Document:

exv10w7

Exhibit 10.7

Appendix 2:

Contract No.: 16084000557

Fixed Assets Loan Agreement

Borrower (Party A): Lishan Senbao (shanghai) Investment Management Co., Ltd.

Domicile (address): Third floor, fifth floor of No. 57 Building, No. 461, Hongcao Road

Legal representative: Zhang Tuo

			
	Lender (Party B):	 	Shanghai Caohejing Hi-Tech Park Branch, Industrial and Commercial Bank of China
Co., Ltd.

Domicile (address): No. 900, Yishan Road

Legal representative (responsible person): Xu Guanghua

 

 

Contents

	 	 	 
	Article I

	 	Party A’s statement and suretyship
	 
	 	 
	Article II

	 	Type of loans
	 
	 	 
	Article III

	 	Use of loans
	 
	 	 
	Article IV

	 	Amount and period of loans
	 
	 	 
	Article V

	 	Interest rate and interest-bearing of loans
	 
	 	 
	Article VI

	 	Withdrawal conditions
	 
	 	 
	Article VII

	 	Withdrawal arrangements
	 
	 	 
	Article VIII

	 	Source of repayment fund and repayment
	 
	 	 
	Article IX

	 	Guaranty
	 
	 	 
	Article X

	 	Rights and obligations
	 
	 	 
	Article XI

	 	Default and liabilites
	 
	 	 
	Article XII

	 	Effectiveness, amendment, dissolution and termination
	 
	 	 
	Article XIII

	 	Dispute resolution
	 
	 	 
	Article XIV

	 	Other issues agreed by parties
	 
	 	 
	Article XV

	 	Supplementary provisions

 

 

Whereas,

Party A, for the uses specified in Article 3.1 of this contract, applied for loans from Party B;

and

Party B agreed to provide the loans to Party A, in order to define the rights and obligations of
the two parties, in accordance with the “Contract Law”, the “Lending General Provisions” as well as
other related laws and regulations, Party A and Party B signed the contract through equal
negotiations and agreements.

Article I      Party A’s statement and suretyship

	1.1	 	Party A is established in accordance with the law, is an entity with legal person
qualifications (or is a branch legitimately authorized by a legal person institution), and has
the right to perform the contract in accordance with the law.
	 
	1.2	 	The projects to be constructed using the loans under the terms of the contract have obtained
the approval or approbation of related government agencies.
	 
	1.3	 	Various accountant statements and materials provided for the investigation, review,
management of project loans shall be authentic, accurate and complete.

Article II      Type of loans

	2.1	 	The loans under the contract are fixed assets loans.

Article III      Use of loans

	3.1	 	The use of the loans granted under the contract is: alteration construction and
decoration of the 44 stores owned by Party A.
	 
	3.2	 	Without Party B’s written consent, Party A shall not change the use of the loans as defined
in the contract.

Article IV      Amount and period of loans

	4.1	 	The amount of the loans under the contract is RMB (amount in words) one hundred and
seventy-two million (amount in figure) 172,000,000 Yuan (in case the amount in figure
is inconsistent with the amount in words, the amount in words shall prevail, throughout the
contract).
	 
	4.2	 	The period of the loans under the contract is 36 months, from September 28, 2008 to
September 27, 2011. In case of withdrawal through several transactions or maturity by multiple
transactions, the maturity date of the last transaction shall be no later than the above
mentioned deadline.

Article V      Interest rate and interest-bearing of loans

 

 

	5.1	 	The interest of the loans under the contract shall be computed by day in accordance with the
actual number of lending days starting from the actual day of withdrawal (daily interest rate=
annual interest rate/360). The interest shall be settled by month (month/season). The
day of interest settlement is the twentieth day of each month (the twentieth day of
each month/the twentieth day of the last month of each season). If the day of interest
settlement is not a working day of the bank, then it shall be prolonged accordingly to the
next working day of the bank. When the loans expire, the interest shall be clear with the
principal.
	 
	5.2	 	The interest rate of the loans under the contract shall be determined by the terms specified
in 5.2.2.

	 	5.2.1	 	The annual interest rate is the fixed interest rate of       %, which shall not be
adjusted during the period of the contract.
	 
