No.: Nong
He Jie Zi Ke Xing No.2009009

    


    


    


    Loan
Contract

    


    


    


    


    Tianjin
Rural Cooperative Bank

     

     

     

     

     

     

     

     

     

     

     

     

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    Catalogue

    


    Chapter1  General
Principles

     

    Chapter2  Function
of the Loan

     

    Chapter3  Currency,
Amount, Term and Transfer of the Loan

     

    Chapter4  Interest
Rate and Interest Calculation Method of the Loan

     

    Chapter5  Release
and Use of the Loan

     

    Chapter6  Repayment

     

    Chapter7  Guarantee

     

    Chapter8  Undertaking
and Compensation of Expenses

     

    Chapter9  Borrower’s
Statement, Warranty and Promise

     

    Chapter10  Duties
for Breaching

     

    Chapter11  Other

     

    Chapter12  Settlement
of Dispute

     

    Chapter13  Effectiveness,
Change and End of the Contract

     

    Chapter14  Attachment

     

    Chapter15  Annex

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    Borrower:
Tianjin Yayi Industrial Co., Ltd.

     

    Address:
Unit C, 4th floor,
Xinmao Technology Park, Huayuan Industrial Area, New Technology Industrial Park,
Tianjin

     

    Postal
code: 300384

     

    Legal
Representative: Liu Li

     

    Agent:

     

    Contact:
Zhang Zhiquan

     

    Tel:
58691664

     

    Fax:
88238889

     

    Opening
Bank: Tianjin Rurual Cooperative Bank, Kexing Branch

     

    Account
No.: 9170101000010000040384

     

    


     

    Lender:
Tianjin Rurual Cooperative Bank, Kexing Branch

     

    Address:
148 Yingshui Road, Huayuan Industrial Area

     

    Postal
code: 300384

     

    Legal
representative: Cao Liqiang

     

    Agent:

     

    Contact:
(handwriting)

     

    Tel:
23859929

     

    Fax:

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    
      Chapter1
General Principle

       

      For the
need of business, the borrower applies for loan from the lender. After
inspection, the lender agrees to release loan to the borrower under the
conditions of the contract.

       

      In order
to clarify both parties’ rights and duties, they have discussed and agreed on
the following clauses in accordance with the laws and regulations of the
People’s Republic of China.

       

      
 

       

      Chapter2
Function of the Loan

       

      Clause1.
After discussion, both parties have agreed upon the following:

       

      
        	
                1.  

              	
                The
      borrower can only use the loan under the contract as working
      capital.

              


      

       

      
        	
                2.  

              	
                The
      borrower must not use the loan for other purposes without the lender’s
      written consent in advance.

              


      

       

      
 

       

      Chapter3
Currency, Amount, Term and Transfer of the Loan

       

      Clause2.
The currency and amount of the loan under the contract is (in Chinese
characters) RMB4,400,000.

       

      Clause3.
The term of the loan under the contract is from January 20, 2009 to January 19,
2010.

       

      


      
        
           

        

        
           

          
            

          

        

        
           

        

      

       

      Clause4.
When all the conditions stated in Clause11 of the contract are met, the lender
should follow the No.1 manner as following to transfer the loan into the
borrower’s account at the lender’s place:

       

      
        	
                1.  

              	
                Transfer
      at one time. The lender should transfer the entire loan to the borrower’s
      account at the lender’s place on January 20,
  2009.

              


      

       

      
        	
                2.  

              	
                Transfer
      at different times. See details of transfer as
  follows:

              


      

       

      First
time transfer:

       

      
        	
                (1)  

              	
                amount:
      (in Chinese characters)

              


      

       

      
        	
                (2)  

              	
                date:

              


      

       

      Second
time transfer:

       

      (1)
amount: (in Chinese characters)

       

      (2)
date:

       

      Third
time transfer:

       

      (1)
amount: (in Chinese characters)

       

      (2)
date:

       

      Other:

       

      Once the
loan has been transferred out of the lender’s account, the loan will be regarded
as having been released. And the calculation of the interest starts from the
same day.

