Capital Trust Loan Contract of Beijing International Trust Co.,Ltd. as the Lender and Inner Mongolia Erdos TCH Energy Conservation Development Co.,Ltd. as the Borrower Contract No.: No. 033, Documents of Trust and Trust Loan, Beijing, 2009 Beijing...

 
Exhibit
10.29
 
Capital
Trust Loan Contract
 
of
 
Beijing
International Trust Co.,Ltd.
 
as
the Lender
 
and
 
Inner
Mongolia Xxxxx TCH Energy Conservation
 
Development
Co.,Ltd.
 
as
the Borrower
 
Contract No.: No. 033,
Documents of Trust and Trust Loan, Beijing, 2009
 
Beijing
City, Chaoyang District

Capital
Trust Loan Contract

Content
 
                  Term 1  Definition and
      interpretation

                  3

                  Term 2  Loan

                  7

                  Term 3  Basic Interest of
      Loan

                  12

                  Term 4  Floating interest of
      loan

                  13

                  Term 5  Repayment of loan principal

                  15

                  Term 6  Taxes

                  15

                  Term 7  Payment

                  16

                  Term 8  Representations and warranties

                  16

                  Term 9  Commitment and other engagement
      items

                  18

                  Term 10  Event
      of default

                  21

                  Term 11  Treatment of
      default

                  22

                  Term 12  Safeguard measures of
    repayment

                  23

                  Term 13 Supplement, change and assignment of the
      Contract

                  24

                  Term 14  Notification

                  25

                  Term 15  Other items

                  25

1

Capital
Trust Loan Contract

The
Lender:    Beijing International Trust
Co.,Ltd.
 
Legal
representative: Xxx Xxxxxxx
 
Address:      Beijing
Finance Trust Mansion Block C，Xx.0 Xx’xxxx Xxxx,
Xxxxxxxx Xxxxxxxx, Xxxxxxx Xxxx
 
Postal
code:    100029
 
Telephone:     （010）64436553                 Fax:   （010）00000000
 
Borrower:      Inner
Mongolia Erdos TCH Energy Conservation Development Co.,Ltd.
 
Legal
representative: Ku Guohua
 
Address:    Qipanjing
Industrial Park, Otog Qi, Xxxxx City,Inner Mongolia
 
Postal
code:    016064
 
Telephone:    (0000)0000000               Fax:  (0000)0000000
 
(The
Lender and the Borrower are hereinafter referred to as the parties, the Lender
or the Borrower is referred to as “the party”,the Lender is “the other party” to
the Borrower, vice versa.
 
Whereas:
 
              1.

              The
      Lender is a legally existing trust company approved by –China Banking
      Regulatory Commission, and the Borrower is a legally existing business
      entity established in pursuant with the laws of the
  P.R.C.

              2.

              The
      Borrower applied to the Lender for trust loan made in RMB (defined in term
      1.1) to meet the capital requirements of the construction and operation of
      II and III stage project of power generating by waste heat (defined in the
      term 1.1). The Lender agreed to provide the Borrower with the trust loan
      in pursuant with the provisions
hereunder.

              3.

              When
      signing this Contract, the Borrower has understood and confirmed that the
      loan capital hereunder comes from the trust capital of low-carbon
      wealth·No.1 renewable energy collective fund trust plan managed by the
      Lender.

              4.

              Through
      friendly negotiation, based on the principle of equality, the parties
      concluded an agreement on the relevant matters of trust loan for the
      construction and operation of II and III stage project of power generating
      by waste heat.

According
to The Trust Law of the
People's Republic of China, The Contract Law of the People's
Republic of China, General Principles of the Civil Law
of the People's Republic of China, Management Regulation of Trust
Company, Measures for
Administration of Collective Fund Trust Plans of Trust Companies, General Rules on Loan and
other relevant laws, administrative rules and regulations as well as the rules
of departments, the parties entered into this Contract and prepared to act in
pursuant with it.

2

Capital
Trust Loan Contract

Term
1  Definition and interpretation
 
              1.1 

              Definition

In this
Contract, unless other interpretations and indications specified in the context,
the following words have the meanings stated as below:
 
              The Lender: 

              Beijing
      International Trust Co.,Ltd. and its legal
  successors.

The Borrower:    
Inner Mongolia Xxxxx TCH Energy Conservation Development Co.,Ltd. and its legal
successors.
 
              This
      contract:

              it
      refers to the Capital Trust Loan Contract executed by and between Beijing
      International Trust Co., Ltd acting as the Lender and Inner Mongolia Xxxxx
      TCH Energy Conservation Development Co., Ltd acting as the
      Borrower.

Documents
about safeguard measures of repayment: it refers
to the written documents signed in pursuant with the relevant provisions
hereunder and for the purpose of ensuring the rights and benefits of the Lender
and the Borrower’s on-time and full repayment, and such documents include but
not limited to Equipment Mortgage Contract, Receivable Pledge Contract, Account
Custody Contract and Contract of Guaranty,
etc.
 
              XXX(x):
      
              The
      legal currency in China, its arithmetical unit is
  Yuan.

Project
of power generating by waste heat:
It refers
to the project in which the Borrower generates electric energy by making a
comprehensive utilization of low-temperature exhaust gas heat from large-scale
cluster electric stove of Xxxxx Metallurgy Co., Ltd.
 
              Capital
      trust:

              It
      refers to the legally established trust in which the trustor, in complete
      trust of Beijing International Trust Co., Ltd, entrusts its legal capital
      under its full powers of free disposal to Beijing International Trust Co.,
      Ltd, who will in its own name take management, application and disposal of
      the capital in pursuant with the trustor’s
will.

3

Capital
Trust Loan Contract

              Trust
      plan :

              it
      refers to the low-carbon wealth·No.1
      renewable energy collective fund trust plan, the capital collected from
      this trust plan shall be all used to provide the Borrower with the loan
      hereunder. Unless otherwise specified, or the
      “turst plan” and the capital trust plan shall have the same
      meaning.

              Trust
      loan:

              it
      refers to the loan provided from the trust capital by Beijing
      International Trust Co., Ltd as the trustee in pursuant with the trust
      provisions under the Low-carbon Wealth·No.1
      Renewable Energy Collective Fund Trust Contract (referred to as “Trust
      Contract”) and the agreements hereunder， unless
      otherwise indicated, the “loan” under this contract and the trust loan
      shall have the same meaning.

              Loan
      term:

              It
      means the term of the trust loan specified by the parties under this
      contract

Special
account of trust property: the unique account for receiving, paying and
depositing  trust capital under the trust plan.
 
Loan
custody account: it refers
to the account, established by Inner Mongolia Xxxxx TCH Energy Conservation
Development Co., Ltd as the Borrower in a bank designated by Beijing
International Trust Co., Ltd as the Lender, is specially used as an unique
account for keeping the loan given by the Lender. The capital in such account
shall be supervised by three parties including the Lender, the Borrower and the
bank designated by the Lender, and the Lender shall cancel the capital
supervision at the appointed time in pursuant with provisions
hereunder.
 
Account
of repayment reserve: it refers to the account, established by Inner Mongolia
Xxxxx Tiankehua Energy Conservation Development Co., Ltd as the Borrower in a
bank designated by Beijing International Trust Co., Ltd as the Lender in
pursuant with the Account Custody Contract (referred to as “Account Custody
Contract”) signed by and between the Lender and the Borrower, which is used as
an unique bank account for keeping all of the income of the Borrower. The
capital in the account shall be used and stored as reserve in pursuant with the
requirements and arrangements in the Account Custody Contract and the Repayment
Plan.

4

 Capital
Trust Loan Contract

                Raising
      period: 

                it
      refers to a six-months period from the date of establishment of the trust
      plan.

                Subscription period: 

                it
      refers to the period when trust institutions are opened for being
      subscribed by investors during the raising
  period.

                CDM project: 

                CDM
      refers to Clean Development Mechanism, which was established by the Kyoto
      protocol and is used to solve problems of climate change by market
      approach. The CDM project stated herein is developed from the project of
      generating power by waste heat of Inner Mongolia Tiankehua Energy
      Conservation Development Co., Ltd in pursuant with the CDM and used for
      verifying the profitability of Carbon Emission Reduction or Voluntary
      Emission Reduction (CER/VER).

