Contract No.: ZJXD-JK20120060


 


Loan Contract


 


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


 


Lender:
Shanghai Pudong Zhanjiang Micro-credit Co., Ltd.


 



    	 



    	 



    

 


Dear client,


 


Thanks for your supports to Shanghai Pudong
Zhanjiang Micro-credit Co., Ltd.(“Our Company”), please take note of the following items:


 


1. Please pay attention to the due date
of principal and interest and ensure timely payment made according to the contract. Should your company / you breach the contract,
our Company has the right to claim the loan due immediately. You company has to repay the principal and interest under the contract
and assume the liability for breach of contract.


 


2. Please pay special attention to the
clauses marked by “▲▲”. These clauses are the important clauses related to your rights and obligations.
Please make sure your company / you carefully read and fully understand all contractual terms and have no objection.


 


3. If your company/ you breach the contract,
your company’s / your default record will be provided to relevant government departments, including the People's Bank of
China, association of small loan companies, relevant industry associations, financial institutions. Your company’s / your
breach may adversely affect your company’s / your future applications for bank loans and government subsidies and may also
adversely affect the personal credit of the related responsible person.


 


4. Please cooperate with our check after
the loan drawdown. The check includes the usage of the fund and your company’s operational condition. Please provide us with
the related material truthfully.


 


5. The reminders that our Company currently
makes, such as the repayment reminders, online reminders, are the free value-added services our Company provides to our clients,
which do not constitute an obligation to our Company.


 


We inform you all the above. Thank you
for your company’s / your cooperation and support. Wish a pleasant cooperation with your company / you.


 


Shanghai Pudong Zhanjiang Micro-credit
Co., Ltd.


 



    	 



    	 



    

 


Please read this Contract carefully
and pay special attention to the terms marked by “▲▲”. If you have any objection, please ask the Lender
to make timely correspondent explaination. 


 


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


 


	Legal Representative:	Qinhuan Wu


 


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


 


	Post Code:	201203


 


	Business License no.:	310115400249903


 


	Contact Person:	Simon Dong


 


	Telephone:	13801969233


 


	Lender: 	Shanghai Pudong Zhanjiang Micro-credit Co., Ltd.


 


	Person in Charge:	Xianpei Lin


 


	Address:	Building#4, No. 439 Chunxiao Road, Shanghai,China


 


	Post Code:	201203


 


	Telephone:	021-58959900	Fax:	021-58959900


 


The Borrower thinks the Lender has the
right to engage in lending transaction and apply for a loan to the Lender. Upon equal negotiations and mutual agreement, the Lender
and the Borrower enter into this Contract in relation to the provision of relevant loan by the Lender to the Borrower.


 


		Article 1	Major terms and security of Loan



 


		1.1	The currency and amount of the loan hereunder shall be RMB 10,000,000



 


		1.2	The term of the loan hereunder shall be six months commencing from Feb 27, 2012 to
Feb 20, 2013 (the actual drawdown date shall be the corresponding date as stated on the debt certificate. The debt certificate
shall constitute integral part of this Contract and have equal legal effect as this Contract).



 


		1.3	The loan hereunder shall be used for the working capital purposes. The Lender may supervise the
use of the proceeds of the loan.



 


		1.4	Performance bond: None.



 


		1.5	The Borrower must secure the performance of this Contract in accordance with the requirements of
the Lender. The security of this contract can be one or more among the guarantee, mortgage, pledge or other way of security.



 


		1.6	The detailed information about the security is described under the security clauses of this Contract.
The agreements includes but not limits to the followings:



 



    	 



    	 



    




 


		l	If there is any default in repayment,
the Borrower agrees to further secure the loan by a mortgage of its new office building in Zhangjiang, Shanghai . Address of
the building is Building#26, No. 1388 Zhangdong Road, Zhangjiang Hi-tech Park, Shanghai , China 



 


		l	The guarantor, Mr. Qinghuan Wu,
provides the Lender unconditional and irrevocable guarantee letter. The guarantor assumes joint liability under the guarantee letter.



 


		l	The loan is secured by a pledge of
the accounts receivables owned by the Borrower.



