LOAN AGREEMENT

LOAN AGREEMENT (this “Agreement”) dated as of December 13, 2010 by and among
CleanTech Innovations, Inc., a Nevada corporation with its principal executive
offices located at C District, Maoshan Industry Park, Tieling Economic
Development Zone, Tieling, Liaoning Province, China 112616 (“CleanTech”), and
its wholly owned subsidiaries, Liaoning Creative Bellows Co., Ltd. (“Creative
Bellows”) and Liaoning Creative Wind Power Equipment Co., Ltd. (“Wind Power,”
together with Creative Bellows, the “Subsidiaries”), each such subsidiary
organized under the laws of the People’s Republic of China (CleanTech, Creative
Bellows and Wind Power are collectively referred to herein as the “Company”),
and NYGG (Asia), Ltd., a company organized under the laws of the British Virgin
Islands with its principal executive offices located at 12th Floor Ruttonjee
House, 11 Duddell Street, Central, Hong Kong ("Lender").

WITNESSETH

WHEREAS, Lender has agreed, subject to the terms and conditions hereof, to loan
to the Company the sum of U.S. $10,000,000 (Ten Million Dollars) (the "Loan").

NOW, THEREFORE, in consideration of the foregoing premises and other good and
valuable consideration, the receipt of which is hereby acknowledged, the parties
hereto hereby agree as follows:

1. The Loan. Simultaneously with the execution of this Agreement by the parties
hereto, the Lender will loan to the Company the sum of U.S. Dollars (“USD”)
10,000,000. The Loan will be evidenced by a note (the "Note"), dated the date
hereof, in the principal amount of the Loan, and will bear simple interest at
the rate of 10% per annum, payable quarterly in advance commencing on the date
hereof and thereafter every three (3) months from the date hereof on the
following dates: March 13, 2011, June 13, 2011, September 13, 2011, and December
13, 2011, unless such date is a banking holiday recognized by JPMorgan Chase &
Co. in New York City or a Saturday or Sunday (a “Business Day”), in which case
such payment will be due on the next succeeding Business Day. The principal,
together with any accrued and unpaid interest thereon, shall be due on the
earlier of (i) March 1, 2012, (ii) on demand of the Lender of a full or partial
payment at any time after the closing of any financing of USD 10,000,000 or
more, or the equivalent in another currency, in one or a series of transactions
or (iii) upon acceleration due to a Change of Control or Event of Default (as
defined in the Note). The Note will be in the form attached hereto as Exhibit A.
At the Lender’s option, the principal amount of the note and all interest
thereon shall be paid in either USD or Renminbi (“RMB”) at an exchange rate of
RMB 6.90 to USD 1.00 to the Lender or any designee of Lender as provided to the
Company in writing by Lender.

2. Representations and Warranties of the Company. The Company represents and
warrants that:

(A) The Company is a corporation duly organized, validly existing and in good
standing under the laws of the State of Nevada, and the Company and its
Subsidiaries are duly qualified to do business and in good standing in such
jurisdictions where the conduct of their business makes such qualification
necessary. The Company has full power and authority, corporate and otherwise, to
enter into and perform this Agreement and the Note.

 
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(B) The execution, delivery and performance by the Company of this Agreement,
and the making, execution and delivery by the Company of the Note (collectively
with the Agreement referred to herein as the "Transaction Documents") have been
duly authorized by all necessary corporate action and will not violate any
provision of law, court order or decree to which the Company or its Subsidiaries
are subject to, or the Company's Articles of Incorporation or Bylaws, as
amended, or result in the breach of, or constitute a default under, or result in
the creation of any lien, charge or encumbrance upon any property or assets of
the Company or its Subsidiaries pursuant to any agreement or instrument to which
they are a party. The Transaction Documents are a valid and binding obligation
of the Company, enforceable in accordance with its terms subject to general
principles of equity and bankruptcy and other laws affecting creditors' rights
generally.

(C) No governmental permit, consent, approval or authorization is required in
connection with (i) the execution, delivery and performance of the Transaction
Documents, or (ii) the offer, sale, issuance and delivery of the Note
contemplated hereby by the Company; provided, that, all representations made to
the Company by the Lender in this Agreement and in any other document or
instrument delivered in connection herewith are assumed for purposes of this
representation and warranty to be accurate and complete.

(D) The Company has made available to the Lender through the EDGAR system, true
and complete copies of the Company’s current report on Form 8-K filed July 2,
2010 (the “8-K”), and all other reports filed by the Company pursuant to the
1934 Act since the filing of the 8-K and prior to the date hereof (collectively,
the “SEC Filings”). The SEC Filings are the only filings required of the Company
pursuant to the 1934 Act for such period. The Company and its Subsidiaries are
engaged in all material respects only in the business described in the SEC
Filings and the SEC Filings contain a complete and accurate description in all
material respects of the business of the Company and its Subsidiaries, taken as
a whole.

(E) The SEC Filings complied as to form and content in all material respects
with the requirements of the 1934 Act and did not contain any untrue statement
of a material fact or omit to state any material fact necessary in order to make
the statements made therein, in the light of the circumstances under which they
were made, not misleading.

