Document:

ESCROW
      AGREEMENT

     

    THIS
      ESCROW AGREEMENT (this "Escrow
      Agreement")
      is
      dated as of April 15, 2008, among China Energy Recovery, Inc., a Delaware
      corporation ("Pubco"),
      Poise
      Profit International, Ltd., a company incorporated pursuant to the laws of
      the
      British Virgin Islands ("Priveco"),
      WU
      Qinghuan and ZHOU Jialing, the stockholders of Priveco (the "Stockholders"),
      and
      Corporate Stock Transfer, Inc. (the "Escrow
      Agent").
      All
      capitalized terms used but not defined herein shall have the meanings ascribed
      to such terms in the Share Exchange Agreement, dated effective as of January
      24,
      2008 (the "Share
      Exchange Agreement").
      

     

    RECITALS

    

    WHEREAS,
      pursuant to the Share Exchange Agreement, the Stockholders exchanged all of
      the
      issued and outstanding shares of Priveco's capital stock for an aggregate of
      41,514,179 shares of Pubco's common stock, $0.001 par value per share
      ("Common
      Stock");
      and

    

    WHEREAS,
      in accordance with the Share Exchange Agreement, the Stockholders are depositing
      with the Escrow Agent 3,558,358 shares of Common Stock pursuant to the Share
      Exchange Agreement (the "Escrow
      Shares").
      

    

    NOW,
      THEREFORE, for and in consideration of the mutual covenants contained in the
      Share Exchange Agreement and herein, and other good and valuable consideration,
      the receipt and legal sufficiency of which are hereby acknowledged, Pubco,
      Priveco, the Stockholders and the Escrow Agent hereby agree as
      follows:

    

    1.      Deposit
      of Escrow Shares.
      Upon
      the execution of this Escrow Agreement, the Stockholders will cause to be
      delivered to the Escrow Agent the Common Stock certificates representing the
      Escrow Shares, including stock powers duly endorsed in blank. 

     

    2.      Method
      of Disposition of Escrow Shares.
      The
      Escrow Agent will hold the Escrow Shares in its possession until authorized
      hereunder to deliver such Escrow Shares as follows:

     

    (a)      In
      the event the HAIE Target is satisfied pursuant to the terms of the Share
      Exchange Agreement, to the Stockholders pro rata in the amounts proportionate
      to
      the number of shares set forth opposite each such Stockholder's name on
Schedule
      1
      to the
      Share Exchange Agreement, within 10 days of receipt of a certificate in the
      form
      of Certificate
      I
      hereto;
      or

     

    (b)      In
      the event the HAIE Target is not satisfied pursuant to the terms of the Share
      Exchange Agreement, to the investors in the Financing pro rata based on each
      investor's respective investment amount in the Financing, within 10 days of
      receipt of a certificate in the form of Certificate
      II
      hereto.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

     

    3.      Concerning
      the Escrow Agent.

     

    (a)      The
      Escrow Agent shall not be under any duty to give the Escrow Shares held by
      it
      hereunder any greater degree of care than it gives its own similar property
      and
      shall not be required to invest the Escrow Shares. 

     

    (b)      This
      Escrow Agreement expressly sets forth all the duties of the Escrow Agent with
      respect to any and all matters pertinent hereto. No implied duties or
      obligations shall be read into this Escrow Agreement against the Escrow Agent.
      The Escrow Agent shall not be bound by the provisions of any other agreement
      among the parties hereto except this Escrow Agreement.

     

    (c)      The
      Escrow Agent shall not be liable, except for its own gross negligence or willful
      misconduct, and, except with respect to claims based upon such gross negligence
      or willful misconduct that are successfully asserted against the Escrow Agent,
      the other parties hereto shall jointly and severally indemnify and hold harmless
      the Escrow Agent (and any successor Escrow Agent) from and against any and
      all
      losses, liabilities, claims, actions, damages and expenses, including reasonable
      attorney's fees and disbursements, arising out of and in connection with this
      Escrow Agreement. 

