Document:

Unassociated Document

    Exhibit
10.5

    

    Execution
Copy

    UNITED
STATES COMMODITY FUNDS LLC

     

    DIRECTOR
DEFERRED COMPENSATION AGREEMENT

     

    This
DIRECTOR DEFERRED COMPENSATION AGREEMENT (“Agreement”)
is effective as of April 1, 2010, by and between United States Commodity Funds
LLC, a Delaware limited liability company (the “Company”),
each of the Funds (as defined below), and the undersigned director of the
Company (the “Director”).

     

    Recitals

     

    A.           The
board of directors of the Company has determined that it is in the best
interests of the Company and each commodity fund for which the Company acts as
the general partner (each a “Fund”,
together, the “Funds”),
including United States Oil Fund, LP, United States 12 Month Oil Fund, LP,
United States Short Oil Fund, LP, United States Natural Gas Fund, LP, United
States 12 Month Natural Gas Fund, LP, United States Short Natural Gas Fund, LP,
United States Heating Oil Fund, LP, United States Gasoline Fund, LP and United
States Brent Oil Fund, LP, to assure that the Company and the Funds will have
the continued dedication and objectivity of the Director.

     

    B.           The
board of directors believes that it is important to provide the Director with
deferred compensation to provide sufficient incentive to the Director to
continue his service to the Company and the Funds.

     

    In
consideration of the mutual covenants herein contained, and in consideration of
the Director’s continuing service to the Company, the parties agree as
follows:

     

    
      	
              1.

            	
              Definition of
      Terms. The following terms referred to in this Agreement shall have
      the following meanings:

            

    

     

    
      	
               
      

            	
              A.

            	
              Cause.  “Cause”
      shall mean the Director’s gross negligence, willful misconduct or failure
      to satisfy his fiduciary duties as a
director.

            

    

     

    
      	
               
      

            	
              B.

            	
              Deferred
      Compensation.  “Deferred
      Compensation” shall mean compensation in an amount equal to two
      times the Director’s annual compensation for services as a director
      (including compensation for service on any committee of the board of
      directors) as of the date hereof.

            

    

     

    
      	
               
      

            	
              C.

            	
              Disinterested
      Board. “Disinterested
      Board” shall mean the board of directors of the Company excluding
      those members of the board of directors, if any, who are parties to
      agreements or arrangements identical to or substantially similar to this
      Agreement.

            

    

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    
      	
               
      

            	
              D.

            	
              Resignation for Good
      Reason. “Resignation
      for Good Reason” shall mean the Director’s resignation because
      (i) his compensation as a Director decreases below the amount of
      compensation in effect on the date of this Agreement, (ii) his
      expenses are not reimbursed at least to the same degree as they were
      reimbursed during the period that he served as a director prior to the
      date of this Agreement, (iii) there is any material adverse change in
      his duties as a director of the Company from his current duties, or any
      material increase in the amount of time (including travel time) necessary
      to perform such duties from the amount of time currently spent by him,
      (iv) the Company fails to maintain directors and officers errors and
      omissions insurance coverage at least equivalent in amount and terms to
      the current coverage, (v) the Company breaches this Agreement, or
      (vi) circumstances are imposed on him by the Company that would, in
      his reasonable judgment, make him unable to perform his duties as a
      director of the Company in an appropriate
  manner.

            

    

     

    
      	
               
      

            	
              E.

            	
              Separation from
      Service.  “Separation
      from Service” shall mean the Director’s separation from service as
      a member of the Board within the meaning of Section 409A of the Internal
      Revenue Code and the regulations
thereunder.

            

    

     

    
      	
              2.

            	
              Deferred
      Compensation.

            

    

     

    
      	
               
      

            	
              A.

            	
              Payment of Deferred
      Compensation. The Deferred Compensation shall be paid in the manner
      set forth in Section 2.B and 2. C below on the earliest to occur of
      (i) April 1, 2012, (ii) the Director’s Separation from
      Service, or (iii) the Director’s death.  Notwithstanding the
      foregoing, upon the Director’s Separation from Service prior to
      April 1, 2012 due to (A) the Director’s voluntary resignation that is
      other than a Resignation for Good Reason or (B) Cause, the Director shall
      forfeit and shall not be entitled to receive payment of his Deferred
      Compensation.

