Loan Agreement, dated December 30, 2006, by and between Henan Gengsheng Refractories Co., Ltd. and Gongyi Sub-branch of China Agricultural Bank

Contract No.41101200500002647

Borrower (full name): Henan Gengsheng Refractories Co., Ltd

Lender (full name): Agricultural Bank of China, Gongyi Sub-branch

Pursuant to the laws and regulations of the People's Republic of China ("PRC"), and on the basis of mutual consent reached through negotiations, Borrower and Lender enter into the following Loan Agreement.

1. Type of loan: Short-term Working Capital Loan

2. Purpose of Loan: Purchase Raw Materials

3. Loan Amount (full-form characters): RMB Five Million

4. Loan and Repayment Term: One Year

(1) The following table sets forth the loan and repayment terms.

(If there is not enough space in the following table, an additional sheet may be attached to the Loan Agreement and shall constitute an integral part of the Agreement.)

(2) If the Loan Amount, Borrowing Date, and Repayment Date herein are inconsistent with the Loan Amount, Borrowing Date, and Repayment Date specified in the borrowing voucher (the "Borrowing Voucher"); the Borrowing Voucher shall prevail. The Borrowing Voucher shall be an integral part of this Loan Agreement and have the same legal force and effect.

(3) If the loan is in foreign currency under this contract, the Borrower shall repay the principal and interest in the original currency in time.

5. Loan Interest Rate

The RMB loan interest rate shall be calculated pursuant to the method designated in the following (1).

(1) Floating Interest Rate

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The Loan interest rate upward (upward/down) floats 20% on the interest rate basis. The executed annual interest rate is 7.344%. The interest rate basis for the loan under 5-year (including 5-year) is the prime rate for the same period RMB loan released by the People’s Bank of China. The interest rate basis for the loan above 5-year is as the prime rate for the RMB loan released by the People’s Bank of China plus / (in Words) %.

The interest is adjusted in One-month cycle. If the prime rate for RMB loan of the People’s Bank of China adjusts, the Borrower determines new interest rate according to the prime rate of corresponding time period after adjustment and the calculation method mentioned above from the corresponding date of the loan of the first month in the next cycle after the adjustment of prime rate. If the adjustment date of the prime rate is the same as the provision day of the loan or the corresponding date of the loan of the first month in the same cycle, the new executed interest rate for the loan is determined from the adjustment date of the prime rate. If there is no corresponding loan date, the last day of that month is regarded as the corresponding date of the loan.

(2) Fixed Interest Rate

The Loan interest rate / (upward/down) floats _ on the interest rate basis. The executed annual interest rate is__. The interest rate basis for the loan under 5-year (including 5-year) is as the basis interest rate for the same period RMB loan published by the People’s Bank of China. The interest rate basis for the loan above 5-year is as the basis interest rate for the RMB loan published by the People’s Bank of China plus / (in Words) %.

The interest rate for foreign currency loan is determined as method described in / :

(1) / (in Words) months / (LIBOR/HIBOR) + interest rate of loan which is consist from interest rate spread of / % and floated by / months. LIBOR/HIBOR is the London/Hong Kong Interbank Offered Rate for the corresponding time period as published by Reuters two working days before the interest rate calculation day.

(2) The executed annual interest rate is / till the expiration day of the loan.

(3) Other method / ..

6. Interest Payment

Interest on the Loan Amount shall accrue on the 20th day of each month ( Month/ Last month of the Quarter) and shall be paid monthly (Monthly/Quarterly) (the "Accrual Date"). The Borrower should pay the interest on every Accrual Date. If there is no Accrual Date for the last repayment date of the principal, the unpaid interest should be settled with the principal ( the daily interest rate = monthly interest rate / 30).

1. Borrower shall open a general deposit account with Lender.

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2. Borrower shall provide any relevant documents and materials that Lender may request and has completed all the relevant procedures.

3. If the loan contemplated by this contract is foreign currency one, the Borrower has completed all related approval, registration and other legal procedures as required by regulations.

4. If the Loan Amount is secured by collateral, Borrower shall have perfected and/or applied for and obtained insurance or performed other such legal procedures as requested by Lender and shall maintain the effectiveness of such security and insurance. If the loan under this contract is under guarantee, the guarantee contract shall be signed and effective.

