Murphy EControls Technologies (Hangzhou) Co., Ltd

Lender/Bank:

Obligors

Facility/

Amount:

Finance

Document

Final Maturity Date

Availability Period

Security:

(1)    it will promptly inform the Lender of any change to its Certificate of Approval;

(2)    it will promptly inform the Lender of any change in the amount of its foreign debt or. its other indebtedness backed by a Security guarantee from overseas; and

(3)    it will conduct the foreign debt registration promptly (and, in any case, no later than 15 days) after enforcement of the foreign guarantee/security for this Facility Letter.

Conditions Precedent:

(1)    The Borrower shall present to the Lender its valid Borrowing Card issued by the People’s Bank of China together with the password thereof.

(2)    Certified true copies of all government approvals and certificates in relation to the establishment of the Borrower shall be submitted to the Lender.

(3)    The Borrower has provided its internal authorization document approving (or authorizing others to approve) the Facility hereunder and authorizing representative(s) to accept and sign the terms, conditions and documents in connection with the Facility hereunder and in strict compliance with its articles of association and the applicable laws.

(4)    In the event that the Lender’s making available any Facility hereunder is subject to regulatory approval or the completion of other procedures with the regulator(s), the acquisition of such regulatory approval and the completion of such procedures with regulator(s).

(5)    The Lender is satisfied that all the security(ies) stated in the “Security” item above (if any) has/have been established and is/are valid and enforceable. The security provider’s company existence evidence and internal authorization document (where the security provider is a company) or valid ID certificate (where the security provider is an individual) has been duly made and submitted to the Lender.

(6)    A tentative schedule of drawdown under the Facility prepared by the Borrower which shall be in form and substance satisfactory to the Lender in all respects.

(7)    Legal opinions, as the Lender may require, from qualified lawyer(s) acceptable to the Lender opining on such matters relevant to this Facility Letter and the security documents in form and substance satisfactory to the Lender in all respects.

(8)    Evidence of payment of all fees, costs and expenses then due and payable from the Borrower under this Facility Letter.

(9)    Documentary evidence satisfactory to the Lender that all stamp duties payable by the Borrower in respect of this Facility Letter have been duly paid by the Borrower.

(10)  Such other documents, evidence and financial and other information relating to any of the matters contemplated under this Facility Letter and the security documents as the Lender shall reasonably require.

(11)  The Borrower has opened a loan disbursement account with the Lender or has designated its existing settlement account with the Lender as loan disbursement account

(12)  The Borrower has opened a settlement account with the Lender.

(13)  The Borrower has provided the Lender with certified true copies of:

(i)     evidences that the Project (defined in the “Schedule of Facility”) has been approved by or (as the case may be) filed with the National Development and Reform Commission or its relevant local office in accordance with law;

(ii)    evidences that the Borrower has obtained the land use right for the Project;

(iii)  evidences that the environmental impact assessment documents of the Project have been examined and approved by competent environmental protection authorities;

(iv)   evidences that the Borrower satisfies the investor’s qualification and business qualification requirements (if any) specified by the State for the investment Project;

(v)    evidences that the Project capital meets the State’s requirement on minimum capital ratio (which is 40% for this Project) and that such minimum capital has been injected in accordance with law and/or the requirements of competent authorities;

(vi)   evidences that after the occurrence of the proposed drawdown the Borrower’s capital injection ratio will not be lower than the ratio of all loans then drawn under this Facility Letter to the total Facility amount hereunder;

(vii) evidences that after the occurrence of the proposed drawdown the ratio of the Borrower’s utilized capital to the registered capital is not lower than ration of all loans then drawn under this Facility Letter to the total facility amount hereunder.

(14)  The Borrower has provided the Lender with evidences to the Lender’s reasonable satisfaction that the progress of the Project construction properly reflects the capital investment into the Project to date.

Representation

(1)    each Obligor is a company duly formed and validly existing as a separate legal person under its jurisdiction of incorporation, and has full power, authority and legal right to assume civil liability under the Finance Document to which it is a party;

(2)    each Obligor has full power, authority and legal right to enter into and engage in the transactions contemplated by the Finance Document to which it is a party;

(3)    each of the Finance Documents constitutes legal, valid and binding obligations of the Obligors enforceable in accordance with its terms;

(4)    neither the execution of the Finance Document nor the performance by the Obligor of any of its obligations or the exercises of any of its rights thereunder will conflict with or result in a breach of any law or regulation, judgment, order, authorization, agreement or obligation applicable to it;

