Document:

SQUIRES TURBO AUTHORIZED
DISTRIBUTOR AGREEMENT

    

    This
Agreement is by and between Squires Turbo, Inc., a Utah corporation with a place
of business at 165 North 1330 West Suite A4, Orem, Utah 84057 ("Squires”) and
the following “Distributor”:

    

    
      
        
          	 
      	
                  Name:

                	
                    

                	 
      
	 
      	
                  Attn:

                	
                    

                	 
      
	 
      	
                  Address:

                	
                    

                	 
      
	 
      	
                  City:

                	
                    

                	 
      
	 
      	
                  State:

                	
                    

                	 
      
	 
      	
                  Zip:

                	
                    

                	 
      
	 
      	
                  Phone:

                	
                    

                	
                   e-mail:

                	
                    

                	 
      
	 
      	
                  Business
      License:

                	
                    

                	 
      
	 
      	
                  Reseller
      Tax ID:

                	
                    

                	 
      

        

      

    

    

    WHEREAS,
Squires manufactures and sells remote mounted turbo systems and related
products; and

    

    WHEREAS,
the term “Products” as used in this Agreement means all products manufactured by
Squires now or in the future and distributed through its network of authorized
Distributors, and the Products as of the date of this Agreement are those
described in Schedule
A; and

    

    WHEREAS,
Distributor desires to purchase Products from Squires for resale from the
approved location described in Schedule B (the
"Approved Location").

    

    In
consideration of the foregoing and the mutual promises set forth in this
Agreement, the parties agree as follows:

    

    SECTION
1.         APPOINTMENT

    

    1.1           Authorized
Distributor.  Squires hereby appoints Distributor as its
nonexclusive Authorized Distributor of the Products at the Approved Location,
and Distributor hereby accepts the appointment.  Squires reserves the
right to sell the Products to other Distributors and to end users
anywhere.  Distributor shall not sell Products and shall not provide
any services related to the Products except from the Approved
Location.  Distributor acknowledges receipt of Squires’s Authorized
Distributor Manual.  As used in this Agreement, the term “Authorized
Distributor Manual” means Squires’s service policies and procedures manual as
the same may be modified, amended, and updated from time to time in Squires’s
sole discretion, including any service letters or notices that may be sent to
Squires’s Authorized Distributors generally.

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    1.2           Nature of
Appointment.  Distributor’s appointment as an Authorized
Distributor is based in part upon its existing ability to provide competent
service to users of Squires’s products and other automotive
products.  This Agreement contemplates a local service business only
and does not authorize Distributor to distribute the Products or to sell them
except as contemplated by the Authorized Distributor Manual.  The
designation of Distributor as an Authorized Distributor does not contemplate
that Distributor’s business will be associated predominantly with Squires
products or that Distributor will be restricted in any way from selling
non-Squires products, nor does it contemplate that Distributor will be required
to adhere to any particular marketing plan or system.  Distributor
acknowledges that it has not been required to pay any fee or premium for the use
of Squires’s Trademarks.  Distributor recognizes, however, that
Squires will promote its products and its network of Authorized Distributors as
being of the highest quality and including a commitment to customer
service.  Distributor expects to benefit substantially from Squires’s
commitment to quality and customer service and from other Authorized
Distributors’ willingness to adhere to standards established by Squires from
time to time.  Accordingly, Distributor agrees to comply with all
provisions of the Authorized Distributor Manual, to refrain from selling the
Products through unauthorized channels, and to avoid practices that might
undermine Squires’s ability to support its Authorized Distributors and maintain
a reputation for service and quality.

    

    1.3           Term of
Appointment.  The term of this Agreement and Distributor’s
appointment hereunder shall commence on the date hereof and shall continue for a
period of one (1) year.

    

    1.4           Changes in Products,
Approved Location, or Customers.  Squires shall have the right
at any time and from time to time, in its sole discretion, (i) to change the
Products included within the scope of this Agreement by written notice to
Distributor at least thirty (30) days prior to the date such change becomes
effective, and (ii) to change the design, capabilities, or other characteristics
of any Product or discontinue the manufacture or marketing of any Product
without prior notice of any kind.

    

    SECTION
2.         DISTRIBUTOR’S
DUTIES

    

    2.1           Sale of
Products.  Distributor shall use its best efforts to vigorously
promote and sell the Products from the Approved Location.

    

    2.2           Technical and Sales
Capabilities.  Distributor acknowledges that the proper
marketing and support of the Products requires substantial expertise and
commitment.  Distributor shall at all times during the term of this
Agreement, at its expense, maintain the ability (i) to provide competent
and adequate technical assistance, service, and support, (ii) to explain in
detail to its customers the features and capabilities of the Products, (iii) to
assist customers in determining which Products will best meet their particular
needs and desires, and (iv) otherwise to carry out its obligations under
this Agreement.

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    2.3           Inventory; Parts and
Accessories.  Distributor shall maintain a sufficient inventory
of Products, replacement parts, and accessories to reasonably fulfill the
requirements of its customers.  Replacement parts and accessories
shall meet such specifications as Squires may establish from time to
time.

    

    2.4           Marketing
Plan.  Distributor shall be responsible for developing and
implementing its own marketing plan and system for distributing the
Products.

    

    2.5           Marketing
Practices.  Distributor shall at all times conduct its business
in a manner that reflects favorably on the Products and upon Squires's good
name, goodwill, and reputation.  Distributor shall demonstrate and
otherwise represent the Products fairly in comparison with competitive products
and shall not make any false or misleading representations regarding the
Products or any representations regarding the Products that are inconsistent
with Squires's product literature or Squires's
warranties.  Distributor shall not engage in any illegal, deceptive,
misleading, or unethical practices that may be detrimental to
Squires.

    

    2.6           Product
Literature.  Distributor shall have the right to use and
distribute to customers such product literature and advertising material as
Squires may provide from time to time in accordance with this
Agreement.  In the event Distributor desires to use, in connection
with sales of the Products, any other literature, technical data, price lists,
promotional materials, or similar materials (including, for example, any
materials written in any language other than English), Distributor shall
prepare, such materials at its expense.  All such materials shall be
submitted to Squires for approval, and Distributor shall not use, in connection
with the sale of any Product, any materials that have not been prepared or
approved by Squires.

    

    2.7           Customer
Assistance.  Distributor shall, at its expense, provide
assistance to its customers in connection with the use and maintenance of the
Products, including installation assistance, training in the operation of the
Products, repair services, and other similar assistance.  Distributor
shall at all times maintain the ability to provide competent service, including
but not limited to any special tools that may be recommended by Squires for the
safe and proper servicing of the Products.

    

    2.8           Warranty
Service.  Distributor shall offer and perform warranty service
on all Products in accordance with Squires’s standard warranties covering the
Products as set out in the Authorized Distributor Manual.

    

    2.9           Alteration of Products and
Packaging.  Distributor shall not modify or alter any Product
without Squires's prior written consent or as specifically provided in the
Authorized Distributor Manual.  Any unauthorized modification or
alteration by Distributor shall void the Squires warranty, and Distributor shall
defend and indemnify Squires from and against any claims or liabilities arising
out of or in connection with any Product that has been so modified or
altered.  Distributor shall not remove, destroy, alter, or conceal any
symbol, label, or other marking appearing on any Product or its
container.  Except with Squires's prior written consent, Distributor
shall sell all Products in their originally supplied
containers.

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    2.10           Reports;
Forecasts.  As frequently as Squires reasonably requests,
Distributor shall provide to Squires written reports showing (i) Distributor's
current inventory levels of the Products, in the aggregate and by product, (ii)
forecasts of Distributor's anticipated orders by product, and (iii) any other
information regarding the Products and/or distribution of the Products that
Squires reasonably requests.  All expenses associated with such
written reports shall be borne by Distributor.