     

    (d)      The
      Escrow Agent shall be entitled to rely upon any order, judgment, certification,
      demand, notice, instrument or other writing delivered to it hereunder without
      being required to determine the authenticity or the correctness of any fact
      stated therein or the proprieties, validity or the service thereof. The Escrow
      Agent may act in reliance upon any instrument or signature reasonably believed
      by it to be genuine and may assume that any person purporting to give notice
      or
      advice, accept receipt of or execute any document, or make any statement in
      connection with the provisions hereof, has been duly authorized to do
      so.

     

    (e)      The
      Escrow Agent may act pursuant to the advice of counsel with respect to any
      matter relating to this Escrow Agreement and, except for its own gross
      negligence or willful misconduct, the Escrow Agent shall not be liable for
      any
      action taken or omitted in accordance with such advice.

     

    (f)      The
      Escrow Agent is serving as escrow holder only and has no interest in the Escrow
      Shares deposited hereunder. This Section
      3(f)
      and
Section
      3(c)
      shall
      survive notwithstanding any termination of this Escrow Agreement or the
      resignation of the Escrow Agent.

     

    (g)      The
      Escrow Agent makes no representation as to the validity, value, genuineness
      or
      the collectibility of any security or other documents or instrument held by
      or
      delivered to it.

     

    (h)      The
      Escrow Agent shall not be called upon to advise any party as to the wisdom
      in
      selling or retaining or taking or refraining from any action with respect to
      any
      securities or other property deposited hereunder.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

     

    (i)      The
      Escrow Agent (and any successor Escrow Agent) may at any time resign as such
      by
      delivering the Escrow Shares to any successor Escrow Agent jointly designated
      by
      the other parties hereto in writing, or to any court of competent jurisdiction,
      whereupon the Escrow Agent shall be discharged of and from any and all further
      obligations arising in connection with this Escrow Agreement. The resignation
      of
      the Escrow Agent will take effect on the earlier of (i) the appointment of
      a
      successor (including a court of competent jurisdiction) or (ii) the day which
      is
      30 days after the date of delivery of its written notice of resignation to
      the
      other parties hereto. If at that time the Escrow Agent has not received a
      designation of a successor Escrow Agent, the Escrow Agent's sole responsibility
      after that time shall be to safekeep the Escrow Shares until receipt of a
      designation of successor Escrow Agent or a joint written disposition instruction
      by the other parties hereto or a final order of a court of competent
      jurisdiction.

     

    (j)      The
      Escrow Agent shall have no responsibility for the contents of any writing of
      the
      court or any third party contemplated herein as a means to resolve disputes
      and
      may rely without any liability upon the contents thereof.

     

    (k)      In
      the event of any disagreement between the other parties hereto resulting in
      adverse claims or demands being made in connection with the Escrow Shares,
      or in
      the event that the Escrow Agent in good faith is in doubt as to what action
      it
      should take hereunder, the Escrow Agent shall be entitled to retain the Escrow
      Shares until the Escrow Agent shall have received (i) a final nonappealable
      order of a court of competent jurisdiction directing delivery of the Escrow
      Shares, or (ii) a written agreement executed by the other parties hereto
      directing delivery of the Escrow Shares, in which event the Escrow Agent shall
      disburse the Escrow Shares in accordance with such order or agreement. Any
      court
      order referred to in (i) above shall be accompanied by a legal opinion of
      counsel for the presenting party satisfactory to the Escrow Agent to the effect
      that said court order is final and nonappealable. The Escrow Agent shall act
      on
      such court order and legal opinions without further question.

