equity Conditions” means (i) on each day during the period beginning 30 Trading Days prior to the applicable date of determination and ending 30 Trading Days after the applicable date of determination (the “Equity Conditions Measuring Period”), (1) the Common Stock is designated for quotation on the Trading Market and shall not have been suspended from trading on such exchange or market nor shall delisting or suspension by such exchange or market been
threatened or pending either (A) in writing by such exchange or market or (B) by falling below the then effective minimum listing maintenance requirements of such exchange or market, and (2) the Closing Price shall not have been below $0.0012; (ii) during the Equity Conditions Measuring Period, the Corporation shall have delivered Conversion Shares upon all conversions or redemptions of Preferred Shares in accordance with their terms to the Holder on a timely basis; (iii) the Corporation shall have no knowledge of any fact that would cause (x) the registration statement under which such Shares were registered not to be effective and available for the resale of all the Conversion Shares or (y) both the registration statement not to be effective and available and Securities Act Rule 144 not to be available for the resale of all the Conversion Shares underlying the Preferred Shares; (iv) a
minimum of $750,000 in aggregate trading volume has traded on the Trading Market during the 20 Trading Dates prior to the date of determination; and (v) the Corporation otherwise shall have been in compliance with and shall not have breached any provision, covenant, representation or warranty of any Transaction Document.

 

g. “LIBOR Rate” with respect to a share of Series A Preferred Stock shall mean the 1-Year LIBOR Rate established for such Series A Preferred Stock under the Preferred Stock Purchase Agreement pursuant to which such Series A Preferred Stock was issued to the Holder thereof.

 

h.  “Rate Factor” with respect to a share of Series A Preferred Stock shall mean the Rate Factor established for the issuance of such Series A Preferred Stock under the Preferred Stock Purchase Agreement pursuant to which such Series A Preferred Stock was issued to the Holder thereof.

 

i. “Trading Day” means any day on which the Common Stock is traded on the Trading Market; provided that it shall not include any day on which the Common Stock is (1) scheduled to trade for less than 5 hours, or (2) suspended from trading.

 

j. “Trading Market” means the Pink Sheets, OTC Bulletin Board, OTCQB, OTCQX, NASDAQ Capital Market, NASDAQ Global Market, NASDAQ Global Select Market, NYSE Amex, or New York Stock Exchange, whichever is at the time the principal trading exchange, quotation system or market for the Common Stock.

 

k. “VWAP” means, for any Trading Day, the volume-weighted average price, calculated by dividing the aggregate value of Common Stock traded on the Trading Market during regular hours (price per share multiplied by number of shares traded) by the total volume (number of shares) of Common Stock traded on the Trading Market for such Trading Day.

 

6. Conversion Limitation.  Notwithstanding any other provision:

 

a. At no time may the Corporation deliver a Conversion Notice if the number of Conversion Shares to be received pursuant to such Conversion Notice, aggregated with all other shares of Common Stock then beneficially (or deemed beneficially) owned by Holder, would result in Holder owning, on the date of delivery of the Conversion Notice, more than 9.99% of all Common Stock outstanding as determined in accordance with Section 13(d) of the Exchange Act and the rules and regulations promulgated thereunder.  In addition, as of any date, the aggregate number of shares of Common Stock into
which the Preferred Stock are convertible within 61 days, together with all other shares of Common Stock then beneficially (or deemed beneficially) owned (as determined pursuant to Rule 13d-3 under the Exchange Act) by Holder and its affiliates (as such term is defined in Rule 12b-2 under the Exchange Act), shall not exceed 9.99% of the total outstanding shares of Common Stock as of such date;

 

b. No Conversion Notice may be issued with respect to more than 20 Preferred Shares in any 20 Trading Day period; and

 

c. In no event will the aggregate number of Conversion Shares issued to Holder, together with any other Common Stock issued to Holder within six months, exceed 19.99% of the total number of shares of Common Stock outstanding before the issuance, for less than the greater of book or market value of the stock, unless Company has obtained either (1) stockholder approval of the issuance, (2) a waiver from the applicable Trading Market of any applicable rule, or (3) the Trading Market has no applicable rule against such an issuance.  The Corporation will use reasonable efforts to obtain
any required approval or waiver as soon as practicable.

