Loan and Guarantee for Loan Agreement



Lender:Rural Credit Cooperative of Xushui County, Dayin Branch

Borrower:Hebei Baoding Orient Paper Milling Co., Ltd

Guarantor:Hebei Chenyang Industry and Trade Group Co., Ltd.



Upon mutual negotiations between the Lender, the Borrower, and the Guarantor, all parties agree to enter into this Loan and Guarantee for Loan Agreement (the Agreement), pursuant to the applicable laws and regulations.



1.
        The Lender agrees to release the loan set forth as below:


1.1
    Loan Type: Long term(
For 3 years)


1.2
    Loan Purpose: To
purchase raw materials


1.3
    Loan Amount:
RMB13,280,000 yuan (RMB Thirteen Million Two Hundred and Eighty Thousand Yuan)


1.4
    Loan Period: From
September 16, 2008 to September 16, 2011


1.5
    Loan Interest Rate:
7.74


1.6
    Repayment Method:
Interest be settled by month, and principal be paid off by one time on maturity date


2.
        The Borrower hereby
warrants as follows:


2.1
    Make the repayment of the
principal and the interest on time;


2.2
    Use the loan for the
purpose set forth in this Agreement, and shall not change the purpose;


2.3
    Provide the Lender with
fairly balance sheet, income statement, all bank accounts and account numbers, and other information, as applicable;


2.4
    Accept the supervision in
the usage of the loans, production and operating activities, as well as the financial conditions, by the Lender;


2.5
    Shall not use the assets
owned by the Borrower to secure other debts without the Lenders prior consent, and only to the extent that shall not affect
the Lenders ability to take back the loans on maturity date;


2.6
    Shall notify the Lender
prior to the changes in the legal representative, corporate address, business location and registered capital;


2.7
    Shall notify the Lender
previously and implement the repayment measures, in case of lease, shareholder structure reforming, pool, merger,
acquiring,joint-ventured,separation, capital reduction, changes in shareholder structure, significant transfer of assets, and the
changes in the external investments.




3.
        The Lender warrants
as follows:


3.1
    Provide the loans to the
Borrower in accordance with the schedule and amount set forth in this Agreement;




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3.2
    Shall not collect from the
Borrower any other fees that are excluded in this Agreement;


3.3
    Keep confidential for
Borrowers debts, financial, production and operating conditions.




4.
        If the Borrower cannot
repay the loan according to the schedule provided in this Agreement in case of special situation, then the Borrower shall furnish
a written application to the Lender, by 10 days in advance of the maturity date. The loan under this Agreement shall not be
extended until the Extension Agreement is executed upon the agreement of the Lender.


However, the interest
rate of the loan shall be determined by level of the cumulative term.


5.
        The Guarantor
warrants as follows:


5.1
    Assume joint and several
liabilities for the Borrowers debts.


5.2
    The Guarantee Period shall
be from the date of the loan to the next two years after the maturity of the loan. If the loan is extended, the Guarantor shall
continue to assume the guarantee liabilities, accordingly, the Guarantee Period shall be extended to the next two years after the
maturity of the extended loan.


5.3
    The Guarantee shall include
the principal, interest and the fees for the Lender to realize the credit rights.


In case that the Guarantor(s)
is not a single person, the Guarantor(s) shall assume joint and several liabilities for the Borrowers debts among
themselves.




6.
        Liabilities:


6.1
    Liabilities for the
Borrower.


6.1.1
    If the Borrower fails to
repay the principal according to the schedule set forth in this Agreement, the Borrower shall pay the interest calculated by a
daily interest rate of 0.3 from the overdue date;


6.1.2
    If the Borrower fails to
pay the interest in a timely basis, the Borrower shall pay compounding interest for the unpaid interest;


6.1.3
    If the Borrower fails to
use the loan in accordance with the agreed usage of the Loan, the Borrower shall pay the interest calculated by a daily interest
rate of 0.4 for the misused loans;




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6.1.4
    If the Borrower fails to
comply with the provisions set forth in 2.2-2.7, the Lender shall has the right to terminate the loan that have not been released,
and take back the loan that have not been due in advance.


The Guarantor shall
assume the guarantee liabilities for taking back the loans that have not been due in advance.




6.2
    Liabilities for the
Lender:


6.2.1
    If the Lender fails to
provide the loans to the Borrower in accordance with the schedule and amount set forth in this Agreement, the Lender shall pay
penalty fees that is calculated by a daily interest rate of 0.1 on the basis of the days and amounts of the
default.


6.2.2
    If the Lender fails to
comply with item 3.2, the Borrower shall has the right to refuse to accept the loan. If the Lender fails to comply with item 3,
the Borrower may file a complaint with People's Bank.


7.
        The Lender takes back
the loans upon the maturity or take bake the loans ahead of the maturity date pursuant to item 6, the Lender may deduct the
payment from the Borrower account or the Guarantors account.




8.
        Any disputes arising
from the execution of this Agreement shall be submitted to the Peoples Court at the location of the Lender for
judgment.




9.
        Other matters agreed
upon by the parties: None.




10.
        Any other matters not
expressly stated herein, shall be settled pursuant to the applicable laws and regulations.




11.
        This Agreement is
executed in three copies and become effective when signatures and seals are made by all parties, Each of them held by the
Borrower, the Guarantor and the Lender, are equally authentic.




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Borrower:  Hebei Baoding Orient Paper Milling Co., Ltd.

(Seal)

Legal representative: Zhenyong Liu



Lender: Rural Credit Cooperative of Xushui County, Dayin Branch

(Seal)

Legal representative: Xinmin Li



Guarantor: Hebei Chenyang Industry and Trade Group Co., Ltd.

(Seal)

Legal representative: Jinguang Liu



Dated August 12, 2008 at Rural Credit Cooperative of Xushui County, Dayin Branch



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