(F) The net proceeds of the Note hereunder shall be used by the Company for
working capital.

(G) Since December 31, 2009, except as identified and described in the SEC
Filings, there has not been:

(i) any change in the financial condition of the Company that could reasonably
be expected to have a material adverse effect (“Material Adverse Effect”) on (x)
the assets, liabilities, results of operations, condition (financial or
otherwise), business, or prospects of the Company and its Subsidiaries taken as
a whole, or (y) the ability of the Company to perform its obligations under the
Transaction Documents, individually or in the aggregate; or

 
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(ii) any other event or condition of any character that has had or could
reasonably be expected to have a Material Adverse Effect.

3. Representations and Warranties by the Lender. As an inducement to the Company
to enter into this Agreement and issue the Note, Lender represents and warrants,
as follows:

(A) Lender is a validly existing company, limited partnership or limited
liability company and has all requisite corporate, partnership or limited
liability company power and authority to enter into the Transaction Documents.

(B) The execution, delivery and performance by Lender of the Transaction
Documents to which Lender is a party have been duly authorized and will each
constitute the valid and legally binding obligation of Lender, enforceable
against Lender in accordance with their respective terms, subject to bankruptcy,
insolvency, fraudulent transfer, reorganization, moratorium and similar laws of
general applicability, relating to or affecting creditors’ rights generally.

(C) Lender acknowledges that it has been advised that the Note has not been
registered under the provisions of the Act.

(D) Lender acknowledges it has reviewed and received copies of all SEC Filings.
Lender specifically disclaims receipt of any other information and material,
whether oral or in writing, from the Company or anyone acting for or on behalf
of the Company, and reliance upon any such unauthorized oral or written
information and material is specifically disclaimed.

4. Covenants. Upon an Event of Default or a Change of Control of the Company (as
defined in the Note), the entire outstanding principal amount of the Note, and
interest due thereon, shall become immediately due and payable in accordance
with the terms of the Note.

5. Negative Covenants. Without the prior written consent of the Lender, from the
date hereof until the date the Note is repaid in full, the Company and its
Subsidiaries shall be prohibited from:

(A) Selling, leasing, encumbering, pledging or otherwise disposing of their
respective assets, except in the ordinary course of business;

(B) Dissolving, liquidating, or winding up their respective businesses;

(C) Conducting their respective businesses other than in their ordinary and
usual course;

(D) Paying any dividend or make any other distributions of cash or property;

 
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(E) Merging or consolidating with another entity;

(F) Issuing any new stock or redeeming any existing stock;

(G) Incurring indebtedness for borrowed money, including capitalized loan
obligations; or

(H) Effecting any fundamental change to the Company's lines of business.

 

6. Loan Delivery. Lender shall deposit a total of USD 10,000,000, less any
applicable wire or transfer fees as follows:

Beneficiary: The Newman Law Firm PLLC IOLA Trust Account
Bank Name: TD Bank, NA
Bank Address: 2 Wall Street, New York, NY 10005
ABA: 026013673
Account Address: 44 Wall Street, New York, NY 10005
Account Number:

Upon the receipt by Lender and Company of the executed Loan Agreement and Note,
The Newman Law Firm is hereby authorized by the Lender and the Company to
promptly release all funds to the Company as directed by the Company in writing.

7. Miscellaneous.

(A) (i) The Company agrees to indemnify and hold harmless the Lender and its
affiliates and their respective directors, officers, employees and agents (each
a “Lender Indemnitee”) from and against any and all losses, claims, damages,
liabilities and expenses (including without limitation reasonable attorney fees
and disbursements and other expenses incurred in connection with investigating,
preparing or defending any action, claim or proceeding, pending or threatened
and the costs of enforcement thereof) (collectively, “Losses”) to which any such
Lender Indemnitee may become subject as a result of any breach of
representation, warranty, covenant or agreement made by or to be performed on
the part of the Company under the Transaction Documents, and will reimburse any
such Lender Indemnitee for all such amounts as they are incurred by such Lender
Indemnitee.

(ii) The Lender agrees to indemnify and hold harmless the Company and its
affiliates and their respective directors, officers, employees and agents (each
a “Company Indemnitee”) from and against any and all Losses to which any such
Company Indemnitee may become subject as a result of any breach of
representation, warranty, covenant or agreement made by or to be performed on
the part of the Lender under the Transaction Documents, and will reimburse any
such Company Indemnitee for all such amounts as they are incurred by such
Company Indemnitee.

 
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(B) This Agreement may not be assigned by a party hereto without the prior
written consent of the Company or the Lender, as applicable, provided, however,
that Lender may assign its rights and delegate its duties hereunder in whole or
in part to an affiliate and may assign in writing any right to the payment of
interest and principal to any designee. The provisions of this Agreement shall
inure to the benefit of and be binding upon the respective permitted successors
and assigns of the parties. Nothing in this Agreement, express or implied, is
intended to confer upon any party other than the parties hereto or their
respective successors and assigns any rights, remedies, obligations, or
liabilities under or by reason of this Agreement, except as expressly provided
in this Agreement.

