Unassociated Document


    EXHIBIT
10.12

    


    RMB
SHORT-TERM LOAN AGREEMENT

    NUMBER0912
1002

    


    According
to the application of the Borrower , after the review of Lender who agrees to
lend RMB to the Borrower for short-term loan subject to this agreement’s
provisions and conditions. In order to specify the obligations and rights of two
parties, and keep the credibility in seriousness, contracting parties on the
basis of relevant laws and regulations of PRC, and through equal consultations,
have signed this agreement on a voluntary basis to conclude the following
contract.

    


    Article
1. DEFINITIONS

    In this
Agreement, the following expressions except where the context otherwise
requires, shall have the following meanings, namely:

     

    1)“Obligatory
right” or principal claim, means Borrower (loanee) applies to Lender(loaner),
after having approvals of the Lender, the financing which the Lender provide
becomes RMB obligatory right( including principals, interests, default
interests, compound interests, penalty, indemnification for loss and the fees of
loaner realizes the obligatory right etc. ) under this agreement.

     

    Borrower
and Lender (collectively called “Two parties”) agree and accept hereof, the
Lender’s obligatory right which Borrower holds in this agreement consistent with
Borrower’s according to this agreement.

     

    2), “
Fees of obligatory right realization” including but not limited to the expenses
of suit, arbitration, identification, auction, sell, telecommunication,
travelling and disposition etc.

     

    3),
“Significant transactions” in Section 12 of this agreement means(including but
not limited to ): any transactions which going to occur or potentially will
adversely affect the company of the Borrower’s basic framework, the changes of
company’s shareholders, contingent liability, cash flow, profitability, the core
business confidential information, the major competitive forces, important
assets, significant debts, ability to repay debts, ability to implement this
agreement, or other events which Lender and / or Borrower consider to be
significant.

     

    4), “
Significant events” in Section 12 of this agreement means (including but not
limited to ): any events which going to occur or potentially will adversely
affect the ability of executives in Borrower’s company implementing their
duties, the employment and termination of company’s core business staff, core
business secrets, major competitive forces, the basic structure of the company,
the changes of company’s shareholders, contingent liability, existence of
company, the legitimacy company’s operation, the stability the company,
company’s development, profitability, the ability to repay debts, the ability to
implement this agreement, or other events which Lender and / or Borrower
consider to be significant.


    
      
         


      

      
         


        
          

        

      

      
         


      

    

     

    5),
“Business Day” under this agreement means the Lender bank’s working day, during
fulfil the agreement, if a withdraw or repayment day is not a business day, then
prolong to the next business day.

     

    Article
2. Loan Amount

     

    Lender
agrees to lend 20million RMB to the Borrower.

     

    Article
3. The purpose of loan

     

    The
purpose of loan is to purchase raw material for production. Without the Lender’s
written consent, the Borrower should not change the purpose of using the borrow
money in this agreement.

     

    Article
4. Loan period

     

    
      	  	
              1)

            	
              The
      loan period is 12 months, from December 14 of 2009 to December 14 of
      2010.

            


    

     

    
      	  	
              2)

            	
              As
      to one-time loan, the loan date is subject to the record actual date on
      receipt for a loan(IOU) or scheduled herein loan, if the actual date of
      advances is late than the previous date of advances, then the maturity
      date should be correspondingly
prolonged.

            


    

     

    
      	  	
              3)

            	
              The
      plan of using the money: To be mutually agreed
  upon

            


    

     

    ____Date____Month_____Year________________yuan;

    ____Date____Month_____Year________________yuan;

     

    ____Date____Month_____Year________________yuan;

    ____Date____Month_____Year________________yuan;

     


     The
Borrower shall apply for a loan to the Lender within 3 working days before the
date of every monthly withdrawals or other time in accordance with the written
demand of the Lender.

     


        If
the Borrower fails to timely withdraw the loan within the time by month based on
the provisions above, the Lender has the right to impose upon the
Borrower   n/a
  per million penalty of that monthly said amount.

     


         In
accordance with the contract Article 6, the Lender shall credit the said amount
in month on the date stipulated above into the Borrower’s
account.


    
      
         


      

      
         


        
          

        

      

      
         


      

    


          4.
The Borrower has the right to adjust the plan of using the monthly-borrowed
money according to the borrowing items if they comply with relevant law,
regulations, policy and the pre-condition of the Lender’s demand, and other
factors that the Borrower requests, such as the sign of guaranteeing contract
corresponding to the contract and the time of performing the guaranteeing
documents. In the event that the Borrower fails to perform the pre-conditions
based on the provisions of the contract, the Lender has the right to stop the
loan or rescind the loan contract, and the Borrower shall bear corresponding
breaching responsibilities.

     


    5. The
monthly loan shall adopt the fixed due date, that is, all the loaning date shall
have the same date with the loaning date at the first time or the date confirmed
by the borrowing documents.

     


    6. If the
Lender recall the loan before the due date in accordance with the provisions
hereof, it is deemed that the due date is advanced correspondingly.

    


    Article
5  Loan Interest Rate and Interest Repayment

     


    
      1. 
The loan
interest rate is subject to the Second arrangement
below:

    

     


    (1) Fixed
interest rate, which implements ____ % per year. If after four days of the
recording date of loaning or before the actual date of loaning, the national
benchmark interest rate is adjusted, the fixed rate shall from the date of
releasing the loan increase by ____% or decrease by ____% with the same term and
grade of national benchmark interest rate; or the actual interest rate equals to
the interest rate of the actual date of releasing loan with the same term and
grade of national benchmark interest rate multiplied by the coefficient____.
During loaning time, the loan rate shall not adjust to the national benchmark
rate.

