Equity
      Pledge Agreement

    


    


    By
      and among

     

     

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

    


    Shengkai
      (Tianjin) Ceramic Valve Co., Ltd.

    


    


    Tianjin
      Shengkai Industrial Technology Development Co., Ltd.

    


     

    May
      30th,
      2008

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

      Equity
        Pledge Agreement

      
        
          

        

      

       

      EQUITY
        PLEDGE AGREEMENT 

    

    


    THIS
      EQUITY PLEDGE AGREEMENT (hereinafter referred to as “this Agreement”) is
      executed by the following parties on May 30th,
      2008 in
      Tianjin, People’s Republic of China (“PRC”): 

    


    (1)
      All shareholders of Tianjin Shengkai Industrial Technology Development Co.,
      Ltd.


    (hereinafter
      collectively called “Party A” or “Pledgors”)

    


    
      	
              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 Road, Xiangzhou
                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

            


    

     

    
      
        
        

      

      
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      Equity
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    (2)
      Shengkai(Tianjin) Ceramic Valve Co., Ltd. (hereinafter collectively called
      “Party B” or “Pledgee”)

    


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

    


    Legal
      Representative:Wang Chen

    


    (3)
      Tianjin Shengkai Industrial Technology Development Co., Ltd. (hereinafter
      collectively called “Party C” or the “Company”)

    


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

    


    Legal
      Representative: Wang Chen

     

    (Pledgors,
      Pledgee and the Company may be collectively called the “Parties” and
      individually as “Each Party”.)

     

    WHEREAS,
      

    


    
      	
              1.

            	
              The
                Company is a domestic company incorporated and validly existing under
                PRC
                Laws, and its business license No. is 120191000015144;

            


    

    


    
      	
              2.

            	
              The
                Pledgors, the PRC citizen, legally
                holds 100% Equity Interests in the
                Company;

            


    

    


    
      	
              3.

            	
              The
                Pledgee, as a wholly foreign-owned enterprise, was duly incorporated
                and
                validly existing under the PRC Laws;


            


    

    


    
      	
              4.

            	
              Party
                A signed a loan agreement (the “Loan Agreement”) on May 30th,
                2008with Party B. According to this agreement, Party B will provide
                the
                loan to Party A and Party A agrees to pledge all their equities in
                Party C
                as a guaranty of the performance of the obligations thereunder.
                

            


    

     

    
      	
              5.

            	
              Party
                B signed a consigned management agreement (the “Consigned Management
                Agreement”) on May 30th,
                2008 with Party C and Party A, and Party A agrees to pledge all their
                equities in Party C to Party B as a guaranty for the performance
                of the
                obligations thereunder. 

            


    

     

    
      
        
        

      

      
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              6.

            	
              Party
                B signed a technology service agreement (the “Technology Service
                Agreement”) on May 30th,
                2008 with Party C and Party A, and Party A agrees to pledge all their
                equities in Party C to Party B as a guaranty for the performance
                of the
                obligations thereunder. 

            


    

     

    
      	
              7.

            	
              The
                Parties signed an exclusive purchase option agreement (the “Exclusive
                Purchase Option Agreement”) on May 30th,
                2008, and the parties thereto agree that Party A shall pledge all
                their
                equities in Party C to Party B as a guaranty of the performance of
                the
                obligations assumed by Party A and Party C thereunder.
                

            


    

     

    NOW
      THEREFORE,
      the
      Parties, through friendly negotiations, hereby enter into this Agreement with
      respect to the equity pledge. 

    


    
      	
              1.

            	
              Definitions
                and Interpretation 

            


    

     

    Unless
      otherwise provided in this Agreement, the following terms shall have the
      following meanings: 

    


    
      	 	
              1.1

            	
              “PRC”
                refers to the People’s Republic of China, excluding the HongKong Special
                Administrative Region, Macao Special Administrative Region and Taiwan
                Province;

            


    

    


    
      	 	
              1.2

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

            


    

    


    
      	 	
              1.3

            	
              “Pledged
                Equity” refers to all the equity in the Company as provided in Article2.1;
                

            


    

    


    
      	 	
