Document:

C3
      Capital, Limited 

     

    

    And

     

    

    Changchun
      Master Industry Co., Ltd 

     

     

    In
      matter of

     

     

    Yili
      Master Carborundum Production Co., Ltd.

     

    

    Enter
      Into

     

    Equity
      Interest Transfer Contract

     

     

     

     

     

    
 

    July,
      2008

    

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    Contents

     

     

    
      	
              Chapter
                I

            	
              Definitions
                of the Contract

            	
              2

            
	 	 	 
	
              Chapter
                II

            	
              Object
                Equity Interest

            	
              4

            
	 	 	 
	
              Chapter
                III

            	Price
              of Equity Interest Transfer	
              4

            
	 	 	 
	
              Chapter
                IV

            	
              Capital
                Increase

            	
              6

            
	 	 	 
	
              Chapter
                V

            	
              Approval
                and Checking

            	
              7

            
	 	 	 
	
              Chapter
                VI

            	Assumption
              of Debts of Object Company	
              8

            
	 	 	 
	
              Chapter
                VII

            	Dispositon
              of Credits of the Object Company	
              9

            
	 	 	 
	
              Chapter
                VIII

            	Employees	
              10

            
	 	 	 
	
              Chapter
                IX

            	Rights,
              Obligations and Guarantees of Party B	
              10

            
	 	 	 
	
              Chapter
                X

            	
              Rights,
                Obligations and Guarantees of Party A

            	
              12

            
	 	 	 
	
              Chapter
                XI

            	Performance,
              Wind-up and Termination	
              12

            
	 	 	 
	
              Chapter
                XII

            	Representations
              and Statements of Party B	
              13

            
	 	 	 
	
              Chapter
                XIII

            	Representations
              and Statements of Party A	
              16

            
	 	 	 
	
              Chapter
                XIV

            	Confidentiality	
              17

            
	 	 	 
	
              Chapter
                XV

            	Liability
              for Breach of Contract	
              17

            
	 	 	 
	
              Chapter
                XVI

            	Force
              Majeure	
              19

            
	 	 	 
	
              Chapter
                XVII

            	
              Disputes
                Settlement

            	
              20

            
	 	 	 
	
              Chapter
                XVIII

            	
              Applicable
                Law

            	
              20

            
	 	 	 
	
              Chapter
                XIX

            	
              Miscellaneous

            	
              20

            

    

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    Equity
      Interest Transfer Contract

     

     

    The
      equity interest transfer contract (hereinafter referred to as “Contract”) is
      made and entered into as the date of July
      31st
      , 2008
      at
      Beijing P. R. China by and among:

    

    Party
      A: C3
      Capital, Limited,
      a
      company registered and established under the laws of the BVI Business Companies
      Act 2004 and incorporated in the British Virgin Islands on 25th
      day of
      October, 2007, BVI Company Number: 1439706;

    

    Party
      B: Changchun
      Master Industry Co., Ltd,
      a
      company registered and incorporated under the laws of People’s Republic of
      China, registered No. 220107020002801ôregistered
      address: Suite 901, 9th
      Floor,
      High-technology Building, Qian
      Jing
      Street No.3003, high and new technology industrial development zones, Changchun
      City, and its legal representative is Gao Zhigang. 

    

    WHEREAS:

     

    	1.  	
            Yili
              Master Carborundum Production Co. Ltd (the “Object Company”) has
              registered with Administration of Industry and Commerce for Yining
              County,
              Yili Kazak Autonomous Prefecture, XinJiang Uygur Autonomous Region,
              registered No. 65402100000504. The Object Company has constructed and
              is
              now operating 35,000 tonnes Carborundum Metallurgy Project of YiLi
              Master
              (the “Carborundum Project”). At present, a set of 5,500 kilovolt-ampere
              carborundum metallurgy and production system, corollary producing
              equipment and infrastructure has been built up, (hereinafter referred
              to
              as “Project Phase I”). Phase II of the Carborundum Project plans to make
              the production capacity of carborundum metallurgy project rise to 15,000
              tons per year. Phase III of the Project plans to make the production
              capacity of carborundum metallurgy project rise to 35,000 tons per
              yearôand
              build up a plant which has the capacity to process 5,000 tons granulation
              and micro mist of carborundum per year.

          

     

    
      
         

      

      
        1

        
          

        

      

      
         

      

       

    

    	2.  	
            The
              registered capital for the Object Company is RMB 3.8 million Yuan which
              is
              invested solely by Party B. Party B plans to transfer to Party A all
              its
              holding shares of the Object Company (“the Object Equity Interest”). Party
              A intends to purchase the equity
              interest.

          

     

    	 	
            According
              to the principle of equality and mutual benefit and through friendly
              consultation, Party A and Party B agree on the following terms and
              conditions, in accordance with the Contract Law of the People’s Republic
              of China, and other applicable Chinese laws and regulations. The parties
              will abide by and fulfill the Contract in good
              faith.

          

     

    

    Chapter
      I      Definitions
      of the Contract

     

     

    Article
      1  Definition
      

     

    The
      terms
      hereinafter used in the Contract shall have the meanings set forth as follows:
      

    

    	1.1  	
            “Industrial
              and commercial administration”
              (AIC) means the industrial and commercial administration of People’s
              Republic of China which performs the job of business registration and
              issues business license.

          

     

    	1.2  	
            “Department
              of Commerce”
              means Ministry of Commerce of People’s Republic of China, or so far as the
              examination and approval is concerned, the local department of commerce
              with competent power of examination and
              approval.

          

     

    	1.3  	
            “Foreign
              Exchange Administration”
              means the State Administration of Foreign Exchange and local foreign
              exchange administrations at all levels.

          

     

    	1.4  	
            “Examination
              and Approval Authority”
              means the relevant Chinese governmental departments having authority
              defined by relevant Chinese laws, regulations, regulatory rules and
              policies to examine and approve the Contract, the equity interest transfer
              and the capital increase, including but not limited to Ministry of
              Commerce (MOC),

          

    

    
      
         

      

      
        2

        
          

        

      

      
         

      

    

    

    	 	
            National
              Development and Reform Commission (NDRC), State Administration of Foreign
              Exchange (SAFE), Industrial and Commercial Administration (AIC),
              etc.

          

     

    	1.5  	
            “Capital
              Increase”
              means, after Party A accepts the equity interests of the Object Company
              from Party B, Party A puts additional registration capital into the
              Object
              company.

          

     

    	1.6  	
            “Encumbrance”
              shall mean any mortgage, pledge, other security interest, assignment,
              lien, charge, option, trust interest, pre-emptive right, lease and
              any
              other restrictions or conditions.

          

     

    	1.7  	
            “Closing
              date”
              means the date on which the Object Equity Interest Transfer has performed
              the formality of alteration registration with the industrial and
              commercial administration, subject to the date on which the industrial
              and
              commercial administration has performed examination and approval procedure
              and issued new business license to the Object
              Company.

          

     

    	1.8  	
            “New
              Business License” means
              the new business license issued by the industrial and commercial
              administration to the Object Company after completion of the Equity
              Interest Transfer.

          

     

    	1.9  	
            “Disclosed
              Information” means
              the related materials, explanation, statement and other information
              disclosed or made by Party B to Party A or its designated intermediaries
              during Party A’s due diligence investigation of the object company, the
              Carborundum project and the object equity interest; or the information
              disclosed by the Party B to Party A in relation to the object company,
              the
              Carborundum project and the object equity
              interest.

          

     

    	1.10  	
            “Employees”
              mean all personnel who work in the Object Company and have employment
              relations with or de facto employment relations with the Object Company
              by
              the date the contract is executed.

          

     

    	1.11  	
            “Force
              Majeure”
              means the special events such as earthquake, typhoon, flood disaster,
              fire
              disaster, war, political disturbance, etc., or the events defined by
              Chinese laws and regulations as Force Majeure.

          

    

    
      
         

      

      
        3

        
          

        

      

      
         

      

       

    

    	1.12  	
            “PRC”
              or
              “China”
              means the People’s Republic of China, and insofar as the Contract is
              concerned, shall exclude Hong Kong, Taiwan and
              Macau.

          

     

    	1.13  	
            “Tax”
              means the state or local taxes defined by Chinese laws and regulations,
              including relevant interest, fine or any other burden imposed by any
              government authorities in relation to such
              taxes.

          

     

    
      Chapter
        II   
        Object
        Equity Interest

      
        	
                Article
                  2

                 

              	
                According
                  to the Contract, Party B shall sell to Party A their respective
                  equity
                  interests of the Object Company and all the related rights and
                  interests
                  in a way free of any encumbrance. Party A shall pay the equity
                  interest
                  transfer price.

              
	 	 
	
                Article
                  3

              	
                After
                  the transfer of the equity interest is completed as per the Contract,
                  Party A will hold 100% equity interest of the Object
                  Company.

              

      

    

     

    Chapter
      III     Price
      of Equity Interest Transfer

      
        	
                Article
                  4

                 

              	
                The
                  price of the equity interest transfer will be based on the evaluation
                  of
                  the object equity interest by the assets evaluation agency. The
                  two
                  parties confirm that the price of the equity interest transfer
                  is US
                  dollar equal to RMB 3,800,000.00 Yuan, reading RMB three million
                  eight
                  hundred thousand Yuan (equity interest transfer price).

              
	 	 
	
                Article
                  5

              	
                Each
                  payment of the equity interest transfer shall be based upon satisfaction
                  of the following conditions: 

              

      

    

    

    	5.1  	
            The
              equity interest transfer and the Contract have been examined and approved
              by all examination and approval authorities. Party A and Party B have
              duly
              opened bank accounts which are used to pay and
              receive the price of the equity
              interest.

          

    

    
      
         

      

      
        4

        
          

        

      

      
         

      

       

    

    	5.2  	
            The
              flaws, defects of the Object Company discovered in the course of the
              due
              diligence investigation and in the course of the handover and operation,
              have all been solved in a way accepted by Party A or have been provided
              guarantee as per requirement of Party A.

