Document:

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

 

SME Financial Service Contract

(Appropriate for working capital loans)

Code: Public Debt #99012012286308

 

China Minsheng Banking Corporation Limited

 

Contract Parties

 

Borrower: Beijing Wowjoint Machinery
Co. Ltd.

Address: Du Shi Industrial Park, Songzhuang
Town, Tongzhou District, Beijing, P.R. China

Zip code: 101118

Legal representative/Responsible Person:
Liu Yabin                 

Telephone: 89579330

Fax: 89579553                               
  

 

Party B: China
Minsheng Bank, Headquarter Branch Sales Department

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

Zip code: 100031

Legal representative/Responsible Person:
Chen Jinzhong

Telephone: 58560088                                
 

Fax: 58560001                                
 

 

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

 

    	 

    	 

    

 

Working Capital Loan Terms

 

Section 1: Loan purpose 

 

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

 

Section 2: Loan amount and
terms 

 

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

 

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

 

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

 

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

 

þ Single
loan, is not a revolving credit line, the loan period from 2012.08.23 (the first agreed loan drawdown date)
to 2013.08.23 (the agreed loan maturity date). If the above dates are not the same as those
on the Borrowing Certificate, the dates on the Borrowing Certificate shall prevail.

 

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

 

Section 3: Interest calculation 

 

Article 4: Interest rates calculation

 

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

 

þ The
annual loan interest rate is 7.8%, which is the applicable benchmark lending rate over the same period
as published by the People's Bank of China on the date of the Contract signing þfloating
upward ýfloating
downward by 30%.

 

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

 

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

 

(C) Loan interest calculation and
interest settlement period:

 

    	 

    	 

    

 

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

 

x Daily
accrual, quarterly interest settlement, interest settlement date is the 20th day of each quarter or N/A
date, but the last interest settlement date is the loan maturity date.

 

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

 

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

 

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

 

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

  

ý Not
be adjusted.

 

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

 

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

 

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

 

ý Other
interest rate adjustment method:            N/A                 

 

Section 4: Loan drawdown and payment 

 

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

 

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

 

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

 

ý Other
methods:               N/A                   

 

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

 

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

 

    	 

    	 

    

 

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

 

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

 

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

 

4. Signed drawdown application by
Party A.

 

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

 

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

 

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

 

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

 

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

 

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

 

Article 7: Issuance
of loan

 

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

 

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

 

Bank branch: China Minsheng Bank,
Weigongcun Branch                                                 .

 

Account number: 012101C910000182                                                        .

 

ý Settlement
Account

 

Bank branch:                  N/A                                      .

 

Account number:           
N/A                                     
        .

 

ý Other:                         N/A                             . 

 

Article 8: Borrower's payment
management solutions

 

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

 

þ All
entrust payment.

 

ý All
self payment.

 

    	 

    	 

    

 

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

 

Entrust payment conditions: 

 

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

 

2.             N/A                              
  .

 

(B) In the above agreed payment
management solutions:

 

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

 

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

 

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

 

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

 

Article 9: Payment of loans

 

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

 

Section 5: Repayment of loans 

 

Article 10: Repayment
of loans

 

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

 

þ Repay
all principal on maturity date;

 

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

 

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

 

Bank branch: China Minsheng Bank,
Weigongcun Branch                                                .

 

Account number: 0121014180000804                                                        .

 

    	 

    	 

    

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

Section 6: Events of default

 

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

 

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

 

    	 

    	 

    

 

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

 

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

 

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

  

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

 

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

 

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

 

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

 

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

 

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

 

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

 

Annex 3: “Withdrawal / Payment
Application"

 

Annex 4: Agreed Financial Covenants 

 

Annexes

 

Section 1: Guarantee 

 

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

 

x Guarantee,
numbered      N/A           "Guarantee
Contract",

 

x Mortgage,
numbered     N/A             "Mortgage
Contract",

 

x Pledge,
numbered       N/A           "Pledge
Contract",

 

þ Guarantee,
numbered  Personal Guarantee No. 99012012287089  "Maximum Guarantee Contract",

 

x Mortgage,
numbered      N/A           "Maximum
Mortgage Contract",

 

x Pledge,
numbered      N/A          "Maximum
Collateral Contract",

 

    	 

    	 

    

 

x Other:                     N/A                                

 

Section 2: Commitments and
guarantees 

 

Article 2: Party A’s
commitments and guarantees

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

    	 

    	 

    

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

Section 3: Other rights and obligations 

 

Article 3: Other rights and
obligations

 

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

 

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

 

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

 

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

 

    	 

    	 

    

 

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

 

Section 4: Credit line adjustment
and accelerated payment of debt 

 

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

 

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

 

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

 

(C) Major national policy adjustments.

 

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

 

Section 5: Events of default 

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

    	 

    	 

    

 

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

 

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

 

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

 

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

 

Section 6: Serving of notices

 

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

 

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

 

Section 7: Settlement of disputes 

 

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

 

Section 8: Effectiveness of contract 

 

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

 

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

 

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

 

    	 

    	 

    

 

Section 9: Other terms 

 

Article 14: Any term preceding
by "£" can be selected or non-selected. For the selected terms, "£" shall be replaced by "R";
for non-selected terms, "£" shall be replaced by "S".

 

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

 

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

 

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

 

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

 

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

 

Article 19: Other matters agreed
by both parties:

 

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

 

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

 

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

 

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

 

ý 5. The
maximum amount of discounted commercial bills by Party A under this contract shall be                ,
denominated in                . Any
third parties listed under the "Confirmation of Maximum Discounted Commercial Bills Credit Line Amount" signed by Party
A may use the credit line.

