Short-termLoan Agreement

PUDONG DEVELOPMENT BANK

Short-term Loan Agreement

1.

x This Agreement is one of the financing documents attached to Financing Limit Agreement No. __________ (hereinafter referred to FLA). All clauses of this Agreement shall be incorporated into Agreement of Financing Limit and shall constitute integral parts hereof upon coming into force. (Choose this and indicate FLA NO. if the Client signed Agreement of Financing Limit with the financing bank previously).

2.

þThis Agreement is an independent credit Agreement to be signed between the financing bank and the Client (Choose this if the financing bank and the Client have not signed FLA before)

xThe loan attempts to pay off the old debts, which is known to the guarantor(s). (Choose this if the Agreement is to pay off one debt with another debt).

1.

After the signing of this Agreement, unless the financing bank has released the loan the Client applied for, any promise of lending made by the financing bank for this Agreement is subject to withdrawal at any time;

2.

Calculation method of interest: The interest under this Agreement shall be accrued on a daily basis and be paid off in the form of matching the principal repayment, unless otherwise specified;

3.

Submission of documents: The Client is required to submit the following documents to the financing bank or meet relevant requirements; however the obligation of authenticity review of such documents shall not fall on the financing bank;

(1)

The copy of latest Articles of Association and Business License of the Client;

(2)

The Board Resolution that authorizes the Client to execute this Agreement and relevant financing documents attached (in case there exists any restriction on the rights of legal representative such as right of signing contracts according to the Articles of Association)

(3)

The Letter of Authority and the specimen signature of the authorized representative;

(4)

This Agreement that has been signed by the Client legally and effectively;

(5)

The available date of draft appointed by the Client shall be a business day of the financing bank;

(6)

The guarantee documents shall be signed and come into effect before the date of draft in the event of a guaranteed loan;

(7)

Other documents and/or requirements casually asked by the financing bank;

4.

The date of draft or repayment date shall be postponed to the following business day if the date of draft appointed by the Client or the repayment date is not a business day;

5.

Early Repayment and Early Maturity

6.

Taxation

7.

Statements and Undertakings

(1)

The Client shall be the company incorporated according to the law of PRC (not including Hong Kong and Macao Special Administrative Region (SAR) and Taiwan region, hereinafter inclusive) and shall have the right to sign this Agreement and any documents related to this Agreement and has taken any necessary actions to make the corporate behavior, this Agreement and any related documents legal, valid and enforceable;

(2)

The signing of this Agreement and performance of the obligations under this Agreement, has not violated and will not violate any other contract or document, the Articles of Association, any applicable laws, regulations or administrative orders, and/or relevant documents, judgments or decisions made by the government authorities, neither inconsistent with any obligations or arrangements borne by the Client;

(3)

The Client and its shareholders and affiliated companies are not involved in any liquidation, bankruptcy, reorganization, annexation, merger, separation, reorganization, dissolution, closure, closures, or similar legal procedure, nor involved in any situation that might lead to such legal procedure;

(4)

Client is not involved in the economic, civil, criminal, administrative proceedings or similar arbitration proceedings that might have huge adverse impact on itself, nor involved in any situation that may lead to their involvement in any such litigation or arbitration proceedings, or similar procedures;

(5)

Client's legal representative, directors, supervisors or other senior management personnel, as well as any significant asset Client owns is not involved in any enforcement, distraint, seal-up, freezing, retention, regulatory measures, nor involved in any situation that could lead to such measures;

(6)

Client shall assure that all financial statements (if any) comply with Chinese law, and the statements give a authentic, complete and fair explanation of its financial condition; All data, documents and information Clients submit to the financing bank in the process of signing and performance of this Agreement, including the information of their own, guarantors and so on are real, effective, accurate and complete, without any concealment or omission;

(7)

Client assures that its business activities are carried out in strict compliance with the laws and regulations in the business scope specified in Business License or legally approved. Client should go through the registration and annual inspection procedures on time;

(8)

Client assures there are no other circumstances or events that have or may have huge adverse effect on Client's performance capacity.

8.