    

    2.11           Notification.  Distributor
shall report promptly to Squires concerning any market information that comes to
Distributor's attention regarding Squires or the Products, including without
limitation, information regarding Squires's market position and the
competitiveness of the Products in the marketplace.  Distributor shall
report promptly to Squires all claimed or suspected defects in the Products and
shall notify Squires in writing of any claim or proceeding involving the
Products within ten days after Distributor learns of such claim or
proceeding.

    

    2.12           Compliance with
Laws.  Distributor shall conduct its business in compliance
with all applicable laws and regulations in any way related to the Products or
to the performance of Distributor's duties under this Agreement.

    

    2.13           Authorized Distributor
Manual.  Distributor shall comply in all respects with all of
the provisions of the Authorized Distributor Manual; provided, however, that if
there is any conflict between this Agreement and any provision of the Authorized
Distributor Manual, this Agreement shall govern.

    

    SECTION
3.         SQUIRES’S
OBLIGATIONS

    

    3.1           Product
Information.  Squires shall make available to Distributor such
technical information in the English language relating to the Products as it
makes available to Authorized Distributors generally.

    

    3.2           Training.  Squires
shall make available to Distributor and its personnel all training that it makes
available to Authorized Distributors generally.

    

    3.3           Additional
Assistance.  In the event Squires provides assistance to
Distributor related to servicing or other technical aspects of the Products or
related to the preparation of literature, technical materials, or promotional
materials, Distributor shall promptly reimburse Squires for any out-of-pocket
expenses incurred by Squires in connection with rendering such assistance,
including without limitation, all travel expenses, lodging, and
meals.  Squires may also charge reasonable hourly or per diem rates
for some or all of the services rendered under this provision, provided that
Squires notifies Distributor, before the services are rendered, of the rates
that will apply to such services.  Nothing in this Section shall be
construed to obligate Squires to provide assistance of any kind to
Distributor.  In the event Squires agrees to provide assistance, such
assistance shall at all times be subject to the availability of Squires's
personnel.

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    SECTION
4.         TERMS OF PURCHASE AND
SALE

    

    4.1           Price and
Quantity.  Squires shall sell Products to Distributor at the
prices set out in Schedule
A.  Squires may change the prices from time to time in its sole
discretion; provided, however, that new prices shall not apply to any purchase
orders accepted by Squires before Distributor receives notice of the
change.

    

    4.2           Standard Terms and
Conditions.  The terms and conditions of this Agreement and of
the applicable Squires invoice or confirmation will apply to all sales of
Products by Squires to Distributor under this Agreement.  Terms in
Distributor's purchase orders and other printed forms shall not apply to any
order, notwithstanding Squires's acknowledgement or acceptance of such
order.  In the event of any conflict between the terms of this
Agreement and any of Squires's standard forms, the terms of this Agreement shall
govern.

    

    4.3           Terms of
Payment.  Unless otherwise agreed by Squires in writing,
payment in full is due prior to shipment.  If credit terms are
offered, all invoices paid after the due date will be assessed a monthly late
payment charge of one and a half percent (1.5%), or the maximum amount allowed
by applicable law, whichever is less.  This charge shall be assessed
with respect to each month or portion thereof between the due date and the date
of payment.  Distributor shall be responsible for all costs of
collection, including reasonable legal fees.  Credit terms are subject
to the approval of Squires’s credit department and may be changed at any time in
Squires’s sole discretion.  If Squires has reasonable grounds for
insecurity with respect to Distributor’s ability or willingness to make timely
payments for the products, Squires may at any time suspend performance, decline
to ship, or require advance payment in cash or other adequate assurance
satisfactory to Squires.

    

    4.4           Warranty.  Squires
warrants to Distributor that the Products will be free from defects in material
and workmanship for a period of one year after the date of shipment, subject to
all terms of Squires’s standard warranty programs.  This warranty does
not apply to any product that has been disassembled, repaired, or otherwise
altered by any person without the authorization of Squires, nor does it apply to
any product that has been misused, damaged, or improperly installed. Other terms
and conditions relating to the warranty shall be as set out in the Authorized
Distributor Manual.

    

    4.5           Limitation of
Liability.  Squires’s responsibility with respect to the
Products and Squires’s obligations related thereto shall in no event exceed the
purchase price of the Products.  In no event shall Squires be liable
for any special, incidental, or consequential damages, including without
limitation, lost profits and any damages, losses, or expenses arising from the
sale, handling, or use of the Products, whether arising from the performance or
nonperformance of this Agreement, negligence, strict liability, or any other
cause, even if Squires is advised of the possibility of such losses or damages
or if such losses or damages could reasonably have been
foreseen.

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    4.6           Indemnification.  Distributor
shall indemnify Squires against, and hold Squires harmless from, any and all
claims by third parties (including but not limited to, all damages, losses,
liabilities, expenses, costs, and attorneys' fees related to such claims)
resulting from Distributor's acts or omissions during the term of this Agreement
or thereafter.

    

    SECTION
5.         TRADEMARKS AND INTELLECTUAL
PROPERTY

    

    5.1           Ownership of Intellectual
Property.  Distributor acknowledges and agrees that Squires has
and shall retain all right, title, and interest in and to all proprietary rights
to the Products, including but not limited to patents, trade secrets, and
copyrights.

    

    5.2           Use of
Trademarks.  Distributor shall use Squires's trademarks, trade
names, service marks, logos, and designations (all referred to in this Agreement
as "Trademarks") to refer to the Products in accordance with Squires's policies
as announced from time to time.  Distributor shall not use the
Trademarks except as specifically provided in this
Agreement.  Distributor shall not (i) dispute or deny the validity of
any of Squires's Trademarks, (ii) claim any right, title, or interest in or
to any such Trademarks (including, but not limited to any attempt to register
the same in any jurisdiction), or (iii) do anything that could adversely
affect Squires's rights in its Trademarks.  Upon expiration or
termination of this Agreement, Distributor shall immediately cease all use of
Squires's Trademarks and shall not thereafter use any of them or any confusingly
similar trade names, trademarks, service marks, logos, or
designations.

    

    5.3           Protection of
Trademarks.  Distributor shall promptly notify Squires of any
known or suspected infringement of Squires's Trademark rights and shall
cooperate without charge in Squires's efforts to protect such
rights.

    

    5.4           Use of Confidential
Information.  Squires may furnish Confidential Information to
Distributor in connection with the execution and performance of this
Agreement.  As used in this Agreement, the term "Confidential
Information" means (i) any and all information set out in the Authorized Service
Distributor Manual, (ii) all information provided to Distributor (or to which
Distributor may have access) while this Agreement is in force that is marked
"CONFIDENTIAL," "PROPRIETARY," or with words of similar import, and (iii) all
other information relating to Squires, its business, or its products or services
that Distributor has reason to know are not available to the general
public.  Distributor shall hold the Confidential Information in the
strictest confidence.  Distributor shall not disclose the Confidential
Information to any third party and shall use the same solely for the purposes
contemplated by this Agreement.  Distributor shall exercise at least
the same degree of care to protect Squires’s Confidential Information as it uses
with respect to its own most sensitive information, but in no event less than
reasonable care.  Notwithstanding the foregoing, Distributor shall not
have any obligation with respect to information that (i) is already known to
Distributor at the time the information is received from Squires, as proven by
prior documents or records of Distributor; or (ii) is or becomes publicly known
through no wrongful act of Distributor; or (iii)  is rightfully received by
Distributor, without restriction, from a third party who is not obligated to
keep the information confidential.  If Distributor becomes legally
obligated to disclose Confidential Information pursuant to a court order or any
other legal process, Distributor shall make only such disclosure as is legally
required and only after affording Squires notice and a reasonable opportunity to
seek appropriate protective orders.

