Document:

Agreement
No.: ZMZ-2013-0031

 

 

 

Financing
and Lease Agreement

 

(Sale-Leaseback)

 

[English
Translation]

  

Date:
June 16, 2013 

 

    	 

    	 

    

  

Table
of Contents 

 

	1	Type
    of the Agreement	1
	2	Leased Property	1
	3	Purchase and Delivery
    of Leased Property	1
	4	Lease Inception,
    Term and Periods	2
	5	Lease Cost, Rate,
    Rent and Rent Due Day	2
	6	Rent Adjustment	3
	7	Prepaid Rent	3
	8	Lease Service Charge	4
	9	Leased Property Ownership	4
	10	Leased Property Registration	5
	11	Leased Property Possession
    and Use	5
	12	Safeguard, Repair
    and Maintenance of the Leased Property	6
	13	Leased Property Quality
    Defect and Claim	7
	14	Leased Property Damage
    and Loss	7
	15	Insurance	8
	16	Handling of the Leased
    Property after the Lease Expires	9
	17	Early Payment	10
	18	Representations and
    Warranties	10
	19	Guarantee	11
	20	Information Disclosure	11
	21	Default Events and
    Remedial Measures	12
	22	Significant Events	14
	23	Leased Property Requisition
    and Collection	14
	24	Force Majeure	15
	25	Notice	15
	26	Contractual Rights
    and Obligations Transfer 	15
	27	Titles	16
	28	Applicable Law and
    Disputes Settlement	16
	29	Appendix	16
	30	Agreement Validation,
    Modification and Discharge	17
	31	Others	17
	Appendix I Supplementary
    Agreement	19
	Appendix II Leased Property
    List	20
	Appendix III Leased Property
    Purchase Price Confirmation	21
	Appendix IV Leased Property
    Ownership Transfer Confirmation (From Lessee to Lessor)	 22
	Appendix V Lease Schedules	 23
	Appendix VI Estimated Rent
    Payment Schedule 	26
	Appendix VII Actual Rent
    Payment Schedule (Formatted Text)	 27
	Appendix VIII Notice of
    Rent Adjustment (Formatted Text)	 28
	Appendix IX Lease Termination
    Notice (Formatted Text)	 29
	Appendix X Leased Property
    Ownership Transfer Notice (From Lessor to Lessee) (Formatted Text)	 30

 

    	 

    	 

    

 

Financing
and Lease Agreement

 

Agreement
No.: ZMZ-2013-0031

 

Lessor:
China National Foreign Trade Financial & Leasing Co., LTD

 

Address:

 

Building
#11 of Beijing Xiyuanfandian, No.1, Sanlihe Road, Haidian District, Beijing

 

Post
Code: 100044

 

Legal
Representative: Jianping Ding

 

Tel.:
010-68321866

 

Fax:
010-68322705

 

Lessee:
Hebei Baoding Orient Paper Milling Co., Ltd

 

Address:
Science Park, Xushui County, Baoding City, Hebei Province

 

Post
Code: 072550

 

Legal
Representative: Zhenyong Liu

 

Tel.:
0312-8698051

 

Fax:
0312-8698217

 

The
above Lessor and Lessee are collectively called “both parties” or “the parties,” and separately called
“each party.”

 

Both
parties agree to enter into this Financing and Lease Agreement with the following terms (“This Agreement”) through
negotiations under rules of The Contract Law of the People’s Republic of China, and other relevant laws and regulations.

 

		1	Type
                                                                of the Agreement

		1.1	The parties engage
                                                            in a financing type of lease in the form of a sales-leaseback 

                                                            according to This Agreement. The Lessor buys the equipment and ancillary
                                                            facilities (hereinafter referred to as the Leased Property) according to the Lessee’s
                                                            requirement and leases the Leased Property back to the Lessee for
                                                            the latter’s use. The Lessee pays the rent and other payables to
                                                            the Lessor according to This Agreement.

 

		2	Leased
                                                                 Property

		2.1	Leased
                                                            Property under This Agreement refers to the equipment and ancillary
                                                            facilities set forth in Leased Property List (Appendix II).

 

		3	Purchase
                                                                 and Delivery of Leased Property

		3.1	The
                                                            Lessor agrees to purchase the Leased Property from the Lessee in accordance
                                                            with This Agreement, and the Lessee agrees to transfer the Leased
                                                            Property to the Lessor.

 

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		3.2	The
                                                            determination of payment terms and amount of the Leased Property purchase
                                                            price payable by the Lessor to the Lessee is set forth in the “Leased
                                                            Property Purchase Price Confirmation” (Appendix III) signed
                                                            by both parties.

 

		3.3	The
                                                            Lessor agrees that the purchase price stipulated in the Leased Property
                                                            Purchase Price Confirmation will be made in one lump-sum payment to a
                                                            designated bank account of the Lessee when all of the following
                                                            payment conditions are met:

 

		(a)	This
                                                                Agreement has taken into effect;

 

		(b)	The
                                                                Lessor has received the prepaid rent, lease service charges and
                                                                other payments (if required) paid by the Lessee under the provisions
                                                                of This Agreement;

 

		(c)	The
                                                                Lessor has received the signed copy of This Agreement and relevant
                                                                guarantee documents (if any) and other legal documents;

 

		(d)	The
                                                                Lessor has received proof of government recording of the guarantee
                                                                documents, if This Agreement requires Lessee or other guarantors to
                                                                provide guarantee for This Agreement, and if it is required
                                                                under the law that such guarantee must be recorded;

 

		(e)	The
                                                                Lessor has received other documents such as the certificate of
                                                                Grant Deed for the Leased Property and photocopies of the original
                                                                purchase invoices (stamped by the official corporate seal of the
                                                                Lessee of the Leased Property;

 

(f)
Other conditions (if any) required by the Lessor are satisfied.

 

		3.4	All
                                                            taxes incurred for the Lessor’s purchase of the Leased Property
                                                            shall be borne and paid by the Lessee.

 

		3.5	On
                                                            the day the Lessor pays the Leased Property purchase price in accordance
                                                            with Section 3.3 of This Agreement, the Lessee transfers the ownership
                                                            of the Leased Property to the Lessor, and the Lessor is deemed to
                                                            have transferred the Leased Property back to the Lessee and the Lessee
                                                            is deemed to have received the Leased Property. The time of payment
                                                            of the Leased Property purchase price is determined by the time the
                                                            bank wires the fund. The Lessee shall provide the Leased Property
                                                            Ownership Transfer Confirmation (Appendix IV) to the Lessor at
                                                            the time of signing This Agreement. Nothing shall affect the Lessor’s
                                                            enjoyment of the full ownership rights of the Leased Property, whether
                                                            or not the Lessee provided the Leased Property Ownership Transfer
                                                            Confirmation.

 

		4	Lease
                                                                 Inception, Term and Periods

		4.1	The
                                                            lease inception date is the day Lessor pays the Leased Property purchase
                                                            price to the Lessee in accordance with Section 3.3 of This Agreement.
                                                            The lease term commences from the lease inception date and runs until
                                                            the expiration of the lease term listed in the Lease Schedules (Appendix
                                                            V).

 

		4.2	The
                                                            details of lease term and installment periods under This Agreement
                                                            are set forth in the Lease Schedules.

 

		5	Lease
                                                                 Cost, Rate, Rent and Rent Due Day

		5.1	The
                                                            definition of “lease cost” is the sum of the Leased Property
                                                            purchase price paid by the Lessor to the Lessee and any expense that
                                                            the Parties agree to be included in the lease cost.

 

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		5.2	The
                                                            interest rate of the lease will be determined by the Parties in the
                                                            Lease Schedules.

 

		5.3	The
                                                            definition of “rent” is the sum of the amount of lease
                                                            cost that the Lessee will pay to the Lessor and the interest as calculated
                                                            with the interest rate of the lease (hereinafter referred to as “lease
                                                            interest rate”).

 

		5.4	The
                                                            “rent due day” is the date that rent should be paid to
                                                            the account designated by the Lessor (in case of legal holidays, the
                                                            rent due day will be moved ahead to the last business day prior to
                                                            the legal holidays). The Lessee must pay the rent in full on time
                                                            and bear any incidental expense incurred for paying the rent.

 

		5.5	The
                                                            Lessor shall calculate and prepare the Estimated Rent Payment Schedule
                                                            (see Appendix VI) based on the lease interest rate in the Lease
                                                            Schedules and the Leased Property purchase price under Section 3.2
                                                            of This Agreement as the lease cost. After the Leased Property purchase
                                                            price is paid, the Lessor shall prepare the Actual Rent Payment Schedule
                                                            (see Appendix VII) with the actual date of payment as the lease commencement
                                                            date. The notification to the Lessee of the Actual Rent Payment Schedule
                                                            will suffice and the Actual Rent Payment Schedule needs not to be
                                                            agreed upon by the Lessee.

 

		5.6	The
                                                            Lessee should pay the rent strictly in accordance with the amount,
                                                            currency, time and payment term specified in the Actual Rent Payment
                                                            Schedule. The Lessee must not prepay or delay the rent or shorten
                                                            or extend the payment term without advance written consent by the
                                                            Lessor.

 

		5.7	It
                                                            is an unconditional obligation of the Lessee to pay Lessor the rent
                                                            and other amounts under the provisions of This Agreement. The Lessee
                                                            shall pay the rent in full on time and shall not attach any deduction
                                                            or withholding from the payment, except for otherwise provided under
                                                            Section 7 of This Agreement.

 

		6	Rent
                                                                 Adjustment

		6.1	During
                                                            the lease term, rent adjustment may be implemented in accordance with
                                                            the provisions agreed by the Parties in the Lease Schedules.

 

		6.2	If
                                                            the Parties elect to adjust the rent according to the method of floating
                                                            rent as provided in the Lease Schedules and therefore cause the amount
                                                            of rent to be changed resulting from the fluctuation of the lease
                                                            interest rate, the Lessor needs not to obtain the Lessee’s approval
                                                            in advance, but shall deliver the Notice of Rent Adjustment (Appendix
                                                            VIII) to the Lessee. The Lessee confirms hereby that the Lessee agrees
                                                            with the Notice of Rent Adjustment and will pay the adjusted rent
                                                            to the Lessor. If the content of the Notice of Rent Adjustment is
                                                            inconsistent with that of This Agreement and the Actual Rent Payment
                                                            Schedule, the content of the last Notice of Rent Adjustment that the
                                                            Lessee received prior to the current rent due date shall govern.

 

		7	Prepaid
                                                                 Rent

		7.1	The
                                                            Lessee shall pay the prepaid rent to the Lessor. The details of the
                                                            prepaid rent amount and payment method are set forth in the Lease
                                                            Schedules.

 

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		7.2	The
                                                            prepaid rent is defined as the one-time lump-sum advance payment of
                                                            rent to the Lessor for the last installment provided in the Lease
                                                            Schedules If the amount of rent as listed in the Actual Rent Payment
                                                            Schedule is inconsistent with the prepaid rent the Lessee actually
                                                            paid, the difference shall be settled as follows: If the prepaid rent
                                                            actually paid is less than the amount of the last installment of rent
                                                            listed in the Actual Rent Payment Schedule, the Lessee shall make
                                                            up the deficiency on the last rent due date; If the prepaid rent actually
                                                            paid is greater than the amount of the last installment of rent, the
                                                            excess will not be refunded but will be applied against the rent of
                                                            the second to last installment (or more of these last installments
                                                            if the second to last installment is fully applied). If during the
                                                            lease term, the rent according to the Actual Rent Payment Schedule
                                                            is adjusted because of changes in the lease interest rate, the amount
                                                            of the last installment of rent shall be calculated in accordance
                                                            with the Notice of Rent Adjustment ice issued by the Lessor.

 

		7.3	The
                                                            prepaid rent shall be settled on the date of the last rent due date
                                                            and be applied against the last installment of rent. In the case where
                                                            the prepaid rent is greater than the last installment of rent, the
                                                            excess shall be settled on the date of the second to last rent due
                                                            date and be applied against the rent of the current installment. Any
                                                            excess prepaid rent shall be settled and applied likewise for the
                                                            other nearest installments.

 

		7.4	If
                                                            This Agreement becomes invalid, is revoked, cancelled or terminated
                                                            by any reason before any applicable settlement of the prepaid rent,
                                                            the prepaid rent shall be applied against any of the Lessee’s
                                                            amount payable under This Agreement. If there is still a remaining
                                                            balance after the applications, the Lessor shall refund the remaining
                                                            balance to the Lessee without interest.

 

		8	Lease
                                                                 Service Charge

		8.1	The
                                                            Lessee shall pay the lease service charge to the Lessor. The details
                                                            of the amount of the lease service charge and the method of payment
                                                            shall be set forth in the Lease Schedules.

 

		8.2	The
                                                            Lessor shall issue an invoice for the amount of the lease service
                                                            charge upon receipt of the lease service charge. The lease service
                                                            charge shall not be refunded after receipt by the Lessor.

 

		9	Leased
                                                                 Property Ownership

		9.1	The
                                                            Lessor becomes the sole owner of the Leased Property starting from
                                                            the day the Lessor pays the Leased Property purchase price to the
                                                            Lessee.

 

		9.2	The
                                                            Lessor may attach identification of ownership to the Leased Property
                                                            if it is deemed necessary. The Lessee shall corporate with the Lessor’s
                                                            request of ownership identification attachment and ensure that the
                                                            attachment is not removed or covered.

 

		9.3	Under
                                                            the premise of not disturbing the Lessee’s use of the Leased
                                                            Property, the Lessor shall have the right to attach lien or other
                                                            rights to the Leased Property.

 

		9.4	The
                                                            Lessor has the right to inquire and inspect the status of the Leased
                                                            Property by way of tele-communication or field investigations
                                                            at all times. The Lessee shall cooperate with the Lessor’s request.

 

		9.5	The
                                                            Lessor’s rights with respect to the Lease Property shall not
                                                            be altered even if the Leased Property is attached onto other personal
                                                            or real property.

 

		9.6	If,
                                                            during the lease term, there is any incident where Lessor’s
                                                            rights and other interests are damaged or compromised, the Lessee
                                                            shall take actions to mitigate the damage or loss and notify the Lessor
                                                            immediately of the situation.

 

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		10	Leased
                                                                  Property Registration

		10.1	In
                                                             order to ensure the protection of the legal ownership rights of the
                                                             Lessor, the Lessee shall cooperate with the Lessor in the process
                                                             of relevant government registration and recording of the Leased Property
                                                             or the lease transaction. The Lessor, as the party initiating the
                                                             registration, is responsible for handling the registration procedures.

