Document:

Unassociated Document

    
      
         

        EXHIBIT
10.17.2

      

       

      
        	
                上海浦东发展银行

              	 
      
	
                SHANGHAI
      PUDONG DEVELOPMENT BANK

              	
                Agreement
      for Establishment of Bank Payable
Bills

              

      

    

     

    Agreement
for Establishment of Bank Payable Bills*

    

    To:                        Sub-branch of                                             Branch of Shanghai Pudong
Development Bank       Number:
CD76012008083584

    

    
      	
              Client
      Name:

            	
              Henan
      Gerui Composite Material Stock Co., Ltd.

            	
              Date
      of Application:

            	
              Oct.
      14, 2008

            
	
              Address:

            	
              1
      Xinzheng Shuanghu Economic Development Zone

            	
              Contact
      Person of Client

            	
              Hairong
      Cao

            
	
              Telephone:

            	
              0371-62566757

            	
              Contact
      Person of Financing Bank: (Filled out by the Financing
    Bank)

            	
              Tao
      Jing

            
	
              Fax:

            	
              0371-62566757

            	 
      
	
              The
      Company hereby irrevocably applies to the bank for the establishment of
      bank payable bills in accordance with the undermentioned terms of this
      Agreement:

            
	
              I.
      Important Provisions

            
	
              oThis Agreement
      shall be signed as an auxiliary financing document of the “Financing Limit
      Agreement” (hereinafter referred to as the “Financing Limit Agreement”)
      with a document number
      of           .  After
      entry of force of this Agreement, all of the terms under this Agreement
      shall become part of the Financing Limit Agreement (If the Client has
      already signed a financing limit agreement with the financing bank, this
      item should be checked, and the document number of the financing limit
      agreement should be noted);

               

              oThis Agreement
      shall be an independent credit document signed between the applicant and
      the financing bank (if the Client has not signed a financing limit
      agreement with the financing bank, this item should be
      checked).

            
	
              II.
      Description of Bank Payable bills

              (If
      the financing agreement signed by the customer has provisions regarding
      the rate and penalty rate, the related columns of this Agreement may be
      omitted)

            
	
              Drawer

            	
              See
      Attachment

            	
              Beneficiary

            	
              See
      Attachment

            
	
              Account
      Number

            	
              See
      Attachment

            	
              Account
      Number

            	
              See
      Attachment

            
	
              Paying
      Bank

            	
              See
      Attachment

            	
              Bank
      Name

            	
              See
      Attachment

            
	
              Amount
      in words of Payable Bill

            	
              See
      Attachment

            	
              Payable
      Bill Number

            	
              See
      Attachment

            
	
              Transferable

            	
              oYes     oNo

            	 
      	 
      
	
              Date
      of Issuance

            	 
      	
              Due
      Date

            	
              See
      Attachment

            
	
              Transaction
      Contract

            	
              (Fill
      out name, number, content of transaction contract)   Oct.
      1, 2008

            
	
              Invoice

            	
              oAlready
      Provided   □Provided Later

            	
              oValue-added tax
      invoice  oSales tax
      invoice    

              oGeneral
      invoice               
       oOther
      Invoice

            
	
              Surcharge
      (Rate)

            	
              0.5‰

            	
              Penalty
      (Rate) for Bank Advance

            	
              0.5‰

            
	
              Note:
      Annual interest rate or daily interest rate shall be noted for penalty
      rate.

            
	
              III.
      Description of Guarantee

              (If
      the Financing Limit Agreement signed by the customer has provisions
      regarding the conditions of guarantee, the related columns of this
      Agreement may be omitted)

            
	
              Guarantor:
      /

            	
              Method
      of Guarantee:    oMortgage;    
      oPledge;     
      oGuarantee

            	
              Security
      Ratio: 100%

            

       

      
        	
                *

              	
                This
      form of agreement is also used for the following bank payable
      bills:

              

      

      
        	
                 
      

              	
                Bill
      in amount of RMB 10,000,000 valid from September 1, 2008 to March 1,
      2009

              

      

      
        	
                 
      

              	
                Bill
      in amount of RMB 10,000,000 valid from October 14, 2008 to April 14,
      2009

              

      

    

     

    
      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

         

      

      
        
          
            
              
                	
                        上海浦东发展银行

                      	 
      
	
                        SHANGHAI
      PUDONG DEVELOPMENT BANK

                      	
                        Agreement
      for Establishment of Bank Payable
Bills

                      

              

            

          

        

      

      
        
          
            	 
	
                    IV.
      General Provisions

                  
	
                    The
      Client hereby confirms that the following general provisions regarding
      establishment of bank payable bills have been read and
agreed:

                    1.
      After the financing bank signs this Agreement, unless bank payable bills
      have been established in accordance with the provisions stipulated under
      this Agreement, the financing bank may cancel the promise of establishing
      bank payable bills as agreed in this Agreement at any time.

                    2.
      Submission of Documents  The Client guarantees that the
      following documents are submitted to the financing bank or the Client
      meets the corresponding conditions prior to the establishment of bank
      payable bills. However, the financing bank has no obligation to examine
      the truthfulness of these documents:

                    (1)
      Duplicate copies of the most recent Articles of Association and business
      license of the Client;

                    (2)
      The resolution of meeting of board of directors authorizing the Client to
      sign this Agreement and the relevant auxiliary financing documents (If the
      Articles of Association of the Client make limitation regarding the
      contract signing power of the legal representative);

                    (3)
      The power of attorney for the authorized representative of the Client and
      a signature sample of the authorized representative;

                    (4)
      This Agreement that is legally and effectively signed by the Client, the
      original copy or duplicate copy of the transaction contract verified by
      the Client, and that sufficient amount of security deposit has been paid
      in accordance with the provisions of this Agreement;

                    (5)
      If the bank payable bills under this Agreement has collateral, the
      collateral document should have already been signed and entered into force
      prior to the establishment of the bank payable bills;

                    (6)
      Other documents and/or conditions requested by the financing bank at
      times.