	 	5.2.2	 	The interest rate of the contract is defined as raise (raise/lower)
0% based on the People’s Bank of China’s benchmark interest rate of the same
category (that is, the benchmark interest rate of loans of the same period). The
contract interest rate of each withdrawal shall be computed separately, and will be
adjusted once for each period, where the period is defined by year  (year/half
year/season/month), for each withdrawal transaction. The time to determine the interest
rate of the first period is the actual withdrawal payment day. Party B shall determine
the interest rate of the first period in accordance with the People’s Bank of China’s
benchmark interest rate of the same category of the day and the floating range as agreed
by the two parties. The time to determine the interest rate of the second period and all
subsequent periods is the corresponding day of the actual withdrawal payment day. Party
B shall determine the interest rate of that period of the withdrawal transaction in
accordance with the People’s Bank of China’s benchmark interest rate of the same
category of the corresponding day and the floating range agreed by the two parties. In
case that in the month of adjustment there is no corresponding day with an actual
withdrawal payment day, then the last day of that month shall be deemed the
corresponding day. The corresponding day of the actual withdrawal payment day for each
withdrawal transaction refers to the date one period after the actual withdrawal payment
day of the withdrawal transaction. For instance, if the actual withdrawal payment day is
May 9th of the year, then the corresponding day of the second period shall be
June 9th of the year if a period consists of one month; August 9th
of the year if a period consists of one season; November 9th of the year if a
period consists of half a year; and May 9th of the following year if a period
consists of a year, and so on.
	 
	 	5.2.3	 	Other terms:                                                                         
                            
                         
                         
                         
   

	 	 	                         
                         
                         
                         
                         
                         
                         
                                     

Party B shall notify Party A in writing within 30 days from the day of the change of interest
rate, while whether the notice is delivered or not shall not affect its implementation.

	5.3	 	If the People’s Bank of China adjusts the interest rate or the methods to determine the
interest rate, then it shall be handled in accordance with the related regulations of the
People’s Bank of China.

Article VI      Withdrawal conditions

 

 

	6.1	 	Before each withdrawal transaction, Party A shall satisfy the following conditions:

	 	6.1.1	 	The guaranty contract has been established in accordance with the law and come
into effect;
	 
	 	6.1.2	 	The capital and other funds to be duly raised for the projects constructed using
the loans under the terms of the contract are in place in accordance with the specified
time and proportion;
	 
	 	6.1.3	 	No excessive costs had been resolved through self-financing;
	 
	 	6.1.4	 	The progress of projects has been achieved in accordance with the plan;
	 
	 	6.1.5	 	The withdrawal formalities have been processed in Party B’s premise according to
the terms of the contract;
	 
	 	6.1.6	 	No breach of contract as specified by the contract has occurred; and
	 
	 	6.1.7	 	Other related materials have been provided to handle the loans in accordance
with Party B’s requirements.

Article VII      Withdrawal arrangements

	7.1	 	The terms of withdrawal for the loans under the contract shall be implemented in accordance
with the following 7.1.3.

	 	7.1.1	 	Party A withdraws the money in one time on           Month           Day,           Year, and
transfer all the loans to the account opened in Party B’s premise;
	 
	 	7.1.2	 	Party A withdraws the money through            transactions, the specific amount and
date of which are as follows:

	 	7.1.2.1	 	          Month           Day,           Year, amount (in words)                      Yuan (in figure:
                     Yuan);
	 
	 	7.1.2.2	 	          Month           Day,           Year, amount (in words)                      Yuan (in figure:
                     Yuan);
	 
	 	7.1.2.3	 	          Month           Day,           Year, amount (in words)                      Yuan (in figure:
                     Yuan);
	 
	 	7.1.2.4	 	          Month           Day,           Year, amount (in words)                      Yuan (in figure:
                     Yuan);
	 
	 	7.1.2.5	 	          Month           Day,           Year, amount (in words)                      Yuan (in figure:
                     Yuan);

	 	7.1.3	 	Other terms of withdrawal:
	 
	 	 	 	The company withdraws the money through several transactions according to its
need., the withdrawal period is from September 28, 2008 to June 27, 2009. The
amount not withdrawn within the withdrawal period shall be regarded as quota
surrendered by Party A. After the withdrawal period, Party A shall not withdraw
the remaining amount for any reason.                     
                         
                         
                         
                         
                         
                         
                         
                         
                         
                         
                         
                         
                         
                         
                         
                         
                         
                         
                         
                         
                         
                         
                         
                         
                         
                         
                         
                         
                         
                         
                         

	7.2	 	Party A shall withdraw the loans according to the agreements as Article 7.1 of the contract.
In case of a special circumstance, it shall issue a written
application, and, upon a written consent

 

 

	 	 	of Party B, may advance or postpone the time of withdrawal by up to            days.

