Technology
      Service Agreement

    


    by
      and among

    


    Tianjin
      Shengkai Industrial Technology Development Co., Ltd.

    


    Shengkai
      (Tianjin) Ceramic Valve Co., Ltd.

    and

    The
      Shareholders of Tianjin Shengkai Industrial Technology Development Co.,
      Ltd.

    


    May
      30th,
      2008


    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    Technology Service Agreement

      
        

      

    

     

    Technology
      Service Agreement

    


    This
      Technology Service Agreement (“this Agreement”) is executed by the following
      Parties on May 30th,
      2008 in
      Tianjin, PRC:

    


    	(1)  	
            Tianjin
              Shengkai Industrial Technology Development Co., Ltd. (hereinafter called
              “Party A”) is a limited liability company, duly incorporated in Tianjin,
              People’s Republic of China (“PRC”) whose legal address is: Room324, 3/F,
              1stStreet, Tianjin Economic-Technological Development
              Area.

          


    


    	(2)  	
            Shengkai
              (Tianjin) Consulting Company Limited (hereinafter referred to as “Party
              B”) is a wholly
              foreign owned enterprise (“WFOE”) duly incorporated in Tianjin, PRC, whose
              legal address is:Room
              A2-191,No.166 Xisandao,Konggang Logistic Processing
              Zones,Tianjin.
              

          


    	 	 


    	(3)  
	All of the shareholders of Tianjin Shengkai Industrial
            Technology Development Co.,
            Ltd. (hereinafter collectively called the
            “Shareholders”). 


    


    
      	
              Name
                of Each Shareholder

            	
               

            	
              Shareholding
                Ratio (%) 

            	
               

            	
              ID
                Card No.

            	
               

            	
              Contact
                Address

            
	
              Wang
                Chen

            	
               

            	
              71.39%

            	
               

            	
              120103196412022118

            	 	
              204-209,Gate
                8,Zhonghuan Deppartment,No.2 Road, Wujiayao, Heping District,
                Tianjin

            
	 	 	 	 	 	 	 
	
              Guo
                Wei

            	
               

            	
              13.33%

            	
               

            	
              120103196607222128

            	 	
              204-209,Gate
                8,Zhonghuan Department,No.2 Road, Wujiayao, Heping District,
                Tianjin

            
	 	 	 	 	 	 	 
	
              Zhao
                Yanqiu

            	
               

            	
              6.55%

            	
               

            	
              2310851197903050762

            	 	
              Tuanjie
                Wei, Muleng Town, Muleng City, Helongjiang Province

            
	 	 	 	 	 	 	 
	
              Ji
                Haihong

            	
               

            	
              6.55%

            	
               

            	
              140102197002012349

            	 	
              No.7,Unit1,4th/F,No.11,Xinmin
                Zhongjie,Xinghualing District, Taiyuan City,Shanxi
                Province

            
	 	 	 	 	 	 	 
	
              Zhang
                Ying

            	
               

            	
              0.48%

            	
               

            	
              51010319740824628X

            	 	
              No.3,4th/F,
                Dong 315, Huangtian Bawei 4th
                Road, Qingyang District, Chengdu City

            
	 	 	 	 	 	 	 
	
              Miao
                Yang

            	
               

            	
              0.48%

            	
               

            	
              110108197106111811

            	 	
              No.1905,No.1Building,
                Yangguang 100 International Department, No.2, Guanghua Road,Chaoyang
                District, Beijing

            
	 	 	 	 	 	 	 
	
              Chen
                Fang

            	
               

            	
              0.48%

            	
               

            	
              440402197211205769

            	 	
              Room
                401, Unit 1, Dong 3,No.2013,Xiangzhou Fenghuang North RoadôXiangzhou
                District,Zhuhai City,Guangzhou Province

            
	 	 	 	 	 	 	 
	
              Wu
                Yanping

            	
               

            	
              0.37%

            	
               

            	
              120106196505060526

            	 	
              No.101,Gate
                3,No.25 Building,Xinghuali,Shengli Street,Da Gang
                District,Tianjin

            
	 	 	 	 	 	 	 
	
              Liu
                Naifan

            	
               

            	
              0.37%

            	
               

            	
              372832196010257414

            	 	
              Dormitory
                District,Yinan Gold Mine,Yinan County,Shandong
                Province

            


    

    


    (Party
      A,
      Party B and
      the
      Shareholders are referred to collectively in this agreement as the “Parties” and
      individually as “a Party” or “each Party”.)

