Bank Acceptance

 

Agreement

 

No.: 3011700074420759

 

Important Notice: This Agreement is entered into by the Parties in accordance
with laws based on equality and free will, and the terms and conditions of this
Agreement fully reflect the genuine intention of the Parties hereto.

 

 

 

 

Party A (Accepting bank): Industrial and Commercial Bank of China Limited,
Shanghai Zhangjiang Branch

 

Address: No. 639 Zhangjiang Road, Pudong District, Shanghai ,China

 

Legal representative: Qiqing Jiang

 

Party B (Drawer): CER Energy Recovery (Shanghai) Co., Ltd.

 

Address: Building#26, No. 1388 Zhangdong Road, Zhangjiang Hi-tech Park, Shanghai
,China

 

Legal representative: Qinghuan Wu

 

To specify the rights and obligations and ensure the proper execution of the
bank acceptance transaction, Party A and Party B hereby enter into this
Agreement after negotiation.

 

Article 1 Acceptance Terms

 

1.1 Party A agrees to accept the bank acceptance notes made by Party B.

 

The bank acceptance notes are made based on the trade contracts between Party B
and the receivers listed in the list of bank acceptance notes. The total amount
is RMB 8,800,000, with 16 notes. Please refer to the list of bank acceptance
notes for details.

 

1.2 The list of bank acceptance notes is an integral part of this Agreement.

 

1.3 In case of a conflict between the Agreement and the bank acceptance note,
the latter shall govern.

 

Article 2 Security and Guaranty

 

2.1 Party B shall put security with amount of 10% of par value of the notes into
the specified security account before Party A starts the acceptance.

 

2.2 Party B has the right to ask Party A for legal and effective guaranty. The
maximum guarantee contract is signed. (Contract No. 30115010485201)

 

2.3 If there occurs any events that may affect the creditor’s right of Party A,
Party B shall put more security or provide other guaranty recognized by Party A.

 

Article 3 Charge

 

The charge of the acceptance transaction is 0.05% of par value, with guarantee
charge of 1.95%.

 

 

 

 

Article 4 Representations and Warranties

 

Party B makes the following representations and warranties to Party A, and these
representations and warranties will remain valid and effective within the term
of this Agreement:

 

4.1 It is eligible to act as a drawer hereunder, and has real and legal
background to enter into and perform this Agreement.

 

4.2 All documents and information provided by Party B to Party A are true,
accurate, complete and effective and do not contain any false record, gross
omission or misleading statement.

 

4.3 It has obtained all necessary authorizations or approvals to enter into this
Agreement. Its execution and performance of this Agreement does not violate its
articles of association or any applicable laws or regulations, or conflict with
any of its obligations under other contracts.

 

4.4 It has not concealed from Party A any litigation, arbitration or claim
involving Party B.

 

Article 5 Undertakings of Party B

 

5.1 Party B undertakes to strictly obey the requirements of security management
stipulated by Party A.

 

5.2 Party B undertakes to provide Party A with the original of the deducting
form of VAT invoice with stamp of tax office, which is also consistent with the
trade contract.

 

5.3 Party B undertakes to fully pay the par value into the bank account opened
with Party A 3 working days prior to the due date of the bank acceptance notes.
Account No.: 1001145719006914063.

 

5.4 Party B undertakes to provide Party A with the financial and accounting
information such as balance sheets, income statements and cash flow statements;
accept and actively cooperate with Party A’s check and supervision on its
production, operational and financial conditions.

 

5.5 Party B undertakes to inform Party A 3 working days in advance and obtain
prior consent of Party A or make appropriate arrangements in relation to the
realization of Party A's claims to Party A’s satisfaction, before it carries out
any merger, division, transfer of material assets and other action that may
cause an adverse impact on Party A’s rights and interests.

 

5.6 Party B undertakes to promptly notify Party A upon occurrence of any of the
following events:

 

A. any change to its articles of association, business scope, registered
capital, legal representative or stock ownership;

 

 

 

 

B. its winding-up, dissolution, liquidation, suspension of business, revocation
or cancellation of its business license, or application (or be applied for) for
bankruptcy;

 

C. it is or may be involved in any material economic dispute, litigation or
arbitration, or its property is subject to seizure, attachment or supervision in
accordance with applicable laws; or

 

D. any of its directors or current senior management personnel is suspected of
major crime or involved in any material economic dispute.

 

E. there is any liability accident caused by Party B's violation of applicable
laws and regulations, regulatory rules or industry standard in relation to food
safety, production safety or environmental protection;

 

F. other events which may affected the realization of Party A's creditor right.

 

5.7 In case of any dispute with Party B and the receiver or the note holder, it
is within Party B’s discretion to settle the matter. Party B undertakes to pay
enough money to the account opened with Party A before the due date of the
acceptance notes.

 

Article 6 Undertakings of Party A

 

6.1 Party A undertakes to timely perform the acceptance procedure after Party B
deposits the security, provides the guaranty and pay related expenses stipulated
by this Agreement.

