Document:

Exhibit 10.3

 

FIFTH AMENDMENT TO THE PLEDGE AND SECURITY
AGREEMENT

 

This FIFTH AMENDMENT
TO THE PLEDGE AND SECURITY AGREEMENT, dated as of January [ ], 2018 (this “Fifth Amendment”), is entered
into by and among Ener-Core, Inc., a Delaware corporation (the “Company”), Ener-Core Power, Inc. (“ECP”),
a Delaware corporation, and each other Subsidiary of the Company and ECP hereafter becoming party hereto (together with the Company
and ECP, each a “Grantor” and, collectively, the “Grantors”), and Empery Tax Efficient,
LP, in its capacity as collateral agent (in such capacity, the “Collateral Agent”) for (a) the buyers listed
in the Schedule of Buyers (the “April 2015 Investors”) attached to that certain Securities Purchase Agreement
dated April 22, 2015 entered into by and among the Company and the April 2015 Investors (as the same may be amended, restated or
otherwise modified from time to time, the “April 2015 SPA”); (b) the buyers listed in the Schedule of Buyers
(the “May 2015 Investors”) attached to that certain Securities Purchase Agreement, dated as of May 7, 2015 entered
into by and among the Company and the May 2015 Investors (as the same may be amended, restated or otherwise modified from time
to time, the “May 2015 SPA”); (c) the buyers listed in the Schedule of Buyers (the “November 2016 Investors”)
attached to that certain Securities Purchase Agreement, dated as of November 23, 2016 entered into by and among the Company and
the November 2016 Investors (as the same may be amended, restated, joined or otherwise modified from time to time, the “November
2016 SPA”); (d) the holders of the notes amended, restated and delivered pursuant to those Amendment Agreements (collectively,
the “Amendment Agreements”), pursuant to which the Company amended and restated certain notes held by the April
2015 Investors and the May 2015 Investors for senior secured convertible notes; (e) the buyers listed in the Schedule of Buyers
(the “September 2017 Investors”) attached to that certain Securities Purchase Agreement, dated as of September
19, 2017 entered into by and among the Company and the September 2017 Investors (as the same may be amended, restated, joined or
otherwise modified from time to time, the “September 2017 SPA”); (f) the buyers listed in the Schedule of Buyers
(the “June 2018 Investors”) attached to that certain Securities Purchase Agreement, dated as of June 5, 2018
entered into by and among the Company and the June 2018 Investors (as the same may be amended, restated, joined or otherwise modified
from time to time, the “June 2018 SPA”); and (g) the buyers listed in the Schedule of Buyers (the “January
2019 Investors”) attached to that certain Securities Purchase Agreement, dated as of January 18, 2019 entered into by
and among the Company and the January 2019 Investors (as the same may be amended, restated, joined or otherwise modified from time
to time, the “January 2019 SPA”). Reference is hereby made to that certain Pledge and Security Agreement dated
April 23, 2015 by and among the Company and the Collateral Agent (as amended, restated, supplemented or otherwise modified prior
to the date hereof, the “Security Agreement”). Capitalized terms used herein and not otherwise defined shall
have the definitions ascribed to such terms in the Security Agreement.

 

RECITALS

 

WHEREAS, the Company
had previously entered into the April 2015 SPA with the April 2015 Investors pursuant to which the Company issued senior secured
promissory notes (as amended, restated, replaced or otherwise modified from time to time in accordance with the terms thereof (including
pursuant to the Amendment Agreements), collectively, the “April 2015 Notes”) and warrants (“April 2015
Warrants”) to the April 2015 Investors (the financing transaction contemplated under the April SPA is hereinafter referred
as the “April 2015 Financing”).

 

WHEREAS, as required
under the terms of the April 2015 SPA, the Company entered into the Security Agreement with the Collateral Agent for the benefit
of the April 2015 Investors, pursuant to which the Company granted the Collateral Agent a security interest in all personal property
(with certain exceptions as set forth in the Security Agreement) for the benefit of the April 2015 Investors in order to secure
all of the Company’s obligations under the April 2015 SPA and the April 2015 Notes.

 

     

     

    

 

WHEREAS, as required
under the terms of the May 2015 SPA, the Company amended the Security Agreement with the Collateral Agent, pursuant to which the
Company granted the Collateral Agent a security interest in all personal property (with certain exceptions as set forth in the
Security Agreement) for the benefit of the May 2015 Investors in order to secure all of the Company’s obligations under the
May 2015 SPA and the senior secured convertible notes issued pursuant to the May 2015 SPA (as amended, restated, replaced or otherwise
modified from time to time in accordance with the terms thereof (including pursuant to the Amendment Agreements), collectively,
the “May 2015 Notes”).

 

WHEREAS, on November
23, 2016, in connection with the consummation of the transactions contemplated by the November 2016 SPA, the Grantors executed
and delivered to the Collateral Agent a second amendment to the Pledge and Security Agreement that granted to the Collateral Agent
(i) for the benefit of the November 2016 Investors, a security interest in all personal property (with certain exceptions specified
below) of the Grantors to secure all of the Company’s obligations under the November 2016 SPA and the senior secured notes
issued pursuant thereto (as such notes may be amended, restated, replaced or otherwise modified from time to time in accordance
with the terms thereof, collectively, the “November 2016 Notes”) and each of the other agreements entered into
by the parties thereto in connection with the transactions contemplated by the November 2016 SPA; and (ii) for the benefit of the
April 2015 Investors and the May 2015 Investors, a security interest in all personal property (with certain exceptions specified
below) of the Grantors to secure all of the Company’s obligations under the Amendment Agreements and the senior secured notes
amended, restated and delivered pursuant thereto and each of the other agreements entered into by the parties thereto in connection
with the transactions contemplated by the Amendment Agreements.

 

WHEREAS, on September
17, 2017, in connection with the consummation of the transactions contemplated by the September 2017 SPA, the Grantors executed
and delivered to the Collateral Agent a third amendment to the Pledge and Security Agreement that granted to the Collateral Agent
for the benefit of the September 2017 Investors, a security interest in all personal property (with certain exceptions specified
below) of the Grantors to secure all of the Company’s obligations under the September 2017 SPA and the senior secured notes
issued pursuant thereto (as such notes may be amended, restated, replaced or otherwise modified from time to time in accordance
with the terms thereof, collectively, the “September 2017 Notes”) and each of the other agreements entered into
by the parties thereto in connection with the transactions contemplated by the September 2017 SPA.

 

WHEREAS, on June 5,
2017, in connection with the consummation of the transactions contemplated by the June 2018 SPA, the Grantors executed and delivered
to the Collateral Agent a fourth amendment to the Pledge and Security Agreement that granted to the Collateral Agent for the benefit
of the June 2018 Investors, a security interest in all personal property (with certain exceptions specified below) of the Grantors
to secure all of the Company’s obligations under the June 2018 SPA and the senior secured notes issued pursuant thereto (as
such notes may be amended, restated, replaced or otherwise modified from time to time in accordance with the terms thereof, collectively,
the “June 2018 Notes”) and each of the other agreements entered into by the parties thereto in connection with
the transactions contemplated by the June 2018 SPA.

 

WHEREAS, it is a condition
precedent to the January 2019 Investors consummating the transactions contemplated by the January 2019 SPA that the Grantors execute
and deliver to the Collateral Agent a further amendment to the Pledge and Security Agreement providing for their grant to the Collateral
Agent, for the benefit of the January 2019 Investors, of a security interest in all personal property (with certain exceptions
specified below) of the Grantors to secure all of the Company’s obligations under the January 2019 SPA and the senior secured
notes issued pursuant thereto (as such notes may be amended, restated, replaced or otherwise modified from time to time in accordance
with the terms thereof, collectively, the “January 2019 Notes”) and each of the other agreements entered into
by the parties thereto in connection with the transactions contemplated by the January 2019 SPA.

 

    2

     

    

 

WHEREAS, the Company
and the Collateral Agent desire to enter into this Fifth Amendment in order amend the Security Agreement to include the January
2019 Investors as secured parties to whom the Company is also granting the aforementioned security interests such that the January
2019 Notes shall rank pari passu in priority with the April 2015 Notes, the May 2015 Notes, the November 2016 Notes, the
September 2017 Notes and the June 2018 Notes, with the holders of each of the April 2015 Notes, the May 2015 Notes, the November
2016 Notes, the September 2017 Notes, the June 2018 Notes and the January 2019 Notes having a first priority perfected security
interest in all of the current and future assets of the Company and all direct and indirect Subsidiaries of the Company, except
for the “Excluded Assets” (as such term is defined in the Security Agreement).

 

WHEREAS, each Grantor
has determined that the execution, delivery and performance of this Fifth Amendment directly benefits, and are in the best interest
of the Company and such Grantor.

 

NOW, THEREFORE, in
consideration of the premises and the agreements herein and for other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the parties hereto covenant and agree as follows:

 

SECTION 1.
Amendments to the Security Agreement.

 

(a)
The definition of the term “Securities Purchase Agreement” in the first paragraph of the Security Agreement
is hereby amended and restated such that it means, collectively, the April 2015 SPA (as defined below), the May 2015 SPA (as defined
below), the November 2016 SPA (as defined below), the Amendment Agreements (as defined below), the September 2017 SPA (as defined
below), the June 2018 SPA (as defined below) and the January 2019 SPA (as defined below).

 

(b)
The seventh recital in the Security Agreement is hereby deleted, and the following recitals set forth below are hereby added
after the sixth recital in the Security Agreement:

 

“WHEREAS, the Company
and each party listed as a “Buyer” (each a “January 2019 Buyer”, and collectively, the “January
2019 Buyers”) on the Schedule of Buyers (as such schedule may be amended, restated, joined or otherwise modified from
time to time) attached to that certain Securities Purchase Agreement by and among the Company and the January 2019 Buyers dated
January 18, 2018 (as the same may be amended, restated, joined or otherwise modified from time to time, the “January 2019
SPA”), are parties to the January 2019 SPA, pursuant to which the Company is required to sell, and the January 2019 Buyers
shall purchase or have the right to purchase, senior secured notes (the “January 2019 Notes”).”

