Document:

Unassociated Document

    
       

      EXHIBIT
10.17.4

       

     

      Commercial Bank of
Zhengzhou

     

     

     

    Loan
Agreement

     

     

    

     

     

    

     

     

    

     

     

     

     

     

     

    Borrower:
Henan Gerui Composite
Materials Co., Ltd.

     

     

    Lender:
Commodity World Branch
of Commercial Bank of Zhengzhou

     

     

    

     

     

    COMMERCIAL
BANK OF ZHENGZHOU

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    Loan
Agreement*

     

     

    Number:
No. 071109310101 of Loan
of Commercial Bank of Zhengzhou

     

     

    Borrower
(Party A): Henan Gerui
Composite Materials Co., Ltd.

     

    
      
        
          	
                  Legal
      Representative: Mingwang
      Lu

                	
                  Position:
      Chairman

                

        

      

    

     

    Address:
No. 1 Xinzheng
Shuanghu Economic Development Zone

     

    
      
        
          	
                  Telephone:
      62566757   

                	
                  Postal
      Code: 451191

                

        

      

    

     

    Lender
(Party B): Commodity World Branch of Commercial Bank of Zhengzhou

     

    
      
        
          	
                  Responsible
      Person: Yunling
      Shi     

                	
                  Position:
      President

                

        

      

    

     

    Address:
Zhengbian Road, Front
Row 1 of Area C, Commodity World

     

    
      
        
          	
                  Telephone:
      66515120

                	
                  Postal
      Code: 450004

                

        

      

    

     

     

    In
pursuance to the application of Party A, in consideration of the rights and
obligations of both parties, through friendly consultations, Party A and Party B
hereby entered this Contract according to the relevant laws, regulations, and
rules of the State.  In consideration of the foregoing and the mutual
covenants and conditions contained herein, the parties hereto agree as
follows:

     

    Article I Loan Amount:
Renminbi Eight Million
Yuan.

     

    Article II Purpose of Loan:
working
capital.

     

    Article III Interest Rate of
Loan and Calculation Method: By mutual consensus, the executed monthly interest
rate for this Contract shall be 8.505‰.

     

    I. The
interest shall be calculated monthly from the day of release of the
loan.  The 20th of
every month shall be the day of collection of interest.  In case that
the time limit of the loan is less than one month, the interest shall be paid
along with the repayment of the principle.  Party A shall prepare
sufficient money in the settlement account before the 20th of
every month.  The account number is: 995620120101001478.

     

    II. From
the day of entry into force of this Contract, Party A voluntarily authorizes
Party B to collect the monthly interest that should be paid by Party A from the
aforementioned account.  The authorized action of collection of
interest by Party B shall be deemed as a voluntarily action of payment of
interest by Party A.  Party A will not issue additional authorization
document for collection of interest, and the terms of this article shall be
used.

     

    
      
        	
                *

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

              

      

      
        	
                 
      

              	
                Loan
      in amount of RMB 10,000,000 valid from June 20, 2008 to June 20,
      2009

              

      

      
        	
                 
      

              	
                Loan
      in amount of RMB 20,000,000 valid from July 24, 2008 to June 5,
      2009

              

      

      
        	
                 
      

              	
                Loan
      in amount of RMB 4,000,000 valid from October 26, 2007 to October 25,
      2009

              
	 	Bill
      in amount of RMB 9,500,000 valid from October 15, 2008 to April 15,
      2009
	 	
                Bill
      in amount of RMB 9,000,000 valid from October 16, 2008 to April 16,
      2009

              

      

    

     

    
      
        
        

      

      
        1

        
          

        

      

      
        
        

      

    

     

    III.
During the execution period of this Contract, should the People’s Bank of China
make an upward adjustment of the prime interest rate, the executed interest rate
of the contract shall be adjusted accordingly, starting from the day of upward
adjustment.  The extent of the upward adjustment of the interest rate
stipulated under this Contract shall remain unchanged.  Should the
People’s Bank of China make a downward adjustment of the prime interest rate,
the executed interest rate of the contract shall remain unchanged.

     

    IV. Where
Party A makes early repayment of loan, Party B shall have the right to collect
interest of loan from Party A in accordance with the time limit and interest
rate stipulated under this Contract.  Should Party A receive approval
from Party B to make early repayment of loan, the interest may be calculated and
paid in accordance with the interest rate stipulated under this Contract and the
actual number of days.

     

    Article IV Time Limit of Loan:
From November 9,
2007 to November 8,
2008.

     

    I. The
actual date of release of the loan and the agreed date of repayment of the loan
shall be determined by the loan note (the repayment date of the loan note shall
not exceed the expiration date of this Contract).  The loan note shall
be an integral part of this Contract and shall have the same legal
force.  In case that a discrepancy exists between the time limit of
execution of the Contract and the loan note, Party A is obligated to promptly
notify the Mortgagors.

     

    II.
Within the time limit of the loan stipulated under this Contract, the use of the
loan by the Borrower may be divided into multiple periods and
amounts.  However, the actual balance of the loan shall not exceed the
loan amount stipulated under this Contract.

