8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of earliest event reported):  October 25, 2010

China Integrated Energy, Inc.

(Exact Name of Registrant as Specified in Charter)

Delaware	001-34390	65-0854589
(State or Other Jurisdiction of Incorporation)	(Commission File Number)	(IRS Employer Identification No.)

Dongxin Century Square, 7th Floor

Hi-Tech Development District

Xi’an, Shaanxi Province, People’s Republic of China 710043

(Address of Principal Executive Offices and Zip Code)

Registrant’s telephone number, including area code: 86-29 8268 3920

(Former Name or Former Address, if Changed Since Last Report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

¨  Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨  Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨  Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨  Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.03 Creation of a Direct Financial Obligation.

On October 28, 2010, Xi’an Baorun Industrial Development Co., Ltd. (“Xi’an Baorun Industrial”), the  variable interest entity and deemed subsidiary through certain contractual relationships of China Integrated Energy, Inc. (the “Company”), entered into a loan agreement with Communications Bank Holdings Co., Ltd., Shaanxi Branch (the “Lender”), whereby the Lender provided a working capital loan to Xi’an Baorun Industrial in the amount of RMB40,000,000, approximately US$6,000,000, which loan matures on October 28, 2011.  The loan bears a per annum interest rate of the base rate floating upward by 10% and is guaranteed by two guarantee corporations pursuant to separate guarantee agreements entered into between the guarantee corporations and the Lender.  In connection with the loan, Xi’an Baorun Industrial pledged certain of its properties to the guarantee corporations as security for the loan pursuant to two separate pledge agreements.  Pursuant to the first pledge agreement, Xi’an Baorun Industrial pledged 4,000 tons of gasoline to the guarantee corporations. Under the terms of the pledge, in the event the gasoline’s total value decreases to under RMB24,000,000, approximately US$3,589,000, the guarantee corporations are entitled to require Xi’an Baorun Industrial to either make a matching repayment of the loan to the Lender or provide additional security (for example, by increasing the volume of gasoline pledged) to account for the difference.  Pursuant to the second pledge agreement, Xi’an Baorun Industrial pledged its biodiesel production line located in Xiaochuanbao, Tongchuan to Xi’an Economic Technology Investment Guarantee Company, one of the two guarantee corporations.

The Lender has the right to accelerate payment under the loan under certain circumstances, including, among other things, if (i) Xi’an Baorun Industrial’s representations and warranties are not true; (ii) Xi’an Baorun Industrial is in breach of the loan agreement; (iii) the Lender believes, based on Xi’an Baorun Industrial’s situation of capital return, that Xi’an Baorun Industrial should repay the loan ahead of schedule; (iv) changes in regulatory policies cause the extension of the loan by the Lender to be non-compliant; (v) Xi’an Baorun Industrial has committed an act of breach during the performance of other contracts with the Lender or with a third party and the debts thereunder are likely to be, or have already been, declared due in advance; (vi) the loan is used for any purpose other than to purchase gasoline; and (vii) any funds flow under the loan is not directly administered by the Lender.  Upon the occurrence of any of these events, the Lender has the right to unilaterally declare the principal amount of the loan due in advance and demand the Borrower to repay all principal and accrued interest under the loan.

A copy of the loan agreement is filed as Exhibit 10.1 to this Current Report on Form 8-K and is incorporated herein by reference. The foregoing summary of the terms of the loan agreement is subject to, and qualified in its entirety by, such agreement.

Item 5.02   Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

On October 22, 2010, the Board of Directors of the Company approved employment agreements with Mr. Xincheng Gao, the Company’s chairman, and Ms. Gaihong Li, the Company's executive vice president.

Employment Agreement with Mr. Xincheng Gao

Xi’an Baorun Industrial entered into an employment agreement with Mr. Xincheng Gao to employ him as its chairman, effective as of October 25, 2010. The agreement will expire on October 24, 2013, and may be renewed for an additional term of three years. Mr. Gao is entitled to a base monthly salary in an amount of RMB70,000, approximately US$10,500. Xi’an Baorun Industrial also pays premiums for Mr. Gao for pension, unemployment, medical insurance and other social insurance coverage in accordance with relevant PRC laws and regulations. Xi’an Baorun Industrial has a right to adjust the salary and welfare benefits of Mr. Gao appropriately based on his capability, experience, attitude, performance, achievement, employment history with the Company, and position as well as its salary and position adjustment policies and business conditions. Either party to the agreement has a right to terminate the agreement, subject to the terms and conditions therein. In connection with the agreement, Mr. Gao also executed a confidentiality and non-competition agreement. In the event of a major change in objective circumstances, which includes the merger of Xi’an Baorun Industrial into another business entity, or the sale, or transfer by Xi’an Baorun Industrial of a substantial portion of its assets to others, Xi’an Baorun Industrial may terminate this agreement by giving a 30-day notice, or giving one month’s salary in lieu of a notice, if the parties cannot agree to a modification of terms of the agreement.

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Employment Agreement with Ms. Gaihong Li

Xi’an Baorun Industrial entered into an employment agreement with Ms. Gaihong Li to employ her as its executive vice president and financial controller, effective as of October 25, 2010. The current term of the agreement will expire on October 24, 2013, and may be renewed for an additional term of three years. Ms. Li receives a base monthly salary in an amount RMB50,000, approximately US$7,500. Xi’an Baorun Industrial also pays premiums for Ms. Li for pension, unemployment, medical insurance and other social insurance coverage in accordance with relevant PRC laws and regulations. Xi’an Baorun Industrial has a right to adjust the salary and welfare benefits of Ms. Li appropriately based on her capability, experience, attitude, performance, achievement, employment history with the Company and position as well as its salary and position adjustment policies and business conditions. Either party to the agreement has a right to terminate the agreement, subject to the terms and conditions therein. In connection with the agreement, Ms. Li also executed a confidentiality and non-competition agreement. In the event of a major change in objective circumstances, which includes the merger of Xi’an Baorun Industrial into another business entity, or the sale, or transfer by Xi’an Baorun Industrial of a substantial portion of its assets to others, Xi’an Baorun Industrial may terminate this agreement by giving a 30-day notice or giving one month’s salary in lieu of a notice, if the parties cannot agree to a modification of terms of the agreement.

Copies of the employment agreements and the confidentiality and non-competition agreements for Mr. Xincheng Gao and Ms. Gaihong Li are filed as Exhibits 10.2, 10.3, 10.4 and 10.5 to this Current Report on Form 8-K and are incorporated herein by reference.  The foregoing summaries of the terms of the employment agreements and the confidentiality and non-competition agreement are subject to, and qualified in their entirety by, such agreements.

Item 9.01. Financial Statements and Exhibits.

 (d)         Exhibits:

No.	Description
10.1	Loan Agreement with Communications Bank Holdings
10.2	Employment Agreement of Mr. Xincheng Gao
10.3	Confidentiality and Non-Competition Agreement of Mr. Xincheng Gao
10.4	Employment Agreement of Ms. Gaihong Li
10.5	Confidentiality and Non-Competition Agreement of Ms. Gaihong Li

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SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Dated:  December 23, 2010	China Integrated Energy, Inc.
	By:	/s/ Xincheng Gao
		Name: Xincheng Gao
		Title:  Chief Executive Officer and President

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EX-10.1

Liquid Capital Loan Contract

Borrower:	Xi'an Baorun Enterprise Development Co., Ltd.
Legal Representative:	GAO Xinnian
Legal Address:	Suite 10720, Dongxin Century Plaza, 7 Huoju Road, Xi'an
Contact Address:	____________________________________________________
Lender:	Communications Bank Holdings Co., Ltd. Sha'anxi Branch
Legal Representative:	LAN Fumin
Contact Address:	88 Xixin Street, Xi'an

Article 1 Loan

1.1       Currency: Renminbi (RMB)

1.2       Amount: 40,000,000.00

1.3       The proceeds of the Loan under this Contract shall be used for revolving liquid capital.

1.4       The term of the loan does not exceed 12 months, starting from the date of the first release of the loan amount and ending on October 28, 2011.

Article 2        Interest Rate and Computation of Interest

2.1          The applicable interest hereunder is specified in (2)  below:

(1) RMB fixed rate; the rate is determined on the day

[   ]     when this Contract becomes effective

[    ]    when the loan is first release

[    ]   when the loan is actually issued (if release in installments, the rate is then determined separately on the day when each amount of the loan is issued)

for ___________ (term) on the basis of [    ] the base rate [    ] the base rate floating upward by ____  [    ] the base rate floating downward by ____ and the rate will not be adjusted during the term of the loan.

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(2) RMB floating rate; the rate is determined as follows:

(2.1) The rate is determined on the day

x when this Contract becomes effective

¨ when the loan is first release

x when the loan is actually issued (if release in installments, the rate is then determined separately on the day when each amount of the loan is issued)

for One Year (term) on the basis of [    ] the base rate [ X ] the base rate floating upward by 10%  [    ] the base rate floating downward by ____.

(2.2)   If, during the term of the loan, People's Bank adjusts the base rate, the interest rate hereunder will be adjusted on the Adjustment Day specified by method (a) below.  Starting on interest rate adjustment day of this Contract, the Lender has the right to assess the interest rate adjusted by the corresponding rate level on the adjustment day, with the upward/downward floating range unchanged.

(a) The People's Bank's interest rate adjustment day is Adjustment Day for this Contract;

(b) Starting on the day when the loan is issued (if release in installments, the adjustment day is based on the day when each installment of the loan is issued),  the day after each [   ] month [    ] quarter [    ] every six months [    ] year is the Adjustment Day for this Contract;

(c) _________________________________________

 (2.3) If the base rate after the People's Bank adjustment is floating rate or the base rate is cancelled, the two parties will engage in separate consultation for the adjustment of the interest rate hereunder; however, the rate after the adjustment shall not be lower than the applicable rate at that time; if, one month after the People's Bank's adjustment day, the two parties are still unable to reach agreement on the new adjusted rate, the Lender has the right to declare all the loan hereunder due ahead of schedule.

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2.2        Daily rate = monthly rate/30, and monthly rate = annual rate/12.

2.3        Computation of interest rate

2.3.1     Normal interest  = Interest Rate Specified Herein <times> Amount of Loan Released <times> Number of Days Used.  The number of days used is calculated starting on the loan release date and ending on the maturity date of the loan.

2.3.2     The penalty interest on the amount of loan that is past due or misappropriated will be calculated on the basis of the amount of loan past due or misappropriated and the actual number of days (starting from the day when the amount of loan is past due or misappropriated until all the loan principal and interests are paid off).  If the loan is made in RMB, the penalty interest rate on the amount of loan that is past due is the rate floated upward by 50% from the rate specified herein and the penalty interest rate on the amount of loan that is misappropriated is the rate floated upward by 100% from the rate specified herein; for loans with floating interest rate, if the People's Bank adjusts the base rate after the loan is past due or misappropriated, the Lender has the right to adjust the penalty interest rate for this Contract, and the new penalty interest rate will apply after the People's Bank interest rate adjustment day.  If the loan is made in a foreign currency, the penalty interest rate is the rate floated upward by _______ from the rate specified herein.

2.4        The settlement of interest is by (1) of the following methods:

(1)         On the 20th of the last month of each quarter;

(1)         On the 20th of each month;

(3)         ______________________________________

2.5         If Borrower repays the loan or the Lender declares the loan due ahead of schedule pursuant to the provisions herein, the level of the corresponding interest rate will not be adjusted and the rate specified will still apply.

2.6         Other provision on the interest rate

______________________________________________________________

______________________________________________________________

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Article 3        Release and Payment of the Loan

3.1       The Borrower may withdraw the loan in installments, but the sum of all the amounts withdrawn separately shall not exceed the amount specified in Article 1.  The withdrawal must follow the loan release schedule below:

Date of Withdrawal	Amount Withdrawn
29th day of October,  2010;	Forty Million (amount in Capital Letters)
___ day ___ month ___ Year;	_______________ (amount in Capital Letters)
___ day ___ month ___ Year;	_______________ (amount in Capital Letters)
___ day ___ month ___ Year;	_______________ (amount in Capital Letters)

3.2       Unless all of the following conditions are satisfied, Lender has the right to refuse to release the Loan:

(1)     Borrower has already completed the statutory procedures including obtaining related permit, approval and registration from the government and other procedures as requested by the Lender, and such permit, approval and registration remain in full force and effect;

(2)     The guarantee contract (if any) hereunder has come into effect and remains in full force and effect;

(3)     There have been no adverse changes in the financial condition of the Borrower;

(4)     Borrower has not violated any provisions herein;

(5)     The loan payment method is in compliance with the provisions herein; if the Lender is entrusted with the making of the payment, the Lender agrees to such arrangement;

(6)     If the loan is to be withdrawn in a foreign currency, the Borrower has set up relevant account in accordance with the requirements of the foreign currency management and provided documents of proof showing that the loan is in compliance with the relevant foreign currency management policies, including but not limited to valid certificates of foreign currency use, registration and approval documents;

(7)     The Borrower has designated a capital return account as requested by the Lender and executed account management agreement.

3.3       The Borrower designates the following account as loan deposit account; the said account is not an account set up by the Borrower with the Lender specifically for loan deposit.

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Account Title: Xi'an Baorun Enterprise Development Co., Ltd.

Account No.   611301011018170037875

Bank holding the account:     Business department of Communications Bank, Sha'anxi Province Branch.

If an account is set up specifically for loan deposit, the release and the payment of the loan must be done through that account.  Such account can only be used for the release and external payment of the proceeds of the loan; it can only issue "Settlement Service Application" certificate but cannot be used for check, bank draft, and bank draft acceptance services or for other settlement.  When the Borrower processes, in its sole discretion, loan proceeds transfer, such transfer must be done over the counter of the bank that holds the account.  The interest on the deposit in such account is included in the Borrower's repayment account.