                    3.
      The Client hereby confirms that: Sufficient amount of security deposit
      shall be paid upon applying for establishment of payable bills. The
      security deposit and the resulting interests shall be used as the
      collateral for execution of this Agreement. Moreover, the Client agrees
      that the security deposit requires no signing of additional collateral
      document. The security deposit shall be possessed by the financing bank on
      the date of deposit into the exclusive account for the security deposit.
      The Client authorizes the financing bank to directly deduct the security
      deposit and the corresponding interests when the financing bank needs to
      make any payment for this Agreement.

                    4.
      Replenishment of Shortage  Irrespective the due date of the bank
      payable bills and whether the financing bank has been requested to pay the
      bank payable bills, the financing bank may request the Client to replenish
      the security deposit to 100% for the bank payable bills already
      established by the financing bank at any time. If the Client fails to
      timely replenish the security deposit as requested by the financing bank,
      10% of the required replenishing amount of the security deposit shall be
      deemed as compensation to the financing bank as breach of contract by the
      Client. In case that the event leads to additional costs incurred on the
      financing bank, the incurred costs shall constitute to the advanced
      payment made by the financing bank. The Client shall immediately return
      the money and bear the penalty interest for advanced payment.

                    5.
      Taxation  Unless the laws require the Client to deduct the
      relevant taxations upon repayment of the financing, the repayment by the
      Client under this Agreement shall be paid in full amount without any
      deduction. In case that the Client must deduct the relevant taxations in
      accordance with the provisions of the laws, the Client shall pay
      additional money to the financing bank, allowing the money received by the
      financing bank equivalent to the amount that should be received by the
      financing bank without any deduction.

                    6.
      Declaration and Guarantee  The Client makes the following
      declarations and guarantees, and that the declarations and guarantees
      shall be deemed being restated by the Client when the financing bank
      provides financing in accordance with the provisions of this
      Agreement:

                  

          

           

          
            
              
              

            

            
              
              

              
                

              

            

            
              
              

            

          

          
             

            
              
                	
                        上海浦东发展银行

                      	 
      
	
                        SHANGHAI
      PUDONG DEVELOPMENT BANK

                      

              

            

          

          
            
              	
                    
	
                      
                        (1)
      The Client is a company registered and established in accordance with the
      laws of China (excluding Hong Kong and Macau Special Administrative
      Regions and Taiwan; similarly hereinafter), has the right to sign this
      Agreement and any documents associated with this Agreement, and has taken
      the necessary company action, allowing this Agreement and any documents
      associated with this Agreement to be legal, effective, and compulsorily
      executable;

                        (2)
      When the Client signs this Agreement and executes its obligations
      stipulated under this Agreement, the Client shall not and will not violate
      any other signed contracts or documents, articles of association, any
      applicable laws, regulations, or administrative directives, and the
      related documents, ruling, and judgment of the concerning authorities and
      will not be in conflict with any previous arrangements or obligations
      borne by the Client;

                        (3)
      The Client and any of its shareholders and associated companies are not
      involved in any liquidation, bankruptcy, reorganization, being buy-out,
      merger, separation, restructuring, dissolution, shutdown, suspension of
      business or similar legal procedures with no occurrence of any situation
      that may lead to involvement of the aforementioned legal
      procedures;

                        (4)
      The Client is not involved in any economic, civil, criminal,
      administrative litigation procedures or similar arbitration proceedings
      that may lead to unfavorable impact, with no occurrence of any situation
      that may lead to involvement of the Client into the aforementioned
      litigations or similar arbitration proceedings;

                        (5)
      The legal representative, directors, supervisors, or other senior
      managerial personnel of the Client and any major assets of the Client are
      not involved in any compulsory execution, seizure, detainment, freezing,
      lien, or supervisory control, with no occurrence of any situation that may
      lead to involvement of the aforementioned situations;

                        (6)
      The Client guarantees that all the financial statements (if any) have met
      the requirements of Chinese laws. All reports and statements are truthful,
      complete, and fairly reflect the financial state of the Client. All the
      materials, documents, and information, including itself and the guarantor
      provided by the Client to the financing bank during signing and execution
      of this Agreement are truthful, valid, accurate and complete without any
      concealment or omission;

                        (7)
      The Client shall strictly abide by the provisions of the laws and
      regulations regarding its operation activities, shall strictly carry out
      all business operations according to the business license or the legally
      approved business scope, and shall timely complete the annual registration
      renewal procedure;

                        (8)
      The Client guarantees no inexistence of any situation or event that cause
      or may cause unfavorable impact to the ability of the Client executing the
      Agreement.