     

    Article V Source of Capitals
for Repayment and Repayment Method:

     

    I. Source
of Capitals for Repayment: sales
income

     

    II.
Repayment Method: one
lump sum (one lump sum, installments)

     

    Installments:

     

    (1)   Year   Month   Day, Amount:
  Ten
Thousand Yuan;

     

    (2)   Year   Month   Day, Amount:
  Ten
Thousand Yuan;

     

    (3)   Year   Month   Day, Amount:
  Ten
Thousand Yuan;

     

    (4)   Year   Month   Day, Amount:
  Ten
Thousand Yuan.

     

    Article VI Extension of
Loan

     

    In case
that Party A has legitimate reasons recognized by Party B to extend the time
limit of the loan, a written application shall be submitted to Party B at least
15 days before the time lime of the loan.  A written loan extension
agreement shall be signed after approval from Party B and the
Mortgagors.

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

     

    Article VII Authorization of
Payment Deduction

     

    Within
the execution period of this Contract, should Party A fail to timely pay the
principle or interests or breach of contract have occurred, Party B shall have
the right to deduct the principle and interests of the loan from all the
accounts opened in the system of Commercial Bank of Zhengzhou.

     

    Article VIII Loan
Guarantee

     

    The
following mortgagors shall provide mortgage to Party B for Party A regarding the
loan in this Contract.

     

    
      
        
          	I. Mortgagor: Zhengzhou
      No. 2 Steel Co., Ltd. 	Mortgage Method: Mortgage of real
      estate and land

        

      

    

     

    
      
        
          
            	II. Mortgagor: Henan
      Jingfa Properties Co., Ltd. 	Mortgage Method: Guarantee of joint
      liability

          

        

      

       

    

    
      
        
          
            	III. Mortgagor:                                                          
      	Mortgage Method:                                                            
      

          

        

      

       

    

    
      
        
          
            	IV. Mortgagor:                                                         
        	Mortgage Method:                                                  
               
  

          

        

      

       

    

    Article IX Rights and
Obligations of Both Parties

     

    I. Rights
and Obligations of Party A

     

    (I) Party
A shall have the right to use the loan in accordance with the terms stipulated
under this Contract.

     

    (II)
Party A shall voluntarily accept the inspection by Party B regarding the state
of utilization of the loan under this Contract.

     

    (III)
Party A shall positively cooperate with Party B regarding the inspection of its
state related to production, operation, and financial matters and shall
truthfully provide all the related materials requested by Party B (including but
not limited to all the signed agreements and contracts, accounting vouchers, and
financial reports).  Moreover, Party A is obligated to timely submit
the monthly, semi-annual and the annual financial reports to Party B (including
but not limited to the duplicate copies of accounting reports and attachments
and financial fact sheets, such as balance sheets, income statement, statements
of profit distribution, cash-flow statements, tax return) and other materials
deemed necessary by Party B.

     

    (IV) From
the entry into force of this Contract to the final settlement of principle and
interests of the loan by Party A, should any of the followings have occurred
without written approval from Party B, the act shall be deemed as breach of
contract by Party A.  Party B shall have the right to prematurely
recover the unused loan, shall have the right to suspend any unreleased loan,
shall have the right to prematurely terminate the execution of this Contract,
and shall request Party A to repay the principle and interests in
advance.

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

     

    1. Profit
distribution exceeding 10% of the net profit of that year by Party A or using
the balance from the previous fiscal year for profit distribution;

     

    2.
Capital expenditures of Party A exceed 20% of its net assets;

     

    3. The
assets listed under Attachment I have been sold, mortgaged, or exchanged by
Party A;

     

    4. Party
A fails to use the loan in accordance with the purpose stipulated under this
Contract;

     

    5. Party
A repays other debts in advance;

     

    6. Party
A changes the terms of the debts with other creditors;

     

    7. Party
A provides collateral to others for a third party;

     

    8. Party
A undergoes contractual operation, lease, restructuring, joint operation,
merger, joint venture, separation, or closure due to subjective
reasons;

     

    9. Party
A fails to fulfill the obligations stipulated under (II) and (III) of this
Paragraph;

     

    10. Party
A violates the provisions of the laws, regulations, and rules of the State
regarding utilization of loan;

     

    11. Party
A violates the terms of this Contract with failure of timely repayment of
principle and interests;

     

    12. Party
A has breach of contract with other financial institutions;

     

    13.
Others have lodge legal proceedings or arbitration against Party A with the
value of the subject matter of action exceeding 20% of the net assets of Party A
in the previous month;

     

    14. The
financial materials or other documentations (including but not limited to all
the materials provided by Party A to Party B prior to the entry of force of this
Contract) provided by Party A to Party B are false;

     

    (V) Where
others have filed bankruptcy against Party A or relevant authorities suspend the
business license or issue temporary suspension of operation, Party B shall have
the right to prematurely recover the unused loan, shall have the right to
suspend any unreleased loan, shall have the right to prematurely terminate the
execution of this Contract, and shall request Party A to repay the principle and
interests in advance.

     

    (VI)
Should any major event have occurred jeopardizing the normal operation of Party
A and producing unfavorable impact to Party A in fulfilling the obligation of
repaying the loan under this Contract, a written notice shall be timely
delivered to Party B.

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

     

    (VII)
Where change in name, legal representative, or legal address of Party A has
occurred, a written notice shall be delivered to Party B ten days in
advance.

     

    (VIII)
Party A shall bear the related costs of this Contract, including but not limited
to costs, such as attorney, insurance, notarization, authentication, appraisal,
auditing, and registration.