            

    

     

    
      	
               
      

            	
              B.

            	
              Timing of Payment of
      Deferred Compensation. The Deferred Compensation shall be paid to
      the Director (or in the event of the Director’s death, (i) to his
      beneficiary designated in accordance with procedures established by the
      Company or (ii) if no such beneficiary is designated, to his estate)
      by the Funds in a single lump sum within fourteen days after the date such
      Deferred Compensation becomes due and payable to the Director pursuant to
      Section 2.A.

            

    

     

    
      	
               
      

            	
              C.

            	
              Payment by the
      Funds.  Payment of the Deferred Compensation shall be
      apportioned among the Funds in a manner consistent with the payment of
      fees and expenses of the directors.

            

    

     

    
      	
              3.

            	
              Segregated
      Account.  An amount equal to the Deferred Compensation
      shall be deposited within fourteen days of the effective date of this
      Agreement  and maintained in a segregated account of the Funds
      to be held by the Funds’ custodian, Brown Brothers Harriman & Co.,
      Inc. (“BBH”),
      on behalf of the Company and the Funds.  However, the segregated
      account and any other assets of the Company and the Funds shall not be
      treated as set aside for or dedicated to the Director, and the Deferred
      Compensation is not intended to be treated as funded for purposes of the
      Internal Revenue Code or otherwise.  The Director shall have no
      interest in or claim on such segregated account or any other assets of the
      Company or the Funds other than that of a general
  creditor.

            

    

     

    
      
         

      

      
        2

        
          

        

      

      
         

      

    

    
      	
              4.

            	
              Termination and
      Amendment of this Agreement.

            

    

     

    
      	
               
      

            	
              A.

            	
              Termination.
      This Agreement shall terminate on the date that all obligations of the
      parties hereunder have been
satisfied.

            

    

     

    
      	
               
      

            	
              B.

            	
              Form of
      Amendment. The form of any amendment of this Agreement shall be a
      written instrument signed by the Director and by a duly authorized officer
      or officers of the Company.  Any such amendment shall have been
      approved by the Disinterested
Board.

            

    

     

    
      	
              5.

            	
              Successors.  Any
      successor to the Company or any of the Funds (whether direct or indirect
      and whether by purchase, merger, consolidation, liquidation or otherwise)
      or to all or substantially all of the business and/or assets of the
      Company or any of the Funds, as applicable, shall assume the obligations
      under this Agreement.  For all purposes under this Agreement,
      the term “Company” or “Fund” shall include any successor to the business
      and/or assets of the Company or any Fund, as applicable, which becomes
      bound by the terms of this Agreement by operation of
  law.

            

    

     

    
      	
              6.

            	
              Notice. Notices
      and all other communications contemplated by this Agreement shall be in
      writing and shall be deemed to have been duly given when personally
      delivered or when mailed by U.S. registered or certified mail, return
      receipt requested and postage prepaid. In the case of the Director, mailed
      notices shall be addressed to him at the home address that was most
      recently communicated to the Company in writing. In the case of the
      Company, mailed notices shall be addressed to its corporate headquarters,
      and all notices shall be directed to the attention of its
      Secretary.

            

    

     

    
      	
              7.

            	
              Miscellaneous
      Provisions.

            

    

     

    
      	
               
      

            	
              A.

            	
              Compliance with
      Section 409A.  This Agreement is intended to comply with
      Section 409A of the Internal Revenue Code and the regulations thereunder
      (“Section
      409A”) and shall be interpreted and operated in accordance with
      such intent.  In the event that a Director is a “specified
      employee” within the meaning of Section 409A, any amounts payable under
      this Agreement that constitute deferred compensation within the meaning of
      Section 409A and that become payable upon a Separation from Service shall
      be delayed and paid upon the earlier of the first day of the
      seventh  month following such Separation from Service or the
      Director’s death, if such delay is necessary to comply with Section
      409A.  Any adverse tax consequences incurred by the Director
      under this Agreement, whether a result of Section 409A or otherwise, are
      the sole responsibility of the affected
  Director.

            

    

     

    
      	
               
      

            	
              B.