              1.4

            	
              “Main
                Agreements” refers to the Loan Agreement, Consigned Management Agreement,
                Technology Service Agreement and Exclusive Purchase Option Agreement
                and
                the Appendixes thereof (if applicable);


            


    

    


    
      	 	
              1.5

            	
              “Right
                of Pledge” refers to the right owned by the Pledgee to be first
                compensated from the money converted from or the proceeds from the
                auction
                or sale of the Pledged Equity by the Pledgors to the Pledgee in the
                event
                of default of Pledgors and/or Party C, and such right shall cause
                the
                Pledgee to be entitled to the bonus arising from Pledged Equity;
                

            


    

    


    
      	 	
              1.6

            	
              “ABIC”
                refers to the competent Administration Bureau of Industry and Commerce
                which is authorized in accordance with PRC Laws to register the Pledged
                Equity hereunder;

            


    

     

    
      
        
        

      

      
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              1.7

            	
              “Event
                of Default” refers to the event as defined in Article 8
                hereunder.

            
	 	 	 
	 	
              1.8

            	
              “Business
                Day” refers to any
                day except Saturday, Sunday and other public holidays as permitted
                by PRC
                Laws;

            


    

    


    
      	
              2.

            	
              Equity
                Pledge 

            


    

     

    
      	 	
              2.1

            	
              The
                Parties agree that Pledgors shall pledge all their Equities in the
                Company
                to the Pledgee as a guaranty for the performance of the obligations
                assumed by the Pledogors and/or the Company under each of the Main
                Agreements. 

            


    

    


    
      	 	
              2.2

            	
              In
                case the Pledgors increase the registered capital in the Company
                during
                the term of this Agreement, such increased capital shall be equally
                deemed
                as the Pledged Equity.

            


    

    


    
      	 	
              2.3

            	
              In
                case any act conducted by the Pledgors or the Company may cause the
                Right
                of Pledge damaged so as to harm the interests of the Pledgee, the
                Pledgee
                is entitled to require the Pledged Equity to be auctioned or sold
                in
                advance and the proceeds from such auction or sale shall be used
                to
                discharge the debt secured by the Pledged Equity in
                advance.

            


    

    


    
      	
              3.

            	
              Registration
                of Pledge 

            


    

    


    
      	 	
              3.1

            	
              Upon
                the execution of this Agreement, the Pledgors shall cause the Company
                to
                record the Right of Pledge in the register of shareholders and deliver
                it
                with the common seal of the Company as well as the original of equity
                contribution certificate of the Pledgors to the Pledgee for keeping.
                Within the term of this Agreement, Party B shall return the register
                of
                shareholders and equity contribution certificate to the Company for
                modification registration with ABIC, and the Company shall complete
                the
                modification registration within 10 days upon receipt of the register
                of
                shareholders and equity contribution certificate, and Party A together
                with the Company shall continue to deliver such modified register
                of
                shareholders and equity contribution certificate to Party B within
                2 days
                following the completion of the aforesaid
                registration.

            


    

    


    
      	 	
              3.2

            	
              The
                Parties agree that if ABIC accept the registration with respect to
                the
                equity pledge, they will promptly cause the Pledged Equity under
                this
                Agreement to be recorded at ABIC, and the Parties confirm that whether
                the
                Pledged Equity is recorded as above or not shall not affect the validity
                of this Agreement unless compulsorily required by PRC Laws.
                

            


    

    


    
      	 	
              3.3

            	
              After
                the signing of this Agreement, the Pledgors shall in accordance with
                the
                Pledgee’s written request which may be made by the Pledgee from time to
                time, together with the Pledgee, notarized this agreement as well
                as the
                register of shareholders with the recorded Pledged Equity in a notary
                public office as designated by the Pledgee, and Party A and the Company
                shall give assistant with respect to the notarization following the
                delivery of the notice with the request of notarization by Party
                B.
                

            


    

     

    
      
        
        

      

      
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              4.

            	
              Representations
                and Warranties

            


    

    


    
      	 	
              4.1

            	
              Each
                Party under this Agreement represents and warrants to other Parties
                that:
                (1) it has relevant power, rights and authorizations for the execution
                hereof, and performance of the obligations hereunder; 

              (2)
                the execution and performance of this Agreement shall not violate
                or
                conflict with any of the terms and conditions of other agreements
                signed
                between the Parties. 