     

    (IX)
Where Party B utilizes legal action to actualize creditor’s rights as result of
breach of contract by Party A, Party A shall bear all the costs incurred on
Party B (including but not limited to all costs for actualizing creditor’s
rights, such as legal fee, attorney fee, and traveling expenses)

     

    II.
Rights and Obligations of Party B

     

    (I) Party
B shall have the right requesting Party A to provide all the materials deemed
necessary by Party B.

     

    (II)
Party B shall have the right to deduct and collect the principle, interests,
compound interests, and penalty interests of the loan and all other payables
from the account of Party A.

     

    (III) In
case of breach of contract by Party A, Party B shall have the right to
prematurely recover the unused loan, shall have the right to suspend any
unreleased loan, shall have the right to prematurely terminate the execution of
this Contract, and recover the principle, interests, compound interests, and
penalty interests of the loan and all other payables.

     

    (IV)
Party B shall be obligated to timely release the loan in accordance with the
terms stipulated under this Contract.

     

    (V) All
the materials provided by Party A related to debts, financial affairs,
production, and operation of Party A shall be kept confidential by Party B,
excluding legal inquirers.

     

    Article X Breach of
Contract

     

    I. Within
the effective period of this Contract, in case that breach of contract has
occurred as result of Party A failing to timely pay the interests, the interests
shall be calculated according to compound interest starting on the 20th of
every month.

     

    II. In
case that the loan is overdue, Party A shall pay penalty interest to Party B
starting on the day of delayed payment of the principle and interests of the
loan.  The penalty interest rate shall be calculated according to the
executed interest rate of this Contract multiplying by one point five (executed
interest rate × 1.5).

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

     

    III.
Where Party A fails to use the loan provided by Party B in accordance with the
purpose stipulated under this Contract, the act shall be deemed as embezzlement
of loan.  Party A shall pay a penalty interest to Party B starting
from the day of embezzlement of loan.  The penalty interest rate shall
be calculated according to the executed interest rate of this Contract
multiplying by two (executed interest rate × 2).  Should Party B
discover that the time of embezzlement of loan by Party A is later than the
actual time of embezzlement by Party A, Party B shall deduct the interests
already paid by Party A upon calculation and collection of penalty
interests.

     

    IV. Where
the Contract states that the loan is to be paid back in installments, failure of
timely payment shall be deemed as delay of payment.

     

    V. Where
Party B fails to timely provide the loan, Party B shall pay a penalty to Party A
in accordance with the amount in breach and the number of days of
delay.  The amount of penalty shall be calculated in accordance with
the executed interest rate stipulated under this Contract.

     

    Article XI Settlement of
Dispute

     

    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, either party may submit the case for
prosecution at the local People’s Court of Party B.

     

    Article XII Effectiveness,
Modification or Termination of Contract

     

    I. This
Contract shall be established upon signing or affix of seal by the legal
representative or authorized representative of Party A and the legal
representative or responsible person or authorized representative of Party B and
shall come into force upon entry of force of the guarantee contract under this
Contract.

     

    II. No
Party shall arbitrarily change or terminate this Contract unless the incidence
permitted by this Contract to undergo change or termination of the Contract has
occurred or due to the provision of the “Contract Law of the People’s Republic
of China”.

     

    III.
Where one party requests change of this Contract, the other party shall be
promptly notified in writing, and a written modification agreement shall be
reached.

     

    Article XIII Through friendly
negotiations, Party A and Party B may reach a written agreement on matters not
discussed in this Contract, which shall become an attachment of this
Contract.  Any attachment to this Contract shall be an integral part
of this Contract and shall have the same legal force.

     

    Article XIV Party B shall hold
two original copies of this Contract with Party A and the Mortgagor holding one
original copy each.  Where the Contract has to be submitted to the
relevant authorities, the rules of the relevant authorities shall be executed
accordingly.  This Contract is made out in four original copies
upon signing.

     

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

     

    Article XV This Contract is
signed at the location of Party B on November 9,
2007.

     

    [Special
Note] Party B has already asked Party A to carefully read all the articles of
this Contract and has provided detailed explanation on all the questions raised
by Party A regarding the articles of this Contract.  Party A has
already understood all the explanations made by Party B regarding the articles
of the contract and the explanations for the questions.  Both Party A
and Party B have no misunderstanding regarding the content of all the articles
stipulated under this Contract and this special note.

     

     

    
      
        
          
            
              
                
                  
                    	Party
      A (Official Seal):  	Party
      B (Official Seal):
	 	 
	
                            Legal
      Representative (Signature or Seal):

                          	
                            Responsible
      Person (Signature):

                          
	 	 
	
                            Authorized
      Representative (Signature):

                          	
                            Authorized
      Representative (Signature):

                          
	 	 
	
                            Handling
      Person (Signature):

                          	
                            Handling
      Person (Signature):

                          
	 	 
	
                            Telephone:
      62566757

                          

                  

                

              

            

          

        

      

    

    

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

     

    Attachment
I

     

     

    List of
Main Assets

     

    
      
        	
                Asset
      Name

              	
                Location

              	
                Quantity

              	
                Purchasing
      Price (10K Yuan)

              	
                Depreciation
      (%)

              	
                Years
      Used

              	
                Current
      Value

              	
                Ownership
      Certificate Number

              	
                Ownership

              	
                Mortgage
      Situation & Mortgagee

              	
                Remark

              
	
                Building

              	
                No.
      1 Xinzheng Shuanghu Economic Development Zone

              	
                4

              	
                629

              	 
      	 
      	
                455

              	 
      	
                Henan
      Gerui Composite Materials Co., Ltd.