(5)    all authorisations required or desirable:

(i)     to enable an Obligor lawfully to enter into, exercise its rights and comply with its obligations in the Finance Documents to which it is a party;

(ii)    to make the Finance Documents to which an Obligor is a party admissible in evidence in its jurisdiction of incorporation; and

(iii)  for an Obligor and its subsidiaries to carry on their business, and which are material,

have been obtained or effected and are in full force and effect;

(6)    the choice of the governing law as specified in each Finance Document will be recognised and enforced in the jurisdiction of incorporation of the Obligor who is a party to that Finance Document;

(7)    any judgment obtained in a jurisdiction that has been specified in a Finance Document will be recognised and enforced in the jurisdiction of incorporation of the Obligor who is a party to that Finance Document;

(8)    each Obligor is not required under the law applicable where it is incorporated or resident to make any deduction for or on account of tax from any payment it may make under any Finance Document;

(9)    under the law of the jurisdiction of incorporation of the Obligor, it is not necessary that the Finance Documents be filed, recorded or enrolled with any court or other authority in that jurisdiction or that any stamp, registration or similar tax be paid on or in relation to the Finance Documents or the transactions contemplated by the Finance Documents, other than the payment of the stamp duty on this Facility Letter;

(10)  all information supplied by Obligor to the Lender is true, complete and accurate in all material respects as at the date it was given and is not misleading in any respect;

(11)  the financial statements of each Obligor supplied to the Lender were prepared in accordance with GAAP consistently applied save to the extent expressly disclosed in such financial statements;

(12)  the financial statements of each Obligor supplied to the Lender give a true and fair view and represent its financial condition and operations during the relevant financial year save to the extent expressly disclosed in such financial statements;

(13)  there has been no material adverse change in the business or financial condition of each Obligor since the date of the latest financial statements supplied to the Lender;

(14)  any person specified as an authorised signatory of an Obligor is authorized to sign the drawdown notice (in the ease of. Borrower only and other notices on its behalf;

(15)  no litigation, arbitration or administrative proceeding is currently taking place or pending or, to the knowledge of the Obligor, threatened against the obligor or its assets;

(16)  no Obligor is in default under any law, regulation, judgment, order, authorisation, agreement or obligation applicable to it or its assets or revenues, the consequences of which default could materially and adversely affect its business or financial condition or its ability to perform its obligations under the Finance Document and no Event of Default or prospective Event of Default, has occurred or is occurring.

Undertaking/

Covenants:

(1)    Without prejudice to any security or other priority right to which the Lender is entitled (if any), this Facility shall rank at least pari-passu with all present and future indebtedness of the Borrower. The Borrower undertakes to advise the Lender in advance of any future borrowing.

(2)    The Borrower should not create or attempt to create or permit to subsist any mortgage, debenture, charge, pledge, lien or other encumbrance upon, or permit any lien or other encumbrance (save a lien arising by operation of law in the ordinary course of trading) on the whole or any part of present or future assets of the Borrower without Lender’s prior written consent.

(3)    Half-yearly and audited yearly financial statements of the Borrower and the Guarantor (if any) to be prepared by qualified accountants shall be provided to the Lender whenever available but in any event no later than 90 days and 120 days from the financial half-year-ends and year-ends respectively.

(4)    The Borrower shall provide other financial or operational information of the Borrower as from time to time reasonably requested by the Lender.

(5)    The Borrower shall promptly inform the Lender of any of the Borrower’s inter-group connected transactions which amounts to in aggregate over 10% of its net assets with the details to the satisfaction of the Lender.

(6)    The Borrower shall notify the Lender immediately after it becomes aware of any material adverse event which will affect the debt payment ability of the obligor (including the Borrower, guarantor and any other security provider).

(7)    The Borrower undertakes to cooperate with the relevant on-site inspections to be conducted by the Lender in respect of the loans.

(8)    The Borrower undertakes to obtain the Lender’s consent prior to the occurrence of any material event such as merger, division, equity transfer, investment or material increase of debt financing.

(9)    The Borrower has in all aspects satisfied the requirements set out in relevant laws and regulations of the state, and will continue to do so. Such requirements include but are not limited to:

(i)     the Project meets the relevant policies of the state regarding industry, land, environmental protection etc. and all administrative procedures for the fixed asset investment project have been fulfilled as required by law.

(ii)    the Project conforms to relevant capital requirements of the state on investment projects (including but without limitation the minimum capital ratio of the Project is in line with relevant provision of the State Council).

