ContractofGuaranteeofMaximumAmount

1.

The Guarantor is willing to provide guarantee for the following Lender’s rights by and between the Lender and the Borrower, amounting to RMB 76,000,000.00. Foreign currency is converted according to the selling price on the date of the occurrence of the business under Item 1 of Article 1 herein.

(1)

The Lender will, from February 10, 2010 to February 9, 2012, transact Lender’s rights formed from agreed business together with the Borrower. The said period is the definite period of guaranteed Lender’s rights of maximum amount. The said business includes: (put “√”before the right answer)

þ RMB/foreign currency loan

¨ L/C for deposit abatement

¨ Packing credit for exports

¨ Commercial bill discounted

¨ Commercial bill discounted

¨ Inward documentary Bill

¨ Bank Guarantee

þ Commercial draft acceptance

¨ Outward documentary Bill

¨ Other business: ___________________

(2)

The principal and interests of the following unpaid Lender’s rights under master contract between the Lender and the Borrower and relevant interest, penalty interest, compound interest and expenses. The relevant interest, penalty interest, compound interest and expenses will be counted according to master contract until the date of actual payment:

2.

Category, amount, interest rate and term of each business guaranteed by this Contract are subject to relevant legal instrument or voucher.

3.

Within the period and maximum amount under the Contract, the Lender needs not to carry out guarantee procedures one by one at the time of issuing the loan under the Contract or providing other bank credit.

4.

Currency is not limited in respect of the business occurred within the period and maximum amount under the Contract, and the Guarantor undertakes guarantee liabilities by the original currency.

1.

The period of guarantee of the Guarantor is two years from the expiration of the master contract.

2.

The period of guarantee of commercial draft acceptance, L/C for deposit abatement and bank guarantee is two years from the date of the Lender advances.

3.

The period of guarantee of commercial bill discounted is two years from the expiration of discounted bill.

4.

If the Lender and the Borrower conclude a renewal agreement for the period of repaying debts under master contract, the Guarantor will continue to undertake the guarantee liabilities and the period of guarantee is two years from the expiration of the said renewal agreement.

5.

In case the occurrence of events under laws or master contract results in the acceleration of maturity of Lender’s rights under master contract by the Lender, the period of guarantee is two years as of the date when the Lender confirms the acceleration of maturity of Lender’s rights under master contract.

1.

Having obtained the authorization for the guarantee under this Contract in accordance with relevant provisions and procedures.

2.

Having provided the Lender with true, complete and valid financial statements, articles of incorporation or other relevant data and information, and having accepted the Lender’s supervision and inspection against its production operations and financial status.

3.

The Guarantor is willing to fulfill guarantee liabilities in the event that the Borrower fails to repay debts as stipulated in master contract.

4.

In case the Guarantor fails to fulfill guarantee liabilities as stipulated in the Contract, the Lender has the right to deduct directly relevant amounts from the account that the Guarantor opens in the Lender’s bank.

5.

In any of the following situations, the Guarantor shall notify the Lender immediately in writing:

(1)

The Guarantor changes its name, address, legal representative, contact way, etc.;

(2)

The Guarantor changes it subordinate relationship, senior personnel, articles of incorporation or organizational structure;

(3)

The financial status or production operations of the Guarantor is in trouble, or having material lawsuit or arbitration to the Guarantor;

(4)

The Guarantor shuts down, goes out of business, suspends business for rectification, or files for bankruptcy or reorganization, etc.;

(5)

The business license of the Guarantor is cancelled or revoked, or it is ordered to close down, or other grounds for dissolution has occurred; or

(6)

The events happen to the Guarantor that are adverse to the realization of Lender’s rights by the Lender;

6.

In the event of carrying out any of the following actions, the Guarantor shall notify the Lender 15 days in advance and obtain its written consent:

(1)

The Guarantor changes its capital structure or management system, including, but not limited to, contract, lease, shareholding reform, joint-operation, merger, division, joint venture, reduction of capital, transfer of assets, filing for reorganization, reconciliation or bankruptcy; or

(2)

The Guarantor provides guarantee to a third party or creates mortgage or pledge for the debts of it or a third party, which may impact its fulfillment of the guarantee liabilities under the Contract.

1.

The definite period of Lender’s rights expires. “The definite period of Lender’s rights expires” includes the expiration of the definite period of Lender’s rights under Article 1 hereof, and acceleration of maturity of definite period of the Lender’s rights by the Lender in accordance with relevant national law and regulations or the provisions herein. In case the Borrower violates its obligations under master contract or the Guarantor violates its obligations under the Contract, the Lender has the right to accelerate the maturity of definite period of the Lender’s rights;

2.

New Lender’s rights may not happen;

3.

The Borrower and the Guarantor are adjudicated a bankruptcy or revoked; or

4.

Other situations stipulated by laws for the confirmation of Lender’s rights.

1.

In any of the following situations, the Lender has the right to require the Guarantor to fulfill guarantee liabilities. In case the amount paid by the Guarantor is insufficient to pay off the Lender’s rights guaranteed under this Contract, the Lender may apply this amount to repay the principal, interests, penalty interest, compound interest or fees, etc.;

(1)

The Lender is not repaid upon the expiration of the period of repaying debts under master contract. “The period of repaying debts under master contract expires” includes the expiration of the period of repaying debts under master contract, and acceleration of maturity of definite period of the Lender’s rights by the Lender in accordance with relevant national law and regulations or the provisions herein;

(2)

People’s court accepts the Borrower and Guarantor’s application for bankruptcy, or verdicts Reconciliation;

(3)

The business license of the Borrower and Guarantor is cancelled or revoked, or they are ordered to close down, or other grounds for dissolution has occurred;

(4)

The Borrower and Guarantor dead, or are declared missing or dead;

(5)

The Guarantor violates its obligations hereunder; or

(6)

Other situations impacting seriously the realization of Lender’s rights.

2.

In case the Lender’s rights guaranteed by this Contract has material guarantee and guarantee provided by the Borrower simultaneously, the Lender has the right to require the Guarantor to undertake guarantee liabilities prior to the material guarantee.

3.

If the Borrower provides property as guarantee, the Guarantor, in case of abandonment of such security interest by the Lender, cis-position of the security interest or change of the security interest, agrees to provide joint and several guarantee liabilities for the Lender’s rights under master contract as specified herein. “The security interest” refers to the security interest formed when the Borrower provides material guarantee for the Lender’s rights under master contract. 

1.

In case the Lender fails to fulfill its obligations agreed results in loss to the Guarantor after the effectiveness of the Contract, it shall bear relevant liabilities for damages.

2.

In any of the following actions taken by the Guarantor, it shall pay penalty to the Lender according to 1 % of the maximum amount of the Lender’s rights guaranteed by the Contract; in case of any loss to the Lender by the Guarantor, the latter shall compensate fully at the same time:

(1)

Having not obtained legal and valid authorization for the guarantee hereunder;

(2)

Failing to provide true, complete and valid financial statements, articles of incorporation or other relevant data and information;

(3)

Failing to notify the Lender promptly in case of the situation described in Item 5 of Article 5 of this Contract;

(4)

Having not obtained the Lender’s consent in advance prior to the implementation of the acts described in Item 6 of Article 5 of this Contract; or

(5)

Any other act violating the provisions herein or impacting the realization of Lender’s rights by the Lender.

1.

Litigation, under the jurisdiction of the people’s court at the Lender’s address.

2.

Arbitration, submitting to   (full name of arbitration institution) for arbitration according to its arbitration rules.