Working Capital Loan Contract


 


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


 


Creditor (Party B):  Shanghai
Pudong Development Bank, Shanghai Branch 


 


Whereas Party A applies for a loan from
Party B and Party B agrees to grant a loan to Party A for the purpose of working capital according to the following terms in the
contract. To specify the rights and obligations, Party A and Party B hereby enter into this Contract after negotiation in accordance
with the Contract Law, General Rules of Loan and relevant laws and regulations. The Contract is an individual credit file signed
by both parties.


 


Part I Commercial Terms


 


Article 1 Type of Loan 


 


The loan under this Contract is short-term
working capital loan.


 


Article 2 Amount of Loan


 


The amount of the loan under this Contract
is: RMB 8,400,000.


 


Article 3 Purpose of Loan 


 


The loan hereunder shall be used for purchasing
project equipments and raw materials.


 


Article 4 Term of Loan 


 


4.1 The term of the loan hereunder is 12
months, from the first drawdown date.


 


4.2 The actual drawdown and repayment date
shall be the date stated on the indebtedness certificate between Party A and Party B. The last repayment date shall not exceed
the term of loan. The indebtedness certificate or loan collection certificate is the integral part of the Contract.


 


Article 5 Interest Rate 


 


5.1 Interest rate of RMB loan


 


The interest rate of the Contract is calculated
at     10    % upwards from the benchmark interest rate of the corresponding grade of the
People’s Bank of China, which is a fixed rate of 6.116% per annum.


 



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5.2 The interest settlement day is the
20th of last month of each quarter. If the principal and interest are repaid in installment, the last installment
of interest shall be paid up with the last installment of principal upon maturity of loan.


 


5.3 Adjustment of interest rate of RMB
loan


 


The interest rate is unchanged during the
term of loan.


 


Article 6 Penalty Interest Rate


 


6.1 Should Party A fail to repay the principal
and interest under the Contract on time, Party B is entitled to claim penalty interest at a rate 30% upward the current
interest rate on any balance of loan used by Party A in breach of this Contract for the days of breach.


 


6.2 Should Party A fail to use the loan
for the purpose as stipulated in the Contract, Party B is entitled to claim penalty interest at a rate 50% upward the current
interest rate on any balance of loan used by Party A in breach of this Contract for the days of breach.


 


Article 7 Drawdown Term


 


The drawdown date of loan hereunder is
from November 18, 2010 to December 31, 2010.


 


Article 8 Drawdown Plan


 


Drawdown is made by installment. The amount
and date of drawdown are as follows:


 


	Index	 	Drawdown date	 	Drawdown amount(RMB)
	1	 	2010-11-30	 	7,700,000
	2	 	2010-12-1	 	700,000


 


Article 9 Repayment Plan


 


Repayment is made by installment. The amount
and date of repayment are as follows:


 


	Index	 	Repayment date	 	Repayment amount(RMB)
	1	 	2010-12-29	 	700,000
	2	 	2011-1-29	 	700,000
	3	 	2011-2-28	 	700,000
	4	 	2011-3-29	 	700,000
	5	 	2011-4-29	 	700,000
	6	 	2011-5-29	 	700,000
	7	 	2011-6-29	 	700,000
	8	 	2011-7-29	 	700,000
	9	 	2011-8-29	 	700,000
	10	 	2011-9-29	 	700,000
	11	 	2011-10-29	 	700,000
	12	 	2011-11-16	 	700,000


 



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Article 10 Compensation of early repayment


 


Not applicable.


 


Article 11 Minimum amount of early repayment


 


Not applicable.


 


Article 12 Open of Bank Account


 


12.1 Party A does not open specific bank
account for working capital loan.


 


12.1.1 The ordinary collection account
opened with Party B:


 


Opening bank: Shanghai Pudong Development
Bank, Chuanzhi Tiandi Branch


 


Account Name: CER Energy Recovery (Shanghai)
Co., Ltd.


 


Account Number: 97590155300000063


 


12.1.2 The special collection account opened
with Party B:


 


Opening bank: Shanghai Pudong Development
Bank, Chuanzhi Tiandi Branch


 


Account Name: CER Energy Recovery (Shanghai)
Co., Ltd.


 


Account Number: 97590155300000063


 


Article 13 Entrusted Payments


 


Any single payment exceeding RMB 5 million
to a specific payee using the loan proceeds shall be subject to the entrusted payment arrangement.