 

		10.2	With
                                                             respect to the Lease Property registration, the Lessee
                                                             should fulfill the following obligations:

 

		(a)	The
                                                                Lessee should assist the Lessor in all the registration procedures.
                                                                The Lessee should provide any information and written
                                                                document to the Lessor within 3 days of the Lessor’s
                                                                written, oral and any other form of request for assistance.

 

		(b)	The
                                                                Lessee shall not raise
                                                                any objection
                                                                over the request for registration, nor shall the Lessee
                                                                apply for a registration of objection.

 

		(c)	In
                                                                case of any change in the Lessee’s basic registration information,
                                                                the Lessor should be informed within 7 days of such change. The
                                                                Lessor is then responsible for updating the government registration
                                                                and recording, if necessary.

 

		(d)	All
                                                                the fees incident to the registration application or the inquiry
                                                                of the Leased Property for purpose of registrations shall be borne
                                                                by the Lessee.

 

		11	Leased
                                                                  Property Possession and Use

		11.1	The
                                                             Leased Property will be possessed and used by the Lessee during the
                                                             lease term. The use of the Leased Property must be used within the
                                                             location and scope defined in the Lease Schedules and must strictly
                                                             follow the instructions of the user’s manual. The Leased Property
                                                             cannot be operated by unqualified personnel and must be maintained
                                                             in good running condition. The Lessee must not change the Leased
                                                             Property location without written consent of the Lessor during the
                                                             lease term.

 

		11.2	The
                                                             Lessee shall use the Leased Property only in accordance with the
                                                             Leased Property’s design capacity in the normal course of it
                                                             business. The Lessee shall pay for all expenses incurred for the
                                                             purposes of possession and use of the Leased Property.

 

		11.3	Without
                                                             written consent of the Lessor, the Lessee must not engage in the
                                                             followings during the lease term:

 

		(a)	Transfer,
                                                                 pledge or attach any lien to the Leased Property for the benefit
                                                                 of any third party. The Lessee must not sublet the Leased Property
                                                                 or engage in any other activity that may infringe the Lessor’s
                                                                 ownership rights to the Leased Property;

 

		(b)	Remove
                                                                 the Leased Property from the specified location according to
                                                                 This Agreement;

 

		(c)	Claim
                                                                 the Leased Property as part of the Lessee’s property in
                                                                 a civil legal proceeding, or include the Leased Property in the
                                                                 Lessee’s assets in a bankruptcy proceeding;

 

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		(d)	Fix
                                                                 any addition, demolition, attachment to the Leased Property (except
                                                                 for normal repair and maintenance),
                                                                 or alter the appearance, capability and quality of the Leased
                                                                 Property.

 

		11.4	Lessee
                                                             shall be held responsible for property damage or personal injury
                                                             caused to any third party related to the location, possession and
                                                             use of the Leased Property. The Lessee shall indemnify immediately
                                                             and unconditionally
                                                             if the Lessor suffers from any claim and litigation and any resulting
                                                             payment (including but not limited to legal counsel fee). The above
                                                             indemnification obligation will survive even after This Agreement
                                                             is canceled, terminated or expired.

 

		12	Safeguard,
                                                                  Repair and Maintenance of the Leased Property

		12.1	The
                                                             Lessee is responsible for the safeguard, repair and maintenance of
                                                             the Leased Property and for paying the costs of safeguard, repair
                                                             and maintenance. The Lessee may enter into regular maintenance contract
                                                             with the vender (or its agent) of the Leased Property to ensure the
                                                             normal working condition of the Leased Property. The Lessee should
                                                             also follow the following guidelines:

 

		(a)	The
                                                                Lessee shall properly operate and safeguard the Leased Property
                                                                and perform periodic or any necessary checkups and maintenance
                                                                services that are no less stringent than the national or industry
                                                                standards;

 

		(b)	When
                                                                replacing machinery parts of the Leased Property, spare parts
                                                                of original specifications and quality made by the original manufacturer
                                                                should be used. If the after-market generic spare parts are used,
                                                                the specification and the technical performance of the parts should
                                                                be consistent with the technical requirements of the equipment
                                                                so that the use of these spare parts will not cause impairment
                                                                to the valuation of the Leased Property;

 

		(c)	Without
                                                                written consent of the Lessor, the Lessee must not build in additions
                                                                to or remove any part of the Leased Property to change the technical
                                                                capability and performance of the Leased Property.

 

		12.2	Any
                                                             parts, device and service added to the Leased Property because of
                                                             the safeguard, repair and maintenance shall automatically become
                                                             part of the Leased Property and belong to the Lessor.

 

		12.3	The
                                                             Lessee’s act of safeguard, repair and maintenance for the Leased
                                                             Property shall not affect the continuation of the lease term, the
                                                             Lessee’s obligation to pay rent and the performance of This
                                                             Agreement.

 

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		13	Leased
                                                                  Property Quality Defect and Claim

		13.1	Since
                                                             the Lessor merely purchases the Leased Property from the Lessee before
                                                             leases it back to the Lessee, Lessee is to be responsible for the
                                                             quantity, quality, specification, technical performance and after-sale
                                                             service of the Leased Property; Lessor shall not be making any guarantee
                                                             with respect to those matters. If the quantity, quality, specification
                                                             and technical performance of the property delivered by the supplier
                                                             fail to match those of the purchase contract or construction contract
                                                             (hereinafter referred to as “Transaction Contract”),
                                                             or if there is any quality defects or misapplication of the purpose
                                                             and use of the property during the product warrantee period, the
                                                             Lessee shall be making claims or asserting its claims directly with
                                                             the supplier. All costs associated with the defects and claims shall
                                                             be borne by the Lessee and shall not be the responsibility of the
                                                             Lessor.

 

		13.2	Any
                                                             agreement that the Lessee and the supplier reach in regard to the
                                                             Leased Property defect or claims requires the advance written consent
                                                             of Lessor. Lessee shall timely inform Lessor in writing of any disposition
                                                             of defect or result of claim with respect to the Leased Property.
                                                             The Lessee should deliver the copy of the original written document
                                                             to the Lessor for the record within 3 days of the disposition of
                                                             defect or claim.

 

		13.3	The
                                                             Lessee shall not use any dispute with the supplier’s Transaction
                                                             Contract as an excuse to refuse the performance of its obligations
                                                             under This Agreement, including but not limited to payment of rent,
                                                             acceptance and lease- back of the Leased Property.

 

		14	Leased
                                                                  Property Damage and Loss

		14.1	The
                                                             Lessee hereby confirms that it bears the risk of damage and loss
                                                             of the Leased Property from the day the Lessee accepts the Leased
                                                             Property until the Lessee has performed all of its responsibilities
                                                             and obligations under This Agreement. The Lessee’s rent payment
                                                             and other obligations shall not be affected by any damage and loss
                                                             of the Leased Property.

 

		14.2	If
                                                             the Leased Property is damaged or lost, the Lessee shall immediately
                                                             inform the Lessor. The Lessor shall inform the Lessee to take any
                                                             of the following actions for remedy. The Lessee shall pay for all
                                                             the associated costs. The Lessee’s obligations under This Agreement,
                                                             including but not limited to rent payment, shall not be affected
                                                             during the period of remedy.

 

(a)
Repair the Leased Property back to its normal working condition;

 

		(b)	Replace
                                                                 the damaged or lost equipment part with equipment part approved
                                                                 by Lessor that is of similar condition, capacity, and value.
                                                                 The replacement part automatically becomes an asset belonged
                                                                 to the Lessor.

 

		14.3	In
                                                             the case the Lessor believes that the damage or loss of the Leased
                                                             Property is such that it is physically or economically beyond repair,
                                                             the Lessor shall have the right to elect any of the following:

 

		(a)	Terminate
                                                            the lease and issue the Lease Termination Notice (see Appendix IX)
                                                            to the Lessee requesting the Lessee to pay any liquidated damages,
                                                            delinquent rent, future rent, and any other amount payable under This
                                                            Agreement. The Lessee shall immediately pay all the amounts payable
                                                            under the Lease Termination Notice in one lump-sum payment to the
                                                            Lessor’s designated account. After the Lessee performed all
                                                            of the above payment obligations, all obligations of the Lessee under
                                                            This Agreement shall automatically cease to exist;

 

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		(b)	Request
                                                            the Lessee to bear all of the costs and replace the damaged or lost
                                                            Leased Property with property with the same or more advanced capacity
                                                            and value. The replacement property shall automatically become the
                                                            Leased Property under This Agreement. The lease under This Agreement
                                                            will continue; and the Lessee’s obligations under This Agreement
                                                            shall not be affected. The Lessee shall attach identification of ownership
                                                            to the replacement property pursuant to Section 9 of This Agreement
                                                            for the protection of the Lessor’s property rights and resume
                                                            all related obligations and responsibilities.

 

		15	Insurance

		15.1	The
                                                             Lessee shall obtain insurance coverage that meets the following requirements
                                                             and bears the cost of premium:

 

		(a)	In
                                                                the case that the Lessee did not insure the Leased Property before
                                                                the signing of This Agreement, the Lessee should obtain insurance
                                                                policy with the coverage specified by the Lessor from an insurance
                                                                company approved by the Lessor within 15 days of the effective
                                                                date of This Agreement. The Lessor shall be the sole beneficiary
                                                                of the policy;

 

		(b)	In
                                                                the case that the Lessee has insured the Leased Property before
                                                                the signing of This Agreement, the Lessee shall change the name
                                                                of the sole beneficiary to the name of the Lessor within 15 days
                                                                of the effective date of This Agreement. If the coverage of the
                                                                Lessee’s insurance policy fails to meet the specification
                                                                set by the Lessor, the Lessee shall obtain a new insurance policy
                                                                in accordance with the requirements of This Agreement;

 

		(c)	Total
                                                                amount of the insurance coverage shall not be lower than the Leased
                                                                Property’s replacement cost. The insurance policy shall
                                                                be effective at all time. Renewal of the insurance policy shall
                                                                be handled by the Lessee at least 15 days before the expiration
                                                                of the policy;

 

		(d)	The Lessee
                                                                                                                                shall immediately obtain insurance policy and pay the insurance
                                                                                                                                premium with respect to the replacement Leased Property under
                                                                                                                                Section 14.3(b), with the Lessor named as the sole owner and beneficiary;

 

		(e)	If
                                                                upon the expiration of the lease term, the Lessee does pay off
                                                                all rents and other amounts payable under This Agreement, the
                                                                Lessee shall continue to insure the Leased Property in accordance
                                                                with This Agreement.

 

		15.2	In
                                                             case where the Lessee fails to obtain insurance coverage or renew
                                                             the policy for the Leased Property in accordance with This Agreement,
                                                             the Lessor may nevertheless obtain insurance coverage or renew the
                                                             policy and request the Lessee to bear all of the related costs. The
                                                             Lessee shall pay the above costs to the Lessor within three days
                                                             after the costs are incurred or such request for reimbursement is
                                                             made by the Lessor (whichever is earlier).

 

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		15.3	The
                                                             Lessee shall bear all of the risk of loss, consequences, and costs
                                                             associated, for whatever reason, with lack of insurance, invalid
                                                             insurance policy, policy cancelation, termination of policy by the
                                                             insurer and insufficient insurance coverage.

 

		15.4	In
                                                             the case where an insurable event occurs during the lease term, the
                                                             Lessee shall immediately inform the Lessor. The Parties shall designate
                                                             personnel charged with the responsibility of dealing with the insurance
                                                             claims to ensure the Lessor’s entitlement of insurance payout.

 

		15.5	If
                                                             an insurable event occurs during the lease term, the insurance payout
                                                             shall be distributed in the following order:

 

		(a)	If
                                                                Section 14.2 or Section 14.3(b) applies under This Agreement,
                                                                the payout shall be distributed in the following order:

 

		(i)	Any
                                                                cost that is necessary for the performance of Section 14.2 or
                                                                Section 14.3(b) of This Agreement;

 

		(ii)	Liquidated
                                                                 damages;

 

		(iii)	Damage
                                                                  awards;

 

		(iv)	Delinquent
                                                                 rent;

 

		(v)	Other
                                                                amounts payable.

 

		(b)	If
                                                                Section 14.3(a) applies, the payout shall be used to pay all applicable
                                                                amounts under Section 14.3(a) in the following order:

 

		(i)	Liquidated
                                                                damages;

 

		(ii)	Damage
                                                                 awards;

 

		(iii)	Delinquent
                                                                  rent;

 

		(iv)	All
                                                                 future rent;

 

		(v)	Nominal
                                                                Price;

 

		(vi)	Other
                                                                 amounts payable.

 

		15.6	If
                                                            the Lessor does not receive the insurance payout or the insurance
                                                            payout is insufficient to cover all costs and expenses under Section
                                                            15.5, the Lessee shall be responsible for the deficiency and assume
                                                            any payment obligation or compensate the Lessor within three days
                                                            of the receipt of the Lessor’s notice for payment.

 

		16	Handling
                                                                  of the Leased Property after the Lease Expires

		16.1	The
                                                            Parties shall dispose the Leased Property according to the provisions
                                                            of the Lease Schedules after the expiration of the lease term and
                                                            the Lessee’s full performance of its obligations under This
                                                            Agreement. The Lessee shall bear the costs of disposing the Leased
                                                            Property:

 

		(a)	The
                                                                Lessee buys the Leased Property with a Nominal Price: The Lessee
                                                                shall pay a Nominal Price to the Lessor within 10 days of the
                                                                end of the lease term. After receiving the Nominal Price, the
                                                                Lessor delivers Leased Property Ownership Transfer Notice (Appendix
                                                                X) to the Lessee and transfers the ownership rights of the
                                                                Leased Property to the Lessee;

 

    	9

    	 

    

 

		(b)	Renewal:
                                                                the Lessee may continue to lease the Leased Property. The details
                                                                of the renewal may be negotiated by the Parties and be embodied
                                                                in new written agreements;

 

		(c)	The
                                                                Leased Property becomes owned by the Lessee automatically;

 

		(d)	Return
                                                                of the Leased Property: the Lessee returns the Leased Property
                                                                to the Lessor within 10days of the end of the lease term. The
                                                                Lessee hereby promises that the Leased Property will be in good
                                                                working condition (except for the normal wear and tear).
	 	 	 

