EXCLUSIVE
      PURCHAE OPTION AGREEMENT

    


    by
      and among

    


    SHENGKAI
      (TIANJIN)
      CERAMIC
      VALVE CO., LTD.

    


    TIANJIN
      SHENGKAI INDUSRIAL TECHNOLOGY

    DEVELOPMENT
      CO., LTD. 

    


    and

    


    THE
      SHAREHOLDERS SIGNATORIES THERETO

    


    May
      30th,
      2008

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

      Exclusive
        Purchase Option Agreement 
        
          

        

      



    EXCLUSIVE
      PURCHASE OPTION AGREEMENT 

     

    
      This
        Exclusive Option Purchase Agreement (the “Agreement”) is executed by the
        following parties on May 30th,
        2008 in
        Tianjin, the People’s Republic of China.

    

    


    (1) Shengkai
      (Tianjin) Ceramic Valve Co., Ltd. (“Party A”)

    


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

    


    Legal
      representative: Wang Chen

    


    (2) Tianjin
      Shengkai Industrial Technology Development Co., Ltd. (“Party
      B”)

     

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

    


    Legal
      representative: Wang Chen

    


    (3)
      The Shareholders of Tianjin Shengkai Industrial Technology Development Co.,
      Ltd.
      (“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 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

            


    

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

    

      Exclusive
        Purchase Option Agreement 
        
          

        

      

    

     

    Party
      A,
      Party B, and shareholders of Party B are hereinafter from time to time,
      collectively, referred to as the “Parties”,
      and
      each of them is hereinafter from time to time referred to as a “Party”;
      the
      individual shareholders are hereinafter from time to time, collectively,
      referred to as the “Shareholders”
and
      each of them is hereinafter from time to time referred to as a “Shareholder”.
      The
      equity interests in Party B held by each Shareholder or any shareholder now
      existing or hereafter acquired is hereinafter from time to time referred to
      as
      the “Equity
      Interests”
or
      “Equity”.

    


    WHEREAS:
      

    


    
      	
              1.

            	
              Party
                A, a wholly foreign-owned enterprise incorporated under the laws
                of the
                People’s Republic of China (the “PRC”),
                which engages in the general business items, including researching,
                developing, technology consulting service of ceramic valves and ceramic
                materials.

            


    

    


    
      	
              2.

            	
              Party
                B, as a domestic limited liability company, incorporated under PRC
                laws in
                Tianjin, and licensed by Tianjin Administration for Industry and
                Commerce,
                it engages in 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. 

            


    

    


    
      	
              3.

            	
              As
                of the date of this Agreement, the percentage ownership of the Equity
                Interests in Party B held by each of the Shareholders shall be set
                forth
                as described above. 

            


    

    


    
      	
              4.

            	
              To
                secure the performance of the obligations assumed by Party B and
                the
                Shareholders under this Agreement, the Shareholders agree to pledge
                all
                their equity in Party B to Party A, and have executed Equity Pledge
                Agreement on May 30th,
                2008 with respect thereto (collectively called as the “Equity
                Pledge Agreements”
                or respectively as “Individual
                Equity Pledge Agreement”
                or “Equity
                Pledge Agreement”).

            


    

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

    

      Exclusive
        Purchase Option Agreement 
        
          

        

      

    

     

    NOW,
      THEREFORE,
      the
      Parties through mutual negotiations hereby enter into this Agreement with
      respect of the exclusive purchase option right:

    


    
      	
              1.

            	
              THE
                GRANT AND EXERCISE OF PURCHASE
                OPTION

            


    

    
      


      
        	 	
                1.1

              	
                Each
                  Shareholder hereby irrevocably grants to Party A an exclusive purchase
                  right at any time, or designate any third party to purchase all
                  or part of
                  such Shareholders’ Equity Interests in Party B, provided permitted under
                  the PRC laws and regulations and Party B agrees to such grant by
                  such
                  Shareholders to Party A. Apart from Party A or any third party
                  designated
                  by Party A, no other person shall have the right to purchase such
                  Equity
                  Interests. Each of the Shareholders shall transfer its Equity Interests
                  in
                  Party B to Party A in accordance with its percentage ownership
                  of such
                  Equity Interests provided Party A selects to purchase such Shareholders’
                  Equity Interests.