       

      
 

       

      Chapter4.
Interest Rate and Interest Calculation Method of the Loan

       

      Clause5.
The borrower should follow the contract to pay for the interest at the annual
interest rate of 6.372%.

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

       

      Clause6.
Both parties agree that during the term of the loan, the interest rate remains
unchanged.

       

      During
the loan term, if the People’s Bank of China adjusts the standard interest rate
of loan or the interest calculation method, which applies to the loan under the
contract, the lender has the right to fix new interest rate and charge the
borrower with the new interest rate from the date of the
adjustment.

       

      Clause7.
The interest of the loan should be liquidated every quarter, with the 20th day of
the last month of each quarter as the liquidation day.

       

      Clause8.
The interest of the loan under the contract is calculated from the date the loan
is transferred out of the lender’s account on the basis of 360 days per year and
the actual amount transferred out and the actual days the loan is
occupied.

      
Clause9.
If the borrower has not followed the contract to repay the principle of the
loan, the lender will have the right to charge penalty interest from the due
date till the borrower repays off the principle and the interest of the loan.
The penalty interest rate is 50% higher than the rate stated in
clause5.

       

      If the
borrower has not followed the contract to use the loan, the lender will have the
right to charge penalty interest from the due date till the borrower repays off
the principle and the interest of the loan. The penalty interest rate is 100%
higher than the rate stated in clause5.

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

       

      Clause10.
For the interest the borrower fails to repay on time, the lender has the right
to charge compound interest on the basis of the penalty interest
rate.

       

      


       

      Chapter5.
Release and Use of the Loan

       

      Clause11.
The lender has no obligation to provide the loan under the contract to the
borrower unless the following conditions are met:

       

      
        	
                1.  

              	
                The
      borrower has already provided all the documents required by the lender.
      The conditions stated in the documents have not changed and the documents
      are valid consistently. Or the borrower has already provided satisfactory
      explanation to the changes which have
occurred;

              


      

       

      
        	
                2.  

              	
                The
      borrower has filled all the loan receipts/vouchers, which are part of the
      contract and share the same legal effectiveness with the contract. When
      the amount, term, interest of the loan stated in the contract are
      different from those stated in the receipts/vouchers, the ones stated in
      the receipts/vouchers should be taken as
  standard;

              


      

       

      
        	
                3.  

              	
                The
      borrower must follow related laws and regulations to get all approvals,
      permits, registration and other legal procedures; and at the lender’s
      request, the borrower should cover the notarization
      procedures;

              


      

       

      
        	
                4.  

              	
                If
      the loan is guaranteed, the borrower should make sure the notarization,
      registration or insurance procedures are covered and consistently
      valid;

              


      

       

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

       

      
        	
                5.  

              	
                none
      of the breaching conditions is met.

              


      

       

      When the
foregoing conditions are met, the lender may transfer the loan to the borrower’s
account at the lender’s place.

       

      


       

      Chapter6.
Repayment

       

      Clause12.
The borrower should repay the interest according to the contract, and repay the
principle of the loan on the basis of the No.1 manner stated below:

       

      
        	
                1.  

              	
                Repay
      the principle at one time. The borrower should repay all the principle on
      January 19, 2010;

              


      

       

      
        	
                2.  

              	
                Repay
      the principle by installment. The details of amount and dates of the
      repayment are as following:

              


      

       

      First
time repayment:

       

      
        (3)  amount:
(in Chinese characters)

      

       

      
        (4)  date:

      

       

      Second
time repayment:

       

      (1)
amount: (in Chinese characters)

       

      (2)
date:

       

      Third
time repayment:

       

      (1)
amount: (in Chinese characters)

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

       

      (2)
date:

       

      If the
date of repayment is not the lender’s business day, it should be deferred to the
next business day of the lender and the repayment date should be counted for
interest. At the last time of the borrower’s repaying the principle, the
interest should be repaid together with the principle and the date is not
limited by the ending date stated in clause7.

       

      Clause13.
The borrower should repay the loan in full amount timely when it is due. If the
borrower fails to repay on time, the lender has the right to deduct the expense
payable, loan interest, compound interest and principle of the
loan.