            


    

    


    
      	 	
              4.2

               

            	
              The
                Pledgors represent and warrant to the Pledgee that:

              (1)
                they are the legal owner of the Pledged Equity, and have fulfilled
                the
                obligations of capital contribution in the registered capital of
                the
                Company;

              (2)
                except for the Right of Pledge as setup hereunder, the
                Pledged Equity is not subject to
                any pledge, guaranty or other form of encumbrances;

              (3)
                they do not or will not transfer the Pledged Equity to any third
                party or
                make any agreements, whether oral or written, with respect to the
                transfer
                of Pledged Equity.

            


    

     

    
      	
            	
              4.3

            	
              The
                Company
                agrees to undertake the joint liability with respect to the
                representations and warrants made by the
                Pledgors.

            


    

     

    
      	
              5.

            	
              Obligations
                of Pledgors 

            


    

    


    
      	 	
              5.1

            	
              The
                dividend and bonus arising from the Pledged Equity shall be deposited
                in
                an escrow account for the supervision of the
                Pledgee.

            


    

    


    
      	 	
              5.2

            	
              Apart
                from the encumbrance set forth hereunder and under the Exclusive
                Purchase
                Option Agreement, without the Pledgee’s prior written consent, the
                Pledgors shall not sell, transfer, mortgage or otherwise dispose
                of the
                Pledged Equity, nor shall place encumbrances on such Pledged
                Equity;

            


    

    


    
      	 	
              5.3

            	
              Without
                the Pledgee’s prior written consent, the Pledgors shall not supplement or
                amend the articles of association of the Company in any manner, nor
                shall
                it increase or decrease the registered capital or change the shareholding
                structure of the Company in any
                manner;

            


    

    


    
      	 	
              5.4

            	
              The
                Pledgors shall cause the Shareholders’ General Meeting not to approve for
                the resolutions on the dissolution, liquidation and change of legal
                form
                of the Company, its subsidiaries wholly owned or controlled by the
                Company; 

            


    

     

    
      
        
        

      

      
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              5.5

            	
              The
                Pledgors shall cause the Shareholders’ General Meeting not to approve for
                any Profit Distribution Proposal, nor shall accept such distributed
                dividend without
                the Pledgee’s prior written consent; At the Pledgee’s request, it shall
                promptly approve for the Profit Distribution Proposal, and accept
                such
                distributed dividend;

            


    

    


    
      	 	
              5.6

            	
              At
                the
                Pledgee’s request, the Pledgors shall provide the Pledgee with all
                information regarding the business operation and financial condition
                of
                the Company;

            


    

    


    
      	 	
              5.7

            	
              The
                Pledgors shall not incur or succeed to any debts or liabilities which
                may
                adversely affect their
                equity interests in the Company without the Pledgee’s prior written
                consent;

            


    

    


    
      	 	
              5.8

            	
              The
                Pledgors shall appoint, and appoint only, the candidates nominated
                by
                the
                Pledgee to the board of directors of the Company, and shall not replace
                such candidates without the Pledgee’s prior written consent;
                

            


    

    


    
      	 	
              5.9

            	
              The
                Pledgors shall cause the Board of Directors of the Company not to
                approve
                any acquisition of, any consolidation with, or any investment in
                any third
                party without the
                Pledgee’s prior written consent; 

            


    

    


    
      	 	
              5.10

            	
              The
                Pledgors shall promptly notify
                the Pledgee of any pending or threatened lawsuit, arbitration or
                administrative dispute which involve the assets, business or incomes
                of
                the Company, and take positive measures against aforesaid lawsuits,
                arbitrations or administrative dispute;


            


    

    


    
      	 	
              5.11

            	
              The
                Pledgors shall
                not commit any conducts or omissions that may adversely affect the
                assets,
                business operation, the debts and liabilities of the Company without
                the
                Pledgee’s prior written consent;

            


    

    


    
      	 	
              5.12

            	
              To
                the extent permitted by the PRC laws and regulations, and at any
                time upon
                Pledgee’s request, the Pledgors shall promptly and unconditionally
                transfer their equity interests of the Company to Pledgee or its
                designated third party in accordance with the Exclusive Purchase
                Option
                Agreement, and cause other shareholders waive their rights of first
                refusal with respect to such transfer;