Interest
payment date: it refers to the date when loan interest is payable in pursuant
with the sub-clause 3.5 herein.
 
Repayment
date:      It refers
to the date when part or all of the loan principal is payable in pursuant with
the sub-clause 5.1 herein.
 
                Advanced repayment:

                It
      refers to that the Borrower voluntarily makes a repayment of part or full
      of the loan principal in advance of the repayment
  date.

              Loan note:

              It
      refers to the loan borrowing voucher filled by the Borrower to be commonly
      used in pursuant with the regulations by the Lender in RMB loan
      services.

                Interest
      penalty:

                It
      refers to the interest penalty, published by People’s Bank of China, which
      is applicable for the penalty interest rate of the loans of the financial
      institutions.

              Business
      day:

              It
      refers to the normal business day of the Lender except for the legal
      festivals and holidays.

              Financing documents:

              it
      refers to the legal documents in connection with the loan matters
      hereunder, such documents include but not limited to this Contract,
      Equipment Mortgage Contract, Receivable Pledge Contract, Account Custody
      Contract and Contract of Guaranty,
etc.

5

 Capital
Trust Loan Contract

              Corporate
      surety:

              it
      refers to one of the Borrower’s shareholders, e.g. Xi’an TCH Energy
      Science&Technology Co., Ltd.

Material
adverse change: It refers to any event, situation, effect, status or the complex
event of the said situation from which the material adverse impact on the
business, operation, assets, debt, any related rights, business, financial
status or expectations of the Borrower may arise, or that is reasonably
considered by the Lender to have material adverse impact, whether such event,
situation, effect, status or the complex event of the said situation exist or
occur in the date of execution of this Contract or before the date, or exist or
occur after such date.
 
                Force
      majeure: 

                It
      refers to all events that occur after the date of execution of this
      Contract
      and can not be foreseen in the said date, of which the occurrence and
      consequence cannot be avoided or conquered, and which will prevent any of
      the parties from all or part of act or omission, such events include but
      not limited to, fire, flood , earthquakes, typhoons, tsunamis, wars,
      terrorist acts or other acts of violence, strikes, pestilence and
      quarantine restrictions.

              1.2 

              Interpretation

Unless
otherwise specified in the context, such phrases as “of this Contract”, “in this
Contract”, “in the Contract” and “under this Contract”, and other similar words
or phrases shall indicate the entire Contract including all components of this
Contract instead of any particular parts or clauses hereof.
 
The title
of the term hereof shall not be considered equivalent to the entire content of
the term, or shall not be used for the interpretation of the term or this
Contract.
 
In this
Contract, unless otherwise required or specified, the words or phrases defined
in the Trust Contract shall have the same meaning when used in this
Contract.

6

Capital
Trust Loan Contract

Term
2   Loan
 
              2.1

              Loan
      amount

The
Lender agrees that, in the precondition of establishment of capital trust plan,
it shall provide the Borrower with the trust loan coming from all of the trust
capital collected by the trust plan in pursuant with this Contract and the
agreements in the trust documents, the total amount of the trust loan shall be
no less than RMB150,000,000.00, and no more than RMB300,000,000.00(the amount
shall be the actually collected amount by the trust plan).
 
              2.2

              Loan
      application

              2.2.1

              The
      trust loan hereunder shall uniquely used by the Borrower for its
      development, construction and operation of II and III stage project of
      power generating by waste heat.

              2.2.2

              The
      specific application of each loan capital shall be handled in pursuant
      with the Detailed Application List of Trust Loan Capital(see appendix 3
      hereto) confirmed by the Borrower affixing its seal on
  it.

              2.3

              Unless
      the Lender has been satisfied by all of the documents listed in this
      clause in the respect of form and content, or the preconditions in this
      clause have been completely met, or the Lender gives a written approval of
      postponement or waiver of such preconditions that have not been met, the
      Lender shall have no obligations to provide the Borrower with any loan
      hereunder:

              2.3.1

              The
      copies of the following documents affixing the Borrower’s corporate stamp
      to affirm the authenticity, integrality, validity and freshness of such
      documents:

                (1)

                The
      Borrower’s Business License for Enterprise Legal Person, issued by the
      industrial and commercial administrative department, which shall have
      passed the latest annual
check;

                (2) 

                The
      Borrower’s Organizaiton Code
Certificate

                (3)

                The
      Borrower’s Tax Registration Certificate (including National Tax
      Registration Certificate and Local Tax Registration
      Certificate)

The
Borrower’s Company Charter(including all of its revision

7

 Capital
Trust Loan Contract

The
original copies of the name lists of shareholders and board members of the
Borrower affixing its corporate stamp, the copies of the ID card/passport of all
shareholders/board members of the Borrower affixing its corporate stamp, and the
specimen signature of all shareholders/board members of the Borrower as
well;
 
              2.3.2

              The
      original copies of resolution of board of shareholders and resolution of
      board of directors given by the Borrower in pursuant with the articles of
      incorporation, the content of such resolutions shall
    include:

              (1)

              The
      agreement that the Borrower apply to the Lender for the loan
      hereunder;

              (2)

              The
      agreement that in pursuant with the requirements of the Lender the
      correlative equipments and assets of the Borrower shall be pledged to the
      Lender as the security for the Borrower’s repayment
      of its debts.

              (3)

              The
      agreement that all of the receivables of I, II and III stage project of
      power generating by waste heat(the rights, interest and recourse related
      to the receivable included) shall be pledged to the Lender as the security
      for the Borrower’s repayment
      of its debts;

              (4)

              The
      agreement that all of the income of I, II and III stage project of power
      generating by waste heat shall be remitted into the custody account
      established by the Borrower in the bank designated by the Lender, and the
      said income shall be controlled, managed and used in pursuant with the
      agreement in the Account Custody Contract and the Lender’s
      requirements;

              (5)

              The
      agreement that the Borrower shall sign and implement the financing
      documents.

              (6)

              The
      appointment of certain person to act as the duly authorized proxy of the
      Borrower and sign the financing documents, and sign and issue and receive
      any notifications or documents in connection with this
      Contract;

              (7)

              The
      specimen signature of the duly authorized proxy shall have become the
      appendix to the resolution of the board of
  directors.

8

 Capital
Trust Loan Contract

              2.3.3

              The
      copies of the capital verification report about the Borrower’s full
      subscription of registered capital issued by the Chinese Certified Public
      Accountant who has been proved to be
genuine.

              2.3.4

              The
      copy of the Corporate Surety’s Business License affixing its corporate
      stamp for proving the authenticity, integrality and freshness of the
      license.

              2.3.5

              The
      original copy of the resolution of the shareholders/the resolution of the
      board of directors about the agreement that the Corporate Surety shall
      provide unconditional and irrevocable joint liability guarantee for the
      Borrower’s full repayment of its debts to the
  Lender;

              2.3.6

              The
      original copies of the name lists of shareholders and board members of the
      Corporate Surety affixing its corporate stamp, the copies of the ID
      card/passport of all shareholders/board members of the Corporate Surety
      affixing its corporate stamp, and the specimen signature of all
      shareholders/board members of the Corporate Surety as
  well;

              2.3.7

              The
      copy of the ID card of the surety Mr. Ku Guohua, and the ID card shall be
      proved to be genuine;

              2.3.8

              All
      of the financing documents and the guarantee documents in connection with
      the loan hereunder (including but not limited to Equipment Mortgage
      Contract, Contract of Guaranty, Receivable Pledge Contract, Account
      Custody Contract and etc.) legally and effectively signed by the clients
      of the parties;

              2.3.9

              All
      of the legal and valid approval, registration, record and authorization in
      connection with the loan hereunder (the approval from the government
      departments and the approval from the Borrower’s company both
      included);

              2.3.10

              Valid
      credit card and its password offered by the People’s Bank of China for the
      Borrower;Valid credit card and its password offered by the People’s Bank
      of China for the Borrower;

              2.3.11

              The
      Commitment Letter issued by Inner Mongolia Xxxxx Metallurgy Co., Ltd on
      the lowest amount of power purchase; Inner Mongolia Xxxxx Metallurgy Co.,
      Ltd Large-scale Cluster Electric Stove Low-temperature Flue Gas Waste Heat
      Comprehensive Utilization Project (energy efficiency EPP project)
      Cooperation Contract signed by and between Inner Mongolia Xxxxx Metallurgy
      Co., Ltd and the Corporate Surety, which shall be issued by Inner Mongolia
      Xxxxx Cashmere Product Co., Ltd, and the Letter of Guarantee under the
      aforementioned Commitment Letter on the lowest amount of power purchase,
      which can voluntarily provide joint responsibility to guarantee, shall be
      issued by Inner Mongolia Xxxxx Cashmere Product Co., Ltd and have been
      disclosed;

9

Capital
Trust Loan Contract

              2.3.12

              Upon
      the completion of all mortgage registration formalities for the mortgage
      under the Equipment Mortgage Contract in the administrative department,
      the certificate of other rights shall be held and managed by the Lender,
      and the Lender shall legally enjoy No.1 right to mortgage on the
      mortgages, and the relevant rights and
  interests.