 


Article 14 Supervision fee on the special
bank account


 


Not applicable.


 


Article 15 Guaranty 


 


15.1 Mr. Qinghuan Wu shall be the guarantor
for the loan under this Contract and take jointly liabilities. (Guaranty Contract Number: YB9759201028000901)


 



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15.2 CER Energy Recovery (Shanghai) Co.,
Ltd. shall pledge for the loan under this Contract. (Pledge Contract Number: YZ9759201028000901)


 


Article 16 Breach of Contract


 


Party A shall pay Party B 5% of the total
principal in case of any breach of Contract.


 


Article 17 Appendix of the Contract


 


None.


 


Article 18 Other Agreed Items


 


None.


 


Article 19 Others


 


The Contract is made in five duplicates
with the equal legal effect. Party A shall hold one and Party B shall hold other four.


 


Part II Common Terms


 


Article 1 Borrowings


 


1.1 Party A agrees and confirms without
revocation that the fund under the loan shall be drawdown at the time when Party B allows. The loan shall be reviewed by Party
B to continue. Party B has the right to ask Party A repay the loan at any time. Party B has the right to terminate or suspend all
or part of the loan without advance notice to Party A.


 


1.2 Party A shall not use the loan out
of the scope of the purpose. Party A shall not misappropriate or divert the fund to invest fixed assets or stocks. The fund shall
not be used in the areas of production or operation that are prohibited by government, or other activities that are out of the
scope of the purpose.


 


Article 2 Interest Rate and Method to
Accrue Interest 


 


2.1 Party A shall designate an ordinary
collection account and a special collection account with Party B (see Part I), and also a working capital loan account if any.
Party A agrees Party B to perform timely monitoring on the accounts mentioned above.


 


2.2 If no working capital loan account
opened, the ordinary collection account shall be used to collect the drawdown of the loan.


 


2.3 The interest of loan hereunder accrues
on a daily basis from the date of practical drawdown, according to the loan amount and the actual days Party A uses. (daily interest=
month interest/30, month interest=year interest/12).


 



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2.4 In the event that Party A fails to
repay the principal due on time, Party B shall has the right to collect a penalty on the overdue amount according to the penalty
interest rate and the overdue days, until the outstanding principal is repaid.


 


2.5 In the event that Party A fails to
use the loan within the scope of the purpose, Party B shall has the right to collect a penalty on the misusing amount according
to the penalty interest rate and the misusing days, until the outstanding amount is repaid.


 


2.6 In the event that Party A fails to
repay the interest due on time, Party B shall has the right to collect a penalty on the overdue interest according to the penalty
interest rate and the overdue days, until the outstanding interest is repaid.


 


2.7 In case the People’s Bank of
China adjusts the policy of marketization of interest rates; both parties shall negotiate to confirm new interest rate. If the
negotiation is not finalized by common consent within five bank working days, Party B shall repay all the outstanding principal
and interests within 30 days from the end of negotiation.


 


Article 3 Drawdown


 


3.1 Before the first drawdown, Party A
shall meet the following requirements, while Party B has no responsibility to validate these documents or conditions.


 


3.1.1 Party A has provided the drawdown
application, indebtedness certificate and other documents as required in the contract;


 


3.1.2 This contract and corresponding guaranty
Contract (if any) have been signed and is effective, the guaranty has been secured;


 


3.1.3 Party A has provided the business
license, company’s article of association, recent financial statements (including but not limited to the audited annual financial
report of last fiscal year and the financial report of current period);


 


3.1.4 Party A has provided the borrowing
resolution from Board/shareholders’ meeting or other authoritative body, the signature sample and authorization form of legal
representative and the authorized person;


 


3.1.5 Party A has opened the related bank
account with Party B as required;


 


3.1.6 There is no default event occurring
under this Contract;


 


3.1.7 Other document or conditions required
by Party B.


 


3.2 After the first drawdown, Party A shall
meet the following requirements before other drawdown, while Party B has no responsibility to validate these documents or conditions.


 


3.2.1 Party A has provided the drawdown
application, indebtedness certificate and other documents as required;


 


3.2.2 There is no default event occurring
under this Contract;


 



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3.2.3 Other document or conditions required
by Party B.