		17	Early
                                                                 Payment

		17.1	During
                                                            the lease term, the Lessee may make an early payment for a portion
                                                            or all of the rent after securing written consent of the Lessor.

 

		17.2	The
                                                                 amount of possible early payment, method of payment, and the
                                                                 handling of the Leased Property will be determined by negotiations
                                                                 of the Parties.

 

		17.3	In
                                                                 the case where the Lessee makes an early payment for a portion
                                                                 or all of the rent, the lease service fee that has been charged
                                                                 by the Lessor shall not be refunded, nor shall there be a waiver
                                                                 for any obligation that was already existent prior to the early
                                                                 payment.

 

		18	Representations
                                                                                                      and Warranties

		18.1	The
                                                             Lessor hereby makes the following representations and warranties:

 

		(a)	The
                                                                 Lessor is a financial leasing company in good standing and properly
                                                                 incorporated under the applicable laws and regulations of the
                                                                 People’s Republic of China, and is capable of and qualified
                                                                 for signing and performing This Agreement;

 

		(b)	The
                                                                 Lessor has received all authorizations and approvals necessary
                                                                 for signing This Agreement and for performing all obligations
                                                                 under This Agreement. The Lessor’s representative signing
                                                                 This Agreement is duly authorized;

 

		(c)	The
                                                                 Lessor makes no representations and warranties for any condition
                                                                 of the Leased Property, including applicability, quality defect,
                                                                 and profitability for the Lessee.

 

		18.2	The
                                                             Lessee hereby makes the following representations and warranties:

 

		(a)	The
                                                          Lessee is an independent legal entity/institution which is duly incorporated
                                                          and registered, and in good legal and operational standing;

 

		(b)	The
                                                                 Lessee has received all authorizations and approvals necessary
                                                                 for signing This Agreement and for performing all obligations
                                                                 under This Agreement. The Lessee’s representative signing
                                                                 This Agreement is duly authorized;

 

		(c)	The
                                                                 Lessee’s signing of This Agreement neither violates any
                                                                 current laws or regulations, nor does it violate the provisions
                                                                 of any other contract and/or agreement entered into with any
                                                                 third party;

 

		(d)	The
                                                                 Lessee guarantees the authenticity, accuracy and integrality
                                                                 of the documents and information provided to the Lessor, including
                                                                 but not limited to personal identity materials, financial information,
                                                                 and guarantee information, etc;

 

		(e)	The
                                                                 Lessee shall notify the Lessor within 7 days in writing of any
                                                                 change regarding the company or enterprise name, the legal representative,
                                                                 the legal address, etc;

 

		(f)	The
                                                                                                                               Lessee
                                                                                                                               shall
                                                                                                                               provide
                                                                                                                               advance
                                                                                                                               notice
                                                                                                                               to
                                                                                                                               the
                                                                                                                               Lessor
                                                                                                                               and
                                                                                                                               obtain
                                                                                                                               the
                                                                                                                               Lessor’s
                                                                                                                               written
                                                                                                                               consent
                                                                                                                               before
                                                                                                                               engaging
                                                                                                                               in
                                                                                                                               any
                                                                                                                               corporate
                                                                                                                               restructuring,
                                                                                                                               merger
                                                                                                                               and
                                                                                                                               acquisition,
                                                                                                                               combination,
                                                                                                                               spin-off
                                                                                                                               or
                                                                                                                               major
                                                                                                                               asset
                                                                                                                               disposition;

 

    	10

    	 

    

 

		(g)	The
                                                                 Lessee guarantees that the Lessee enjoys an integral ownership
                                                                 rights to the Leased Property prior to the transfer of the Leased
                                                                 Property to the Lessor;

 

		(h)	The
                                                                 Lessee guarantees the Leased Property transferred to the Lessor
                                                                 is without any ownership blemishes or obstacles including mortgage,
                                                                 pledge、seizure, detention, court enforcement, receivership
                                                                 or property capital contribution, etc. The Lessee also guarantees
                                                                 that there is no quality defect in the Leased Property.

 

		18.3	The
                                                                   Lessee guarantees to notify the Lessor and provide new guarantee
                                                                   approved by the Lessor within three days of it becoming aware
                                                                   of any of the following incidents regarding the guarantor:

 

		(a)	Operation
                                                                 and financial condition significantly deteriorates;

 

		(b)	The
                                                                 guarantor has delinquent debt owed to the Lessor or to other
                                                                 financial institutions;

 

		(c)	The
                                                                 guarantor or its legal representative, key management personnel
                                                                 is involved or is expected to be involved in criminal case or
                                                                 other legal disputes; or the guarantor is involved in major lawsuits, arbitrations
                                                                 or administrative judgment, or its major assets are being taken
                                                                 for attachment or other judicial enforcement measures;

 

		(d)	The
                                                                 loss, impairment or potential impairment in value of the collateral;

 

		(e)	Incidents
                                                                 where the ability to guarantee is lost or weakened, including
                                                                 suspended production, shutdown, dissolution, cease of doing business,
                                                                 license suspension or cancellation, bankruptcy, spin off, or
                                                                 business combination, etc.

 

		18.4	The
                                                                  representations and warranties made in Section18 by both Parties
                                                                  shall be valid and effective before the termination of This
                                                                  Agreement.

 

		19	Guarantee

		19.1	To
                                                             ensure the Lessee’s performance of its rent and other obligations,
                                                             the Lessee or a third party designated by the Lessee shall provide
                                                             the guarantee that satisfies the Lessor’s requirement and enter
                                                             into the Guarantee Agreement in accordance with the manner of guarantee
                                                             confirmed in the Lease Schedules. The Lessee bears all of the costs
                                                             of guarantee.

 

		19.2	The
                                                             Lessor may choose at its own discretion any or all guarantors to
                                                             assume the guarantee responsibility if the Lessee fails to pay all
                                                             or part of the rent, delinquency penalty, nominal price and/or other
                                                             amounts payable, or if other default or breach occurs.

 

		19.3	The
                                                             Lessor shall have the right to request the Lessee to provide additional
                                                             guarantees to supplement or substitute the above guarantee, if the
                                                             Lessee or the guarantor’s credit rating declines, the value
                                                             of the guarantee assets declines, or if other event occurs that potentially
                                                             may materially affect the Lessor’s rights under This Agreement.

 

		20	Information
                                                                  Disclosure

		20.1	When
                                                             the Lessor makes request to update its understanding about the Lessee’s
                                                             operation status, the Lessee shall provide its balance
                                                             sheet, income statement, statement
                                                             of income distribution,
                                                             cash
                                                             flow statement
                                                             or other financial information that the Lessor reasonably
                                                             requests.

 

    	11

    	 

    

 

		20.2	The
                                                             two parties acknowledge to keep in confidentiality
                                                             all commercial information, including the content of This
                                                             Agreement, in accordance with the disclosure provisions contained
                                                             in This Agreement. The Parties also promise not to publicly disclose
                                                             any the details in any form (except for under the provisions under
                                                             Section 26.1 and information disclosed in accordance with the provisions
                                                             of relevant laws and regulations).

 

		21	Default
                                                                  Events and Remedial Measures

		21.1	The
                                                            two parties promise to strictly execute all the sections of This Agreement.
                                                            If either party violates the provisions of This Agreement, it shall
                                                            be held responsible for the consequences of default.

 

		21.2	In
                                                            the case where the Lessee is delinquent for making the rent payment
                                                            and other amount payable to the Lessor, the Lessee shall pay liquidated
                                                            damages to the Lessor with respect to the delinquent amount at the
                                                            rate of 0.05% per day. The period of delinquency starts from the day
                                                            following the rent due date under This Agreement and ends on the date
                                                            the delinquent amount is paid in full to the Lessor’s account
                                                            as listed in the Lease Schedules. Delinquency penalty shall be deducted
                                                            from any payment that the Lessee pays before the payment is applied
                                                            for any other purposes.

 

		21.3	The
                                                            Lessee shall be in default in any of the following situations:

 

		(a)	Delinquent
                                                               on any rent for over one month;

 

		(b)	Transfer
                                                               property illegally or withdraw registered capital;

 

		(c)	Failure
                                                               to pass the State Administration of Industry and Commerce annual
                                                               inspection, or revocation of business
                                                               license because of illegal
                                                               or unlawful business
                                                               operations;

 

		(d)	The
                                                               Lessee fails to return, after repeated requests by the Lessor,
                                                               the legal ownership certificates of the Leased Property (including
                                                               but not limited to the invoices of the Leased Property, quality
                                                               control certificate and deeds of ownership) that the Lessee borrowed
                                                               from the Lessor for over 7 days;

 

		(e)	Violating
                                                               the provision under Section 9 of This Agreement and infringing
                                                               upon the Lessor’s ownership rights of the Leased Property
                                                               and the failure to curb within 15 days of written notice by the
                                                               Lessor;

 

		(f)	When
                                                               the parties elect to handle the ownership registration by the method
                                                               provided in Section 10.1, the Lessee fails to provide the necessary
                                                               information for purposes of registration during the period specified
                                                               in Section 10.2(a) or 10.2(c), or fails to timely provide changes
                                                               to the basic information to the Lessor;

 

		(g)	Violating
                                                               Section 11 of This Agreement with respect to the possession and
                                                               use of the Leased Property;

 

		(h)	Violating
                                                               the provisions under Section 12 of This Agreement with respect
                                                               to the safeguard, repair and maintenance of the Leased Property
                                                               and failing to curb within 15 days of written notice by the Lessor;

 

		(i)	The
                                                               Lessee’s failure to obtain insurance coverage for the Leased
                                                               Property in accordance with the provisions under Section 15 of
                                                               This Agreement;

 

    	12

    	 

    

 

		(j)	The
                                                               Lessee fails to provide guarantee in accordance with Section 19
                                                               of This Agreement; or the Lessee’s failure to provide additional
                                                               guarantee as meeting the Lessor’s requirement within 15 days
                                                               of written notice when the Lessor has reason to believe that the
                                                               guarantee the Lessee previously provided has been lost or weakened;

 

		(k)	The
                                                               Leased Property is detained, attached, confiscated or otherwise
                                                               impacted such that its normal operations are affected;

 

		(l)	The
                                                               shutdown, production suspension, bankruptcy of the Lessee and its
                                                               involvement in major legal dispute; or the discontinuation of the
                                                               Lessee’s major business segment, production plan, marketing
                                                               plan and major changes in government policy, which may materially
                                                               affect the Lessee’s normal business production and its ability
                                                               to perform under This Agreement;

 

		(m)	The
                                                               Lessee is involved in corporate reorganization, merger and acquisition,
                                                               spin off or major disposition of assets without advance notice
                                                               to the Lessor and securing written permission from the Lessor prior
                                                               to the transaction;

 

		(n)	The
                                                               Lessee disposes it assets or business operations in violation of
                                                               any equitable principle;
                                                               or all or part of the Lessee’s property and rights are confiscated,
                                                               detained, expropriated, and deprived;

 

		(o)	The
                                                               Lessee encounters major events, which could potentially affect
                                                               its ability to perform the debt payment obligations;

 

		(p)	The
                                                               Lessee is in default with respect to any contract entered into
                                                               with the Lessor or any other third party; or the Lessee’s
                                                               failure to pay any amount delinquent under such contracts with
                                                               the Lessor or the third party;

 

		(q)	The
                                                               Lessee’s behavior that materially damages the Leased Property
                                                               and the Lessor’s legal rights and interests;

 

		(r)	The
                                                               Lessee’s representations and warranties in This Agreement
                                                               or related documents are untrue, incomplete, materially misleading,
                                                               or inconsistent with other representations and warranties;

 

		(s)	Other
                                                               situations stipulated under laws and regulations or between the
                                                               two parties.

 

		21.4	When
                                                            the Lessee is in default pursuant to the provisions of Section 21.3,
                                                            the Lessor may elect one or more of the following remedies. The Lessor’s
                                                            actions of remedy shall not affect the Lessor’s rights and the
                                                            Lessee’s obligations under This Agreement:

 

		(a)	The
                                                                Lessor is entitled to control the use and disposition of the Leased
                                                                Property. All of the resulting losses will be undertaken by the
                                                                Lessee;

 

		(b)	Announce
                                                                that all or part of the Lessee’s obligations under This
                                                                Agreement become instantly due and payable. The Lessor may request
                                                                the Lessee to pay, in part or in lump-sum, the delinquent rent,
                                                                future rent, liquidated damages, nominal price (if any) and so
                                                                on under This Agreement and to compensate all losses caused to
                                                                the Lessor because of the default;

 

		(c)	Unilaterally
                                                                terminate This Agreement and request the Lessee to pay the delinquent
                                                                rent and liquidated damages as of the day of termination, and
                                                                return the Leased Property to the Lessor. In the case where the
                                                                Lessee does not return the Leased Property to the Lessor by the
                                                                day of termination, the Lessee shall pay for the loss caused to
                                                                the Lessor during the period of possession (the period starting
                                                                from the termination date to and ending on the day the Leased
                                                                Property is actually returned; the loss shall be calculated based
                                                                on the rent specified in This Agreement).

 

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		21.5	When
                                                            the Lessee returns the Leased Property back to the Lessor in accordance
                                                            with Section 21.4(c), the Lessee shall pay for all of the costs of
                                                            delivering the Leased Property, all related manuals, files and records
                                                            to the specified location of the Lessor, and shall keep the Leased
                                                            Property in the condition specified in This Agreement. If the Lessee
                                                            fails to return the Leased Property in accordance with this section,
                                                            the Lessor (including Lessor’s agent) shall be entitled to enter
                                                            into the premises of the Leased Property to retrieve the Leased Property
                                                            and shall be entitled to unilaterally dispose the Leased Property.
                                                            The Lessee hereby confirms and agrees to the Lessor’s rights
                                                            to the disposition of the Leased Property and the disposition proceeds.

 

		21.6	The
                                                            Lessor shall have the right to use the disposition proceeds of the
                                                            Leased Property to pay for costs in the following order:

 

		(a)	Lessor’s
                                                                costs of retrieving, transferring, safeguarding and repairing
                                                                the Leased Property or costs of executing This Agreement, including
                                                                but not limited to litigation fees, mediation fees, lawyer fees,
                                                                property preservation fees, inspection fees, appraisal
                                                                fees, audit fee, auction
                                                                fee and execution
                                                                fees;

 

		(b)	The
                                                                Lessee’s delinquency penalty, all unpaid rent (including
                                                                delinquent rent and future rent) that the Lessee is liable, as
                                                                well as any loss caused to the Lessor;

 

		(c)	Any
                                                                other amount payable.

