Shanghai Pudong Development Bank Real Estate Maximum Mortgage Agreement

Real Estate Maximum Mortgage Agreement

Mortgagor (Party A): Guanglin Chemistry Factory, Liufang Street, Jiangxia District, Wuhan

Legal Address: Hukou Village, Liufang Street, Jiangxia District

Correspondence Address:

Mortgagee (Party B): Shanghai Pudong Development Bank Wuhan Branch

Address:

Whereas Party B has granted or intends to grant a series of credits (including but not limited to offering loans, opening banker’s acceptance bill, etc.) to Wuhan Blower Co., Ltd (hereinafter referred to as “Debtor”) in accordance with the period and amount of claims provided in Article 2.1 of this Agreement. To safeguard the implementation of Party B’s claims, Party A hereby agrees to mortgage the following collateral as security and grant Party B the first priority of claim. In conformity with the principle of equality and through consultation, the two Parties hereby enter into this Agreement.

1.1 The collateral under this Agreement is:

Title: Real Estate of Guanglin Chemistry Factory, Hukou village, Liufang Street, Jiangxia District, Wuhan

Location: Hukou village, Liufang Street, Jiangxia District

Type: For both business and residential purposes.

Structure: Steel & Concrete

Area: 5149.52 sqm

Condition: Good

Appraised Value:

Ownership: Guanglin Chemistry Factory, Hukou village, Liufang Street, Jiangxia District

Ownership to Use Right:

Series Number of Certificate: Xia Guo Yong (2003) No.219

1.2 The validity of the mortgage right in this Contract shall affect the collateral itself, the appendants, secondary rights, right of subrogation, fixtures, accessories and fruits thereof.

1.3 In the event that Party A goes into bankruptcy proceedings, the collateral under this Agreement shall not be contained in the list of bankruptcy property.

2.1 Principal debt

The principal debt guaranteed under this Agreement shall be the debts offered by Party B owing to the loan and other credits during the period between 16 November 2006 and 15 October 2009 . The maximum principal balance of the above loan and other credits shall not excess RMB NINE MILLION AND SIX HUNDRED THOUSAND YUAN . The effective evidence in respect of liability owned by the Debtor shall be referred to in the accounting evidence issued by Party B in accordance with the operational rules. In the event that any matters provided by law or agreed to by the Parties arise and lead to the earlier termination of the above-mentioned Credit Period, the claims below the above-mentioned maximum principal balance by this date shall fall within the scope of guaranty.

2.2 Scope of Guaranty

Besides the principal claim mentioned in the above article, the scope of guaranty under this Agreement also includes all the interests, fines for breach of contract, compensation fees, attorney fees, proceedings fee and other relevant fees thereof.

2.3 Nature of Guarantee

(1) Party B shall be entitled to the priority of claim in respect to the collateral. Party B shall have priority of the proceeds from elimination of the collateral pursuant to legislation. When exercising the rights under this Agreement, Party B shall not have the obligation to claim with Debtor or other guarantors firstly or simultaneously.

(2) The guarantee liability of Party A under this Agreement shall be independent, irrevocable and unconditional. This Mortgage Contract shall not be affected by the principal contract and still be effective regardless of the invalidity of the principal contract. The guarantee liability of Party A shall not be affected by Party B’s consent to the renewal of debt, reorganization, the modification of Credit Contract and the alteration to the operation or management system of Debtor or Party A.

3.1 The execution of this Agreement shall be notarized with notarization authorities as Party B determines. If Party B requires, the notarization with enforceability shall be implemented.

3.2 The Parties thereto shall go through mortgage registration with competent real estate registration authority according to supervision authority within thirty (30) days after notarization (or the date of execution of this Contract in the event that Party B expressly indicates that notarization is not required). After the grant of mortgage certificate, Party A shall forthwith deliver the original copy of mortgage certificate or certificate of collateral ownership to Party B for preservation.

3.3 In the event that the house purchased by installment is pledged as collateral by Party A and the house is bought during the mortgage period, the Parties shall go through mortgage registration within thirty (30) days after the grant of certificate of house ownership.

3.4 In the event that this Agreement is terminated pursuant to the provisions of Article 8 or Party B otherwise agrees, Party B shall return the above documentation and other relevant evidence of rights to Party A at Party A’s request and go through cancellation registration with the original real estate registration authority in company with Party A.

3.5 Party A shall bear all the fees and expenses incurred in connection with this Article.

4.1 In the event that Party A has taken out an insurance policy with respect to the collateral, Party A shall go through the transfer procedure with respect to insurance rights and interests which places Party B as the first beneficiary within five (5) days after the date of this Agreement. If there is no insurance policy with respect to collateral existing or Party B is not satisfied with the original insurance, Party A shall go through insurance procedure at the insurance company in respect of insurance coverage, insurance period and insured amount as determined by Party B within five (5) days after the date of this Agreement. Party B shall be the first benef