Unassociated Document


    Exhibit
10.3

    
 

    Hankou
Bank

    
 

    RMB
Loan Agreement

    
 

    Borrower (Party A): Wuhan Blower Co.,
Ltd.

    


    Lender (Party B): Hankou Bank Company Limited,
Wuhan Economic and Technological Development Zone Branch


    
      
         


      

      
         


        
          

        

      

      
         


      

    


    Important
Note:

    


    Mortgagee
kindly requests Mortgager to read through this contract carefully, especially
the specific provisions contained in headlines marked with ** listed in the
contents below, which may contain descriptions that result in or may result in
the waiver or limitation of liability. If there is any question or objection,
please contact in time Mortgagee for explanation.

    


    Contents

    


    Article 1
Loan

    Article 2
Loan Interest Rate, Interest and Penalty Interest

    Article 3
Loan Security

    Article 4
Grant and Repayment of Loan

    Article 5
Party A’s Representation and Warranties**

    Article 6
Party A’s Rights and Obligations**

    Article 7
Party B’s Rights and Obligations

    Article 8
Event of Default and its Disposition**

    Article 9
Change and Cancellation of Contract**

    Article
10 Costs and Expenses**

    Article
11 Notarization**

    Article
12 Public Notice of Debt Collection

    Article
13 Evidence Effect of Lender Records**

    Article
14 Use of Borrower Credit Information**

    Article
15 Collection of Receivables**

    Article
16 Supplemental Clauses

    Article
17 Anti-Commercial Bribery

    Article
18 Miscellaneous


    
      
         


      

      
         


        
          

        

      

      
         


      

    


    (Note: if
the Maximum Financing Agreement exists, this contract shall be the corresponding
contract under No. ____________Maximum Financing Agreement)

    


    Borrower: Wuhan Blower Co.,
Ltd. (hereinafter “Party
A”)

    Domicile
(address): Canglongdao Science Park, Miaoshan Development Zone, Jiangxia
District

    Legal
representative: Xu Jie

    Contact:
Li Fengping

    Contact
Address: Canglongdao Science Park, Miaoshan Development Zone, Jiangxia
District

    Telephone:
59700038

    Fax:
/

    


    Lender: Hankou Bank Company
Limited, Wuhan Economic and Technological Development Zone Branch (hereinafter
“Party B”)

    Domicile
(address):  10 Chuangye Road, Plot 1C1, Wuhan Economic and
Technological Development Zone

    Legal
representative (the responsible person): Shi Huanwei

    Contact:
Fu Hua

    Contact
Address: 10 Chuangye Road, Plot 1C1, Wuhan Economic and Technological
Development Zone

    Telephone:
84211332

    Fax:
/

    


    Whereas,

    Party A
applies to Party B for a loan and Party B agrees to provide the loan to Party A.
Based on the principle of equality and voluntariness and in accordance with the
relevant laws, regulations and rules of the People’s Republic of China, both
parties have reached negotiated consensus and hereby agree as
follows:

    


    Article 1
Loan

    1.1 Types
of Loan

    The loan
provided hereunder shall be classified as the type of No. (1):

    (1)
Short-term Loan: a loan with a term less than one year (including one
year);

    (2)
Middle-term Loan: a loan with a term more than one year (excluding one year) but
less than five years (including five years);

    (3)
Long-term Loan: a loan with a term more than five years (excluding five
years);

    


    1.2
Principal of Loan

    The
principal of the loan provided hereunder is RMB One Hundred and Twenty-Seven
Million Six Hundred Thousand Yuan (127,600,000.00).

    


    1.3 Term
of Loan

    The term
of the loan provided hereunder is 1 year, namely,
from June 29,
2010 (Date of Loan Grant) to June 29, 2011
(Maturity Date of Loan).

    


    If the
term of loan, loan grant date, and loan maturity date agreed herein are
inconsistent with the those recorded in loan note, the loan note shall
prevail.

    


    1.4
Purpose of Use of Loan

    1.4.1 The
loan provided hereunder shall be used to repay the loan provided by
Standard Chartered Bank (China) Co., Ltd., Guangzhou Branch. Without
Party B’s written consent, Party A shall not change the purpose of use of the
loan.

    


    1.4.2
Party A consents to and accepts Party B’s supervision of the purpose of use of
the loan provided hereunder. If Party A fails to use the loan provided hereunder
for the purpose as agreed in Article 1.4.1 herein, Party A shall be deemed as
breach of contract and Party B shall be entitled to exercise the remedial for
breach contract as agreed in Article 8.2 herein.


    
      
         


      

      
         


        
          

        

      

      
         


      

    

    


    1.4.3
Notwithstanding Article 1.4.2 herein, Party B hereby specifically represents
that, if Party A uses the loan provided hereunder for any purpose other than the
one agreed in Article 1.4.1 without Party B’s written consent, Party B shall not
undertake any liability arisen therefrom.

    


    Article 2
Loan Interest Rate, Interest and Penalty Interest

    2.1 Loan
Interest Rate

    The
interest rate of the loan provided hereunder is annual interest rate, and the
initial annual interest rate shall be fixed pursuant to the following method: a
____(% or BPs) upward/ downward based on the _one-year RMB loan
benchmark rate of financial institutions quoted by People’s Bank of China on the
date on which the loan hereunder is actually granted. Within the term of the
loan, if the benchmark rate is adjusted, the interest rate for the loan
hereunder shall be adjusted accordingly pursuant to the method set forth in
Article 2.2 herein.