3.4        Before each withdrawal, the Borrower process the relevant withdrawal procedures at least ____ bank business days in advance and specify the payment method (entrusting the Lender with the payment or the Borrower itself making the payment); only one of the payment methods can be used for each withdrawal.

3.5        Entrusting the Lender with making the payment means that the Lender, pursuant to the payment entrustment engagement letter from the Borrower and after the release of the loan pursuant to the provisions herein, makes the payment from the loan proceeds through the Borrower's account directly to the Borrower's trading partner that meets the requirement of the loan purpose stipulated herein.

Upon satisfying one of the following conditions, the method of entrusting the Lender with the payment can be adopted:

(1)           The amount of single payment exceeds ____________ (this amount is the limit that the Borrower can pay if the payment is made by the Borrower)

________________________________________________________________

________________________________________________________________

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If the method of entrusting the Lender with the payment is adopted, the Borrower must submit to the Lender withdrawal application, payment engagement letter in the format specified by the Lender, loan certificate, relevant payment certificate and other documents requested by the Lender (including but not limited to commercial contract, invoices and goods acceptance documents and other trading documents), specify the amount to be withdrawn and the recipient and amount of the payment; the amount to be withdrawn must be equal to the amount of the payment.

If the payment proposed by the Borrower does not comply with the provisions herein or those in the relevant commercial contracts or has other defects, the Lender has the right to refuse the payment and return the payment engagement letter submitted by the Borrower.

When the Lender agrees to make such payment,  if the external payment cannot be made or the payment made is returned due to the error in the information provided by the Borrower, the Borrower must re-submit relevant certificate and documents with the correct information within the time specified by the Lender.  The Lender will not be responsible for any loss from unsuccessful payment.

3.6           The Borrower making the payment in its sole discretion means that, after the Lender releases the loan proceeds into the Borrower's account pursuant to the provisions herein, the Borrower makes the payment from the loan proceeds to the Borrower's trading partner that meets the requirement of the loan purpose stipulated herein.

If the method of the Borrower making the payment is adopted, the Borrower must submit to the Lender withdrawal application, loan certificate, explanation of the use of the proceeds and other documents requested by the Lender.  The Lender has right to analyze through the Borrower's account, verify the certificate and conduct on-site investigation to verify if the payment of the loan proceeds complies with the specified purpose of use, and the Borrower must assist with the Lender's verification.

3.7           The actual loan release date and the amount released must be based on the records in the "Loan Certificate."

Article 4        Repayment of the Loan

4.1           The Borrower must repay the loan at the maturity date specified in 1.4 herein and according to the following schedule; if the maturity date in the "Loan Certificate" is inconsistent with that specified herein, the record in the "Loan Certificate" shall prevail:

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Date of Repayment	Amount Withdrawn
28th day of October,  2011;	Forty Million (amount in Capital Letters)
___ day ___ month ___ Year;	_______________ (amount in Capital Letters)
___ day ___ month ___ Year;	_______________ (amount in Capital Letters)
___ day ___ month ___ Year;	_______________ (amount in Capital Letters)

4.2         The Borrower shall not repay the Loan prior to the scheduled date without obtaining written consent from the Lender.

4.3         The Borrower designates:

(1)           Loan repayment account:

Account Title: Xi'an Baorun Enterprise Development Co., Ltd.

Account No.    611301011018170037875

Bank holding the account:     Business department of Communications Bank,

Sha'anxi Province Branch.

(2)           Capital return account:

Account Title:  Xi'an Baorun Enterprise Development Co., Ltd.

Account No.    611301011018170037875

Bank holding the account:     Business department of Communications Bank,

Sha'anxi Province Branch.

Article 5        Representations and Warranties of the Borrower

5.1         The Borrower is a duly incorporated and an existing entity, has the required power and capacity to fulfill the obligations hereunder in its own name and will assume civil liabilities.

5.2         The execution and performance of this Contract is the true intention of the Borrower, and the Borrower has all necessary consents, approvals and authorizations, and there are no existing legal defects.

5.3         The Borrower's production operation is legal and in compliance, and the Borrower has the ability to continue its operation, the legal source of funds for repayment and the Borrower has not material unfavorable credit record.  The Borrower's senior management officers have no unfavorable records

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5.4         All the documents, reports, data and information provided by the Borrower to the Lender during the execution and performance of this Contract are true, accurate, complete and valid; the Borrower has not withheld any information which may affect the evaluation of its financial status and repayment ability and there has been no adverse change in the Borrower's financial situation since the date of the most recent financial report.

5.5         At the time of executing this Contract, the Borrower is not a shareholder of the guarantor or its actual control person within the meaning of the "Corporate Law," nor does the Borrower have any plan to become a shareholder or the actual control person of the guarantor.

Article 6       Rights and Obligations of the Lender

6.1         The Lender has the right to receive repayment of the principal, interest (including compound interest, and penalty interest for past-due and misappropriated loan) and the relevant fees payable by the Borrower from the Borrower in accordance with provisions herein. The Lender has the right, on the basis of the Borrower's capital return, to decide in its sole discretion to declare the loan due ahead of the schedule and exercise any other rights under the relevant laws and regulations or stipulated herein.

6.2         During the course of performing this Contract, the Lender will only conduct customary verification on the documents provided by the Borrower.  If the untruthfulness, inaccuracy or incompleteness of such documents provided by the Borrower cause the Lender to be unable to complete the entrustment payment on time or cause the Borrower to make any payment in violation of the provisions herein, the Lender shall bear no responsibility.

6.3         If the release of the loan or payment is unsuccessful because the loan release account designated by the Borrower or the account of the payment recipient is frozen or for any other reason, the Lender shall bear no responsibility.

Article 7        Obligations of the Borrower

7.1         The Borrower must repay the Loan hereunder and pay the interest hereunder in accordance with the date, amount and currency set forth herein.

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If the capital return account designated by the Borrower is used for receiving sales receivable or the proposed repayment of the loan and the sales receivable is settled in non-cash method, the Borrower must ensure that the amount received is transferred to the capital return account promptly.  The Borrower must provide information on the inflow/outflow of the funds in the capital return account as requested by the Lender.

7.2         Borrower must use the proceeds of the loan hereunder for the purpose stipulated herein.  The Borrower cannot appropriate the loan hereunder for any other use, and cannot use the loan for fixed asset investment, equity investment or in any production or operation area or for any purpose prohibited by the State.

7.3         The Borrower must be responsible for the fees and expenses under this Contract, including but not limited to for notary service fees, appraisal fees, assessment fees and registration fees.

The Borrower must be responsible for the settlement fees incurred from the payments of loan proceeds (including both those made by the Lender under the entrustment method and those by the Borrower) and pay the corresponding fees on time and in full according to the charge item, fee rate and schedule specified by the Lender.

If the loan account is set up specifically for the release of the loan, when making payment of the loan proceeds, if the receiving account is not set up with Communications Bank, the payment of the loan proceeds can be made through the payment system of the People’s Bank or through the interchange system in the same city.

If the loan account is not set up specifically for the release of the loan, when making payment of the loan proceeds, if the receiving account is set up with a bank in other locations, all payments of the loan proceeds must be made through the payment system of the People’s Bank.

7.4         The Borrower must adhere to the Lender’s business system and operation practices related to providing loan services, including but not limited to assisting the Lender with loan payment management, supervision over and review of the use of the loan and the Borrower’s operation and providing promptly all the financial reports, records and documents on the use of the loan, information about the related parties and related party transactions and other documents and information requested by the Lender, and ensure that the documents, material and information provided are true, complete and accurate.

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7.5         If any one of the following events occurs, the Borrower must notify the Lender at least thirty (30) days in advance and must not take any of the following actions before the principal and interest hereunder are repaid completely or a repayment schedule and guarantee approved by the Lender are provided:

(1)           Selling, donating, leasing, lending, assigning, mortgaging, pledging or disposing of all or substantial part of its assets;

(2)           Any substantial change, or likely substantial change, in operation or equity structure, including but not limited to subcontracting, lease, joint operation, company restructuring, joint-stock, sale of businesses, merger (acquisition), joint capital (partnership), spin-off, incorporation of subsidiary, equity transfer, ownership transfer and reduction of registered capital.

(3)           External investment exceeding RMB ________ or increase of debt financing exceeding RMB ________.

7.6         The Borrower must notify the Lender in writing within seven (7) days upon the occurrence, or likely occurrence, of any of the following events:

(1)           The Borrower’s or any of its affiliates amends its the Articles of Association, changes its name, legal representative, domicile, address and the scope of its business and other AIC registration events, and makes any decision that will have major impact on the Borrower’s financial and personnel situation;

(2)           The Borrower, any of its affiliates or its guarantor intends, or is likely, to file for bankruptcy.

(3)           The Borrower is involved in any major litigation or arbitration or administrative sanctions, or any lien or encumbrance is imposed on its assets or its collaterals hereunder, or the sound condition of its assets or its collaterals hereunder is, or is likely to be, impacted or their value is, or is likely to be, reduced;

(4)           The Borrower or any of its affiliates provides guarantee to any other third party, which will have material adverse effect on its economic or financial situation and its ability to perform its obligations hereunder;

(5)           The Borrower or any of its affiliates enters into a contract which will have a material adverse effect on its operation and financial situation;

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(6)           The Borrower or any of its affiliates or its guarantor ceases its operation, goes out of business, is dissolved, is shut-down for rectification, is cancelled or has its business license revoked;

(7)           The Borrower’s or any of its affiliates’ major individual investor, or the Borrower’s or any of its affiliates’ legal representative (responsible person), director or major management officer, has disappeared, is in violation of the law and statutes or of the rules of the applicable exchanges or has abnormal changes;

(8)           The Borrower or any of its affiliates faces severe hardship in its operation, experiences deterioration of its financial situation or any other event which will have an adverse effect on the financial situation of the Borrower or any of its affiliates or its ability to repay the Loan;

(9)           The completion of related party transaction and the amount of such transaction reaches or exceeds 10% of its recently audited net assets;

(10)         The Borrower becomes, or is likely to become, a shareholder of its guarantor or its “actual control person” within the meaning of the “Corporate Law” before the repayment in full of all the debts hereunder.

(11)         The Borrower or any of its affiliates is involved in a liable accident because of its violation of the law and statutes, regulatory provisions, state policies or industry standards or is exposed by the media;

(12)         The relationship of having control or being controlled between the Borrower and its affiliates experiences changes;

(13)         Other events occur, which will have material adverse effect on the ability of the Borrower or any of its affiliates to repay debts.

7.7         Upon the occurrence of any change to the guarantee hereunder that is adverse to the Lender’s claims, the Borrower must promptly provide other guarantee approved by the Lender as requested.

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The “change” referenced in this provision includes but is not limited to: the guarantor’s merger, spin-off, ceasing operation, going out of business, dissolution, shut-down for rectification, being cancelled, having its business license revoked, filing for or being forced into bankruptcy; material change in the guarantor’s operation or financial situation; the guarantor’s involvement in major litigation or arbitration or administrative sanctions, or imposition of a lien or other enforcement measures on its major assets; the decrease, or likely decrease, of the value of its collateral or the imposition of a lien or other enforcement measures thereupon; impact, or likely impact, on the sound condition of its collaterals; the guarantor or its legal representative (responsible person) or major management officer’s violation of the law and statutes or the rules of the applicable exchanges; if the guarantor is an individual, the guarantor’s disappearance or death (being declared dead); the guarantor’s act of breach as defined in the guarantee contract; disputes between the guarantor and the Borrower; demand by the guarantor to dissolve the guarantee contract; the guarantee contract not coming into effect or becoming invalid or being cancelled; security interest not being established or invalid; or other events that will affect the security of the Lender’s claims.

7.8         The Borrower promises that, before the full repayment of all loan principal and interest hereunder and the related fees, the Borrower’s financial indicators must always meet the following criteria:

(1)       ___________________________________________________

(2)       ___________________________________________________

(3)       ___________________________________________________

Article 8        Other Matters

The loan can be only used to purchase oil; _______[handwritten part, illegible] provide purchase contract.  The reception and payment of the funds can only be done through Communications Bank; otherwise Communications Bank has the right to declare the loan due ahead of schedule.

Article 9        Advance Maturity of the Loan

9.1       The occurrence of any of the following will be considered an “advance maturity event” for this Contract:

(1)       The Borrower’s representations and warranties in Section 5 are not true;

(2)       The Borrower is in breach of this Contract;

(3)       Any of the events listed in Section 7.6 has occurred and the Lender believes that such event will have a material adverse effect on its claims;

(4)       The Lender believes, based on the Borrower’s situation of capital return, that the Borrower should repay the loan principal and interest ahead of schedule;

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(5)       The changes of the regulatory policies cause the release of the loan by the Lender pursuant to the provisions hereunder to be non-compliant;

(6)       The Borrower has committed an act of breach during the performance of other contracts with the Lender or with a third party or the debts thereunder are likely to be, or have already been, declared due in advance.

9.2           Upon the occurrence of any of the “advance maturity events,” the Lender has the right to take one or more or all of the following measures:

(1)       Suspend the release of the loan that has not been used by the Borrower;

(2)       Suspend the payment of the loan that has already been released but has not been used;

(3)       Demand the Borrower to negotiate supplemental conditions on release and payment of the loan with the Lender within a specific time;

(4)       Demand the Borrower to change payment method according to the Lender’s requirements;

(5)       Unilaterally declare all the loan principals released under this Contract due in advance and demand the Borrower to repay all the loan principal and settle the interest.

Article 10      Breach of Contract

10.1         In the event that the Borrower fails to repay the principal or interest in full in a timely fashion or to use the proceeds of the Loan for the purpose specified herein, the Lender has the right to assess interest at overdue penalty rate and misappropriation penalty rate and to assess compound rate on the interest due but yet unpaid.