 

6.2 Party A undertakes to unconditionally pay the amount at the par value of the
note to the note holder after checking the documents of authority for
collection, remittance documents received from the opening bank of the note
holder.

 

Article 7 Default

 

7.1 Party B will be in default upon occurrence of any of the following events:

 

A. Party B fails to deliver the tax invoice related to the trade contract as
required to Party A;

 

B. Party B delivers false invoice to Party A;

 

C. Party B fails to repay the money in accordance with this Agreement, or fails
to perform any other obligations hereunder, or breaches any of its
representations, warranties or undertakings hereunder;

 

D. Party B fails to deposit more security or provide other guaranty acceptable
to Party A when the guaranty provided hereunder suffers any change that is
adverse to the claim of Party A;

 

 

 

 

E. Party B fails to settle any other debt when it becomes due (including due to
accelerated maturity declared by the creditor), or is in default or breach of
any of its obligations under other agreements, which has affected or may affect
performance of its obligations hereunder;

 

F. Party B's ability to make profit, repay debts or operate its business, or its
financial indicators such as cash flow do not comply with agreed standard or
suffer deterioration, or Party B's equity structure, production, operation or
external investment suffers any material adverse change, which has affected or
may affect performance of its obligations hereunder;

 

G. Party B’s property is subject to attachment, seizure or enforcement, which
has affected or may affect performance of its obligations hereunder;

 

H. Party B is or may be involved in any material economic dispute, litigation or
arbitration, which has affected or may affect performance of its obligations
hereunder;

 

I. Party B is investigated or punished by any competent judicial or
administrative authority in accordance with laws, which has affected or may
affect performance of its obligations hereunder;

 

J. there is any abnormal change or missing of major individual investor or key
management personnel of Party B, or any competent judicial authority has
launched investigation on or restricted right of freedom of such investor or
personnel in accordance with laws, which has affected or may affect performance
of Party B's obligations hereunder;

 

K. Party B is or may be under winding-up, dissolution, liquidation, suspension
of business, or its business license has been or may be revoked or cancelled, or
it has applied or been applied, or may apply or be applied, for bankruptcy;

 

L. there is any liability accident caused by Party B's violation of applicable
laws and regulations, regulatory rules or industry standard in relation to food
safety, production safety or environmental protection, which has affected or may
affect performance of its obligations hereunder;

 

M. other events that may cause adverse impact on realization of Party A's claim
hereunder.

 

7.2 If Party B is in default, Party A may require Party B to remedy its default
within a designated period; or Party A has the right to ask early repayment from
Party B or collect the due amount from all the depositary accounts of Party B
opened with Party A; Party A has the right to cease conducting new bank
acceptance business for Party B.

 

7.3 If Party B fails to repay the amount when the notes becomes due, Party A has
the right to deduct from the security account and any depositary account opened
with Party A. If the deduction is not enough to repay the due amount, Party A
may take any one or more of the following steps:

 

 

 

 

A. Party A may impose penalty interest on Party B at the daily overdue penalty
interest rate of 0.05% immediately following the advancement date.

 

B. Party A has the right to refuse any new bank acceptance business for Party B
until the advancement is paid off.

 

C. Other steps stipulated by law or this Agreement.

 

Article 8 Miscellaneous

 

8.1 The Parties shall attempt to resolve through consultation any dispute
arising from the conclusion, contents, performance and interpretation of this
Agreement or in connection with this Agreement. If the Parties are not willing
to or are unable to resolve such dispute through consultation, either Party may
submit the dispute to a court in the place where Party A is located to start
litigation.

 

8.2 Failure to exercise, partial exercise or delay in exercise by Party A of any
of its rights hereunder will not constitute waiver of or amendment to such right
or any other right, nor will it affect Party A's further exercise of such right
or any other right.

 

8.3 Invalidity or unenforceability of any provision hereof will not affect
validity or enforceability of any other provision hereof or validity of the
whole Agreement.

 

8.4 This Agreement shall become void automatically after Party B settle up the
notes.

 

8.5 The Agreement is made in three duplicates with the equal legal effect. Party
A shall hold two and Party B shall hold one.

 

8.6 Others

 

A. The breach of any contract between Party B and any financial authority
constitutes shall be the breach of this Agreement. Party A has the right to
claim accelerating maturity of this Agreement.

 

B. Party B undertakes to open specific security account with Party A. The
security shall be deposited into the account 3 working days before the due date.

 

C. Party B undertakes that the financial terms with other banks are not better
than those with Party A. The percentage of business of Party A is not less than
that of financing.

 

D. Party B shall not use its effective operational assets to mortgage, pledge or
provide guaranty without the written consent from Party A.

 

 

 

 

Party A: Industrial and Commercial Bank of China Limited, Shanghai Zhangjiang
Branch

 

(Seal)

 

Legal Representative (Or duly authorized representative): Qinqing Jiang

 

Party B: CER Energy Recovery (Shanghai) Co., Ltd. (Seal)

 

Legal Representative (Or duly authorized representative): Qinghuan Wu

 

Date: November 24, 2011