                        7.
      Promised items: The Client makes the following promises:

                        (1)
      The Client shall strictly observe and execute all the obligations
      stipulated under this Agreement;

                        (2)
      The Client shall timely repay the principal and interests of the financed
      fund and pay the corresponding fees. The Client shall process, receive,
      and abide by all the approvals, authorizations, registrations, and
      licensing required by the applicable laws and shall maintain their
      effectiveness, allowing the Client to legally sign and fulfill the
      obligations stipulated under this Agreement and any other documents
      associated with this Agreement. In case of request from the financing
      bank, the Client shall promptly provide the related proof;

                        (3)
      Within five working days of learning of its possible involvement in an
      economic, civil, criminal, administrative litigation procedures or similar
      arbitration proceedings that may lead to unfavorable impact or within five
      working days of learning of  its major assets are involved in
      any compulsory execution, seizure, detainment, freezing, lien, or
      supervisory control, the Client shall notify the financing bank in writing
      detailing the impact and the remedial measures taken or plan to be
      taken;

                        (4)
      Without a written approval from the financing bank, repayment of large
      amount of debts to a third party other than the financing bank or
      fulfillment of any guarantee liability is prohibited;

                        (5)
      Without a written approval from the financing bank, occurrence of any
      other large amount of debts or existing debts or setting or providing any
      form of collateral with first priority nature to any other debts for
      itself or any third party is prohibited. Starting from the signing date of
      this Agreement to the full repayment of all the debts under this
      Agreement, without a written approval from the financing bank, the Client
      shall not:

                      

                    

            

          

           

          
            
              
              

            

            
              
              

              
                

              

            

            
              
              

            

          

          
             

            
              
                	
                        上海浦东发展银行

                      	 
      
	
                        SHANGHAI
      PUDONG DEVELOPMENT BANK

                      

              

            

          

          
            
              	
                    
	
                      
                        a.
      undergo liquidation, reorganization, bankruptcy, being buy-out, merger,
      separation, restructuring, dissolution, shutdown, suspension of business,
      or similar legal procedures;

                        b.
      undergo sale, lease, donation, transfer or any other types of method of
      disposition of any of its major assets unless necessary to its day-to-day
      operations;

                        c.
      undergo any change in the structuring of share rights;

                        d.
      undergo signing of contract/agreement that may have major unfavorable
      impact to fulfill the obligations stipulated under this Agreement or bear
      any obligations that may have the same impact.

                        (6)
      When specific circumstances or specific changes have occurred to the
      collateral listed under this Agreement, the Client shall timely provides
      other collateral approved by the financing bank in accordance with the
      requirements of the financing bank. The specific circumstances or specific
      changes shall include but not limit to the suspension of production,
      termination of business, dissolution, temporary suspension of operation,
      revoke or suspension of business license, applying for or being requested
      for reorganization, bankruptcy, major changes in operation or financial
      situation, involvement in major legal proceeding or arbitration, and
      involvement of legal representative, directors, supervisor, and chief
      managerial personnel in legal proceedings, devaluation, possible
      devaluation, or seizure of the mortgage property or other property
      preservation measures, actions of breach of contract under collateral
      contract, and request for termination of collateral contract;

                        (7)
      With the request from the financing bank, the Client shall also undergo
      notarization of effective compulsory execution at a notarization office
      appointed by the financing bank. The Client shall bear the costs and shall
      voluntarily accept the compulsory execution;

                        (8)
      The Client shall notify the financing bank at any time for any event that
      may impact the ability of Client to fulfill its obligations stipulated
      under this Agreement or any documents associated with this
      Agreement.

                        8.
      Fees and Expenses  Unless the laws clearly stipulate that the
      taxed items are borne by the financing bank, the Client shall be
      responsible to bear any stamp tax duty and other taxations under this
      Agreement or any documents associated with this Agreement.

                        9.
      Penalty Interest  For any overdue payment by the Client, a daily
      penalty interest with the unpaid money (including unpaid interests) as
      basis shall be charged against the Client starting from the due date to
      the date of actual payment. The penalty interest shall be settled monthly
      and shall be compounded monthly.

                        10.
      Authorization of Repayment and Counterbalance  The Client hereby
      authorizes the financing bank to represent the Client using money
      (irrespective the types of currency) in any accounts opened in the
      financing bank to directly compensate the debts when any due debt is not
      paid, irrespective whether the debt belongs to the debts under this
      Agreement. This authorization is irrevocable. In case that currency
      conversion is involved, the financing bank may undergo conversion in
      accordance with the exchange rate determined by the financing bank. The
      Client shall bear the risk of exchange rate.

                        11.
      Proof of Debts  The financing bank shall maintain a set of
      accounting notes and vouchers related to the business activities
      concerning this Agreement on its accounting books in accordance to its
      general operational guidelines. Other than the obvious errors, the Client
      shall accept that the relevant records of the accounting notes and
      vouchers are the valid proof of the debts of the Client.

                        12.
      Breach of Contract: Any actions, such as violation of any declaration or
      guarantee of this Agreement by the Client or the declarations and
      guarantees are proved ambiguous, untruthful, missing, misleading, or
      already been violated, and/or violation or failure of execution of any
      promised items of this Agreement by the Client and/or violation of any
      provision of this Agreement by the Client, and/or occurrence of any
      incidence that may impact the safety of the loan of the financing bank,
      and/or violation of the provisions of the guarantee documents by the
      guarantor, shall constitute breach of contract by the Client regarding
      this Agreement. The financing bank shall have the right requesting the
      Client to immediately return any money or replenish the security deposit
      and may request the Client to compensate all the losses incurred on the
      financing bank, including attorney
fees.

