List ofcollateral

1.

Party A set mortgage with the property listed in “List of collateral” hereof.

2.

In the event that renewal of ownership or other title certificate of collateral of the collateral causes the “List of collateral” hereof or other title (right or mortgage) certificate accepted by Party B to be inconsistent with new title certificate or relevant records in the register of registration authority, Party A may not refuse to undertake guarantee liabilities hereby.

3.

Except as otherwise agreed by Party A and Party B or stipulated by law, the property newly added to the collateral due to annexing, mixing, processing and rebuilding will be taken as the mortgage guarantee of the Lender’s rights of Party B, and Party A shall carry out necessary mortgage registration as required by Party B.

4.

If the value of collateral has or may decrease and this will impact the realization of Lender’s rights by Party B, Party A shall provide new guarantee as required by Party B.

1.

The guarantee scope of the mortgage of maximum amount includes all debts under master contract, including but without limitation all principals, interests (including compound interest and penalty interest), liquidated damages, compensation, other amounts payable to Party B by the Borrower (including but without limitation relevant handling charges, telecommunications fees, miscellaneous expenses and relevant banking charges repudiated by the beneficiary of L/C which have been paid by Party B in advance), expenses accrued to Party B for the realization of Lender’s rights and rights to guarantee (including but without limitation litigation costs, arbitration fees, property security expenses, travel costs, expenses of execution, appraisal costs, auction fees, notary fees, delivery fees, charges for announcement and legal fees).

2.

The maximum amount of guarantee liabilities under the mortgage herein is (currency) RMB (amount) 44,000,000.00. If Party A fulfills guarantee liabilities according to this Contract, the said maximum amount will be reduced correspondingly by fulfilled amount.

3.

The loans, advances, interests, expenses or any other Lender’s rights of Party B under master contract will still fall within the guarantee scope of the mortgage of maximum amount, even though their actual occurrence time exceeds the definite period of Lender’s rights. The deadline of performing the debts under master contract will not be subject to the expiration of the definite period of Lender’s rights.

1.

Party A agrees that Party B and the Borrower, while concluding master contract or alter it (including but without limitation renewal of the period of repaying debts, or increase of the principal of Lender’s rights), need not to notify Party A and that Party A shall still undertake guarantee liabilities within the maximum amount and guarantee scope as specified herein.

2.

Change of party hereto

(1)

Restructuring, consolidation, merger, division, increase or decrease in capital, joint venture, joint operation, change of name of Party B or the Borrower;

(2)

Party B entrusts a third party to fulfill its obligations under master contract;

3.

In case the Lender’s rights under master contract are transferred to a third party, the guarantee hereunder will be transferred therewith and Party A shall assist Party B and such third party in carrying out the registration of changing mortgage as stipulated by law.

4.

In case the transfer of Lender’s rights or debts under master contract is ineffective, invalid, revoked or rescinded, Party A shall still undertake guarantee liabilities to Party B as specified herein.

1.

Party A shall possess, maintain and use the collateral properly, keep it in good condition and pay all taxes related to it on schedule. Party B has the right to inspect the collateral and may require Party A hand over the original of its title certificate to Party B for custody.

2.

In case Party A entrusts or allows a third party to possess, keep and use the collateral, it shall notify such third party of the right to mortgage of Party B concerning the collateral, and require it to keep the collateral in good condition, accept Party B’s inspection and not to prevent Party B to realize the right to mortgage. Party A shall not be exempted from the liabilities described in the preceding clause and be liable for the acts of such third party.

3.

The personal injury or property damage arising out of the collateral shall be undertaken by Party A. If Party B bears liability for the claim therefore or pay compensation for Party A, Party B has the right to recover from Party A.

1.

Except as otherwise agreed by both parties hereto, Party A shall arrange and maintain insurance for the collateral by law and according to insurance coverage, period, and amount appointed by Party B. The insurer shall have legal qualification and good reputation.

2.

The content of insurance policy shall conform to the requirements of Party B and any restrictive condition that damages Party B’s rights and interests may not be added. Insurance policy shall state specially: Party B is the preferred indemnified party (the first beneficiary) of insurance compensations; the change of insurance policy shall be subject to the written consent of Party B; in case of insurance risk, insurer shall transfer directly insurance compensations to the account appointed by Party B. If the collateral has been insured but the above-mentioned contents have not noted thereon, the insurance policy shall be annotated or altered correspondingly.