 

H. Transferability. The Series A Preferred Stock may only be sold, transferred, assigned, pledged or otherwise disposed of (“Transfer”) in accordance with state and federal securities laws.  The Corporation will keep at its principal office, or at the offices of the transfer agent, a register of the Series A Preferred Stock.  Upon the surrender of any certificate
representing Series A Preferred Stock at such place, the Corporation, at the request of the record Holder of such certificate, will execute and deliver (at the Corporation’s expense) a new certificate or certificates in exchange therefor representing in the aggregate the number of shares represented by the surrendered certificate.  Each such new certificate will be registered in such name and will represent such number of shares as is requested by the Holder of the surrendered certificate and will be substantially identical in form to the surrendered certificate.

 

II. Miscellaneous.

 

A. Notices.  Any and all notices to the Corporation will be addressed to the Corporation’s President or Chief Executive Officer at the Corporation’s principal place of business.  Any and all notices or other communications or deliveries to be provided by the Corporation to any Holder hereunder will be in writing and delivered personally, by facsimile, sent by a nationally recognized overnight courier service addressed to
each Holder at the facsimile telephone number or address of such Holder appearing on the books of the Corporation, or if no such facsimile telephone number or address appears, at the principal place of business of the Holder. Any notice or other communication or deliveries hereunder will be deemed given and effective on the earliest of (1) the date of transmission, if such notice or communication is delivered via facsimile at the facsimile telephone number specified in this Section II.A prior to 5:30 p.m. Eastern time, (2) the date after the date of transmission, if such notice or communication is delivered via facsimile at the facsimile telephone number specified in this section later than 5:30 p.m. but prior to 11:59 p.m. Eastern time on such date, (3) the second business day following the date of mailing, if sent by nationally
recognized overnight courier service, or (4) upon actual receipt by the party to whom such notice is required to be given.

 

B. Lost or Mutilated Preferred Stock Certificate.  Upon receipt of evidence reasonably satisfactory to the Corporation (an affidavit of the registered Holder will be satisfactory) of the ownership and the loss, theft, destruction or mutilation of any certificate evidencing shares of Series A Preferred Stock, and in the case of any such loss, theft or destruction upon receipt of indemnity reasonably satisfactory to the Corporation (provided that
if the Holder is a financial institution or other institutional investor its own agreement will be satisfactory) or in the case of any such mutilation upon surrender of such certificate, the Corporation will, at its expense, execute and deliver in lieu of such certificate a new certificate of like kind representing the number of shares of such class represented by such lost, stolen, destroyed or mutilated certificate and dated the date of such lost, stolen, destroyed or mutilated certificate.

 

C. Headings.  The headings contained herein are for convenience only, do not constitute a part of this Certificate of Designations and will not be deemed to limit or affect any of the provisions hereof.

 

RESOLVED, FURTHER, that the chairman, chief executive officer, president or any vice-president, and the secretary or any assistant secretary, of the Corporation be and they hereby are authorized and directed to prepare and file a Designation of Preferences, Rights and Limitations of Series A Preferred Stock in accordance with the foregoing resolution and the provisions of Nevada law.

 

IN WITNESS WHEREOF, the undersigned have executed this Certificate this 12th day of September 2011.

 

Signed:                                                      

Name:                                                                

Title:                                                      

Signed:                                                      

Name:                                                                

Title:                                                      

Page 

  

  

  

Exhibit 3

Form of Transfer Agent Instructions

 

[Letterhead of ULURU Inc.]

September 12, 2011

Continental Stock Transfer & Trust Company

17 Battery Place, 8th Floor

New York, NY 10004

Re:           ULURU Inc.

Ladies and Gentlemen:

In accordance with the Preferred Stock Purchase Agreement (“Agreement”), dated September 12, 2011, by and between ULURU Inc., a Nevada corporation (“Company”), and Ironridge Global III, LLC, a Delaware limited liability company (“Purchaser”), pursuant to which Company may issue and deliver shares (“Shares”) of Company’s common stock, par value $0.001 per share
(“Common Stock”) upon conversion of shares of Series A Preferred Stock, this will serve as our irrevocable authorization and direction to you (provided that you are the transfer agent of Company at such time), in the event the Company or the Purchaser issues a Conversion Notice to issue the Shares.  Capitalized terms used herein without definition will have the respective meanings ascribed to them in the Agreement.