10.2         In the event that the Borrower fails to repay the principal or interest in full in a timely fashion, the Borrower shall be responsible for the Lender’s fees and expenses in exercising its creditor’s rights, including litigation cost (arbitration fee), costs of preservation of asset, public announcement fees, enforcement fee, legal fees, travel and other expenses.

10.3         In the event that the Borrower evades the Lender’s supervision, fails to repay the principal or the interest of the Loan or avoids the repayment intentionally, Lender has the right to report such acts to the relevant government authority and make public announcements in the news media.

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Article 11     Deduction Provision

11.1         If there is any loan principal, interest, penalty interest, compound interest or other fees due and payable, the Borrower authorizes the Lender to deduct the corresponding amount from funds in any of the Borrower’s accounts set up with Communications Bank.

11.2         After such deduction, the Lender must notify the Borrower of the account being deducted, the loan contract number, “Loan Certificate” serial number, amount deducted and the balance of the debt obligations.

11.3         If the amount deducted is insufficient to pay off all of the Borrower’s debt, such amount must first be used to offset the fees due and payable.  If the principal and interest are past due for less than ninety (90) days, the balance of the deducted amount after offsetting the fees must be first used to repay the past due interest, penalty interest and compound interest and then be used to repay the past due principal; if the principal and interest are past due payment for more than ninety (90) days, the balance of the deducted amount after offsetting the fees must be first used to repay the past due principal and then be used to repay the past due interest, penalty interest or compound interest.

11.4         If the currency of the deducted amount is different from the currency used to repay the loan, the deducted amount will be converted at the foreign exchange rate published by Communication Bank on the date of deduction and then be used to repay the debt.

Article 12     Notifications

12.1        The information on contact methods (including communication address, contact telephone number and fax number) provided by the Borrower herein is true and effective.  If there is any change, the Borrower must immediately mail/deliver the updated information in writing to the communication address provided by the Lender herein.  Such updated information will only become effective after it is actually received and the contact methods are updated by the Lender.

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12.2       Unless expressly specified otherwise herein, the Lender has the right to use any of the following means for sending notification to the Borrower.  The Lender has the right to choose the notification method it deems appropriate and shall not be responsible under any circumstance for any error, miss or delay of the postal mail, fax, telephone or any other communication system.  If the Lender chooses several notification methods, the notification will be considered served on the basis of the faster method.

(1)       Public announcement: the notification will be considered served on the day when the Lender publish such announcement on its website, online banking site, telephone banking system or business website;

(2)       Courier delivery: the notification will be considered served on the day when the Borrower signs the delivery receipt;

(3)       Postal mail (including special express mail, ordinary mail and registered mail): the notification will be considered served 3 days (if, in the same city)/5 days (if, in different regions) such mail is sent to the Borrower’s most recent mailing address that the Lender knows (even though such mail may be returned);

(4)       Notification by fax or by other electronic method will be considered served when it is sent to the most recent fax number or e-mail address that the Lender knows.

Article 13       Disclosure of Information and Confidentiality

13.1       The Lender must have the responsibility to keep confidential the Borrower’s commercial secrets and other information and documents which carry written legends requiring confidentiality; however the following circumstances are excepted:

(1)         Disclosure as required by the applicable law and statutes or by the public offering rules;

(2)         Disclosure as required by judicial or government authorities;

(3)         Disclosure made to the Lender’s outside business experts;

(4)         Disclosure made with the Borrower’s consent or authorization.

13.2       The Borrower agrees that, under the following circumstances, Communications Bank may use or disclose all the information about the Borrower, including but not limited to the Borrower’s basis information, credit transaction information and other relevant information and documents and is willing to all the consequences resulting from such use or disclosure:

15

(1)        Disclose to and allow the use of such information and documents by business out-source organization, third party service provider, other financial institution and other agencies or individuals deemed necessary by the Lender for the following purposes: (a) to develop lending business or in connection with lending business, such as promoting Communications Bank’s lending service, collecting the Borrower’s delinquent debt and transferring creditor’s claims; (b) to provide, or is likely to provide, new products or services or further services to the Borrower; and (c) to maintain, manage and improve customer relations;

(2)        Provide such information and documents to China Credit Information Center or other credit information agency or credit information data bank established with the approval of the People’s Bank of China;

(3)        Use, or allow the use by a third party, such information and documents on a confidential basis for the purposes of business operation, management, statistics and risk control.

Article 14      Governing Law and Dispute Resolution

This Contract is governed by the law of the People’s Republic of China.  Any dispute arising from this Contract should be submitted to the court of jurisdiction at the location of the Lender.  During the course of resolving the dispute, both parties must continue to perform other provisions not involved in the dispute.

Article 15      Other Provisions

15.1         The Borrower agrees that the Lender will inquire about and keep the Borrower’s credit information in connection with the Borrower’s loan application and loan management.

15.2         If, due to Force Majeure or the malfunction in the communication, internet or the Lender’s internal system, the Lender fails to release the loan proceeds or processing payment on time, the Lender shall bear no responsibility but must notify the Borrower promptly.

16

15.3         The format of the “Withdrawal Application,” and the “Withdrawal Application,” “Entrustment Payment Engagement Letter” and “Loan Certificate” executed by the two parties hereto, and all other relevant documents and material acknowledged by the two parties, are all inseparable components of this Contract.

15.4         The “affiliate,” “related party transaction” and “major individual investor” referenced herein have the same definition as the same terms used in “Enterprise Accounting Principles No. 36 – Related Party Disclosure” (FC[2006]3) and in the subsequent amendment thereto promulgated by the Ministry of Finance.

15.5         This Contract becomes effective after it is signed by the respective legal representative (responsible person) or authorized agent and/or imprinted with the seals of both the Borrower and the Lender.

15.6         This Contract is executed in six counterparts, with one to each party hereto and one to the guarantor(s) (if applicable).

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Attachment: “Withdrawal Application” Format [not translated]

  The Borrower has read carefully all the provisions above, and the Lender has provided corresponding explanation at the Borrower’s request.  The Borrower has no objection to the contents herein.

The Borrower (seal/signature)

/seal/Xi'an Baorun Enterprise Development Co., Ltd.

Legal Representative (Responsible Person)

/s/        GAO Xinnian

October 28, 2010

The Lender (business seal)

/seal/Communications Bank Holdings Co., Ltd. Sha'anxi Branch.

Responsible Person (Authorized Agent)

/s/        ZHAO Juxia

October 28, 2010

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EX-10.2

Employment Contract

Employment Contract

Of Xi’an Baorun Industrial Development Co., Ltd.

Party A:	Xi’an Baorun Industrial Development Co., Ltd.
	Address: Room 10720, Dongxin Century Plaza, No.7, Huoju Road, Xi’an 10720 Legal Representative: Gao Xincheng
Party B:	Gao Xincheng
	Home Address: Date of Birth: June 13, 1963 ID/Passport Number: 610203630613361 Registered Permanent Address:

Chapter 1- General Provisions

1. Pursuant to the Labor Law of the People’s Republic of China(hereinafter “Labor Law”), the Employment Law of the People’s Republic of China(hereinafter “Employment Law”) and other relevant regulations, in consideration of the mutual promises and covenants made herein, and for other good and valuable consideration, the receipt and sufficiency of which is acknowledged, Party A and Party B (collectively referred to as the “Parties”) hereby agree as follows:

Chapter 2- Term

2. This Contract shall be a contract with a fixed term of 3 years, from October 25, 2010(“Starting Date”) to October, 2013.

3. [Intentionally Omitted]

4. If upon the expiration of the term, Party A and Party B agree to renew this Contract, they shall execute the Agreement to Renew Employment Contract attached to this Contract as Appendix A, or shall execute a new employment contract.

Chapter 3- Scope of Work

5. Party B agrees to assume the position of Chairman (or engage in ____) pursuant to the work needs of Party A.  The position duty, work task, objective, disciplines and other relevant management rules shall be implemented according to the work standards and other rules prescribed by Party A.  The main work location of Party B shall be Xi’an.

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6. Both Parties acknowledge that, Party A shall have the right to change the type of work, job title and position, job duties and work location of Party B at any time according to the business needs of Party A or ability or work performance or actual situation of Party B, provided, however, that such change shall be made in good faith with reasonable causes.  Party B shall be subject to any such changes as deemed necessary and appropriate in the sole judgment of Party A.

Chapter 4- Duties of Party B

7. Party B hereby agrees that, in addition to the duties and responsibilities otherwise set forth herein, during the term of this Contract, Party B shall:

7.1 devote his/her full time, attention and skills during the normal working hours designated to him/her hereunder exclusively to the performance of his/her duties hereunder, and effectively perform his/her duties and make his/her best endeavors to ensure the satisfactory accomplishment of the assignment to him/her by Party A; and

7.2 perform his/her duties hereunder faithfully and diligently for Party A in accordance with the terms hereunder, the rules and policies of Party A and the applicable laws and regulations, engage in no activities which are in violation of any PRC laws or regulations or may be prejudicial to the interests of Party A, and seek no personal gains, directly or indirectly, by utilizing his/her position or power in Party A.

Chapter 5- Work Schedule, Labor Protection and Working Conditions

8. Party B shall work five (5) days per week, eight (8) hours per day, with the average working hours not exceeding forty (40) hours per week.  Party A may require Party B to work overtime due to the business needs and Party A shall pay Party B overtime pay in accordance with its overtime management rules and the relevant state regulations.

9. Party A shall provide Party B with appropriate working conditions and facilities and with labor protection in accordance with the state standards, and Party B shall comply with the rules and regulations of work safety and sanitation formulated by Party A.

10. Party A will be responsible for providing education and training to Party B on business technologies, labor safety and sanitation and articles of association of Party A.

Chapter 6- Remuneration

11. In consideration of the duties and obligations assumed by Party B under this Contract, Party A shall pay salary to Party B in amount confirmed in writing per month, which will be payable on 30th of each corresponding month.

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12. During the term of employment under this Contract, Party A will decide the earning prior to tax of Party B based upon Party A’s then current salary systems and position adjustment policies.  Party A will pay the payment through the individual bank account designated by Party A or through other means Party A deems proper.  The amount of salary will be stipulated in an offer letter.

13. Party B shall be responsible for the payment of due and payable individual income tax resulting from the salary and other remuneration paid by Party A in accordance with the relevant PRC laws and regulations.  Party A, as the withholding person, shall withhold the individual income tax and other due and payable tax of Party B prior to paying the remuneration to Party B as required by law.

14. Party A shall have the right to adjust the salary and welfare of Party B appropriately based on the capability, experience, attitude, performance, achievement, working-age and position of Party B as well as according to the salary and position adjustment policies and business conditions experienced by Party A.

15. Party A shall deduct the following from the salary payable to Party B in accordance with the relevant PRC laws and regulations:

15.1 The individual income tax of Party B;

15.2 The part of the society insurance and other welfare benefits which are to be borne by Party B;

15.3 All compensation or fines payable by Party B and withheld by Party A on the effective court verdict or arbitration decision;

15.4 All compensation or fines payable by Party B to Party A according to  court verdict or arbitration decision.

16. Party A may, in its discretion, pay a bonus to Party B based upon Party A’s business operation situation and articles of association.  The detailed amount, conditions and form will be set forth by Party A.  Notwithstanding the above, paying bonus should not be deemed as an obligation of Party A.

Chapter 7- Insurance, Welfare and Leave

17. The Parties shall pay premiums for social security insurance schemes such as Pension, Unemployment, Medical Insurance, etc. in accordance with relevant PRC laws and regulations.

Chapter 8- Labor Discipline

18. Party B shall abide by the Working Rules and articles of association stipulated by Party A pursuant to laws. Party B shall strictly adhere to proper instructions and decisions of Party A, take care of all assets of Party A, and abide by professional morality.

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19. In case Party B violates the Working Rules or articles of association of Party A, Party A may impose punishment to Party B in accordance with the Working Rules or articles of association of Party A.

20. Party A has the right to require Party B to compensate the economic losses caused by Party B’s violation of relevant laws, Working Rules or articles of association of Party A.

21. Party A has the right to appropriately amend its rules or articles of association at any time based on its business needs. Party A shall notify Party B in any way Party A deems proper, including but not limited to, through notice, announcement, e-mail and memorandum of any such changes.

22. Party B shall not take position in any other enterprise or company during working in Party A.  Any invention, creation, development, design, improvement, production made by Party B during working in Party A shall belong to Party A, and any intellectual property right arising from them (including but not limited to patent right, copyright, know-how) shall also belong to Party A.

Chapter 9- Confidentiality

23. Party B shall keep the proprietary and confidential information of Party A confidential and shall abide by any confidentiality rules set forth by Party A. Party B shall not take, use of or disclose any material or information of Party A to any third party except on behalf of Party A’s and with Party A’s prior written consent. Party B shall execute and abide by the Non-disclosure and Non-Competition Agreement (“Confidentiality Agreement”).  Where Party B breaches the competition restriction obligation under the Confidentiality Agreement, Party B shall pay liquidated damages to Party A in accordance with Confidentiality Agreement.

24. Party B agrees that Party A may disclose his/her personal information including, but not limited to, Party B’s name, address, nationality, position, payment, bank account, this Contract and its renewal and amendment, as directly or indirectly required by Party A’s reasonable business and operation.

Chapter 10- Modification, Termination and Extension of the Employment Contract

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Employment Contract

25. In case a modification occurs in the laws and administrative regulations that govern this Contract, the corresponding part of this Contract and appendixes shall be modified accordingly. In case a major change occurs in the circumstances under which this Contract was concluded or there is any conflict between this Contract and the relevant PRC laws and regulations, so that this Contract cannot be performed anymore, the relevant part of this Contract may be modified upon agreement between Party A and Party B through amicable consultation based on the requirements of the relevant PRC laws and regulations.

