Exhibit
      10.12

     

    Loan
      Agreement

    


    
      	
              (Important
                Notice: The Borrower please carefully read the agreement, especially
                the
                clauses with ▲▲mark. Should the Borrower have any question, please request
                the Lender to clarify immediately.)

            


    

    


    The
      Borrower: Danyang Lihua Electron Co., Ltd 

    Legal
      Representative (responsible person): 

    Business
      Address: 

    Correspondence
      Address:

     

    The
      Lender: Bank of Communications Zhen Jiang Branch

    Legal
      Representative (responsible person): 

    Business
      Address: 

    Correspondence
      Address:

    


    WHEREAS
      the Borrower is borrowing from the Lender, for clarifying and confirming the
      parties’ rights and obligations, after negotiation, the Borrower and the Lender
      hereby agree as follows:

    


    Article
      1
      Facility

    1.
      Currency: RMB

    2.
      Amount: Three Million

    3.
      Purpose: Purchase of Material

    4.
      Borrowing Period: from August 26, 2008 to November 25, 2008

    


    Article
      2
      Interest Rate and Calculation

    2.1
      The
      interest Rate hereunder is 

    ࿳RMB
      fixed rate, during the borrowing period is       (      year      month)

    √RMB
      floating rate. The interest rate is the benchmark interest rate for the period
      of one year or less than one year announced by the People’s Bank of China
      (hereinafter PBC)at the time the agreement becomes effective upwardly floats
      20%. During the period of the agreement, in the case the PBC adjusts the
      benchmark interest rate, the Lender is entitled to adjust the borrowing interest
      rate accordingly. The upward (downward) floating percentage is not changed.
      The
      adjusted interest rate is adopted from the date the PBC adjusts the benchmark
      interest rate. In the event the PBC benchmark interest rate becomes the floating
      rate or is canceled after the adjustment, the borrowing interest rate shall
      be
      negotiated by the parties herein, but the adjusted borrowing interest rate
      shall
      not be lower than the borrowing interest rate applied then. In the case after
                    month
      from the PBC adjusted the benchmark interest rate, the parties have not reached
      the agreement to the borrowing interest rate, the Lender may declare the full
      amount of the facility is due immediately. 

    ࿳                     (foreign
      currency), the interest rate:
                           .

    2.2
      Daily
      interest =monthly interest / 30, monthly interest =yearly interest/
      12.

    2.3
      Calculation


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    


    
      
        	2.3.1	
                Ordinary
                  interest =the borrowing interest rate hereunder ×the lunched amount× the
                  drawdown days. The drawdown days are from the date the facility
                  is
                  launched to the due date.

              


      

    

    
      
        	
                2.3.2

              	
                The
                  punitive interest for deferral and the misappropriation of the
                  facility
                  funds shall be calculated by the deferral days and the amount of
                  the
                  misappropriated funds. In the event the facility currency is RMB,
                  the
                  deferral interest rate is the borrowing interest rate hereunder
                  upwardly
                  floating 50%, the punitive interest for misappropriation is the
                  borrowing
                  interest rate hereunder upwardly floating 100%. In the case the
                  floating
                  rate facility defers or is misappropriated after the PBC adjusts
                  the
                  benchmark interest rate, the Lender is entitled to adjust the deferral
                  and
                  punitive interest rates accordingly. The adjusted deferral and
                  punitive
                  interest rates are applied since the PBC adjusted the benchmark
                  interest
                  rate. In the event the facility currency is foreign currency, the
                  punitive
                  interest rate is the borrowing interest rate hereunder upwardly
                  floating             .

              


      

    

    2.4
      The
      settlement of the interest under this agreement is the    (2)   method
      specified below. The unpaid interest shall repaid with the unpaid principal
      when
      due. The settlement day is the interest payment date:

    (1)
      The
      20th
      day in
      the last month of every quarter.

    (2)
      The
      20th
      day of
      every month.