(iii)  all approvals, license, authorization, permit in connection with the Borrower and the investment project shall remain in full force and effect from the date of this Facility Letter until the full settlement of all outstanding amount under relevant loans.

(iv)   The Borrower will ensure that the actual total investment amount of the Project does not exceed 110% of the approved total investment amount (if applicable).

(10)  The Borrower shall provide the Lender with a construction progress report in relation to the Project certified by an independent third party to the satisfaction of the Lender on quarterly basis unless the Project has been completed, in which case, evidence of the completion should be provided.

(11)  The Borrower shall ensure that, if calculated on an annual, basis, 50% of the incoming cash flow of the Project will be credited into the above mentioned settlement account with us and the average daily balance of such account will not be lower than RMB200,000.-.

(12)  The Borrower shall undertake to open operating and loan account with the Leader.

(13)  The Borrower shall undertake to seek Lender’s prior consent for any dividend paid out.

(14)  In order to ensure and monitor the repayment ability of the Borrower, according to relevant regulations on banking facilities and loans issued by China Banking Regulatory Commission, the Borrower should at least direct 80% sales proceeds to the account opened with the Lender to facilitate the Lender to monitor the fund flow situation.

Event of Default

(1)    any Obligor fails to pay any amount payable by it under any Finance Document when due;

(2)    any Obligor fails to duly perform any of its material obligations (other than obligations to pay) or to observe any of the material terms and conditions (including the Borrower’s failure to use the loan for the stated purpose or to utilize the loan proceeds as mutually agreed) imposed on it by any Finance Document;

(3)    all or a material part of the assets of an Obligor is seized, expropriated, re-entered or resumed or is subject to compulsory purchase or acquisition (whether subject to compensation or not);

(4)    an Obligor becomes or is declared insolvent or bankrupt, is unable to pay its debts as they fall due, stops, suspends or threatens to stop or suspend payment of all or a material part of its debts or begins negotiations or takes any proceedings or other step with a view to readjustment, rescheduling or deferral of its indebtedness (or of any part of its indebtedness which it will or would otherwise be unable to pay when due) or purposes or makes a general assignment or any arrangement, compromise or composition with or for the benefit of its creditors or a moratorium is agreed or declared in respect of or affecting all or a material part of its indebtedness;

(5)    any distress, attachment, execution or other legal process (including the taking of possession or appointment of a receiver, manager or similar officer) is levied, enforced or sued out on or against all or a material part of the assets of the Obligor (whether to enforce any encumbrance or otherwise);

(6)    (i) a proceeding is commenced by an Obligor, a resolution is passed by the Obligor, an order is made by the Obligor or any action is taken by the Obligor for the dissolution of the Obligor or for the appointment of a liquidator, receiver, administrator, trustee or similar officer of the Obligor or of all or a material part of its assets or if the Obligor otherwise becomes insolvent or dissolved under any applicable laws;

(ii) a proceeding is commenced, a resolution is passed, an order is made or any action is taken by any person for the dissolution of the Obligor or for the appointment of a liquidator, receiver, administrator, trustee or similar officer of the Obligor or of all or a material part of its assets or if the Obligor otherwise becomes insolvent or dissolved under any applicable laws;

(7)    any requirement of financial covenants (if any) is not satisfied;

(8)    any representation or statement made or deemed to be made by an Obligor in the Finance Documents or any other document delivered by or on behalf of any Obligor under or in connection with any Finance Document is or proves to have been incorrect or misleading in any material respect when made or deemed to be made;

(9)    the Borrower is not or ceases to be a subsidiary of the Guarantor;

(10)  an Obligor repudiates a Finance Document or evidences an intention to repudiate a Finance Document;

(11)  if there shall occur a material adverse change in the business, assets, general condition or prospects of an Obligor, which could materially and adversely affect the ability of the Obligor to perform its obligations under the Finance Document;

(12)  it is or will become unlawful for any Obligor to perform or comply with any material obligations under the Facility;

(13)  any other financial indebtedness of an Obligor is declared be or otherwise becomes due and payable prior to its specified maturity as a result of an event of default (however described).

Governing Law:

Jurisdiction:

For and on behalf of

HSBC Bank (China) Company Limited

Hangzhou Branch

Accepted by

Murphy EControls Technologies

(Hangzhou) Co., Ltd.

/s/ Angela Fang

/s/ Susan Xu

Angela Fang

Relationship Manager

Commercial Banking

Authorised Signatures

Company Chop

Date

/s/ Dennis Zhu

Dennis Zhu

Branch Manager