26. This Contract may be terminated upon mutual agreement between Party A and Party B in writing.

27. Party A shall have right to unilaterally terminate this Contract with immediate effect without any prior written notice under the following circumstances, and will notify Party B of such termination:

27.1 The termination of this Contract during the probation period under Article 3 hereof;

27.2 Party B seriously violates the labor disciplines or the rules or regulations of Party A (including but not limited to the Working Rules or articles of association of Party A);

27.3 Party B causes serious damage to the interests of Party A due to Party B’s serious dereliction of his/her duties (including but not limited to, his/her duties under Article 7 hereof), or his/her engagement in malpractices for seeking personal gains;

27.4 Party B has additionally established an employment relationship with another employer which materially affects the completion of his tasks with  Party A, or Party B refuses to rectify the matter after the same is brought to his attention by Party A;

27.5 The Employment contract is invalid because Party B uses such means as deception or coercion, or takes advantage of Party A’s difficulties, to cause Party A to conclude the employment contract, or to make an amendment thereto, which is contrary to Party A’s true intent; or

27.6 Party B is criminally prosecuted under the law.

28. Party A may terminate this Contract by serving 30 days’ prior written notice to Party B or giving Party B one month’s salary in lieu of notice in any one of the following circumstances:

28.1 where Party B, after undergoing a legally prescribed period of medical treatment and recuperation for an illness or a non-work-related injury, remains unable to carry out the original job, and is also unfit for the job otherwise assigned to Party B by Party A;

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28.2 where Party B is unable to fulfill the duties of his/her position to the standards required under the terms hereof or by Party A, and, despite undergoing further training or a transfer of his/her position, remains unable to do so;

28.3 where this Contract cannot be performed due to any major changes of any objective circumstances under which this Contract was concluded, and following consultation, Party A and Party B cannot agree upon the necessary modification to be made to this Contract.

29. The term “major changes of any objective circumstances” stipulated in Section 27.3 includes but not limited to:

29.1 Merger of Party A into another business entity, or sale or transfer by Party A of substantial portion of the assets it owns to other enterprises or third parties;

29.2 Material adjustment in operative policy or material changes in operative situation of Party A;

29.3 Serious difficulty incurred in the operation of Party A;

29.4 Entry into the period of clearing up, or stop of manufacture or business totally or partially by Party A;

29.5 Declaration of bankruptcy, dissolution or liquation by Party A;

29.6 Decision of Party A in ceasing the research and development which directly relates to Party B’s work according to the need of business development of Party A and/or the actual market situation; or

29.7 Laws or regulations newly promulgated by the government that makes either Party or both Parties not able to perform this Contract.

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Employment Contract

30. Party B may resign his/her job and terminate this Contract during the Contract term with a prior written notice of 30 days to Party A.  With regard to Party A’s  economic losses arising from Party B , Party A shall have the right to deduct any such amount of economic losses from corresponding salary and any other remuneration due and payable to Party B and Party A shall still have the right to claim the uncompensated economic losses from Party B.

31. In the event that Party A is close to bankruptcy or faces a bad business situation or serious difficulty in the operation, Party A shall explain the situation to its employees.  After having solicited opinions from the employees, and reported the situation to the administrative department for labor, Party A may terminate this Contract.

32. Party A shall not terminate this Contract in accordance with Articles 28 and 31 hereof where Party B:

32.1 is engaged in operations exposing him to occupational disease hazards and  has not undergone a pre-departure occupational health check-up, or is suspected of having contracted an occupational disease and is being diagnosed or under medical observation;

32.2 has been confirmed as having lost or partially lost his capacity to work due to an occupational disease contracted or a work-related injury sustained with the Employer;

32.3 is receiving medical treatment for diseases or injuries related to work within the stipulated period of time;

32.4 is a female staff member during her pregnancy, maternity and lactation; or

32.5 has been working for the Employer continuously for not less than 15 years and is less than 5 years away from his legal retirement age;

32.6 finds himself in other circumstances stipulated in laws or administrative statues.

33. In any of the following circumstances, Party B may terminate this Contract:

33.1 Party A fails to pay the social insurance premiums for Party B in accordance with the law;

33.2 Where Party A forces Party B to work by means of violence, intimidation, detention or illegal restriction of personal freedom, or where Party B is instructed in violation of rules and regulations or peremptorily ordered by Party A to perform dangerous operations which threaten his personal safety;

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Employment Contract

33.3 Party A fail to pay labor remuneration in full and on time or fails to provide the labor protection or working conditions as agreed under this Contract.

33.4 The Employment contract is invalid because Party A uses such means as deception or coercion, or takes advantage of Party B’s difficulties, to cause Party B to conclude the employment contract, or to make an amendment thereto, which is contrary to Party B’s true intent;

33.5 Party A’s rules and regulations violate laws or regulations, thereby harming Party B’s rights and interests; or

33.6 Other circumstances in which laws or administrative statues permit Party B to terminate his employment contract

Party B may terminate the Contract forthwith without giving prior notice to Party A under the circumstances of article 33.2.

34. Upon the termination of this Contract, Party B shall cease conducting any activities on Party A’s behalf or complete the uncompleted matters pursuant to Party A’s request, and settle all accounts with Party A. Party B shall, within 3 days of the termination of this Contract, return all the property and hand over all files and documents (including but not limited to written documents and electronic documents) he or she has in his/her possession but is the property of Party A, and Party A may carry out the resign procedures with the confirmation of the aforesaid properties, files and documents and issue resign consent letter .  If Party B fails to complete the above hand-over procedures, Party A could refuse to handle the procedures of termination for Party B and may set-off any amounts due to Party B for the losses Party A suffers therefrom.

Chapter 11- Economic Compensation and Repayment

35. Party A shall provide economic compensation and/or medical subsidies to Party B pursuant to relevant laws and regulations in case Party A terminates this Contract according to Article 26, 28 and 31 of this Contract and applicable laws and regulations.

36. In case Party A fails to pay salary, economic compensation or medical subsidies to Party B according to relevant laws and regulations and stipulations of this Contract, Party A shall bear the statutory liability for indemnification to Party B.

37. If Party B terminates this Contract in breach of the terms and conditions specified herein, Party B shall indemnify Party A for its losses incurred therefrom according to the relevant laws and regulations.

38. Before Party B is trained at Party A’s expense, Party A may require Party B to execute an agreement, pursuant to which the service term may be prescribed and if Party B resigns from his/her job by breaching the service term stipulated in the Contract, Party B shall at the time of resignation reimburse Party A for the training fees herein.

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Chapter 12- Settlement of Labor Disputes

39. Any dispute arising out of the interpretation and performance of this contract shall be settled through friendly consultation between the Parties.  If the parties fail to reach a solution through friendly consultation, one or both parties can bring such dispute to the competent Labor Dispute Arbitration Commission within sixty (60) days of the dispute.  In case the parties have no disagreement to the arbitral award of such Labor Dispute Arbitration Commission, such arbitral award is final and binding upon the parties.  In case any party is not satisfied with the decision of the arbitration, the party may bring a lawsuit to the court having jurisdiction.

Chapter 13- Miscellaneous

40. Party B has been aware of and agreed to abide by the Working Rules, which will be provided to Party B from time to time, and shall be of the same legal validity with this Contract.  However, this Contract shall prevail in the event of any conflict between the Working Rules and this Contract.

41. Party A and Party B could execute the Agreement to Amend Employment Contract attached as Appendix B to revise partial provisions of this Contract, or conclude a new employment contract upon agreement of consultation.

42. The invalidity and non-enforcement of any provision of this Contract shall not affect the validity of any other provision of this Contract.

43. Failure or delay of any Party hereto to exercise a right under this Contract shall not constitute a waiver thereof.

44. If there is any conflict between this Contract and the relevant laws and/or regulations, the provisions of the relevant laws and/or regulations shall prevail.

45. This Contract shall become effective from the date of the execution hereof.  In case both parties do not execute this Contract on the same day, the later date shall be the effective date of this Contract.

Party A: Xi’an Baorun Industrial                 Development Co., Ltd.	Party B: Gao Xincheng
By: /s/ Gao Xincheng	By: /s/ Gao Xincheng
Name: Gao Xincheng	Name: Gao Xincheng
Date: October 25, 2010	Date: October 25, 2010

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Employment Contract 

Appendix A

Agreement to Renew Employment Contract

The renewed terms of this Employment Contract shall come into force and effect as of the ___ day of _____, ____ and shall expire as of the ___ day of _____, ____.  All provisions of the original Employment Contract shall apply to this renewed Contract.

Party A (chop):                                                             Party B (signature):

Date:

The renewed terms of this Employment Contract shall come into force and effect as of the ___ day of _____, ____ and shall expire as of the ___ day of _____, ____.  All provisions of the original Employment Contract shall apply to this renewed Contract.

Party A (chop):                                                             Party B (signature):

Date:

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The renewed terms of this Employment Contract shall come into force and effect as of the ___ day of _____, ____ and shall expire as of the ___ day of _____, ____.  All provisions of the original Employment Contract shall apply to this renewed Contract.

Party A (chop):                                                             Party B (signature):

Date:

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Appendix B

Agreement to Amend Employment Contract

Party A and Party B voluntarily and equally agree to make the following amendments to this Employment Contract through amicable consultationo
______________________________________________________________________________________________ o
Besides the above amendments, other provisions of the original Employment Contract shall remain valid.
Party A (chop):	Party B (signature):
Date:
Party A and Party B voluntarily and equally agree to make the following amendments to this Employment Contract through amicable consultationo
______________________________________________________________________________________________o
Besides the above amendments, other provisions of the original Employment Contract shall remain valid.
Party A (chop):	Party B (signature):
Date:

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EX-10.3

CONFIDENTIALITY AND NON-COMPETITION AGREEMENT

Party A: Xi’an Baorun Industrial Development Co., Ltd.

Address: Room 10720, Dongxin Century Plaza, No.7, Huoju Road, Xi’an

Legal Representative: Gao Xincheng

Party B: Gao Xincheng

ID/Passport Number: 610203630613361

Address:

In consideration of Party B's employment or continued employment with Party A, and the compensation now and hereafter paid to Party B by Party A, the Parties hereby agree to enter into this Agreement. For the purposes of this Agreement, "Group" means Party A and any entity which is established by Party A for the time being and from time to time, the holding company, parent or subsidiary or affiliate of Party A, or any subsidiary or office of the holding company of Party A.

1. Employment.Party B acknowledge that the terms and conditions of his/her employment with Party A is provided for in a separate employment agreement between the Parties and no provision of this Agreement shall be construed as confirmation of Party B's employment with Party A.

2. Business: Refined oil wholesale business

3. Confidential Information

Confidential Information in this Agreement includes:

3.1 Company Information.  Company Information means any proprietary information, technical data, trade secrets or know-how, including, but not limited to, research, patterns, plans, compilations, inventions and developments, products, formulas, designs, prototypes, methods, techniques, processes, procedures, computer programs and software (whether as source code or object code), database, development plans, records for research and development, technical report, inspection report, experimental data, operation manual, technical documentation, technologies, hardware configuration information, yield data, equipment modifications, services, customer lists and customers (including, but not limited to, customers of Party A and/or any other member of the Group on whom Party B called or with whom Party B became acquainted during the term of Party B's employment with Party A), supplier lists, partners, markets, pricing, marketing, finances, salary, legal business or other business information of the Group disclosed to Party B or obtained by Party B from Party A and/or any other member of the Group either directly or indirectly in writing, orally or by drawings or observation of parts or equipment.  Confidential Information may be a complete set of plan, documentation or product, and may also be part of the information or elements of the complete set of plan, documentation or product.  The Parties further understand that Confidential Information does not include any of the foregoing items which has become publicly known and made generally available through no wrongful act of Party B or of others who were under confidentiality obligations as to the item or items involved.

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3.2 Third Party Information.  Party B recognize that Party A and/or other members of the Group have received and in the future will receive from third parties, including subsidiaries and affiliated companies of Party A, their confidential or proprietary information subject to a duty on Party A’s part and/or the part of other members of the Group to maintain the confidentiality of such information and to use it only for certain limited purposes.  Party B agrees to hold all such confidential or proprietary information in the strictest confidence and not to disclose it to any person, firm or corporation or to use it except as necessary in carrying out his/her work for Party A consistent with the agreement(s) Party A and/or a member of the Group has entered into with such third party.

4. Media of Confidential Information

4.1 All documents, information, photographs, diagrams, notes, reports, letters, faxes, magnetic tapes, disks, prototypes, apparatus and any other forms of media, which are containing Confidential Information of Party A and held or kept by Party B in need of his/her work, shall be owned by Party A, no matter whether the Confidential Information is of business value.

4.2 Party B shall return Party A all the properties and media contained Confidential Information owned by Party A upon Party A's so request or Party B's dismissal (whatever the reason is), and shall not reproduce, hold or give the media herein above to any other person without authorization of Party A.

4.3 If the aforesaid media contained Confidential Information of Party A belong to Party B, Party A shall make corresponding economic compensation equivalent of the value of the media itself to Party B when Party B returns such media to Party A.

5. Maintenance ofConfidentiality

5.1 Party B agrees at all times during the term of his/her employment and thereafter, to hold in strictest confidence, and not to use, except for the benefit of Party A or the benefit of the Group, or to disclose, publicize, release, impart, transfer, to any person, firm or corporation (including other employees who are not entitled to know Confidential Information in accordance with Party A's internal administrations) without written authorization of Party A, any Confidential Information.  Party B agrees that he/she shall secure and keep such Confidential Information confidential and shall protect and safeguard the Confidential Information against any unauthorized use, disclosure, report, transfer or publication with at least the same degree of care as it uses for its own confidential or proprietary information, but in no event use less than reasonable care;

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5.2 Except for the benefit of Party A or the benefit of the Group, Party B shall not take any Confidential Information and media contained Confidential Information out of Party A's office without written authorization of Party A.

5.3 It will be regarded that Party A has agreed that Party B may disclose or use Confidential Information once Party B's supervisor of Party A has agreed in writing Party B to do so, provided that Party A has clearly stated in advance that such superior manager had been granted such power.