Upon your receipt of a copy of the Notice executed by the Company, you will use your best efforts to, within one (1) Trading Day following the date of receipt of the Conversion Notice, (a) issue and surrender to a common carrier for overnight delivery to the address as specified in the notice of exercise a certificate, registered in the name of the Purchaser or its designee, for the number of Shares to which the Purchaser is entitled upon conversion of as set forth in the notice, or (b) provided you are participating in The Depository Trust Company (DTC) Fast Automated Securities Transfer (FAST) Program, upon the request of the Purchaser, credit such aggregate
number of Shares to which the Purchaser is entitled to the Purchaser’s or its designee’s balance account with DTC through its Deposit Withdrawal At Custodian (DWAC) system provided the Purchaser causes its bank or broker to initiate the DWAC transaction.

Company hereby confirms that the Shares should not be subject to any stop-transfer restrictions and will otherwise be freely transferable on the books and records of Company.  If the Shares are certificated, the certificates will not bear any legend restricting transfer of the shares represented thereby.

Company hereby confirms that no instructions other than as contemplated herein will be given to you by Company with respect to the Shares. Company hereby agrees that it will not replace you as Company’s transfer agent, until such time as Company provides written notice to you and Purchaser that a suitable replacement has agreed to serve as transfer agent and to be bound by the terms and conditions of this letter agreement regarding Irrevocable Transfer Agent Instructions (this “Agreement”).

Company and you hereby acknowledge and confirm that complying with the terms of this Agreement does not and will not prohibit you from satisfying any and all fiduciary responsibilities and duties you may owe to Company.

Company must keep its bill current with you – if Company is not current and is on suspension, the Purchaser will have the right to pay Company’s outstanding bill, in order for you to act upon this Agreement. If the outstanding bill is not paid by Company or the Purchaser, you have no further obligation under this Agreement.

IN WITNESS WHEREOF, the parties have caused this letter agreement regarding Transfer Agent Instructions to be duly executed and delivered as of the date first written above.

ULURU INC.

By:                                                      

Name:                                                                

Title:                                                      

The Foregoing Instructions Are Acknowledged:

CONTINENTAL STOCK TRANSFER & TRUST COMPANY

 

By:                                                      

Name:                                                                

Title:                                                      

  

  

  

Exhibit 4

Form of Legal Opinion

We are counsel to ULURU Inc., a Nevada corporation (“Company”), in connection with the sale and issuance of shares (“Preferred Shares”) of Company’s Series A Preferred Stock, par value $0.001 per share (“Preferred Stock”), convertible into shares (“Common Shares”) of Company’s common stock, par value $0.001 per share (“Common Stock”) to Ironridge Global III, LLC, a
Delaware limited liability company (“Purchaser”), (the Preferred Shares and Common Shares, collectively, “Shares”) pursuant to the terms of the Preferred Stock Purchase Agreement dated as of September 12, 2011 (“Agreement”, and collectively with all documents and agreements related to or arising from the Agreement, the “Transaction Documents”), by and between Company and Purchaser.  Capitalized terms not otherwise defined herein have the meanings set forth in the Transaction Documents.

 

We are of the opinion that, as of the date hereof:

 

1. Company is a corporation validly existing and in good standing under the laws of the State of Nevada.

 

2. The Shares are duly authorized and, when issued in accordance with the terms and conditions of the Agreement will be, legally and validly issued, fully paid and non-assessable.  The issuance of the Shares will not be subject to any statutory or, to our knowledge, contractual preemptive rights of any stockholder of Company.

 

3. Company has the corporate power and authority to (a) execute, deliver and perform all of its obligations under the Agreement and the Transaction Documents, and (b) issue, sell and deliver the Shares.

 

4. The execution, delivery and performance of the Agreement and the Transaction Documents have been duly authorized by all necessary corporate action on the part of Company, and have been duly executed and delivered by Company.

 

5. Upon execution and delivery of the Agreement, the Agreement will constitute the legal, valid and binding obligation of Company, enforceable against Company in accordance with its terms.

