LOAN AGREEMENT
This Loan Agreement (the “Agreement”) is entered into as of Oct. 12, 2010
between and by the following Parties in Dalian, People’s Republic of China
(“China” or “PRC”):

Party A:
Dalian Xinding New Material Technology Consultancy Inc., with the registered
address of Rm# 2122, Unit one, No. 112 Youhao Road, Zhongshan District, Dalian;
and the legal representative is Liang Hai-yan; and

Party B:
____________, with the address of ____________________; and the ID number of
__________________.

WHEREAS,
 
1.
Party A, a wholly foreign-owned enterprise duly incorporated and validly
existing under the PRC laws;

 
2.
Party B, a PRC citizen and the shareholder of Dalian Tongda Equipment and
Technology Development Co., Ltd. (“Domestic Company”) holding ____% equity
interests of Domestic Company; and

 
3.
Party A and Party B concluded a loan agreement, pursuant to which Party A agreed
to provide the interest free loan to Party B with the amount of RMB__________
for Party B in order to clear the debt occurred when to establish Domestic
Company.

NOW, THEREFORE, in order to clarify the Parties’ rights and obligations, through
friendly negotiations, the Parties hereby agree as follows:
 
1.
Loan

  
 
1.1
Under the provisions and conditions of this Agreement, Party A will provide an
interest-free loan to Party B with the principal as RMB _________.

 
 
1.2
Party B agrees that after it receives the payment of loan, it will use all of
the loan for clearing the debt occurred for establishing Domestic Company.

2.
Term of Loan

 

 
2.1.
The term of such loan starts from the date when Party B receives the first
payment of loan from Party A, until ten (10) years after signing this Agreement
and could be extended upon the written confirmation by Party A and the extended
period shall be determined by Party A.

 

 
2.2.
During the term or extended term of such a loan, Party A may accelerate the loan
repayment in written notice, if any of the following events occurs:

 
 
(1)
Party B dies or becomes a person without capacity or with limited capacity for
civil acts;

 
 
 

--------------------------------------------------------------------------------

 
 
 
(2)
Party B commits a crime or is involved in a crime;

 
 
(3)
Any other third party claims more than RMB100,000 against Party B;

 
 
(4)
Any statement or warranties made by Party B under this Agreement is untrue or in
accurate in any material aspects; or Party B breaches the obligations under this
Agreement; or

 
 
(5)
Party A has a written notice to Domestic Company and exercised its right of
purchase in accordance with the terms of Equity Interest Purchase Agreement
(“Purchase Agreement”).

 
3.
Repayment of Loan

 

 
3.1.
The Parties herein agree and confirm that Party B or their successors or
assignees have to repay the loan only by the following methods: transfer all
equity interest in Domestic Company to Party A in compliance with PRC laws and
use the proceeds to repay the loan when the loan is due and Party A gives a
written notice.

 

 
3.2.
Without the written consent made by Party A, Party B shall not repay such loan
partially or in full.

 

 
3.3.
Based on the Clause 3.1, all parties herein agree and confirm that, according to
the PRC laws, Party A or its designated person (including natural person, legal
entity or any other entity) has the right, but not the obligation, to purchase
all or part of the equity interest held by Party B in Domestic Company (the
“Option”) at anytime, however, Party A shall notify Party B of such purchase of
equity interests with a written notice. Once the written notice for exercising
the Option is issued by Party A, Party B shall sell his all or part of equity
interests of Domestic Company upon Party A’s request and instructions (including
the equity interest obtained by any methods after such notice date) with the
original invest price (the “Original Investment Price”, means RMB 70,000 for
each 1% of equity interests) or price otherwise stipulated by laws according to
the consent of Party A to Party A or its designated person. All parties agree
and confirm that when Party A exercises the Option, the price that allowed by
the applicable law at the time is higher than the Original Investment Price,
Party A shall purchase the equity interests at the lowest price in accordance
with the applicable law; if the lowest price is higher than the Original
Investment Price, Party B shall reimburse the exceeding amount to Party A
pursuant to Article 4 of this Agreement. All parties agree to execute the
Purchase Agreement in connection with above matters.

 

 
3.4.
The Parties agree to complete the registration for changing the shareholder at
relevant administration for industry and commerce authorities; and the equity
transfer abovementioned shall be considered as complete after Party A or its
designated person is registered as legal owner of target equity interests.