    


    
      
         

      

      
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      Technology Service Agreement 

      
        

      

    

     

    WHEREAS:

    


    	(1)    
              	
            Party
              A’s business scope is as follows:
              The design, manufacturing and marketing of Environmental pollution
              control
              equipments (including flue gas desulphurization governance, de-dusting
              equipment); the production and manufacturing of industrial control
              systems
              of its transportation systems and equipments; the design, manufacturing
              and marketing of ceramic valves; the manufacturing environmental dedicated
              instrumentation electronic equipments; the manufacturing of ceramic
              coatings; the manufacturing and sale of high-tech ceramics;
              electromechanical products (except cars), chemical products (flammable,
              explosive, dangerous goods except prone to cause toxicity); technical
              consultation; technical services; operating the enterprise home-grown
              products as well as related technology import and export
              business;

          


    


    	(2)     
             	
            Party
              B is engaged in researching, developing, technology consulting service
              of
              ceramic valves and ceramic materials; 

          


    


    	(3)       
            	
            The
              Parties agree that Party B shall provide Party A with technology services,
              such as is
              researching, developing, technology consulting, technology service
              of
              ceramic valves and ceramic materials;

          


    	 	 


    	(4)       	The Shareholders hold 100% of the equity interests
            in
            Party A. 


    


    NOW
      THEREFORE,
      the
      Parties hereby agree through friendly negotiation as follows:

     

    Article
      1 Definitions

    


    1.1
“PRC”
      refers to the People’s Republic of China, for the purpose of this Agreement,
      excluding the Hong Kong Special Administrative Region, Macao Special
      Administrative Region and Taiwan Provinceå 

     

    
      
         

      

      
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        Technology Service Agreement 

        
          

        

      

       

    

    1.2
“PRC
      Laws” refers to all PRC laws, administrative regulations and government rules in
      effect;

    1.3
“RMB”
      refers to the legal currency within the PRC;

    1.4
      “Technology Service Fee” or “Consideration” refers to the consideration as
      defined in Article 3.1 and to be paid to Party B by Party A.

    


    Article
      2 Contents of Technology Services

    


    2.1
      Select, purchase and update the proper software on finance management in
      accordance with practical requirements with respect thereto and conduct training
      on the use of such software, and provide relevant consulting
      services.

    


    2.2
      Select, purchase and update the proper software on human resource management
      in
      accordance with practical requirements with respect thereto and conduct training
      on the use of such software, and provide relevant consulting
      services.

    


    2.3
      Select, purchase and update the proper software on the management of
      supermarkets in accordance with practical requirements with respect thereto
      and
      conduct training on the use of such software, and provide relevant consulting
      services.

    


    2.4
      Assist with other related systems and software in accordance with the specific
      requirements of Party A.

    


    2.5
      Seek
      qualified network service companies to provide services to Party A with respect
      to its application for the domain name and design of website, assist Party
      A in
      communication with the network service company on matters relating to the domain
      name and website.

    


    2.6
      Assist with the computers, server and other facilities in accordance with the
      requirements of Party A, and make periodic maintenance on aforesaid facilities.
      

    


    2.7
      Conduct training of the technical employees of Party A.

    


    2.7.1
      Conduct Party A to the research of new formulations of ceramics, increase the
      toughness and machinability of ceramics, raise manufacturing ceramic materials
      burn rate and lower sintering temperature, significantly lower production costs,
      fulfill precision match between ceramic pieces and the metal valve
      bodies.

    


    2.7.2
      Conduct Party A to the research and development of the new product of ceramic
      valves, further improve the resilience and corrosion-resistant of industrial
      ceramics and other fine performance, increase the caliber of ceramic valves,
      pressure and temperature range, wider application of ceramic valves, fulfill
      the
      bigger large-scale replacement of metal valves. 

     

    
      
         

      

      
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      Technology Service Agreement 

      
        

      

    

     

    2.7.3
      Strengthen the training of Party A’s staff to use new equipments, quickly create
      productivity of the new equipments and improve the company production
      capacity

    


    2.8
      In
      the event of occurrence of technical problems of Party A, Party B shall
      designate with 12 hours relevant staff to perform on-site research for assisting
      Party A to resolve such problems.