	7.3	 	If Party B requests to cancel all or part of the amount of money not withdrawn under the
contract, it shall submit a written application to Party B 30 days in advance of the
withdrawal date specified by the contract, and such amount may be cancelled after receiving a
written consent of Party B.
	 
	7.4	 	The specific withdrawal date and repayment date in the contract shall be the actual date
recorded in the receipt for the borrowed money handled by Party A and Party B. The receipt for
borrowed money or the loan withdrawal document comprises an indispensable part of the
contract. The contract shall prevail in cases of inconsistencies, except for dates, between
the receipt and the contract.

Article VIII      Source of repayment fund and repayment

	8.1	 	The capital for Party A’s repayment of the principal and interest of the loans under the
contract is attributed but not limited to:

	 	8.1.1	 	Revenue of Party A’s main business and other revenues                
                         
                         ;
	 
	 	8.1.2	 	                         
                         
                         
                         
                         
                         
          .

	8.2	 	No agreement in which Party A is an interested party, concerning Party A’s source of
repayment capital, shall affect Party A’s performance of its repayment obligation under this
contract. Under no circumstances shall Party A cite Article 8.1 to refuse to perform its
repayment obligation under the contract.
	 
	8.3	 	Party A shall pay the interest on time and in full in accordance with the terms of the
contract, and repay the principal of the loans in accordance with the following agreement as
in Article 8.3.3:

	 	8.3.1	 	Repay the principal in one time, Party A shall repay all the principal of the
loans on           Month           Day,           Year;
	 
	 	8.3.2	 	Repay the principal by several times, the specific amount of repaid principal
and date are as follows:

	 	8.3.2.1	 	          Month           Day,           Year, amount (in words)                      Yuan (in figures:
                     Yuan);
	 
	 	8.3.2.2	 	          Month           Day,           Year, amount (in words)                      Yuan (in figures:
                     Yuan);
	 
	 	8.3.2.3	 	          Month           Day,           Year, amount (in words)                      Yuan (in figures:
                     Yuan);
	 
	 	8.3.2.4	 	          Month           Day,           Year, amount (in words)                      Yuan (in figures:
                     Yuan);
	 
	 	8.3.2.5	 	          Month           Day,           Year, amount (in words)                      Yuan (in figures:
                     Yuan);

(Additional pages can be attached in case of more periods)

	 	8.3.3	 	Other terms of principal repayment:
	 
	 	 	 	Repayment through multiple transactions: repay 35 million Yuan before the
expiration of the first year period beginning the first day of withdrawal by Party A;
repay 57 million Yuan before the expiration of the second year period beginning the
first day of withdrawal by Party A; and repay 80 million Yuan before the deadline of

 

 

	 	 	 	the loans specified by the contract. The repayment shall be made per season.
          

	8.4	 	If Party A intends to make the repayment in advance, it shall submit a written application to
Party B 30 days prior to the date of the intended earlier repayment, and shall receive a
written consent of Party B;
	 
	8.5	 	If Party A intends to make the repayment in advance, it shall receive a consent of Party B,
and the repaid principal shall be no less than                      Yuan (amount in words), and shall be the
integral multiples of                      Yuan (amount in words).
	 
	8.6	 	The principal that Party A repaid in advance shall offset in reverse order according to
the repayment order set forth in Article 8.3.2 of the contract or according to the repayment
order determined by the receipt of the loans.
	 
	8.7	 	The deposit balance of the settlement account that is opened by Party A in Party B’s premise
seven days prior to the interest settlement date or the principal repayment date specified by
the contract or determined by the receipt of the loans shall be no less than the interest
or/and the principal to be duly paid. Otherwise, Party B shall have the right to suspend
or cancel the loans that Party A has not withdrawn or used, and shall have the right to
collect part or all of the loans in advance; for the loans that cannot be collected, the
liquidated damages shall be collected, computed on daily basis according to the interest rate
of overdue loans. In addition, Party A authorizes Party B to collect the principal and
interest of the loans to be duly paid by Party A from the account that Party A opens in Party
B’s system on the specified interest settlement date or the principal repayment date.

Article IX      Guaranty

	9.1	 	The terms of the guarantee for the loans under the contract are: suretyship, mortgage.
          
	 
	9.2	 	Party A is obliged to proactively assist Party B and prompt Party B and the surety to sign
the guarantee contracts on the specific guarantee issues of this contract with No.
16084000557101, 16084000557102, 16084000557103 and 16084000557201.
	 
