Exhibit
      10.16

    RMB
      Capital Loan Agreement

    Contract
      No: LD2008119

    Loan
      type: Industry liquid capital

    


    the
      Borrower (Party A): Danyang Lihua Electron Co., Ltd.

    Address:
      Danyang City Hougang County Five Star Industry Development District

    Postal
      Code: 212312

    Legal
      Person: Jianhua Zhu

    Tel:
      82229628

    


    the
      Lender (Party B): China Construction Bank, Danyang Branch

    Address:
      1Yunyang Road, Dangyang City

    Postal
      Code: 212300

    Legal
      person: Leiping Zhang

    Tel:
      86526069

    


    Party
      A
      applies to borrow from Party B, and Party B agrees to loan the capital to Party
      A. According to the relevant laws and regulations, the parties reach the
      following agreement through negotiations. The parties memorializes the
      contact so that they both abide by its terms. 

    


    Clause
      1 Loan Amount

    Party
      A
      borrows RMB EIGHT MILLION (8,000,000) from Party B

    


    Clause
      2 Use of Proceeds

    Party
      A
      will use the loan for manufacture cash flow. Party A shall not change the use
      of
      the loan without written permission from Party B. 

    


    Clause
      3 Term of the Loan 

    The
      term
      of the loan is 12 months, from 3/7/2008 to 3/6/2009.

    


    If
      the
      loan effective date under this contract does not agree with the loan deposit
      certificate, the effective date shall be the date on the loan deposit
      certificate, and the due date shall be adjusted accordingly. 

    


    The
      Loan
      deposit certificate is incorporated into and part of the contract. It has the
      same legal effect as this contract. 

    


    Clause
      4 Loan Interest Rate, Penalty Rate and the Calculation and Payment of
      Interest

    


    1.
      Loan
      Interest Rate

    The
      interest rate of the loan under this contract is APY. For this loan, it is
      the
third
      category
      below:

    i)
      Fixed
      rate, which means the rate stays the same during the term of the
      loan;

    ii)
      Fixed
      rate, which means the Base Rate plus or minus certain percentage, and the rate
      stays the same during the term of the loan;


    
      
         

      

      
         

        
          

        

      

      
         

      

    


    iii)
      Floating rate, the Base Rate of the Interest Starting Date plus 20%. The rate
      is
      adjusted every six months according to that date’s Base Rate plus 20% during the
      period from the Interest Starting Date to the date when the principal and
      interest of the loan are paid off. Rate Adjusting Date is the corresponding
      date
      of the Interest Starting Date in the adjusting month. If there is not
      corresponding date in the rate adjusting month, then the last date of the
      adjusting month shall be the Rate Adjusting Date.

    


    2.
      Penalty Rate

    1)
      If
      Party A does not use the loan as specified in this contract, the Penalty Rate
      will be Loan Interest Rate plus 100%. If the Loan Interest Rate were to be
      adjusted according to Clause 4.1(iii), the Penalty Rate will be adjusted
      according to the adjusted Loan Interest Rate and the above upward
      adjustment.

    


    2)
      If the
      loan is not paid off on time, then the Penalty Rate is the Loan Interest Rate
      plus 50%. If Loan Interest Rate were to be adjusted according to Clause
      4.1(iii), the Penalty Rate will be adjusted according to the adjusted Loan
      Interest Rate and the above upward adjustment.

    


    3)
      If the
      loan is not used as specified in the contract and the loan is not paid off
      on
      time, the Penalty Rate should be the higher one and interest is compounding.
      

    


    3.
      The
      Interest Starting Date shall be the date when the loan is transferred to Party
      A’s bank account. When the loan is disbursed, the Base Rate is the rate
      published by China People’s Bank for loans of the same terms and category on the
      Interest Starting Date. After that, when the Loan Interest Rate is adjusted
      according to the above conditions, the Base Rate is the rate published by China
      People’s Bank for loans of same term and category on the Rate Adjusting Date. If
      China People’s Bank no longer publishes rates for loans with the same period and
      same category, the Base Rate shall be set according to the rate for loans of
      the
      same term and category and which is commonly accepted by the banking industry
      on
      the Rate Adjusting Date, except that parties may have other arrangement in
      relation thereto. 