            	
              Waiver. No
      provision of this Agreement shall be modified, waived or discharged unless
      the modification, waiver or discharge is agreed to in writing and signed
      by the Director and by an authorized officer of the Company.  No
      waiver by either party of any breach of, or of compliance with, any
      condition or provision of this Agreement by the other party shall be
      considered a waiver of any other condition or provision or of the same
      condition or provision at another
time.

            

    

     

    
      
         

      

      
        3

        
          

        

      

      
         

      

    

    
      	
               
      

            	
              C.

            	
              Whole
      Agreement. No agreements, representations or understandings
      (whether oral or written and whether express or implied) which are not
      expressly set forth in this Agreement have been made or entered into by
      either party with respect to the subject matter
  hereof.

            

    

     

    
      	
               
      

            	
              D.

            	
              Choice of Law.
      The validity, interpretation, construction and performance of this
      Agreement shall be governed by the laws of the State of
      California.

            

    

     

    
      	
               
      

            	
              E.

            	
              Severability.
      The invalidity or unenforceability of any provision or provisions of this
      Agreement shall not affect the validity or enforceability of any other
      provision hereof, which shall remain in full force and
    effect.

            

    

     

    
      	
               
      

            	
              F.

            	
              No Assignment of
      Benefits. The rights of any person to payments or benefits under
      this Agreement shall not be made subject to option or assignment, either
      by voluntary or involuntary assignment or by operation of law, including
      (without limitation) bankruptcy, garnishment, attachment or other
      creditor’s process, and any action in violation of this subsection (E)
      shall be void.

            

    

     

    
      	
               
      

            	
              G.

            	
              Assignment by Company
      and the Funds. The Company may assign its rights under this
      Agreement to an affiliate, and an affiliate may assign its rights under
      this Agreement to another affiliate of the Company or to the
      Company.  In the event of any such assignment, the term
      “Company” when used in a section of this Agreement shall mean the Company
      that the Director is actually associated with.  No Fund may
      assign this Agreement without the prior written consent of the
      Director.

            

    

     

    
      	
               
      

            	
              H.

            	
              Headings. The
      headings of sections herein are included solely for convenience of
      reference and shall not control the meaning or interpretation of any
      provisions of this Agreement.

            

    

     

    
      	
               
      

            	
              I.

            	
              Counterparts.
      This Agreement may be executed in counterparts, each of which shall be
      deemed an original, but all of which together will constitute one and the
      same instrument.

            

    

     

    
      
         

      

      
        4

        
          

        

      

      
         

      

    

    IN
WITNESS WHEREOF, each of the parties has executed this Agreement, in the case of
the Company by its duly authorized officer, as of the day and year first above
written.

     

    
      
        	 
      	
                United
      States Commodity Funds LLC

              
	 
      	 
      	 
      
	 
      	
                By: 

              	
                  

              
	 
      	 
      	
                Name:

              
	 
      	 
      	
                Title:

              

      

    

     

    
      
        
          
            
              	 	
                      United States Oil Fund,
      LP, by its general partner United 
States
      Commodity Funds LLC 

                    
	 
      	 
      	 
      
	 
      	
                      By: 

                    	
                        

                    
	 
      	 
      	
                      Name:

                    
	 
      	 
      	
                      Title:

                    
	 
      	 
      	 
      
	 
      	
                      United States 12 Month Oil
      Fund, LP, by its general 
partner United States Commodity Funds
      LLC

                    
	 
      	 
      	 
      
	 
      	
                      By:

                    	
                        

                    
	 
      	 
      	
                      Name:

                    
	 
      	 
      	
                      Title:

                    
	 
      	 
      	 
      
	 
      	
                      United States Short Oil Fund,
      LP, by its general partner 
United States Commodity Funds
      LLC

                    
	 
      	 
      	 
      
	 
      	
                      By:

                    	
                        

                    
	 
      	 
      	
                      Name:

                    
	 
      	 
      	
                      Title:

                    
	 
      	 
      	 
      
	 
      	
                      United States Natural Gas Fund,
      LP, by its general 
partner United States Commodity Funds
      LLC

                    
	 
      	 
      	 
      
	 
      	
                      By: 

                    	
                        

                    
	 
      	 
      	
                      Name:

                    
	 
      	 
      	
                      Title:

                    

            

          

        

      

    

    
      
         

      

      
        5

        
          

        

      

      
         

      

    

    

    
      
        	 
      	