 

    3

     

    

 

“WHEREAS, (a) each of
the April 2015 Buyers, the May 2015 Buyers, the November 2016 Buyers, the September 2017 Buyers and the June 2018 Buyers are hereinafter
referred to individually as a “Buyer” and collectively, the “Buyers”; (b) the April 2015
Notes, the May 2015 Notes, the November 2016 Notes, the September 2017 Notes and the June 2018 Notes are hereinafter referred to
collectively as the “Notes”; and (c) collectively, the (1) April 2015 SPA, the April 2015 Notes and each of
the other agreements entered into by the parties thereto in connection with the transactions contemplated by the April 2015 SPA;
(2) the May 2015 SPA, the May 2015 Notes and each of the other agreements entered into by the parties thereto in connection with
the transactions contemplated by the May 2015 SPA; (3) the November 2016 SPA, the November 2016 Notes and each of the other agreements
entered into by the parties thereto in connection with the transactions contemplated by the November 2016 SPA; (4) the Amendment
Agreements and each of the other agreements entered into by the parties thereto in connection with the transactions contemplated
by the Amendment Agreements; (5) the September 2017 SPA, the September 2017 Notes and each of the other agreements entered into
by the parties thereto in connection with the transactions contemplated by the September 2017 SPA; (6) the June 2018 SPA, the June
2018 Notes and each of the other agreements entered into by the parties thereto in connection with the transactions contemplated
by the June 2018 SPA; and (7) the January 2019 SPA, the January 2019 Notes and each of the other agreements entered into by the
parties thereto in connection with the transactions contemplated by the January 2019 SPA are hereinafter referred to as the “Combined
Transaction Documents.”

 

(c)
Section 1(c) of the Security Agreement is hereby amended to add the following term and definition:

 

“Note Required Holders”
means the holders of a majority of the outstanding principal amount of April 2015 Notes, the April 2015 Notes, the November 2016
Notes, the September 2017 Notes, the June 2018 Notes and the January 2019 Notes, taken together, and shall include Empery Asset
Master Ltd. (“Empery”) so long as Empery or any of its affiliates holds any April 2015 Notes, any May 2015 Notes,
any November 2016 Notes, any September 2017 Notes, any June 2018 Notes or any January 2019 Notes.”

 

SECTION
2. Effectiveness. This Fifth Amendment shall become effective as of the date hereof only upon the satisfaction of
all of the following conditions precedent (the date of satisfaction of such conditions being referred to herein as the “Fifth
Amendment Effective Date”):

 

(a)
The Collateral Agent shall have received a counterpart signature page of this Fifth Amendment duly executed by each of the
Grantors; and

 

(b)
The representations and warranties contained in Section 3 of this Fifth Amendment are and will be true and correct in all
material respects on and as of the Fifth Amendment Effective Date to the same extent as though made on and as of that date, except
to the extent such representations and warranties specifically relate to an earlier date, in which case they were true and correct
in all material respects on and as of such earlier date.

 

SECTION
3. Representations and Warranties. In order to induce the Collateral Agent to enter into this Fifth Amendment and
to amend the Security Agreement in the manner provided herein, each Grantor represents and warrants to the Agent, that the following
statements are true and correct in all material respects:

 

(a)
This Fifth Amendment has been duly executed and delivered by each Grantor party hereto and each of this Fifth Amendment
and the Security Agreement as amended hereby is the legal, valid and binding obligation of each Grantor, and is enforceable against
each Grantor in accordance with its terms, except as enforceability may be limited by applicable bankruptcy, insolvency or similar
laws affecting the enforcement of creditors’ rights generally and by equitable principles relating to enforceability.

 

    4

     

    

 

(b)
The execution, delivery and performance of this Fifth Amendment and the Security Agreement as amended hereby, are within
each Grantor’s corporate powers and have been duly authorized by all necessary corporate actions of each Grantor. The execution,
delivery and performance of this Fifth Amendment and the existing Security Agreement as amended hereby (a) do not require any consent
or approval of, registration or filing with, or any other action by, any governmental authority or other regulatory body or any
other Person, except (A) such as have been obtained or made and are in full force and effect, (B) for filings and registrations
necessary to perfect Liens created pursuant to the Notes and the Transaction Documents, or (C) consents or approvals the failure
of which to obtain would not reasonably be expected to result in a Material Adverse Effect (as defined in the Securities Purchase
Agreement), (b) will not violate any law applicable to any Grantor which would result in a Material Adverse Effect (as defined
in the Securities Purchase Agreement), (c) will not result in a default under any material indebtedness, and (d) will not result
in the creation or imposition of any Lien on any asset of any Grantor, except Liens created pursuant to the Notes and the Transaction
Documents.

 

SECTION
4. References to and Effect on the Security Agreement.

 

(a)
On and after the Fifth Amendment Effective Date, each reference in the Security Agreement to “this Agreement”,
“hereunder”, “hereof”, “herein” or words of like import referring to the Security Agreement,
and each reference in the Transaction Documents to the “Pledge and Security Agreement”, “thereunder”, “thereof”
or words of like import referring to the Security Agreement shall mean and be a reference to the Security Agreement, as amended
by this Fifth Amendment.

 

(b)
Except as specifically amended by this Fifth Amendment, the Security Agreement and the Transaction Documents shall remain
in full force and effect and are hereby ratified and confirmed.

 

(c)
The execution, delivery and performance of this Fifth Amendment shall not constitute a waiver of any provision of, or operate
as a waiver of any right, power or remedy of any Collateral Agent or Buyer under, the Security Agreement or any of the other Transaction
Documents.

 

SECTION
5. APPLICABLE LAW. THIS FIFTH AMENDMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE GOVERNED
BY, CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, EXCEPT AS REQUIRED BY MANDATORY PROVISIONS
OF LAW AND EXCEPT TO THE EXTENT THAT THE VALIDITY AND PERFECTION OR THE PERFECTION AND THE EFFECT OF PERFECTION OR NON-PERFECTION
OF THE SECURITY INTEREST CREATED HEREBY, OR REMEDIES HEREUNDER, IN RESPECT OF ANY PARTICULAR COLLATERAL ARE GOVERNED BY THE LAW
OF A JURISDICTION OTHER THAN THE STATE OF NEW YORK

 

SECTION
6. Counterparts and Facsimile or Electronic Signatures. This Fifth Amendment may be executed in any number of counterparts
and by different parties hereto in separate counterparts, each of which when so executed and delivered shall be deemed an original,
but all such counterparts together shall constitute but one and the same instrument; signature pages may be detached from multiple
separate counterparts and attached to a single counterpart so that all signature pages are physically attached to the same document.
This Fifth Amendment may be executed by fax or electronic mail, in PDF format, and no party hereto may contest this Fifth Amendment’s
validity solely because a signature was faxed or otherwise sent electronically.

 

[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]

 

    5

     

    

 

IN WITNESS
WHEREOF, each Grantor has caused this Fifth Amendment to be executed and delivered by its officer thereunto duly authorized, as
of the date first above written.

 

	 	ENER-CORE, INC., a Delaware corporation
	 	 
	 	By:	                               
	 	Name: Domonic J. Carney
	 	Title: Chief Financial Officer
	 	 
	 	Address for Notices:
	 	 
	 	30100 Town Center Dr., Suite O-209
	 	Laguna Niguel, California 92677
	 	Attention: Mr. Domonic J. Carney
	 	Email: DJ.Carney@ener-core.com
	 	 
	 	ENER-CORE POWER, INC., a Delaware corporation
	 	 
	 	By:	                              
	 	Name: Domonic J. Carney
	 	Title: Chief Financial Officer
	 	 
	 	Address for Notices:
	 	 
	 	30100 Town Center Dr., Suite O-209
	 	Laguna Niguel, California 92677
	 	Attention: Mr. Domonic J. Carney
	 	Email: DJ.Carney@ener-core.com

 

Signature
Page to Fifth Amendment to Pledge and Security Agreement

 

    6

     

    

 

ACCEPTED BY:

 

	EMPERY TAX EFFICIENT, LP,	 
	as Collateral Agent	 
	 	 
	By: Empery Asset Management, LP, its authorized agent	 
	 	 
	By:	                          	 
	Name: Brett Director	 
	Title: General Counsel	 
	Address: c/o Empery Asset Management, LP	 
	1 Rockefeller Plaza, Suite 1205	 
	New York, NY 10020	 

 

Signature
Page to Fifth Amendment to Pledge and Security Agreement

 

    7Blueprint

 

 

Exhibit 10.1

 

 

 

China Merchants Bank Co., Ltd.

 

Shanghai Branch

 

 

 

Credit Extension Agreement

 

(Applicable
to working capital loan without the need to sign a separate loan
contract)

 

 

1

 

 

Credit Extension Agreement

 

(Applicable
to working capital loan without the need to sign a separate loan
contract)

 

No.:
4802181206

 

Credit Grantor: China Merchants Bank Co., Ltd., Shanghai Dalian Road Sub-branch
(hereinafter referred to as "Party A")

 

Chief
Person-in-charge: Lu
Min

 

Credit Applicant:
SHANGHAI CELLULAR
BIOMEDICINE CO., LTD. (hereinafter referred to as "Party
B")

 

Legal
Representative/Chief Person-in-charge: LIU BIZUO

 

Upon
Party B's application, Party A agrees to provide Party B with the
credit line for use by Party B. NOW, THEREFORE, This Agreement is
entered into by and between Party A and Party B on the following
terms and conditions through full consultation and in accordance
with the relevant laws and regulations.