    


    4.
      The
      calculation of loan interest starts when the loan is transferred to a bank
      account designated by Party A. The interest is calculated daily; daily interest
      is annual interest divided by 360. If Party A cannot pay interest on the
      interest payment date, then the interest starts to compound the next
      day.

    


    5.
      Payment of interest

    1)
      For
      the fixed rate loan, when calculating the interest, the interest shall be
      calculated according to the rate agreed. For the float rate loan, the interest
      shall be calculated according to the rate set for that floating period. If
      there
      are multiple changes of rate in one interest payment period, the total interest
      shall be the sum of the interests of all the floating periods.

    2)
      The
      payment of interest is monthly, and the payment date is the 20th
      day of
      each month.


    
      
         

      

      
         

        
          

        

      

      
         

      

    


    Clause
      5 Distribution and Use of the Loan

    


    1.
      The
      condition precedents for distribution of the loan

    Unless
      Party B waives in whole or in part, Party B is obligated to disburse the loan
      only when the following conditions are satisfied:

    1)
      Party
      A has obtained all loan-related approvals, registration, insurance, payments
      and
      other legal procedures;

    2)
      If
      there are collaterals under the contract, the liens on such collaterals shall
      meet Party B’s requirements and have been perfected and effective and shall
      remain perfected and effective;

    3)
      Party
      A has established a bank account for the service of the loan;

    4)
      Party
      A is not in breach of the contract or causes or permits to exist any event
      or
      circumstances which may adversely affect the security of Party B’s loan;


    5)
      There
      exist no laws and regulations or other authorities which may prohibit or limit
      Party B from making the loan; and

    6)        (left
      blank)                               

    


    2.
      Use of
      the Loan Proceeds

    The
      loan
      shall be for one time use only.

    


    3.
      Party
      A shall use the loan according to Clause 5.2. Party A shall not advance, delay
      or cancel the withdrawal of the loan, without the written consent of Party
      B.

    


    Clause
      6 Repayment of the loan

    


    1.
      Principles of Repayment

    Under
      this contract, the repayment by Party A shall be distributed according to the
      following order of priority:

    Party
      B
      has the right to use the repayment by Party A to offset Party B’s cost which
      Party A should be responsible for under the contract and Party B’s cost in
      perfecting its creditor’s rights. The balance shall be repaid according to the
      following principle: interest shall be paid prior to principal and interest
      shall stop accumulating only when the principal is paid off. 

    For
      loans, the principals of which are not repaid in full 90 days after the maturity
      date, or loans, the interests of which are not repaid within 90 days after
      the
      due date, or other types of loans specified by relevant laws and regulations,
      Party A’s repayment funds, after clearing the costs described above, shall be
      applied to principal first and then to interest.

    


    2.
      Payment of Interest

    Party
      A
      shall pay interest to Party B on Interest Payment Date. The first Interest
      Payment Date is the first payment date after the loan is disbursed. The interest
      and principal shall be paid off on the last repayment of the
      loan.


    
      
         

      

      
         

        
          

        

      

      
         

      

    


    3.
      Principal Repayment Plan

    


    The
      principal shall be repaid all at once.

    


    4.
      The
      Method of Repayment

    Party
      A
      shall transfer enough funds to repay the amount due for the current period
      to a
      bank account set up by Party B before the due date. Party A shall transfer
      the
      funds to repay the loan (Party B also has the right to repay the loan from
      such
      account), or Party A shall transfer enough funds to repay the loan from other
      accounts on the repayment date.

    


    5.
      Prepayment of the Loan

    If
      Party
      A wishes to prepay the loan, it shall submit a written application to Party
      B
      ten days before the prepayment. After the approval of Party B, Party A can
      prepay the loan in part or in whole.

