| 1.   | The amount of the Contract shall be RMB twenty million (Uppercase). |
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| 2.   | The loan hereunder shall be used for purchasing raw and assistant materials. Party A can not change the use of the loan without written approval by Party B. |
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| 3.   | The term of the loan hereunder is one year, from October 20th 2010 to October 19th 2011. |
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| 4.   | The interest rate and the penalty rate of the loan; Interest Calculation and payment. |
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| 4.1   | Fixed interest rate. The interest rate is the benchmark interest rate for one year. There is no change during the term. |
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| 4.2   | The penalty rate. |
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| 4.2.1   | The penalty rate should be the interest rate up floating 100%, in the case that, Party A don’t use the loan as promised in the Contracts. |
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| 4.2.2   | The penalty rate should be the interest rate up floating 50%, in the case that, Party A don’t repay the loan timely. |
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| 4.2.3   | If the loan is neither repaid on time nor used in the way that comply with contract, the higher penalty interest rate of above will apply. |
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| 4.3   | The interest should be calculated from the day of fist withdrawal transferred to the account assigned by Party A. The loan interest is calculated by day from the date of the actual loan-taking day, daily interest rate = annual interest rate/360. If Party A can not pay the interest timely, the interest should be paid by compounding interest from the next day. |
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| 5.   | Interest Settlement. |
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| 5.1   | Fixed-rate interest is calculated according to the agreed fixed rate. Floating-rate interest is calculated according to the determined rate in the floating period. If the interest rate is floated multiple times in one interest period, interest will be the cumulative amount of interests calculated according to different rates during floating period. |
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| 5.2   | The interest on the loan is calculated monthly with the settlement date on the 20th of each month. |
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| 6.   |  Withdrawals and Loan Payments |
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| 6.1   | The Withdrawals conditions. |
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| 6.1.1   | The necessary approvals, registration, delivery, insurance and other legal approvals have been obtained by Party A. |
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| 6.1.2   | Party A has completed the relevant guarantee (if there has) procedure requested by the lender and the guarantee is legitimate and continually effective. |
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| 6.1.3   | Party A opens an account to receive and repay the loan as required by Party B. |
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| 6.1.4   | Party A doesn’t breach any items of the contract and there has or may not have conditions which can impact the collection of the loan. |
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| 6.1.5   | No laws, regulations, rules or authorized department forbids or limits the issuing of the loan. |
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| 6.1.6   | Other conditions: N/A |
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| 6.1.7   | Significant finance indicators of Party A should be subject to the Exhibit 2. |
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| 6.1.8   | If any one of below happens, Party A should provide relevant information to Party B: |
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| (1)   | The loan note stamped by Party A; |
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| (2)   | The payment note stamped by Party A, for example, T.T Or m/t vouchers, bank draft application, signed checks and etc. |
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| (3)   | The exact trade information, just like the original or copies of the purchasing contracts, repayment loan contracts and etc. |
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| (4)   | Other document required by Party B. |
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| 6.1.9   | If a single withdrawal amount doesn’t match the above, Party A should provide a plan which shows the usage of the loan or other document required by Party B. |
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| 6.1.10   | All information and/or documents provided by Party A should be legal, real, whole, actual and effective. Other requirements required by Party B. |
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| 6.1.11   | Other conditions: N/A |
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| 6.1.12   | Party B can require Party A to pay all by entrust in certain condition that certain defaults are occurred by Party A. |
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| 6.2   | Party A can apply withdrawal any time according to the needs of the project. |
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| 7.   | The entrust account is_________. |
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| 8.   | Party A shall pay to Party B the due interest on the Interest Payment Date. The first interest payment shall be made on the first Interest Payment Date after the Disbursement of the Loan. Upon the maturity date for the Loan, Party A shall pay in full all the unpaid interest together with the principal. |
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| 9.   | Party A shall deposit into its account with Party B such funds as sufficient to repay the amount due to Party B before each Repayment Date specified in this Contract, and shall automatically transfer such funds to Party B for repayment; or Party A shall transfer a sufficient amount from its other accounts to make such repayment on the aforementioned Repayment Date. |
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| 10.   |  Prepayment. If Party A intends to pre- pay the loan, it should submit written application to Party B 30 days in advance. Upon Party B’s approval, Party A can prepay the loan or partly. |
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|   | (1) Instituting legal proceedings with the People’s Court in the location of Party B. |
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|   | The Parties shall perform this Contract in accordance with the undisputed parts during the course of such legal proceedings or arbitration. |
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