              	 
      	 
      
	
                Automobile

              	
                No.
      1 Xinzheng Shuanghu Economic Development Zone

              	
                14

              	
                340

              	 
      	 
      	
                104

              	 
      	
                Henan
      Gerui Composite Materials Co., Ltd.

              	 
      	 
      
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      

      

    

     

    Note: The
aforementioned assets mainly include valuable assets that are easily noticeable
with clear ownership, such as transportation vehicles, machinery and equipment,
buildings, and lands.

     

    
      
        
          
            
              
                
                  
                    
                      	Party
      A (Official Seal):  	Party
      B (Official Seal):
	 

                    

                  

                

              

            

          

        

      

    

     

    
      
        
        

      

      
        8Unassociated Document

    
      
         

        EXHIBIT
10.17.5

         

      

      Real
Estate Maximum Mortgage Agreement

       

      Contract
Number: 207601200728033801

       

       

      Mortgagor:
Henan Gerui Composite Material Stock Co., Ltd.

       

      Legal
Address: NO.1 Xinzheng Shuanghu Economic Development Zone

       

      Mailing
Address: Same as Above

       

       

       

      Mortgagee:
Zhengzhou Branch of Shanghai Pudong Development Bank

       

      Address:
NO. 299 Jinshui Road, Zhengzhou

       

       

      In
consideration that Henan Gerui Composite Material Stock Co., Ltd. (“Borrower” of
the main contract) and the Mortgagee (“Lender” of the main contract) have signed
or will sign a loan contract (hereinafter known as the “Loan Contract”) in
accordance with the time limit and the amount of creditor’s right stipulated
under Article 2.1 of this Contract and the Bank’s Payable Bills Payable
Agreement (hereinafter known as the “Bills Payable Agreement”) and to guarantee
the realization of creditor’s right of the Mortgagee, the Mortgagor is willing
to use the undermentioned mortgage properties as collateral and grant the first
priority of mortgage right over all other mortgages. Both parties hereby entered
this Contract after consideration of the foregoing and the mutual covenants and
conditions contained herein:

       

       

      Article
I                      Mortgage
Properties

       

      1.1 The
mortgage properties under this Contract are the rights to use land legally
obtained by the Mortgagor, which haven’t yet contained any building or structure
on the land, or the legally obtained building and the right to use the land for
the land occupied by the building, or other properties that can be legally
mortgaged.

       

      1.2 The
mortgage properties under this Contract are:

       

      Name:
Right to Use
Land

       

      Purpose:
Land for Industrial
Use

       

      Structure:                                        
                                                                           

       

      Area:
1. 139569.79
m2; 254685.96 m2;

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      Location:
1. North of Shuangmei
Road of Longhu Town and West of Houhu Reservoir; 2. South of Meishan Huanxiang
Highway of Longhu Town and East of Houhu Reservoir.

       

      Four-Corner
Boundary of Land: East
to: Houhu Reservoir; Henan Traffic School

       

      West to: Shuangmei Road;
Henan Rongli Frozen and Dry Food Products Co., Ltd.

       

      South to: Houhu Reservoir of
Gucheng Village of Longhu Town; Houhu Reservoir

       

      North to: Houhu Reservoir;
Houhu Reservoir and Huanxiang Highway

       

      Condition:
Excellent geographic
location

       

      Type of
Ownership: State-Owned
Transfer

       

      Ownership
of Right to Use: Henan
Gerui Composite Material Stock Co., Ltd.

       

      Title
Deed Certificate Number: 1. No. 212 (2004) of New
State-Owned Land; 2. No. 213 (2004) of New State-Owned Land

       

      Value of
Mortgage Properties: Renminbi (Currency)
53.4203 million
Yuan

       

      Valuation
Method: Land Appraisal
Report

       

      Method of
Obtaining Right to Use Land: Transfer

       

      Time
Limit of Use of Land: From June, 9, 2004 to
June of
2054

       

      1.2 The
effectiveness of collateral includes the aforementioned mortgage properties as
well as the accessory objects, accessory right, physical subrogation, attached
objects, adhered objects, and yield of mortgage properties

       

      1.3 In
case the Mortgagor undergoes bankruptcy procedure, the mortgage properties
listed under this Contract shall not be included in the bankruptcy scope of
assets of enterprise.

       

       

      Article
II Guaranteed Creditor’s Right

       

      2.1
Principal Creditor’s Right

       

      The
principal creditor’s right guaranteed under this Contract shall be the maximum
total balance (refers to the maximum point of the sum of the loan value and the
Payable Bills, determined by the data of the end of business day of the
Lender/Acceptance Bank of Payable Bills) continuously provided to the Borrower
by the Lender/Acceptance Bank of Payable Bills in accordance with the terms
stipulated under a series of loan contract and Payable Bills agreements signed
between the Lender/Acceptance Bank of Payable Bills and the Borrower from March 26, 2007 to
March 31, 2010,
and the amount shall not exceed Renminbi (currency)
Twenty Three
Million Yuan of sum of the loan value and the Payable
Bills.  In case that the drawer has already paid security deposit,
then that part of the principal creditor’s right shall be correspondingly
reduced to the balance of sum of the face values of Payable Bills deducting the
paid security deposit. In case that the Acceptance bank of Payable Bills has to
make advanced payment for the due payable bills, the corresponding part of the
principal creditor’s right shall be transferred to the sum of forced advanced
payments of the Acceptance bank of Payable Bills becoming overdue
loan.