	9.3	 	If the guarantee under the contract changes negatively to the creditor rights of Party B,
upon Party B’s notice, Party A shall separately provide a guarantee that satisfies Party B
according to the requirements.

Article X      Rights and obligations

	10.1	 	Rights and obligations of Party A:

	 	10.1.1	 	Withdraw and use the loans according to the period and use of loans specified in the
contract;
	 
	 	10.1.2	 	Do not repay the loans in advance without Party B’s consent;
	 
	 	10.1.3	 	Accept Party B’s investigation, understanding and supervision of the use situations of
the loans under the contract in a timely manner;
	 
	 	10.1.4	 	Proactively cooperate with the investigation, understanding and supervision of its
situations relating to production, operation, project construction and financial
situations, and provide report materials such as the balance sheet, income statement ,
etc. of each period to Party B;
	 
	 	10.1.5	 	Proactively support Party B to participate in related issues such as three calculation

 

 

	 	 	 	review (budget estimates, budget, final accounts), engineering bidding and project
completion acceptance, etc.;

	 	10.1.6	 	Pay off the principal and interest of the loans under the contract according to the
terms of the contract;
	 
	 	10.1.7	 	Assume the expenses of related costs under the contract, including but not limited to
the costs of events such as notarization, authentication, evaluation, registration,
etc.;
	 
	 	10.1.8	 	Send out the return receipt within 3 days after signing the collection letter or
collection file delivered through mail or other forms by Party B;
	 
	 	10.1.9	 	When carrying out actions such as contracting, renting, shareholding reform, joint
operation, merger, acquisition, joint-venture, separation, equity change, major assets
transfer as well as other actions that suffice to affect the exercise of Party B’s
rights and interests, Party A shall notify Party B at least 30 days in advance and
receive a written consent of Party B, otherwise the abovementioned actions shall not be
conducted before paying off all the debts;
	 
	 	10.1.10	 	In case of changes in items of business registration such as residence,
correspondence address, business scope, legal representative, etc., Party A shall notify
Party B in writing within 7 days after such changes;
	 
	 	10.1.11	 	In case of any other events that jeopardize its normal operations or have serious
negative influence on its performance of the repayment obligations under the contract,
including but limited to major economic disputes, bankruptcy, worsening financial
situations, etc., Party A shall immediately notify Party B in writing;
	 
	 	10.1.12	 	Upon a business closure, dismissal, suspension and rectification, revocation or
cancellation of the business license, Party A shall notify Party B in writing within 5
days after such event, and shall ensure to repay the principal and interest of the loans
immediately;
	 
	 	10.1.13	 	Assume all the costs such as lawyer’s cost, etc. incurred during the exercise of
Party B’s creditor rights under the contract;
	 
	 	10.1.14	 	Timely, completely and accurately disclose its related parties’ relationship and the
associated transactions to Party B, in accordance with the “Accounting Standards for
Enterprises —Disclosure of related parties’ relationship and their transactions”, the
related parties in this article refer to:

	 	10.1.14.1	 	Enterprises directly or indirectly controlled by Party A, enterprises
directly or indirectly control Party A, as well as enterprises the same
enterprises that control Party A;
	 
	 	10.1.14.2	 	Party A’s cooperative enterprises;
	 
	 	10.1.14.3	 	Party A’s associated enterprises;
	 
	 	10.1.14.4	 	Party A’s major individual investors, key management personnel or their
closely related family members;
	 
	 	10.1.14.5	 	Enterprises directly controlled by Party A’s major individual investors, key
management personnel or their closely related family members.

	 	 	 	The other words in this article have the same meaning with the identical
words in the “Accounting Standards for Enterprises —Disclosure of related parties
‘relationship and their transactions”.

	10.2	 	Rights and obligations of Party B:

 

 

	 	10.2.1	 	Ask Party A to provide all materials related to the loans;
	 
	 	10.2.2	 	Collect the principal, interest, compound interest, penalty interest of the loans and
all other costs to be paid duly by Party A under the contract from Party A’s account in
accordance with the terms of the contact as well as laws and regulations;
	 
	 	10.2.3	 	In cases of Party A’s evasion of Party B’s supervision, default of the principal
and interest or other serious actions of breach, Party B shall have the right to carry
out credit sanctions, shall have the right to notify related departments or units, and
shall have the right to issue a collection notice through news media;
	 
	 	10.2.4	 	Provide Party A with the loans on time and in full, according to the terms of the
contract (except delays caused by Party A’s fault);
	 
	 	10.2.5	 	Keep confidential the materials and situations provided by Party A related to its
debts, finance, production, operation, etc., except as is otherwise regulated by the
contract or laws and regulations.

