10-Q/A

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-Q/A
(Amendment No. 1)

(Mark One)

[ X ]   QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended: September 30, 2011

[   ]   TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ____________to _____________

Commission File No. 000-52843

SILVAN INDUSTRIES, INC.
(Exact name of registrant as specified in its charter)

Nevada	20-5408832
(State or other jurisdiction of incorporation or	(I.R.S. Employer Identification No.)
organization)

Jun Yue Hua Ting, Building A
3rd Floor, Unit -1
#58 Xin Hua Road
Guiyang, Guizhou 550002
People’s Republic of China
(Address of principal executive offices)

(+86) 851-552-0951
(Registrant’s telephone number, including area code)

CHINA FORESTRY INDUSTRY GROUP, INC.
               _________________________________________________________________
      (Former name, former address and former fiscal year, if changed since last report)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes [X]   No [   ]

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

Yes [X]   No [   ]

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer [  ]	Accelerated filer [  ]
Non-accelerated filer [  ]  (Do not check if a smaller reporting company)	Smaller reporting company [X]

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes [   ]   No [ X ]

The number of shares outstanding of each of the issuer’s classes of common stock, as of November 17, 2011 is as follows:

Class of Securities	Shares Outstanding
Common Stock, $0.001 par value	30,000,000

EXPLANATORY NOTE

This Amendment No. 1 on Form 10-Q/A (this "Amendment") hereby amends our Quarterly Report on Form 10-Q for the fiscal quarter ended September 30, 2011, previously filed with the Securities and Exchange Commission (the "Commission’) on November 21, 2011 (the "Original Filing"). This Amendment is being filed in response to comments by the staff of Commission in connection with its review of the Original Filing.

This Amendment does not reflect events occurring after the filing of the Original Filing or modify or update those disclosures, including the exhibits to the Original Filing affected by subsequent events.

In addition, as required by Rule 12b-15 under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), this Amendment contains new certifications pursuant to Rules 13a-14 and 15d-14 under the Exchange Act and Section 302 of the Sarbanes-Oxley Act of 2002.

i

 PART I    

 FINANCIAL INFORMATION    

ITEM 2.   MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION ANDRESULTS OF OPERATIONS.

Special Note Regarding Forward Looking Statements

In addition to historical information, this report contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. We use words such as “believe,” “expect,” “anticipate,” “project,” “target,” “plan,” “optimistic,” “intend,” “aim,” “will” or similar expressions which are intended to identify forward-looking statements. Such statements include, among others, those concerning market and industry segment growth and demand and acceptance of new and existing products; any projections of sales, earnings, revenue, margins or other financial items; any statements of the plans, strategies and objectives of management for future operations; any statements regarding future economic conditions or performance; as well as all assumptions, expectations, predictions, intentions or beliefs about future events. You are cautioned that any such forward-looking statements are not guarantees of future performance and involve risks and uncertainties, including those identified in Item 1A “Risk Factors” included in our Annual Report on Form 10-K for the year ended December 31, 2010, as well as assumptions, which, if they were to ever materialize or prove incorrect, could cause the results of the Company to differ materially from those expressed or implied by such forward-looking statements.

Readers are urged to carefully review and consider the various disclosures made by us in this report and our other filings with the SEC. These reports attempt to advise interested parties of the risks and factors that may affect our business, financial condition and results of operations and prospects. The forward-looking statements made in this report speak only as of the date hereof and we disclaim any obligation, except as required by law, to provide updates, revisions or amendments to any forward-looking statements to reflect changes in our expectations or future events.

Use of Terms

Except where the context otherwise requires and for the purposes of this report only:

• the “Company,” “we,” “us,” and “our” refer to the combined business of Silvan Industries and its subsidiaries, Bingwu Forestry, Aosen Forestry, Silvan Flooring and Guiyang Silvan Touch;

• “Silvan Industries” refers to Silvan Industries, Inc., a Nevada corporation (formerly China Forestry Industry Group, Inc.);

• “Bingwu Forestry” refers to China Bingwu Forestry Group Limited, a Hong Kong company;

• “Aosen Forestry” refers to Qian Xi Nan Aosen Forestry Company, Limited, a PRC company;

• “Silvan Flooring” refers to Qian Xi Nan Silvan Flooring Company, Limited, a PRC company;

• “Guiyang Silvan Touch” refers to Guiyang Silvan Touch Flooring Co., Limited, a PRC company;

• “Hong Kong” refers to the Hong Kong Special Administrative Region of the People’s Republic of China;

• “PRC” and “China” refer to the People’s Republic of China;

• “SEC” refers to the Securities and Exchange Commission;

• “Exchange Act” refers the Securities Exchange Act of 1934, as amended;

• “Securities Act” refers to the Securities Act of 1933, as amended;

• “Renminbi” and “RMB” refer to the legal currency of China; and

• “U.S. dollars,” “dollars” and “$” refer to the legal currency of the United States.

1

Overview of Our Business

We produce and sell floor materials and related products to residential and commercial customers in China. Our product lines include laminate flooring and fiber floor boards that are manufactured in a variety of colors, dimensions and designs.

The primary raw material used in our products is wood, which we currently procure from third party suppliers. We expect that commencing in late 2012, we will be able to procure approximately 20% of our wood from a 2,250 hectares (approximately, 22.5 km2) of fir forest in Guizhou Province.

Our manufacturing facility in Qianxinan, Guizhou Province has an annual production capacity of six million square meters of laminate flooring and 75,000 cubic meters of industrial fiber boards. We are constructing two new manufacturing facilities next to our current facility to expand our laminate flooring production line and industrial fiber board production line. We expect that this expansion will increase our overall capacity to 200,000 cubic meters of fiber boards and 12 million square meters of laminate floor.

We market and sell our products through five branch offices and 504 contracted flooring specialty retail stores, concentrated mostly in southwestern China. We also sell some of our products through eight retail stores which we refer to as “flagship” stores because they are generally larger and better equipped with samples, promotional material and product inventory, as compared to regular retail stores, and as a result, they better promote our image and the quality of our products. We are also seeking commercial arrangements for the sale of our products through home supply stores, such as our recent agreement to sell our products at Red Star Macalline Furniture Mall’s Guiyang store. Red Star Macalline Furniture Mall is a large home products supply store chain in China, similar to Home Depot and Lowe’s in the U.S., with over 30 malls and stores across China. We believe that home supply stores are an important channel for the sale of building/home renovation materials and we plan to increase our efforts to work with more home supply stores in the future.

In March 2011, we established Guiyang Silvan Touch in order to expand our sales channels. Guiyang Silvan Touch’s principal activity is the wholesaling of wood flooring, furniture and decorations.

Recent Developments

• On October 3, 2011, we filed a Certificate of Amendment to our Articles of Incorporation with the Nevada Secretary of State to change the name of the Company from “China Forestry Industry Group, Inc.” to “Silvan Industries, Inc.” Please see our current report on Form 8-K filed with the SEC on October 6, 2011 for more information.

• On May 17, 2010, our Chairman and CEO, Mr. Yulu Bai, entered into an option agreement with Ms. Ren Ping Tu, his wife, pursuant to which Mr. Bai was granted an option to acquire all of the 20,500,000 shares of the Company’s common stock currently owned by Ms. Tu for an exercise price of $2,500,000. On September 6, 2011, Mr. Bai exercised the option to acquire all 20,500,000 shares of the Company’s common stock. After Mr. Bai exercised this option, he directly owns 68.33% of the Company’s issued and outstanding common stock.

Third Quarter Financial Performance Highlights

The following summarizes certain key financial information for the third quarter of 2011:

• Revenue: Revenue was $10.7 million for the three months ended September 30, 2011, an increase of $1.9 million, or 22.1%, from $8.8 million for the same period last year.

• Gross Profit and Margin: Gross profit was $3.4 million for the three months ended September 30, 2011, an increase of $0.45 million, or 15.3%, from $2.9 million for the same period last year. Gross margin was 31.5% for the three months ended September 30, 2011, as compared to 33.3% for the same period last year.

• Net Income: Net income was $1.3 million for the three months ended September 30, 2011, a decrease of $0.8 million, or 40.7%, from $2.1 million for the same period last year.

2

• Fully diluted net income per share: Fully diluted net income per share for the three months ended September 30, 2011 was $0.04, as compared to $0.09 for the same period last year.

Results of Operations

Comparison of Three Months Ended September 30, 2011 and September 30, 2010

The following table shows key components of our results of operations during the three months ended September 30, 2011 and 2010, in both dollars and as a percentage of our revenue.

(All amounts, other than percentages, in U.S. Dollars)
		Three Months Ended				Three Months Ended
		September 30, 2011				September 30, 2010
				% of				% of
		Dollars		Revenue		Dollars		Revenue
Revenue	$	10,711,139		100.00%	$	8,771,019		100.00%
Cost of revenue		7,342,247		68.55%		5,848,371		66.68%
Gross profit		3,368,892		31.45%		2,922,648		33.32%
Operating expenses
Selling expenses		269,467		2.52%		27,834		0.32%
General and administrative expenses		697,341		6.51%		322,625		3.68%
Total operating expenses		966,808		9.03%		350,459		4.00%
Income from operations		2,402,084		22.43%		2,572,189		29.33%
Other income (expenses)
Interest income		642		0.01%		-		0.00%
Interest expenses		(464,170	)	-4.33%		(173,244	)	-1.98%
Other (expenses) income		(1,559	)	-0.01%		-		0.00%
Value added tax refund		-		0.00%		526,399		6.00%
Government grant		31,184		0.29%		-		0.00%
Total other income (expenses)		(433,903	)	-4.05%		353,155		4.03%
Income before income taxes		1,968,181		18.38%		2,925,344		33.35%
Less: income tax expense		702,862		6.56%		791,257		9.02%
Net income	$	1,265,319		11.81%	$	2,134,087		24.33%

Revenue. We generate revenue from the sales of our industrial fiber boards, laminate flooring, wooden flooring, and related flooring products. Our revenue increased to $10.7 million for the three months ended September 30, 2011, from $8.8 million for the same period in 2010, representing a 22.1% increase. The increase in revenue was mainly due to an increase in average unit sales price with stable sales volume across all product categories.

In terms of product lines, sales of our laminate flooring and fiber board products accounted for approximately 62.6% and 37.4% of our revenue, respectively, for the three months ended September 30, 2011, as compared to approximately 64.5% and 35.5%, respectively, for the same period in 2010. We did not sell any hard wood flooring products in the third quarter because we are still developing this new product market.

The average unit sales price of our laminate flooring products increased slightly by approximately 2.3% for the three months ended September 30, 2011. We sold approximately 1.00 million square meters of laminate flooring products during the three months ended September 30, 2011, as compared to approximately 1.07 million square meters of laminate flooring products for the same period in 2010. We were able to maintain the relatively stable sales volume as last year with the increased average unit sales price mainly due to our continued promotion and market expansion efforts for this product line.

The average sales price of our fiber board products increased approximately 26% in the third quarter of 2011 as compared to the same period last year. A larger portion of our products sold in this quarter was 15mm fiber board which generally has a higher sales price than our 12mm fiber board which was the major products sold in the same quarter last year. Sales volume remained fairly stable. We sold approximately 0.6 million pieces of fiber boards during the three months ended September 30, 2011 as compared to approximately 0.59 million pieces of fiber boards for the comparative period in 2010.

3

Cost of revenue. Our cost of revenue is primarily comprised of the costs of our raw materials, labor and overhead. Our cost of revenue increased $1.5 million, or 26%, to $7.3 million for the three months ended September 30, 2011, from $5.8 million for the same period in 2010. The cost of revenue as a percentage of revenue increased from 67% for the three months ended September 30, 2010 to 69% for the three months ended September 30, 2011. Such increase was primarily due to the significant increase in cost of raw materials primarily including wood, chemical boards and papers. Unit cost for these raw materials has increased 19 to 20% compared to the same period in 2010. The rise in raw material cost is due to macro inflationary environment in China, which in turn resulted in the increase in unit cost and until selling price of our products.

Gross profit and gross margin. Our gross profit is equal to the difference between our revenue and our cost of revenue. Our gross profit increased $0.5 million, or 15%, to $3.4 million for the three months ended September 30, 2011, from $2.9 million for the same period in 2010. Gross profit as a percentage of net revenue (gross margin) was 31% and 33% for the three months ended September 30, 2011 and 2010, respectively. The decrease in the gross margin was primarily driven by the decreased gross margin of our laminate flooring products. The respective gross margins for our laminate flooring and fiber board products were 25% and 25% for the three months ended September 30, 2011, as compared to 32% and 21% for the same period in 2010. The drop in the gross margin of our laminate flooring product line was mainly attributable to a greater percentage increase in average cost than the percentage increase in average sales price.

Selling expenses. Our selling expenses are comprised primarily of sales commissions, the cost of advertising and promotional materials, salaries and fringe benefits of sales personnel, travel expense, consulting fees and other sales related costs. Our selling expenses increased by $241,633, or 868%, to $269,467 for the three months ended September 30, 2011, from $27,834 for the same period in 2010. The increase was primarily a result of the expansion of our sales network leading to increased salary, welfare expenses and advertisement and exhibition expenses. Our salary expenses for the three months ended September 30, 2011 amounted to $144,315, compared to $12,171 for the same period in 2010. Our welfare expenses for the three months ended September 30, 2011 amounted to $36,100, compared to $1,447 for the same period in 2010. Our advertisement and exhibition expenses for the three months ended September 30, 2011 amounted to $49,806, compared to $623 for the same period in 2010. Due to continued efforts to promote our brand recognition and marketing in the PRC, our travel and consultation expenses also increased and contributed to the increase of selling and marketing expenses. Our travel expenses for the three months ended September 30, 2011 amounted to $22,182, compared to $10,137 for the same period in 2010. Our consultation expenses for the three months ended September 30, 2011 amounted to $9,093, compared to $721 for the same period in 2010.

General and administrative expenses. General and administrative expenses consist primarily of compensation and benefits to our management, finance and administrative staff, professional advisor fees, audit fees and other expenses incurred in connection with general operations. Our general and administrative expenses increased $374,716, or 116%, to $697,341 for the three months ended September 30, 2011, from $322,625 for the same period in 2010. This increase was mainly due to the hiring of additional staff to manage our expanding business, particularly in our finance department, to assist with the increased administrative duties associated with being a public company. This also led to increases of related welfare expenses.

Other income (expense). We had $433,903 in other expenses for the three months ended September 30, 2011, as compared to other income of $353,155 for the same period in 2010. Compared to same period in 2010, we incurred more expenses in this quarter mainly because of a higher interest expense of $290,926 resulting from increased bank borrowings during the three months ended September 30, 2011. We had approximately $19.6 million bank loans as of September 30, 2011 as compared to $4.5 million as of September 30, 2010. In addition, a majority of the 2010 other income was attributable to a $0.53 million value added tax refund. According to a tax refund approval notice issued by the Tax Administration of the Ministry of Finance of the PRC, certain items, including our wood flooring and wooden fiber sheets are qualified for the refund of VAT in 2009 and 2010. No such tax refund approval notice was issued for 2011. During the three months ended September 30, 2011, we received $31,184 in government grant income for use in research and development of applied technology as compared to $0 for the same period in 2010.

Income taxes. Our income taxes decreased by $0.09 million, or 11%, to $0.7 million for the three months ended September 30, 2011, from $0.8 million for the same period in 2010. The decrease was due to the decrease in our taxable income.

Net income. For the three months ended September 30, 2011, we generated a net income of $1.3 million, a decrease of $0.8 million, or 40.7%, from $2.1 million for the same period in 2010, as a result of the cumulative effect of the foregoing factors.

4

Comparison of Nine Months Ended September 30, 2011 and September 30, 2010

The following table shows key components of our results of operations during the nine months ended September 30, 2011 and 2010, in both dollars and as a percentage of our revenues.

(All amounts, other than percentages, in U.S. Dollars)
		Nine Months Ended				Nine Months Ended
		September 30, 2011				September 30, 2010
				% of				% of
		Dollars		Revenue		Dollars		Revenue
Revenue	$	29,611,048		100.00%	$	25,696,546		100.00%
Cost of revenue		19,390,075		65.48%		17,085,785		66.49%
Gross profit		10,220,973		34.52%		8,610,761		33.51%
Operating expenses
Selling expenses		995,699		3.36%		146,481		0.57%
General and administrative expenses		1,602,111		5.41%		1,062,610		4.14%
Total operating expenses		2,597,810		8.77%		1,209,091		4.71%
Income from operations		7,623,163		25.74%		7,401,670		28.80%
Other income (expenses)
Interest income		24,217		0.08%		-		0.00%
Interest expenses		(1,099,182	)	-3.71%		(231,761	)	-0.90%
Other (expenses) income		(31,923	)	-0.11%		43,988		0.17%
Value added tax refund		-		0.00%		1,950,176		7.59%
Government grant		76,598		0.26%		-		-
Total other income (expenses)		(1,030,290	)	-3.48%		1,762,403		6.86%
Income before income taxes		6,592,873		22.26%		9,164,073		35.66%
Less: Provision for income taxes		1,884,480		6.36%		2,012,055		7.83%
Net income	$	4,708,393		15.90%	$	7,152,018		27.83%

Revenue. Our revenue increased to $29.6 million for the nine months ended September 30, 2011, from $25.7 million for the same period in 2010, representing a 15% increase. The increase in revenue was mainly due to higher sales volume in the first quarter of 2011 after the expansion of our sales and distribution network, coupled with increase in unit sales price of both our laminate flooring and fiber boards. During the nine months ended September 30, 2011, we sold approximately 2.9 million square meters of laminate flooring products and approximately 1.6 million pieces of fiber boards, as compared to approximately 1.6 million square meters of laminate flooring products and approximately 2.2 million pieces of fiber boards for the same period in 2010. In addition, we started selling hard wood flooring products in the first quarter of 2011 and sold approximately 0.05 million square meters of hard wood flooring products in the nine months ended September 30, 2011. Our respective sales of laminate flooring products, fiber board products and hard wood flooring products accounted for approximately 64.0%, 35.9% and 0.1% of our revenue for the nine months ended September 30, 2011, as compared to 46.1%, 53.9% and 0% for the same period in 2010.

Cost of revenue. Our cost of revenue increased $2.3 million, or 13%, to $19.4 million for the nine months ended September 30, 2011, from $17.1 million for the same period in 2010. The increase was generally in line with the increase in sales volume. Cost of revenue as a percentage of revenue remain relatively consistent as we had a slight decrease from 66% for the nine months ended September 30, 2010 to 65% for the nine months ended September 30, 2011 primarily attributable to our fiber board product line. As a percentage of revenue, cost of revenue for our fiber board product line was 74% for the nine months ended September 30, 2011, as compared to 78% for the same period in 2010. The decrease was due to the fact that the percentage increase in the unit selling price of fiber boards outpaced the percentage increase in the raw material cost. The unit cost of major raw materials had a percentage increase between 2% to 29% while the unit selling price of 12mm and 15mm fiber boards increased by 7% and 25%, respectively. To minimize the impact of continuing rise in raw material cost, we hope that through our research and development efforts, we can improve our manufacturing technology of this product line which we expect to result in lower consumption of raw materials.

Gross profit and gross margin. Our gross profit increased $1.6 million, or 19%, to $10.2 million for the nine months ended September 30, 2011, from $8.6 million for the same period in 2010. Such increase in overall gross profit was mainly due to an approximately 27% increase in gross profit generated from sales of fiber boards which more than offset an approximately 6% decrease of gross profit from sales of laminate flooring products. Gross profit as a percentage of net revenue (gross margin) was 35% and 34% for the nine months ended September 30, 2011 and 2010, respectively. The slight increase in gross margin was primarily driven by increased gross margin of fiber board products. Gross margins for our laminate flooring products and fiber board products were 26% and 26%, respectively, for the nine months ended September 30, 2011, as compared to 34% and 22%, respectively, for the same period in 2010. The gross margin of new hard wood flooring products was 24.8% for the nine months ended September 30, 2011. The improved gross margin of fiber board product line was due to the decrease in cost of revenue as noted above. The drop in gross margin of laminate flooring products was mainly attributable to a combined effect of decrease in their unit sales price and increase in unit cost. The average sales price of laminate flooring products per square meter dropped approximately 10% from the nine months ended September 30, 2010 as a result of intense competition in the market for similar products.

5

Selling expenses. Our selling expenses increased significantly by $0.8 million, or 580%, to $1.0 million for the nine months ended September 30, 2011, from $0.1 million for the same period in 2010. The increase was primarily a result of the expansion of our sales network leading to increased salary, welfare expenses and advertisement and exhibition expenses. Our salary expenses for the nine months ended September 30, 2011 amounted to $0.7 million, compared to $0.3 million for the same period in 2010. Our welfare expenses for the nine months ended September 30, 2011 amounted to $0.1 million, compared to $5,859 for the same period in 2010. Our advertisement and exhibition expenses for the nine months ended September 30, 2011 amounted to $0.2 million, compared to $55,045 for the same period in 2010. Due to continued efforts to promote our brand and marketing in the PRC, we also incurred more travel and consultation expenses. Our travel expenses for the nine months ended September 30, 2011 amounted to $72,292, compared to $17,974 for the same period in 2010. Our consultation expenses for the nine months ended September 30, 2011 amounted to $96,325, compared to $721 for the same period in 2010.

General and administrative expenses. Our general and administrative expenses increased $0.5, million or 51%, to $1.6 million for the nine months ended September 30, 2011, from $1.1 million for the same period in 2010. This increase was mainly due to the hiring of additional staff to manage our expanding business, particularly in our finance department, to assist with the increased administrative duties associated with being a public company. This also led to increases of related welfare expenses.

Other income (expense). We had $1.0 million in net other expenses for the nine months ended September 30, 2011, as compared to net other income of $1.8 million for the same period in 2010. The $2.8 million decrease in other income (expense) was primarily due to value added tax refund of $1.9 million received in the nine months ended September 30, 2010 coupled with higher interest expense of $1.1 million resulting from increased bank borrowings during the nine months ended September 30, 2011, as compared to $0.2 million interest expense for the comparative period in 2010.

Income taxes. Our income taxes decreased by $0.1 million, or 6%, to $1.9 million for the nine months ended September 30, 2011, from $2.0 million for the same period in 2010. The decrease was due to the decrease in our taxable income.

Net income. For the nine months ended September 30, 2011, we generated a net income of $4.7 million, a decrease of $2.4 million, or 34%, from $7.2 million for the same period in 2010, as a result of the cumulative effect of the foregoing factors.

Liquidity and Capital Resources

As of September 30, 2011, we had cash and cash equivalents of $72,045. The following table summarizes the key cash flow metrics from our condensed consolidated statements of cash flows for the nine months ended September 30, 2011 and 2010.

Cash Flow
		Nine Months Ended
		September 30,
		2011			2010
Net cash (used in) provided by operating activities	$	(3,715,575	)	$	2,744,432
Net cash used in investing activities		(8,334,032	)		(6,202,457	)
Net cash provided by financing activities		11,756,689			3,350,958
Effects of exchange rate change in cash		2,153			329,050
Net (decrease) increase in cash and cash equivalents		(290,765	)		221,983
Cash and cash equivalents at beginning of the period		362,810			748,493
Cash and cash equivalent at end of the period	$	72,045		$	970,476

6

Operating Activities

Net cash used in operating activities was $3.7 million for the nine months ended September 30, 2011, as compared to net cash provided by operating activities of $2.7 million for the same period in 2010. The decrease in net cash from operating activities was primarily due to a decrease of $2.4 million in net income, an approximately $5.6 million cash outflow in inventory purchases which was primarily offset with a corresponding increase in bills payable which are utilized to pay our suppliers for raw material purchases, a $7.3 million outflow in deposits and prepaid expenses primarily for deposits paid to suppliers of raw materials and goods supplies. In addition, as a result of increase in our bills payable, our cash outflow for the restricted cash balance, which serves as collaterals for bills payable, increased by $2.6 million. The significant increase in inventory during the nine months ended September 30, 2011 was attributable to increased inventory and raw materials purchases in anticipation of the development of our sales network in some selected markets in China, as evidenced by our $12.9 million inventory balance as of September 30, 2011 and our $9.5 million sales order backlog.

Investing Activities

Net cash used in investing activities for the nine months ended September 30, 2011 was $8.3 million, as compared to $6.2 million for the same period in 2010. The net cash used in investing activities was primarily due to our purchase of land use rights for approximately $2.5 million during the nine months ended September 30, 2011. In addition, we paid approximately $5.8 million as prepayment for properties under construction for the expansion of our facilities.

Financing Activities

Net cash provided by financing activities for the nine months ended September 30, 2011 was $11.8 million, as compared to $3.4 million for the same period in 2010. The increase in net cash provided by financing activities was primarily due to increased bank borrowings of $17.7 million to fund our expansion. Such increase was offset by repayment of two short term bank loans totaled $3.1 million that matured in June and July 2011. In addition, we paid off $2.9 million payable to Mr. Yulu Bai for the purchase cost of the forestry land use right that Mr. Bai had paid on behalf of the Company.

Loan Commitments

As of September 30, 2011, the amount, maturity date and term of each of our bank loans were as follows:

			Interest
Bank		Amount*	Rate	Maturity Date	Duration
China Merchant Bank	$	3,913,282	8.484%	March 7, 2012	1 year
Xingyi City Rural Cooperative Bank		3,756,751	8.715%	April 29, 2012	1 year
Bank of Chongqing		3,130,625	7.572%	June 28, 2012	1 year
Xingyi City Rural Cooperative Bank		782,656	9.5667%	August 2, 2012	1 year
Guiyang City Nanming Rural Credit Cooperative Bank		3,913,282	8.775%	November 18, 2012	22 months
Guiyang City Nanming Rural Credit Cooperative Bank		4,069,813	8.775%	January 18, 2013	2 years
Total	$	19,566,409
* Calculated based on the exchange rate of $1 = RMB 6.3885

Four of the above loans were guaranteed by other entities. On March 7, 2011, Guizhou Huacheng Real Estate Co., Ltd. (“Guizhou Huacheng”) entered into a pledge agreement with Guiyang Branch, China Merchant Bank (“China Merchant Bank”) to guarantee a loan of $3.9 million that we borrowed from China Merchant Bank. Guizhou Huacheng used its pledged property to guarantee our repayment of the loan principal and accrued interests. The term of the pledge is from March 3, 2011 to September 2, 2012. During the term of this agreement, Guizhou Huacheng has the obligation to submit the title and other ownership certificates of the pledged property to Chongqing Bank and maintain the pledged property in good condition. Our director, Yudong Ji is the Chairman of Guizhou Huacheng. No payment was made by us to Guizhou Huacheng for the guarantee.

On June 29, 2011, Guizhou Huacheng entered into a pledge agreement with Guiyang Branch, Bank of Chongqing (“Chongqing Bank”) to guarantee a loan of $3.1 million that we borrowed from Chongqing Bank. Guizhou Huacheng pledged its property to guarantee our repayment of the loan principal and accrued interests. During the term of this agreement, Guizhou Huacheng has the obligation to submit the title and other ownership certificates of the pledged property to Chongqing Bank and maintain the pledged property in good condition. No payment was made by us to Guizhou Huacheng for the guarantee.

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On July 4, 2011, certain of our officers and directors, including Yulu Bai,Yudong Ji, Yi Zeng and Bei Shi also entered into a guarantee agreement with Chongqing Bank to guarantee the loan of $3.1 million that we borrowed from Chongqing Bank. The term of the guaranty is from July 4, 2011 to June 28, 2014. If we fail to repay the principal and accrued interests pursuant to our loan agreement with Xingyi Bank, these individual guarantors will have the joint and several liability to pay off the loan.

On April 30, 2011, Guizhou Dingshengxin Guarantee & Investment Co., Ltd., Xi’nanzhou Branch (“Dingshengxin”) entered into a guarantee agreement with Guizhou Xingyi Rural Cooperative Bank (“Xingyi Bank”) to guarantee a loan of $3.8 million that we borrowed from Xingyi Bank. The term of the guaranty is from April 30, 2011 to April 29, 2014. If we fail to repay the principal and accrued interests pursuant to our loan agreement with Xingyi Bank, Dingshengxin will have the joint and several liability to pay off the loan. We paid approximately $0.17 million to Dingshengxin for the guarantee.

On August 3, 2011, Dingshengxin entered into a guarantee agreement with Xingyi Bank to guarantee a loan of $0.8 million that we borrowed from Xingyi Bank. The term of the guaranty is from August 3, 2011 to August 3, 2014. If we fail to repay the principal and accrued interests pursuant to our loan agreement with Xingyi Bank, Dingshengxin will have the joint and several liability to pay off the loan. We paid approximately $36,000 to Dingshengxin for the guarantee.