                United States 12 Month Natural
      Gas Fund, LP, by its 
general partner United States Commodity
      Funds 
LLC

              
	 
      	 
      	 
      
	 
      	
                By:

              	
                  

              
	 
      	 
      	
                Name:

              
	 
      	 
      	
                Title:

              
	 
      	 
      	 
      
	 
      	
                United States Short Natural Gas
      Fund, LP, by its 
general partner United States Commodity Funds
      
LLC

              
	 
      	 
      	 
      
	 
      	
                By:

              	
                  

              
	 
      	 
      	
                Name:

              
	 
      	 
      	
                Title:

              
	 
      	 
      	 
      
	 
      	
                United States Heating Oil Fund,
      LP, by its general 
partner United States Commodity Funds
      LLC

              
	 
      	 
      	 
      
	 
      	
                By:

              	
                  

              
	 
      	 
      	
                Name:

              
	 
      	 
      	
                Title:

              
	 
      	 
      	 
      
	 
      	
                United States Gasoline Fund,
      LP, by its general 
partner United States Commodity Funds
      LLC

              
	 
      	 
      	 
      
	 
      	
                By:

              	
                  

              
	 
      	 
      	
                Name:

              
	 
      	 
      	
                Title:

              
	 
      	 
      	 
      
	 
      	
                United States Brent Oil Fund,
      LP, by its general 
partner United States Commodity Funds
      LLC

              
	 
      	 
      	 
      
	 
      	
                By:

              	
                  

              
	 
      	 
      	
                Name:

              
	 
      	 
      	
                Title:

              
	 
      	 
      	 
      
	 
      	
                Director

              
	 
      	 
      	 
      
	 
      	
                  

              
	 
      	
                Name:

              

      

    

    
      
         

      

      
        6Unassociated Document

     

    Exhibit
4.1

    

    Ref. No.:
3770502010M100000400

    

    Loan
Contract

    (Unofficial
English Translation Solely for Convenience)

    

    Bank of
Communication

    
      
         

      

      
        -1-

        
          

        

      

      
         

      

    

     

    Ref. No.:
3770502010M100000400

    

    Loan
Contract

    

    
      	
              Borrower:

            	
              Fuwei Films (Shandong)
      Co., Ltd.

            

    

     

    
      	
              Legal
      Representative:

            	
              Xiaoan
      He

            

    

     

    
      
        	
                Legal
      Address:

              	
                Hi-Tech
      Development Zone, Dong Ming Road, Weifang

              

      

    

     

    
      	
              Correspondence
      Address:

            	
              Same as
      above

            

    

    

    
      	
              Lender:

            	
              Weifang
      Branch, Bank of Communication

            

    

     

    
      	
              Responsible
      Person:

            	
              Lei
      Wang

            

    

     

    
      	
              Correspondence
      Address:

            	
              358
      Dong Fang, Dong Street, Weifang

            

    

     

    Both parties
agree to the following terms:

     

    
      	
              1

            	
              Loan

            

    

     

    
      	
              1.1

            	
              Currency:
      Renminbi (RMB)

            

    

     

    
      	
              1.2

            	
              Amount:
      46,000,000

            

    

     

    
      	
              1.3

            	
              The
      proceeds of the Loan under this Contract shall be used for industrial
      working capital..

            

    

     

    
      	
              1.4

            	
              Loan
      Period: Commencing from June 7, 2010, to June 6,
  2011.

            

    

    

    
      	
              2

            	
              Interest
      Rate and Computation of Interest

            

    

     

    
      	
              2.1

            	
              Interest
      rate: The annul interest rate is 5.841%(√□annually
      □monthly).

            

    

     

    
      	
              2.2

            	
              Computation of
      Interest

            

    

     

    
      	
              2.2.1

            	
              Normal
      interest = interest rate under this Contract X proceeds of the Loan X
      number of days of use.  Number of days of use is calculated from
      the drawing date to the maturity
date.

            

    

    
      
         

      

      
        -2-

        
          

        

      

      
         

      

    

    
      	
              2.2.2

            	
              The
      penalty interest of the overdue loan and appropriated loan is calculated
      based on the amount and the actual number of days overdue or appropriated.
      If the currency of the loan is Renminbi (RMB), the overdue penalty
      interest rate is equal to the loan interest rate set forth in this
      Contract plus 50% of such loan’s interest rate, and the appropriated
      penalty interest rate is equal to the loan interest rate set forth in this
      Contract plus 100% of such loan interest rate. If the currency of the loan
      is a foreign currency, the aforesaid penalty interest rates are equal to
      the loan interest rate set forth in this Contract plus 20% of such loan
      interest rate.