 

Article 1 Line of Credit

 

1.1
Party A shall provide Party B with credit lines of RMB 100 million only in word
(including other currencies of equivalent value, with the exchange
rate being calculated according to the foreign exchange quotation
announced by Party A at the time of occurrence of each specific
business, the same below), including revolving credit lines and/or
one-off credit lines.

 

The
types of credit under the credit line include but not limited to
one or more credit services such as loans/order loans, trade
financing, bill discounting, commercial draft acceptance,
commercial acceptance draft discounting guarantee, international /
domestic letters of guarantee (L/G), customs duty payment guarantee, legal
person account overdraft, derivative transactions, and gold
lease.

 

The
revolving credit line refers to the maximum limit of the sum of the
principal balance(s) of one or more of the credit services provided
by Party A for Party B in the preceding paragraph during the credit
period.

 

One-off
credit line means that the cumulative amount of the various credit
services provided by Party A for Party B in the preceding paragraph
during the credit period shall not exceed the amount of the one-off
credit line stipulated in this Agreement. Party B shall not use the
one-off credit line in a recycling way, and the corresponding
amount of the multiple credit services applied for by Party B shall
occupy the amount of the one-off credit line until it is fully
occupied.

 

"Trade
financing" includes but is not limited to international/domestic
letters of credit, advance against inward documentary bills,
shipping guarantees, inward bills purchased under collection,
packing loans, advance against outward documentary bills, export
negotiation, outward bills purchased under collection,
import/export remittance financing, credit guarantee financing,
factoring, and check guarantees.

 

1.2 If
Party A is to perform the import factoring and domestic buyer
factoring services with Party B as the payer, the receivables of
Party A assigned to Party B shall occupy the above credit lines; if
Party B applies to Party A for domestic seller factoring or export
factoring service, the basic purchase amount provided by Party A to
Party B with Party A's own funds or other funds of legal source
shall occupy the above credit lines.

 

 

2

 

 

1.3 If
Party A, due to its internal procedural needs, authorizes another
branch of China Merchants Bank to forward a L/C to the beneficiary
after the L/C is opened, such L/C and the documentary exchange and
shipping guarantee thereunder shall occupy the above credit
lines.

 

When
opening an import L/C, if the advance against inward documentary
bills actually occurs under the same L/C, the import L/C and the
advance against inward documentary bills shall occupy the same
amount at different stages, i.e., when the advance against inward
documentary bills occurs, the amount recovered by L/C payment shall
be used to offset the advance against inward documentary bills,
which is deemed to occupy the same amount of the original import
L/C.

 

1.4
Credit lines shall not include the corresponding credit amount of
margin or deposits pledge guarantee provided by Party B or a third
party exclusively for a single specific service under the
Agreement, the same as below.

 

1.5 If
there is any outstanding balance for the specific service performed
under / (name of
the agreement) numbered / concluded by and between
Party A (or its subordinate organizations) or / and Party B, such balance
shall be automatically incorporated into this Agreement and
directly occupy the credit line hereunder.

 

Article 2 Credit Period

 

The
credit period is twelve
(12) months commencing from December 31, 2018 and ending on
December 30, 2019.
Except as otherwise stipulated herein, Party B shall, within the
said period, submit an application to Party A for use of the credit
line, and Party A shall not accept any such application submitted
by Party B beyond the expiry date of the credit
period.

 

Article 3 Use of Credit Lines

 

3.1
Types and scope of credit lines

 

The
types of credit lines hereunder (revolving lines or one-off lines)
and the applicable types of credit services, the amount of credit
lines corresponding to each specific type of credit services, the
conjunctive use of different credit services, and the specific
conditions for use shall be subject to the approval from Party A.
If Party A adjusts Party A's original approval opinions according
to Party B's application during the credit period, Party A's
subsequent approval opinions shall constitute a supplement and
change to the original approval opinions, and so on.

 

3.2 The
specific business agreements signed by and between Party A and
Party B on the specific services under the credits (whether a
single agreement/application or framework agreement) shall
constitute an integral part of this Agreement and shall stipulate
the arrangement of rights and obligations related to specific
services.

 

Party B
shall apply for the credit line one by one and shall submit the
materials required by Party A for Party A's review and approval.
Party A has the right to decide whether or not to approve the
application according to its internal management requirements and
Party B's business conditions, and to unilaterally reject Party B's
application without assuming any form of legal liability to Party
B. If the provisions of this paragraph are inconsistent with those
of other paragraph, the provisions of this paragraph shall
prevail.

 

 

3

 

 

The
specific amount, term, interest rate, costs, purposes and other
service factors in respect of each loan or other credits shall be
determined by the specific service agreement, relevant service
vouchers confirmed by Party A and service records on Party A's
system.

 

3.3
Where Party B applies for a working capital loan within the credit
line, Party A and Party B need not to sign the Loan Contract on a case-by-case basis.
In applying for use of each working capital loan, Party B shall
submit the withdrawal application, loan receipts and other
materials required by Party A according to the different
requirements for independent payment and entrusted payment (such
applications, loan receipts and other materials may be affixed with
Party B's reserved seal at Party A or submitted in any other manner
approved by Party A). Party A shall review and approve each of
Party B's applications and the actual amount of each withdrawal,
start and end time, purposes, interest rate and other relevant
matters shall be subject to the loan receipts and the service
records on Party A's system. Matters not covered by the loan
receipts and Party A's system shall be subject to the provisions of
this Agreement.

 

The
application for withdrawal, loan receipts and service records on
Party A's system shall constitute an integral part of this
Agreement.

 

3.4 The
specific period for use of each loan or other credits within the
credit line shall be determined according to the operation needs of
Party B and the business management rules of Party A. The expiry
date of each specific service may be later than the expiry date of
the credit (except otherwise required by Party A).

 

3.5
During the credit period, Party A shall have the right to regularly
assess Party B's business and financial conditions in each year,
and adjust the amount of credit lines available to Party B in the
light of the assessment results (Tick √ if this paragraph
applies).

 

Article 4 Working Capital Loan Interest Rate

 

4.1 The
interest rate of any loan hereunder shall be specified by Party B
in the corresponding withdrawal application and finalized upon
Party A's approval. If it is inconsistent with the loan receipt,
the loan receipt shall prevail.

 

4.2
Party A has the right to regularly or irregularly adjust the
floating ratio and/or the basic point of the working capital loan
in the light of the changes in relevant state policies, domestic
credit market price or Party A's credit policies. Once Party A
decides to do the adjustment, it shall notify Party B of such
adjustment in advance. Such adjustment takes effect upon the giving
of a notice by Party A to Party B, and the specific floating ratio
and/or basic point of the relevant loans newly withdrawn by Party B
and the loans withdrawn before the entry into force of the notice
and not yet repaid by Party B shall be in accordance with Party A's
notice.

 

In the
event of any conflict or inconsistency between this paragraph and
any other provisions hereof, the provisions of this paragraph shall
prevail.

 

4.3 If
Party B fails to use any loan in accordance with the provisions of
this Agreement, an interest calculated at the original interest
rate plus 100 %
shall be charged on the part of the loan which is not used for the
purposes stipulated in this Agreement from the date when the
purposes of the loan are changed. The original interest rate refers
to the interest rate applicable before the purposes of the loan are
changed.

 

 

4

 

 

If
Party B fails to repay the loan on time, an interest calculated at
the original interest rate (the interest rate for the overdue loan)
plus 50 % shall be
charged on the outstanding part of the loan from the first date
when the loan becomes overdue. The original interest rate refers to
the interest rate applicable before the maturity date (including
early maturity date) of the loan (in the case of a floating rate,
it is the last floating period before the maturity date (including
the early maturity date).

 

If any
loan is overdue and not used for the purpose stipulated herein, the
higher of the abovementioned interests shall apply.

 

4.4 In
the event that the loan interest rate is adjusted by the People's
Bank of China during the loan period, the relevant regulations of
the People's Bank of China shall apply.

 

4.5 The
loan interest shall be calculated according to the actual amount of
the loan and the actual number of days of use of the loan from the
date when the loan reaches Party B's account. The interest shall be
calculated once on a
quarterly basis and the value date shall be the 20th day
of the last month of each
quarter. The daily interest rate shall be converted in
accordance with the relevant regulations of the People's Bank of
China or international practice.

 

If the
maturity date of the loan falls on a holiday, it shall be
automatically postponed to the first working day following the
holiday, and the interest calculated according to the actual number
of days of use of the loan.

 

4.6
Party B shall pay interest on each value date, and Party A may
deduct the corresponding amount directly from any of Party B's
accounts opened in China Merchants Bank. If Party B fails to pay
the interest on time, a compound interest shall be charged on the
interest payable at the interest rate for the overdue loan as
stipulated in this article.

 

Article 5 Guarantees

 

5.1 All
debts owed by Party B to Party A hereunder shall be mortgaged
(pledged) by ____________________with the
property owned by it or of which it has the right to dispose
according to law, for which the parties shall sign a separate
guarantee contract.

 

5.2 All
debts owed by Party B to Party A hereunder shall be guaranteed
by CELLULAR
BIOMEDICINE GROUP HK LIMITED as a joint guarantor who shall
issue to Party A in a separate letter of guarantee.
and/or

 

If the
guarantor fails to sign the guarantee contract and complete the
guarantee procedure according to this article (including the
debtor's defense against the receivables prior to the pledge
thereof), Party A shall have the right to refuse to grant the
credit to Party B.

 

5.3 If
the mortgagor provides real estate mortgage guarantee for all debts
owed by Party B to Party A hereunder, and if Party B is aware that
the mortgaged property has been or may be included in the
government's demolition and expropriation plan, Party B shall
immediately notify Party A and shall urge the mortgagor to continue
to provide guarantee for Party B's debts with the compensation
provided by the demolition party and to timely complete the
guarantee procedure in accordance with the mortgage contract, or to
provide other guarantee measures satisfactory to Party
A.