We are not aware of any material trend, event or capital commitment, which would potentially adversely affect liquidity. In the event a material trend develops, we believe that our cash on hand and cash flow from operations will meet part of our present cash needs and we will require additional cash resources, including loans, to meet our expected capital expenditure and working capital for the next 12 months. In the future we may also require additional cash resources due to changed business conditions or acquisitions that we may decide to pursue. In addition, because substantially all of our revenues are generated from our indirect PRC subsidiaries, Aosen Forestry and Silvan Flooring, the ability of our PRC subsidiaries to make dividends and other payments to us is subject to the PRC dividend restrictions. Current PRC law permits payments of dividend by our PRC subsidiaries only out of their accumulated after-tax profits, if any, determined in accordance with PRC accounting standards and regulations. Our PRC subsidiaries are also required under PRC laws and regulations to allocate at least 10% of their annual after-tax profits determined in accordance with PRC GAAP to a statutory general reserve fund until the amounts in said fund reaches 50% of their registered capital. Allocations to the statutory reserve fund can only be used for specific purposes and are not transferable to us in the form of loans, advances or cash dividends. As we disclosed above, our PRC subsidiaries did not allocate their after-tax profits to the statutory general reserve fund pursuant to the PRC regulations. As of September 30, 2011, we had allocated an aggregate of RMB10,380,366 (approximately $1.6 million) to our fund.

If our own financial resources are insufficient to satisfy our capital requirements, we may seek to sell additional equity or debt securities or obtain additional credit facilities. The sale of additional equity securities could result in dilution to our stockholders. The incurrence of indebtedness would result in increased debt service obligations and could require us to agree to operating and financial covenants that would restrict our operations. Financing may not be available in amounts or on terms acceptable to us, if at all. Any failure by us to raise additional funds on terms favorable to us, or at all, could limit our ability to expand our business operations and could harm our overall business prospects.

Obligations Under Material Contracts

In addition to the loan obligations disclosed above, we have the following material contractual obligations:

• On February 2, 2010, we entered into a financial advisory agreement to appoint Asia Regal Financial Capital Group Co., Ltd. and Shenzhen Junwei Investment and Development Co., Ltd. as financial advisors. Pursuant to the agreement, we are obligated to issue to the financial advisors 100,000 shares of common stock at $0.10 per share prior to December 31 of every year within 5 years from the quotation of our stock in the OTC markets. The agreement contains an exclusivity provision whereby we have agreed to engage them as our sole financial advisors for a 2-year period following such stock quotation and contains a $1 million liquidated damages provision for breach of such exclusivity.

• As of September 30, 2011, the total estimated contract costs to complete the production line for wooden fiber sheet are approximately $58.3 million (RMB372.4 million) of which the Company has completed and paid for approximately $6.1 million (RMB39.2 million). The remaining of $52.2 million (RMB333.2 million) will be completed and paid by the end of 2013.

8

• As of September 30, 2011, the total estimated contract costs to complete the production line for wooden floor are approximately $23.7 million (RMB151.6 million) of which the Company has completed and paid for approximately $0.2 million (RMB1.6 million). The remaining of $23.5 million (RMB150.0 million) will be completed and paid by the end of 2013.

• As of September 30, 2011, the total estimated contract costs to complete a property are approximately $9.8 million (RMB62.7 million) of which the Company has completed and paid for approximately $6.7 million (RMB42.5 million). The remaining of $3.1 million (RMB20.2 million) will be completed and paid by the end of 2011.

• As of September 30, 2011, we have operating lease commitments for four store leases and two warehouse leases, the leases expire through year 2013. Our future minimum lease payments are as follow: $19,988 for the remainder of 2011, $81,060 for 2012, $74,567 for 2013 and $10,380 for 2014.

Seasonality

Our operating results and operating cash flows historically have not been subject to seasonal variations. This pattern may change, however, as a result of new market opportunities or new product introduction.

Inflation

Inflation and changing prices have not had a material effect on our business, and we do not expect that inflation or changing prices will materially affect our business in the foreseeable future. However, our management will closely monitor price changes in the Chinese economy and our industry and continually maintain effective cost controls in operations.

Off Balance Sheet Arrangements

We do not have any off balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, sales or expenses, results of operations, liquidity or capital expenditures, or capital resources that are material to an investment in our securities.

Critical Accounting Policies

Critical accounting policies are those we believe are most important to portraying our financial conditions and results of operations and also require the greatest amount of subjective or complex judgments by management. Judgments and uncertainties regarding the application of these policies may result in materially different amounts being reported under various conditions or using different assumptions. There have been no material changes to the critical accounting policies previously disclosed in our Annual Report on Form 10-K for the fiscal year ended December 31, 2010.

Recent Accounting Pronouncements

See Note 2 to our unaudited condensed consolidated financial statements included elsewhere in this report.

PART II
OTHER INFORMATION

ITEM 6.  EXHIBITS.

The following exhibits are filed as part of this report or incorporated by reference:

9

Exhibit No.	Description
10.1	English Translation of Loan Contract, dated February 25, 2011, by and between China Merchant Bank Co., Ltd. Guiyang Branch and Qian Xi Nan Aosen Forestry Company, Limited.
10.2	English Translation of Working Capital Loan Contract, dated April 30, 2011, by and between Guizhou Xingyi Rural Cooperative Bank and Qian Xi Nan Aosen Forestry Company, Limited.
10.3	English Translation of Working Capital Loan Contract, dated June 29, 2011, by and between Guiyang Branch, Bank of Chongqing Co., Ltd. and Qian Xi Nan Aosen Forestry Company, Limited.
10.4	English Translation of Working Capital Loan Contract, dated August 3, 2011, by and between Guizhou Xingyi Rural Cooperative Bank and Qian Xi Nan Aosen Forestry Company, Limited.
10.5	English Translation of Working Capital Loan Contract, dated January 19, 2011, by and between Guiyang Nanming District Rural Credit Cooperative Bank, Xinhu Lu Branch and Qian Xi Nan Aosen Forestry Company, Limited.
10.6	English Translation of Working Capital Loan Contract, dated January 19, 2011, by and between Guiyang Nanming District Rural Credit Cooperative Bank, Xinhu Lu Branch and Qian Xi Nan Silvan Flooring Company, Limited.
10.7	English Translation of Pledge Agreement, dated March 7, 2011, by and between China Merchant Bank Co., Ltd. Guiyang Branch and Guizhou Huacheng Real Estate Co., Ltd.
10.8	English Translation of Pledge Agreement, dated June 29, 2011, by and between Guiyang Branch, Bank of Chongqing and Guizhou Huacheng Real Estate Co., Ltd.
10.9	English Translation of Guarantee Agreement, dated July 4, 2011, by and among Guiyang Branch, Bank of Chongqing, Ji Yudong, Zeng Yi, Bai Yulu and Shi Bei.
10.10	English Translation of Guarantee Agreement, dated April 30, 2011, by and between Guizhou Xingyi Rural Cooperative Bank and Guizhou Dingshengxin Guarantee & Investment Co., Ltd., Xi’nanzhou Branch.
10.11	English Translation of Guarantee Agreement, dated August 3, 2011, by and between Guizhou Xingyi Rural Cooperative Bank and Guizhou Dingshengxin Guarantee & Investment Co., Ltd., Xi’nanzhou Branch.
31.1	Certifications of Principal Executive Officer filed pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2	Certifications of Principal Financial Officer filed pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1	Certifications of Principal Executive Officer furnished pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2	Certifications of Principal Financial Officer furnished pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

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SIGNATURES

In accordance with Section 13 or 15(d) of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Date: February 28, 2012

SILVAN INDUSTRIES, INC.

By: /s/ Yulu Bai                                                      
Yulu Bai
Chief Executive Officer
(Principal Executive Officer)

By: /s/ Jiyong He                                                  
Jiyong He
Chief Financial Officer
(Principal Financial Officer and Principal
Accounting Officer)

EX-10.1

Exhibit 10.1

Loan Contract

(English Translation)

No.: 2011 Ying 1011200625

This contract is the specific contract under the Credit Agreement of No.___ (Please check the box if this applies.).

Money Lender: China Merchant Bank Co., Ltd., Guiyang Branch (hereinafter referred to as Party A)

Principal: Zhang Qingdian

Borrower: Qian Xi Nan Aosen Forestry Company, Limited (hereinafter referred to as Party B)

Legal Representative/Principal: Bai Yulu

Party B applies to Party A for working capital loans because of production and management needs. Party A agrees to issue the loan upon checking. Now both parties enter into this contract and reach agreement on the following articles through full consultation in accordance with relevant laws.

Article 1 Loan currency and amount

RMB (Capitalized) SAY RMB TWENTY-FIVE MILLION ONLY.(RMB 25,000,000)

Article 2 Loan purpose

This loan is defined as working capital loan, and shall be only used for working capital turnover. And Party B shall not use it for any other purpose without the written approval of Party A.

Article 3 Loan term

The term of the loan is one year, from March (month) 8 (date) 2011 (year) to March (month) 7 (date) 2012 (year). If the actual loan issuing date is not the same as the above start date, the loan issuing date shall be subject to the date on the receipt for the loan, and the repayment date shall also be extended correspondingly, subject to the receipt for the loan.

[  ] During the loan term, Party A shall issue the loan step by step according to the actual needs of Party B, and the amount and start date of the loan issued each time should be subject to the receipt for the loan (Please check the box if this article applies.).

[  ] During the loan term, Party A may have the right to ask Party B to make equal installment repayment according to the following plan ((Please check the box if this article applies.).

Article 4 Loan prerequisites

The issuing of the loan (including each loan issued by stage) under this agreement is on the premise that Party B shall fulfill the following requirements. Party A has the right to refuse the loan issuing if Party B fails to fulfill any of these requirements:

4.1 Party B has provided relevant materials according to this agreement;

4.2 Party B shall cooperate with Party A in supervision and inspection;

4.3 Party B has made full repayment on time for the issued loan;

4.4 Party B hasn’t caused any event of default stipulated in the agreement;

4.5 Party B hasn’t violated any other stipulation in this agreement.

The loan prerequisites are concluded for protecting the rights and interests of Party A, and Party A has the right to lower the requirements for the loan prerequisites.

Article 5 The interest rate and interest of the loan

5.1 Interest rate

5.1.1 This loan adopts (choose one from the two items below, checking the box):

[x] fixed rate [  ] floating rate

5.1.2 Determination of the interest rate during the contract period:

For RMB loan, the base rate should be subject to the __ month/one year RMB loan base rate of the financial institution announced by the People’s Bank of China on the pricing date, [x] floating upward/[  ] floating downward (Choose one from the two, checking the box) 40%.

For foreign currency loan, the base rate should be subject to the __ month(s)/___day(s) (Choose one from the two, checking the box) base rate of the corresponding foreign currency loan on the pricing date or one working day before or two working days before: [[ ] plus/[ ] minus (Choose one from the two, checking the box) __ basic point(s) (BPs). It’s decided by Party A to choose the pricing date, one working day before or two working days before as the interest rate determination day. The pricing date means the reference day for determining the loan term or the basic rate during the floating period. If this loan adopts the fixed rate, the pricing date shall be the actual loan issuing date; if this loan adopts the floating rate, the determination of pricing date shall conform to the stipulation in Article 5.1.3.

The stipulations in the above article, that is “[ ] floating upward/[ ] floating downward __%” (hereinafter referred to as floating proportion), or “[ ] plus/[ ] minus __ (basic point)”(hereinafter referred to as basic point), refer to the floating proportion and/or the basic point determined when this contracts is signed. Party A has the right to adjust this floating proportion and/or the basic point regularly or irregularly in combination with the change of state policy, the price change of the domestic credit market, or the change of its own credit policy. Once Party A decides to adjust, it should notify Party B in writing five working days in advance. Such adjustment shall come into force when Party B receives the notification from Party A. The specific floating proportion and /or the basic point of the relevant new loan Party B has just drawn and the loan Party B has drawn before the notification comes into force and still hasn’t repaid shall be subject to the determination in Party A’s notification, and the base rate and floating period shall still subject to this agreement.

5.1.3 If this loan adopts floating interest rate, the floating period shall be _/_ month(s)/__ day(s). The base interest applied in each floating period shall be determined according to article 5.1.2. The actual loan issuing date is the pricing date of the first floating period. And the first day of each floating period followed is considered as the pricing date of this floating period.

5.1.4 In the case that Party B hasn’t used the loan according to this agreement, additional 100% interest rate shall be collected on the basis of the original rate for the loan that hasn’t used in accordance with the purpose stipulated in this agreement from the day of changing the loan purpose.

In the case that Party B hasn’t repaid the loan on time, additional 50% interest rate shall be collected on the basis of the original rate for the loan that Party B hasn’t repaid on time from the day when the time limit expires.

The original interest rate refers to the interest rate applied (For floating rates, this refers to the last floating period before the maturity, including the maturity in advance) before the maturity (including the due date in advance).

If the loan is overdue or hasn’t been used for purpose stipulated in this contract, the interest shall be collected according to the above-mentioned ways, and adopt the way in whichever the interest is higher.

5.1.5 During the loan term, if the People’s Bank of China adjusts the regulation of loan interest rate, such regulation of the People’s Bank of China shall be performed.

5.2 Interest accrual: the interest rate should be calculated from the date when the loan is entered into Party B’s account and based on the actual loan amount and actual number of days. Interest is calculate once a season, interest accrual day is the 20th of the last month of each season. The conversion way of daily interest rate shall conform to the relevant regulations of the People’s Bank of China or the international practice.

5.3 Payment of interest: Party B should pay interest just on each interest accrual day. Party A may withhold directly from Party B’s deposit account. If Party B hasn’t paid the interest on time, as for the unpaid interest, Party A shall have the right to collect compound interest based on the loan interest over the same period.

Article 6 Guarantee clause (For the following items, please check the box according to the real situation.)

[  ]6.1 __ is designated by Party B as the guarantor of the principals and interests and all the other relevant expenses under this contract, and he/she must provide Party A with the irrevocable guaranty and/or

[x]6.2 Guizhou Huacheng Real Estate Co., LTD uses the commercial buildings and the land-use right that they own or for which they have legal right to handle as the mortgage/pledge for the loan under this contract, and both parties shall sign separate mortgage contract.

[  ]6.3 Other guarantee methods:

If this contract is the specific contract under the Credit Agreement, this article shall not apply. The debt under this contract shall automatically enter into the guarantee scope of the guarantor who has signed the a contract of mortgage/pledge of the maximum amount with Party A or has provided the irrevocable guaranty of the maximum amount.

If the guarantor hasn’t signed the guarantee document or gone through the guarantee procedure according to the stipulations, Party A may have the right to refuse to issue the loan to Party B.

Article 7 Rights and obligations of Party B

7.1 Party B enjoys the following rights:

7.1.1 Has the right to draw and use the whole loan according to this contract; 7.1.2 Has the right transfer the debt to the third party upon approval of Party A. 7.2 Party B shall fulfill the following obligations:

7.2.1 Shall truthfully provide the files and materials, all the account-opening banks, account Numbers and the condition of the deposits and the loans demanded by Party A, and cooperate with Party A in investigation, review and check;

7.2.2 Shall accept Party A’s supervision on its use of credit funds, production and management, and financial activities. And shall take reasonable processing measures based on Party A’s suggestions and requirements;

7.2.3 Shall use the loan in accordance with the purpose stipulated in this contract, and conform to Party A’s requirements on the payment and management of the loan funds;

7.2.4 Shall fully repay the principal and the interest on time according to this contract;

7.2.5 Shall get approval from Party A if transfer the whole or part of the debt under this contract to the third party;

7.2.6 Shall notify Party A immediately if the following conditions happen, and on Party A ‘s request to cooperate with Party A in carrying out the protective measures for repay fully the principals, the interests and all the other expenses under this contract on time:

7.2.6.1 Essential financial loss, capital loss or other financial crisis arises;

7.2.6.2 Provide loan or guarantee for the benefit of the third party or for protecting the third party from loss, or to provide mortgage or pledge by using the property owned by itself;

7.2.6.3 Credit status reduces, and main business profitability goes down;

7.2.6.4 Conditions arise, such as termination of business, business license being revoked or cancelled, applying for or being applied for bankruptcy, dismiss and so on;

7.2.6.5 Party B’s controlling shareholders, actual controller and other affiliated companies suffer crucial management or financial crisis, which influence its normal operation;

7.2.6.6 Party B has connected transactions with its controlling shareholder and other affiliated companies, which influences its normal operation;

7.2.6.7 Any litigation, arbitration, or criminal and administrative penalties occur, which have much bad effect on its management or financial status;

7.2.2.8 The borrower’s legal representative, directors or important high-level managers experience personnel change, or their personal freedom is restricted by the state authorized organizations due to illegal and disciplinary events, which may influence its normal operation;

7.2.6.9 Other important events occur that may influence its ability to repay the debt;

7.2.7 Shall not delay in managing and claiming the creditor's right, or handle the main current property for free or in other inappropriate ways.

7.2.8 Part B shall get approval from Party A before carries out the important events, such as merger, division, restructuring, equity transfer, joint venture (cooperation), the transfer of property rights, the shareholding system reform, foreign investment, the actual increase in debt financing, and so on;

7.2.9 According to Party A’s requirements, Party B shall (For the following items, please check the box according to the real situation.): [ ]insure its core assets and designate Party A as the first beneficiary; [ ]not sell or mortgage the _/__ asset designated by Party A before settlement of the loan; [ ]make the following limit on the profit-sharing ratio of its shareholders according to Party A’s requirement during the existence of the loan:

[ ]Others:

Article 8 Rights and Obligations of Party A

8.1 Party A enjoys the following rights:

8.1.1 Has the right to ask Party B to fully repay the principal and the interest of the loan;

8.1.2 Has the right to ask Party B to provide materials related to the loan;

8.1.3 Has the right to know about Party B’s production and management and financial activities;

8.1.4 Has the right to supervise Party B to use the loan according to the purpose stipulated in this contract;

8.1.5 Has the right to supervise the account Party B opened at Party A, entrust other organizations of China Merchants Bank outside Party A to supervise Party B’s account, and control the payment of loan funds in accordance with the loan usage and payment scope agreed on between both parties;

8.1.6 Has the right to withdraw the principal, the interest and other relevant expenses of the loan directly from Party B’s account;

8.1.7 Has the right to transfer the creditor’s right it owns for Party B, and has the right to adopt the methods that it deems appropriate (including but not limited to by fax, mail, personal delivery, notification on the public media and so on) to inform Party B of the transfer and urge Party B to pay back the debt;

8.1.8 In the business of buyer credit and interest seller-bearing, and seller credit and interest buyer-bearing, Party A has the right to refuse to issue the loan to Party B before receives the Commitment Letter of Interest-bearing provided by the seller/the buyer;

8.1.9 Has the right to call in the loan in advance according to the status of funds withdrawal;

8.1.10 Has the right to take measures in accordance with this contract if Party B fails to fulfill the obligations under this contract;

8.1.11 Has other rights stipulated in this contract;

8.2 Party A shall fulfill the following obligations:

8.2.1 Shall issue the loan according to the requirements stipulated in this contract;

8.2.2 Shall keep confidential of Party B’s financial, production and management status, except otherwise stipulated by laws and regulations and the regulatory organizations.

Article 9 Party B particularly guarantee the following matters

9.1 Party B is the kind of entity which is established formally based on the Chinese law, exists legally, possesses the status of a legal person, and has full civil capacity to sign and execute this contract;

9.2 Party B has got the full authorization of the board of directors or any other competent authority in signing and executing this contract. This contract has the legal and effective binding to Party B from the contract date;

9.3 The loan item and loan events conform to the laws and regulations. The loan won’t be used in the investment of fixed assets and equity; in the speculation on securities, futures and real estate illegally; in seeking illegal income by lending to each other; in the fields and usages prohibited by the state; and in other usages outside this contract;

9.4 If the loan borrowers makes the payment of the loan by themselves, Party B should regularly (at least quarterly) make summary report to Party A the payment of the loan funds. Party A has the right to check whether the loan payment conforms to the stipulated usage by account analysis, certificate inspection, field survey and other methods; The loan borrowers makes the payment of the loan by themselves means that Party A issue the loan funds to Party B’s account upon Party B’s withdrawal request, and then Party B may pay the loan to the its counterparty who is subject to the stipulated loan usage at its own will;

9.5 After approval of Party A, if Party B needs to use online banking to make loan payment, Party B shall accept the limit measures taken by Party on the online banking, including presetting the list of payment objects, single payment limit, periodical payment limit and so on;

9.6 The documents, materials and certifications on Party B, the guarantor, the mortgagor (pledger) object given as a mortgage/pledge provide by Party B are all truth, correct, complete and effective, There is no crucial mistake contradictory with the truth or important fact is omitted in such documents, materials and certifications;

9.7 When both parties sign this contract, no litigation, arbitration, or criminal and administrative penalties occurs which have serious bad effect on Party B or the main assets of Party B, and such litigation, arbitration, or criminal and administrative penalties won’t occur during the execution of this contract. If happens, Party B shall notify Party A immediately;

9.8 Party B shall strictly conform to the national laws and regulations in management, develop all businesses strictly based on the business scope stipulated in the “Business License for Legal Person” of Party B, and go through the registration procedures of annual inspection of the enterprise (legal person) in due time;

9.9 Maintain or improve the current management level, ensure the assets to keep and increase its value, shall not give up any matured claim, and shall not handle the main current property for free or in other inappropriate ways;

9.10 Party B should ensure that its financial indicators shall not lower than the following requirement during the loan term:

9.11 When both parties sign this contract, Party B hasn’t caused any crucial events that influence Party B’s fulfillment of the obligations under this contract.

Article 10 Withdrawal and use of the loan

10.1 The way of using the loan by Party B under this contract is (Please check the box according to the real situation. Only one box can be checked, and if not choose anyone, 10.1.2 will automatically be applied.).

[  ] 10.1.1 Self Payment

Self payment means that Party A issues the loan funds to Party B’s account upon Party B’s withdrawal request, and then Party B may pay the loan to the its counterparty who is subject to the stipulated loan usage at its own will;

[  ] 10.1.2 Entrusted payment

Entrusted payment means that Party A pay the loan funds to Party B’s counterparty who is subject to the stipulated loan usage through Party B’s account an based on the loan withdrawal request an payment entrustment.

In the case of adopting entrusted payment, after the loan issuing, Party B shall get Party A’s approval when pay the loan to external parties and Party B shall not evade the supervision of Party A by using the methods of online banking, the check for transfer to transfer funds at the bank issuing the check, breaking down into elements and so on.

[ ]10.1.3 Combination of self payment and entrusted payment

In the case of adopting this item, if at the time of loan withdrawal by Party B, the single payment amount Party B plans to make to the same beneficiary is over or equal to RMB 10,000,000 (or foreign currency of the same value), the entrusted payment must be adopted according to the stipulation in 10.1.2; if at the time of loan withdrawal by Party B, the single payment amount Party B plans to make to the same beneficiary is less than the above amount, the self payment stipulated in 10.1.1 shall be automatically applies.

10.2 Party B should submit Party A the “Withdrawal Application”, receipt for the loan and the materials that Party A asks Party B to provide depends on the different requirements of self payment and entrusted payment. Or else, Party A has the right to refuse the request of loan withdrawal of Party B.

10.3 After receiving the above-mentioned documents, if Party A agrees to issue the loan after auditing, issues such as the actual issuing date, term, amount, etc. of each loan funds that has been withdrawn shall be recorded in detail on the receipt for the loan.

If entrusted payment is adopted, Party B shall authorize Party A to make the payment to the counterparty of Party B through Party B’s account on the very day of loan issuing (or the first working day after the loan issuing day).

Article 11 Paying off in advance

11.1 Party B may apply for paying off the loan in advance, but should get approval from Party A;

11.2 If Party B repay the loan in advance, the interest rate shall also be calculated according to the method stipulated in this contract.

Article 12 Loan extension

If Party B fails to repay the loan under this contract and asks for loan extension, it should submit a written application to Party A one month before the expiration of this contract. If Party A agrees to the loan extension, both parties shall sign the loan extension agreement separately. If Party A doesn’t agree to the loan extension, this contract shall still be in force. Party B shall repay the loan funds it has already taken up and the interest payable according to the stipulations in this contract.

Article 13 Expenses

13.1 Loan processing fee: Within _/_ day(s) from the contract date, Party B shall pay Party A at one time the loan processing fee, which is _/_% of the loan amount stipulated in Article 2 (including the total of local and foreign currency).

13.2 Party B shall make payment for the expenses incurred due to credit investigation, examination and notarization, etc. related to this contract, and make payment for the attorney fee, litigation cost and travel cost, etc. Party A paid for realizing the creditor’s right in the case that Party B fails to repay on time the principal and the interest of the loan under this contract and repay the accrued expenses. And Party B authorizes Party A to deduct such repayment directly from its bank account. If there is not enough amount of funds in its bank account, Party B promises to pay off in full after receives Party A’s notification, without the need of any certification provided by Party A.

[  ]Article 14 Dedicated account of the loan (Please check the box to indicate the stipulation in this article is applicable.).

14.1 The issuing and external payment of all the loan funds under this contract must be performed through the following account.

Specific information of this account is as follows:

Account Name: ______________/____________________;
Account No.: ______________________/______________;
Account-opening Bank: _____________/_______________.

14.2 If entrusted payment is adopted, when necessary Party A may have the right to limit the off-counter payments (such as the online banking, phone banking, etc.) and exchange through the above account.

Article 15 Supervision of the status of capital-returning of Party B

15.1 After this contract comes into force and before Party B pays off all the financing debt, both partied agree to designate the following accounts as the capital-returning bank for Party B:
Account Name: Qian Xi Nan Aosen Forestry Company, Limited
Account No.: 851900004010306
Account-opening Bank: China Merchant Bank Co., Ltd. Guiyang Branch

15.2 The supervision requirement of this account is as follows: __________________
Party A has the right to call in the loan in advance based on the capital-returning status of Party B, that is when this account has returned capital, the loan which is correspondingly of the same amount as this sum of returned capital may be regarded as expires in advance, and Party A has the right to deduct directly this sum of returned capital from this account to repay the loan;

15.3 If entrusted payment is adopted, when necessary Party A may have the right to limit the off-counter payments (such as the online banking, phone banking, etc.) and exchange through the above account.

15.4 Party B should provide quarterly the status of capital in and off the above account, and cooperate Party A in supervise the relevant accounts and returned capital.

Article 16 Event of Default and measures taken

16.1 If one of the following circumstances exists, Party B shall be deemed as breaching the contract:

16.1.1 Party B violates the stipulations in 7.2.1 of this contract, provides false information for Party A or conceals the important truth, doesn’t cooperate with Party A in investigation, review and check, and still doesn’t make the corrections within the time limit even if Party A asks it to;

16.1.2 Party B violates the stipulations in 7.2.2 of this contract, doesn’t accept or avoid Party A’s supervision of its credit fund and relevant production and management and financial activities;

16.1.3 Party B violates the stipulations in 7.2.3 of this contract, fails to use the loan according to the purpose stipulated in this contract, or fails to conform to the Party A’s requirements on fund payment management and report;

16.1.4 Party B violates the stipulations in 7.2.4 of this contract, fails to repay fully the principal and the interest of the loan on time according to the stipulations in this contract;

16.1.5 Party B violates the stipulations in 7.2.5 of this contract, arbitrarily transfer the debt under this contract to the third party; or violates the stipulations in 7.2.7 of this contract, delays in managing and claiming the matured claim, or handle the main current property for free or in other inappropriate ways;

16.1.6 Party violates the stipulations in 7.2.6 of this contract, and doesn’t inform Party A timely in the events referred to in 7.2.6; or doesn’t cooperate when Party A is informed of such event happens and asks Party B to strengthen the protective measures of loan repayment under this contract; or Party A believes such behavior influence the safe calling in of the loan;

16.1.7 Party violates the stipulations in 7.2.8 of this contract, and doesn’t get Party A’s approval in the case of the crucial events referred to in 7.2.8;

16.1.8 Party violates the stipulations in 9.1, 9.2, 9.6 or 9.3, 9.4, 9.5, 9.7, 9.8, 9.9, 9.10 and 9.11 of this contract, and doesn’t make timely corrections according to Party A’s requirements;

16.1.9 Party B fails to withdraw or use the loan according to Article 10 of this contract, or Party B violates the stipulations in Article 15 of this contract, failing to use the funds in capital-returning account according to Party A’s requirement, or doesn’t accept Party A’s supervision, or doesn’t make corrections timely in accordance with Party A’s request.

16.1.10 Party B caused significant events of default under the legal and effective contract with its other creditor, and such events fail to be solved successfully within three months from the day of breach of the contract.

The above significant events of default means Party B’s breach of contract causes that its creditor has the right to claim reimbursement of over RBM _______ 10,000 yuan.