    If
      Party
      A prepays the loan, the interest shall be calculated according to the actual
      loan term and the Loan Interest Rate agreed in the contract. 

    If
      Party
      B permits Party A to prepay the loan, Party B has the right to ask Party A
      to
      pay compensation, which shall be calculated in the following way:

    Compensation
      = loan principal prepaid times number of month before the loan due date
      times1‰

    


    Clause
      7 Party A’s Rights and Obligations

    1.
      Party
      A’s rights

    i)
      Party
      A has the right to ask Party B to disburse the loan according to the
      contract;

    ii)
      Party
      A has the right to use the loan proceeds according to the contact;

    iii)
      Party A has the right to apply for an extension of the loan if it meets the
      conditions set by Party B;

    iv)
      Party
      A has the right to ask Party B to keep confidential all the financial data
      and
      business secrets provided by Party A, except those covered by other laws,
      regulations and other authorities or parties agree to otherwise;

    v)
      Party
      A has the right to refuse to pay Party B any bribery and has the right to report
      to relevant government agencies any of Party B’s action to demand a bribery and
      any Party B’s action which violates relevant law and regulation regarding loan
      interest and service fee. 

    


    2.
      Party
      A’s obligation

    i)
      Party
      A shall withdraw funds according to the contract and repay the loan and
      interest. Party A shall also pay all the costs according to the
      contract.

    ii)
      Party
      A shall provide data on its financial situation and business operations
      according to Party B’s requirements, including but not limited to provide last
      quarter’s asset balance sheet, income statement within 10 business days of the
      first month of every quarter, and annul cash flow chart at the end of the fiscal
      year. Party A shall be responsible for the truthfulness, comprehensiveness,
      validity of the materials provided. Party A shall not provide false or
      misleading information or omit important financial information.

    iii)
      If
      Party A changes its name, legal person, address, scope of business, registered
      capital or corporate charter and the changes require Industry and Commerce
      registration, Party A shall notify Party B in writing within three business
      days
      of the change and send Party B all the materials after the change. 


    
      
         

      

      
         

        
          

        

      

      
         

      

    


    iv)
      Party
      A shall use the loan proceeds according to the contract. Party A shall not
      use
      the funds for any illegal transaction; shall cooperate with Party B to examine
      and supervise the use of the loan proceeds; Party A shall not withdraw the
      funds, transfer asset or use related-party transactions to evade its liability
      to Party B; Party A shall not use fake contracts with related parties, fake
      receipts without any trading background or amount due as collateral in exchange
      for capital and credit award from banks.

    


    v)
      If
      Party A uses the loan proceeds to engage in manufacturing or construction,
      it
      should obey relevant laws regarding to the environmental
      protection.

    


    vi)
      Before Party A repays the interest and principal of the loan in full to Party
      B,
      Party A shall not use the asset purchased with this loan as collateral to any
      third party.

    


    vii)
      If
      Party A is a corporate client, Party A shall report to Party B any transactions
      which involve over ten percent of its assets, including: 

    a)
      the
      relationship between the transaction parties;

    b)
      the
      project of the transaction and nature of the transaction;

    3)
      the
      transaction amount or its corresponding ratio;

    4)
      pricing policy (including transactions with no or nominal monetary
      values)

    


    viii)
      The
      loan under this contract is fixed asset loan or project level loan. Party A
      shall guarantee that the proposed project has already been approved by the
      governmental authority and does not violate any laws or regulations; that
      sufficient capital or other funds shall be readily available according to the
      contract. Party A shall also guarantee the project will be developed as planned.
      

    


    Claus
      8 Party B’s rights and obligations

    1
      Party B
      has the right to demand Party A to repay the principal, interest and fees on
      schedule. Party B can also exercise other rights according to the contract
      and
      demand Party A to perform its obligations in this contract.