          

     

    	5.3  	
            The
              representations and statements made by Party B in the Contract are
              all
              true and correct.

          

    

    Article
      6 Payment of the equity interest transfer price

    

    	6.1  	
            First
              payment

          

     

    	 	
            Within
              3 days after the competent department of commerce has approved the
              equity
              interest transfer and the competent authority has issued new approval
              certificate of foreign invested enterprise to the Object Company as
              per
              the said approval, Party A shall pay 50% (first payment) of the equity
              interest transfer price to Party B.

          

     

    	6.2  	
            Second
              payment

          

     

    	 	
            Within
              3 days after the industrial and commercial alteration registration
              procedure has been duly performed and the Object Company has obtained
              new
              business license, Party A shall pay 40% (second payment) of the equity
              interest transfer price to Party B.

          

     

    	6.3  	
            Arrears
              of payment

          

     

    	 	
            The
              arrears of equity interest transfer price are used as Party B’s deposit.
              After
              the obligations under Article 27, 28 have been fulfilled and within
              3 days
              after Party A confirms in writing that the Carborundum Project operates
              legally and no significant issue exists in the facilities and equipments,
              Party A shall pay the arrears of the equity interest transfer price
              to
              Party B.

          

    

      
        	
                Article
                  7

              	
                The
                  parties to the Contract shall bear their respective payable taxes
                  arising
                  from the revenue or activity under the Contract according to the
                  relevant
                  laws, administrative regulations, rules and normative documents.
                  

              

      

       

      
        
           

        

        
          5

          
            

          

        

        
           

        

      

       

      
        	 	 
	
                Article
                  8

              	
                Party
                  B shall issue formal and valid receipt and invoice to Party A immediately
                  after receiving each equity interest transfer payment from Party
                  A. Within
                  5 (five) days after receiving the equity interest transfer payment,
                  Party
                  B shall go to the local foreign exchange administration and perform
                  the
                  registration for receiving foreign exchange from foreign investor
                  for the
                  Equity Interest Transfer, a corresponding certificate procured
                  by Party B
                  shall be provide to Party A.

              
	
                 

                Chapter
                  IV Capital Increase

                 

              
	 	 
	
                Article
                  9

              	
                Purpose
                  of the capital increase

              
	 	 
	
                 

              	
                Up
                  until the execution of this Contract, the Carborundum Project Phase
                  I
                  under the Object Company has finished construction and was put
                  into use on
                  January 16th, 2006. After closing date, Party A commits the capital
                  increase to the Object Company, in order to invest in the construction
                  of
                  continual project for the Carborundum Project.

              
	 	 
	
                Article
                  10

              	
                Scheme
                  of increase

              
	 	 
	
                 

              	
                The
                  first capital increase shall be conducted within 21 days upon the
                  closing
                  date (in case that the preconditions stipulated by Article 11 are
                  all met
                  after the closing date, the date on which such preconditions are
                  all met
                  will govern instead of the closing date) and the amount is US$
                  8.00
                  Million. The time and amount of capital increase later on by Party
                  A shall
                  be fixed depending on the construction process of the continual
                  project
                  and fund demand.

              

      

    

     

    
      	Article
              11	
              The
                preconditions for the capital increase

            

    

    

    	11.1  	
            Party
              B has already performed all the obligations stipulated by this contract
              and the statements and guarantees made by Party B in this contract
              are all
              true and correct.

          

    

    
      
         

      

      
        6

        
          

        

      

      
         

      

    

    

    	11.2  	
            The
              approval procedures including the project approval, environmental
              protection, construction and planning required for the construction
              and
              operation of the continual project of the first phase Carborundum Project
              and the follow-up projects have been performed and the follow-up project
              construction can be started legally.

          

     

    	11.3  	
            The
              debts of the Object Company before the closing date have been fully
              paid
              off by Party B or Party B has provided adequate guarantee for the debt
              as
              mentioned before.

          

    

    Chapter
      V    Approval
      and Checking

     

     

    
      	
              Article
                12

            	
              Upon
                the Contract coming into force, Party A and Party B shall cooperate
                and immediately perform procedures relating to the industrial and
                commercial alteration registration of the object equity interest
                transfer.

            
	 	
            
	
              Article
                13

            	
              Checking

            

    

    

    	13.1  	
            Party
              B commits that, after the execution of this Contract, all assets or
              any
              documents (including electronic data and written materials) of the
              Object
              Company, shall be kept in full and safe condition and checking procedure
              shall be conducted.

          

     

    	13.2  	
            Upon
              the Contract coming into force, Party A and Party B shall form a checking
              team and work together to do the checking work relating to the Object
              Company.

          

     

    	13.3  	
            The
              checking work shall include but not limited
              to:

          

    

    	(1)  	
            All
              the official seals, financial seals and contract seals and other seals
              of
              the Object Company;

          

     

    	(2)  	
            All
              certificates and licenses of the Object
              Company;

          

     

    	(3)  	
            The
              assets of the Object Company;

          

    

    
      
         

      

      
        7

        
          

        

      

      
         

      

    

    

    	(4)  	
            The
              financial books and the accounting records of the Object
              Company;

          

     

    	(5)  	
            All
              documents on the archives of the Carborundum Project (including but
              not
              limited to the project application, feasibility study report, preliminary
              design report, engineering drawings, equipment drawings, all competent
              authorities’ replies, permits, records or acceptance documents relating to
              the Carborundum Project);

          

     

    	(6)  	
            All
              contracts for which the Object Company is one party (including but
              not
              limited to Engineering Construction Contract, Equipment Purchase Contract
              and Installation Contract, Electricity Provision contract, Raw Materials
              Purchase Contract, Product Sales Contract and Loan Contracts)
              ;

          

     

    	(7)  	
            Other
              check and handover procedures reasonably required by Party
              A.

          

    

    	13.4  	
            The
              check and handover work shall be completed within seven days after
              the
              Contract is effective. The completion of the check and handover work
              shall
              be confirmed by the representatives of both parties in
              writing.

          

     

    	13.5  	
            After
              the completion of the handover, the parties shall draw up detailed
              list of
              the handover items which shall be confirmed by representatives of both
              parties.

          

     

     

    Chapter
      VI Assumption of Debts of Object Company

    
       

       

      
        	
                Article
                  14

                 

              	
                Party
                  B shall disclose to Party A all loans of the Object Company before
                  the
                  execution date of this Contract (including tax payable and administration
                  cost). Party B shall provide Party A with detailed list of the
                  foregoing
                  debts (the list shall contain the amount of each debt, the debtor,
                  the
                  fulfillment period, the guarantee condition and the names of the
                  documents
                  related to the debts, etc.). 

              
	
                 

              	
                 

              
	
                Article
                  15

                 

              	
                All
                  debts owed by the Object Company before the closing date shall
                  be borne by
                  Party B. Party B shall perform the payment obligation according
                  to the
                  deadline and the amount as agreed in the underlying documents of
                  the
                  paid-off debts. The payment conduct shall be legal and
                  valid.

              

      

       

      
        
           

        

        
          8

          
            

          

        

        
           

        

      

      
        	
                Article
                  16

                 

              	
                The
                  debts owed by the Object Company before the closing date and undisclosed
                  by Party B at the time of executing the Contract shall be borne
                  by Party
                  B. If Party A or the Object Company detects that the undisclosed
                  debts do
                  exist, Party A or the Object Company is entitled to ask Party B
                  to
                  immediately pay off the debts or dispose of the debts. 

              
	
                 

              	
                 

              
	
                Article
                  17

              	
                In
                  respect of the debts owed by the Object Company before the closing
                  date
                  and agreed to be borne by Party B according to Article 15 and Article
                  16
                  of the Contract, if Party B does not pay off the debts or Party
                  B does not
                  bear the debts according to the Contract, thus causing a result
                  that the
                  related creditors make claims against the Object Company, the Object
                  Company or Party A is entitled to seek compensation from Party
                  B on the
                  basis of this Contract. The scope of compensation includes the
                  debts
                  itself and all costs and expenses incurred by the Object Company
                  or Party
                  A in disposing of and settling the debts, including but not limited
                  to
                  litigation cost, arbitration fee, enforcement fee, attorney’s fee and
                  traveling costs, etc.

              

      

       

      Chapter
        VII Disposition
        of Credits of the Object Company

       

       

      
        	
                Article
                  18

              	
                Except
                  the Contract provides otherwise, all credits of the Object Company
                  before
                  the closing date shall be owned by Party B. 

              
	 	 
	
                Article
                  19

              	
                Party
                  B shall complete the work of disposing of the credits of the Object
                  Company as per Article 18 of the Contract in timely manner. The
                  disposing
                  work performed by Party B shall be in compliance with Company Law
                  of
                  People’s Republic of China and the related provisions of the Articles
                  of
                  Association of the Object Company. 

              
	 	 
	
                Article
                  20

              	
                When
                  Party B disposes of the credits of the Object Company before the
                  closing
                  date as per the Contract and the disposing work is performed after
                  the
                  closing date, Party A shall provide necessary assistance without
                  contravening relevant laws and regulations.

              

      

       

      
        
           

        

        
          9

          
            

          

        

        
           

        

      

      Chapter
        VIII Employees

       

       

      
        	
                Article
                  21

              	
                Within
                  three days after the contract comes into force, Party B shall provide
                  Party A with detailed list of employees and managers of the Object
                  Company
                  before the closing date (including gender, age, deadline of the
                  employment
                  contracts, remuneration level, position, code for employment contracts
                  and
                  etc).

              

      

       

      Chapter
        IX Rights,
        Obligations and Guarantees of Party B

       

       

      In
        addition to Party B’ rights, obligations and guarantees specified by other
        clauses of the Contract, Party B shall enjoy rights, bear obligations and
        provide guarantees as per the following provisions of this chapter:

       

       

      
        	
                Article
                  22 

              	
                Except
                  as otherwise provided by this Contract,
                  upon execution of the Contract, no act shall be performed which
                  leads to
                  or may lead to loss or damage of the assets, rights and interests
                  of the
                  Object Company. 