 

ý 6. Party
A shall allow all wholly owned or majority owned companies of Party A which are set out in the annex to use the line of credit
under the contract. The said companies and Party B shall separately sign the related loan contracts. If the said companies do not
fulfill contract obligations, Party A shall fulfill instead.

 

ý 7. Based
on the                            line
of credit granted by Party B, and the signed "SME financial service contracts" of code no.                ,
all wholly owned or majority owned companies of Party A which are set out in the annex shall use the line of credit under the contract.

 

ý 8. Mandatory
contract notarization.

 

    	 

    	 

    

 

þ 9. Other: service
scope listed under SME Financial Service Contract No. 99012012287089.

 

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

 

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

 

Party A (seal): 

 

Authorized Signatory (signature or seal): /s/Liu
Yabin

 

2012.08.20

 

Party B (seal): 

 

Authorized Signatory (signature or seal): /s/Du
Pengzhi

 

2012.08.23

 

    	 

    	 

    

 

Annex 1 to Working Capital Loan Terms:

 

Party A Loan Drawdown Timetable (Amount
and Time)

 

Number: ___________ 

 

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

 

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

 

    	 

    	 

    

 

Annex 2 to Working Capital Loan Terms: 

 

Party A Loan Repayment Timetable (Amount
and Time)

 

Number: ___________ 

 

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

 

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

 

    	 

    	 

    

 

Annex 3 of Working Capital Loan
Terms:

 

Withdrawal / Payment Application

 

Code:  99012012286308  

 

China Minsheng Bank, Headquarter
Branch Sales Department: 

 

In accordance with the "SME Financial
Service Contract" code of Public Debt #99012012286308 signed by both our company and your bank, we hereby
apply:

 

1. þ Loan
amount: 5 million. Currency: RMB. Loan period: 6 months. Purpose: working capital
for daily operation. Interest: 7.8%. If the above information is inconsistent with the actual, the Borrowing
Certificate shall prevail.

 

Our company intends to draw down on the
following date: N/A.

 

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

 

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

 

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

 

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

 

This application shall adopt the following
____ method of payment:

 

1. Entrust payment

 

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

 

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

 

	
        Order

        No. 
	 	
        Account Name

        (Payee name)
	 	Bank Branch	 	
        Account

        Number
	 	
        Amount

        (to decimal

        points)
	 	
        Use of

        Proceeds
	 	Remarks
	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 

 

    	 

    	 

    

 

2. Self Payment

 

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

 

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

 

Account name: _______________________________________________________

Account number: _______________________________________________________

Opening bank branch: _____________________________________________________ 

 

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

 

The applicant (stamped seal):

 

Authorized signatory (signature or seal): Liu
Yabin

 

Date of Application: 2012.08.23

 

Attachments:

 

 ̈ Business
Contracts:________________________( contract name and number).

 

 ̈ Details
of previous self payment.

 

 ̈ Other
documents requested by your bank:                           
                      

 

    	 

    	 

    

 

Annex 4 of Working Capital Loan
Terms:

 

Agreed Financial Covenants

  

Code: ___________ 

 

    	 

    	 

    

 

China Minsheng Banking Corporation Limited

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

Zip code: 100031

Telephone: 010-58560088                                
 

24-Hour Customer Service Hotline: 95568                                
 

Website: www.cmbc.com.cnLoan Contract 

  

Borrower: Beijing Wowjoint Machinery Co. Ltd.

Organization code: 75961712-9                          

Business license: 110102006704329

Legal representative/responsible person: Liu Yabin                 

Position: Legal Representative

Address: Du Shi Industrial Park, Songzhuang Town, Tongzhou
Dist., Beijing, P.R. China

Zip code: 101118                             

Telephone: 89579330                               
  

Fax: 89579553

Contact person:                    

Position: 

Account No.: 01090946300120102114378                                     

Opening bank: Bank of Beijing, Shangdi Branch 

 

Lender (hereinafter referred to as “Bank of Beijing”): Dazhongsi
Branch of Bank of Beijing

Legal representative/responsible person: Yu Guirui   

Position: Branch Manager

Address: 1 Shangdixinxi Road, Haidian District, Beijing

Zip code: 100085                             

Telephone: 82895591                                
 

Fax: 82895592

 

In accordance with the “Law of the People’s
Republic of China on Contract”, the following contract conditions and General Terms and Conditions for Loan
Contract, the Borrower and the Bank of Beijing (hereinafter referred to as “both parties”) make this contract
on the signing date stated on the cover at the place of domicile of Bank of Beijing through cooperative/friendly consultation.

 

A. Associated contract (fill when appropriate):

This contract is a specific business contract numbered [0159579]
and signed between the accrediting party Bank of Beijing, Shangdi Branch and the accredited party Beijing
Wowjoint Machinery Co. Ltd., under the Comprehensive Credit Contract.

 

B. Loan amount and period:

B.1 The loan currency under this contract is RMB,
and the loan amount is (in case of discrepancy of amounts in words and in figures, the amount in words shall prevail, the same
below): (in words) ten million Yuan only, (in figures): RMB 10,000,000.00 Yuan.

 

    	 

    	 

    

 

B.2 The period for this loan contract is 12 months
since the first withdrawal date;

 

B.3 The expiry date of loan shall be the date on which the
loan period specified in B.2 expires.

 

C. Contract interest rate (mark √ in □ for
an appropriate item and × for an inappropriate item, the same below):

C.1 In case of RMB loan, the contract interest rate shall be
determined based on the base interest rate on the withdrawal date þupward
[15 %], xdownward [N/A%]. The contract
interest rate during the loan period shall be adjusted as per xmonth, xquarter, xyear
or þNot
adjusted.