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      The
Mortgagor hereby accepts that the effective proof for the principle and
interests of the principal creditor’s right owed by the Borrower/Drawer shall be
determined by the accounting vouchers issued by the Lender/Acceptance Bank of
Payable Bills in accordance with the business operation guidelines.

       

      Single
principal creditor’s right involved in this Contract having contract date within
the time limit of the aforementioned principal creditor’s right shall be
included in the scope of this maximum mortgage.

       

      The terms
“expiration” and “maturity” referred in this Contract shall include the
situation of early maturity declared by the Lender/Acceptance Bank of Payable
Bills. This act of declaration of early maturity shall be made in writing and
shall be deemed entry into force on the day of fax transmission or on the day of
delivery of registered mail.

       

      After
expiration of the principal creditor’s right stipulated under this Contract has
occurred, the Mortgagor and the Mortgagee shall undergo determination
registration of mortgage rights at maximum amount at the original registration
authority.

       

      2.2 Scope
of Mortgage

       

      In
addition to the aforementioned principal creditor’s rights, the scope of pledge
for the mortgage listed under this Contract shall include all the incurring
interests, penalty, compensatory payment for damages, attorney fee for
actualizing mortgage rights, litigation fee, and other related
expenses.

       

      2.3
Nature of Mortgage

       

      (1) The
Mortgagee shall have the first priority of right of compensation, and that it
does not have to press for payment from the Borrower/Drawer or other guarantor
first or concurrently when exercising its rights stipulated under the contract.
It can receive first compensation from the earning of the disposition of the
mortgage properties in accordance with the laws. The Mortgagor hereby forfeits
the right to defense.

       

      (2) The
mortgage under this Contract is independent, irrevocable, and unconditional.
This mortgage contract is not impacted by the effectiveness of the main contract
and shall not become invalid or revocable resulting from ineffectiveness or
revocability of the main contract. The mortgage liability of the Mortgagor shall
not be changed by the change of loan contract/Payable Bills Agreement between
the Lender/Acceptance Bank of Payable Bills and the Borrower/Drawer or the
Lender agreeing extension of loans.  Furthermore, any change of
operation or management system by the Borrower/Drawer or the Mortgagor shall not
lead to any change.

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      Article
III Notarization and Registration of Mortgage

       

      3.1 The
signing of this Contract is generally notarized by a notarization authority.
Should the Mortgagee demand, notarization of effective compulsory execution
shall be carried out.

       

      3.2
Within thirty days of notarization (in case that the Mortgagee clearly indicates
that notarization is unnecessary, then it shall commence from the day of signing
of this Contract), the concerning parties of the mortgage shall apply for
mortgage registration to the jurisdictional real estate registration department
in accordance with the administrative authority of real estate registration. The
original copy of the certificate of mortgage right shall be kept by the
Mortgagee.  The Mortgagee is willing to give the title deed to the
Mortgagee for safekeeping unless the Mortgagee refuses to accept the
responsibility.

       

      3.3 In
case that this mortgage contract is terminated in accordance with the provisions
stipulated under Article 8.1 of this Contract, the Mortgagor and the Mortgagee
shall jointly apply for cancellation of mortgage registration to the original
mortgage registration authority.  Where the original mortgage
registration authority approves the cancellation of registration, the
certificate of mortgage right shall be taken back by the registration authority.
The Mortgagee shall return the title deed to the Mortgagor
concurrently.

       

       

      Article
IV Insurance

       

      4.1 Where
the mortgage properties are already insured by the Mortgagor, the procedure of
transferring the insurance rights and benefits to the Mortgagee as the first
beneficiary shall be carried out.  Where the mortgage properties are
not yet insured or the original insurance policies fail to meet the requirements
of the Mortgagee, the Mortgagor shall purchase the insurance with the specified
type, duration, and amount appointed by the Mortgagee with the Mortgagee as the
first beneficiary within 5 days of signing of this Contract. The expiration date
of the aforementioned insurance shall be: (1) three months after the due date of
the final loan stipulated under this series of loan agreement. If the loans
under the loan agreement are extended, the duration of insurance is
correspondingly extended; and (2) ...

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      4.2 The
Mortgagor shall timely pay all the insurance premiums and shall timely submit
original copies of all the insurance documents and vouchers to the Mortgagee for
safekeeping.

       

      4.3
Without the written approval from the Mortgagee, the Mortgagor shall not amend
or modify any terms of the insurance policy or undergo any change to the
insurance policy. The insurance policy shall not be terminated or cancelled.
Moreover, the insurance policy shall not be permitted being cancelled,
terminated, expired, or revoked.

       

      4.4
Should the Mortgagor fail to timely purchase insurance or to actively maintain
the insurance policy, the Mortgagee shall have the right to purchase an
insurance policy and/or maintain the insurance policy. The incurred expenses
shall be borne by the Mortgagor.  However, the Mortgagee shall not be
obligated to purchase insurance policy or maintain insurance for the
Mortgagor.