              2.3.13

              The
      formalities of receivable pledge registration under the Receivable Pledge
      Contract shall have been finished in the Credit Information Center of the
      People’s Bank of China, the Lender shall enjoy No.1 right to pledge on the
      pledge object, and the relevant rights or
  interests.

              2.3.14

              The
      Borrower shall have established the custody account for loan offering in
      the bank designated by the Lender.

              2.3.15

              Loan
      Application (see appendix 1 hereto) legally filled and signed, and the
      Lender given Repayment Plan, signed and issued by the Borrower in pursuant
      with the form and content in the appendix 2 hereto, which shall be on the
      Borrower’s plan of repayment of the loan principal and its interest
      hereunder to the Lender.

              2.3.16

              The
      Borrower shall, on the date of loan offering, provide the Lender with such
      documents legally filled and signed by the Borrower listed as following:
      Detailed Application List of Trust Loan Capital (see appendix 3 hereto),
      Irrevocable Drawing Notice (see appendix 4 hereto), Loan Offering
      Confirmation (see appendix 5 hereto), and the Loan Note (see appendix 6
      hereto).

              2.3.17

              Capital
      Verification Report for proving the full payment of the project
      capital.

              2.3.18

              Other
      documents, suggestions and guarantee required by the
  Lender

10

 Capital
Trust Loan Contract

              2.4

              Loan
      offering

The
Borrower irrevocably agrees that the trust loan offered by the Lender shall be
appropriated to the loan custody account by the Lender, and the loan shall be
used by the Borrower in pursuant with the conditions and terms hereunder and in
the trust documents.
 
              2.5

              Loan
      application

              2.6

              The
      Borrower shall submit the Repayment Application to the Lender prior to any
      of its application of the capital in the custody account, however, the
      following conditions shall be met
firstly:

              2.5.1

              The
      said application shall be in pursuant with the provisions of the Detailed
      Application List of Trust Loan Capital (see the appendix 3 hereto)
      affirmed by the Borrower affixing its corporate stamp on
    it.

              2.5.2

              The
      Repayment Application, appropriately filled and signed by the duly
      authorized proxy of the Borrower, shall be delivered to the Lender in
      advance of the repayment by at least three (3) business days, such
      application shall specify the amount to be used, purpose, date and other
      relevant matters;

              2.5.3

              The
      certification documents such as the related contracts and agreements on
      the Borrower’s application of loan capital shall be provided, and such
      documents shall be in integrality, authenticity and
    validity;

              2.5.4

              The
      certification documents such as the related contracts and agreements on
      the Borrower’s application of loan capital shall be provided, and such
      documents shall be in integrality, authenticity and
    validity;

              2.5.5

              Prior
      to the proposed payment, no event of default (cross default included) or
      potential event of default shall occur, nor shall occur such circumstance
      in which the application of the loan capital will incur any event of
      default, meanwhile,  the representations and warranties made by
      the Borrower shall be in authenticity, accuracy and integrality, and shall
      not mislead anything.

              2.5.6

              From
      the Lender’s point of view, any event that will have material adverse
      impact on the Borrower’s ability to implement the obligations hereunder
      and in other financing documents shall not occur, nor shall occur the
      Force Majeure that will have overall effect on the Borrower;
      and

                2.5.7

                Any
      adverse change in the applicable laws for this Contract that will make the
      loan hereunder illegal shall not
occur.

11

 Capital
Trust Loan Contract

              2.6

              Loan
      term

              The
      loan term hereunder shall be four (4) years, from the date of __ (month)
      __ (day), 2009, when the first loan interest is calculated, to the
      expiration date of __ (month) __ (day),
2009.

Term
3  Basic Interest of Loan
 
              3.1

              The
      corresponding loan interest rate for the basic interest of the loan
      hereunder shall be the annual interest rate, the interest rate of the
      basic interest of the loan, in accordance with the corresponding trust
      capital’s trust institutions, shall be divided
  into:

              3.1.1

              The
      annual loan interest rate corresponding to the trust capital corresponding
      to trust institutions of category B under the trust plan shall be 8.35
      percent;

              3.1.2

              The
      annual loan interest rate corresponding to the trust capital corresponding
      to the trust institutions of category A1 under the trust plan shall be
      9.94 percent;

              3.1.3

              The
      annual loan interest rate corresponding to the trust capital corresponding
      to the trust institutions of category A2 under the trust plan shall be 11
      percent;

              3.1.4

              The
      annual loan interest rate corresponding to the trust capital corresponding
      to the trust institutions of category A3 under the trust plan shall be
      12.05 percent.

              3.2

              The
      loan interest rate corresponding to the basic interest of loan hereunder
      shall be the fixed interest rate, the rate shall not be adjusted during
      the term of this Contract.

              3.3

              Initial
      day of calculation of the basic
interest

On the
precondition of the establishment of the trust plan, the parties confirmed
that:
 
              3.3.1

              The
      initial day of calculation of the loan interest shall be the day of
      establishment of the trust plan, e.g. [ ] (month) [ ] (day), 2009, the
      relevant matters of the first loan such as its actual amount shall be
      confirmed in pursuant with the Loan Offering Amount Confirmation (see
      appendix 5 hereto for its form) submitted by the Borrower in the light of
      the requirements of the Lender;

12

 Capital
Trust Loan Contract

              3.3.2

              The
      initial day of calculation of the other loan interest shall be the next
      working day from the date of the expiration of each subscription within
      the raising period, e.g. the interest of such loan shall be calculated
      from the next working day from the date of expiration of corresponding
      subscription period, the relevant matters of such loan as the date of the
      initial day of calculation of the interest or the actual amount shall be
      confirmed in pursuant with the Loan Offering Amount Confirmation (see
      appendix 5 hereto for its form) submitted by the Borrower in the light of
      the requirements of the Lender.

              3.4

              The
      basic interest of loan hereunder, based on 360 days as a year, shall be
      calculated according to the loan balance, number of occupied days and the
      loan interest rate in pursuant with the provisions in sub-clause 3.1
      hereunder from the initial day of calculation of the interest in pursuant
      with the provisions in the sub-clause 3.3
  hereunder.

              3.5

              The
      basic interest of loan hereunder shall be pre-paid by ￥ _____ yuan
      (Say:______ CNY) within 10 working days from the date of the loan
      offering, the rest of the interest shall be paid in pursuant with the
      interest payment date stated as below: the payment shall be made on the
      day of one, two, three and four year(s) from the initial date of
      calculation of the first loan interest, e.g., the interest payment day
      shall be the day of one, two, three and four year(s) from the initial date
      of calculation of the first loan
interest.

Term
4  Floating interest of loan
 
The
Borrower agrees that, except for the basic interest of loan specified in the
term 3 herein, it shall provide the Lender with the following floating interest
of loan, e.g. the profit sharing from the CDM project and the management
stimulation profit:
 
              4.1

              Within
      the loan term specified herein, if the Borrower obtains profit sharing
      from the CDM project, the Borrower shall pay the Lender 50 percent of the
      profit sharing from the CDM project, and the payment shall be made within
      five (5) working days from the date of the Borrower’s obtainment of each
      profit sharing from the CDM
project.