3.

Party A shall ensure insurance remains in force, and may not cause insurance to be disrupted, cancelled or invalid with any reason, or not cause insurer to mitigate liability for compensation, or not change insurance policy without party B’s consent. If the period of insurance expires and if the Lender’s rights guaranteed by Party A have not been repaid fully, Party A shall renew the period of insurance correspondingly.

4.

Party A shall, within 5 working days as of the conclusion of this Contract (in case the insurance of the collateral is renewed, as of the date of renewal), deliver to Party B the original of insurance policy of the collateral and keep in Party B’s address the documents related to insurance claim or necessary for the transfer of insurance interest.

5.

In respect of the insurance compensation concerning the collateral, Party B has the right to dispose of by the following ways and Party A shall assist in carrying out relevant procedures:

(1)

Using to repair the collateral to restore its value with Party B’s consent;

(2)

Repaying or repaying in advance the principals, interests and relevant expenses of the debts under master contract;

(3)

Proving pledge guarantee for the debts under master contract;

(4)

Disposing of by Party A at liberty if Party A provides new guarantee satisfactory to Party B.

1.

Without Party B’s written consent, Party A may not dispose of the collateral by any way, including but without limitation waiver, lease (including the renewal of previous leasing contract), donation, transfer, contribution, repeated guarantee, displacement, change into public use, annex with other buildings, rebuilding, partition.

2.

With Party B’s written consent, the prices or other amounts obtained from the disposal of the collateral by Party A shall be deposited into the account appointed by Party B. Party B has the right to dispose of the collateral by any way described in Paragraph (2), (3) and (4) of Clause 5 of Article 6 hereof, and Party A shall assist in carrying out relevant procedures.

1.

If the collateral is levied, expropriated, demolished, confiscated, retaken without compensation, or seized, frozen, detained, supervised, created with lien, auctioned, occupied forcibly, destructed, or disposed of otherwise by a third party, Party A shall notify Party B promptly and take measures to prevent, exclude or remedy to prevent further loss; Party A shall, at the request of Party B, provide new guarantee satisfactory to Party B.

2.

The remaining part of the collateral after the occurrence of the events in preceding clause shall still be taken as the mortgage guarantee of the Lender’s rights of Party B. The indemnification or compensation Party A obtains for the above reasons shall be deposited into the account appointed by Party B. Party B has the right to dispose of the collateral by any way described in Paragraph (1), (2), (3) and (4) of Clause 5 of Article 6 hereof, and Party A shall assist in carrying out relevant procedures.

1.

If the Borrower fails to fulfill the debts due and payable under master contract or the debts announced due and payable in advance or violates other provisions under master contract, Party B has the right to dispose of the collateral.

2.

The value recorded in List of collateral hereof or agreed otherwise by both parties (hereinafter referred to as “provisional value”), whether recorded in the register of registration authority, may not represent the final value of the collateral. The final value shall be the net amount of the prices obtained from disposal of the collateral by Party B minus all taxes.

3.

The prices from disposal of the collateral by Party B shall, after paying the expenses incurred during realization or auction (including but without limitation custody charges, appraisal fees, auction charges, transfer fees, taxes, transfer fee of national land use right), be used with preference to pay off the debts under master contract, and the remaining will be returned to Party A.

4.

If Party A and the Borrower are the same one, Party B may apply for forcible execution against the property other than the collateral of Party A, provided that Party B may not waive the right to mortgage or dispose of the collateral first.

5.

Party A may not prevent Party B from realizing the right to mortgage in any way (including acts or omissions).

6.

Whether Party B has other guarantee (including but without limitation guarantee, mortgage, pledge, L/G, stand-by L/C) for the Lender’s rights under master contract, whether the said other guarantee will be established or valid at any time and whether Party B lodges claim against other guarantor, whether there is a third party willing to undertake the debts under master contract in whole or in part, whether other guarantee is provided by the Borrower, the guarantee liabilities of Party A hereunder may not be mitigated; Party B may require directly Party A to undertake guarantee liabilities within its guarantee scope as specified herein and Party A will not put forward any objection.