16.1.11 Party B violated other obligations stipulated in this contract, or based on Party A’s reasonable judgment, the credit status of Party B goes down or other conditions occur which may influence Party A realize the creditor’s right;

16.1.12 Party B caused the conditions which may influence the lawful rights and interests of Party A, and for which Party A can reasonably believe so.

16.2 If one of the following circumstances exists, and Party A thinks this may influence the guarantee ability of the guarantor, asks the guarantor to eliminate the bad influence caused by this, or asks Party B to increase or change guarantee conditions, the guarantor and Party B don’t cooperate, and then such behavior shall be deemed as breach of contract:

16.2.1 If any of the events referred to in 7.2.6, 7.2.7 and 7.2.8 of this contract happens;

16.2.2 Conceal the actual guarantee ability or hasn’t got the authorization of the competent authorities when issuing the irrevocable guaranty;

16.2.3 Hasn’t gone through the registration procedures of the annual inspection on time;

16.2.4 Delay in managing and claiming the matured claim, or handle the main current property for free or in other inappropriate ways.

16.3 If the mortgagor (pledger) has one of the following situations, and Party A thinks this may violate the establishment of mortgage (pledge) or make mortgage object (pledge) short of value, asks the mortgagor (pledger) to eliminate the bad influence caused by this, or asks Party B to increase or change guarantee conditions, the guarantor and Party B don’t agree:

16.3.1 Hasn’t the ownership of or the disposing right to mortgage object (pledge), or the ownership dispute exists;

16.3.2 Conceal the fact that mortgage object (pledge) is in common, rent, sealed up and supervised, or is subject to legal priority over the mortgage;

16.3.3 The mortgagor arbitrarily transfer, rent, remortgage or deal with mortgage object in other ways without getting Party A’s approval;

16.3.4 The mortgagor doesn’t properly keep, maintain or repair mortgage object, causing its value going down obviously; or the mortgagor’s behavior directly influence mortgage object, causing its value decreasing; or the mortgagor doesn’t insure mortgage object according to Party A’s requirement during the mortgage period;

16.3.5 The mortgage object is or may be collected or removed; or other events exist which may influence the value of the mortgage object or influence the mortgage right of Party A.

16.4 If any of the events of default referred to in 16.1, 16.2, and 16.3 happens, Party A has the right to take the following measures at the same time or separately:

16.4.1 Change the entrusted payment condition of the loan fund, and cancel Party B’s right to use the loan by “self payment”;

16.4.2 Stop issuing the loan which Party B hasn’t used;

16.4.3 Call in the issued principal and interest of the loan and relevant expenses;

16.4.4 Directly deduct the deposit in the settlement account or other account of Party B, an entrust the other organizations of China Merchants Bank to deduct Party B’s deposit there, in order to pay off the whole debt of Party B under this contract;

16.4.5 Claim according to Article 19 of this contract.

Article 17 Modification and cancellation of the contract

This contract can be modified or cancelled through mutual agreement and concluded written agreement between Party A and Party B. This contract is still effective before reaching the written agreement. Neither party shall modify, alter or cancel this contract alone.

Article 18 Miscellaneous

18.1 Situation change and force majeure

18.1.1 If changes of the applicable laws and policies cause that the lending activity of Party A under this contract becomes illegal, Party A has the right to terminate this contract, announce all the issued loan expire in advance and Party B should immediately repay the loan according to Party A’s requirement.

18.1.2 If changes of the applicable law and policy requirements cause new added cost to Party A to fulfill the loan obligation under this contract, Party B shall compensate the new added cost in accordance with Party A’s request.

18.1.3 In the course of executing this agreement, one party or both party who suffer from force majeure shall not bear any responsibility for the other party’s damage, but the affected party shall inform the other party at once and take reasonable steps to prevent further loss, or the party shall bear responsibility for the other party on the extending damage.

18.2 Non-waiver Agreement

Failure or delay on the part of Party A to exercise any right, power or privilege under this agreement shall not operate as a waiver thertof, nor shall any single or partial exercise of any right, power or privilege further exercise thereof or exercise of any other right, power or privilege. A waiver by Party A at any time of a breach of any term or provision of this agreement committed by Party B shall not be construed as a waiver by such party of any subsequent breach to be committed by Party B, nor shall it be construed as a waiver by such party of its rights under such provision or any of its other rights under this agreement.

18.3 Severability

If any portion, term or provision of this agreement shall be held illegal, void or ineffective, Party B shall still fulfill its obligations. If the abovementioned case occurs, party A has the right to terminate the contract, and repay the principal and the interest of the loan and all the other relevant expenses at once.

18.4 Notice

For both Party A and Party B, all the notices, demands and other documents which are related with this contract shall be in written form. If delivered personally, it is regarded as the personal service only when the recipient sign (if refused by the recipient, it’s regarded as service on the refusing day); if delivered by mail, it is regarded as service after 7 days from the date of postage; if delivered by fax, it is regarded as service when the fax system of the recipient receive it. If Party A informs Party B of transferring the creditor’s right or urges party B to repay the loan by notification through the public media, it’s regarded as service from the day of notifying.

Address of Party A
Address of Party B

If either party changes the contact address, it shall inform the other party timely, or else shall be responsible for possible lose due to this.

18.5 The receipt for the loan and the written supplementary agreement that are concluded between Party A and Party B through consensus on the unaccomplished matters and changed issued under this contract shall be regarded as the attachment of this contract, and shall be an integral part of this contract.

18.6

18.7

18.8

Article 19 Applicable laws and settlement of disputes

19.1 The law of the People's Republic of China applies to the conclusion and interpretation of this contract and settlement of the disputes. The interests of both Party A and B are protected by the law of the People's Republic of China.

19.2 Both parties will solve the disputes arising from execution of the contract through friendly consultation. In case the agreement cannot be reached, either party may (Choose one from three items below, checking the box):

[x]19.2.1 submit the dispute to the people’s court at where Party A is located. Or

[  ]19.2.2 submit for arbitration to ______________ arbitration committee.

[  ]19.2.3 submit to (If choose this item, choose one from the two options below, checking the box):

                   [  ]China International Economic and Trade Arbitration Commission

                   [  ]____ Branch of China International Economic and Trade Arbitration Commission

Arbitration shall be performed according to the arbitration rules of financial dispute.

19.3 After both parties have gone through the formalities to have this contract rendered enforceable by the notary public, Party A may apply to the people’s court that has the jurisdiction for compulsory execution, in order to claim the matured debt of Party B under this contract.

Article 20 Effectiveness of the contract

This contract shall come into force when signed (sealed with name) and affixed with the company seal/contract seal by the legal representatives (principals) or authorized agents of both parties. And shall become ineffective automatically from the day when the entire principal and the interest of the loan and all other related costs are paid off.

Article 21 Annexes

This contract shall be made in 3 triplicates, which have the same legal effect. Party A, Party B and mortgage institution will hold one each.

Special Instructions:

All articles in this contract are fully consulted by the parties. Party A has informed Party B to specially notice the articles that are relevant with cancelling or limiting Party A’s liability, Party A having some one-sided rights, increasing Party B’s liability or limiting Party B’s right, and has asked Party B to have full and accurate understanding of such articles. On demand of Party B, Party A has made corresponding explanations to the above articles. Both contracting parties have the same understanding of the articles in this contract.

Party A: China Merchant Bank Co., Ltd., Guiyang Branch (seal)
Principal or authorized agent (signature or seal with name): Zhang Qingdian  
Feb. 25, 2011

Party B: Qian Xi Nan Aosen Forestry Company, Limited (seal)

Legal representative / principal or authorized agent (signature or seal with name): Bai Yulu

Date of Signature: Feb. 25, 2011

EX-10.2

Guizhou Xingyi Rural Cooperative Bank

No.: XNHY (2011) LDZi No. 055

Exhibit 10.2

Working Capital Loan Contract
 (English Translation)

between

Borrower: Qian Xi Nan Aosen Forestry Company, Limited

and

 Lender: Guizhou Xingyi Rural Cooperative Bank

Prepared by Guizhou Xingyi Rural Cooperative Bank

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Guizhou Xingyi Rural Cooperative Bank
Working Capital Loan Contract

This Contract is entered into by and between the Borrower: Qian Xi Nan Aosen Forestry Company, Limited (organization code: 76608081-7) (“Party A”), having its address at Hexing Village, Dingxiao Development Zone, Guizhou Province, and the Lender: Guizhou Xingyi Rural Cooperative Bank (“Party B”) (referred to as the Parties collectively and the Party individually).

WHEREAS Party A applies to Party B for a loan and Party B agrees to offer such loan, THEREFORE, after friendly negotiations, the Parties agree to reach the following terms and conditions for mutual observance, in accordance with applicable laws and regulations. IT IS AGREED AS FOLLOWS:

Article 1 Amount of the Loan

Party A hereby applies to Party B a loan amounting to RMB24,000,000 (in words: twenty four million) (in case of any conflict between the number in figures and in words, the number in words shall control, the same below) (the “Loan”).

Article 2 Purpose of the Loan

The Loan is used for the purpose of working capital (used to purchase the raw materials like wood, paraffin wax, etc. and equipment components and spares).

Article 3 Term of the Loan

The term of the Loan contemplated hereunder is 12 months, commencing from April 30, 2011 and ending on April 29, 2012.

During the term of this Contract, the actual granting day and due day hereunder shall be subject to the Loan Receipt. The Loan Receipt and the Withdrawal Evidence shall be an integral part of this Contract and legally authentic to this Contract.

Article 4 Loan Interest Rate, Default Interest Rate and Calculation & Settlement of Interests

1. Loan Interest Rate

The interest rate of the Loan hereunder is 0.8715 % (on a yearly/monthly basis), which is i) detailed below:

(1) fixed interest rate, i.e. the interest rate hereunder remains unchanged even in case of adjustment of state interest rate within the effective term of this Contract;

(2) floating interest rate, i.e. increase/decrease by ___% based on the benchmark rate, from the value day, in case of change of benchmark interest rate, Party B will make corresponding adjustment according to the regulations of the People’s Bank of China and it is not necessary to sign a contract or obtain Party A’s consent otherwise for such purpose.

2. Default Interest Rate

(1) If Party A fails to use the Loan for the purpose as specified herein, the default interest rate shall be increased by 100% based on the interest rate as stated in this Contract;

(2) If Party A’s Loan hereunder is overdue, the default interest rate is increased by 50% based on the interest rate as stated in this Contract;

3. The “value day” hereof shall mean such day when the Loan granted initially hereunder is deposited into Party A’s account.

When the Loan is granted for the first time, the benchmark interest rate is defined as the interest rate of the loan at the same level as issued by the People’s Bank of China on the value day; thereafter, when the interest rate of the loan or default interest rate is adjusted according to abovementioned provisions, the benchmark interest rate shall mean the interest rate of the loan at the same level as issued by the People’s Bank of China on the adjustment day; if no interest rate of the loan at the same level is issued by the People’s Bank of China, the benchmark interest rate is the interest rate of the loan generally accepted in the banking industry or at the same level, except otherwise stated by the Parties.

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4. The interest rate of the Loan shall be calculated from the day when the Loan is deposited into Party A’s account. The Loan hereunder is calculated the interest rate on a daily basis. The daily interest rate = monthly interest rate/30 = annual interest rate / 360. If Party A fails to pay the interests in schedule, the compound interest will be collected from the next day.

5. Settlement of Interests

(1) As for the Loan subject to the fixed interest rate, upon settlement of interests, the interests shall be calculated as per the specified interest rate. As for the Loan subject to the floating interest rate, the interests shall be calculated according to the interest rate determined according to the floating period; If there are several floating interest rates in a single settlement period, it is required to first calculate the interests of each floating period, and then calculate the interests during the interest settlement period based on the sum of the interest rates in different floating periods on the interest settlement day.

(2) The Loan hereunder will be settled the interests on a quarterly basis. The interest settlement day is generally the 20^th day of (each month/the last month of a quarter).

Article 5 Granting and Payment of the Loan

1. Prior Conditions for Granting of the Loan

(1) Except entire or partial waiving by Party B, Party B is obliged to grant the Loan, provided, however, that:

a) Party A has completed the legal formalities for approval, registration, delivery and others relating to the Loan hereunder, in accordance with the applicable regulations.

b) If any guaranty is set up hereunder, the guaranty contract to the satisfaction of Party B or other guaranty mode has become effective;

c) In the course of application for the Loan, the Loanee has provided the Loaner with all documents and materials as requested by the Loaner and the documents and materials remain effective;

d) Party A doesn’t fall within any of breaches as specified in this Contract;

e) If Party A adopts the trusted payment, Party A shall have the formalities for application for withdrawal and trusted payment done and provide relevant transaction materials consistent with the Loan purpose; if Party A adopts the payment by itself, Party A shall handle the withdrawal application and provide relevant materials and fund use plan consistent with the Loan purpose;

f) The competent authority fails to set up any restrictions on or prohibits granting of the Loan hereunder;

g) Party A shall open a settlement account as the fund custody account at Party B;

h) The prior conditions for granting of the Loan as specified by the Parties:

_______________________________________________________________________________________________________________________________________________ .

(2) Party B will, within seven legal working days after satisfaction of said prior conditions, issue the Loan.

2. Mode of Payment, Payment Amount and Payment Counterparty of the Loan

As for the single payment amounting to more than RMB300,000, Party A adopts the payment by means of trusted payment. The Loanee irrevocably authorizes or trusts the Loaner to pay the Loan to the Loanee’s counterparty consistent with the specified purpose hereunder according to the withdrawal application and payment trustment after the guaranty becomes effective (or is filed).

As for the single payment amounting to not more than RMB300,000 and with an undefined counterparty, Party A adopts the payment by itself. The Loaner will directly deposit the Loan to the Loanee’s account according to the withdrawal application and the Loanee will pay the Loan to the counterparty consistent with the specified purpose hereunder.

The specific amount of the Loan and the counterparty shall be the payment amount and counterparty as designated in the Loanee’s withdrawal application. The Loanee’s withdrawal application and the Letter of Authorization for Payment are an integral part of this Contract and shall be equally authentic to this Contract.

3. Withdrawal Plan

(1) On ________________, amount: ______________
(2) On ________________, amount: ______________
(3) On ________________, amount: ______________

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If Party A indeed delays the withdrawal date, Party A is required to get consent of Party B ___ days before withdrawal and pay Party B the loss of interests caused thereby (the interests for the period of delayed withdrawal – interests for current deposit at the same period = loss of interests incurred to the Loaner).

Article 6 Repayment

1. Repayment Principle

The repayment amount of Party A hereunder shall be repaid according to the following principles:

(1) As for the Loan with the principal overdue for 90 day that is not recovered, the Loan with the interests overdue for 90 days that is not recovered, the Loan that is not due or that is overdue not exceeding 90 days, but for which Party A has stopped its operations or production or the projects are stopped, or the Loan for which the laws or regulations have otherwise specified, it is subject to the principle of “first repaying the principal and then repaying the interests thereof”.

(2) As for the Loan other than those specified in item i), it is subject to the principle of “first repaying the interests and then repaying the principal and the interests to be cleared with the principal”.

2. Payment of Interests

Party A shall pay the interests due to Party B on the interest settlement day. The initial interest repayment day shall be the first interest settlement day after granting of the Loan. Upon the last repayment, the interests shall be cleared with the principal.

3. Repayment Plan

Party A shall repay the principal of the Loan according to the following schedule:

(1) On April 29, 2012, amount: RMB24,000,000
(2) On ________________, amount: ______________
(3) On ________________, amount: ______________
(4) On ________________, amount: ______________

4. Repayment Mode

(1) Party A shall, before the repayment day as contemplated hereunder, deposit adequate amount payable at that period into the account opened at Party B and repay the Loan by transfer, or on the repayment day as specified herein, transfer the amount from any other account for repayment of the Loan; if Party A fails to make repayment in schedule, Party B is entitled to deduct the amount out of the deposit account opened at Party B and any of its branches. This Article shall be deemed such irrevocable authorization by Party A to Party B to directly deduct the principal and the interests thereof.

(2) If Party A’s repayment account is registered for loss, frozen, stopped payment, settled, or Party A needs to change the repayment account, Party A shall go to Party B’s premises to handle the formalities for repayment change.

Before the change formalities are valid, if the original repayment account has no adequate amount for transfer, Party A shall go to Party B’s premises to handle the counter repayment procedures. Where Party A fails to handle the formalities for change of repayment account in a timely manner or fails to handle the counter repayment formalities in a timely manner, thereby causing that the principal of the Loan and the interests thereof and other fees incurred are not settled in schedule, Party A shall bear the liabilities for breach of contract.

5. Advanced Repayment

(1) When Party A repays the interests of the Loan, it just notifies Party B of the same in advance.

(2) When Party A repays the principal of the Loan, it shall file written application ___ legal working days in advance and after consent of Party B, may repay all or part of the principal of the Loan in advance.

If Party A repays the principal of the Loan in advance, Party A agrees to pay Party B the penalties amounting to (advanced repayment amount x __% x days in advance).

If Party A repays the Loan by installments, in the event of repayment of part of the principal of the Loan, Party A shall repay the amount according to the sequence opposite to the repayment plan. After advanced repayment, the Loan that is not repaid yet shall be subject to the interest rate as specified in this Contract.

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6. Extension or Delay of the Loan

(1) Party A shall make repayment in schedule. If Party A needs to extend or delay the repayment schedule, Party A shall file an application for such purpose within 30 days before the Loan is due. Party B will carry out the credit extension review of Party A according to Party A’s application and after consent of Party B, handle the formalities for extension or delay.

(2) After Party B agrees to handle the formalities for extension or delay, the term of the Loan and the term of guaranty shall remain effective until the principal of the Loan and the interests thereof are cleared or postponed accordingly.

(3) If Party B objects extension, Party A shall repay the principal of the Loan and the interests thereof pursuant to this Contract.

Article 7 Loan Guaranty

The guaranty mode of the Loan hereunder is SURETY.

Article 8 Party A’s Rights and Obligations

1. Party A’s Rights

(1) Request Party B to grant the Loan under the terms of this Contract;

(2) Use the Loan for such purpose as specified in this Contract;

(3) Under such conditions as required by Party B, apply to Party B for extension or delay of the Loan;

(4) Request Party B to keep confidential relevant financial documents and commercial secrets relating to the production and operation as provided by Party A, except otherwise regulated by the laws and regulations;

2. Party A’s Obligations

(1) As requested by Party B, provide such materials relating to the financial and accounting and production and operation; being liable for authenticity, completeness and effectiveness of the materials as provided;

(2) Use the Loan for the purpose as specified in this Contract; being prohibited from occupying, embezzling or using them for such investment like fixed assets and equities; being prohibited from using them in the field or for such purpose as prohibited for production and operation by the state;

(3) In case of trusted payment, handle the formalities for withdrawal application and payment trustment at Party B and, under such circumstance, Party B shall pay the Loan to the Loanee’s counterparty consistent with the purpose as specified in this Contract;

(4) The Loanee shall designate a special fund recovery account and provide the outflow and inflow of the funds in such account in a timely manner;

(5) Party A undertakes to cooperate Party B with the management of the payment of the Loan and post-loan management and relevant check and in case of any major adverse matter that affects repayment ability, shall inform Party B of the same in a timely manner;

(6) In case of repayment by the Loanee, Party A shall regularly summarize and report the payment of the Loan and shall, as requested by Party B, provide the fund use records and materials in a timely manner;

(7) Take initiative to cooperate with Party B and actively accept Party B’s check and supervision of its operation and production, financial activities and use of the Loan hereunder;

(8) Has the consistent operating ability and legal repayment sources and repay the principal of the Loan and the interests thereof in schedule under the terms of this Contract;

(9) Party A and its investors shall not draw or escape or transfer their assets to avoid the debts to Party B;

(10) Before repayment of the principal of the Loan and the interests thereof, without consent of Party B, being prohibited from providing any guaranty to any third parties by using the assets generating from the Loan hereunder;

(11) Within the effective term, if Party A provides guaranty for others’ debts, which may affect the repayment ability hereunder, it is required to inform in writing Party B of the same in advance and obtain Party B’s consent;

(12) If the guarantor hereunder is shut down, goes out of business, is cancelled registration, is revoked the Business License, is bankrupt, is cancelled the operation qualification, or is in the red, thus losing the guaranty ability corresponding to the Loan entirely or partially, or resulting in reduction of the value of the pledged properties, accidental damage or loss, Party A shall provide other guaranty as recognized by Party B in a timely manner;

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(13) Within the effective term of this Contract, Party A shall inform Party B of any change of Party A’s name, legal representative or person in charge, address, operation scope or registered capital, etc. in a timely manner;

(14) Within the effective term of this Contract, if Party A falls within such acts as external investment, substantial increase of debt financing, contracting, leasing, transfer of equities, reforming of stock system, joint operation, M&A, separation, joint venture, application for shutdown, application for dissolution, application for bankruptcy, which adequately affect realization of Party B’s creditor’s rights, Party A shall, upon a prior 15-day written notice to Party B, inform Party B of the same and obtain Party B’s consent and shall, as requested by Party B, exercise the settlement and guaranty of the debts hereunder;

(15) Within the effective term of this Contract, if Party A is shut down, goes out of business, is revoked registration, is revoked the Business License, or its legal representative or person n charge is involved in the illegal activities or relates to any gross lawsuit activity, or Party A has difficulty in production and operation and Party A’s financial status is aggravating, thus substantially affecting its repayment obligations adversely, Party A shall immediately notify Party B of the same and shall, as requested by Party B, exercise the settlement and guaranty of the debts hereunder;

(16) Bear the fees for attorney’s service, insurances, evaluation, registration, custody, verification, notarization, etc. in connection with this Contract and/or the guaranty hereunder.

Article 9 Party B’s Rights and Obligations

1. Party B’s Rights

(1) Know Party A’s production and operation and financial activities and request Party A to provide relevant plan & statistics and financial statements, etc.;

(2) As for the payables to Party B hereunder, deduct such payables out of the account opened at Party B and any of its branches;

(3) Designate a dedicated fund recovery account and if necessary, monitor such account and take back the Loan in advance according to the fund recovery situations;

(4) In the course of payment of the Loan, if Party A’s credit declines, Party A’s main business ability is weak or Party A’s use of the Loan is abnormal, supplement the conditions for granting and payment of the Loan, change the mode of payment of the Load and stop the granting and payment of the Loan.

2. Party B’s Obligations

(1) Grant the Loan in full amount and in a timely manner under the terms of this Contract, except for delay for any reason attributable to Party A;

(2) Keep confidential the financial materials and production & operation information as provided by Party A, unless otherwise specified by the laws and regulations.

Article 10 Liabilities for Breach of Contract

1. Breach Circumstances (1) Party A’s Breach of Contract

In case of any or more of the following circumstances hereunder, Party A is deemed breach of this Contract:

a) Fail to follow or perform any of its commitments, warranties, obligations or responsibilities hereunder fully or adequately;

b) Fail to provide, as requested by Party B, true, complete and effective financial statements and operation & production situations, etc. or hide any critical facts;

c) Fail to use the Loan as agreed upon by the Parties;

d) Fail to pay the Loan in such matter as specified in this Contract;

e) Break through the restrictions on the financial indices as specified;

f) Fall within any gross cross breach event;

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g) Fail to repay the principal of the Loan and the interests thereof in schedule;

h) Decline or hamper Party B’s supervision and check of the use of the Loan;

i) Transfer the assets, draw and escape the funds, in order to escape from the debts;

j) The operations and financial status are aggravating, thus failing to clear the due debts, or involving or being about to involving any lawsuit or arbitration proceedings and other legal disputes, in Party B’s opinion, they may affect or have affected Party B’s rights and interests hereunder;

k) Any other debt burden by Party A may affect or has affected Party B’s performance of its obligations hereunder;

l) Party A is in the red or behind in payment of the principal of any loan and the interests thereof of any other institution;

m) Party A’s legal representative or person in charge is dead or declared dead, missing, or becoming the person whose civil acts are limited or lost, in Party B’s opinion, which may affect or damage or have affected or damaged Party B’s rights and interests hereunder;

n) The Loanee or its legal representative, shareholder or contributor, etc. is suspected of involvement in any illegal activity or criminal case;

o) Within the effective term of this Contract, in case of any act of changing the operation mode or transferring the operation system like contracting, leasing, M&A, joint venture, separation, joint operation, reforming of stock system, etc., in Party B’s opinion, which may affect or have affected Party B’s rights and interests hereunder;

p) Other circumstances, in Party B’s opinion, affecting realization of Party B’s creditor’s rights;

q) Breach of other obligations as specified in this Contract.

(2) If the guarantor falls within any of the following circumstances and Party A fails to provide any new guaranty to the satisfaction of Party B, it will be deemed breach of contract:

a) The guarantor falls within contracting, leasing, M&A, joint venture, separation, joint operation, reforming of stock system, bankruptcy, revocation, etc., which affect the joint and several guaranty liabilities of the guarantor;

b) The guarantor provides such guaranty exceeding its burden ability to any third party;

c) The guarantor loses or may lose the guaranty ability;

d) Other breach circumstances as specified in the guaranty contract.

(3) If the mortgagor falls within any of the following circumstances and Party A fails to provide any new guaranty to the satisfaction of Party B, it will be deemed breach of contract:

a) The mortgagor fails to handle the insurances for the mortgaged properties, or after occurrence of any insurance accident, fails to handle the insurance compensations in accordance with the terms of the mortgage contract concerned;

b) In case of damage to, loss or devaluation of the mortgaged property for any reason attributable to any third party, the mortgagor fails to handle the insurance compensations in accordance with the terms of the mortgage contract concerned;

c) Without written consent of Party B, the mortgagor donates, transfer, leases or repeats the mortgage of, transfers or otherwise disposes of the mortgaged properties;

d) After consent of Party B, the mortgagor disposes of the mortgaged properties; however, the amount from disposal of the mortgaged properties is not handled according to the mortgage contract concerned;

e) In case of damage to or loss or devaluation of the mortgaged properties, which affects the clearance of the debts hereunder, the mortgagor fails to recover the value of the mortgaged properties in a timely manner or fails to provide other guaranties as recognized by Party B;

f) Other breach circumstances as specified in the mortgage contract concerned.

(4) If the pledgor falls within any of the following circumstances and Party A fails to provide any new guaranty to the satisfaction of Party B, it will be deemed breach of contract:

a) The pledgor fails to handle the insurances for the pledged properties, or after occurrence of any insurance accident, fails to handle the insurance compensations in accordance with the terms of the pledge contract concerned;

7

b) In case of damage to, loss or devaluation of the pledged property for any reason attributable to any third party, the pledgor fails to handle the insurance compensations in accordance with the terms of the pledge contract concerned;

c) After consent of Party B, the pledgor disposes of the pledged properties; however, the amount from disposal of the pledged properties is not handled according to the pledge contract concerned;

d) In case of damage to or loss or devaluation of the pledged properties, which affects the clearance of the principal of the Loan and the interests thereof hereunder, the mortgagor fails to recover the value of the pledged properties in a timely manner or fails to provide other guaranties as recognized by Party B;

e) Other breach circumstances as specified in the pledge contract concerned.

(5) If the guaranty contract or other guaranty is not effected, is invalid or is cancelled, or the guarantor falls within other circumstances of loss of all or part of its guaranty ability or rejects to perform the guaranty obligations, Party A fails to exercise any new guaranty to the satisfaction of Party B, it is deemed breach by Party A of this Contract.

2. Remedies In case of any of breach events as described in items (1) ~ (5), Party B is entitled to exercise one or more of the following rights:

1) Terminate this Contract in advance, stop the Loan not granted yet, stop the granting and payment of the Loan, announce that the Loan is immediately terminated and request Party A to immediately repay the principal of the debts due and not due and the interests thereof and other fees incurred caused thereby.

2) Collect the penalties as per ___‰ of the principal of the Loan.

3) If Party A fails to use the Loan for such purpose as specified in this Contract, as for the part embezzled by Party A, collect the interests and compound interests as per the default interest rate and interest settlement mode hereunder from the day upon use of the Loan for such purpose as specified in this Contract to the day upon clearance of the principal of the Loan and the interests thereof.

4) Before the Loan is mature, the interests not repaid in a timely manner are subject to the compound interests according to the interest rate of the Loan and interest settlement mode as specified in Article 4 hereof.

5) After the Loan is overdue, as for the principal of the Loan and the interests thereof not cleared by Party A in schedule (including the principal of the Loan and the interests thereof mature in advance as declared by Party B), the interests and compound interests will be collected according to the interest settlement mode as specified in this Contract, from the overdue day to the day upon clearance of the principal of the Loan and the interests thereof. The term “overdue” hereof shall mean such act that Party A fails to repay the Loan in schedule or according to the installments as specified in this Contract.