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    5.5           Equitable
Remedies.  Distributor acknowledges that Squires will be
irreparably harmed by any breach by Distributor of its obligations under this
Section 5 and that no remedy at law will be sufficient to protect Squires’s
interests in the event of such breach. Therefore, in addition to any other
remedies that Squires may have, Squires shall be entitled to an injunction
restraining any violation of this Section 5 or specific performance, if
applicable.  Distributor hereby waives, with respect to any future
dispute related to this Section 5, any defense based on the argument that
Squires will not be irreparably harmed by a breach of the terms of this Section
or that Squires has available to it an adequate remedy at law.

    

    5.6           Infringement
Claims.  Squires shall have the right and obligation to defend
any action brought against Distributor based on an allegation that any Product
infringes a United States patent, and Squires shall pay all costs and damages
made in settlement or finally awarded as a result of any such action. If a final
injunction shall be obtained in any such action restraining the use of the
product by any customer of Distributor, or if Squires believes that any Product
is likely to become the subject of a claim of infringement, Squires shall, at
its option and at its expense, (i) procure for Distributor's customer the right
to continue using the product, (ii) replace or modify the product so that it
becomes noninfringing, or (iii) repurchase the product on a depreciated (five
year straight line) basis. Notwithstanding the foregoing, Squires shall have no
obligation with respect to any action brought against Distributor based on an
allegation of patent infringement unless Squires is promptly notified by
Distributor in writing of such action and is allowed complete control of the
defense of such action and all negotiations for its settlement or compromise.
This paragraph states Squires’s entire liability with respect to infringement of
patents and other intellectual property rights

    

    5.7           Obligations After
Termination.  Upon Squires’s request, and in any event upon
termination or expiration of this Agreement for any reason, Distributor shall
return to Squires (or, with Squires’s consent, destroy) all materials in its
possession or control that contain or represent Confidential Information,
including but not limited to documents, drawings, diagrams, flow charts,
computer programs, memoranda, notes, and every other medium.  Upon
Squires’s request, Distributor shall certify in writing that it has complied
fully with its obligations under this Section.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    SECTION
6.         TERMINATION AND
RENEWAL

    

    6.1           Renewal Upon Expiration of
Term.  This Agreement may be renewed by mutual agreement of the
parties following expiration of its term

    

    6.2           Termination at Distributor's
Option.  Distributor may terminate this Agreement at any time
without cause upon sixty (60) days’ prior written notice.

    

    6.3           Termination at Squires’s
Option.  Squires may terminate this Agreement immediately upon
the occurrence of any of the following:

    

    
      	
               
      

            	
              (a)

            	
              Distributor
      fails to make any payment due to Squires in connection with this Agreement
      and the failure is not fully cured within tent (10) days after notice from
      Squires.

            

    

    

    
      	
               
      

            	
              (b)

            	
              Distributor
      breaches any of its obligations relating to the Trademarks or Confidential
      Information or any other intellectual property rights of
      Squires.

            

    

    

    
      	
               
      

            	
              (c)

            	
              Distributor
      breaches any of its other obligations under this Agreement and the breach
      is not fully cured within thirty (30) days after notice from
      Squires.

            

    

    

    
      	
               
      

            	
              (d)

            	
              Distributor
      is merged or consolidated with any other entity or there is a substantial
      change in the management or control of
  Distributor.

            

    

    

    
      	
               
      

            	
              (e)

            	
              Distributor
      ceases to function as a going concern or ceases to conduct its operations
      in the ordinary course of business, or makes an assignment for the benefit
      of creditors, or a receiver is appointed for Distributor or its property,
      or any proceedings are commenced by or against Distributor under any
      bankruptcy, insolvency, or debtor’s relief
law.

            

    

    

    6.4           Suspension of Squires's
Obligations.  Immediately upon the occurrence of any breach by
Distributor of any of its obligations under this Agreement or upon the
occurrence of any event or circumstance that would permit Squires to terminate
this Agreement, all of Squires's obligations to ship Products shall be suspended
and such obligations shall remain suspended until the event or circumstance
giving rise to the suspension has been corrected to Squires's reasonable
satisfaction.

    

    SECTION
7.         POST-TERMINATION
OBLIGATIONS

    

    7.1           Referrals by
Distributor.  At all times following the expiration or
termination of this Agreement, Distributor shall refer to Squires or Squires's
designee all inquiries and orders pertaining to the purchase of
Products.

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    7.2           Shipments Following Notice
of Termination.  The expiration or termination of this
Agreement shall not relieve Squires of its continuing obligation to ship
Products pursuant to any purchase orders accepted by Squires prior to the notice
of termination, nor shall it relieve Distributor of its continuing obligation to
accept and pay for such Products; provided, however, that with respect to all
Products shipped after any notice of termination, Distributor shall make payment
prior to shipment by certified or cashier's check notwithstanding any credit
terms that may have been available to Distributor prior to such notice of
termination.

    

    7.3         
 Acceleration of
Amounts Due. All outstanding invoices for the Products and all other
amounts owed to Squires by Distributor shall be accelerated and shall fall due
and payable immediately upon the date of expiration or termination, even if
longer terms had been provided previously.

    

    7.4           Liability Upon
Termination.  Squires shall have no liability to Distributor by
reason of the expiration or termination of this Agreement for compensation,
reimbursement, or damages of any kind, including without limitation any loss of
prospective profits on anticipated sales, loss of goodwill, or investments made
in reliance on this Agreement.  Distributor acknowledges that it has
received no assurances from Squires that its business relationship with Squires
will continue beyond the term established in this Agreement, that it will obtain
any anticipated amount of profits in connection with this Agreement, or that it
will recoup its investment in the promotion of the Products.  However,
these provisions apply only to damages that are attributable to the expiration
or termination of this Agreement and shall not affect any amount due under this
Agreement or the right of either party to seek damages directly attributable to
any breach.

    

    SECTION
8.         GENERAL
PROVISIONS

    

    8.1           Notices.  Without
precluding any other sufficient form of notice, all notices, demands, or other
communications under this Agreement shall be deemed sufficient if served
personally or sent by fax, overnight courier, or first class mail to the
respective addresses of the parties as set out in this Agreement and directed to
the attention of the individuals signing this Agreement on behalf of the parties
or to another address or individual specified by the party.  All
notices, demands, and other communications shall be deemed given on the earlier
to occur of (i) actual receipt, or (ii) in the case of notice by fax or
overnight courier, the day after notice is sent, or (iii) in the case of notice
by U.S. mail, three (3) days after the notice is deposited in the U.S.
mail.

    

    8.2           No Agency
Relationship.  Nothing contained in this Agreement shall be
construed or interpreted as creating an agency, partnership, or joint venture
relationship between the parties.  Distributor is not Squires’s agent
for any purpose whatsoever and does not have the authority to make any agreement
or commitment for Squires or to incur any liability or obligation on Squires’s
behalf.

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    8.3           Entire
Agreement.  This Agreement constitutes the entire agreement
between the parties pertaining to its subject matter, and it supersedes any and
all written or oral agreements previously existing between the parties with
respect to such subject matter.

    

    8.4           Amendment and
Modification.  No modification or amendment of this Agreement
shall be binding unless executed in writing by both parties.  No
waiver shall be effective unless it is in writing and signed by the party
against whom enforcement is sought.

    

    8.5           Assignment.  This
Agreement may not be assigned by either party without the prior written consent
of the other.

    

    8.6           Choice of
Law/Forum.  This Agreement shall be governed by and construed
in accordance with Utah law, without regard to its rules regarding conflicts of
law.  Each of the parties consents to the jurisdiction of the courts
located in the state of Utah with respect to all matters relating to this
Agreement and agrees that all litigation relating to this Agreement shall take
place in courts located in the state of Utah.

    

    8.7           Successors and
Assigns.  This Agreement shall inure to the benefit of, and
shall be binding upon, the respective heirs, legal representatives, successors,
and permitted assigns of each of the parties.

    

    8.8           Paragraph
Headings.  The preliminary statement and the paragraph headings
in this Agreement are included for convenience only and shall not be deemed to
limit or otherwise affect the interpretation of any of its
provisions.