              
	 	 
	
                Article
                  23

              	
                Upon
                  execution of the Contract, Party B shall not pledge, transfer or
                  put into
                  trusteeship its holding equity interest of the Object Company or
                  do any
                  other act which may affect Party A’s procurement of the object equity
                  interest.

              
	 	 
	
                Article
                  24

              	
                Upon
                  execution of the Contract, Party B guarantees that: it will operate
                  and
                  manage the Object Company in normal matter with duty of care of
                  a
                  kindhearted administrator, after the execution of the Contract,
                  including
                  but not limited to: (1) not to change the documents for establishing
                  the
                  Object Company; (2) not to change the financial policies of the
                  Object
                  Company; (3)on disposing of the assets, the credits and debts and
                  other
                  rights and obligations of the Object Company, Party B shall procure
                  advance approval from Party A.

              

      

       

      
        
           

        

        
          10

          
            

          

        

        
           

        

      

      
        	 	 
	
                Article
                  25

              	
                Party
                  B shall assist Party A to complete the examination, approval and
                  filing
                  procedures for the equity interest transfer.

              
	 	 
	
                Article
                  26

              	
                Party
                  B shall timely conduct the checking working specified in Chapter
                  Five of
                  the Contract. 

              
	 	 
	
                Article
                  27

              	
                Within
                  42 days upon the full payment of the first capital increase stipulated
                  in
                  Article10, Party B shall perform the procedure relating to land
                  use for
                  Carborundum Project for the Object Company and obtained the “certificate
                  for stated-owned land use right”.

              
	 	 
	
                Article
                  28

              	
                Within
                  six months upon the full payment of the first capital increase
                  stipulated
                  in Article 10, Party
                  B shall conduct the rights registration procedure for real estate
                  including the office premises, factory buildings and other buildings,
                  perform and complete
                  the procedures of planning permit for construction land, planning
                  permit
                  for construction project, and other registration procedure for
                  real
                  estateåParty
                  B shall conduct and complete the overall completion acceptance
                  for the
                  Carborundum Project Phase I within 6 months after the increased
                  capital is
                  paid.

              
	 	 
	
                Article
                  29

              	
                Party
                  B guarantee that, all losses (including the administrative liability)
                  suffered by the Object Company from flaws in the project approval,
                  land,
                  engineering, design, machine and equipment, installation and operation,
                  enviromental protection, completion acceptance etc., will be compensated
                  by Party B if the flaws are confirmed to be incurred or exist before
                  the
                  Contract is executed. 

              
	 	 
	
                Article
                  30

              	
                Party
                  B shall provide Party A with necessary assistance for Party A to
                  perform
                  its obligations or enjoy rights under this Contract.

              
	 	 
	
                Article
                  31

              	
                Party
                  B shall give timely written notice to Party A when Party B is in
                  knowledge
                  of any situation which may lead to failure in fulfilling all or
                  any part
                  of the Contract.

              
	 	 
	
                Article
                  32

              	
                Party
                  B are entitled to receive the equity interest transfer price as
                  per the
                  Contract.

              

      

       

      
        
           

        

        
          11

          
            

          

        

        
           

        

      

      Chapter
        X
Rights,
        Obligations and Guarantees of Party A

       

       

      In
        addition to Party A’s rights, obligations and guarantees specified by other
        clauses of the Contract, Party A shall enjoy rights, bear obligations and
        provide guarantees in accordance with the following provisions:

       

      
        	
                Article
                  33

              	
                Party
                  A shall assist Party B to perform all approval procedures in relation
                  to
                  the equity interest transfer and commit to provide all necessary
                  cooperation.

              
	
                 

                Article
                  34

              	
                 

                Party
                  A shall assist Party B to perform all industrial and commercial
                  registration alteration procedures in relation to the equity interest
                  transfer and promise to provide all necessary
                  cooperation.

              
	
                 

                Article
                  35

              	
                 

                Party
                  A shall pay the equity interest transfer price to Party B as per
                  the
                  Contract and shall increase the registration capital of the Object
                  Company
                  as per the Contract in order to ensure the start of construction
                  for the
                  Carborundum Project Phase II.

              
	
                 

                Article
                  36

              	
                 

                Party
                  A shall give necessary cooperation to Party B when Party B perform
                  their
                  obligations under the Contract or exercise their rights under the
                  Contract.

              
	
                 

                Article
                  37

                 

              	
                 

                Party
                  A shall give timely written notice to Party B when Party A is in
                  knowledge
                  of any situation which may lead to failure in fulfilling all or
                  any part
                  of the Contract.

              

      

       

      Chapter
        XI Performance,
        Wind-up and Termination

       

       

      
        	
                Article
                  38

              	
                The
                  parties shall perform their contractual obligations fully and completely
                  as per the provisions of the Contract.

              

      

       

      
        
           

        

        
          12

          
            

          

        

        
           

        

      

      
        	
                Article
                  39

              	
                Party
                  B and Party A shall work well together, give mutual cooperation,
                  prepare
                  all necessary application documents and complete all procedures
                  relating
                  to the equity interest transfer under the Contract, including but
                  not
                  limited to examination and approval, record-keeping, industrial
                  and
                  commercial registration. The costs and expenses incurred therefrom
                  shall
                  be borne evenly among the parties.

              
	
                 

                Article
                  40

                 

              	
                 

                If
                  there are any undisclosed facts or circumstances relating to the
                  Object
                  Company before the Contract is executed, which have material and
                  adverse
                  impact on the legal and normal operation of the Object Company
                  after the
                  closing date, Party A is entitled to terminate the Contract.

                 

              
	
                Article
                  41

              	
                If
                  Party A does not pay the equity transfer price or does not pay
                  the price
                  of increased capital according this Contract, resulting in the
                  Project
                  Phase II construction unrealizable, Party B has the right to terminate
                  this Contract.

              
	
                 

                Article
                  42

              	
                 

                If
                  the abiding party terminates the Contract as per Article 40 and
                  Article 41
                  of the Contract, it shall give written termination notice to the
                  breaching
                  party. The breaching party shall bear the liability of breach a
                  contract
                  as per the Contract.

              
	
                 

                Article
                  43

              	
                 

                If
                  the Contract and the equity interest transfer fail to be approved
                  by the
                  examination and approval authority and such failure is not due
                  to Party A
                  or Party B, the Contract shall be automatically terminated and
                  no parties
                  to the Contract shall bear breach of contract
                  liability.

              

      

       

      Chapter
        XII Representations
        and Statements of Party B

       

       

      As
        the
        substantial basis for Party A to execute the Contract, Party B represent
        and
        state that: 

       

      
        
           

        

        
          13

          
            

          

        

        
           

        

         

      

      
        	
                Article
                  44

              	
                Party
                  B has full civil right capability and capacity for civil conduct
                  to
                  execute and fulfil the Contract and Party B has procured due authorization
                  to execute and fulfil the Contract.

              
	
                 

                Article
                  45

              	
                 

                After
                  the Contract is effective, the Contract is legally binding upon
                  Party B
                  and is enforceable against Party B under relevant Chinese laws
                  of
                  bankruptcy, liquidation, reorganization, moratorium and other laws
                  relating to the creditor’s rights and remedies.

              
	
                 

                Article
                  46

              	
                 

                The
                  registered capital of the Object Company has been fully paid in
                  as per
                  related Chinese laws. The Object Company is a legal person duly
                  incorporated and validly existing under Chinese laws. The Object
                  Company
                  legally owns the Carborundum Project and has procured business
                  license,
                  permit, registration and approval, which are legal and have not
                  been
                  violated.

              
	
                 

                Article
                  47

              	
                 

                The
                  equity interest to be transferred by Party B to Party A does not
                  bear any
                  encumbrance preventing the transfer to Party A.

              
	
                 

                Article
                  48

              	
                 

                The
                  execution, closing and fulfilment of the Contract by Party B, will
                  not (1)
                  violate any articles of association of the Object Company; (2)
                  cause the
                  Object Company, or Party B to violate any agreements, covenants,
                  commitments or other documents; (3) violate any laws, administrative
                  regulations, rules, normative documents, administrative replies
                  or any
                  judgments, awards, verdicts, orders or decrees, where the violation
                  will
                  have material adverse impact on the business, operation, assets
                  or
                  financial condition of the Object Company or Party B, or (4) result
                  in the
                  creation of (or the obligation to create) any encumbrance or restriction
                  of any kind on any properties or equity interests of the Object
                  Company.
                  

              
	
                 

                Article
                  49

              	
                 

                Except
                  the disclosed information, there is no other circumstance affecting
                  the
                  legality and validity of the equity interest transfer and there
                  is no
                  circumstance affecting the legal interest of the Object Company.
                  The
                  copies of the materials provided by Party B or the Object Company
                  to Party
                  A or Party A appointed professional agencies are consistent with
                  the
                  original copies and the original copies are truly existent, legal
                  and
                  valid. There are no other credits, debts, restrictive rights, potential
                  disputes, defects or flaws of the assets (including design and
                  building
                  defects or flaws) of the Object Company which are undisclosed to
                  Party
                  A.

              

      

       

      
        
           

        

        
          14

          
            

          

        

        
           

        

      

      
        	
                Article
                  50

              	
                Except
                  the information disclosed by Party B, the assets (construction
                  projects,
                  machines and equipment) of Carborundum Project are in good standing
                  and
                  have no material defects. They are in good operational condition
                  and fit
                  well the purpose of their design, construction and manufacture.
                  

              
	
                 

                Article
                  51

              	
                 

                The
                  Object Company has full ownership of the assets under its name.
                  The assets
                  are free of any encumbrance, mortgage, pledge or liens.

              
	
                 

                Article
                  52

              	
                 

                By
                  the date the Contract is executed, the Object Company does not
                  have any
                  pending litigation, arbitration, administrative penalty nor does
                  the
                  Object Company have any fact or issue which may lead to a
                  dispute.

              
	
                 

                Article
                  53

              	
                 

                The
                  Object Company is in compliance with requirements of all Chinese
                  laws in
                  respect of environment protection, health and safety and does not
                  have any
                  harmful act which will entitle a third party to file a claim against
                  the
                  Object Company, demanding removal of the harm or obstacle or compensation
                  for its loss.