 

 

5

 

 

If the
mortgaged property falls under any of the circumstances mentioned
in the preceding paragraph, which requests for the provision of new
guarantees or the taking of other guarantee measures, the relevant
costs incurred therefrom shall be borne by the mortgagor, for which
Party B shall bear the joint and several liability. Party A has the
right to deduct the costs directly from Party B's
account.

 

Article 6 Party B’s Rights and Obligations

 

6.1
Party B shall enjoy the following rights:

 

6.1.1
Party B shall have the right to require Party A to provide loans or
other credits within the credit line in accordance with the
conditions stipulated herein;

 

6.1.2
Party B has the right to use the credit line according to the
provisions hereof;

 

6.1.3
Except otherwise stipulated by laws and regulations or otherwise
required by the regulatory authority, Party B shall have the right
to require Party A to keep confidential the information provided by
Party B on its production, operation, property and accounts, among
others.

 

6.1.4
Party B has the right to transfer debts to a third party with the
consent of Party A.

 

6.2
Party B shall undertake the following obligations:

 

6.2.1
Party B shall truthfully provide the documentation (including but
not limited to the provision of Party B's true financial
books/statements and annual financial reports, major decisions and
changes in production, operation and management, withdrawal/payment
documents, information relating to collateral, etc. within the
period required by Party A), all banks of deposits, accounts,
balances of deposits and loans and other information required by
Party A, and shall assist Party A in investigating, reviewing and
inspecting;

 

6.2.2
Party B shall accept the supervision by Party A to its use of the
credit funds, production and management and financial
activities;

 

6.2.3
Party B shall use the loans and/or other credits in accordance with
the provisions of, and/or the undertakings under this Agreement and
each specific contract;

 

6.2.4
Party B shall repay the principal, interest and expenses in respect
of the loans, advances and other credit debts in full and in time
in accordance with the provisions of this Agreement and each
specific contract;

 

6.2.5
Any transfer of the debts hereunder to a third party in whole or in
part is subject to the written consent from Party A;

 

6.2.6
If Party B has any of the following circumstances, Party B shall
immediately notify Party A and actively assist Party A in taking
measures to guarantee the safe repayment of the principal, interest
and all expenses in respect of the loans, advances and other credit
debts hereunder:

 

6.2.6.1
Party B suffers major financial losses, assets losses or other
financial crises;

 

6.2.6.2
Party B provides loans or guarantees for third parties, or provides
mortgage (pledge) guarantees with its own property
(rights);

 

 

6

 

 

6.2.6.3
Party B is shut down, revoked or cancelled its business license,
applies for or is applied for bankruptcy, is dissolved or
otherwise;

 

6.2.6.4
Party B's normal operation is affected by the major operational or
financial crises of its controlling shareholders and other related
companies;

 

6.2.6.5
Party B is engaged in a related transaction amounting to more than
10% of Party B's net assets with its controlling shareholders and
other related companies;

 

6.2.6.6
Party B is involved in any action, arbitration or criminal or
administrative punishment that has major adverse effect on the
business or property status of Party B;

 

6.2.6.7
Any other major issue that may affect Party B's solvency has
occurred.

 

6.2.7
Party B shall not be negligent in managing and recovering debts due
nor shall it dispose of its major properties for free or by other
inappropriate means.

 

6.2.8
Party B shall not engage in such important matters as consolidation
(merger), separation, reorganization, joint venture (cooperation),
transfer of property (shares), shareholding reform, foreign
investment, and increasing debt financing, without the written
consent of Party A.

 

6.2.9
At the request of Party A, Party B shall (Tick "√" in
⬜):

 

⬜
cover insurance for its key assets and appoint Party A as the
primary beneficiary;

 

⬜
not sell or mortgage / assets designated by Party A
before the credit debts are paid off;

 

⬜
impose the following restrictions on the dividends due to its
shareholders before the credit debts are paid off:

 

/                                                                                                                                      

 

⬜
Other: /

 

6.2.10
In the case of dynamic pledge of accounts receivable, Party B shall
ensure that the balance of credit at any time point during the
credit period shall be lower than / % of the balance of the
pledged receivables, failing which, Party B shall provide new
accounts receivable approved by Party A for pledging or adding to
the margin until the balance of the pledged receivables x
/ %+ effective
margin > credit balance.

 

6.2.11
In the event that Party B provides a pledge of margin, if the
balance of the margin account is less than / % of the corresponding amount
of specific business due to exchange rate fluctuation, Party B
shall be obliged to supplement the corresponding amount of margin
or other guarantees as required by Party A.

 

6.2.12
Party B shall ensure that the sales payment for import goods shall
be recovered from Party A designated account and that notes and/or
documents under L/C shall be transferred to Party A in export
negotiations.

 

 

7

 

 

Article 7 Party A’s Rights and Obligations

 

7.1
Party A shall enjoy the following rights:

 

7.1.1
Party A has the right to require Party B to repay the principal,
interest and expenses in respect of the loans, advances and other
credit debts under this Agreement and each specific contract in
full and in time;

 

7.1.2
Party A has the right to require Party B to provide materials
relevant to the use of its credit lines;

 

7.1.3
Party A has the right to understand Party B’s production,
management and financial activities;

 

7.1.4
Party A has the right to supervise Party B's use of the loans
and/or other credits for the purposes stipulated in this Agreement
and in each specific contract, and to unilaterally and directly
suspend or restrict the enterprise online banking functions of
Party B's account when necessary (including but not limited to
closure of e-banking, presetting the list of payment
objects/payment limit per transaction/staged payment limits or
taking other restrictive measures), restrict the sale of settlement
documents, or restrict the telephone banking, mobile phone banking
and other non-counter payment and general exchange functions of
Party B's accounts;

 

7.1.5
According to its internal procedural needs, Party A has the right
to authorize other branches of China Merchants Bank located in the
place of the beneficiary to forward the L/C to the beneficiary
after accepting Party B's application for opening the
L/C.

 

7.1.6
Party B has the right to deduct money directly from the account
opened by Party B in any institution of China Merchants Bank for
repaying the debts owed by Party B under this Agreement and each
specific contract (where the credit debts are not in Renminbi,
Party A shall have the right to purchase the foreign exchange
directly from Party B's RMB account at the exchange rate announced
by Party A at the time of deduction to repay the principal,
interest and fees in respect of the credits);

 

7.1.7
Party A has the right to assign the debts owed to it by Party B,
notify Party B of the assignment via facsimile, mail, personal
delivery, announcement in public media or otherwise, and urge Party
B to repay the debts;

 

7.1.8
Party A has the right to supervise Party B's account, entrust other
institutions of China Merchants Bank other than Party A to
supervise Party B's account, and control the payment of the loan
funds according to the purposes and scope of payment agreed by the
parties;

 

7.1.9
Other rights stipulated in this Agreement.

 

7.2
Party A shall undertake the following obligations:

 

7.2.1
Party A shall grant loans or other credits within the credit lines
in accordance with the conditions set out in this Agreement and
each specific contract; and;

 

7.2.2
Except otherwise provided by laws and regulations or otherwise
required by regulatory authorities, Party A shall keep confidential
the information in connection with Party B’s assets, finance,
production and operation.

 

 

8

 

 

Article 8 Party B Specifically Makes the Following
Warranties

 

8.1
Party B is a corporate entity duly organized and lawfully existing
in accordance with Chinese laws. Its registration and annual report
publicity formalities are true, legitimate and valid. Party B has
sufficient civil capacity to sign and implement this
Agreement;

 

8.2
Party B has been fully authorized by its board of directors or any
other competent authorities to sign and fulfill this
Agreement;

 

8.3
Documents, materials and vouchers provided by Party B regarding
Party B, guarantor, mortgagor (pledgor) and mortgaged (pledged)
property are true, accurate, complete and valid, and are free from
major errors in nonconformity with the facts or omission of any
major facts;

 

8.4
Party B shall strictly abide by the specific service agreements and
the various correspondences and related documents it has issued to
Party A;

 

8.5 No
action, arbitration or criminal or administrative punishment that
may have major adverse effect on Party B or Party B's main property
occurs at the time of signing this Agreement or during the
performance of this Agreement. In the event that any such action,
arbitration or criminal or administrative punishment occurs, Party
B shall immediately notify Party A;

 

8.6
Party B shall strictly abide by the laws and regulations of the
state in its business activities, engage in business activities in
strict accordance with its business license or the business scope
approved by law, and go through such procedures as annual
registration and inspection, and operating period
extension/prolonging;

 

8.7
Party B shall maintain or improve its existing operation and
management level, ensure the value preservation and appreciation of
existing assets, and shall not give up any debts due, nor shall it
dispose of the existing major property for free or by other
improper means;

 

8.8
Without Party A's permission, Party B shall not pay off other
long-term debts in advance, and / , / ;

 

Party B
shall ensure that no financial indicator of Party B is short of the
following requirements during the working capital loan
period:

 

  /                                                                                                                                      

 

8.9 In
signing and performing this Agreement, Party B has not incurred any
other major events that affect the performance of Party B's
obligations hereunder.

 

8.10
The loans applied for under the credits are in conformity with the
requirements of laws and regulations. Party B shall not use the
loans for investment in fixed assets, equity, etc., purchase and
sale of negotiable securities, futures and real estate in violation
of regulations, mutual lending to obtain illegal incomes, fields
and purposes where production and operation is prohibited by the
state; or purposes other than stipulated in this Agreement and the
withdrawal application;

 

 

9

 

 

If the
loan funds are paid by the borrower independently, Party B shall
regularly (at least on a monthly basis) send Party A summary
reports regarding the payment of the loan funds. Party A has the
right to verify whether the loan payments conform to the agreed
purposes by means of account analysis, certificate examination and
on-site investigation.

 

8.11
Party B undertakes that within the validity term of this Agreement,
twice the net assets of Party B shall be higher than the amount of
principal of and interest on the loan hereunder.