       

      Clause14.
If the borrower has repaid part of the loan and interest at a due date, the
repayment should be used firstly to repay the expense that the borrower should
repay; and should be used secondly to repay the loan interest and compound
interest; and then to repay the principle of the loan at last.

       

      Clause15.
If the borrower wants to repay the loan before due, it should apply for that to
the lender 30 days in advance and get the lender’s consent.

       

      The
standard interest for the repayment before due is: (none)

       

      


       

      Chapter7.
Guarantee

       

      Clause16.
The manner of guarantee to the loan under the contract is: 1.

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

       

      
        	
                1.  

              	
                Tianjin
      Haitai Investment Guarantee Co., Ltd. (the guarantor) will provide joint
      liability guarantee; the guarantee contract number is “Nong He Bao Zi Ke
      Xing No.2009009”.

              


      

       

      
        	
                2.  

              	
                ________
      provide the mortgage; the contract number is
  ______.

              


      

       

      
        	
                3.  

              	
                ________
      provide the pledge; the contract number is
  ________.

              


      

       

      Clause17.
The lender and the guarantor should sign contract for the guarantee and cover
related procedures for notarization or insurance.

       

      


       

      Chapter8.
Undertaking and Compensation of Expenses

       

      Clause18.
The borrower should undertake all the lender’s expenses, including but not
limited to expenses for lawyer’s service, accounting service, audit, insurance,
notarization, identification, evaluation, registration, related to the loan
contract and corresponding guarantee contract. As per the lender’s request, the
borrower should pay to the lender for the foregoing expenses.

       

      Clause19.
As per the lender’s request, the borrower should pay in full amount for all the
lender’s expenses, including but not limited to court suit expense, lawyer’s
expense, traveling expense and other expense for realizing its creditor’s
rights, occurred while the lender conducts its rights under the
contract.

       

      


       

      Chapter9.
Borrower’s Statement, Warranty and Promise

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

       

      Clause20.
The borrower is incorporated under the laws of the People’s Republic of China.
As an independent legal company, the borrow conducts its civil actions
independently, and has full rights to undertake civil liabilities with all of
its assets.

       

      Clause21.
The borrower is fully authorized to sign the contract and conduct the
transaction under the contract. The borrower has taken all necessary actions as
a legal person to sign the contract. The contract is signed by the legal
representative or authorized signatory of the borrower and is stamped with the
borrower’s company seal.

       

      Clause22.
The borrower has obtained all the governmental approvals and third party’s
consent to sign the contract. And the borrower’s signing and fulfilling the
contract will not violate other documents.

       

      Clause23.
All the documents and vouchers the borrower has provided to sign the contract
are true, complete, accurate and valid. The financial statements the borrower
has submitted have reflected the borrower’s financial status when the financial
statements are issued.

       

      Clause24.
The contract is legal and valid, and is binding the borrower.

       

      Clause25.
The borrower has opened an account at the lender’s place. The capital of loan
will be liquidated through such account.

       

      Clause26.
In order to ensure the legal effectiveness, validity or enforceability, the
borrower has finished all the necessary registration, filing or
notarization.

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

       

      Clause27.
There is no lawsuit, arbitration or administrative procedure occurring which may
bring material and negative influence to the borrower’s ability to fulfill the
duties under the contract.

       

      Clause28.
The borrower’s statement, warranty and promise shall remain correct before the
loan and interest are paid off. The borrower will provide any document per the
lender’s request at any time.

       

      Clause29.
The borrower has never violated any contract or agreement.

       

      Clause30.
The borrower has read carefully and completely understood and accepted the
content of the contract. The borrower voluntarily signs and fulfills the
contract.

       

      Clause31.
The borrower should provide all the authentic documents as per the lender’s
request (unless the law prohibits the borrower to provide such document), and
should cooperate actively with the lender’s inspection and
investigation.

       

      Clause32.
The borrower should accept and cooperate with the lender’s inspection on its
production, operation and financial condition; the borrower is obliged to
provide the lender with the balance sheet, income statement and other documents
of the latest month every month.