       

      4.5 Where
accident has occurred on insured mortgage properties, the Mortgagee shall have
the right to have first priority receiving repayment from the insurance
compensatory payment and recovering the principle and interests of the principal
creditors right and the related costs and/or transferring the insurance
compensatory payment to the special security deposit account to be used for
providing mortgage and/or for external expenses.

       

       

      Article
V Declaration and Guarantee

       

      The
Mortgagor shall make the following declarations and guarantees to the Mortgagee,
which shall remain valid within the effective period of this
Contract:

       

      5.1 The
Mortgagor is a legal person or other type of economic organization registered
and established in accordance with Chinese laws, which has sufficient power over
all of its assets, possesses full civil action capacity, and is able to bear
civil liabilities independently.

       

      5.2 The
Mortgagor has authorized representative to sign this Contract. All provisions of
this Contract are reflection of true intention of the Mortgagor, which has legal
binding force on the Mortgagor.

       

      5.3 The
signing and execution of this Contract by the Mortgagor will not violate the
laws, regulations, rules, rulings, judgments, or directives that should be
abided by the Mortgagor and will not come in conflict with the articles of
association or any other signed contracts, agreements, or any other borne
obligations.

       

      5.4 All
documents and materials associated with this Contract and the mortgage
properties are all truthful, valid, accurate, and complete without any
concealment.

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      5.5 The
Mortgagor guarantees that it has full legal ownership or legal disposition right
regarding to the mortgage properties upon the signing of this Contract and that
the mortgage properties have no existence of any form of mortgage (excluding
this Contract), lease (unless written declaration has been made to the Mortgagee
with approval from the Mortgagee), trust, or other co-owner. Moreover, No
existence or possible existence of any form of ownership dispute, legal
restriction or other flaw of right is present.

       

       

      5.6 The
Mortgagor guarantees that no construction debt is present before the signing of
this Contract, or the Mortgagee has been fully notified, and the relevant
materials are provided to the Mortgagee with approval from the Mortgagee. After
the signing of this Contract, no new construction debts shall
occur.

       

       

      Article
VI Agreed Matters

       

      The
Mortgagor and the Mortgagee further agree to the conditions as
follows:

       

      6.1 The
mortgage properties shall be kept and utilized by the Mortgagor during the
mortgage period. Moreover, the Mortgagor shall be responsible for the safety and
good condition of the mortgage properties, shall fully fulfill all obligations,
including maintenance and preservation of the mortgage properties, and shall
timely pay all the taxations and fees related to the mortgage.

       

      6.2 The
Mortgagee shall have the right to undergo supervision and inspection of the
operation of the Mortgagor and the utilization and maintenance of the mortgage
properties at any time. The Mortgagor shall actively cooperate.

       

      6.3
Without the written approval from the Mortgagee, the Mortgagor shall not undergo
exchange, donation, pricing for shares, lease, sale, turnover housing or
relocation housing, re-mortgage, or other types of disposition of the mortgage
properties. Moreover, the mortgage properties shall not be reconstructed,
removed, or undergo any other types of changes in the utilization nature of the
mortgage properties.

       

      6.4 In
case that finished commercial residential buildings (referring to completion of
initial registration of real estate) of real estate development enterprises are
used for mortgage, the Mortgagor shall not sell the mortgage properties during
the effective period of mortgage.

       

      In
addition to the aforementioned terms, should the Mortgagor wish to transfer
(exclusively refers to sale, similarly undermentioned) the mortgage properties
during mortgage period, the transferee shall be informed about the fact of
mortgage and that the act of transfer must receive approval from the Mortgagee.
Within 3 days of reaching the preliminary transfer intent, the Mortgagor shall
deliver a written report to the Mortgagee, stating the price of the mortgage
properties and the method of disposition. The Mortgagor can only sign the
transfer agreement with the transferee after the Mortgagee has agreed to the
disposition of the mortgage properties with a written reply. The Mortgagor shall
deliver one original copy of the agreement to the Mortgagee within three days of
signing of the transfer agreement.  Should the Mortgagee deem that the
transfer price of the mortgage properties is clearly lower than its value, the
Mortgagee may request the Mortgagor to provide a new pledge. Where the Mortgagor
disagrees to provide new pledge or the provided pledge cannot be accepted by the
Mortgagee, the Mortgagee may prohibit the transfer of the mortgage properties.
In case that the Mortgagor fails to notify the Mortgagee, the transfer shall be
deemed invalid.

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      The
transfer money shall be directly transferred to the special account appointed by
the Mortgagee, which shall be used to repay the pledged creditor’s right. If the
Mortgagee agrees, the transfer money can also be drawn by a third party approved
by both parties and treated as disposition of mortgage properties or use other
methods approved by both parties.

       

      6.5 In
case that the loss, damage or devaluation of the mortgage properties which is
not the fault of the Mortgagor, the Mortgagor shall immediately notify the
Mortgagee, and a written notification shall be delivered to the Mortgagee within
3 days of occurrence of the incidence. The Mortgagor shall take effective
measures to prevent worsening of the damage. The compensation, compensatory
payment, and other earnings shall be used to repay the pledged creditor’s rights
within 7 days. If the Mortgagee agrees, drawing from a third party approved by
both parties may be carried out as disposition of mortgage
properties.