 

Article 9 Special Provisions on Working Capital Loans

 

9.1
Withdrawal and use

 

For the
purpose of this Agreement, Party B may use the working capital
loans by means of independent payment and entrusted
payment.

 

9.1.1
Independent payment

 

Independent
payment refers to payment independently made by Party B to Party
B's counterparty stipulated herein after Party A has released the
loan funds to Party B's account according to Party B's withdrawal
application.

 

9.1.2
Entrusted payment

 

Entrusted
payment refers to payment of the loan funds by Party A via Party
B's account to Party B's counterparty stipulated herein according
to Party B's withdrawal application and payment authorization. For
loan funds adopting an entrusted payment method, Party B shall
authorize Party A to make the payment to Party B's counterparty via
Party B's account on the date of release of the loan (or the
working day next following the date of release).

 

9.1.3
Under the following circumstances, Party B shall unconditionally
and fully adopt the entrusted payment method;

 

9.1.3.1
Party B's single withdrawal exceeds RMB 10 million (inclusive, or
equivalent foreign currency);

 

9.1.3.2
Party A requires Party B to adopt the entrusted payment method
according to regulatory requirements or due to risk control
needs.

 

9.1.4
Where the entrusted payment method is adopted, the payment after
the loan is released is subject to approval from Party A. Party B
shall not evade Party A's supervision by means of online banking,
check transfer, or breaking up the whole into parts,
etc.

 

9.2
Early repayment

 

9.2.1
If Party B applies for early repayment, it shall submit a written
application to Party A seven (7) working days prior to the planned
date of early repayment and pay Party A the liquidated damages for
early repayment. Liquidated damages for early repayment = amount of
early repayment x ratio of liquidated damages ( / %). After Party A has
reviewed and approved Party B's application for early repayment,
Party B shall pay Party A the liquidated damages for early
repayment in full within the time limit required by Party A. If
Party B fails to do so, Party A shall have the right to reject
Party B's application for early repayment, but no obligation to
properly mitigate the amount of liquidated damages for early
repayment in its own discretion according to such factors as the
remaining period of the loan when Party B makes the early
repayment.

 

 

10

 

 

9.2.2
Where Party B makes an early repayment of the loan, the interest
rate shall still be calculated in accordance with the provisions of
this Agreement and the interest payable shall be calculated in
accordance with the actual term of loan.

 

9.3
Roll-over

 

If
Party B is unable to repay any loan hereunder on schedule, and
needs to go through the roll-over formalities, it shall submit a
written application to Party A one (1) month prior to the maturity
date of the loan; if Party A agrees to such roll-over upon review,
the parties shall sign a separate roll-over agreement. If Party A
does not agree to the roll-over, the loans occupied by Party B and
the accrual interest payable shall still be repaid in accordance
with the provisions of this Agreement and the corresponding loan
receipts.

 

⬜
9.4 Special account for loans (if applicable, please tick "√"
in "⬜")

 

The
release and payment of all loan funds hereunder must be made via
the following account:

 

Account
Name: SHANGHAI CELLULAR
BIOMEDICINE CO., LTD.;

 

Account No.:
121931396310901

 

Bank of
Deposit: China Merchants
Bank, Shanghai Dalian Road Sub-branch

 

9.5 The
monitoring of Party B's fund return account

 

9.5.1
Party A and Party B agree to designate the following account as
Party B's fund return account:

 

Account
Name: SHANGHAI CELLULAR
BIOMEDICINE CO., LTD.;

 

Account No.:
121931396310901

 

Bank of
Deposit: China Merchants
Bank, Shanghai Dalian Road Sub-branch

 

9.5.2
The account monitoring requirements are as follows: /

 

Party A has the right to recover the loans in advance according to
the amount of funds returned to Party B, i.e., when there are
returned funds in the account, the loans corresponding to such
returned funds may be deemed as due in advance, and Party A shall
have the right to make deductions directly from the account to
repay the loans.

 

9.6
Party B shall provide the receipts and payments in the
abovementioned account on a quarterly basis and assist Party A in
monitoring the relevant accounts and returned funds.

 

 

11

 

 

Article 10 Default Events and Handling

 

10.1 A
default event shall be deemed to have occurred under any of the
following circumstances:

 

10.1.1
Party B fails to perform or violates any of the obligations
hereunder;

 

10.1.2
The relevant representations and warranties made by Party B
hereunder are untrue or incomplete, or Party B violates the
requirements of this article and fails to make rectifications as
required by Party A;

 

10.1.3
Party B fails to withdraw or use the loans in accordance with the
provisions of this Agreement, or fails to use the funds in the fund
return account as required by Party A, or fails to accept Party A's
supervision, and fails to immediately make rectifications as
required by Party A; or

 

10.1.4
Party B is involved in a major default event under a lawful and
effective contract with any other creditor and such event is not
satisfactorily resolved within three (3) months from the date of
the default.

 

The abovementioned major default event means that Party B's breach
of contract confers its creditors the right to claim more than RMB
/ to Party
B.

 

10.1.5
Party B's new third board listing encounters major obstacles or
suspension of listing application; Party B is issued a warning
letter, ordered to make rectifications, imposed restrictions on
securities account transactions and taken other self-regulatory
measures for more than three (3) cumulative times or is given
disciplinary punishment, listing termination or other
punishments;

 

10.1.6
Other circumstances that Party A considers may damage the lawful
rights and interests of Party A.

 

10.2 If
any one of the following circumstances occurs, which Party A
considers may affect the guarantor's guarantee ability, Party A
shall require the guarantor to eliminate the adverse effects thus
incurred by the guarantor, or require Party B to increase or change
the guarantee conditions. If the guarantor and Party B fail to
provide cooperation, a default event shall be deemed to have
occurred:

 

10.2.1
Any circumstance similar to one of those stipulated in Article
6.2.6 hereof occurs or the circumstance stipulated in Article 6.2.8
occurs without the consent of Party A;

 

10.2.2
When issuing an irrevocable letter of guarantee, the guarantor
conceals its actual ability in undertaking the guarantee
responsibility, or fails to obtain the authorization from the
competent authority;

 

10.2.3
The guarantor fails to complete the annual inspection and
registration procedures and the operating period
extension/prolonging procedures on time;

 

10.2.4
The guarantor is negligent in managing and recovering debts due or
disposes of its major properties for free or by other inappropriate
means.

 

10.2.5
The Guarantor fails to perform or violates the obligations
stipulated in the Letter of Guarantee/Commitment issued by the
Guarantor.

 

10.3 In
case any one of the following circumstances occurs, which Party A
considers may cause the mortgage (or pledge) to be void or null or
the mortgaged (pledged) property to be insufficient, Party A shall
require the mortgagor (or pledgor) to eliminate the adverse effects
resulting therefrom, or require Party B to increase or change the
guarantee conditions. If the mortgagor (or pledgor) fails to
provide cooperation, a default event shall be deemed to have
occurred:

 

 

12

 

 

10.3.1
The mortgagor (or pledgor) has no ownership or right to dispose of
the mortgaged (or pledged) property or its ownership has
disputes;

 

10.3.2
The mortgaged (or pledged) property has been leased, sealed up,
detained, regulated or imposed legal priority (including but not
limited to the priority in relation to construction funds), and/or
the occurrence of any of such circumstances is
concealed;

 

10.3.3
Without the written consent of Party A, the mortgagor transfers,
leases, re-mortgages or otherwise disposes of the mortgaged
property in any other improper way, or though with the written
consent of Party A, the mortgagor fails to use the proceeds from
the disposal of the mortgaged property to repay the debts owed to
Party A by Party B as required by Party A;

 

10.3.4
The mortgagor fails to properly keep, maintain and repair the
mortgaged property, resulting in obvious decrease in the value of
the mortgaged property; or the mortgagor's actions directly
endanger the mortgaged property and result in decrease in the value
of the mortgaged property; or the mortgagor fails to cover
insurance for the mortgaged property in accordance with the
requirements of Party A during the mortgage period;

 

10.3.5
The mortgaged property has been or may be included in the scope of
government demolition and expropriation, and the mortgagor fails to
immediately notify Party A and fulfill the relevant obligations as
stipulated in the mortgage contract;

 

10.3.6
The mortgagor uses his property mortgaged in China Merchants Bank
to provide the residual mortgage guarantee for the transaction
hereunder, and settles his personal mortgage loan in advance
without the consent of Party A before Party B pays off the credit
hereunder.

 

10.3.7
The Mortgagor (or Pledgor) fails to perform or violates the
obligations stipulated in the Guarantee Contract / Letter of
Commitment signed thereby.

 

10.4
Where any guarantee hereunder includes the pledge of accounts
receivable, and the debtor of the accounts receivable suffers a
significant deterioration in his business, evades debts by
transferring property/illegally withdrawing funds, colludes with
the pledgor of the accounts receivable to alter the repayment path,
resulting in the failure of the accounts receivable to enter the
special account for repayment, loss of business reputation, loss or
possible loss of performance ability or other major events that
will affect its solvency, Party A shall have the right to request
Party B to provide the corresponding guarantee or new effective
accounts receivable for pledging. If Party B fails to provide such
guarantee, it is deemed that a default event has
occurred.

 

10.5 In
case any of the default events mentioned above occurs, Party A
shall have the right to take the following measures separately or
concurrently:

 

10.5.1
Reduce the credit line hereunder, or stop the use of the remaining
credit line;

 

10.5.2
Recover in advance the principal, interest and related expenses for
loans already released within the credit line;

 

 

13

 

 

10.5.3
For drafts accepted or L/Cs, letters of guarantee and shipping
guarantees issued (including forwarded upon authorization) by Party
A during the credit period, whether Party A has made advance
payments or not, Party A may require Party B to increase the amount
of margin, or transfer Party B's deposit in other accounts opened
in the side of Party A to its margin account as the margin for
paying off Party A's future advances hereunder or have the
corresponding amount escrowed by a third party as the margin for
Party A's future advances for Party B;

 

10.5.4
For creditor's rights of any unpaid receivables transferred by
Party B to Party A under the factoring transaction, Party A shall
have the right to request Party B to immediately fulfill its
repurchase obligations and to take other recovery measures in
accordance with the relevant specific transaction agreement; for
creditor's rights of any receivables transferred by Party B to
Party A under the factoring transaction, Party A shall have the
right to immediately recover such debts from Party B.