     

    (l)      Notwithstanding
      anything to the contrary contained herein, in the event of any dispute between
      the parties hereto as to the facts of default, the validity or meaning of these
      instructions or any other fact or matter relating to the transaction between
      the
      parties, the Escrow Agent is instructed as follows:

     

    (i)      that
      it shall be under no obligation to act, except under process or order of court,
      or until it has been adequately indemnified to its full satisfaction, and shall
      sustain no liability for its failure to act pending such process or court order
      or indemnification; and

     

    (ii)      that
      it may in its sole and absolute discretion, deposit the property herein or
      so
      much thereof as remains in its hands with the then Clerk, or acting Clerk,
      of
      the District Court located in Denver, Colorado, interplead the parties hereto,
      and upon so depositing such property and filing its complaint in interpleader
      it
      shall be relieved of all liability under the terms hereof as to the property
      so
      deposited, and furthermore, the parties hereto for themselves, their heirs,
      legal representatives, successors and assigns do hereby submit themselves to
      the
      jurisdiction of said court. The institution of any such interpleader action
      shall not impair the rights of the Escrow Agent under Section
      3(c)
      above.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    (m)      Pubco,
      on the one hand, and the Stockholders, on the other hand, each agree to pay
      one-half of the Escrow Agent's fees for the services hereunder, which shall
      be
      an aggregate amount of $1,500. All reasonable expenses, disbursements and
      advances incurred or made by the Escrow Agent in performance of its duties
      hereunder (including reasonable fees, expenses and disbursements of its
      counsel), shall be allocated equally between Pubco, on the one hand, and the
      Stockholders, on the other hand. 

     

    (n)      No
      printed or other matter in any language (including, without limitation,
      prospectuses, notices, reports and promotional materials) which mentions the
      Escrow Agent's name or the rights, powers or duties of the Escrow Agent shall
      be
      issued by the other parties hereto or on such parties' behalf unless the Escrow
      Agent shall first have given its specific written consent thereto.

     

    4.      Notices.
      Any
      notice, request, demand, waiver, consent, approval or other communication which
      is required or permitted hereunder shall be in writing. All such notices shall
      be delivered personally, by facsimile or by reputable overnight courier (costs
      prepaid), and shall be deemed given or made when delivered personally, the
      business day sent if sent by facsimile or one business day after delivery to
      the
      overnight courier for next business day delivery. All such notices are to be
      given or made to the parties at the following addresses (or to such other
      address as any party may designate by a notice given in accordance with the
      provisions of this Section):

     

    If
      to
      Pubco:

    

    China
      Energy Recovery, Inc.

    9440
      Little Santa Monica Boulevard, Suite 401

    Beverly
      Hills, California 90210

    USA

    Attention:
      Michael Kurdziel

    Facsimile
      No.: 310-402-5932

    

    with
      a
      copy to:

    

    Brownstein
      Hyatt Farber Schreck, LLP

    410
      Seventeenth Street, Suite 2200

    Denver,
      Colorado 80202

    USA

    Attention:
      Adam J. Agron

    Facsimile
      No.: 303-223-1111

    

    If
      to the
      Stockholders:

    

    WU
      Qinghuan

    No.
      984
      Nan Jing Xi Road

    Jing
      An
      District

    Shanghai

    China

    Facsimile
      No.: [________________]

     

    Zhou
      Jialing

    No.
      984
      Nan Jing Xi Road

    Jing
      An
      District

    Shanghai

    China

    Facsimile
      No.: [________________]

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
 

    with
      a
      copy to:

    

    AllBright
      Law Offices

    Citigroup
      Tower, 14th
      Floor

    33
      Hua
      Yuan Shi Qiao Road

    Pudong,
      Shanghai, China 200120

    Attention:
      Steve Zhu

    Facsimile
      No.: 8621-6105-9100

    

    If
      to the
      Escrow Agent: 

    

    Corporate
      Stock Transfer, Inc.