                 

              
	 	
                1.2

              	
                Party
                  B hereby irrevocably grants to Party A an exclusive purchase option,
                  at
                  any time to acquire all or a portion of such Shareholders’ Equity
                  Interests, or all or substantial part of Party B’s assets, provided
                  permitted under the PRC laws and regulations and the shareholders
                  agree to
                  such grant by Party B to Party A. 

                 

              
	 	
                1.3

              	
                For
                  the purpose of this Agreement, a “third party” or a “person” may be a
                  natural person, company, partnership, enterprise, trust agency
                  or other
                  non-corporate entity.

              


      

       

    

    
      	 	
              1.4

            	
              To
                the extent permitted under the PRC laws and regulations, Party A
                shall
                determine at any time and at its own option to exercise such exclusive
                right to (i) purchase the Equity Interests as provided in Section
                1.1
                by
                written notice to the applicable Shareholder(s) specifying the amount
                of
                equity to be purchased (hereinafter referred to as “Equity
                Transfer”)
                or (ii) purchase all or substantially all of Party B’s assets as provided
                in Section
                1.2
                (hereinafter referred to as “Assets
                Transfer”)
                by written notice to Party B (each an "Exercise
                Notice").

            


    

    


    
      	 	
              1.5

            	
              Within
                thirty (30) days of the receipt of the Exercise Notice, the applicable
                Shareholder(s) and Party B shall execute a share/asset transfer agreement
                and other documents (collectively, the "Transfer
                Documents")
                necessary to effect the respective transfer of equity or assets to
                Party A
                (or any eligible party designated by Party A), and shall unconditionally
                assist Party A to obtain all approvals, permits, registrations, filings
                and other procedures necessary to effect the Equity or Assets
                Transfer.

            


    

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

    

      Exclusive
        Purchase Option Agreement 
        
          

        

      

    

     

    
      	 	
              1.6

            	
              Unless
                otherwise required under the PRC laws and regulations, the transaction
                price for the Equity Transfer or the Assets Transfer hereunder, as
                applicable, shall be the lowest price permitted under the PRC laws
                and
                regulations.

            
	 	 	 
	 	
              1.7

            	
              The
                consideration after tax payment (the “Consideration of Equity Transfer”)
                obtained by the Shareholders from Equity Transfer in Party B hereunder
                shall be used to satisfy their repayment obligations under the Loan
                Agreement dated as of May 30th,
                2008, signed by and among, Party A and the Shareholders (the “Loan
                Agreement”);

               

              The
                consideration after tax payment (the “Consideration of Assets Transfer”)
                by the Party B, if as applicable, from Assets Transfer hereunder
                shall be
                allocated to the Shareholders, to the largest extent as permitted
                by PRC
                laws and regulations, through profit allocation proposal and fulfill
                their
                payment obligations under the Loan Agreement, and Party B shall give
                full
                cooperation;

               

              And
                if the Consideration of Equity Transfer or Assets Transfer is higher
                than
                the total principal under the Loan Agreement due to the requirement
                by the
                applicable law or any other reasons, the excess shall be deemed as
                loan
                interests and/or utilizing fees of the Loan to the largest extent
                being
                permitted by PRC Laws, and be paid to Party A by the Shareholders
                together
                with loan principal.

            


    

    


    
      	
              2.

            	
              REPRESENTATIONS
                AND WARRANTIES

            


    

    


    
      	 	
              2.1

            	
              Each
                Party hereto represents to the other Parties that: (1) it has all
                the
                necessary rights, powers and authorizations to enter into this Agreement
                and perform its duties and obligations hereunder; and (2) the execution
                or
                performance of this Agreement shall not violate or conflict with
                the terms
                of any other contracts or agreements to which it is a
                party.

            


    

    


    
      	 	
              2.2

            	
              Each
                Shareholder hereby represents to Party A that: (1) such Shareholder
                is the
                legally registered shareholder of party B and has paid full amount
                of
                registered capital in Party B as required to be contributed by such
                Shareholder under the PRC laws and regulations; (2)Except for the
                Equity
                Pledge Agreement executed among the Parties, such Shareholder has
                not
                created any other mortgage, pledge, secured interests or other form
                of
                debt liabilities over the Equity Interests held by such Shareholder;
                and
                (3) such Shareholder has not transfer to any third party (and entered
                into
                any agreement in respect of) such Equity
                Interests.