    


    2.9 Party
      B
      shall be the sole and exclusive owner of all rights, title, interests and
      intellectual property rights arising from the performance of this Agreement
      (including but not limited to, any copyrights, patent, know-how, commercial
      secrets and otherwise), regardless developed independently by Party B or by
      Party A based on Party B’s intellectual property or by Party B based on Party
      A’s intellectual property. Party A shall not claim against Party B on any
      rights, ownership, interests or intellectual property.

    


    If
      such
      development is conducted on the basis of Party A’s intellectual property, Party
      A shall ensure that such intellectual property is clear and free from any lien
      or encumbrance or license, or Party A shall indemnify Party B any and all
      damages incurred thereby. In case Party B shall be liable to any third party
      by
      reason thereof, Party B shall be compensated in full by Party A as long as
      Party
      B has compensated the third party.

    


    Article
      3 Technology Service Fee

    


    3.1
      Party
      A shall pay the Technology Service Fee annually, equal to 1% of its total
      revenue as the Consideration for services provided by Party B as set forth
      in
      Article 2 hereof.

    


    3.2
      Party
      A shall pay to Party B the last year’s Technology Service Fee before January
      31st
      of each
      year.

    


    3.3
      Party
      B shall be entitled to request in writing that Party A adjust the Consideration
      in accordance with the quantity and quality of the technology services. The
      Parties shall positively negotiate with each other in respect of the Technology
      Service Fee, and Party A shall agree with such adjustment.

    


    3.4 Both
      Parties agree that any losses incurred during the performance of this Agreement
      shall be jointly burden by both Parties.

    


    Article
      4 Warranties and Undertakings by Party A

    


    4.1
      Within the term of this Agreement, Party B shall be the entity exclusively
      appointed by Party A to provide the services as set forth in Article 2
      hereunder, and Party A shall not appoint any other entities to provide to Party
      A (including its branches and subsidiaries) any services the same as or similar
      to those services described in Article 2 hereof.

     

    
      
         

      

      
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        Technology Service Agreement 

        
          

        

      

    

     

    4.2
      Party
      A will provide Party B with all information related to the content of service
      as
      set forth in Article 2. 

    


    4.3
      Party
      A will give full cooperation to Party B, and provide assistance and convenience
      to Party B for its on-site work, and shall not hinder Party B from providing
      services as set forth in Article 2 hereof.

    


    4.4
      Party
      A will promptly make full payment of the Consigned Management Service Fee to
      Party B in accordance with the provisions hereof.

    


    4.5
      Without the prior written consent of Party B, Party A shall not commit any
      act
      or omission that would materially affect Party B’s rights and interests
      hereunder.

    


    Article
      5 Warrants and Undertakings by Party B

    


    5.1
      Party
      B shall take advantage of its capacity and resources to provide the services
      as
      stipulated in Article 2 hereunder.

    


    5.2
      Party
      B shall timely adjust and complete the technology services in accordance with
      practical requests from Party A.

    


    5.3
      In
      the event that Party B intends to provide services to any other entities engaged
      in business similar to that of Party A, it shall give prior notice to Party
      A
      and strictly keep the confidential information obtained during the course of
      providing services to Party A .

    


    5.4
      Party
      B shall accept any reasonable suggestions regarding hardware, software and
      staff
      training from Party A during the course of providing services to Party
      A.

    


    Article
      6 Guaranty 

    


    6.1
      To
      secure the performance of the obligations assumed by Party A hereunder,
      Shareholders agree to pledge all their equity interests in Party A to Party
      B,
      and the Parties agree to execute an equity pledge agreement with respect
      thereto. 

    


    Article
      7 Taxes and Expenses

    


    7.1
      The
      Parties shall pay, in accordance with relevant PRC laws and regulations, their
      respective taxes arising from the execution and performance of this
      Agreement.

     

    
      
         

      

      
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    Article
      8 Assignment of the Agreement

    


    8.1
      Party
      A shall not transfer part or all its rights and obligations under this Agreement
      to any third party without the prior written consent of Party B.

    


    8.2
      The
      Parties agree that Party B shall be entitled to transfer, at its own discretion,
      any or all of its rights and obligations under this Agreement to any third
      party
      upon six (6) days’ written notice to Party A.

