Document:

Exhibit 10.1

 

SEPARATION AND GENERAL RELEASE AGREEMENT

 

THIS SEPARATION AND
GENERAL RELEASE AGREEMENT (this “Agreement”) is entered into between Darryl Miller, an individual with an address
at 7625 Blackhall, The Colony, Texas 75056 (“Employee”), and I.D. Systems, Inc., with a headquarters address
123 Tice Boulevard, Suite 101, Woodcliff Lake, NJ  07677 (“Company” and, together with its parent, divisions,
affiliates, and subsidiaries and their respective officers, directors, employees, shareholders, members, partners, plan administrators,
attorneys, and agents, as well as any predecessors, future successors or assigns or estates of any of the foregoing, the “Released
Parties”).

 

WHEREAS, Employee was
employed by Company from on or about January 7, 2010 until his employment was terminated on November 27, 2012 (the “Separation
Date”); and

 

WHEREAS, Company contended
that it had grounds to terminate Employee’s employment for Cause (as that term is defined in that certain Severance
Agreement between the parties dated as of December 14, 2010 (the “Severance Agreement”)) and Employee disputed
the Company’s contention that there was Cause; and 

 

WHEREAS, during his
employment and for an extended time period thereafter (as set forth below) Employee agreed to be bound by that certain Confidentiality,
Assignment of Contributions and Inventions, Non-Competition and Non-Solicitation Agreement he signed on or about December 14, 2010
(the “Covenants Agreement”).

 

NOW, THEREFORE,
as and material consideration for Employee’s execution of this Agreement and for him not challenging the restrictive covenants
in the Covenants Agreement as legally unenforceable and agreeing to extend the definition of the Restricted Period as defined in
the Covenants Agreement, and in consideration of the premises, mutual covenants and agreements described herein and for other good
and valuable consideration acknowledged by each of the parties to be satisfactory and adequate, the parties, intending to be legally
bound hereby, agree as follows:

 

1.          Separation
of Employment. Employee acknowledges and understands that Employee’s last day of employment with Company was the Separation
Date, and that Employee has received all compensation and benefits to which Employee is entitled as a result of Employee’s
employment, except as otherwise provided in this Agreement. Employee understands that, except as otherwise provided under this
Agreement, Employee is entitled to nothing further from the Released Parties, including reinstatement by Company.

 

    	 

    	 

    

 

2.           Employee
Release of Released Parties. In consideration of the payments and benefits set forth below in Section
4, Employee hereby releases, waives, discharges and gives up any and all Claims (as defined below) that Employee may have against
the Released Parties, arising on or prior to the date hereof. “Claims” means any and all actions, charges, controversies,
demands, causes of action, suits, rights, and/or claims whatsoever for debts, sums of money, wages, salary, bonuses, severance
pay, commissions, draw, bonuses, unvested stock options, vacation pay, sick pay, fees and costs, unreimbursed expenses, legal fees,
losses, penalties, damages, including damages for pain and suffering and emotional harm, arising, directly or indirectly, out of
any promise, agreement, offer letter, contract (including but not limited to the Severance Agreement), understanding, common law,
tort, the laws, statutes, and/or regulations of the States of New Jersey, Texas, or any other state and the United States, including,
but not limited to, federal and state wage and hour laws, federal and state whistleblower laws, Section 1981 of the Civil
Rights Act of 1866, Title VII of the Civil Rights Act of 1964, the Civil Rights Act of 1991, the Equal
Pay Act, the Americans with Disabilities Act, the Family and Medical Leave Act, the Employment Retirement Income Security Act,
the Vietnam Era Veterans Readjustment Assistance Act, the Fair Credit Reporting Act, the Fair Labor Standards Act, the Age Discrimination
in Employment Act (“ADEA”), OSHA, the Sarbanes-Oxley Act of 2002, the Lily Ledbetter Act, the New Jersey Law
Against Discrimination, the New Jersey Family Leave Act, the New Jersey Civil Rights Act, the Conscientious Employee Protection
Act, and the Texas Human Rights Act, as each may be amended from time to time, whether arising
directly or indirectly from any act or omission, whether intentional or unintentional. This Agreement releases all Claims including
those of which Employee is not aware and those not mentioned in this Agreement up to the date of the execution and delivery of
this Agreement to Company. Employee specifically releases any and all Claims arising out of Employee’s employment with Company
and separation therefrom. Employee expressly acknowledges and agrees that, by entering into this Agreement, Employee is
releasing and waiving any and all Claims which may have arisen on or before the date of Employee’s execution and delivery
of this Agreement to Company, including claims under ADEA.

 

3.           Representations;
Covenant Not to Sue. Employee hereby represents and warrants to the Released Parties that: (a) Employee has not filed or caused
or permitted to be filed any proceeding or Claim (nor has Employee lodged a complaint with any governmental
or quasi-governmental authority) against the Released Parties, nor has Employee agreed to do any of the foregoing; (b) Employee
has not assigned, transferred, sold, encumbered, pledged, hypothecated, mortgaged, distributed, or otherwise disposed of or conveyed
to any third party any right or Claim against the Released Parties that has been released in this Agreement; and (c) Employee has
not, directly or indirectly, assisted any third party in filing or causing or assisting to be filed any proceeding or Claim against
the Released Parties. Except as set forth in Section 11 below, Employee covenants and agrees that he shall not encourage or solicit
or voluntarily assist or participate in any way in the filing, reporting or prosecution by himself or any third party of a proceeding
or Claim against any of the Released Parties. 

 

4.           Consideration.
As good consideration for Employee’s execution, delivery, and non-revocation of this Agreement
and full compliance with the terms hereof, Company shall provide Employee with the following:

 

(a)          payment
of $200,000 (less applicable withholdings and deductions) in twelve equal monthly installments commencing on the next regularly
scheduled paydate following the Effective Date (defined below) and payable on the last business day of each month thereafter;

 

    	-2-

    	 

    

 

(b)          reimbursement
of expenses totaling $500.89 together with payment of $11,423.00 representing all unused accrued vacation days, payable on the
next regularly scheduled paydate following the Effective Date;

 

(c)          a
pro rata portion of the Restricted Shares awarded to Employee pursuant to Restricted Stock Award Agreements between Employee and
the Company dated February 5, 2010, March 30, 2011 and March 29, 2012, respectively, as identified on Exhibit A hereto under
the column “Number of Restricted Shares To Be Vested Upon Effective Date”, will be deemed to have vested as
of the Effective Date (the “Vested Restricted Shares”). Employee shall sell the Vested Restricted Shares only
during the thirty (30) day period (the “VRS Sale Period”) beginning on the date of delivery of the Vested Restricted
Shares to Employee, which Vested Restricted Shares shall be delivered, within three (3) business days following the Effective Date
(and, for the avoidance of doubt, only if the Agreement has not been revoked in accordance with Section 12(b) of this Agreement),
in electronic form via book entry transfer to the account maintained by the Employee’s broker at Depository Trust Company
as set forth on Schedule 4.6(c) attached hereto. The Employee may not sell the Vested Restricted Shares following the VRS
Sale Period, and any Vested Restricted Shares not sold upon the expiration of the VRS Sale Period shall automatically, and without
any further action of the Company, be forfeited. Employee shall (y) notify the Company and the Escrow Agent (as defined below),
in writing, of the sale of the Vested Restricted Shares, together with a detailed accounting thereof, on a weekly basis (with such
notice and accounting for any sales made during any week (i.e. a period of Monday through Friday) to be delivered to the Company
and the Escrow Agent by no later than 5:00 p.m. New York time on Tuesday of the next week) and (z) deliver to Lowenstein Sandler
LLP (the “Escrow Agent”) the proceeds from the sale of the Vested Restricted Shares (the “Escrowed
Restricted Stock Proceeds”) on a weekly basis (with the proceeds from the sale of any Vested Restricted Shares for the
prior week to be delivered to the Escrow Agent no later than Tuesday of the next week); provided, however, the Employee may use
the proceeds from the sale of the Vested Restricted Shares to pay the exercise price for some or all of the Vested Options (as
defined in Section 4(d) below) in accordance with Section 4(d) below, in which case, Employee shall, within the time period following
the sale of the Vested Restricted Shares provided in clauses (y) and (z) of the immediately preceding sentence, (A) notify the
Company, in writing, as to all or the portion of such proceeds which shall be applied on account of the option exercise (which
Vested Options shall be exercised solely in accordance with Section 4(d) below) and (B) instead deliver such proceeds to the Company
on account of, and to be applied against, the option exercise. Except as set forth herein, all other Restricted Shares previously
awarded to Employee which have not, as of the Separation Date, vested are forfeited.

