Boiler Project Contract

Contract No.: 070626

Supplier: Dongguan Hongyuan Boiler Equipments Co., Ltd. (hereinafter referred to
as “Supplier” or “Party B”)

Purchaser: Jiangmen Roots Biopack Limited. (hereinafter referred to as
“Purchaser” or “Party A”)

 

In accordance with the provisions and stipulations of the Contract Law of the
People’s Republic of China and relevant laws and regulations and etc., and in
the light of the mutual principle of equality, free will, faith and trust, the
Supplier and the Purchaser hereby agree on matters concerned as the following
agreement which shall be abided by the two parties:

I. Commodity description, model, brand, quantity, and sum:

Item

Commodity Description

Model/Specs

Brand

Qty.

Unit

Total Sum (RMBYuan)

Remarks

1

Main/auxiliary machinery and installation project of Heavy-oil Fired HTF Boiler

YYW-6000 500-Y

Changneng Xianfeng

1

Item

1031810

Detailed as Price Schedule Ⅰ, Ⅱ, Ⅲ

2

Plant pipeline construction

 

 

1

Item

674432

Detailed as Price Schedule Ⅳ

Total Amount: SAY RENMINBI one million seven hundred and six thousand two
hundred and forty two ONLY(Yen1706242)

Agreed Deal Price: SAY RENMINBI one million five hundred and thirty five
thousand six hundred and eighteen ONLY (Yen1535618) tax included.

II. Project contract format: General contracting in Turnkey contract for labor
and materials: including Technology Supervision Bureau’s installation
declaration procedure, project acceptance, use license receiving.

 

III. The product technical standard & quality requirement shall be in compliance
with the following relevant national manufacturing & inspection criterions:

vOrganic heat transfer material heaters in reference to Safety Technique
Inspection Regulations of Organic Heat Transfer Material Heaters in LGF(1993)No.
356.

 

IV. Warranty Period: Twelve months from the pass date of the facility
acceptance; or eighteen months from the factory-out date of the product.
Supplier is responsible for free warranty on inhuman failures in boiler
operation during the warranty period. {The acceptance pass date is prescribed as
the acceptance date of the quality & technology supervision department,
excluding wear and tear parts (combustion engine oil pumps, chokes, firing rods,
magic eyes of oil-fired boilers; grate tablets of coal-fired boilers) }

 

V. Delivery time, place, shipment method:

 

1.

Delivery time: Project commissioning with a complete acceptance within two and a
half months upon the subscription of deposit (payment to be made within fifty
days upon acceptance of the license) 2.         Delivery place & Consignee (or
receiving person): Inside the plant of Purchaser, Duruan Town, Xinhui District,
Jiangmen City.

 

3.

Shipment & fees: √Supplier charged shipment □Self pick-up by Purchaser; the
shipment fee is borne by Supplier, and the discharging is at Supplier’s expense
as well.

 

4.

The commodity shall be in the charge of Purchaser after its arrival at
Purchaser. If any loss of goods or spare parts occurs, Purchaser shall undertake
the expense of re-purchasing, and undertake the installation delay liabilities
as a result.

 

5.

If Purchaser postpones collection of the goods, a written notice shall be sent
to Supplier and the renewed delivery time shall be negotiated. Whenever
Purchaser postpones collection of the goods, Supplier is entitled to dispose of
the completed goods, and determine the renewed delivery time; if the collection
time is overdue for more than one month, Supplier is entitled to readjust the
contract purchase price and shipment fee according to market conditions.

 

6.

The construction site of Purchaser shall be provided with camion entrance
conditions and cargos unloading & placing conditions, of which the road shall
endure the cargo weight and extend directly to the boiler

 

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Supplier:

Purchaser:

 

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house gate without obstacles. If the road condition mention above is not
suitable for unloading of the boiler, , the Supplier is entitled for no
delivery. In case of any surcharge arises due to unloading problems, the
Purchaser shall undertake the additional part of shipment fee and unloading &
placing fee.

 

7.

Prior to the boiler installation, the Purchaser shall prepare “ Three-through”
in the boiler room, ie., that water and electricity is connected into the boiler
room to fulfill construction water and electricity consumption, supplied to the
installation team with free of charge. Ensure a smooth road without obstacles.
Prepare the foundation of the boiler room ground and auxiliary machinery spare
parts (with reference to the foundation drawing of the boiler room provided by
Supplier, as Appendix Ⅱ). Upon the accomplishment of preparation before entrance
and installation, a written notice shall be sent to Supplier for goods delivery.

 

8.