    


    Article
      9 Liability of Breach

    


    9.1
      If
      Party A fails to duly pay the Technology Service Fee in accordance with the
      provisions of Article 3 hereunder, then Party A shall pay liquidated damages
      per
      day equal to 0.03% of the unpaid Consideration which falls due; if any delay
      of
      payment amounts to sixty (60) days, then Party B shall be entitled to exercise
      the right of pledge under the equity pledge agreement.

    


    9.2
      If
      Party A violates its representations and warranties hereunder and fails to
      redress such violation within sixty (60) days upon receipt of written notice
      from Party B, Party B shall be entitled to exercise the right of pledge under
      the equity pledge agreement.

    


    9.3
      If
      Party B is in non-performance, or incomplete performance, of this Agreement,
      or
      is otherwise in default of any of its representations and warranties hereunder,
      Party A shall be entitled to request Party B to redress its
      default.

    


    Article
      10 Effectiveness, Modification and Cancellation

    


    10.1
      This
      Agreement shall take effect on the date of execution hereof, and the valid
      term
      hereof shall be expired upon the date of completion of the acquisition of the
      assets or the equity of Party A by Party B or its designated third
      party.

    


    10.2
      The
      modification of this Agreement shall not be effective without written agreement
      through negotiation. If the Parties do not reach an agreement, this Agreement
      remains effective.

    


    10.3
      This
      Agreement shall not be discharged or canceled without written agreement through
      negotiation, provided that Party B may, by giving thirty (30) days’ prior notice
      to the other Parties hereto, terminate this Agreement.

    


    10.4
      If
      Party B fails to provide the loan in accordance with the Loan Agreement signed
      between Party B and the Shareholders on May 30th,
      2008,
      this Agreement shall be automatically terminated.

     

    
      
         

      

      
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        Technology Service Agreement 

        
          

        

      

       

    

    Article
      11 Confidentiality

    


    11.1
      Any
      information, documents, data and all other materials (herein “Confidential
      Information”) arising out of the negotiation, signing, and implementation of
      this Agreement, shall be kept in strict confidence by the Parties. Without
      the
      written approval of the other Parties, no Party shall disclose to any third
      party any Confidential Information, but the following circumstances shall be
      excluded:

    (1)
      Material that is known or may be known by the Public (but not including
      materials disclosed by each Party receiving the Confidential
      Information);

    (2)
      Materials required to be disclosed subject to applicable laws or rules or
      provisions of a stock exchange; or 

    (3)
      Materials disclosed by each Party to its legal or financial consultant relating
      to the transaction of this Agreement, and this legal or financial consultant
      shall comply with the confidentiality set forth in this Section. The disclosure
      of Confidential Information by staff or a consignee of any Party shall be deemed
      the disclosure of such Confidential Information by such Party, and such Party
      shall bear the liabilities for breaching the contract. This Clause shall survive
      whether this Agreement is invalid, amended, revoked, terminated or unable to
      be
      implemented for any reason.

    


    11.2
      If
      this Agreement is terminated or becomes invalid or unenforceable, the validity
      and enforceability of this Article 11 shall not be affected or
      impaired.

    


    Article
      12 Force Majeure

    


    12.1
      “Force Majeure” refers to any event that could not be foreseen, and could not be
      avoided and overcome, which includes among other things, but without limitation,
      acts of nature (such as earthquakes, floods or fires), government acts, strikes
      or riots. 

    


    12.2
      If
      an event of force majeure occurs, any of the Parties that is prevented from
      performing its obligations under this Agreement by an event of force majeure
      shall notify the other Parties without delay and within fifteen (15) days of
      the
      event provide detailed information about and notarized documents evidencing
      the
      event, shall take appropriate measures to minimize or remove the negative
      effects of force majeure on the other Parties and shall not assume the
      liabilities for breaching this Agreement. The Parties shall continue performing
      this Agreement after the event of force majeure disappears.

    


    Article
      13 Governing Law and Dispute Resolution

    


    13.1
      The
      effectiveness, interpretation, implementation and dispute resolution related
      to
      this Agreement shall be governed under PRC Laws.