 

If
the disposition proceeds do not cover all of Lessor’s amounts listed above, the Lessee shall compensate the Lessor within
3 days of the Lessor’s written request for compensation. Any surplus proceeds from the disposition shall belong to the Lessor.

 

		22	Significant
                                                                  Events

		22.1	The
                                                           Lessee shall notify the Lessor of the occurrence or possible occurrence
                                                           of the events defined under Sections 21.3(k),21.3(l),21.3(m),21.3(n),21.3(o)
                                                           or 21.3(p). For the decisions that the Lessee may make at its own discretion,
                                                           the Lessee shall notify the Lessor of the decision within 15 days of
                                                           making such decisions;
                                                           for the decisions that are not within the discretion of the Lessee,
                                                           the Lessee shall notify the Lessor of the event within 3 working days
                                                           of the occurrence of such event. For the actions that require Lessor’s
                                                           prior permission, the Lessee shall obtain Lessor’s consent in
                                                           writing in advance.

 

		22.2	The
                                                           Lessee shall be responsible for the compensation for all of the Lessor’s
                                                           losses if the Lessee negligently delays the Section 22.1 notification obligation
                                                           and caused losses to the Lessor.

 

		23	Leased
                                                                  Property Requisition and Collection

		23.1	If
                                                            the Leased Property is requisitioned by the government during the
                                                            lease term, the parties may negotiate as to whether to continue to
                                                            perform This Agreement based on the requisition situation. If the
                                                            parties are unable to reach an agreement through negotiation, This
                                                            Agreement shall be terminated on the day the government orders to
                                                            requisition. If the Leased Property is acquired by the government,
                                                            causing the Lessor to lose the ownership of the Leased Property, This
                                                            Agreement shall be regarded as being terminated at the time the government
                                                            orders to acquire.

 

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		23.2	Unless
                                                            the Lessee and Lessor have otherwise reached an agreement, in the
                                                            case where the Leased Property is requisitioned or acquired by the
                                                            government, the compensation paid by the government and preferential
                                                            policy subsidies shall belong to the Lessor. All of the government
                                                            compensation shall first be used to pay the liquidated damages, damage
                                                            awards, all unpaid rent (including the delinquent rent and the future
                                                            rent) and other amount payables by the Lessee to the Lessor under
                                                            This Agreement. If the government compensation is insufficient for
                                                            paying all of the above amounts, the deficiency shall be complemented
                                                            by the Lessee within three days.

 

		24	Force
                                                                  Majeure

		24.1	Force
                                                                                                                          Majeure as
                                                                                                                          referred
                                                                                                                          to in
                                                                                                                          the
                                                                                                                          Agreement
                                                                                                                          means
                                                                                                                          unforeseeable,
                                                                                                                          unavoidable
                                                                                                                          and
                                                                                                                          insurmountable
                                                                                                                          objective conditions,
                                                                                                                          including
                                                                                                                          but
                                                                                                                          not
                                                                                                                          limited
                                                                                                                          to war,
                                                                                                                          strike,
                                                                                                                          earthquake,
                                                                                                                          landslide,
                                                                                                                          mining
                                                                                                                          disaster,
                                                                                                                          fire,
                                                                                                                          flood,
                                                                                                                          demonstration,
                                                                                                                          riot,
                                                                                                                          government
                                                                                                                          restriction,
                                                                                                                          etc.

 

		24.2	The
                                                            Lessee shall bear all losses caused by force majeure events to the
                                                            Lessee during the lease term. The Lessee shall not regard it as an
                                                            excuse to protest the rent payment and other amounts payable under
                                                            This Agreement.

 

		25	Notice
                                                                 

 

		25.1	Unless
                                                             otherwise agreed in This Agreement, all notices or other communication
                                                             under This Agreement shall be made in written form and delivered
                                                             by designated personal to the address stated on This Agreement heading
                                                             , by courier, registered mail or fax (if using multiple ways to deliver,
                                                             whichever delivered to the recipient first):

 

		(a)	If
                                                                 delivered by a designated person, the delivery date for the material
                                                                 or advice shall be the date of receipt;

 

		(b)	If
                                                                 delivered by an express courier, the delivery date for the material
                                                                 or advice shall be three days after delivery to the express courier;

 

		(c)	If
                                                                 delivered by registered mail, the delivery date for the material
                                                                 or advice shall be five days after delivery to the registered
                                                                 mail;

 

		(d)	If
                                                                 deliver by fax, the delivery date is the day of dispatch of fax.

 

		25.2	If
                                                            the address of any party changes, the party shall notify the other
                                                            party within seven days. Otherwise, the party failing to give notice
                                                            shall bear all liabilities and consequences.

 

		26	Contractual
                                                                  Rights and Obligations Transfer 

		26.1	The
                                                             Lessor shall have the right to transfer or pledge all or part of
                                                             the rights
                                                             under This Agreement to a third party without consent by the
                                                             Lessee.

 

		26.2	If
                                                             the Lessee transfers or pledges the rights and obligations under
                                                             This Agreement, the Lessee must obtain the advance written consent
                                                             of the Lessor

 

    	15

    	 

    

 

		27	Titles

		27.1	The
                                                             titles included in This Agreement are only used for the sake of convenience
                                                             and are not giving any effect to the meaning or semantics of any
                                                             section.

 

		28	Law
                                                                  Application and Disputes Settlement

		28.1	This
                                                             Agreement is subject to the applicable laws of the People’s
                                                             Republic of China, and shall be interpreted in accordance with the
                                                             PRC laws.

 

		28.2	If
                                                             any dispute occurs for the interpretation and performance of This
                                                             Agreement, both parties shall resolve the disputes through friendly
                                                             negotiation. If there is still any dispute that cannot be resolved
                                                             through friendly negotiation, either party can submit a lawsuit to
                                                             the People’s Court of the People’s Republic of China
                                                             in the Lessor’s jurisdiction.

 

		28.3	In
                                                             the case of existing disputes on part of the terms in the Agreement,
                                                             during the settling, and arbitration, the Agreement shall be executed
                                                             continually by both parties except for matters in disputes.
	 	 	 

		29	Appendix

 

29.1
  The appendix is an integrated part of This Agreement with equal legal
force:

 

Appendix
I Supplementary Agreement

 

Appendix
II Leased Property List

 

Appendix
III Leased Property Purchase Price Confirmation

 

Appendix
IV Leased Property Ownership Transfer Confirmation (From Lessee to Lessor)

 

Appendix
V Lease Schedules

 

Appendix
VI Estimated Rent Payment Schedule

 

Appendix
VII Actual Rent Payment Schedule (Formatted Text)

 

Appendix
VIII Notice of Rent Adjustment (Formatted Text)

 

Appendix
IX Lease Termination Notice (Formatted Text)

 

Appendix
X Leased Property Ownership Transfer Notice (From Lessor to Lessee) (Formatted Text)

  

    	16

    	 

    

 

		30	Agreement
                                                                  Validate, Modification and Discharge

		30.1	This
                                                                                                                             Agreement
                                                                                                                             becomes
                                                                                                                             validated
                                                                                                                             after
                                                                                                                             being
                                                                                                                             signed
                                                                                                                             (or
                                                                                                                             sealed)
                                                                                                                             by
                                                                                                                             both
                                                                                                                             parties’
                                                                                                                             legal
                                                                                                                             representative
                                                                                                                             (or
                                                                                                                             authorized
                                                                                                                             representatives)
                                                                                                                             with
                                                                                                                             stamps
                                                                                                                             of
                                                                                                                             the
                                                                                                                             company’s
                                                                                                                             seal.
                                                                                                                             If
                                                                                                                             the
                                                                                                                             Agreement
                                                                                                                             is
                                                                                                                             signed
                                                                                                                             by
                                                                                                                             authorized
                                                                                                                             representatives,
                                                                                                                             the
                                                                                                                             authorized
                                                                                                                             representatives
                                                                                                                             shall
                                                                                                                             provide
                                                                                                                             the
                                                                                                                             original
                                                                                                                             power
                                                                                                                             of
                                                                                                                             attorney
                                                                                                                             issued
                                                                                                                             by
                                                                                                                             the
                                                                                                                             legal
                                                                                                                             representatives.

 

		30.2	Except
                                                             for the provisions of rent adjustment in Section 5.6 and Section
                                                             6 of This Agreement, the modifications of This Agreement and its
                                                             terms shall only take effect with written documents signed by both
                                                             the Lessor and the Lessee.

 

		30.3	After the validation of
                                                                                                                           This Agreement,
                                                                                                                           either
                                                                                                                           party
                                                                                                                           shall
                                                                                                                           not
                                                                                                                           be
                                                                                                                           able
                                                                                                                           to
                                                                                                                           unilaterally
                                                                                                                           terminate
                                                                                                                           This
                                                                                                                           Agreement,
                                                                                                                           except
                                                                                                                           provided
                                                                                                                           otherwise
                                                                                                                           by
                                                                                                                           the
                                                                                                                           law
                                                                                                                           or
                                                                                                                           otherwise
                                                                                                                           agreed
                                                                                                                           to
                                                                                                                           by
                                                                                                                           This
                                                                                                                           Agreement.

 

		30.4	This
                                                             original Agreement is made in quadruplicate and each party hold two
                                                             copies with equal legal force.

 

		31	Others

		31.1	This
                                                             Agreement is signed as a result of negotiations between the two parties.
                                                             Both parties have reviewed all clauses and have no dissent at the
                                                             time of signing. Both parties have accurate understanding for the
                                                             legal implication of the clauses regarding their respective rights
                                                             and obligations.

 

If
there is any conflict between a Chinese language provision and the corresponding English language provision in this Agreement,
the Chinese language provision will prevail.

 

(No
text below this page, the signature and stamp page of the Financing and Lease Agreement is attached in the next page. )

 

(No
text in this page, signature and stamp page of the Financing and Lease Agreement numbered ZMZ-2013-0031)

 

Lessor:
China National Foreign Trade Financial & Leasing Co., Ltd

(Sealed)

 

    	17

    	 

    

 

Legal
representative (signature or seal) or authorized representative
(signature):

/s/Jianping
Ding

 

Lessee:
Hebei Baoding Orient Paper Milling Co., Ltd

(Sealed)

Legal
representative (signature or seal) or authorized representative
(signature):

/s/Zhenyong
Liu

 

    	18

    	 

    

 

Appendix
I Supplementary Agreement

 

Supplementary
Agreement

 

Agreement
No.: ZMZ-2013-0031

 

The
Lessor (China National Foreign Trade Financial & Leasing Co., Ltd) and the Lessee (Hebei Baoding Orient Paper Milling Co.,
Ltd) hereby make the following supplementary agreements through friendly negotiation under the Financing Lease Agreement numbered
ZMZ-2013-0031:

 

		1.	Subsection
                                                            (g) is added to Section 3.3 of the Financing Lease Agreement, and
                                                            reads: China Orient Asset Management Corporation Shijiazhuang Office,
                                                            which provides the service of long term financial non-performing assets
                                                            acquisition, issues formally the “Long Term Acquisition Commitment
                                                            Letter” to the Lessor.

 

		2.	Section
                                                            30.1 of the Financing Lease Agreement is amended to read: This Agreement
                                                            becomes effective after being signed (or sealed) by both parties’
                                                            legal representatives (or authorized representatives) with stamps
                                                            of the company’s seal.

 

		3.	Section
                                                            30.4 of the Financing Lease Agreement is amended to read: This original
                                                            Agreement is made in six
                                                            copies and each party hold three copies with equal legal force.

 

Each
party confirms that: The supplementary agreement is an integral part of the Agreement with equal legal force. To the
extent that the supplementary agreement is inconsistent with the Financing Lease Agreement, the provisions in the supplementary
agreement govern. The provisions in the Financing Lease Agreement shall still be executed to the extent not covered by the supplementary
agreement.

 

The
supplementary agreement becomes effective after being stamped by the company seals of both parties.

 

Lessor:
China National Foreign Trade Financial & Leasing Co., Ltd

(Sealed)

Date:
June 16, 2013

Lessee:
Hebei Baoding Orient Paper Milling Co., Ltd

(Sealed)

Date:
June 16, 2013

 

    	19

    	 

    

  

Appendix II Leased Properties List

 

Leased Properties List

 

Agreement NO.ZMZ-2013-0031

 