 


3.3 Drawdown


 


3.3.1 Party A shall drawdown the loan according
to the Contract. When applying for drawdown, Party A shall submit a drawdown application form to Party B at least 3 bank business
days prior to the proposed drawdown date.


 


3.3.2 If Party A needs to delay or change
the drawdown date, a notice shall be sent to get the agreement of Party B. Party A shall also compensate for the interest loss
of Party B. (interest loss=interest during the delay days deducted by the interest of the demand deposit)


 


3.3.3 If Party A asks to cancel all or
part of the loan, application shall be sent to Party B at least 3 bank business days prior to the proposed drawdown date or the
drawdown termination date. The requirement shall be agreed by Party B


 


3.3.4 If Party A does not drawdown or applies
for delay the drawdown date during the supposed drawdown period, Party B shall notice Party A to proceed with the formality within
three bank working days. If Party still does not proceed with the formality, Party B has the right to cancel the loans not drawdown.


 


3.3.5 Even considering the terms aboved,
Party B has the right to refuse the drawdown application and cancel all or part of the loan under this Contract at any time, when
the loan is not drawdown.


 


Article 4 Account open and management


 


4.1 Party A shall designate an ordinary
collection account and a special collection account with Party B (see Part I), and also a specified working capital loan account
if any. Party A agrees Party B to perform timely monitoring on the accounts mentioned above.


 


4.2 If no specified working capital loan
account opened, the ordinary collection account shall be used to collect the drawdown of the loan.


 


If there is a specified working capital
loan account, the account shall be used to collect the drawdown of the loan; the capital in the account shall bear an interest
of demand deposit. Party A agrees that both the stamp specimen of Party A and the loan supervision stamp of Party B shall be reserved
for the specified working capital loan account. The stamp specimens shall not be changed without the written consent from Party
B.


 


4.3 Party B confirms that the special collection
account will be used to collect relevant sales revenue or fund to be used to repay the loan.


 


Party B guarantees that the fund in the
special collection account shall be no less than the principal and interest to be paid in this period, within the three days prior
to the principal and interest repayment day. Party A has the right to limit or refuse the payment transaction which shall lead
to the lack of repayment amount from this account, within the three days prior to the principal and interest repayment day.


 



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Party B has the right to supervise on the
special collection account. If anything irregularity noted, Party B has the right to investigate the reason and take corrective
actions.


 


Article 5 Payment Supervision


 


5.1 Party A agrees that Party B has the
right to monitor and control the entrusted payment or direct payment, to ensure the use of the loan is within the scope of agreed
purpose.


 


Entrusted payment is
the payment method where Party B will, upon and in accordance with drawdown application and payment entrustment issued by Party
A, pay the proceeds of the financing to the relevant payees of Party A for agreed purposes.


 


Direct payment is the
payment method where Party B will, upon the drawdown application issued by Party A, pay the proceeds of the financing to Party
A’s account and Party A will make the payment directly to the relevant payees of Party A for agreed purposes.


 


5.2 Party A agrees that if the credit relationship
is newly set up and Party A has normal credit standing, or the payment exceed the agreed amount (see Part I)under this Contract,
or any other possible situation, the entrusted payment method will be used.


 


In relation to entrusted payment, Party
A shall, upon each drawdown, provide Party B with information of its own designated account to receive the financing and payee's
account, payment amount and relevant supporting documents to prove that such drawdown is for the agreed purposes. Party B will
carry out review on information provided by Party A to ensure all the information is consistent with the commercial Contract. When
the review completed, Party B shall, through the account designated by Party A, transfer relevant amount to the accounts of Party
A's payees as required


 


5.3 Party A shall submit the certified
materials required by Party B when payment is applied.


 


5.3.1 Document to certify that the payment
is within the scope of purpose.


 


5.3.2 Commercial Contract or the written
documents which reflects the payment obligation of Party A. As for the payment without Contract, Party A shall submit the payment
policy or standard approved by authorized department.


 


5.3.3 Related invoice or receipt. If not
available at the payment time, invoice or receipt should be submitted later.


 


5.3.4 Legal and effective payment vouchers.


 



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5.3.4 Other documents required by Party
B.


 


5.4 If the specified working capital loan
account is not opened, Party A shall submit the drawdown application form 3 bank working days prior to the supposed drawdown date
and confirm the payment method. Party A agrees Party B has the right to review the related information to decide the related payment
method.