     


    (2)
Flouting interest, determined in quarterly, the interest rate per year shall
increase by   0 
% or decrease by  
0  % with the same term and grade of national benchmark interest
rate; or the actual interest rate equals to the interest rate of the actual date
of releasing loan with the same term and grade of national benchmark interest
rate multiplied by the coefficient   1  .
Initial interest payment rate is the interest rate of the actual date of
releasing loan with the same term and grade of national benchmark interest rate
multiplied by the coefficient above. From the actual date of releasing the loan,
after the whole quarter, the next period’s interest rate shall be determined by
the corresponding interest rate with the same term and grade of national
benchmark interest rate multiplied by the coefficient above.


    
      
         


      

      
         


        
          

        

      

      
         


      

    


         During
the period of loaning, if national benchmark interest rate is adjusted, the
Lender shall not inform the Borrower any more.

      


    (3) Other
interest rates:

     


    2. The
loan by installments hereof shall agree with the national benchmark interest
rate on the date of releasing the loan every time as a determined
standard.

      


    3. If the
nation calls off the benchmark interest rate, the Lender shall have the right
according to the national policy at the same period to re-fix the loan rate
based on the principle of equality and credibility and by contrast with the
industry convention and interest rate state. If the borrower disagrees with the
interest rate determined by the Lender, the Borrower shall negotiate with the
Lender immediately. In the event of failure to negotiate, the Lender has the
right to recall the loan in advance, and the Borrower shall pay back the rest
loan and the interest immediately.

     


    4.
Payment of the Interest of Borrowed Money

     


    The
payment of the interest of borrowed money shall be implemented pursuant to
the First
provision.

     


    (1) The
loan hereof are agreed the date of 20th of
every month as interest settlement day. The Borrower shall pay the interest of
that term the day after the date of interest settlement day, and the interest of
last term on the due date of loaning.

     


    (2) The
Borrower shall pay back all the loan interest on the due date of
loaning.

     


    (3) Other
payments: ______________________________________.

     


    5.
Penalty Interest and Compound Interest

     


    (1) If
the Borrower fails to use the loan according to the use hereof, the Lender shall
have the right to impose upon penalty interest, and the penalty interest rate
increases by   100 
% of loan interest rate. If the Borrower is overdue to pay back and does
not agree with the Lender about future payment, that is, overdue borrowed money;
the Lender has the right to impose upon the penalty interest, and penalty
interest rate increases by   50 % of
loan interest rate. As for the overdue paid interest, the Lender has the right
to impose upon the compound interest based on the penalty interest rate
hereof.


    
      
         


      

      
         


        
          

        

      

      
         


      

    


    (2) Loan
interest rate adopts the fixed rate, so the penalty interest rate shall be
fixed, too. If the loan interest rate uses the fluctuating interest rate, so the
penalty interest rate shall be the same, and the fluctuating period shall be the
same with the loan interest rate’.

     


    (3) The
counting method and payment of penalty interest and compound interest shall
perform according to the repayment of loan interest hereof.

    


    Article
6 Loan Releasing and Repayment

     
  

    1. Loan
Releasing

     


         In
the event that the Borrower meets the pre-conditions of releasing loan requested
by the Lender, the Lender shall release the loan as the following
items:

     


         (1)
The Borrower has delivered the following documents to the Lender, the situation
demonstrated by the documents has no change and continues to validate; or the
Borrower has made the Lender satisfactory explanation and statement about the
change:

     


         1)
The Borrower’s company charters confirmed in written by the Borrower, business
license, the signature sample of legal representatives and the members of the
director board as the registration and record in the administrative department
for industry and commerce, the Borrower’s property assessment report, and the ID
card copies of the legal representatives, and other company documents that the
Lender deemed necessary.

     


         2)
The original copy of the meeting of the board of directors or the shareholders
held by the Borrower according to legal procedures, and passed by the votes of a
quorum of the directors or shareholders, true, legitimate and effective
agreement about applying for the loan hereof to the Lender and announcing the
use of the loan clearly and accepting the all the borrowed conditions required
by the Lender; or other documents that the Lender deemed
necessary.


    
      
         


      

      
         


        
          

        

      

      
         


      

    


         3)
The recent three years’ audited annual financial reports and statements approved
by the Lender; or other financial documents that the Lender deemed
necessary.

     


         4)
If the loan items under the contract in accordance with national regulations or
requirements need to be applied for approval, the Lender has provided the true
and effective original documents approved by the relevant national authorities
for the Lender;

     


         5)
If there is a third party to guarantee, the company charters confirmed in
written by the guarantor; business license; the signature sample of legal
representatives and the members of the director board as the registration and
record in the administrative department for industry and commerce; and the true,
legal, and effective resolution made by the authoritative agent about agreeing
with the guaranteeing for the loan hereof; and other company documents that the
Lender deemed necessary.

     

        6)
Other documents, reports, certificates and data required by the
Lender.

     


        (2)
The Lender has filled with the relevant promissory note or loan certificate. The
promissory note or loan certificate is an integral part of this contract, and
both of them have the same legal validity. If the loan amount, loan period and
interest rate and so on are inconsistent with the record of loan certificate,
the record of the loan certificate shall prevail.

     


        (3)
The declaration and commitments made by the Borrower in the contract Article 8
remained true and effective; on the date of withdrawal or before the date no any
events of default or potential event of default occurred.

     


        (4)
If there exists mortgage or pledge, according to relevant laws and regulations,
the Borrower has finished the registration of a mortgage or pledge, relevant
ownership and registration certificate documents and so on have been delivered
to the Lender to receive and keep based on the Lender’s requirements; if there
is the third party to guarantee, the guarantee contract has been put into an
effect. The guarantee shall remain valid.


    
      
         


      

      
         


        
          

        

      

      
         


      

    


        (5)
If the Lender requests to mortgage property to insure for the loan, the
insurance procedures of the Lender as the first beneficiary have been completed
and the insurance documents has delivered to the Lender to receive and keep; and
the insurance remains valid.

