Share Pledge Agreement

SHARE PLEDGE AGREEMENT


This Share Pledge Agreement (hereinafter " this Agreement" ) is entered into in Baoding on the day of June 24 , 2009 by the following parties:


Party A:Baoding Shengde Paper Co. Ltd(hereafter referred to as" Pledgee" )

Address:Nanwaihuan Road, Xushui County, Hebei Province, China


Party B:(hereafter referred to as " Pledgor" )


Liu Zhenyong

ID:13062519630822311X

Address:Liuzhuang, Cuizhuang Town, Xushui County, Hebei Province


Zhao Shuangxi

ID:13242319640606005X

Address:Hujiaying, Liucun Town, Xushui County, Hebei Province


Liu Xiaodong

ID:132423197408117114

Address:#113, No 268, Chaoyang South Avenue, Xinshi District, Baoding City, Hebei Province


Party C: Hebei Baoding Orient Paper Milling Co., Ltd

Address:Wuji Village, Xushui County,Hebei Province, China


Whereas:


1.

The Party A, the Pledgee, is a wholly-owned foreign enterprise registered in Baoding the People' s Republic of China (hereinafter " PRC" )


2.

Party C is a enterprise registered in accordance with the laws and regulations of PRC.


3.

The Pledgors, are the citizens of PRC. The Pledgors own respectively 93.26% , 0.13% and


1 6.61% of the equity interest in Party C


4.

Party A, B and C executed a " Exclusive Technology and Business Consulting Service Agreement" (hereinafter " Exclusive Technology and Business Consulting Service Agreement" or " Service Agreement" ), Call Option Agreement, Loan Agreement and Proxy Agreement on June 24, 2009.


5.

In order to ensure that Pledgors will perform their obligations under the Service Agreement and the Pledgee can normally collect the Technology Consulting Service Fee from Party C, the Pledgors agree to pledge all their equity interest in Party C as a security for the performance of the obligation under Call Option Agreement, Proxy Agreement and payment of the Technology Consulting Service Fee under the Exclusive Technology and Business Consulting Service Agreement" As a result of the foregoing, Party A and Party B reach this Share Pledge Agreement.


NOW THEREFORE, the Pledgee and the Pledgors through mutual negotiations hereby enter into this Agreement based upon the following terms:


1.

Definition


Unless otherwise provided in this Agreement, the following terms shall have the following meanings:


1.1

" Pledge" : refers to the full content of Article 2 hereunder.


1.2

" Equity Interest" : refers to all the equity interest in Party C legally held by the Pledgors.


1.3

" Principal Agreement" : refers to the Exclusive Technology and Business Consulting Service Agreement" Call Option Agreement, Loan Agreement and the Proxy Agreement.


1.4

" Event of Default" : refers to any event in accordance with Article 7 hereunder.


1.5

" Notice of Default" : refers to the notice of default issued by the Pledgee in


2 accordance with this Agreement.


2.

Pledge


2.1

The Pledgors agree to pledge their equity interest in Party C to the Pledgee as a security for their obligations under the Principal Agreement.


2.2

The scope of Pledge under this Agreement refers to all costs(including legal costs) , payement Party C and/or the Pledgors shall pay the Pledgee, losses, interests, penalty, compensation, and expenses to realize the debt, and obligations of Party C and/or the Pledgor to the Pledgee under the circumstances that the agreement is wholy or in part invalid due to any reasons.


2.3

Pledge under this Agreement refers to the rights owned by the Pledgee, who shall be entitled to a priority in receiving payment by the evaluation or proceeds from the auction or sale of the equity interest pledged by the Pledgors to the Pledgee.


2.4

Without other written consent of the Pledgee, Pledge shall take effect until the obligations under the Principal Agreements will have been fulfilled. If Party C or the Pledgor cannot fulfill all or part of the obligations under the Principal Agreements at the time the term of those agreements expires, the Pledgee shall be still entitled to the pledge under this Agreement, until all the above said obligations has been fulfilled.


3.

Effectiveness and Term


3.1

The agreement is effective as of the date first set forth above.


3.2

During the term of the Pledge, the Pledgee shall be entitled to dispose of the pledged assets in accordance with this Agreement in the event that Pledgors do not perform their obligation under the Loan Agreement and Pledgor fails to pay exclusive technology consulting service fee in accordance with the Exclusive Technology and Business Consulting Service Agreement.


4.

Physical Possession of the Documents


3

4.1

During the term of Pledge under this Agreement, the Pledgors shall deliver the physical possession of the Name List of Shareholder of Party C to the Pledgee within sixty days as of the date of conclusion of this Agreement.


4.2

If any information on the certificate of pledge has changed, the Pledgor and the Pledgee shall revise the information on the certi ...