    

    8.9           Severability.  If
any of the provisions of this Agreement are held by a court or other tribunal
having jurisdiction to be unenforceable, the parties intend that the provision
shall be enforced to the maximum extent permissible and the remaining portions
of this Agreement shall remain in full force and effect.

    

    IN
WITNESS OF THE FOREGOING, the parties have signed this Agreement on the dates
indicated below.  This Agreement shall be deemed effective on the date
it is signed by Squires.

    

    
      
        
          
            	
                    SQUIRES
      TURBO SYSTEMS, INC.

                  	 
      	
                    DISTRIBUTOR:

                  	
                      

                  
	 
      	 
      	 
      	 
      
	
                    By:

                  	
                      

                  	 
      	
                    By:

                  	
                      

                  
	
                    (Signature)

                  	
                      

                  	 
      	
                    (Signature)

                  	
                      

                  
	
                    Name
      (Print):

                  	
                      

                  	 
      	
                    Name
      (Print):

                  	
                      

                  
	
                    Title:

                  	
                      

                  	 
      	
                    Title:

                  	
                      

                  
	
                    Date:

                  	
                      

                  	 
      	
                    Date:LOAN
AGREEMENT

    

    This Loan Agreement dated March 31,
2010 by and between Mr. Dejun Zou and Ms. Jianping Qiu, with their address at 11
Youquan Road, Zhanqian Street, Jinzhou District, Dalian, China 116100 (the
"Borrowers") and RINO International Corporation, a Nevada corporation with its
address at 11 Youquan Road, Zhanqian Street, Jinzhou District, Dalian, China
116100 (the "Lender").

    

    WITNESSETH

    

    WHEREAS, the Lender has
provided a loan to the Borrowers in the amount of Three Million Five Thousand
dollars ($3,500,000.00) on December 7, 2009.

    

    NOW THEREFORE, in
consideration of the mutual covenants herein contained and other good and
valuable consideration, the receipt of which is hereby acknowledged, it is
hereby agreed as follows:

    

    SECTION
1.  DEFINITIONS

    

    1.1.        Defined
Terms.  As used in this Agreement, the following terms shall
have the following meanings:

    

    "Collateral" shall be the
property described in the Deed of Trust.

    

    "Default" shall mean any of
the events specified in Section 7.1 hereof, whether or not any requirement for
the giving of notice or the lapse of time or both has been
satisfied.

    

    "Event of Default" shall mean
any of the events specified in Section 7.1 hereof.

    

    "Lien" shall mean, with
respect to any asset, any mortgage, lien, pledge, charge, security interest or
encumbrance of any kind in respect of such asset.

    

    "Loan" shall mean the amount
of monies borrowed by Borrowers from Lender under Section 2.1
hereof.

    

    "Loan Agreement" shall mean
this Loan Agreement including all Exhibits hereto as amended or supplemented
from time to time.

    

    "Loan Documents" shall mean
collectively, this Loan Agreement, the Note, and the Deed of Trust, and all
other agreements, documents, instruments or certificates delivered in connection
with the Loan Agreement.

    

    "Note" shall mean the secured
promissory note described in Section 2.1 hereof and attached hereto as Exhibit
2.1 or any promissory note issued in exchange therefor.

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    "Obligations" shall mean all
obligations and liabilities of the Borrowers to Lender whether now or hereafter
existing, including but not limited to under the Loan Documents.

    

    "Person" shall mean any
individual, corporation, company, voluntary association, partnership, joint
venture, trust, unincorporated organization or government (or any agency,
instrumentality or political subdivision thereof).

    

    "Deed of Trust" shall mean the
Deed of Trust attached hereto as Exhibit 4.1.

    

    1.2.   
     Use of
Defined Terms.  All terms defined in this Loan Agreement shall
have such defined meanings when used (without definition) in the Note, the Deed
of Trust, certificates or other documents made or delivered pursuant to this
Loan Agreement.

    

    1.3    
     Lender's
Discretion. Whenever the terms
"satisfactory to," "determined by," "acceptable to," "shall elect," "shall
request," or similar terms are used in this Loan Agreement or any of the other
Loan Documents to apply to Lender, except as otherwise specifically provided
herein or therein, such terms shall mean satisfactory to, at the election of,
determined by, acceptable to, or requested by, as applicable, Lender, in its
sole discretion.

    

    
      	
               
      

            	
              1.4.

            	
              Statements
      as to Knowledge.  Any statements, representations or
      warranties which are based upon the knowledge of the Borrowers shall be
      deemed to have been made after due inquiry with respect to the matter in
      question but without Borrowers being required to seek an opinion of
      counsel with respect thereto.

            

    

    

    SECTION
2.  AMOUNT
AND TERMS OF LOAN

    

    2.1         Loan.  Subject
at all times to all of the terms and conditions of this Loan Agreement, the
Lender agrees to advance to Borrowers the sum of Three Million Five Hundred
Thousand dollars ($3,500,000.00) which sum is hereby acknowledged to have been
delivered to the account of the Borrowers. Such Loan is to be evidenced by the
Note in the format of Exhibit 2.1 attached hereto and shall have a term
commencing on December 7, 2009 (the “Issuance Date”) and terminating on May 10,
2010 (the "Maturity Date" or "Maturity"). The Note may be prepaid at any time
before the Maturity Date with no less than five (5) days notice to
Lender.

    

    2.2.        Fees and
Interest.

    

    (a)         The
Borrowers shall pay to the Lender interest on the unpaid principal amount of the
Loan, for the period commencing on the Issuance Date until such Loan is paid in
full at a rate per annum equal to 5.25%.

    

    (b)         Interest
defined in Section 2.2(a) shall be computed on the basis of a 360-day year for
the actual number of days elapsed, shall be due and payable on the Maturity
Date.

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    
      	
               
      

            	
              (c)

            	
              In
      the event that Borrowers fails to timely pay any interest or principal
      hereunder when due or upon the occurrence of any Event of Default
      (hereinafter defined) hereunder, such unpaid principal or interest shall
      accrue interest thereafter at a rate per annum equal to three percent (3%)
      above the rate otherwise applicable thereto (the "Post-Default Rate") and
      shall be payable on demand.

            

    

    

                  (d)           Intentionally
deleted.

    

    2.3.         Principal
Payment. Principal payment on account of the Note shall be on May 10,
2010. The amount of the
principal payment
shall equal the amount of Borrowers' Obligations to Lender then outstanding on
the Maturity Date.

    

    2.4.         Application
of Payments. Any funds received from or on behalf of the Borrowers
(whether pursuant to any of the terms and provisions of the Note or otherwise)
by Lender shall be applied to the following items in the following
manner:

    

    
      (i)           the
payment to or reimbursement of Lender for any fees and expenses for which it is
entitled to be paid or reimbursed pursuant to any of the provisions of the Loan
Documents;

    

    

    
      	
               
      

            	
              (ii)

            	
              the
      payment of any accrued and unpaid interest of the Note;
  and

            

    

    

    
      	
               
      

            	
              (iii)

            	
              for
      such use as the Lender may elect, in accordance with this
      Agreement.

            

    

    

    2.6.        Closing.
The execution and delivery of the Loan Documents (the “Closing” or the “Closing
Date”).

    

    SECTION
3.  REPRESENTATIONS AND
WARRANTIES OF BORROWERS

    

    Borrowers represent and warrant to
Lender that:

    

    3.1         No Liens
or Restrictions. The Collateral is so owned as of the date of this Loan
Agreement by the Borrowers, free and clear of any Lien.

    

    3.2         Consents.  This
Loan Agreement and all the other Loan Documents executed by and to be executed
by Borrowers constitute valid and binding obligations of Borrowers enforceable
in accordance with their respective terms.  To the Borrowers'
knowledge, no consent of any other party and no consent, license, approval, or
authorization of any governmental authority is required in connection with the
borrowing by Borrowers hereunder, the execution, delivery, and performance of
this Loan Agreement, and any of the other Loan Documents executed or to be
executed in connection herewith.