    


    2.2
Method to Adjust Loan Interest Rate

    2.2.1
Within the term of the loan, if the benchmark rate is adjusted, the interest
rate for the loan hereunder shall be adjusted pursuant to the method (2) as follows. Both
Party A and Party B agree that when Party B does not need to notify Party A when
it adjusts the interest rate pursuant to the method as agreed
herein.

    


    (1) Fixed
Interest Rate, namely, the interest rate for the loan provided hereunder shall
remain unchanged from the date on which the loan is actually granted until the
maturity date of the loan.

    


    (2)
Floating Interest Rate, namely, the interest rate for the loan provided
hereunder shall be adjusted according to method No. A  from
the date on which the loan is actually granted until the maturity date of the
loan. The adjusted loan interest rate shall be the one floated pursuant to the
float method and percentage as agreed in Article 2.1 based on the benchmark rate
applicable on the date on which the interest rate is adjusted.

    


    (A)
Immediate Adjustment: the date of rate adjustment shall be the date on which the
benchmark interest rate of People’s Bank of China is adjusted (applicable to the
repayment method of fixed term interest settlement, lump-sum repayment of
principal plus interest)

    


    (B)
Periodic Adjustment: the rate is adjusted every __ month(s) since loan grant
date, based on the then-current applicable benchmark rate. The interest rate
adjustment date is a certain date in the month for adjustment, which is same as
the date on which the loan is actually granted; if there is no such a
corresponding date in the month for adjustment, the interest rate adjustment
date shall be the last date of the month for adjustment (applicable to the
repayment method of fixed term interest settlement, lump-sum repayment of
principal plus interest)

    


    (C)
Subsequent Adjustment: The interest rate adjustment date shall be the next
settlement date of interest since the date on which the benchmark rate is
adjusted (applicable to the repayment method of equal principal installments,
equal installments of principal plus interest and equal increment of
principal)

    


    2.2.2 The
benchmark rate referred herein is the loan interest rate of the same period and
of the same level promulgated by People’s Bank of China; if People’s Bank of
China no longer promulgates the loan interest rate of the same period and of the
same level, the benchmark rate refers to the loan interest rate of the same
period and of the same level publicly recognized by the banking association; if
there is no such loan interest publicly recognized by the banking association,
the benchmark rate refers to the loan interest rate of the same period and of
the same level publicly announced by Party B, unless otherwise agreed by both
Party A and Party B. When the loan interest rate or penalty interest rate under
this contract is adjusted according to this article, the benchmark interest rate
shall be the benchmark rate of the date on which the interest rate is
adjusted.


    
      
         


      

      
         


        
          

        

      

      
         


      

    

    


    2.3 Other
Agreement on Loan Interest Rate: _____\___________.

    


    2.4
Calculation of Interest Rate

    2.4.1 The
interest for the loan provided hereunder shall be calculated since the date on
which the loan is actually granted, and based on the actual amount of loan, and
the number of days for which the loan is actually extended.

    


    2.4.2 The
interest for the loan provided hereunder is calculated by days (daily interest
rate = monthly interest rate/30 = annual interest rate/360).

    


    2.4.3 If
Party A fails to pay the interest by the interest settlement date as agreed in
Article 2.5 herein, the compound interest shall be charged from the next day
pursuant to Article 2.7.1.

    


    2.4.4 For
a loan with fixed interest rate, the interest shall be settled according to the
agreed interest rate. For a loan with floating interest rate, the interest shall
be calculated pursuant to each phased term as well as the interest rate after
adjustment (if any).

    


    2.5
Settlement of Interest

    The
method for settling interest of the loan hereunder shall be type No. (1)

    (1)
periodic settlement and lump-sum repayment of principal, namely, Party A repays
the interest periodically and the principal in a lump sum upon the expiration.
The period for settling interest is type No. (C)

    


    (A)
settle on a daily basis, namely, make a settlement every ___ days since the loan
grant date.

    (B)
settle on a monthly basis, namely, make a settlement on the ___(1st to
28th
) day of each month since the loan grant date.

    (C)
settle on a quarterly basis, namely, make a settlement on the 21st day of the
final month of each quarter.

    


    (2)
lump-sum repayment of principal plus interest, namely, Party A will make a
lump-sum repayment for the principal plus interest under this contract upon the
loan maturity date.

    


    (3) equal
principal installments, monthly settlement of interest, namely, the interest
will be settled on the ___(1st to
28th
) day of each month since the loan grant date.

    


    (4) equal
installments of principal plus interest, monthly settlement of interest, namely,
the interest will be settled on the ___(1st to
28th
) day of each month since the loan grant date.

    


    (5) equal
positive or negative increment of principal, monthly settlement of interest,
namely, the interest will be settled on the ___(1st to
28th
) day of each month since the loan grant date.

    


    2.6
Payment for Interest

    2.6.1 If
the method to settle the interest of the loan hereunder is type No.(1), (3),
(4), (5) as agreed in Article 2.5 herein, Party A shall deposit sufficient
amount in advance in the account specified in Article 4.2.2 before each interest
settlement date, and irrevocably authorize Party B to directly deduct interest
from such account as scheduled; if Party A chooses other method to pay interest
to Party B, it shall ensure the interest is transferred to the account on
time.

    


    2.6.2 If
the method to settle the interest of the loan hereunder is type No.(2) as agreed
in Article 2.5 herein, Party A shall deposit sufficient amount in advance in the
account specified in Article 4.2.2 before the loan maturity date, and
irrevocably authorize Party B to directly deduct principal plus interest of the
loan from such account as scheduled; if Party A chooses other method to repay
principal plus interest to Party B, it shall ensure the principal plus interest
is transferred to the account on time.


    
      
         


      

      
         


        
          

        

      

      
         


      

    

    


    2.7
Delinquent Interest Rate and Penalty Interest Rate

    2.7.1 In
cases of loan delinquency, penalty interest and compound interest shall be
charged at a delinquent interest rate for the outstanding principal plus
interest which Party A fails to repay (including the loan principal plus
interest of which Party B declares early maturity in whole or in part). The
delinquent interest rate shall be 150% of the interest rate in effect upon the
loan delinquency of this contract; this delinquent interest rate shall also be
used to calculate compound interest for outstanding interest. In cases of
delinquency of loan with floating interest rate, if benchmark interest rate is
adjusted, Party B shall be entitled to adjust the delinquent interest rate of
this contract and adopt new delinquent interest rate since the date on which the
benchmark interest rate is adjusted.

    


    Loan
delinquency refers to that Party A fails to repay the loan as scheduled or Party
A repays the loan at a time later than the deadline agreed herein.

    


    Prior to
the maturity date, compound interest shall be charged for the interest overdue
and payable by Party A at the rate agreed herein (namely, the interest rate in
effect when the loan interest is overdue, if floating interest rate is adopted
herein).

    


    2.7.2 If
Party A does not use the loan hereunder for the purposes as agreed in Article
1.4.1 herein, for the portion appropriated by Party A, penalty interest shall be
charged for the appropriated portion from the date on which the loan is
appropriated until Party A makes rectification, and the penalty interest rate is
the interest rate in effect at the time when the loan is appropriated plus
100%.For the interest which is outstanding and overdue during the loan period,
compound interest shall be charge at the penalty interest rate prescribed in
this article. If the loan with floating interest rate is appropriated and the
benchmark rate is adjusted, Party B shall be entitled to adjust the penalty
interest rate and such newly adjusted penalty interest rate shall be applied
since the date on which the benchmark interest rate is adjusted.

    


    2.7.3 If
the loan provided hereunder is used for the purpose not agreed herein, and at
the same time it is delinquent, penalty interest and compound interest shall be
charged for the loan principal plus interest at the penalty interest rate agreed
in Article 2.7.2 only, instead of at concurrent interest rate.

    


    Article 3
Security of Loan

    3.1
Method of Security

    The
principal, interest, penalty interest, compound interest of the loan provided
hereunder as well as any other relevant fees and expenses agreed in Article 10
shall adopt one or several types of security as follows:

     
(i) Guarantee Security

     
(ii) Mortgage Security

     
(iii) Pledge Security

     
(iv) Maximum Security

     
(v) This contract is the specific contract under the Maximum Financing Agreement
numbered as____________. The loan provided hereunder shall be automatically
included in the security scope of ð Maximum Guarantee
Contract/ ð Maximum
Mortgage Contract/ ð
Maximum Pledge Contract signed by and between Guarantor and Party
B.

     
(vi) Security Deposit. Party B opens a deposit security account pursuant to
Party A’s requirements, and the deposit security account number shall be subject
to the account number automatically created by Party B’s system when the deposit
is paid in. Party A agrees to deposit RMB ___ Yuan into such security deposit
account. Party A’s act of paying such agreed security deposit into the foregoing
security deposit account shall be deemed as that Party A has specified this fund
as security deposit and transferred it to Party B for its possession, in order
to secure Party A’s debts under this contract.


    
      
         


      

      
         


        
          

        

      

      
         


      

    

    


     
(vii) Other Forms of Security: provide credit at the first
stage, and then supplement it with maximum mortgage.

    


    3.2
Security Contract

    Party B
has entered into a series of security contracts for the specific security
matters with the following guarantors:

    


    
      
        	
                (1)

              	
                Guarantor

              	 
      
	 
      	
                Form
      of Security

              	 
      
	 
      	
                Number
      of Security Contract

              	 
      


      

    

    


    
      
        	
                (2)

              	
                Guarantor

              	 
      
	 
      	
                Form
      of Security

              	 
      
	 
      	
                Number
      of Security Contract

              	 
      


      

    

    


    
      
        	
                (3)

              	
                Guarantor

              	 
      
	 
      	
                Form
      of Security

              	 
      
	 
      	
                Number
      of Security Contract

              	 
      


      

    

    


    
      
        	
                (4)

              	
                Guarantor

              	 
      
	 
      	
                Form
      of Security

              	 
      
	 
      	
                Number
      of Security Contract

              	 
      


      

    

    


    
      
        	
                (5)

              	
                Guarantor

              	 
      
	 
      	
                Form
      of Security

              	 
      
	 
      	
                Number
      of Security Contract

              	 
      


      

    

    


    Article 4
Grant and Repayment of Loan

    4.1
Method of Loan Grant

    4.1.1 The
loan hereunder shall be granted by Party B or other branches of Hankou Bank
Company Limited authorized by Party B according to type No. (1) as
follows:

    


    (1)
transfer the loan in a lump-sum into Party A’s designated account as
follows:

    Opening
Bank: Hankou Bank Company Limited,
Wuhan Economic and Technological Development Zone Branch

    Account
Name: Wuhan Blower
Co., Ltd.

    Account
Number:
266011000020087

    


    (2)
transfer the loan in installments into Party A’s designated pursuant to the
following schedule:

    (A) to
transfer RMB _______ Yuan into the following account on the date of
_________

    Opening
Bank: Hankou Bank
Company
Limited________________________________

    Account
Name: __________________________________________________________

    Account
Number: _________________________________________________________

    


    (B) to
transfer RMB _______ Yuan into the following account on the date of
_________

    Opening
Bank: Hankou Bank
Company Limited________________________________

    Account
Name: __________________________________________________________

    Account
Number: _________________________________________________________

    


    (C) to
transfer RMB _______ Yuan into the following account on the date of
_________


    
      
         


      

      
         


        
          

        

      

      
         


      

    

    


    Opening
Bank: Hankou Bank
Company Limited________________________________

    Account
Name: __________________________________________________________

    Account
Number: _________________________________________________________

    (D) to
transfer RMB _______ Yuan into the following account on the date of
_________

    Opening
Bank: Hankou Bank
Company Limited________________________________

    Account
Name: __________________________________________________________

    Account
Number: _________________________________________________________

    


    4.1.2
Party A consents to and accepts Party B’s supervision of the use and purpose of
use in connection with the fund in the account specified in Article 4.1.1; if
anything abnormal occurs to the fund in this account, and the use and purpose of
use of this fund does not match the purpose of use as agreed in Article 1.4.1,
Party B shall be entitled to exercise the remedy for breach of contract set
forth in Article 8.2.

    


    4.1.3 If
the loan grant amount, loan grant date and the information of Party A’s
designated account is inconsistent with the loan note’s description, the loan
note shall prevail.

    


    4.2
Method of Loan Repayment

    4.2.1 The
method to repay the loan hereunder shall be Class A of Type No. (1).

    (1) repay
the principal in a lump sum according to the following method:

    (A)
settle the interest periodically and repay the principal in a lump
sum

    (B)
settle the interest together with the principal

    


    (2)  repay
the principal in installments according to the following method:

    (A) equal
principal installment

    (B) equal
interest installment

    (C) equal
increment of principal, with the principal being increased/decreased by RMB __
Yuan for each term.

    


    4.2.2
Party A shall deposit the installment payment for the current term in sufficient
amount in the debt service account as follows no later than Party B’s business
close time of the interest settlement date as agreed in Article 2.5 or the loan
maturity date.

    Opening
Bank: Hankou Bank Company Limited, Wuhan
Economic and Technological Development Zone Branch

    Account
Name: Wuhan Blower
Co., Ltd.

    Account
Number:
266011000020087

    


    4.3 Early
Repayment

    If Party
A need to make early repayment, it shall submit to Party B an irrevocable
written application for early repayment 30 days prior to the repayment date, and
obtain Party B’s written consent. If Party A makes early repayment, Party B
shall be entitled to charge liquidated damages in a lump sum at a charge rate of
20 %.
Liquidated damages = amount of early repayment * remaining period of loan * loan
interest rate agreed in Article 2.1 herein * the foregoing charge
rate.

    


    4.4
Extension of Loan

    If Party
A requests to extend the loan maturity date, it shall submit to Party B a
written application for extension 30 days prior to the loan maturity date, as
well as a written instrument proving that the Guarantor agrees to continue
undertaking security liability after such extension, or a new security
recognized by Party B. If Party B agrees to extend the loan maturity date, both
parties shall sign a loan term extension contract separately; if Party B refuses
to grant such extension, Party A shall still perform its repayment obligation as
agreed herein.

    


    Article 5
Party A’s Representation and Warranties**


    
      
         


      

      
         


        
          

        

      

      
         


      

    

    


    5.1 Party
A is a legal entity or other organization duly incorporated and validly existing
pursuant to the laws of the People’s Republic of China, and has the capacity for
civil rights and civil acts necessary for signing and performing this contract
pursuant to the law.

    


    5.2 Party
A has signed a written contract in connection with the purpose of use of the
loan hereunder with a third party, and has properly handled the permission,
approval, registration and other statutory formalities relevant to the loan and
investment project hereunder, and such formalities shall remain
valid.

    


    5.3 Party
A’s signing and performance of this contract is Party A’s true expression of
intent. Party A’s signing and performance of this contract does not conflict
with its signing and performance of other contracts. Party A has lawfully
obtained any and all full authorization and effective approval, either obtained
internally or externally, necessary for signing this contract. Where laws and
administrative regulations require relevant approval or registration
formalities, Party A shall ensure such formalities are handled properly and
remain valid.

    


    5.4 The
documents, information, reports and statements, vouchers and certificates
relevant to Party A, Party A’s affiliates, Guarantor(s) and security which are
provided by Party A to Party B during the signing and performance of this
contract, are true, accurate, complete and valid, and free from any significant
mistake inconsistent with the facts or omission of any material
fact.

    


    5.5  When
Party A signs this contract, Party A is free from any litigation, arbitration,
criminal or administrative penalty that brings material adverse impact to Party
A’s business operation or financial status, and free from any other significant
event that affects the performance of Party A’s obligation
hereunder.

    


    5.6 Upon
signing this contract, Party A shall strictly comply with various state laws and
regulations to conduct business activities, ensure ongoing business operation
during the performance of this contract, and handle relevant formalities of
annual inspection and registration in a timely manner.

    


    5.7 After
signing this contract, Party A shall keep or improve current management level
and each financial index to maintain and increase the value of current assets,
and shall not waive any expired claims, nor shall it dispose of its current
major assets without any compensation, or at unreasonably low prices or by other
inappropriate means.

    


    5.8 Party
A has strictly complied with P.R.C. laws and regulations on anti-commercial
bribes, and during the process of signing and executing this contract, Party A
did not and will not solicit, accept, offer or give any benefit not agreed
hereunder from Party B or its person in charge or other relevant personnel,
including but not limited to express discount, hidden discount, cash, coupon,
tangible goods, negotiable securities, tour, or other non-material
benefit.

    


    5.9.Party
A undertakes to use the loan hereunder for the purpose as agreed in Article
1.4.1.

    


    5.10
Party A undertakes that the source of the fund used to repay the principal,
interest, penalty interest, compound interest as well as any other relevant
costs and expenses agreed in Article 10 herein is clear and lawful.

    


    Article 6
Party A’s Rights and Obligations**

    6.1 Party
A shall be entitled to use the loan pursuant to the agreements reached
herein;

    


    6.2 Party
A shall use the loan for the purpose as agreed herein;

    


    6.3 Party
A shall repay the principal plus interest pursuant to the agreements reached
herein;


    
      
         


      

      
         


        
          

        

      

      
         


      

    

    


    6.4 Party
A shall, periodically or at any time upon Party B’s request, provide Party B
with true and complete reports, financial statements and other documents and
information which can fully reflect its business operation and financial status,
as well as information about all of Party A’s account-opening banks, account
numbers, balance of loans and deposits, and assists Party B in the
investigation, review and check-up;

    


    6.5 Party
A shall accept Party B’s investigation and supervision of its use of the loan
and relevant manufacture, business operation and financial activities, and bear
various costs and expenses incurred by Party B due to Party A’s obstruction of
Party B’s investigation, examination and supervision;

    


    6.6 Upon
the effectiveness of this contract, if Party A intends to assign its debts under
this contract in whole or in part to a third party, it shall first submit to
Party B a written guarantee that the Guarantor agrees to continue undertaking
security obligations after such assignment or provide a new security, which
shall obtain Party B’s written consent;

    


    6.7 If
the Guarantor for the loan hereunder violates any agreement of the security
contract or if any event of default set forth in the security contract occurs,
Party A shall increase or replace security conditions upon Party B’s
request;

    


    6.8 If
Party A is involved or is likely to be involved in any of the following events
or circumstances that may affect the performance of Party A’s obligations
hereunder, Party A shall immediately notify Party B and assist Party B in fixing
the liability for repaying principal plus interest of the loan hereunder
pursuant to Party B’s request, as well as other safeguards to ensure that Party
A’s claims hereunder are repaid in full as scheduled:

    


    6.8.1
significant financial loss, assets loss or other financial crisis;

    


    6.8.2
events that may affect the performance of Party A’s obligations hereunder,
including but not limited to profit distribution, capital expenditure, assets
sale or early repayment of claims;

    


    6.8.3
events that may affect the performance of Party A’s obligations hereunder,
including but not limited to applying to other credit-givers for line of credit,
or modifying the debt clauses reached with other credit-givers;

    


    6.8.4
events that may affect the performance of Party A’s obligations hereunder,
including but not limited to providing debt security for a third party or
mortgaging assets to other creditors or credit-givers after the signing of this
contract;

    


    6.8.5
events that may affect the performance of Party A’s obligations hereunder,
including but not limited to neglect of managing and seeking recourse for
expired claims, disposition of its current major assets without any
compensation, or at unreasonably low prices or by other inappropriate
means;

    


    6.8.6
matters of change of management systems or property rights forms, including but
not limited to consolidation, division or split, capital decrease,
reorganization, equity joint venture, cooperation joint venture, property rights
transfer, shareholding system reform, and other mergers and
acquisitions;

    


    6.8.7
causes of dissolution or liquidation, including but not limited to business
suspension or close down, revocation or deregistration of business licenses,
being ordered to close down or dissolve its business, Party A or creditor’s
application for bankruptcy, or the legal representative or chief responsible
person’s engagement in illegal activities;

    


    6.8.8 any
litigation, arbitration or criminal investigation or administrative penalty, or
its major assets being subject to property preservation and other enforcement
measures that will bring material adverse impact to its business operation or
financial status;


    
      
         


      

      
         


        
          

        

      

      
         


      

    

    


    6.8.9
Party A’s controlling shareholder or other affiliates suffer a significant
crisis in respect of business operation or financial status, or Party A has a
material related transaction with its controlling shareholder or other
affiliates, which affects its normal business operation;

    


    6.8.10
other significant matters that may affect its solvency;

     

    
      6.8.11
Other rights and obligations as agreed herein.

    

    


    Article 7
Party B’s Rights and Obligations

    7.1 If
Party A satisfies Party B’s approval condition for granting a loan, Party B
shall grant the loan to Party A pursuant to the agreement reached
herein;

    


    7.2 Upon
the effectiveness of this contract, Party B may transfer to a third party its
claims hereunder in whole or in part, and shall be entitled to notify Party A of
the transfer in a way it deems appropriate, including but not limited to fax,
delivery by post, delivery by hand, announcement on public media and
etc;

    


    7.3 Party
B shall keep confidential Party A’s trade secrets or information about
management, business operation, finance and etc that needs to be kept
confidential according to Party A’s written requirements, unless otherwise
prescribed by laws, rules and regulations or required by supervising
authorities;

    


    7.4 Party
B shall be entitled to request Party A to repay the principal plus interest of
the loan in full as scheduled, and shall also be entitled to directly withhold
and deduct Party A’s savings deposited in its accounts opened at Party B as well
as all other operating agencies of Hankou Bank, to repay the matured debts under
this contract; Party B shall be entitled to request Party A to use the loan for
the purpose as agreed herein, and supervise Party A’s use of the loan; Party B
shall have the right to know Party A’s manufacture, business operation and
financial activities, and request Party A to provide information relevant to the
loan;

    


    7.5 Party
B shall be entitled to request Party A to regularly report and summarize the
information about the use of the loan hereunder, and Party B shall be entitled
to review whether the use of the loan hereunder is consistent with the
agreements reached herein through account analysis, voucher verification,
on-site investigation and etc, during the process of which Party A shall give
unconditional assistance and cooperation;

    


    7.6 Other
rights and obligations as agreed herein.

    


    Article 8
Liability for Breach**

    8.1 Event
of Default

    If Party
A or Guarantor is found to be in any of the following circumstances, an event of
default shall be deemed as occurred:

    


    8.1.1 The
information submitted by Party A to Party B in connection with this contract is
proven to be untrue, inexact, incomplete or have flaws of effectiveness, or
intentionally misleading;

    


    8.1.2
Party A’s representation and warranties of Article 5 herein are proven to be
untrue, inexact, incomplete or have flaws of effectiveness, or intentionally
misleading;

    


    8.1.3
Party A fails to perform its obligation as agreed in Article 6
herein.

    


    8.1.4
Party A commits any other act that does or may endanger or damage Party B’s
legitimate rights and interests.

     

    
      
         


      

      
         


        
          

        

      

      
         


      

    


    8.1.5
During the term of validity of this contract, the security qualifications,
security ability, credit status, financial status or other factors in connection
with the Guarantor who provides security for the debts hereunder undergoes
material change, which has endangered or damaged or might endanger or damage
Party B’s exercise of its security rights; and Party A refuses to increase or
replace security conditions according to Party B’s requirements;

    


    8.1.6
During the term of validity of this contract, the Guarantor who provides real
security for the debts hereunder has disposed of security properties without
Party B’s authorization or the security properties have suffered from insurance
accidents, which causes the destruction, damage, loss or value decrease of the
security properties, or the security properties are listed in the scope of
removal and relocation, sequestration and expropriation, and Party A refuses to
increase or replace security conditions according to Party B’s
requirements;

    


    8.1.7
During the term of validity of this contract, the Guarantor who provides pledge
of rights for the debts hereunder has exercised and disposed of pledge rights
without Party B’s authorization, or the Guarantor fails to take due care to
perform its obligation to maintain the effectiveness and value of pledge rights,
which leads to the expiration of pledge rights, or pledge rights are invalidated
or devalued due to any other reason, or pledge rights or the movable properties
hereunder are deregistered, confiscated, taken back by force, sequestered,
frozen, seized, supervised, withheld and deducted, kept in lien, auctioned,
possessed by force, destroyed or damaged, and Party A refuses to increase or
replace security conditions according to Party B’s requirements;

    


    8.1.8
Where Party A repays the principal plus interest of the loan hereunder in
installments, Party A fails to perform its repayment obligations for any
installment;

    


    8.1.9
Other events of default as agreed herein.

    


    8.2 Remedy for Breach of
Contract

    If any of
the foregoing events of default set forth in Article 8.1 occurs, Party B shall
be entitled to exercise one or several rights as follows:

    


    8.2.1 to
charge compound interest and penalty interest at the delinquent interest rate
and penalty interest rate as agreed in Article 2.7 herein;

    


    8.2.2 to
cease to grant the balance of the loan which has not been granted to Party A
yet;

    


    8.2.3 to
declare the early maturity of the debts hereunder, and to request Party A to
repay the principal plus interest of the loan as well as relevant costs and
expenses;

    


    8.2.4 to
directly withhold and deduct Party A’s savings deposited in the accounts opened
at Party B as well as all other operating agencies of Hankou Bank or other
accounts, to repay all of Party A’s debts under this contract;

    


    8.2.5 to
exercise security rights;

    


    8.2.6 to
request the Guarantor to pay on behalf of Party A the principal plus interest
which Party A should have repaid pursuant to the agreements reached
herein;

    


    8.2.7 to
impose inter-bank sanction on Party A, and be entitled to report to the relevant
authorities or entities, and to press for collection by public notice on news
media;

    


    8.2.8
other remedies permitted by laws.

    


    Article 9
Change and Cancellation of Contract**

    9.1 After
this contract becomes effective, without negotiated consensus of both parties,
neither Party A nor Party B shall change or cancel this contract at its own
discretion, unless otherwise provided herein.


    
      
         


      

      
         


        
          

        

      

      
         


      

    

    


    9.2 This
contract shall remain effective before the agreement for changing or canceling
this contract takes effect.

    


    Article
10 Costs and Expenses**

    Any
expense in connection with this contract, including but not limited to reference
check, examination, insurance, assessment, registration, appraisal, custody,
notarization and etc, as well as attorney fee, litigation fee, travel expenses
all other fees paid by Party B for realizing its claims, shall be borne by Party
A, Party B shall be entitled to directly withhold and deduct from Party A’s bank
accounts. If the balance of Party A’s bank accounts is insufficient for
deduction, Party A shall undertake to repay in full after receiving Party B’s
notice, and Party B does not need to provide any certification.

    


    Article
11 Notarization**

    If any
party to this contract requests notarization, this contract shall be notarized
at a statutory notary public office, with the notarization fee to be borne by
Party A. If Party B requests to issue a notarial deed with compulsory
enforceability, Party A agrees that Party B may use this contract to apply to
the notary public office for the issuance of a notarial deed with compulsory
enforceability. Party B’s claims and relevant expenses fail to be repaid within
performance period agreed herein, Party B may use this notarial deed to directly
apply to the people’s court at Party B’s location for specific performance, with
any expenses arisen therefrom to be borne by Party A. Party A unconditionally
consents to the specific performance by the people’s court at Party B’s location
and waives any defense right.

    


    Article
12 Public Notice of Debt Collection

    If Party
A refuses to undertake security liability for its illegal act or violation of
relevant regulations, or if other events of default occur, Party B shall be
entitled to report to the relevant authorities or entities,  and be
entitled to press for collection by public notice on news media.

    


    Article
13 Evidence Effect of Lender Records**

    Unless
there is reliable and established evidence to the contrary, Party B’s internal
accounting records involving principal, interest, expense and repayment records
and etc, the instruments and vouchers prepared or retained by Party B which are
produced during the process of withdrawal, repayment and interest payment by
Debtor, as well as Party B’s records and vouchers of pressing for collection of
loan, all shall constitute established evidence which can effectively
demonstrate the creditor-debtor relationship between Party A and Party B. Party
A shall not raise any objection simply based on the reason that the foregoing
records, instruments and vouchers are prepared or retained by Party B
alone.

    


    Article
14 Use of Borrower Credit Information

    Party A
agrees that the credit report shall be used only for the purpose prescribed in
Provisional Measures for the Administration of Enterprise Credit Information
Databases issued by People’s Bank of China if it is obtained through Party B’s
inquiring of Enterprise Credit Information Database of People’s Bank of China,
enterprise credit databases approved by the competent authorities for credit
report or relevant entities, departments and individuals about Party A’s credit
records. Party A also agrees that Party B may provide Party A’s credit
information to Enterprise Credit Information Database of People’s Bank of China
and other enterprise credit databases approved by the competent authorities for
credit report.

    


    Article
15 Collection of Receivables

    For all
of Party A’s payables under this contract, Party B shall be entitled to deduct
such payables in Renminbi or other currency from any account opened by Party A
at Hankou Bank systems, without prior notice to Party A. If the payables
deducted are in foreign currency, Party B shall be entitled to convert it into
Renminbi to repay Party A’s payables at the forex buying rate quoted by People’s
Bank of China at the time of such deduction.


    
      
         


      

      
         


        
          

        

      

      
         


      

    

    


    Article
16 Supplemental Clauses

    The borrower hereby
authorizes the lender to transfer the amount of the loan directly to Standard
Charter (China) Co., Ltd., Guangzhou Branch, for the purpose of repaying the
loan obtained by the borrower from said bank.

    


    Article
17 Anti-Commercial Bribery

    


    17.1 Both
Party A and Party B understand and are willing to strictly comply with the laws
and regulations on anti-commercial bribery of the People’s Republic of China,
and both parties are aware that offering or taking bribes in any form will
violate the laws and be subject to the severe punishment by the
laws.

    


    17.2
Neither Party A nor Party B shall solicit, accept, offer or give any benefit not
agreed hereunder from the other party or its person in charge or other relevant
personnel, including but not limited to express discount, hidden discount, cash,
coupon, bank cards deposited with savings, membership cards deposited with
money, token cards (vouchers), tangible goods, negotiable securities, tour,
inspection or other non-material benefit; however, if such benefit is common
practice or custom of this industry, it shall be expressly stated
herein.

    


    17.3
Party B strictly forbids its person in charge from committing any commercial
bribery. Any act set forth in Article 17.2 that is conducted by Party B’s person
in charge is a violation of Party B’s internal system and shall be investigated
and affixed responsibility pursuant to its internal system.

    


    17.4
Party B seriously declares that, Party B objects to any act set forth in Article
17.2 herein that is conducted by Party A or Party A’s person in charge involving
any third party beyond this contract for the purpose of performing this
contract. All such acts are violation of state laws and will be subject to
punishment pursuant to state laws.

    


    17.5 If
either party or its person in charge violates the foregoing provisions of
Article 17.2, Article 17.3 and Article 17.4., which cause loss to the other
party, such party in breach shall undertake liability for compensation for
damages.

    


    17.6
“Other relevant personnel” herein refer to persons having direct or indirect
interest with this contract, other than Party A or Party B’s person in
charge.

    


    Article
18 Miscellaneous **

    18.1
Continuity of Obligation

    All of
Party A’s obligations hereunder shall have continuity and full binding force
upon its successor, receiver, assignee and the subject after it is merged and
acquired, reorganized and renamed, and free from the influence of any dispute,
claim, legal proceeding and any directive of superordinate, or any contract and
document signed by Party A and any natural person, legal person or other
organization, nor shall it be modified because of Party A’s bankruptcy,
insolvency, loss of operating capacity or subject capacity, change of property
rights forms, change of internal organization forms or bylaws, or any other
material change.

    


    18.2
Non-waiver of Rights

    After
this contract becomes effective, Party B’s any tolerance, grace or deferral in
exercising its rights and interests herein in connection with Party A’s any act
of breach or delay shall not damage, affect or limit any rights and interests
that Party B is entitled to pursuant to this contract and relevant laws and
regulations, and shall not be deemed as Party B’s permission or recognition of
any act that violates this contract, nor shall it be deemed as Party B’s waiver
of its rights to take action against any current or future breach
act.

    


    18.3
Independence of Contract Clauses


    
      
         


      

      
         


        
          

        

      

      
         


      

    

    


    Should
any clause herein or any of its portion becomes invalid in legal respect for
whatever reason, such invalid clause or its invalid portion shall not affect the
validity and enforceability of other clauses herein or other portion thereof.
Upon the occurrence of the foregoing circumstances, Party A shall undertake any
and all security liability, and/or compensate Party B for all the economic loss,
with the scope of its security liability and/or compensation liability to be
determined according to the security scope set forth in Article
1.3.

    


    18.4
Notice

    Any
notice or request of Party B and Party A in connection with this contract shall
be made in writing. If delivered by hand, the acknowledged receipt by recipients
shall be deemed as properly served (if rejected by recipients, it shall be
deemed as served on the Date of Rejection); if delivered by mail, it shall be
deemed as properly served seven days after the date of posting; if delivered by
facsimile, the confirmed receipt by the facsimile system of recipients shall be
deemed as served. If Party B notifies Party A of claims assignment or presses
Party A for payment through public notice on news media, such notice shall be
deemed as served on the date of public notice. In the event that Party A or
Party changes its correspondence address, it shall give the other party timely
notice; otherwise, any possible loss arisen therefrom shall be borne by
it.

    


    18.5
Supplemental Agreement

    After
this contract becomes effective, any amendment to it shall be made in writing
and signed by both parties. Any matter uncovered herein or matters of change may
be agreed upon in a written supplemental agreement through negotiated consensus
by Party A and Party B. Such written supplemental agreement shall be attached
herein and constitute an indispensable part of this contract.

    


    18.6
Governing Law

    The
conclusion, construction and dispute resolution of this contract shall be
governed by the laws of the People’s Republic of China.

    


    18.7
Dispute Resolution

    Any
dispute arisen during the performance of this contract by Party A and Party B
shall be resolved by both parties through negotiation, failing which the method
No.
(2)  will be chosen for resolving the dispute.

    (1) apply
to Wuhan Arbitration Committee for arbitration.

    (2) bring
a lawsuit to the People’s Court at Party B’s location.

    


    18.8
Effectiveness of Contract

    This
contract shall become effective upon the simultaneous satisfaction of the
following conditions:

    (1) This
contract is affixed with signatures (seals) of both parties’ legal
representatives (responsible persons) or authorized agents as well as company
seals / special seals for contracts of both parties.

    (2) Where
any security is created for this contract, a security contract satisfying Party
B’s requirements becomes effective.

    (3) Where
the Guarantor provides real security for the claims hereunder, Party B’s
security interest have been validly created and become effective.

    


    18.9
Counterpart

    This
contract is made in duplicate, all being
equally authentic and each held by Party A, Party B and___\___, ____\__,
_____\____ and __\___.

    


    18.10
Construction of Contract Clauses

    Party B
has directed Party A’s attention at the clauses hereof that waive or limit Party
B’s liability, which have been marked with ** behind the headlines of those
clauses, and has provided full explanation for the relevant provisions pursuant
to Party A’s requirements. Neither Party A nor Party B has any objection to the
comprehension of any clause of this contract. The headlines of this contract are
for convenience only and shall not affect the construction of this
contract.


    
      
         


      

      
         


        
          

        

      

      
         


      

    

    


    Party A:
/Seal of Wuhan Blower Co., Ltd./

    Legal
Representative/ Responsible Person or Authorized Agent (Signature/Seal): /Xu
Jie/

    Date:
June 29, 2010

    


    Party B:
/Seal of Hankou Bank Company Limited, Wuhan Economic and Technological
Development Zone Branch /

    Legal
Representative/ Responsible Person or Authorized Agent (Signature/Seal): /Shi
Huanwei/

    Date:
June 29, 2010