7.

If the maximum amount of the guarantee liabilities hereunder is lower than the balance of actual debts under master contract, and if the Lender’s rights under master contract have not been paid off fully after Party A undertakes guarantee liabilities, Party A undertakes that it will claim (including exercise in advance) right of subrogation or right of recourse against the Borrower or other guarantors and not cause any damage to Party B’s rights and interests and agrees that the discharge of the debts under master contact has precedence over the realization of the right of subrogation or right of recourse of Party A.

(1)

Party A agrees not to claim right of subrogation or right of recourse against the Borrower or other guarantors; if the prices obtained from any disposal of the collateral are settled, Party A shall assist in carrying out relevant procedures.

(2)

If the right to mortgage fails to be created effectively or the value of the collateral decrease or Party B fails to realize the right to mortgage promptly or fully because of Party A, and if Party A and the Borrower are not the same one, Party B has the right to require Party A to undertake joint and several liabilities to the debts and the Borrower within the guarantee scope specified herein.

(1)

Requiring Party B to bear the expenses of post-registering the title certificate of the collateral;

(2)

Requiring Party B to postpone returning the title certificate of the collateral or assisting Party B in carrying out the procedures for nullifying mortgage registration.

1.

Assumption of fees

2.

Deduction of payables

3.

Use of Party A’s information

4.

Announcement and collection

5.

Evidentiary effect of Party B’s records

6.

Reservation of rights

7.

If Party A is divided or dissolved, or enters into bankruptcy procedures, or is revoked or cancelled industry and commerce registration or business license, or the collateral is damaged, lost, infringed or out of Party A’s control, or the property right of the collateral is disputed or the title certificate is written off, Party A shall notify Party B promptly.

8.

Dissolution or bankruptcy of the Borrower

9.

Dissolution or bankruptcy of Party A

10.

Where Party A’s address or contact way is changed, it shall notify Party B promptly in written. Any loss due to the failure of Party A to notify shall be borne by Party A.

11.

Other provisions

12.

Settlement of dispute

(1)

Bring a lawsuit before the people’s court at Party B’s location.

(2)

Submit to             Arbitration Commission (the place of arbitration is                 ) for arbitration in accordance with rules in effect at the time of applying for arbitration. The arbitration award shall be final and binding upon both parties.

13.

Effectiveness of this Contract

14.

The Contract is in quadruplicate.

1.

Party A has a clear understanding of the business scope and authority of Party B.

2.

Party A has read all provisions under this Contract and master contract. At the request of Party A, Party B has made corresponding explanations for this Contract and master contract. Party A has understood thoroughly the meanings of all provisions under this Contract and master contract and relevant legal consequences.

3.

Party A is qualified for a guarantor legally. Party A’s guarantee acts hereunder comply with laws, administrative regulations, rules and the articles of association or internal organization documents of Party A and have also be authorized by the competent institution inside Party A and/or competent national authority. Party A shall bear all liabilities because Party A has no authority to sign this Contract, including but without limitation full compensation of the losses sustained by Party B therefore.

4.

Party A has full understood the assets, debts, operation, credibility, and reputation of the Borrower, the qualification of the Borrower to sign master contract and all contents of master contract.

5.

Party A has the ownership or right to dispose of the collateral by law. The collateral is not a public utility or not forbidden to be traded or transferred, and there is no dispute regarding its ownership,

6.

The collateral has no other co-owner, or although it has other co-owner, the mortgage guarantee hereunder has been permitted by such co-owner in written.

7.

The collateral has no such defect or encumbrance as has not been notified to Party B in written, including but without limitation the collateral is limited merchantable thing or is sealed up, detained, supervised, leased, kept or mortgaged, or there is any unpaid purchasing prices, maintenance fees, construction project prices, national taxes, transfer fees of land use right and damages, or the collateral has been created for guarantee by a third party.

8.

All data and information provided by Party A to Party B for the collateral are all true, valid and accurate.

9.

The provision of the mortgage guarantee hereunder by Party A will neither damage the legitimate rights and interest of any third party nor violate the legal and agreed obligations of Party A.