Practice Areas:

Btur/dng and FUUIIfciol Law

Bankmptcy
Capitlll Morkets & SeClUities
Commen:io1 Litigation
Dejense Contrucl
General Corporate Business Law
Immigration
Attorneys At law InteIlectJuJl Property
Labor and Employment Law
fiudemU8 viam inseniam auifaciam MlIIrimonilll
Mergers & Acquisitions
WE WILL EITHER FIND A WAY OR MAKE ONE ReoJEstaJe
Tax
1h
100 Church Street • 8 Floor TratIenuuTcs
NewYOIk. NY .10007

SUDDYJ. Barkats, Esq.

PhODe: 646-502-7007
Fax:64~07-5544
E-mail: sbarkats@JSBarkats.com

June 22, 2010

VIA ELECTRONIC MAIL AND REGULAR U.S FEDERAL MAIL

Mr. Kexuan Yao

One Waters Park Drive, Suite 98
San Mateo, CA 94403

Re: Rule 144 Opinion Letter for Affiliate Shareholder

Effectuating a Bona Fide Pledge of Securities.

Dear Mr. Yao,

Thank you for selecting JSBarkats PLLC (the "Firm" or ''us'') as your attorneys to
represent Mr. Kexuan Yao ("Mr. Yao" or ''you'') personally regarding the issuance ofa Rule 144
Opinion Letter (the "Opinion") to the Fund (as defined herein) in connection with the pledge of
all of your beneficially-owned stock in China Armco Metals, Inc. (the "Company") to the Fund
pursuant to the Structure Transaction Agreement, entered into as of June 11, 2010 (the
"Agreement"), by and between you and Crisnic Fund, S.A. (the ''Fund'') (the "Matter"). We
appreciate the confidence you have shown our :firm by engaging us with regard to the Matter.
JSBarkats PLLC shall be the only law :firm representing you for this Matter.

This engagement letter should be read in conjunction with the enclosed Fee and Billing
Information, which shall apply to our engagement hereunder except as otherwise noted herein.

www.JSBarkats.com
 Attorneys At law

Page 2 ofS

Legal Fees and Scopes of Representation

We will represent you in connection with the Matter on a flat fee basis. We will
undertake the Matter and issue the Opinion for an aggregate flat fee of $4,500, payable as
follows:

(i) $500 in immediately available funds upon the execution of this engagement letter;
and

(ii) delivery of a certified check upon execution of this engagement letter payable to
the order of JSBarkats PLLC in the amount of $4,000 dated no later than July 15,
2010.

You agree that the delivered certified check is not being held in escrow and thus not subject to
any conditions, other than the issuance of the Opinion, before it can be deposited in the Firm's
account or cashed on or after the date of the check. For the avoidance of doubt, the Firm has full
rights to the proceeds of the certified check by July 15th 2010 the latest whether the opinion was
issued or not based on our due diligence. Such check will be either provide by you personally or
by Mr. Ed Furman's personal account.

In the event that you request us to handle projects outside the scope of the Matter, we may
request an additional retainer on a project-by-project basis. Jfyou prefer to be billed on an hourly
basis rather than paying our flat fee, our current billable hourly rates range from $350-$480 per
hour for Partners and $245-$300 per hour for Associates. Our current hourly rate for paralegal
services is $145 per hour. Our hourly rates may be subject to change from time to time. By
accepting our flat fee and executing this engagement letter, you have agreed to waive any rights
to obtain hourly billable invoices and tracking of our billable time. Since our services are
provided on a flat fee basis you waive the right to receive hourly detailed invoices.

Assignment of Firm's Personnel

Sunny J. Barkats, Esq., will be the Partner primarily responsible for your legal representation and
will be working closely with our Associates and as necessary, will draw upon the talent and
expertise of other Partners within the Firm and use legal assistants to handle appropriate tasks.

The fees set forth above do not include any expenses or charges associated with filings or other
third party charges for which you will be solely responsible, and such fees will have to be either
paid upfront or directly to the service provider.
 Attorneys At law

Page 3 of5

If you have any questions regarding the billing format or information contained in any invoice,
please contact us so that we can try to answer them promptly.

While we anticipate that you will be satisfied 'with our representation, we encourage you to
inform us if at any time our services do not meet your expectations. If we cannot resolve a
problem, or for any reason, you may end this relationship at anytime by giving us thirty (30)
days written notice, subject to your obligation to pay us according to the terms of this
engagement letter. We, in turn, reserve the right to withdraw from the representation upon
written notice in the event that you fail to cooperate with us in any way which we may
reasonably request, or to timely pay our statements in full as submitted, or in the event we
determine in our reasonable discretion that it would be improper under rules of professional
responsibility or impractical to continue our relationship.