    

    3.3         No
Conflicts.  The borrowing by the Borrowers hereunder and the
execution and delivery by the Borrowers of this Loan Agreement and other Loan
Documents executed and to be executed by Borrowers, do not conflict with or
result in the breach of any agreement, mortgage or similar instrument under
which Borrowers or any of his properties are bound, or, to Borrowers' knowledge,
any law, rule, or regulation of any governmental agency applicable to them or
said properties.

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    3.4         Litigation.  There
is no action or proceeding pending or, to the knowledge of Borrowers,
contemplated or threatened against Borrowers before or by any court, arbitrator,
grand jury or administrative agency, any governmental authority, bureau, agency,
or instrumentality which might reasonably foreseeable result in a material
adverse change in the financial condition of Borrowers.

    

    3.5         No
Defaults.  Borrowers are not in default in the payment or
performance of any of his obligations or in the performance of any contract,
agreement or other instrument to which they are a party or by which any of their
assets or properties may be bound.

    

    SECTION
4.  CONDITIONS TO LENDER'S
OBLIGATIONS

    

    The obligation of the Lender to make
the Loan is subject to the satisfaction of the following conditions precedent
(to the satisfaction of the Lender):

    

    4.1         Pledge.  The
Borrowers shall have delivered to the Lender:

    

    
      	
               
      

            	
              a.

            	
              the
      Note, in the form of Exhibit 2.1 attached hereto, duly executed by the
      Borrowers; and

            

    

    

    
      	
               
      

            	
              b.

            	
              the
      Deed of Trust, in the form of Exhibit 4.1 attached hereto, duly executed
      by the Borrowers,

            

    

    

    4.2         Legal
Matters.  All matters and all documentation and other
instruments in connection with the Loan shall be satisfactory in form and
substance to Lender and its counsel, and counsel to Lender shall have received
copies of all documents which it may reasonably request in connection with the
Loan.

    

    4.3         Regulations.  The
making of the Loan by Lender to Borrowers and the other transactions
contemplated hereby, including but not limited to the execution, delivery and
performance of the Deed of Trust shall be in compliance with applicable laws and
government regulations imposed upon Lender and the Borrowers.

    

    4.4         Intentionally
deleted.

    

    4.5         No
Judgment and Litigation.  Lender shall have received evidence
that (i) there exists no judgment, order, injunction or other restraint issued
or filed which prohibits the making of the Loan or the consummation of the other
transactions contemplated hereby, and (ii) no action, suit, litigation or
similar proceeding at law or in equity by or before any court, governmental
authority, or agency exists or is threatened with respect to the transactions
contemplated hereby.

    

    SECTION
5.  AFFIRMATIVE
COVENANTS

    

    Borrowers hereby covenants that, so
long as any of the Obligations remains outstanding and unpaid, Borrowers shall,
unless otherwise consented to in writing by Lender:

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    5.1         Notices.  Promptly
give notice in writing to Lender of (a) the occurrence of any Default or Event
of Default under this Loan Agreement or any other Loan Document or (b) of any
default whether or not any requirement for the giving of notice or the lapse of
time or both has been satisfied under any instrument or agreement of Borrowers
which could have a materially adverse effect on the Collateral.

    

    5.2         Notice of
Litigation and Other Matters.  Promptly upon learning of (a)
the institution of any investigation or proceeding by any governmental authority
or agency; or (b) any action, suit, proceeding which names as a party or may
effect the Borrowers involving individually amounts greater than $1,000,000 and
in the aggregate greater than $3,000,000, Borrowers shall give notice to the
Lender of any of the foregoing events describing the substance and status of the
matter involved.

    

    SECTION
6.  NEGATIVE
COVENANTS

    

    Borrowers covenants that so long as any
of the Obligations remains outstanding and unpaid, the Borrowers shall not
without Lender's express prior written consent, create, assume or suffer to
exist any Lien of any kind upon any of the Collateral, except for liens and
security interests in favor of Lender.

    

    SECTION
7.  EVENTS
OF DEFAULT AND REMEDIES

    

    7.1         Events of
Default.  An "Event of Default" shall exist if any one or more
of the following shall occur:

    

    (a)           Failure
by Borrowers to pay the principal of the Note within ten business days of the
date when due, whether on the date fixed for payment or by acceleration or
otherwise, or the failure by Borrowers to pay any interest defined in Section
2.2. hereof within ten business days of the date such interest becomes due;
or

    

    (b)           If
any representation or warranty made by Borrowers in this Loan Agreement or in
any certificate or statement furnished at the time of Closing or pursuant to
this Loan Agreement or any other Loan Document shall prove to have been
knowingly untrue or misleading in any material respect at the time made;
or

    

    (c)           Default
by Borrowers in the performance or observance of any covenant or agreement
contained in this Loan Agreement or default in any other Loan Document which is
not cured within any applicable grace period for therein, if any;
or

    

    (d)           A
final judgment for the payment of money in excess of $3,000,000 shall be
rendered against Borrowers, and such judgment shall remain undischarged for a
period of sixty days from the date of entry thereof unless within such sixty day
period such judgment shall be stayed, and appeal taken therefrom and the
execution thereon stayed during such appeal; or

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    (e)           If
the Borrowers shall default in respect of any evidence of indebtedness or under
any agreement under which any notes or other evidence of indebtedness of
Borrowers are issued, if the effect thereof is to cause, or permit the holder or
holders thereof to cause, such obligation or obligations in an amount in excess
of $3,000,000 in the aggregate to become due prior to its or their stated
maturity or to permit to acceleration thereof; or

    

    (f)       
    If an Event of Default under the Deed of Trust of even
date herewith shall occur and any grace period provided for therein shall have
expired; or

    

    (g)           If
Borrowers shall make a general assignment for the benefit of creditors or
consent to the appointment of a receiver, liquidator, custodian, or similar
official of all or substantially all of their properties, or any such official
is placed in control of such properties, or Borrowers admit in writing their
inability to pay their debts as they mature, or the Borrowers shall commence any
action or proceeding or take advantage of or file under any federal or state
insolvency statute, including, without limitation, the United States Bankruptcy
Code, seeking to have an order for relief entered with respect to the Borrowers
or seeking adjudication as a bankrupt or insolvent, or seeking reorganization,
arrangement, adjustment, liquidation, dissolution, or other relief with respect
to them or their debts; or

    

    (h)           There
shall be commenced against Borrowers any action or proceeding of the nature
referred to in subsection (g) of this Section 7.1, or seeking issuance of a
warrant of attachment, execution, distraint, or similar process against all or
any substantial part of the property of Borrowers, which results in the entry of
an order for relief which remains undismissed, undischarged or unbonded for a
period of sixty days; or

    

    (i)        
   The Deed of Trust shall cease at any time after its execution
and delivery and for any reason to create a valid and perfected first priority
security interest in and to the property subject thereto or the validity or
priority of such security interest shall be contested by Borrowers or by any
other Person; or any of the other Loan Documents shall at any time after their
execution and delivery for any reason cease to be in full force and effect or
shall be declared null or void, or the validity or enforceability thereof shall
be contested by Borrowers or by any other Person; or

    

    7.2         Rights.
Upon the occurrence of an Event of Default, specified in Subsections 7.1(g) or
7.1(h), the Note, together with any accrued and unpaid interest thereon, shall
be immediately due and payable without notice or demand. Upon the occurrence of
an Event of Default other than those specified in Subsections 7.1(g) and 7.1(h),
Lender may declare, at its option, so long as the Event of Default is continuing
at the time notice thereof is given and any applicable grace period has expired,
upon five calendar days notice or demand, the Note to be immediately due and
payable.  In any case, the Note shall become due and payable without
presentment, demand or protest, all of which are hereby expressly
waived.