 

    	-3-

    	 

    

 

(d)          a
pro rata portion of the Options granted to Employee pursuant to Stock Option Grant Agreements between Employee and the Company
dated February 5, 2010, March 30, 2011 and March 29, 2012, respectively, as identified on Exhibit A hereto under the column
“Number of Shares With Respect to Which Option may be Exercised” (the “Vested Options”),
may be exercised only during the VRS Sale Period or the VO Sale Period (as defined below), and the shares of Common Stock issuable
upon exercise thereof (the “Underlying Vested Option Shares”) may be sold only during the thirty (30) day period
following the expiration of the VRS Sale Period (the “VO Sale Period”). Employee may not exercise the Vested
Options after the expiration of the VO Sale Period and may only sell the Underlying Vested Option Shares during the VO Sale Period,
and any unexercised Vested Options or Underlying Vested Option Shares outstanding upon the expiration of the VO Sale Period shall
automatically, and without any further action of the Company, be forfeited. All other Options previously granted to Employee which
have not, as of the Separation Date, vested are hereby forfeited by Employee. Employee shall be responsible for paying the full
exercise price to the Company, in cash, in connection with any exercise by Employee of the Vested Options. As specified in Section
4(c) above, Employee may use the proceeds from the sale of the Vested Restricted Shares to pay the exercise price for some or all
of the Vested Options (the proceeds from the sale of the Vested Restricted Shares that the Employee uses to pay the exercise price
of the Vested Options are referred to herein as the “VRS Option Proceeds”). To the extent any additional funds
are needed for Employee to pay the full exercise price for the Vested Options being exercised by Employee, Employee shall be responsible
for paying such additional amounts to the Company in order to complete the exercise of the Vested Options. By no later than Tuesday
of the week immediately following which any Underlying Vested Option Shares were sold by the Employee, Employee shall (y) notify
the Company and the Escrow Agent, in writing, of the sale of the Underlying Vested Option Shares for such week, together with a
detailed accounting thereof and (z) deliver to the Escrow Agent an amount equal to (the “Escrowed Option Proceeds”
and together with the “Escrowed Restricted Stock Proceeds”, the “Escrowed Funds” ) the sum
of (1) the proceeds from the sale of the Underlying Vested Option Shares during such week less the exercise price for such Underlying
Vested Option Shares sold by the Employee during such week, plus (2) an amount equal to the VRS Option Proceeds.

 

The terms and conditions
of the escrow agreement regarding the Escrowed Funds and the escrow arrangement with the Escrow Agent are set forth on Exhibit
B attached hereto, which Exhibit B is fully incorporated herein by reference. The Escrow Agent is an express third party
beneficiary of Exhibit B. The Company shall have the power and the right to deduct (including from the Escrowed Funds) or
withhold, or require the Employee to remit to the Company, an amount sufficient to satisfy any federal, state, local and foreign
taxes of any kind (including, but not limited to, the Employee’s FICA and SDI obligations) which the Company, in its sole
discretion, deems necessary to be withheld or remitted to comply with the Internal Revenue Code of 1986, as amended, or any other
applicable law, rule or regulation with respect to the Vested Restricted Shares and Vested Options and, if the Employee fails to
do so, the Company may otherwise refuse to issue or transfer any shares of Common Stock otherwise required to be issued pursuant
to this Agreement.

 

Except to the extent
provided above, the Restricted Stock Award Agreements and Stock Option Grant Agreements referenced in paragraphs (c) and (d) above
shall remain in full force and effect.

 

Employee acknowledges
that Employee is not otherwise entitled to receive the payments and benefits set forth in this Section 4 and acknowledges that
nothing in this Agreement shall be deemed to be an admission of liability or wrongdoing on the part of Company. Employee agrees
that Employee will not seek anything further from the Released Parties.

 

    	-4-

    	 

    

 

Employee acknowledges
that (i) the Company may, at any at any time prior to the expiration of the VRS or VO Sale Period, as applicable, release information
pertaining to the Company and its business (including its earnings) that may have a negative impact on the share price of the Company’s
Common Stock (“Company Released Information”) and, as a result, may negatively impact the purchase price that
the Employee is able to obtain from the sale of any of the Vested Restricted Shares or Vested Underlying Option Shares and (ii)
the purchase price from any sale of the Vested Restricted Shares and/or Vested Underlying Option Shares may be limited by the fact
that such sales are required to occur during the VRS or VO Sale Period, as applicable. Employee hereby irrevocably waives any and
all actions, causes of action, rights or claims, whether known or unknown, contingent or matured, and whether currently existing
or hereafter arising, that Employee may have or hereafter acquire against the Released Parties in any way, directly or indirectly,
arising out of, relating to or resulting from Employee’s sale of the Vested Restricted Shares and the exercise of any Vested
Options and the sale of any Vested Underlying Option Shares, including, without limitation, claims (i) relating to the Company’s
disclosure of any Company Released Information and the impact of such disclosure on the purchase price Employee is able to obtain
from the sale of the Vested Restricted Shares and Vested Underlying Option Shares during the VRS or VO Sale Period, as applicable,
(ii) relating to the limited time period during which Employee may sell the Vested Restricted Shares and exercise and sell the
Vested Underlying Option Shares, (iii) the escrow of the Escrowed Funds in accordance with the terms of this Agreement and Exhibit
B and (iv) relating to the market price of the Company’s Common Stock and the purchase price from the sale of the Vested
Restricted Shares and the Vested Underlying Option Shares. Employee intends to effect, to the maximum extent permitted by law,
a complete and knowing waiver of Employee’s rights as set forth in this paragraph.

 

5.           Who
is Bound. Company and Employee are bound by this Agreement. Anyone who succeeds to Employee’s rights and responsibilities,
such as the executors of Employee’s estate, is bound, and anyone who succeeds to Company’s rights and responsibilities,
such as its successors and assigns, is also bound, by this Agreement.

 

6.           Cooperation.
Employee agrees, upon Company’s request, to reasonably cooperate in any Company investigation,
litigation, arbitration, or regulatory proceeding regarding events that occurred during Employee’s tenure with Company. Employee
will make himself reasonably available to consult with Company representatives, including its counsel, to provide information,
and to appear to give testimony. To the extent permitted by law, Company will reimburse Employee for reasonable out-of-pocket expenses
Employee incurs in extending such cooperation, so long as Employee provides Company with satisfactory documentation of the expenses.

 

7.           Non
Disparagement; Confidentiality; Covenants Agreement.

 

(a)          Employee
agrees not to make any defamatory or derogatory statements concerning the Released Parties. Provided that inquiries are directed
to Company’s Human Resources Department, Company shall disclose to prospective employers information limited to Employee’s
dates of employment and last position with the Company (or its affiliate) held by Employee. Employee confirms and agrees that Employee
shall not, directly or indirectly, disclose to any person or entity or use for Employee’s own benefit, any confidential information
concerning the business, finances, or operations of Company or its clients (or any such information regarding any predecessor entity
previously operating Company’s business); provided, however, that Employee’s obligations under this Section
7 shall not apply to information generally known in Company’s industry through no fault of Employee or the disclosure of
which is required by applicable law. 

 

    	-5-

    	 

    

 

(b)          Employee
represents and warrants that to date he has complied with the Covenants Agreement. Employee further agrees as good and valuable
consideration for the payments and benefits set forth in Section 4 of this Agreement to modify the definition of “Restricted
Period” contained in section 5 of the Covenants Agreement from twelve (12) months to eighteen (18) months. All terms
and conditions of the Covenants Agreement shall remain in full force and effect as modified herein.

 

(c)          Employee
represents and warrants that he currently is employed with Amazon.com, Inc. and that such employment does not conflict with his
obligations under the Covenants Agreement.