                      

                    

            

          

           

          
            
              
              

            

            
              
              

              
                

              

            

            
              
              

            

          

          
             

            
              
                	
                        上海浦东发展银行

                      	 
      
	
                        SHANGHAI
      PUDONG DEVELOPMENT BANK

                      

              

            

          

          
            
              	
                    
	
                      
                        13.
      Special Term for Group Client: When the client of this Agreement is a
      group client, the Client hereby agrees that: (1) The Client shall timely
      report any associated transactions over 10% of the net assets of the
      actual fiduciary, including: a. the relationships among all parties of the
      transaction; b. the items and nature of the transaction; c. the amount or
      the corresponding ratio of the transaction; d. pricing policy (including
      non-monetary or token transactions); (2) In case that the actual fiduciary
      has one of the followings, the Client shall be deemed breach of contract,
      and the financing bank shall have the right to unilaterally cancel the
      remaining unused credit with recovery of part or all of the used credits
      or request the Client to pay up to 100% of security deposit: a. providing
      false materials or concealing important operation and financial facts; b.
      arbitrarily altering the purpose of use of credit without approval from
      the financing bank; embezzling the credit or using the bank credit to
      undergo unlawful and illegal transactions; c. using a fake contract with
      receivable notes and account receivables that have no actual trade context
      with an associated party to discount for cash or pledge from bank; d.
      refusing to accept supervision and inspection from the financing bank
      regarding the state of utilization of credit and the related operation and
      financial activities; e. occurrence of major merger, buy-out, and
      restructuring deemed by the financing bank as possible threat to the
      safety of credit; f. intentional evasion of bank creditor’s rights through
      associated transactions.

                        14.
      Other Agreed Terms:                                               

                      

                      
                        15.
      Applicable Laws and Judicial Jurisdiction  The laws of the
      People’s Republic of China (excluding Hong Kong and Macau Special
      Administrative Regions and Taiwan) shall be applicable for this Agreement
      and shall be interpreted by the laws. All disputes in connection with this
      Agreement of the execution thereof shall be governed by the local People’s
      Court of the financing bank, which possesses non-exclusive judicial
      jurisdiction.

                        16.
      Place for Delivery of Litigation  The Client confirms that the
      delivery of the legal documents, such as subpoena and notices, issued
      during the process of any legal proceedings that may have occurred
      regarding this Agreement shall be deemed delivered upon delivery to the
      address listed at the beginning of this Agreement. In case that the
      financing bank is not notified in advance for any change of the
      aforementioned address, the change shall be ineffective to the financing
      bank.

                        17.
      Severability of Articles  In case that certain article or part
      of an article of this Contract is deemed invalid, illegal, or
      unenforceable, the invalid article or the invalid part shall not impact
      the effectiveness, legality, and enforceability of other articles of this
      Agreement.

                        18.
      Within the effective period of this Agreement, the moratorium or delayed
      action granted by the financing bank to the Client for any breach of
      contract or other actions shall not harm, impact, or restrict all the
      rights, interests, and benefits enjoyed by the financing bank as a
      creditor in accordance with the laws and the provisions of this Agreement
      and shall not be deemed as approval from the financing bank regarding the
      act of breach of contract by the Client. Furthermore, it shall not be
      deemed as forfeit of right undergoing legal action against the Client
      regarding the present or future act of breach of contract.

                        19.
      Consistency with the Financing Limit Agreement  In case that a
      discrepancy exists between the Financing Limit Agreement (If present, it
      shall include the effective changes made at times) and this Agreement, the
      provisions of this Agreement shall prevail.

                        20.
      Signing  This Agreement is made out in four original copies,
      with the Client holding one copy and the financing bank holding three
      other copies, which shall come into force upon signing and
      affixing of seal by the legal representative/responsible person or
      authorized representative of both parties and starting on the day of
      application.

                      

                    

            

          

           

          
            
              
              

            

            
              
              

              
                

              

            

            
              
              

            

             

          

          
            
              	
                      上海浦东发展银行

                    	 
      
	
                      SHANGHAI
      PUDONG DEVELOPMENT BANK

                    	
                      Agreement
      for Establishment of Bank Payable
Bills

                    

            

          

          
            	 
	
                    Signing
      Column

                    Both
      parties confirm that, upon signing of this Agreement, both parties have
      undergone detailed explanation regarding all the provisions and that both
      parties have no objection regarding all the terms stipulated under this
      Agreement. Moreover, the legal meaning of the provisions related to the
      rights and obligations and limits of liabilities of all parties, or escape
      clauses are accurately and fully understood.

                  
	
                    Client
      (Official Seal): Henan Gerui Composite Material Stock Co.,
      Ltd.

                     

                     

                    Legal
      Representative (Signature or Seal)

                    or
      Authorized Representative: Mingwang Lu (Seal)

                  	
                    Financing
      Bank (Official Seal): Special Finance Contract Seal of Zhengzhou Branch of
      Shanghai Pudong Development Bank

                     

                    Responsible
      Person (Signature or Seal)

                    or
      Authorized Representative: Xuan Hu
(Seal)

                  

          

        

      

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    This
Attachment is a supplement to “Establishment of Bank Payable Bills Agreement”
(Agreement Number; CD7601200888) of Shanghai Pudong Development Bank. Two payable bills
have been issued with a total amount of ten million Yuan,
with ten
million Yuan of security deposit, zero Yuan of credit
exposure, and zero Yuan of order
pledge. The constituents of the bank payable bills referred to by this Agreement
are as follows:

    Full Name
of Client: See left bottom corner for the official seal of the Client    Paying Bank:
Banking Department of Zhengzhou Branch of Shanghai Pudong Development Bank    Account No.:
65976090154500000417

    
      
        	
                No.

              	
                Amount
      (Yuan)

              	
                Beneficiary’s
      Account No.

              	
                Beneficiary’s
      Name

              	
                Bank
      Number of Beneficiary’s Bank

              	
                Bank
      Name of Beneficiary’s Bank

              	
                Issuance
      Date of Payable Bill (yyyy/mm/dd)

              	
                Due
      Date of Payable Bill (yyyy/mm/dd)

              	
                Payable
      Bill No.