13

 Capital
Trust Loan Contract

              4.2

              If
      the financial index reflected on the Borrower’s audited financial reports
      for the the fiscal year prior to the expiration of the loan term meets
      P×Y＞ 1.06, the
      Borrower shall pay the Lender a sum of management stimulation profit,
      which is the profit = (P×Y-1.06) × class sub-B
      trust institution share × RMB 1.00
      yuan, in which:a)

P= the
audited net profit in the fiscal year prior to the expiration of the loan
term  ÷ the Borrower’s
average amount of registered capital in the said fiscal year;
 
              b) 

              Y
      refers to the “multiple”:

              i)

              When
      the Borrower’s average amount of registered capital in the aforementioned
      fiscal year is no more than RMB150,000,000.00, Y shall be
    “5”;

              ii)

              When
      the Borrower’s average amount of registered capital in the aforementioned
      fiscal year is more than RMB150,000,000.00, but less than
      RMB200,000,000.00, Y shall be “6”;

              iii)

              When
      the Borrower’s average amount of registered capital in the aforementioned
      fiscal year is no less than RMB200,000,000.00, Y shall be
    “8”;

              4.3

              The
      payment of the management stimulation profit shall be made on the day of
      the Borrower’s full repayment of all loan principal to the Lender/the
      expiration of the loan term (the one which come earlier shall be
      adopted).

14

 Capital
Trust Loan Contract

Term
5  Repayment of loan principal
 
              5.1

              The
      Borrower shall make the repayment of the loan principal to the Lender in
      pursuant with the following requirements of time and
    amount:

              5.1.1

              The
      Borrower shall make the repayment of the loan principal corresponding to
      the trust capital amount corresponding to the trust institutions of
      category A1 under the trust on the day of the next year from the date of
      the initial calculation of the first loan
  interest;

              5.1.2

              The
      Borrower shall make the repayment of the loan principal corresponding to
      the trust capital amount corresponding to the trust institutions of
      category A2 under the trust on the day of the third year from the date of
      the initial calculation of the first loan
  interest;

              5.1.3

              The
      full repayment of the rest of the loan principal shall be made by the
      Borrower to the Lender on the day of the fourth year from the date of the
      initial calculation of the first loan
interest.

              5.2

              The
      loan term hereunder shall not be
extended.

              5.3

              Without
      the Lender’s prior written approval, the Borrower shall not make the
      repayment ahead of schedule; if the Lender agrees the Borrower’s repayment
      in advance, the following conditions about the Borrower shall be
      met:

              5.3.1

              The
      trust plan shall have been existing for 2 years from the date of the
      establishment of the plan;

              5.3.2

              The
      advanced repayment shall be put forward in written form, the amount and
      detailed date of the repayment shall be
  illustrated;

              5.3.3

              For
      any of the advanced repayment, except for the repayment of the loan
      principal, the repayment of all of the loan interest on the engaged
      repayment date shall have to be made by the Borrower in pursuant with the
      sub-clause 5.1 herein.

Term
6   Taxes
 
              6.1

              The
      Lender and the Borrower shall respectively pay its taxes and other
      relevant charges in pursuant with the laws of the
  P.R.C.

              6.2

              The
      relevant charges arising from the negotiation, draft, subscription of this
      Contract, including but not limited to assessment fee, audit charges,
      attorney fee, registration fee, communication expenses and travel
      expenses, shall be assumed by the
Borrower.

15

 Capital
Trust Loan Contract

Term
7   Payment
 
              7.1

              All
      of the Borrower’s payment hereunder shall have to be made in due time and
      in full, any neutralization, claim or restraints shall not be affixed to
      the said payment, nor the deduction or withholding of the taxes in any
      nature.

              7.2

              The
      Borrower shall preserve the repayment reserve in pursuant with the
      Repayment Plan issued by the Borrower to the Lender.  The
      Borrower’s reasonable requirements of adjustment to the Repayment Plan
      shall be met upon the obtainment of the Lender’s approval, or the Lender
      may have the rights to investigate for the Borrower’s responsibility of
      breach of this Contract, and may require the surety to assume the joint
      liability to guarantee and/or exercise the right to mortgage and
      pledge.

              7.3

              When
      the Borrower makes a certain payment (including but not limited to the
      charges, damages, interest penalty, basic and floating interest, principal
      and advanced repayment) due to the Lender in pursuant with the provisions
      hereunder, if the date of such payment is just the Lender’s non-business
      day, the postponement to the nearest next business day of the Lender shall
      be made on the abovementioned date, and the interest rate shall be
      calculated for the days of
postponement.

              7.4

              The
      Borrower hereby makes the commitment that, if the amount of the loan
      principal and/or basic interest given to the Lender from the Borrower is
      less than the amount due to the Lender in such date of the said
      principal/interest repayment, the Lender shall have the right to
      appropriate the said repayment from the custody account in the order
      stated as below: accrue fees, damages, penalty interest, basic interest
      and principal.

Term
8   Representations and warranties
 
              8.1

              The
      Borrower makes the following representations and warranties to the Lender
      on the day of execution of this
Contract:

              8.1.1

              The
      Borrower shall be a limited company, established in pursuant with the laws
      of the P.R.C, legally existing in legal entity status, which has right to
      enter into this Contract;

              8.1.2

              The
      Borrower makes the warranty that the loan shall be applied in pursuant
      with the provisions hereunder, and not applied for other purposes not
      specified herein, and not applied to take any illegal activities or other
      activities forbidden by policies, laws and
  regulations.

16

 Capital
Trust Loan Contract

              8.1.3

              The
      Borrower shall not be involved in any liquidation, dissolution, merger,
      separation or other similar legal procedures, and any other events or
      circumstances from which such involvement in the said legal procedures may
      arise shall not occur;

              8.1.4

              The
      Borrower shall not be involved in any civil, criminal or administrative
      litigation or arbitration procedure that will have adverse impact on the
      Borrower’s ability to implement this Contract, and the event or
      circumstance from which such  involvement in the said litigation
      and arbitration procedure may arise shall not
  occur.

              8.1.5

              Any
      important asset of the Borrower shall not be involved in any measures of
      compulsory execution, property preservation, distrainment, detention,
      retention or supervision, and any events or circumstances from which the
      said involvement in such measures may arise shall not
    occur.

              8.1.6

              Any
      event of default in the Borrower party shall not occur, nor the
      circumstance in which such event may
last;

              8.1.7

              The
      Borrower shall sign this Contract and exercise and implement the
      obligations and rights hereunder, and shall not violate any documents of
      agreement, mortgage, pledge, bond or other documents signed by the
      Borrower or binding on the Borrower and its asset, and shall not violate
      the approved documents and internal rules and regulations established by
      the Borrower or laws, governmental orders and judicial
      decisions.

              8.1.8

              The
      Borrower makes the warranty that the loan project and matters shall comply
      with laws and regulations, and the provisions and requirements of the
      national policies on land, property, environmental protection and
      investment, and have already been approved or
  recorded.

              8.2

              The
      Borrower confirms that the aforementioned representations and warranties
      shall keep consistently valid prior to the Borrower’s full payment of its
      dues hereunder to the Lender, and the Borrower understands exactly the
      aforementioned representations and warranties shall act as the basis for
      the Lender’s approval of its loan request and subscription of this
      Contract.

17

 Capital
Trust Loan Contract

Term
9  Commitment and other engagement items
 
For the
related matters during the loan term, the Borrower makes further commitments
stated as below:
 
              9.1

              The
      Borrower shall purchase property insurance for I, II and III stage project
      of power generating by waste heat in pursuant with the requirements of the
      Lender;

              9.2

              The
      Borrower shall legally run its business, comply with the national laws and
      regulations, and apply the loan in pursuant with the applications
      specified herein.