       

      Clause33.
During the term of the loan, if the borrower’s name, legal representative or
address has changed, it should inform the lender 30 business days of the lender
in advance.

       

      Clause34.
Before the loan is paid off, if the borrower wants to lease, or change the
equity ownership, or involve others for operation, or merger, or acquire, or
divide, or transfer assets, or apply for business stoppage, demission, bankrupt
or other actions which may bring the lender’s interests, the borrower should
inform the lender in written form about the foregoing 30 business days of the
lender in advance and get the lender’s consent in written form. Meanwhile, the
borrower should fulfill its duties to repay the loan; otherwise the borrower
must not conduct the foregoing activities.

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

       

      Clause35.
The borrower promises that during the term of the contract, it will not
undertake any other company, organization or individual’s debt which may
influence the borrower’s ability to repay the loan, or provide any guarantee
which may influence the borrower’s ability to repay the loan, or enter in to any
mortgage or pledge with its assets or interests, which may influence the
borrower’s ability to repay the loan.

       

      Clause36.
Apart from the foregoing, if anything which may bring risks to the borrower’s
business or may bring important and negative influence to the borrower’s duty
under the contract to repay the loan, the borrower should inform the lender in
written form at once.

       

      


       

      Chapter10.
Duties for Breaching

       

      Clause37.
Any of the following cases will be considered as a violation of the
contract:

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

       

      
        	
                1.  

              	
                The
      borrower has not repaid interest or principle of the loan in accordance
      with the contract;

              


      

       

      
        	
                2.  

              	
                The
      borrower has not used the loan in accordance with the
      contract;

              


      

       

      
        	
                3.  

              	
                The
      borrower has provided fake balance sheet, income statement or other
      financial statements to the lender, or refuses to accept the lender’s
      monitor or inspection on the use of the loan or related operation and
      financial activities;

              


      

       

      
        	
                4.  

              	
                The
      statement, warranty or promise made by the borrower or the guarantor has
      been proved to be untrue or
misleading;

              


      

       

      
        	
                5.  

              	
                The
      borrower or the guarantor has breached other contract under which the
      borrower or the guarantor is one
party;

              


      

       

      
        	
                6.  

              	
                The
      operation or financial status of the borrower or the guarantee has become
      very bad;

              


      

       

      
        	
                7.  

              	
                The
      mortgaged or pledged articles related to the loan under the contract have
      depreciated, have been damaged or
lost;

              


      

       

      
        	
                8.  

              	
                When
      the borrower or the guarantor is merged, divided or reorganized into under
      equity system, the borrower or the guarantor has not provided satisfactory
      arrangement for repaying the loan to the
lender;

              


      

       

      
        	
                9.  

              	
                The
      borrower or the guarantor has bankrupted, has been dismissed or shut down
      or revoked;

              


      

       

      
        	
                10.  

              	
                The
      borrower fails to inform the lender about one of the following
      conditions:

              


      

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

       

      
        	
                (1)  

              	
                any
      important modification to its articles of association or any material
      change to its operation;

              


      

       

      
        	
                (2)  

              	
                any
      important modification to its accounting
  policies;

              


      

       

      
        	
                (3)  

              	
                any
      important change to the financial aspect or other aspect of the borrower
      or its subsidiary or its parent
company;

              


      

       

      
        	
                (4)  

              	
                any
      lawsuit, arbitration or administrative procedures which involves the
      borrower and may bring seriously negative influence to the borrower’s
      financial condition or the borrower’s ability to fulfill its duties under
      the contract.

              


      

       

      
        	
                11.  

              	
                 The
      borrower has violated any other clause of the contract and has not taken
      any remedy action satisfactory to the
lender;

              


      

       

      
        	
                12.  

              	
                Any
      other case which may bring negative influence to the lender’s interests
      under the contract.

              


      

       

      Clause38.
It is subject to the lender’s judgment on whether the above mentioned breaching
cases have occurred. If any breaching case occurs, the lender is entitled to
take any or more several of the following measures:

       

      
        	
                1.  

              	
                To
      stop transferring the loan under the
contract;

              


      

       

      
        	
                2.  