 

10.5.5
Party A may also directly request Party B to provide other property
acceptable to Party A as a new guarantee. If Party B fails to
provide the new guarantee as required, it shall pay / % of the amount of credit
lines hereunder as the liquidated damages.

 

10.5.6
Party A may directly freeze/withhold the deposit in any settlement
account and/or other accounts opened by Party B in China Merchants
Bank;

 

10.5.7
For the working capital loans under the credits, Party A may change
the conditions of entrusted payment of the loan funds and cancel
the use of loans by Party B in the form of "independent
payment";

 

10.5.8
Recourse pursuant to this Agreement.

 

10.6
The amount recovered by Party A shall be used to repay the credits
in the order of whose expiry date comes late. The specific order of
repayment of each credit shall be in the order of fees, liquidated
damages, compound interest, default interest, interest and the
principal of credit, until the principal, interest and all related
expenses are paid off.

 

Except
otherwise required by laws and regulations, Party A shall have the
right to unilaterally adjust the order of repayment.

 

Article 11 Alteration and Rescission

 

No
alteration or rescission of this Agreement may be made unless a
written agreement is reached by and between the parties through
consultation. This Agreement shall remain valid before such written
agreement is reached. Neither party may unilaterally alter, modify
or rescind this Agreement.

 

Article 12 Miscellaneous

 

12.1
Party A's tolerance or connivance of any act of violation or delay
by Party B or deferred exercise of the rights or interests deserved
by such party hereunder during the validity term of this Agreement
shall not impair, affect or restrict Party A's enjoyment of all
rights and interests by law and hereunder, nor be deemed as Party
A's permission or recognition of any violation, default or delay or
as Party A's waiver of its right to take actions against any
existing or future violation or delay.

 

 

14

 

 

12.2
Party B shall be liable for repaying all debts owed to Party A
hereunder even if this Agreement becomes invalid at law in whole or
in part for whatever reason. If the above circumstance occurs,
Party A shall be entitled to terminate its performance of this
Agreement and may immediately claim against Party B for all debts
owed by Party B hereunder.

 

If in
performing the obligations hereunder, Party A incurs additional
costs due to changes in the applicable laws or policies, Party B
shall, at the request of Party A, compensate for such additional
costs.

 

12.3
All notices, requests or other documents in connection with this
Agreement shall be sent in writing (including but not limited to by
means of letter, fax, e-mail, Party A’s e-bank, SMS, WeChat,
etc.).

 

Party
A's Mailing Address: No.1546 Dalian Road, Yangpu District,
Shanghai 

 

 

	
Company E-mail:
lichenyang@cmbchina.com

	
Fax:

	
 

	
 

	
Mobile:

	
Company
WeChat:

	
 

	
 

	

Party
B's Mailing Address: No.85
Faladi Road, Pudong New Area,
Shanghai 

	
   

	
 

	
Company
Email:

	
Fax:

	
   

	
 

	
Mobile:

	
 Company
WeChat:

 

12.3.1
A notice shall be deemed to have been given: if delivered
personally (including but not limited to the circumstance in which
such notice is delivered by a lawyer/notary or by courier), at the
time of signature by the recipient (if the recipient rejects such
notice, such notice shall be deemed to have been given after seven
(7) days as of the date of rejection/return or the date of posting
(whichever is earlier); if delivered by mail, it should be deemed
to have been given at seven (7) days after posting; if delivered by
fax or e-mail, Party A’s e-bank notice, SMS or WeChat or
other electronic means, it should be deemed to have been given on
the date when the sender’s system indicates that such notice
has been sent.

 

If
Party A notifies Party B of the debts transfer or claims against
Party B for repayment by issuing an announcement through public
media, such notice shall be deemed to have been given on the date
of such announcement.

 

If
either party changes its mailing address, e-mail, fax number, phone
number, or WeChat number, such party shall give a notice of change
to the other party within five (5) working days of such change. If
such party fails to give such notice of change, the other party
shall have the right to deliver a notice according to the original
mailing address or information. If a notice fails to be given due
to change in the mailing address, such notice shall be deemed to
have been given after seven (7) days as of the date of return or
the date of posting (whichever is earlier). Without prejudice to
the legal effect of the service, the party making such change shall
assume all losses arising therefrom, if any.

 

12.3.2
The above mailing address, e-mail, fax number, phone number, or
WeChat number shall become the address to which the relevant
notarization documents and judicial documents (including but not
limited to the pleadings/applications for arbitration, evidence,
subpoena, notice of respondence to action, notice of adducing
evidence, notice of court session, notice of hearing, written
judgment/award, written verdict, mediation documents, notice of
execution within the specified period and other legal instruments
created at the stage of trial and enforcement) shall be delivered.
The notarization documents and judicial documents shall be deemed
to have been effectively given by the appellate court and the
notary organization when the same are delivered by such written
form as agreed herein to the above address (the specific service
standard shall be determined by reference to the provisions of
Article 12.3.1).

 

 

15

 

 

12.4
The parties agree that for any service application under the trade
financing service, Party B may only need to bear the reserved seal
in accordance with the Reserved
Seal Authorization provided by Party B to Party A and that
the parties shall acknowledge the effect of such seal.

 

12.5
The parties acknowledge that if
Party B submits any application or service voucher in respect of
the credit service through the online enterprise bank system, it
shall be deemed as the expression of the true intent of Party B;
and that Party A shall have the right to fill out the relevant
service vouchers based on the application information issued online
and Party B acknowledges the authenticity, accuracy and legality of
such service vouchers.

 

12.6
The written supplemental agreement reached by the parties through
consultation over the matters not covered herein or any change, and
the specific contracts hereunder constitute annexes to this
Agreement and become an integral part of this
Agreement.

 

12.7 In
order to provide convenience in performing the service, any branch
within the jurisdiction of Party A may handle all transaction
operations in which Party A is involved (including but not limited
to acceptance of applications, data review, loan granting,
transaction confirmation, deduction, inquiry, receipt printing,
collection, deduction and collection, and issuance of notices) and
generate, sign or issue the relevant letters. The service operation
and letters carried out and issued by such branch within the
jurisdiction of Party A shall be deemed as the act done by Party A
and shall be binding upon Party B.

 

12.8
Annexes hereto constitute an integral part of this Agreement and
are automatically applicable to the specific service actually
taking place between the parties.

 

12.9 If
this Agreement shall be notarized (other than the compulsory
notarization) or is otherwise relevant to the matters for which a
third party shall be entrusted to provide services, the relevant
costs shall be for the account of the entrusting party. If the
parties jointly act as the entrusting party, the relevant costs
shall be equally shared by the parties. If Party B is unable to
repay its debts owed to Party A under this Agreement when due, all
costs incurred by Party A for realization of the creditor’s
rights, including the attorney’s fees, legal costs, travel
expenses, announcement fees and delivery fees, shall be for the
account of Party B. Party B authorizes Party A to directly deduct
such costs from the account opened by Party B at Party A. If the
balance of such account is insufficient to cover such costs, Party
B shall warrant that it will repay the balance upon receipt of
Party A’s notice, for which Party A is not required to
provide any certificate.

 

12.10 /                                                                                                                                      

 

Article 13 Governing Laws and Dispute Resolution

 

13.1
The execution and construction of this Agreement and the resolution
of disputes hereunder shall be governed by the laws of the People's
Republic of China (excluding the laws of Hong Kong, Macau and
Taiwan), and the rights and interests of the parties shall be
protected by the laws of the People's Republic of
China.

 

13.2
Any dispute arising out of the performance of this Agreement shall
be resolved by the parties through negotiations; if such
negotiations fail, either party may (choose one of the following
three options by checking "√" in ⬜):

 

 

16

 

 

☑13.2.1
bring an action in the people's court of the place where this
Agreement is signed;

 

⬜13.2.2
bring an action in the people's court of the place where Party A is
located;

 

⬜13.2.3
apply to / (name of
arbitration agency) for arbitration in (place of arbitration
/ ).

 

13.3.
Upon notarization of this Agreement and each specific contract,
endowing Party A with the enforcement effect, Party A may directly
apply to the people's court of jurisdiction for enforcement of the
debts owed by Party B under this Agreement and each specific
contract.

 

Article 14 Effectiveness

 

This
Agreement takes effect upon bearing the signature (or name seal) of
the legal representatives/Chief Person-in-charge or authorized
agents of the both parties and being affixed with their respective
company chop/contract seal and automatically terminates on the
expiry date of the credit period or on the date when all debts and
other related expenses owed by Party B to Party A hereunder are
paid off (whichever is later).

 

Article 15 Supplementary Provisions

 

This
Agreement is made in three copies, one for each of
Party A, Party B and Party
A's superior, and / , and all copies have the
equal legal effect.