       

      In case
that the Mortgagor doesn’t require compensation of the responsible party for the
mortgage loss or damage, the Mortgagee retains the right of
subrogation.

       

      6.6 Where
the act of the Mortgagor leads to devaluation of the mortgage properties, the
Mortgagor shall have the right requesting the Mortgagor to stop its action.
...  In case that the Mortgagee deems that the mortgage properties
cannot fulfill the pledge of the principal debts, the Mortgagor shall re-provide
or increase additional mortgage properties approved by the Mortgagee to remedy
the value loss of the original mortgage properties. Should the Mortgagee agree,
both parties may undergo consultation and reach agreement with other type of
handling method.

       

      6.7 Where
the building is included in the scope of removal during the mortgage period, the
Mortgagor shall notify the Mortgagee in writing within 3 days of learning the
situation. In case that the removal of the building is compensated by exchange
of property right, mortgage right shall be reset on the exchanged building. In
case that the removal is compensated by cash, the compensated money and other
earning received by the Mortgagor shall be used to repay the pledged creditor’s
rights first. If the Mortgagee agrees, drawing from a third party may be carried
out to be treated as disposition of mortgage properties.  In case that
a method with combining exchange of property right with cash compensation is
used, the cash compensation part is used to repay the pledged creditor’s rights
first, or, with the approval from the Mortgagee, withdrawal from a third party
may be carried out.  Mortgage is reset for the exchanged properties to
compensate any insufficient repayment of the creditor’s rights.

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      Under the
aforementioned three different types of compensation methods, should the value
of the exchange properties be lower than the value of the original mortgage
properties stated in Article 1.2 after appraisal or the compensatory payment
from cash compensation be lower than the pledged debts, or the ratio of the
balance after subtracting the compensatory payment from the pledged debts and
the appraisal value of the exchanged properties be greater than the ratio of the
pledged debts and the value of the original mortgage properties, the Mortgagee
shall increase mortgage properties or take other measures to add mortgage for
the insufficient part. The Mortgagor may also prematurely repay the
corresponding pledged debts occupied by the insufficient part.

       

      In case
that the right to use land has been included in the scope of expropriation by
the State, the aforementioned terms shall be used.

       

      6.8 Where
the Mortgagee deems necessary, a legally established appraisal institution may
be authorized to undergo appraisal of the mortgage properties.

       

      6.9 In
case that any other situations that may impact the pledge ability of the
mortgage properties have occurred, the Mortgagor shall guarantee to notify the
Mortgagee in writing within three days of learning the situation

       

      6.10 The
costs of insurance, appraisal, registration, drawing, notarization,
notification, auction, subrogation recourse resulting from execution of this
Contract and related fees of the preservation of value of the mortgage
properties or actualization of the mortgage rights (including attorney fee,
litigation fee, and enforcement fee) shall be borne by the Mortgagor. In case
that the Mortgagee has made advanced payment for the aforementioned fees, the
Mortgagor hereby authorizes the Mortgagee to voluntarily deduct the fees after
costs have occurred from the accounts opened at the place of the Mortgagee or
within the other branch institutions of the head office system of the
Mortgagee.

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      Article
VII Actualization of Mortgage Right

       

      7.1 Where
any of the debts under the Loan Contract/Payable Bills Agreement is due
(including the early maturity of the debts declared by the Mortgagee as result
of breach of contract by the Borrower/Drawer and/or violation of declaration or
guarantee or agreed terms by the Mortgagor), and that the Mortgagee has not been
fully paid or the Drawer fails to provide sufficient amount of security deposit
leading to occurrence or possible occurrence of advanced payment by the
Acceptance Bank of Payable Bills or occurrence of situation that the Mortgagee
has the right to dispose the mortgage properties in accordance with the relevant
laws, regulations, and rules, the Mortgagee and the Mortgagor may undergo
consultation regarding the discount of the mortgage properties or the money
received from auction or sale of the mortgage properties to repay the debt. If
no settlement can be reached, the Mortgagee shall have the right to lodge a
legal proceeding in the People’s Court. In case that this Contract has
notarization of effective compulsory execution, the matter shall be handled in
accordance with the provisions stipulated under Article 10.2 of this
Contract.

       

      7.2
During the disposition process, the Mortgagee shall have the right to appoint an
auction house, appraiser, attorney, or other agents to exercise all or part of
its rights. The Mortgagor shall not have any objection regarding the
matter.

       

      7.3 After
the Mortgagee exercises mortgage rights in accordance with the provisions of
this Contract, should the mortgage properties fail to repay all the pledged
debts and the Mortgagor ...

       

       

      Article
VIII

       

      ...

       

       

      Article
IX Breach of Contract

       

      9.1 After
entry into force of this Contract, the Mortgagor and the Mortgagee shall execute
this Contract. Should any party fails to execute or incompletely execute this
Contract, the party in breach shall bear the corresponding liability for breach
of contract and shall compensate the resulting economic loss incurred on the
other party.

       

      9.2 Where
the mortgagor violates the terms stipulated under Article V of this Contract
regarding the items of declaration and guarantee leading to loss of the
Mortgagee, the Mortgagor shall compensate all the resulting losses incurred on
the Mortgagee. Where loss of a third party, such as the tenant, has occurred,
the Mortgagor shall bear the corresponding compensation liability of the third
party.