6) If the Loaner needs to realize its creditor’s rights by means of lawsuit or arbitration due to Party A’s breach of contract, Party A shall pay Party B such fees for realization of the creditor’s rights incurred by Party B like legal costs, arbitration fees, public notification fees, demanding fees, attorney’s fees, inquiry fees, traveling fees, etc.

7) Deduct the amount out of the account opened by Party A at Party B and any of its branches to repay the principal of the Loan and the interests thereof and other fees to be borne by Party A under the terms of this Contract.

8) Request Party A to provide any new guaranty to the satisfaction of Party B for all of the debts hereunder.

9) Perform the guaranty rights and exercise the security interest.

10) Terminate this Contract.

Article 11 Custody of Funds in the Account

Party A hereby designates the account (account name: Qian Xi Nan Aosen Forestry Company, Limited, account number: 2881010001201100024254, bank: the Operation Department of Guizhou Xingyi Rural Cooperative Bank) opened at Party B as the custody account. Party B is responsible for supervising the use of the Loan by Party A pursuant to this Contract. Party A shall report in time the outflow and inflow of the fund in this account. It is required to first use the Loan in respect of the use of the fund in the custody account, after completion of the Loan, the remaining funds shall be paid and settled in accordance with the Measures for the Administration of the Payment and Settlement of the People’s Bank of China.

8

Article 12 Special Provisions on Trusted Payment by the Loanee

In the case of trusted payment by the Loanee as specified by the Parties, Party A will irrevocably authorize or trust the trusted payment to Party B. Party A shall be liable for authenticity, accuracy and legality of the name, account number and bank information of the counterparty as provided by Party B.

Party B is entitled to review the Loanee’s conditions according to the requirements for trusted payment, and has the right to request the Loanee to provide corresponding documentation and to provide the inflow and outflow of the current fund custody account.

Article 13 Miscellaneous

(1) In case of trusted payment, Party B shall make payment according to Party A’s withdrawal application and the Letter of Authorization for Payment of Loan. Party B assumes no liabilities for payment error attributable to Party A or economic dispute between Party A and any third party; Party A shall undertake any and all of legal liabilities caused thereby.

(2) _______________________________________________________________________________________________________________________________-.

Article 14 Dispute Resolution

Any disputes arising out of or in connection with this Agreement shall be settled through mutual consultations between the Parties, if no agreement is reached through consultations, such disputes will be settled by means of 1 below: 1. To file a suit in the Party B’s local people’s court; 2. To be submitted for arbitration to ____________Arbitration Commission.

During the litigation or arbitration, the terms that don’t involve disputes still need to be performed.

Article 15 Validity

This Contract shall become effective after signature and seal of the Parties.

Article 16 This Contract is prepared in three copies, each of which shall be held by Party A, Party B and the Guarantor respectively and shall have the same legal effects.

THE LOANEE HAS CAREFULLY READ ALL OF THE TERMS AND CONDITIONS ABOVEMENTIONED. THE LOANER HAS EXPLAINED THE TERMS AND CONDITIONS HEREIN CONTAINED, AS REQUESTED BY THE LOANEE, HAS PERFORMED THE OBLIGATIONS OF REASONABLE PROMPTING AND INSTRUCTIONS. THE LOANEE HAS FULLY KNOWN THEIR MEANING AND FILED NO OBJECTION AGAINST THE CONTENTS OF THIS CONTRACT.

Loanee (seal): Qian Xi Nan Aosen Forestry Company,	Loaner (seal): Guizhou Xingyi Rural Cooperative Bank
Limited
	Legal Representative (Person in Charge)
Legal Representative (Person in Charge)	or Authorized Person (signature or seal):
or Authorized Person (signature or seal):
	Handled by: Feng Lijiang
April 30, 2011	April 30, 2011

9

EX-10.3

Exhibit 10.3

Working Capital Loan Contract for Bank of Chongqing
(English Translation)

Party A (Creditor): Guiyang Sub-branch (Branch /Section), Bank of Chongqing Co., Ltd.

Party B (Borrower): Qian Xi Nan Aosen Forestry Company, Limited

Bank of Chongqing Co., Ltd.

Working Capital Loan Contract for Bank of Chongqing

Contract No.:(2011) (Chong Yin Qian Dai) No.0577

Party A (Creditor): Guiyang Sub-branch (Branch /Section), Bank of Chongqing Co., Ltd.
Address: No.1, 2 and 3, Shengshihuating, No.51, Jiefang Road, Nanming District, Guiyang
Tel.: 0851-8577397 Fax: 0851-8577377
Director: Huang Changsheng Position: Sub-branch Manager

Party B (Borrower): Qian Xi Nan Aosen Forestry Company, Limited.
Address: Hexin Village, Dingxiao Town, Xingyi
Tel.: 0851-5855580-8040 Fax: 0851-5525598
Director: Bai Yulu Position: Executive Director

Whereas Party B applies for a loan from Party A and Party A agrees to grant a loan to Party B after examination, both parties hereby enter into this Loan Contract after negotiation in accordance with the relevant laws, regulations and rules of PRC, and shall abide by all provisions of the Contract.

Article 1: Contents of Loan

1. Amount of Loan (Currency: RMB) : RMB twenty million ( in words)
2. Term of Loan: from June 29, 2011 to June 28, 2012.

The computation method for the term of loan is as follows: the term of loan shall begin as of the practical origination date. The practical origination and due date of the loan shall be the date stated on the indebtedness certificate between Party A and Party B, which shall be equally legally effective with the Contract as an attachment to the Contract.

3. Interest Rate and Adjustment

The benchmark interest rate of the corresponding grade of the People’s Bank of China hereunder is 6.31% . Both parties agree that the interest rate of the Contract is calculated at 20 % (upwards) or / % (downwards) from the benchmark interest rate. The practical interest rate hereunder is 7.572 %.

After the signature of the Contract, in case PBC adjusts the above-mentioned benchmark interest rate, the practical interest rate hereunder shall:
[  ] Not be adjusted

[  ] Automatically float on the new benchmark interest rate as specified in this Article; the adjusted practical interest rate shall apply from the second day to the first interest settlement day after the interest rate adjustment date. The interest shall accrue from the application day according to the practical interest rate.

[X] Automatically float on the new benchmark interest rate as specified in this Article; the adjusted practical interest rate shall apply from the interest rate adjustment date. The interest shall accrue from the application day according to the practical interest rate.

In case the practical interest rate hereunder changes, the overdue interest rate and penalty interest rate shall change correspondingly, apply simultaneously with the practical interest rate and be calculated by installment.  Both parties don’t need to sign agreement for the interest rate adjustment as specified herein. Neither party shall obtain the consent of the other, nor notify the guarantor or gain his/her consent.

4. Purpose of Loan: circulating and turnover.

5. Guarantee of Loan

The loan guarantee method hereunder is: (tick in the option)

[X] Mortgage, the guarantor shall sign a Mortgage Contract with Party A. [the details can be found in (2011) (Chong Yin Qian Di) No.0578 “Mortgage Contract for Bank of Chongqing”].

[X]  Guarantee, the guarantor shall sign a Guarantee Contract with Party A. [the details can be found in (2011) (Chong Yin Qian Bao) No.0579 “Guarantee Contract for Bank of Chongqing”].

[  ] , the guarantor shall sign a Contract with Party A. [the details can be found in (__ ) (__) No. “ ”].

[  ] Others ________________________________________________________________________________________________

Article 2 Origination and Payment of Loan

1. Where Party A requires a guarantee for the Contract (the loan hereunder), the following requirements shall be met before the loan origination:

(1) Where the loan guarantee hereunder is suretyship, the Suretyship Contract shall be effective.

(2) Where the loan guarantee hereunder is mortgage, the Mortgage Contract shall be effective and the mortgage registration procedures have been handled.

(3) Where the loan guarantee hereunder is pledge, the Pledge Contract shall be effective and the pledge (right) registration procedures have been handled or the pledge (right certificate) has been submitted to Party A.

(4) Where the loan guarantee hereunder is in other forms, the guarantee has been effective and can defend against the claims of third party.

If Party A requires the guarantee hereunder in multiple forms including suretyship and mortgage etc, the multiple forms of guarantee shall simultaneously meet the abovementioned conditions.

2. The origination method of the loan to Party B shall be

[X] Origination once for all

[  ] Origination by installment as specified on the 《indebtedness certificate》 . The due dates after the first installment (not included) shall be the same with the due date of the fist installment.

3. In the origination of loan, indebtedness certificate shall be filled as specified herein.

4. Payment and use of Loan Capital

The payment of the loan capital shall be managed and controlled by Party A. Party B shall submit the relevant information proving the use of capital compliant with the uses as specified herein. Party A agrees to pay after
examination. The loan capital is paid:

[  ] Wholly in entrusted payment

[X] Partially in entrusted payment, and the entrusted paid part shall account for at least 80% of the loan.

[  ] Wholly independently

Entrusted payment means that Party confirms the use of loan is compliant with the uses specified herein, and directly pays the loan to the transaction party of Party B compliant with the uses specified herein in accordance with the《Payment Order》 (affixed with the seal of Party B) of Party B.

Independent payment means that after Party A originates the loan to the account of Party B, Party B pays the loan to the transaction party of Party B compliant with the uses specified herein. Party B shall provide in time the record and information on use of loan to Party A after payment, and regularly summarize and report the proofs on loan payment and compliant uses.

In case of independent payment, in any of the following circumstances, the loan shall be paid in entrusted payment by Party A:

1.____________________________________________

2.____________________________________________

3.____________________________________________

5. In case Party B’s credit condition deteriorates, profitability ability of main business weakens or the use of loan has any abnormality in the origination and payment of loan, Party A has right to adopt the following (one or more) measures: change the origination and payment conditions of the loan; change the payment method of the loan; stop the origination and payment of the loan.

Article 3 Interest Settlement of Loan

1. Interest shall accrue from the practical origination date in accordance with the practical amount and term of loan. Interest shall be settled as specified in the (1):

(1) settled monthly, and the settlement date is the 20^th day every month.

(2) settled seasonally, and the settlement date is the 20^th day of the last month every season.

(3) (3) Others:                  /                                        .

2. Party B shall pay the interest on every interest settlement day. Party B irrevocably authorizes Party A to directly deduct the interest from the account of Party B. In case Party B fails to duly pay the interest, Party A has right to charge compound interest on the unpaid interest. The compound interest rate shall be 50% upwards on the basis of the practical interest rate as specified in the Clause 3, Article 1 herein.

Article 4 Repayment of Loan

1. Party B shall repay all principal and interest of the loan on the due date; Where Party B fails to duly repay with justifiable reasons, Party B shall notify Party A in written form 1 month in advance and negotiate with Party A on the repayment issues.

2. Where Party B repays the loan in advance, Party B shall notify Party A 7 days in advance and obtain the consent of Party A. Where Party B repays the loan in advance, Party A may claim the loss to Party B on the corresponding interest of the part repaid in advance from the advance repayment date to the due date.

3. Party B irrevocably authorizes Party A to deduct all due principal and interest of the loan from the account of Party B.

4. Where Party A agrees repayment by installment by Party B, the repayment by installment by Party B shall be as follows: __________________________________________________________

Party B shall repay the loan in the following order; However, Party A keeps the right to change the order: (1) liquidated damages; (2) compensation damage; (3) compound interest; (4) penalty interest; (5) interest; (6) principal; (7) other payables.

Article 5 Penalty Interest of Loan

Where Party B fails to duly repay the principal and interest of the loan when the loan is due or due in advance, Party A has right to charge penalty interest and compound interest whose rates shall be 50% upwards on the basis of the practical interest rate as specified in the Provision 3, Article 1 herein.

Where Party B fails to use the loan as specified herein, Party A has right to charge penalty interest from the use change date. The penalty interest rate shall be 100% upwards on the basis of the practical interest rate as specified in the Provision 3, Article 1 herein.

Article 6 Advance Maturity of Loan

Any of the following circumstances shall be deemed as advance maturity of the loan. Party A has right to immediately take back all originated loan and stop originating the left part hereunder from the exact day when the violation is found.

1. Party B violates any obligation as specified herein, or refuses to perform the obligations hereunder by express statement or action.

2. Party B is forced or take the initiative to close down, reduce registered capital;

3. Party B’s loan project is cancelled or unable to continue;

4. Party B has financial loss due to major operational mistake;

5. Party B suffers from administrative sanction die to major illegal operational behavior;

6. Party B has division, merger, liquidation, reorganization, revocation, bankruptcy or dissolution etc;

7. Party B’s interest is overdue for over 1 month;

8. Party B fails to use the loan as specified herein or otherwise;

9. Party B violates other similar contracts signed with Party A or any third party, or has any lawsuit or arbitration due to dispute arising therefrom;

10. The guarantor breaches the related guarantee contract attached hereto, including but not limited to false guarantee information and procedures provided by the guarantor, and forced or voluntary close-down etc;

11. Party B fails to provide complete and real annual financial report; fails to maintain the financial indicators as required by the bank; fails to duly provide related transaction on over 10% of net assets.

12. Party B’s profit distribution exceeds certain proportion of net profit after tax without Party A’s consent.

13. Party B’s capital expenditure exceeds the proportion required by Party A;

14. Party B sells specific assets (mainly fixed assets), changes the liability provisions with other credit grantors, applies for credit to other credit grantors, mortgage assets to other creditors or credit grantors, settles other long-term liabilities in advance, conduct merger and acquisition, or provide extra liability guarantee for third party without Party A’s consent;

15. The document, information and data provided by Party B in loan application are proven false;

16. Party B fails to keep commitment, or Party B’s commitment is proven false;

17. Party B has any major cross default;

18. Other circumstances endangering or possibly endangering the safety of Party A’s loan.

Article 7 Party B’s Right

1. Party B has right to withdraw and use all loan as specified herein;

2. Party B has right to refuse any additional condition unspecified herein;

3. Party B has right to transfer liability to third party with Party A’s written consent.

Article 8 Party B’s Obligation and Promise

1. Provide authentic, complete and effective information and situation on account number and deposit and loan balance as required by Party A, and cooperate with Party A’s investigation, examination and check;

2. Cooperate with Party A on the payment management, after-loan management and related checks of the loan; accept Party A’s supervision on credit fund and related production, operation and financial activities, duly provide monthly financial statements and updates on registration to Party A, and not break the specified financial indicators;

3. Use the loan as specified herein, fully and duly repay the principal and interest of the loan as specified herein;

4. Party B shall gain Party A’s consent before wholly or partially transfer the liability hereunder to any third party, make external investment, substantially increase debt financing, or conduct merger, split or equity transfer;

5. Party B promises to duly notify Party A in written form where major adverse event that may influence its solvency ability occurs in the term of loan.

Article 9 Party A’s Right

1. Party has right to ask Party B to provide the information related to loan;

2. Party has right to ask Party B to duly repay the principal and interest of loan;

3. Party has right to get to know about Party B’s production, operation, financial activities and repayment plan;

4. Party has right to monitor Party B to use the loan as specified herein;

5. Party has right to directly deduct the principal and interest of loan from the account of Party B.

6. Where Party B fails to perform the obligations as specified herein, Party A has right to ask Party B to repay the loan in advance or stop paying Party B the unused loan;

7. Where Party B has major property title transfer, systematic change, transfer of liabilities or creditor’s right, Party A has right to ask Party B to pay off the principal and interest of the loan hereunder and all other related fees, assign all liabilities hereunder to an assignee who Party A agrees to accept, or provide the guarantee measures that Party A agrees to accept.

Article 10 Party A’s Obligation

1. Originate loan to Party B as specified herein;

2. Keep Party B’s financial, production and operational situation secret, unless otherwise specified legally;

Article 11 Disbursement Clause

1. Party B shall afford the fees occurred from credit investigation, check, notarization, witness and registration etc related hereto.

2. Party B shall afford any fee occurred from Party A’s collection of the loan due to Party B’s failure to repay the loan, including announcement, sending, and authentication fee, attorney fee, legal cost, travel expense, appraisal fee, auction fee, property preservation fee and enforcement fee etc.

Article 12 Party B shall open a settlement account in Party A, make settlement on economic transaction through this account, and Party B promises that Party A has right to collect the loan in advance according to Party B’s fund withdrawal situation.

Article 13 Liability for Breach of Contract

1. Where Party B violates the obligation as specified in Clause 1 and 2, Article 8 herein, Party A has right to stop originating the loan unused by Party B and collect all or part of the loan in advance;

2. Where Party B violates the obligation and promises as specified in Clause 3, Article 8 herein, Party A has right to charge penalty interest, stop originating the loan unused by Party B and collect all or part of the loan in advance;

3. Where Party B violates the obligation and promises as specified in Clause 4 and 5, Article 8 herein and thus causes any frustration of the liability hereunder, Party A has right to stop originating the loan unused and collect the originated loan in advance. Party A has right to wholly or partially claim to Party B for any loss on credit assets of Party A thus occurred;

4. Where Party B violates the provisions herein, Party A has right to raise the floating proportion of interest rate of the loan.

Article 14 Amendment and Termination of Contract

Both parties may amend or terminate the Contract through consultation. The contract amendment or termination agreement shall be in written form.

Article 15 Miscellaneous

1. In the effective term of the Contract, Party A’s any tolerance or grace on Party B’s any breach or delay behavior or Party A’s postponed execution of its rights and interest due herein shall not damage, influence or limit Party A’s any right and interest due as creditor in accordance with the Contract and related laws, shall not be deemed as Party A’s permission or consent on any violation of the Contract, or Party A’s waiver of the right to take actions against current or future breach behavior.

2. Where the Contract becomes legally ineffective or partially ineffective for whatever causes, Party B shall still perform all repayment obligations. In case of the above-mentioned situation, Party A has right to terminate the Contract and immediately collect the loan and other related amounts hereunder from Party B.

3. The notice of both parties related hereto shall be in written form.

Article 16 Party B’s Representations and Warranties

Party B has legal right to sign and perform the Contract, and its signature and performance of the Contract has gained full authorization of its Board or any other competent organization (if needed).

Party B promises that the application information provided to Party A is real, legitimate and effective and doesn’t include any major mistake incompliant with fact or omits any major fact.

Party B promises to notify Party A in written form within 10 days after any change of premises, correspondence address, contact number, scope of business, legal representative and name etc.

Party B has fully known and understood all provisions of the Contract. Signature of the Contract is the expression of both parties’ real intention.

Article 17 Law Application and Dispute Resolution

The Contract is formulated in accordance with the law of PRC, and shall be governed by the law of PRC. Where any dispute arises in the performance of the Contract, both parties shall have consultation or conciliation; where the consultation or conciliation fails, the dispute shall be resolved as specified in the following clause 1.

1. Lodge a lawsuit to the local people’s court of Party A.

2. Apply for arbitration to Chongqing Arbitration Committee.

3. Where Party B fails to perform or fails to fully perform the obligations specified herein after both parties have handled with the notarization with enforcement potency over the Contract, Party A has right to apply for enforcement certificate to the original notarial organization and apply for enforcement to competent people’s court with the original notarial deed and the enforcement certificate, Party B is willing to accept the enforcement of the people’s court.

4. ______________________________________________________________________________________________.                 

Article 18 Other issues agreed by both parties: ____________________________________________________________.

Article 19 The Contract is in four copies. Party A holds two copies, and Party B and the Guarantor holds one. All copies shall be equally legally effective.

Article 20 Party A has asked Party B to take notice to have a full and accurate understanding on the articles hereof, and has made corresponding explanations as required by Party B. Both parties have consistent understanding on the Contract.

Party A (Stamp): Director: (Or entrusted agent)	Party B (Stamp): Legal representative
	(Or entrusted agent) Signature Date: June 29, 2011 Signature Place: Guiyang Sub-branch, Bank of Chongqing

EX-10.4

Guizhou Xingyi Rural Cooperative Bank

                                                                                                                                                                         No.: XNHY (2011) LDZi No. 082

Exhibit 10.4

Working Capital Loan Contract
(English Translation)

between

Borrower: Qian Xi Nan Aosen Forestry Company, Limited

and

Lender: Guizhou Xingyi Rural Cooperative Bank

Prepared by Guizhou Xingyi Rural Cooperative Bank

1

Guizhou Xingyi Rural Cooperative Bank
Liquid Fund Borrowing Contract

This Contract is entered into by and between the Borrower: Qian Xi Nan Aosen Forestry Company, Limited (organization code: 76608081-7) (“Party A”), having its address at Hexing Village, Dingxiao Development Zone, Guizhou Province, and the Lender: Guizhou Xingyi Rural Cooperative Bank (“Party B”) (referred to as the Parties collectively and the Party individually).

WHEREAS Party A applies to Party B for a loan and Party B agrees to off such loan, THEREFORE, after friendly negotiations, the Parties agree to reach the following terms and conditions for mutual observance, in accordance with applicable laws and regulations. IT IS AGREED AS FOLLOWS:

Article 1 Amount of the Loan

Party A hereby applies to Party B a loan amounting to RMB 5,000,000.00 (in words: five million) (in case of any conflict between the number in figures and in words, the number in words shall control, the same below) (the “Loan”).

Article 2 Purpose of the Loan

The Loan is used for the purpose of liquid fund (for material purchasing).

Article 3 Term of the Loan

The term of the Loan contemplated hereunder is 12 months, commencing from August 03, 2011 and ending on August 02, 2012. During the term of this Contract, the actual granting day and due day hereunder shall be subject to the Loan Receipt. The Loan Receipt and the Withdrawal Evidence shall be an integral part of this Contract and legally authentic to this Contract.

Article 4 Loan Interest Rate, Default Interest Rate and Calculation & Settlement of Interests

1. Loan Interest Rate

The interest rate of the Loan hereunder is 9.5667 ‰ (on a yearly/monthly basis), which is i) detailed below:

(1) fixed interest rate, i.e. the interest rate hereunder remains unchanged even in case of adjustment of state interest rate within the effective term of this Contract;

(2) floating interest rate, i.e. increase/decrease by ___% based on the benchmark rate, from the value day, in case of change of benchmark interest rate, Party B will make corresponding adjustment according to the regulations of the People’s Bank of China and it is not necessary to sign a contract or obtain Party A’s consent otherwise for such purpose.

2. Default Interest Rate

(1) If Party A fails to use the Loan for the purpose as specified herein, the default interest rate shall be increased by 100% based on the interest rate as stated in this Contract;

(2) If Party A’s Loan hereunder is overdue, the default interest rate is increased by 50% based on the interest rate as stated in this Contract;

3. The “value day” hereof shall mean such day when the Loan granted initially hereunder is deposited into Party A’s account.

When the Loan is granted for the first time, the benchmark interest rate is defined as the interest rate of the loan at the same level as issued by the People’s Bank of China on the value day; thereafter, when the interest rate of the loan or default interest rate is adjusted according to abovementioned provisions, the benchmark interest rate shall mean the interest rate of the loan at the same level as issued by the People’s Bank of China on the adjustment day; if no interest rate of the loan at the same level is issued by the People’s Bank of China, the benchmark interest rate is the interest rate of the loan generally accepted in the banking industry or at the same level, except otherwise stated by the Parties.

4. The interest rate of the Loan shall be calculated from the day when the Loan is deposited into Party A’s account. The Loan hereunder is calculated the interest rate on a daily basis. The daily interest rate = monthly interest rate/30 = annual interest rate / 360. If Party A fails to pay the interests in schedule, the compound interest will be collected from the next day.

5. Settlement of Interests

(1) As for the Loan subject to the fixed interest rate, upon settlement of interests, the interests shall be calculated as per the specified interest rate. As for the Loan subject to the floating interest rate, the interests shall be calculated according to the interest rate determined according to the floating period; If there are several floating interest rates in a single settlement period, it is required to first calculate the interests of each floating period, and then calculate the interests during the interest settlement period based on the sum of the interest rates in different floating periods on the interest settlement day.

2

(2) The Loan hereunder will be settled the interests on a quarterly basis. The interest settlement day is generally the 20^th day of the last month of a quarter (each month/the last month of a quarter).

Article 5 Granting and Payment of the Loan

1. Prior Conditions for Granting of the Loan

(1) Except entire or partial waiving by Party B, Party B is obliged to grant the Loan, provided, however, that:

a) Party A has completed the legal formalities for approval, registration, delivery and others relating to the Loan hereunder, in accordance with the applicable regulations.

b) If any guaranty is set up hereunder, the guaranty contract to the satisfaction of Party B or other guaranty mode has become effective;

c) In the course of application for the Loan, the Loanee has provided the Loaner with all documents and materials as requested by the Loaner and the documents and materials remain effective;

d) Party A doesn’t fall within any of breaches as specified in this Contract;

e) If Party A adopts the trusted payment, Party A shall have the formalities for application for withdrawal and trusted payment done and provide relevant transaction materials consistent with the Loan purpose; if Party A adopts the payment by itself, Party A shall handle the withdrawal application and provide relevant materials and fund use plan consistent with the Loan purpose;

f) The competent authority fails to set up any restrictions on or prohibits granting of the Loan hereunder;

g) Party A shall open a settlement account as the fund custody account at Party B;

h) The prior conditions for granting of the Loan as specified by the Parties: The loan will not be released until the guarantor Guizhou Ding Sheng Xin Guaranteed Investment Co., Ltd deposited the security fund equal to 10% of the loan amount..

(2) Party B will, within seven legal working days after satisfaction of said prior conditions, issue the Loan.

2. Mode of Payment, Payment Amount and Payment Counterparty of the Loan As for the single payment amounting to more than RMB300,000, Party A adopts the payment by means of trusted payment. The Loanee irrevocably authorizes or trusts the Loaner to pay the Loan to the Loanee’s counterparty consistent with the specified purpose hereunder according to the withdrawal application and payment trustment after the guaranty becomes effective (or is filed).

As for the single payment amounting to not more than RMB300,000 and with an undefined counterparty, Party A adopts the payment by itself. The Loaner will directly deposit the Loan to the Loanee’s account according to the withdrawal application and the Loanee will pay the Loan to the counterparty consistent with the specified purpose hereunder.

The specific amount of the Loan and the counterparty shall be the payment amount and counterparty as designated in the Loanee’s withdrawal application. The Loanee’s withdrawal application and the Letter of Authorization for Payment are an integral part of this Contract and shall be equally authentic to this Contract.

3. Withdrawal Plan

(1) On August 3, 2011 , amount: 5,000,000.00

(2) On ________________, amount: ______________

(3) On ________________, amount: ______________

If Party A indeed delays the withdrawal date, Party A is required to get consent of Party B ___ days before withdrawal and pay Party B the loss of interests caused thereby (the interests for the period of delayed withdrawal – interests for current deposit at the same period = loss of interests incurred to the Loaner).

Article 6 Repayment

1. Repayment Principle

The repayment amount of Party A hereunder shall be repaid according to the following principles:

(1) As for the Loan with the principal overdue for 90 day that is not recovered, the Loan with the interests overdue for 90 days that is not recovered, the Loan that is not due or that is overdue not exceeding 90 days, but for which Party A has stopped its operations or production or the projects are stopped, or the Loan for which the laws or regulations have otherwise specified, it is subject to the principle of “first repaying the principal and then repaying the interests thereof”.

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(2) As for the Loan other than those specified in item i), it is subject to the principle of “first repaying the interests and then repaying the principal and the interests to be cleared with the principal”.

2. Payment of Interests

Party A shall pay the interests due to Party B on the interest settlement day. The initial interest repayment day shall be the first interest settlement day after granting of the Loan. Upon the last repayment, the interests shall be cleared with the principal.

3. Repayment Plan

Party A shall repay the principal of the Loan according to the following schedule:

(1) On August 3, 2012 , amount: 5,000,000.00

(2) On ________________, amount: ______________

(3) On ________________, amount: ______________

(4) On ________________, amount: ______________

4. Repayment Mode

(1) Party A shall, before the repayment day as contemplated hereunder, deposit adequate amount payable at that period into the account opened at Party B and repay the Loan by transfer, or on the repayment day as specified herein, transfer the amount from any other account for repayment of the Loan; if Party A fails to make repayment in schedule, Party B is entitled to deduct the amount out of the deposit account opened at Party B and any of its branches. This Article shall be deemed such irrevocable authorization by Party A to Party B to directly deduct the principal and the interests thereof.

(2) If Party A’s repayment account is registered for loss, frozen, stopped payment, settled, or Party A needs to change the repayment account, Party A shall go to Party B’s premises to handle the formalities for repayment change. Before the change formalities are valid, if the original repayment account has no adequate amount for transfer, Party A shall go to Party B’s premises to handle the counter repayment procedures. Where Party A fails to handle the formalities for change of repayment account in a timely manner or fails to handle the counter repayment formalities in a timely manner, thereby causing that the principal of the Loan and the interests thereof and other fees incurred are not settled in schedule, Party A shall bear the liabilities for breach of contract.