 


If the specified working capital loan account
is opened, and the entrusted payment method is used, Party A shall submit the payment application form with the reserved specimen
of the seal 3 bank working days prior to the supposed drawdown date. Party B has the right to review all the related information
and make the payment when finishing review and sealing on the payment voucher.


 


If direct payment method is used, Party
A shall submit the payment application form and related information 3 bank working days prior to the supposed drawdown date. Party
A agrees Party B has the right to review the related information and will make the payment to the ordinary collection account after
reviewing the payment voucher filled by Party A and sealing on the voucher.


 


5.5 If the proceeds of
financing are to be paid directly by Party A to its payees, Party A shall make periodical report about the direct payment to Party
B. Party B has the right to perform account analysis, voucher verification and on-site investigation, to check the use of proceeds
and payment method.


 


5.6 Party A confirms that transaction charge
will be paid to Party B and the amount will be deducted directly by Party B.


 


5.7 Party B may decide to make supplementary
conditions or adjust the conditions for advance and payment of financing, or cease to advance and pay the financing proceeds, upon
occurrence of any of the following events:


 


5.7.1 Worse credit rating.


 


5.7.2 Weak profitability of major business.


 


5.7.3 Any irregularity in use of proceeds.


 


Article 6 Repayment


 


6.1 Party A shall repay the principal of
and pay the interest on the loan hereunder and other amount payable in accordance with the amount and schedule as required under
this Contract. Party A irrevocably authorizes Party B to transfer an amount equal to such principal, interest and other amount
payable out of such account on such repayment date or interest settlement date without further instruction from Party A.


 


6.2 If Party A applies for prepayment of
all or part of the loan, it shall submit a written application to Party B for its approval 10 bank working days prior to such prepayment.
If the prepayment is not agreed by Party B in written, Party A still shall repay the principal and interest according to the agreed
term. Party A shall pay compensation to Party B if the prepayment not agreed by Party B in written.


 



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If Party B approves any prepayment, which
is deemed the loan due in advance, Party B still has the right to ask for compensation according to the Contract (See Part I).


 


Party A shall fully pay on the prepayment
date all principal, interest and other amounts due and payable as of such prepayment date hereunder. The principal prepaid cannot
be less than the agreed amount described in Part I and the amount is used to be deducted from the total principal in a reversal
order.


 


6.3 In the event Party A fails to repay
the loan with proper reason, Party A shall apply for extension term of loan and prepare essential materials 30 bank working days
prior to the supposed repayment date. If there is any guarantee, pledge or mortgage under this Contract, the guarantor, pledger
and mortgagor should also represent written certification of agreements. Party B has the right to decide loan extension. If not
agreed, the loan will be deemed as overdue after the due date.


 


Article 7 Representations and warranties


 


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


 


7.1 Party A is an independent legal entity,
which has all the necessary rights and can take the responsibility under this Contract and bear civil liability.


 


7.2 Party A has the right to sign this
Contract and get all the approval and authorization from the board, the shareholders and other authorities. All the terms under
this Contract reflect the real agreement from Party A and have legal restriction on Party A.


 


7.3 The signing and undertaking of this
Contract comply with all the laws, related documents, judgments and adjudication to be obeyed by Party A and do not contradict
any article of association, Contracts, agreements and responsibilities to take.


 


7.4 The financial and accounting reports
provided by Party A to Party B are prepared in accordance with the general accepted accounting principle of the PRC and give true,
fair and complete presentation of the operation and indebtedness status of Party A.


 


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


 


7.6 Party A guarantees to complete all
the backup, registration and other procedures to make this Contract effective, and also will pay related tax and expenses.


 


7.7 The financial condition of Party A
has no material adverse change since the end date of its latest financial and accounting reports.


 



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7.8 Party A strictly obeys the law in general
operating activity and perform business according to the scope required in the business certification. Party A performs annual
verification, has ability to operate in a continuous manner, and has legal resource of repayment.


 


7.9 Party A shall not give up any creditor’s
rights due and will not dispose any major assets improperly.


 


7.10 Party A has disclosed all the information
should be acknowledged by Party B to make any decision under this Contract.


 


7.11 Party A confirms that there will be
no delay in staff salary, medical and disability pension or other compensations.


 


7.12 Party A guarantees its good credit
rating and it has no significant negative records.


 


7.13 Party A guarantees that there exists
no other event that will has significant negative impact on its ability to implement its commitment.