              9.3

              The
      Lender shall have the right to, at any time, in the reasonable manner the
      Lender believes it to be, examine and supervise the application of the
      loan, and try to know the plan execution, operation management, financial
      activities, inventory materials and significant business contract of the
      Borrower. The Borrower must cooperate actively with the Lender on the
      Lender’s supervision on its application of the loan and its business
      situation, and provide relevant material in pursuant with the requirements
      of the Lender.

              9.4

              The
      Borrower shall provide the documents about the construction and operation
      of the project of power generating by waste heat in pursuant with the
      requirements of the Lender, such documents shall include but not limited
      to:

              9.4.1

              Overall
      planning progress report of the construction of the project of power
      generating by waste heat;

              9.4.2

              Archival
      records of public bidding of the project of power generating by waste
      heat;

              9.4.3

              Monthly
      image progress examined by the management company of the project of power
      generating by waste heat;

              9.4.4

              Monthly
      report on the construction of the project of power generating by waste
      heat;

              9.4.5

              Summary
      report on the monthly operation of the waste heat power
      station;

              9.4.6

              Monthly
      brief report on work of the waste heat power
  station;

              9.4.7

              Report
      on the monthly generated power amount of the waste heat power station and
      the payment condition of Inner Mongolia Ordos Metallurgy Co.,
      Ltd;

              9.4.8

              Documents
      on the funds available and construction progress of the follow-up project
      of power generating by waste heat.

18

Capital
Trust Loan Contract

              9.5

              The
      Borrower, in pursuant with the requirements of the Lender, shall provide
      the related financial and accounting information and the documents about
      the business condition of the company prior to the 5th day of each
      calendar month, such information and documents include but not limited to
      the balance sheet, income statement, cash flow statement, loan capital
      payment chart and other notes to statements (including but not limited to
      the note on account receivable, other account receivable, stock, fixed
      assets, short and long term loan,  accounts payable, etc.)of the
      company in the previous month.

              9.6

              The
      Borrower, in pursuant with the requirements of the Lender, shall mortgage
      the its equipments of the construction of I, II and III stage project of
      power generating by waste heat to the Lender, and register the said
      mortgage within three working days from the date of the Lender’s
      acquisition of ownership of the said equipment.

              9.7

              The
      Borrower shall have the obligations to promptly inform the Lender the
      changes that will or may happen on the project, business, properties and
      scope.

              9.8

              The
      Borrower makes the warranty that, prior to taking loan credit preservation
      measures approved by the Lender in written form, it shall not take the
      following actions as dissolution, liquidation, substantial increase of
      financing debt and establishment of subsidiary company as well as any
      other actions that will have adverse impact on the rights and interests of
      the creditor.

              9.9

              The
      Borrower makes the warranty that it shall not make the full repayment of
      the other loan in priority by not violating the normal repayment order,
      and not sign any contract, agreement or other legal documents at present
      or in the future that will make the loan hereunder be in the secondary
      status.

              9.10

              The
      Borrower makes the warranty that, without the written approval from the
      Lender, it shall not provide the third party with the security that will
      be enough to have adverse impact on its financial situation and its
      ability to implement its obligations hereunder.

                9.11

                The
      Borrower makes the warranty that, once the occurrence or potential
      occurrence of the event that will have adverse impact on
      the  repayment safeguard measures specified in the term 12
      hereof, it shall promptly provide the alternative security approved by the
      Lender.

            9.12

            The
      Borrower makes the warranty that, once the occurrence of the following
      situation, it shall inform the Lender the situation within seven days and
      implement the full repayment and security of the debts hereunder in
      pursuant with the requirements of the
Lender:

19

Capital
Trust Loan Contract 

            9.12.1

            All
      litigation, arbitration and administrative disposal that will have adverse
      impact on the interests of the
Borrower;

            9.12.2

            Any
      event of default or potential event of default, furthermore, once the
      occurrence of the event of default, the Borrower shall show the properties
      and duration of the said event, as well as the action or measures that the
      Borrower has taken or will take;

            9.12.3

            The
      Borrower, once its acquaintance of the involvement of it or its important
      asset in any litigation procedure, arbitration procedure, compulsory
      execution, distrainment, detention or similar measures, or the event or
      circumstance from which the said involvement may arise, shall inform the
      Lender in pursuant with the provisions in present clause, and make
      detailed list of the impacts that have been on it or will be potentially
      on it, as well as the remedies which it has taken or it plans to
      take;

            9.12.4

            The
      Borrower’s economic disputes with the third party incurred by the economic
      activities, or the events that will have adverse impact on the normal
      operational activities of the
Borrower;

            9.12.5

            Failure
      on the part of the Borrower to confirm the capital shortage incurred by
      project overruns or other reasons;

            9.12.6

            Any
      severe event that will be probable to seriously affect the business,
      capital and property status of the
Borrower;

            9.12.7

            Any
      event, having adverse impact on the normal repayment of the Borrower,
      which will potentially happen or have
happened;

            9.12.8

            The
      requirements of the Borrower to change legal representative, duly
      authorized proxy, postal address or institution name, or to amend its
      charter or Legal Person Public Institution Certificate for meeting the
      significant changes in the respect of finance and
  staffing.

20

Capital
Trust Loan Contract 

Term
10  Event of default
 
              10.1

              Any
      of the following events shall constitute the Borrower’s breach of this
      Contract:

              10.1.1

              The
      Borrower fails to make the payment due and payable stipulated herein on
      the maturity date in pursuant with the currency and method
      hereunder;

              10.1.2

              Any
      of the representations and warranties hereunder made by the Borrower is
      incorrect, untrue, misleading, disobeyed, or the representations and
      warranties are proved to be incorrect, untrue, misleading, disobeyed when
      they are being made or considered to be made, or the representations and
      warranties have become incorrect and misleading
  currently;

              10.1.3

              The
      repayment of the Borrower’s debts under any other financing agreement has
      not been made on the maturity date, or such debts is declared as being
      acceleration of maturity prior to its fixed maturity;

              10.1.4

              The
      Borrower is involved in any liquidation, bankrupt, dissolution, shutout or
      the similar legal procedures;

              10.1.5

              Any
      of the Borrower’s important asset is involved in any compulsory execution,
      distrainment, detention, property preservation, supervision measures or
      similar measures;

              10.1.6

              The
      Borrower fails to substantially comply with or implement any of its
      commitments hereunder;

              10.1.7

              The
      significant changes,  incurred by the changes of the laws or any
      of the administrative orders from the governmental departments, occurs in
      the business condition or important assets of the Borrower, or the events
      or circumstance from which the said significant changes may arise also
      occurs, the said changes, events or circumstance have been reasonably
      considered by the Lender as having had or probably having material adverse
      impact on the Borrower’s ability in repayment
hereunder;

              10.1.8

              The
      Borrower fails to preserve the repayment reserve in pursuant with the
      Repayment Plan given to the Lender, or the said repayment reserve is
      adjusted without the Lender’s approval;

            10.1.9

            The
      Borrower violates the term 8 as “Representations and warranties” or the
      term 9 as “Commitment and other engagement
  items”.

21

Capital
Trust Loan Contract 

              10.2

              The
      failure of the Lender to provide the Borrower with the loan in pursuant
      with this Contract shall constitute a breach of this Contract, except for
      the Borrower’s breach
abovementioned.