 

8.            Remedies;
Dispute Resolution.

 

(a)          If
the Company determines in its sole judgment and discretion that Employee is in breach of this Agreement
or the Covenants Agreement (as modified herein), then in addition to and not instead of the Released Parties’ other remedies
hereunder or otherwise at law or equity, Company shall have the right, upon written notice to Employee and his counsel (c/o Scott
Jacobson, Esq, Archer & Greiner) (a “Breach Notice”), to cease making any further payments to Employee under
Sections 4(a) and (b) of this Agreement. This Agreement shall continue to be binding on Employee and the Released Parties shall
be entitled to enforce the provisions of this Agreement.

 

(b)          If
Employee disagrees with Company’s determination under Section 8(a) or for any reason has a dispute with Employer regarding
this Agreement or any other matter or thing, Employee shall be permitted to bring an arbitration proceeding in Bergen County before
a retired judge of the Superior Court of New Jersey or other mutually agreeable arbitrator. The prevailing party in that arbitration
proceeding shall be entitled to recoup reasonable attorneys’ fees and other costs associated with such arbitration proceeding
if the arbitrator so determines. The Company also shall have the right to file a demand for arbitration if a dispute between the
parties requires resolution. Notwithstanding the foregoing, nothing herein shall be deemed to limit or alter the Company’s
right to seek injunctive relief before a court of competent jurisdiction to enforce its rights under the Covenants Agreement.

 

9.           Company
Property. By executing this Agreement, Employee acknowledges that Employee has returned to Company any and all Company and
client property in Employee’s use or possession, including, but not limited to, all Company equipment, credit cards, computers,
pass codes, keys, swipe cards, documents or other materials that Employee received, prepared, or helped to prepare. Employee acknowledges
that Employee has not retained any copies, duplicates, reproductions, computer disks or excerpts thereof or of Company or client
documents. Employee expressly represents and warrants that he has returned to the Company any and all audio and/or electronic recordings
of any of the Released Parties in his possession, custody or control and has not maintained any copies of same.

 

    	-6-

    	 

    

 

10.          Construction
of Agreement. This Agreement, together with the Covenants Agreement (as modified herein), is the entire agreement between the
parties as of the Effective Date. In the event that one or more of the provisions contained in this Agreement shall for
any reason be held unenforceable in any respect under the law of any state of the United States, such unenforceability shall not
affect any other provision of this Agreement, but this Agreement shall then be construed as if such unenforceable provision or
provisions had never been contained herein. If it is ever held that any restriction hereunder is too broad to permit enforcement
of such restriction to its fullest extent, such restriction shall be enforced to the maximum extent permitted by applicable law.
This Agreement and any and all matters arising directly or indirectly herefrom shall be governed under the laws of the State of
New Jersey, without reference to choice of law rules.

 

11.          Acknowledgments.
Company and Employee acknowledge and agree that:

 

(a)  By entering into
this Agreement, Employee does not waive any rights or Claims that may arise after the date that Employee executes and delivers
this Agreement to Company;

 

(b) This Agreement
shall not affect the rights and responsibilities of the Equal Employment Opportunity Commission (the “EEOC”)
and similar state agencies to enforce the ADEA and other laws, and it is further acknowledged and agreed that this Agreement shall
not be used to justify interfering with Employee’s protected right to file a charge or participate in an investigation or
proceeding conducted by the EEOC or similar state agency. Accordingly, nothing in this Agreement shall preclude Employee from filing
a charge with, or participating in any manner in an investigation, hearing or proceeding conducted by, the EEOC or similar state
agency, but Employee hereby waives any and all rights to recover under, or by virtue of, any such investigation, hearing or proceeding;

 

(c)  Notwithstanding
anything set forth in this Agreement to the contrary, nothing in this Agreement shall affect or be used to interfere with Employee’s
protected right to test in an arbitration pursuant to Section 8, under the Older Workers’ Benefit Protection Act, or like
statute or regulation, the validity of the waiver of rights under ADEA set forth in this Agreement; and

 

(d) Nothing in this
Agreement shall preclude Employee from exercising Employee’s rights, if any (i) under Section 601-608 of the Employee Retirement
Income Security Act of 1974, as amended, popularly known as COBRA, or (ii) Company’s pension plan(s) or 401(k) plan(s),
if applicable.

 

    	-7-

    	 

    

 

12.          Opportunity
For Review.

 

(a)          Employee
is hereby advised and encouraged by Company to consult with his/her own independent counsel before signing this Agreement.
Employee represents and warrants that Employee: (i) has had sufficient opportunity to consider this Agreement; (ii) has
read this Agreement; (iii) understands all the terms and conditions hereof; (iv) is not incompetent or had a guardian, conservator
or trustee appointed for Employee; (v) has entered into this Agreement of Employee’s own free will and volition; (vi) has
duly executed and delivered this Agreement; (vii) understands that Employee is responsible for Employee’s own attorneys’
fees and costs; (viii) has had the opportunity to review this Agreement with counsel of Employee’s choice or has chosen voluntarily
not to do so; (ix) understands the Employee has been given twenty-one (21) days to review this Agreement before signing this Agreement
and understands that he is free to use as much or as little of the 21-day period as he/she wishes or considers necessary before
deciding to sign this Agreement; (x) understands that if Employee does not sign and return this Agreement to Company (Attn: Julie
L. Werner, Esq., Lowenstein Sandler LLP) within 21 days of receipt of this Agreement, Company shall have no obligation to enter
into this Agreement, Employee shall not be entitled to the payment and benefits set forth in Section 4 of this Agreement and the
Separation Date shall be unaltered; and (xi) understands that this Agreement is valid, binding and enforceable against the parties
in accordance with its terms.

 

(b)          This
Agreement shall be effective and enforceable on the eighth (8th) day after execution and delivery to Company (Attn:
Julie L. Werner, Esq., Lowenstein Sandler LLP) by Employee (the “Effective Date”).
The parties understand and agree that Employee may revoke this Agreement after having executed and delivered it to Company by so
advising Company (Attn: Julie L. Werner, Esq., Lowenstein Sandler LLP) in writing no later than
11:59 p.m. on the seventh (7th) day after Employee’s execution and delivery of this Agreement to Company. If Employee
revokes this Agreement, it shall not be effective or enforceable, Employee shall not be entitled to the payments or benefits set
forth in Section 4 of this Agreement, and the Separation Date shall be unaltered. Employee acknowledges and understands that Company
is not obligated to make any payment or provide any benefits under Section 4 of this Agreement until after the Effective Date.

 

Agreed to and accepted by, on this 18 day of July,
2013.

 

	Witness:	 	EMPLOYEE:	 
	 	 	 	 
	/s/ Kathleen DeNardi	 	/s/ Darryl Miller	 
	 	 	Name:  Darryl Miller	 

 

Agreed to and accepted by, on this ____ day of ___________,
2013

 

	 	I.D. Systems, Inc.	 
	 	 	 	 
	 	By:	/s/ Jeffrey M. Jagid	 
	 	 	 Name: Jeffrey M. Jagid	 
	 	 	 Title:  Chairman and CEO	 

  

    	-8-

    	 

    

 

EXHIBIT A

 

RESTRICTED SHARES

 

	Award Date	 	Number of
 Restricted Shares
 Awarded	 	 	Number of
 Restricted Shares
 To Be Vested Upon
 Effective Date	 	 	Number of Restricted
 Shares Forfeited as of
 Separation Date	 
	February 5, 2010	 	 	21,930	 	 	 	20,103	 	 	 	1,827	 
	March 30, 2011	 	 	8,020	 	 	 	4,233	 	 	 	3,787	 
	March 29, 2012	 	 	6,374	 	 	 	1,239	 	 	 	5,135	 
	 	 	 	 	 	 	 	 	 	 	 	 	 
	TOTALS	 	 	36,324	 	 	 	25,575	 	 	 	10,749	 

 

STOCK OPTIONS

 

	Grant Date	 	Number of Shares
 Subject to Option	 	 	Number of Shares
 With Respect to
 Which Option may
 be Exercised	 	 	Number of Shares
 With Respect to
 Which Option is
 Forfeited as of
 Separation Date	 
	February 5, 2010	 	 	44,543	 	 	 	40,831	 	 	 	3,712	 
	March 30, 2011	 	 	17,061	 	 	 	9,004	 	 	 	8,057	 
	March 29, 2012	 	 	40,541	 	 	 	7,883	 	 	 	32,658	 
	 	 	 	 	 	 	 	 	 	 	 	 	 
	TOTALS	 	 	102,145	 	 	 	57,718	 	 	 	44,427	 

 

    	-9-

    	 

    

 

EXHIBIT B

 

1.           Appointment.
The Company and Employee hereby appoint Lowenstein Sandler LLP as their escrow agent for the purposes set forth herein (the “Escrow
Agent”), and the Escrow Agent hereby accepts such appointment under the terms and conditions set forth herein. The Company
and Employee hereby instruct the Escrow Agent to act in accordance with the terms set forth in the Agreement and this Exhibit
B. All terms not expressly defined in this Exhibit B are defined in the Agreement.