    3200
      Cherry Creek Drive South

    Suite
      430

    Denver,
      Colorado 80209

    USA

    Attention:
      Carylyn Bell

    Facsimile
      No.: 303-282-5800

    

    5.      Waivers
      and Amendments.
      This
      Escrow Agreement may be amended, superseded, canceled, renewed or extended
      and
      the terms hereof may be waived only by a written instrument signed by Pubco,
      the
      Stockholders and the Escrow Agent.

     

    6.      Counterparts.
      This
      Agreement may be executed in one or more counterparts, each of which shall
      be
      deemed an original, but all of which together shall constitute one and the
      same
      instrument.

     

    7.      Governing
      Law; Severability.
      This
      Agreement shall be governed by, and construed in accordance with, the internal
      laws of the State of Delaware, without reference to the choice of law or
      conflicts of law principles thereof. Should any clause, section or part of
      this
      Agreement be held or declared to be void or illegal for any reason, all other
      clauses, sections or parts of this Agreement shall nevertheless continue in
      full
      force and effect.

     

    8.      Assignment.
      Neither
      the rights nor the obligations of any party to this Agreement may be transferred
      or assigned, except by the express written agreement of the parties hereto.
      Any
      purported assignment of this Agreement shall be null, void and of no
      effect.

     

    9.      Termination.
      This
      Escrow Agreement shall terminate upon the complete distribution of the Escrow
      Shares in accordance with the terms hereof. 

     

    10.     Binding
      Effect.
      This
      Agreement shall inure to the benefit of and be binding upon the parties hereto
      and their respective representatives, successors and assigns. 

     

    [Remainder
      of This Page Intentionally Left Blank; Signature Page to
      Follow]

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    IN
      WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
      date
      first set forth above.

    
      
        	 	 	 
	 	PUBCO:
	 	 
	 	China Energy
                Recovery,
                Inc.
	 
 	 
 	 
 
	 	By:  	/s/ Michael Kurdziel
	 	
                 

              	
                

                Name:
                  Michael Kurdziel

              
	 	
              	Title: Chief Executive
                Officer

      

       

      
        	 	 	 
	 	
                PRIVECO:

              
	 	 
	 	Poise Profit
                International,
                Ltd.
	 
 	 
 	 
 
	 	By:  	/s/ WU Qinghaun
	 	
                 

              	
                

                Name:
                  WU Qinghuan

              
	 	 	Title:
                Director

      

       

      
        	
              	 	 
	 	STOCKHOLDERS:
	 	 
	 	/s/ WU Qinghuan
	 	
                
                  

                

                WU Qinghuan

              
	 	 
	 	/s/ ZHOU Jialing
	 	
                
ZHOU
                Jialing

         

        
          	 	 	 
	 	ESCROW
                  AGENT:
	 	 
	 	Corporate Stock
                  Transfer,
                  Inc.
	 
 	 
 	 
 
	 	By:  	/s/ Carylyn Bell
	 	
                   

                	
                  
Name: Carylyn
                  Bell
	 	 	Title: President

        

         

      

    

    [signature
      page to Escrow Agreement]

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    CERTIFICATE
      I

    

    CERTIFICATE
      

    

    Reference
      is hereby made to the Escrow Agreement dated as of [April __, 2008] among China
      Energy Recovery, Inc., a Delaware corporation ("Pubco"),
      Poise
      Profit International, Ltd., a company incorporated pursuant to the laws of
      the
      British Virgin Islands ("Priveco"),
      WU
      Qinghuan and ZHOU Jialing, the stockholders of Priveco (the "Stockholders"),
      and
      Corporate Stock Transfer, Inc. (the "Escrow
      Agent").
      Capitalized terms used herein but not defined herein have the meaning assigned
      such terms in the Escrow Agreement or in the Share Exchange Agreement (as
      defined in the Escrow Agreement).