Term
11  Treatment of default
 
            11.1

            Upon
      the occurrence of one or some of the default listed in the sub-clause 10.1
      herein, the Lender may unilaterally and unconditionally adopt one or some
      of the measures listed below to handle the said default, under this
      condition, the Borrower shall agree to unconditionally cancel the right to
      defense, and compensate for the Lender’s all losses incurred by its
      default:

            11.1.1

            The
      Lender shall stop providing undrawn loan, declare the loan principal
      hereunder be on maturity immediately, recover all or part of the provided
      loan ahead of the schedule, ask the Borrower’s full payment of the owed
      interest and the dues, and make the immediate recourse to the Borrower in
      various ways;

            11.1.2

            Within
      the Contract term, if the Borrower’s unauthorized diversion of any of the
      loan hereunder without the written approval from the Lender occurs, the
      interest penalty, according to the diversion amount, number of days of
      actual diversion and the penalty interest rate of 0.05 percent per day,
      shall be calculated from the day of unauthorized diversion till the full
      repayment of the principal and interest. The Lender’s charge of the
      penalty interest shall not affect its other rights
    hereunder;

            11.1.3

            Within
      the loan term herein, if the Borrower fails to make the payment of the
      basic and floating interest in pursuant with payment term herein, the said
      interest shall be charged with the penalty interest, the penalty interest
      shall be calculated from the date of the day overdue by the penalty
      interest rate of 0.05 percent per
day;

              11.1.4

              For
      the overdue loan or the loan the Lender declares to be on maturity
      immediately, the penalty interest, according to the penalty interest rate
      of 0.05 percent per day, shall be calculated from the date of the day
      overdue or the day declared to be on maturity till the full repayment of
      the principal and interest;

            11.1.5

            The
      Lender shall cancel the Borrower’s undrawn
loan;

22

Capital
Trust Loan Contract 

              11.1.6

              The
      Lender shall require the Borrower to provide the alternative security with
      the written approval from the
Lender;

            11.1.7

            Other
      necessary measures stipulated by the
laws.

              11.2 

              If
      the Borrower’s application of all or part of the loan is not made, the
      payment of the interest shall still be made in full by the Borrower in
      pursuant with the provisions
herein.

Term
12   Safeguard measures of repayment
 
            12.1

            For
      the loan principal, basic interest, floating interest and other payment
      dues, the Borrower provides the Lender with the following payment
      safeguard measures:

            12.1.1

            The
      Borrower, in pursuant with the requirements of the Lender, shall mortgage
      its possessing relevant assets of the construction of I, II and III stage
      project of power generating by waste heat to the
  Lender;

            12.1.2

            Xi’an
      Tiankehua Energy Science&Technology Co., Ltd shall provide the Lender
      with the unconditional and irrevocable joint liability guarantee on all of
      the Borrower’s obligations
hereunder;

            12.1.3

            Mr.
      Ku Guohua shall provide the Lender with the unconditional and irrevocable
      joint liability guarantee on all of the Borrower’s obligations
      hereunder;

            12.1.4

            The
      Borrower shall pledge all of the receivables of I, II and III stage
      project of power generating by waste heat (the relevant rights, interests
      or right of recourse of the receivables included) to the Lender, the said
      receivables shall act as the security for the Borrower’s implementation of
      all of its obligations hereunder;

            12.1.5

            The
      Borrower shall remit all of its income from the project of power
      generating by waste heat into the repayment reserve account, and preserve
      the repayment reserve in time and in full in pursuant with the engagement
      in the Repayment Plan;

            12.1.6

            The
      Borrower shall arrange Inner Mongolia Xxxxx Metallurgy Co., Ltd to provide
      the Borrower with the commitment on the lowest amount of power
      purchase;

23

Capital
Trust Loan Contract 

              12.1.7

              The
      Borrower shall arrange Inner Mongolia Xxxxx Cashmere Product Co., Ltd to
      provide the joint liability guarantee for Inner Mongolia Ordos Metallurgy
      Co., Ltd to implement the Inner Mongolia Xxxxx Metallurgy Co., Ltd
      Large-scale Cluster Electric Stove Low-temperature Flue Gas Waste Heat
      Comprehensive Utilization Project (energy efficiency EPP project)
      Cooperation Contract and the obligations in the commitment on the lowest
      amount of power purchase;

              12.2

              The
      Borrower agrees that it shall from time to time provide other safeguard
      measures satisfying the Lender in pursuant with the requirements of the
      Lender.

Term
13  Supplement, change and assignment of the Contract

              13.1

              For
      the outstanding issues of this Contract, the parties may conclude
      supplemental agreement through negotiation. The supplemental agreement,
      acting as the appendix to this Contract, shall constitute a part of this
      Contract and have the same legal effect as this
  Contract.

                13.2 

                If
      this Contract violates the national laws and regulations, in the premise
      that the safety and efficiency of the loan from the Lender can be
      guaranteed, the parties shall promptly conclude supplemental agreement to
      improve this Contract. However, whether the supplemental agreement is
      signed or not, the Lender shall reserve the right to accelerate the
      maturity of the loan and make recourse to the Borrower
      immediately;

              13.3

              Upon
      the execution of this Contract, the change of the terms of this Contract
      shall have to be made on the basis of negotiated consensus among the
      parties hereof and the related third party, and the formalities of
      approval, registration and record of this Contract and its relevant
      documents shall be handled in pursuant with the provisions in the
      laws;

              13.4

              The
      Borrower shall not assign any of its rights or obligations
      hereunder;

              13.5

              Within
      the Contract term, the Lender, informing the Borrower in written form
      ahead of the assignment stated below by ten business days, may make the
      assignment of the Lender’s rights and obligations hereunder to the other
      party, the Borrower’s prior approval for the assignment is not
      required;

            13.6

            For
      carrying out the aforementioned assignment, the Assignor and the Assignee
      shall separately sign the written assignment document, the Assignee and
      the Borrower shall separately sign the Loan Contract and all other
      relevant documents required by the repayment safeguard measures, and
      handle the formalities of approval, registration and record required by
      the Loan Contract and other documents. The Borrower shall have the
      obligations to unconditionaly cooperate with the Assignor and the Assignee
      and complete all of the relevant
formalities.

24

Capital
Trust Loan Contract 

Term
14   Notification

                14.1

                The
      addresses of the parties hereof are at the top of this Contract. If the
      address of any party changes, the party shall inform the other party in
      written form ahead of the said change by fifteen days.

              14.2

              The
      notices of the parties hereof shall be sent by registered letter, fax or
      EMS. The notices shall be deemed as being delivered on the following
      date:

              14.2.1

              When
      sent by the registered letter, the date shown on the return receipt of the
      registered letter;

              14.2.2

              When
      sent by fax, the first working day from the date of receiving the reply
      code or successfully sending the confirmation
  slip;

              14.2.3

              When
      sent by EMS, the same day as the notified party signs after
      receiving.

Term
15   Other items
 
                15.1

                This
      Contract shall take effect upon affixing their seals by the parties hereof
      and the subscription of the legal representatives or duly authorized proxy
      of the parties hereof, the loan principal, basic interest, floating
      interest, interest penalty and other payment dues shall automatically
      terminate upon the full repayment of them;

                15.2

                The
      establishment, effectiveness, implementation, amendment and termination of
      this Contract shall be governed by the current effective laws,
      administrative laws and regulations, judicial interpretation and relevant
      regulations of the P.R.C.

                15.3

                The
      disputes arising from the implementation of this Contract shall be settled
      through negotiation between the parties. If the negotiation fails, any
      party shall have the right to bring the dispute to the competent people’s
      court in the Lender’s location.

                15.4

                The
      documents on repayment safeguard measures, loan application and
      irrevocable loan application notice required or stipulated by this
      Contract, and other relevant documents and information provided by the
      Lender and the Borrower, shall be the integral part of this
      Contract.

25

Capital Trust Loan Contract 
          
                  15.5

                  The
      original copy of this Contract shall be in sextuplicate, each party shall
      hold two copies, the rest shall be used for handling relevant
      formalities.

                15.6

                This
      Contract is executed in Chaoyang District, Beijing City on [ ](month) [
      ](day), 2009.

(rest of
the page intentionally left blank)

26

Capital
Trust Loan Contract 

(This
page, including the signed content hereof, is the integral part of Capital Trust
Loan Contract numbered Xx.000, Xxxxxxxxx xx Xxxxx xxx Xxxxx Xxxx, Xxxxxxx, 0000.
The signed content of this page shall be used and only be used to sign Capital
Trust Loan Contract by and between Beijing International Trust Co., Ltd acting
as the Lender and Inner Mongolia Xxxxx TCH Energy Conservation Development Co.,
Ltd acting as the Borrower.)