    2.5
      Other
      interest covenants: (N/A) 

    


    Article
      3
      Launch and Repayment

    3.1
      The
      Borrower shall complete relevant procedures at least three bank business days
      before drawing down, and be in compliance with the launch plan set forth
      below:

    Launch Date                                            Launch Amount

                Year       Month              Day                                           Amount

                Year       Month              Day                                           Amount 

                Year       Month              Day                                           Amount

                Year       Month              Day                                           Amount 

    ▲▲3.2
      Before the following conditions are completely fulfilled, the Lender is entitled
      not to launch the facility:

    
      
        	(1)	
                The
                  Borrower has completed the relevant legal procedures, such as obtaining
                  governmental permissions, approvals, registrations, and other procedures
                  as requested by the Lender, and the aforesaid permissions, approvals
                  and
                  registrations are continuously
                  effective.

              


      

    

    
      
        	
                (2)

              	
                The
                  guarantee agreements hereunder (if any) have become effective and
                  continuously effective. In the event the Borrower provides collaterals
                  for
                  pledge agreements or mortgage agreements, the secured interests
                  have been
                  registered and continuously
                  effective.

              


      

    

    
      	
              (3)

            	
              No
                material adverse change in the Borrower’s business operations and
                financial conditions.

            


    

    
      	(4)	
              The
                Borrower does not breach the agreement
                .

            


    

    3.3
      The
      actual launch date and launch amount are specified in the borrowing
      certificate.


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    


    
      
        	3.4	
                The
                  Borrower shall repay the facility in accordance with the maturity
                  date set
                  forth in Article 1.4 and the plan set forth below. In the case
                  the
                  maturity date set forth in the borrowing certificate and in the
                  agreement
                  is inconsistent, the borrowing certificate shall
                  control.

              


      

    

    Repayment Date                                     Repayment Amount

                Year       Month              Day                                           Amount

                Year       Month              Day                                           Amount 

                Year       Month              Day                                           Amount

                Year       Month              Day                                           Amount 

    ▲▲3.5
      Without the Lender’s written consent, the Borrower shall not prepay the loan.


    


    ▲▲Article
      4 The Borrower’s Representations and Warranties

    
      	4.1	
              The
                Borrower is legally incorporated and continues, and has all necessary
                legal capacity to perform the obligations hereunder and assume civil
                liabilities on its own behalf. 

            


    

    
      	4.2	
              The
                Borrower shall sign and perform this agreement with its true intention,
                and obtain all necessary consents, approvals and authorizations without
                any legal defect.

            


    

    
      	4.3	
              Any
                document, financial report, material and information provided by
                the
                Borrower during signing and performing this agreement shall be authentic,
                accurate integrated and valid. The Borrower shall not conceal any
                information could affect its financial condition and repayment
                ability.

            


    

    
      	4.4	
              The
                Borrower shall not be the guarantee’s shareholder or the actual control
                person specified in the Company Law, and has no plan to become the
                guarantee’s shareholder or actual control
                person.

            


    

    


    Article
      5
      The Lender’s Rights and Obligations

    
      	5.1	
              The
                Lender is entitled to collect the principal, the interest (including
                the
                compound interest, the punitive interest for deferral and
                misappropriation), the unpaid expenses, and to exercise other rights
                in
                accordance with laws and the
                agreement.

            


    

    
      	5.2	
              Except
                as otherwise specified in laws or regulations or in the agreement,
                without
                the Borrower’s consent, the Lender shall not disclose the Borrower’s trade
                secrets, or financial, business operation and any other information
                the
                Borrower has requested to keep confidential to any third-party institution
                or individual.

            


    

    


    Article
      6
      The Borrower’s Obligations

    
      	6.1	
              The
                Borrower shall repay the principal and the accrued interest hereunder
                in
                accordance with the schedule, amount, and currency set forth in the
                agreement.

            


    

    
      	6.2	
              The
                Borrower shall not misappropriate the facility funds
                hereunder.

            


    

    ▲▲6.3
      The
      Borrower shall assume all relevant expenses, including but not limited to
      notary, appraisal, and registration fees.

    ▲▲6.4
      The
      Borrower shall be in compliance with the business custom regarding the loan
      business and related operations, including but not limited to the followings:
      actively cooperates with the Lender’s investigation and supervision to its
      compliance with the purpose hereunder; promptly provides financial reports
      and
      other materials and information; and represents and warrants the authenticity,
      the accuracy and the integrity of the information provided
      herein.