              
	
                 

                Article
                  54

              	
                 

                The
                  Object Company has legally completed tax registration and has legally
                  and
                  sufficiently fulfilled its tax payment obligations before the closing
                  date. The Object Company does not have any pending tax claim and
                  is not
                  threatened by any auditing and investigation. 

              
	
                 

                Article
                  55

              	
                 

                The
                  Object Company before the closing date does not have any outstanding
                  salaries, remuneration, housing accumulation fund, social insurance,
                  employment compensation, employment injury compensation, nor does
                  the
                  Object Company have any labor disputes or potential issue which
                  may lead
                  to labor disputes. 

              

      

       

      
        
           

        

        
          15

          
            

          

        

        
           

        

      

      
        	
                 

                Article
                  56

              	
                 

                Regarding
                  the financial statement of the Object Company up to May 31st ,
                  2008, the
                  statement is: (a) true, accurate and complete; (b) consistent with
                  the
                  accounting books of the Object Company;(c) reflecting the uniform
                  financial condition, assets and debts of the Object Company at
                  the
                  respective dates and the operational result and cash flow change
                  of the
                  Object Company within the time period, and (d) prepared according
                  to the
                  sustainable accounting principle and financial system. 

              
	
                 

                Article
                  57

              	
                 

                From
                  the date the Contract is executed until the closing date, Party
                  B will
                  operate and manage the Object Company and the Carborundum Project
                  in
                  normal manner. The operation, business and condition of the Object
                  Company
                  and the Carborundum Project will not have any material and adverse
                  change
                  compared with the condition before the Contract is
                  executed.

              

      

       

      Chapter
        XIII Representations
        and Statements of Party A

       

       

      As
        the
        substantial basis for Party B to execute the Contract, Party A represent
        and
        state that: 

       

      
        	
                 

                Article
                  58

              	
                 

                Party
                  A has full civil right capability and capacity for civil conduct
                  to
                  execute and fulfil the Contract and has procured due authorization
                  to
                  execute and fulfil the Contract.

              
	
                 

                Article
                  59

              	
                 

                After
                  the Contract is effective, the Contract is legally binding upon
                  Party A
                  and is enforceable against Party A under relevant Chinese laws
                  of
                  bankruptcy, liquidation, reorganization, moratorium and other laws
                  relating to the creditor’s rights and remedies.

              
	
                 

                Article
                  60

              	
                 

                The
                  execution and fulfilment of the Contract by Party A will not (1)
                  cause
                  Party A to violate any agreement, covenant, commitment or other
                  document;
                  (2) violate any laws, statutory laws, regulations, statutory rules
                  or any
                  judgments, injunctions, orders or decrees where the violation will
                  have
                  material and adverse impact on the business, operation, assets
                  or
                  financial condition of Party A.

              

      

       

      
        
           

        

        
          16

          
            

          

        

        
           

        

      

      Chapter
        XIV Confidentiality

       

       

      
        	
                Article
                  61

              	
                The
                  party which receives the disclosed information as per the Contract,
                  shall:

              

      

      

        
          	
                  (1)

                	
                  Keep
                    the disclosed information confidential within five years upon
                    execution of
                    the Contract;

                
	 	 
	
                  
                    (2)

                  

                	
                  Except
                    that the above materials and information are disclosed to the
                    employees or
                    consultants on need-to-know basis, any party to the Contract
                    shall not
                    disclose to the third party the above materials and
                    information.

                

        

      

       

      
        	
                Article
                  62

              	
                Article
                  61 is not applicable to the following
                  cases:

              

      

      
        

          
            	
                    (1)

                  	
                    
                      Before
                        the disclosing party discloses the information to the receiving
                        party, the
                        receiving party has already known the information or the
                        receiving party
                        can prove the materials and information may be known through
                        other legal
                        channels. 

                    

                  
	 	 
	
                    
                      (2)

                    

                  	
                    The
                      receiving party obtains the materials and information from
                      the third Party
                      who is not subject to any confidentiality obligations. 

                  
	 	 
	
                    (3)

                  	The
                    materials and
                    information are disclosed as per requirement of laws and
                    regulations.

          

        

         

      

       

       Chapter
        XV Liability
        for Breach of Contract

       

       

      
        	
                Article
                  63

              	
                If
                  Party A and Party B fail to obtain internal authorization to execute
                  and
                  fulfill the Contract, or, the execution and fulfillment of the
                  Contract
                  contradicts with or contravenes articles of association, government
                  authorization or approval, or due to something one party shall
                  take blame
                  for, the Contract is invalidated, becomes impossible to be fulfilled
                  or
                  fully fulfilled, such party shall be deemed to have breached the
                  Contract.
                  The breaching party shall pay the abiding party 1% of the Equity
                  Interest
                  Transfer Price as penalty. 

              

      

       

      
        
           

        

        
          17

          
            

          

        

        
           

        

      

      
        	
                Article
                  64 

                 

              	
                If
                  the significant issues related to Party A
                  but not disclosed by Party A before this Contract is executed,
                  causes the
                  equity interest transfer and Phase II construction of the Carborundum
                  Project impossible, then Party B is entitled to terminate this
                  Contract.
                  Party A shall return the equity interest of the Object Company
                  transferred
                  according to this Contract and shall also compensate Party B for
                  the total
                  loss resulted from the execution and performance of this
                  Contract.

              
	
                 

                Article
                  65

                 

              	
                 

                If
                  Party B, before this Contract is executed, has not disclosed the
                  facts
                  which may impact the legal existence of the Object Company and
                  the
                  Carborundum Project, thus the legal existence of the Object Company
                  or the
                  Carborundum Project is seriously impacted after the Equity Interest
                  Transfer is completed, Party A is entitled to terminate this Contract
                  and
                  Party B shall immediately repay all payments received as per the
                  Contract.
                  Party B shall also compensate Party A for the total loss resulted
                  from the
                  execution and performance of this Contract.

                 

              
	
                Article
                  66 

                 

              	
                In
                  case that Party A does not perform any of
                  its obligations under this Contract, and this non-performance has
                  a
                  significant adverse impact on the construction of Carborundum Project
                  Phase II, in addition, Party A does not eliminate the adverse effect
                  or
                  fulfill the compensation obligation, Party B has the right to terminate
                  this Contract. Then Party A shall compensate Party B for its loss
                  resulting from the execution and performance of this
                  Contract.

              
	 	 
	
                Article
                  67 

              	
                If
                  Party B does not perform any of its
                  obligations under this Contract, and this non-performance has a
                  significant adverse impact on the Object Company after closing
                  date, in
                  addition, Party B does not eliminate the adverse effect or fulfill
                  the
                  compensation obligation, Party A has the right to terminate this
                  Contract.
                  Then Party B shall repay all payments received as per the Contract.
                  Party
                  B shall also compensate Party A for the total loss resulted from
                  the
                  execution and performance of this
                  Contract.

              

      

       

      
        
           

        

        
          18

          
            

          

        

        
           

        

      

       

      
        	
                Article
                  68

                 

              	
                During
                  the period from the Contract execution date to the closing date
                  of the
                  equity interest, if Party B commits any act which harms the assets,
                  rights
                  and interests of the Object Company, it shall constitute a breach
                  of the
                  Contract. Party B shall be liable to make compensation to Party
                  A or the
                  Object Company for any damages arising from the breach of the Contract.
                  

                 

              
	
                Article
                  69

              	
                If
                  Party A does not make the payment of equity
                  interest transfer price according to the deadline as agreed, for
                  each day
                  delay, Party A shall pay 0.5‰ of the delayed amount as late payment
                  fee.

              
	
                 

                Article
                  70

              	
                 

                If
                  either Party A or Party B violates the obligations under the Contract
                  or
                  the representations and statements are false, or the guarantee
                  responsibilities are not fulfilled, it shall constitute a breach
                  of
                  contract. If the penalty as agreed is not sufficient to cover the
                  financial losses suffered by the abiding party in executing and
                  fulfilling
                  the Contract, the breaching party shall make up the losses suffered
                  by the
                  observant party.

              

      

       

      Chapter
        XVI Force
        Majeure

       

      

       

      
        	
                Article
                  71

              	
                In
                  case Force Majeure event occurs, the obligations of the affected
                  party and
                  any time period binding on such affected party shall be suspended
                  and
                  extended automatically during the period of the Force Majeure event.
                  In
                  such case, the affected party shall not bear any liability for
                  breach of
                  the Contract as provided in the Contract.

              
	 	 
	
                Article
                  72

              	
                The
                  Party alleging the occurrence of a Force Majeure event shall inform
                  the
                  other Party in writing within seven (7) days after the Force Majeure
                  event, and shall provide sufficient evidence issued by competent
                  authority
                  proving the occurrence and the continuation of the Force Majeure
                  event
                  occurs. The party alleging Force Majeure shall to the best of its
                  ability
                  eliminate the adverse effect of the Force Majeure event on the
                  fulfillment
                  of the Contract.

              

      

       

      
        
           

        

        
          19

          
            

          

        

        
           

        

      

      Chapter
        XVII Disputes
        Settlement

       

       

      
        	
                Article
                  73

              	
                Any
                  dispute arising from the Contract or related to the contract, may
                  be
                  submitted the dispute to China International Economic and Trade
                  Arbitration Commission (hereinafter referred to as “CIETAC”) for
                  arbitration pursuant to the prevailing CIETAC arbitration rules,
                  the
                  arbitration site is Beijing .

              
	
                 

                Article
                  74

              	
                 

                The
                  arbitration award issued by CIETAC shall be final and binding on
                  each
                  party. 

              

      

       

      Chapter
        XVIII Applicable
        Law

       

       

      
        	
                Article
                  75

              	
                The
                  establishment, validity, interpretation and implementation of this
                  Contract shall be governed and bound by the laws and regulations
                  of the
                  PRC. In the event the laws of the PRC do not have provision on
                  a certain
                  issue relating to this Contract, a reference shall be made to the
                  general
                  international commercial practice.