            


    

    


    
      	 	
              5.13

            	
              The
                Pledgors shall cause the directors of the Company approve for the
                resolution in respect of the Equity Transfer or Assets Transfer
                hereunder;

            


    

     

    
      
        
        

      

      
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              5.14

            	
              The
                Pledgors shall make every efforts to cause the
                Company perform the obligations of Article 6 hereunder;

            
	 	 	 
	 	
              5.15

            	
              The
                Shareholders shall, to the extent permitted by applicable laws, cause
                the
                business term of Party C (including the circumstance of change of
                business
                terms) not shorter than that of Party B(including the circumstance
                of
                change of business terms);

            


    

     

    
      	 	
              5.16

            	
              The
                Pledgors shall strictly comply with the provisions of this Agreement,
                and
                effectively perform its obligations hereunder, and shall be prohibited
                from committing any act or omission which may affect the validity
                or
                enforceability of this Agreement.

            


    

    


    
      	
              6.

            	
              Obligations
                of the Company

            


    

    


    
      	 	
              6.1

            	
              Without
                the
                Pledgee’s prior written consent, it shall not supplement or amend the
                articles of association or rules of the Company, its subsidiaries
                wholly-owned or controlled by the Company in any manner, nor shall
                it
                increase or decrease the registered capital or change the shareholding
                structure of aforesaid entities in any manner; 

            
	 	
              6.2

            	
              It
                shall prudently and effectively maintain its business operations
                according
                to good financial and business standards so as to maintain or increase
                the
                value of its assets; 

            


    

    


    
      	 	
              6.3

            	
              Unless
                as required necessary for the business operation of the
                Company or upon the prior written consent by Party B , it shall not
                transfer, mortgage or otherwise dispose of the lawful rights and
                interests
                to and in its assets or incomes, nor shall it encumber its assets
                and
                income in any way that would affect the Pledgee’s security interests;
                

            


    

    


    
      	 	
              6.4

            	
              It
                shall not incur or succeed to any debts or liabilities unless as
                required
                necessary for the business operation of the
                Company or upon the prior written consent by Party B;
                

            


    

    


    
      	 	
              6.5

            	
              Without
                the
                Pledgee’s prior written consent, it shall not enter into any material
                contract (exceeding RMB3,000,000 in value);


            


    

    


    
      	 	
              6.6

            	
              Without
                the
                Pledgee’s prior written consent, it shall not provide any loans or
                guaranty to any third party; 

            


    

    


    
      	 	
              6.7

            	
              At
                the
                Pledgee’s request, it shall provide the Pledgee with all information
                regarding its business operation and financial condition;
                

            


    

    


    
      	 	
              6.8

            	
              The
                Company shall purchase insurance from insurance companies acceptable
                to
                the Pledgee in such amounts and of such kinds as are customary in
                the
                region among companies doing similar business and having similar
                assets;
                

            


    

     

    
      
        
        

      

      
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              6.9

            	
              Without
                the Pledgee’s prior written consent, it shall not acquire or consolidate
                with any third party, nor shall they invest in any third party;
                

            


    

    


    
      	 	
              6.10

            	
              It
                shall promptly notify
                the Pledgee of any pending or threatened lawsuit, arbitration or
                administrative dispute which involve its assets, business or incomes,
                and
                take positive measures against aforesaid lawsuits, arbitrations or
                administrative dispute; 

            


    

    


    
      	 	
              6.11

            	
              Without
                the
                Pledgee’s prior written consent, it shall not distribute any dividends to
                the Pledgors in any manner, and at the Pledgee’s request, it shall
                promptly distribute all distributable dividends to the
                Pledgors.

            
	 	 	 
	 	
              6.12

            	
              Without
                the Pledgee’s prior written consent, it shall not commit any act or
                omission that would materially affect its assets, business or
                liabilities;

            


    

    


    
      	
              7.

            	
              Exercise
                of Right of Pledge 

            


    

    


    
      	 	
              7.1

            	
              The
                Pledgee may exercise the Right of Pledge at any time following the
                delivery of Notice of Default as provided in Article 8.2 to the
                Pledgors.