 

Annex 1: Special Terms on Bank-Customs Direct (Customs Tax Payment
Guarantee Business)

 

Annex 2: Special Terms on Buyer / Import Factoring
Business

 

Annex 3: Special Terms on Order Loan Business

 

Annex 4: Special Terms on Guarantee to Discount of Commercial
Acceptance Draft

 

Annex 5: Special Terms on Derivative Trading Business

 

Annex 6: Special Terms on Gold Leasing Business

 

Annex 7: Special Terms on Cross-border Trade Financing
Business

 

 

17

 

 

Annex 1: Special Terms on Bank-Customs Direct (Customs Tax Payment
Guarantee Business)

 

Article
1 Party B applies to Party A for the provision of the customs tax
payment guarantee service within the credit line. The
“customs tax payment guarantee service” refers to a
service provided by Party A to Party B according to online payment
banking guarantee orders issued by Party B via the electronic
port/www.easipay.net and by providing the customs online with
guarantees and commitments for payment of the tax payable
(guaranteeing that the tax payable will be paid to the national
treasury when due; and the system shows that Party A sends
“successful payment” information to the electronic
port/www.easipay.net) within the credit line, via the electronic
port/www.easipay.net and in the form of e-payment guarantee. With
such service, Party B may firstly go through goods clearance
procedures, and then pay the relevant import and export taxes
within such payment period as specified by the
customs.

 

The
advance paid by Party A according to its payment guarantee &
commitment (whether such advance payment is made within the credit
period or not) and the relevant interest and costs directly
constitute Party B’s financing debts owed by Party B to Party
A and shall be included into the scope of credit
guarantees.

 

Article
2 Party B shall, according to such proportion as required by Party
A, deposit certain funds as the margin (the account number shall be
subject to that automatically generated or input by the system at
the time of fund depositing) to provide the counter guarantee over
the tax payment guarantee provided by Party A.

 

Article
3 Party A shall, in the capacity of the warrantor, issue the
e-payment guarantee to the customs; and Party B shall understand
and acknowledge that such e-payment guarantee constitutes an
independent letter of guarantee. The guarantee liability assumed by
Party A to the customs is the independent demand guarantee
liability.

 

Article
4 Party B shall, through electronic ports/www.easipay.net issue
withholding orders to Party A trade by trade. Party A shall,
according to such withholding orders issued by Party B online,
provide the payment guarantee & commitment to the customs.
Party B grants Party A the right to deduct the principal and
interest of the guarantee and commitment amount from the relevant
margin account of Party B and fill out the relevant business
vouchers according to the online withholding orders.

 

The
specific time and amount as to each payment guarantee &
commitment made by Party A within the credit line shall be subject
to Party B’s online payment bank guarantee orders (payment
guarantee withholding orders) received by Party A and kept in Party
A’s online system. Party B must, within the credit period,
issue the payment guarantee withholding orders to Party A. If Party
B issues such payment guarantee withholding orders beyond the
credit period, Party A will not accept Party B’s
application.

 

Party A
shall, according to the “payment period” (i.e.,
“Maturity date of the Tax Payable”) specified under the
actual deduction orders issued by the electronic
port/www.easipay.net to Party A, determine the maturity date of any
single payment guarantee & commitment.

 

Article
5 If Party B does not apply for the customs tax payment guarantee
service with its credit lines for consecutive month(s),
Party A shall have the right to refuse to provide such service to
Party B.

 

 

18

 

 

Article
6 Party B authorizes Party A to pay the tax payable to the customs
by directly deducting the relevant amount from Party B’s
account (including the margin account) without giving a prior
notice to or obtaining the consent of Party B when the tax payable
is due. If the account balance is insufficient to pay the tax
payable, Party B shall warrant that it will remit the difference to
the designated account for payment of taxes in full within 3 days
prior to the maturity date of the tax payable for the purpose of
payment of the tax payable in time. If Party B fails to timely
supplement the difference, and if Party A pays the relevant amount
to the national treasury for and on behalf of Party B according to
its payment guarantee & commitment, Party A shall have the
right to claim against Party B for the relevant amount and charge
Party B the liquidated damages at an annual interest rate of
/ % according to
the actual days as of the date when Party A pays the
advance.

 

Article
7 Party A shall, on a quarterly basis, charge Party B the guarantee
fees according to the actual transaction amount of the online
payment bank guarantee service and at a rate of / %/year.

 

Article
8 If Party B fails to perform its obligations under the
Credit Extension Agreement
or this Annex or any statement, undertaking or warranty made by
Party B is untrue, Party A shall have the right to take the breach
disposal measures specified in the Credit Extension Agreement, and charge
Party B 100% of the margin as per the total guarantee amount which
Party A has provided the payment guarantee & commitment but no
claim has been filed.

 

 

19

 

 

Annex 2: Special Terms on Buyer / Import Factoring
Business

 

Article 1 Definitions

 

1.1 The
“buyer/import factoring service” means the
comprehensive factoring service provided by Party A as the
buyer/import factor to the seller/export factor after the
seller/export factor accepts the transfer of the receivables of
which Party B is the debtor under a service contract, including
collection and management of the approved payment and accounts
receivable.

 

Under
the buyer/import factoring service, if Party B suffers the buyer
credit risk, Party A shall assume the approved payment liability to
the seller/export factor. If any dispute arises during the
performance of the service contract, Party A shall be entitled to
transfer the account receivable it accepts to the seller/export
factor.

 

1.2 The
“seller/export factor” means a party signing the
factoring agreement with the goods/service provider under the
service contract (creditor of accounts receivable) and accepting
the transferred accounts receivable held by the creditor of
accounts receivable. Party A may concurrently act as the
buyer/import factor and the seller/export factor.

 

1.3 A
“dispute” means the defense, counterclaim or offset or
similar act made or committed by Party B for the account receivable
accepted by Party A due to any dispute between the creditor of
accounts receivable and Party B due to the relevant goods, service,
invoices or any other matters in connection with the service
contract, and any act committed by any third party including
claiming for the account receivable hereunder or applying for
seal-up, freezing and attachment. If the account receivable
accepted by Party A cannot be realized in whole or in part due to
the buyer credit risk, it shall be deemed that a dispute has
arisen.

 

1.4 A
“service contract” means a transaction contract signed
by and between Party B and the creditor of accounts receivable for
the purpose of any goods transaction and/or service transaction
settled by means of credit sale.

 

1.5 The
“approved payment/secured payment” means the account
receivable to be paid by Party A to the seller/export factor within
a certain period after the account receivable is due in the event
that Party B has suffered the buyer credit risk.

 

Article
2 At the request of Party B, Party A agrees to provide Party B with
the buyer factoring service within the credit line. The amount and
other relevant costs paid by Party A in the capacity of the buyer
factor for the purpose of performing the approved payment liability
shall be deemed as the credit loan granted by Party A to Party B
under the Credit Extension
Agreement.

 

As long
as Party A has accepted the transferred account receivable within
the credit period, even if Party A performs the approved payment
liability beyond the credit period, Party A shall still have the
right to file a claim against Party B in accordance with the
Credit Extension Agreement
and the service contract.

 

Article 3 Buyer/import factoring service charge

 

The
“factoring service charge” means the service management
fees to be charged for Party A’s provision of the
buyer/import factoring service, which shall be charged by Party A
against Party B at a certain proportion of the account receivable
at the time of transfer closing. The specific rate shall be
reasonably determined by Party A according to its service
rules.

 

Article
4 For any dispute arising during performance of the service
contract, Party B waives its right to raise a dispute. Now
therefore, notwithstanding anything else herein, if Party B fails
to effect payment in accordance with the service contract, it shall
be deemed that Party B suffers the buyer credit risk, in which
case, Party A shall make approved payment and Party B shall raise
no objection in this regard.

 

 

20

 

 

Annex 3: Special Terms on Order Loan Business

 

Article
1 The “order loan service” means the loan service
provided by Party A to Party B according to the business contract
(or engineering contract) concluded by and between Party B and its
downstream clients (payers) and for the purpose of granting the
loan for the daily production and operation in accordance with the
business contract (or for performance of the engineering contract),
which primary source of repayment shall be the contract sales
collections (or engineering collections) .

 

Article
2 Party B shall open a special account for collection of sales
amounts under the business contract (or engineering contract) at
Party A. All sales amounts under the business contract (or
engineering contract) for which an order loan application is
submitted must be directly collected and deposited in such special
account for collection. Without the approval from Party A, no fund
in such special account for collection may be used and no change
shall be made in such special account for collection. Party B must
notify the payer that such special account is the only account for
collection of the sales amount. Party A shall have the right to
deduct the relevant amount form such special account to repay the
principal and interest, default interest and other relevant fees in
respect of the order loan financing.

 

Article
3 Should any of the following circumstances occur, Party A may
immediately suspend the use of Party B’s limit under the
Credit Extension Agreement
and take measures to dispose default in accordance with the
Credit Extension
Agreement:

 

3.1 Any
downstream client of Party B delays in payment for three
consecutive installments and Party A reasonably believes that such
downstream client experiences the worsening financial position or
other circumstances unfavorable to protection of Party A’s
creditor’s rights;

 

3.2
Party B is disqualified by its downstream clients as supplier; Part
B delays in delivery of goods to its downstream clients; the
product quality is unstable; the construction is neither approved
by the downstream clients nor carried out in accordance with the
engineering contract; Party B’s qualification is reduced,
which results in that Party B’s qualification no longer
satisfies the downstream clients’ requirements; Party A
reasonably believes that Party B experiences the operation
difficulty and worsening financial position; or the amount
collected from the downstream clients for three consecutive months
is less than the total monthly amount to be repaid by Party B for
the credit loan in accordance with each financing contract; or the
downstream clients fail to effect payment for two consecutive
installments in accordance with the engineering
contract.

 

 

21

 

 

Annex 4: Special Terms on Guarantee to Discount of Commercial
Acceptance Draft

 

Article
1 The “commercial acceptance draft discounting guarantee
service” means the discounting service provided by Party A
for the commercial acceptance drafts accepted by Party B or allowed
to be applied for by any bearer to any branch of China Merchants
Bank (hereinafter referred to as “Other Discounting Accepting
Banks”). A bearer (hereinafter referred to as
“Discounting Applicants”) may apply to Party A or Other
Discounting Accepting Banks for discounting service with the
commercial acceptance drafts. The discounting service will occupy
the credit lines hereunder.