 

6. The execution and delivery of the Transaction Documents by Company does not, and Company’s performance of its obligations thereunder will not (a) violate the Second Amended and Restated Articles of Incorporation or the Amended and Restated By-Laws of Company, as in effect on the date hereof, (b) violate in any material respect any federal or state law, rule or regulation, or judgment, order or decree of any state or federal court or governmental or administrative authority, in each case that, to our knowledge, is applicable to Company or its properties or assets and which could have a material adverse
effect on Company’s business, properties, assets, financial condition or results of operations or prevent the performance by Company of any material obligation under the Agreement, or (c) require the authorization, consent, approval of or other action of, notice to or filing or qualification with, any state or federal governmental authority, except (i) as have been, or will be prior to the Closing, duly obtained or made, or (ii) to the extent failure to be so obtained or made would not have a material adverse effect on Company or its ability to consummate the transactions contemplated under the Agreement.

 

7. To our knowledge, there is no claim, action, suit, proceeding, arbitration, investigation or inquiry, pending or threatened, before any court or governmental or administrative body or agency, or any private arbitration tribunal, against Company that challenges the validity or enforceability of, or seeks to enjoin the performance of, the Agreement.

 

8. Company is not, and immediately after the consummation of the transactions contemplated by the Agreement will not be, an investment company within the meaning of Investment Company Act of 1940, as amended.

 

Sincerely,

 

 

  

  

  

Exhibit 5

 

Form of Officer’s Certificate

 

 

ULURU INC.

 

[Closing Date]

 

The undersigned hereby certifies that:

 

The undersigned is the duly appointed [__________] of ULURU Inc., a Nevada corporation (“Company”).

 

This Officer’s Certificate (“Certificate”) is being delivered to Ironridge Global III, LLC, a Delaware limited liability company (“Purchaser”), by Company, to fulfill the requirement under the Preferred Stock Purchase Agreement, dated as of September 12, 2011, between Purchaser and Company (“Agreement”).  Terms used and not defined in this Certificate have the meanings set forth in the Agreement.

 

The representations and warranties of Company set forth in the Agreement are true and correct in all material respects as if made on the above date (except for any representations and warranties that are expressly made as of a particular date, in which case such representations and warranties will be true and correct as of such particular date), and no default has occurred under the Agreement, or any other agreement with Purchaser or any Affiliate of Purchaser.

 

Company is not, and will not be as a result of the applicable Closing, in default of the Agreement, any other agreement with Purchaser or any Affiliate of Purchaser.

 

All of the conditions to the Closing required to be satisfied by Company prior to such Closing have been satisfied in their entirety.

 

IN WITNESS WHEREOF, the undersigned has executed this Officer’s Certificate as of the date set forth above.

 

Signed:                                                                

Name:                                                                

Title:                                                      

 

  

  

  

Exhibit 6

 

Form of Secretary’s Certificate

 

 

[Closing Date]

 

The undersigned hereby certifies that:

 

The undersigned is the duly appointed Secretary of ULURU Inc., a Nevada corporation (the “Company”).

 

This Secretary’s Certificate (“Certificate”) is being delivered to Ironridge Global III, LLC, a Delaware limited liability company (“Purchaser”), by Company, to fulfill the requirement under the Preferred Stock Purchase Agreement, dated as of September 12, 2011, between Purchaser and Company (“Agreement”).  Terms used and not defined in this Certificate have the meanings set forth in the Agreement.

 

Attached hereto as Exhibit “A” is a true, correct and complete copy of the Articles of Incorporation of Company, as in effect on the Execution Date.

 

Attached hereto as Exhibit “B” is a true, correct and complete copy of the Bylaws of Company, as in effect on the Execution Date.

 

Attached hereto as Exhibit “C” is a true, correct and complete copy of the resolutions of the Board of Directors of Company authorizing the Agreement, the Transaction Documents, and the transactions contemplated thereby.  Such resolutions have not been amended or rescinded and remain in full force and effect as of the date hereof.

 

IN WITNESS WHEREOF, the undersigned has executed this Secretary’s Certificate as of the date set forth above.

 

Signed:                                                                

Name:                                                                

Title:

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