 
 
 

--------------------------------------------------------------------------------

 
 
4.
Interests of Loan

All parties agree and confirm that this loan is an interest-free loan unless
otherwise provided in this Agreement. But if the loan is due and Party B has to
transfer his equity interests in Domestic Company to Party A pursuant to this
Agreement or its designated person and the proceeds exceed the loan principal
due to the legal requirement or other reasons, the extra amount over the
principal of proceeds will be considered as the interests or capital use cost,
which shall be repaid to Party A.
 
5.
Party B’s Representation, Warranties and Promises

 
 
5.1
Party B shall deliver the copy of Capital Contribution Certificate which
evidences he owns ____% equity interests of Domestic Company to Party A.

 
 
5.2
As the guarantee of the loan, Party B agrees to pledge all equity interests held
in Domestic Company to Party A and grant Party A an option right to purchase
such equity interests; and Party B agrees to execute the Equity Pledge Agreement
and Purchase Agreement upon the request of Party A.

 
 
5.3
Without prior written consent by Party A, not, upon the execution of this
Agreement, to sale, transfer, mortgage or dispose, in any other form, any equity
interests or any other rights, or to approve any other security interest set on
it except the set is for the Party A’s benefit.

 
 
5.4
Without the prior written consent by Party A, not to decide or support or
execute any shareholders resolution on Domestic Company’s shareholders’ meeting
that approves any sale, transfer, mortgage or dispose of any legitimate or
beneficial interest of equity interest, or allows any other security interest
set on it, other than made to Party A or its designated persons.

 
 
5.5
Without prior written notice by Party A, they shall not agree or support or
execute any shareholders resolution on the Domestic Company’s shareholders’
meeting that approves Domestic Company to merger or associate with any person
(under this Agreement, the “person” means individual, company, partnership or
other entities), acquire any person or invest in any person.

 
5.6
Without prior written consent by Party A, not to take any action or any
nonfeasance that may affect materially Domestic Company’s assets, business and
liabilities; Without prior written consent by Party A, not, upon the execution
of this Agreement, to sale, transfer, mortgage or dispose, in any other form,
any asset, legitimate or beneficial interest of business or income of Domestic
Company, or to approve any other security interest set on it.

 
 
5.7
Upon the request of Party A, to appoint any person designated by Party A to be
the directors and senior management personnel of Domestic Company.

 
 
5.8
Upon the exercise of the option and to the extent permitted by PRC laws, to
transfer all or part of equity interests of Domestic Company held by Party B to
the person designated by Party A in any time unconditionally, and to waive the
first right of refusal for the equity interests to be transferred held by the
other shareholder of Domestic Company.

 
 
 

--------------------------------------------------------------------------------

 
 
 
5.9
Not to request Domestic Company to distribute the dividend; and not to approve
any shareholders’ resolution which may cause Domestic Company to distribute
dividend to its shareholders.

 

 
5.10
Without prior written consent by Party A, not, in any form, to supplement,
change or modify the Articles of Association of Domestic Company, to increase or
decrease registered capital of the corporation, or to change the structure of
the registered capital in any other forms.

 

 
5.11
According to fair finance and business standard and tradition, to maintain the
existence of the corporation, prudently and effectively operate business and
deal with works; to provide materials relating to Domestic Company’s operation
and financial conditions upon Party A’s request; and to normally operate all
business to maintain the asset value of Domestic Company.

 

 
5.12
Without prior written notice by Party A, not cause, inherit, guarantee or allow
the existence of any debt, other than (i) the debt arising from normal or daily
business but not from borrowing; and (ii)the debt disclosed to Party A and
obtained the written consent from Party A.

 

 
5.13
Without prior written consent by Party A, not to enter into any material
agreement, other than the agreement in the process of normal business (as in
this paragraph, the amount in the agreement that exceeds a hundred thousand Yuan
(RMB 100,000) shall be deemed as a material agreement).

 

 
5.14
In order to keep its ownership of the equity interest, to execute all requisite
or appropriate documents, conduct all requisite or appropriate actions, and make
all requisite or appropriate claims, or make requisite or appropriate defend
against fall claims of compensation; to notify Party A the occurrence or the
potential occurrence of any litigation, arbitration or administrative procedure
related to Domestic Company.