Commitment

(1)

All obligations under this Agreement will be obeyed and performed strictly;

(2)

The principal and interest of the loan and relevant expense thereof will be paid on time in compliance with this Agreement; Client shall be responsible to obtain any approval, authorization, registration and permission required by applicable law and maintain the effectiveness of such documents so as to ensure the legality of the signing and its legal performance of the obligations under the Agreement and any relevant documents. If required, Client shall provide the certification promptly;

(3)

Within 5 business days after the Client realizes its involvement in the economic, civil, criminal, administrative proceedings or similar arbitration proceedings that might have material adverse impact on itself, or the involvement of its significant asset in any enforcement, seizure, distrainment, freezing, retention, regulatory measures, the Client shall notify the financing bank of such circumstances in writing and describe the influence and the remedial measures it has taken or plans to take.

(4)

The Client shall not reimburse any large amount debt to a third party other than the financing bank or take any guarantee liability without written approval of the financing bank;

(5)

The Client shall not have any other large amount debt without written consent of the financing bank, nor shall it attempt to establish or provide the guarantee with nature of priority in any form for any other debt for benefit of itself or any third party. From the signing date to the settlement of the debt under this Agreement, without written consent of the financing bank, the Client is prohibited to:

 

a.

Enter into liquidation, restructuring, bankruptcy, annexation, merger, separation, reorganization, dissolution, closure, shut-down or similar legal procedure;

 

b.

Dispose any significant asset in the forms of sale, rent, donation and transfer or any other forms except for daily business requirement;

 

c.

Make any adjustment to the equity structure;

 

d.

Sign the contract/Agreement that may have huge negative effect on the Client’s ability to perform the obligations under this Agreement or assume relevant obligations that have such adverse effect.

(6)

The Client shall timely provide other guarantee permitted by the financing bank in accordance with the requirement of the financing bank in case that special circumstances or specific adjustments happen to the guarantee under this Agreement. The special circumstances or specific adjustments includes, without limitation, the production suspension, shut-down, dissolution, closure, revocation or withdrawal of Business License, applying for or being applied for restructuring, bankruptcy, great change in business operation or financial situation, being involved in material lawsuits or arbitration, the involvement of legal representative, director, supervisor or major management staffs in a case, the decrease or possible decrease of the collateral value, property preservation measures such as sealing up the collateral, any breach of contract under the guarantee Agreement and required cancellation of guarantee Agreement.

(7)

Upon the request of the financing bank, the Client should go through the enforceable notarization with the notary authority designated by the financing bank and assume relevant expense and of its free will accept the enforced execution.

(8)

The Client shall at any time inform the financing bank of the events that may have effect on its ability to perform the obligations under this Agreement and any documents which are relevant to the agreement and are related to the obligation of the incident.

9.

Expense and Expenditure

10.

Interest Penalty

11.

Authorized Repayment and set-off

12.

Certificate of Debt

13.

Transfer

14.

Disclosure of Information

15.

Breach of Agreement

16.

Special Agreement for the group Client: in case of group Client, the Client hereby agree to: (1) give description of connected transactions that accounts for above 10% of net asset of actual accredited party, including: a. the affiliated relations among the transaction parties; b. transaction items and the nature of transaction; c. the amount or corresponding proportion of transaction; d. pricing policy, including the transaction with no price or only nominal amount. (2) the financing bank is entitled to withdraw unilaterally the unused credit and withdraw partly or wholly the used loan credit or ask the Client to raise the margin to 100% in the following circumstances which are deemed as breach of this Agreement: a. Providing false materials or concealing important facts; b. Changing the particular purpose of the credit, appropriate the credit or being engaged in illegal and incompliant transaction with the bank credit without the consent of the financial bank; c. Obtaining the bank financing or credit by discounting or pledging the notes receivable or debt receivable without actual trade background in virtue of the fake relationship Agreement between the connected parties; d. declining to accept the supervision and inspection carried out by the financing bank on the operation of the credit funds and the business activities; e. being involved in reorganization, mergers and acquisitions which in the view of the financing bank may have effect on the safety of the credit; f. intended postponement of the bank debt through connected transaction.

17.

Other Provisions

18.

Applicable law and judicial jurisdiction

19.

Delivery Address

20.

Severability

22.

Consistency

23.

Signature