            


    

    


    
      	 	
              7.2

            	
              The
                Pledgee is entitled to be first compensated with the money converted
                from
                or the proceeds from auction or sale of all or part of Pledged Equity
                in
                accordance with legal proceedings unless the Pledgors has duly and
                completely performed the obligations under Main Agreements.
                

            


    

    


    
      	 	
              7.3

            	
              Within
                the term of this Agreement, If the Pledged Equity hereunder is subjected
                to any compulsory measures implemented by a court or other departments
                due
                to the Pledgors’ failing to repay the debts which fall due or violation of
                PRC Laws or state policies etc., the Pledgors shall, 

              (1)
                notify the Pledgee in written form of such compulsory measures within
                three (3) days following its occurrence;

              (2)
                use all efforts (including but not limited to provide other security
                to
                the court or other government authorities), in order to dismiss the
                compulsory measures taken by the court or other government authorities
                over the Pledged Equity.

            


    

    


    
      	 	
              7.4

            	
              The
                Pledgors shall not hinder the Pledgee from exercising the Right of
                Pledge
                and shall give necessary assistance so that the Pledgee could realize
                its
                Right of Pledge. 

            


    

     

    
      
        
        

      

      
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              8.

            	
              Event
                of Default 

            


    

    


    
      	 	
              8.1

            	
              The
                following events shall be regarded as the Events of Default:
                

            


    

    


    
      	 	
              8.1.1

            	
              Any
                Party breaches any of the representations or warranties
                hereunder;

            


    

    


    
      	 	
              8.1.2

            	
              The
                Pledgors and/or the Company breaches any of the representations or
                warranties under the Main
                Agreements;

            


    

    


    
      	 	
              8.1.3

            	
              The
                Pledgors and/or the Company fail(s) to duly and completely perform
                the
                obligations hereunder; 

            


    

    


    
      	 	
              8.1.4

            	
              The
                Pledgors and/or the Company fail(s) to duly and completely perform
                the
                obligations under the Main
                Agreements;

            


    

    


    
      	 	
              8.1.5

            	
              Any
                other external borrowing, guaranty, compensation or other liabilities
                of
                the Pledgors: (1) is required for an early repayment or performance
                prior
                to the scheduled date due to any breach by the Pledgors; or (2) is
                due

              but
                can not be repaid or perform as scheduled, which , at the discretion
                of
                the Pledgee, has an adverse effect on the Pledgors’ ability of performing
                the obligations under this
                Agreement;

            


    

    


    
      	 	
              8.1.6

            	
              The
                Company fails to repay the debts which fall
                due;

            


    

    


    
      	 	
              8.1.7

            	
              The
                properties owned by Pledgor have significant adverse changes, which,
                at
                the discretion of Pledgee, has an adverse effect on Pledgor’s ability of
                performing the obligations under this
                Agreement;

            


    

    


    
      	 	
              8.2
                

            	
               

              Unless
                the Pledgors take the action to Pledgee’s satisfaction to remedy the
                defaults as listed in Article 8.1 hereof, the Pledgee may give a
                written
                notice about default (“Notice of Default”) to the Pledgors when such
                default occurs or at any time thereafter. 

               

            


    

    


    
      	
              9.

            	
              Taxes
                and Expenses 

            


    

    


    
      	 	
              9.1

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

            


    

    


    
      	
              10.

            	
              Assignment 

            


    

    


    
      	 	
              10.1

            	
              The
                Pledgors shall not transfer part or all of the rights and obligations
                under this Agreement without prior written consent from the Pledgee.
                

            


    

    


    
      	 	
              10.2

            	
              To
                the extent being permitted by law, the Pledgee shall
                have the right to transfer any or all of its rights and obligations
                under
                this Agreement to any third party upon a six (6) -day written notice
                to
                the Pledgors or the Company without its
                approval.

            


    

     

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

    

      Equity
        Pledge Agreement

      
        
          

        

      

       

    

    
      	
              11.

            	
              Effectiveness
                Modification
                and Cancellation

            


    

    


    
      	 	
              11.1

            	
              This
                Agreement shall be executed on the date set forth in the first page
                and
                shall become effective on the day on which the Pledged Equity is
                recorded
                on the register of the
                shareholders.