 
5.15
To exercise the rights as Domestic Company’s shareholder upon the request by
Party A and only upon Party A’s written authorization.

 

 
5.16
To prudently comply with the provisions of this Agreement and perform all
obligations under this Agreements, without taking any action or any nonfeasance
that sufficiently affects the validity and enforceability of this Agreement.

 

 
5.17
The Parties agree and confirm the meaning of “Party A’s written notice” pursuant
to this Agreement means the consent shall be approved by the board of Party A,
but if such consent only approved by Party A, such consent shall not be deemed
as satisfied with the obtaining of written notice from Party A.

 
 
 

--------------------------------------------------------------------------------

 
 
6.
Taxes and Expenses

Unless otherwise provided in this Agreement, the Parties shall, according to the
PRC laws, bear any and all taxes and expenses pursuant to this Agreement. Other
taxes and reasonable expense regarding the loan shall be borne by Party A.
 
7.
Effectiveness and Termination

 
 
7.1
This Agreement is concluded upon its execution and takes effect on the date
hereof.

 
 
7.2
The Parties agree and confirm that this Agreement shall be terminated when the
Parties has completed to perform their obligation under this Agreement; the
Parties further agree and confirm that Party B shall be deemed the completion of
performing their obligations under this agreement only if the following
requirements are met:

 
 
(1)
Party B has transferred all equity interests of Domestic Company to Party A
and/or its designated person; and,

 
 
(2)
Party B has repaid the total amount caused from the equity interest transferring
according to this Agreement or the proceeds stipulated by Purchase Agreement to
Party A.

 
 
7.3
Party B cannot terminate or revoke unilaterally this Agreement unless (1) Party
A commits the gross negligence, fraud or other material illegal action; or
(2) Party A terminates as a result of bankruptcy, dissolution, or being ordered
to be closed down according to laws.

 
8.
Breach of Contract

 
 
8.1
If any party (“Defaulting Party”) breaches any provision of this Agreement,
which may cause the damages of the other party (“Non-defaulting Party”), the
Non-defaulting Party could notify the Defaulting Party in written and request it
to rectify and correct such breach of contract; if the Defaulting Party cannot
take any action satisfied by Non-defaulting Party and rectify and correct such
breach within fifteen (15) days upon the issuance of the written notice, the
Non-defaulting Party could take the actions pursuant to this Agreement or other
measures in accordance with laws.

 
 
8.2
If Party B can not repay the loan pursuant to this Agreement, Party B shall pay
the penalty at a rate of 0.2‰ per day for any outstanding loan to Party A (from
the request date for repayment by Party A), and shall also indemnify Party A on
a full indemnity basis against all direct economic damages due to breach of
contract by Party A (including but not limited to market value of pending equity
interests held by Party B or outstanding loan, which is the higher).

 
9.
Confidentiality

The Parties acknowledge and confirm any oral or written materials exchanged by
the Parties in connection with this Agreement are confidential. The Parties
shall maintain the secrecy and confidentiality of all such materials. Without
the written approval by the other Parties, any Party shall not disclose to any
third party any relevant materials, but the following circumstances shall be
excluded:
 
 
 

--------------------------------------------------------------------------------

 
 
 
(a)
The materials that is known or may be known by the Public (but not include the
materials disclosed by each party receiving the materials );

 
 
(b)
The materials required to be disclosed subject to the applicable laws or the
rules or provisions of stock exchange; or

 
 
(c)
if any documents required to be disclosed by any party to its legal counsel or
financial consultant for the purpose of the transaction of this Agreement by any
party, such legal counsel or financial consultant shall also comply with the
confidentiality as stated hereof. Any disclosure by employees or agencies
employed by any party shall be deemed the disclosure of such party and such
party shall assume the liabilities for its breach of contract pursuant to this
Agreement. This Article shall survive whatever this Agreement is void, amended,
cancelled, terminated or unable to perform.

 
10.
Notices

Notices or other communications required to be given by any party pursuant to
this Agreement shall be in written and delivered personally or sent by
registered mail or postage prepaid mail or by a recognized courier service or by
facsimile transmission to the address of relevant each party or both parties set
forth below or other address of the party or of the other addressees specified
by such party from time to time. The date when the notice is deemed to be duly
served shall be determined as the follows: (a) a notice delivered personally is
deemed duly served upon the delivery; (b) a notice sent by mail is deemed duly
served the seventh (7th) day after the date when the air registered mail with
postage prepaid has been sent out (as is shown on the postmark), or the fourth
(4th) day after the delivery date to the internationally recognized courier
service agency; and (c) a notice sent by facsimile transmission is deemed duly
served upon the receipt time as is shown on the transmission confirmation of
relevant documents.
 