     


        (6)
If the Lender requires notarization procedures and so on, such procedure and the
procedures related to it have been completed.

     


        (7)
The Borrower has opened an account at the Lender’ and paid the relevant costs in
accordance with the requirements of the Lender hereof.

     


        (8)
Other loan conditions required by the Lender.

       

    The
Lender shall perform its obligations in accordance with provisions hereof under
the pre-condition that the Provision 1 in Article 6 is met. As for the
pre-conditions above, the Lender has the right to unilaterally decide to reduce
or give up parts of them; and the Borrower and Guarantor shall not take this
condition as the subject matter object to the Lender. Once the borrowed money is
credited to the Borrower, the loan is deemed to have been released, and the loan
interest shall be counted from the date of releasing.

       

    
      	
              2.

            	
              Payment
      of Borrowed Money

            


    

    
      
        	 	 
	
                (1)

              	
                The
      borrowed money hereof adopts the Option A
  below:

              


      

    

     


    (A) The
Borrower shall pay back all the cost and interest on the due date at a
time.

     


    (B) The
Borrower shall pay back all the cost and interest by installments, and the
amount of the cost and the date as followed:

     


    _____(Month)______
(Date)____ (Year), pay back _____Yuan;

    _____(Month)______
(Date)____ (Year), pay back _____Yuan;

    _____(Month)______
(Date)____ (Year), pay back _____Yuan;

    _____(Month)______
(Date)____ (Year), pay back _____Yuan;

    _____(Month)______
(Date)____ (Year), pay back _____Yuan.

     


    If the
Lender adjusts the installment use plan, the date of installment payment does
not change, and the Borrower shall pay back the cost and interest on
time.

     


    (C) Other
payments of paying back the cost and interest: _____________.


    
      
         


      

      
         


        
          

        

      

      
         


      

    


    (2) The
Borrower shall timely repay the enough cost and interest on the date of
repayment and interest settlement hereof. If the Borrower fails to pay back the
cost and interest, the Lender has the right to take out of the cost and interest
from the Borrower’s account opened at the Lender’ or any branch agent in
accordance with relevant regulations and the internal systems of the
Lender.

     


    (3) If
the date of repayment is the Lender’s non-working day, the date shall delay the
next working day of the Lender, and the date is counted into the actual days of
loaning. When the Borrower pays back the last installment payment, the Borrower
shall repay all the cost and interest, and this is not subject to constraints of
the interest settlement date in Article 5.

      


    (4) The
Borrower fails to repay the loan hereof and requires the extension of repayment,
the Borrower shall submit the written application about the extension of
repayment before   n/a
  days of the Lender’s working day in advance. After the
application is reviewed and approved by the Lender, the two parties shall sign
another one Loan Contract of
Extension as the supplementary contract of the contract.

     


    Article
7   Surety

    
    

    
      	
              1.

            	
              The
      following as guarantee contract of this
contact

            


    

    
      (1) 
NO. :
Xingye Bank in Hubei
(guaranteed) 0912 No. 9001; commitment guarantee( the name of
contact)

    

    means of
this guarantee:   commitment
guarantee            
Guarantor: Wuhan
Credit Risk Management Ltd.
Co.                

    (2) NO. :
Xingye Bank in Hubei
(guaranteed) 0912 No. 9002; Guarantee
Margin Agreement ( the name of
contact)

    means of
this guarantee:
margin Guarantor:Wuhan Criedit Risk
Management Ltd. Co.

     

    
      	
              2.

            	
              Before
      this contract which is signed comes into affect, the Lender shall not
      fulfill the obligations of loan and other ones under this contract for
      now.

            


    


    
      
         


      

      
         


        
          

        

      

      
         


      

    


    Article
8   Statements and Commitments of the Borrower

       

    The
Borrower voluntarily makes the following statements and commitments and bears
the legal liabilities for the authenticity of them.

       

    
      	
               
      

            	
              1.

            	
              The
      Borrower is a legal entity duly established and existing in accordance
      with laws of the People’s Republic of China with a full civil capacity.
      The Borrower guarantee to provide the relevant verification, permission,
      certificate and other documents required at irregular intervals by the
      Lender.

            


    

    
      
        	 	 	 
	
                 
      

              	
                2.

              	
                The
      Borrower has enough ability to perform all the obligations and
      responsibility under this contract. If some instruction and his financial
      situation are changed, or he enters into any agreement with any units, he
      will be diminished and exempted from payment
    responsibility.

              


      

    

    
      
        	 	 	 
	
                 
      

              	
                3.

              	
                The
      Borrower has full rights, authorization or legal rights to enter into this
      contract. The borrower has obtained and fulfilled all the approval,
      authorization and other relevant procedures of the bank, and all the
      approval, registration, authorization, content, permission and other
      procedure of any government and power organ required by signing and
      performing this contract. All the approval, registration, authorization,
      content, permission and other procedures required by signing this contract
      are legal and valid.

              


      

    

    
      
        	 	 	 
	
                 
      

              	
                4.

              	
                The
      Borrower signing this contract completely consists with the relevant
      regulations, internal decision and the resolution of meeting of
      shareholders and boards of directors of the Lender. This contract does not
      breach and violate any regulation, internal decision, the resolution of
      meeting of shareholders and boards of directors of the Borrower and the
      borrower’s policy.

              


      

    

    
      
        	 	 	 
	
                 
      

              	
                5.

              	
                In
      accordance with the genuine intention of the Borrower, this contract is
      signed and performed. The signing and performing of the contract mentioned
      above do not breach any law, regulation, decree and the agreement of the
      contract. This contact that is legal and valid may be enforced. If this
      contract is null and void due to the defects of title of the Borrower, the
      Borrower shall immediately and unconditionally compensate for all the
      losses of the Lender.