 


Article 8 Covenants 


 


Both parties have the agreements as follows.


 


8.1 Party A guarantees to operate the business
in accordance with the law. Party A shall use the loan in accordance with the term and purpose as specified in the Contract. Party
A shall provide the financial information including monthly or annual report to Party B. Party B can monitor the use of the loan
in any way.


 


8.2 Party A shall repay the principal and
interest of loan hereunder as stipulated in the Contract, application forms and the debt or credit voucher. The practical repayment
date, amount, currency and interest rate should be complied with the debt or credit voucher.


 


8.3 Party A guarantees to provide Party
B with new guaranty once there occurs or will occur any events which may adversely affect the financial situation or ability to
guarantee of the guarantor.


 


8.4 Party A commits that the following
actions shall not be taken without the written approval of Party B.


 


8.4.1 Selling, offering, renting, lending,
transferring, mortgaging, pledging or disposing most or all of its significant assets in other ways.


 


8.4.2 Contracting, rent, jointly operation,
external investment, stock restructuring, merger, division, transfer of stock, material increase of debt financing, setup of subsidiary,
transfer of property, decrease of registered capital, winding-up, dissolution, application (or be applied for) for bankruptcy,
reconstruction and other action that may cause an adverse impact on Party B's rights and interests.


 



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8.4.3 Amendment of company’s article
of association or other setup file and change of scope of operation or major business


 


8.4.4 Provision of guaranty to third party
that may cause an adverse impact on Party A’s financial condition or ability to repay debt under the Contract.


 


8.4.5 Prepayment of other long-term liability


 


8.4.6 Signing Contract or agreement that
may cause an adverse impact on Party A’s ability to repay debt under the Contract.


 


8.5 Party A commits to notice Party B on
the day the event occurs and send the original documents with company chop to Party B within 5 bank working days from the event
occurs.


 


8.5.1 Events that may lead to the representations
or warranties becoming fake, false or ineffective.


 


8.5.2 Party A, its holding shareholder,
actual controller or other related person are or may be involved in any material economic dispute, litigation or arbitration, or
its property is subject to attachment, seizure or enforcement, or the legal representative, directors, supervisors or key management
personnel of Party A are in any material dispute, litigation, arbitration or other compulsory administrative measures.


 


8.5.3 Any change of its legal representative,
authorized agent, executive, chief financial executive, corresponding address, company name, working domicile, and others.


 


8.5.4 Being applied to restructure or bankruptcy
by other creditors or higher supervision department.


 


8.5.5 Other events that may cause an adverse
impact on Party A’s ability to repay debt under the Contract.


 


8.6 Party A guarantees to repay the loans
according to the normal repayment order and the debt hereunder is not subordinated to other debt Contract signed by Party A in
the future.


 


8.7 Party A shall try to repay the principal
and interest under the loan in same currency. If the currency of deducted amount is different from that of the loan hereunder,
the amount will be converted to the currency of the loan using the method described in Article Nine below by Party A itself or
by Party B with the authorization from Party A. Party A shall bear all the expenses incurred. If the guarantor repays the loan
for Party A in a different currency, Party A shall also bear all the related expenses incurred.


 



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8.8 Party A shall provide other guaranties
acknowledged by Party B if the original guaranty is changed under some situation. The situation includes, but not limits to winding-up,
dissolution, suspension of business, cancellation of its business license, or application (or be applied for) for restructure or
bankruptcy, great change in financial or operational condition of the guarantor, significant litigation or arbitration, legal representative,
director, controller, key management personnel engaging in lawsuit, decrease or future possible decrease in the value of security,
other breach of guaranty Contract or requirement to terminate the guaranty Contract.


 


8.9 Party A undertakes to accept credit
check by Party B, to provide financial documents including balance sheets and income statements and other documents that reflect
Party A's ability to repay its debts, as requested by Party Bs, and to actively assist and cooperate with Party B in investigating,
understanding and supervising its production, operation and financial conditions.


 


8.10 Party B may require Party A to early
repay any loan based on Party A's collection of receivables.


 


8.11 Special agreement for group client
- Not applicable.


 


Article 9 Deduction and setoff


 


9.1 When any debt due hereunder in accordance
with this Contract, Party B may deduct relevant amount from the ordinary collection account or special collection account opened
by Party A with Party B. If the fund saved in the ordinary collection account or special collection account is not enough to meet
the amount of repayment. Party B may deduct relevant amount from any accounts opened by Party A with Party B or any other branch
office of Shanghai Pudong Development Bank to set off such debt, until all debts of Party A hereunder are fully settled.