5. Advanced Repayment

(1) When Party A repays the interests of the Loan, it just notifies Party B of the same in advance.

(2) When Party A repays the principal of the Loan, it shall file written application ___ legal working days in advance and after consent of Party B, may repay all or part of the principal of the Loan in advance.

If Party A repays the principal of the Loan in advance, Party A agrees to pay Party B the penalties amounting to (advanced repayment amount x __% x days in advance).

If Party A repays the Loan by installments, in the event of repayment of part of the principal of the Loan, Party A shall repay the amount according to the sequence opposite to the repayment plan. After advanced repayment, the Loan that is not repaid yet shall be subject to the interest rate as specified in this Contract.

6. Extension or Delay of the Loan

(1) Party A shall make repayment in schedule. If Party A needs to extend or delay the repayment schedule, Party A shall file an application for such purpose within 30 days before the Loan is due. Party B will carry out the credit extension review of Party A according to Party A’s application and after consent of Party B, handle the formalities for extension or delay.

(2) After Party B agrees to handle the formalities for extension or delay, the term of the Loan and the term of guaranty shall remain effective until the principal of the Loan and the interests thereof are cleared or postponed accordingly.

(3) If Party B objects extension, Party A shall repay the principal of the Loan and the interests thereof pursuant to this Contract.

Article 7 Loan Guaranty

The guaranty mode of the Loan hereunder is: The guarantee means for he loan under the Contract is: Guizhou Ding Sheng Xin Guaranteed Investment Co., Ltd provides the guarantee.

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Article 8 Party A’s Rights and Obligations

1. Party A’s Rights

(1) Request Party B to grant the Loan under the terms of this Contract;

(2) Use the Loan for such purpose as specified in this Contract;

(3) Under such conditions as required by Party B, apply to Party B for extension or delay of the Loan;

(4) Request Party B to keep confidential relevant financial documents and commercial secrets relating to the production and operation as provided by Party A, except otherwise regulated by the laws and regulations;

2. Party A’s Obligations

(1) As requested by Party B, provide such materials relating to the financial and accounting and production and operation; being liable for authenticity, completeness and effectiveness of the materials as provided;

(2) Use the Loan for the purpose as specified in this Contract; being prohibited from occupying, embezzling or using them for such investment like fixed assets and equities; being prohibited from using them in the field or for such purpose as prohibited for production and operation by the state;

(3) In case of trusted payment, handle the formalities for withdrawal application and payment trustment at Party B and, under such circumstance, Party B shall pay the Loan to the Loanee’s counterparty consistent with the purpose as specified in this Contract;

(4) The Loanee shall designate a special fund recovery account and provide the outflow and inflow of the funds in such account in a timely manner;

(5) Party A undertakes to cooperate Party B with the management of the payment of the Loan and post-loan management and relevant check and in case of any major adverse matter that affects repayment ability, shall inform Party B of the same in a timely manner;

(6) In case of repayment by the Loanee, Party A shall regularly summarize and report the payment of the Loan and shall, as requested by Party B, provide the fund use records and materials in a timely manner;

(7) Take initiative to cooperate with Party B and actively accept Party B’s check and supervision of its operation and production, financial activities and use of the Loan hereunder;

(8) Has the consistent operating ability and legal repayment sources and repay the principal of the Loan and the interests thereof in schedule under the terms of this Contract;

(9) Party A and its investors shall not draw or escape or transfer their assets to avoid the debts to Party B;

(10) Before repayment of the principal of the Loan and the interests thereof, without consent of Party B, being prohibited from providing any guaranty to any third parties by using the assets generating from the Loan hereunder;

(11) Within the effective term, if Party A provides guaranty for others’ debts, which may affect the repayment ability hereunder, it is required to inform in writing Party B of the same in advance and obtain Party B’s consent;

(12) If the guarantor hereunder is shut down, goes out of business, is cancelled registration, is revoked the Business License, is bankrupt, is cancelled the operation qualification, or is in the red, thus losing the guaranty ability corresponding to the Loan entirely or partially, or resulting in reduction of the value of the pledged properties, accidental damage or loss, Party A shall provide other guaranty as recognized by Party B in a timely manner;

(13) Within the effective term of this Contract, Party A shall inform Party B of any change of Party A’s name, legal representative or person in charge, address, operation scope or registered capital, etc. in a timely manner;

(14) Within the effective term of this Contract, if Party A falls within such acts as external investment, substantial increase of debt financing, contracting, leasing, transfer of equities, reforming of stock system, joint operation, M&A, separation, joint venture, application for shutdown, application for dissolution, application for bankruptcy, which adequately affect realization of Party B’s creditor’s rights, Party A shall, upon a prior 15-day written notice to Party B, inform Party B of the same and obtain Party B’s consent and shall, as requested by Party B, exercise the settlement and guaranty of the debts hereunder;

(15) Within the effective term of this Contract, if Party A is shut down, goes out of business, is revoked registration, is revoked the Business License, or its legal representative or person n charge is involved in the illegal activities or relates to any gross lawsuit activity, or Party A has difficulty in production and operation and Party A’s financial status is aggravating, thus substantially affecting its repayment obligations adversely, Party A shall immediately notify Party B of the same and shall, as requested by Party B, exercise the settlement and guaranty of the debts hereunder;

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(16) Bear the fees for attorney’s service, insurances, evaluation, registration, custody, verification, notarization, etc. in connection with this Contract and/or the guaranty hereunder.

Article 9 Party B’s Rights and Obligations

1. Party B’s Rights

(1) Know Party A’s production and operation and financial activities and request Party A to provide relevant plan & statistics and financial statements, etc.;

(2) As for the payables to Party B hereunder, deduct such payables out of the account opened at Party B and any of its branches;

(3) Designate a dedicated fund recovery account and if necessary, monitor such account and take back the Loan in advance according to the fund recovery situations;

(4) In the course of payment of the Loan, if Party A’s credit declines, Party A’s main business ability is weak or Party A’s use of the Loan is abnormal, supplement the conditions for granting and payment of the Loan, change the mode of payment of the Load and stop the granting and payment of the Loan.

2. Party B’s Obligations

(1) Grant the Loan in full amount and in a timely manner under the terms of this Contract, except for delay for any reason attributable to Party A;

(2) Keep confidential the financial materials and production & operation information as provided by Party A, unless otherwise specified by the laws and regulations.

Article 10 Liabilities for Breach of Contract

1. Breach Circumstances

(1) Party A’s Breach of Contract

In case of any or more of the following circumstances hereunder, Party A is deemed breach of this Contract:

a) Fail to follow or perform any of its commitments, warranties, obligations or responsibilities hereunder fully or adequately;

b) Fail to provide, as requested by Party B, true, complete and effective financial statements and operation & production situations, etc. or hide any critical facts;

c) Fail to use the Loan as agreed upon by the Parties;

d) Fail to pay the Loan in such matter as specified in this Contract;

e) Break through the restrictions on the financial indices as specified;

f) Fall within any gross cross breach event;

g) Fail to repay the principal of the Loan and the interests thereof in schedule;

h) Decline or hamper Party B’s supervision and check of the use of the Loan;

i) Transfer the assets, draw and escape the funds, in order to escape from the debts;

j) The operations and financial status are aggravating, thus failing to clear the due debts, or involving or being about to involving any lawsuit or arbitration proceedings and other legal disputes, in Party B’s opinion, they may affect or have affected Party B’s rights and interests hereunder;

k) Any other debt burden by Party A may affect or has affected Party B’s performance of its obligations hereunder;

l) Party A is in the red or behind in payment of the principal of any loan and the interests thereof of any other institution;

m) Party A’s legal representative or person in charge is dead or declared dead, missing, or becoming the person whose civil acts are limited or lost, in Party B’s opinion, which may affect or damage or have affected or damaged Party B’s rights and interests hereunder;

n) The Loanee or its legal representative, shareholder or contributor, etc. is suspected of involvement in any illegal activity or criminal case;

o) Within the effective term of this Contract, in case of any act of changing the operation mode or transferring the operation system like contracting, leasing, M&A, joint venture, separation, joint operation, reforming of stock system, etc., in Party B’s opinion, which may affect or have affected Party B’s rights and interests hereunder;

p) Other circumstances, in Party B’s opinion, affecting realization of Party B’s creditor’s rights;

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q) Breach of other obligations as specified in this Contract.

(2) If the guarantor falls within any of the following circumstances and Party A fails to provide any new guaranty to the satisfaction of Party B, it will be deemed breach of contract:

a) The guarantor falls within contracting, leasing, M&A, joint venture, separation, joint operation, reforming of stock system, bankruptcy, revocation, etc., which affect the joint and several guaranty liabilities of the guarantor;

b) The guarantor provides such guaranty exceeding its burden ability to any third party;

c) The guarantor loses or may lose the guaranty ability;

d) Other breach circumstances as specified in the guaranty contract.

(3) If the mortgagor falls within any of the following circumstances and Party A fails to provide any new guaranty to the satisfaction of Party B, it will be deemed breach of contract:

a) The mortgagor fails to handle the insurances for the mortgaged properties, or after occurrence of any insurance accident, fails to handle the insurance compensations in accordance with the terms of the mortgage contract concerned;

b) In case of damage to, loss or devaluation of the mortgaged property for any reason attributable to any third party, the mortgagor fails to handle the insurance compensations in accordance with the terms of the mortgage contract concerned;

c) Without written consent of Party B, the mortgagor donates, transfer, leases or repeats the mortgage of, transfers or otherwise disposes of the mortgaged properties;

d) After consent of Party B, the mortgagor disposes of the mortgaged properties; however, the amount from disposal of the mortgaged properties is not handled according to the mortgage contract concerned;

e) In case of damage to or loss or devaluation of the mortgaged properties, which affects the clearance of the debts hereunder, the mortgagor fails to recover the value of the mortgaged properties in a timely manner or fails to provide other guaranties as recognized by Party B;

f) Other breach circumstances as specified in the mortgage contract concerned.

(4) If the pledgor falls within any of the following circumstances and Party A fails to provide any new guaranty to the satisfaction of Party B, it will be deemed breach of contract:

a) The pledgor fails to handle the insurances for the pledged properties, or after occurrence of any insurance accident, fails to handle the insurance compensations in accordance with the terms of the pledge contract concerned;

b) In case of damage to, loss or devaluation of the pledged property for any reason attributable to any third party, the pledgor fails to handle the insurance compensations in accordance with the terms of the pledge contract concerned;

c) After consent of Party B, the pledgor disposes of the pledged properties; however, the amount from disposal of the pledged properties is not handled according to the pledge contract concerned;

d) In case of damage to or loss or devaluation of the pledged properties, which affects the clearance of the principal of the Loan and the interests thereof hereunder, the mortgagor fails to recover the value of the pledged properties in a timely manner or fails to provide other guaranties as recognized by Party B;

e) Other breach circumstances as specified in the pledge contract concerned.

(5) If the guaranty contract or other guaranty is not effected, is invalid or is cancelled, or the guarantor falls within other circumstances of loss of all or part of its guaranty ability or rejects to perform the guaranty obligations, Party A fails to exercise any new guaranty to the satisfaction of Party B, it is deemed breach by Party A of this Contract.

2. Remedies

In case of any of breach events as described in items (1) ~ (5), Party B is entitled to exercise one or more of the following rights:

1) Terminate this Contract in advance, stop the Loan not granted yet, stop the granting and payment of the Loan, announce that the Loan is immediately terminated and request Party A to immediately repay the principal of the debts due and not due and the interests thereof and other fees incurred caused thereby.

2) Collect the penalties as per ___‰ of the principal of the Loan.

3) If Party A fails to use the Loan for such purpose as specified in this Contract, as for the part embezzled by Party A, collect the interests and compound interests as per the default interest rate and interest settlement mode hereunder from the day upon use of the Loan for such purpose as specified in this Contract to the day upon clearance of the principal of the Loan and the interests thereof.

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4) Before the Loan is mature, the interests not repaid in a timely manner are subject to the compound interests according to the interest rate of the Loan and interest settlement mode as specified in Article 4 hereof.

5) After the Loan is overdue, as for the principal of the Loan and the interests thereof not cleared by Party A in schedule (including the principal of the Loan and the interests thereof mature in advance as declared by Party B), the interests and compound interests will be collected according to the interest settlement mode as specified in this Contract, from the overdue day to the day upon clearance of the principal of the Loan and the interests thereof. The term “overdue” hereof shall mean such act that Party A fails to repay the Loan in schedule or according to the installments as specified in this Contract.

6) If the Loaner needs to realize its creditor’s rights by means of lawsuit or arbitration due to Party A’s breach of contract, Party A shall pay Party B such fees for realization of the creditor’s rights incurred by Party B like legal costs, arbitration fees, public notification fees, demanding fees, attorney’s fees, inquiry fees, traveling fees, etc.

7) Deduct the amount out of the account opened by Party A at Party B and any of its branches to repay the principal of the Loan and the interests thereof and other fees to be borne by Party A under the terms of this Contract.

8) Request Party A to provide any new guaranty to the satisfaction of Party B for all of the debts hereunder.

9) Perform the guaranty rights and exercise the security interest.

10) Terminate this Contract.

Article 11 Custody of Funds in the Account

Party A hereby designates the account (account name: Qianxinan Aosen Wooden Co., Ltd., account number: 2881010001201100024254, bank: Guizhou Xingyi Rural Cooperative Bank) opened at Party B as the custody account. Party B is responsible for supervising the use of the Loan by Party A pursuant to this Contract. Party A shall report in time the outflow and inflow of the fund in this account. It is required to first use the Loan in respect of the use of the fund in the custody account, after completion of the Loan, the remaining funds shall be paid and settled in accordance with the Measures for the Administration of the Payment and Settlement of the People’s Bank of China.

Article 12 Special Provisions on Trusted Payment by the Loanee

In the case of trusted payment by the Loanee as specified by the Parties, Party A will irrevocably authorize or trust the trusted payment to Party B. Party A shall be liable for authenticity, accuracy and legality of the name, account number and bank information of the counterparty as provided by Party B.

Party B is entitled to review the Loanee’s conditions according to the requirements for trusted payment, and has the right to request the Loanee to provide corresponding documentation and to provide the inflow and outflow of the current fund custody account.

Article 13 Miscellaneous

(1) In case of trusted payment, Party B shall make payment according to Party A’s withdrawal application and the Letter of Authorization for Payment of Loan. Party B assumes no liabilities for payment error attributable to Party A or economic dispute between Party A and any third party; Party A shall undertake any and all of legal liabilities caused thereby.

(2) ____________________________________________________________________________________________________________________________________________________.

Article 14 Dispute Resolution

Any disputes arising out of or in connection with this Agreement shall be settled through mutual consultations between the Parties, if no agreement is reached through consultations, such disputes will be settled by means of 1 below:

1. To file a suit in the Party B’s local people’s court;

2. To be submitted for arbitration to ____________Arbitration Commission.

During the litigation or arbitration, the terms that don’t involve disputes still need to be performed.

Article 15 Validity

This Contract shall become effective after signature and seal of the Parties.

Article 16 This Contract is prepared in three copies, each of which shall be held by Party A, Party B and the Guarantor respectively and shall have the same legal effects.

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THE LOANEE HAS CAREFULLY READ ALL OF THE TERMS AND CONDITIONS ABOVEMENTIONED. THE LOANER HAS EXPLAINED THE TERMS AND CONDITIONS HEREIN CONTAINED, AS REQUESTED BY THE LOANEE, HAS PERFORMED THE OBLIGATIONS OF REASONABLE PROMPTING AND INSTRUCTIONS. THE LOANEE HAS FULLY KNOWN THEIR MEANING AND FILED NO OBJECTION AGAINST THE CONTENTS OF THIS CONTRACT.

Loanee (seal): Qian Xi Nan Aosen Forestry Company, Limited   Legal Representative (Person in Charge) or Authorized Person (signature or seal):  
August 3, 2011 Loaner (seal): Guizhou Xingyi Rural Cooperative Bank   Legal Representative (Person in Charge) or Authorized Person (signature or seal): Handled by: August 3, 2011

EX-10.5

Guiyang Nanming District Rural Credit Cooperative

No. Rural Credit [Zhu Nan]WC Loan Zi. No.2011 No.012

Exhibit 10.5

Working Capital Loan Contract
(English Translation)

Borrower: Qian Xi Nan Aosen Forestry Company, Limited

Lender: Guiyang Nanming District Rural Credit Cooperative Bank, Xinhua Lu Branch

Manufactured by Guiyang Nanming District Rural Credit Cooperative

Guiyang Nanming District Rural Credit Cooperative
Working Capital Loan Contract

Loan Type: Mid-Term Loan
Borrower: (Party A for short below): Qian Xi Nan Aosen Forestry Company, Limited
Domicile: Hexing Village, Dingxiao Development Zone, Qian Xi Nan Prefecture, Guizhou Province Tel:
Indentity Card No. Or Organization Code: 76608081-7
Lender (Party B for short below): Guiyang Nanming District Rural Credit Cooperative Bank Xinhua Lu Branch

Party A applies to Party B for the loan and Party B agrees to lend the loan to Party A. Pursuant to the relevant laws and regulations, Party A and Party B, through consultation, have entered into and concluded the present Contract so as to bind upon the parties hereto.

Article 1  Loan Amount

Party A applies to Party B for the loan of RMB twenty-five million, namely å25,000,000.00 (if the amounts in words and figure are not consistent, the amount in words shall prevail).

Article 2  Loan Purpose

The loan of Party A is used for the purpose of paying the credit.

Article 3  Loan Term

The term of the Loan is twenty-two months, namely commencing from January 19, 2011 and ending on November 18, 2012.

During the Contract period, the effective date of releasing the loan and maturity date of the loan are subject to the loan note. Loan note and withdrawal certificate form the parts of the Contract and bear the same legal force as the Contract does.

Article 4  Loan Interest Rate, Punitive Interest Rate, Interest Accrual and Interest Settlement

One. Loan Interest Rate

The loan interest rate under the Contract is 8.775% (year/month), the interest rate is the first one below:

(1) Fixed interest rate, namely the loan interest rate remains unchanged when the official interest rate is changed during the period of performing the Contract.

(2) Floating interest rate, namely the interest rate (__/__float upward/lower) by __/__% on the basis of benchmark interest rate. From the value date, if the benchmark interest rate is changed, Party B will adjust the interest rate in accordance with the provisions of the People’s Bank of China without singing the separate contract or the consent of Party A.

Two. Punitive Interest Rate

(1) If Party A does not use the loan in accordance with the provisions of the Contract, the punitive interest rate will be charged by 100% on the basis of the interest rate carried in the Contract;

(2) If Party A defaults the repayment of the loan under the Contract, the punitive interest rate will be charged by 50% on the basis of the interest rate carried in the Contract.

Three. The value date mentioned in this Article is the date when the first batch of the loan under the Contract is transferred into the account of Party A.

When the loan under the Contract is released for the first time, the benchmark interest rate means the same-kind loan interest rate of same kind promulgated by the People’s Bank of China on the value date. Afterwards, loan interest rate or punitive interest rate is adjusted in accordance with the above provisions, the benchmark interest rate means the same-kind loan interest rate promulgated by the People’s Bank of China on the date of adjustment. If the People’s Bank of China no longer promulgates the same-kind loan interest rate, the benchmark interest rate means the inter-bank recognized or common same-kind loan interest rate on the date of adjustment, unless otherwise agreed by the two parties.

Four. The loan interest is calculated from the date when the loan is transferred into the account of Party A. The loan under the Contract is calculated on daily basis. Daily Interest = Monthly Interest Rate/30 = Annual Interest Rate /360. If Party A does not pay the interest on schedule, the compound interest will be charged from the next day.

Five. Interest Settlement

(1) For the loan with fixed interest rate., the interest shall be calculated at the agreed interest at the time of settling the interest; for the loan with floating interest rate, the interest is calculated at the defined interest rate of floating periods, if there are several floating interest rate during one interest settlement period, the interest of each floating period shall be calculated first. On the interest settlement date, the interest of each floating period shall be added up for settling the interest of settlement period.

(2) The interest of the loan under the Contract is settled on quarterly (monthly/quarterly) basis, the settlement date shall be 20^th day of (monthly/last month of each quarter) last month of each quarter.

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Article 5 Release and Payment of the Loan

One. Precondition for Releasing the Loan

(1) Unless Party B wholly or partially waives, Party B will not release the loan until the preconditions set out below are satisfied:

1. Party A has, in accordance with the provisions of relevant laws, handled the approval, registration, delivery and other statutory formalities related to the loan under the Contract;

2. If the security is provided to the loan under the Contract, the security means or other guarantee means meeting the requirements of Party B have taken effect;

3. In the course of applying for the loan, the Borrower has provided the Lender all the documents and data required by the Lender, and such documents and data continue to remain effective.

4. Party A has no beaching agreed in the Contract.

5. Where Party A commission the Lender to pay the loan capital, he shall file the application for payment order and handle the relevant formalities, and shall provide the relevant transaction data and documents proving the loan purpose; if Party A pays the loan capital at his own discretion, he shall file the withdrawal application, and shall provide the relevant data and capital use plan proving the purpose of the Contract;

6. The competent authority does not restrict or prohibit the release of the loan under the Contract.

7. Party A has opened one settlement account at the Part B as capital supervision account;

8. Other preconditions agreed by the two parties for releasing the loan.

_____________________________________________________________________________________________________________________________________________________________________.

(2) Party B will, within one business day after the above preconditions are satisfied, release the loan.

Two. Payment Means, Amount and Counterparty

(1) If the Lender is commissioned to pay the loan, the Borrower shall irrevocably authorizes or commission the Lender to pay the loan capital to the Borrower’s transaction counterpart complying with the purpose agreed in the Contract in accordance with the withdrawal application and payment order by the Borrower after the security for the loan under the Contract takes effect (or the Contract is filed).

(2) If the Borrower pays the loan capital at this own discretion, the Lender will , upon the application by the Borrower for withdrawal, directly transfer the loan capital into the account of the Borrower so that the Borrower can directly pay the loan capital to his transaction counterparty complying with the purpose of the Contract.

The specific loan payment amount and payment counterparty are the payment counterparty and payment amount indicated by the Borrower in the withdrawal application. The withdrawal application by the Borrower, loan payment authorization form the parts of the Contract and bear the same legal effect as the Contract does.

Three. Withdrawal Plan

(1) 18^th of January, 2011   Amount: RMB Twenty-Five Million

(2) _____day of ______,   _______Amount: RMB ________________

(3) _____day of ______,   _______Amount: RMB ________________

(4) _____day of ______,   _______Amount: RMB________________

 (5) _____day of ______,   _______Amount: RMB ________________

(6) _____day of ______,   _______Amount: RMB ________________

If Party A needs to delay the repayment date, he shall obtain the consent of Party A one day earlier, and shall compensate the interest loss to Party B for the overdue repayment (Interest of delayed withdrawal period – Current Deposit Interest of Same Period = Interest Loss Suffered by the Lender)

Article 6 Loan Repayment

One. Repayment Principle

Under the Contract, Party A shall repay the loan in accordance with the following principles”

(1) If the loan with overdue principal repayment lasting more than ninety day and the loan with overdue interest payment lasting more than ninety days are not able to be recovered, or the production and business operation have shut down although the loan is not matured or overdue payment is less than ninety day, or the project relating to the loan has stopped, or the loan is governed by the laws and regulations or other provisions, the loan shall be repaid in the principle of repaying the principal first and the interest later.

(2) The loan beyond the circumstances mentioned in the above Item (1) shall be repaid in the principle of paying the interest first, then repaying the principal, and paying the interest along with the repayment of the loan.

Two. Interest Payment

Party A shall, on the interest settlement date, pay the matured interest. The first interest payment date is the first interest settlement date after the loan is released. When the last loan repayment is made, the interest shall be paid along with the repayment of the principal.

Three. Repayment Schedule

Party A shall repay the principal of the loan in accordance with the following schedule:

(1) 18^th day of November, 2012 Amount: RMB Twenty-Five Million

(2) _____day of ______,   _______Amount: RMB ________________

(3) _____day of ______,   _______Amount: RMB ________________

(4) _____day of ______,   _______Amount: RMB_________________

 (5) _____day of ______,   _______Amount: RMB ________________

(6) _____day of ______,   _______Amount: RMB ________________

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Four Repayment Means

(1) Party A shall, prior the date agreed in the Contract for repaying the date, deposit the fund, which is adequate for repaying the loan of the phase, into the account opened at the Party B for automatic transfer of the loan for repaying the loan, or transfer the fund from other account for repaying the loan of the phase. If Party A fails to repay the loan on schedule, Party B has the right to transfer and collect the fund from the other deposit account at the Party B and his subsidiaries for repaying the loan, this provisions shall be deemed as the irrevocable authorization by Party B to Party A for directly transferring and collecting the fund for repaying the loan.

(2) If the repayment account of Party A is reported lost, frozen, suspended from payment, settled up, or Party A changes the repayment account, Party A shall go to the site of Party B for changing the repayment account. If the fund in the original repayment account is not enough for repaying the loan before the change takes place, Party A shall go to the counter of Party B for repaying the loan. If Party B fails to change the repayment account or go to the counter of Party B for repaying the loan on schedule, the liability for which shall be born by Party A.

Five. Earlier Repayment

(1) If Party A wants to pay the interest earlier, he shall notify Party B earlier;

(2) When Party A wants to repay the loan principal earlier, he shall apply in writing to Party B 10 legal business days earlier. Upon the consent of Party B, the part or the whole of the principal can be repaid earlier.

If Party A repay the principal earlier, he shall agree to pay the penalty to Party B, the penalty = Earlier Repaid Amount ×0.1‰ × Earlier Days

If Party A repay the loan installments and wants to repay the part of the loan capital earlier, the loan shall be repaid in the reverse order of repayment schedule. After earlier repayment, the loan interest rate agreed in the Contract shall be applied to the outstanding loan.

Six. Loan Extension and Postponement

(1) Party A shall repay the loan in accordance with the schedule agreed in the Contract. If Party A needs to extend or postpone the repayment of the loan, he shall, 30 days prior to the expiration of the loan, file the application in writing to Party B. Party B will, based on the application by Party A, re-examine the credit examination to Party A. After Party B approves the application, the loan can be extended or postponed.

(2) After Party B has agreed to extend or post the loan, the loan term and security term shall remain effective until the principle and interest accrued are paid up, or the shall be extended accordingly.

(3) If Party B does not agree to extend the loan, Party A shall pay the interest and repay the principal in accordance with the provisions of the Contract.

Article 7 Loan Security

The security for the loan under the Contract is: mortgage.

Article 8 Rights and Obligations of Party A

One. Rights of Party A

(1) Has the right to ask Party B to release the loan in accordance with the provisions of the Contract;

(2) Has the right to sue the loan for the purpose agreed in the Contract;

(3) Has the right to apply to Party B for extending or postponing the loan, provided that the conditions prescribed by Party B are satisfied;

(4) Has the right to ask Party B to protect the financial data and business secrets of production and operation provided by Party A, unless otherwise agreed by the laws, regulations and the Articles of Association.

Two. Obligations of Party A

(1) Party A must, in accordance with the requirements of Party B, provide the financial data and the information regarding the production and operation of Party A, and shall be liable for the authenticity, integrity and effectiveness of such data and information.

(2) Party A must use the loan in accordance with the purpose agreed in the Contract, and shall not occupy and embezzle the loan capital, and shall not use the loan capital for making investment on the fixed assets and stocks, and shall not use the loan in the filed and for the purposes prohibited by the state.

(3) If the Borrower commissions the loan payment by the payment order, he must handle the withdrawal application and payment order so that Party B can directly pay the loan capital to the Borrower’s transaction counterparty complying with the purpose agreed in the Contract.

(4) The Borrower shall designate the funds withdrawal account and shall promptly provide the information of the capital inflow and outflow of the account.

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(5) Party A undertakes that he will cooperate with Party B for loan payment management, post-loan management and relevant inspections, and he will forthwith notify Party B of any material adverse event affecting the debt-paying ability;

(6) If the Borrower pays the loan at his own discretion, Party A shall, on periodical basis, summarize and report the loan capital payment, and will, at the requirement by Party B, provide the record and data of using the loan capital;

(7) Party A shall actively cooperate with Party B and shall be ready for accept the inspection and supervision by Party B on his production and operation, financial activities and the use of the loan under the Contract;

(8) Party A shall have going-concern ability, legitimate repayment sources and repay the loan and pay the interest accrued in accordance with the provisions of the Contract;

(9) Party A and his investors shall not withdraw the funds or transfer the assets for escaping the debts owed to Party B;

(10) Before the principal and interest of the loan of Party B are paid off, Party A shall not, without consent of Party B, use the assets formed by the loan under the Contract for providing the security to the third person.