              


      

    


    
      
         


      

      
         


        
          

        

      

      
         


      

    


    
      	
               
      

            	
              6.

            	
              All
      the documents, financial report and other data under this contract that
      the Borrower provides for the Lender are authentic, complete, accurate and
      valid. And the Borrower shall persistently maintain all financial indexes
      claimed by the Lender.

            


    

    
      
        	 	 	 
	
                 
      

              	
                7.

              	
                The
      Borrower accepts loan business under this contract and is governed by the
      regulations, conventions and actual practice of the Lender, whose ultimate
      translating rights belongs to the
Lender.

              


      

    

    
      
        	 	 	 
	
                 
      

              	
                8.

              	
                If
      the Borrower does not fulfill the obligation under this contract, the
      Borrower hererby authorizes the Leader to transfer and receive the due
      payment from any account opened by the Borrower at the Lender or the
      Lender’s other systems.

              


      

    

    
      
        	 	 	 
	
                 
      

              	
                9.

              	
                During
      any transacting stage after signing this contract, if the Borrower
      provides any documents related with the transaction for the Lender to
      check, the Borrower shall guarantee the authenticity of all the documents.
      The lender just judges the external authenticity of the documents, neither
      involves in nor knows the substantial transaction the lender engages in,
      as well as not bears the legal
reliability.

              


      

    

    
      
        	 	 	 
	
                 
      

              	
                10.

              	
                Besides
      the situations disclosed to the Leader in writing, the borrower confirms
      he does not conceal any the following events that happened or is expect to
      happen, which may cause that the lender refuses to issue the loan under
      this contract:

              


      

    

     


    (1) the
Borrower’s debt including but not limited to mortgage, pledge, lien, and other
debts covered in accordance with the assert and income of the
Lender

     


    (2) the
behavior of breaching law and regulation or the claimed situation involving the
chief managers from the Borrower and the lender

     


    (3) the
behavior of breaking the contracts between the Borrower and any
creditor

     


    (4) no
lawsuit, arbitration administrative litigation referred to the Borrow and the
Borrower’s property, in progress or the possible in accordance with the Lender’s
understanding, and no the liquidation, discontinuance or other similar
procedures related with the borrower proposed by the Borrower or the third
party


    
      
         


      

      
         


        
          

        

      

      
         


      

    


    (5) other
any situation that may affect financial conditions or repay ability of the
Borrower

       


       11.
The Borrower promises to use the loan in accordance with this contract and shall
not be appropriated for any other use or used for other purposes that
of  breaching this contract. The borrower shall be supervised and
checked voluntarily and cooperatively by the Leader about the use of the loan,
production and operation, financial activities, the material in stock, asset and
liabilities, the deposit of the bank, the cash and other situations. The
borrower shall meet other requirements that the Lender thinks necessary and
proper.

     


       12.
The Borrower shall provide the enough and valid surety accepted by the Lender or
other surety that the Lender thinks to be accepted or matched.

     


       13.
No the borrower may reduce the registered fund by any means. Without the
approval in writing of the Lender, the Borrow shall not transfer the loan under
this contract to the third Party. Before the payment in full of the debt under
this contract, the Borrower shall not repay any debt with the Lender and any
creditor in advance without the approval in writing of the Lender.

    


       14.
If the litigation and arbitration occur between the Borrower or the relevant
third party related to the Borrower when the Lender performs the obligations in
accordance with the provisions hereof, so that the Lender is forced to get
involved in the disputes with any other third party; and the Borrower shall pay
the costs of litigation or arbitration. And the attorney fees and all other
costs shall be also born by the Borrower.

    


       15.
Any settlement business related with this contract shall be handled by the
settlement account opened by the Lender.


    
      
         


      

      
         


        
          

        

      

      
         


      

    


    Article
9 Responsibilities and Obligations of Both Parties

      


    
      	
               
      

            	
              1.

            	
              Responsibilities
      and Obligations of the Lender

            


    

    
      
        	 	 	 
	
                 
      

              	
                (1)

              	
                Responsibilities
      of the Lender

              


      

    

    
      
        	 	 	 
	
                 
      

              	
                1.

              	
                having
      the right to require the Borrower to duly repay the principle and interest
      of the loan and the relevant
expense

              


      

    

    
      
        	 	 	 
	
                 
      

              	
                2.

              	
                having
      the right to require the Borrower to provide all the date related with the
      loan

              


      

    

    
      
        	 	 	 
	
                 
      

              	
                3.

              	
                having
      the right to understand production and operation and financial conditions
      of the Borrower

              


      

    

    
      
        	 	 	 
	
                 
      

              	
                4.

              	
                having
      the right to supervise the Borrower to use the loan in accordance with
      this contract

              


      

    

    
      
        	 	 	 
	
                 
      

              	
                5.

              	
                having
      the right supervise the advancement of the project and put forward the
      suggestions and demands, which uses the loan under this
      contract

              


      

    

    
      
        	 	 	 
	
                 
      

              	
                6.

              	
                having
      the right to transfer and receive the principle and interest of the loan
      and other relevant expense from the account of the Borrower any the
      time

              


      

    

    
      
        	 	 	 
	
                 
      

              	
                7.

              	
                The
      lender have the right to transfer the obligatory right or part of that and
      the security interests to the third Party without the approval of the
      Borrower. After transferring the obligatory right and the security
      interests, the Lender remains to bear the entire obligation under this
      contract

              


      

    

    
      
        	 	 	 
	
                 
      

              	
                8.

              	
                If
      the Borrower fails to repay the principle and interest of the loan in
      accordance with this contract or deal with the relevant matters of
      repayment, the Lender is able to disclose it in credit information of the
      People’s Bank of China or in the new media and take legal actions such as
      recovery, litigation and
arbitration

              


      

    

    
      
        	 	 	 
	
                 
      

              	
                9.