 

Whereas,
Other Discounting Accepting Banks accept a bearer’s
application for discounting service is conditional upon Party
A’s provision of the commercial acceptance draft discounting
guarantee service to Party B. Other Discounting Accepting Bank,
upon provision of the discounting service, shall have the right to
transfer the discounted draft to Party A, and Party A is obliged to
accept such transfer. For any commercial acceptance drafts
transferred by Other Discounting Accepting Banks and accepted by
Party A, Party B undertakes to unconditionally pay for the amount
shown on such commercial acceptance drafts on the maturity date,
for which neither party shall raise objections.

 

Article
2 The commercial acceptance drafts mentioned in this Article
include the paper commercial acceptance drafts and the electronic
commercial acceptance drafts (hereinafter referred to as
“Electronic Commercial Drafts”); and include the
commercial acceptance drafts with interest payable by the
Discounting Applicant and the commercial acceptance drafts with
interest paid by the buyer.

 

The
buyer interest paid commercial acceptance drafts discounting
service means the note discounting service provided by Party A for
the commercial acceptance drafts signed and accepted by Party B,
which the discounting interest shall be paid by Party
B.

 

Article
3 During the credit period, Party B shall open a commercial
acceptance draft margin account in Party A (the account number
shall be subject to that automatically generated or recorded by
Party A’s system at the time of the margin received), and
prior to acceptance of each note and as per such proportion as
required by Party A, deposit in such margin account a certain
amount of funds as the payment margin for the commercial acceptance
drafts that are accepted by Party B and for which Party A
undertakes to provide discounting service.

 

Party B
shall, prior to the maturity date of each commercial acceptance
draft, deposit the sufficient amount in the margin account opened
by Party B in Party A for the purpose of paying for the amount
shown on the commercial acceptance drafts when due.

 

Article
4 During the credit period, the Discounting Applicant may, by
virtue of the commercial acceptance drafts accepted by Party B,
apply to Party A for discounting directly or to Other Discounting
Accepting Banks for discounting. Party A or Other Discounting
Accepting Banks shall have the right to review the Discounting
Applicant’s qualification, request Party B to make review
confirmation and at its own discretion determine whether to provide
discounting service.

 

 

22

 

 

Upon
provision of the discounting service, Other Discounting Accepting
Banks shall have the right to, in accordance with the relevant
regulations of China Merchants Bank, endorse and transfer to Party
A the commercial acceptance drafts that have been discounted by
Other Discounting Accepting Banks. After Party A provides the
discounting service or accepts the commercial acceptance drafts
transferred by Other Discounting Accepting Banks, Party B shall, at
the request of a bearer, unconditionally pay Party A for the amount
payable shown on the commercial acceptance drafts in full and in
time.

 

Article
5 The opening and discounting of Electronic Commercial Drafts shall
be subject to the service information kept in the electronic note
system of the People’s Bank of China, or client statements of
account filled out or printed on the basis thereof or other
relevant service records. Party A’s service records shall be
the integral part hereof and have the same legal effect as this
Agreement. Party B accepts the accuracy, authenticity and legality
of such service records.

 

Article
6 If there is any dispute over the basic contract for the
commercial acceptance drafts discounted by Party A within the
credit line, such dispute shall be coordinately settled by Party A
with the relevant party. Prior to expiry of each note, Party B
shall still be obliged to deposit the margin and the note amount in
full and in time in accordance with the aforementioned
provisions.

 

Article
7 If Party A has provided the discounting service for the
commercial drafts accepted by Party B or accepted the commercial
drafts transferred by Other Discounting Accepting Banks, and if
Party B fails to pay the commercial draft amount in full prior to
the maturity date, Party A shall be entitled to deduct the relevant
amount from any margin account opened by Party B at China Merchants
Bank. If Party B fails to deposit the sufficient amount or if Party
B’s account balance is insufficient for deductions, which
results in that Party A has to effect payment for and on behalf of
Party B, Party A may, in accordance with the relevant provisions of
the Measures for Payment and
Settlement, charge the default interest at a rate of 0.05%
of the advance amount for each overdue day.

 

 

23

 

 

Annex 5: Special Terms on Derivatives Trading Business

 

Article
1 For any derivatives trading agreed by Party A to provide based on
Party B’s application, such derivatives trading may occupy
the credit line at a certain percentage of the notional transaction
principal/transaction amount, or Party A may, according to the
specific agreements between the parties, increase the occupied
credit lines of Party B in the case of any floating loss in such
derivatives trading (in entering into any transaction, Party A may
determine the occupied credit lines amount based on the risk degree
coefficient corresponding to the category, term, risk degree and
the deducted credit lines in respect of such transaction). The
actually occupied credit lines amount is subject to the record
contained in the notice of occupation and/or transaction
confirmation/certificate and other relevant transaction documents
issued by Party A.

 

Article
2 For any derivatives trading with any balance or loss within the
credit period, the credit lines shall be occupied in accordance
with the provisions of the preceding paragraph, regardless of
whether such trading takes place within the credit period or
not.

 

 

24

 

 

Annex 6: Special Terms on Gold Leasing Business

 

Article
1 The “Gold Leasing” service means the service provided
by Party A to Party B, which is carried out by leasing the physical
gold by Party A to Party B and returning by Party B the gold of the
same quantity, quality and property when due and timely paying the
rent to Party A in renminbi.

 

Article
2 Party A may, at the request of Party B, provide Party B with the
Gold Leasing service within the credit period and the credit line.
The physical gold leased by Party A shall occupy the credit line at
such value as agreed in the Gold Leasing agreement concluded by and
between the parties, and constitute the debts owed by Party B to
Party A.

 

 

25

 

 

Annex 7: Special Terms on Cross-border Trade Financing
Business

 

Article
1 The cross-border linkage trade financing service means the
cross-border trade financing service jointly provided by Party A
and overseas branches of China Merchants Bank (“Linkage
Platform”) based on the application submitted by Party B
against the background of Party B’s true cross-border trade
with overseas companies.

 

Article
2 The cross-border linkage trade financing service includes the
following categories: back-to-back letter of credit, entrusted
issuance of letter of credit, entrusted overseas financing, notes
certification, guarantee-based overseas credit loan and
cross-border trade financing direct train. The specific definition
and service rules of each service category shall be determined
according to the corresponding service agreement.

 

Article
3 Under the back-to-back letter of credit, the overriding credit
applied by Party B to Party A for issuance shall directly occupy
the credit lines hereunder; and the documentary credit or advance
granted or paid by Party A in performing its obligations under such
overriding credit as an issuing bank (whether such circumstance
occurs within the credit period or not) and the relevant interest
and fees constitute the financing debts owed by Party B to Party A
and shall be included into the scope of credit
guarantees.

 

Under
the entrusted issuance of letter of credit/entrusted overseas
financing, if Party A, at the request of Party B, entrusts the
Linkage Platform to accept the L/C for which an overseas company
submits an issuance application/trade financing provided such L/C
and trade financing shall occupy the credit lines hereunder. If
Party A grants the advance against inward documentary bills under
collection or provide the advance to Party B for payment under
inward collection, such negotiation or advance payment (whether it
is granted or made within the credit period or not) and the
relevant interest and costs directly constitute the financing debts
owed by Party B to Party A and shall be included into the scope of
credit guarantees.

 

In the
case of check guarantee, Party A may, at the request of Party B,
directly occupy Party B’s credit lines hereunder to provide
additional guarantees for Party B’s acceptance drafts. If
Party B fails to pay the check amount in full and in time, Party A
shall be entitled to directly pay the advance for the certified
check. Such advance payment (whether it is made within the credit
period or not) and the relevant interest and costs shall be
included into the scope of credit guarantees.

 

Under
the guarantee-based overseas credit loan, Party A may, according to
the letter of guarantee/standby letter of credit issued at the
request of Party B, directly occupy the credit lines hereunder.
After the overseas company transfers the collection equity (other
than the claim right) under the letter of guarantee to the Linkage
Platform, if the Linkage Platform files a claim against Party A
according to the letter of guarantee/standby letter of credit, the
advance paid by Party A (whether such advance payment is made
within the credit period or not) and the relevant interest and
costs directly constitute the financing debts owed by Party B to
Party A and shall be included into the scope of credit
guarantees.

 

Under
the cross-border trade financing direct train, after Party A
approves Party B’s trade financing at the request of Party B,
the trade financing directly provided by the Linkage Platform to
Party B shall occupy the credit lines hereunder. If Party B fails
to repay the trade financing amount to the Linkage Platform in full
and in time, Party A shall be entitled to repay such amount in the
form of the negotiation or advance payment, in which case, such
negotiation or advance payment (whether such negotiation or advance
payment is granted or made within the credit period or not) and the
relevant interest and costs directly constitute the financing debts
owed by Party B to Party A and shall be included into the scope of
credit guarantees.

 

 

26

 

 

Special
Tips:

 

The
parties hereto have conducted sufficient negotiation regarding all
terms of this Agreement (including Schedules). The bank has asked
the other parties to pay special attention to and have a complete
and accurate understanding of the terms in connection with the
discharge or limitation of the bank's liability, rights
unilaterally enjoyed by the bank, addition of such other
parties’ liability or limitation of their rights. The Bank
has made corresponding explanation to the above-mentioned terms at
the request of the other parties. The parties hereto have the same
understanding of the terms hereof.

 

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

 

 

27

 

 

(This
page is the signature page of the Credit Agreement numbered
4802181206)

 

 

 

Party
A:

(sealed)

 

Chief
Person-in-charge or Authorized Agent

 

(Signature/Name
Seal):

 

 

 

Party
B:                                             

(sealed)

 

Legal
Representative/Chief Person-in-charge or Authorized
Agent:

 

(Signature/Name
Seal): /s/ Bizuo (Tony) Liu

 

 

Date:
January 19,
2019

 

Place
of Signing: Yangpu
District, Shanghai
City

 

 

 

28

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00291-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00291-of-00352.parquet"}]]