 

C.2 In case of foreign currency loan, the contract interest
rate shall be determined based on the HIBOR (for HK currency) or LIBOR (for other foreign currencies) interest rate (which is
the rate on the second working day before the withdrawal date) with a N/A months period, with increased base
point not less than [N/A BP], for which the value stated in the loan receipt approved by the Bank of Beijing
shall prevail.

 

C.3 Before the loan under this contract is fully repaid, the
above contract interest rate during the loan period shall float as per 2.4 hereof.

 

D. Withdrawal plan, use of loan and account monitoring:

D.1 The withdrawal period is 90 days, commencing on
the signing date; the specific withdrawal plan is as follows:

To withdraw RMB 10,000,000 Yuan by June 30, 2013, 

N/A Yuan by (M) (D) (Y), N/A Yuan
by (M) (D) (Y), N/A Yuan by (M) (D) (Y)

 

D.2 The Borrower shall use loan funds in accordance with the
stated purpose in the loan receipt approved by the Bank of Beijing. However if the following condition is met, the Borrower shall
use entrust payment method: þSingle payment exceeds RMB10,000,000,
xPayment counterparty is clear and single payment exceeds RMB N/A.

 

D.3 Loan funds shall be transferred to the Borrower’s
bank account opened at the Bank of Beijing with account number of 01090946300120102114378 (if the Borrower and the Bank
of Beijing mutually agree to change, the new account number shall be stated in the loan receipt). The Borrower shall use this
account to make payment to third parties using the loan funds, and shall accept the inspection and supervision of Bank of Beijing.

 

D.4 The Borrower shall at Bank of Beijing (name of opening
branch) set up a bank account with number of 01090946300120102114378 with account name of Beijing Wowjoint Machinery
Co. Ltd. as the account for return of funds (can be changed with the approval of Bank of Beijing). The Borrower shall regularly
(i.e. every quarter) report to Bank of Beijing account information regarding return of funds and transaction flows, and
promise to cooperate with Bank of Beijing’s inspection and supervision.

 

    	 

    	 

    

 

D.5 For the above account, Bank of Beijing shall inspect, supervise
and manage in accordance with þterms agreed in this contract, xterms
agreed in account supervision agreement signed separately by both parties and terms in this contract.

 

E. Purpose of loan: purchase raw materials, daily working
capital

 

F. Principal repayment plan:

All principal shall be repaid by the final maturity date, and
will be repaid by installment during the loan period as agreed below:

þ principal
to be repaid in lump sum at maturity;

x principal
to be repaid in equal amount as per month, on the 21st day each month;

x principal
to be repaid in equal amount as per quarter, on the 21st day of the last month of each quarter;

x to
be repaid as per the following plan, and the specific repayment plan in the loan receipt approved by the Bank of Beijing shall
prevail:

	N/A	 

 

G. Interest repayment plan:

All interest shall be repaid by the final maturity, and will
be repaid by installment during the loan period as agreed below:

x to
be repaid on the specified date (the 21st day of each month) as per month;

þ to
be repaid on the specified date (on the 21st day of the last month of each quarter) as per quarter;

x to
be repaid on the second day of the corresponding day as per month, the corresponding day refers to the day that corresponds to
the withdrawal date (or the last day of the month in case of no corresponding day).

x to
be repaid on the second day of the corresponding day as per quarter, the corresponding day refers to the day that corresponds
to the withdrawal date on the last month of each quarter) as per quarter (or the last day of the month in case of no corresponding
day).

x (optional
only for foreign currency loan) to be repaid each interest rate period as agreed in C.2. The interest repayment day shall be the
second day of the corresponding day (or the last day of the month in case of no corresponding day) on the last month of each period
since the withdrawal date.

 

K. Borrower’s commitments on key financial indexes:

(a) The ratio of tangible net assets (paid-up capital stock
plus capital accumulation fund) to total liability does not exceed [        N/A               
     ];

(b) Minimum net assets not less than RMB (in words) [      N/A            
     ];

(c) Total annual pre-tax profits not less than RMB (in words) [         N/A        
      ];

(d) The ratio of circulating assets to circulating liabilities
(i.e. current ratio) not less than [      N/A       
        ];

 

    	 

    	 

    

 

(e) The ratio of profits before tax and interest to interest
expenses (interest coverage ratio) not less than [       N/A          
    ].

 

M. Guarantee (the guarantee document shall prevail):

þ Surety
guarantee: name of guarantor: Beijing Zhongguancun Sci-tech Guaranty Co., Ltd.

x Pledge
guarantee, name of pledgeor:       N/A          
    .

x Security
guarantee, name of mortgagor:       N/A          
    .

x Others:
see special agreement column hereof or relevant guarantee documents:        N/A          
  .

 

U. Appendix (loan receipt and the following appendix are part
hereof):  N/A                 

 

W. Compulsory enforcement notarization:

x
A notarization agreement, which makes compulsory enforcement hereof effective, shall be made within N/A days
after signing the contract, with notarization handling completed.

þ No
compulsory enforcement notarization is required for this contract.

 

X. Special agreement:

	     N/A	 

 

Y. The Borrower hereby acknowledges that: his attention has
been drawn to clauses relating to responsibility or rights limitations, full explanations and descriptions have been made for
the contract, and that revision and addition (if any) agreed between both parties have been stated in the special agreement column
or supplementary agreement; through full review and discussion with Bank of Beijing, the Borrower fully understands and agrees
all contents hereof including Terms and Conditions of Loan Contract, General Terms and Conditions and
Appendix of Contract, without doubts or objections.