    

    1.      Pubco
      and the Stockholders agree that HAIE High-Tech Engineering (Hong Kong) Co.,
      Ltd.
      has generated: (i) gross revenue for the 12-month period ended December 31,
      2008
      of at least 150,000,000 China Yuan Renminbi, and (ii) a gross margin for the
      12-month period ended December 31, 2008 of at least 30,000,000 China Yuan
      Renminbi, in each case as determined in accordance with GAAP and certified
      by
      Pubco's independent auditor in its report on the 2008 audited financial
      statements of Pubco. 

    

    2.      Pubco
      and the Stockholders hereby instruct the Escrow Agent to distribute the Escrow
      Shares to the Stockholders as follows:

    

    1.      2,135,015
      shares of Common Stock to WU Qinghuan; and

    

    2.      1,423,343
      shares of Common Stock to ZHOU Jialing.

     

    IN
      WITNESS WHEREOF, Pubco and the Stockholders have executed this certificate
      as of
      ___________, 2009.

    
      
        
          	 	 	 
	 	PUBCO:
	 	 
	 	China Energy
                  Recovery,
                  Inc.
	 
 	 
 	 
 
	 	By:  	 
	 	
                   

                	
                  

                  Name:
                    Michael Kurdziel

                
	 	
                	Title: Chief Executive
                  Officer

        

         

        
          	
                	 	 
	 	STOCKHOLDERS:
	 	 
	 	 
	 	
                  
                    

                  

                  WU Qinghuan

                
	 	 
	 	 
	 	
                  
ZHOU
                  Jialing

           

          
            
              
              

            

            
              
              

              
                

              

            

            
              
              

            

          

        

      

    

    CERTIFICATE
      II

    

    CERTIFICATE
      

    

    Reference
      is hereby made to the Escrow Agreement dated as of [April ___, 2008] among
      China
      Energy Recovery, Inc., a Delaware corporation ("Pubco"),
      Poise
      Profit International, Ltd., a company incorporated pursuant to the laws of
      the
      British Virgin Islands ("Priveco"),
      WU
      Qinghuan and ZHOU Jialing, the stockholders of Priveco (the "Stockholders"),
      and
      Corporate Stock Transfer, Inc. (the "Escrow
      Agent").
      Capitalized terms used herein but not defined herein have the meaning assigned
      such terms in the Escrow Agreement or in the Share Exchange Agreement (as
      defined in the Escrow Agreement).

    

    1.      Pubco
      and the Stockholders agree that HAIE High-Tech Engineering (Hong Kong) Co.,
      Ltd.
      has not generated: (i) gross revenue for the 12-month period ended December
      31,
      2008 of at least 150,000,000 China Yuan Renminbi, and (ii) a gross margin for
      the 12-month period ended December 31, 2008 of at least 30,000,000 China Yuan
      Renminbi, in each case as determined in accordance with GAAP and certified
      by
      Pubco's independent auditor in its report on the 2008 audited financial
      statements of Pubco. 

    

    2.      Pubco
      and the Stockholders hereby instruct the Escrow Agent to distribute the Escrow
      Shares, accompanied with stock powers duly endorsed in blank, to the investors
      in the Financing as follows:

    

    1. ____
      shares of Common Stock to [_____________________]

    

    2. ____
      shares of Common Stock to [_____________________]

    

    3. ____
      shares of Common Stock to [_____________________]

    

    4. ____
      shares of Common Stock to [_____________________]

    

    IN
      WITNESS WHEREOF, Pubco and the Stockholders have executed this certificate
      as of
      ___________, 2009.

    
      
        
          
            	 	 	 
	 	PUBCO:
	 	 
	 	China Energy
                    Recovery,
                    Inc.
	 