(C) This Agreement may be executed in two or more counterparts, each of which
shall be deemed an original, but all of which together shall constitute one and
the same instrument. This Agreement may also be executed via facsimile, which
shall be deemed an original.

(D) The titles and subtitles used in this Agreement are used for convenience
only and are not to be considered in construing or interpreting this Agreement.

(E) Unless otherwise provided, any notice required or permitted under this
Agreement shall be given in writing and shall be deemed effectively given as
hereinafter described (i) if given by personal delivery, then such notice shall
be deemed given upon such delivery, (ii) if given by mail, then such notice
shall be deemed given upon the receipt of such notice by the recipient and (iii)
if given by an internationally recognized overnight air courier, then such
notice shall be deemed given two Business Days after delivery to such carrier.
All notices shall be addressed to the party to be notified at the address as
follows, or at such other address as such party may designate by ten days
advance written notice to the other party:

If to the Company:
C District, Maoshan Industry Park,
Tieling Economic Development Zone,
Tieling, Liaoning Province, China 112616
Att: Bei Lu

With a copy to (which copy shall constitute notice):
The Newman Law Firm, PLLC
14 Wall Street, 20th Floor
New York, NY 10005
Attention: Robert Newman

If to the Lender:
NYGG (Asia), Ltd.
12th Floor Ruttonjee House,
11 Duddell Street
Central, Hong Kong

 
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With a copy to (which copy shall constitute notice):
Orrick, Herrington & Sutcliffe, LLP
51 West 52nd Street
New York, NY 10019
Attn: George H. Wang Esq.

(F) Amendments and Waivers. Any term of this Agreement may be amended and the
observance of any term of this Agreement may be waived (either generally or in a
particular instance and either retroactively or prospectively), only with the
written consent of the Company and the Lender, and the Company will pay the
reasonable fees and expenses of the Lender incurred in connection with any such
amendment.

(G) Severability. Any provision of this Agreement that is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof but shall be interpreted as if it were written so as
to be enforceable to the maximum extent permitted by applicable law, and any
such prohibition or unenforceability in any jurisdiction shall not invalidate or
render unenforceable such provision in any other jurisdiction. To the extent
permitted by applicable law, the parties hereby waive any provision of law which
renders any provision hereof prohibited or unenforceable in any respect.

(H) Entire Agreement. This Agreement, including the Exhibits and the Disclosure
Schedules, and the other Transaction Documents constitute the entire agreement
among the parties hereof with respect to the subject matter hereof and thereof
and supersede all prior agreements and understandings, both oral and written,
between the parties with respect to the subject matter hereof and thereof.

(I) Further Assurances. The parties shall execute and deliver all such further
instruments and documents and take all such other actions as may reasonably be
required to carry out the transactions contemplated hereby and to evidence the
fulfillment of the agreements herein contained.

(J) Governing Law; Consent to Jurisdiction; Waiver of Jury Trial. This Agreement
shall be governed by, and construed in accordance with, the internal laws of the
State of New York without regard to the choice of law principles thereof. Each
of the parties hereto irrevocably submits to the exclusive jurisdiction of the
courts of the State of New York located in New York County and the United States
District Court for the Southern District of New York for the purpose of any
suit, action, proceeding or judgment relating to or arising out of this
Agreement and the transactions contemplated hereby. Service of process in
connection with any such suit, action or proceeding may be served on each party
hereto anywhere in the world by the same methods as are specified for the giving
of notices under this Agreement. Each of the parties hereto irrevocably consents
to the jurisdiction of any such court in any such suit, action or proceeding and
to the laying of venue in such court. Each party hereto irrevocably waives any
objection to the laying of venue of any such suit, action or proceeding brought
in such courts and irrevocably waives any claim that any such suit, action or
proceeding brought in any such court has been brought in an inconvenient forum.
EACH OF THE PARTIES HERETO WAIVES ANY RIGHT TO REQUEST A TRIAL BY JURY IN ANY
LITIGATION WITH RESPECT TO THIS AGREEMENT AND REPRESENTS THAT COUNSEL HAS BEEN
CONSULTED SPECIFICALLY AS TO THIS WAIVER.

 
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(K) The Company shall pay the reasonable fees and expenses of counsel incurred
in connection with the negotiation and consummation of the transactions
contemplated hereby.

IN WITNESS WHEREOF, the parties hereto have executed this agreement as of the
date first above written

CLEANTECH INNOVATIONS, INC.
 
By:
/s/ Bei Lu
 
 Name: Bei Lu
 
 Title: President and Chief Executive Officer
   
LIAONING CREATIVE BELLOWS CO., LTD.
 
By:
/s/ Bei Lu
 
 Name: Bei Lu
 
 Title: President and Chief Executive Officer
   
LIAONING CREATIVE WIND POWER
EQUIPMENT CO., LTD.
   
By: 
/s/ Bei Lu
 
 Name: Bei Lu
 
 Title: President and Chief Executive Officer

 
 
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LENDER:
 
NYGG (Asia), Ltd.
 
By: 
/s/ Ming Li
 
 Name:
 
 Title:

 
 
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