    

    At any time after the date first above
written, Lender shall thereupon have the rights, benefits, and remedies afforded
to it under any of the Loan Documents with respect to the Collateral and may
take, use, sell or otherwise, encumber or dispose of the Collateral as if it
were the Lender’s own property. Borrowers agrees that Lender may or may not
proceed, as it determines in its sole discretion, with any or all other rights,
benefits, and remedies which it may have against Borrowers.

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    Anything herein to the contrary
notwithstanding, (but except as provided below), the Lender agrees, for itself,
its representatives, successors, endorsees and assigns, that: the Lender (and
any such representative, successor, endorsee or assignee) shall look to the
property encumbered by the Deed of Trust and/or the other instruments of
security that secure the Note for payment of the Obligations, and will not make
any claim or institute any action or proceeding against the Borrowers (or any
representatives, successors, assigns or affiliates of the Borrowers) for any
deficiency remaining after collection upon the Collateral. Provided, however,
and notwithstanding the foregoing, the Borrowers are and will remain personally
liable for any deficiency remaining after collection of the pledged collateral
to the extent of any loss suffered by Lender, or its representatives,
successors, endorsees or assigns, if such loss is caused by Borrowers based in
whole or in part upon:

    

    (i)           Damages
arising from any fraud, misrepresentations or the breach of any covenant or
agreement; and/or

    

    (ii)          Damage
to the pledged collateral resulting from gross negligence or intentional acts;
and/or

    

    (iii)         Failure
to pay taxes or other property-related liens; and/or

    

    (iv)         Damages
arising from the failure to comply with any and all laws.

    

    SECTION
8.  MISCELLANEOUS

    

    8.1.        Redelivery
of Collateral. Lender agrees that, within three business days of
Borrowers’ full payment of the Obligations, to return the Collateral to
Borrowers at the address specified herein for the giving of notices or to such
other person and address as Borrowers specifies in writing to
Lender.

    

    8.2         Notices.  All
notices, requests or other communications to either of the parties by the other
shall be in writing and shall be deemed duly given on the earlier of the date
the same is delivered in person or when deposited in the United States mail,
certified or registered, postage prepaid, return receipt requested, as
follows:

    

    If to Lender:

    

    RINO International
Corporation

    11
Youquan Road, Zhanqian Street,

    Jinzhou
District, Dalian, China 116100

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    If to the Borrowers:

    

    Mr. Dejun Zou and Ms. Jianping
Qiu

    11
Youquan Road, Zhanqian Street,

    Jinzhou
District, Dalian, China 116100

    

    Either party may designate by notice in
writing to the other a new address to which notices, requests and other
communications hereunder shall be given.

    

    8.3         Construction.
This Loan Agreement, the Note and all instruments or agreements delivered
hereunder shall be governed by and construed in accordance with the laws of the
State of New York, excluding therefrom any principles of conflicts of
laws.  If any of the provisions of this Loan Agreement shall be or
become illegal or unenforceable under any law, the other provisions shall remain
in full force and effect.

    

    8.4         Further
Assurances. Borrowers hereby agrees to execute and deliver such further
instruments and documents as may be reasonably requested by Lender in order to
carry out fully the intent and accomplish the purposes of this Loan Agreement
and the transactions referred to herein. Borrowers agrees to take any action
which Lender may reasonably request in order to obtain and enjoy the full rights
and benefits granted to Lender by this Loan Agreement and each other agreement,
instrument and document delivered to Lender in connection herewith, including
specifically, at Borrowers' own cost and expense, the use of its best efforts to
assist in obtaining consent of any government agency or self-regulatory
organization for an action or transaction contemplated by this Loan Agreement
which is then required by law.

    

    8.5         Survival
of Agreements. Except as herein provided, all agreements, representations
and warranties made herein and in any certificate delivered pursuant hereto,
shall survive the execution and delivery of this Loan Agreement and the Note,
and shall continue in full force and effect until the indebtedness of Borrowers
under the Note and all other Obligations have been paid in full.

    8.6         Entire
Agreement. This Loan Agreement and Other Loan Documents contain the
entire agreement between the parties hereto and may be amended, changed or
terminated only by an instrument in writing signed by the parties
hereto.

    

    8.7         Waivers.
No failure to exercise and no delay in exercising, on the part of Lender, any
right, power or privilege under this Loan Agreement or under the Note, or any
agreement or instrument delivered to Lender hereunder shall operate as a waiver
thereof; nor shall any single or partial exercise of any such right, power or
privilege preclude any other or further exercise thereof or the exercise of any
other right, power or privilege.  No waiver of any provision of this
Loan Agreement, the Deed of Trust or the Note or any agreement or instrument
delivered hereunder shall be effective unless executed by Lender and any such
waiver shall not constitute a waiver in the future of any of the provisions of
any of the foregoing documents, except as may be specifically provided in any
such waiver. No notice to Borrowers from Lender shall entitle Borrowers to any
other or further notice in any circumstance unless expressly provided for in
such notice or this Loan Agreement.  No course of dealing between
Borrowers and Lender shall operate as a waiver of any of the rights of Lender
under this Loan Agreement.

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    8.8         Gender
and Number. Unless the context otherwise requires, when used herein, the
singular includes the plural, and vice-versa, and the masculine includes the
feminine and neuter, and vice-versa.

    

    8.9         Captions.
Captions used herein are inserted for convenience only and shall not be given
any legal effect.

    

    8.10       Counterparts.
This Loan Agreement may be executed in any number of counterparts, each of which
shall be deemed an original, but all of which together shall constitute one and
the same agreement.

    

    8.11       Successors
and Assigns. This Loan Agreement shall be binding upon and inure to the
benefit of Borrowers and Lender and their respective successors and assigns
except that the rights and obligations of Borrowers hereunder may not be
assigned or transferred in any respect.  The provisions of this Loan
Agreement are intended to be for the benefit of any holder, from time to time,
of the Note and shall be enforceable by any such holder, whether or not an
expressed assignment to such holder of rights under this Loan Agreement has been
made by Lender or its successors or assigns.

    

    8.12       Confidentiality.
This Loan Agreement and the other Loan Documents are to be kept confidential and
are not to be reproduced in any manner whosoever for Persons other than the
parties hereto. Each Party agrees not to circumvent the legitimate interests of
the other party and to maintain this transaction in strict confidentiality. Each
party agrees to maintain the confidentiality of any trade secrets, techniques,
and contracts and contacts of the other party. Each party agrees not to engage
in unauthorized communications (i.e. telephone calls, written inquiries, etc.)
with the other party’s banks, insurers, contracting parties and
contacts.

    

    8.13       Consent
to Jurisdiction: Venue; Jury Trial Waiver.  Borrowers hereby
consents to the jurisdiction of the courts of the State of New York, as well as
to the jurisdiction of all courts from which an appeal may be taken from the
aforesaid courts, for the purpose of any suit, action or other proceeding
arising out of any of Borrowers' obligations under or with respect to this Loan
Agreement, and expressly waives any and all objections Borrowers may have as to
venue in any of such courts.  In addition, Borrowers consents to the
service of process by United States certified or registered mail, return receipt
request, addressed to Borrowers at the address provided
herein.  Borrowers also, to the extent permitted by law, waives trial
by jury in any action brought on or with respect to this Loan Agreement and
agrees that in the event this Loan Agreement shall be successfully enforced by
suit or otherwise, Borrowers will reimburse the holder or holders of the
Obligations, upon demand, for all reasonable expenses incurred in connection
therewith, including, without limitation, reasonable attorneys' fees and
expenses.

    

    IN WITNESS WHEREOF, the
parties hereto have caused this Loan Agreement to be duly executed and delivered
as of the day and year first above written.