            


    

    


    
      	 	
              2.3

            	
              Party
                B hereto represents to Party A that: (1) it is a limited liability
                company
                duly registered and validly existing under the PRC laws and regulations;
                and (2) its business operations are in compliance with applicable
                laws and
                regulations of the PRC in all material
                respects.

            


    

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

    

      Exclusive
        Purchase Option Agreement 
        
          

        

      

    

     

    
      	
              3.

            	
              OBLIGATIONS
                OF PARTY B AND ALL
                SHAREHOLDERS

            


    

    


    The
      Parties further agree as follows:

    


    
      	 	
              3.1

            	
              Before
                Party A has acquired all the equity/assets of Party B by exercising
                the
                purchase option provided hereunder, Party
                B:

            


    

     

    
      	 	
              a.

            	
              without
                Party A’s prior written consent, shall not supplement or amend the
                articles of association or rules of Party B, its wholly-owned and
                holding
                subsidiaries in any manner, nor shall it increase or decrease the
                registered capital or change the shareholding structure of aforesaid
                entities in any manner; 

            
	 	
              b.

            	
              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; 

            


    

    


    
      	 	
              c.

            	
              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 Party A’s security
                interests unless as required necessary for the business operation
                of Party
                B or upon prior written consent by Party A ;


            


    

    


    
      	 	
              d.

            	
              shall
                not incur or succeed to any debts or liabilities without Party A’s prior
                written consent; 

            


    

    


    
      	 	
              e.

            	
              without
                Party A’s prior written consent, shall not enter into any material
                contract (exceeding RMB 3,000,000 in
                value);

            


    

    


    
      	 	
              f.

            	
              without
                Party A’s prior written consent, shall not provide any loans or guaranty
                to any third party; 

            


    

    


    
      	 	
              g.

            	
              at
                Party A’s request, it shall provide Party A with all information regarding
                Party B’s business operation and financial condition;
                

            


    

    


    
      	 	
              h.

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

            


    

    


    
      	 	
              i.

            	
              without
                Party A’s prior written consent, shall not acquire or consolidate with any
                third party, nor shall they invest in any third party;
                

            


    

    


    
      	 	
              j.

            	
              shall
                promptly notify Party A of any pending or threatened lawsuit, arbitration
                or administrative dispute which involve Party B’s assets, business or
                incomes, and take positive measures against aforesaid lawsuits,
                arbitrations or administrative dispute;


            


    

    
       

      
        
          
          

        

        
          6

          
            

          

        

        
          
          

        

      

      

        Exclusive
          Purchase Option Agreement 
          
            

          

        

      

       

      
        	 	
                k.

              	
                without
                  Party A’s prior written consent, shall not distribute any dividends to
                  the
                  shareholders in any manner, and, at Party A’s request, shall promptly
                  distribute all distributable dividends to the shareholders of Party
                  B;

              
	 	 	 
	 	
                l.

              	
                without
                  Party A’s prior written consent, shall not commit any act or omission that
                  would materially affect Party B’s assets, business or
                  liabilities;

              
	 	
                 

                m

                 

              	
                 

                at
                  Party A’s request, shall it promptly and unconditionally transfer its
                  assets to Party A or its designated third party as permitted by
                  PRC laws
                  and regulations;

                 

              
	 	
                n

              	
                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.

              


      

       

    

    
      	 	
              3.2

            	
              Before
                Party A has acquired all the equity/assets of Party B by exercising
                the
                purchase option provided hereunder, each
                Shareholder:

            


    

    

      
        	 	
                a.

              	
                apart
                  from relevant provisions in each of the Equity Pledge Agreements,
                  without
                  Party A’s prior written consent, it shall not individually or collectively
                  transfer, sell, mortgage or otherwise dispose of such Shareholder’s Equity
                  Interests in Party B; nor shall such Shareholder places encumbrances
                  on
                  such Shareholder’s Equity Interests that would affect Party A’s interest
                  hereunder and thereunder;

              


      

    

     

    
      	 	
              b.

