Sales Agency AgreementBetween:ItN Nanovation AG whose registered office is at:UntertürkheimerStraße 25, 66117 Saarbrücken, Germanyregistered at the Registry of Commerce of Saarbrücken under HRB 15671, duly represented by Dr. Christoph Weiß(hereinafter called "the Seller")and:China Power CM Environment Engineering Co. LTD whose registered office is at: 8Floor, Techart Plaza Tower A, No. 30 Xueyuan Road, Haidian District, Beijing 100083 Peoples Republic of China, registered at the Registry of Commerce of Beijing under number 110108006300457,duly represented by Yangyuan(hereinafter called "the Agent")it is agreed as follows:Article 1 - Territory and Products1.1The Seller appoints the None ExclusiveAgent, subject to the terms andconditions herein, as his Commercial Agent to promote the sale of the products listed in Annex I, paragraph 1 (hereinafter called "the Products") in the territory defined in Annex I, paragraph 2 (hereinafter called "the Territory").1.2Territory” means the geographic areas listed on Annex I, heretoArticle 2 - Good faith and fair dealing2.1In carrying out their obligations under this agreement the parties will act inaccordance with good faith and fair dealing.2.2The provisions of this agreement, as well as any statements made by theparties in connection with this agency relationship, shall be interpreted in good faith.Article 3 - The Agent's functions3.1The Agent agrees to use his best endeavours to promote the sale of theProducts in the Territory in accordance with the Seller's reasonable instructions and shall protect The Seller's interests with the diligence of a responsible businessman.3.2When negotiating with customers, the Agent shall offer Products strictly inaccordance under the terms and conditions as the Seller has communicated tohim.3.3 The Agent agrees to promote the sale of the Products in the Territory and toservice the customers of the Seller in a manner consistent with good sales procedure and customer relations.3.4The Agent agrees that he will not promote or sell products of the Seller outsidethe Territory agreed upon, without the prior written consent of the Seller.3.5The Agent agrees to abide by and comply with all sales policies and operatingprocedures of the Seller, as long as they are not in conflict with governmental regulations and / or laws. The Agent commits himselfto respect universal ethical standards and to observe nationally and internationally valid legislation.3.6The Agent will not be entitled to sign any kind of legal binding documents suchas offers, orders or any other compulsory documents, except if the Agent has received a power of attorney from the Seller prior to the occasion3.7Independent Contractors. The relationship of the Sellerand the Agentestablished by this Agreement is that of an independent contractor, and nothing contained in this Agreement shall be construed to (i) give either party the power to direct and control the day-to- day activities of the other, or (ii) constitute the parties as partners, joint ventures, co-owners or otherwise as participants in a joint undertaking, or (iii) allow the Agent to create or assume any obligation on behalf of The Sellerfor any purpose whatsoever. All financial and other obligations associated with the Agent’s business are the sole responsibil ity of the Agent.The Agent shall be responsible for, and shall indemnify and hold The Sellerfree and harmless from, any and all claims, damages or lawsuits (including Company’s attorneys’ fees) arising solely out of the acts or the Agent, its employees or its the Agents.Article 4 - Sale of the Products4.1 Prices and Terms of Sale:The Sellershall provide the Agent with its currentprice lists, its delivery schedules, and its standard terms and conditions of sale, as established or adapted from time to time. The Agent shall quote to customers only those authorized prices, delivery schedules, and terms and conditions, and shall have no authority to quote or offer any discount to such prices or change any such terms and conditions, without the consent of Company. The Sellermay change the prices, delivery schedules, and terms and conditions, provided that it gives the Agent at least thirty (30) days prior written notice of any changes;however, such changes shall not affect any existing contacts or pricing agreements. Each order for a Product shall be governed by the prices, delivery schedules, and terms and conditions in effect at the time the order is accepted, and all quotations by the Agent shall contain a statement to that effect.4.2 Quotations: The parties shall furnish to each other copies of all quotationssubmitted to customers. (Related to CFM Membranes only)4.3 Orders: All orders for the Products shall be in writing, and the original shall besubmitted to the Seller. The Sellershall promptly furnish to the Agent informational copies of all commissionable orders sent by customers in the Territory.4.4 Acceptance: All orders obtained by the Agent shall be subject to acceptanceby The Sellerat its principal office currently located at the address listed for the Sellerat the beginning of this Agreement, and all quotations by the Agent shall contain a statement to that effect. The Agent shall have no authority to make any acceptance or delivery commitments to customers. The Sellerspecifically reserves the right to reject any order or any part thereof for any reasonable