    2
      Party B
      shall disburse the loan proceeds as specified in the contract, except when
      any
      delay is caused by Party A or when such delay is not due to Party B’s fault.


    3.
      Party
      B should keep confidential all the financial data and business secrets provided
      by Party A unless otherwise covered by laws or regulations, or demanded by
      governmental authority or parties hereto otherwise agreed.

    4.
      Party
      B shall not bribe Party A or ask and accept any bribery from Party
      A.

    5.
      Party
      B shall not be dishonest, and shall not engage in any action which may harm
      Party A’s interest.

    


    Clause
      9 Event of Default and Make-Good Clause if Party A’s Action Jeopardizes Party
      B’s Creditor Rights.

    1.
      Party
      B’s breach and its liability

    i)
      If
      Party B refuses to disburse the loan without valid reason, Party A can demand
      Party B to continue to disburse the loan according to the contract;

    ii)
      If
      Party B violates the laws or regulations against the taking of any fees or
      interests from Party A, Party A has the right to demand the return of such
      fees
      or interests.


    
      
         

      

      
         

        
          

        

      

      
         

      

    


    2.
      Situations which cause Party A’s breach

    i)
      Party
      A breaches any covenants in the contract or violates any legal
      obligation;

    ii)
      Party
      A clearly repudiates or repudiates with its action the contract.

    


    3.
      Situations which jeopardize Party B’s rights as creditor

    i)
      Any
      event or circumstance below which may be deemed by Party B as will jeopardize
      its creditor’s rights: contracting, leasing, entrusting, share restructuring,
      reduction of registered capital, investment, business alliance, merger,
      acquisition, spin-off, joint-venture, (involuntary) filing of halting of
      business operation, dissolution, revocation, bankruptcy, change of control
      or
      major asset sale by controlling shareholder or de facto controller, halt of
      business activity, levy of hefty fines by governmental authority , revocation
      of
      business registration or license, major legal dispute, business in significant
      trouble or worsening of financial situation, or when the legal person or major
      management personnel cannot perform duty normally.

    


    ii)
      Any
      event or circumstance below which may be deemed by Party B as will jeopardize
      its creditor’s rights: Party A defaults under other loans, including loans made
      by China Construction Bank or other third party; Party A conveys its asset
      for
      little or no consideration; Party A reduces liability owed to it by third
      parties or is not diligent in exercising its creditor right, or provides
      guaranty for a third party.

    


    iii)
      Party A abuses its status as corporation legal person or limited liability
      status for shareholder, or is unable to pay its debts, when such action may
      be
      deemed by Party B as will jeopardize its creditor rights. 

    


    iv)
      Any
      condition precedent for the loan in the contract is not met
      continuously.

    


    v)
      Any
      event or circumstance below of the Guarantor which may be deemed by Party B
      as
      will jeopardize its creditor’s rights:

    a)
      Breach
      any term in the Guaranty, or any representation or warranty is false, wrong
      or
      misleading.

    b)
      contracting, leasing, entrusting, share restructuring, reduction of registered
      capital, investment, business alliance, merger, acquisition, spin-off,
      joint-venture, (involuntary) filing of halting of business operation,
      dissolution, revocation, bankruptcy, change of control or major asset sale
      by
      controlling shareholder or de facto controller, halt of business activity,
      levy
      of hefty fines by governmental authority , revocation of business registration
      or license, major legal dispute, business in significant trouble or worsening
      of
      financial situation, when the legal person or major management personnel cannot
      perform duty normally, or any other event or circumstance which may adversely
      affect the Guarantee.

    c)
      Any
      situation which may cause it unable to guarantee the loan.