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    


    ▲▲6.5
      In
      the event the Borrower will engage in the followings, the Borrower shall send
      the thirty-day written notice to the Lender, and shall not take any action
      before repaying the principal and the accrued interest hereunder or providing
      the acceptable repayment plan to the Lender:

    
      	
            	(1)	
              To
                sell, gift, lease, lend, transfer, mortgage, pledge or dispose the
                whole
                or most part of assets or material
                assets;

            


    

    
      	
            	(2)	
              Material
                change occurs or will occur in its operation system or share-holding
                system, including but not limited to outsource, lease, conversion
                to
                corporation system, conversion to share-holding system, sale of the
                company, co-operating business, merger, acquisition, joint venture,
                split,
                setting up subsidiaries, and asset
                transfer.

            


    

    ▲▲6.6
      The
      Borrower shall send a seven-day written notice to the Lender before the
      followings occur or could occur:

    
      	
            	(1)	
              The
                Borrower revises the Article of Incorporation, changes the company
                name,
                legal representatives (responsible persons), the business address,
                the
                correspondence address, its business scope or other business registration
                items, makes material decisions with regard to the financial or human
                resource matters.

            


    

    
      	
            	(2)	
              The
                Borrower or the guarantee plans to file bankruptcy or has been filed
                bankruptcy by its creditors.

            


    

    
      	
            	(3)	
              The
                Borrower involves in material lawsuits, arbitrations, executive actions,
                or its material assets or the collaterals hereunder are
                seized.

            


    

    
      	
            	(4)	
              The
                Borrower provides guarantees to a third party, and such guarantees
                cause
                material adverse effects to the Borrower’s economic condition, financial
                condition or performance of the obligations
                hereunder.

            


    

    
      	
            	(5)	
              The
                Borrower reaches agreements could cause material effects to its business
                operations and financial
                conditions.

            


    

    
      	
            	(6)	
              The
                Borrower or the guarantor ceases productions, suspends business,
                is
                dissolved, is undergoing reformation, is
                revoked or abolished business
                license.

            


    

    
      	
            	(7)	
              The
                Borrower or the guarantor or its legal representatives (responsible
                persons) or executive officials engage in illegal activities or do
                not
                comply the applicable securities exchange
                regulations.

            


    

    
      	
            	(8)	
              The
                Borrower’s business operation encounters difficulties, its financial
                conditions worsen or other events could cause adverse effects on
                the
                Borrower’s business operations, financial conditions, repayment abilities
                or economic conditions.

            


    

    
      	
            	(9)	
              The
                Borrower engages in the transactions with its related parties, and
                the
                amounts of such transactions reach or excess 10% of its most recently
                audited net assets.

            


    

    
      	
            	(10)	
              Before
                the Borrower repays the borrowing hereunder in full, it becomes or
                could
                become the guarantor’s shareholder or the actual control person defined in
                accordance with the Company Law.

            


    

    
      	▲▲6.7	
              In
                the case any change in the guarantee hereunder causes adverse effects
                to
                the Lender’s rights and interests, the Borrower shall upon the Lender’s
                request, immediately provides other acceptable guarantees to the
                Lender.
                

            


    

    The
      change set forth in this Article is including but not limited to, the guarantor
      carries out mergers and splits, ceases productions, suspends business, is
      dissolved, is undergoing reformation, is revoked or abolished the business
      license, files or to be filed by others the bankruptcy; the material change
      in
      the guarantor’s business operations or financial conditions occur; the guarantor
      involves in material law suits, arbitrations, executive actions or its material
      assets are seized; the value of the collaterals hereunder is impaired or could
      be impaired or the collaterals are seized, the guarantor or its legal
      representatives (responsible persons) or executive officials engage in illegal
      actions or do not comply laws or securities exchange regulations; in the case
      the guarantor is individual, the guarantor is missing, dead (or declared to
      be
      dead); the guarantor is not in compliance with the guarantee agreement; disputes
      occur between the guarantor and the Lender; the guarantor requests to terminate
      the guarantee agreement; the guarantee agreement is not effective or is invalid
      or is cancelled; the registration of the pledge or the mortgage is not completed
      or is invalid; or any other event affects the Lender’s rights and interests
      hereunder.


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    


    Article
      7
      Other Covenants (N/A)

    


    Article
      8
      Acceleration of the Facility

    In
      the
      case any of the followings occur, the Lender is entitled to cease launching
      the
      facility funds the Borrower has not drawn down yet, and at its discretion to
      declare the part or the full amount of the unpaid principal becomes due and
      payable, and the Borrower shall repay the entire unpaid principal and accrued
      interests immediately.