 

2.           Investment
of Escrow Funds. The Escrow Agent shall deposit the Escrowed Funds in a non-interest bearing bank account maintained at Bank
of America, which is hereby approved by the Company and Employee. Instructions to make any other investment must be at the written
direction of both Employee and the Company and shall specify the type and identity of the investments to be purchased and/or sold.
The Escrow Agent shall have no responsibility or liability for the investment of the Escrowed Funds or the selection of the investment.

 

3.            Agreement
of the Company and Employee Regarding Release of the Escrowed Funds.

 

(a)          Subject
to Section 3(b) below, on each of the nine (9) month anniversary of the Separation Date, the twelve (12) month anniversary
of the Separation Date and the eighteen (18) month anniversary of the Separation Date (each such anniversary of the Separation
Date, an “Anniversary Release Date”), the Company and Employee shall jointly instruct the Escrow Agent to distribute
one-third of the Escrowed Funds to Employee, unless the Company shall have delivered a Breach Notice to Employee on or prior to
any such Anniversary Release Date.

 

(b)          If
the Company delivers a Breach Notice to Employee, Employee shall have a period of ten (10) days following receipt of the Breach
Notice (the “Objection Period”) to notify the Company and the Escrow Agent, in writing (the “Objection
Notice”), of his objection (if any) to such Breach Notice and the specific grounds for such objection. If Employee does
not deliver an Objection Notice within the Objection Period, (x) Employee shall be deemed to have accepted the Breach Notice and
shall cease to have any right, title or interest in or to the Escrowed Funds, (y) the Escrowed Funds shall be distributed, in their
entirety, to the Company and (z) the Company shall be authorized to instruct the Escrow Agent, in writing, that the Escrowed Funds
be released to the Company as a result of Employee’s failure to timely deliver an Objection Notice (a “Breach Notice
Acceptance Instruction”) and the Escrow Agent shall be fully authorized in relying upon such Breach Notice Acceptance
Instruction.

 

(c)          If
Employee timely delivers an Objection Notice, the Company and Employee shall, for a period of thirty (30) days following the Company’s
receipt of the Objection Notice, seek to resolve the dispute between the parties and the manner in which the Escrowed Funds shall
be distributed. If the parties are able to resolve such dispute, then the Escrowed Funds shall ultimately be distributed in accordance
with the joint written instructions to the Escrow Agent by Employee and the Company. If the parties are unable to resolve such
dispute during such thirty (30) day period, then the dispute will be resolved in accordance with Section 8(b) of the Agreement,
and the Escrowed Funds shall be distributed in the manner specified in accordance with the arbitration award entered in accordance
therewith.

 

    	-10-

    	 

    

 

4.            Release
of Escrowed Funds by the Escrow Agent. The Escrow Agent shall distribute the Escrowed Funds as follows: (w) to the Company
or Employee, as applicable, in accordance with the joint written instructions of the Company and Employee; (x) to the Company upon
receipt of a Breach Acceptance Notice Instruction from the Company; (y) to the Company or Employee, as applicable, in accordance
with the terms of the arbitration award entered into in accordance with Section 8(b) of the Agreement; and (z) to the Company or
Employee, as applicable in accordance with the terms of a final non-appealable order of a court of competent jurisdiction. Upon
distribution and release of the entire Escrowed Funds by the Escrow Agent in accordance with the terms of this Exhibit B,
the appointment of the Escrow Agent shall terminate.

 

5.            Escrow
Agent Duties; Limitations on Liability; Indemnification etc. The Company and Employee acknowledge and agree for the benefit
of the Escrow Agent as follows:

 

(a)          Ministerial
Duties. The Escrow Agent: (i) is not responsible for the performance by the Company or Employee of the Agreement or this Exhibit
B or for determining or compelling compliance therewith; (ii) is only responsible for (A) holding the Escrowed Funds in escrow
in accordance with the terms set forth in this Exhibit B, and (B) disbursing the Escrowed Funds in accordance with Section
4 of this Exhibit B, each of the responsibilities of the Escrow Agent in clause (A) and (B) is ministerial in nature, and
no implied duties or obligations of any kind shall be read into the terms set forth in this Exhibit B against or on the
part of the Escrow Agent (collectively, the “Escrow Agent Duties”); (iii) shall not be obligated to take any
legal or other action hereunder which might in its judgment involve or cause it to incur any expense or liability unless it shall
have been furnished with indemnification acceptable to it, in its sole discretion; (iv) may rely on and shall be protected in acting
or refraining from acting upon any written notice, instruction (including, without limitation, wire transfer instructions, whether
incorporated herein or provided in a separate written instruction), instrument, statement, certificate, request or other document
furnished to it hereunder and believed by it to be genuine and to have been signed or presented by the proper person, and shall
have no responsibility for making inquiry as to, or for determining, the genuineness, accuracy or validity thereof, or of the authority
of the person signing or presenting the same; and (v) may consult counsel satisfactory to it (including its general counsel), and
the opinion or advice of such counsel in any instance shall be full and complete authorization and protection in respect of any
action taken, suffered or omitted by it hereunder in good faith and in accordance with the opinion or advice of such counsel. Documents
and written materials referred to in this Exhibit B include, without limitation, e-mail and other electronic transmissions
capable of being printed, whether or not they are in fact printed; and any such e-mail or other electronic transmission may be
deemed and treated by the Escrow Agent as having been signed or presented by a person if it bears, as sender, the person’s
e-mail address.

 

(b)          Limitation
on Liability. The Escrow Agent shall not be liable to anyone for any action taken or omitted to be taken by it hereunder, except
in the case of Escrow Agent’s gross negligence or willful misconduct in breach of the Escrow Agent Duties. IN NO EVENT SHALL
THE ESCROW AGENT BE LIABLE FOR INDIRECT, PUNITIVE, SPECIAL OR CONSEQUENTIAL DAMAGE OR LOSS (INCLUDING BUT NOT LIMITED TO LOST PROFITS)
WHATSOEVER, EVEN IF THE ESCROW AGENT HAS BEEN INFORMED OF THE LIKELIHOOD OF SUCH LOSS OR DAMAGE AND REGARDLESS OF THE FORM OF ACTION.

 

    	-11-

    	 

    

 

(c)          Indemnification.
The Company and Employee hereby jointly and severally indemnify and holds harmless the Escrow Agent from and against any and all
loss, liability, cost, damage and expense, including, without limitation, reasonable counsel fees and expenses, which the Escrow
Agent may suffer or incur by reason of any action, claim or proceeding brought against the Escrow Agent arising out of or relating
to the performance of the Escrow Agent Duties, except to the extent such action, claim or proceeding is exclusively the result
of the willful misconduct, bad faith or gross negligence of the Escrow Agent.

 

(d)          Conflicts.
The Escrow Agent has acted as legal counsel to the Company in connection with this Agreement and various other matters, is merely
acting as a stakeholder under this Agreement and is, therefore, hereby authorized to continue acting as legal counsel to the Company
including, without limitation, with regard to any dispute arising out of the Agreement and this Exhibit B, the Escrowed
Funds and its release or any other matter. Employee hereby expressly consents to permit the Escrow Agent to represent the Company
in connection with all matters relating to this Agreement, including, without limitation, with regard to any dispute arising out
of this Agreement, the Escrowed Funds and its release or any other matter, and hereby waives any conflict of interest or appearance
of conflict or impropriety with respect to such representation. Employee has consulted with his own counsel specifically about
this Section 4(d), and has entered into the Agreement after being satisfied with such advice.