 


		1.7	The Borrower hereby acknowledges that the Lender has the right to freely choose its way to exercise
any or part of the creditor’s rights under this Contract. The borrower agrees to give up defense towards the Lender’s
choice.



 


		Article 2	Interest rate and interest calculation



 


		2.1	Interest rate under this Contract is RMB Fixed interest rate.



 


The rate is
at 12% per annum, which shall remain unchanged within the term of this Contract.


 


		2.2	The daily interest rate shall be applicable monthly interest rate/30. The monthly interest rate
shall be applicable annual interest rate/12. One month shall be 30 days.



 


		2.3	Calculation of interest



 


		2.3.1.	Normal interest=applicable interest rate*drawdown amount*occupation days. Occupation days shall
be counted from the actual drawdown date to the due date.



 


		2.3.2.	Borrower shall pay penalty for the overdue amount. Penalty is calculated by the overdue amount
and the overdue period. Should the Borrower fail to repay the principal and interest under the Contract on time, the Lender is
entitled to claim penalty interest at a rate that four times the current interest rate. Penalty=(overdue principal or overdue interest)*(4*daily
interest)*overdue days. The daily interest is the contractual daily interest agreed in this Contract.



 


		2.3.3.	The penalty is settled at both principal repayment date and interest settlement date. If the Borrower
repays part of the overdue amount, the repayment first goes to the penalty, then the normal overdue principal and interest. The
loan with early maturity has priority in settlement.



 


		2.3.4.	Should the Borrower misappropriate the fund in violation of the purpose of the loan; the Lender
is entitled to claim penalty interest at a rate that four times the current interest rate from the misappropriation date.



 


		2.4	The loan interest hereunder shall be settled every month (month/quarter/half year). If interest
is settled on a monthly basis, the settlement date shall be 20th day of each month.



 


The first interest period shall
commence from the actual drawdown date to the first interest settlement date; the last interest period shall commence from the
day immediately following the end of the preceding interest period to the day that is one day before the final repayment date;
and each of the other interest period shall commence from the day immediately following the end of the preceding interest period
to the next interest settlement date.


 



    	 



    	 



    

  


Interest payment date is the
first bank business day immediately after interest settlement date. In case of legal holidays, the payment date extends to the
first bank business day immediately after the legal holidays.


 


Upon maturity of the loan, all
outstanding interest shall be paid together with the principal.


 


		Article 3	Drawdown and repayment



 


		3.1	The loan hereunder shall be drawdown in lump.



 


The Borrower
shall make the drawdown within 2 months after the Contract is signed and all the related procedures are completed or within the
period that agreed by the Lender, or the Lender has the right to refuse the drawdown.


 


		3.2	▲▲The Lender has no obligation to advance any loan to the Borrower until all following
conditions have been satisfied.



 


		3.2.1.	Total drawdown amount does not exceed the amount agreed in Article 1.1.



 


		3.2.2.	The drawdown application date and actual drawdown date are made by the Borrower within the borrowing
term.



 


		3.2.3.	The Borrower has provided related government approval, registration (if necessary) and any other
procedure required by the Lender. All the above have taken effect and are continuously effective.



 


		3.2.4.	The guaranty contract (if any) under this Contract have taken effect and is continuously effective;
If the guaranty contract is a mortgage contract or pledge contract, the correspondent mortgage or pledge has been secured.



 


		3.2.5.	The Borrower operation and financial condition does not suffer any material adverse change.



 


		3.2.6.	The Borrower meets the related requirement of the Lender.



 


		3.2.7.	There is no default event occurring under this Contract.



 


		3.2.8.	If required, the Borrower shall provide the Lender with a due diligence report issued by a designated
lawyer office or accounting firm.



 


		3.3	As for the drawdown information, the documents retained, certificates and notes shall prevail.
The Lender has the right to ask the Borrower sign a debt certificate.



 


		3.4	Repayment is made by installment. The Borrower shall repay RMB 0.9 million every month since April
2012.



 


When the loan is repaid by installment,
the Borrower shall inform the Lender of the repayment amount and date by written notice. If the Lender is not informed, the Borrower
shall bear the interest during the period.