 

Z. Signing of both parties:

 

	Borrower (seal)	 	Bank of Beijing (seal):
	 	 	 
	Legal representative	 	Responsible person
	Or Authorized representative:	 	Or Authorized representative:
	/s/Liu Yabin	 	/s/Yu Guirui

 

    	 

    	 

    

 

General Terms and Conditions for Loan Contract

 

1. Definitions and explanations

1.1 Unless otherwise expressly noted, the following terms in
this contract shall have the following meanings:

This contract: refers to the whole part consisting of all of
the following documents: Terms and Conditions of Loan Contract (Clauses A-Z as main contents), General
Terms and Conditions of Loan Contract, loan receipt signed by both parties, other appendixes of contract listed in Clause
U hereof, and other documents (including, but not limited to, supplementary agreement, commitment letter, etc.) which legally
and effectively determine both parties’ rights and obligations under this contract; however, it specially refers to the
corresponding clauses of Terms and Conditions of Loan Contract and General Terms and Conditions of Loan
Contract when clauses hereof are cited without different description.

 

Base interest rate: it refers to the legal base interest rate
for RMB loan of corresponding period issued by the People’s Bank of China (if the legal base interest rate of such period
is cancelled, then the base interest rate determined and issued by the Bank of Beijing shall prevail); base interest rate over
the same period refers to the base interest rate determined as per the agreed period as defined in Clause B.2.

 

LIBOR (HIBOR): it refers to the London (Hongkong) Interbank
Offered Rate issued on relevant webpages of authoritative financial telecommunications such as Reuters or Bloomberg at about 11am
of London (Hongkong) time on the very day. The data of the previous last day shall prevail if the above interest rate data is
not available.

 

Entrusted Payment: based on the Borrower’s withdrawal
request and entrusted payment authorization, Bank of Beijing shall transfer the loan funds to the transaction counterparties through
the Borrower’s account, in accordance with agreed loan purpose under this contract.

 

Self Payment: based on the Borrower’s withdrawal request,
Bank of Beijing shall transfer the loan funds to the Borrower’s account, then the Borrower shall make payment directly to
the transaction counterparties, in accordance with agreed loan purpose under this contract.

 

Guarantee documents: they refer to any documents such as guarantee
contracts, guarantee clauses and guarantee letter, and commitments signed or agreed by guarantor for setting guarantee.

 

Laws and regulations: they refer to the laws, administrative
regulations and judicial interpretations by the Supreme People’s Court applicable to the mainland of the People’s
Republic of China, other than Hongkong, Macao and Taiwan.

 

    	 

    	 

    

 

Financial rules: they refer to the rules, regulations and instructions
given by the bank regulatory bodies, the People’s Bank of China and foreign exchange management department.

 

Working day: it refers to any day on which commercial banks
in the city where the Bank of Beijing is located provide services for corporate customers, excluding legal festivals and holidays,
Saturday and Sunday, but including Saturday and Sunday on which the public shall work as per government’s temporary regulation.

 

1.2 Any terms having been defined in this contract shall have
the same meaning in any document hereunder or made as per this contract, unless otherwise expressly specified in the document.

 

2. Loan

2.1 See Clause B hereof for the loan currency, amount and loan
period under this contract. The specific amount of each loan which actually occurs hereunder shall be the amount stated on the
loan receipt, which constitutes part hereof.

 

2.2 The Borrower may withdraw a loan in the withdrawal period
agreed in Clause D hereof, and change of withdrawal plan shall be subject to the consent of the Bank of Beijing. Any loan amount
not withdrawn after expiry of the withdrawal period will be cancelled automatically and may not be withdrawn any more. Whenever
the Borrower requests a withdrawal, the Bank of Beijing shall not be obliged to grant a loan, unless all of the following conditions
are met (excluding those which the Bank of Beijing decides to waive at that time):

 

(1) The guarantee document specified in Clause M hereof has
been made, with handover and registration procedures completed.

 

(2) The Borrower has completed account opening and other procedures
reasonably required by the Bank of Beijing, and has provided the Bank of Beijing with documents and relevant certificates reasonably
stating its specific capital use and capital flow arrangement, and the Bank of Beijing has raised no objections after review.
When this Contract is a credit contract as stated in Clause A, sufficient available limit shall be reserved for the Borrower hereunder.

 

(3) No defaults hereunder are performed by the Borrower, and
no defaults hereunder are performed by the guarantor.

 

(4) Laws and regulations, financial rules and national credit
policy effective at that time neither impose significant influences on contract performance by one party hereto, nor prohibit
or restrict loan granting or withdrawal hereunder.

 

(5) Other conditions as agreed herein or in laws and regulations
and financial rules.

 

    	 

    	 

    

 

2.3 If the Borrower meets withdrawal conditions, the Bank of
Beijing shall grant a loan in full amount within 3 working days. The loan shall be deemed as having been withdrawn and used by
the Borrower once the loan is transferred to the Borrower’s account, and the day shall be the withdrawal day of this loan
and the loan interest shall commence from that day as per the contract interest rate. When an RMB loan is withdrawn in several
times, the contract interest rate shall be determined for each withdrawal respectively based on the base interest rate over the
same period on the very day and the floating range stated in Clause C.1 hereof.