              
	
                0001

              	
                5000000

              	
                65276030154500000391

              	
                Zhengzhou
      No. 2 Steel Co., Ltd.

              	 
      	
                Zhengzhou
      Da Sub-Branch of Shanghai Pudong Development Bank

              	
                Oct.
      16, 2008

              	
                Apr.
      16, 2009

              	 
      
	
                0002

              	
                5000000

              	
                65276030154500000391

              	
                Zhengzhou
      No. 2 Steel Co., Ltd.

              	 
      	
                Zhengzhou
      Da Sub-Branch of Shanghai Pudong Development Bank

              	
                Oct.
      16, 2008

              	
                Apr.
      16, 2009

              	 
      
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	
                 
      

              	 
      
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      

      

    

    

    Client
(Official
Seal):                                           Henan
Gerui Composite Material Stock Co., Ltd.

    Legal
Representative or Authorized Representative (Signature or Seal): Mingwang Lu
(Seal)

    Financing
Bank (Official Seal): Special Finance Contract Seal of Zhengzhou Branch of
Shanghai Pudong Development Bank

    Responsible
Person or Authorized Representative (Signature or Seal): Xuan Hu
(Seal)Unassociated Document

     

    
       

      EXHIBIT
10.17.3

       

    

    Contract
Number: No. 081710 (2008) of Henan Bank Loan

     

     

    

     

    Renminbi
Loan Agreement

    
 

     

     

     

    

     

     

      

     

     

    

     

     

    

    
 

     

    Zhengzhou
Branch of China CITIC Bank

     

    
      
        
        

      

      
        1

        
          

        

      

      
        
        

      

    

     

    Renminbi
Loan Agreement*

     

     

    Borrower:
Henan Gerui Composite Materials Co., Ltd. (hereinafter referred to as “Party
A”)

     

    Address:
Shuanghu Economic Development Zone, Zhengzhou

     

    Postal
Code: 451191

     

    Telephone:
0371-62566757

     

    FAX:
0371-62563116

     

    Legal
Representative: Mingwang Lu

     

    Bank Name
and Account Number: Banking Department of Zhengzhou Branch of China CITIC Bank
7391010182600094320

     

    

    Lender:
Zhengzhou Branch of China CITIC Bank

     

    Address:
No.26 Jingsan North Road, Zhengzhou

     

    Postal
Code: 450008

     

    Telephone:
0371-65792959

     

    FAX:
0371-65792962

     

    Legal
Representative/Responsible Person: Rongxing Dou

     

     

    Contract
Location: Zhengzhou

     

    Contract
Date: July 16, 2008

     

     

    In
pursuance to the relevant laws, regulations, and rules, such as “Contract Law of
the People’s Republic of China” and the “General Rules on Loans”, Party A and
Party B hereby entered this Contract after consideration of the foregoing and
the mutual covenants and conditions contained herein:

     

    Article
I Type of Loan

     

    1.1           Party
B agrees to provide Item (1) of the following
types of loans to Party A in accordance with the terms stipulated under this
Contract:

     

    (1)
Short-Term Loan; (2) Medium-Term Loan; (3) Long-Term Loan.

     

    Article
II Amount of Loan (Principle, similarly hereinafter) and Loan
Period

    
       

      
        
          	
                  *

                	
                  This
      form of agreement is also used for the following
  loans:

                

        

        
          	
                   
      

                	
                  Loan
      in amount of RMB 5,000,000 valid from August 4, 2008 to August 3,
      2009

                

        

        
          	
                   
      

                	
                  Loan
      in amount of RMB 15,000,000 valid from June 17, 2008 to June 16,
      2009

                

        

        
          	
                   
      

                	
                  Loan
      in amount of RMB 8,000,000 valid from August 28, 2008 to February 28,
      2009

                

        

        
          	
                   
      

                	
                  Loan
      in amount of RMB 10,000,000 valid from September 1, 2008 to March 1,
      2009

                

        

        
          	
                   
      

                	
                  Loan
      in amount of RMB 10,000,000 valid from September 2, 2008 to March 2,
      2009

                

        

        
          	
                   
      

                	
                  Loan
      in amount of RMB 12,000,000 valid from September 3, 2008 to March 3,
      2009

                

        

      

       

    

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

     

    2.1           The
loan amount under this Contract is Renminbi: Five Million Yuan
(¥5,000,000.00).

     

    2.2           The
loan period under this Contract is one year, from July
16, 2008 to July 15, 2009.

     

    2.3           The
actual loan period, actual withdrawal date, and the loan amount shall be
determined by the period, date, and the amount stated under the Loan Note of
this Contract. The Loan Note shall be an integral part of this Contract and
shall have the same legal effect as this Contract.

     

    Article
III Purpose of Loan

     

    3.1           The
loan under this Contract shall be used to supplement the working
capital. Party A shall not change the purpose of this loan without a
written approval from Party B. In case that Party A changes the purpose of the
loan without a written approval from Party B or violates the provisions of the
“General Rules on Loans” or other laws, regulations, and rule, Party B shall not
bear any responsibility resulting from the illegal use of this
loan.

     

    Article
IV Interest Rate and Interest of Loan

     

    4.1           The
interest rate of this loan shall be determined by Item (1) of the
followings:

     

    (1)           Based
on the actual withdrawal day of the loan, a floating rate of plus 10 (% or BPs) of
the prime interest rate for the same period and same type of loan from the China
People’s Bank.  Hence, the interest rate of the loan for this Contract
is 8.217%.