              	
                The
      Lender has the right to take corresponding measures in accordance with the
      compulsory and leading regulation and instruction of bank’s administrative
      department and the obligations entitled by the instructions and
      conventions of national and local bank association without the need of
      informing the Borrower in advance and requesting permission of the
      Borrower in advance

              


      

    


    
      
         


      

      
         


        
          

        

      

      
         


      

    


    
      	
               
      

            	
              10.

            	
              having
      the right to enjoy other responsibilities by the laws, regulations,
      degrees and this contract

            


    

    


    2. The Rights and
Obligations of the Borrower

     


     (1)
The following rights belong to the borrower:

     


       Firstly,
rights in drawing and using all loans in accordance with convention in this
contract.

      


       Secondly,
rights in requiring lender’s confidentiality obligation of borrower’s data
according to the clauses of this agreements.

      


    (2)
Obligations of the Borrower

      


       a.
the borrower should supply the files and data lender requires and all the
information of opening bank, account numbers and balances of deposits and loans.
In addition, borrower should cooperate with the lender in its investigation,
inspection and examination.

     

       b.
the borrower should accept lender’s supervision in using credit capital and
other related production and operation, as well as financial activities; In case
of the loan in this contract is used in project construction, the borrower
should cooperate with lender to give a survey on such project and adopt the
reasonable measures in regarding to lender’s suggestions or
demands.

    


       c.
the borrower should use loan according to the contract’s conventions and avoid
embezzlement and equity investment, and speculation of marketable securities,
futures, real estate and so on. The borrower should not engage in lending and
borrowing activities between enterprises and other illegal activities restricted
by other countries; it should not occupy and embezzle borrowed loan in other
ways.

      


    d. the
borrower should repay the enough principals of loans according to the contract’s
agreements.

     


    e.
Without lender’s written agreement, the borrower should not transfer its all or
partial debts to the third party.


    
      
         


      

      
         


        
          

        

      

      
         


      

    


    f. The
borrower should bear the cost regarding to the contract, which includes but not
limited in notary, identification, evaluation, register fees and other fees as
well as lender’s fees in realizing the rights of debts.

      


    g. The
borrower should not reduce the registered capital in any way.

      


    h. The
borrower should obtain the written agreements coming from lender in advance and
implement the safeguard measurements in full repayment of loan’s principles and
costs scheduled according to lender’s requirement under the agreements of this
contract. Otherwise, it can be takes as the borrower’s defaults and lenders can
adopt measurement of recovering debts in advance and these cases
include:

      


    1.The
amount of loan applied for the third party of bank is more than   n/a   Thousands
Yuan or total liabilities is more than   n/a   Yuan or
providing more than   n/a   Yuan
RMB loan; or supply the guarantee for the third party’s debts more
than   n/a  
Yuan.

      


    2. Making
the material assets and property changes, the adjustment in ways of operation
and the main management personnel (including but not limited in the signing of
cooperative contracts or joint ventures with foreign traders or Hong Kong,
Macao, Twain businessmen; cancellation, close, production, merger, division,
taking over, being mergered, acquisitions and recombination, organization or
reconstruction into the joint-stock company; or invest to build the joint-stock
companies and investment company by taking the fixed assets such as houses,
machines and other equipments or some intangible assets such as trademark,
patent, proprietary technique, and land use rights and so on; to make the
operation right transaction, the main personnel changes in management by the way
of lease contract, joint custody and so on.

      


    3. the
borrower should immediately notice lender and implement the supporting
measurement of paying of the principal of loan and scheduled full-payment in
repaying in event of these cases:

    
    

    
      	  	
              (1)

            	
              The
      happening of great financial losses, assets losses, or other financial
      crisis.

            


    


    
      
         


      

      
         


        
          

        

      

      
         


      

    


    
      	  	
              (2)

            	
              The
      happening of revoke or cancellation of business licenses or closing down,
      application or being application of bankruptcy or dissolution and other
      status.

            


    

    
      
        	 	 	 
	  	
                (3)

              	
                The
      great crisis of controlling shareholders or other related company’s
      operation influencing its normal
operation

              


      

    

    
      
        	 	 	 
	  	
                (4)

              	
                The
      great changes of the legal representative of borrower, director, senior
      management personnel and other changes influences its normal
      operation

              


      

    

    
      
        	 	 	 
	  	
                (5)

              	
                The
      affiliate transaction happening between the borrower and controlling
      shareholders and other related company influences its normal
      operation

              


      

    

    
      
        	 	 	 
	  	
                (6)

              	
                Any
      litigation, arbitration, administrative penalty results from the bad
      influences on operation or
property

              


      

    

    
      
        	 	 	 
	  	
                (7)

              	
                Other
      great matters happening in influencing its ability in paying
      debts

              


      

    

     


    10. The
borrower guarantees that it should keep current assets and net asset value
within the rank of   n/a
 , asset liability ration within the rank of   n/a   , current
assets ration within the rank of   n/a  .

     


    11. In
regard to the sending collection letters or files the lender send, the borrower
should sign and return the receipt to the lender.

     


    12. The
borrower own independent obligation under the clauses of this contract and is
not influenced by any party of this contract or the relationship between the
third parties in addition to that of outsides the regulation of this
contract.

    


    2.
Obligations of the Lender

     


    1) To
grant loans to the Borrower as agreed in this contract;

     


    2) To be
entitled to keep the Borrower’s debts, financial status, and manufacturing and
operation conditions in secret, excluding the laws and rules or stipulations,
instructions and command of the supervisory organizations.

    


    Article
10    Prepayment

      


    1. If the
Borrower requires repaying partial or total of the principal and interest of the
loan ahead of schedule, the Lender shall be notified thereof in writing
ahead workdays and
the Borrower should obtain the written consent of the Lender. The Lender has the
right to ask the Borrower to pay   n/a   Yuan of the
loan repaid beforehand as compensation.