	No.	 	Name of Leased Properties	 	Specification	 	QTY	 	Unit	 	Vendor	 	Invoice No.	 	Remarks
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	1	 	Transmission Department	 	\	 	1.00	 	Unit	 	QinYang  First Paper Machinery
    Co., Ltd	 	00419923	 	Line 5600mm/1200mm
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	2	 	First and Second Cylinder Section	 	\	 	1.00	 	Unit	 	QinYang  First Paper Machinery
    Co., Ltd	 	00490972	 	Line 5600mm/1200mm
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	3	 	Third and Fourth Cylinder Section	 	\	 	1.00	 	Unit	 	QinYang  First Paper Machinery
    Co., Ltd	 	00490973	 	Line 5600mm/1200mm
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	4	 	Coating Machine	 	\	 	1.00	 	set	 	QinYang  First Paper Machinery
    Co., Ltd	 	00400786	 	Line 5600mm/1200mm
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	5	 	Roller Winding Machine	 	\	 	1.00	 	set	 	QinYang  First Paper Machinery
    Co., Ltd	 	00419920	 	Line 5600mm/1200mm
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	6	 	Fifth and Sixth Cylinder Section	 	\	 	1.00	 	Unit	 	QinYang  First Paper Machinery
    Co., Ltd	 	00419919	 	Line 5600mm/1200mm
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	7	 	Baseplate of Paper Machine	 	\	 	1.00	 	Unit	 	QinYang  First Paper Machinery
    Co., Ltd	 	00400785	 	Line 5600mm/1200mm
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	8	 	Drying Parts and Frame of Paper Machine	 	\	 	1.00	 	Unit	 	QinYang  First Paper Machinery
    Co., Ltd	 	00490971	 	Line 5600mm/1200mm
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	9	 	Frame of Paper Machine	 	\	 	1.00	 	Unit	 	QinYang  First Paper Machinery
    Co., Ltd	 	00490970	 	Line 5600mm/1200mm
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	10	 	Drying and Pressing Parts of Paper Machine	 	\	 	1.00	 	Unit	 	QinYang  First Paper Machinery
    Co., Ltd	 	00490969	 	Line 5600mm/1200mm
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	11	 	High Speed Winder	 	\	 	1.00	 	set	 	QinYang  First Paper Machinery
    Co., Ltd	 	00419921	 	Line 5600mm/1200mm
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	12	 	Quantitative Moisture Tester	 	\	 	1.00	 	set	 	QinYang  First Paper Machinery
    Co., Ltd	 	00419922	 	Line 5600mm/1200mm
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	13	 	Spare Parts	 	\	 	1.00	 	batch	 	Zhengzhou Aoke Papermaking Technology
    Engineering Co., Ltd	 	08303879	 	Line 5600mm/1200mm
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	14	 	Rotary Drum Pressure Screen	 	3m2	 	1.00	 	set	 	Baoding New Downtown Qiangsheng Light
    Industry Machinery Factory	 	04136509	 	\
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	15	 	1400 Drag Conveyer	 	3m2	 	1.00	 	set	 	Baoding New Downtown Qiangsheng Light
    Industry Machinery Factory	 	04136509	 	\
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	16	 	Composite Board	 	\	 	409.36	 	m2	 	Baoding Jianxin Colorbond engineering
    co., Ltd	 	03591802	 	light steel structure in workshop
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	17	 	#155 Digital Photo Paper Coating Production Line	 	\	 	1.00	 	line	 	Hebei Shuangxing Paper Co., Ltd	 	07275349	 	\
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	18	 	#156 Digital Photo Paper Coating Production Line	 	\	 	1.00	 	line	 	Hebei Shuangxing Paper Co., Ltd	 	09691590	 	\
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	19	 	#3460 Folding Multi-cylinder Paper Machine	 	#3460	 	1.00	 	suit	 	Shanghai Paper Making Machinery Co. ,
    Ltd , Beijing Branch	 	04127265	 	\
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	20	 	Knife Cutting Machine	 	\	 	2.00	 	set	 	Shanghai Paper Making Machinery Co. ,
    Ltd , Beijing Branch	 	65999812-65999814	 	\
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	21	 	Papermaking Machinery High-speed Vacuum Roll	 	\	 	2.00	 	set	 	Shanghai Paper Making Machinery Co. ,
    Ltd , Beijing Branch	 	01092841	 	\
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	22	 	Water Lines Vacuum Roll	 	\	 	2.00	 	set	 	Shanghai Paper Making Machinery Co. ,
    Ltd , Beijing Branch	 	65999819-65999825	 	\
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	23	 	35m3Pulping Relief Warehouse	 	35m3	 	2.00	 	set	 	Shanghai Paper Making Machinery Co. ,
    Ltd , Beijing Branch	 	16843497-16843498	 	\
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	24	 	Full Set Pulp Flow Equipment	 	#1575	 	1.00	 	suit	 	Shanghai Paper Making Machinery Co. ,
    Ltd , Beijing Branch	 	16843495-16843496	 	\
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	25	 	Fluffer	 	\	 	1.00	 	unit	 	Shanghai Paper Making Machinery Co. ,
    Ltd , Beijing Branch	 	16843496	 	\
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	26	 	Sieve Shaker Machine	 	1575	 	1.00	 	unit	 	Shanghai Paper Making Machinery Co. ,
    Ltd , Beijing Branch	 	58691003	 	\
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	27	 	Sieve Shaker Machine	 	\	 	1.00	 	unit	 	Beijing Papermaking Machinery Sales Co.,
    Ltd	 	08810942	 	\
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	28	 	Propeller	 	\	 	8.00	 	suit	 	Beijing Papermaking Machinery Sales Co.,
    Ltd	 	08810942	 	\
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	29	 	500KVA Transformer	 	500KVA	 	1.00	 	suit	 	Beijing Papermaking Machinery Sales Co.,
    Ltd	 	08810942	 	\
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	30	 	1200 Full Set Pulp Flow Equipment	 	1200	 	1.00	 	suit	 	Beijing Papermaking Machinery Sales Co.,
    Ltd	 	08810937, 08810938	 	\
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	31	 	Head Box	 	\	 	1.00	 	item	 	Beijing Papermaking Machinery Sales Co.,
    Ltd	 	08810938	 	\
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	32	 	Crown Block	 	\	 	1.00	 	set	 	Beijing Papermaking Machinery Sales Co.,
    Ltd	 	08810938	 	\
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	33	 	a set of Bent 1200	 	1200	 	1.00	 	suit	 	Beijing Papermaking Machinery Sales Co.,
    Ltd	 	08810933-08810934	 	\
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	34	 	Frequency Converters	 	1200	 	1.00	 	suit	 	Beijing Papermaking Machinery Sales Co.,
    Ltd	 	08810943-08810945	 	\
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	35	 	Electric  Cabinet	 	\	 	6.00	 	suit	 	Beijing Papermaking Machinery
    Sales Co., Ltd	 	08810945	 	\
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	36	 	Oblique Box Machine	 	\	 	1.00	 	suit	 	Beijing Papermaking Machinery Sales Co.,
    Ltd	 	08810945	 	\
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	37	 	1880 Paper Cutting Machine	 	1880	 	1.00	 	set	 	Beijing Papermaking Machinery Sales Co.,
    Ltd	 	31549008-31549012	 	\
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	38	 	1880 Xide Five Roll Top Ranking Paper Machine	 	1880	 	1.00	 	set	 	Beijing Papermaking Machinery Sales Co.,
    Ltd	 	31549003-31549007	 	\
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	39	 	Paper Cutting Machine	 	2400	 	1.00	 	set	 	Beijing Papermaking Machinery Sales Co.,
    Ltd	 	16825638-16825639	 	\
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	40	 	Knife Cutting Machine	 	\	 	1.00	 	set	 	Beijing Papermaking Machinery Sales Co.,
    Ltd	 	16825639	 	\
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	41	 	Pressure Sereen	 	\	 	1.00	 	suit	 	Beijing Papermaking Machinery Sales Co.,
    Ltd	 	16825640, 16825642	 	\
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	42	 	500KVA Transformer	 	500KVA	 	1.00	 	set	 	Shanghai Paper Making Machinery Co. ,
    Ltd , Beijing Branch	 	16825637	 	\
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	43	 	Workshop Power Distribution Equipment	 	\	 	7.00	 	suit	 	Shanghai Paper Making Machinery Co. ,
    Ltd , Beijing Branch	 	16825637	 	\
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	44	 	Volume Pressure Tank	 	\	 	1.00	 	suit	 	Shanghai Paper Making Machinery Co. ,
    Ltd , Beijing Branch	 	58691013	 	\
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	45	 	Aquapulper	 	\	 	1.00	 	suit	 	Shanghai Paper Making Machinery Co. ,
    Ltd , Beijing Branch	 	58691014	 	\
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	46	 	Pulping Equipment Well-4	 	\	 	1.00	 	unit	 	Shanghai Paper Making Machinery Co. ,
    Ltd , Beijing Branch	 	58691015	 	\
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	47	 	#1880 Fourdrinier Wire and Multi-cylinder Culture Paper Machine
    Production Line-5	 	1880	 	1.00	 	item	 	Shanghai Paper Making Machinery Co. ,
    Ltd , Beijing Branch	 	58691002, 58691026-58691046, 58691048-58691050,
    58694793	 	\
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	48	 	Power Facilities of Moisture Quantitative Analysis Instrument	 	\	 	1.00	 	item	 	Shanghai Paper Making Machinery Co. ,
    Ltd , Beijing Branch	 	31549857-31549870	 	\
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	49	 	Xide Net Pulp Flow Monitoring and Control Device-5	 	\	 	1.00	 	item	 	Shanghai Paper Making Machinery Co. ,
    Ltd , Beijing Branch	 	31549851-31549854, 31549856, 31549021-31549025	 	\
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	50	 	Print Knife Cutter	 	\	 	1.00	 	suit	 	Shanghai Paper Making Machinery Co. ,
    Ltd , Beijing Branch	 	64995951-64995954	 	\
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	51	 	Super Pressing Machine	 	\	 	1.00	 	suit	 	Beijing First Paper Making Company	 	04662739	 	\
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	52	 	Pulper	 	\	 	1.00	 	set	 	Baoding Chenguang Paper Machinery Co.,
    Ltd	 	00589574	 	\
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	53	 	Submersible Pump	 	\	 	1.00	 	set	 	Baoding Pengfei Boiler & Fan Co.,
    Ltd	 	00846806	 	\
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	54	 	Induced Draft Fan	 	\	 	1.00	 	set	 	Baoding Pengfei Boiler & Fan Co.,
    Ltd	 	00846806	 	\
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	55	 	Induced Draft Fan	 	\	 	1.00	 	set	 	Baoding Pengfei Boiler & Fan Co.,
    Ltd	 	00846806	 	\
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	56	 	Crane	 	\	 	1.00	 	item	 	Hebei Yili Hoisting Machinery Manufacturing
    Co., Ltd	 	07627696	 	\
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	57	 	Inside Net Front Screen(Bottom Screen)	 	FW3.5	 	1.00	 	set	 	Baoding New Downtown Qiangsheng Light
    Industry Machinery Factory	 	04118193	 	\
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	58	 	Inside Net Front Screen(Surface Slurry)	 	FW2.5	 	1.00	 	set	 	Baoding New Downtown Qiangsheng Light
    Industry Machinery Factory	 	04118193	 	\
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	59	 	Inside Net Front Screen(NO.2 Bottom Screen)	 	FW2.0	 	1.00	 	set	 	Baoding New Downtown Qiangsheng Light
    Industry Machinery Factory	 	04118193	 	\
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	60	 	5600 Paper Machine Pulping Equipment	 	\	 	1.00	 	suit	 	Shandong Hantong Aote Machinery Co.,
    Ltd	 	00860662	 	\
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	61	 	Slurry Pump, Water Pump	 	\	 	1.00	 	suit	 	Baoding Hengtong Pump Manufacturing Co.,
    Ltd	 	04119190	 	\
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	62	 	Disk Filter	 	DF3614/15	 	1.00	 	set	 	Shandong Shuntong Technology Co., Ltd	 	00861811	 	\
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	63	 	Control System	 	\	 	1.00	 	suit	 	Shandong Shuntong Technology Co., Ltd	 	00861811	 	\
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	64	 	Electric Hoist Monorail Car	 	\	 	1.00	 	set	 	Hebei Yili Hoisting Machinery Manufacturing
    Co., Ltd	 	04121570	 	\
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	65	 	Hanging Electric Hoist Crane	 	\	 	1.00	 	set	 	Hebei Yili Hoisting Machinery Manufacturing
    Co., Ltd	 	04121570	 	\
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	66	 	Horizontal Rolling Paper Machine	 	DWZ	 	1.00	 	set	 	Dandong Wuzhou Light Industrial Papermaking
    Equipment Co., Ltd	 	00033044	 	\
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	67	 	5600/1200 Hot Pressing Light Machine	 	1000/800	 	1.00	 	set	 	QinYang  First Paper Machinery
    Co., Ltd	 	08390459	 	\
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	68	 	Drying Machine	 	1500	 	1.00	 	suit	 	Dandong Wuzhou Light Industrial Papermaking
    Equipment Co., Ltd	 	00033376	 	\
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	69	 	Decanters	 	800*1600	 	1.00	 	set	 	Baoding New Downtown Qiangsheng Light
    Industry Machinery Factory	 	04122993	 	\
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	70	 	Vacuum System	 	\	 	1.00	 	suit	 	Zibo Quandu Pump Industry Co,Ltd	 	00863226	 	\
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	71	 	Bottom Mesh Machine Outside the White Sink	 	\	 	1.00	 	set	 	Baoding Swan Shengxing Technical Engineering
    Services Co., Ltd	 	04122771	 	\
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	72	 	Surface Mesh Machine Outside the White Sink	 	\	 	1.00	 	set	 	Baoding Swan Shengxing Technical Engineering
    Services Co., Ltd	 	04122771	 	\
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	73	 	Whitewater Chute	 	\	 	1.00	 	item	 	Baoding Swan Shengxing Technical Engineering
    Services Co., Ltd	 	04122771	 	\
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	74	 	Screw Machine	 	KG-150A	 	2.00	 	set	 	Baoding Friendship Mechanical & Electrical
    Equipment Co., Ltd	 	04123556	 	\
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	75	 	Cold and Dry	 	KHC-150A	 	1.00	 	set	 	Baoding Friendship Mechanical & Electrical
    Equipment Co., Ltd	 	04123556	 	\
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	76	 	Filter	 	*-25-#	 	4.00	 	piece	 	Baoding Friendship Mechanical & Electrical
    Equipment Co., Ltd	 	04123556	 	\
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	77	 	Gas Tank	 	C-4.0M3/0.8MPa	 	2.00	 	set	 	Baoding Friendship Mechanical & Electrical
    Equipment Co., Ltd	 	04123556	 	\
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	78	 	Gas Tank	 	C-2.0M3/0.9MPa	 	1.00	 	set	 	Baoding Friendship Mechanical & Electrical
    Equipment Co., Ltd	 	04123566	 	\
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	79	 	Boiler	 	10T	 	2.00	 	set	 	Hebei Huayong  Boiler Manufacturing
    Co., Ltd	 	04124103	 	\
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	80	 	Power Transformer	 	s11-m-2000kva/10kvs11-m-2500kva/10kv	 	5.00	 	set	 	Baoding Zhengwei Electric Power Equipment
    Co., Ltd	 	04124557	 	\
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	81	 	Closed Hood、Machine Ventilation and Heat Recovery System	 	\	 	1.00	 	suit	 	Changsha Shenzhou Machinery Co., Ltd	 	00547126	 	\
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	82	 	Water Filters	 	\	 	2.00	 	set	 	Qidong Hengrong Machinery Manufacturing
    Co., Ltd	 	00386718	 	\
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	83	 	Water Injection Filters	 	\	 	1.00	 	suit	 	Qidong Hengrong Machinery Manufacturing
    Co., Ltd	 	00386718	 	\
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	84	 	Starch Filter	 	\	 	1.00	 	suit	 	Qidong Hengrong Machinery Manufacturing
    Co., Ltd	 	00386718	 	\
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	85	 	Steel Structure	 	\	 	1.00	 	item	 	Xushui Chenhao Steel Sales Agency	 	28572113	 	\
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	86	 	Steel Structure	 	\	 	1.00	 	item	 	Xushui Chenhao Steel Sales Agency	 	28572899	 	\
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	87	 	Line	 	\	 	1.00	 	unit	 	Xushui Power Supply Co., Ltd	 	03130636	 	\
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	88	 	Distribution Engineering	 	\	 	1.00	 	item	 	Xushui Wanda Power Engineering Installation
    Co., Ltd	 	00667751	 	\
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	89	 	Pipeline	 	\	 	1.00	 	item	 	Hebei Rongwei  Installation
    Engineering Co., Ltd	 	00694556	 	\
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	90	 	Boil Plastic Cans	 	\	 	1.00	 	set	 	Zibo Xinmei Machinery Co., Ltd	 	00864446	 	\
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	91	 	Cable	 	\	 	1.00	 	batch	 	Sanhua Cable Co., Ltd	 	03130865	 	\
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	92	 	Pulp Tower	 	\	 	2.00	 	set	 	Baoding Swan Shengxing Technical Engineering
    Services Co., Ltd	 	03198835	 	\
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	93	 	5-Core Cable	 	\	 	1.00	 	batch	 	Hebei Baoding Haiyan Electric Wire Factory	 	03504830	 	\
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	94	 	Control Systems	 	\	 	1.00	 	suit	 	Zhejiang Shuangyuan Science & Technology
    Development Co., Ltd	 	00739180	 	\
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	95	 	4-Core Cable	 	\	 	1.00	 	batch	 	Hebei Baoding Haiyan Electric Wire Factory	 	03505863	 	\
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	96	 	Compact Busway	 	\	 	1.00	 	suit	 	Beijing Yongxing Aohua Mechanical &
    Electrical Co., Ltd	 	06418935	 	\
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	97	 	Flame Retardant Power Cable	 	\	 	1.00	 	batch	 	Hebei Baoding Haiyan Electric Wire Factory	 	03937939	 	\
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	98	 	Low Voltage Distribution Cabinet	 	\	 	72.00	 	set	 	Nanjing Daquan Electric Co., Ltd	 	08628520	 	\
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	99	 	Air Heating Machine	 	\	 	3.00	 	set	 	Baoding Jinneng Heat Exchange Equipment
    Co., Ltd	 	03937861	 	\
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	100	 	For Projects	 	\	 	1.00	 	item	 	Hebei Rongwei  Installation
    Engineering Co., Ltd	 	00694989	 	\
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	101	 	PM 3600	 	\	 	1.00	 	set	 	Shanghai Paper Making Machinery Co. ,
    Ltd , Beijing Branch	 	04268510	 	\
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	102	 	3600 Paper Machine Main Frame	 	\	 	1.00	 	suit	 	Shanghai Paper Making Machinery Co. ,
    Ltd , Beijing Branch	 	04268510	 	\
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	103	 	3200 Paper Machine Vacuum System	 	\	 	1.00	 	suit	 	Shanghai Paper Making Machinery Co. ,
    Ltd , Beijing Branch	 	1147149	 	\
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	104	 	8m3Pulp Ease Positions	 	\	 	1.00	 	set	 	Shanghai Paper Making Machinery Co. ,
    Ltd , Beijing Branch	 	16825633	 	\
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	105	 	Net Pressure Screen	 	# 1575	 	1.00	 	suit	 	Shanghai Paper Making Machinery Co. ,
    Ltd , Beijing Branch	 	16825631-16825632	 	\
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	106	 	Winder	 	# 1575	 	1.00	 	suit	 	Shanghai Paper Making Machinery Co. ,
    Ltd , Beijing Branch	 	16843477	 	\
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	107	 	Machine Network Transmission Equipment	 	# 1575	 	1.00	 	suit	 	Shanghai Paper Making Machinery Co. ,
    Ltd , Beijing Branch	 	16843492-16843494	 	\
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	108	 	Drying Equipment	 	# 1575	 	1.00	 	suit	 	Shanghai Paper Making Machinery Co. ,
    Ltd , Beijing Branch	 	16843480-16843486	 	\
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	109	 	Refiner Mechanical	 	# 1575	 	2.00	 	suit	 	Shanghai Paper Making Machinery Co. ,
    Ltd , Beijing Branch	 	16825627	 	\
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	110	 	Machine Crushing Equipment	 	# 1575	 	1.00	 	suit	 	Shanghai Paper Making Machinery Co. ,
    Ltd , Beijing Branch	 	16843488-16843491	 	\
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	111	 	Multi-cylinder Fourdrinier Paper Machine	 	# 1760	 	1.00	 	suit	 	Beijing First Paper Making Company	 	1147143	 	\
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	112	 	Supercalenders	 	# 1880	 	1.00	 	suit	 	Shanghai Paper Making Machinery Co. ,
    Ltd , Beijing Branch	 	04295983	 	\
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	113	 	Press	 	# 3460	 	1.00	 	suit	 	Shanghai Paper Making Machinery Co. ,
    Ltd , Beijing Branch	 	04127265	 	\
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	114	 	Supercalenders Guide Roller	 	# 1880	 	1.00	 	suit	 	Shanghai Paper Making Machinery Co. ,
    Ltd , Beijing Branch	 	08372175	 	\
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	115	 	Yaskawa Inverter	 	\	 	1.00	 	suit	 	Beijing First Paper Making Company	 	08810944-08810945	 	\