     

    (2)           Based
on the contract day of the loan, a floating rate of ---- (% or BPs) of
the prime interest rate for the same period and same type of loan from the China
People’s Bank. Hence, the interest rate of the loan for this Contract is --- %.

     

    4.2           The
interest rate adjustment method shall be determined by Item (2) of the
followings for this loan.

     

    (1)           Fixed
interest rate, which shall remain unchanged during the loan period.

     

    (2)           Floating
interest rate, which shall undergo adjustment based on Item 3
of the followings. The adjusted interest rate of the loan shall be the
determined interest rate based on the applicable prime interest rate for the
same period and same type of loan from the China People’s Bank undergoing
adjustment on the day of adjustment of interest rate in accordance with Article
4.1 of this Contract

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

     

    1 From the day of
the actual withdrawal, the interest rate shall be adjusted every---months. The
interest rate adjustment day shall be the day corresponds to the actual
withdrawal day for the adjusted month. In case that the adjusted month has no
day corresponding to the actual withdrawal day, the last calendar day of the
adjusted month shall be the interest rate adjustment day.

     

    2 From the day of
the actual withdrawal, the interest rate shall be adjusted on  --- Year --- Month --- Day, with the
interest rate being adjusted every--- months after the
interest rate adjustment day. The interest rate adjustment day shall be the day
corresponds to the day for the first interest rate adjustment day.  In
case that the adjusted month has no day corresponding to the first interest rate
adjustment day, the last calendar day of the adjusted month shall be the
interest rate adjustment day.

     

    3 From the day of
the actual withdrawal, the adjustment day of the prime interest rate of the
China People’s Bank shall be the adjustment day for the interest rate of this
loan.

     

    4.3           The
interest period shall commence on the day of actual withdrawal for this
loan.  The calculation formula for the interest shall be: interest =
actual balance of the loan × the actual days of the loan period × interest
rate/360 days.

     

    4.4           For
the loan that is not repaying principal and interest in a lump sum, the first
day of interest settlement shall be July 20, 2008.  The interest
calculating method shall be determined by Item (1) of the
followings:

     

    (1)           Monthly,
which shall be the 20th of
every month;

     

    (2)           Quarterly,
which shall be the 20th of the
last month in a quarter.

     

    4.5           Prior
to every date of interest settlement, Party A shall prepare sufficient amount of
money in the account opened in Party B for Party B to timely deduct the interest
from the account.  In case that Party A chooses other method for
interest payment to Party B, Party A shall assure the timely transfer of
interest to Party B.  In case that the date of the interest settlement
is a bank non-working day, the money shall be transferred one bank working day
in advance.  Should Party B fail to receive the corresponding interest
in full on the date of interest settlement, the act shall be deemed as delay
interest payment of Party A.

     

    4.6           The
interests and the principal shall be fully paid upon expiration of the loan
period.  In case that the expiration date of the loan is a legal
holiday or non-working day, the loan shall be settled on the last bank working
day before the legal holiday or the non-working day.  The interest
shall be calculated in accordance with the contract interest rate. However, the
interest corresponding to the number of days between the date of expiration and
the settlement date that is calculated according to the contract interest rate
shall be deducted.  Should the loan fail to be settled on the first
bank working day after the legal holiday or the non-working day, interest shall
be calculated according to the terms for overdue loan, starting from that
date.

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

     

    Article
V Withdrawal

     

    5.1           Party
A shall make withdrawal according to the following schedule.  The
planned withdrawal dates shall be bank working days.

     

    
      
        	
                Item

              	
                Date
      of Withdrawal

              	
                Amount
      of Withdrawal

              
	
                1.

              	
                July
      16, 2008

              	
                ¥5,000,000.00

              
	
                ---

              	
                ---

              	
                ---

              
	
                ---

              	
                ---

              	
                ---

              

      

    

     

    5.2           In
case that Party A or the Guarantor fails to fulfill all the obligations required
by the laws or stipulated under this Contract, including but not limited to
Party A fails to timely provide the complete loan materials as required by Party
B and the Guarantor fails to timely complete the guarantee registration
procedure, Party A agrees that Party B shall have the right to change the
aforementioned withdrawal schedule.  Should the change of withdrawal
plan cause change in the loan period, the terms stipulated under Article 2.3 of
this Contract shall be followed.

     

    5.3           Unless
specified otherwise by this Contract, Party A shall undergo withdrawal in
accordance with the withdrawal schedule stipulated under this
Contract.  Party A shall not change the withdrawal schedule without
written approval from Party B.  Should the withdrawal time and/or
withdrawal amount be changed, Party A shall notify Party B in writing with five bank working
days in advance.  Party B agrees to grant five bank working
days of withdrawal grace period.  If the loan is not withdrawn at the
end of the grace period, this loan shall be deemed as voluntary forfeit by Party
A.  Party A shall not undergo withdrawal of this loan any more and
shall bear the responsibilities for breach of contract in accordance with the
terms stipulated under Article 12.2 of this Contract.

     

    5.4           Where
Party A voluntarily cancel the loan leading to the change in the actual release
of the principle of the loan by Party B, the actual occurred loan notes under
this Contract shall be used to calculate the principle of the loan under this
Contract.

     

    5.5           Three
bank working days before every planned withdrawal date, Party A shall submit an
irrevocable withdrawal note or loan note or other withdrawal notice to Party B
in accordance with the withdrawal schedule stated in the aforementioned Article
5.1 or in accordance with the modified withdrawal schedule agreed by Party B in
writing.  The loan shall be released after examination and approval by
Party B in accordance with the notice.  The notice shall be used as
proof of the withdrawal.  In case that Party A fails to either submit
the withdrawal notice or a request for delayed withdrawal, the terms stipulated
under Article 5.3 shall be followed.