reason. The Sellershall send copies to the Agent of any written acceptances on commissionable orders.4.5 Credit Approval: The Sellershall have the sole right of credit approval orcredit refusal for its customers in all cases.4.6 Collection: It is expressly understood by the Agent that full responsibility forall collection rests with the Seller, provided, at Seller’s request, the Agent will provide reasonable assistance in collection of any accounts receivable. In the event that the Agent, with the approval of the Seller, purchases Products from the Sellerand resells said Products to its own customers, the Agent shall have the sole right of credit approval or credit refusal for its own customers and full responsibility for all collection for such customers rests with the Agent.4.7 Inquiries from Outside the Territory: The Agentshall promptly submit toSeller, for Seller’s attention and handling, the originals of all inquiries received by the Agent from customers outside the Territory.4.8 Product Availability: The Sellershall not be responsible to the Agent or anyother party for its failure to fill accepted orders, or for its delay in filling accepted orders, when such failure or delay is due to a cause beyond Seller’s reasonable control.Article 5 - Additional Obligations of The Seller5.1 Training by The Seller: The Sellershall provide sales training to the Agent’spersonnel at periodic intervals, with the frequency and content of the training to be determined by the Seller. When possible, such training shall be given at the Agent’s facilities, but it may be necessary to provide training at a geographically central location near but not in the Territory.5.2 Regulatory Approvals:The Sellerand the Agent shall be mutuallyresponsible for obtainingall necessary approvals if required to distribute theProducts in Peoples Republic of China5.3 Materials: The Sellershall provide the Agent with marketing and technicalinformation concerning the Products as well as reasonable quantities of brochures, instructional material, advertising literature, demonstration product samples and other Product data at no charge.5.4 Technical and Sales Support: The Sellershall provide a reasonable level ofTelephone technical support to the Agent and it’s the Sub-Agents. The Sellershall use its best efforts to support the Agent’s sales and marketing activities.5.5 Delivery Time:The Sellershall use its best efforts to fulfil delivery obligationsas committed in acceptances.5.6 New Developments: The Sellershall promptly inform the Agent of newproduct developments relating to the Products.Article 6- Sub-AgentsThe Agent may engage sub-Agents, provided he informs the Seller. The Agent shall be responsible for the activities of his sub-Agent. The Agent confirms to, that the sub Agent(s) are complying with the regulation as agreed within this Sales Agency Agreement fully.Article 7 - Complaints by CustomersThe Agent shall immediately inform the Seller of any observations or complaints received from customers in respect of the Products. The parties hereto shall deal promptly and properly with such complaints.Article 8 - Exclusivity8.1The Seller shall not, during the validity of this contract, grant any other personor undertaking within the Territory the right to represent or sell the Products.8.2The Seller is, whenever necessary, entitled to deal directly, without the Agent'sintervention (provided it informs the latter) with customers situated in the Territory, however, in respect of any sales arising therefrom, the Agent shall be entitled to a commission rate, still to be agreed upon, unless otherwise agreed.8.3Within the sense of this Agreement, the Agent acts as none exclusivesalesagent of the products.(Please see also § 9.2 “Exclusivity”Article 9 - Term and Termination of the Contract9.1 Contract: This contract enters into force on the xxxxxxxxxxx20139.2 Term: This Agreement shall continue in full force and effect for a period ofthree years from the date above, unless terminated earlier under the provisions ofthis Agreement. Thereafter, this Agreement shall be renewed automatically for successive additional three years terms under the same terms and conditions unless either party chooses not to continue the relationship and provides written notice 180 days prior to the natural expiration of the existing three-year term.The first 6 months of the agreement are seen as a probation period between the Seller and the Agentduring which the contract can be terminated by either Party without any further reason at the end of any monthThe contract may, after one year of coming into force, enter into an exclusive contract between the partners. The validity of an exclusive contract must be confirmed in written by both partners9.3 Termination: This Agreement may be terminated by as follows:9.3.1. By the Seller:if the Agent fails to achieve its annual quotarequirement asprovided by Business Plan later on. (Six months notice period in accordance with9.1).9.3.2. By either party: if the other party becomes insolvent or bankrupt, or files avoluntary petition in bankruptcy, or has had filed for aninvoluntary petition of bankruptcy (unless such involuntary petition is withdrawn or dismissed within ten days after filing) in which event termination may be immediate upon notice; or9.3.3 By either party: if the other party fails to cure any breach of a materialcovenant, commitment