            

    

     

    
      	
              2.3

            	
              The
      loan under this Contract uses the second (2nd)
      method mentioned below for payment of interest. On the maturity date, the
      interest shall be paid together with the principal. The date of payment of
      interest is the date of the settlement of
  interest:

            

    

     

    
      	
               
      

            	
              1.

            	
              Interest
      settlement on the 20th
      day of the last month of each quarter;
or

            

    

     

    
      	
               
      

            	
              2.

            	
              Interest
      settlement on the 20th
      day of each month.

            

    

     

    
      	
              3

            	
              Granting
      and Repayment of Loan

            

    

     

    
      	
              3.1

            	
              Borrower
      shall start the related procedure three (3) business days prior to drawing
      the proceeds of the Loan in accordance with the following loan drawing
      schedule: (N/A)

            

    

     

    Drawing
Date   
                                                          Drawing
Amount

    _7_ day
__6_ month __2010 Year; _46,000,000_(amount in capitalization)

    ___ day
___ month ___ Year; _______________(amount in capitalization)

    ___ day
___ month ___ Year; _______________(amount in capitalization)

    ___ day
___ month ___ Year; _______________(amount in capitalization)

    
      
         

      

      
        -3-

        
          

        

      

      
         

      

    

    

    
      	
              3.2

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

            

    

     

    
      	
               
      

            	
              1.

            	
              Borrower
      has already completed the statutory procedures including obtaining related
      permit, approval and registration from the government and such permit,
      approval and registration remain in full force and
  effect.

            

    

     

    
      	
               
      

            	
              2.

            	
              The
      guarantee contract (if any) under this Contract has come into effect and
      remains in full force and effect.

            

    

     

    
      	
               
      

            	
              3.

            	
              The
      financial condition of the Borrower does not have any substantial adverse
      changes; and

            

    

     

    
      	
               
      

            	
              4.

            	
              Borrower
      is not in breach of this Contract.

            

    

     

    
      	
              3.3

            	
              The
      actual drawing date and drawing amount shall be in accordance with the
      promissory note.

            

    

     

    
      	
              3.4

            	
              Borrower
      shall not repay the Loan prior to the scheduled date without having a
      written consent from Lender.

            

    

     

    
      	
              4

            	
              Representation
      and Guarantee of the Borrower

            

    

     

    
      	
              4.1

            	
              Borrower
      is an independent entity and has the necessary contractual capacity to
      perform this Contract and will be liable for its non-performance of its
      obligations hereunder.

            

    

     

    
      	
              4.2

            	
              The
      execution and performance of this Contract is the true intention of the
      Borrower, and the Borrower has all necessary consents, approvals and
      authorizations to perform its
obligations.

            

    

     

    
      	
              4.3

            	
              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 in full effect, and Borrower has not withheld any
      information which may affect the evaluation of its financial status and
      repayment ability.

            

    

    
      
         

      

      
        -4-

        
          

        

      

      
         

      

    

    
      	
              5

            	
              Rights
      and Obligations of Lender

            

    

     

    
      	
              5.1

            	
              Lender
      has the right to be repaid the principal, receive interest (including
      compound, overdue and appropriated penalty interest) and the necessary
      expenses from the Borrower in accordance with this Contract. Lender has
      the right to exercise any other rights under the relevant laws and
      regulations or stipulated in this
Contract.

            

    

     

    
      	
              5.2

            	
              Except
      as otherwise specified under this contract, Lender shall keep all the
      financial and operation data and information confidential unless compelled
      by requirements of applicable laws and
  regulations.

            

    

     

    
      	
              6

            	
              Rights
      and Obligations of Borrower

            

    

     

    
      	
              6.1

            	
              Borrower
      shall repay the Loan under this Contract and pay the interest hereunder in
      accordance with the date, amount, currency set forth in this
      Contract.

            

    

     

    
      	
              6.2

            	
              Borrower
      shall not use the proceeds of the Loan for any usage not stipulated in
      this Contract.