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

     

    Article
VI Repayment Method

     

    6.1           Item
(1) of the
following repayment methods shall be used for the loan stated under this
Contract:

     

    (1)           Fixed
date of interest payment with repayment of principle upon expiration of
loan;

     

    (2)           Repayment
of interests and principle in one lump sum;

     

    (3)           Other
method:                                                                                     
  

     

    6.2           Party
A shall repay the principle in accordance with the following
schedule:

     

    
      
        	
                Item

              	
                Date
      of Repayment

              	
                Amount
      of Repayment

              
	
                1.

              	
                July
      15, 2009

              	
                ¥5,000,000.00

              
	
                ---

              	
                ---

              	
                ---

              
	
                ---

              	
                ---

              	
                ---

              
	
                ---

              	
                ---

              	
                ---

              
	
                ---

              	
                ---

              	
                ---

              

      

    

     

    6.3           An
amount not lower than the interests and principle of the loan that should be
repaid by Party A shall be transferred to the account opened in Party B (Account
number: 7391010182600094320)
before the date of the repayment.  Party A shall authorize Party B to
deduct the interests and principle of the loan automatically from the
account.

     

    6.4           Where
Party A desires to settle the loan early, a written irrevocable early repayment
schedule shall be submitted to Party B with 30 days in advance before the date
of planned loan settlement.  Party A must receive a written approval
from Party B.

     

    Article
VII Extension Period of Loan

     

    7.1           Where
Party A fails to repay the loan stated under this Contract and needs to extend
the loan period, a written application shall be submitted to Party B with thirty bank working
days in advance before the expiration of the loan.  A loan extension
agreement shall be signed after examination and approval from Party
B.  In case that Party B disapproves the loan extension, Party A shall
timely repay the loan.  Otherwise, Party B shall have the right to
treat this loan as an overdue loan.

     

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

     

    Article
VIII Guarantee of Loan

     

    8.1           Item(s)
(2) & (3)
of the following guarantee methods shall be used for the loan stated under this
Contract:

     

    (1)           Mortgage
guarantee;

     

    (2)           Collateral
guarantee;

     

    (3)           Warrandice;

     

    (4)           Other
types of guarantee:

     

    Party B
and the Guarantor shall sign the following numbered guarantee contracts
regarding the specific guarantee matters for the aforementioned
guarantee(s).

     

    (1)           Contract Number 081710 of
Chattel Mortgage Contract

     

    (2)           No. 081710 (2008) of Maximum
Guarantee of Zhengzhou Branch of China CITIC Bank

     

    (3)                                                                  ---                                                                  

     

    (4)                                                                  ---                                                                  

     

    Article
IX Declaration and Guarantee of Party A

     

    9.1           Party
A is a Chinese legal entity or other organization that is legally established in
accordance with the laws of the People’s Republic of China, shall legally have
the civil right capacity and action capacity necessary for the signing and
execution of this Contract, and shall be able to bear the civil responsibilities
independently.  Moreover, Party A has already received all the
internal and external approvals and authorizations necessary and legally for the
signing of this agreement.

     

    9.2           All
the documents, reports, and statements provided by Party A in accordance with
the laws and the requirements of Party B are all valid, legal, truthful,
accurate, and complete.

     

    Article
X Rights and Obligations of Party A

     

    10.1
Party A shall have the right to withdraw and use the loan in accordance with the
period and purposed stipulated under this Contract.

     

    10.2
Party A shall fully repay the principle and interests of the loan in accordance
with the terms stipulated under this Contract.

     

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

     

    12.4.10
Party A fails to fulfill the related matters, such as settlement or deposit at
Party B as contracted;

     

    12.4.11
Party A arbitrarily changes the purpose of loan;

     

    12.4.12
The senior managerial personnel of Party A are suspected in case(s) of major
corruption, bribery, embezzlement, or other illegal operation(s);

     

    12.4.13
Occurrence of breach of contract by Party A with other creditors;

     

    12.4.14
Violation of terms or breach of contract stipulated under guarantee contracts by
the Guarantor of Party A;

     

    12.4.15
Other matters by Party A jeopardizing and damaging or possibly jeopardizing and
damaging the interests of Party B.

     

    12.5
Party B shall have the right to charge additional 50% of penalty
interest rate in accordance with the actual number of days of delay and the
applicable interest rate at that time for the loan of this Contract in addition
to the right of exercising the rights stipulated under Article
12.4.

     

    12.6
Where Party A fails to timely pay the interest, Party B shall have the right to
calculate and collect compound interests in accordance with the actual number of
days of delay and the penalty interest rate stipulated under Article
12.5

     

    12.7
Where Party A fails to use the loan in accordance with the purpose stipulated
under this Contract, Party B shall have the right to charge additional 100% of penalty
interest rate in accordance with the actual number of days of delay and the
applicable interest rate at that time for the loan of this Contract on the
portion of the illegal use, starting from the day of the illegal use in addition
to the right of exercising the rights stipulated under Article
12.4.

     

    12.8
Where Party A repays the loan early, Party B shall have the right to charge one
lump-sum penalty in accordance with the amount of early repayment, remaining
loan period, the interest rate of loan as stated under this Contract, and the
--- % of rate.
The formula for calculating penalty is: penalty = amount of early repayment ×
remaining loan period (calculated based on year) × interest rate of the loan as
stated under this Contract × rate.