The project time will be postponed correspondently, and Purchaser shall submit
the renewed entrance date with noticing Supplier in written at least 3 days in
advance in cases as follows:

(1) Purchaser fails to supply water, electricity, and the road fails to be
smooth with obstacles not removed, as well as the foundation fails to complete
in time and affects the entrance & construction;

(2) During the construction, any cut-off of power and water-supply of more than
8 hours, or any continual intermittence cut-off for more than 3 days (each time
more than 4 hours), affects normal construction.

(3) Purchaser fails to pay the earnest money and other charges in time according
to the 5th stipulation of this Contract;

(4) In the installation process, Purchaser alters the installation content or
replaces any spare part of the auxiliary machinery, which affects the
construction;

(5) Purchaser notices for entrance delay. If the delay is over one month,
Supplier is entitled to adjust the price of installation materials.

 

VI. Payment & Maturity:

Purchaser shall pay an earnest money equal to 30% of the total contract sum
within one week after the contract is signed, and pay 40% of the total contract
sum one week before delivery, and pay 15% of the total contract sum within three
days from the acceptance of the completed project, and pay 10% on the delivery
date of Boiler Use License approved and issued by the boiler faculty of
Technology Supervision Bureau, and the balance 5% shall be paid off within six
months from the pass date of the acceptance by Technology Supervision Bureau.

 

VII. If any quality problem is detected in facility operation, Purchaser shall
make an objection within 3 months from the acceptance date. Purchaser shall not
make any objection on declined quality incurred by ill use, storage, and
maintenance by Purchaser.

 

VIII. Liabilities for breach of contract:

 

1.

In case that Purchase fails to pay the contract facility cost within the
stipulated period in this Contract, a penalty shall be paid to Supplier which is
equal to 0.5‰ of the unpaid dues per overdue day. In case the payment is overdue
for more than three months, Supplier is entitled to receive penalties according
to the contract, and take or promote to take measures to prohibit Purchaser
using the facility, by which all result incurred shall be undertaken by
Purchaser.

 

2.

Whenever Purchaser cancels the order midway, Purchaser shall pay 5% of the
cancelled sum as a penalty to Supplier, and has no right to demand paid sum
return.

 

IX. Force Majeure

In case of delayed or failed contract execution by either of the parties which
is incurred by Force Majeure, a notice shall be sent to the other party stating
the reason of the failed or incomplete execution. Meanwhile, a certificate shall
be submitted in ten days to permit delay, incomplete execution, or back-out of
the contract. The breach liability is partially or fully exempted according to
conditions. (Force Majeure means any unforeseen, unavoidable and insurmountable
event such as earthquakes, typhoons, floods, wars, and etc.)

 

X. Title retention

Prior to overall sum being paid off by Purchaser, the ownership of the facility
is possessed by Supplier, and none alteration shall incur to the material
ownership in any reason without Supplier’s written consent. In addition, all
loss risk of the material shall be undertaken by Purchaser from the delivery
date of the facility to Purchaser.

 

 

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Supplier:

Purchaser:

 

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XI. Contract dispute solution:

Any dispute incurred in this Contract performance shall be negotiated by both
parties, and in case of failed negotiation, shall be arbitrated by the people’s
court of Supplier’s locus, by which all litigation costs and reasonable attorney
fee incurred shall be undertaken by the unsuccessful party.

 

XII. In case of matters not mentioned herein, parties hereto shall sign
supplemental provisions through negotiation, which is of the equal effect as
this Contract.

 

XIII. This contract is made of two originals, each of which has eight folios.
Party A and Party B shall each keep one original, both of which have the equal
legal effect with validation from the signing date.

 

XIV. Requirements for concrete works of Party A: The foundation engineering of
the boiler room, the boiler, and all auxiliary machinery shall be completed
within 50 days from the contract validation; the support foundation of the plant
pipeline shall be completed within 30 days from the contract validation. In case
the construction of Party A delays, the construction of Party B might defer
accordingly.

 

XV. Party B supplies an old German Wish combustion engine of 4T/h, which is of a
brand-new oil pump and choke. Party A shall pay for the old combustion engine to
Party B total say RMB TWENTY EIGHT THOUSAND ONLY (?28000.00 ). If Party A
returns the old combustion engine to Party B within one and a half year, Party B
shall repay to Party A total say RMB TWENTY THOUSAND ONLY. This payment shall be
paid off at one time on the arrival date of the goods which has been adjusted
and qualified.

 

XVI. Others Appendixes: three folios of Price Schedule, one folio of Commodity
list, two folios of Support Drawing, one folio of Plant Pipeline Layout, one
folio of Floor Chart.

 

Supplier (Seal): Dongguang Hongyuan Boiler Equipments Co., Ltd.

Purchaser (Seal): Jiangmen Roots Biopack Ltd

Date: 2007 (YY) 6 (MM)28 (DD)

Date: 2007 (YY) 6 (MM)28 (DD)

 

 

 

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Supplier:

Purchaser: