Credit Facility Agreement


 


No. 5301830E10113001


 


Party A: CER Energy Recovery (Yangzhou)
Co., Ltd. 


 


Business certification No.:321000400017579


 


Legal Representative: Qinghuan Wu


 


Address: Room 101, Building Xiwu, Automobile
Industrial Park, Yizheng, Yangzhou, China


 


Zip code: 211400


 


Opening institution and Account No.: Bank
of China, Yizheng operation department 53018308091001


 


Telephone No.: 0514-83442902


 


Fax: 0514-83442903


 


Party B:  Bank of China, Yizheng Branch



 


Legal Representative: Aihong Liu


 


Address: No 1, Gongnong North Road,
Yizheng, Yanghzou, China


 


Zip code: 211400


 


Telephone No.: 0514-83441926


 


Fax: 0514-83410042


 


To develop friendly cooperation relationship,
based on free will, equality, mutual benefit and honesty, Party A and Party B, following adequate consultation, agree as following.


 


Article 1 Scope of Business


 


Party B provides Party A with the credit
facility under this Agreement. Subject to the provisions of this agreement and related individual agreements, Party A shall apply
for revolving, flexible or one-time use of the credit facility. The credit facility shall be used for RMB short-term loan, foreign
currency short-term loan, trade financing, guarantee, and funding or other credit businesses. (Called “individual credit
business”)


 



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The trade financing specified in this Agreement
includes oversea L/C, domestic L/C, imported bills purchase, delivery against guarantee, package loan, exported bills purchase,
discount under the forward L/C, buyer’s bill purchase under domestic L/C, seller’s bills purchase under domestic L/C,
domestic L/C negotiation and other international or domestic trade financing business.


 


The guarantee specified in this Agreement
includes setting up guarantee, backup L/C or other international or domestic guarantee business.


 


Article 2 Currency and Limit Amount
of the Credit Facility


 


Party B agrees to provide Party A with
the credit facility as follows:


 


Currency: RMB


 


Limit Amount: RMB 30,000,000


 


Details: The credit facility is limited
to RMB 30,000,000, which including the short-term working capital loan of RMB 30,000,000.


 


Article 3 Purpose of the Credit Facility


 


3.1 During the term of the credit facility,
Party A shall use the facility within the scope of individual credit business agreed by this Agreement. Party A shall make revolving
use of the credit facility as short-term working capital loan.


 


If Party A needs to use the facility stipulated
in article 1 in a flexible manner, written application should be sent to Party B. Party B shall send written notice to Party A
if Party B accepts the application and decides how to make flexible use of the facility.


 


3.2 Until the date that this Agreement
takes effective, the credit facility of Party A based on all the other credit facility agreements, related agreements or individual
agreements signed before, are all deemed as the credit facility provided under this Agreement.


 


Besides, the credit balance used is deemed
as the credit balance used under this Agreement.


 


3.3 Unless otherwise agreed, the following
businesses do not utilize the credit facility:


 


3.3.1 Exported bills purchase with consistent
documentation.


 


3.3.2 Exported L/C which is accepted, confirmed
payment, or guarantee to pay by the issuing bank or the payment bank that is accepted by Party B; or the bills purchase or financing
under the domestic L/C


 


3.3.3 Party A can provide the deposit,
the national debt, the documentation from Party B, or the bank acceptance, guarantee, backup L/C accepted by Party B, which do
not utilize the credit facility.


 


3.3.4 Other businesses agreed by both Parties
with written consent.


 



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Although the businesses mentioned above
do not utilize the credit facility, the agreements on these businesses are still the agreements on the individual credit business
stipulated under this agreement. These agreements shall constitute integral part of this Agreement and restricted by this Agreement,
except any other provisions stipulated in these agreements.


 


Article 4 Individual Credit Business
Subordinate to the Credit Facility 


 


If Party A applies for the individual credit
business subordinate to this Agreement, related application form and the agreement with Party B on the individual credit business
should be sent to Party B.


 


Article 5 Term of the Credit Facility


 


The credit facility stipulated in article
2 can be used from the date that the Agreement takes effect to November 24, 2013.


 


When the term of the credit facility expires,
Party B shall extend the term of credit facility base on the mutual negotiation and final consent. Written supplementary agreement
should be signed to confirm the limit amount and term of the new credit facility. The supplementary agreement shall constitute
integral part of this Agreement and has equal legal effect as this Agreement. The provisions of this Agreement are applicable to
the supplementary agreement if there is no specific stipulation for some terms in the supplementary agreement.


 


The expiration of the term of the credit
facility does not affect the legal effect of this Agreement and shall not be the reason of termination of this Agreement. Both
Parties shall implement this Agreement and the agreement of the individual credit business until the rights and obligations under
these agreements are accomplished.


 


If the term of the credit facility covers
two or more than two credit years, Party B and its superior bank shall have a review over the credit facility every year according
to the internal credit management stipulation of Party B. When Party B or its superior management authority reduces the limit amount
of the credit facility in the new credit year, or asks for more strict credit issuing and management requirements, if Party A cannot
meet the requirements when applying for any new credit business, Party B’s providing credit facility to Party A base on the
original credit issuing and management requirements shall constitute default or overreaching its authority. In that case, Party
B has the right to cancel all or part of the limit amount of the facility. Party A shall not object on that.


 


Article 6 Conditions of Individual Credit
Business


 


Followings are the conditions of making
individual credit business:


 


6.1 Party B has reserved the related files
of Party A, the documents, the stamp, the relevant personnel list, and the signature specimen and filled in relevant voucher.


 


6.2 Party A has opened a bank account for
making individual credit business.


 



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6.3 Party A has provided security as required
by this Agreement and the agreement of the individual credit business.


 


6.4 Other conditions stipulated by the
agreement of the individual credit business.


 


6.5 Other conditions required by Party
B.


 


Article 7 Guaranty


 


Both Parties agree to adopt the following
guaranties for the Party A’s debt to Party B under this Agreement and the agreement of the individual credit business.


 


7.1 The maximum guarantee


 


7.1.1 The maximum guarantee contract among
CER Energy Recovery (Shanghai) Co., Ltd., Shanghai Hai Lu Kun Lun Hi-tech Engineering Co., Ltd., the Yizheng Automobile Industrial
Park Investment and Development Co., Ltd and Party B provides Party A with a maximum guarantee for the performance of its obligations
hereunder.


 


7.1.2 The maximum guarantee contract between
Mr. and Mrs. Qinghuan Wu and Party B provide Party A with a maximum guarantee for the performance of its obligations hereunder.


 


7.2 The maximum pledge


 


The maximum pledge contract between Party
A and Party B provides Party A with a maximum pledge for the performance of its obligations hereunder.


 


If there occurs any events that may affect
Party A or the guarantor’s ability to implement the contracts, or the guarantee contracts are ineffective, revoked, or Party
A or the guarantor is in worse financial condition, material litigation or arbitration, or the guarantor breaches the guarantee
contract or other contracts with Party B, or the security is impaired, damaged, missed or seized, which may lead to the decrease
in the value of guaranty, Party B has the right to ask Party A for new guaranty, or to change new guarantor, to guarantee for the
performance of Party A’s obligations hereunder.


 


Article 8 Representations and warranties


 


8.1 Representations of Party A.


 


8.1.1 Party A is legally registered and
is in legal continuous operation. Party A has all the actions and civil abilities to sign and implement this Agreement.


 


8.1.2 All the terms under this Agreement
and the agreement of the individual credit business reflect the real agreement from Party A. Party A has signed and implemented
this Agreement and the agreement of the individual credit business with legal and effective authorization according to the company’s
article of association and other internal management documents, without breach of any other agreements, contracts or laws. Party
A has registered or backup all the approval for signing or implementing the Agreement and the agreement of the individual credit
business.


 



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8.1.3 All documents, financial statements,
vouchers and other information provided by Party A to Party B under this Agreement and the agreement of the individual credit business
are true, accurate, complete and effective


 


8.1.4 The business background of Party
A is true, legal and not for illegal purposes such as money-laundry.


 


8.1.5 Party A does not conceal any events
of itself and the guarantor that may affect the financial condition or ability to implement the Agreement.


 


8.2 Warranties of Party A.


 


8.2.1 Party A guarantees to periodically
submit its financial statements to (including but not limited to annual, quarterly and monthly report) to Party B.


 


8.2.2 Party A guarantees to accept and
actively cooperate with the Lender's check and supervision on its credit standing, production and operation and financial activities.


 


8.2.3 If Party A has signed any counter-guaranty
agreement or similar agreements, the agreements shall not prejudice any rights of Party B under this Agreement.


 


8.2.4 Timely notice should
be sent to Party B if Party A will experience the change of operational mode including but not limited to merger, division, jointly
operation, cooperation with foreign investors, contracting, reconstruction, reorganization, IPO plan, decrease of registered capital,
transfer of significant assets and stock, undertaking significant debt, setting up new debt on the security, or the security is
subject to seizure, or Party A is dissolved, revoked, applying for or applied for bankruptcy, or Party A is involved in any material
economic dispute, litigation or arbitration, or other events that may cause an adverse impact on Party A’s or the guarantor’s
financial condition or ability to implement the Agreement.


 


8.2.5 Party A undertakes not to distribute
any dividend or profit in any form during the term of the credit facility.


 


8.2.6 Any issue that
is not covered by this Agreement shall be governed by the related stipulation and business practice of Party B.


 


Article 9 Disclosures of Related Party
Transactions


 


Party A is not the group client as defined
in the Credit Financing Risk Management Instruction of Commercial Bank’s Group Client.


 


Article 10 Default and Treatment


 


10.1 Party A will be in default upon occurrence
of any of the following events:


 


10.1.1 Party A does not repay the loan
according to this Agreement and the agreement of the individual credit business;


 



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10.1.2 Party A does not use the fund from
the credit facility within the scope of agreed purpose;


 


10.1.3 Any of Party A’s representations
and warranties is false or Party A breaks any promise made in this Agreement and the agreement of the individual credit business;


 


10.1.4 There occur any of the events described
in article 8.2.4 when Party B doubts the financial condition and ability of Party A or its guarantor to implement the this Agreement.
Party A does not provide Party B with new security or change the guarantor;


 


10.1.5 Party A is under termination of
operation, dissolution, suspension of business, or it has applied or been applied for bankruptcy;


 


10.1.6 Party A breaches other agreements
regarding the rights and obligations under this Agreement and the agreement of the individual credit business,


 


10.1.7 There occurs breach of other contracts
between Party A and Lender or other institution of Bank of China Co., Ltd.


 


10.1.8 The guarantor breach the guaranty
contract signed or there occurs breach of other contracts between the guarantor and Lender or other institution of Bank of China
Co., Ltd.


 


10.2 If Party A is in default, Party B
may take any one or more of the following steps according to specific situation:


 


10.2.1 Party B may require Party A or its
guarantor to remedy its default within a designated period;


 


10.2.2 Party B may reduce all or part of
the credit line, cease, cancel or terminate the credit financing to Party A;


 


10.2.3 Party B may cease or terminate the
acceptation of other business applications under this Agreement and the agreement of the individual credit business or other agreements
between Party A and Party B. Party B may cease or cancel all or part of the loan which Party A has not made drawdown or the trade
financing or guarantee which has not been conducted, and terminate the advance, payment and conduction.


 


10.2.4 Party B may declare full or part
accelerated maturity of the loan, the trade financing, the principle and interest under the guarantee and other payables under
this Agreement and the agreement of the individual credit business, or other agreements between both Parties.


 


10.2.5 Terminate or dissolve this Agreement,
and terminate or dissolve all or part of the agreements of the individual credit business and other agreements between both Parties.


 



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10.2.6Ask Party A to compensate for
the losses from the breach of agreement.


 


10.2.7 Party B may deduct relevant amount
from all accounts opened by Party A with Party B or any other institutions of Bank of China to set off such debt. The undue amount
is deemed as accelerated maturity. If the currency of deducted amount is different from that of the loan hereunder, the amount
will be converted in accordance with applicable exchange rate published by Party B on the date of such deduction.


 


10.2.8 Exertion of the right of real security.


 


10.2.9 Ask the guarantor to exert guaranty.


 


10.2.10 Other necessary and possible steps.


 


Article 11 Reservation of Rights


 


To both Parties, failure to exercise or
partial exercise of any of its rights hereunder will not constitute waiver of or amendment to such right or any other right; failure
to ask the other party to undertake or partial undertake of any of its responsibilities hereunder will also be not waiver or amendment
to such responsibility or any other responsibility.


 


To both Parties, any grace or delay in
exercise of any of its rights hereunder will not affect the rights deserved according to this Agreement and the agreement of the
individual credit business, laws and stipulations and will not constitute waiver of such right or any other right.


 


Article 12 Change, Amendment and Termination


 


Any amendment to this Agreement shall be
agreed by the Parties and made in writing. Amended clauses or amendment agreement shall constitute an integral part of this Agreement.


 


Unless there is any stipulation by law
or agreement by both Parties, this Agreement and the agreement of the individual credit business shall end upon the date when all
of Party A's obligations hereunder are fully performed.


 


Unless there is any stipulation by law
or agreement by both Parties, the ineffectiveness of any term under this Agreement shall not affect the legal impact of the others.


 


Article 13 Governing Law and Dispute
Resolution


 


Unless otherwise agreed,
the Agreement shall be governed by the law of the People's Republic of China.


 


Unless otherwise agreed, all disputes and
controversies arising from or in connection with this Agreement and the agreement of the individual credit business shall be solved
by both Parties through consultations, failing which, be solved by the means agreed hereunder. Either party may submit the dispute
to a court in the place where Party B or other institution of Bank of China Co., Ltd. is located to start litigation. During the
proceedings, other terms of this Agreement and the agreement of the individual credit business shall continue to be implemented
if the dispute does not affect other terms.


 



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Article 14 Expenses


 


Except the expenses stipulated by law or
agreed by both Parties, other expenses (including the lawyer agent fee) arising from the agreement signing, implementation and
dispute settlement are afforded by Party A.


 


Article 15 Appendix


 


The following appendices and the agreement
of the individual credit business as confirmed by both Parties shall constitute integral part of this Agreement and have equal
legal effect as this Agreement.


 


Article 16 Other Terms


 


16.1 Party A may not transfer any of its
rights and obligations hereunder to a third party, without consent of Party B.


 


16.2 Party A acknowledges that Party B
may, based on business requirements, authorize another institution of Bank of China to perform the rights and obligations hereunder.
The institution of Bank of China that is the transferee of the rights and obligations of Party B may in its own name initiate litigation
or arbitration or apply for enforcement in relation to the dispute hereunder.


 


16.3 With no impact on the other stipulations
under this Agreement and the agreement of the individual credit business, this Agreement shall be legally binding upon both Parties,
the successor and the assignee,.


 


16.4 Unless otherwise agreed, the address
of each party as stated in this Agreement will be its address for communication and contact. If the contact address or other contact
information of a party changes, such party shall promptly notify the other party of such change in writing.


 


16.6 The headings and the transaction
names are for reference only, and do not constitute any interpretation of the terms and rights and obligations under this Agreement.


 



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Article 17 Agreement Effectiveness


 


The Agreement takes into effect since the
date it’s signed and chopped by the legal representatives or the authorized representatives of both Party A and Party B.


 


The Agreement is made in seven duplicates
with the equal legal effect. Both Parties, the registration authority and the guarantor shall hold one.


 


	Party A: CER Energy Recovery (Yangzhou) Co., Ltd. (Seal)	 	Party B: Bank of China, Yizheng Branch (Seal)
	 	 	 
	Legal Representative: Qinghuan Wu                            	 	Legal Representative: Aihong Liu                       
	 	 	 
	(Or duly authorized representative)	 	(Or duly authorized representative)
	 	 	 
	Date: December 9, 2010	 	Date: December 9, 2010


 



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