 


		3.5	▲▲If the Borrower applies for prepayment of all or part of the loan, it shall submit
a written application to the Lender for its approval 3 bank business days prior to such prepayment, and pay to the Lender relevant
compensation as agreed hereunder. If the Borrower prepays the Lender within 30 day (including 30 days) from the actual drawdown
date, the Borrower shall pay interest of 30 days and the processing fee according to the interest rate agreed in Article 2.1. If
the Borrower prepays the Lender after 30 day from the actual drawdown date, the Borrower shall pay interest according to the actual
borrowing period.



 



    	 



    	 



    

 


 


		3.6	The Lender will provide the funds to the Borrower through promissory note, credit voucher, online
banks or others. If fund is provided in the manner of promissory note, the Lender shall starts accruing interest from the note
issuing day and the Borrower shall take the promissory note on the issuing day. If fund is provided in the manner of credit voucher
or online banks, the Lender shall start accruing interest from the day that the fund is successfully transferred to the Borrower’s
account and stop accruing interest from the day that the principal is fully repaid. If the opening bank of the Lender and Borrower
are different, the Borrower may not receive the funds on the day that the Lender transfers it. Hence the Borrower shall try to
provide the bank account with the same opening bank as the Lender’s so as to receive the funds as soon as possible. If the
Borrower affords the false bank account to the Lender which leads to unsuccessful transfer of funds, the Borrower shall assume
the interest loss arousing from its mistake. The interest loss shall be calculated at a rate agreed in this Contract. If the unsuccessful
transfer of funds is caused by the Lender, the interest loss shall be assumed by Lender.



 


		Article 4	▲▲Representations and warranties



 


		4.1	The Borrower is an independent legal entity, which has all the necessary rights and can take the
responsibility under this Contract and bear civil liability.



 


		4.2	It has obtained all necessary authorizations or approvals to enter into this Contract. Its execution
and performance of this Contract does not violate any applicable laws or regulations.



 


		4.3	All documents and information provided by the Borrower to the Lender are true, accurate, complete
and effective and do not contain any false record, gross omission or misleading statement.



 


		Article 5	Rights and responsibilities of the Lender



 


		5.1	The Lender has the right to receive the principal and interests (including the overdue and misappropriation
penalty interest) and exercise other rights regulated by law or agreed in this Contract. If the Borrower is in default, the Lender
has the right to declare accelerated maturity of the loan or withdraw part of the loan, or/and forfeit the performance bond.



 


		5.2	The Lender may transfer all or part of its rights hereunder to a third party by notifying the Borrower,
without consent of the Borrower.



 


Once the Lender sends written
notice to the Borrower, the both Parties of this Contract automatically adjust to be the creditor assignee and the Borrower. Both
Parties shall continue to implement this Contract. There is no need to renew the Contract unless the Borrower present written objection
within three bank business days from the notification is received.


 


		5.3	The Lender may transfer its right to loan proceeds hereunder to a third party without sending notice
to the Borrower. The Borrower shall continue to undertake its obligation under this Contract.



 


		5.4	The Lender shall deduct the repayment in a sequence of expense, penalty, interest and principal.



 



    	 



    	 



    

 


 


		5.5	The Lender undertakes to keep non-public materials and information provided by the Borrower confidential,
unless otherwise required by applicable laws and regulations or agreed hereunder.



 


		5.6	The Borrower agrees that the Lender has the right to engage the details of its implementation of
this Contract into the credit system.



 


		Article 6	Rights and responsibilities of the Borrower



 


		6.1	The Borrower undertakes to settle principal, interest and any other amount payable in relation
to the loan hereunder in accordance with the debt certificate and this Contract.



 


		6.2	The Borrower undertakes to draw down and use the loan in accordance with the schedule and purpose
as agreed hereunder. The Borrower shall not use the proceeds of the loan hereunder for any other purpose that is not agreed in
this Contract.



 


		6.3	▲▲The Borrower undertakes to bear expenses for entering into and performing this Contract,
and expenses paid and payable by the Lender for realization of its claim hereunder, including without limitation litigation or
arbitration fee, attachment fee, attorney's fee, enforcement fee, appraisal fee, auction fee and announcement fee.