 

(e)          Resignation;
Replacement. The Escrow Agent shall have the right at any time to resign for any reason and be discharged of its duties as
escrow agent hereunder (including without limitation the Escrow Agent Duties) by giving written notice of its resignation to the
Company and Employee at least ten (10) calendar days prior to the specified effective date of such resignation. All obligations
of the Escrow Agent hereunder shall cease and terminate on the effective date of its resignation and its sole responsibility thereafter
shall be to hold the Escrow Amount, for a period of ten (10) calendar days following the effective date of resignation, at which
time,

 

(I)         if
a successor escrow agent acceptable to both the Company and Employee shall have been appointed and have accepted such appointment
in a writing to both the Company and Employee, then upon written notice thereof given to each of the Escrow Agent, the Company
and Employee, the Escrow Agent shall deliver the Escrowed Funds to the successor escrow agent, and upon such delivery, the Escrow
Agent shall have no further liability or obligation; or

 

(II)        if
a successor escrow agent shall not have been appointed, for any reason whatsoever, the Escrow Agent shall at its option in its
sole discretion, either (A) deliver the Escrowed Funds to a court of competent jurisdiction selected by the Escrow Agent and give
written notice thereof to the Company and the Employee, or (B) continue to hold the Escrowed Funds in escrow pending written direction
from the Company and the Employee in form and formality satisfactory to the Escrow Agent.

 

    	-12-

    	 

    

 

(f)          Interpleader.
In the event that the Escrow Agent shall be uncertain as to its duties or rights hereunder or shall receive instructions with respect
to the Escrowed Funds or any portion thereunder which, in its sole discretion, are in conflict either with other instructions received
by it or with any provision of this Exhibit B, the Escrow Agent shall have the absolute right to suspend all further performance
of its duties under this Agreement (except for the safekeeping of such Escrowed Funds) until such uncertainty or conflicting instructions
have been resolved to the Escrow Agent’s sole satisfaction by final judgment of a court of competent jurisdiction or joint
written instructions from the Company and Employee. In the event that any controversy arises between the Company and the Employee
with respect to this Agreement, Exhibit B or the Escrowed Funds, the Escrow Agent shall not be required to determine the
proper resolution of such controversy or the proper disposition of the Escrowed Funds, and shall have the absolute right, in its
sole discretion, to deposit the Escrowed Funds with the clerk of a court selected by the Escrow Agent and file a suit in interpleader
in that court and obtain an order from that court requiring all parties involved to litigate in that court their respective claims
arising out of or in connection with the Escrowed Funds. Upon the deposit by the Escrow Agent of the Escrowed Funds with the clerk
of such court in accordance with this provision, the Escrow Agent shall thereupon be relieved of all further obligations and released
from all liability hereunder.

 

6.          Miscellaneous.
The Company and Employee acknowledge and agree that the Escrow Agent is an express third party beneficiary of the provisions of
this Exhibit B. The provisions of this Exhibit B may not be modified except in a writing signed by the parties hereto
and the Escrow Agent.

 

    	-13-

    	 

    

 

Schedule 4.6(c)

 

The account maintained by the Employee’s
broker at the Depository Trust Company is:

 

TD Ameritrade’s DTC# is 0188.

 

    	-14-Maximum Amount Comprehensive Credit Line
Contract

NO. SX161213000233

Borrower: Shenzhen Highpower Technology
Co., Ltd.

Address: Building A1, 68 Xinxia Street, Pinghu,
Longgang, Shenzhen.

 

Creditor:Bank of Jiangsu, Shenzhen
Sub-branch.

Address:4011, Shennan Road, Futian District,
Shenzhen.

 

According to relevant laws
and regulations of China, this contract was agreed to by the two parties, and both parties agree to comply with all terms of the
contract.

 

Clause 1 The maximum
comprehensive credit limit(hereinafter referred to as “borrower”) means the credit line that creditor provides to borrower
who can use the credit line in the business lines agreed upon in the contract.

 

Clause 2 Content of
the credit

 

1. The maximum amount of
comprehensive credit limit that creditor may provide to borrower is RMB 20,000,000.

 

2. The period of the credit:
From June 21th, 2013 to June 20th, 2014. This period only limits the start date of the credit businesses,
not the expiration date.

 

3. The allotted time, amount,
interest rate and rate of single specific business under this credit contract should be agreed upon in a specific business contract
and voucher.

 

4. Aforesaid “The
maximum comprehensive credit limit” only includes the balance of credit principal which is the actual used credit line (deducting
any guaranty bond) less the part which has been repaid under this contract during the contract period, but includes the interest,
punitive interest compound interest and other payables which should be paid by borrower.

 

Clause 3 The usage of
credit line

 

1. When borrower needs
to use the credit line under this contract, it should apply to creditor one by one, creditor has the right to audit in accordance
with fund condition of itself, the operational situation of borrower and the purpose of credit etc. If the applications are approved,
both parties should sign a specific credit business contract separately. Every single credit business contract under this contract
and relevant vouchers constitute an effective attachment to this contract.

 

2. Within the period agreed
upon in this contract, borrower can use the credit line according to the limit of every single credit business agreed by this contract
repeatedly, if borrower need to adjust the usage of credit line, application should be provided to creditor in writing, and creditor
decides whether the application can be approve and the method of adjustment.

 

4. When the credit period
expires, the credit line which is not used will automatically be cancelled.

 

Clause 4 Adjustment
of credit line

 

In the process
of performing this contract, if any of the following situations, which may affect the rights of creditor, occur, creditor has the
right to make relevant adjustments and/or stop borrower from using the credit line, and cancel unused credit line of borrower.

 

1. The market, which is
related to borrower’s operations, has significant adverse changes, or the Country’s monetary policy has significant
adjustment.

 

    	1

    	 

    

 

2. There are significant
difficulties on the borrower’s operational situation or important adverse changes to the borrower’s financial condition.

 

3. Termination of business,
liquidation, restructuring, dissolution and bankruptcy of or by borrower by an active or passive means.

 

4. Borrower is involved
in significant litigation, arbitration or administrative punishment, or has a significant default with other creditors.

 

5. Borrower indicates or
expresses by its actions that it does not intend to perform its obligations under this contract or another contract signed by creditor
and borrower.

 

6. Borrower provides false
materials or conceals any important fact of finance or operations.

 

7. Borrower does not
perform the obligations agreed to in this contract or any specific credit business contract.

 

8. Borrower violates
other contracts signed by creditor and borrower.

 

9. Borrower transfers
its assets, pumps money, evades debts and engages in other behaviors which damage or might damage the rights of creditor.

 

10. Borrower is involved
in illegal operations.

 

11. Division, merger,
important takeover, consolidation and reorganization of borrower.

 

12. Borrower loses commercial
integrity.

 

13. Controlling shareholder
of borrower transfer is changed, or significant items happen to controlling shareholder, actual controller, legal representative,
or senior executives of borrower, including but not limited to becoming involved in illegal actions, litigation, arbitration, deterioration
of financial condition, bankruptcy, dissolution etc.

 

14. A Guarantor of the
credit business under this contract defaults, such as by providing false information; violating other contracts signed by creditor
or other third parties becoming involved in litigation, arbitration, business failures, or illegal actions;, ceasing doing business;
evading bank creditor’s rights; merging, consolidating, or reorganizing; or other situation which may affect guaranty ability
of Guarantor.

 

15. Other situations
that damage the rights and interests of creditor.

 

Clause 5 Rights and
obligations of borrower

 

1. Having the right
to apply for using the credit line.

 

2. Opening a settlement
account in Bank of Jiangsu, Shenzhen Sub-branch, and arranging settlement of both domestic and overseas accounts, foreign exchange
settlements and sale and other intermediate business in Bank of Jiangsu or its sub-branch more than the proportion of the credit
line which borrower gets from creditor and all credit line of borrower.

 

3. Borrower should provide
true documents and information to creditor (including but not limited all bank accounts, balance of deposits and loans, situations
of using loans, condition of assets, operations, and inner management etc.

 

    	2

    	 

    

 

4. Providing last month’s
financial statements before the 20th of each month, and providing audited financial statement to creditor within120 days after
a fiscal year, and providing changes and modifications of itself to creditor.

 

5. Accepting and cooperating
with creditor in surveying, supervising and examining on the use of credit, related production, management, financial situation
and operations.

 

6. Complying with this
contract and every single business contract under this contract strictly.

 

7. When used credit exceeds
the credit line agreed to in this contract results from the change of exchange rate, borrower should repay the exceeding part or
pay homologous security deposit.