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    
      
        
          
            
              	 
      	
                      Borrowers:

                    
	 
      	 
      
	 
      	
                         

                    
	 
      	
                      Mr.
      Dejun Zou

                    
	 
      	 
      
	 
      	
                         

                    
	 
      	
                      Ms.
      Jianping Qiu

                    
	 
      	 
      
	 
      	
                      Lender:

                    
	 
      	 
      
	
                      By:

                    	
                         

                    
	
                      For:

                    	
                      RINO
      International
Corporation

                    

            

          

        

      

    

    

    IT IS
SPECIFICALLY AGREED AND UNDERSTOOD THAT THE TRANSMITTAL OF THIS LOAN AGREEMENT
DOES NOT CONSTITUTE AN OFFER BY THE PROPOSED LENDER AND THAT THE PROPOSED LOAN
AGREEMENT SHALL NOT BE BINDING UPON THE PROPOSED LENDER UNLESS ACTUALLY SIGNED
BY THE LENDER. MOREOVER, IT IS SPECIFICALLY AGREED THAT THE ENCLOSED DOES NOT
REPRESENT A NOTE OR MEMORANDUM OF AGREEMENT UNTIL EXECUTED AND PERFORMED. THE
LENDER SHALL BE UNDER NO OBLIGATION TO PROCEED WITH THE CONSUMMATION OF THIS
TRANSACTION.

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    EXHIBIT
2.1

    

    SECURED
PROMISSORY NOTE

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    THESE
SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, OR THE SECURITIES LAWS OF ANY STATE AND MAY NOT BE SOLD OR OFFERED FOR
SALE IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES OR
THE DEBTOR SHALL HAVE RECEIVED AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO
THE DEBTOR, IN A GENERALLY ACCEPTABLE FORM, THAT REGISTRATION IS NOT REQUIRED
UNDER THE ACT OR UNLESS SOLD PURSUANT TO, AND IN ACCORDANCE WITH, RULE 144 OR
RULE 144A UNDER THE ACT OR OUTSIDE THE UNITED STATES IN ACCORDANCE WITH RULE 904
OF REGULATION S UNDER THE ACT AND IN COMPLIANCE WITH APPLICABLE LOCAL LAWS AND
REGULATIONS.

     

    SECURED
PROMISSORY NOTE

     

    $3,500,000.00

     

    Issue
Date:   March 31, 2010

     

    FOR VALUE
RECEIVED, Mr. Dejun Zou and Ms. Jianping Qiu (collectively referred to as the
"Debtor")
hereby promises to pay in accordance with the provisions hereof to the order of
RINO International Corporation, a Nevada corporation or its successors, assigns
and legal representatives (the "Holder"),
at 11 Youquan Road, Zhanqian Street, Jinzhou District, Dalian, China 116100, or
at such other location as the Holder may designate from time to time, the
aggregate principal sum of Three Million Five Hundred Thousand ($3,500,000.00)
Dollars, in lawful money of the United States of America, together with interest
thereon at a rate per annum equal to 5.25% (the "Interest
Rate"). This Note is issued pursuant to that certain Loan Agreement by
and between the Debtor and the Holder, and the Holder and this Note are subject
to the terms and entitled to the benefits of the Loan Agreement. The terms used
in this Note that are not defined herein, shall have the meaning as set forth in
the Loan Agreement.

     

    1.        
   Maturity.

     

    (a)           Unless
prepaid by the Debtor in accordance with Section 4 hereof, the Note shall mature
on May 10, 2010 (the “Maturity
Date”).  On the Maturity Date, unless otherwise prepaid in
accordance with the provisions hereof, all outstanding principal and any accrued
and unpaid interest due and owing on the Note shall be immediately paid by the
Debtor.

     

    (b)           Intentionally
deleted.

     

    2.       
    Calculation
and Payment of Interest.

     

    (a)           The
Note shall bear interest ("Interest")
at a rate equal to 5.25%  per annum on a 360-day year (the "Interest
Rate"). To the extent unpaid, Interest shall accrue on all outstanding
principal until all amounts owed under the Note shall be fully repaid and shall
be payable in full on the Maturity Date.

    
      
         

      

      
         

        
          
 

      

      
         

      

    

     

    (b)           Intentionally
deleted.

     

    (c)           All
payments to be made by the Debtor hereunder or pursuant to the Note shall be
made, without setoff or counterclaim, in lawful money of the United States or
the equivalence of Chinese Yuan (Renminbi) and in immediately available
funds.

     

    3.        
   Prepayment.

     

    (a)           Voluntary
Prepayment.  All or any portion of the Note (along with all
interest accrued and the Applicable Accrued Value) may be prepaid by the Debtor
on or after the fifth (5th)
business day upon giving notice to Holder (the "Prepayment
Date") in accordance with Section 16 of this Note of the Debtor's intent
to prepay the Note.

     

    (b)           Intentionally
deleted.

     

    4.    
       Covenants.  The
Debtor agrees that, so long as any amount payable under the Note as defined in
the Loan Agreement, remains unpaid, it will not without the prior written
consent of the Holder:

     

    (a)           Intentionally
deleted;

     

    (b)           create,
incur, assume or suffer to exist any lien, claim, pledge, charge, security
interest or encumbrance of any kind ("Liens")
on any asset or property secured by the Deed of Trust; or

     

    (c)           Intentionally
deleted.

     

    (d)           Notwithstanding
anything to the contrary in this Note, the Debtor can create, incur, guarantee,
issue, assume or in any manner become liable in respect of, any obligation,
secured or unsecured provided the proceeds of which are used to pay all
outstanding obligations to Holder (including principal and interest together
with costs and expenses, including, without limitation, reasonable fees, charges
and disbursements of counsel) in accordance with the provisions
herein.

     

    5.      
     Intentionally
Deleted.

     

    6.      
     Intentionally
Deleted.

    
      
         

      

      
         

        
          
 

      

      
         

      

    

     

    7.       
    Security.

     

    (a)           The
indebtedness evidenced by this Note and the obligations created hereby are
secured by a first priority lien on the Collateral pursuant to the Loan
Agreement  and the Deed of Trust executed in connection
herewith.  The Debtor represents and covenants that this grant of
security interest is, and shall remain while any indebtedness hereunder is
outstanding, senior in right to all other security interests of the Debtor with
regard to such assets and is not subordinated to any other security interest of
any other party.

     

    8.     
      Events
of Default.  Each of the following shall constitute an "Event
of Default" hereunder:

     

    (a)           The
Debtor shall fail to pay the principal amount of this Note, accrued interest
thereon when due and payable (whether at the Maturity Date, prepayment pursuant
to Section 4, upon acceleration or otherwise) and such failure shall continue
for a period of ten (10) business days, after delivery of written notice to the
Debtor of such failure;

     

    (b)           The
Debtor shall fail to pay any other amount under this Note when due and payable
(whether at the Maturity Date, prepayment pursuant to Section 4, upon
acceleration or otherwise) and such failure shall continue for a period of
fifteen (15) business days, after delivery of written notice to the Debtor of
such failure;

     

    (c)           There
shall have occurred and be continuing without cure for a period of not less than
twenty (20) business days after delivery of written notice to the Debtor a
material breach by the Debtor of any provision of this Note, the Deed of Trust,
or any other agreement of even date herewith between the Debtor and Holder, or
the mortgagor with regard to that certain mortgage of even date herewith
(collectively, the "Transaction
Documents");

     

    (d)           Any
representation or warranty made by the Debtor in the Transaction Documents shall
have been untrue or misleading in any material respect when made;

     

    (e)           Any
material covenant, agreement or obligation of the Debtor in any Transaction
Document shall be determined by a court of competent jurisdiction to be
unenforceable in any material respect;

     

    (f)           If
an Event of Default under the Deed of Trust of even date herewith shall occur
and any grace period provided for therein shall have expired;

     

    (g)           The
Deed of Trust shall cease at any time after its execution and delivery and for
any reason to create a valid and perfected first priority security interest in
and to the Collateral subject thereto or the validity or priority of such
security interest shall be contested by the Debtor or by any other
Person;

    
      
         

      

      
         

        
          
 

      

      
         

      

    

    (h)           If
Debtor shall make a general assignment for the benefit of creditors or consent
to the appointment of a receiver, liquidator, custodian, or similar official of
all or substantially all of their properties, or any such official is placed in
control of such properties, or Borrowers admits in writing their inability to
pay their debts as they mature, or the Borrowers shall commence any action or
proceeding or take advantage of or file under any federal or state insolvency
statute, including, without limitation, the United States Bankruptcy Code,
seeking to have an order for relief entered with respect to the Debtor or
seeking adjudication as a bankrupt or insolvent, or seeking reorganization,
arrangement, adjustment, liquidation, dissolution, or other relief with respect
to them or their debts.