              	
                To
      announce that the released loan is due and to require the borrower to
      repay all the released loan, including the principle, interest and other
      payables;

              


      

       

      
        	
                3.  

              	
                To
      require the borrower to add or change guarantor, collateral or pledged
      articles or rights;

              


      

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

       

      
        	
                4.  

              	
                To
      deduct the borrower’s payables to the lender from any of the borrower’s
      accounts in the lender’s bank
system;

              


      

       

      
        	
                5.  

              	
                To
      announce the realization of the any of the lender’s rights under the
      guarantee to the loan;

              


      

       

      
        	
                6.  

              	
                To
      take other measures which the lender thinks is
  proper.

              


      

       

      


       

      Chapter11.
Other

       

      Clause39.
Both parties should keep the other party’s information about debt, finance,
production and operation confidential, unless the inquiry on the borrower’s
information is legal.

       

      Clause40.
Without the lender’s consent in advance, the borrower must not transfer or
handle all or part of its duties under the contract.

       

      Clause41.
Without the borrower’s consent in advance, the lender may transfer its
creditor’s right to any third party, and only needs to inform the borrower in
written form after the transfer.

       

      Clause42.
All the payables of the borrower must be fully paid and can not be deducted with
any of the lender’s payables to the borrower. If any law requires the borrower
to deduct or accrue any fund from the payables, the borrower should pay to the
lender an additional sum of money equaling the deducted or accrued sum of
payables.

       

      Clause43.
Any extension, discount or defer provided by the lender to the borrower will not
influence, damage or limit the lender’s rights under the contract; or may not be
regarded as the lender’s waiver of its rights or interests under the contract;
or will not influence any duty the borrower should undertake in accordance with
the contract.

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

       

      Clause44.
If at any time any clause of the contract is or becomes illegal, invalid or not
enforceable; other clauses will not be influenced.

       

      Clause45.
Any modification or supplement to the contract must be made in written form and
signed by both parties.

       

      Clause46.
The subtitles of the contract are added only for the convenience of reading and
must not be used for explanation of the contract or other purposes.

       

      Clause47.
Any notice or requirement sent from one party to the other must be sent in
written form to the address or fax listed on the first page of the contract. If
either party needs to the change its address or fax number, it should inform the
other party promptly.

       

      Clause48.
For correspondence between the two parties, if it is delivered by designated
person, it will be regarded as received when the person has delivered it; if
sent by registered mail, it will be regarded as received three days after
delivery; if sent by fax, it will be regarded as received right after sending.
But for all the documents sent by the borrower to the lender, they must be
actually received by the lender before they can be regarded as
received.

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

       

      Chapter12.
Settlement of Dispute

       

      Clause49.
If any dispute arises during the term of the contract, both parties should
firstly try to settle it through negotiation; if the negotiation does not work,
the dispute may be brought to the local court at the lender’s place for
settlement.

       

      


       

      Chapter13.
Effectiveness, Change and End of the Contract

       

      Clasue50.
The contract is effective after both parties have signed and stamped on
it.

       

      Clause51.
After the contract is effective, neither party may modify or terminate it. If it
is to be modified or terminated, both parties should negotiate and achieve
written agreement. Before the written agreement is reached, the clauses of the
contract are still valid.

       

      


       

      Chapter14.
Attachment

       

      Clause52.
For anything not settled in the contract, both parties may sign additional
written agreement to settle. And the additional agreement will serve as an
attachment to the contract.

       

      


       

      Chapter15.
Annex

       

      Clause53.
There should be three original copies of the contract, with the borrower holding
one, the lender holding two and the guarantor holding none. All the three
original copies share the same legal efficacy.

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

       

      Clause54.
The contract is signed on January 20, 2009 in Tianjin.

       

       

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

       

      (This
page is for only signatures and there is no text.)

       

      


       

      The
Borrower (stamp):

       

      Legal
representative: Liu Li (stamp)

       

      (or
entrusted agent)

       

      


       

      The
Lender:

       

      Legal
representative: Cao Liqiang (stamp)

       

      (or
entrusted agent)