 

If using the entrusted payment method through Bank of Beijing,
(i) the Borrower shall at least 3 working days in advance (or other period reasonably agreed by Bank of Beijing) provide completed
commercial contracts and other related transaction documents (including but not limited to transaction subject being clear with
complete signature, filling out standardized transaction documents or evidence). Before releasing loan funds, Bank of Beijing
shall verify whether the above info meets the agreed conditions in this contract. After Bank of Beijing’s verification,
the loan funds shall be transferred to the Borrower’s transaction counterparties through the Borrower’s account (no
need for the Borrower to separately provide settlement evidence). The Borrower shall make a good record. The time when the loan
funds arrives at the account of the transaction counterparties shall be determined in reference to the arrival time of the exchange
settlement as well as the opening time of the related system. The transaction fees based on Bank of Beijing’s rate standard
effective at the time of payment shall be deducted from the Borrower’s account by transaction or in aggregate by Bank of
Beijing (unless the Borrower takes the initiative to pre-pay separately); (ii) the Borrower shall be responsible for any delay
in loan withdrawal or entrust payment caused by the incomplete, unqualified, untimely information submitted by the Borrower or
there is reasonable doubt regarding the information; (iii) Due to the Borrower’s abnormal account status, the Borrower’s
transaction counterparties’ incomplete, inaccurate or abnormal account status, inter-bank payment or settlement systems,
or other problems unrelated to Bank of Beijing, after arriving in the Borrower’s bank account the loan funds cannot pay
to or arrive in time at the Borrower’s transaction counterparties’ accounts. Any transaction fees, loan interest or
other negative consequences such as loss and delay resulting from the above scenarios shall be borne by the Borrower. But Bank
of Beijing shall use reasonably efforts to continue the payment procedures, or leave funds in the Borrower’s account/pending
account and notify the Borrower to complete the relevant procedures.

 

If using the self payment method, the Borrower shall provide
timely loan usage plan as required by Bank of Beijing, and after loan withdrawal shall within the 10th day of each
month provide aggregated fund payment info to Bank of Beijing. Bank of Beijing shall have the right to analyze the account, verify
the fund transfer evidence or on-site investigation in order to confirm whether the loan fund payment is in accordance with the
terms of this contract. The Borrower shall cooperate.

 

    	 

    	 

    

 

The loan funds shall be entrusted to pay through Bank of Beijing
or the Bank of Beijing shall be able to monitor usage. Before the debt in this contract is fully repaid, Bank of Beijing shall
have the right to refuse to sell checks, conduct deposit and withdrawal, open internet banking, phone banking or other methods
for monitoring related accounts and the fund usage within the accounts.

 

During the loan payment process, if Bank of Beijing finds that
the Borrower experiences credit decline, its main business profitability is not strong or has unusual usage of loans, Bank of
Beijing shall have the right to request change in how loan funds are used. The Borrower shall accept and cooperate.

 

2.4 As the loan hereunder is a loan with floating interest
rate, the contract interest rate shall float during the loan period in such a manner: (i) for an RMB loan, the contract interest
rate shall be adjusted automatically and calculated in sub-stage in accordance with the base interest rate over the same period
applicable at that time and the floating range as stated in C.1 hereof, from corresponding date (first day of each calendar month,
first day of each calendar quarter, and Jan. 1 of each year) respectively, in the adjustment frequency (as per month, quarter
and year) as agreed in C.1 hereof; (ii) in case of foreign currency loan, the contract interest rate for each interest period
(including the first day and excluding the last day) shall be the LIBOR (HIBOR) rate (annual interest rate expressed in percentage)
for corresponding currency and period on the second business day of such foreign currency one day prior to the starting day of
such interest period, plus the increased base point value (100 BPs as 1%) agreed in C.2 hereof; automatic interest rate adjustment
above shall not be deemed as change to the contract. When the contract interest rate is converted from annual interest rate to
daily interest rate, Hongkong dollar shall be calculated as per 365 days a year, and RMB and other currencies shall be calculated
as per 360 days a year.

 

2.5 The Borrower warrants that this loan will be used for the
purpose as stated in Clause E hereof, and warrants that such use purpose will not be in violation of provisions of laws and regulations
and financial rules; the Borrower undertakes that it will not use this loan in items or services where use of commercial bank
loans is prohibited by laws and regulations or financial rules. The Borrower shall obtain a written consent of the Bank of Beijing
prior to change of use purpose.

 

2.6 The Borrower shall repay the principal of this loan as
agreed in Clause F hereof, and repay loan interest as agreed in Clause G; an interest period shall commence from each interest
repayment day (including) to the next interest repayment day (excluding) (the first interest period commences from the withdrawal
date and the last interest period ends at maturity of the principal); When each loan principal is repaid, all interests incurred
by such principal shall be settled, and all principal, interests and other amounts payable shall be settled on maturity. In case
of non-working day, the Borrower shall deposit sufficient amount of money in its account in advance so that the Bank of Beijing
can deduct from its account on the very day or on the sequent first working day after extension. Interest will be calculated as
per the contract interest rate during such extension.

 

    	 

    	 

    

 

2.7 In order to repay relevant the amounts payable in a timely
manner, the Borrower shall open and always maintain in the Bank of Beijing an account as stated hereof (in case of change of account,
the changed account shall apply to this contract continually), and shall deposit full amount of money repayable to such account
for deduction by the Bank of Beijing. The Borrower may also directly transfer money to its Bank of Beijing account for repayment,
and shall timely notify the Bank of Beijing of such service No. for the repayment. The Bank of Beijing may, at its discretion,
deduct any amount payable from any account the Borrower has opened in the Bank of Beijing Company system, and will notify the
Borrower of such deduction in the form of bank account or other forms.