              

      

       

      Chapter
        XIX Miscellaneous

       

       

      
        	
                Article
                  76

                 

              	
                Amendment

                 

              
	
                 

              	
                
                  An
                    Amendment of the Contract is only effective upon the execution
                    of written
                    document by both Parties. If the amendment is only effective
                    upon approval
                    by relevant administrative departments according to Chinese laws,
                    it shall
                    be approved by such competent administrative
                    departments.

                

              
	 	 
	
                Article
                  77

              	
                Severability

              

      

       

      
        
           

        

        
          20

          
            

          

        

        
           

        

      

       

      
        	 	 
	
                 

              	
                The
                  invalidity of any article in this Contract shall not affect the
                  validity
                  of the other articles in this Contract.

              
	 	 
	
                Article
                  78

              	
                The
                  Contract is written and executed in Chinese and English. If there
                  is any
                  discrepancy between the Chinese and English version, the Chinese
                  version
                  shall prevail.

              
	
                Article
                  79

              	
                The
                  Contract has six copies in duplicate. Each party keeps two copies.
                  The other two copies shall be submitted for approval.
                  

              
	
                 

              	
                 

              
	
                Article
                  80

              	
                The
                  Contract shall be effective upon seals of both parties and the
                  date when
                  the approval is granted by examination and approval
                  authority.

              
	 	 
	
                Article
                  81

              	
                Notification

              
	 	 
	
                81.1

              	Unless
                as otherwise
                specified in the Contract, any notice or written communication shall
                be
                sent by one party to the other party via express mail service. All
                notices
                shall be deemed to have been served on the fifth day after the date
                (subject to the postal seal) when the notices are sent to the
                correspondence address specified in the Contract. If the date of
                actual
                receipt is earlier than the said date, the date of actual receipt
                shall be
                the date of receipt.
	 	 
	
                81.2

              	All notices
                and
                correspondences shall be sent to the following addresses unless the
                other
                party gives written notice to update such
                addresses.

      

      
         

         

      

       

      Party
        A’s
        correspondence address:

       

      Phoneæ  

       

      Addresseeæ

       

      Party
        B’s
        correspondence address:
        Suite
        902, Building B, Century Baisheng Huayuan, Xinhua South Road No.36, Urumqi
        Municipality, Xinjiang; post code: 830004

       

      Phoneæ
        13999966895

       

      AddresseeæGao
        Zhigang

       

      

       

      Execution
        page follows

       

      
        
           

        

        
          21

          
            

          

        

        
           

        

      

       

      No
        text
        on this page, for signature only.

       

      

       

      

       

      Party
        A

       

      Authorized
        representative:

       

      Date:

       

      

       

      Party
        B

       

      Authorized
        representative:

       

      Date:

       

       

      
        
           

        

        
          22C3
      Capital, Limited

     

    And

     

    Gao
      Zhigang 

     

    In
      matter of

     

    Xinjiang
      Ehe Mining and Metallurgy Co., Ltd.

     

    Enter
      Into

     

    Equity
      Interest Transfer Contract

     

     

    August,
      2008

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    Contents

    

    
      	Chapter I	
              Definitions
                of the Contract

            	
              4

            
	 	 	 
	Chapter II	
              Object
                Equity Interest

            	
              6

            
	 	 	 
	Chapter III	
              Price
                of Equity Interest Transfer

            	
              6

            
	 	 	 
	Chapter IV	
              Capital
                Increase

            	
              7

            
	 	 	
               

            
	Chapter V	
              Approval
                and Checking

            	
              8

            
	 	 	 
	Chapter VI	
              Assumption
                of Debts of Object Company

            	
              10

            
	 	 	 
	Chapter VII	
              Employees

            	
              11

            
	 	 	 
	Chapter VIII	
              Rights,
                Obligations and Guarantees of Party B

            	
              11

            
	 	 	 
	Chapter IX	
              Rights,
                Obligations and Guarantees of Party A

            	
              13

            
	 	 	 
	Chapter X	
              Performance,
                Wind-up and Termination

            	
              14

            
	 	 	 
	Chapter XI	
              Representations
                and Statements of Party B

            	
              15

            
	 	 	 
	Chapter XII	
              Representations
                and Statements of Party A

            	
              17

            
	 	 	 
	Chapter XIII	
              Confidentiality

            	
              17

            
	 	 	 
	Chapter XIV	
              Liability
                for Breach of Contract

            	
              18

            
	 	 	 
	Chapter XV	
              Force
                Majeure

            	
              20

            
	 	 	 
	Chapter XVI	
              Disputes
                Settlement

            	
              20

            
	 	 	 
	Chapter XVII	
              Applicable
                Law

            	
              21

            
	 	 	 
	Chapter XIX	
              Miscellaneous

            	
              21

            

    

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

    

    Equity
      Interest Transfer Contract

    

     

    The
      equity interest transfer contract (hereinafter referred to as “Contract”) is
      made and entered by and among: 

     

    Party
      A:
      C3
      Capital Limted, a company registered and established under the BVI Business
      Companies Companies Act 2004 and incorporated on October 25th
      2007,
      its registration number is 1439706.

    

    Party
      B:
      Gao
      Zhigang, the
      citizen of People’s Republic of China, ID No. 130721197009125215; his domicile
      is Renmin Street No. 138, Nanguan District, Changchun Province. 

     

    WHEREAS:

     

    
      	1.	
              Xinjiang
                Ehe Mining and Metallurgy Co., Ltd (the “Object Company”) was established
                on August 7th, 2007. It plans to construct the project of 40,000
                tons
                green silicon carbide (the “Carborundum Project”) in Aletai Area of
                Xinjiang Uygur Autonomous Region. The procedures of project proposal,
                environmental protection, land use, resources use, planning, etc
                is being
                conducted, and construction has not yet been
                started.

            

    

    

    
      
        	2.	
                The
                  registered capital for the Object Company is RMB 1 million. The
                  shareholder is Party B and Changchun Masite Industry Co., Ltd (the
                  “Changchun Maisite Company”), and Party B holds 90% of the equity
                  interest. 

              

      

    

    

    
      
        	3.	
                Party
                  B plans to transfer to Party A all its holding shares of the Object
                  Company (“the Object Equity Interest”). Party A intends to accept
                  the equity interest. After Party A completes the transfer of equity
                  interest, the Object Company will become Chinese-foreign joint
                  venture.
                  

              

      

    

     

    
      
         

      

      
        3

        
          

        

      

      
         

      

    

     

    According
      to the principle of equality and mutual benefit and through friendly
      consultation, Party A and Party B agree
      on
      the following terms and conditions in accordance with,
      the
      Contract Law of the People’s Republic of China,
      and
      other applicable Chinese laws and regulations. The parties will abide by and
      fulfill the Contract in good faith.

     

    Chapter
      I Definitions of the Contract

    

    Article
      1  Definition
      

     

    The
      terms
      hereinafter used in the Contract shall have the meanings set forth as
      follows:

     

    
      	
            	1.1	
              “Industrial
                and commercial administration”
                (AIC) means the industrial and commercial administration of People’s
                Republic of China which performs the job of business registration
                and
                issues business license. 

            

    

     

    
      	
            	1.2	
              “Department
                of Commerce”
                means Ministry of Commerce of People’s Republic of China, or so far as the
                examination and approval is concerned, the local department of commerce
                with competent power of examination and
                approval.

            

    

     

    
      	
            	1.3	
              “Development
                and Reform Department” means
                national Development and Reform Committee and local Development and
                Reform
                Committee of different levels.

            

    

     

    
      	
            	1.4	
              “Foreign
                Exchange Administration”
                means the State Administration of Foreign Exchange and local foreign
                exchange administrations at all
                levels.

            

    

     

    
      	
            	1.5	
              “Examination
                and Approval Authority”
                means the relevant Chinese governmental departments having authority
                defined by relevant Chinese laws, regulations, regulatory rules and
                policies to examine and approve the Contract, the equity interest
                transfer
                and the capital increase, including but not limited to Ministry of
                Commerce (MOC), National Development and Reform Commission (NDRC),
                State
                Administration of Foreign Exchange (SAFE), Industrial and Commercial
                Administration (AIC), etc.

            

    

     

    
      
         

      

      
        4

        
          

        

      

      
         

      

    

     

    
      	
            	1.6	
              “Capital
                Increase”
                means, after Party A accepts the equity interests of the Object Company
                from Party B, Party A puts additional registration capital into the
                Object
                company. 

            

    

     

    
      	
            	1.7	
              “Closing
                date”
                means the date on which the Object Equity Interest Transfer has performed
                the formality of alteration registration with the industrial and
                commercial administration, subject to the date on which the industrial
                and
                commercial administration has performed examination and approval
                procedure
                and issued new business license to the Object
                Company.

            

    

     

    
      	
            	1.8	
              “New
                Business License”
                means the new business license issued by the industrial and commercial
                administration to the Object Company after completion of the Equity
                Interest Transfer.

            

    

     

    
      	
            	1.9	
              “Disclosed
                Information”
                means the related materials, explanation, statement and other information
                disclosed or made by Party B to Party A or its designated intermediaries
                during Party A’s due diligence investigation of the object company, the
                Carborundum project and the object equity interest; or the information
                disclosed by the Party B to Party A in relation to the object company,
                the
                Carborundum project and the object equity
                interest.

            

    

     

    
      
        	
              	1.10	
                “Employees”
                  mean all personnel who work in the Object Company and have employment
                  relations with or de facto employment relations with the Object
                  Company by
                  the date the contract is
                  executed.

              

      

    

     

    
      	
            	1.11	
              “Encumbrance”
                shall
                mean any mortgage, pledge, other security interest, assignment, lien,
                charge, option, trust interest, pre-emptive right, lease and any
                other
                restrictions or conditions.

            

    

     

    
      	
            	1.12	
              “Force
                Majeure”
                means the special events such as earthquake, typhoon, flood disaster,
                fire
                disaster, war, political disturbance, etc., or the events defined
                by
                Chinese laws and regulations as Force
                Majeure.