 


		6.4	▲▲The Borrower undertakes to accept and actively cooperate with the Lender's check
and supervision on use of the proceeds of the loan (including purpose of the loan) and the Lender’s operation condition.
The Borrow shall provide the Lender with the financial documents and other information, and ensure all these materials are true,
complete and accurate.



 


		6.5	▲▲The Borrower undertakes to promptly notify the Lender upon occurrence of any of the
following events. A written application shall be submitted to the Lender for its notification 30 bank business days prior to such
prepayment. The Borrower commits that the following actions shall not be taken without the written approval of Party B.



 


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



 


		6.5.2.	Significant change in the operation structure or the form of ownership, including but not limit
to contracting, rent, jointly operation, stock restructuring, company selling, merger, division, transfer of stock, , setup of
subsidiary, decrease of registered capital and other action that may cause an adverse impact on the Lender's rights and interests.



 


		6.6	▲▲The Borrower undertakes to promptly notify the Lender upon occurrence of any of the
following events. A written application shall be submitted to the Lender for its notification7 bank business days prior to such
prepayment.



 


		6.6.1	Any change to its articles of association, company name, legal representative, address, correspondence,
business scope, or other significant decision related to fiancé or personnel;



 


		6.6.2	The Borrower or the guarantor has applied or been applied, or may apply or be applied, for bankruptcy.



 



    	 



    	 



    

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



 


		6.6.4	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.



 


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



 


		6.6.6	The Borrower’s winding-up, dissolution, liquidation, suspension of business, revocation or
cancellation of its business license.



 


		6.6.7	The Borrower, its legal representative or its major management personnel is suspected of major
crime or involved in any material dispute.



 


		6.6.8	The Borrower’s financial condition suffers 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 the Borrower.



 


		6.6.9	The amount of the related-party transaction exceeds 10% of the net assets (which is currently audited).



 


		6.6.10	The Borrower and the guarantor change or add operational address.



 


		6.7	▲▲If there occur the events which will put negative effects on the guaranty under this
Contract; the Borrower shall provide the Lender with other guaranty that is acknowledged by the Lender. The events includes but
not limits to:



 


		6.7.1	The guarantor is under merge, division, winding-up, dissolution, liquidation, suspension of business,
or its business license has been or it has applied or been applied, or may apply or be applied, for bankruptcy.



 


		6.7.2	There occur the events which put negative effects on the operation and financial condition of the
guarantor.



 


		6.7.3	The guarantor is or may be involved in any material economic dispute, litigation or arbitration,
or its major property is subject to supervision in accordance with applicable laws.



 


		6.7.4	The value of the guaranty decreases or may decrease or is subject to seizure, attachment or supervision
in accordance with applicable laws.



 


		6.7.5	The guarantor, its legal representative or its major management personnel is suspected of major
crime or involved in any material dispute.



 


		6.7.6	If the guarantor is a natural person, in this circumstance, the guarantor is missing, dead or claimed
dead.



 


		6.7.7	The guarantor default under this Contract.



 


		6.7.8	There arises dispute between the Borrower and the guarantor.



 


		6.7.9	The guarantor asks for ending the guaranty agreement.



 


		6.7.10	The guaranty agreement does not take effect, is ineffective or canceled



 


		6.7.11	The guaranty is not set up or invalidly set up.



 


		6.7.12	Other event that will affect the safety of the debt obligation of the Lender.



 



    	 



    	 



    

  


		Article 7	Special clause



 


The Borrower agrees to undertake all the
default responsibilities, including repaying the principal and interest, forfeiting the performance bond, paying the penalty and
any other cost. i.e. the lawyer fee, litigation fee, preservation fee.


 


		Article 8	▲▲Adjustment of principal amount and claim
of the accelerated maturity of the loan



 


The Lender may reduce, suspend or cancel
the credit amount under this Contract, declare accelerated maturity of all or part of the loan, require the Borrower to immediately
repay all or part of the principal and pay the interest of the loan and ask for compensation according to the default clauses agreed
in this Contract if not repaid on time, if any of the following events occurs within the term of this Contract:


 


		8.1	The Borrower fails to repay the principal or interests according to this contract or any of the
debt certificates.



 


		8.2	The representation and guaranty made by the Borrower under Article 4 is not true.



 


		8.3	The Borrower or the guarantor collateralizes the guaranty again without the consensus of the Lender.



 


		8.4	There occurs one of the events listed in Article 6.6 and 6.7.



 


		8.5	The Borrower defaults in other contracts with the Lender and does not correct its behavior after
notifying by the Lender.