or obligation under this Agreement, within 45 days after receipt of written notice specifically setting forth the breach from the other party;or9.3.4 By either party: if the other party is convicted or pleads guilty to a crime oran act of fraud that materially impacts on its performance or its fiduciary duties hereunder, in which event termination may be immediate upon notice.9.4 Return of Materials: All Confidential Information and other propertybelonging to the Sellershall remain the property of the Sellerand will be immediately returned bythe Agent upon termination. The Agent shall not make or retain any copies of any confidential Information that may have been entrusted to it.9.5 Return of the Products:Upon the termination of this Agreement, theSellershall repurchase any inventory and instrumentation of the Agent at the Agent’s cost free house. Article 10- The Agent to be kept informed10.1The Seller shall provide the Agent with all necessary written informationrelating to the Products as well as with the information needed by the Agent forcarrying out his obligations under the contract.10.2 The Seller shall furthermore inform the Agent without undue delay of hisacceptance, refusal and/or non execution of any business transmitted by theAgent.10.3The Seller shall keep the Agent informed of any relevant communicationwith customers in the Territory.Article 11-The Agent's commissionSole Compensation:Under the terms of this Agreement the Agentgets OEMbest prices from the seller. The Agent has to calculate his commission / pricesurcharge by himself.Article 12- Indemnity in case of terminationAfter termination of the contract according to the paragraphs set into this Sales Agency Agreement no further claims, rights and / or demands are requested by a partner of the Sales Agency Agreement, neither from the Seller to the Agent nor from the Agent to the Seller. Especially no partner neither the Seller nor the Agent hasthe right of compensation for loss of profit and / or loss of further projects.Article 13 - Applicable lawAny disputes between the Parties in connection with this Agreement and, inparticular, concerning its interpretation, validity, compliance and termination(including the validity and compliance with this Clause) shall be submitted toarbitration, that shall be settled by a bench of three arbitrators following therules about Conciliation and Arbitration of the International Chamber ofCommerce.The arbitration board will be nominated by the President of theInternational Chamber of Commerce.The seat of arbitration shall be Frankfurt am Main (Germany). The partiesagree that the language of the arbitration, including oral hearings, writtenevidence and correspondence, shall be English.This Agreement shall begoverned by the laws of Germany. .Article 14- IndemnificationThe Sellershall be solely responsible for the design, development, supply,production and performance of its products and the protection of its tradenames and patents. The Selleragrees to indemnify, hold the Agent harmlessagainst and pay all losses, costs, damages or expenses, whatsoever,including counsel fees, which the Agent may sustain or incur on account ofinfringement or alleged infringements of patents, trademarks or trade namesresulting from the sale of the Company's products, or arising on account ofwarranty claims, negligence claims, product liability claims or similar claimsby third parties. The Agent shall promptly deliver to the Sellerany notices orpapers served upon it in any proceeding covered by this IndemnificationAgreement, and the Sellershall defend such litigation at its expense. TheAgent shall, however, have the right to participate in the defence at its ownexpense unless there is a conflict of interest, in which case, the Agent shallindemnify the Sellerfor the expenses of such defence including counsel fees.The Sellershall provide theAgent with a certificate of insurance evidencing theAgent asan additional insured on the Company’s product liability insurancepolicy. This provision shall survive and remain in full force and effect after thetermination or nonrenewal of this Agreement.Article 15 - Modifications - Nullity16.1No addition or modification to this contract shall be valid unless made inwriting. However, a party may be precluded by his conduct from asserting theinvalidity of additions or modifications not made in writing to the extent thatthe other party has relied on such conduct.16.2The nullity of a particular clause of this contract shall not entail the nullityof the whole agreement, unless such clause is to be considered assubstantial, i.e. if the clause is of such importance that the parties (or theparty to benefit of which such clause is made) would not have entered into thecontract if it had known that the clause would not be valid.Article 17- Authentic textThe English text of this contract is the only authentic and binding text.Made in onThe Seller The AgentANNEX I PRODUCTS and TERRITORY(Article 1.1) Paragraph 1 Products:The Seller is a supplier of Ceramic Flat Membrane (CFM) Units for Water filtration and of compact MBBR Filtration Units for Waste Water Treatment at municipal and industrial applications.(Article 1.2) Paragraph 2 Territory:The sales areais defined as the Territory covered by the People’s Republic ofChina Comment: Still to be more exactly defined; depending of the market activity of the agent。