 


9.2 Except any stipulation made by the
government, if the amount deducted by Party B is insufficient to repay all debts owed by Party A, the amount deducted shall set
off the unpaid expenses, then the due interests, finally the due principal.


 


9.3 If the currency of deducted amount
is different from that of the loan hereunder, the situation shall be dealt with as follows:


 


9.3.1 If the loan currency is RMB, the
amount will be converted to RMB in accordance with applicable bid rate of RMB published by Party B on the date of such deduction.


 


9.3.2 If the loan currency is not RMB and
the deduction currency is RMB, the amount will be converted to the loan currency in accordance with applicable selling rate of
the loan currency published by Party B on the date of such deduction.


 


9.3.3 If both of the loan currency and
deduction currency are not RMB, the amount will be first converted to RMB in accordance with applicable bid rate of RMB published
by Party B on the date of such deduction. Then the RMB will be further converted to the loan currency in accordance with applicable
selling rate of the loan currency published by Party B on the date of such deduction.


 



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Article 10 Debt certificate


 


Party B shall keep record in its account
for the principal, interests and fees and other fees of Party A under this Contract. The above mentioned record and the documentation
for the drawdown, repayment and payment of interest are the certificates of the debts between the two parties.


 


Article 11 Notices and arrival


 


11.1 Unless otherwise agreed, the address
of each Party as stated in the signature page of this Contract 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 changes in writing.
The arrival date is agreed as follows: If the notice is the letter, the 7th bank working day after sending is the deemed arrival
date. If the notice is courier sending, the signing date is the deemed arrival date. If the notice is fax or email, the sending
date is the deemed arrival date.


 


But all the notices, requirements or other
information sending to Party B should be deemed arrival when Party B actually received. Any information sending by fax or email
should be chopped and the original should be sent to Party B after the notice.


 


11.2 Party A agrees that any summons or
notice issued due to litigation sending to the address as stated in the signature page of this Contract is deemed as arrival. If
the change of address is not informed to Party B, the change is ineffective.


 


Article 12 Effectiveness, Modification
and Termination of Contract 


 


12.1 The Contract shall come into effect
after the signing and stamping of the legal representative or the authorized agent, and also the chop of the company. The Contract
shall terminate after all the liabilities under the loan are paid up.


 


12.2 After the Contract takes into effect,
any party shall not modify or terminate in advance the Contract. The modification or termination of the Contract, if required,
shall be subject to the written agreement of both parties hereto through consultation. The loan Contract shall remain in force
before the written Contract is entered into.


 


Article 13 Default and Treatment


 


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


 


13.1.1 Any of its representations, warranties,
undertakings or notice, authorization, approval, certificates and other documents hereunder is incorrect, misleading, ineffective,
or lose legal effect.


 


13.1.2 Breach of any item agreed in Article
Eight.


 


13.1.3 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.


 


13.1.4 The major investor of Party A is
engaged in drawdown of funds, transfer of assets, and sale of stocks without authorization.


 



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13.1.5 The guarantor is lack of the ability
of guarantee or breach the guaranty Contract signed.


 


13.1.6 Party A 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.


 


13.1.7 Party A or its guarantor’s
financial condition suffer deterioration, which has affected or may affect performance of its obligations hereunder; or there occurs
the events which put negative effects on the financial condition or ability of repayment of Party A or its guarantor.


 


13.1.8 Party A, its holding shareholder,
actual controller or other related person is or may be involved in any material economic dispute, litigation or arbitration, or
its property is subject to attachment, seizure or enforcement, or the legal representative, directors, supervisors or key management
personnel of Party A are in any material dispute, litigation, arbitration or other compulsory administrative measures, which has
negative effect on its ability to repay the obligations hereunder.