    (1)
      The
      Borrower’s representations and warranties under the Article 4 are
      false;

    (2)
      The
      Borrower breaches the agreement;

    (3)
      Any
      of the events specified in the Article 6.6 occurs, and the Lender believes
      such
      an event will affect its rights and interests hereunder;

    (4)
      The
      Borrower defers its performances under other agreements between the Lender,
      and
      does not amend such deferrals or non-performances upon the Lender’s
      requests.

    


    Article
      9
      Breach

    
      	9.1	
              In
                the event the Borrower does not repay the full amount of the principal,
                the accrued interests on schedule, or misappropriates the facility
                funds,
                the Borrower shall pay the Lender the default interest calculated
                in
                accordance with the method for the punitive interest for the deferral
                or
                the misappropriation, and shall pay the compound interest against
                the
                unpaid interest.

            


    

    
      	9.2	
              In
                the event the Borrower does not repay the full amount of the principal,
                the accrued interests on schedule, the Borrower shall assume the
                collection fees, law suit or arbitration fees, seizure fees, public
                announcement fees, exercise fees, counsel fees, travel expenses and
                other
                expenses arising out of and related to the fulfillment of the Lender’s
                rights and interests hereunder.

            


    

    
      	9.3	
              In
                the event the Borrower avoids the Lender’s supervision, does not repay the
                principal and the accrued interest on schedule, or maliciously breach
                the
                agreement, the Lender is entitled to report to the competent authority
                and
                to disclose such events via news
                media.

            


    

    


    Article
      10 Withdrawal Covenant

    
      	10.1	
              The
                Borrower authorizes the Lender to withdraw the principal, the accrued
                interest, the punitive interest, the compound interest or other expenses
                form any of its accounts at the
                Lender.

            


    


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    


    
      	10.2	
              After
                the Lender withdraw funds pursuant to the Article 10.1, it shall
                notify
                the Borrower the account, from which it withdraw funds, the loan
                agreement
                number, the borrowing certificate number, the withdrawal amount and
                the
                residual of the account.

            


    

    
      	10.3	
              In
                the case the withdrawal amount is inadequate for repaying the Borrower’s
                debts in full, the withdrawal funds shall be first to set off the
                unpaid
                expenses. In the case the deferral days for repaying the principal
                and the
                interest is less than 90 days, the residual after being to set off
                the
                expenses shall be first to set off the unpaid interest, the punitive
                interest or the compound interest, and then to set off the principal;
                in
                the case the deferral days for repaying the principal and the interest
                is
                more than 90 days, the residual after being to set off the expenses
                shall
                be first to set off the unpaid principal, and then to set off the
                unpaid
                interest, punitive interest, or the compound
                interest.

            


    

    
      	10.4	
              In
                the event the currency of the withdrawal funds is inconsistent with
                the
                currency of the unpaid debts, the amount of setting off the debts
                shall be
                calculated in accordance with the foreign exchange rate announced
                by the
                Lender.

            


    

    


    Article
      11 Dispute Resolution

    Any
      dispute arising out of or related to the agreement shall be submitted to the
      court, in which the Lender resides. During the dispute, each party shall
      continuously perform the clauses not in disputes.

    


    Article
      12 Miscellaneousness 

    
      	12.1	
              The
                borrowing certificate and relevant documents and information confirmed
                by
                the parties constitute an undividable part of this
                agreement.

            


    

    
      	12.2	
              The
                agreement becomes effective after the Borrower’s legal representative
                (responsible person) or authorized person signs (or seals) and fixes
                the
                corporate chop on the agreement, and the Lender’s responsible person or
                authorized person signs (or seals) and fixes the business unit chop
                on the
                agreement.

            


    

    
      	12.3	
              This
                agreement is to be written up in three original copies with the Borrower,
                the Lender and the Guarantor, and the three parties shall each hold
                one
                original copy, which shall have same legal
                effects.

            


    

    


    
      	
              The
                Borrower has thoroughly read the clauses above, the Lender has provided
                relevant explanations to the Borrower. The Borrower has no objections
                to
                all contents of the agreement.

            


    

    


    The
      Borrower:

    Legal
      Representative(responsible person):

    


    The
      Lender:

    Responsible
      Person or Authorized person:

    


    Date:
      August 26, 2008