            

    

     

    
      	
              6.3

            	
              Borrower
      shall be liable for the expenses under this Contract, including but not
      limited to, expenses for notary service, authentication, evaluation and
      registration.

            

    

     

    
      	
              6.4

            	
              Borrower
      shall comply with the operation procedure and the general practice of the
      Lender and loan application, including but not limited to, facilitating
      Lender’s examination and supervision on Borrower’s operation status, and
      providing all the financial statements, or any other data and information
      requested by Lender, and shall guarantee that such documents, data and
      information are true, complete and
accurate.

            

    

     

    
      	
              6.5

            	
              If
      any one of the following events occurs, Borrower shall notify the Lender
      within thirty (30) days and shall not commence such activities unless the
      Loan and interest under this Contract are repaid completely, or a
      repayment schedule and guarantee are approved and accepted by the Lender.
      These are as follows:

            

    

    
      
         

      

      
        -5-

        
          

        

      

      
         

      

    

    
      	
               
      

            	
              1.

            	
              Selling,
      donating, renting, lending, assigning, mortgaging, pledging or disposing
      of all or substantial part of its
assets.

            

    

     

    
      	
               
      

            	
              2.

            	
              Any
      substantial changes in organization or structure of the Borrower,
      including but not limited to, its operation, subcontracting, lease,
      affiliation, company restructuring, joint-stock, merger (consolidation),
      equity joint-venture (non-equity), spin-off, incorporation of subsidiary,
      asset assignment, reduction of registered capital,
  etc.

            

    

     

    
      	
              6.6

            	
              Borrower
      shall notify the Lender within seven (7) days of occurrence of any of the
      following events:

            

    

     

    
      	
               
      

            	
              1.

            	
              Amendment
      of the Articles of Association, change of Borrower’s name, change of legal
      representative , change of domicile, change of address, and change in the
      scope of its business.

            

    

     

    
      
        	
              	
                2.

              	
                Borrower
      or Guarantor’s (if any) intention to file for
  bankruptcy.

              

      

    

     

    
      	
               
      

            	
              3.

            	
              Borrower’s
      involvement in any major litigation or arbitration, or any lien or
      encumbrance is imposed on its
assets.

            

    

     

    
      	
               
      

            	
              4.

            	
              Borrower’s
      guarantee to any other third party, which will have an adverse effect on
      its financial status and ability to perform its obligations under this
      Contract.

            

    

     

    
      	
               
      

            	
              5.

            	
              Borrower
      enters into a contract which will have a material adverse effect on its
      operation and financial status.

            

    

     

    
      	
               
      

            	
              6.

            	
              Borrower
      or Guarantor (if any) stops its operation, its business terminates or its
      business license is revoked.

            

    

     

    
      	
               
      

            	
              7.

            	
              Borrower’s
      legal representative or senior management has committed a criminal
      offence.

            

    

     

    
      	
               
      

            	
              8.

            	
              Borrower
      faces substantial hardship in managing its business or any other event
      which will have an adverse effect on the financial status or ability of
      the Borrower to repay the Loan.

            

    

    
      
         

      

      
        -6-

        
          

        

      

      
         

      

    

    
      	
              6.7

            	
              Any
      changes to the form of collateral under this Contract that may have
      adverse effect on Lender’s right shall be made upon Lender’s
      consent.

            

    

     

    
      	
              7

            	
              Maturity
      Repayment of the Loan before the Maturity
Date

            

    

     

    
      	
              7.1

            	
              In
      the event of the occurrence of any of the following events, Lender has the
      right to suspend the drawing of the proceeds of the Loan and require
      repayment of the principal of the Loan partially or completely before the
      maturity date and demand that the Borrower repay the principal of the Loan
      and pay the interest hereunder. These are as
  follows:

            

    

     

    
      	
               
      

            	
              1.

            	
              Borrower’s
      representations and warranties in Section 4 are not
  true;

            

    

     

    
      	
               
      

            	
              2.

            	
              Borrower
      is in breach of this Contract;

            

    

     

    
      	
               
      

            	
              3.

            	
              The
      events set forth in Section 6.6 have occurred and Lender believes that
      such event will have a material adverse effect on its rights as a
      creditor; or

            

    

     

    
      	
               
      

            	
              4.