5.4 Except for the benefit of Party A or the benefit of the Group, Party B shall not  inquiry, disclose or discuss the salary, bonus, welfare, option or any other payments to or with any other persons except for the direct relatives of Party B.

6. Intellectual Property Rights

6.1 Works Retained and Licensed. Party B have attached hereto, as Exhibit A, a list describing all inventions, original works of authorship, developments, improvements, and trade secrets which were made by him/her prior to his/her employment with Party A (collectively referred to as "Prior Works"), which belong to Party B and relate to Party A’s current and proposed business, products or research and development, and which are not assigned to Party A; or, if no such list is attached, Party B represent that there are no 就such Prior Works.  If in the course of Party B employment with Party A, Party B incorporate into a product, process or machine of Party A and/or any other member of the Group the Prior Works owned by Party B or in which Party B have an interest, Party A is hereby granted and shall have a nonexclusive, royalty-free, irrevocable, perpetual, worldwide license to make, have made, modify, use and sell such Prior Works as part of or in connection with such product, process or machine.

6.2 Disclosure.  Party B agrees that Party B will promptly make full written disclosure to Party A or its designee, will hold in trust for the sole right and benefit of Party A, all his/her right, title, and interest in and to any and all inventions, original works of authorship, developments, concepts, improvements, designs, discoveries, ideas, trademarks or trade secrets, processes, copyright works, know-how, any other work’s information or matter which gives rise or may give rise to any intellectual property of whatsoever nature, whether or not patentable or registrable under any law of any country, which Party B may solely or jointly conceive or develop or reduce to practice, or cause to be conceived or developed or reduced to practice, during the period that Party B is in the employ of Party A (collectively referred to as "Works").

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6.3 Intellectual Property Rights.  The Parties acknowledge that Party A or its designee, has the absolute title, right or interest in and to any and all Works made by Party B (solely or jointly with others) during the period of Party B's employment with Party A or within one year after Party B's dismissal, and which are the duties of Party B  or the tasks assigned to him by Party A or its designee, or which are created mainly with the materials and technical resources of Party A or its designee and under Party A or its designee's responsibility.  Those Works are the "service invention-creation (zhi wu fa ming)" and "works made for hire (zhi wu zuo pin)" as defined under the patent and copyright laws of the People’s Republic of China.  Party B understands and agrees that the decision whether or not to commercialize or market Works is within Party A’s sole discretion and for the sole benefit of Party A and/or any other member of the Group.  Party B shall put forward written applications if he/she claims for authorship of the works made by him during the period of Party B's employment with Party A, and Party B is entitled to such works upon written confirmation of Party A that such works are not Works made for hire (zhi wu zuo pin).  The works made by Party B for which Party B does not claim will be regarded as the Works made for hire.  In respect of such works of Party B which are not the Works but related to the business of Party A or the Group, Party A or any member of the Group shall have a preemptive right to acquire for itself or its nominee all or any part (at Party A's option) of Party B's rights therein within three (3) months of Party B's disclosure to Party A of such works.

6.4 Maintenance of Records.  Party B agrees to keep and maintain adequate and current written records of all Works made by Party B (solely or jointly with others) during the term of his/her employment with Party A.  The records will be in the form of notes, sketches, drawings, and any other format.  The records will be available to and remain the sole property of Party A at all times.

6.5 Patent and Copyright Registrations.  Party B agrees to assist Party A, or its designee, at Party A's expense, in every proper way to secure Party A's (or its designee's) rights in the Works and any copyrights, patents, mask work rights or other intellectual property rights relating thereto in any and all countries, including the disclosure to Party A of all pertinent information and data with respect thereto, the execution of all applications, specifications, oaths, assignments and all other instruments which Party A shall deem necessary in order to apply for and obtain such rights and in order to assign and convey to Party A, its successors, assigns, and nominees the sole and exclusive rights, title and interest in and to such Works, and any copyrights, patents, mask work rights or other intellectual property rights relating thereto.  Party B further agrees that his/her obligation to execute or cause to be executed, when it is in his/her power to do so, any such instrument or papers shall continue after the termination of this Agreement.

7. Conflicting Employment.  Party B agrees that, during the term of his/her employment with Party A, Party B will provide full-time services to Party A and will not accept, provide or engage in, directly or indirectly any other employment, occupation, consulting or other business activity related to the business in which Party A and/or the Group is now involved or becomes involved during the term of his/her employment, nor will Party B engage in any other activities that conflict with his/her obligations to Party A. Without unanimous written consent from the Board of Directors of Party A, Party B shall not acquire any shares or interests of other companies which have business activity related to the business in which Party A and/or the Group is now involved or becomes involved during the term of his/her employment other than that have been disclosed to Party A upon the execution of this Agreement.

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8. Non-competition.

8.1 Party B agrees that during the course of his/her employment and for a period of 24 months(Party A shall be entitled to waive or reduce the period at its own discretion) immediately following the termination of his/her relationship with Party A for any reason, whether with or without good cause or for any or no cause, voluntarily or involuntarily, with or without notice, Party B will not, without the prior unanimous written consent of the Board of Director of Party A, (i) serve as a partner, employee, consultant, officer, director, manager, agent, associate, investor, or otherwise for, (ii) directly or indirectly, own, purchase, organize or take preparatory steps for the organization of, (iii) build, design, finance, acquire, lease, operate, manage, invest in, work or consult for or otherwise affiliate Party B with, any business, in competition with or otherwise similar to Party A's business, as stated under Section 2 of this Agreement.  The foregoing covenant shall cover Party B's activities in every part of the Territory in which Party B may conduct business during the term of such covenant as set forth above.  "Territory" shall mean (a) the People's Republic of China, (b) Taiwan, (c) Hong Kong, (d) Macao, (e) the United States of America, and (f) all other countries and/or regions of the world.

8.2 Party B acknowledge that Party B will derive significant value from Party A's agreement to provide Party B with that Confidential Information of Party A and/or any member of the Group to enable Party B to optimize the performance of Party B's duties to Party A.  Party B further acknowledge that Party B's fulfillment of the obligations contained in this Agreement, including, but not limited to, Party B's obligation neither to disclose nor to use the Confidential Information of Party A or any member of the Group other than for Party A's exclusive benefit and Party B's obligation not to compete contained in subsection (a) above, is necessary to protect the Confidential Information of Party A or any member of the Group and, consequently, to preserve the value and goodwill of Party A.  Party B further acknowledge the time, geographic and scope limitations of Party B's obligations under Section 8.1 above are reasonable, especially in light of Party A's and the Group's desire to protect their Confidential Information, and that Party B will not be precluded from gainful employment if Party B is obligated not to compete with Party A during the period and within the Territory as described above.

8.3 The covenants contained in Section 8.1 above shall be construed as a series of separate covenants, one for each city, county and state of any geographic area in the Territory.  Except for geographic coverage, each such separate covenant shall be deemed identical in terms to the covenant contained in Section 8.1 above.  If, in any arbitration proceeding, the arbitration panel refuses to enforce any of such separate covenants (or any part thereof), then such unenforceable covenant (or such part) shall be eliminated from this Agreement to the extent necessary to permit the remaining separate covenants (or portions thereof) to be enforced.  In the event the provisions of Section 8.1 above are deemed to exceed the time, geographic or scope limitations permitted by applicable law, then such provisions shall be reformed to the maximum time, geographic or scope limitations, as the case may be, then permitted by such law.

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8.4 Party B further agrees that Party B will be compensated by Party A upon the termination of Party B's employment with Party A and for the performance of the covenants that Party B make in this Section 8 of this Agreement (hereinafter “Compensation”).  The total amount of Compensation shall be the twelve times of monthly-salary based on the month when leaving the employ or the lowest amount as required by law, whichever is higher(In the case of Party A waive the requirement of non-competition or reduce the period, the compensation shall be canceled or reduced in proportion respectively). The Compensation will be paid by two installments, of which the first installment equal to 1/2 of the total amount of the Compensation will be paid within one month after the employment is terminated and the other installments equal to 1/2 of the total amount of the Compensation will be paid per three months thereafter.

9. Returning Party A's Documents.  Party B agrees that, at the time of leaving the employ of Party A, Party B will deliver to Party A (and will not keep in Party B's possession, recreate or deliver to anyone else) any and all devices, records, data, notes, reports, proposals, lists, correspondence, specifications, drawings blueprints, sketches, materials, equipment, other documents or property, or reproductions of any aforementioned items developed by Party B pursuant to Party B's employment with Party A or otherwise belonging to Party A and/or any other member of the Group, their successors or assigns.  In the event of the termination of Party B's employment, Party B agrees to sign and deliver the "Termination Certification" attached hereto as Exhibit B.

10. Liability for Default.  In the event that Party B breaches this Agreement and causes any damages of Party A, he/she shall be liable for such breach and shall compensate all damages resulting thereof.  The amount of compensation may be deducted directly from Party B's salary, bonus and other incomes paid by Party A after Party B is informed and has confirmed in written form.

11. Notification of New Employer.  In the event that Party B leave the employ of Party A, Party B hereby grant consent to notification by Party A to his/her new employer about his/her rights and obligations under this Agreement.

12. Solicitation of Employees.  Party B agrees that for a period of 24 months immediately following the termination of his/her relationship with Party A for any reason, whether with or without cause, Party B shall not either directly or indirectly solicit, induce, recruit or encourage any employees of Party A and/or any other member of the Group to leave their employment, or take away such employees, or attempt to solicit, induce, recruit, encourage or take away employees of Party A and/or any other member of the Group, either for himself/herself or for any other person or entity.

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13. Conflict of Interest Guidelines.  Party B agrees to diligently adhere to the Conflict of Interest Guidelines attached as Exhibit C hereto.

14. Anti-Corruption Policy.  Party B agrees to diligently adhere to the Anti-Corruption Policy of Party A attached hereto as Exhibit D.

15. Representations.  Party B agrees to execute any warranties or verify any proper document required to carry out the terms of this Agreement.  Party B represent that his/her performance of all the terms of this Agreement will not breach any agreement to keep in confidence proprietary information acquired by Party B in confidence or in trust prior to his/her employment by Party A.  Party B has not entered into, and Party B agrees he/she will not enter into any oral or written agreement in conflict herewith.

16. Arbitration.

16.1 Arbitration.  THE PARTIES AGREE THAT ANY DISPUTE OR CONTROVERSY ARISING OUT OF, RELATING TO, OR CONCERNING ANY INTERPRETATION, CONSTRUCTION, PERFORMANCE OR BREACH OF THIS AGREEMENT, SHALL BE SUBMITTED TO CHINA INTERNATIONAL ECONOMIC AND TRADE ARBITRATION COMMISSION ("CIETAC") FOR ARBITRATION.  THE ARBITRATION SHALL BE CONDUCTED IN BEIJING IN ACCORDANCE WITH THE THEN APPLICABLE ARBITRATION RULES OF CIETAC.  THE ARBITRATION AWARD SHALL BE FINAL, CONCLUSIVE AND BINDING ON THE PARTIES TO THE ARBITRATION.

16.2 Consideration. PARTY B UNDERSTAND THAT EACH PARTY’S PROMISE TO RESOLVE CLAIMS BY ARBITRATION IN ACCORDANCE WITH THE PROVISIONS OF THIS AGREEMENT, RATHER THAN THROUGH THE COURTS, IS CONSIDERATION FOR OTHER PARTY’S LIKE PROMISE.

17. General Provisions

17.1 Governing Law.  This Agreement will be governed by the laws of the People's Republic of China, without reference to choice of laws or conflict of laws principles.

17.2 Entire Agreement.  This Agreement sets forth the entire agreement and understanding between Party A and Party B relating to the subject matter herein, supersedes any prior agreement(s) between us regarding the subject matter herein, and merges all prior discussions between us.  No modification of or amendment to this Agreement, nor any waiver of any rights under this agreement, will be effective unless in writing signed by the party to be charged.  Any subsequent change or changes in Party B's duties, salary or compensation will not affect the validity or scope of this Agreement.

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17.3 Severability.  If one or more of the provisions in this Agreement are deemed void by law, then the remaining provisions will continue in full force and effect.

17.4 Successors and Assigns.  This Agreement will be binding upon Party B's heirs, executors, administrators and other legal representatives and will be for the benefit of Party A, its successors, and its assigns.

17.5 Counterparts.  This Agreement may be executed in any number of counterparts, each of which shall be enforceable, and all of which together shall constitute one agreement.

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Party A: Xi’an Baorun Industrial Development Co., Ltd.

Name: Gao Xincheng

By: /s/ Gao Xincheng

Party B: Gao Xincheng

By: /s/ Gao Xincheng

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EXHIBIT A

XI’AN BAORUN INDUSTRIAL DEVELOPMENT CO., LTD.

CONFLICT OF INTEREST GUIDELINES

It is the policy of Xi’an Baorun Industrial Development Co., Ltd., its subsidiaries, affiliates, successors or assigns (together, the "Company") to conduct its affairs in strict compliance with the letter and spirit of the law and to adhere to the highest principles of business ethics.  Accordingly, all officers, employees and independent contractors must avoid activities which are in conflict, or give the appearance of being in conflict, with these principles and with the interests of Party A.  The following are potentially compromising situations which must be avoided.  Any exceptions must be reported to the President and written approval for continuation must be obtained.

1. Revealing confidential information to outsiders or misusing confidential information.  Unauthorized divulging of information is a violation of this policy whether or not for personal gain and whether or not harm to Party A is intended.  (The Confidential Information, Invention Assignment and Non-Competition Agreement elaborates on this principle and is a binding agreement.)

2. Accepting or offering substantial gifts, excessive entertainment, favors or payments which may be deemed to constitute undue influence or otherwise be improper or embarrassing to Party A.

3. Participating in civic or professional organizations that might involve divulging confidential information of Party A.