The
Borrower (corporate stamp)
Inner
Mongolia TCH Energy Conservation Development Co., Ltd

/s/ Legal
Representative of Inner Mongolia TCH Energy Conservation Development Co.,
Ltd
Legal
Representative or Duly Authorized Proxy (signature)

The
Lender (corporate stamp) Beijing International Trust Co., Ltd

/s/ Legal Representative of Beijing
International Trust Co., Ltd
Legal
Representative or Duly Authorized Proxy (signature)

27

Capital
Trust Loan Contract 

Appendix
I
Loan
Application

RE Beijing International Trust
Co., Ltd:
 
The
undersigned company is a joint venture established between Xi’an TCH Energy
Science&Technology Co., Ltd (hereinafter “Xi’an TCH”) and Inner Mongolia
Xxxxx Metallurgy Co., Ltd. (hereinafter “Xxxxx Metallurgy”), specifically for
investment, construction and operation of the “comprehensive utilization project
of using waste heat resource from the large scale cluster electric stove of
Xxxxx Metallurgy Co., Ltd for power generation” (hereinafter “project of power
generating by waste heat”), the company has 80 million CNY registered capital,
in which Xi’an TCH contributes 80% and Xxxxx Metallurgy contributes
20%.
 
The
project of power generating by waste heat shall offer investment, construction
and operation of waste heat recycling power generation facilities associated to
64 sets of ferrosilicon, silicomanganese and calcium carbide electric stoves
owned by Xxxxx Metallurgy in the manner of 20-year BOT. Since the project is
designed to convert abandoned thermal energy into electric energy, and it can be
described as an energy conservation renovation project as well as a
comprehensive resource utilization project which are in conformity with the
state’s industrial preferential policies and economic development planning;
hence it is entitled to preferential tax policies and financial encouragement
policies. Meanwhile, the project will save 247,000 tons of coal equivalent per
year after its commissioning, and will become an energy conservation and
emission reduction project which is biggest in China’s metallurgy industry and
the first in ferroalloy industry. The project will construct 11 generator sets
at a gross installed capacity of 130mw in five stages. Currently, the project’s
first stage construction (two generator sets at 9mw) has initiated since March
2009, and is anticipated to be put into service at the end of the year; the
second and the third stage have successively deployed early stage preparation,
and it is planned to construct 4 generator sets at 9mw capacity, which is
anticipated to initiate at the end of 2009 and to be put into service at the end
of 2010.

28

Capital
Trust Loan Contract 

The gross
investment of first stage, second stage and third stage is approximately 420
million CNY, which means there will be a shortage of 240 million CNY considering
the company will offer 180 million CNY as independent investment; hence the
company intends to submit an loan application to your company in the manner of
putting the company’s engineering facilities in first stage, second stage and
third stage construction in pledge as well as putting the company’s accounts
receivable in pledge, meanwhile one of the company’s shareholders i.e. Xi’an TCH
and its actual controlling entity will offer an irrevocable security with
unlimited joint and several liability, in addition the company’s another
shareholder i.e. Xxxxx Metallurgy will make an commitment upon its minimum power
purchase, and further have its indirect controlling shareholder provide a
performance bond for its payment obligation as well as its commitment upon
minimum power purchase. The term of the said loan is estimated to be 4
years.
 
The
company undertakes to persist in its principle of goodwill first, and honor the
contract to the end. Your company’s kind support will be deeply
appreciated.
 
In
witness whereof,

Inner
Mongolia Xxxxx TCH Energy Conservation Development Co., Ltd.
 
 2009年11月10日
 
November
10, 2009

29

Capital
Trust Loan Contract 

Appendix
II
Repayment
Plan

RE Beijing International Trust
Co., Ltd.:
 
In the
light of the relevant agreements under the Capital Trust Loan Contract by and
between the undersigned company and your company, the undersigned company shall
strictly subject to the following plan in preparing the accounts payable
specified in Capital Trust Load Contract in full amount and in due time so as to
ensure the fulfillment of repayment obligation:
 
1. In
addition to the reserved accounts specified in Item 2 and Item 3 hereunder, the
company hereby undertakes that the balance of repayment reserve account shall
remain not less than 20% of current year’s mature/payable principle and interest
at the date 4 months prior to the repayment date of principle and interest
specified in Capital Trust Loan Contract; the balance of repayment reserve
account shall remain not less than 40% of current year’s mature/payable
principle and interest at the date 3 months prior to the repayment date of
principle and interest; the balance of repayment reserve account shall remain
not less than 70% of current year’s mature/payable principle and interest at the
date 2 months prior to the repayment date of principle and interest; and the
balance of repayment reserve account shall remain not less than 100% of current
year’s mature/payable principle and interest at the date 1 week prior to the
repayment date of principle and interest.
 
2. Every
time prior to the date of receiving the profits of a CDM project, the
undersigned company undertakes to save 50% of the profits received from the CDM
project into repayment reserve account for the purpose of settling variable
interest.
 
3. 5
working days prior to the maturity of loan term, the undersigned company
undertakes to save a repayment reserve in equivalent to the profits of
management stimulus into repayment reserve account.

Inner
Mongolia Xxxxx TCH Energy Conservation Development Co., Ltd.
Legal
Representative or Duly Authorized Proxy (Signature):

Date:       [
 ](month) [  ](day), [  ](year)

30

Capital
Trust Loan Contract 

Appendix
III
Detailed
Application List of Trust Loan Capital

RE Beijing International Trust
Co., Ltd.:
 
In the
light of the agreements concluded by and between the undersigned company and
your company in Capital Trust Loan Contract, the undersigned company shall apply
entire capital under trust plan to the first stage and second stage construction
under the “comprehensive utilization project of power generating by waste heat
from the large scale cluster electric stove of Xxxxx Metallurgy Co., Ltd’s for
power generation” (hereinafter “project of power generating by waste heat”) as
per capital utilization approaches specified in the trust plan; details of
utilization are as follows:
 
1. Design
and survey: ￥_____________
(Say: _______________CNY)
  
2．Civil engineering:
￥______________
(Say: _____________CNY)
 
3.
Equipments procurement and installation: ￥______________
(Say: _____________CNY)
 
4. Daily
operating capital: ￥_____________
(Say: ______________CNY)
 
The
undersigned company undertakes to fulfill its obligations concerning capital
utilization specified in Capital Trust Loan Contract and assume all liabilities
in breach.

The
Borrower: (corporate stamp) Inner Mongolia Xxxxx TCH Energy Conservation
Development Co., Ltd.
Legal
Representative or Duly Authorized Proxy (Signature):
Date:        [
](month) [ ](day), [ ](year)

31

Capital
Trust Loan Contract 

Appendix
IV
Irrevocable
Capital Withdrawal Notice
No:        

RE Beijing International Trust
Co., Ltd.:
 
In the
light of the provisions of the Capital Trust Loan Contract (Contract
No.:          ) concluded on [
](month) [ ](day), [ ](year) in which your company acts as the Lender and the
undersigned company acts as the Borrower (hereinafter “Loan Contract”), the
undersigned company hereby delivers this irrevocable capital withdrawal notice
to your company. The definitions in the Loan Contract have the same implications
of that in this irrevocable capital withdrawal notice.
 
The said
capital withdrawal is based on the terms and conditions specified in the Loan
Contract, by which your company is requested to transfer the loan of ￥___________ (Say:
___________CNY) to undersigned company’s CNY loan account at your company’s
specified bank on [ ](month) [ ](day), [ ](year):
Account
name: ______________________________:
Account
number: ____________________________;
Opening
bank: ______________________________;
 
The
company hereby confirms the following matters upon the delivery of this
irrevocable capital withdrawal notice:
1. All
capital withdrawn shall be applied to the capital application specified in the
Loan Contract;
2. The
undersigned company guarantees that the representations and warranties made by
the undersigned company in the Loan Contract are still accurate, authentic,
intact and effective;
3. Not a
single breach specified in the Loan Contract has occurred or is currently
ongoing, neither the capital withdrawal will incur any of such
breaches;
4. Should
the undersigned company fail to withdraw the loan or withdraw the loan in full
amount prior to the withdrawal date, the undersigned company will undertake the
liabilities for breach specified in the Loan Contract.