  

    	20

    	 

    

 

Appendix
III Leased Property Purchase Price Confirmation

 

Leased
Property Purchase Price Confirmation

 

Agreement
No.: ZMZ-2013-0031

 

In
accordance with Section 3.1 of the Financing and Lease Agreement NO. ZMZ-2013-0031 signed by China National Foreign Trade Financial
& Leasing Co., Ltd (the Lessor) and Hebei Baoding Orient Paper Milling Co., Ltd (the Lessee), the Lessor purchases the Leased
Property owned by the Lessee (see Appendix II Leased Property List in This Agreement).

 

The
confirmation is as follows:

 

		1.	The
                                                           actual Leased Property purchase price the Lessor pays to the Lessee
                                                           is:

 

RMB(in
Capitalization)ONE HUNDRED FORTY ONE MILLION SIX HUNDRED SEVENTY FIVE THOUSAND ONLY (in figures: ¥
141,675,000.00), i.e. the Leased Property purchase price is RMB(in Capitalization) ONE HUNDRED FIFTY MILLION (in
figures: ¥ 150,000,000.00), net of the prepaid rent in Section 7.1 of the Financing
and Lease Agreement that is RMB(in Capitalization) NIL ONLY (in figures: ¥ 0.00)
and the lease service fee in Section 8.1 that is RMB (in Capitalization) EIGHT MILLION THREE HUNDRED TWENTY FIVE THOUSAND
ONLY (in figures: ¥ 8,325,000.00).

 

		2.	The
                                                           Lessor shall pay the Leased Property purchase price to the Lessee in
                                                           the amount determined in the first section of This Confirmation within
                                                           30 business day of the satisfaction of all of the funding requirements
                                                           in Section 3.3 in This Agreement. The designated account by the Lessee
                                                           is:

 

BEBEFICIARY:
Hebei Baoding Orient Paper Milling Co., Ltd

 

BANK
NAME: HUAXIA BANK, DONGFENG ROAD BAODING BRANCH

 

ACCOUNT
NUMBER: 13851000000055362

 

LARGE
AMOUNT PAYMENT NUMBER: 304134010693

 

		3.	The
                                                           Confirmation takes effect at the date of being sealed by both parties.

 

Lessor:
China National Foreign Trade Financial & Leasing Co., Ltd

 

(Sealed)

 

Date:
June 16, 2013

 

Lessee:
Hebei Baoding Orient Paper Milling Co., Ltd

 

(Sealed)

 

Date:
June 16, 2013

 

    	21

    	 

    

 

Appendix
IV Leased Property Ownership Transfer Confirmation 

 

Leased
Property Ownership Transfer Confirmation

 

Agreement
No.: ZMZ-2013-0031

 

To:
China National Foreign Trade Financial & Leasing Co., Ltd

 

The
company hereby confirms the following in accordance with provisions in the NO.ZMZ-2013-0031Financing and Lease Agreement (hereinafter
referred as to Financing and Lease Agreement) that signed by China National Foreign Trade Financial & Leasing Co., Ltd (the
Lessor) and Hebei Baoding Orient Paper Milling Co., Ltd (the Lessee) on June 16th, 2013:

 

The
ownership of the Leased Property listed in the Appendix II  Leased Property List In the Financing and Lease Agreement shall
belong to your company from the day your company paid entire Leased Property purchase price in accordance with the Financing and
Lease Agreement. The payment day of the Leased Property purchase price shall be the earlier of the bank’s remittance advice
or the date recorded in the receipt.

 

Hereby
confirm.

 

Confirmed
by(Lessee): Hebei Baoding Orient Paper Milling Co., Ltd

(Sealed)

Legal
representative (authorized representative) (signature or seal):

/s/Zhenyong
Liu

Date:
June 16, 2013

 

    	22

    	 

    

 

Appendix
V Lease Schedules

 

Lease
Schedules

 

Agreement
No.: ZMZ-2013-0031

 

		1.	Leased
                                                           Property:

See
Appendix II Leased Property List, Leased Property setting place: Production Area in WuJi Village, Xushui County, Baoding City
and Production Area in Industrial Park, Xushui County, Baoding City.

 

		2.	Lease
                                                           Term:

The
lease term is 36 months, number of installments is 12, starting from the lease commencement day.

 

		3.	Lease
                                                           interest rate:

Lease
interest rate per year is 6.1500% (according to the 1-3 years benchmark
interest rate of 6.1500% of the People's
Bank of China
for the same period)

 

4.
    Rent payment arrangement:

Pay
rent on time every 3 months.

 

5.
   Lease cost:

  Lease
cost is RMB ONE HUNDRED FIFTY MILLION .

 

(¥150,000,000.00)

 

6.
Lease service charge:

 

Lease
service charge: 5.5500% of the lease cost (¥ 8,325,000.00)

 

Payment
arrangement (according to item 6.1)

6.1
The lease service charge will be deducted directly when the Lessor pay the Leased Property purchase price

6.2
The lease service charge will be paid in ___days after the Financing and Lease Agreement comes into force.

 

7.
Prepaid Rent

 

Prepaid
Rent: 0.0000% of lease cost

Payment
arrangement (according to item 7.1)

7.1
Prepayment rents will be deducted directly when the Lessor pay the Leased Property purchase price

7.2
Prepayment rents will be paid in ___days after Financing and Lease Agreement.

 

8.
The Lessor’s bank account for all the rents and other dues:

 

Account
Name: China National Foreign Trade Financial & Leasing Co., Ltd.

Bank
information: Xingye Bank Beijing Anhua Branch,

Bank
address: First Floor of Fujian Building, No. 11, the Third District of Anzhenxili , Chaoyang District, Beijing

RMB
account #: 321140100100242802

Large
Amount account #: 309100003245

 

9.
Rent payment arrangement:( please choose in √)

 

o
Pay equal amount of principal per installment 

o
Pay equal amount of principal and interest per installment

o Others:
Pay interest in quarterly installment and pay principal every half year (principal repayment amount is ¥ 25,000,000.00
per half year); if the benchmark interest rate
of the People's Bank of China is
adjusted, the amount of principle repayment every half year shall not be changed.

 

    	23

    	 

    

 

10.
   Rent adjustment arrangement:

The
confirmed arrangement for rent adjustment by the two parties (according to item 10.2 )

10.1Scheduled
rent, which is not adjusted during the lease period;

10.2
  Floating rent; which means that during the lease term the Lessor will adjust the lease interest rate with adjustment
proportionate to the benchmark rate whenever the benchmark
interest rate
of the People's Bank
of China is adjusted. The rent will be not changed before
the adjustment of benchmark interest
rate, the rent for the next installment will be paid with the adjusted rent.

The
unpaid rent of the Lessee will be adjusted when the benchmark
interest rate
is adjusted upward. If the benchmark interest
rate is adjusted downward, the unpaid rent will be based on the original lease interest.

 

11.
 Handling of the Leased Property after the lease expires

 

According
to Section 16.1(a) of the Financing and Lease Agreement, if subsection (a) of Section 16.1 is chosen, the Nominal Price of
¥ 15,000.00 will be paid.

 

12.
  Guarantee arrangement:

 

Guarantee
provided by the Lessee (according to items 12.1, 12.2 as below)

12.1
Guarantee, see Guarantee Agreement No. ZMZ-2013-0031-11.

12.2
Collateral, see Collateral Agreement No. ZMZ-2013-0031-12.

12.3
Other guarantee: none

12.4
No guarantee

The
Lease Schedules is confirmed and sealed by both parties.

 

(No
text in this page, the stamp page is attached in the next
page). 

 

    	24

    	 

    

 

(No
text in this page, it is the stamped page of Appendix V in the
Financing and Lease Agreement that NO. ZMZ-2013-0031)

 

Lessor:
China National Foreign Trade Financial & Leasing Co., Ltd

(Sealed)

 

Date:
June 16, 2013

 

Lessee:
Hebei Baoding Orient Paper Milling Co., Ltd

 

(Sealed)

 

Date:
June 16, 2013

 

    	25

    	 

    

 

Appendix
VI Estimated Rent Payment Schedule 

Estimated
Rent Payment Schedule 

 

Agreement
No.: ZMZ-2013-0031

 

Lease
Inception Date: 2013-06-16

Lease
Cost: RMB (Capitalization) ONE HUNDRED FIFTY MILLION ONLY

 

(in
figures: ¥ 150,000,000.00)

 

Prepaid
Rent : RMB (Capitalization) NIL ONLY (in figures: ¥
0.00)

Lease
Service Charge: RMB (Capitalization) EIGHT MILLION THREE HUNDRED TWENTY FIVE THOUSAND ONLY

 

(in
figures:¥ 8,325,000.00)

 

Total
Rent: RMB (Capitalization) ONE HUNDRED SIXTY SIX MILLION THREE HUNDERD SEVENTY EIGHT THOUSAND SIX HUNDRED FOURTY FIVE POINT EIGHT
THREE ONLY

 

(in
figures: ¥ 166,378,645.83)

 

Nominal
Price: RMB (Capitalization) FIFTEEN THOUSAND ONLY

 

(in
figures: ¥ 15,000.00)

Unit:
RMB/YUAN

 

	Lease
    

Term	 	Rent
    Due Day	 	Rent	 	 	Principal	 	 	Interest	 
	1	 	2013-09-15	 	 	2,357,500.00	 	 	 	0.00	 	 	 	2,357,500.00	 
	2	 	2013-12-15	 	 	27,331,875.00	 	 	 	25,000,000.00	 	 	 	2,331,875.00	 
	3	 	2014-03-15	 	 	1,921,875.00	 	 	 	0.00	 	 	 	1,921,875.00	 
	4	 	2014-06-15	 	 	26,964,583.33	 	 	 	25,000,000.00	 	 	 	1,964,583.33	 
	5	 	2014-09-15	 	 	1,571,666.67	 	 	 	0.00	 	 	 	1,571,666.67	 
	6	 	2014-12-15	 	 	26,554,583.33	 	 	 	25,000,000.00	 	 	 	1,554,583.33	 
	7	 	2015-03-15	 	 	1,153,125.00	 	 	 	0.00	 	 	 	1,153,125.00	 
	8	 	2015-06-15	 	 	26,178,750.00	 	 	 	25,000,000.00	 	 	 	1,178,750.00	 
	9	 	2015-09-15	 	 	785,833.33	 	 	 	0.00	 	 	 	785,833.33	 
	10	 	2015-12-15	 	 	25,777,291.67	 	 	 	25,000,000.00	 	 	 	777,291.67	 
	11	 	2016-03-15	 	 	388,645.83	 	 	 	0.00	 	 	 	388,645.83	 
	12	 	2016-06-15	 	 	25,392,916.67	 	 	 	25,000,000.00	 	 	 	392,916.67	 
	Total	 	 	 	 	166,378,645.83	 	 	 	150,000,000.00	 	 	 	16,378,645.83	 

 

In
the case that the Actual Rent Payment Schedule is inconsistent with the Estimated Rent Payment Schedule, the Actual Rent Payment
Schedule governs.