            

    

     

    
      
         

      

      
        5

        
          

        

      

      
         

      

    

     

    
      
        	
              	1.13	
                “PRC”
                  or
                  “China”
                  means the People’s Republic of China, and insofar as the Contract is
                  concerned, shall exclude Hong Kong, Taiwan and
                  Macau.

              

      

    

     

    
      
        	
              	1.14	
                “Tax”
                  means the state or local taxes defined by Chinese laws and regulations,
                  including relevant interest, fine or any other burden imposed by
                  any
                  government authorities in relation to such
                  taxes.

              

      

    

     

    Chapter
      II Object
      Equity Interest

    

    
      	Article
              2	
              According
                to the provision of this Contract, Party B shall sell to Party A
                their
                respective equity interests of the Object Company (the Object Equity
                Interest) and all the related rights and interests in a way free
                of any
                encumbrance. Party A shall pay the equity interest transfer
                price.

            

    

     

    
      	Article
              3	
              Party
                B guarantees that other shareholders of the Object Company agrees
                to waive
                their preemption right on the Object Equity
                Interest.

            

    

     

    
      	Article
              4	
              After
                the transfer of the equity interest is completed as per the Contract,
                Party A will hold 90% equity interest of the Object
                Company.

            

    

    

    Chapter
      III Price of Equity Interest Transfer

     

    
      	Article
              5	
              The
                price of the equity interest transfer will be based on the evaluation
                of
                the object equity interest by the assets evaluation agency. The two
                parties confirm that the price of the equity interest transfer is
                US
                dollars of equal value of RMB 0.9 Million Yuan (“equity interest transfer
                price”). 

            

    

     

    
      	Article
              6	
              Party
                A shall fulfill the payment obligation of equity interest price by
                the
                closing date. If Party A makes the payment through foreign exchange,
                the
                procedures legally required for payment shall be
                performed.

            

    

     

    
      
         

      

      
        6

        
          

        

      

      
         

      

    

     

    
      	Article
              7	
              Each
                payment of the equity
                interest transfer shall be conditioned on the satisfaction of the
                following: 

            

    

     

    
      
        	
              	7.1	
                The
                  equity interest transfer have been examined and approved by all
                  examination and approval authorities. Party A and Party B have
                  duly opened
                  accounts used to pay and receive the price of the equity
                  interest.

              

      

    

     

    
      
        	
              	7.2	
                Party
                  A has completed the Due Diligence investigation. All the issues
                  which have
                  been pointed out by Party A have been solved in a way accepted
                  by Party
                  A.

              

      

    

     

    
      
        	
              	7.3	
                The
                  representations and statements made by Party B in the Contract
                  are true
                  and correct.

              

      

    

     

    
      	Article
              8	
              The
                Contractual parties shall bear their respective payable taxes arising
                from
                the revenue or activity under the Contract according to the relevant
                laws,
                administrative regulations, rules and normative documents.
                

            

    

     

    
      
        
          
            	Article
                    9	
                    Party
                      B shall issue formal and valid receipt and invoice to Party
                      A immediately
                      after receiving each equity interest transfer payment from
                      Party A. Within
                      5 (five) days after receiving the equity interest transfer
                      payment, Party
                      B shall go to the local foreign exchange administration and
                      conduct the
                      registration for receiving foreign exchange from foreign investor
                      for the
                      Equity Interest Transfer, it shall procure a corresponding
                      certificate
                      which is to be provided to Party
                      A.

                  

          

        

      

    

     

    Chapter
      IV Capital Increase

     

    
      	Article
              10	
              Capital
                Increase Arrangement

            

    

     

    After
      the
      transfer of the Object Equity Interest, Party A shall increase the capital
      investment of the Object Company. The amount of capital increased by Party
      A
      shall be fixed by Party A, Party B and their shareholders according to the
      construction process of the Carborundum project and fund demand 

     

    
      
         

      

      
        7

        
          

        

      

      
         

      

    

     

    
      	Article
              11	
              The
                precondition for payment of increased capital
                

            

    

     

    
      	11.1  	
              The
                Equity Interest Transfer has been approved by the examination and
                approval
                authorities and the Object Company has obtained Approval Certificate
                for
                Foreign Invested Enterprise.

            

    

     

    
      	11.2  	
              The
                statements and guarantees made by Party B in this contract are all
                authentic and correct.

            

    

     

    
      	11.3  	
              The
                investment scale, construction process, operation plan etc have been
                accepted by Party A.

            

    

     

    
      	11.4  	
              Party
                A has acquired the position as shareholder of the Object Company
                and has
                enjoyed the shareholder’s rights according to its holding of 90% shares.
                The approval and handover of the Object Company has been completed
                successfully.

            

    

     

    
      	11.5  	
              The
                approval procedures including the project approval, environmental
                protection, land use, resources utilization, safety manufacture and
                planning required for the construction and operation of the Carborundum
                Project have been performed and the project construction can be started
                legally.

            

    

     

    
      	11.6  	
              The
                loan of RMB 0.9 Million Yuan which Party B borrowed from the Object
                Company on April 16th
                2008 has been fully paid off by Party B to the Object Company. In
                addition, the payment has been approved by Party
                A.

            

    

     

    
      	Article
              12	
              The
                increased capital shall be for the purpose of Carborundum Project
                construction.

            

    

     

    Chapter
      V Approval and Checking 

     

    
      	Article
              13	
              After
                the execution of this Contract, Party A and Party B shall confirm
                the date
                for application to authorities for examination and approval. If this
                equity interest transfer needs to be examined and verified by authorities
                of development and reform, environmental protection, land etc, this
                Contract shall be submitted to all these authorities for
                approval.

            

    

     

    
      
         

      

      
        8

        
          

        

      

      
         

      

    

     

    
      
        	Article
                14	
                Upon
                  the approval
                  of the
                  equity interest transfer by the examination and approval authorities,
                  Party A and Party B shall cooperate and immediately perform procedures
                  relating to the industrial and commercial alteration registration
                  for the
                  object equity interest
                  transfer.

              

      

    

     

    
      	Article
              15	
              Checking
                

            

    

     

    
      	
            	15.1	
              Party
                B promises that, after the execution of this Contract, all assets
                or any
                documents (including electronic data and written materials) of the
                Object
                Company shall be kept in full and safe condition and the checking
                procedure shall be conducted.

            

    

     

    
      	
            	15.2	
              Upon
                the approval
                of the
                equity interest transfer by the examination and approval authorities,
                Party
                A and Party B shall form a check team and work together to do the
                checking
                work relating to the Object
                Company.

            

    

     

    
      
        	
              	15.3	
                The
                  object of checking includes but not limited
                  to:

              

      

    

     

    
      	
            	(1)	
              All
                the
                official seals, financial seals and contract seals, etc of the Object
                Company;

            

    

     

    
      	
            	(2)	
              All
                certificates and licenses of the Object Company;
                

            

    

     

    
      	
            	(3)	
              The
                assets of the Object Company;

            

    

     

    
      	
            	(4)	
              The
                financial books and the accounting records of the Object
                Company;

            

    

     

    
      	
            	(5)	
              All
                documents on the archives of the Carborundum Project (including but
                not
                limited to the project application, feasibility study report, preliminary
                design report, engineering
                drawings, equipment drawings, all competent authorities’ replies, permits,
                record-keeping or acceptance documents relating to the
                Carborundum Project);
                

            

    

     

    
      	
            	(6)	
              All
                contracts for which the Object Company is one party (including but
                not
                limited to Engineering Construction Contract, Equipment Purchase
                Contract
                and Installation Contract, Electricity Provision contract, Raw Materials
                Purchase Contract, Product Sales Contract and Loan Contracts)
                ;

            

    

     

    
      
         

      

      
        9

        
          

        

      

      
         

      

    

     

    
      	
            	(7)	
              Other
                checking items reasonably required by Party
                A.

            

    

     

    
      	
            	15.4	
              The
                checking work shall be completed within seven days upon
                the approval
                of the
                equity interest transfer by the examination and approval
                authorities.The
                completion of the checking and handover work shall be confirmed by
                signatures of0 both parties’ representatives.

            

    

     

    
      	
            	15.5	
              After
                the completion of the handover, the parties shall draw up detailed
                list of
                the handover items which shall be confirmed by representatives of
                both
                parties.

            

    

     

    Chapter
      VI Assumption of Debts of Object Company

    

    
      	Article
              16	
              Party
                B shall disclose to Party A all loans
                of the Object Company (including tax payable and administration cost).
                Party B shall provide Party A with detailed list of the foregoing
                debts
                (the
                list shall contain the amount of each debt, the debtor, the fulfillment
                period, the guarantee condition and the names of the documents related
                to
                the debts, etc.).

            

    

     

    
      	Article
              17	
              It
                is the responsibility of Party B to pay off all debts owed by the
                Object
                Company before the closing date. Party B shall perform the payment
                obligation according to the deadline and the amount as agreed in
                the
                underlying documents of the paid-off debts. The conduct of payment
                shall
                be legal and valid.

            

    

     

    
      	Article
              18	
              The
                debts owed by the Object Company before the closing date and undisclosed
                by Party B at the time of executing the Contract shall be borne by
                Party
                B. If Party A or the Object Company detects that the undisclosed
                debts do
                exist, Party A or the Object Company is entitled to ask Party B to
                immediately pay off or dispose of the debts. 

            

    

     

    
      
         

      

      
        10

        
          

        

      

      
         

      

    

     

    
      	Article
              19	
              In
                respect of the debts owed by the Object Company before the closing
                date
                and agreed to be borne by Party B according to Article 17 and Article
                18
                of the Contract, if Party B does not pay off the debts or Party B
                does not
                bear the debts according to the Contract, thus causing a result that
                the
                related creditors make claims against the Object Company, the Object
                Company or Party A is entitled to seek compensation from Party B
                on the
                basis of this Contract. The scope of compensation includes the debts
                itself and all costs and expenses incurred by the Object Company
                or Party
                A in disposing of and settling the debts, including but not limited
                to
                litigation cost, arbitration fee, enforcement fee, attorney’s fee and
                traveling costs etc.