       

      9.3 Where
the Mortgagor violates the terms stipulated under Article VI of this Contract
regarding the obligation of notification/delivery with failure of
notification/delivery to the Mortgagee within the time limit, a penalty
equivalent to the interest rate for overdue loan shall be paid to the Mortgagee
for every occurrence, i.e. penalty = balance of principal creditor’s right ×
overdue interest rate × number of days of delayed notification. Should the
delayed notification/delivery leads to loss of the Mortgagee, the Mortgagor
shall compensate all the resulting losses incurred on the
Mortgagee.

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      9.4 Where
the Mortgagor violates the terms of this Contract with regard to the
compensation, compensatory payment, exchange of property right, and other
earning received from disposition of the mortgage properties in accordance with
the provisions of this Contract, the Mortgagor shall undergo correction within
the time limit required by the Mortgagee and shall continue execution in
accordance with the provisions of this Contract. Moreover, the Mortgagor shall
bear a penalty of 0.1% of the pledged
debt. Should the Mortgagor fail to execute the aforementioned terms within the
time limit, additional penalty for exceeding the time limit shall be added in
accordance with the terms stipulated under Article 9.3. In case that the
Mortgage no longer can continue execution, the Mortgagor shall bear a penalty of
1% of the
pledged debt, and all the resulting losses incurred on the Mortgagee shall be
compensated by the Mortgagor as well.

       

      9.5 Where
loss, damage, or devaluation of mortgage properties has occurred as result of
action or fault of the Mortgagor and that the Mortgagee believes that the
mortgage properties cannot fulfill its pledge on the debt with the Mortgagor
failing to provide or increase additional mortgage properties approved by the
Mortgagee within the time limit or failing to execute the terms agreed by both
parties, the Mortgagor shall bear a penalty of 1% of the value of
loss, damage, or devaluation of mortgage properties, and all the resulting
losses incurred on the Mortgagee shall be compensated by the
Mortgagor.

       

      9.6 Where
the Mortgagor violates the provisions stipulated under Article 6.3 and 6.4 of
this Contract and arbitrarily disposes the mortgage properties, the Mortgagor
shall bear a penalty of 1% of the pledged
creditor’s right, and all the resulting losses incurred on the Mortgagee shall
be compensated by the Mortgagor.   

       

      9.7 Where
the Mortgagor fails to truthfully and fully inform and provide the debt
information of the construction project influencing the judgment of the
Mortgagee regarding the mortgage ability of the mortgage properties and leading
to loss of the Mortgagee, the Mortgagor shall bear the corresponding liability
of compensation and shall bear a penalty of 1% of the pledged
creditor’s right.

       

      9.8 Where
the mortgage contract is invalid, the party at fault shall compensate all the
resulting losses suffered by the other party. In case that both parties are at
fault, each party shall bear the corresponding responsibility.

       

      9.9 With
written approval from the Mortgagee, the liabilities for breach of contract by
the Mortgagor may be partially reduced or exempted.

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      Article
X Other Provisions

       

      10.1 This
Contract is an effective integral part of the loan contract and Payable Bills
Agreement and shall have the same legal force.  The full effective
execution of this Contract is one of the pre-conditions for the Borrower
undergoing withdraw as stipulated in the Loan Contract and for the Acceptance
Bank of Payable Bills providing Payable Bills for the Drawer as stipulated in
the Payable Bills Agreement.

       

      10.2 This
Contract shall not be modified without consultations and approval from both
parties. Where modification is agreed by both parties after consultation, the
Mortgagor shall make the corresponding change to the registered content. This
Contract shall remain valid before change of registration is made.

       

      10.3 The
laws of the People’s Republic of China are applicable to this Contract. All
disputes of the Mortgagor and the Mortgagee 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, either party may submit
the case for prosecution at a People’s Court. All disputes in connections with
this Contract shall be governed by the court of the main contract, which shall
be the local people’s court of the principal business location of the Mortgagee.
In case that this Contract has notarization of effective compulsory execution,
the Mortgagee may directly take apply to the jurisdictional People’s Court for
compulsory execution in accordance with the related laws and regulations of the
People’s Republic of China.

       

      10.4 This
Contract is made out in four original copies with concerning parties, the
notarization department, and the relevant registration department holding one
copy each. Several copies of duplicate are present for future
reference.

       

      Attachments:

       

      oTitle Deed

       

      oProperty Ownership
Plan

       

      oThe Contract on the
Transfer of the Right to Use the Land

       

      oAppraisal
Report

       

      oInsurance
Voucher

       

      oNotarization

       

      oCertificate issued by
the Relevant Authorities Approving the Mortgage

       

      oOther
Attachments

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      The
aforementioned attachments shall be the integral parts of this Contract. The
attached attachments are all duplicate copies, and the original copies are kept
separately.

       

       

      Signing:

       

      When
signing this Contract, both parties have no objection regarding all the terms
stipulated under this Contract and that the legal meaning of the provisions
related to the rights and obligations of all parties are accurately and fully
understood.

       

       

       

      
        
          	Mortgagor
      (Official Seal)     	Mortgagee
      (Official Seal)
	 	 
	
                  Legal
      Representative (Signature or Seal)

                	
                  Legal
      Representative (Signature or Seal)

                
	 	 
	or
      Authorized Representative	or
      Authorized  Representative
	 	 
	Bank
      and Account Number:	 
	 	 
	Contract
      Date: March 26,
      2007

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