4. Initiating or approving personnel actions affecting reward or punishment of employees or applicants where there is a family relationship or is or appears to be a personal or social involvement (other than as officers of Party A appointed by the board of directors of Party A).

5. Initiating or approving any form of personal or social harassment of employees.

6. Investing or holding outside directorship in suppliers, customers, or competing companies, including financial speculations, where such investment or directorship might influence in any manner a decision or course of action of Party A.

7. Borrowing from or lending to employees, customers or suppliers.

8. Acquiring real estate of interest to Party A.

9. Improperly using or disclosing to Party A any proprietary information or trade secrets of any former or concurrent employer or other person or entity with whom obligations of confidentiality exist.

10. Unlawfully discussing prices, costs, customers, sales or markets with competing companies or their employees.

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11. Making any unlawful agreement with distributors with respect to prices.

12. Improperly using or authorizing the use of any inventions which are the subject of patent claims of any other person or entity.

13. Engaging in any conduct which is not in the best interest of Party A.

Each officer, employee and independent contractor must take every necessary action to ensure compliance with these guidelines and to bring problem areas to the attention of higher management for review.  Violations of this conflict of interest policy may result in discharge without warning.

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EXHIBIT B

XI’AN BAORUN INDUSTRIAL DEVELOPMENT CO., LTD.

CONFLICT OF INTEREST GUIDELINES

The following policies are made and will be enforced by Xi’an Baorun Industrial Development Co., Ltd., its subsidiaries, affiliates, successors or assigns (together, the "Company") that:

1. The use of Company funds or assets for any unlawful or improper purpose is strictly prohibited.  No payment shall be made to, or for the benefit of, government employees for the purpose of, or otherwise in connection with, the securing of sales to or obtaining favorable action by a government agency.  Gifts of substantial value to or lavish entertainment of government employees are prohibited since they can be construed as attempts to influence government decisions in matters affecting Party A's operation.  Any entertaining of public officials, or the furnishing of assistance in the form of transportation or other services should be of such nature that the official's integrity or reputation will not be compromised.

2. The offer, payment or promise to transfer in the future company funds or assets or the delivery of gifts or anything else of value to the officials, the political parties or officials or candidates of the political parties is strictly prohibited for the purpose of influencing any act or decision of any such person in his or her official capacity, including the decision to fail to perform his or her official functions or to use such persons or party’s influence with a the government or instrumentality in order to affect or to influence any act or decision of such government or instrumentality in order to assist Party A in obtaining or retaining business for or with, or directing business to any person or entity.

3. All records must truly reflect the transactions they record.  All assets and liabilities shall be recorded in the regular books of account.  No undisclosed or unrecorded fund or asset shall be established for any purpose.  No false or artificial entries shall be made in the books and records for any reason.  No payment shall be approved or made with the intention or understanding that any part of such payment is to be used for any purpose other than that described by the document supporting the payment.

4. No political contribution shall be made, directly or indirectly, with corporate funds or assets regardless of whether the contributions are legal under the laws of the county in which they are made.

5. Any employee who learns of or suspects a violation of this Policy should promptly report the matter to the President, Chief Financial Officer or Internal Auditor, as appropriate in the circumstances.  All managers shall be responsible for the enforcement of and compliance with this Policy, including the necessary distribution to insure employee knowledge and compliance.

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EX-10.4

Employment Contract

Employment Contract

Of Xi’an Baorun Industrial Development Co., Ltd.

Party A: Xi’an Baorun Industrial Development Co., Ltd.

Address: Room 10720, Dongxin Century Plaza, No.7, Huoju Road, Xi’an

Legal Representative: Gao Xincheng

Party B: Li Gaihong

Home Address:

Date of Birth: June 7th, 1977

ID/Passport Number: 610528197706072022

Registered Permanent Address:

Chapter 1- General Provisions

1. Pursuant to the Labor Law of the People's Republic of China(hereinafter “Labor Law”), the Employment Law of the People’s Republic of China(hereinafter “Employment Law”) and other relevant regulations, in consideration of the mutual promises and covenants made herein, and for other good and valuable consideration, the receipt and sufficiency of which is acknowledged, Party A and Party B (collectively referred to as the "Parties") hereby agree as follows:

Chapter 2- Term

2. This Contract shall be a contract with a fixed term of 3 years, from October 25, 2010("Starting Date") to October, 2013.

3. [Intentionally Omitted]

4. If upon the expiration of the term, Party A and Party B agree to renew this Contract, they shall execute the Agreement to Renew Employment Contract attached to this Contract as Appendix A, or shall execute a new employment contract.

Chapter 3- Scope of Work

5. Party B agrees to assume the position of Executive Vice President and Financial Controller (or engage in ____) pursuant to the work needs of Party A.  The position duty, work task, objective, disciplines and other relevant management rules shall be implemented according to the work standards and other rules prescribed by Party A.  The main work location of Party B shall be Xi’an.

6. Both Parties acknowledge that, Party A shall have the right to change the type of work, job title and position, job duties and work location of Party B at any time according to the business needs of Party A or ability or work performance or actual situation of Party B, provided, however, that such change shall be made in good faith with reasonable causes.  Party B shall be subject to any such changes as deemed necessary and appropriate in the sole judgment of Party A.

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Chapter 4- Duties of Party B

7. Party B hereby agrees that, in addition to the duties and responsibilities otherwise set forth herein, during the term of this Contract, Party B shall:

7.1 devote his/her full time, attention and skills during the normal working hours designated to him/her hereunder exclusively to the performance of his/her duties hereunder, and effectively perform his/her duties and make his/her best endeavors to ensure the satisfactory accomplishment of the assignment to him/her by Party A; and

7.2 perform his/her duties hereunder faithfully and diligently for Party A in accordance with the terms hereunder, the rules and policies of Party A and the applicable laws and regulations, engage in no activities which are in violation of any PRC laws or regulations or may be prejudicial to the interests of Party A, and seek no personal gains, directly or indirectly, by utilizing his/her position or power in Party A.

Chapter 5- Work Schedule, Labor Protection and Working Conditions

8. Party B shall work five (5) days per week, eight (8) hours per day, with the average working hours not exceeding forty (40) hours per week.  Party A may require Party B to work overtime due to the business needs and Party A shall pay Party B overtime pay in accordance with its overtime management rules and the relevant state regulations.

9. Party A shall provide Party B with appropriate working conditions and facilities and with labor protection in accordance with the state standards, and Party B shall comply with the rules and regulations of work safety and sanitation formulated by Party A.

10. Party A will be responsible for providing education and training to Party B on business technologies, labor safety and sanitation and articles of association of Party A.

Chapter 6- Remuneration

11. In consideration of the duties and obligations assumed by Party B under this Contract, Party A shall pay salary to Party B in amount confirmed in writing per month, which will be payable on 30th of each corresponding month.

12. During the term of employment under this Contract, Party A will decide the earning prior to tax of Party B based upon Party A’s then current salary systems and position adjustment policies.  Party A will pay the payment through the individual bank account designated by Party A or through other means Party A deems proper.  The amount of salary will be stipulated in an offer letter.

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13. Party B shall be responsible for the payment of due and payable individual income tax resulting from the salary and other remuneration paid by Party A in accordance with the relevant PRC laws and regulations.  Party A, as the withholding person, shall withhold the individual income tax and other due and payable tax of Party B prior to paying the remuneration to Party B as required by law.

14. Party A shall have the right to adjust the salary and welfare of Party B appropriately based on the capability, experience, attitude, performance, achievement, working-age and position of Party B as well as according to the salary and position adjustment policies and business conditions experienced by Party A.

15. Party A shall deduct the following from the salary payable to Party B in accordance with the relevant PRC laws and regulations:

15.1 The individual income tax of Party B;

15.2 The part of the society insurance and other welfare benefits which are to be borne by Party B;

15.3 All compensation or fines payable by Party B and withheld by Party A on the effective court verdict or arbitration decision;

15.4 All compensation or fines payable by Party B to Party A according to  court verdict or arbitration decision.

16. Party A may, in its discretion, pay a bonus to Party B based upon Party A’s business operation situation and articles of association.  The detailed amount, conditions and form will be set forth by Party A.  Notwithstanding the above, paying bonus should not be deemed as an obligation of Party A.

Chapter 7- Insurance, Welfare and Leave

17. The Parties shall pay premiums for social security insurance schemes such as Pension, Unemployment, Medical Insurance, etc. in accordance with relevant PRC laws and regulations.

Chapter 8- Labor Discipline

18. Party B shall abide by the Working Rules and articles of association stipulated by Party A pursuant to laws. Party B shall strictly adhere to proper instructions and decisions of Party A, take care of all assets of Party A, and abide by professional morality.

19. In case Party B violates the Working Rules or articles of association of Party A, Party A may impose punishment to Party B in accordance with the Working Rules or articles of association of Party A.

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20. Party A has the right to require Party B to compensate the economic losses caused by Party B’s violation of relevant laws, Working Rules or articles of association of Party A.

21. Party A has the right to appropriately amend its rules or articles of association at any time based on its business needs. Party A shall notify Party B in any way Party A deems proper, including but not limited to, through notice, announcement, e-mail and memorandum of any such changes.

22. Party B shall not take position in any other enterprise or company during working in Party A.  Any invention, creation, development, design, improvement, production made by Party B during working in Party A shall belong to Party A, and any intellectual property right arising from them (including but not limited to patent right, copyright, know-how) shall also belong to Party A.

Chapter 9- Confidentiality

23. Party B shall keep the proprietary and confidential information of Party A confidential and shall abide by any confidentiality rules set forth by Party A. Party B shall not take, use of or disclose any material or information of Party A to any third party except on behalf of Party A's and with Party A's prior written consent. Party B shall execute and abide by the Non-disclosure and Non-Competition Agreement ("Confidentiality Agreement").  Where Party B breaches the competition restriction obligation under the Confidentiality Agreement, Party B shall pay liquidated damages to Party A in accordance with Confidentiality Agreement.

24. Party B agrees that Party A may disclose his/her personal information including, but not limited to, Party B's name, address, nationality, position, payment, bank account, this Contract and its renewal and amendment, as directly or indirectly required by Party A's reasonable business and operation.

Chapter 10- Modification, Termination and Extension of the Employment Contract

25. In case a modification occurs in the laws and administrative regulations that govern this Contract, the corresponding part of this Contract and appendixes shall be modified accordingly. In case a major change occurs in the circumstances under which this Contract was concluded or there is any conflict between this Contract and the relevant PRC laws and regulations, so that this Contract cannot be performed anymore, the relevant part of this Contract may be modified upon agreement between Party A and Party B through amicable consultation based on the requirements of the relevant PRC laws and regulations.

26. This Contract may be terminated upon mutual agreement between Party A and Party B in writing.

27. Party A shall have right to unilaterally terminate this Contract with immediate effect without any prior written notice under the following circumstances, and will notify Party B of such termination:

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27.1 The termination of this Contract during the probation period under Article 3 hereof;

27.2 Party B seriously violates the labor disciplines or the rules or regulations of Party A (including but not limited to the Working Rules or articles of association of Party A);

27.3 Party B causes serious damage to the interests of Party A due to Party B’s serious dereliction of his/her duties (including but not limited to, his/her duties under Article 7 hereof), or his/her engagement in malpractices for seeking personal gains;

27.4 Party B has additionally established an employment relationship with another employer which materially affects the completion of his tasks with  Party A, or Party B refuses to rectify the matter after the same is brought to his attention by Party A;

27.5 The Employment contract is invalid because Party B uses such means as deception or coercion, or takes advantage of Party A’s difficulties, to cause Party A to conclude the employment contract, or to make an amendment thereto, which is contrary to Party A’s true intent; or

27.6 Party B is criminally prosecuted under the law.

28. Party A may terminate this Contract by serving 30 days' prior written notice to Party B or giving Party B one month’s salary in lieu of notice in any one of the following circumstances:

28.1 where Party B, after undergoing a legally prescribed period of medical treatment and recuperation for an illness or a non-work-related injury, remains unable to carry out the original job, and is also unfit for the job otherwise assigned to Party B by Party A;

28.2 where Party B is unable to fulfill the duties of his/her position to the standards required under the terms hereof or by Party A, and, despite undergoing further training or a transfer of his/her position, remains unable to do so;

28.3 where this Contract cannot be performed due to any major changes of any objective circumstances under which this Contract was concluded, and following consultation, Party A and Party B cannot agree upon the necessary modification to be made to this Contract.

29. The term "major changes of any objective circumstances" stipulated in Section 27.3 includes but not limited to:

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29.1 Merger of Party A into another business entity, or sale or transfer by Party A of substantial portion of the assets it owns to other enterprises or third parties;

29.2 Material adjustment in operative policy or material changes in operative situation of Party A;

29.3 Serious difficulty incurred in the operation of Party A;

29.4 Entry into the period of clearing up, or stop of manufacture or business totally or partially by Party A;

29.5 Declaration of bankruptcy, dissolution or liquation by Party A;

29.6 Decision of Party A in ceasing the research and development which directly relates to Party B's work according to the need of business development of Party A and/or the actual market situation; or

29.7 Laws or regulations newly promulgated by the government that makes either Party or both Parties not able to perform this Contract.

30. Party B may resign his/her job and terminate this Contract during the Contract term with a prior written notice of 30 days to Party A.  With regard to Party A’s  economic losses arising from Party B , Party A shall have the right to deduct any such amount of economic losses from corresponding salary and any other remuneration due and payable to Party B and Party A shall still have the right to claim the uncompensated economic losses from Party B.

31. In the event that Party A is close to bankruptcy or faces a bad business situation or serious difficulty in the operation, Party A shall explain the situation to its employees.  After having solicited opinions from the employees, and reported the situation to the administrative department for labor, Party A may terminate this Contract.