    


    vi)
      Any
      situation below of the pledge or collateral which may be deemed by Party B
      as
      will jeopardize its creditor rights:


    
      
         

      

      
         

        
          

        

      

      
         

      

    


    a)
      Because of third party’s action, government taking, confiscation, unpaid
      recovery, demolition, change of market conditions or any other reasons , the
      pledged asset is damaged, lost or its value is diminished.

    b)
      The
      pledged asset is seized, attached, frozen, detained, auctioned, or supervised
      by
      administrative agencies, or its title is in dispute.

    c)
      The
      Pledgor or Guarantor breaches any terms in the relevant contract or any
      representation or warranty is false, wrong or misleading.

    d)
      Other
      situations which may adversely affect Party B’s lien on the pledged assets or
      collateral.

    


    vii)Any
      event or circumstance below may be deemed by Party B as will jeopardize its
      creditor rights: Guaranty is not valid, not effective, invalidated, revoked,
      cancelled, the Guarantor breaches the Guaranty, repudiates or repudiates with
      action the Guaranty, or the Guarantor loses all or part of his capability to
      perform his obligations or the value of the Guaranty is diminished;
      or

    


    viii)
      Any
      other events or circumstances which may be deemed by Party B as will jeopardize
      its creditor rights. 

    


    4.
      Party
      B’s Damage Control Measures 

    Party
      B
      has the right to take the following one or more actions once any event or
      circumstance under Clause 9.2 or Clause 9.3 occur:

    


    i)
      Stop
      further disbursement of loan proceeds; 

    


    ii)
      Accelerate the loan and make it due and payable immediately and demand Party
      A
      to pay all principal, interest and fees.

    


    iii)
      If
      Party A has not withdrew the loan proceeds as specified in the contract, Party
      B
      has the right to ask Party A to pay a penalty of 0.1% of the breaching amount.
      Party B also has the right to stop disbursing the remaining balance of the
      loan.

    


    iv)
      If
      Party A does not use the loan proceeds according to the contract, as to the
      mis-used portion of the loan, starting from the date of the breach to the end
      of
      the term, Party B has the right to ask Party A to pay back the funds at the
      Penalty Rate as defined in the contract, pay compounding interest and other
      interests in one of the ways as defined in the contract.

    


    v)
      If the
      loan is overdue, as to the overdue portion of the loan, including principal
      and
      interest (include those principal and interest accelerated by Party B), starting
      from the date of the breach to the end of the term, Party B has the right to
      ask
      Party A to pay back at the Penalty Rate as defined in the contract, pay
      compounding interest and other interests in one of the ways as defined in the
      contract. The loan is overdue if Party A does not repay it on time or does
      not
      repay the loan according to the schedule specified in the contract.

    Before
      the loan is due, Party A shall pay back the overdue interests according to
      the
      principles set forth in the contract, including pay compounding interest and
      other interests in one of the ways as defined in the contract. 


    
      
         

      

      
         

        
          

        

      

      
         

      

    


    vi)
      Other
      measures to diminish the damage, including but not limited to:

    a.
      Without prior notice to Party A, withdraw RMB or other currency in equivalent
      value from its bank account in China Construction Bank system 

    b.
      Exercise right on the collateral;

    c.
      Ask
      Party A to provide new guarantee which meets the requirements specified in
      this
      contract;

    d.
      Cancel
      this contract.

    


    Clause
      10. Other Terms

    1.
      Payment of fees:

    Except
      otherwise agreed to by parties hereto, Party A shall pay the following fees
      related to the contract and the collateral/guaranty: attorneys’ costs,
      insurance, valuation, registration, safe keeping, and notarization.

    Party
      A
      shall cover all of Party B’s actual costs and expenses to perfect and exercise
      its creditor rights (including but not limited to, cost related to litigation,
      arbitration, property insurance, travel, execution, evaluation, notarization,
      delivery, public notice and legal service. ) 

     

    2.
      The
      use of information provided by Party A:

    Party
      A
      agrees that Party B may check Party A’s credit condition with China People’s
      Bank or via the credit database established by credit administration authority
      under the permission of China People’s Bank, or may inquire related entity and
      department about Party A’s credit condition. Party A also agrees that Party B
      may furnish Party A’s credit information to the above-mentioned credit database.
      Party A also agrees that Party B may reasonably use and disclose Party A’s
      information for business purposes.