1. Lender shall have the right to know the Borrower's production operations, financial affairs, commodity stock and the use of loan funds and to request that Borrower provide, in a timely manner, to Lender all documents, materials and information such as the financial statement of Borrower.

2. The Lender may stop providing the loan or ask for repayment of outstanding loan in the event of occurrence of any adverse behaviors or situations which include but not limited to the ones listed in Sections 7, 8, and 9 of Article 4 in this Contract.

3. When Lender collects, upon or prior to the due dates, the principal, interest, penalty interest, compound interest and other fees as stipulated per this agreement from Borrower, Lender shall have the right to directly transfer funds from Borrower's any account with Lender.

4. If the money repaid by the Borrower is not enough to pay off all the due amount under this contract, the Lender could choose to use this amount of money to repay the principal, interest, penalty interest, compound interest and other fees.

5. If the Borrower fails to fulfill the obligation of the repayment, the Lender can publicly disclose the default behavior of the Borrower.

6. Subject to Borrower compliance with the terms and conditions of this Loan Agreement, Lender shall release to Borrower the Loan Amount defined in this agreement.

1. Borrower has the right to acquire and use the funds borrowed under this Loan Agreement in accordance with the Loan Agreement.

2. Borrower shall meet the requirements designated in Article 2.

3. If the loan in this contract is in a foreign currency, Borrower shall complete all the approval, registration and other legal procedures related to this loan as decided in the regulations.

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4. Borrower shall repay the principal and pay accrued interest according to schedule. If Borrower is in need of an extension, then Borrower must submit a written application to Lender fifteen days prior to such due dates for extension thereof. Upon Lender's consent, Lender and Borrower shall enter an extension agreement.

5. Borrower shall use the funds borrowed under this Loan Agreement only for the purposes specified herein and for no other purpose.

6. Borrower shall, on a monthly basis, provide accurate, complete and effective financial statements and other related materials and information to Lender and shall actively cooperate with Lender for Lender's review of Borrower's operations, financing activities and use of funds borrowed under this Loan Agreement.

7. Unless Borrower provides notice in writing to Lender in advance and obtains Lender's consent, and unless Borrower performs its repayment obligations or its prepayment obligations, Borrower shall not, before paying off the principal and interest, engage in sub-contracting, leasing, equity restructuring, pooling, consolidating, merging, splitting, joint investment, capital transferring, filing for restructuring, filing for dissolution, filing for bankruptcy, and any other actions which may affect the debtor-creditor relationship under this Loan Agreement or affect the realization of Lender's rights.

8. Borrower shall notify Lender in writing of such events (in addition to the above-described events) as the disruption of production, going out of business, invalidation of the registration, revocation of the business license, legal representative(s) or officer(s) of the company engaging in illegal activities or being involved in significant litigation, serious production or operation problems, and deteriorating financial position, which may materially affect its ability to perform its obligations under this Loan Agreement. At the same time, Borrower shall take methods to save the loan from damage as approved by the Lender.

9. During the term of this Loan Agreement, Borrower shall give an advance notice and obtain

Lender's consent when Borrower makes assurances to, or provides its main assets as collateral for a third party and when by so doing Borrower may affect its repayment ability.

10. Borrower and its investors shall not take out the capital, transfer the assets or transfer the equity of Borrower in an attempt to avoid debt obligations to Lender.

11. If, during the Loan Term, Borrower changes its name, legal representative, legal address, business scope, etc., Borrower shall give an advance written notice to Lender.

12. Borrower shall provide other guaranties to Lender under the following circumstances: the guarantor under this Loan Agreement loses partial or total ability to provide guarantees relating to this loan because of production disruption, going out of business, cancellation of the registration, revocation of the business license, going into bankruptcy, or business losses; or the value of the collateral or hypothecated assets or rights under this Loan Agreement has decreased.

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13. Borrower shall bear the expenses of attorney services, insurance, transportation, evaluation, registration, safekeeping, appraisal, and notarization, relevant to this Loan Agreement or relevant to the guaranty under this Loan Agreement.

Borrower makes prepayment after getting the approval from the Lender. If the Lender agrees the prepayment by the Borrower, the interest rate for the part of the prepayment in the loan should be calculated as following method 1 .