 

2.8 Unless otherwise there are substantial and sufficient opposite
evidences, the bank voucher generated by the Bank of Beijing shall be effective evidence for loan granting and principal repayment
hereunder.

 

3. Advance repayment and extension

3.1 The Borrower may not repay money during the withdrawal
period. If the Borrower requests advance repayment after the withdrawal period, the Borrower shall, 30 days in advance, submit
to the Bank of Beijing an irrevocable written application stating the proposed principal amount for advance repayment and the
repayment plan for the remaining loan principal; where the Bank of Beijing consents in writing after review, the Borrower shall
perform advance repayment on the advance repayment date, pay to the Bank of Beijing advance repayment compensation as specified
in Clause N.1 hereof (advance years shall be the quotient obtained by dividing the actual day number from advance repayment date
to the agreed maturity date by 365, with two decimals reserved), and settle all interests incurred by advance repaid principal
and other amounts overdue. The remaining principal (if any) shall be repaid as per the new repayment plan consented by the Bank
of Beijing (the last repayment date shall still be no later than the last maturity date). Where the Borrower fails to submit or
both parties fail to reach a new repayment plan, reverse repayment shall apply (i.e. the advance repaid capital will be used to
repay the amount that will be overdue at last); the contract interest rate shall not be adjusted by virtue of advance repayment
or as per the period determined in the new repayment plan.

 

3.2 Where the Borrower requests an extension, the Borrower
shall, at least 30 days before the maturity date, submit to the Bank of Beijing a written extension application stating extension
reasons and repayment capital arrangement after such extension. After the Bank of Beijing consents through review and the Borrower
meets the conditions required by the Bank of Beijing, both parties shall sign an extension agreement, with extension procedures
handles as per such agreement. If the Bank of Beijing does not agree on extension or both parties fail to sign an extension agreement,
the Borrower shall still perform repayment as agreed herein.

 

    	 

    	 

    

 

3.3 During the loan period, Bank of Beijing shall have the
right to request the Borrower to prepay, based on the Borrower’s return of funds situation (including but not limited to
the early return of funds marked for repayment, the Borrower’s available liquidity after repayment is sufficient for normal
funding requirement, etc.). After the prepayment notice by Bank of Beijing arrives at the Borrower, the loan principal and interest
is due on the date of prepayment designated by Bank of Beijing, and the Borrower shall timely repay as requested.

 

4. Commitment and guarantee

4.1 Both parties hereby undertake and guarantees to the other
party that: (1) The party has the qualification and ability to enter into and perform this contract, and the person who signs
this contract on behalf of the party has been fully authorized to enter into this contract; (2) The conclusion and performance
of this contract by the party are not in breach of organization documents such as regulation, laws and regulations and financial
rules and other law documents it shall observe, and the party has obtained any necessary internal and external authorization,
permission and filing so that this contract is legally binding to the party and lawfully enforceable.

 

4.2 The Borrower undertakes and guarantees to perform the following
obligations before performance of this contract is completed:

(1) The Borrower is always a legal entity that is established
lawfully and operates continually, and will handle legal procedures such as annual inspection. The borrower shall, prior to conclusion
of this contract and application for withdrawal each time, submit to the Bank of Beijing true and complete information regarding
financial and operation conditions of the Borrower and other important information in connection with this contract.

 

(2) The Borrower shall have sufficient and legal repayment
sources that match with the repayment plan, and sufficient repayment capability, and ensure that relevant capital and resources
support under the production and operation projects for which loan is used are in place timely and in full amount so that the
projects can go on smoothly.

 

(3) Production and operation comply with laws and regulations,
environmental protection requirements, tax regulations set forth in laws and regulations and other provision, and necessary approval
and permission documents are obtained timely and lawfully and effectively.

 

(4) The Borrower accepts and actively coordinates the Bank
of Beijing’s inspection and supervision concerning its financial and operation conditions, and the use of loan hereunder,
including, but not limited to: (i) reasonably stating the capital flow of each loan hereunder as required by the Bank of Beijing,
providing relevant repayment voucher and evidence, and proving conformance to this contract; (ii) by the end of April each year,
submitting to the Bank of Beijing complete audited financial statements (including notes) of previous year and audit reports,
and submitting, the first month of each quarter, to the Bank of Beijing copies of financial statements such as balance sheet,
profit and loss statement, and cash flow statement (in case of audited half-year or quarterly financial statements, the complete
audited statements and audit reports shall be provided).

 

    	 

    	 

    

 

(5) All application information, financial statements and other
information provided to the Bank of Beijing are true, complete, lawful and effective, without any fraud, significant omission
or misleading.

 

(6) Where the Borrower performs merger, division, reduces registered
capital, applies for close of business for rectification/ takeover / disbanding / bankruptcy or items that affect the existence
of the applicant or its continual operations, the Borrower shall, at least 30 days in advance, notify the Bank of Beijing of such
item and obtain the Bank’s written consent; if a third party requests or an administrative/judicial organ orders the Borrower
to close its business for rectification / takeover / disbanding / bankruptcy, or suspend or cancel its operation license for main
operating business or major business, the Borrower shall notify in writing the Bank of Beijing of such condition as soon as possible
(no later than 3 working days) after notification, and take measures timely for remedy.

 

(7) When the Borrower makes any changes to industrial and commercial
registrations, top ten shareholders, directors, financial officer, or contact address, it shall notify the Bank of Beijing of
such item as soon as possible (no later than 5 working days).