    


    3.
      Public
      notice to urge Party A’s repayment of the loan

    If
      Party
      A delays the repayment of the loan or breaches the contract in other ways,
      Party
      B has the right to notify related entities or departments and has the right
      to
      make public notice through news media to urge Party A’s repayment of the
      loan.

    


    4.
      The
      effect of Party B’s evidence

    Unless
      Party A can show reliable and clear evidence to the contrary, Party B’s internal
      financial records on principal, interest, fee, repayment, receipts which are
      made and kept by Party B on Party A’s withdrawal, repayment of principal and
      interest, and record which shows Party B has urged Party A to repay the loan
      shall all constitute effective evidence of the creditor-debtor relationship.
      Party A shall not raise any objection merely because the above-mentioned record,
      receipts and certificates are made and kept by Party B unilaterally.


     

    
      
         

      

      
         

        
          

        

      

      
         

      

    


    5.
      Reserved Rights

    Party
      B’s
      rights under this contract shall not affect other rights Party B may have
      according to laws, regulations or other contracts. Any waiver, extension or
      delay to exercise the rights under this contract shall not operate as a waiver
      of any rights and interest under this contract or as permission to the default,
      hence it shall not limit, prohibit or hinder Party B’s exercise of its rights
      under the contract or other any rights it may have and it shall not lead any
      obligation and liability on the part of Party B to Party A.

    


    6.
      If
      Party A has other debts to Part B besides this contract, Party B has the right
      to withdraw RMB or other currency with equal value from Party A’s bank account
      in China Construction Bank system to pay any debts due. Party A agrees not
      to
      raise any objections.

    


    7.
      Party
      A shall notify Party B of any change of mailing address or contact information
      in writing as soon as possible. Party A shall cover any losses caused by any
      delayed notification.

    


    8.
      Transfer of the amount due

    As
      to all
      of the Party A’s amount due under this contract, Party B has the right to
      withdraw corresponding RMB or other currency with equal value from Party A’s
      bank account in China Construction Bank system without prior notice to Party
      A.
      Party A has the obligation to help Party B with the foreign exchange procedure
      if there is such a need. Party A shall bear all the risks of currency exchange
      rate fluctuations.

    


    9.
      Dispute Resolution 

    If
      a
      dispute arises under this contract, the parties hereto shall resolve the dispute
      through negotiation. The following procedure shall be adopted if the negotiation
      fails:

    To
      file a
      lawsuit in court with jurisdiction over Party B.

    


    10.
      Precondition to the effectiveness of this contract

    The
      contract shall be effective once executed and sealed by both parties or their
      representatives.

    


    11.
      This
      contract has five copies.

    


    12.
      Other
      agreed matters

    i)
      The
      lien under this contract is covered by the Maximum Collateral Contract with
      contract number: ZGEBZ2007186. 

    ii)
      The
      lien under this contract is covered by the Maximum Collateral Contract with
      contract number: ZGEBZ2008045.

    


    Clause
      11 Declarations 

    1.
      Party
      A is fully aware of Party B’s scope of business and limits of
      authority.

    


    2.
      Party
      A has read all the clauses under this contract. As required by Party A, Party
      B
      has already explained the corresponding clauses of this contract. Party A has
      fully understood the meaning of the contract and its corresponding legal
      consequences.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    


    3.
      Party
      A’s execution and performance of this contract comply with all laws,
      regulations, Party A’s charter and internal organizational document, and is
      approved by Party A’s internal authority and/or government
      authority.

    


    Party
      A:
      Seal 

    


    Signature
      by Legal Person or Authorized Representative: Zhu, JianHua

    Date:
      March 7, 2008

    


    Party
      B:
      Seal

    


    Signature
      by Legal Person or Authorized Representative: ________ (illegible)

    Date:
      March 7 ,2008