32. Party A shall not terminate this Contract in accordance with Articles 28 and 31 hereof where Party B:

32.1 is engaged in operations exposing him to occupational disease hazards and   has not undergone a pre-departure occupational health check-up, or is suspected of having contracted an occupational disease and is being diagnosed or under medical observation;

32.2 has been confirmed as having lost or partially lost his capacity to work due to an occupational disease contracted or a work-related injury sustained with the Employer;

32.3 is receiving medical treatment for diseases or injuries related to work within the stipulated period of time;

32.4 is a female staff member during her pregnancy, maternity and lactation; or

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32.5 has been working for the Employer continuously for not less than 15 years and is less than 5 years away from his legal retirement age;

32.6 finds himself in other circumstances stipulated in laws or administrative statues.

33. In any of the following circumstances, Party B may terminate this Contract:

33.1 Party A fails to pay the social insurance premiums for Party B in accordance with the law;

33.2 Where Party A forces Party B to work by means of violence, intimidation, detention or illegal restriction of personal freedom, or where Party B is instructed in violation of rules and regulations or peremptorily ordered by Party A to perform dangerous operations which threaten his personal safety;

33.3 Party A fail to pay labor remuneration in full and on time or fails to provide the labor protection or working conditions as agreed under this Contract.

33.4 The Employment contract is invalid because Party A uses such means as deception or coercion, or takes advantage of Party B’s difficulties, to cause Party B to conclude the employment contract, or to make an amendment thereto, which is contrary to Party B’s true intent;

33.5 Party A’s rules and regulations violate laws or regulations, thereby harming Party B’s rights and interests; or

33.6 Other circumstances in which laws or administrative statues permit Party B to terminate his employment contract

Party B may terminate the Contract forthwith without giving prior notice to Party A under the circumstances of article 33.2.

34. Upon the termination of this Contract, Party B shall cease conducting any activities on Party A's behalf or complete the uncompleted matters pursuant to Party A's request, and settle all accounts with Party A. Party B shall, within 3 days of the termination of this Contract, return all the property and hand over all files and documents (including but not limited to written documents and electronic documents) he or she has in his/her possession but is the property of Party A, and Party A may carry out the resign procedures with the confirmation of the aforesaid properties, files and documents and issue resign consent letter .  If Party B fails to complete the above hand-over procedures, Party A could refuse to handle the procedures of termination for Party B and may set-off any amounts due to Party B for the losses Party A suffers therefrom.

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Chapter 11- Economic Compensation and Repayment

35. Party A shall provide economic compensation and/or medical subsidies to Party B pursuant to relevant laws and regulations in case Party A terminates this Contract according to Article 26, 28 and 31 of this Contract and applicable laws and regulations.

36. In case Party A fails to pay salary, economic compensation or medical subsidies to Party B according to relevant laws and regulations and stipulations of this Contract, Party A shall bear the statutory liability for indemnification to Party B.

37. If Party B terminates this Contract in breach of the terms and conditions specified herein, Party B shall indemnify Party A for its losses incurred therefrom according to the relevant laws and regulations.

38. Before Party B is trained at Party A’s expense, Party A may require Party B to execute an agreement, pursuant to which the service term may be prescribed and if Party B resigns from his/her job by breaching the service term stipulated in the Contract, Party B shall at the time of resignation reimburse Party A for the training fees herein.

Chapter 12- Settlement of Labor Disputes

39. Any dispute arising out of the interpretation and performance of this contract shall be settled through friendly consultation between the Parties.  If the parties fail to reach a solution through friendly consultation, one or both parties can bring such dispute to the competent Labor Dispute Arbitration Commission within sixty (60) days of the dispute.  In case the parties have no disagreement to the arbitral award of such Labor Dispute Arbitration Commission, such arbitral award is final and binding upon the parties.  In case any party is not satisfied with the decision of the arbitration, the party may bring a lawsuit to the court having jurisdiction.

Chapter 13- Miscellaneous

40. Party B has been aware of and agreed to abide by the Working Rules, which will be provided to Party B from time to time, and shall be of the same legal validity with this Contract.  However, this Contract shall prevail in the event of any conflict between the Working Rules and this Contract.

41. Party A and Party B could execute the Agreement to Amend Employment Contract attached as Appendix B to revise partial provisions of this Contract, or conclude a new employment contract upon agreement of consultation.

42. The invalidity and non-enforcement of any provision of this Contract shall not affect the validity of any other provision of this Contract.

43. Failure or delay of any Party hereto to exercise a right under this Contract shall not constitute a waiver thereof.

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44. If there is any conflict between this Contract and the relevant laws and/or regulations, the provisions of the relevant laws and/or regulations shall prevail.

45. This Contract shall become effective from the date of the execution hereof.  In case both parties do not execute this Contract on the same day, the later date shall be the effective date of this Contract.

Party A: Xi’an Baorun Industrial Development Co., Ltd.		Party B: Li Gaihong
By:	/s/ Gao Xincheng	By:	/s/ Li Gaihong
Name:	Gao Xincheng
Date: October 25, 2010
		Date: October 25, 2010

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Appendix A

Agreement to Renew Employment Contract

The renewed terms of this Employment Contract shall come into force and effect as of the ___ day of _____, ____ and shall expire as of the ___ day of _____, ____.  All provisions of the original Employment Contract shall apply to this renewed Contract.
Party A (chop):	Party B (signature):
Date:
The renewed terms of this Employment Contract shall come into force and effect as of the ___ day of _____, ____ and shall expire as of the ___ day of _____, ____.  All provisions of the original Employment Contract shall apply to this renewed Contract.
Party A (chop):	Party B (signature):
Date:
The renewed terms of this Employment Contract shall come into force and effect as of the ___ day of _____, ____ and shall expire as of the ___ day of _____, ____.  All provisions of the original Employment Contract shall apply to this renewed Contract.
Party A (chop):	Party B (signature):
Date:

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Appendix B

Agreement to Amend Employment Contract

Party A and Party B voluntarily and equally agree to make the following amendments to this Employment Contract through amicable consultation：
______________________________________________________________________________________________ 。
Besides the above amendments, other provisions of the original Employment Contract shall remain valid.
Party A (chop):	Party B (signature):
Date:
Party A and Party B voluntarily and equally agree to make the following amendments to this Employment Contract through amicable consultation：
______________________________________________________________________________________________。
Besides the above amendments, other provisions of the original Employment Contract shall remain valid.
Party A (chop):	Party B (signature):
Date:

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EX-10.5

CONFIDENTIALITY AND NON-COMPETITION AGREEMENT

Party A: Xi’an Baorun Industrial Development Co., Ltd.

Address: Room 10720, Dongxin Century Plaza, No.7, Huoju Road, Xi’an

Legal Representative: Gao Xincheng

Party B: Li Gaihong

ID/Passport Number: 610528197706072022

Address:

In consideration of Party B's employment or continued employment with Party A, and the compensation now and hereafter paid to Party B by Party A, the Parties hereby agree to enter into this Agreement. For the purposes of this Agreement, "Group" means Party A and any entity which is established by Party A for the time being and from time to time, the holding company, parent or subsidiary or affiliate of Party A, or any subsidiary or office of the holding company of Party A.

1. Employment.Party B acknowledge that the terms and conditions of his/her employment with Party A is provided for in a separate employment agreement between the Parties and no provision of this Agreement shall be construed as confirmation of Party B's employment with Party A.

2. Business: Refined oil wholesale business

3. Confidential Information

Confidential Information in this Agreement includes:

3.1 Company Information.  Company Information means any proprietary information, technical data, trade secrets or know-how, including, but not limited to, research, patterns, plans, compilations, inventions and developments, products, formulas, designs, prototypes, methods, techniques, processes, procedures, computer programs and software (whether as source code or object code), database, development plans, records for research and development, technical report, inspection report, experimental data, operation manual, technical documentation, technologies, hardware configuration information, yield data, equipment modifications, services, customer lists and customers (including, but not limited to, customers of Party A and/or any other member of the Group on whom Party B called or with whom Party B became acquainted during the term of Party B's employment with Party A), supplier lists, partners, markets, pricing, marketing, finances, salary, legal business or other business information of the Group disclosed to Party B or obtained by Party B from Party A and/or any other member of the Group either directly or indirectly in writing, orally or by drawings or observation of parts or equipment.  Confidential Information may be a complete set of plan, documentation or product, and may also be part of the information or elements of the complete set of plan, documentation or product.  The Parties further understand that Confidential Information does not include any of the foregoing items which has become publicly known and made generally available through no wrongful act of Party B or of others who were under confidentiality obligations as to the item or items involved.

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3.2 Third Party Information.  Party B recognize that Party A and/or other members of the Group have received and in the future will receive from third parties, including subsidiaries and affiliated companies of Party A, their confidential or proprietary information subject to a duty on Party A’s part and/or the part of other members of the Group to maintain the confidentiality of such information and to use it only for certain limited purposes.  Party B agrees to hold all such confidential or proprietary information in the strictest confidence and not to disclose it to any person, firm or corporation or to use it except as necessary in carrying out his/her work for Party A consistent with the agreement(s) Party A and/or a member of the Group has entered into with such third party.

4. Media of Confidential Information

4.1 All documents, information, photographs, diagrams, notes, reports, letters, faxes, magnetic tapes, disks, prototypes, apparatus and any other forms of media, which are containing Confidential Information of Party A and held or kept by Party B in need of his/her work, shall be owned by Party A, no matter whether the Confidential Information is of business value.

4.2 Party B shall return Party A all the properties and media contained Confidential Information owned by Party A upon Party A's so request or Party B's dismissal (whatever the reason is), and shall not reproduce, hold or give the media herein above to any other person without authorization of Party A.

4.3 If the aforesaid media contained Confidential Information of Party A belong to Party B, Party A shall make corresponding economic compensation equivalent of the value of the media itself to Party B when Party B returns such media to Party A.

5. Maintenance ofConfidentiality

5.1 Party B agrees at all times during the term of his/her employment and thereafter, to hold in strictest confidence, and not to use, except for the benefit of Party A or the benefit of the Group, or to disclose, publicize, release, impart, transfer, to any person, firm or corporation (including other employees who are not entitled to know Confidential Information in accordance with Party A's internal administrations) without written authorization of Party A, any Confidential Information.  Party B agrees that he/she shall secure and keep such Confidential Information confidential and shall protect and safeguard the Confidential Information against any unauthorized use, disclosure, report, transfer or publication with at least the same degree of care as it uses for its own confidential or proprietary information, but in no event use less than reasonable care;

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5.2 Except for the benefit of Party A or the benefit of the Group, Party B shall not take any Confidential Information and media contained Confidential Information out of Party A's office without written authorization of Party A.

5.3 It will be regarded that Party A has agreed that Party B may disclose or use Confidential Information once Party B's supervisor of Party A has agreed in writing Party B to do so, provided that Party A has clearly stated in advance that such superior manager had been granted such power.

5.4 Except for the benefit of Party A or the benefit of the Group, Party B shall not  inquiry, disclose or discuss the salary, bonus, welfare, option or any other payments to or with any other persons except for the direct relatives of Party B.

6. Intellectual Property Rights

6.1 Works Retained and Licensed. Party B have attached hereto, as Exhibit A, a list describing all inventions, original works of authorship, developments, improvements, and trade secrets which were made by him/her prior to his/her employment with Party A (collectively referred to as "Prior Works"), which belong to Party B and relate to Party A’s current and proposed business, products or research and development, and which are not assigned to Party A; or, if no such list is attached, Party B represent that there are no 就such Prior Works.  If in the course of Party B employment with Party A, Party B incorporate into a product, process or machine of Party A and/or any other member of the Group the Prior Works owned by Party B or in which Party B have an interest, Party A is hereby granted and shall have a nonexclusive, royalty-free, irrevocable, perpetual, worldwide license to make, have made, modify, use and sell such Prior Works as part of or in connection with such product, process or machine.

6.2 Disclosure.  Party B agrees that Party B will promptly make full written disclosure to Party A or its designee, will hold in trust for the sole right and benefit of Party A, all his/her right, title, and interest in and to any and all inventions, original works of authorship, developments, concepts, improvements, designs, discoveries, ideas, trademarks or trade secrets, processes, copyright works, know-how, any other work’s information or matter which gives rise or may give rise to any intellectual property of whatsoever nature, whether or not patentable or registrable under any law of any country, which Party B may solely or jointly conceive or develop or reduce to practice, or cause to be conceived or developed or reduced to practice, during the period that Party B is in the employ of Party A (collectively referred to as "Works").

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6.3 Intellectual Property Rights.  The Parties acknowledge that Party A or its designee, has the absolute title, right or interest in and to any and all Works made by Party B (solely or jointly with others) during the period of Party B's employment with Party A or within one year after Party B's dismissal, and which are the duties of Party B  or the tasks assigned to him by Party A or its designee, or which are created mainly with the materials and technical resources of Party A or its designee and under Party A or its designee's responsibility.  Those Works are the "service invention-creation (zhi wu fa ming)" and "works made for hire (zhi wu zuo pin)" as defined under the patent and copyright laws of the People’s Republic of China.  Party B understands and agrees that the decision whether or not to commercialize or market Works is within Party A’s sole discretion and for the sole benefit of Party A and/or any other member of the Group.  Party B shall put forward written applications if he/she claims for authorship of the works made by him during the period of Party B's employment with Party A, and Party B is entitled to such works upon written confirmation of Party A that such works are not Works made for hire (zhi wu zuo pin).  The works made by Party B for which Party B does not claim will be regarded as the Works made for hire.  In respect of such works of Party B which are not the Works but related to the business of Party A or the Group, Party A or any member of the Group shall have a preemptive right to acquire for itself or its nominee all or any part (at Party A's option) of Party B's rights therein within three (3) months of Party B's disclosure to Party A of such works.

6.4 Maintenance of Records.  Party B agrees to keep and maintain adequate and current written records of all Works made by Party B (solely or jointly with others) during the term of his/her employment with Party A.  The records will be in the form of notes, sketches, drawings, and any other format.  The records will be available to and remain the sole property of Party A at all times.