Party A:
Dalian Xinding New Material Technology Consultancy Inc.,

Legal Address:
Rm# 2122, Unit one, No. 112 Youhao Road, Zhongshan District, Dalian

Postcode:
116001

Tel:
Fax:

Party B:
Legal Address:
Postcode:
Tel:
Fax:
 
 
 

--------------------------------------------------------------------------------

 
 
11.
Applicable Law and Dispute Resolution

 

 
11.1
The execution, validity, performance and interpretation of this Agreement and
the disputes resolution under this Agreement shall be governed by PRC laws.

 

 
11.2
The parties shall strive to settle any dispute arising from this Agreement
through friendly consultation.

 

 
11.3
In case no settlement can be reached through consultation within thirty
(30) days after such dispute is raised, each party can submit such matter to
Dalian Arbitration Commission in accordance with its then effective rules. The
arbitration shall take place in Dalian. The arbitration award shall be final
conclusive and binding upon both parties. If there is any dispute is in process
of arbitration, other then the matters in dispute, the Parties shall perform the
other rights and obligation pursuant to this Agreement.

 
12.
Miscellaneous

 

 
12.1
The headings contained in this Agreement are for the convenience of reference
only and shall not affect the interpretation, explanation or in any other way
the meaning of the provisions of this Agreement.

 

 
12.2
The Parties confirm that this Agreement shall constitute the entire agreement of
the Parties upon its effectiveness with respect to the subject matters therein
and supersedes and replaces all prior or contemporaneous verbal or/and written
agreements and understandings.

 

 
12.3
This Agreement shall be binding and benefit the successor of each Party and the
transferee allowed by each Party. Without the prior written notice by Party A,
Party B shall not transfer, pledge or dispose in other manners its rights,
interest and obligation pursuant to this Agreement.

 
12.4
Party B hereby agrees that, (i) if Party B dies, Party B agree to transfer the
rights and obligation pursuant to this Agreement to the person designated by
Party A; (ii) Party A could transfer its rights and obligation pursuant to this
Agreement to other third parties. Party A only needs to issue a written notice
to Party B for such transfer and no need to obtain the consent by Party B.

 

 
12.5
Any delay of performing the rights under the Agreement by either Party shall not
be deemed the waiver of such rights and would not affect the future performance
of such rights.

 

 
12.6
If any provision of this Agreement is judged as void, invalid or non-enforceable
according to relevant laws, the provision shall be deemed invalid only within
the applicable area of the PRC Laws, and the validity, legality and
enforceability of the other provisions hereof shall not be affected or impaired
in any way. The Parties shall cease performing such void, invalid or
non-enforceable provisions and replace those void, invalid or non-enforceable
provisions with valid provisions to the extent which such provisions could be
valid, effective and enforceable.

 
 
 

--------------------------------------------------------------------------------

 
 

 
12.7
Any matters excluded in this Agreement shall be negotiated by the Parties. Any
amendment and supplement of this Agreement shall be made by the Parties in
writing. The amendment and supplement duly executed by each Party shall be
deemed as a part of this Agreement and shall have the same legal effect as this
Agreement.

 

 
12.8
This Agreement is executed with four (4) original copies; each Party holds two
(2) original copies and each original copy has the same legal effect.

 
 
 

--------------------------------------------------------------------------------

 
 
IN WITNESS THEREFORE, the parties hereof have caused this Agreement to be
executed by their duly authorized representatives as of the date first written
above.

Party A: Dalian Xinding New Material Technology Consultancy Inc.,
Legal/Authorized Representative:
Name:
Party B: [Name of Owner]
Signature:
 
 
 

--------------------------------------------------------------------------------

 
 
List of Equity Holders and Equity Interest Held:
 
Name
 
Percentage Interest
   
Loan
Amount
 
Fei Li-zhi
    7.8 %   RMB 546,000  
Wang Di
    41.2 %   RMB 2,884,000  
Wang Yu-kai
    51.0 %   RMB 3,570,000  

 
 
 

--------------------------------------------------------------------------------