 	 
 	 
 
	 	By:  	 
	 	
                     

                  	
                    

                    Name:
                      Michael Kurdziel

                  
	 	
                  	Title: Chief Executive
                    Officer

          

           

          
            	
                  	 	 
	 	STOCKHOLDERS:
	 	 
	 	 
	 	
                    
                      

                    

                    WU Qinghuan

                  
	 	 
	 	 
	 	
                    
ZHOU
                    JialingLOAN
      AND TRANSACTION EXPENSES AGREEMENT

    

    This
      LOAN
      AND TRANSACTION EXPENSES AGREEMENT (the “Agreement”)
      is
      entered into by and between Shanghai Hai Lu Kun Lun Hi-tech Engineering Co.,
      Ltd., a company incorporated in the People’s Republic of China (“HAIE
      Company”),
      on
      the one hand, and RMK Emerging Markets, LLC, a Delaware limited liability
      company (“RMK”),
      on
      the other hand, as of December 18, 2007. 

    

    WHEREAS,
      in order to fund HAIE Company’s fees and expenses in connection with the
      Transaction until the Initial Financing and Merger are completed, HAIE Company
      wishes to borrow from RMK as a short term bridge loan the amount set forth
      on
      the signature page, but collectively, an amount up to and not to exceed $600,000
      (“Bridge
      Loan”).

    

    The
      Bridge Loan must be paid back at 1.75x its principle value at the time of the
      event of HAIE Company’s sale, next financing or going public event of $5 million
      USD or more, as long as such a sale/financing/going public event involves a
      party that is not a 100% domestic company in China.

    

    The
      Bridge
      Loan funds will be deposited in escrow with RMK Investment Partners, the Escrow
      Agent. 

    

    HAIE
      Company is currently in the process of entering into service agreements
      (Service
      Agreements”)
      for
      the payment, retainer and/or fee agreements with legal, accounting, consultant,
      and other service providers (each service provider is hereinafter the
“Service
      Provider”)
      for
      services needed by HAIE Company in connection with and to consummate the
      transaction. 

    

    RMK
      shall
      recommend the Service Providers to HAIE Company, which will review and execute
      these Service Agreements. HAIE Company authorizes RMK to promptly authorize
      the
      Escrow Agent to release funds from the escrowed Bridge Loan and pay all of
      HAIE
      Company’s required payments under and in accordance with the payment terms set
      forth in the approved Service Agreement to the Service Providers.

    

    If
      the
      intended transaction is not consummated for any reason, RMK shall notify HAIE
      Company and the Service Providers to terminate the Service Agreements
      immediately. It is RMK’s responsibility to settle the unpaid bills with the
      Service Providers, even though these Service Agreements are signed by HAIE
      Company. 

    

    Both
      Parties understand the transaction is based on HAIE Company receiving $9 million
      USD for 30% of HAIE Company with an additional 6% put into escrow at close
      and
      going to the investors if the HAIE Company fails to meet agreed upon 2008
      financial targets of 150 mm RMB of Revenue and 30 mm RMB of EBITDA. 
Additionally, both Parties agree that $500,000 of the proceeds from the
      financing will be used to settle pre-existing tax liabilities and $500,000
      will
      be allocated to Investor Relations programs as dictated by RMK.

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    This
      Note
      shall be governed in all respects by the laws of the State of California as
      applied to agreements entered into and performed entirely within the State
      of
      California by residents thereof, without regard to any provisions thereof
      relating to conflicts of laws among different jurisdictions.

    

    Any
      term
      of this Note may be amended, waived or modified only with the written consent
      of
      both HAIE Company and RMK. 

    

    IN
      WITNESS WHEREOF, the Parties hereto have executed this AGREEMENT as of date
      first written above.

    

    SHANGHAI
      HAI LU KUN LUN HI-TECH ENGINEERING, CO., LTD. 

     

    
      	By:
              	 /s/
              WU Qinghuan
	 	WU Qinghuan 
	 	Executive Director and
              President

    

     

    RMK
      EMERING MARKETS, LLC

     

    
       

      
        	By:
                	
                 /s/
                  Adam M. Roseman

              
	 	
                Adam
                  M. Roseman

              
	 	Chief Executive
                Officer

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