     

    
      
         

      

      
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        Technology Service Agreement 

        
          

        

      

       

    

    13.2
      Any
      dispute arising out of this Agreement shall be resolved by all the Parties
      through mutual negotiation. If all the Parties cannot reach an agreement within
      thirty (30) days from the date on which the dispute is brought forward, any
      Party may submit the dispute to the Beijing Arbitration Commission for
      arbitration under its applicable rules. The arbitration award shall be final
      and
      binding upon both parties.

    


    13.3
      During the process of dispute resolution, all the Parties shall continue to
      perform under the other terms of this Agreement, except for the provisions
      subject to the dispute resolution.

    


    Article
      14 Miscellaneous

    


    14.1
      The
      Parties acknowledge that this Agreement constitutes the entire agreement of
      the
      Parties with respect to the subject matters hereof and supersedes and replaces
      all prior or contemporaneous oral or written agreements and understandings.
      

    


    14.2
      This
      Agreement shall bind and benefit the successor of each Party and any transferee
      permitted hereunder with the same rights and obligations as if such successor
      or
      transferee were an original party hereto. 

    


    14.3
      Any
      notice required to be given or delivered to the Parties hereunder shall be
      in
      writing and delivered to the address as indicated below or such other address
      or
      as such party may designate, in writing, from time to time. All notices shall
      be
      deemed to have been given or delivered upon by personal delivery, fax and
      registered mail. It shall be deemed to be delivered upon: (1) registered air
      mail: 5 business days after deposit in the mail; (2) personal delivery or fax:
      2
      business days after transmission. If the notice is delivered by fax, it should
      be confirmed by original through registered air mail or personal
      delivery:

    


    Party
      A:

    Contact
      person: Wang Chen

    Address:
      Room324, 3/F, 1stStreet, Tianjin Economic-Technological Development
      Area

    Tel:
      86-22-28590002  Fax:
      86-22-28590003

    


    Party
      B:

    Contact
      person: Wang Chen

    Address:
      Room A2-191, No.166 Xisandao, Konggang Logistics Processing Zones,
      Tianjin

    Tel:
      86-22-28590002 
      Fax:
      86-22-28590003

    


    The
      Representative designated by the Shareholders

    Contact
      person: Wang Chen

    Address:
      Shengkai Ind. Park Wanggang R.d Jinnan (Shuanggang) Dev. Area
      Tianjin

    Tel:
      86-22-28590002  Fax:
      86-22-28590003

    


    
      
         

      

      
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    14.4
      This
      Agreement is executed in eleven originals with each party holding one original,
      and each of the originals shall be equally valid and authentic.

    


    [Signature
      Page Follows]


    
      
         

      

      
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      Technology Service Agreement 

      
        

      

    


    IN
      WITNESS WHEREOF,
      the
      Parties hereto have caused this Agreement to be executed and delivered as of
      the
      date as written above.

    


    Party
      A Tianjin Shengkai Industrial Technology Development Co., Ltd.


     

    Legal
      Representative: Wang Chen

    Signature
      and Company Seal: 

    


    Party
      B Shengkai (Tianjin) Ceramic Valve Co., Ltd.

    


    Legal
      Representative: Wang Chen

    Signature
      and Company Seal:

     

    All
      shareholders of Tianjin Shengkai Industrial Technology Development Co.,
      Ltd.

     

    
      	
              Name
                of the

              Shareholders

            	
               

            	
              Signature

            	
               

            	
              Name
                of the

              Shareholders

            	
               

            	
              Signature

            
	
              Wang
                Chen

            	
               

            	
              /s/
                Wang Chen 

            	
               

            	
              Guo
                Wei

            	
               

            	
              /s/
                Guo Wei

            
	
              Zhao
                Yanqiu

            	
               

            	
              /s/
                Zhao Yanqiu

            	
               

            	
              Ji
                Haihong

            	
               

            	
              /s/
                Ji Haihong

            
	
              Zhang
                Ying

            	
               

            	
              /s/
                Zhang Ying

            	
               

            	
              Miao
                Yang

            	
               

            	
              /s/
                Miao Yang

            
	
              Chen
                Fang

            	
               

            	
              /s/
                Chen Fang

            	
               

            	
              Wu
                Yanping

            	
               

            	
              /s/
                Wu Yanping

            
	
              Liu
                Naifan

            	
               

            	
              /s/
                Liu Naifan

            	
               

            	
               

            	
               

            	
               

            


    

     

    
      
         

      

      
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