1. Calculates and collects the interest rate according to loan term and executed interest rate defined in this agreement.

2. Calculates and collects the interest rate as upward floating % on the basis of the promised interest rate in this contract according to the actual loan term.

1. Provided Borrower complies with the terms and conditions of the Loan Agreement, Lender shall pay to Borrower a penalty if Lender fails to deliver a full amount of the underlying loan promptly, thereby causing Borrower to suffer losses. The penalty shall be calculated on the basis of the default amount and the number of overdue days. The calculation method of the default amount shall be the same as for overdue loan interest.

2. Lender shall have the right to charge interest on any overdue repayment at the rate which upward floats 50% (Full form characters) on the basis of the executed interest rate for loan under this contract from the date when the overdue repayment begins until the principal and interest rate have been fully paid off by the Borrower. During the overdue period, the default interest rate for the RMB loan should be correspondingly upward adjusted from the adjustment date if the prime rate for the same-period RMB loan of the People’s Bank of China is adjusted upward.

3. If Borrower does not use the funds according to the purpose specified in this Loan Agreement, Lender shall have the right to collect penalty interest on the abused amount of the loan at the rate which is upward floated 100% (Full form characters) on the basis of the executed interest rate as promised in this contract from the abused date until the principal and interest rate have been fully paid off. During this period, the default interest rate shall be correspondingly adjusted upward from the adjustment date if the prime rate for the same-period RMB loan of the People’s Bank of China is adjusted upward.

4. Compound interest is to be calculated and collected on any due unpaid interest according to the rules set by the People's Bank of China. Due unpaid interest includes the one during the loan period (including the abused default interest) and the one accrued from the overdue repayment (including the overdue default interest and abused default interest). The due unpaid interest during the loan period is calculated in compound interest on the basis of the executed interest rate for the promised loan in the loan period. After the expiration day of the loan, it is calculated in compound interest on the basis of the interest rate for the overdue repayment. The due unpaid interest rate for the overdue loan is calculated in compound interest on the basis of interest rate for the overdue loan.

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5. If the Borrower breaches this contract, Lender shall have the right to ask the Borrower to correct the problems within a time period and stop providing the loan, demand the repayment of the principal and interest of the funds outstanding under this Loan Contract and announce that all the loans under other contracts signed by and between the Borrower and Lender are due immediately.

6. If any guarantor for the borrowed funds under this Loan Agreement breaches its duties under the Guarantee Agreement, Lender shall have the right to stop providing funds under this Loan Agreement and demand repayment of the outstanding principal and interest of the funds under this Loan Agreement and to announce that all the loans under other contracts signed by and between the Borrower and Lender are due immediately.

7. If Borrower defaults under this Loan Agreement, Borrower agrees to pay all legal, travel and other expenses that Lender incurs in the course of pursuing litigation or arbitration to enforce its financial claims.

The loan specified hereof shall be guaranteed through a Guarantee Contract. A separate Guarantee Contract shall be made and signed. If the maximum amount guarantee method is used, the Guarantee Contract No is / .

Disputes arising out the performance of this Loan Agreement shall be settled through negotiation between the two parties or following method 1 .

1. Litigation. Any litigation between the parties hereto arising out of the performance of this Loan Agreement shall be within the jurisdiction of the civil courts where the Lender resides.

2. Arbitration. Arbitration is submitted to / (Name of the arbitration organization) and executed by the arbitration rules. During the period of litigation and arbitration, other clauses which are not involved in should be executed as usual.

None

This Loan Agreement shall become effective upon signature by the Borrower and Lender or the affixing of the official seals of both parties.

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Article 11 Copies of This Agreement

There are 4 copies of this Loan Agreement, one copy for each of the two parties to the contract and one copy to each Guarantor. All copies shall be of the same force and effect.

Lender has asked Borrower to fully and correctly understand the terms and conditions of this Loan Agreement and has answered all of Borrower's questions regarding the terms and conditions of this Loan Agreement. The signatories to this agreement have the same understanding of this Loan Agreement.

Borrower: Henan Gengsheng Refractories Co., Ltd
(Corporate Seal)

Legal representative: /s/Shunqing ZHANG

Lender: Agricultural Bank of China, Gongyi Sub-branch
(Corporate Seal)

Date: December 30, 2006

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