            	
              without
                Party A’s prior written consent, shall not supplement or amend the
                articles of association or rules of Party B in any manner, nor shall
                it
                increase or decrease its registered capital or change the shareholding
                structure in any manner;

            


    

    


    
      	 	
              c.

            	
              without
                Party A’s prior written consent, shall cause the Shareholders’ General
                Meeting not to approve for the resolutions on the dissolution, liquidation
                and change of legal form of Party B, its wholly owned and holding
                subsidiaries; 

            


    

    


    
      	 	
              d.

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

            


    

    


    
      	 	
              e.

            	
              at
                Party A’s request, it shall provide Party A with all information regarding
                Party B’s business operation and financial
                condition;

            


    

     

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

    

      Exclusive
        Purchase Option Agreement 
        
          

        

      

    

     

    
      	 	
              f.

            	
              shall
                not incur or succeed to any debts or liabilities which may adversely
                affect its Equity Interests in Party B without Party A’s prior written
                consent;

            


    

    


    
      	 	
              g.

            	
              shall
                appoint, and appoint only, the candidates nominated by Party A to
                the
                board of directors of Party B, and shall not replace such candidates
                without Party A’s prior written consent;


            


    

    


    
      	 	
              h.

            	
              shall
                cause Party B’s board of directors not to approve any acquisition of, any
                consolidation with, or any investment in any third party without
                Party A’s
                prior written consent; 

            


    

    


    
      	 	
              i.

            	
              shall
                promptly notify Party A of any pending or threatened lawsuit, arbitration
                or administrative dispute which involve Party B’s assets, business or
                incomes, and take positive measures against aforesaid lawsuits,
                arbitrations or administrative dispute;


            


    

    


    
      	 	
              j.

            	
              without
                Party A’s prior written consent, shall not commit any act or omission that
                would materially affect Party B’s assets, business or
                liabilities;

            


    

    


    
      	 	
              k.

            	
              to
                the extent permitted by the PRC laws and regulations, and at any
                time upon
                Party A’s request, shall promptly and unconditionally transfer their
                Equity Interests in Party B to Party A or a third party designated
                by
                Party A, and waive their rights of first refusal with respect to
                such
                transfer; 

            


    

    


    
      	 	
              l.

            	
              shall
                cause the directors of Party B approve for the resolution in respect
                of
                the Equity Transfer or Assets Transfer
                hereunder;

            


    

    


    
      	 	
              m.

            	
              shall
                make every efforts to cause Party B perform the obligations of Section
                3.1
                hereunder; and 

            


    

    


    
      	 	
              n.

            	
              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.

            


    

    


    
      	 	
              3.3

            	
              The
                Shareholders shall, to the extent permitted by applicable laws, cause
                Party 

              B's
                operational term (including the circumstance of change of business
                terms)
                to be extended to equal the operational term of Party A (including
                the
                circumstance of change of business
                terms).

            


    

     

    
      
        
        

      

      
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      Exclusive
        Purchase Option Agreement 
        
          

        

      

    

     

    
      	
              4.

            	
              GUARANTY
                OF THIS AGREEMENT 

            


    

    


    
      	 	
              4.1

            	
              To
                secure the performance of the obligations assumed by the Shareholders
                and
                Party B hereunder, the Parties agree to execute the Equity Pledge
                Agreement with respect thereto.

            


    

    


    
      	
              5.

            	
              TAXES
                AND FEES 

            


    

    


    
      	 	
              5.1

            	
              The
                Parties shall pay, in accordance with relevant PRC laws and regulations,
                their respective taxes arising from Equity or Assets transfer and
                related
                registration formalities and other charges during the transactions
                contemplated herein and therein. Party A shall pay the taxes and
                charges
                which shall be paid by Party B arising from Equity Transfer and related
                registration formalities, if the consideration of equity transfer
                is lower
                than, or equal to the total principal under the Loan Agreement.
                

            


    

    


    
      	
              6.

            	
              ASSIGNMENT
                OF AGREEMENT

            


    

    


    
      	 	
              6.1

            	
              Party
                B and the Shareholders shall not transfer such Shareholder’s rights and
                obligations under this Agreement to any third party without the prior
                written consent of Party A. 