 

(8) Where the Borrower provides any guarantee (or liability
responsibility or similar arrangement of guarantee nature) for a third party or reaches with a third party partner / contracting
operation, waiver of significant creditor’s rights, acquisition for restructuring, transfer of main business or similar
significant transaction that may reduce the Borrower’s repayment capability, the Borrower shall obtain written consent from
the Bank of Beijing in advance, except that the above items will not impose significant adverse influences on the Borrower’s
capability to perform this contract and that the total amount or total guarantee amount of the above-mentioned significant transaction
does not exceed 30% of total assets of the Borrower and 50% of its net assets.

 

(9) The Borrower shall notify timely in writing the Bank of
Beijing of any affiliated transaction with a total amount up to or exceeding more than 10% of its net assets (affiliated parties
and affiliated transaction shall be identified in accordance with Chinese accounting standards or international accounting standards
lawfully applicable to the Borrower), including: affiliating relations of transaction parties, transaction items and property,
transaction amount or corresponding proportion, pricing policy (including transactions with no amount or with only symbolistic
amount), etc. and the Borrower shall not perform affiliated transaction in which registered capitals are withdrawn, bank capital
or credit is obtained through fictitious transaction, liabilities are evaded through asset transfer, or transactions that severely
impair its repayment capability or illegal transactions such as money laundering.

 

    	 

    	 

    

 

(10) The Borrower shall always observe the commitment as stated
in Clause K hereof, and will maintain in agreed scope relevant financial indexes (calculated in accordance with Chinese accounting
standards or international accounting standards lawfully applicable to the Borrower).

 

(11) The Borrower will not distribute dividend or bonus to
shareholders in any form when the net profit after tax of an accounting year is zero or negative, or the net profit after tax
is not sufficient to cover the accumulative losses of previous accounting years, or when the profit before tax is not sufficient
to settle next loan principal repayable.

 

(12) The Borrower shall, no later than the first withdrawal
date, provide the Bank of Beijing with the Guarantee as agreed in Clause M hereof, see guarantee document for details. The Borrower
warrants to maintain the pledge rate and mortgage rate thereunder in the range (if any) as agreed thereunder; the Borrower undertakes
that it fully understands, agree and accepts the clauses and contents contained in relevant guarantee documents, and warrants
that all guarantees submitted to the Bank of Beijing based on relevant guarantee documents are lawful, effective and lawfully
enforceable.

 

5. Expenses of taxation

The Borrower and the Bank of Beijing shall bear the stamp tax
payable hereunder respectively. The taxes and administrative fees imposed by the government or organs exercising administrative
management authority (except those taxes the Bank of Beijing shall bear lawfully on its own) and notarial fees (if any), and guarantee
fees (if any) shall be borne by the Borrower.

 

6. Default and remedy measures

6.1 The occurrence of any one or more of the following shall
constitute default of the Borrower:

(1) The Borrower fails to use the loan as agreed herein, or
fails to repay, on schedule and in full amount, the interest, principal or other amounts payable.

 

(2) The Borrower fails to (or states expressly or indicates
by act that it will not) completely perform any commitment, guarantees, obligations or responsibilities hereunder in an appropriate
way.

 

(3) Any guarantor fails to completely perform any commitment,
guarantees, obligations or responsibilities under the guarantee document in an appropriate way, or other default events under
the guarantee document occur, or the mortgage / pledge (if any) experiences damage, loss, transfer of ownership, seal up / freezing
/ seizure or enforcement, or the guarantee document or the guarantee right of the Bank of Beijing is identified as invalid, cancelled
or rescinded without written consent of the Bank of Beijing.

 

    	 

    	 

    

 

(4) Any significant credit financing, guarantee, indemnification
or other repayment obligation of the Borrower cannot be performed at maturity, or the operating license for the main business
or major business is suspended or cancelled, or the Borrower is involved in procedures such as close of business for rectification
/ takeover / disbanding / declaration of bankruptcy.

 

(5) The Borrower’s financial or operating conditions
experience significant adverse changes, or produce bad credit records, or are involved in disputes or administrative penalty that
may impose significant adverse influences on its repayment capability or the performance of this contract, or other conditions
occur that may impose severe adverse influences on the creditor’s right or security interest.

 

6.2 Where the Borrower fails to repay, on schedule and in full
amount, any loan principal and interests payable or other amounts payable, additional penalty interest for the unpaid amounts
shall be paid as per day at 150% of contract interest rate applicable for the same period (overdue penalty interest rate); where
the Borrower uses a loan for a purpose that does not comply with contract provisions or provisions set forth in laws and regulations
or financial rules, it shall immediately repay the principal and interest for the above loan used in breach of contract, and additional
penalty interest for such loan shall be paid as per day for the breach period at 200% of contract interest rate applicable for
the same period (appropriation penalty interest rate); where the loan is used in breach of contract and is also overdue, appropriation
penalty interest rate shall apply. Penalty interest as state above does not influence other breach remedy rights of the Bank of
Beijing.

 

6.3 Should any breach event hereunder occur to the Borrower,
the Bank of Beijing shall have the right to exercise its breach remedy rights as agreed herein or in accordance with provisions
set forth in laws and regulations and financial rules, including, but not limited to, requirement for correction of breach, stopping
granting loan, payment of penalty interest, exercise of security interest and right of lien according to law, declaration of immediate
maturity of whole or part debt hereunder, declared collection, requirement for compensation of loss and payment of all expenses
and fees (including, but not limited to, law expenses/arbitration expenses, disposal expenses such as evaluation / appraisal/auction,
attorney fee, investigation fee, travel expenses and other reasonable fees) to the Bank of Beijing incurred in connection with
realization of creditor’s right and security right.