    
      
         


      

      
         


        
          

        

      

      
         


      

    


    2. After
repaying partial principal and interest of the loan ahead of schedule with the
approval from the Lender, the Borrower shall confer with the Lender on the next
repayment tenor, date and loan amount. The accrued interest of the principal
repaid beforehand is calculated at the borrowing rate agreed in the contract
according to the actual utilization time of the loan. The Lender shall not
adjust the loan interest calculated before prepayment.

     


    3. If the
Borrower repay the loan under this contract in advance without the written
consent of the Lender, the Lender has the right to calculate the interest
according to the rate and time limit agreed in the contract.

    


    Article
11    Recall the loan beforehand

      

    1. During the borrowing
period, if the Borrower or the Guarantor (namely, the assurer or
mortgagor, or pledgor under this contract) is under any of the following
circumstances, the Lender shall be entitled to take the unilateral decision to
withhold the unused part of loan under this contract and recover part or total
of the principal plus interest; for the amortized loan, if the Lender recalls
one part of the loan in advance as agreed in the contract, other undue parts of
the loan shall be deemed as due prior to maturity:

     


    (1)
Providing false materials or concealing important financial operation facts; any
certificate or document submitted to the Lender and any provision of pledge or
commitment made in Article 8 of this contract is proved to be false, in error,
incomplete or misleading deliberately;

     


    (2)
Changing the assigned use of loan, diverting the loan, or using the loan to
engage in illicit trade without the approval of the Lender;

     


    (3) Using
the false contract entered with the interested party to discount on or pledge
claims such as notes receivable or accounts receivable to cheat the Lender of
capital or credit.

     


    (4)
Refusing to accept the Lender’s supervision and inspection of the use of credit
funds and financial operation activities;


    
      
         


      

      
         


        
          

        

      

      
         


      

    


    (5) The
occurrence of important situations like restructuring, merger and acquisition
which might affect the security of the loan according to the
Lender;

     


    (6)
Deliberately evading the Lender’s claim through affiliated
transaction;

     


    (7) With
deteriorating credit and having apparently impaired liquidity (including
contingent liability);

     


    (8) The
Borrower, or the Lender’s affiliated enterprise or guarantor,  or the
Guarantor’s affiliated enterprise having any cross-default circumstances as
provided in Article 14 of this contract;

     


    (9) The
Borrower’s defaulting in paying off any principal, interest or expense of the
financing under the contract;

     


    (10) The
Borrower’s stopping paying for his debts or failing to or showing to be unable
to pay his debts;

     


    (11) The
Borrower’s suspension, discontinuance of a business or having been declared
bankrupt, dissolution or revoked of the business licenses, or dismantlement, or
involving in major economic disputes, or deteriorating financial
situation;

     


    (12) The
Borrower’s failing to perform the obligations provided in article 9 and 12 of
the contract and other obligations agreed as the contract, or the Guarantor’s
failure to fulfill the obligations agreed in the guaranty contract;

     


    (13) The
already or significantly possible reduction of the value of the mortgaged
property or pledged property, or the right of pledge’s having to be granted to
cash before maturity;

     


    (14)
Other issues that imperil, impair or possibly imperil, impair the rights and
interests of the Lender.

       

    2. When
recalling the loan ahead of the time, the Lender is entitled to take relevant
measures as agreed in the Article 13, section 2 of the
contract.


    
      
         


      

      
         


        
          

        

      

      
         


      

    


    Article
12 The Borrower’s obligation to disclose important transactions and events to
the Lender

    


    In any of
the following cases, the borrower shall submit written disclosure to the Lender
duly, and cooperate with the Lender to take loan assurance measures at the
request of him, to pay off or implement the repayment of debts.

     


    1. The
Borrower shall present written reports to the lender duly to inform the
applicant’s important trades or events.

     


    2. If the
Borrower belongs to the group customer, the Borrower should report its
affiliated transactions accounting for more than 10% of its net asset value to
the Lender, which includes but not limits:

     


    (1) the
related relationship of the parties in transaction;

     


    (2) the
transaction items and nature;

     


    (3) the
transaction value and its corresponding proportion;

     


    (4)
pricing policy (including the transactions with no value or token
value).

      


    3. Within
the effective period of this contract, if the Borrower makes preparations for
the transfer of the share, restructuring, merger, separation, shareholding
reform, joint venture, cooperation, joint management, contracting, leasing,
changing business scope or registered capital, transfer of significant assets,
contingent liability or other items, or conducts any item that might affect or
seriously influence his accountability capacity, which all shall be informed to
the Lender in written form ahead of 30 calendar days.

       


    4. The
Borrower’s suspension, discontinuance of a business or declaration of
bankruptcy, dissolution or revocation of the business licenses, or
dismantlement, deterioration of financial situation or involving in major
economic disputes, or the occurrence of any other events that might affect or
seriously influence his accountability capacity, which all shall be informed to
the Lender in written form within 7 calendar days after the occurrence of the
event.

       


    5. If the
Borrower involves in major court case or arbitration case with any third party,
which might affect or seriously influence his accountability capacity, the
Borrower shall inform the Lender in written form within 7 calendar days after
receiving the relevant notice.


    
      
         


      

      
         


        
          

        

      

      
         


      

    


    6. The
Borrower shall be ensured not to imperil the Lender’s claim by taking advantage
of his legal dispute with any third party (including basic trade contract
dispute).

    


    Article
13    Liability for breach of
contract

     


    1. After
the commencement of this contract, both the Borrower and the Lender shall
perform the obligations agreed in the contract, any party who fails to or does
not fully fulfill his contract obligations shall be liable for the corresponding
breach of contract.