 


		8.6	The borrower breaches other terms of this Contract.



 


The accelerated maturity of all or part
of the loan takes effect since the Lender makes the declaration. Written notice will be sent to the Borrower after the declaration.


 


		Article 9	▲▲Default



 


		9.1	Since this Contract takes effect, the Lender has the right to forfeit all the performance bond,
declare accelerated maturity of the loan, require the Borrower to immediately repay all or part of the principal and pay the interest
of the loan and ask for compensation according to the default clauses agreed in this Contract if not repaid on time, if the Borrower
is in default upon occurrence of any default events motioned in this Contract.



 


		9.2	If the Borrower fails to repay any principal, interest or use the funds according to the agreed
purpose, the Lender has the right to settle penalty based on the overdue penalty interest or misappropriation penalty interest.



 


		9.3	If the Borrower fails to repay any principal and interest, it undertakes to reimburse the Lender
such expenses in relation to realize the debt obligation. i.e. Reminder fees, legal fees (or arbitration fees ) , security fees
, advertising fees, collateral and disposal fees , transfer fees , execution fees, lawyer fees, travelling fees and other fees.



 


		9.4	The Lender may make a public announcement in media to demand repayment if the Borrower deliberately
avoids supervision of the Lender, fails to repay any principal, interest. The Lender may report the crime of fraud in loan if the
material provided by the Borrower is not true.



 



    	 



    	 



    




 


		Article 10	▲▲Deduction



 


		10.1	The Borrower undertakes to transfer the payable interest, principal and other expenses to the designated
account on every repayment date and settlement date. Funds transferring into the bank account of the Lender listed below are deemed
to be repayment.



Account Name: Shanghai
Pudong Zhanjiang Micro-credit Co., Ltd.


Opening bank: Shanghai
Pudong Development Bank, Zhangjiang Branch


Account No.: 97160158000000409


 


		10.2	If the amount deducted by the Lender is insufficient to repay all debts owed by the Borrower, the
Borrower agrees to deduct in a sequence of expense, penalty, interest and principal.



 


		Article 11	Covenant



 


		11.1	When both Parties agree the credit has been granted to the Borrower, the Lender has the right to
receive a processing fee of RMB 0.2 million in lump from the Borrower before the first drawdown.



 


		11.2	Both Parties agree that the Borrower shall repay the loan of RMB 5 million (Contract No. ZJXD-JK2011300)
to the Lender within 3 bank business days after it obtains the loan from the Bank of Communication, or the Lender has the right
to declare accelerated maturity of the loan under this Contract.



 


The Borrower shall repay the
loan to the Lender immediately after it receives the accounts receivable from Zhenjiang Kailin, or the Lender has the right to
declare accelerated maturity of the loan under this Contract.


 


		Article 12	Dispute Resolution



 


Either Party may submit the dispute to
a court in the place where the Lender is located to start litigation. During the proceedings, both Parties shall continue to perform
their respective duties, responsibilities and obligations hereunder in a faithful, diligent and responsible manner.


 


		Article 13	Miscellaneous



 


The debt certificate shall constitute integral
part of this Contract and have equal legal effect as this Contract


 


This Contract takes effect after signing
by both Parties.


 


The Contract is made in three duplicates
with the equal legal effect.


 


The Borrower has read the terms above
and the Lender has made correspondent explanations as required by the Borrower. The Borrower has no objection over all the terms
of this Contract.


 



    	 



    	 



    

 


	Signature Page
	 
	Borrower (seal): __
	CER Energy Recovery (Shanghai) Co., Ltd.
	Legal representative/authorized representative:
	Qinghuan Wu	 
	 
	Date: _____________________
	 
	Lender (seal):__ 





	Shanghai Pudong Zhangjiang Micro-credit Co., Ltd.	 





	Person-in-charge/authorized representative:





	Xianpei Lin