 

The
Estimated Rent Payment Schedule is hereby confirmed and sealed by both parties.

 

Lessor:
China National Foreign Trade Financial & Leasing Co., Ltd (Sealed)

Date:
June 16, 2013

 

    	26

    	 

    

 

Lessee:
Hebei Baoding Orient Paper Milling Co., Ltd(Sealed)

Date:
June 16, 2013

 

Appendix
VII Actual Rent Payment Schedule (Formatted Text)

 

Actual
Rent Payment Schedule

 

Agreement
NO.

 

To:
_ _ _
_ _ _ _
_ _ (Lessee)

 

_
_ _ _
_ _ _ _
_ (Guarantor)

 

Lease
Inception:  Year Month Date

 

Lease
Cost: RMB (Capitalization) _ _
_ _ _ _
_ _ _ONLY (in figures: ¥
_ _ _ _
_ _ _)

 

Prepaid
Rent: RMB (Capitalization) _ _
_ _ _ _
_ ONLY (in figures: ¥_ _
_ _ _ _
_)

 

Lease
Service Charge: RMB (Capitalization) _ _ONLY
(in figures: ¥ _ _ _ _
_ __ _)

 

Total
Rent: RMB (Capitalization) _ _
_ _ _ _
_ _ _ ONLY(in figures: ¥
_ _ _ _
_ __ _)

 

Nominal
Price: RMB (Capitalization) _ _
_ _ _ __ ONLY(in figures:¥ _ _
_ _ _ __ _)

 

Unit:
RMB/YUAN

	Lease
    Term	 	Rent
    Due Day	 	Rent	 	Principal	 	Interest	 
	1	 	 	 	 	 	 	 	 	 
	2	 	 	 	 	 	 	 	 	 
	3	 	 	 	 	 	 	 	 	 
	4	 	 	 	 	 	 	 	 	 
	Total	 	 	 	 	 	 	 	 	 

 

If
the Actual Rent Payment Schedule is not consistent with the Estimated Rent Payment Schedule, the Actual Rent Payment Schedule
shall governs,.

 

The
Actual Rent Payment Schedule will take effective on the date of be sealed by our company.

 

Lessor:
China National Foreign Trade Financial & Leasing Co., Ltd

(seal)

 

Date:

 

    	27

    	 

    

 

Appendix
VIII Notice of Rent Adjustment (Formatted Text)

 

 

 

Notice
of Rent Adjustment

 

Agreement
NO.

 

To:
_ _ _
_ _ _ _
_ _ (Lessee)

 

Re:
The rent adjustment items to the Financing and Lease Agreement

 

In
accordance with the Financing and Lease Agreement and the Lease Schedules entered into on_
_ _ (date) that No. _ _
_ by your company and our company, considering the adjustment of the benchmark _ _ year lending rate
on _ _ _ (date) announced by the People's Bank of China,
the adjusted benchmark _ _ year lending rate adjusted now is_
_. Therefore, our company’s adjustment to the rent of the above Financing and Lease Agreement
as follows:

 

The
adjusted Rent Payment Schedule:

 

	Lease
    Term	 	Rent
    Due Day	 	Rent	 	Principal	 	Interest	 
	1	 	 	 	 	 	 	 	 	 
	2	 	 	 	 	 	 	 	 	 
	3	 	 	 	 	 	 	 	 	 
	4	 	 	 	 	 	 	 	 	 
	Total	 	 	 	 	 	 	 	 	 

 

 

The
terms and all items specified in the Financing and Lease Agreement are applicable to the Notice with equal implication.

 

The
Notice of Rent Adjustment will take effective on the date of be sealed by our company.

 

China
National Foreign Trade Financial & Leasing Co., Ltd

(seal)

 

Date:

 

    	28

    	 

    

 

Appendix
IX Lease Termination Notice

 

Lease
Termination Notice

 

Agreement
No.

 

To:
____________ (Lessee)

 

Re:
Terminate lease under No._____ the Financing and Lease Agreement

 

According
to the Financing and Lease Agreement that No. _____, our company decides to terminate the lease business under the No.__ the Financing
and Lease Agreement, Your company must pay the entire amount as follows by one time:

 

(1)As
of ____ (date), the default is_____, and the total expired unpaid rent is ____;

(2)All
undue rent is _____;

(3)The
fund which is relevant to the Financing and Lease Agreement is_____.

The
above money is total______. Please pay it to the following account:

Account
name:

Bank
information:

RMB
account:

Big
amount account:

Our
contact person:

Tel:

Fax:

Please
pay attention that if your company delay the payment, our company will collect default according to the Financing Lease Agreement.

This
notice will be valid from the seal day.

 

China
National Foreign Trade Financial & Leasing Co., LTD

(Seal)

 

Date:

 

    	29

    	 

    

 

Appendix
X Leased Property Ownership Transfer Notice (From Lessor to Lessee) (Formatted Text)

 

Leased
Property Ownership Transfer Notice

 

Agreement
No.

 

To:
__________ (Lessee):

 

Our
company has received your companies’ all the rent and payables in the Financing and Lease Agreement (hereinafter referred
as to Financing and Lease Agreement) as No._________. And have received RMB_________as nominal price from your company.

 

According
to the Financing and Lease Agreement, our company confirmed that: From now on, ownership of properties under Financing and Lease
Agreement transfers to your company.

 

This
notice will be valid from the seal day.

 

China
National Foreign Trade Financial & Leasing Co., LTD

(Seal)

 

Date:

 

    	30Agreement No.: ZMZ-2013-0031-12

 

Collateral Agreement

[English Translation]

 

Agreement Date:
June 16, 2013

 

    	 

    	 

    

 

Table of Contents

 

	1	Secured Principal Debt	2
	 	 	 
	2	Scope of Collateral	3
	 	 	 
	3	Collateral	3
	 	 	 
	4	Collateral Registration	3
	 	 	 
	5	Entire Collateral Agreement	4
	 	 	 
	6	Possession and Keeping of the Collateral	4
	 	 	 
	7	Insurance	4
	 	 	 
	8	Realization of Collateral	5
	 	 	 
	9	Representations and Warranties of Party B	6
	 	 	 
	10	Rights and Obligations for Both Parties	8
	 	 	 
	11	Breach Liability	9
	 	 	 
	12	Dispute Settlement	10
	 	 	 
	13	Advice and Delivery	10
	 	 	 
	14	Effectiveness of Agreement	11
	 	 	 
	15	Other Terms	11
	 	 	 
	16	Other Agreed Terms	11
	 	 	 
	Appendix I Collateral List	14

 

    	1

    	 

    

 

Collateral
Agreement

 

Agreement No.: ZMZ-2013-0031-12

 

Mortgagee: China National Foreign Trade
Financial & Leasing Co., Ltd (hereinafter called “Party A”)

Address: Building #11 of Beijing Xiyuanfandian,
No.1, Sanlihe Road, Haidian District, Beijing

Post Code: 100044

Legal Representative: Jianping Ding

Telephone: 010-68321866

Fax: 010-68322705

 

Mortgagor: Hebei Baoding Orient Paper Milling
Co., Ltd (hereinafter called “Party B”)

Address: Science Park, Xushui County, Baoding
City, Hebei Province

Postcode: 072550

Legal Representative: Zhenyong Liu

Telephone: 0312-8698051

Fax: 0312-8698217

 

In order to ensure the realization of Party
A’s rights as a creditor, Party B voluntarily provides collateral as guarantee to Party A. To specify both parties’
rights and liabilities, Party A and Party B agree to enter into this Agreement according to the “Contract Law”, “Guarantee
Law” and other relevant law and regulations of the People’s Republic of China

 

		1	Secured Principal Debt

 

		1.1	The secured principal debt is Party A’s right of all the receivable rents and relevant charges
to Hebei Baoding Orient Paper Milling Company Limited (hereinafter called “Lessee”) according to the “Financing
& Lease Agreement” (hereinafter called “Principal Agreement”) numbered ZMZ-2013-0031, which is entered
into by Party A and the Lessee on June 16, 2013.

 

    	2

    	 

    

 

		1.2	The amount and terms of the principal debt are subject to the “Actual Rent Payment Schedule,”
which is specified in the Principal Agreement. If any adjustment of the People’s Bank of China benchmark lending rate occurs
during the term of the lease, the amount and terms shall be subject to changes according to the “Notice of Rent Adjustment.”

 

		1.3	If the Principal Agreement fails to take effect, becomes invalid in all or in part, is revoked
or is canceled, the secured principal rights shall be the Lessee’s liabilities to Party A for returning property and reimbursement
for losses under the Principal Agreement.

 

		2	Scope of Collateral

 

		2.1	The scope of Collateral under the Agreement includes the rent, penalty, damages, all expenses paid
by Party A to reinforce the creditor’s rights (including but not limited to litigation fees, arbitration fees, legal fees,
travel expenses, and expenses for auction and evaluation for retrieving leased property under the Principal Agreement) and all
other fees attributable to the Lessee. The scope of guarantee also includes any amounts arising from adjustments triggered by change
in the interest rate according to provisions under the Principal Agreement.

 

		3	Collateral

 

		3.1	The collateral is the usage right of a State-owned land possessed by Party B sited at Jingshang
Village and Wuji Village of Dayin Town, Xushui County (the State-owned Land Use Right No. XUGUOYONG(2012)DI011HAO). For the
quantity, address, acreage, ownership certificate and other information, see Collateral List (Appendix I).

 

		3.2	The valuation (if any) set forth in the Collateral List on the collateral is not Party A’s
valuation basis for purposes of collateral disposition, and is not a limitation to Party A for executing the collateral. The final
valuation of the collateral is determined by the proceeds actually collected from the disposition of the collateral.

 

		3.3	Party A has the right to request Party B to submit all property right or usage right certificate
or other valid certificate files and relevant materials of the collateral to Party A’s keeping if Party A deems necessary,
and Party B shall submit it in time according to Party A’s request.

 

		4	Collateral Registration

 

		4.1	Collateral registration should be
                                                             made with the appropriate collateral registration authority within
                                                             10 business days after the Agreement is signed by the two
                                                             parties.

 

    	3

    	 

    

 

		4.2	Collateral amendment registration
                                                             should be made by the two parties with the appropriate collateral
                                                             registration authority within 10 business days if any collateral
                                                             registration amendments need to be registered according to applicable
                                                             law.

 

		5	Entire Collateral Agreement

 

		5.1	This Agreement has an independent irrevocability. The effectiveness of the secured rights and debts
under this Agreement shall not affect the effectiveness of this Agreement. Even if the secured principal debt is invalid in all
or in part due to any reason, this Agreement is still valid.

 

		6	Possession and Keeping of the Collateral

 

		6.1	The collateral under the Agreement is possessed and kept by Party B. Party B shall maintain the
integrity of the collateral during possession of the collateral, and shall not use the collateral in any unreasonable way to detract
the value of the collateral. Party A has the right to inspect how the collateral is being used and kept.

 

		6.2	When the collateral is damaged or lost, Party B shall inform Party A in time and take measures
to keep the loss from worsening. Meanwhile, Party B shall also submit the certificate of the collateral damage and loss issued
by the relevant government administration to Party A.

 

		7	Insurance

 

		7.1	Party B  ̈ is or  ̈√
is not required (Mark with “√”) to obtain
insurance coverage for the collateral under the Agreement. If required, Party B shall obtain insurance coverage with the insurance
company approved by the two parties as requested by Party A before signing the Agreement.

 

		7.2	The insurance period shall be no less than the Principal Agreement performance period, and the
amount covered should be no less than the rent amount under the Principal Agreement. Party B shall provide the original insurance
policy for Party A to keep.

 

		7.3	Party A shall be indicated as the primary beneficiary in the insurance policy and there shall not
be any term that imposes restriction on Party A’s rights and interests.

 

		7.4	Party B shall not suspend or cancel the insurance for any reason during the Agreement’s effective
term. Otherwise, Party A shall have the right to handle the insurance matters on Party B’s behalf. All relevant charges incurred
shall be borne by Party B.

 

    	4

    	 

    

 

		7.5	If an insurable event occurs, all insurance policy payout shall be served as the collateral to
pay Party A for any unpaid debt or, as agreed to by Party A, be used to restore the value of the collateral.

 

		8	Realization of Collateral

 

		8.1	Party A shall have the right to execute the collateral rights to pay off the unpaid debt with the
proceeds of the collateral under the following circumstances:

 

		(a)	The Lessee fails to pay rent, liquidated damages, compensation damages or other payables according
to the requested term, amount and currency set forth in the Principal Agreement for any lease term;

 

		(b)	Other defaults by the Lessee under the Principal Agreement;

 

		(c)	Party B’s refusal to perform the obligations under this Agreement such that the Party A’s
collateral rights are jeopardized;

 

		(d)	Party B’s lawsuit, arbitration or major administrative legal case that may have negative
impact on the collateral;

 

		(e)	Party B suffers from bankruptcy, out of business, dissolution, being brought to bankruptcy and
reorganization, and cancellation or revocation of the business license;

 

		(f)	Party B fails to recover the value of the collateral or otherwise provides equivalent security
with the detracted value in accordance with the Agreement;

 

		(g)	Circumstances that make it difficult or unable for Party A to realize the collectability of its
credit under the Principal Agreement.