            	
              Borrower
      has delayed its performance or is in breach of other contracts entered
      into between Borrower and Lender, and has not provided the Lender with any
      remedy upon notification by Lender.

            

    

     

    
      	
              8

            	
              Breach
      of Contract

            

    

     

    
      	
              8.1

            	
              In
      the event that Borrower fails to repay the principal or interest in full
      in a timely fashion, or to use the proceeds of the Loan as set forth in
      this Contract, Lender has the right to use the overdue penalty interest
      rate and appropriate penalty interest rate to calculate the
      interest.

            

    

     

    
      	
              8.2

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

            

    

    
      
         

      

      
        -7-

        
          

        

      

      
         

      

    

    
      	
              8.3

            	
              In
      the event that Borrower avoids Lender’s supervision, fails to repay the
      principal or the interest of the Loan or avoids the repayment
      intentionally, Lender has the right to inform relevant government
      authority and to publish the payment notification in the news
      media.

            

    

     

    
      	
              9

            	
              Withdrawal
      Instruction

            

    

     

    
      	
              9.1

            	
              In
      the event that Borrower is overdue in payment in respect of principal,
      interest, penalty interest, compound interest or other expenses, Lender is
      authorized to withdraw the money from any other bank accounts of Borrower
      with Bank of Communication to setoff the said outstanding
      payment.

            

    

     

    
      	
              9.2

            	
              After
      the aforesaid withdrawal, Lender shall inform the Borrower of such account
      number, loan contract reference number, promissory note reference number,
      amount of withdrawal, and the outstanding Loan
  amount.

            

    

     

    
      	
              9.3

            	
              If
      the amount of withdrawal is not sufficient to setoff the aforesaid
      payment, the overdue expenses shall be settled first. If the principal and
      interest are overdue for less than ninety (90) days, the remaining balance
      shall be first used to settle the overdue interest, penalty interest and
      compound interest, then shall be used to settle the overdue principal. In
      the event that the overdue payment or interest is overdue for more than
      ninety (90) days, the remaining balance shall be used to settle the
      overdue principal, then shall be used to settle the overdue interest,
      penalty interest or compound
interest.

            

    

     

    
      	
              9.4

            	
              If
      the currency of the aforesaid withdrawal amount is different from the
      currency of the Loan, the exchange rate determined by Bank of
      Communication on the date of withdrawal shall be used for the currency
      conversion calculation.

            

    

     

    
      	
              10

            	
              Dispute
      Resolution

            

    

     

    
      
        	
                10.1

              	
                Any
      dispute arising from or in connection with this Contract shall be resolved
      by the first method listed
below:

              

      

    

    
      
         

      

      
        -8-

        
          

        

      

      
         

      

    

    
      	
               
      

            	
              1.

            	
              File
      a lawsuit to the competent court in the place where Lender is located;
      or

            

    

     

    
      	
               
      

            	
              2.

            	
              Submit
      the disputes to _____________________ arbitration committee for
      arbitration in accordance with the currently effective arbitration rules
      of such committee. The arbitral award is final and is legally binding upon
      both Parties.

            

    

    

    
      	
              11

            	
              Miscellaneous

            

    

     

    
      
        	
                11.1

              	
                This
      Contract comes into effect upon both Parties’ execution of this
      contract.

              

      

    

     

    
      
        	
                11.2

              	
                This
      Contract is executed in five (4) counterparts. Each of the Parties and
      Guarantor shall keep one
counterpart.

              

      

    

     

    IN WITNESS WHEREOF, the
parties hereto have executed this Contract as of the day and year first set
forth below.

     

    
      	
              June
      7, 2010

            	
              June
      7, 2010

            

    

     

    
      	
              Borrower
      (seal):

            	
              Lender
      (seal):

            

    

     

    
      	
              Fuwei
      Films (Shandong) Co., Ltd.

            	
              Bank
      of Communication

            

    

     

    
      	
              Legal
      Representative or Authorized Person

            	
              Responsible
      Person or Authorized Person

            

    

    

    
      	
              Xiaoan
      He

            	
              Lei
      Wang

            

    

     

    
      	
              (signature
      or seal)

            	
              (signature
      or seal)

            

    

     

    
      
        
        

      

      
        -9-

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