 

8. If any of the following
situations occurs, borrower should provide notice in writing to creditor within 5 days of the occurrence of the related situation
and implement security measures acceptable to creditor.

 

(1) Changes of membership
function, executives, articles of association and organization.

 

(2) Stopping production,
going out of business, cancelling registration, having it business license cancelled or filing for bankruptcy.

 

(3) Changes of name, domicile,
legal representative, contact manner and so on.

 

(4) Financial standing
depravation, significant difficulty on operations, significant litigation or arbitration.

 

(5) Other things that have
significant effect on the rights and interests of creditor.

 

9. Borrower should ask
for creditor’s consent and implement security measures, which are acceptable to creditor, before taking following actions.

 

(1) Contract management,
lease, stock system reform, joint operation, consolidation, merger, discrete, joint venture, asset transference, reducing registered
capital, applications of suspensions, dissolution, bankruptcy and other actions which can affect rights and interests of creditor.

 

(2) Providing a guarantee
for other’s debts, or pledging or mortgaging any of its major assets to a third party, leading to affecting borrower’s
repayment ability under this contract.

 

10. When the guarantor,
whether under this contract or under a single business contract of this contract, loses its guarantee ability, or a pledge, which
is under this contract or under a single business contract of this contract, depreciates in value, borrower should take other guarantee
measures, which are acceptable to creditor, in time.

 

11. Borrower is not allowed
to sign a contract, which can damage the rights and interests of creditor, with any other third party.

 

Clause 6 Rights and
obligations of creditor

 

1. Accepting and reviewing
borrower’s application of using the credit.

 

2. The financial conditions
and operations of borrower should be kept secret by Party B, except the laws, administrative laws and regulations, normative documents
requested.

 

    	3

    	 

    

 

3. Having the right to
ask borrower to provide related information of the credit, having the right to know the production, financial condition, operation,
and repayment plan of borrower, and having right to extract and copy from account books, operations records and related information.

 

4. Having the right to
supervise borrower’s uses the credit according to this contract and single credit business contract.

 

5. Having the right to
collect principal, interest, and other related expenses from Party A’s account on schedule or in advance.

 

6. If borrower fails to
act or violates the obligations under this contract or single credit business contract of this contract, creditor has the right
to adjust the maximum amount of comprehensive credit line, and stop using credit line, cancel unused credit line of borrower, demand
accelerated repayment of credit.

 

7. Having the right to
query the credit inquiry of borrower, the legal representative of borrower and executives of borrower, and having the right to
provide the information of borrower to the people’s Bank of China etc.

 

8. If borrower fails to
comply with its repayment obligations under this contract or single credit business contract of this contract, defaults of borrower
can be announced in public by creditor.

 

Clause 7 All debts
(including punitive interest and related expense) under the contract are guaranteed by Maximum Amount Guaranty Contract (NO.B2161213000023)
signed by SPRINGPOWER TECHNOLOGY (SHENZHEN) CO., LTD. and the creditor, and Maximum Amount Personal Joint Responsibility Guarantee(B2161213000024)
signed by DANGYU PAN and the creditor.

 

Clause 8 Expense

 

1. The expenses of credit
information, notarization, testimony, register etc. under the contract should be paid by borrower.

 

2. The expenses resulting
from borrower non-repayment of debt, such as advertising fees, delivery fees, appraisal costs, counsel fees, legal fares, travel
expenses, valuation fees, auction fees, property preservation fees, enforcement fees etc., should be paid by borrower.

 

Clause 9 Modification,
dissolution and execution of civil right of the contract

 

1. When agreed by both
parties, this contract can be modified and dissolved in writing.

 

2. Any tolerance, extension
or delay from creditor to borrower in exercising its rights under this contract does not affect the rights creditor enjoys according
to this contract and laws and regulations, and cannot be considered as approval to the default, and does not mean the abdication
of the right.

 

3. If any item of this
contract becomes invalid because of any reason, borrower still should assume all responsibilities. If any of the above situations
happen, creditor has the right to terminate this contract, and ask borrower to repay all debt immediately.

 

4. If borrower violates
the obligations stated in the eighth item of clause 5 of this contract, it will be considered delivered if the creditor will have
mailed related notices to original address provided.

 

5. Any related notices
and documents should be sent in writing by both parties.

 

Clause 10 Borrower
agrees that the creditor’s rights under this contract can be enforced after notarization. When borrower does not carry out
obligations under the contract completely or partly, creditor can apply for enforcement to a competent court.

 

    	4

    	 

    

 

Clause 11 Applicable
Law and Resolution for dispute

 

The making, efficacy, explanation,
performance and resolution for dispute of the contract are subject to the applicable to the laws of People’s Republic of
China. During the performance of this contract or all disputes relating to this contract, the two parties will attempt settle through
negotiations. If through negotiation the parties cannot reach agreement, both parties can apply to the local people’s court
of creditor.

 

Clause 12 Effective
and invalid of the contract

 

1. This contract is entered
into force upon the date when it is signed or sealed and affixed with official seals by the legal representative or entrusted agents
of borrower and creditor.

 

2. This contract become
invalid after borrower accomplishes all repayment responsibility under this contract.

 

Clause 13 This contract
is signed in triplicate, creditor holds two copies, borrower holds one copy, three copies have equal legal effect.

 

The things which are not
mentioned in this contract should be explained and settled according to relevant laws, administrative laws and regulations, normative
documents and single credit business contract, and the related regulations of Bank of Jiangsu.

 

Clause 15 Prompt

 

Borrower has known the
business scope and grant privilege of Party B. Borrower has read all terms of the contract. Creditor has explained homologous terms
requested by borrower. Borrower has known the meaning of all terms of the contract and homologous legal consequence. Signing the
contract is the true will of borrower.

 

/s/ [COMPANY SEAL]

Borrower (stamp)

Legal Representative or agent (signature):

June 28, 2013

 

/s/ [COMPANY SEAL]

Creditor (stamp)

Legal Representative or agent (signature):

June 28, 2013

 

    	5

    	 

    

 

Supplementary Agreement of Maximum
Amount Comprehensive Credit Contract of Shenzhen Highpower Technology Co., Ltd

 

1. Credit line is limited
to use of the funds for normal operations, such as the purchase of raw materials etc. When a single business transaction occurs,
an effective transaction contract or order form should be provided with amount of no less than the transactional amount. When writing
the bank acceptance bill, the relevant value added tax invoice should be provided in time. Credit cannot be used for any related
transaction which has no actual business, and cannot be used for fixed assets, stock right, coupon investment and diverting.

 

2. Borrower has the obligation
to ensure that borrower’s account opened in Bank of Jiangsu, Shenzhen Sub-branch is the only account of sales outstanding
of borrower in new sales contract and order form signed by Springpower Technology (Shenzhen) Co, Ltd and Meilv Electronics Co.,
Ltd, by writing (or notary service mode). Accounts receivable should return to above account. Without creditor’s consent,
borrower cannot change the account of sales outstanding.

 

3. Borrower should complement
bank acceptance exposure in advance as single bank acceptance bill contract requested.

 

4. In the credit period, except for
existing financing banks, the Creditor must approve guarantees of new financing banks of the Borrower if they
are superior to that of the Creditor.

 

5. If the Borrower defaults
on the above clauses, 1% of the exposure amount of credit line will be charged by the Creditor as a penalty and the Creditor has
the right to declare the credit due and payable.

 

6. Amount of settlement
should match to the usage of credit; otherwise, creditor has the right to decide the usage of credit line and further operation
after expiration according to the settlement.

 

/s/ [COMPANY SEAL]

Borrower (stamp)

Legal Representative or agent (signature):

 

/s/ [COMPANY SEAL]

Creditor (stamp)

Legal Representative or agent (signature):

    	6

    	 

    

 

Maximum Amount Personal Joint Responsibility
Guarantee

NO. BZ161213000024

 

To: Bank of Jiangsu, Shenzhen Sub-branch

 

To ensure the performance
of Creditor’s right, guarantor agrees to provide joint responsibility guarantee for the “Maximum Amount Comprehensive
Credit Line Contract” (herein after referred to as “master contract”) unconditionally and irrevocably, which
contract number is “SX 161213000223”, entered into by Shenzhen Highpower Technology CO., Ltd.(herein after referred
to as “debtor”) and Creditor. Guarantor promises as follows:

 

Article 1 The guaranteed
creditor’s right 

 

The secured creditor’s
right is all debt Creditor lends to debtor according to master contract.