(11) If Party A, during the effective period of the Contract, wants to provide security for the debts of others, which is likely to affect debt-paying ability under the Contract, he shall advise in writing Party A earlier and shall obtain the consent of Party B.

(12) When the guarantor under the Contract is suspended in production, shut down, cancelled in business registration, deprived of business license, bankruptcy, written off and suffers business loss, the part or the whole of guarantee ability for the loan is lost , or the mortgage and pledged properties as the security for the loan under the Contract are impaired, destroyed or lost accidentally, Party A shall promptly provide other security recognized by Party B.

(13) If Party A has the change in the name, legal representative (responsible officer), domicile, business scope and registered capital, etc. during the effective period of the Contract, he shall promptly notify Party B;

(14) If Party A, during the effective period of the Contract, has the acts of making external investment, substantially increasing the debt financing, contracting, leasing, assigning the stock equity, shareholding restructuring, affiliation, merger, acquisition, separation, joint venture, applying for shutdown and rectification, applying for disbandment and bankruptcy, etc., which adequately affect the realization of the claim of the loan, he shall give a 15-day notice in writing to Party B for obtaining the consent of Party B, and Party A shall, in accordance with the requirements of Party B, pay off the debts under the Contract and provide new security.

(15) If Party A, during the effective period of the Contract, has the circumstance that the production is stopped, the business is shut down, registration is cancelled, the business license is revoked, legal representative or principal officer engage in the illegal activities, Party A is involved in big lawsuit, production and operation meet with severe difficulties and financial condition deteriorates, etc., which produces material negative impact on the fulfillment of repaying obligation under the Contract, he shall immediately notify in writing Party B, and shall, pay off the debts under the Contract and provide new security.

(16) Party A shall bear the costs the lawyer services, insurances, evaluation, registration, custody, identification and notarization, etc. in connection with the Contract and the security under the Contract.

Article 9 Rights and Obligations of Party B

One. Rights of Party B

(1) Party B has the right to know the production and operation and financial position of Party A, has the right to ask Party A to provide the related plan and statistics, financial statements and other documents and data;

(2) Any fund payable to Party B in accordance with the Contract, Party B has the right to transfer and deduct the fund from the account opened by Party A at Party B and his subsidiaries;

(3) Party B has the right to designate the special funds withdrawal account, and may monitor the account when necessary, and may recover the loan in accordance with the funds withdrawal;

(4) If the credit standing declines, primary business earning power is weak and loan capital use has abnormal circumstances in the course of paying the loan, Party B has the right to supplement the conditions for loan release and payment, has the right to change loan payment means, stop releasing and paying the loan capital.

Two. Obligations of Party B

(1) Party B shall release the loan with full amount on schedule in accordance with the provisions of the Contract, except for the delay caused by the reasons on the part of Party A;

(2) Party B shall protect the relevant financial data and business secrets of production and operation provided by Party A, unless otherwise prescribed by the laws and regulations.

Article 10 Liability for Breaching

One. Circumstances of Breaching

(1) Breaching by Party A

When one or more of the following circumstances take place, it will constitute the breaching by Party A.

1. Fail to completely and properly comply with or perform any undertaking, warranty and obligation or responsibility under the Contract;

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2. Fail to provide true, integrated, effective data of financial accounting, business performance and other relevant data in accordance with the requirements of Party B, or conceal important facts;

3. Fail to use the loan in accordance with the purpose agreed by the two parties;

4. Fail to pay the loan capital by the agreed means;

5. Break the constraint of agreed financial indicators;

6. Have big breaching event;

7. Fail to repay the debt and interests accrued;

8. Refuse or obstruct Party B from supervising and inspecting the use of the loan capital;

9. Transfer the assets, withdraw the capital for escaping the debts;

10. Business performance and financial condition deteriorate, not able to pay off the matured debts, involved or is to be involved in the lawsuit or arbitration procedures and other legal disputes, Party B deems that such circumstances are likely to or has affected or damaged the rights and interests of Party B under the Contract;

11. Any other debt has affected or is likely to affect the fulfillment of the obligations by Party B under the Contract;

12. Party A suffers heavy business loss or defaults the loan and interest accrued to any financial institution;

13. The legal representative or responsible officer dies or is declared dead, missing or is declared missing, or is restricted in civil capacity, or loses the civil capacity, which, in the opinions of Party B, are likely to or have affected or damaged the rights and interests of Party B under the Contract;

14. The Borrower or/and legal representative, shareholder and investors of the Borrower and/or the Borrower are suspected of illegal activities or criminal cases;

15. Party A has the acts of changing business operation means or converting the operation mechanism, including the contracting, lease, merger, acquisition, joint venture, separation, affiliation, shareholding restructuring, etc., which, in the opinions of Party B, are likely to or have affect or damaged the rights and interests of Party B under the Contract;

16. Other circumstances adequate for affecting the realization of the claim in the opinions of Party B;

17. Party A violates the other obligations under the Contract.

(2) If the guarantor has the following circumstances and Party A fails to provide new security complying with the requirements of Party B, it will be deemed as breaching by Party A.

1. The guarantor has the circumstances of contracting, lease, merger and acquisition, joint venture, separation, affiliation, shareholding restructuring, bankruptcy and cancellation, which adequately affect the guarantor from bearing the joint security liability;

2. The guarantor provides the third party the security exceeding his own guarantee capability;

3. The guarantor loses or is likely to lose the guarantee capability;

4. Other breaching circumstances of the guarantor as agreed in the security contract;

(3) When the mortgagor has the following circumstances, and Party A fails to provide new security complying with the requirements of Party B, it will be deemed as breaching by Party A.

1. The Mortgagor fails to effect the property insurance for collateral, or fails to claim the insurance compensation in accordance with the provisions of the mortgage contract;

2. The collateral is damaged, destroyed and impaired due to the acts of the third person, the mortgagor fails to claim the insurance compensation in accordance with the provisions of the mortgage contract;

3. The mortgagor donates, assigns, lease, remortgage, relocate or dispose the collateral by the other means without written consent of Party B;

4. The mortgagor may, upon the consent of Party B, dispose the collateral, but the payment received from disposing the collateral is not processed in accordance with the provisions of the mortgage contract;

5. The collateral is damaged, destroyed and impaired, which adequately affect the repayment of the debts under the Contract, the mortgagor fails to restore the value of the collateral, or fails to provide other security recognized by Party B.

6. Other breaching circumstances of the mortgagor as agreed in the mortgage contract;

(4) Pledger has the following circumstances, and Party A fails to provide new security complying with the requirements of Party B, it will be deemed as breaching by Party A.

1. The pledger fails to effect the property insurance for collateral, or fails to claim the insurance compensation in accordance with the provisions of the pledge contract;

2. The pledged property is damaged, destroyed and impaired due to the acts of the third person, the pledger fails to claim the insurance compensation in accordance with the provisions of the pledge contract;

3. The pledger, upon the consent of Party B, agrees to dispose the pledged property, but the income received from disposing the pledged property is not processed in accordance with the provisions of the pledge contract;

4. The pledged property is damaged, destroyed and impaired, which adequately affect the repayment of the debts under the Contract, the mortgagor fails to restore the value of the pledged property, or fails to provide other security measures recognized by Party B.

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5. Other breaching circumstances of the pledgers as agreed in the pledge contract;

(5) If the security contract or other security means does not take effect, is invalid, is cancelled, or the guarantor loses the part or the whole of security ability or refuses to fulfill the security obligation, Party A fails to provide new security in accordance with the requirements of Party B, it will be deemed as breaching by Party A.

Two. Remedies for Breaching

When the breaching event mentioned in the above Item (1) through (5), Party B has the right to exercise one or more of the following rights:

(1) Terminate the contract earlier, withhold the remaining part of the loan, stop the release and payment of loan capital, declare immediate maturity of the loan, ask Party A immediately repay the principal, interest and costs of all the matured and unmatured debts under the Contract.

(2) Charge the penalty at the rate of __‰ of the loan principal on Party A;

(3) If Party A fails to use the loan for the purpose agreed in the Contract, Party B will calculate and charge the interest and compound interest on the embezzled loan at the punitive interest rate and and by the interest settlement means agreed in the Contract from the date of embossment to the date when the principal and interest accrued are paid off

(4) If Party A fails to pay off the accrued interest prior to the maturity of the loan, Party B will calculate and charge the compound interest on Party A at the loan interest rate agreed in Article 4 of the Contract;

(5) If the loan repayment is delayed, Party B will calculate and charge the interest and compound interest at the punitive interest rate and by the interest settlement means agreed in the Contract on the outstanding loan principal and interest (including the part or the whole of the earlier matured loan principal and interest declared by Party B) from the date of overdue repayment to the date when the loan principal and interest are paid off. The overdue loan repayment means that Party A fails to repay the loan on schedule or repay the installment of the loan in accordance with the repayment schedule agreed in the Contract.

(6) If Party A breaches he Contract, the Lender has to resort to the lawsuit, arbitration and other means for realizing the claim, Party A shall bear the legal cost, arbitration fee, public notice fee, interpellation fee, attorney fee, inquiry fee and business travel expenses for realizing the claim.

(7) Transfer and collect the funds from the account opened by Party A at the Party B and his subsidiaries for repaying the loan principal and interest and paying the costs that shall be born by Party A in accordance with the Contract.

(8) Ask Party A provide new security complying with the requirements of Party A for all the debts under the Contract.

(9) Exercise the security right for realizing the claim.

(10) Cancel the Contract.

Article 11 Account Capital Supervision

Party A designates the account opened at the Party B (Account Name: Qian Xi Nan Aosen Forestry Company, Limited, Account No.: 2022040001201100079927) as the supervision account so that Party B can supervise whether Party A uses the loan capital in accordance with the provisions of the Contract. Party A shall promptly report Party B the information regarding the capital inflow and outflow of the account. The loan capital shall be used first in the use of the fund in the supervision account. After the loan capital is used up, the remaining capital shall be paid and settled in accordance with the “Measures for Payment and Settlement Management” promulgated by the People’s Bank of China.

Article 12  Special Provisions for Commissioned Payment by the Lender

Party A and Party B agree that if the commissioned payment by the Lender is adopted, Party A shall irrevocably authorize or entrust the commissioned payment to Party B. Party A shall be liable for the authenticity, correctness and legitimacy of the name, account number, opening bank and other information of transaction counterparty as provided to Party B.

Party B has the right to, in accordance with the requirements of commission payment, review the conditions of the Borrower, and has the right to ask the Borrower to provide the corresponding certificates, has the right to require the Borrower to provide the information of capital inflow and outflow of supervision account.

Article 13 Other Provisions

(1) If the commissioned payment is adopted, Party B will handle the payment in accordance with the withdrawal application by Party A and loan payment authorization letter. Party B bears no liability for the payment error due to the reasons attributable to Party A or the economic dispute between Party A and any third party arising from, all the consequent legal liabilities shall be born by Party A.

(2) Article 14 Settlement to the Dispute Any dispute arising from the execution of the Contract shall be settled by the two parties through consultation. In case no settlement can be reached through consultation, the dispute shall be settled by the following first means:

One. File a lawsuit to the people’s court of justice in the locality of Party B

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Two. Refer the dispute to the _____/____ arbitration commission for arbitration.

During the litigation or arbitration period, the other provisions not under the dispute shall continue to be performed.

Article 15 Execution of the Contract

The Contract take effect after it is executed by the legal representative (responsible officer) or authorized agent of Party A (if Party A is a natural person, the signature and fingerprint are required) and legal representative (responsible officer) or authorized agent of Party B

Article 16 The Contract is done in triplicate, one for the parties to the Contract and property rights office respectively, all have the same legal effect.

The Borrower has carefully read the above whole terms and conditions, the Lender has made explanatory notes to the terms and conditions of the Contract in accordance with the requirements of the Borrower, has fulfilled the obligation of reansible prompts and explanation, the Borrower has known their meanings and has no disagreement to the whole terms and conditions of the Contract.

Borrower: Qian Xi Nan Aosen Forestry Company, Limited	Lender: Guiyang Nanming District Rural Credit
Legal Representative (Responsible Officer) Or Authorized Agent: Date: January 19, 2011	Cooperative Bank Xinhua Lu Branch Legal Representative (Responsible Officer) Or Authorized Agent: Date: January 19, 2011

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EX-10.6

Guiyang Nanming District Rural Credit Cooperative

No. Rural Credit [Zhu Nan]WC Loan Zi. No.2011 No.011

Exhibit 10.6

Working Capital Loan Contract (English Translation)

Borrower: Qian Xi Nan Silvan Flooring Company, Limited

Lender: Guiyang Nanming District Rural Credit Cooperative Bank, Xinhua Lu Branch

Manufactured by Guiyang Nanming District Rural Credit Cooperative

Guiyang Nanming District Rural Credit Cooperative
Working Capital Loan Contract

Loan Type: Mid-Term Loan
Borrower: (Party A for short below): Qian Xi Nan Silvan Flooring Company, Limited
Domicile: Hexin Community, Dingxiao Town, Xingyi Tel:
Indentity Card No. Or Organization Code: 66696634-6
Lender (Party B for short below): Guiyang Nanming District Rural Credit Cooperative Bank, Xinhua Lu Branch

Party A applies to Party B for the loan and Party B agrees to lend the loan to Party A. Pursuant to the relevant laws and regulations, Party A and Party B, through consultation, have entered into and concluded the present Contract so as to bind upon the parties hereto.

Article 1 Loan Amount

Party A applies to Party B for the loan of RMB twenty-six million, namely å26,000,000.00 (if the amounts in words and figure are not consistent, the amount in words shall prevail).

Article 2 Loan Purpose

The loan of Party A is used for the purpose of material purchasing.

Article 3 Loan Term

The term of the Loan is twenty-four months, namely commencing from January 19, 2011 and ending on January 18, 2013.

During the Contract period, the effective date of releasing the loan and maturity date of the loan are subject to the loan note. Loan note and withdrawal certificate form the parts of the Contract and bear the same legal force as the Contract does.

Article 4 Loan Interest Rate, Punitive Interest Rate, Interest Accrual and Interest Settlement

One. Loan Interest Rate

The loan interest rate under the Contract is 8.775% (year/month), the interest rate is the (first) one below:

(1) Fixed interest rate, namely the loan interest rate remains unchanged when the official interest rate is changed during the period of performing the Contract.

(2) Floating interest rate, namely the interest rate (__/__float upward/lower) by __/__% on the basis of benchmark interest rate. From the value date, if the benchmark interest rate is changed, Party B will adjust the interest rate in accordance with the provisions of the People’s Bank of China without singing the separate contract or the consent of Party A.

Two. Punitive Interest Rate

(1) If Party A does not use the loan in accordance with the provisions of the Contract, the punitive interest rate will be charged by 100% on the basis of the interest rate carried in the Contract;

(2) If Party A defaults the repayment of the loan under the Contract, the punitive interest rate will be charged by 50% on the basis of the interest rate carried in the Contract.

Three. The value date mentioned in this Article is the date when the first batch of the loan under the Contract is transferred into the account of Party A.

When the loan under the Contract is released for the first time, the benchmark interest rate means the same-kind loan interest rate of same kind promulgated by the People’s Bank of China on the value date. Afterwards, loan interest rate or punitive interest rate is adjusted in accordance with the above provisions, the benchmark interest rate means the same-kind loan interest rate promulgated by the People’s Bank of China on the date of adjustment. If the People’s Bank of China no longer promulgates the same-kind loan interest rate, the benchmark interest rate means the inter-bank recognized or common same-kind loan interest rate on the date of adjustment, unless otherwise agreed by the two parties.

Four. The loan interest is calculated from the date when the loan is transferred into the account of Party A. The loan under the Contract is calculated on daily basis. Daily Interest = Monthly Interest Rate/30 = Annual Interest Rate /360. If Party A does not pay the interest on schedule, the compound interest will be charged from the next day.

Five. Interest Settlement

(1) For the loan with fixed interest rate., the interest shall be calculated at the agreed interest at the time of settling the interest; for the loan with floating interest rate, the interest is calculated at the defined interest rate of floating periods, if there are several floating interest rate during one interest settlement period, the interest of each floating period shall be calculated first. On the interest settlement date, the interest of each floating period shall be added up for settling the interest of settlement period.

(2) The interest of the loan under the Contract is settled on quarterly (monthly/quarterly) basis, the settlement date shall be 20^th day of (monthly/last month of each quarter) last month of each quarter.

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Article 5 Release and Payment of the Loan One. Precondition for Releasing the Loan

(1) Unless Party B wholly or partially waives, Party B will not release the loan until the preconditions set out below are satisfied:

1. Party A has, in accordance with the provisions of relevant laws, handled the approval, registration, delivery and other statutory formalities related to the loan under the Contract;

2. If the security is provided to the loan under the Contract, the security means or other guarantee means meeting the requirements of Party B have taken effect;

3. In the course of applying for the loan, the Borrower has provided the Lender all the documents and data required by the Lender, and such documents and data continue to remain effective.

4. Party A has no beaching agreed in the Contract.

5. Where Party A commission the Lender to pay the loan capital, he shall file the application for payment order and handle the relevant formalities, and shall provide the relevant transaction data and documents proving the loan purpose; if Party A pays the loan capital at his own discretion, he shall file the withdrawal application, and shall provide the relevant data and capital use plan proving the purpose of the Contract;

6. The competent authority does not restrict or prohibit the release of the loan under the Contract.

7. Party A has opened one settlement account at the Part B as capital supervision account;

8. Other preconditions agreed by the two parties for releasing the loan.

________________________________________________________________________.

(2) Party B will, within one business day after the above preconditions are satisfied, release the loan.

Two. Payment Means, Amount and Counterparty

(1) If the Lender is commissioned to pay the loan, the Borrower shall irrevocably authorizes or commission the Lender to pay the loan capital to the Borrower’s transaction counterpart complying with the purpose agreed in the Contract in accordance with the withdrawal application and payment order by the Borrower after the security for the loan under the Contract takes effect (or the Contract is filed).

(2) If the Borrower pays the loan capital at this own discretion, the Lender will , upon the application by the Borrower for withdrawal, directly transfer the loan capital into the account of the Borrower so that the Borrower can directly pay the loan capital to his transaction counterparty complying with the purpose of the Contract.

The specific loan payment amount and payment counterparty are the payment counterparty and payment amount indicated by the Borrower in the withdrawal application. The withdrawal application by the Borrower, loan payment authorization form the parts of the Contract and bear the same legal effect as the Contract does.

Three. Withdrawal Plan

(1) 18^th of January, 2011 Amount: RMB Twenty-Six Million

(2) _____day of ______, _______Amount: RMB

(3) _____day of ______, _______Amount: RMB

(4) _____day of ______, _______Amount: RMB

(5) _____day of ______, _______Amount: RMB

(6) _____day of ______, _______Amount: RMB

If Party A needs to delay the repayment date, he shall obtain the consent of Party A one day earlier, and shall compensate the interest loss to Party B for the overdue repayment (Interest of delayed withdrawal period – Current Deposit Interest of Same Period = Interest Loss Suffered by the Lender)

Article 6 Loan Repayment

One. Repayment Principle

Under the Contract, Party A shall repay the loan in accordance with the following principles”

(1) If the loan with overdue principal repayment lasting more than ninety day and the loan with overdue interest payment lasting more than ninety days are not able to be recovered, or the production and business operation have shut down although the loan is not matured or overdue payment is less than ninety day, or the project relating to the loan has stopped, or the loan is governed by the laws and regulations or other provisions, the loan shall be repaid in the principle of repaying the principal first and the interest later.

(2) The loan beyond the circumstances mentioned in the above Item (1) shall be repaid in the principle of paying the interest first, then repaying the principal, and paying the interest along with the repayment of the loan.

Two. Interest Payment

Party A shall, on the interest settlement date, pay the matured interest. The first interest payment date is the first interest settlement date after the loan is released. When the last loan repayment is made, the interest shall be paid along with the repayment of the principal.

Three. Repayment Schedule

Party A shall repay the principal of the loan in accordance with the following schedule:

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(1)   18th  day of January, 2013        Amount: RMB Twenty-Six Million

(2) _____day of ______, _______Amount: RMB

(3) _____day of ______, _______Amount: RMB

(4) _____day of ______, _______Amount: RMB

(5) _____day of ______, _______Amount: RMB

(6) _____day of ______, _______Amount: RMB

Four Repayment Means

(1) Party A shall, prior the date agreed in the Contract for repaying the date, deposit the fund, which is adequate for repaying the loan of the phase, into the account opened at the Party B for automatic transfer of the loan for repaying the loan, or transfer the fund from other account for repaying the loan of the phase. If Party A fails to repay the loan on schedule, Party B has the right to transfer and collect the fund from the other deposit account at the Party B and his subsidiaries for repaying the loan, this provisions shall be deemed as the irrevocable authorization by Party B to Party A for directly transferring and collecting the fund for repaying the loan.

(2) If the repayment account of Party A is reported lost, frozen, suspended from payment, settled up, or Party A changes the repayment account, Party A shall go to the site of Party B for changing the repayment account. If the fund in the original repayment account is not enough for repaying the loan before the change takes place, Party A shall go to the counter of Party B for repaying the loan. If Party B fails to change the repayment account or go to the counter of Party B for repaying the loan on schedule, the liability for which shall be born by Party A.

Five. Earlier Repayment

(1) If Party A wants to pay the interest earlier, he shall notify Party B earlier;

(2) When Party A wants to repay the loan principal earlier, he shall apply in writing to Party B 10 legal business days earlier. Upon the consent of Party B, the part or the whole of the principal can be repaid earlier.

If Party A repay the principal earlier, he shall agree to pay the penalty to Party B, the penalty = Earlier Repaid Amount ×0.1‰ × Earlier Days

If Party A repay the loan installments and wants to repay the part of the loan capital earlier, the loan shall be repaid in the reverse order of repayment schedule. After earlier repayment, the loan interest rate agreed in the Contract shall be applied to the outstanding loan.

Six. Loan Extension and Postponement

(1) Party A shall repay the loan in accordance with the schedule agreed in the Contract. If Party A needs to extend or postpone the repayment of the loan, he shall, 30 days prior to the expiration of the loan, file the application in writing to Party B. Party B will, based on the application by Party A, re-examine the credit examination to Party A. After Party B approves the application, the loan can be extended or postponed.

(2) After Party B has agreed to extend or post the loan, the loan term and security term shall remain effective until the principle and interest accrued are paid up, or the shall be extended accordingly.

(3) If Party B does not agree to extend the loan, Party A shall pay the interest and repay the principal in accordance with the provisions of the Contract.

Article 7 Loan Security

The security for the loan under the Contract is: mortgage.

Article 8 Rights and Obligations of Party A

One. Rights of Party A

(1) Has the right to ask Party B to release the loan in accordance with the provisions of the Contract;

(2) Has the right to sue the loan for the purpose agreed in the Contract;

(3) Has the right to apply to Party B for extending or postponing the loan, provided that the conditions prescribed by Party B are satisfied;

(4) Has the right to ask Party B to protect the financial data and business secrets of production and operation provided by Party A, unless otherwise agreed by the laws, regulations and the Articles of Association.

Two. Obligations of Party A

(1) Party A must, in accordance with the requirements of Party B, provide the financial data and the information regarding the production and operation of Party A, and shall be liable for the authenticity, integrity and effectiveness of such data and information.

(2) Party A must use the loan in accordance with the purpose agreed in the Contract, and shall not occupy and embezzle the loan capital, and shall not use the loan capital for making investment on the fixed assets and stocks, and shall not use the loan in the filed and for the purposes prohibited by the state.

(3) If the Borrower commissions the loan payment by the payment order, he must handle the withdrawal application and payment order so that Party B can directly pay the loan capital to the Borrower’s transaction counterparty complying with the purpose agreed in the Contract.

(4) The Borrower shall designate the funds withdrawal account and shall promptly provide the information of the capital inflow and outflow of the account.

(5) Party A undertakes that he will cooperate with Party B for loan payment management, post-loan management and relevant inspections, and he will forthwith notify Party B of any material adverse event affecting the debt-paying ability;

(6) If the Borrower pays the loan at his own discretion, Party A shall, on periodical basis, summarize and report the loan capital payment, and will, at the requirement by Party B, provide the record and data of using the loan capital;

(7) Party A shall actively cooperate with Party B and shall be ready for accept the inspection and supervision by Party B on his production and operation, financial activities and the use of the loan under the Contract;

(8) Party A shall have going-concern ability, legitimate repayment sources and repay the loan and pay the interest accrued in accordance with the provisions of the Contract;

(9) Party A and his investors shall not withdraw the funds or transfer the assets for escaping the debts owed to Party B;

(10) Before the principal and interest of the loan of Party B are paid off, Party A shall not, without consent of Party B, use the assets formed by the loan under the Contract for providing the security to the third person.

(11) If Party A, during the effective period of the Contract, wants to provide security for the debts of others, which is likely to affect debt-paying ability under the Contract, he shall advise in writing Party A earlier and shall obtain the consent of Party B.

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(12) When the guarantor under the Contract is suspended in production, shut down, cancelled in business registration, deprived of business license, bankruptcy, written off and suffers business loss, the part or the whole of guarantee ability for the loan is lost , or the mortgage and pledged properties as the security for the loan under the Contract are impaired, destroyed or lost accidentally, Party A shall promptly provide other security recognized by Party B.

(13) If Party A has the change in the name, legal representative (responsible officer), domicile, business scope and registered capital, etc. during the effective period of the Contract, he shall promptly notify Party B;

(14) If Party A, during the effective period of the Contract, has the acts of making external investment, substantially increasing the debt financing, contracting, leasing, assigning the stock equity, shareholding restructuring, affiliation, merger, acquisition, separation, joint venture, applying for shutdown and rectification, applying for disbandment and bankruptcy, etc., which adequately affect the realization of the claim of the loan, he shall give a 15-day notice in writing to Party B for obtaining the consent of Party B, and Party A shall, in accordance with the requirements of Party B, pay off the debts under the Contract and provide new security.

(15) If Party A, during the effective period of the Contract, has the circumstance that the production is stopped, the business is shut down, registration is cancelled, the business license is revoked, legal representative or principal officer engage in the illegal activities, Party A is involved in big lawsuit, production and operation meet with severe difficulties and financial condition deteriorates, etc., which produces material negative impact on the fulfillment of repaying obligation under the Contract, he shall immediately notify in writing Party B, and shall, pay off the debts under the Contract and provide new security.

(16) Party A shall bear the costs the lawyer services, insurances, evaluation, registration, custody, identification and notarization, etc. in connection with the Contract and the security under the Contract.

Article 9 Rights and Obligations of Party B

One. Rights of Party B

(1) Party B has the right to know the production and operation and financial position of Party A, has the right to ask Party A to provide the related plan and statistics, financial statements and other documents and data;

(2) Any fund payable to Party B in accordance with the Contract, Party B has the right to transfer and deduct the fund from the account opened by Party A at Party B and his subsidiaries;

(3) Party B has the right to designate the special funds withdrawal account, and may monitor the account when necessary, and may recover the loan in accordance with the funds withdrawal;

(4) If the credit standing declines, primary business earning power is weak and loan capital use has abnormal circumstances in the course of paying the loan, Party B has the right to supplement the conditions for loan release and payment, has the right to change loan payment means, stop releasing and paying the loan capital.

Two. Obligations of Party B

(1) Party B shall release the loan with full amount on schedule in accordance with the provisions of the Contract, except for the delay caused by the reasons on the part of Party A;

(2) Party B shall protect the relevant financial data and business secrets of production and operation provided by Party A, unless otherwise prescribed by the laws and regulations.

Article 10 Liability for Breaching

One. Circumstances of Breaching

(1) Breaching by Party A

When one or more of the following circumstances take place, it will constitute the breaching by Party A.

1. Fail to completely and properly comply with or perform any undertaking, warranty and obligation or responsibility under the Contract;

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2. Fail to provide true, integrated, effective data of financial accounting, business performance and other relevant data in accordance with the requirements of Party B, or conceal important facts;

3. Fail to use the loan in accordance with the purpose agreed by the two parties;

4. Fail to pay the loan capital by the agreed means;

5. Break the constraint of agreed financial indicators;

6. Have big breaching event;

7. Fail to repay the debt and interests accrued;

8. Refuse or obstruct Party B from supervising and inspecting the use of the loan capital;

9. Transfer the assets, withdraw the capital for escaping the debts;

10. Business performance and financial condition deteriorate, not able to pay off the matured debts, involved or is to be involved in the lawsuit or arbitration procedures and other legal disputes, Party B deems that such circumstances are likely to or has affected or damaged the rights and interests of Party B under the Contract;

11. Any other debt has affected or is likely to affect the fulfillment of the obligations by Party B under the Contract;

12. Party A suffers heavy business loss or defaults the loan and interest accrued to any financial institution;

13. The legal representative or responsible officer dies or is declared dead, missing or is declared missing, or is restricted in civil capacity, or loses the civil capacity, which, in the opinions of Party B, are likely to or have affected or damaged the rights and interests of Party B under the Contract;

14. The Borrower or/and legal representative, shareholder and investors of the Borrower and/or the Borrower are suspected of illegal activities or criminal cases;

15. Party A has the acts of changing business operation means or converting the operation mechanism, including the contracting, lease, merger, acquisition, joint venture, separation, affiliation, shareholding restructuring, etc., which, in the opinions of Party B, are likely to or have affect or damaged the rights and interests of Party B under the Contract;

16. Other circumstances adequate for affecting the realization of the claim in the opinions of Party B;

17. Party A violates the other obligations under the Contract.

(2) If the guarantor has the following circumstances and Party A fails to provide new security complying with the requirements of Party B, it will be deemed as breaching by Party A.