     


    2. If the
Borrower fails to fulfill any contract agreement, the Lender is entitled to take
the following one or multiple measures:

     


    (1) to
remedy the default with a time limit;

     


    (2) to
withhold the unused loan under the contract;

     


    (3) to
take the unilateral decision of the of maturity in advance of partial or total
of the loan;

     


    (4) to
take the unilateral decision to terminate the contract, and require the Borrower
to pay off the mature or immature principal with interest and pay or compensate
for the related expenses;

     


    (5) to
require the borrower to pay default interest if the payment is overdue; to
require the borrower pay for the default interest by diverting the funds; to
require the borrower to pay for the compound interest;

     


    (6) to
require the borrower to supplement the right of mortgaged or pledged property,
or change the guarantor;

     


    (7) to
implement or fulfill the obligations under any guarantee levels;

     


    (8) to
deduct the principal and interest from any of the borrower’s accounts (excluding
public accounts like public accumulation funds and trade union expenses) opened
at the Lender’s, or to consign the issuing bank of the Borrower’s account to
deduct the principal and interest of the loan, which includes but not limits to
the borrowing principal and interest, as well as other expenses agreed in the
contract; if the currency in the borrower’s account is different for the his
loan currency, the Lender has the right to deduct the fund after converting the
currency into the loan currency according to the buying exchange price quotation
of that day so as to pay off the borrowing principal and
interest;


    
      
         


      

      
         


        
          

        

      

      
         


      

    


    (9) to
institute legal proceedings or arbitrations to require the Borrower to pay off
the principal and interest of the loan, the expenses that the Lender fulfills
his obligatory right shall be borne by the Borrower;

     


    (10) The
Lender is entitled to grant a levy or lien on the borrower’s tangible or
intangible property under the Lender’s control or possession of any of the
Borrower’s movable property or real estate, or take other measures that are
deemed appropriate by other Lenders;

     


    (11) to
take other measures stipulated by the laws and regulations, agreed as the
contract or appropriate for the Lenders.

     


    3. If the
Lender fails to provide the loan according to the agreed date and value, which
consequently causes the loss to the Borrower, he shall compensate for the direct
economic loss brought to the Borrower. However, the Lender is not liable for
indemnity towards any foreseeable or unforeseeable indirect loss caused by the
above reasons.

     


    4. If the
Guarantor under this contract (i.e. the warrantor, mortgagor or pledgor)
produces the following causes, the Lender has the right to take measures as per
this Article, Section 2:

      


    (1) The
Guarantor fails to fulfill the agreements in the guaranty contract or his credit
condition deteriorates or the occurrence of other events weakens the Guarantor’s
capability of guarantee;

      


    (2) The
Mortgagor fails to fulfill the agreements in the mortgage contract, or
deliberately destroy or ruin the mortgaged property; or the value of the
mortgaged property might reduce or has apparently reduced; or other events that
imperil the Lender’s right of mortgage appear;

      


    (3) The
Pledgor fails to fulfill the agreements pledge contract; or the value of the
pledged property might reduce or has apparently reduced; or the right of pledge
has to be fulfilled before the payment of the loan; or other events that imperil
the Lender’s right of pledge appear;


    
      
         


      

      
         


        
          

        

      

      
         


      

    
  

    Article
14   Cross-default clause

     


    Borrower,
or the Borrower’s related enterprises and its Guarantor, or the Guarantor’s
related enterprises having any of the following cases will be regarded as the
concurrent breach of contract of the Borrower, the Lender has the right to
recall the loan beforehand as the agreements in the Article 11 of this contract,
and at the same time, to require the Borrower to undertake the liability of
breach of contract on the strength of the agreements in the Article 13 of this
contract:

     


    (1) Any
loans, financings or debts have violated or might violate the contract, or have
been declared to be due prior to maturity;

     


    (2) Any
Guaranties or similar obligations fail to be fulfilled, or existing the
possibility of failing to be fulfilled;

     


    (3)
Failing to fulfill or violate the relevant loan guaranty and other legal
documents or contracts similar to obligations; or existing the possibility of
violation or failing to be fulfilled;

     


    (4) The
occurrence or immediately occurrence of the situation of insolvency of the
due debts or the due loans/financings;

     


    (5) Being
named in the gazette or immediately being declared bankrupt according to legal
procedures;

     


    (6)
Transferring the assets or properties to other creditors;

     


    (7)
Imperiling the security of the principal and interest of the loan under this
contract.

    


    Article
15 Continuity of the Obligations

     


    Borrower’s
any obligation has continuity under the clauses of the contract and these
subjects after being mergered and reorganized and renamed stills own the
complete and equally binding upon heirs, agents, receivers and
assignees.


    
      
         


      

      
         


        
          

        

      

      
         


      

    


    Article
16 Accelerate Expired Clauses of Principals, Interests and Costs

     


    With the
agreements of both borrower and guarantor, in event of borrower’s failure of
performance the statements and promises hereof in the contract or borrower’s
failure of any obligations hereof in this contract, lenders reserves the right
to decide borrower’s other any obligation to lender including all the
principals, interests (including default interest and compound interest) of due
and undue loan and the pay obligation of corresponding cost should be due
immediately.

    


    Article
17 Priority in Arrangements of Subrogation Right

     


    The
borrower gives a special statement here that the lender owns the priority in
subrogation rights claim as for lender’ s any third party’s claims, accounts
receivable or other interests and properties in case of borrower’s breach or
failures in paying the due debt including principal, interest and cost;
meanwhile the borrower having not enough property to pay debt.

    


    Article
18 Offset Arrangements

     


    The
borrower reserves the right in deducting lender’s any account to offset the
debts directly in event of any debt advanced expire resulting from lenders or
guarantor’s failure of performance of due debts or any breach of agreements
herein this contract. When the borrower’s deducts the lender’s payment in
accounts, the foreign exchange prices should be subjected to the exchange rate
quoted by borrower in case of any different currencies.