The
Borrower: (corporate stamp)

Legal
Representative or Duly Authorized Proxy (Signature):

Date:           [
](month) [ ](day), [ ](year)

32

Capital
Trust Loan Contract 

Appendix
V
Loan
Offering Confirmation
 
RE Beijing International Trust
Co., Ltd.:
 
In the
light of the provisions of the Capital Trust Loan Contract (Contract
No.:          ) concluded on [
](month) [ ](day), [ ](year) in which your company acts as the Lender and the
undersigned company acts as the Borrower (hereinafter “Loan Contract”) , the
undersigned company hereby confirms the following matters concerning crediting
with your company:
1. Upon
the date of issuing this Loan Offering Confirmation, the undersigned company has
received the loan granted by your company, which amounts to: ￥_______________
(Say: _________________CNY);
2. The
sum of the aforementioned loan is related to the detailed loan amounts, load
interest rates and repayment dates specified in the following
sheet:

                          Source of the trust
loan

                          Capital size/loan
amount 
(10 thousand CNY)

                          Loan
interest  rate

                          Repayment date

                          Trust
      capital corresponding to trust institutions of Category A1

                          [        ]

                          10.05%

                          December
      [  ],2011

                          Trust
      capital corresponding to trust institutions of Category A2

                          [        ]

                          11.11%

                          December
      [  ],2012

                          Trust
      capital corresponding to trust institutions of Category A3

                          [        ]

                          12.17%

                          December[  ],2013

                          Trust
      capital corresponding to trust institutions of Category B

                          [        ]

                          8.47%

                          December[  ],2013

3. The
interest date of the aforementioned loan is [ ](month) [ ](day), 20[
].

4.
Definitions in the Loan Contract have the same implications of that in this Loan
Offering Confirmation.

Legal
Representative or Duly Authorized Proxy (Signature):

Date:          [
](month) [ ](day), [ ](year)

33

Capital
Trust Loan Contract 

Appendix
VI
Loan
Note

34

Capital
Trust Loan Contract 

Appendix
VII
Payment
Application
No.:        

RE Beijing International Trust
Co., Ltd.:
 
In the
light of the provisions of the Capital Trust Loan Contract (Contract
No.:          ) concluded on [
](month) [ ](day), 2009 in which your company acts as the Lender and the
undersigned company acts as the Borrower (hereinafter “Loan Contract”), the
undersigned company hereby delivers this Payment Application to your company.
Definitions specified in the Loan Contract have the same implications of that in
this Payment Application.

1.
Payment in this application is: loan ￥________, (Say:
__________CNY)
2.
Payment application: _____________________;
3.
Payment basis: _____________________;
4.
Payment date: _____________________;
5.
Account for colleting payment:
Account
name: ______________________________;
Account
number: ____________________________;
Opening
bank: ______________________________;

Upon the
delivery of this irrevocable payment application, the undersigned company hereby
confirms the following matters:

1. The
entire payment in this application shall be used for the purposes previously
specified;
2. The
undersigned company guarantees that the representations and warranties made by
the undersigned company in the Loan Contract are still accurate, authentic,
intact and effective;

                3 . 
      
                Not
      a single breach specified in the Loan Contract has occurred or is
      currently ongoing, neither the capital withdrawal will incur any of such
      breaches.

The
Applicant: (Corporate stamp) Inner Mongolia Xxxxx TCH Energy Conservation
Development Co., Ltd.

Legal
Representative or Duly Authorized Proxy (Signature):

Date:          [
](month) [ ](day), [ ](year)

35
Document Metadata

Table of Contents

Capital Trust Loan Contract of Beijing International Trust Co.,Ltd. as the Lender and Inner Mongolia Erdos TCH Energy Conservation Development Co.,Ltd. as the Borrower Contract No.: No. 033, Documents of Trust and Trust Loan, Beijing, 2009 Beijing...

Document Metadata

Term 1 Definition and interpretation	3

Term 2 Loan	7

Term 3 Basic Interest of Loan	12

Term 4 Floating interest of loan	13

Term 5 Repayment of loan principal	15

Term 6 Taxes	15

Term 7 Payment	16

Term 8 Representations and warranties	16

Term 9 Commitment and other engagement items	18

Term 10 Event of default	21

Term 11 Treatment of default	22

Term 12 Safeguard measures of repayment	23

Term 13 Supplement, change and assignment of the Contract	24

Term 14 Notification	25

Term 15 Other items	25
9.6	The Borrower, in pursuant with the requirements of the Lender, shall mortgage the its equipments of the construction of I, II and III stage project of power generating by waste heat to the Lender, and register the said mortgage within three working days from the date of the Lender’s acquisition of ownership of the said equipment.
9.7	The Borrower shall have the obligations to promptly inform the Lender the changes that will or may happen on the project, business, properties and scope.
9.8	The Borrower makes the warranty that, prior to taking loan credit preservation measures approved by the Lender in written form, it shall not take the following actions as dissolution, liquidation, substantial increase of financing debt and establishment of subsidiary company as well as any other actions that will have adverse impact on the rights and interests of the creditor.
9.9	The Borrower makes the warranty that it shall not make the full repayment of the other loan in priority by not violating the normal repayment order, and not sign any contract, agreement or other legal documents at present or in the future that will make the loan hereunder be in the secondary status.
9.10	The Borrower makes the warranty that, without the written approval from the Lender, it shall not provide the third party with the security that will be enough to have adverse impact on its financial situation and its ability to implement its obligations hereunder.
9.11	The Borrower makes the warranty that, once the occurrence or potential occurrence of the event that will have adverse impact on the repayment safeguard measures specified in the term 12 hereof, it shall promptly provide the alternative security approved by the Lender.
10.1	Any of the following events shall constitute the Borrower’s breach of this Contract:
	10.1.1	The Borrower fails to make the payment due and payable stipulated herein on the maturity date in pursuant with the currency and method hereunder;
	10.1.2	Any of the representations and warranties hereunder made by the Borrower is incorrect, untrue, misleading, disobeyed, or the representations and warranties are proved to be incorrect, untrue, misleading, disobeyed when they are being made or considered to be made, or the representations and warranties have become incorrect and misleading currently;
	10.1.3	The repayment of the Borrower’s debts under any other financing agreement has not been made on the maturity date, or such debts is declared as being acceleration of maturity prior to its fixed maturity;
	10.1.4	The Borrower is involved in any liquidation, bankrupt, dissolution, shutout or the similar legal procedures;
	10.1.5	Any of the Borrower’s important asset is involved in any compulsory execution, distrainment, detention, property preservation, supervision measures or similar measures;
	10.1.6	The Borrower fails to substantially comply with or implement any of its commitments hereunder;
	10.1.7	The significant changes, incurred by the changes of the laws or any of the administrative orders from the governmental departments, occurs in the business condition or important assets of the Borrower, or the events or circumstance from which the said significant changes may arise also occurs, the said changes, events or circumstance have been reasonably considered by the Lender as having had or probably having material adverse impact on the Borrower’s ability in repayment hereunder;
	10.1.8	The Borrower fails to preserve the repayment reserve in pursuant with the Repayment Plan given to the Lender, or the said repayment reserve is adjusted without the Lender’s approval;
	12.1.7	The Borrower shall arrange Inner Mongolia Xxxxx Cashmere Product Co., Ltd to provide the joint liability guarantee for Inner Mongolia Ordos Metallurgy Co., Ltd to implement the Inner Mongolia Xxxxx Metallurgy Co., Ltd Large-scale Cluster Electric Stove Low-temperature Flue Gas Waste Heat Comprehensive Utilization Project (energy efficiency EPP project) Cooperation Contract and the obligations in the commitment on the lowest amount of power purchase;
12.2	The Borrower agrees that it shall from time to time provide other safeguard measures satisfying the Lender in pursuant with the requirements of the Lender.

13.1	For the outstanding issues of this Contract, the parties may conclude supplemental agreement through negotiation. The supplemental agreement, acting as the appendix to this Contract, shall constitute a part of this Contract and have the same legal effect as this Contract.
13.3	Upon the execution of this Contract, the change of the terms of this Contract shall have to be made on the basis of negotiated consensus among the parties hereof and the related third party, and the formalities of approval, registration and record of this Contract and its relevant documents shall be handled in pursuant with the provisions in the laws;