1. The guarantor has the circumstances of contracting, lease, merger and acquisition, joint venture, separation, affiliation, shareholding restructuring, bankruptcy and cancellation, which adequately affect the guarantor from bearing the joint security liability;

2. The guarantor provides the third party the security exceeding his own guarantee capability;

3. The guarantor loses or is likely to lose the guarantee capability;

4. Other breaching circumstances of the guarantor as agreed in the security contract;

(3) When the mortgagor has the following circumstances, and Party A fails to provide new security complying with the requirements of Party B, it will be deemed as breaching by Party A.

1. The Mortgagor fails to effect the property insurance for collateral, or fails to claim the insurance compensation in accordance with the provisions of the mortgage contract;

2. The collateral is damaged, destroyed and impaired due to the acts of the third person, the mortgagor fails to claim the insurance compensation in accordance with the provisions of the mortgage contract;

3. The mortgagor donates, assigns, lease, remortgage, relocate or dispose the collateral by the other means without written consent of Party B;

4. The mortgagor may, upon the consent of Party B, dispose the collateral, but the payment received from disposing the collateral is not processed in accordance with the provisions of the mortgage contract;

5. The collateral is damaged, destroyed and impaired, which adequately affect the repayment of the debts under the Contract, the mortgagor fails to restore the value of the collateral, or fails to provide other security recognized by Party B.

6. Other breaching circumstances of the mortgagor as agreed in the mortgage contract;

(4) Pledger has the following circumstances, and Party A fails to provide new security complying with the requirements of Party B, it will be deemed as breaching by Party A.

1. The pledger fails to effect the property insurance for collateral, or fails to claim the insurance compensation in accordance with the provisions of the pledge contract;

2. The pledged property is damaged, destroyed and impaired due to the acts of the third person, the pledger fails to claim the insurance compensation in accordance with the provisions of the pledge contract;

3. The pledger, upon the consent of Party B, agrees to dispose the pledged property, but the income received from disposing the pledged property is not processed in accordance with the provisions of the pledge contract;

4. The pledged property is damaged, destroyed and impaired, which adequately affect the repayment of the debts under the Contract, the mortgagor fails to restore the value of the pledged property, or fails to provide other security measures recognized by Party B.

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5. Other breaching circumstances of the pledgers as agreed in the pledge contract;

(5) If the security contract or other security means does not take effect, is invalid, is cancelled, or the guarantor loses the part or the whole of security ability or refuses to fulfill the security obligation, Party A fails to provide new security in accordance with the requirements of Party B, it will be deemed as breaching by Party A.

Two. Remedies for Breaching

When the breaching event mentioned in the above Item (1) through (5), Party B has the right to exercise one or more of the following rights:

(1) Terminate the contract earlier, withhold the remaining part of the loan, stop the release and payment of loan capital, declare immediate maturity of the loan, ask Party A immediately repay the principal, interest and costs of all the matured and unmatured debts under the Contract.

(2) Charge the penalty at the rate of __‰ of the loan principal on Party A;

(3) If Party A fails to use the loan for the purpose agreed in the Contract, Party B will calculate and charge the interest and compound interest on the embezzled loan at the punitive interest rate and and by the interest settlement means agreed in the Contract from the date of embossment to the date when the principal and interest accrued are paid off

(4) If Party A fails to pay off the accrued interest prior to the maturity of the loan, Party B will calculate and charge the compound interest on Party A at the loan interest rate agreed in Article 4 of the Contract;

(5) If the loan repayment is delayed, Party B will calculate and charge the interest and compound interest at the punitive interest rate and by the interest settlement means agreed in the Contract on the outstanding loan principal and interest (including the part or the whole of the earlier matured loan principal and interest declared by Party B) from the date of overdue repayment to the date when the loan principal and interest are paid off. The overdue loan repayment means that Party A fails to repay the loan on schedule or repay the installment of the loan in accordance with the repayment schedule agreed in the Contract.

(6) If Party A breaches he Contract, the Lender has to resort to the lawsuit, arbitration and other means for realizing the claim, Party A shall bear the legal cost, arbitration fee, public notice fee, interpellation fee, attorney fee, inquiry fee and business travel expenses for realizing the claim.

(7) Transfer and collect the funds from the account opened by Party A at the Party B and his subsidiaries for repaying the loan principal and interest and paying the costs that shall be born by Party A in accordance with the Contract.

(8) Ask Party A provide new security complying with the requirements of Party A for all the debts under the Contract.

(9) Exercise the security right for realizing the claim.

(10) Cancel the Contract.

Article 11 Account Capital Supervision

Party A designates the account opened at the Party B (Account Name: Qian Xi Nan Silvan Flooring Company, Limited Account No.: 2022040001201100079895) as the supervision account so that Party B can supervise whether Party A uses the loan capital in accordance with the provisions of the Contract. Party A shall promptly report Party B the information regarding the capital inflow and outflow of the account. The loan capital shall be used first in the use of the fund in the supervision account. After the loan capital is used up, the remaining capital shall be paid and settled in accordance with the “Measures for Payment and Settlement Management” promulgated by the People’s Bank of China.

Article 12 Special Provisions for Commissioned Payment by the Lender

Party A and Party B agree that if the commissioned payment by the Lender is adopted, Party A shall irrevocably authorize or entrust the commissioned payment to Party B. Party A shall be liable for the authenticity, correctness and legitimacy of the name, account number, opening bank and other information of transaction counterparty as provided to Party B.

Party B has the right to, in accordance with the requirements of commission payment, review the conditions of the Borrower, and has the right to ask the Borrower to provide the corresponding certificates, has the right to require the Borrower to provide the information of capital inflow and outflow of supervision account.

Article 13 Other Provisions

(1) If the commissioned payment is adopted, Party B will handle the payment in accordance with the withdrawal application by Party A and loan payment authorization letter. Party B bears no liability for the payment error due to the reasons attributable to Party A or the economic dispute between Party A and any third party arising from, all the consequent legal liabilities shall be born by Party A.

(2) _______________________________________________________________________________________________-

Article 14 Settlement to the Dispute

Any dispute arising from the execution of the Contract shall be settled by the two parties through consultation. In case no settlement can be reached through consultation, the dispute shall be settled by the following first means:

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One. File a lawsuit to the people’s court of justice in the locality of Party B

Two. Refer the dispute to the _____/____ arbitration commission for arbitration.

During the litigation or arbitration period, the other provisions not under the dispute shall continue to be performed.

Article 15 Execution of the Contract

The Contract take effect after it is executed by the legal representative (responsible officer) or authorized agent of Party A (if Party A is a natural person, the signature and fingerprint are required) and legal representative (responsible officer) or authorized agent of Party B

Article 16 The Contract is done in triplicate, one for the parties to the Contract and housing registration authority respectively, all have the same legal effect.

The Borrower has carefully read the above whole terms and conditions, the Lender has made explanatory notes to the terms and conditions of the Contract in accordance with the requirements of the Borrower, has fulfilled the obligation of reansible prompts and explanation, the Borrower has known their meanings and has no disagreement to the whole terms and conditions of the Contract.

Borrower:	Lender: Guiyang Nanming District Rural Credit
	Cooperative Bank, Xinhua Lu Branch
Legal Representative (Responsible Officer)
Or Authorized Agent: Qian Xi Nan Silvan Flooring Company, Limited	Legal Representative (Responsible Officer)
	Or Authorized Agent:
Date: January 19, 2011	Date: January 19, 2011

EX-10.7

Exhibit 10.7

Pledge Agreement
 (English Translation)

No.: YingZi No. 1011200025 in the year of 2011

Mortgagee: Guiyang branch of China Merchant Bank Co., LTD	(hereinafter Party A)
Principal person: Zhang QingDian

Pledger (legal person or other organization): Guizhou Huacheng Real Estate Co., LTD. (hereinafter referred to as Party B) Legal representative or principal person: Ji YuDong

Pledger (natural person)	(hereinafter Party B)
ID number:

Whereas:

1. Party B applies for loan/acceptance/bills discounting with the total amount of ____ yuan in the currency of _____. Party A agrees to provide Party B with loan/business acceptance/bills discounting. Both parties enter into ____ No.___ (hereinafter referred to as main contract). or

2. Qian Xi Nan Aosen Forestry Company, Limited (hereinafter referred to as "debtor") applies to Party A for loan/business acceptance/bills discounting with the total amount of RMB 25million. Party A agrees to provide loan/business acceptance/bills discounting to the debtor. Party A and the debtor therefore sign Loan Contract YingZi No. 1011200025 in the year of 2011 (hereinafter referred to as Main Contract).

To guarantee debt interest under the contract and other all expenses related can be fully paid back as scheduled, Party B will mortgage the property owned or the property penalized according to laws, which Party A reviews and agrees to accept. Both parties agree on the following terms and enter into the contract in accordance with the provisions of relevant laws through equal consultation.

Article 1 Mortgaged property of Party B

1.1 Name: Huacheng Arch of Triumph No. 1 and No.2 of negative 1st floor, Building A and Building B

1.2 Quantity or area: 2377.29 m²

1.3 Assessment price and mortgage rate: RMB 48,132,000

1.4 Time limit: March 3, 2011 ~ September 2, 2012

1.5 Premises: No.56-58 North Zhonghua Road, YunYan District

1.6 Ownership certificate: YunYan Zi No. 010017995 of property right certificate

Article 2 Ways of mortgage guarantee

2.1 Upon expiration of the time limit for paying debts, Party B fulfills its duty according to article 3 of the contract for loan, business acceptance or bills accounting which is not yet paid. Prior to the time limit, if Party A claims loan in advance, Party B can fulfill its duty with mortgaged property.

2.2 In case both parties enter into an extension on time limit, interest rate and amount under the main contract, or change relevant clauses, or Party A adjusts the interest rate during the time limit under the contract, Party A does not have to ask for consent of Party B or notify Party B, all of which the latter shall recognize and won’t impair Party B’s mortgage guarantee responsibility under the contract.

Article 3 Scope of mortgage guarantee

Scope of guaranty under the contract includes but is not limited to debt principal as well as its corresponding debt interest, penalty, compound interest, liquidated damages and fees for realizing mortgage rights, including:

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3.1 loan principal issued by Party A under the contract as well as its corresponding debt interest, penalty, compound interest, liquidated damages and related fees; or

3.2 principal balance paid by Party A in advance for fulfilling its duty of accepting commercial draft under the contract as well as its corresponding interest, penalty, compound interest, liquidated damages and related fees; or

3.3 principal of commercial draft discounted by Party A as well as its corresponding interest, penalty, compound interest, liquidated damages and related fees; or

3.4 expenses incurred when Party A exercises its mortgage rights (including but not limited to legal fees, attorney fees, announcement fee, service fee, travel, etc)

Article 4 Custody and responsibility of certificates of mortgaged property and its ownership

4.1 During the mortgage, the mortgaged property is kept by party B or its entrusted agent, who shall properly keep, repair and maintain the property and be ready for check by Party A at any time.

The mortgage period refers to the period of time from the day as of the contract comes into force to the date of expiration of legal action concerning the obligatory rights

4.2 During the mortgage, Party B shall not devalue any mortgaged property. If so, Party A shall be entitled to require party B to cease and restore its value, or provide new mortgage agreed by Party A. Party B shall bear the costs incurred by restoring the property or adding new mortgaged property.

4.3 During the mortgage, Party B shall hand in certificates of mortgaged property and its documents to Party A for safekeeping. Party A shall properly keep all the certificates of mortgaged property. In case of any loss for improper custody, Party A shall bear the expenses.

Article 5 Registration of mortgaged property

5.1 Party B should cooperatively go to register mortgaged property in the agent along with the contract and relevant documents during the period as scheduled;

5.2 Party B should cooperatively go through the formalities as required. In case Party B fails, Party B shall bear the liability for compensation for any loss

Article 6 Insurance

Party B shall insure the mortgaged property in ________insurance company with a full amount of property insurance, the proper type and Party A as the first beneficiary as required. Time limit of Insurance shall be longer than the period under the contract. If the period under the contract prolongs, Party A is entitled to claim principal and interest of loan/acceptance/discount and all other related expenses, or deposit insurance compensation in the margin account which is set up by Party B in advance or automatically generated when loan guarantees are deposited, or handle procedures of drawings after consultation with Party B so as to withdraw the payable upon expiration under the contract.

If Party B fails to insure the mortgaged property or extend the time limit, Party A is entitled to represent Party B to go through formalities directly.

Article 7 Restrictions on disposing mortgaged property

7.1 During the period, Party B is not entitled to transfer the mortgaged property under the contract by means of selling, exchanging and giving away without authorization; if Party B has to transfer the mortgaged property under the contract, the following conditions shall be met with:

7.1.1 The transfer shall be approved in written consent by Party A and the transferee shall be notified in advance. If not, the transfer is deemed void;

7.1.2 If the payment of transferred property is so below its value that it cannot afford to pay the principal and interest and relevant fees under the contract, Party A is entitled to require Party B to provide corresponding mortgaged property in full amount; the transfer is not allowed unless Party B can afford to offer.

7.1.3 The transfer pay directly goes into the account appointed by Party A to pay principal and interest and other expenses in advance or upon expiration, or is deposited in Party A’s margin account opened by Party B. Since the capital enters into the margin account, it is deemed as specified and possessed by Party A, which shall serve as mortgage guarantee under the contract. Party B has no objection to it and shall go through related formalities as required.

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When Party B transfers the full amount of mortgaged property into the margin account, Party A may assist Party B in handling registration cancellation procedures and return certificates of property ownership to Party B.

7.2 without the written consent of Party A, Party B shall not transfer, lease, re-mortgage or dispose the property in any other appropriate ways.

Article 8 Expense bearing

Fees of insurance, notarization, registration, transportation and warehousing shall be borne by Party B.

Article 9 Change or terminate the contract

When the contract comes into force, one party shall not unilaterally modify or terminate the contract without the written consent of the other party. In case of any modification or termination of the contract, a written agreement shall be reached through consultations of both parties. Before that, the contract remains effective.

Article 10 During the effective period of the contract, if Party B divides or mergers, it’s up to the new organization to undertake or separately undertake obligations under the contract. If Party B breaks up or goes bankrupt, Party A is entitled to dispose the mortgaged property in advance.

Article 11 Under one of the following circumstances, Party A is entitled to lawfully dispose the property.

11.1 Party B (or the debtor) violates the contract;

11.2 Party B or mortgagor/pledgor/guarantor violates the contract; or Party B fails to fulfill the obligations under the contract;

11.3 Party B guarantees loan/acceptance/discount by means of movable property, and its market value drops below the percentage of ____ of the principal of loan/acceptance/discount;

11.4 Party B is natural person, and has no heir or legatee upon death;

11.5 Party B is natural person, and its heir or legatee disclaims inheritance or bequest and refuses to pay back principal and interest;

11.6 Party B as legal person or other organization closes, or its business license is revoked or cancel led, or it applies for or is filed for bankruptcy, or it breaks up;

11.7 Other reasons for Party’s failure to fulfill its rights.

Article 12 In case Party B guarantees loan/acceptance/discount by means of movable property, and its market value drops below the percentage of ____ of the principal of loan/acceptance/discount, Party B shall provide the margin as required, or add or replace the mortgage to make up for the gap that arises for the drop of the market value.

Article 13 Liability for breach of contract

13.1 In case Party B is against the provisions of article 4 and fails to maintain and manage the property so that it devalues, or Party B’s behavior endangers the property so that it devalues, Party A is entitled to require Party B to cease and provide other acceptable property, and Party A is entitled to dispose the property in advance;

13.2 If Party B violates the provisions of article 7 and disposes the property without authorization, it is deemed void; Party A is entitled to require Party B to cease and provide other acceptable property, and Party A is entitled to dispose the property in advance;

13.3 In case Party B conceals the property co-ownership, dispute, close-down, detainment, lease, prior mortgage and priority (including but not limited to priority of construction payment ) or Party B doesn’t have ownership or right of disposition, Party A is entitled to require Party B to provide other acceptable property;

13.4 Under one of the circumstances above, if Party B fails to provide new guarantee, Party B shall pay 5% of principal and interest of loan/acceptance/discount under the contract. If it brings any economic loss to Party A, Party B shall make the payment.

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Article 14 Independence of the contract

The contract is independent and unconditional, the effectiveness of which is neither influenced by the main contract nor any agreement or document signed by Party B with others, or is not subject to change for Party B’s fraud, reorganization, closure, breakup, bankruptcy, liquidation and so on. In case there is another mortgage guarantee or guarantor, and Party A gives up syn-position of the mortgage, gives up or changes or cancels other mortgage guarantee, or changes or cancels the liability of guarantor, or Party A requires Party B to undertake the liability of guarantee in advance, Party B still has to undertake the liability of guarantee under the contract.

If Party A ceases to loan, accept or discount, or claims loan or acceptance issued, it shall not affect the liabilities borne by Party B under the contract.

Article 15 If Party B (or the debtor) fails to pay off principal and interest under the contract, Party A can claim the mortgage rights. If the property is seized or detained by the people's court, Party A is entitled to charge natural fruits separated from mortgaged property and legal fruits Party B can collect from the property.

Article 16 Materialization of mortgage rights

16.1 When one individual item or items of Article 11, 13.1, 13.2 arise, mortgage rights can be materialized by one of the means:

16.1.1 Both parties reach an agreement of converting mortgaged property into money or auctioning or selling off mortgaged property. In case no agreement can be reached with 15 days since one individual item or items of Article 11, 13.1, 13.2 arise, Party A is entitled to ask the people's court to auction or sell off mortgaged property;

16.1.2 The property is legally disposed according to the contract.

16.1.3 After compulsory execution granted by both parties is notarized, Party A can apply for compulsory execution to the competent people's court.

16.2 Party A is entitled to money claimed for disposing the property. If it exceeds principal and interest and its related fees, the excess goes to Party B. Otherwise, Party A can recover the deficiency.

Article 17 Extermination of mortgage rights

When or before the contract expires, if principal and interest of loan/discount and related fees are paid off, or commercial draft accepted is paid off, mortgage rights terminate. Certificates of property rights or insurance policy kept by Party A shall be returned to Party B. Party A can assist Party B in handling formalities of cancellation of mortgaged property registration.

Article 18 Settlement of applicable laws and disputes:

18 1 Formation and interpretation of the contract and its dispute settlement are applicable to laws of the People's Republic of China.

18.2 Disputes that arise shall be settled by consultation or mediation of both parties. Otherwise, both parties agree to settle disputes according to the contract.

Article 19 Notice

Notices and requirements related to the contract shall be sent in a written form.

If they are delivered by hand, signature by hand is deemed service (if the receipt refuses, the very day when refusal occurs is deemed service); in case they are delivered by post, 7 days is deemed service; if they are delivered by fax, that the receipt’s fax receives notices or requirements is deemed as service.

Party A’s address:

Party B’s address:

One party shall be informed of any change made by the other party. Otherwise, loss incurred should be borne by itself.

Article 20 Terminology

The terminology used in the contract, unless otherwise specified, bears the same meaning as the main contract.

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Article 21 Execution of contract

The contract comes into effect after legal representative (or responsible person) or authorized agent of both parties signs/stamps, or after Party A signs/stamps if Party B is legal person, and becomes void until principal and interest are paid off.

21 Other matters

21.1 ________________________________________________________________________________

21.2 ________________________________________________________________________________

21.3 ________________________________________________________________________________

Article 21 Bylaw

The contract in quadruplicate is effective. Both parties, the debtor and the mortgage registration institution each have one copy.

(No text followed)

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(Signature Page)

Party A: Guiyang branch of China Merchant Bank Co., LTD (stamp)

Main person in charge or authorized:

Party B: Guizhou Huacheng Real Estate Co., LTD. (stamp)

Signed or stamped by legal representative/person in charge or authorized agent (signature or stamp):

Signing date: March 7, 2011

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EX-10.8

Exhibit 10.8

Pledge Agreement for Bank of Chongqing
(English Translation)

Party A (Creditor): Guiyang Sub-Branch (Section), Bank of Chongqing Co., Ltd.

Party B (Pledgor): Guizhou Huacheng Real Estate Development Co., Ltd.

Bank of Chongqing Co., Ltd.

Pledge Agreement

Contract No.: (2011) (Chong Yin Qian Di) No.0578

Party A (Mortgagee): Guiyang Branch, Bank of Chongqing Co., Ltd.

Address: No.1, 2 and 3, Shengshihuating, No.51, Jiefang Road, Nanming District, Guiyang

Tel.: 0851-8577397                                  Fax: 0851-8577377

Director: Huang Changsheng               Position: Sub-branch Manager

Party B (Mortgagor): Guizhou Huacheng Real Estate Development Co., Ltd.

Address: Floor E, Huacheng Kaixuanmen, No.56-58, North Zhonghua Road, Yunyan Road, Guiyang

Tel.:                                                                Fax:                                                      

Director: Ji Yudong                                     Position: Executive Director

Legal Reprrsentative: Ji Yudong              Position: Executive Director

To guarantee the performance of (2011) (Chong Yin Qian Dai) No. 0577 “Working Capital Loan Contract for Bank of Chongqing” (hereinafter referred to as Principal contract) signed on June 29, 2011 between Party A and Qian Xi Nan Aosen Forestry Company, Limited, Party B is willing to mortgage its own property (hereinafter referred to as “mortgaged property) to Party A. Both parties hereby enter into the Contract and abide by the following provisions through consultation.

Article 1 Scope of Mortgage Guarantee. The scope of mortgage guarantee herein is the following type 1:

1. All principal, interest, penalty interest, compound interest and expenses for enforcing the claim of the liability afforded by debtor under the principal contract. The principal thereof is RMB (in words): twenty million, and the interest, penalty interest and compound interest thereof shall be calculated as specified in the principal contract.

2. ________________________________________________________________________________________________________

Article 2 Mortgaged Properties

1. The details of mortgaged property can be found in the Attachment hereto “List of Mortgaged Property”. Party B is willing to guarantee to Party A with the mortgaged property listed in the List.

2. Keeping of Mortgaged Property and Its Ownership Certificate and Responsibilities

In the term of mortgage, Party B or its entrusted agent shall keep the mortgaged property. They shall well keep the mortgaged property, be responsible for its repair and maintenance to keep it intact, and accept Party A’s check any time. In the term of mortgage, where Party B’s behavior is likely to cause the value of the mortgaged property to decline, Party A has right to ask Party B to stop the behavior. Where the value of the mortgaged property is declined, Party has right to ask Party B to restore its value, or provide new mortgaged property recognized by Party A. Party B shall afford the expenses occurred from restoring the original state of the mortgaged property or providing new mortgaged property. Where Party B fails to take the above-mentioned measures as required by Party A, Party B shall be jointly and severally liable for payment thereof.

In the term of mortgage, Party B shall submit the ownership certificate and other related certificates thereof to Party A for keeping, who shall well keep them. Party A shall afford the post-registration fees where the certificates are lost due to improper keeping.

In the term of mortgage, with Party A’s written consent, Party B may transfer the registered mortgaged property. Where the proceeds expected from the transfer is evidently less than its value, Party A can ask Party B to provide an additional guarantee; the mortgaged property shall not be transferred where Party B fails to provide it.

The proceeds which Party B obtains from the transfer of the mortgaged property shall first be used to liquidate the claim secured by the mortgage or it shall be deposited with a third party agreed upon by Party A.

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If the proceeds exceed the claim, the balance shall belong to Party B; if the proceeds do not cover the claim, the difference shall be paid by the debtor.

3. Registration of Mortgaged Property

The mortgaged property hereunder must be registered in accordance with related laws. Both parties shall handle with the registration for mortgaged property with the Contract and the related materials in the competent authority within 15 work days from the signature hereof.

Article 3 Insurance of Mortgaged Property

1. Where Party A believes it necessary to handle with property insurance, Party B shall handle with the insurance of the mortgaged property until the termination of mortgage. If the insurance is discontinued, Party A has right to handle with the insurance for Party B who shall afford the insurance cost

2. Party B shall take Party A as the first beneficiary of the insurance; where Party B has handled with insurance for the mortgaged property before the mortgage, Party B shall change the first beneficiary to Party B within the term specified by Party A ( if the original sum insured is insufficient, the sum shall be complemented as specified above), provide the original copy of insurance policy to Party A, and irrevocably authorize Party A to accept the insurance indemnity to enjoy the preferred payment for the mortgaged debt.

Article 4 Enforcement of Mortgage Right

I. Where the debtor fails to repay the principal and interest of the liability under the principal contract, both parties may handle with the mortgaged property with agreement and a preferred payment is given to the debtor’s due debt with the proceeds thus gained.

II. In any of the following circumstances, Party A has right to be paid out of the proceeds from the conversion of the mortgaged property or from the auction or sale of the mortgaged property:

1. The debtor fails to repay its due debt (including due as specified in contract and due in advance) as required by law;

2. Party B or any third party disposes of the mortgaged property without authorization;

3. Party B’s legal successor or legatee refuses to repay the due debt;

4. Party B is declared dissolved or bankrupt;

5. Party B, debtor or any third party violates Party A’s legal right and interest, or have any other behavior severely influencing Party A’s timely and full collection of its claim.

III. In any of the above-mentioned circumstances, Party A has right to dispose of the mortgaged property. The proceeds from the conversion of the mortgaged property or from the auction or sale thereof shall be used for repaying all debts under the principal contract. If the proceeds exceed the claim, the balance shall be returned to Party B; if the proceeds do not cover the claim, Party A may continue to perform its right of recourse to the debtor.

Article 5 Party B’s Representations and Warranties

Party B has legal right to sign and perform the Contract, and its signature and performance of the Contract has gained full authorization of its Board or any other competent organization (if needed).

Party B promises that the application information provided to Party A is real, legitimate and effective and doesn’t include any major mistake incompliant with fact or omits any major fact. Party B has legal right to mortgage the mortgaged property and has no dispute with any third party. Party B’s signature and performance of the Contract does not contradict with its signature and performance of any other contract.

Party B promises that the application information provided to Party A is real, legitimate and effective and doesn’t include any major mistake incompliant with fact or omits any major fact.

Party B promises to notify Party A in written form within 10 days after any change of premises, correspondence address, contact number, scope of business, legal representative and name etc.

Party B has fully known and understood all provisions of the Contract. Signature of the Contract is the expression of both parties’ real intention.

Party B agrees to accept and cooperate with Party A in the investigation on its property and operational conditions, including through telephone, on site or through other information enquiry organizations etc.

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Without Party A’s written consent, Party B shall not rent, transfer, gift, sub-mortgage or re-mortgage the mortgaged property. Where Party A agrees Party B to dispose of the mortgaged property as abovementioned, The proceeds thus gained shall be used to repay Party A’s claim secured with the mortgaged property in advance or used with Party A’s monitoring.

Article 6 In any of the following circumstance, Party B shall take the initiative to take remedial measures and notify Party A in time in written form:

1. The value of mortgaged property is lost or decline as it’s lost, damaged, or destroyed.

2. The ownership of the mortgaged property changes or any dispute arises from it.

3. The mortgaged property is sealed up or frozen.

Article 7 The mortgage provided by Party B is an independent mortgage and shall not be affected or replaced by mortgage provided by other guarantors.

Article 8 Where the Contract becomes legally ineffective or partially ineffective for whatever causes, the debtor of the principal contract shall still perform all repayment obligations, and Party B shall afford the guarantee obligation for the repayment obligation of the debtor under the principal contract as specified herein. Where an effective mortgage registration is not made on the mortgage hereunder due to Party B’s fault, Party B shall be jointly and severally (compensation) liable to Party A for all debts under the principal contract.

Article 9 All expenses of both parties from the concluding and performance of the Contract, including the cost from notarization or witness, registration fee, and fees from sale or auction shall be afforded by Party B.