 


13.1.9 Party A does not use the loan within
the scope of purpose.


 


13.1.10 There is false or fake information
in the application documents of loan.


 


13.1.11 Party A’s financial indicators
do not comply with agreed standard.


 


13.1.12 Irregular capital transaction noted
in the ordinary collection account or special collection account  ,


 


13.1.13 Other events that may cause adverse
impact on realization of Party B's claim hereunder.


 


13.2 If Party A is in default, Party B
may take any one or more of the following steps:


 


13.2.1.1 Party B may require Party A to
remedy its default within a designated period;


 


13.2.1.2 Party B may cease to advance the
loans and other amounts to Party B under this Contract, and cancel all or part of the loan or other amount for which Party A has
not made drawdown;


 


13.2.1.3 Party B may declare immediate
maturity of all or part of the loans under this Contract, require immediate repayment of such loans and amounts and look for recovery
of the outstanding interest from Party A or its guarantor;


 


13.2.1.4 Party A should pay penalty and
compounded interest on the overdue and misusing loan;


 


13.2.1.5 Party B can deduct the amount
from any of Party A’s account with any branch of Shanghai Pudong Development bank;


 



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13.2.1.6 Require Party A to make supplementary
requirements on the drawdown of the loan or change the method of payment;


 


13.2.1.7 Party A can be asked for other
guarantors who are accepted;


 


13.2.1.8 Other steps that are set out under
applicable laws and regulations.


 


13.2.2 Except the measures mentioned above,
Party B may require Party A to take the responsibility of breach of Contract and ask Party A to make compensation(Calculation is
listed in Part I). If the compensation exceeds the losses caused by such default of Party A, Party A will make full compensation
for the losses.


 


13.2.3 If Party A does not repay full amount
of the principle and interest due, Party A needs to bear all the costs, such as the collection fee, litigation fee, notice fee,
legal fee, travelling expense, interpretation fee and all other fees.


 


Article 14 Other terms


 


14.1 Definition


 


14.1.1 The “creditor’s right”
under this Contract means the loan principle, interest, penalty and other expenses relating to the loan.


 


14.1.2 The “interest” under
this Contract means all the normal lending interest, penalty interest and the compounded interest of the loan.


 


14.1.3 The “bank working day”
under this Contract means Party B’s operational days of public service, excluding Saturday and Sunday or other legal holidays.


 


14.2 Applicable laws


 


This Contract shall be governed by and
interpreted in accordance with the law of the People's Republic of China.


 


14.3 Dispute resolution


 


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 B is located to start litigation. During the proceedings, the Parties
shall continue to perform their respective duties, responsibilities and obligations hereunder in a faithful, diligent and responsible
manner.


 


14.4 Miscellaneous


 


14.4.1 If
any information needs to be supplemented, both parties can agree to record the information in Part I of this Contract or make another
written agreement as the appendix of this Contract.


 



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14.4.2 During
the Contract term, failure to exercise, partial exercise or delay in exercise by Party B 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 B's further exercise of such right
or any other right.


 


14.4.3 Invalidity or unenforceability of
any provision hereof will not affect validity or enforceability of any other provision hereof or validity of the whole Contract.
Party B has the right to terminate the Contract and chase up Party A with the outstanding debt under this Contract whenever the
Contract becomes invalid.


 


14.4 Party B may transfer all or part of
its rights hereunder to a third party, without consent of Party A. Under this circumstance, Party A still needs to take all the
responsibility under this Contract for the third party.


 


14.5 Unless there are any special notes
in the Contract, the related wording and description in the appendix are of the same meaning and effect with that in the Contract.


 


14.6 The headings are for reference only,
and do not constitute any interpretation of this Contract.


 



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The Contract is signed on November 18,
2010 by both parties. Party A hereby confirms by signing or affixing of seal that all terms of this Contract have been fully
negotiated. The understanding of Party A and Party B of this Contract is consistent and accurate, especially regarding to the rights
and obligations of each Party, the restriction of responsibilities and exceptions. The Parties have no dispute over ALL the terms
of this Contract.


 


	Party A: CER Energy Recovery (Shanghai) Co., Ltd. (Seal)	 	Party B: Shanghai Pudong Development Bank Shanghai branch (Seal)
	 	 	 
	Lf Legal Representative:   Qinghuan Wu                      	 	Legal Representative:    Jiang Lin                                    
	 	 	 
	(Or duly authorized representative)	 	(Or duly authorized representative)
	 	 	 
	Main Address:	 	Main Address:
	 	 	 
	Zip code:	 	Zip code:
	 	 	 
	Telephone No.:	 	Telephone No.:
	 	 	 
	Fax:	 	Fax:
	 	 	 
	Email:	 	Email::
	 	 	 
	Contact Person:	 	Contact Person:


 



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