 

The master contract
of this guarantee consists of the master contract and all attachments signed according to master contract (including but not limited
affiliated contracts, applications, notices, various vouchers and other legal documents which form the debtor-creditor relationship).

 

Article 2 Guarantee
Covers

 

The guarantee coverage:
the principal and interest (including punitive interest and compound interest) of all loans (credit) outstanding between debtor
and Creditor according to the master contract and its attachments from June 21,2013 to June 20, 2014, the punitive sum that debtor
should pay to Creditor; compensation and other expenses Creditor charges for realizing its creditor’s rights (including but
not limited legal fees, arbitration fees, property preservation fees, execution fees, valuation fees, auction fees, attorneys’
fees, travelling fees, etc.).

 

Aforesaid period indicates
the date of occurrence, and does not limit the date of expiration.

 

Article 3 Guaranty
Method

 

Guarantor voluntarily
provides the joint liability guarantee, when debtor does not perform its obligations related to the debt according to the master
contract, no matter what other guarantee Creditor has for ensuring the creditor’s rights under the master contract (including
but not limited to guarantees, mortgages, pledges, etc.), Creditor has the right to ask guarantor to take guarantee responsibilities
within guarantee coverage.

 

Article 4 Maximum
amount of the guaranty

 

The maximum amount which
the guarantee assumed hereunder is at most no more than RMB 20 million only. The maximum amount of guaranty hereon is the loan
principal balance by total amount (meaning the line of credit deducting the amount of cash deposit) of use of loans and facility
actually under the master contract signed between creditor and debtor and in the period as mentioned in the contract deducting
amounts repaid, excluding the proceeds of payable except the principal stipulated in article 3, such as interest expenses and penalties,
etc., but the guarantee shall still assume the joint liquidated liability.

 

The guarantor agrees that
the debtor can recycle the loans under master contract, and agrees that the debtor can adjust the credit line of all kinds of loans
within the line of credit hereunder, and the guarantor shall assume the joint guarantee liability.

 

    	1

    	 

    

 

Article 5 Warranty Period

 

The warranty period of
this contract is from the effective date of this contract to 2 years after the maturity date of the debts (including deferred loans)
under master contract.

 

Article 6 Changes
of Master contract

 

The warranty obligations
of this contract will not be affected by any changes (including but not limited to modifying, supplying and deleting etc.) of the
master contract agreed by creditor and debtor except the amount of the loan. If creditor and debtor agree with delaying to repay
the debt, this contract is still effective.

 

Creditor may transfer
its creditor’s right to a third party legally, and guarantor shall assume the same warranty responsibilities as before.

 

Article 7 Independence
of this guarantee

 

This guarantee is independent
of the master contract ,the effectiveness of this guarantee is not affected if the master contract is invalid completely or partly.
If the master contract is considered as invalid, guarantor assumes joint security responsibility to the debt resulting from debtor’s
returned property or pay for the damage. Guarantor promises to supervise debtor’s use the loan (credit), and if debtor changes
the purpose of the loan (credit), guarantor still assumes warranty responsibility.

 

Any tolerance, extension,
privilege or delay from creditor to guarantor for exercising of its rights under this contract does not affect, injure and limit
the rights creditor enjoys according to this contract and laws and regulations, and cannot be considered as the abdication of the
related right according this contract, and will not affect the obligations of guarantor under this contract.

 

The efficacy of this
guarantee will not be affected by any contract, agreement, and guarantee, and tacit agreement, or dispute.

 

Warranty obligations of
guarantor (including the inheritor, assignee and conservator of guarantor) are continuous, and have no effect on any change of
guarantor and debtor (including but not limited in division, merger, reorganization, transactions of property right and operational
right). If debtor’s subject qualification ceases to exist before debtor repays all debt to creditor, or creditor announces
its subject qualification ceases to exist within 6 months since debtor repaid all debt result in the foregoing repayment become
invalid, the warranty obligations under this contract are still effective.

 

Article 8 Guaranty

 

Guarantor agrees to
assume warranty responsibility by all his property (including family possessions; since the date of signing this guarantee, guarantor
will not allowed to dispose the above property without Creditor’s consent, if Creditor thinks it is necessary that the above
property can be guaranteed, mortgaged or pledged, guarantor promise to assist to process above procedures.

 

During the warranty
period, guarantor promises that he will not provide guarantee which exceeds his warranty ability to a third party. If the above
property is insufficient to afford the guarantee responsibility, guarantor promises to assume repayment responsibility for the
insufficient part.

 

If Creditor feels necessary,
guarantor agrees to provide the list of all his assets, and evaluate the assets on the list, guarantor will pay any valuation fee.
Guarantor promises that he enjoys ownership and the right of disposal of all assets on the list.

 

    	2

    	 

    

 

Article 9 Advanced
Guarantee Responsibilities

 

During the warranty
period, when any default under master contract or other situations which is considered as can affect the realization of creditor’s
right by Creditor happen, Creditor can announce the debt immediately due and payable, and has the right to ask the guarantor to
assume security responsibility on the date announced by Creditor, guarantor agrees to assume the security responsibility as Creditor
requested.

 

Article 10 Receiving
Payables

 

Creditor has the right
to take payment from guarantor’s account in bank of Jiangsu for all payables of guarantor in the range of warranty coverage.
If the payment is foreign currency, it will be calculated according to the rate Creditor announced on the day.

 

Article 11 Other
Items

 

1. During warranty period,
Creditor has the right to supervise the funds and financial condition of guarantor, and guarantor should provide true information.

 

2. Guarantor authorizes
the Creditor to claim for creditor’s due right, the money collected should be repaid Creditor to the Creditor as priority.

 

3. If the loan, which
is under the master contract or a specific credit business of the master contract, is not paid as agreed, or is changed the way
of payment, guarantor shall still assume security responsibility.

 

Article 12 Settlement
of Dispute

 

When there is any dispute
in performing the contract, both parties should settle the dispute through negotiations at first, if negotiations cannot reach
an agreement, both parties can apply to the local people’s court of Creditor.

 

During the litigation
or arbitration period, the items of this contract which are not involved in the dispute still should be performed.

 

Article 13 Becoming
Effective

 

This guarantee comes
into force as of being signed by guarantor

 

Article 14 Statements

 

1. Guarantor knows the
business scope and limits of authority of Creditor.

 

2 The guarantor has
read the contract comprehensively and carefully and fully understands the master contract entered into between creditor and debtor,
upon the request of guarantor, the creditor has made the terms interpretation accordingly as for the master contract and the contract
hereunder, and the guarantor is fully aware of and understands all the terms of the master contract and the contract hereunder,
and signed this contract with willingly. The guarantor is fully aware of the legal consequences for the conclusion and performance
of the master contract and the contract hereunder may give rise to, and fully confirms the obligations related to this contract.

 

3. Guarantor has the
right to sign this guarantee.

 

5. It should be noticed
to Creditor in writing of any changes of guarantor’s abode, postal address, contact number etc. in 10 days after the changes
happen. It will be considered as if the information has been delivered if Creditor sends related notices and documents according
to the primary address on file if the guarantor does not provide such notice.

 

    	3

    	 

    

 

6. If a notary agency
mandates enforceable status to this contract, guarantor agrees to be enforced by the legislative body and gives up the right of
defense.

 

	Guarantor (signature):	/s/ Dangyu Pan	 
	ID number:	 	 

 

    	4

    	 

    

 

Maximum Amount Guaranty Contract

 

Contract No.:NO: B2161213000023

 

Guarantor: Springpower Technology (Shenzhen)
Co., Ltd.

Address: Workshop A, Shun Industrial Zone,
Baoan District

 

Creditor: Bank of Jiangsu, Shenzhen Sub-branch.

Address:4011, Shennan Road, Futian District,
Shenzhen.

 

In order to guarantee the performance of
debts under item one of this contract, the guarantor provides the guarantee to the creditor voluntarily, and the two parties entered
into this contract after equal negotiation.

 

Article 1: Master contract

 

The master contract hereunder is    A     .