6.5 Patent and Copyright Registrations.  Party B agrees to assist Party A, or its designee, at Party A's expense, in every proper way to secure Party A's (or its designee's) rights in the Works and any copyrights, patents, mask work rights or other intellectual property rights relating thereto in any and all countries, including the disclosure to Party A of all pertinent information and data with respect thereto, the execution of all applications, specifications, oaths, assignments and all other instruments which Party A shall deem necessary in order to apply for and obtain such rights and in order to assign and convey to Party A, its successors, assigns, and nominees the sole and exclusive rights, title and interest in and to such Works, and any copyrights, patents, mask work rights or other intellectual property rights relating thereto.  Party B further agrees that his/her obligation to execute or cause to be executed, when it is in his/her power to do so, any such instrument or papers shall continue after the termination of this Agreement.

7. Conflicting Employment.  Party B agrees that, during the term of his/her employment with Party A, Party B will provide full-time services to Party A and will not accept, provide or engage in, directly or indirectly any other employment, occupation, consulting or other business activity related to the business in which Party A and/or the Group is now involved or becomes involved during the term of his/her employment, nor will Party B engage in any other activities that conflict with his/her obligations to Party A. Without unanimous written consent from the Board of Directors of Party A, Party B shall not acquire any shares or interests of other companies which have business activity related to the business in which Party A and/or the Group is now involved or becomes involved during the term of his/her employment other than that have been disclosed to Party A upon the execution of this Agreement.

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8. Non-competition.

8.1 Party B agrees that during the course of his/her employment and for a period of 24 months(Party A shall be entitled to waive or reduce the period at its own discretion) immediately following the termination of his/her relationship with Party A for any reason, whether with or without good cause or for any or no cause, voluntarily or involuntarily, with or without notice, Party B will not, without the prior unanimous written consent of the Board of Director of Party A, (i) serve as a partner, employee, consultant, officer, director, manager, agent, associate, investor, or otherwise for, (ii) directly or indirectly, own, purchase, organize or take preparatory steps for the organization of, (iii) build, design, finance, acquire, lease, operate, manage, invest in, work or consult for or otherwise affiliate Party B with, any business, in competition with or otherwise similar to Party A's business, as stated under Section 2 of this Agreement.  The foregoing covenant shall cover Party B's activities in every part of the Territory in which Party B may conduct business during the term of such covenant as set forth above.  "Territory" shall mean (a) the People's Republic of China, (b) Taiwan, (c) Hong Kong, (d) Macao, (e) the United States of America, and (f) all other countries and/or regions of the world.

8.2 Party B acknowledge that Party B will derive significant value from Party A's agreement to provide Party B with that Confidential Information of Party A and/or any member of the Group to enable Party B to optimize the performance of Party B's duties to Party A.  Party B further acknowledge that Party B's fulfillment of the obligations contained in this Agreement, including, but not limited to, Party B's obligation neither to disclose nor to use the Confidential Information of Party A or any member of the Group other than for Party A's exclusive benefit and Party B's obligation not to compete contained in subsection (a) above, is necessary to protect the Confidential Information of Party A or any member of the Group and, consequently, to preserve the value and goodwill of Party A.  Party B further acknowledge the time, geographic and scope limitations of Party B's obligations under Section 8.1 above are reasonable, especially in light of Party A's and the Group's desire to protect their Confidential Information, and that Party B will not be precluded from gainful employment if Party B is obligated not to compete with Party A during the period and within the Territory as described above.

8.3 The covenants contained in Section 8.1 above shall be construed as a series of separate covenants, one for each city, county and state of any geographic area in the Territory.  Except for geographic coverage, each such separate covenant shall be deemed identical in terms to the covenant contained in Section 8.1 above.  If, in any arbitration proceeding, the arbitration panel refuses to enforce any of such separate covenants (or any part thereof), then such unenforceable covenant (or such part) shall be eliminated from this Agreement to the extent necessary to permit the remaining separate covenants (or portions thereof) to be enforced.  In the event the provisions of Section 8.1 above are deemed to exceed the time, geographic or scope limitations permitted by applicable law, then such provisions shall be reformed to the maximum time, geographic or scope limitations, as the case may be, then permitted by such law.

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8.4 Party B further agrees that Party B will be compensated by Party A upon the termination of Party B's employment with Party A and for the performance of the covenants that Party B make in this Section 8 of this Agreement (hereinafter “Compensation”).  The total amount of Compensation shall be the twelve times of monthly-salary based on the month when leaving the employ or the lowest amount as required by law, whichever is higher(In the case of Party A waive the requirement of non-competition or reduce the period, the compensation shall be canceled or reduced in proportion respectively). The Compensation will be paid by two installments, of which the first installment equal to 1/2 of the total amount of the Compensation will be paid within one month after the employment is terminated and the other installments equal to 1/2 of the total amount of the Compensation will be paid per three months thereafter.

9. Returning Party A's Documents.  Party B agrees that, at the time of leaving the employ of Party A, Party B will deliver to Party A (and will not keep in Party B's possession, recreate or deliver to anyone else) any and all devices, records, data, notes, reports, proposals, lists, correspondence, specifications, drawings blueprints, sketches, materials, equipment, other documents or property, or reproductions of any aforementioned items developed by Party B pursuant to Party B's employment with Party A or otherwise belonging to Party A and/or any other member of the Group, their successors or assigns.  In the event of the termination of Party B's employment, Party B agrees to sign and deliver the "Termination Certification" attached hereto as Exhibit B.

10. Liability for Default.  In the event that Party B breaches this Agreement and causes any damages of Party A, he/she shall be liable for such breach and shall compensate all damages resulting thereof.  The amount of compensation may be deducted directly from Party B's salary, bonus and other incomes paid by Party A after Party B is informed and has confirmed in written form.

11. Notification of New Employer.  In the event that Party B leave the employ of Party A, Party B hereby grant consent to notification by Party A to his/her new employer about his/her rights and obligations under this Agreement.

12. Solicitation of Employees.  Party B agrees that for a period of 24 months immediately following the termination of his/her relationship with Party A for any reason, whether with or without cause, Party B shall not either directly or indirectly solicit, induce, recruit or encourage any employees of Party A and/or any other member of the Group to leave their employment, or take away such employees, or attempt to solicit, induce, recruit, encourage or take away employees of Party A and/or any other member of the Group, either for himself/herself or for any other person or entity.

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13. Conflict of Interest Guidelines.  Party B agrees to diligently adhere to the Conflict of Interest Guidelines attached as Exhibit C hereto.

14. Anti-Corruption Policy.  Party B agrees to diligently adhere to the Anti-Corruption Policy of Party A attached hereto as Exhibit D.

15. Representations.  Party B agrees to execute any warranties or verify any proper document required to carry out the terms of this Agreement.  Party B represent that his/her performance of all the terms of this Agreement will not breach any agreement to keep in confidence proprietary information acquired by Party B in confidence or in trust prior to his/her employment by Party A.  Party B has not entered into, and Party B agrees he/she will not enter into any oral or written agreement in conflict herewith.

16. Arbitration.

16.1 Arbitration.  THE PARTIES AGREE THAT ANY DISPUTE OR CONTROVERSY ARISING OUT OF, RELATING TO, OR CONCERNING ANY INTERPRETATION, CONSTRUCTION, PERFORMANCE OR BREACH OF THIS AGREEMENT, SHALL BE SUBMITTED TO CHINA INTERNATIONAL ECONOMIC AND TRADE ARBITRATION COMMISSION ("CIETAC") FOR ARBITRATION.  THE ARBITRATION SHALL BE CONDUCTED IN BEIJING IN ACCORDANCE WITH THE THEN APPLICABLE ARBITRATION RULES OF CIETAC.  THE ARBITRATION AWARD SHALL BE FINAL, CONCLUSIVE AND BINDING ON THE PARTIES TO THE ARBITRATION.

16.2 Consideration. PARTY B UNDERSTAND THAT EACH PARTY’S PROMISE TO RESOLVE CLAIMS BY ARBITRATION IN ACCORDANCE WITH THE PROVISIONS OF THIS AGREEMENT, RATHER THAN THROUGH THE COURTS, IS CONSIDERATION FOR OTHER PARTY’S LIKE PROMISE.

17. General Provisions

17.1 Governing Law.  This Agreement will be governed by the laws of the People's Republic of China, without reference to choice of laws or conflict of laws principles.

17.2 Entire Agreement.  This Agreement sets forth the entire agreement and understanding between Party A and Party B relating to the subject matter herein, supersedes any prior agreement(s) between us regarding the subject matter herein, and merges all prior discussions between us.  No modification of or amendment to this Agreement, nor any waiver of any rights under this agreement, will be effective unless in writing signed by the party to be charged.  Any subsequent change or changes in Party B's duties, salary or compensation will not affect the validity or scope of this Agreement.

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17.3 Severability.  If one or more of the provisions in this Agreement are deemed void by law, then the remaining provisions will continue in full force and effect.

17.4 Successors and Assigns.  This Agreement will be binding upon Party B's heirs, executors, administrators and other legal representatives and will be for the benefit of Party A, its successors, and its assigns.

17.5 Counterparts.  This Agreement may be executed in any number of counterparts, each of which shall be enforceable, and all of which together shall constitute one agreement.

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Party A: Xi’an Baorun Industrial Development Co., Ltd.

Name: Gao Xincheng

By: /s/ Gao Xincheng

Party B: Li Gaihong

By: /s/ Li Gaihong

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EXHIBIT A

XI’AN BAORUN INDUSTRIAL DEVELOPMENT CO., LTD.

CONFLICT OF INTEREST GUIDELINES

It is the policy of Xi’an Baorun Industrial Development Co., Ltd., its subsidiaries, affiliates, successors or assigns (together, the "Company") to conduct its affairs in strict compliance with the letter and spirit of the law and to adhere to the highest principles of business ethics.  Accordingly, all officers, employees and independent contractors must avoid activities which are in conflict, or give the appearance of being in conflict, with these principles and with the interests of Party A.  The following are potentially compromising situations which must be avoided.  Any exceptions must be reported to the President and written approval for continuation must be obtained.

1. Revealing confidential information to outsiders or misusing confidential information.  Unauthorized divulging of information is a violation of this policy whether or not for personal gain and whether or not harm to Party A is intended.  (The Confidential Information, Invention Assignment and Non-Competition Agreement elaborates on this principle and is a binding agreement.)

2. Accepting or offering substantial gifts, excessive entertainment, favors or payments which may be deemed to constitute undue influence or otherwise be improper or embarrassing to Party A.

3. Participating in civic or professional organizations that might involve divulging confidential information of Party A.

4. Initiating or approving personnel actions affecting reward or punishment of employees or applicants where there is a family relationship or is or appears to be a personal or social involvement (other than as officers of Party A appointed by the board of directors of Party A).

5. Initiating or approving any form of personal or social harassment of employees.

6. Investing or holding outside directorship in suppliers, customers, or competing companies, including financial speculations, where such investment or directorship might influence in any manner a decision or course of action of Party A.

7. Borrowing from or lending to employees, customers or suppliers.

8. Acquiring real estate of interest to Party A.

9. Improperly using or disclosing to Party A any proprietary information or trade secrets of any former or concurrent employer or other person or entity with whom obligations of confidentiality exist.

10. Unlawfully discussing prices, costs, customers, sales or markets with competing companies or their employees.

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11. Making any unlawful agreement with distributors with respect to prices.

12. Improperly using or authorizing the use of any inventions which are the subject of patent claims of any other person or entity.

13. Engaging in any conduct which is not in the best interest of Party A.

Each officer, employee and independent contractor must take every necessary action to ensure compliance with these guidelines and to bring problem areas to the attention of higher management for review.  Violations of this conflict of interest policy may result in discharge without warning.

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EXHIBIT B

XI’AN BAORUN INDUSTRIAL DEVELOPMENT CO., LTD.

CONFLICT OF INTEREST GUIDELINES

The following policies are made and will be enforced by Xi’an Baorun Industrial Development Co., Ltd., its subsidiaries, affiliates, successors or assigns (together, the "Company") that:

1. The use of Company funds or assets for any unlawful or improper purpose is strictly prohibited.  No payment shall be made to, or for the benefit of, government employees for the purpose of, or otherwise in connection with, the securing of sales to or obtaining favorable action by a government agency.  Gifts of substantial value to or lavish entertainment of government employees are prohibited since they can be construed as attempts to influence government decisions in matters affecting Party A's operation.  Any entertaining of public officials, or the furnishing of assistance in the form of transportation or other services should be of such nature that the official's integrity or reputation will not be compromised.

2. The offer, payment or promise to transfer in the future company funds or assets or the delivery of gifts or anything else of value to the officials, the political parties or officials or candidates of the political parties is strictly prohibited for the purpose of influencing any act or decision of any such person in his or her official capacity, including the decision to fail to perform his or her official functions or to use such persons or party’s influence with a the government or instrumentality in order to affect or to influence any act or decision of such government or instrumentality in order to assist Party A in obtaining or retaining business for or with, or directing business to any person or entity.

3. All records must truly reflect the transactions they record.  All assets and liabilities shall be recorded in the regular books of account.  No undisclosed or unrecorded fund or asset shall be established for any purpose.  No false or artificial entries shall be made in the books and records for any reason.  No payment shall be approved or made with the intention or understanding that any part of such payment is to be used for any purpose other than that described by the document supporting the payment.

4. No political contribution shall be made, directly or indirectly, with corporate funds or assets regardless of whether the contributions are legal under the laws of the county in which they are made.

5. Any employee who learns of or suspects a violation of this Policy should promptly report the matter to the President, Chief Financial Officer or Internal Auditor, as appropriate in the circumstances.  All managers shall be responsible for the enforcement of and compliance with this Policy, including the necessary distribution to insure employee knowledge and compliance.

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