            


    

    


    
      	 	
              11.2

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

            


    

    


    
      	 	
              11.3

            	
              This
                Agreement shall not be discharged or canceled without written agreement
                through negotiation.

            


    

    


    
      	 	
              11.4

            	
              If
                the Pledgee fails to provide the loan to the Pledgors in accordance
                with
                the Loan Agreement, this Agreement shall be automatically
                terminated.

            


    

    


    
      	
              12.

            	
              Confidentiality

            


    

    


    
      	 	
              12.1

            	
              Any
                information, documents, data and all other materials (herein “Confidential
                Information”) arising out of the negotiation, signing, and implement of
                this Agreement, shall be kept in strict confidence by the Parties.
                Without
                the written approval by the other Parties, any Party shall not disclose
                to
                any third party any Confidential Information, 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 Confidential
                Information);

            


    

    


    
      	 	
              b.

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

            


    

    


    
      	 	
              c.

            	
              The
                materials disclosed by each Party to its legal or financial consultant
                relating the transaction of this Agreement, and this legal or financial
                consultant shall comply with the confidentiality set forth in this
                Section. The disclosure of the Confidential
                Information by staff or employed institution of any Party shall be
                deemed
                as the disclosure of such Confidential Information by such Party,
                and such
                Party shall bear the liabilities for breaching the contract.
                

            


    

    


    
      	 	
              12.2

            	
              This
                Clause shall survive whatever this Agreement is invalid, amended,
                revoked,
                terminated or unable to implement by any
                reason.

            


    

     

    
      
        
        

      

      
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    Equity
      Pledge Agreement

    
      
        

      

    

     

    
      	
              13.

            	
              Force
                Majeure

            


    

    


    
      	 	
              13.1

            	
              An
                event of force majeure means an 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 earthquake, flood or
                fire),
                government acts, strikes or riots;

            


    

    


    
      	 	
              13.2

            	
              If
                an event of force majeure occurs, any of the Parties who 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 and take appropriate means 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 keep on performing this Agreement after the event of force
                majeure
                disappears.

            


    

    


    
      	
              14.

            	
              Applicable
                Law and Dispute Resolution


            


    

    


    
      	 	
              14.1

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

            


    

    


    
      	 	
              14.2

            	
              The
                Parties shall strive to settle any dispute arising from or in connection
                with this Agreement through friendly consultation. 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 Beijing
                Arbitration Commission for arbitration in accordance with its rules.
                The
                arbitration award shall be final conclusive and binding upon the
                Parties.

            


    

    


    
      	 	
              14.3

            	
              During
                the process of dispute-resolution, the Parties shall continue to
                perform
                other terms under this Agreement, except for provision of dispute
                resolution.

            


    

    


    
      	
              15.

            	
              Miscellaneous
                

            


    

    


    
      	 	
              15.1

            	
              Entire
                Agreement 

            


    

    


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

            


    

    


    
      	 	
              15.2

            	
              Successor
                

            


    

    


    
      	 	 	
              This
                Agreement shall bind and benefit the successor of each Party and
                the
                transferee permitted hereunder with the same rights and obligations
                as if
                the original parties hereof. 

            


    

     

    
      
        
        

      

      
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      Equity
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              15.3

            	
              Notice

            


    

    


    
      	 	 	
              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 delivery by 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. 

               

              The
                Representative designated by 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

               

              Party
                C

              Contact
                person: Wang Chen

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

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

            


    

     

    
      	 	
              15.4

            	
              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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    Equity
      Pledge Agreement

    
      
        

      

    

     

    IN
      WITNESS WHEREOF,
      each
      party has caused this Agreement to be executed and delivered as of the date
      first above written. 

    


    Party
      A 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

              	 	 	 	 


      

    

    


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

    


    Legal
      Representative: Wang Chen

    Signature
      and Company Seal: /s/ Wang Chen

    


    Party
      C  Tianjin
      Shengkai Industrial Technology Development Co. Ltd. (“Company”) 

     

    Legal
      Representative: Wang Chen

    Signature
      and Company seal: /s/ Wang Chen

    


    
      
        
        

      

      
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