 

A. The creditor and the debtor Shenzhen
Highpower Technology Company Limited entered into this contract of maximum amount comprehensive credit line whose
number is SX 161213000223, and has or will enter into the separate facility business contract, as well as amendments
and supplements.

 

B. The creditor and the debtor                ,
from     year   month   day    to    year month   day
, entered into the contracts of loans, bank acceptance drafts, trade financing, letter of guarantee, funds business, and other
agreement, as well as amendments and supplements.

 

Article 2: Primary credit and period

 

Except the period determined or agreed
separately in accordance with the laws, the actual credit under the master contract consists of the primary credit of the contract
in the below period:      A     .

 

A. From the effective date of “maximum
amount comprehensive credit line contract” in article one to the expiration date of facility period stipulated in this contract
and amendments or supplements.

 

B. From ___ year __ month ___ day __ to
__ year __ month __ day under article one of this contract.

 

Article 3: Guarantee Coverage

 

The scope of guaranty of creditor hereunder
covers all debts occurring under this contract by the debtor, including but not limited to principal, interest expenses, compounded
interests, penalties, processing fees, default expenses, damage compensation, legal fees, escrow fees, taxation expenses, arbitration
fees, travel fees, assessment fees, auction fees, property preservation fees, compulsory execution fees and other expenses for
realization of the creditor’s rights.

 

Article 4: Maximum amount of the guaranty

 

The maximum amount which the guarantee
assumed hereunder is at most no more than RMB 20 million only. The maximum amount of guaranty hereon is loan principal
balance by total amount (meaning the line of credit deducting the amount of cash deposit) of use of loans and facility actually
under the master contract signed between creditor and debtor and in the period as mentioned in the contract deducting the part
of repaid, excluding the proceeds of payable except the principal stipulated in article 3, such as interest expenses and penalties,
etc., but the guarantee shall still assume the joint liquidated liability.

 

The guarantor agrees that the debtor can
recycle the loans under master contract, and agrees that the debtor can adjust the credit line of all kinds of loans within the
line of credit hereunder, and the guarantor shall assume the joint guarantee liability.

 

    	1

    	 

    

 

Article 5: The guarantor has read
the contract comprehensively and carefully and fully understands the master contract entered into between creditor and debtor,
and upon the request of guarantor, the creditor has made the terms interpretation accordingly as for the master contract and the
contract hereunder, and the guarantor is fully aware of and understands all terms of the master contract and the contract hereunder,
and signed this contract willingly. The guarantor is fully aware of the legal consequences for the conclusion and performance of
the master contract and the contract hereunder may give rise to, and fully confirms the obligations related to this contract.

 

Article 6: The guarantor shall assume
the responsibilities for all debts owed by the debtor to the creditor under the master contract, including the debts arising from
prepayment requested by the creditor. After receiving the written notice sent by creditor, the guarantor shall perform the settlement
responsibilities according to the time, type of currency, amount, and method of settlement specified by the creditor, and commit
to the creditor that the creditor has the right to deduct all amounts of guaranty from the guarantor’s account when the creditor
deems appropriate, if the deducted proceeds constitute foreign currency, the currency shall be calculated according to the bid
price published by the creditor at the deducted date.

 

Article 7:
The guarantee obligation of the guarantor (including the inheritor, assignee, and conservator of the guarantor) are continuous
under this contract, and shall not be affected by the change of the guarantor or the debtor (including but not limited to merger,
split, recombination, conduct title transaction or transactions
of managerial authority by way of lease, contract, and so on). If the debtor’s subject qualification ceases to exist before
debtor repays the loans hereunder, or the debtor declares that its subject qualification ceases within six months from the date
debtor repaid all of the loans leading to its foregoing repayment activity invalid, the guarantor’s warranty obligations
is still effective.

 

Article 8: The term of the guaranty
hereunder is from the date of effective to two years after expiration of the debts hereunder (including the maturity of extension
period).

 

Article 9: The guaranty obligations
under this contract shall not be affected by any change in the terms and conditions of the master contract agreed by both creditor
and debtor (including but not limited to amendments, supplements, and cancellations). If the creditor and debtor agree to extend
or delay the performance of the obligations hereunder, the contract hereunder shall continue to be valid. In the event of the creditor
transfers its creditor’s right to others in the period of guaranty according to the law, the guarantor will continue to assume
the guaranty responsibility within the scope of the guaranty.

 

Article 10: The guarantor makes
the following commitment to the creditor unconditionally and irrevocably: if the debtor fails to or delays to fulfill the obligations
of the master contract, or confirms the invalidity of the master contract, or due to the guarantor fails to or delays performance
of any clause hereunder leading to a loss to the creditor, all of such losses shall be a debt payable byte guarantor to the creditor.

 

Article 11: Whatever reasons leading
to the master contract being invalid in law or partially invalid, the guarantor shall still assume the guaranty responsibility
for the debtor’s repayment liability in accordance with the terms listed hereunder. The guarantor’s pledge to monitor
the debtor’s use of the loans (facility), in the event of the debtor’s change the purpose of the loan, the guarantor
shall still assume the guaranty responsibilities.

 

Any tolerance, grace or postponement of
the exercise of any right preferential by the creditor to the guarantor under this contract, shall not affect, damage, or restrict
the creditor’s rights in accordance with the contract hereunder, laws and regulations, and normative documents, and shall
not be deemed as giving up the rights and benefits under this contract, and shall not affect any obligations assumed by the guarantor
under this contract.

 

Article 12: If there is any collateral
security other than this guarantee under this contract, the guarantor is willing to perform the joint guaranty responsibility prior
to collateral security on all guaranty debts.

 

    	2

    	 

    

 

Article 13: The guarantor is an
entity established in accordance with the laws, is qualified to identify the contract hereunder and perform joint guaranty responsibility.
In addition, signing this contract has obtained empowerment thereof, and the process of performing the contract has been completed.

 

Article 14: The guarantor’s
signing and performance of this contract is its real intention, is true and effective and legal, and shall not affected by any
relationship of any party hereunder and others or other any events.

 

Article 15: The debts hereunder
have equal position with guarantor’s other debts, and shall be in the same compensation sequence.

 

Article 16: If the guarantor enters
into the counter guarantee contract with the debtor upon this contract, this counter guarantee contract shall not damage the creditor’s
interests, and when the guarantor’s compensation arising from the counter guarantee contract and the creditor’s claim
are in the same sequence, the creditor shall be compensated prior to the guarantor.

The guarantor shall not request the debtor
to set up a counter guarantee by way of a property pledge as to the obligations assumed by the debtor hereunder.

 

Article 17: The guarantor’s
responsibility shall decrease gradually with the decrease of the debts hereunder.

 

Article 18: The guarantor shall
provide the true, complete, valid financial statements and other relevant materials and information as required by the creditor.

 

Article 19: In the event of guarantor
changes its residence, mailing address, telephone number, the scope of its business, or the legal representative, it shall notice
the creditor in written within 10 days from the date the change events occurred.

 

Article 20:
If a notary agency mandates enforceable status to this contract, guarantor agrees to be enforced by the legislative
body and gives up the right of defense.

 

Article 21: The application of laws
and resolution of dispute

 

The signing, effectiveness, interpretation,
performance and settlement of disputes of this contract shall apply for the People's Republic of China's laws. If there are any
disputes based on this agreement, the contracting parties could attempt to resolve them through negotiation. If negotiation fails,
the parties shall resolve the disputes according to the following way of     A    :

 

A. Institute legal proceeding to the court
where the creditor located.

B.

 

Article 22: This contract and any
modifications and supplements of it are entered into in force upon the date when it is signed or sealed and affixed with official
seals by the legal representative or entrusted agents of both parties.

 

Article 23: Other items appointed by
both parties.

 

The things which are not mentioned in this
contract should be explained and settled according to relevant laws, administrative laws and regulations, normative documents and
the related regulations of Bank of Jiangsu.

 

Article 24: This agreement is in
triplicate, Party A has one copy, Party B has two copies, and three copies have the same legal effect.

 

Guarantor (stamp): /s/ [COMPANY SEAL]

Legal representative or agent:

 

Creditor (stamp): /s/ [COMPANY SEAL]

Legal Representative or agent:

 

6/28/2013

 

    	3

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00223-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00223-of-00352.parquet"}]]