     

    12.9 All
the costs (including but not limited to litigation fees, traveling expenses,
attorney fee (within 100% of the total amount of the creditor’s rights),
property preservation fee, notarization fee, translation fee, appraisal, and
auction fee) incurred on Party B to actualize creditor’s rights shall be borne
by Party A.

     

    Article
XIII Continuity of Obligations

     

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

     

    13.1 All
obligations of Party A stated in this Contract shall have continuity, which
shall have full binding force to its inheritor, receiver, transferee, and the
entity after merger, restructuring, and name change and shall be not be impacted
in any way by any dispute, claim, legal proceeding, directive orders from higher
authorities and debtor of the main contract and any contract or agreement signed
with any natural persons or legal persons.  Moreover, the obligations
shall not be changed in any ways as result of bankruptcy, inability to repay
debts, loss of business qualifications, and change of articles of
association.

     

    Article
XIV Notarization

     

    14.1 In
case that any side of the contracted parties makes a notarization request, the
notarization of this Contract shall be carried out at the notarization
authorities authorized by the State. Party A shall bear the cost.

     

    14.2 In
case Party B makes the request of notarization with effective compulsory
execution, Party A agrees that Party B may take this Contract and apply to the
relevant notarization authority for the issuance of notarization with effective
compulsory execution.  Should Party B fail to receive full repayment
of the principle and interests of the loan and the related costs within the time
limit stipulated under this Contract, Party B may directly take this
notarization to the local People’s Court of Party B and apply for compulsory
execution.  All incurred costs shall be borne by Party
A.  Party A unconditionally agrees that the local court of Party B may
legally undergo compulsory execution and that all the rights to defense shall be
forfeited.

     

    Article
XV Other Agreed Matters

     

    Party A guarantee that no
capital of this bank loan shall enter the stock market or real estate market
through its own bank account or bank account(s) of any other third
party.  Otherwise, any loss incurred on Party B shall be borne by
Party A.

     

    In case
that the terms stipulated under this article in contradiction with the terms
stipulated under other articles, the terms of this article shall
prevail.

     

    Article
XVI Applicable Laws

     

    16.1 The
laws of the People’s Republic of China shall be applicable for this
Contract.

     

    Article
XVII Settlement of Dispute

     

    17.1 All
disputes in connection with this Contract of the execution thereof shall be
settled through friendly negotiations.  In case that no settlement can
be reached through negotiations, both parties agree that Item (2) of the following
methods shall be used for settlement:

     

    (1)           Arbitration
at                                                                                     
Arbitration Commission;

     

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

     

    (2)           Submission
of the case for prosecution or applying for compulsory execution to the local
People’s Court of Party B.

     

    Article
XVIII Accumulation of Rights of Party B

     

    18.1 The
rights of Party B under this Contract shall be cumulative and shall not impact
and exclude any rights enjoyed by Party B regarding Party A in accordance with
the laws and other contracts.  Unless specified in writing by Party B
that Party B is not going to fully exercise, partly exercise, or delayed
exercise any of its rights, the waiver or partly waiver of the rights shall not
be constituted, and the continuous exercise of the rights or exercise of any
other rights shall not be impacted, hindered, and obstructed.

     

    Article
XIX Effectiveness, Change, and Termination of Contract

     

    19.1 This
Contract shall come into force upon signing by the legal representative or
authorized representative of Party A and the legal representative or responsible
person or authorized representative of Party B with affix of the official seals
or contract seals from both parties.

     

    19.2
Unless specified otherwise in the Contract, neither Party A nor Party B shall
arbitrarily change or terminate this Contract after the entry into force of this
Contract.   Where change or termination of this Contract is
necessary, both parties shall reach consensus and a written
agreement.

     

    19.3
Party B may transfer all or part of the creditor’s rights stated under this
Contract to a third party after the entry into force of this Contract and does
not have to receive permission from Party A.  However, Party A shall
be notified in writing.

     

    19.4
After the entry into force of this Contract, where Party A transfers all or part
of the debt to a third party, a written document approving the transfer and the
continuous fulfillment of obligation by the guarantor or a new guarantee is
submitted to Party B.  A written approval must be obtained from Party
B.

     

    Article
XX Miscellaneous

     

    20.1
Party A and Party B may reach a written agreement on matters not discussed in
this Contract and shall be an attachment of this Contract.  Any
attachment, modification, or supplement to this Contract shall be an integral
part of this Contract and shall have the same legal force.

     

    20.2 In
case that certain article or part of an article of this Contract is deemed
invalid, the invalid article or the invalid part shall not impact the
effectiveness of this Contract and other articles or other content of the
article of this Contract.

     

    20.3 Any
notification, request, or other communications, including but not limited to
telex, telegraph, and FAX delivered to Party A from Party B regarding this
Contract shall be deemed received by Party A upon
delivery.  Registered postal mails shall be deemed received by Party A
starting on the third day from the mailing day.

     

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

     

    20.4 This
Contract is made out in three original copies
with Party A holding one copy, Party B
holding one
copy, and the relevant authority holding one
copy.

     

    20.5
Party B has already taken reasonable method to draw attention to Party A
regarding the terms excluding or limiting its responsibilities under this
Contract and has provided sufficient explanation regarding the relevant articles
in accordance with the request of Party A.  Both Party A and Party B
have no misunderstanding regarding the content of all the articles stipulated
under this Contract.

     

     

    
      	
              Party
      A (Official Seal or Contract Seal)

               

              Legal
      Representative:

               

              (or
      Authorized Representative)

            	
              Party
      B (Official Seal or Contract Seal)

               

              Legal
      Representative/Responsible Person:

               

              (or
      Authorized Representative)

            

    

     

    
      
        
        

      

      
        11

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