YANTAI POLARIS STATE-HOLDING CO.,LTD.

5 The Supervision of Brand Employment License

Clause Thirty The holding company supervises the companies that are licensed to employ “ Polaris ” brand and business firm according to 《 the People's Republic of China Brand Law 》 and these methods. The range is:

• Whether the companies employ “ Polaris ” brand mark and the anti-falsification mark according to regulations or not.

• Whether the companies employ “ Polaris ” brand within the verified or promissory scope or not.

• Whether the companies arbitrarily change the explanation and figure of “ Polaris ” brand or not.

• Whether the companies strictly execute 《 Products Quality Management Regulations 》 or not

• Whether the companies pay the brand employment charge according to the contract or not

• Whether the companies fulfill other liabilities of the contract and perform relevant regulations or not

Clause Thirty-One The holding company carry out misbehavior records regulation to the companies that violate the relevant regulations of these methods, and give punishment such as open criticizing 、 rectifying and improving within limited time 、 authorizing others to manufacture the same kind of products 、 suspending the employment of anti-falsification mark 、 turning down the application for brand employment 、 canceling the brand employment license, etc.

6 Supplementary Articles

Clause Thirty-Two In case that these methods are in contradiction with state law or statute, we conform to state law and statute.

Clause Thirty-Three The management of other registered brands of the holding company is referred to these methods.

Clause Thirty-Four The relevant regulations 、 provisions 、 notices instituted according to these methods by the holding company have equivalent force.

Clause Thirty-Five The programming and developing department of the holding company is responsible to explain the methods.

Clause Thirty-Six These methods are brought into effect from January 1, 2003, the former administrative provisions about “ Polaris ” brand are abolished at the same time.