            


    

    


    
      	 	
              6.2

            	
              Each
                Shareholder and Party B agree that Party A 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 such Shareholder
                and
                Party B without approval by such Shareholder and Party B.
                

            


    

    


    
      	
              7.

            	
              EVENTS
                OF DEFAULT

            


    

    


    
      	 	
              7.1

            	
              Any
                violation of any provision hereof, incomplete performance of any
                obligation provided hereunder, any misrepresentation made hereunder,
                material concealment or omission of any material fact or failure
                to
                perform any covenants provided hereunder by any Party shall constitute
                an
                event of default. The defaulting Party shall assume all the legal
                liabilities pursuant to the applicable PRC laws and
                regulations.

            


    

    


    
      	 	
              7.2

            	
              In
                the event of default by Party B or Shareholders, Party A shall be
                entitled
                to exercise the Pledgee’s right under the Equity Pledge Agreement in the
                event that Party B and Shareholders commit an event of default and
                fail to
                redress such default within 60 working days upon receipt of written
                notification from Party A.

            


    

    


    
      	
              8.

            	
              EFFECTIVEMESS,
                MODIFICATION AND
                CANCELLATION

            


    

    


    
      	 	
              8.1

            	
              This
                Agreement shall be effective upon the execution hereof by all Parties
                hereto.

            


    

    


    
      	 	
              8.2

            	
              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.

            


    

     

    
      
        
        

      

      
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              8.3

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

            


    

    


    
      	 	
              8.4

            	
              If
                Party A fails to provide the loan to the Shareholders in accordance
                with
                the Loan Agreement, this Agreement shall be automatically
                terminated.

            


    

    


    
      	
              9.

            	
              CONFIDENTIALITY

            


    

    


    
      	 	
              9.1

            	
              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 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.

            	
              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 materials by staff or
                employed
                institution of any Party shall be deemed as the disclosure of such
                materials by such Party, and such Party shall bear the liabilities
                for
                breaching the contract. 

            


    

    


    
      	 	
              9.2

            	
              If
                this Agreement is terminated or becomes invalid or unenforceable,
                the
                validity and enforceability of Article 9 shall not be affected or
                impaired.

            


    

    


    
      	
              10.

            	
              FORCE
                MAJEURE

            


    

    


    
      	 	
              10.1

            	
              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;

            


    

    


    
      	 	
              10.2

            	
              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.

            


    

     

    
      
        
        

      

      
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              11.

            	
              APPLICABLE
                LAW AND DISPUTE RESOLUTION

            


    

    


    
      	 	
              11.1

            	
              Applicable
                Law 

            


    

    


    
      	 	 	
              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. 

            


    

    


    
      	 	
              11.2

            	
              Dispute
                Resolution 

            


    

    


    
      	 	 	
              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 shall take place in Beijing and the proceedings shall
                be
                conducted in Chinese. The arbitration award shall be final conclusive
                and
                binding upon the Parties. 

            


    

    


    
      	
              12.

            	
              MISCELLANEOUS

            


    

    


    
      	 	
              12.1

            	
              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.

            


    

    


    
      	 	
              12.2

            	
              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. 

            


    

    


    
      	 	
              12.3

            	
              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: 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. 

            


    

     

    
      
        
        

      

      
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                Party
                  A

                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
                  B

                Contact
                  person: Wang Chen

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

                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

              




    

    
      	 	
              12.4

            	
              Copies

            


    

    


    
      	 	 	
              This
                Agreement is executed in eleven originals with each of the person
                for
                signing this Agreement holding one original, and each of the originals
                shall be equally valid and
                authentic.

            


    

     

    [Signature
      page follows]

     

    
      
        
        

      

      
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    IN
      WITNESS THEREFORE,
      the
      parties hereof have caused this Agreement to be executed and delivered as of
      the
      date first written above.

    


    Party
      A Shengkai
      (Tianjin) Ceramic Valve Co., Ltd (Seal)

    


    Legal
      Representative (or Authorized Representative): Wang Chen

     

    


    Party
      B Tianjin Shengkai Industrial Technology Development Co., Ltd.
      (Seal)

    


    Legal
      Representative (or Authorized Representative): Wang Chen

     

    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

            	 	 	 	 


    

    


    
      
        
        

      

      
        13