            

    

     

    Chapter
      VII  Employees

     

    
      
        
          	Article
                  20	
                  Within
                    three days upon the approval ofthe
                    equity interest transfer by the examination and approval authorities,
                    Party
                    B shall provide Party A with detailed list of employees and management
                    staffs for the Object Company (including gender, age, term of
                    labor
                    contracts, remuneration standard, position, labor contracts series
                    number
                    and etc).

                

        

      

    

     

    
      
        
          	Article
                  21	
                  If
                    the Object Company suffers from loss resulting from being claimed
                    by
                    employees for the disputes arising before the delivery date between
                    the
                    Object Company and employees, Party A has the right to recover
                    it from
                    Party B.

                

        

      

    

     

    Chapter
      VIII
      Rights, Obligations and Guarantees of Party B

     

    In
      addition to the
      rights,
      obligations and guarantees of Party B as
      specified
      by other clauses of the Contract, Party B shall enjoy rights, bear obligations
      and provide guarantees as per the following provisions of this chapter:

     

    
      
         

      

      
        11

        
          

        

      

      
         

      

    

     

    
      	Article22	
              Except
                as otherwise provided by this Contract, upon
                execution of the Contract, no act shall be performed which leads
                to or may
                lead to loss or damage of the assets, rights and interests of the
                Object
                Company. 

            

    

     

    
      	Article23	
              Upon
                execution of the Contract, Party B shall not pledge, transfer or
                put into
                trusteeship its holding equity interest of the Object Company or
                do any
                other act which may affect Party A’s procurement of the object equity
                interest

            

    

     

    
      	Article24	
              Upon
                execution of the Contract, Party B guarantees that: it will operate
                and
                manage the Object Company in normal matter with duty of care of a
                kindhearted administrator, including but not limited to: (1) not
                to change
                the documents for establishing the Object Company; (2) not to change
                the
                financial policies of the Object Company; (3) when disposing of the
                assets, the credits and debts and other rights and obligations of
                the
                Object Company, Party B shall procure advance approval from Party
                A.

            

    

     

    
      	Article25	
              Party
                B shall be responsible for performing the examination, approval and
                filing
                procedures related to the equity interest
                transfer.

            

    

     

    
      	Article26	
              Party
                B shall timely complete the checking affairs specified in Chapter
                Five of
                the Contract. 

            

    

     

    
      	Article27	
              Party
                B
                shall be responsible for the electricity use issue under the construction
                and operation of Carborundum Project. Party B shall make the Object
                Company sign preferential electricity supply contracts with electricity
                supply organization and the contracts shall be approved by Party
                B.

            

    

     

    
      	Article28	
              Party
                B shall be responsible for performing the approval procedures including
                the project application, environmental protection, land owenership,
                resources utilization, safety manufacture, planning, water intake
                permit,
                water and soil conservation required for the construction and operation
                of
                the Carborundum Project, so that the legal requirements for the project
                construction and operation can be
                met.

            

    

     

    
      
         

      

      
        12

        
          

        

      

      
         

      

    

     

    
      	Article29	
              Party
                B shall make sure that the Object Company is able to obtain preferential
                and high quality raw materials for the construction and operation
                of the
                Carborundum Project.

            

    

     

    
      	Article30	
              Party
                B shall
                send timely written notice to Party A when Party B is in knowledge
                of any
                situation which may lead to failure in fulfilling all or part of
                the
                Contract.

            

    

     

    
      	Article31	
              Party
                B is entitled to receive the equity interest transfer price as per
                the
                Contract.

            

    

     

    Chapter
      IX
      Rights, Obligations and Guarantees of Party A

     

    In
      addition to Party A’s rights, obligations and guarantees specified by other
      clauses of the Contract, Party A shall enjoy rights, bear obligations and
      provide guarantees in accordance with the following provisions:

     

    
      	Article
              32	
              Party
                A shall assist Party B to perform all approval procedures in relation
                to
                the equity interest transfer and promise to provide all necessary
                cooperation.

            

    

     

    
      	Article
              33	
              Party
                A shall assist Party B to perform all industrial and commercial alteration
                registration procedures in relation to the equity interest transfer
                and
                promise to provide all necessary
                cooperation.

            

    

     

    
      	Article
              34	
              Party
                A shall pay the equity interest transfer price to Party B as per
                the
                Contract and shall increase the registration capital of the Object
                Company
                as per the Contract.

            

    

     

    
      	Article
              35	
              Party
                A shall
                give timely written notice to Party B when Party A is in knowledge
                of any
                situation which may lead to failure in fulfilling all or any part
                of the
                Contract. 

            

    

     

    
      
         

      

      
        13

        
          

        

      

      
         

      

    

     

    Chapter
      X Performance,
      Wind-up and Termination

    

    
      	Article36	
              The
                parties shall perform their contractual obligations fully and completely
                as per the provisions of the Contract. 

            

    

     

    
      	Article37	
              Party
                B and Party A shall work well together, give mutual cooperation,
                prepare
                all necessary application documents and complete all procedures relating
                to the equity interest transfer under the Contract, including but
                not
                limited to examination and approval, record filing, industrial and
                commercial registration. The costs and expenses occurred therefrom
                shall
                be borne evenly among the parties.

            

    

     

    
      	Article38	
              If
                there are any undisclosed facts or circumstances relating to the
                Object
                Company before the Contract is executed, which have material and
                adverse
                impact on the legal and normal operation of the Object Company after
                the
                closing date, Party A is entitled to terminate the
                Contract.

            

    

     

    
      	Article39	
              If
                Party A does not pay the equity transfer price or does not increase
                the
                capital according to this Contract, Party B has the right to terminate
                this Contract.

            

    

     

    
      	Article40	
              If
                Party A terminates the Contract as per Article 38 and Article 39
                of the
                Contract, it shall give written termination notice to Party B and
                Party B
                shall bear the breach of contract liability as per the
                Contract.

            

    

     

    
      	Article41	
              If
                the equity interest transfer fail to be approved by the examination
                and
                approval authority and such failure is not caused by Party A or Party
                B,
                the Contract shall be automatically terminated and no parties to
                the
                Contract shall bear breach of contract
                liability.

            

    

     

    
      
         

      

      
        14

        
          

        

      

      
         

      

    

     

    Chapter
      XI Representations
      and Statements of Party B

    

    As
      the
      substantial basis for Party A to execute the Contract, Party B represent and
      state that: 

     

    
      	Article
              42	
              Party
                B has full civil right capability and capacity for civil conduct
                to
                execute and fulfil the Contract and Party B has procured due authorization
                to execute and fulfill the Contract. Party B has been authorized
                to
                execute and perform this Contract.

            

    

     

    
      	Article
              43	
              The
                registered capital of the Object Company has been fully paid as per
                related Chinese laws. 

            

    

     

    
      	Article
              44	
              Unless
                Chinese laws provide otherwise, the equity interest to be transferred
                by
                Party B to Party A does not bear any encumbrance preventing the transfer
                to Party A.

            

    

     

    
      	Article
              45	
              The
                execution, delivery and fulfilment of the Contract by Party B, will
                not
                (1) violate any articles of association of the Object Company; (2)
                cause
                the Object Company, or Party B to violate any agreements, covenants,
                commitments or other documents; (3) violate any laws, administrative
                regulations, rules, normative documents, administrative replies or
                any
                judgments, awards, verdicts, orders or decrees, where the violation
                will
                have material adverse impact on the business, operation, assets or
                financial condition of the Object Company or Party B; or (4) result
                in the
                creation of (or the obligation to create) any encumbrance or restriction
                of any kind on any properties or equity interests of the Object Company.
                

            

    

     

    
      	Article
              46	
              Except
                the disclosed information, there is no other circumstance affecting
                the
                legality and validity of the equity interest transfer and there is
                no
                circumstance affecting the legal interest of the Object Company.
                The
                copies of the materials provided by Party B or the Object Company
                to Party
                A or Party A appointed professional agencies are consistent with
                the
                original copies and the original copies are truly existent, legal
                and
                valid. There are no other credits, debts, restrictive rights, potential
                disputes, defects or flaws of the assets (including design and building
                defects or flaws) of the Object Company which are undisclosed to
                Party A.
                

            

    

     

    
      
         

      

      
        15

        
          

        

      

      
         

      

    

     

    
      	Article
              47	
              The
                Object Company has full ownership of the assets under its name. The
                assets
                are free of any encumbrance, mortgage, pledge or
                liens.

            

    

     

    
      	Article
              48	
              By
                the date the Contract is executed, the Object Company does not have
                any
                pending litigation, arbitration, administrative penalty nor does
                the
                Object Company have any fact or issue which may lead to a
                dispute.

            

    

     

    
      	Article
              49	
              The
                Object Company is in compliance with requirements of all Chinese
                laws in
                respect of environment protection, health and safety and does not
                have any
                harmful act which will entitle a third party to file a claim against
                the
                Object Company, demanding removal of the harm or obstacle or compensation
                for its loss.

            

    

     

    
      	Article
              50	
              The
                Object Company has legally completed tax registration and has legally
                and
                sufficiently fulfilled its tax payment obligations before the closing
                date. The Object Company does not have any pending tax claim and
                is not
                threatened by any auditing or investigation.

            

    

     

    
      	Article
              51	
              The
                Object Company after the closing date does not have any outstanding
                salaries, remuneration, housing accumulation fund, social insurance,
                employment compensation, employment injury compensation, nor does
                the
                Object Company have any labor disputes or potential issue which may
                lead
                to labor disputes.

            

    

     

    
      	Article
              52	
              From
                the date the Contract is executed until the closing date, Party B
                will
                operate and manage the Object Company in normal manner. The operation,
                business and condition of the Object Company will not have any material
                and adverse change compared with the condition before the Contract
                is
                executed. 