    


    Article
19 Law Application, Jurisdiction and Disputes Settlements

     


    
      	
               
      

            	
              1.

            	
              Signing,
      effect, performance, release, interpretation and disputes settlements and
      so on are applicable to laws of the People’s Republic of
      China.

            


    

    
      
        	 	 	 
	
                 
      

              	
                2.

              	
                All
      disputes arising from the execution of or in connection with, this
      contract shall be settled amicably through friendly the borrower and
      lender. In case no settlement can be reached through negotiation, the case
      shall then be submitted to these following the First Option
      below;

              


      

    


    
      
         


      

      
         


        
          

        

      

      
         


      

    


    Settlement
one: to institute legal proceeding lender’s People’s Court. Legal costs and
reasonable counsel fee and other fees produced in the process of lawsuit are
included but not limited to the property preservation fee, travel fee, notary
and certification fee, translation fee, evaluation fee and auction fee and so
on. All fees should be borne by losing party.

    


    Settlement
two: All disputes arising in connection with this Contract shall be submitted to
arbitration by any party, in accordance with its arbitral rules of procedure.
The decision shall be accepted as final and binding upon both parties. The
arbitration shall be conducted by (  ) court. Arbitration fee and
reasonable counsel fee and other fees produced in the process of lawsuit are
included but not limited to the property preservation fee, travel fee, notary
and certification fee, translation fee, evaluation fee and auction fee and so
on. All fees should be borne by losing party.

     


    Settlement
three: other ways:  (   )

    


    
      	 	
              3.

            	
              During
      the litigation or arbitration, other clauses not involving disputes should
      be performed.

            


    

    


    Article
20 Files Exchanges, Communication and Notice

     


    
      	
               
      

            	
              1.

            	
              All
      exchanges, communications and notices which may or shall be given under
      this contract shall be made by registered address, telex number or other
      ways to send to the other party in a written
  form.

            


    

    
      
        	 	 	 
	
                 
      

              	
                2.

              	
                If
      either party has changed its address mentioned above, any shortcut should
      be used to notice the other party without
  hesitation.

              


      

    

    
      
        	 	 	 
	
                 
      

              	
                3.

              	
                All
      files, communications and notices should be taken as being delivered
      according to the above-mentioned addresses within the following
      dates:

              


      

    

    
      
        	 	 	 
	
                 
      

              	
                (1)

              	
                5
      days after the letter is
registered;

              


      

    

    
      
        	 	 	 
	
                 
      

              	
                (2)

              	
                Date
      of confirmation by the other party if the telex is
  send;

              


      

    

    
      
        	 	 	 
	
                 
      

              	
                (3)

              	
                Date
      of signature of receipt in case of the special
  sending;

              


      

    


    
      
         


      

      
         


        
          

        

      

      
         


      

    


    
      	
               
      

            	
              (4)

            	
              The
      two parties agree that the official seal, office seal, financial seal and
      contract seal, send and receive seal, as well as lender’s special seal in
      credit business are the effective seals for the communication, file
      exchange and notices. Staff in borrower’s company is the entitled signer
      for exchange of files, communications and
  notices.

            


    

    


    Article
21 Contract Effectiveness and Other Matters

     


    
      
        	
                1.

              	
                The
      contract shall enter into effect upon the date of two parties’ signature
      or seals.

              


      

    

    
        


      
        	
                2.

              	
                During
      this contract becoming effective, any lenient, extending or delay over the
      interests and rights hereof described in this contract the lender entitles
      to borrower and guarantor poses no harm, influences or limitation to
      lender’s due interests and rights according to the contract and related
      laws or regulations. It is not regarded to lender’s abandon of the rights
      and interests hereof prescribed in the contract and it also gives on
      impacts on lender’s any obligation under the clauses of this
      contract.

              


      

    

    
       


      
        	
                3.

              	
                In
      event of any time, this contract’s any clause becoming illegal, invalid or
      unenforceable in all aspects does not affect or harm other clauses’
      legality, validity or enforceability in this
  contract.

              


      

    

    
       


      
        	
                4.

              	
                In
      order to the convenience in reading of this contract, subtitles are put
      in, which can not be used as explanation to this contract or for any other
      purpose.

              


      

    

     


    
      	
              5.

            	
              The
      appendices hereto in this contract are the inalienable parts and have the
      legally of equal effect as the contract
text.

            


    

     

    
      	
              6.

            	
              This
      contract is made in four originals. The borrower, lender and
      (    ) keep (  ) original of the four. Each
      one has the legally of equal
effect.

            


    

    


    Article
22 Notary and Self-imposed Compulsory Execution

     


    
      	
              1.

            	
              This
      contract should be acknowledged by Notary Public Office appointed by The
      People’s Republic of China if the loaner proposes any notary
      request.

            


    


    
      
         


      

      
         


        
          

        

      

      
         


      

    


    
      	
              2.

            	
              This
      contract is entitled with the effect of compulsory execution after
      notarized. If the borrower fails to fulfill obligation or the promissory
      lender realizes creditor’s right according to legal regulations or laws,
      the lender reserves the right to apply for the direct compulsory execution
      to People’s Court with
jurisdiction.

            


    

    


    Article
23 Supplementary Clauses:

    


    The above
promissory notes are the irrevocable promise and indispensable attachments in
relation to all the credit business agreements between the loaner and
debtor.

    


    
      
        	 
      	 
      	
                LENDER (Official
      Seal)     

              
	 
      	 
      	 
      
	 
      	 
      	
                December
      14 2009

              


      

    

    


    BORROWER(S)
(Official Seal)

     


    LEGAL
REPRESENTATIVE(S) OR AGENT (Official Seal)

    
      
        	
                
                   

                

              	
                December
      14 2009