 

6.4 Where the currency of amount collected by the Bank of Beijing
for exercising rights differs from the currency of the amount unpaid by the Borrower, such amount shall be exchanged at the exchange
rate issued by the Bank of Beijing for the currency of amount sold and unpaid and currency of amount purchased and collected,
to settle creditor’s right of Bank, and any exchange rate loss and fees for exchange so incurred shall be borne by the Borrower.
The Borrower shall be obliged to coordinate in handling exchange procedures.

 

    	 

    	 

    

 

6.5 The amounts collected by the Bank of Beijing for exercising
rights shall settle its creditor’s rights in the following sequence: (1) expenses and fees for realization of creditor’s
rights and security interest, and other fees that the Borrower shall bear, (2) damages, compensation and penalty, (3) penalty
interest, (4) loan interest, (5) principal, (6) other amounts payable; however, the Bank of Beijing may change the said settlement
sequence. If the Borrower has many amount payable, the settlement sequence determined by the Bank of Beijing shall prevail.

 

6.6 Where one party undergoes force majeure and has provided
the other party with evidence issued by authoritative organ within 5 working days after occurrence, corresponding liabilities
for breach of contract may be exempted according to laws, however, in order to avoid doubt, both parties hereby conform that corresponding
liabilities for breach of contract may be exempted when the Borrower undergoes force majeure, however, the Borrower shall still
have the obligation to repay the principal of loan withdrawn, loan interest calculated as per contract interest rate and fees
for realization of creditor’s rights and security interest.

 

7. Governing laws and dispute settlement

7.1 This contract shall be governed by the laws and regulations
of the People’s Republic of China; and all disputes hereunder and in connection with this contract shall be settled through
friendly consultation. If no agreement is reached, the dispute may be referred to the people’s court of the place where
the Bank of Beijing is located.

 

7.2 Where the guarantee document contains express written agreement
regarding law application and dispute settlement thereunder, such agreement applies. If there is not written agreement, or written
agreement is not express, or the agreement is invalidated or cancelled according to laws, the laws and regulations of the People’s
Republic of China apply and the disputes may be referred to the people’s court of the place where the Bank of Beijing is
located.

 

8. Supplementary articles

8.1 This contract is a specific business contract under relationship
contract (if any) as stated in Clause A hereof. Items not mentions herein shall be subject to provisions under the relation contract.
In case of any discrepancy between the two, this contract shall prevail. Where there are discrepancies between the special agreement
in Clause X hereof and other clauses of body hereof, the special agreement shall prevail; the appendixes as listed in Clause U
hereof shall constitute part of this contract. Unless otherwise expressly agreed in writing in the body of this contract or appendixes
hereof, the body of this contract shall prevail in case of any discrepancy between such appendixes and the body of this contract.

 

    	 

    	 

    

 

8.2 Where any party sends a notice or document hereunder: (1)
in form of personal delivery or entrusted delivery, the delivery date shall be the date on which the notified party or its receipt
agent signs for receipt; (ii) in form of express mail service or intracity registered mail (including municipal area and suburb),
the delivery date shall be the third day after the mail is sent; (iii) in other mail methods, the delivery date shall be the seventh
day after the mail is sent; if there is discrepancy between the delivery date as determined as per provisions above and the actual
receiving date or formal signing date of the notified party, the earlier date shall prevail. However, in order to avoid any doubt,
both parties hereby confirm that any document which the Bank of Beijing requires the Borrower to submit personally shall be directly
submitted by a designated person to the person authorized by the Bank of Beijing. Any party who changes its contact way shall
notify the other party; otherwise the other party shall still have the right to deem the contact way prior to such change as valid.

 

8.3 The Bank of Beijing may provide information regarding this
contract to the credit system and information base established through powerful government departments.

 

8.4 Unless otherwise agreed herein, any party shall be obliged
to keep confidential any commercial secrets procured during conclusion and performance of this contract and belonging to the other
party, and other undisclosed information the party expressly requires keeping confidential before the above information loses
privacy. Without written permit of the other party, such information shall not be publicly disclosed or disclosed to any third
party; However, disclosure by one party of such information in accordance with provisions of relevant laws and regulations, as
required by powerful organs or the exchange where listing is made, or as reasonably required by this contract to this party’s
auditor, financial advisor, legal advisor or other intermediaries (such party shall ask such intermediaries and their staff to
assume confidentiality obligation) shall not be deemed as default of confidentiality obligation.

 

8.5 The effect of this contract is independent of guarantee
document, relationship contract (if any) and any contract / agreement / commitment, without being influenced by the validity and
enforceability of the above documents. Where any clauses or contents hereof are cancelled or identified as being invalid according
to laws, the effect of other clauses and contents shall not be influenced and still remain valid. Failure to exercise corresponding
remedy rights by the other party in case of default by one party shall not be deemed as waiver of such rights or permit of such
default.

 

    	 

    	 

    

 

8.6 This contract is entered into by and between the Borrower
and the Bank of Beijing on the contract signing date at the place of domicile of Bank of Beijing, and shall take effect after
it is signed by the legal representative / responsible person / authorized representative and sealed with company seal (or contract
seal recognized by a document with company seal). This contract is made in three originals (corresponding number of originals
shall be signed if notarization is required or if guarantee registration procedures are handled), with the Bank of Beijing holding
two originals and the Borrower holding one original. Each original has equal legal effect. In case of guarantor, the Borrower
shall be responsible for provide a copy of this contract for the guarantor, however, failure to do so by the Borrower will not
impose adverse influences on the Bank of Beijing’s creditor’s rights and security interests.

 

(No additional contents below)

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