            

    

     

    
      
         

      

      
        16

        
          

        

      

      
         

      

    

     

    Chapter
      XII
      Representations and Statements of Party A

     

    As
      the
      substantial basis for Party B to execute the Contract, Party A represent and
      state that:

     

    
      	Article
              53	
              Party
                A
                has full civil right capability and capacity for civil conduct to
                execute
                and fulfil the Contract and has procured due authorization to execute
                and
                fulfil the Contract.

            

    

     

    
      	Article
              54	
              After
                the Contract comes into effect, the Contract is legally binding upon
                Party
                A and is enforceable against Party A under relevant Chinese laws
                of
                bankruptcy, liquidation, reorganization, moratorium
                and other laws relating to the creditor’s rights and
                remedies.

            

    

     

    
      	Article
              55	
              The
                execution and fulfilment of the Contract by Party A will not (1)
                cause
                Party A to violate any agreement, covenant, commitment or other document;
                (2) violate any laws, statutory laws, regulations, statutory rules
                or any
                judgments, injunctions, orders or decrees where the violation will
                have
                materially adverse impact on the business, operation, assets or financial
                condition of Party A.

            

    

     

    Chapter
      XIII
      Confidentiality

    

    
      	Article
              56	
              The
                party which receives the disclosed information as per the Contract,
                shall:

            

    

     

    
      	
            	(1)	
              Keep
                the disclosed information confidential within five years upon execution
                of
                the Contract;

            

    

     

    
      	
            	(2)	
              Except
                that the above materials and information are disclosed to the employees
                or
                consultants on need-to-know basis, any party to the Contract shall
                not
                disclose to any third party the above materials and
                information.

            

    

     

    
      
         

      

      
        17

        
          

        

      

      
         

      

    

     

    
      	Article
              57	
              the
                Provisions of Article 56 are not applicable
                to:

            

    

     

    
      	
            	(1)	
              the
                information the receiving party has already known or the receiving
                party
                can prove the materials and information may be known through other
                legal
                channels before the disclosing party discloses the information to
                the
                receiving party,. 

            

    

     

    
      	
            	(2)	
              the
                materials and information obtained by the receiving party from any
                third
                Party who is not subject to any confidentiality obligations.
                

            

    

     

    
      	
            	(3)	
              the
                materials and information which is required to bedisclosed as per
                provision of laws and regulations.

            

    

     

    Chapter
      XIV Liability for Breach of Contract

    

    
      	Article
              58	
              If
                Party A or Party B fails to obtain internal authorization to execute
                and
                fulfill the Contract, or, the execution and fulfillment of the Contract
                contradicts with or contravenes articles of association, government
                authorization or approval, or due to some reason one party shall
                take
                blame for, the Contract is invalidated, becomes impossible to be
                fulfilled
                or fully fulfilled, such party shall be deemed to have breached the
                Contract. The breaching party shall pay the abiding party 1% of the
                Equity
                Interest Transfer Price as penalty.

            

    

     

    
      	Article
              59	
              If
                the significant issues related to Party A but not disclosed by Party
                A
                before this Contract is executed, fail the realization of this equity
                interest transfer, or Party A does not perform the capital increase
                obligation, then Party B is entitled to terminate this Contract.
                Party A
                shall return the equity interest of the Object Company transferred
                according to this Contract and shall also compensate Party B for
                the total
                losses resulted from the execution and performance of this
                Contract.

            

    

     

    
      	Article
              60	
              If
                Party B, before this Contract is executed, has not disclosed the
                facts
                which may impact the legal existence of the Object Company and the
                Carborundum Project, thus the legal existence of the Object Company
                or the
                Carborundum Project is seriously impacted after the Equity Interest
                Transfer is completed, Party A is entitled to terminate this Contract
                and
                Party B shall immediately repay all payments received as per the
                Contract.
                Party B shall also compensate Party A for the total losses resulted
                from
                the execution and performance of this
                Contract.

            

    

     

    
      
         

      

      
        18

        
          

        

      

      
         

      

    

     

    
      	Article
              61	
              If
                Party A does not perform any of its obligations under this Contract,
                and
                this non-performance has a significant adverse impact on the construction
                of Carborundum Project, in addition, Party A does not eliminate the
                adverse effect or fulfill the compensation obligation, Party B has
                the
                right to terminate this Contract. Then Party A shall compensate Party
                B
                for its losses resulting from the execution and performance of this
                Contract.

            

    

     

    
      	Article
              62	
              If
                Party B does not perform any of its obligations under this Contract,
                and
                this non-performance has a significant adverse impact on the Object
                Company after closing date, in addition, Party B does not eliminate
                the
                adverse effect or fulfill the compensation obligation, Party A has
                the
                right to terminate this Contract. Then Party B shall repay
                all payments received as per the Contract and shall also compensate
                Party
                A for the total losses resulted from the execution and performance
                of this
                Contract.

            

    

     

    
      	Article
              63	
              During
                the period from the Contract execution date to the closing date,
                if Party
                B commits any act which harms the assets, rights and interests of
                the
                Object Company, it shall constitute a breach of the Contract. Party
                B
                shall be liable to make compensation to Party A or the Object Company
                for
                any damages arising from the breach of the Contract.
                

            

    

     

    
      	Article
              64	
              If
                Party A does not make the payment of equity interest transfer price
                according to the deadline as agreed, for each day delay, Party A
                shall pay
                0.5‰ of the delayed amount as late payment
                fee.

            

    

     

    
      	Article
              65	
              If
                either Party A or Party B violates the obligations under the Contract
                or
                the representations and statements are false, or the guarantee
                responsibilities are not fulfilled, it shall constitute a breach
                of
                contract. If the penalty as agreed is not sufficient to cover the
                financial losses suffered by the abiding party in executing and fulfilling
                the Contract, the breaching party shall make up the losses suffered
                by the
                abiding party.

            

    

     

    
      
         

      

      
        19

        
          

        

      

      
         

      

    

     

    Chapter
      XV Force
      Majeure

    

    
      	Article
              66	
              In
                case Force Majeure event occurs, the obligations of the affected
                party and
                any time period binding on such affected party shall be suspended
                and
                extended automatically during the period of the Force Majeure event.
                In
                such case, the affected party shall not bear any liability for breach
                of
                the Contract as provided in the
                Contract.

            

    

     

    
      	Article
              67	
              The
                Party alleging the occurrence of a Force Majeure event shall inform
                the
                other Party in writing within seven (7) days after the Force Majeure
                event, and shall provide sufficient evidence issued by competent
                authority
                proving the occurrence and the continuation of the Force
                Majeure event
                occurs. The party alleging Force Majeure shall, to the best of its
                ability, eliminate the adverse effect of the Force Majeure event
                on the
                fulfillment of the Contract.

            

    

     

    Chapter
      XVI Disputes
      Settlement 

     

    
      	Article
              68	
              If
                the Parties have disputes arising from the Contract and the dispute
                cannot
                be resolved through friendly consultation, any Party may submit the
                dispute to China International Economic and Trade Arbitration Commission
                (hereinafter referred to as “CIETAC”)
                for arbitration in Beijing pursuant to the effective CIETAC arbitration
                rules at the time of arbitration.

            

    

     

    
      
         

      

      
        20

        
          

        

      

      
         

      

    

     

    
      	Article
              69	
              The
                arbitration award issued by CIETAC shall be final and binding on
                each
                party. 

            

    

     

    Chapter
      XVII Applicable
      Law

    

    
      	Article
              70	
              The
                establishment, validity, interpretation and implementation of this
                Contract shall be governed and bound by the laws and regulations
                of the
                PRC. In the event the laws of the PRC do not have provision on a
                certain
                issue relating to this Contract, a reference shall be made to the
                general
                international commercial practice.

            

    

     

    Chapter
      XIX Miscellaneous

    

    
      	Article
              71	
              Amendment

            

    

     

    Any
      amendment to the Contract is only effective upon the execution of written
      document by both Parties. If the amendment is only effective upon approval
      by
      relevant administrative departments according to Chinese laws, it shall be
      approved by such competent administrative departments.

     

    
      	Article
              72	
              Severability

            

    

    
       

        The
          invalidity of any article in this
          Contract shall not affect the validity of other articles in this
          Contract.

      

    

     

    
      	Article
              73	
              Language

            

    

     

    The
      Contract is written and executed in Chinese and English. If there is any
      discrepancy between the Chinese and English version, Chinese version shall
      prevail.

     

    
      	Article
              74	
              The
                Contract has six copies in duplicate. Each party keeps two copies.
                The
                other two copies shall be submitted for approval.
                

            

    

     

    
      	Article
              75	
              The
                Contract shall be effective upon seals of both
                parties.

            

    

     

    
      
        	Article
                76	
                Notification

              

      

    

     

    
      
        
          	
                	76.1	
                  Any
                    notice sent by one party to the other party shall be via express
                    mail
                    service. All notices shall be deemed to have been served on the
                    fifth day
                    after the date (subject to the postal seal) when the notices
                    are sent to
                    the correspondence address specified in the Contract. If the
                    date of
                    actual receipt is earlier than the said date, the date of actual
                    receipt
                    shall be the date of
                    receipt.

                

        

      

    

     

    
      	
            	76.2	
              All
                notices and correspondences shall be sent to the following addresses
                unless the other party gives written notice to update such
                addresses.

            

    

     

    
      
         

      

      
        21

        
          

        

      

      
         

      

    

    Party
      A’s
      correspondence address:

     

    Phoneæ  

     

    Faxæ

     

    Addresseeæ

    

     

    Party
      B’s
      correspondence address:
      Bai
      Sheng Graden, No. 36 Xin Hua South Road, Urumqi City, Xinjiang; post code
      830004.

     

    Phone:
      13999966895

     

    Addressee:
      Gao
      Zhigang

     

    

     

    Execution
      page follows

     

    
      
         

      

      
        22

        
          

        

      

      
         

      

    

     

    [No
      text
      on this page, for signatures only]

    

     

    Party
      A C3 Capital, Limited

     

    Authorized
      representative:

     

    Date:

    

     

    Party
      B Gao Zhigang

     

    Authorized
      representative:

     

    Date:

     

    
      
         

      

      
        23

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