 

		8.2	Party A has the right to take any of the following methods to execute collateral:

 

		(a)	Negotiate with Party B to apply the value of the collateral as a payment to repay the debt, or
to use the proceeds from the auction or sale of the collateral to first repay the unpaid debt;

 

		(b)	Petition the People’s Court to auction or sell the collateral, and use the proceeds to first
repay the unpaid debt.

 

		8.3	Party B shall cooperate with Party A in disposing the collateral in accordance with the Agreement.
Party B must not block or interfere with the disposition.

 

		8.4	Payments to Party A from Party B shall be applied in the following order:

 

		(a)	the expenses related to the collection of the principal debt or exercising the guarantee rights;

 

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		(b)	defaults paid by Party B;

 

		(c)	damage compensation paid by Party B;

 

		(d)	defaults paid by the Lessee;

 

		(e)	damage compensation paid by the Lessee;

 

		(f)	Accrued unpaid rent or other payables paid by the Lessee.

 

Party A has the right to adjust
the above distress order as necessary.

 

		8.5	Whether Party A has other security to the debt under the Principal Agreement (including but not
limited to commitment, collateral, pledge etc. ), no matter when the above security is established, whether such security is valid,
whether Party A asserts its rights to other guarantee, whether the third party agrees to undertake all or part of the obligations
under the Principal Agreement, and whether other security is provided by Party B, Party A’s security responsibility under
the Agreement is not remised, Party A may directly request Party B to assume security responsibility within the security scope
in accordance with the Agreement. Party B shall not raise any objection.

 

		9	Representations and Warranties of Party B

 

		9.1	Party B is a legal entity with operations within the permitted scope of businesses of its business
license, is in good standing, and is duly incorporated in accordance with the laws of the People’s Republic of China.

 

		9.2	All internal authorizations needed by Party B to sign the Agreement have been processed and are
sufficiently valid.

 

		9.3	Party B’s signing into the Agreement and its performance of the obligation under the Agreement
do not contradict with any existing and internal regulations or any other binding contract, agreement and other document of
Party B.

 

		9.4	Party B has the outright legal ownership or valid disposition rights to the collateral under the
Agreement; and the collateral is not involved in any disputes. Relevant ownership certificates have been provided and submitted
to Party A.

 

		9.5	Party B guarantees that all documents relevant to the collateral submitted to Party A are authentic and valid,
and that it has made sufficient written disclosure with respect to the ownership rights restrictions and defects (if any).

 

		9.6	Party B has the ability to perform the obligations under the Agreement. There has not been any
existing legal procedure including lawsuit or arbitration, executing enforced, bankruptcy or other events or conditions that may
cause major adverse effects to Party B’s ability to perform the obligations under the Agreement.

 

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		9.7	If one of the following events occurs, without any acknowledgement of Party B, Party B shall continue
to bear the guarantee responsibility according to the Agreement:

 

		(a)	Party A negotiates changes to the Principal Agreement with the Lessee, and the changes do not increase
the Lessee’s debt or extend the period of debt performance;

 

		(b)	The rent changes due to floating rent rate or rent adjustment after the confirmation of lease commencement
date;

 

		(c)	Party A transfers the principal debt to a third party;

 

		(d)	If China Orient Asset Management Corporation, Shijiazhuang Branch acquires the rights and obligations
under the Principal Agreement according to the Long-Term Acquisition Commitment Letter.

 

		9.8	Party B agrees that the collateral shall be transferred along with Party A’s transfer of
the debt. Party B guarantees to continue to provide collateral security to the transferred debt with the same collateral in the
Agreement and to cooperate with the transferee of the debt to handle the relevant procedures for registering the changes in the
collateral registration.

 

		9.9	Party B guarantees that all of its taxes have been paid off before the signing of this Agreement,
and that it has no record of any tax delinquency or tax evasion.

 

		9.10	Party B guarantees the collateral under the Agreement is not let prior to the collateralization.
If the collateral has been let, Party B guarantees that it has informed Party A of the collateral lease in writing. If the collateral
under the Agreement is let after being collateralized, Party B guarantees that it will inform the lessee of the collateral and
inform Party A of related lease information.

 

		9.11	Party B promises that before Party A’s rights under the Principal Agreement has been fully
satisfied, Party B will not cause any damage to Party A’s interests and its claim of subrogation or recourse right to the
Lessee or other guarantors. Party B also agrees that any payment of debt under the Principal Agreement takes priority to the realization
of its own subrogation or recourse right against the Lessee. Specifically, before the full payment of debt to Party A:

 

		(a)	Party B agrees not to claim subrogation or recourse right to Lessee or other guarantors. If for
any reason, Party B realizes the above right, Party B shall first pay off any unpaid balance of debt to Party A.

 

		(b)	If the debt under the Principal Agreement is collateralized by any other property or right, Party
B agrees not to claim any right to the proceeds from the disposition of such other property or right in the grounds of excising
subrogation right or other right. The proceeds from the above mentioned property or right disposition shall be first used to pay
off the unpaid balance of debt to Party A.

 

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		(c)	If the Lessee or other guarantor provide counter-guarantee to Party B, Party B shall first use
the proceeds from such counter-guarantee to pay off any unpaid balance of debt to Party A.

 

		10	Rights and Obligations for Both Parties 

 

		10.1	Rights and Obligations for Party A

 

		(a)	Party A has the right to request Party B to suspend any of its behaviors that has the effect of
diminishing the value of the collateral. If there is a decline in value of the collateral, Party A has the right to request Party
B to recover the value of the collateral, or provide additional guarantee with value equal to the decline;

 

		(b)	Any excess of collateral disposition proceeds after paying off all debts within the Scope of Collateral
under the Agreement belongs to Party B.

 

		(c)	Party A shall assist Party B to handle the collateral registration cancellation procedures after
paying off the debt within the Scope of Collateral under the Agreement. Party A shall return to Party B the collateral property
right or use right certificates and other documents in its possession.

 

		10.2	Rights and Obligations for Party B

 

		(a)	Party B has the right to request Party A to release the collateral under the Agreement after the
debt has been paid off within the Scope of Collateral under the Agreement;

 

		(b)	Party B has no right to dispose the collateral in any way without the consent of Party A, including
but not limited to fixing any additional guarantee to the collateral or transferring or gifting the collateral to any third party;

 

		(c)	Party B shall bear any and all fees caused by signing and performing the Agreement, including but
not limited to: collateral registration fee, notarial fee, counsel fee, correspondence fee, travel charge, file and material
fee, taxes fee, property insurance fee, identify fee, appraisal fee, reiterate fee, transfer fee etc. If Party A pays the fees
on behalf of Party B, Party A has the right to request Party B for immediate reimbursement.

 

		(d)	Party B has the obligation to take appropriate actions to mitigate damages at the time the collateral
is or may be in danger of being damaged by any third party;

 

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		(e)	In the case Party A transfers all or part of the debt under the Principal Agreement to others;
Party B shall continue to assume collateral security responsibilities to Party A’s assignee in accordance with the convention
of the Agreement;

 

		(f)	Party B shall notify Party A at least 30 days in advance under the following circumstances:

 

		(i)	change of organizational structure, including spin off, merger, shareholding restructure, etc.;

 

		(ii)	Party B involved in a major lawsuit;

 

		(iii)	The ownership of the collateral in dispute;

 

		(iv)	Events materially impacting the legal standing of Party B, including bankruptcy, dissolution, suspended
operations for rectification, revocation of business license, etc.

 

		(g)	In the case where value of the collateral declined for reasons not attributable to Party B, any
compensation that Party B receives shall be used to pay off the debt to Party A or be deposited with a third party designated by
Party A; or Party B may provide additional collateral to the extent of the amount of Party B’s compensation,. To the extent
value of the collateral has not declined, it shall continue to serve as security to the principal debt.

 

		11	Breach Liability

 

		11.1	Any of the following events shall constitute a default of Party B under the Agreement:

 

		(a)	Party B’s concealment of any joint ownership, disputes, confiscation, detainment or multiple
guarantees, etc, of the collateral;

 

		(b)	failing to providing the perfecting documents and substantive materials about the collateral
at Party A’s request;

 

		(c)	disposing the collateral arbitrarily without the consent of Party A;

 

		(d)	in the case where Party A does not receive insurance payout because of actions of Party B’s
and as a result of the insurance company’s refusal to settle the claims or discontinuance of insurance coverage;

 

		(e)	Party B refusal to cooperate with Party A to handle the collateral registration procedure under
the Agreement;

 

		(f)	Representations made by Party B under the Agreement proved to be untrue, inaccurate, or misleading;

 

    	9

    	 

    

 

		(g)	Party B’s ability to perform the obligations under the Agreement materially impacted when
any other party gaining all or part of Party B’s business operations or ownership of assets; or the adjudication or judgment
against Party B’s any assets is executed or enforced;

 

		(h)	Party B suspends or is expected to suspend its business operations or any major segment of its
business operations, or Party B disposes all or part of its business operations or assets, consequently impacting materially Party
B’s ability to perform the obligations under the Agreement;

 

		(i)	any material adverse change to Party B’s financial situation or to Party B’s ability
to perform under the Agreement occurs,;

 

		(j)	any other circumstances affecting or may affect Party B to perform the obligation under the Agreement.

 

		11.2	Party A has the right to take any one or more following measures, under the following circumstances:

 

		(a)	Issue the default notice to Party B, and require Party B to curb the breach and continue to perform
the Agreement;

 

		(b)	Exercise the collateral right

 

		(c)	Request Party B to compensate the loss.

 

		12	Dispute Settlement

 

		12.1	If any dispute occurs for the interpretation and performance of this Agreement, both parties shall
resolve the disputes through friendly negotiation. If there is any dispute that cannot be resolved through friendly negotiation,
both parties can submit a lawsuit to the People’s Court of the People’s Republic of China in Party A’s jurisdiction.

 

		12.2	In case there is any dispute between Party A and Party B, both parties shall continue to execute
the other clauses which have no relationship with the disputes during the disputes resolution period.

 

		13	Advice and Delivery

 

		13.1	Except as otherwise agreed in this Agreement, any advice or other communication under this Agreement
shall be made in written form, and be delivered to the address specified in the first page of this Agreement by a designated person,
express courier, registered mail and fax.

 

		(a)	If delivered by a designated person, the delivery date for the material or advice shall be the
date of receipt;

 

    	10

    	 

    

 

		(b)	If delivered by an express courier, the delivery date for the material or advice shall be three
days after delivery to the express courier;

 

		(c)	If delivered by registered mail, the delivery date for the material or advice shall be five days
after delivery to the registered mail;

 

		(d)	If deliver by fax, the delivery date is the day of dispatch of fax.

 

		13.2	If the address of any party changes, the party shall notify the other party within seven days.
Otherwise, the party failing to give notice shall bear all liabilities and consequences.

 

		14	Effectiveness of Agreement

 

		14.1	This Agreement becomes effective after being signed and sealed by the legal representatives (or
authorized representative) of both parties.

 

		14.2	This Agreement is signed in four copies, with two copies retained by each party. The copies retained
by the parties have the same effect.

 

		14.3	Party A and Party B may sign other relevant documents at the time and for the purpose of collateral
registration or other relevant procedures. To the extent provisions of these other documents are inconsistent with the Agreement,
provision of the Agreement shall govern.

 

		15	Other Terms

 

		15.1	The invalidity of any section in this Agreement for any reason shall not affect the validity and
enforceability for the other sections of this Agreement, and both parties shall continue to fulfill the other sections.

 

		15.2	Any tolerance, grace period, preference or deferred exercise of right provided by Party A to Party
B shall not affect, prejudice or restrict any of Party A’s right according to this Agreement, and shall not be regarded as
waiver to the right and benefit or as waiver to any liability of Party B under this Agreement. The tolerance, grace period, preference
or deferred exercise that Party A gives to Party B has no effect, damage or limitation on the rights of Party A over Party B.

 

		15.3	This Agreement is signed as a result of negotiations between the two parties. Both parties have
reviewed all sections and have no dissent at the time of signing. Both parties have accurate understanding for the legal implication
of the sections regarding their respective rights and obligations.

 

		16	Other Agreed Terms

 

		16.1	Party B promises: If the government requisitions the collateral during the duration of Financing
& Lease Agreement, Party A has the right to request Party B to pay off prior to the maturity.

 

    	11

    	 

    

 

		16.2	During the term of the Financing and Lease Agreement, Party B agrees that the any construction-in-progress
of the collateral caused by: construction, annexation, renovation shall also be deemed as the collateral, and shall also be registered
according to relevant laws and regulations. At the same time, Party B commits to register at the time of the completion of construction
such construction-in-progress as collateral according to Party A’s request. If Party B fails to cooperation and perform the
registration obligation at the request of Party A, it shall be regarded as a fundamental default of the agreement by Party B.

 

If there is any conflict between a Chinese
language provision and the corresponding English language provision in this Agreement, the Chinese language provision will prevail.

 

(No text in below of this page)

 

    	12

    	 

    

 

(No text in the page, it is the signature
page for “Collateral Agreement” numbered ZMZ-2013-0031-12)

 

Party A: China National Foreign Trade Financial
& Leasing Co., Ltd

 

(Company Seal)

 

Legal representative (or authorized representative)
(signature or seal):

/s/Jianping Ding

 

Party B: Hebei Baoding Orient Paper Milling
Co., Ltd

 

(Company Seal)

 

Legal representative (or authorized representative)
(signature or seal):

/s/Zhenyong Liu

 

    	13

    	 

    

 

Appendix I Collateral List

 

Collateral List

 

	No.	 	Name of

Collateral	 	Quantity

(Piece)	 	Address	 	Area

(square

meter)	 	The

Ownership

Certificate

and Number	 	Other
	1	 	State-owned Land Use 

Right  	 	One	 	Jingshang Village and 

Wuji Village 

of Dayin

Town, Xushui County	 	58,566.00	 	State-owned

Land Use 

Right No. 

XUGUOYONG(2012)DI011HAO)	 	
        Nature of Land

        Industrial Land

        Type of Use

        Right: Sale

         

        Expire date: December 1, 2061

 

    	14

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