Resolution o(Disputes -Mediation and Arbitration

Any dispute, controversy or claim arising out of or relating to this engagement, including any
dispute, controversy or claim relating to our fees, disbursements and charges, shall first be
submitted to non-binding mediation before a mediator jointly selected by the parties hereto.
Failing resolution through mediation, any such dispute, controversy or claim shall be finally
resolved by confidential arbitration as follows: (1) if and to the extent that the New York Fee
Dispute Resolution Program (part 137 of22 NYCRR) providing for the informal and expeditious
resolution of fee disputes between attorneys and clients is applicable, then the rules and
procedures of such Fee Dispute Resolution Program shall apply and (2) if such Fee Dispute
Resolution Program is not applicable to any such dispute, controversy or claim, then the
arbitration shall be conducted in New York City in accordance with the Commercial Arbitration
Rules of the American Arbitration Association, and any award issued in such arbitration shall be
enforceable in any court with jurisdiction. A copy of the New York Fee Dispute Resolution
Program is available upon request.

Binding Agreement

This letter represents the entire agreement between you and our Firm concerning the terms and
conditions of this engagement. By signing below, you acknowledge that this engagement letter
has been reviewed and its content understood and that you agree to be bound by its terms and
conditions. Furthermore, you acknowledge that our Firm has made no representations to you
regarding the outcome of the Matter and if the due diligence does not permits the issuance of an
opinion the fee remains due and payable in full. No change or waiver of any of the provisions of
this engagement letter shall be binding on either you or our Firm unless the change or waiver is
in writing and signed by both parties hereto.
 Attornevs At law

Page 4 of 5

If this letter reflects your understanding of our relationship with respect to the Matter, please sign
and return the enclosed duplicate copy.

Thank you again for this opportunity to be of service to you. My colleagues and I look forward
to working with you.

Very truly yours,

JSBarkats PLLC

Agreed and Acknowledged:

By: _
Kexuan Y 30, personally and individually

Agreed and Acknowledged:

By:
~------------~
Ed Furman, personally and individually
Page 5 of 5
FEE AND BILLING INFORMATION

The following is a general description of our fee and billing policies. These general policies may be modified by the specific retainer letter to
which this memorandum is attached.

Professional Fees. In the absence of a written agreement with you to the contrary, our fees for professional services are based on the hours
worked by and billing rates of our attorneys and legal assistants. To help us determine the value of our services, our lawyers and legal
assistants maintain time records for each dient and matter. Our attomeys and legal assistants are assigned hourly rates, which are based on
years of experience, specialization, training and level of professional attainment. We adjust our rates periodically (usually at the beginning of
each year) to take into account inflation and the increased experience of our professional personnel.

We attempt to work on an economical basis by assigning tasks that do not require extensive legal training to assistants, law clerks and support
personnel. Legal work that does not require more experienced attomeys will be performed, where feasible, by lawyers with lower billing rates.
Of course, the quality of the work is paramount, and we do not sacrifice quality for economy.

Before undertaking a particular assignment, we will, if requested, provide you with a fee estimate to the extent possible. Estimates are not
possible for some matters, however, and cannot be relied on in many others because the scope of our work will not be clear at the outset.
When a fee estimate is given, it is only an estimate; it is not a maximum or minimum fee quotation. The actual fee may be more or less than the
quoted estimate.

Other charges. In addition to charges for services, our invoices include charges for other costs we incur in providing your legal services. These
costs include duplicating, long distance telephone, postage for major mailings, delivery charges, travel expense, computerized legal research,
word processing, computer, communication, and telecopier. Some of these items represent disbursements to third parties; some include an
allocation of associated overhead costs, and some may include the full monthly third-party service charges without allocation to other accounts
or for unrelated usage where a significant portion of usage represents assistance provided to you on this or related matters.

Billing and Payment Procedures. Unless other arrangements are made at the time of the engagement, bUls will be sent monthly. Our normal
policy is to request a, retainer or advance payment, in which case monthly bills will be applied against the retainer; other retainer arrangements
may also be used. When we foresee substantial costs, we may ask you to pay certain of them directly or to fund them in advance. In most
cases our minimum billing unit will be % of an hour.

Our stalements nonnally contain a brief narrative description of the work done and the amount biDed, and includes our out-of-pocket costs. We
will be happy to break down the charges among the various projects or matters covered by the billing if requested.

Statements for services are payable upon presentation. All Statements paid more than 30 days after receipt may be subject to a late charge of
one (1 %) percent per month. You should feel free to contact the partner in charge of your work with any questions or comments you may have.

In the event you dispute the finn's fees, under Part 137 of the Rules of the Chief Administrator of the Courts (New York), you may be entitled to
arbitrate the matter. You should consult the rule to detennine whether it applies to your dispute and to be sure that you act in a timely manner
to preserve your arbitration rights.

Other Services. Often, a client asks us to pertonn services additional to those originally required. In such event, you will be liable for payment
therefore at our customary hourly rates and for related disbursements, unless we enter into a retainer letter setting forth different terms.

Change in Terms of Engagement No alteration, modification or variation of the terms of our engagement will be effective unless in writing
executed on behalf of the finn, other than annual increases in rates for professional services which will become effective January of each year.

Please read and initials: _

Please read and initials: _

wwwJSBarkats.com