     

    Upon the
occurrence of any Event of Default, the Holder may, at its option, declare all
amounts due hereunder to be due and payable immediately and, upon any such
declaration, the same shall become and be immediately due and payable. Upon the
occurrence of any Event of Default, the Holder may, in addition to declaring all
amounts due hereunder to be immediately due and payable, pursue any available
remedy, whether at law or in equity.  If an Event of Default occurs,
the Debtor shall pay to the Holder the reasonable attorneys' fees and
disbursements and all other reasonable out-of-pocket costs incurred by the
Holder in order to collect amounts due and owing under this Note or otherwise to
enforce the Holder's rights and remedies hereunder.

     

    9.     
      Waiver
of Presentment, Demand and Dishonor.  The Debtor hereby waives
presentment for payment, protest, demand, notice of protest, notice of
non-payment and diligence with respect to this Note, and waives and renounces
all rights to the benefit of any statute of limitations or any moratorium,
appraisement, exemption or homestead now provided or that hereafter may be
provided by any federal or applicable state statute, including but not limited
to exemptions provided by or allowed under the Federal Bankruptcy Code, both as
to itself and as to all of its property, whether real or personal, against the
enforcement and collection of the obligations evidenced by this Note and any and
all extensions, renewals and modifications hereof.

     

    No
failure on the part of the Holder hereof to exercise any right or remedy
hereunder with respect to the Debtor, whether before or after the happening of
an Event of Default, shall constitute a waiver of any future Event of Default or
of any other Event of Default.  No failure to accelerate the debt of
the Debtor evidenced hereby by reason of an Event of Default or indulgence
granted from time to time shall be construed to be a waiver of the right to
insist upon prompt payment thereafter; or shall be deemed to be a novation of
this Note or a reinstatement of such debt evidenced hereby or a waiver of such
right of acceleration or any other right, or be construed so as to preclude the
exercise of any right the Holder may have, whether by the laws of the state
governing this Note, by agreement or otherwise; and the Debtor hereby expressly
waives the benefit of any statute or rule of law or equity that would produce a
result contrary to or in conflict with the foregoing.

     

    10.          Intentionally
Deleted.

    
      
         

      

      
         

        
          
 

      

      
         

      

    

    11.          Enforcement
Costs.  In the case of any Event of Default under this Note,
the Debtor shall pay to Holder such reasonable amounts as shall be sufficient to
cover the cost and expense of such Holder due to such Event of Default,
including all reasonable attorneys fees and expenses and all reasonable costs of
collection and enforcement.

     

    12.          Amendment;
Waiver.  Any term of this Note may be amended or waived only
upon the written consent of the Debtor and the consent of the
Holder.  No such waiver or consent on any one instance shall be
construed to be a continuing waiver or a waiver in any other instance unless it
expressly so provides.

     

    13.          Transfers.  This
Note has not been and is not being registered under the provisions of the 1933
Act or any state securities laws and this Note may not be transferred prior to
the end of the holding period applicable to sales under Rule 144 unless in
accordance with applicable law and unless (1) the transferee is an “accredited
investor” (as defined in Regulation D under the 1933 Act) and (2) the Holder
shall have delivered to the Debtor an opinion of counsel, reasonably
satisfactory in form, scope and substance to the Debtor, to the effect that this
Note may be sold or transferred without registration under the 1933 Act. Prior
to any such transfer, such transferee shall have represented in writing to the
Debtor that such transferee has requested and received from the Debtor all
information relating to the business, properties, operations, condition
(financial or other), results of operations or prospects of the Debtor and the
Subsidiaries deemed relevant by such transferee; that such transferee has been
afforded the opportunity to ask questions of the Debtor concerning the foregoing
and has had the opportunity to obtain and review the reports and other
information concerning the Debtor which at the time of such transfer have been
filed by the Debtor with the SEC pursuant to the 1934 Act.

     

    14.          Governing
Law; Consent to Jurisdiction.    The validity,
construction and interpretation of this Note will be governed, and construed in
accordance with, the laws of the State of New York, without regard to the
principles of conflict of laws.  EACH
OF THE DEBTORS AND, BY ITS ACCEPTANCE HEREOF, THE HOLDER HEREBY WAIVES ANY RIGHT
TO REQUEST A TRIAL BY JURY IN ANY LITIGATION WITH RESPECT TO THIS NOTE AND
REPRESENTS THAT COUNSEL HAS BEEN CONSULTED SPECIFICALLY AS TO THIS
WAIVER.

     

    Each of
the Debtor and, by its acceptance of this Note, the Holder irrevocably submits
to the exclusive jurisdiction of any state or federal court located in the State
of New York for the purpose of any suit, action, proceeding or judgment relating
to or arising out of this Note and the transactions contemplated
hereby.  Each of the Debtor and, by its acceptance of this Note, the
Holder irrevocably consents to the jurisdiction of any such court in any such
suit, action or proceeding and to the laying of venue in such
court.  Each of the Debtor and, by its acceptance of this Note, the
Holder irrevocably waives any objection to the laying of venue of any such suit,
action or proceeding brought in such courts and irrevocably waives any claim
that any such suit, action or proceeding brought in any such court has been
brought in an inconvenient forum.

    
      
         

      

      
         

        
          
 

      

      
         

      

    

    15.          Notices.  All
notices required or permitted hereunder shall be in writing and shall be deemed
effectively given: (a) upon personal delivery to the party to be notified;
(b) five days after having been sent by registered or certified mail,
return receipt requested, postage prepaid; (c) if transmitted by facsimile,
on the date of transmission with receipt of a transmittal confirmation; or (d)
the next business day after deposit with a nationally recognized overnight
courier, specifying next day delivery, with written verification of
receipt.  All communications shall be sent to the Debtor or the Holder
at the address below or at such address as either party hereto may designate by
10 days' advance written notice to the other party hereto.

     

    Mr.
Dejun Zou and Ms. Jianping Qiu 

    11
Youquan Road, Zhanqian Street, 

    Jinzhou
District, Dalian, China 116100

     

    With a
Copy to:

    Guzov
Ofsink, LLC

    600
Madison Avenue, 14th Floor

    New York,
New York 10022

    Attention:  Darren
Ofsink

     

    RINO
International Corporation 

    11
Youquan Road, Zhanqian Street, 

    Jinzhou
District, Dalian, China 116100

     

    With a
Copy to: 

    Guzov
Ofsink, LLC 

    600
Madison Avenue, 14th Floor 

    New York,
New York 10022 

    Attention:  Darren
Ofsink

     

    17.          Assignability.
This Note shall be binding upon the Debtor and its successors and assigns, and
shall inure to the benefit of and be binding upon the Holder and its successors
and permitted assigns.

     

     [Signature
Page to Secured Promissory Note]

    
      
         

      

      
         

        
          
 

      

      
         

      

    

     

    Dated:  March
31, 2010

     

    
      
        	
                Dejun
      Zou

              
	 
      
	
                   

              
	 
      
	
                Jianping
      Qiu

              
	 
      
	
                   

              

      

    

    
      
         

      

      
         

        
          
 

      

      
         

      

    

    EXHIBIT
4.1

     

    DEED
OF TRUST

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