Article 10 Party A shall have its claim repaid with the proceeds from the disposing of the mortgaged property in the following order; However, Party A keeps the right to change the order: (1) liquidated damages; (2) compensation damage; (3) compound interest; (4) penalty interest; (5) interest; (6) principal; (7) other payables.

Article 11 Modification of Contract

1. Where either party hereunder needs to modify or terminate the Contract, it shall notify the other party in advance in written form and reach a written agreement with the other party. The Contract shall keep effective until a written agreement on modification or termination of the Contract is concluded.

2. Party A’s tolerance on Party B shall not deemed as the modification or termination of the Contract, unless a written modification agreement has been conclude as specified above.

3. Where the principal contract is modified, unless the principal of the loan under the principal contract is increased and Party B’s guarantee obligation is thus expanded, it’s not necessary to gain Party B’s consent in advance if other contents of the principal contract change, and Party B still affords guarantee obligation for the modified principal contract; however, Party A has obligation to notify Party B with the above-mentioned modified contents.

Article 12 The Contract shall come into effect after the signature and stamping of both parties.

Article 13 Law Application and Dispute Resolution

1. The Contract is formulated in accordance with the law of PRC, and shall be governed by the law of PRC.

2. Any dispute arises from the Contract shall be resolved as specified in the principal contract.

Article 14 Other issues agreed by both parties: ___________________________________________________________________________________________________________________

Article 15 The Contract is in four copies. Party A holds one copy, and Party B, the debtor and registration authority each holds one. All copies shall be equally legally effective.

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Party A (Stamp):
	Party B (Stamp):
Director:
	Legal representative:
(Or entrusted agent)
	(Or entrusted agent)
	Signature Date: June 29, 2011

2011 Chong Yin Qian Di No. 0578 Attachment to “Mortgage Contract”

List of Mortgaged Property

Total value of mortgaged property RMB 39,665,500

Page 1 of 1 page

No.	Name of Mortgaged Property	Size	Amount	Place	Registration Authority	Insurance Condition	No. of Ownership Certificate	Evaluated Value or  Confirmed Value	Notes
1	Property of Guizhou Huacheng Real Estate Development Co., Ltd.	M2	1114.2	No.3,4 and 5, Floor 1, Building A, Huacheng Kaixuanmen, No.56-58, North Zhonghua Road, Yunyan Road, Guiyang			No.010026924	RMB 39,665,500
2
3
4
…

Party A (Stamp):
	Party B (Stamp):
Director:	Legal representative:
	(Or authorized signatory)
(Or authorized signatory)	June 29, 2011

EX-10.9

                                                                                                                                                                                                                                   Exhibit 10.9

Guarantee Agreement of Bank of Chongqing

(English Translation)

Party A (Loaner): Guiyang Branch , Bank of Chongqing Co., Ltd.

Party B (Guarantor): Bai Yulu, Ji Yudong, Zeng Yi, Shi Bei

Bank of Chongqing Co., Ltd.

Guarantee Agreement
Contract Code: (CYQB) Zi No. 0579 (2011)

Party A (Guarantee/Loaner): Guiyang Branch, Bank of Chongqing Co., Ltd.
Address: Suites #1, 2, 3, Shengshi Huating, No. 51, Jiefang Road, Nanming District, Guiyang
Tel: 0851-8577397                                                       Fax: 0851-8577377
Person in Charge: Huang Changsheng                  Position: Director

Party B (Guarantor): Bai Yulu, Ji Yudong, Zeng Yi, Shi Bei
Address: Suite 18, 24F, No. 3, Caozhuangyuan Street, Nanming District, Guiyang, Guizhou; Suite 2, 30F, Building B, No. 60, North Zhonghua Road, Yunyan District, Guiyang; Suite 8, 2F, Unit 2, No. 30, East Sanmin Road, Yunyan District, Guiyang, Guizhou; Suite 17-3, Xindongmenwai, Defeng Township, Liping County, Guizhou

Tel: _____________________________________                                      Fax: _________________________

Person in Charge: __________________________                                       Position: _____________________

Legal Representative: _______________________                                       Position: _____________________

In order to guarantee performance of the Circulating Fund Load Contract of Bank of Chongqing (hereinafter referred to as Main Contract) coded (CYQD) Zi No. 0577 (2011) entered into by and between Party A and Qian Xi Nan Aosen Forestry Company, Limited (hereinafter referred to as Loanee) on June 29^th, 2011, Party B are willing to provide guaranty to Party A as guarantor for the Loanee under the Main Contract. Party A and Party B hereby agree to enter into this contract through negotiation according to the Guarantee Law of the People’s Republic of China, and are willing to observe the following terms.

Article 1 Scope of Guaranty. Scope of guaranty hereunder is 1 below:

1. All principal, interest, default interest, compound interest and expenses arising from the realization of Loaner’s rights of the loan to be born by the Loanee hereunder. The amount of the principal is RMB TWENTY MILLION YUAN ONLY (in word). The interest, default interest and compound interest are to be calculated as agreed upon herein.

2. ___________________________________________________________________________________________________________________________________          

Article 2 Term of Guaranty. Term of guaranty hereof lasts for two extra years in addition to the period from effective date of the Contract to expiration date of the Main Contract. During the guaranty, if Party A transfers his credit to a third party according to law, Party B shall continue to assume his guaranty liabilities within the scope of the original guaranty.

Article 3 Guaranty Liabilities. Party B shall assume joint and several guaranty liabilities for all debt covered by the guaranty. If the Loanee fails to perform his obligations to repay the due debt, Party A may claim against both the Loanee and Party B directly. Party B shall irrevocably authorize Party A to deduct the interest owed and due principal from Party B’s bank account directly if the Loanee owes the interest or fails to pay off when the main debt is due (including expiration of the Contract or expiration of the Contract ahead of time).

Party B commits that his performance of the guaranty liabilities shall not be based on the Loaner’s exercise of the real rights for security (including the Main Loanee’s real rights for security) hereunder first.

Article 4 The guaranty hereunder is independent, and not affected by guaranty provided by other Guarantors. When the Main Contract is guaranty by several persons or guaranteed mortgage for other objects, Party B shall still assume joint and several liabilities for all debt covered by the guaranty.

Article 5 The guaranty hereof is irrevocable, and is neither affected by any agreement or document entered into by and between the Loanee and any organization, nor changed due to the Loanee’s bankruptcy, non-solvency of the loan, disqualification of enterprise, alteration of articles of association and alteration of name.

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Article 6 Even if the Main Contract becomes void or some terms thereof become void for whatsoever reasons, the Loanee hereunder shall still perform his obligations to repay. As long as the Loaner’s credit is not paid off, Party B shall assume guaranty liabilities for the Loanee’s liabilities to repay as per conditions stated herein.

Article 7 Party B’s Statement and Guaranty

Party B is legally qualified to enter into and perform this contract, and is fully authorized (if required) by his board of directors or any other entitled institution to do so.

Party B guarantees that various application information provided to Party A is true, legal and valid, and contains no major mistake that fails to comply with the fact or omits any major fact.

Party B confirms that various application information provided to Party A by the Loanee is true, legal and valid, and contains no major mistake that fails to comply with the fact or omits any major fact.

Party B guarantees that he will notify Party A in writing of any alteration of his address, telephone number and scope of business, legal representative and name within ten days after the alteration.

If the Loanee fails to perform his debt as agreed upon herein, Party A has right to directly request Party B to assume all guaranty liabilities covered in the guaranty, regardless of other guaranty for Party A’s credit.

Party B shall agree on, accept and coordinate in the Loaner’s investigation into his property and business status during guaranty, including inquiry via phone, at site or at other information inquiry institution’s premise.

Party B has been fully informed of and understood all terms of This Contract and corresponding Main Contract. Both parties are willing to enter into this contract.

If Party A withdraws the loan ahead of time due to the Main Loanee’s breach of contract, Party B shall assume joint and several (guaranty) liabilities for solvency.

Article 8 Revision

1. If either party requests to revise this Contract, he shall give notification to the counterparty, and shall not revise until both parties enter into a written agreement. Before the written agreement is entered into, all terms hereof continue to be valid.

2. Party A’s tolerance of Party B shall not be deemed as alteration or cancellation hereof, unless any written alteration agreement is entered into as mentioned above.

3. When the Main Contract is revised, unless principal of the loan under the Main Contract is increased, which leads to enlargement of Party B’s guaranty liabilities, other contents of the Main Contract may be altered without Party B’s prior consent, and Party B shall still assume guaranty liabilities for the Main Contract altered. However, Party A is obliged to inform Party B of said alteration to the contract in a timely manner.

Article 9 Applicable Law and Settlement of Disputes

1. This contract is entered into according to the PRC laws, and applies to the PRC laws.

2. Disputes arising out of this Contract shall be settled in the way agreed upon in the Main Contract.

Article 10 Miscellaneous: ______________________________________________________________________________________________

__________________________________________________________________________________________________________________

_____________________________________________________________________________________________.

Article 11 This contract shall come into effect upon signatures and seals of both parties, and expire automatically after the Loanee pays off all debt hereunder or the Guarantor has performed his joint and several guaranty liabilities. This contract is in septuplicate, with one copy for the Guarantor, the Loanee and the Loaner each, which shall have the same legal effect.

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Party A (Seal):	Party B (Seal):
(Corporate Loan Contract Chop of Guiyang Branch	Ji Yudong, Zeng Yi, Bai Yulu, Shi Bei
of Bank of Chongqing Co., Ltd.)
Person in Charge: Pan Jinguo	Legal Representative:
(Or Commissioned Agent)	(Or Commissioned Agent)
	Signed on July 4th, 2011

3

Letter of Underwriting

Guiyang Sub-branch (Branch /Section), Bank of Chongqing Co., Ltd..:

This Guarantor is legally qualified as guarantor and is able to pay off the debt on behalf. I (We) are willing to (tick “ ” in the following options):

[  ] 1. Provide joint and several guaranty for the debt in the amount no more than RMB (in word) to the maximum provided to the Loanee as specified in a series of loan and acceptance contract entered into with you during MM      DD       YY      to MM      DD      YY      and its interest, liquidated damage, compensation for any damage and expenses arising from realization of Loaner’s rights of the loan.

[X] 2. Provide joint and several guaranty for the debt in the amount of RMB TWENTY MILLION YUAN ONLY (in word) under the Circulating Fund Loan of Bank of Chongqing coded (CYQD) Zi No. 0577 (2011) entered into with you and the interest, liquidated damage, compensation for any damage and expenses arising from realization of Loaner’s rights of the loan.

For Qian Xi Nan Aosen Forestry Company, Limited., the Borrower.

I (We) hereby confirm that the guaranty contract coded (CYQB) Zi No. 0579 (2011) entered into with you is true. This Guarantor assumes full legal responsibilities for terms listed therein.

Guarantor (Seal): Bai Yulu, Ji Yudong, Shi Bei, Zeng Yi	Legal Representative:
	(Or Authorized Agent)
	July 4th, 2011
Underwritten by:

EX-10.10

GUIZHOU XINGYI RURAL COOPERATION BANK

No.: Xing Nong He Yin (2011) Nian Bao Dai Zi No.055

Exhibit 10.10

	Gurantee Agreement (English Translation)
Surety: Guizhou Dingshengxing Guarantee& Investment Co., Ltd. Creditor: Guizhou Xingyi Rural Cooperative Bank

1

Guizhou Xingyi Rural Cooperation Bank
Guarantee Agreement

Surety (“Party A”): Guizhou Dingshengxin Guarantee & Investment Co., Ltd.
Address: Room G8, 24/F, Guiyang Hotel, Yunyan District, Guiyang, Guizhou
ID card No. or Organization Code: 77533646-6

Creditor (“Party B”): Guizhou Xingyi Rural Cooperative Bank

In order to secure the performance of the Working Capital Loan Contract (the “Master Contract”) [No.: Xing Nong He Yin (2011) Nian Liu Dai Zi No.055] concluded between Qian Xi Nan Aosen Forestry Company, Limited. (the “Debtor”) and Party B, and the realization of Party B’s claim, Party A is willing to offer the joint and several guaranty to the debt formed on the master contract between the Debtor and Party B. In accordance with pertinent laws, regulations and rules, Party A and Party B, upon consensus reached through consultation, make and enter into this Contract for mutual compliance.

Article 1 Mode of guarantee Party A offers the joint and several guarantee liability.
Party A confirms that where the Debtor fails to discharge the debt as stipulated in the master contract, regardless of whether Party B possesses other guaranties (including but not limited to such modes of guarantee as guaranty, mortgage, pledge, bond, etc.) to the debt under the master contract, Party B shall have the right to demand Party A directly to undertake the guarantee liability to the extent of its guarantee. Article 2 Scope of guarantee Principal of the claim (in words) TWENTY FOUR MILLION ONLY and interests (including the compound interests and penalty interests), penalties, compensation and related fees advanced by Party B, and all expenses incurred to Party B for the realization of the claim (including but not limited to the legal costs, arbitration fee, property preservation expenses, attorney’s fees, traveling expenses, execution fees, evaluation fees, auction fees, etc.) Article 3 Term of guarantee From the effective date of this Contract to the date two years after the expiry date of the performance period of the debt under the master contract. Where Party B agrees on the extension of the claim upon maturity of the loan, the term of guarantee shall expire on the date two years after the expiry date of the performance period of the debt re-stipulated in the extension agreement. Article 4 Modification of the secured master contract Party A confirms that any modification of articles of the master contract upon consensus between Party B and the Debtor shall be deemed as having acquired the prior consent of Party A, which cannot exempt Party A from its guarantee liability, with the exception that the amount of the principal of the claim is increased. Modification of the term of the master contract by the Creditor and the Debtor (including the extension under the letter of credit) shall not be subject to the consent of the Surety, but the Surety shall assume the guarantee liability continuously pursuant to the scope of guarantee set in this Contract, and the term of guarantee shall remain valid till the full repayment of the principal and interests or be extended accordingly. Article 5 Severability of contract validity This Contract is the ancillary contract of the master contract. Where the master contract is deemed as invalid, Party A is willing to undertake the joint and several guarantee liability to the debt resulting from the Debtor’s property return or loss compensation. Article 6 Guarantee ability During the term of guarantee, where Party A loses or will probably loss the guarantee ability, or the legal person or other organizations as a surety undergoes contract, lease, combination, M&A, co-investment, division, association, joint stock reform, or cancellation, Party A shall given a written notice to Party B in advance, and all the obligations hereunder shall be undertaken by the body after the aforesaid charge or the body that makes the cancellation decision to Party A. In the event that Party B believes that the body after the change does not have corresponding guarantee ability, Party A or the body that makes the cancelation decision shall offer new acceptable guaranty to Party B, and conclude corresponding guarantee contract. During the term of guarantee, Party A, without the prior written consent of Party B, shall not offer guaranty above 100% of the amount of the net assets in its last annual financial statements to any third party. Article 7 Supervision to surety During the term of the guarantee, Party B shall have the right to know Party A’s production and operation, financial activities, industrial and commercial registration, tax registration, tax payment and operation of related enterprises, and conduct investigation, also have the right to require Party A to provide related planning, statistics, financial statements, etc., and Party A shall: (1) Provide related financial materials and production and operation materials as required by Party B, and be held liable for the authenticity, integrity and validity of the materials provided; (2) Provide the industrial and commercial registration information as required by Party B, and offer conveniences to Party B for the investigation of the industrial and commercial registration in the name of Party A;

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(3) Provide the tax registration and payment information as required by Party B, and offer conveniences to Party B for the investigation of the tax registration in the name of Party A;

(4) Provide the list of major fixed assets as required by Party B, and offer conveniences to Party B for the investigation and verification of Party A’s immovable properties;

(5) Provide the list of related enterprises and copies of the business license of the enterprises, and the list of shareholders or contributors as required by Party B;

(6) Provide the list of Party A’s external investments and current status as required by Party B; and

(7) Provide the list of Party A’s external guaranty, lease and donation as required by Party B.

Article 8 Early assumption of guarantee liability

During the term of guarantee, where Party B declares early maturity of the debt as stipulated in the master contract, Party B shall have the right to require Party A to undertake the joint and several guarantee liability.

Article 9 Transfer and collection of amount payable

As for the amount payable to which Party A undertakes the joint and several payment liability, Party A irrevocably authorizes Party A to transfer and collect from its account opened by Party A with Party B and its branches. The stipulation of this article shall be taken as Party A’s irrevocable authorization to Party B on its direct transfer and collection of amount for the repayment of the loan principal and interests.

Article 10 Miscellaneous

1. During the term of guarantee, such cases of the Debtor as combination, division, joint stock reform, capital increase or decrease, co-investment, association, or rename shall not reduce Party A’s guarantee liability or exempt Party A from the guarantee liability.

2. The Surety shall be obligated to supervise the Debtor’s use of the loan.

3. The Surety has fully recognized the interest rate risk, and is willing to undertake the increased guarantee liability due to the fluctuation of interest rate where the floating interest rate is adopted in the master contract.

4. ____________________________________________________.

Article 11 Dispute resolution

Any disputes arising from the contract performance shall be settled through negotiation. Should no consensus be reached, Method 1 below shall be adopted for solution:

1. Take legal action at the people’s court of the place where Party B is located;

2. Submit it to ______arbitration commission for arbitration.

During the litigation or arbitration period, articles of the part irrelevant to the disputes shall be performed continuously.

Article 12 Effectiveness

This Contract shall take effect after signed or sealed by Party A and Party B.

Article 13 This Contract shall be made in triplicate, with Party A, Party B and the Debtor each holding one.

The Surety has read the aforesaid articles carefully, and the Creditor has construed articles of the Contract upon request of the Surety, and performed the obligation of giving reasonable prompt and explanation. The Surety has know the meanings, and has no objection to contents of the articles hereof.

Party A:	Party B:
Legal Representative (Principal)	Legal Representative (Principal)
Or Authorized Representative (Signature or Seal):	Or Authorized Representative (Signature or Seal): Zhou
	Lunqi
	Handling Person: Feng Lijiang
30 April 2011	30 April 2011
Guizhou Dingshengxin Guarantee& Investment Co., Ltd.	Guizhou Xingyi Rural Cooperation Bank	Seal
Xi’nanzhou Branch	for Contracts

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EX-10.11

GUIZHOU XINGYI RURAL COOPERATION BANK

No.: Xing Nong He Yin (2011) Nian Bao Dai Zi No.082

Exhibit 10.11

	Guarantee Agreement
	(English Translation)
Surety: Guizhou Dingshengxing Guarantee& Investment Co., Ltd.
Creditor: Guizhou Xingyi Rural Cooperative Bank

1

Guizhou Xingyi Rural Cooperation Bank
Guarantee Agreement

Surety (“Party A”): Guizhou Dingshengxin Guarantee& Investment Co., Ltd.
Address: Room G8, 24/F, Guiyang Hotel, Yunyan District, Guiyang, Guizhou
ID card No. or Organization Code: 77533646-6
Creditor (“Party B”): Guizhou Xingyi Rural Cooperation Bank
In order to secure the performance of the Working Capital Loan Contract (the “Master Contract”) [No.: Xing Nong He Yin (2011) Nian Liu Dai Zi No.082] concluded between Qian Xi Nan Aosen Forestry Company, Limited. (the “Debtor”) and Party B, and the realization of Party B’s claim, Party A is willing to offer the joint and several guaranty to the debt formed on the master contract between the Debtor and Party B. In accordance with pertinent laws, regulations and rules, Party A and Party B, upon consensus reached through consultation, make and enter into this Contract for mutual compliance.
Article 1 Mode of guarantee
Party A offers the joint and several guarantee liability.
Party A confirms that where the Debtor fails to discharge the debt as stipulated in the master contract, regardless of whether Party B possesses other guaranties (including but not limited to such modes of guarantee as guaranty, mortgage, pledge, bond, etc.) to the debt under the master contract, Party B shall have the right to demand Party A directly to undertake the guarantee liability to the extent of its guarantee.
Article 2 Scope of guarantee
Principal of the claim (in words) FIVE MILLION ONLY and interests (including the compound interests and penalty interests), penalties, compensation and related fees advanced by Party B, and all expenses incurred to Party B for the realization of the claim (including but not limited to the legal costs, arbitration fee, property preservation expenses, attorney’s fees, traveling expenses, execution fees, evaluation fees, auction fees, etc.)
Article 3 Term of guarantee
From the effective date of this Contract to the date two years after the expiry date of the performance period of the debt under the master contract. Where Party B agrees on the extension of the claim upon maturity of the loan, the term of guarantee shall expire on the date two years after the expiry date of the performance period of the debt re-stipulated in the extension agreement.
Article 4 Modification of the secured master contract
Party A confirms that any modification of articles of the master contract upon consensus between Party B and the Debtor shall be deemed as having acquired the prior consent of Party A, which cannot exempt Party A from its guarantee liability, with the exception that the amount of the principal of the claim is increased. Modification of the term of the master contract by the Creditor and the Debtor (including the extension under the letter of credit) shall not be subject to the consent of the Surety, but the Surety shall assume the guarantee liability continuously pursuant to the scope of guarantee set in this Contract, and the term of guarantee shall remain valid till the full repayment of the principal and interests or be extended accordingly.
Article 5 Severability of contract validity
This Contract is the ancillary contract of the master contract. Where the master contract is deemed as invalid, Party A is willing to undertake the joint and several guarantee liability to the debt resulting from the Debtor’s property return or loss compensation.
Article 6 Guarantee ability
During the term of guarantee, where Party A loses or will probably loss the guarantee ability, or the legal person or other organizations as a surety undergoes contract, lease, combination, M&A, co-investment, division, association, joint stock reform, or cancellation, Party A shall given a written notice to Party B in advance, and all the obligations hereunder shall be undertaken by the body after the aforesaid charge or the body that makes the cancellation decision to Party A. In the event that Party B believes that the body after the change does not have corresponding guarantee ability, Party A or the body that makes the cancelation decision shall offer new acceptable guaranty to Party B, and conclude corresponding guarantee contract.
During the term of guarantee, Party A, without the prior written consent of Party B, shall not offer guaranty above 100% of the amount of the net assets in its last annual financial statements to any third party.
Article 7 Supervision to surety
During the term of the guarantee, Party B shall have the right to know Party A’s production and operation, financial activities, industrial and commercial registration, tax registration, tax payment and operation of related enterprises, and conduct investigation, also have the right to require Party A to provide related planning, statistics, financial statements, etc., and Party A shall:
(1) Provide related financial materials and production and operation materials as required by Party B, and be held liable for the authenticity, integrity and validity of the materials provided;
(2) Provide the industrial and commercial registration information as required by Party B, and offer conveniences to Party B for the investigation of the industrial and commercial registration in the name of Party A;

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(3) Provide the tax registration and payment information as required by Party B, and offer conveniences to Party B for the investigation of the tax registration in the name of Party A;

(4) Provide the list of major fixed assets as required by Party B, and offer conveniences to Party B for the investigation and verification of Party A’s immovable properties;

(5) Provide the list of related enterprises and copies of the business license of the enterprises, and the list of shareholders or contributors as required by Party B;

(6) Provide the list of Party A’s external investments and current status as required by Party B; and

(7) Provide the list of Party A’s external guaranty, lease and donation as required by Party B.

Article 8 Early assumption of guarantee liability

During the term of guarantee, where Party B declares early maturity of the debt as stipulated in the master contract, Party B shall have the right to require Party A to undertake the joint and several guarantee liability.

Article 9 Transfer and collection of amount payable

As for the amount payable to which Party A undertakes the joint and several payment liability, Party A irrevocably authorizes Party A to transfer and collect from its account opened by Party A with Party B and its branches. The stipulation of this article shall be taken as Party A’s irrevocable authorization to Party B on its direct transfer and collection of amount for the repayment of the loan principal and interests.

Article 10 Miscellaneous

1. During the term of guarantee, such cases of the Debtor as combination, division, joint stock reform, capital increase or decrease, co-investment, association, or rename shall not reduce Party A’s guarantee liability or exempt Party A from the guarantee liability.

2. The Surety shall be obligated to supervise the Debtor’s use of the loan.

3. The Surety has fully recognized the interest rate risk, and is willing to undertake the increased guarantee liability due to the fluctuation of interest rate where the floating interest rate is adopted in the master contract.

4.                                                                                                                               .

Article 11 Dispute resolution

Any disputes arising from the contract performance shall be settled through negotiation. Should no consensus be reached, Method 1 below shall be adopted for solution:

1. Take legal action at the people’s court of the place where Party B is located;

2. Submit it to                arbitration commission for arbitration.

During the litigation or arbitration period, articles of the part irrelevant to the disputes shall be performed continuously.

Article 12 Effectiveness

This Contract shall take effect after signed or sealed by Party A and Party B.

Article 13 This Contract shall be made in duplicate, with Party A, Party B and the Debtor each holding one.

The Surety has read the aforesaid articles carefully, and the Creditor has construed articles of the Contract upon request of the Surety, and performed the obligation of giving reasonable prompt and explanation. The Surety has know the meanings, and has no objection to contents of the articles hereof.

Party A:	Party B:
Legal Representative (Principal)	Legal Representative (Principal)
Or Authorized Representative (Signature or Seal):	Or Authorized Representative (Signature or Seal): Zhou Lunqi
	Handling Person: Xiao Qiangfeng
3 August 2011	3 August 2011

Guizhou Dingshengxin Guarantee& Investment Co., Ltd.	Guizhou Xingyi Rural Cooperation Bank	Seal
Xi’nanzhou Branch	for Contracts

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EX-31.1

Exhibit 31.1

CERTIFICATIONS

I, Yulu Bai, certify that:

1.	I have reviewed this quarterly report on Form 10-Q/A of Silvan Industries, Inc.;
2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.	The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
	a)	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
	b)	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
	c)	Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
	d)	Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5.	The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
	a)	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
	b)	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: February 28, 2012

/s/ Yulu Bai                                         
Yulu Bai
Chief Executive Officer
(Principal Executive Officer)

EX-31.2

Exhibit 31.2

CERTIFICATIONS

I, Jiyong He, certify that:

1.	I have reviewed this quarterly report on Form 10-Q/A of Silvan Industries, Inc.;
2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.	The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
	a)	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
	b)	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
	c)	Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
	d)	Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5.	The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
	a)	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
	b)	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: February 28, 2012

/s/ Jiyong He                                                                          
Jiyong He
Chief Financial Officer
(Principal Financial and Accounting Officer)

EX-32.1

Exhibit 32.1

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO SECTION 906
OF THE SARBANES-OXLEY ACT OF 2002

The undersigned, Yulu Bai, the Chief Executive Officer of SILVAN INDUSTRIES, INC. (the “Company”), DOES HEREBY CERTIFY that:

1. The Company’s Quarterly Report on Form 10-Q/A for the quarter ended September 30, 2011 (the “Report”), fully complies with the requirements of Section 13(a) of the Securities Exchange Act of 1934; and

2. Information contained in the Report fairly presents, in all material respects, the financial condition and results of operation of the Company.

IN WITNESS WHEREOF, each of the undersigned has executed this statement this 28^th day of February, 2012.

/s/ Yulu Bai                                            
Yulu Bai
Chief Executive Officer
(Principal Executive Officer)

A signed original of this written statement required by Section 906 has been provided to Silvan Industries, Inc. and will be retained by Silvan Industries, Inc. and furnished to the Securities and Exchange Commission or its staff upon request.

The forgoing certification is being furnished to the Securities and Exchange Commission pursuant to § 18 U.S.C. Section 1350. It is not being filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and is not to be incorporated by reference into any filing of the Company, whether made before or after the date hereof, regardless of any general incorporation language in such filing.

EX-32.2

Exhibit 32.2

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO SECTION 906
OF THE SARBANES-OXLEY ACT OF 2002

The undersigned, Jiyong He, the Chief Financial Officer of SILVAN INDUSTRIES, INC. (the “Company”), DOES HEREBY CERTIFY that:

1. The Company’s Quarterly Report on Form 10-Q/A for the quarter ended September 30, 2011 (the “Report”), fully complies with the requirements of Section 13(a) of the Securities Exchange Act of 1934; and

2. Information contained in the Report fairly presents, in all material respects, the financial condition and results of operation of the Company.

IN WITNESS WHEREOF, each of the undersigned has executed this statement this 28^th day of February, 2012.

/s/ Jiyong He                                
Jiyong He
Chief Financial Officer
(Principal Financial Officer)

A signed original of this written statement required by Section 906 has been provided to Silvan Industries, Inc. and will be retained by Silvan Industries, Inc. and furnished to the Securities and Exchange Commission or its staff upon request.

The forgoing certification is being furnished to the Securities and Exchange Commission pursuant to § 18 U.S.C. Section 1350. It is not being filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and is not to be incorporated by reference into any filing of the Company, whether made before or after the date hereof, regardless of any general incorporation language in such filing.

CORRESP

   Silvan Industries, Inc.: Correspondence - Filed by newsfilecorp.com