Article XI      Default and liabilities

	11.1	 	After the contract comes into effect, the interested parties of Party A and Party B shall
both perform the obligations specified in the contract. Any party who fails to perform all
the obligations specified in the contract shall assume the liabilities for breach of contract
in accordance with the law.
	 
	11.2	 	If Party A fails to handle and withdraw the loans in accordance with Article 7.1 of the
contract, Party B shall have the right to collect liquidated damages for delays computed on
daily basis according to the interest rate in the contract;
	 
	11.3	 	If Party B fails to grant the loans in accordance with Article 7.1 of the contract, it
shall pay the liquidated damages for delays computed on daily basis according to the interest
rate in the contract;
	 
	11.4	 	If, without the written consent of Party B, Party A repays the loans under the contract
in advance, Party B shall have the right to calculate and collect interests according to the
loan period and interest rate as specified in the contract.
	 
	11.5	 	If Party A fails to repay the principal and interest of the loans under the contract upon
expiration, Party B shall have the right to clear off such loans within a time limit, whereas
Party A authorizes Party B to confiscate the capital in all the accounts that Party A opens
in the Industrial and Commercial Bank of China and all of its branch institutions to
compensate for the debts under the contract. Meanwhile, for the overdue loans, the penalty
interest shall be computed and collected by an additional 40% plus the interest rate
in the contract. For the overdue interests, the compound interest shall be computed and
collected by an additional 40% plus the interest rate in the contract. If the amount
deducted is a foreign currency, it shall be computed according to the offer price of the
foreign exchange publicized by Party B on the day of deduction.
	 
	11.6	 	If Party B fails to use the loans as specified in the contract, Party B shall have the right
to suspend granting of the loans, and shall have the right to collect part or all of the loans
in advance or terminate the contract. For the loans that Party A uses in breach of the
contract, Party B shall calculate and collect the penalty interest by an additional
70% plus the interest rate in the contract according to the number of days of the uses
in breach, and calculate and 

 

 

	 	 	collect the compound interest by an additional 70% plus
the interest rate in the contract for the unpaid interest.

	11.7	 	During the loan period, the compound interest shall be computed and collected by the interest
rate in the contract for the interests not paid on time. After the loans become overdue, the
compound interest shall be computed and collected by the interest rate specified
in 11.5.
	 
	11.8	 	If the circumstances listed in Articles 11.5 and 11.6 for the loans used by Party A occur
simultaneously, Party B shall penalize according to the more serious measure of the two, and
the two penalties shall not be imposed together.
	 
	11.9	 	If Party A conducts one of the following behaviors, it shall correct and take remedial
measures that satisfy Party B within 7 days after receiving Party B’s notice, otherwise, Party
B shall have the right to suspend or cancel the loans that Party A has not withdrawn or used,
and shall have the right to collect part or all of the loans in advance. For the loans that
cannot be collected, the liquidated damages shall be collected by the day according to the
interest rate of overdue loans; 

	 	11.9.1	 	Provide balance sheet, income statement and other financial materials that are false
or conceal important facts;
	 
	 	11.9.2	 	Do not cooperate or refuse to accept Party B’s supervision of its use of the loans and
related production, operation and financial activities;
	 
	 	11.9.3	 	Transfer or dispose, or threaten to transfer or dispose a material portion of its
property without the consent of Party B;
	 
	 	11.9.4	 	A material portion or all of its property is occupied by other creditors or taken over
by a designated trustee, recipient or similar personnel, or its property is detained or
frozen, which might incur serious loss to Party B;
	 
	 	11.9.5	 	Without Party B’s consent, carry out contracting, renting, shareholding reform, joint
operation, merger, acquisition, joint-venture, separation, equity change, major assets
transfer as well as other actions that is material enough to affect the exercise of
Party B’s rights and interests and jeopardizes the safety of Party B’s creditor rights;
	 
	 	11.9.6	 	Occur changes in items of business registration such as residence, correspondence
address, business scope, legal representative, etc. or situations such as major external
investment, etc. that seriously affect or threaten the exercise of Party B’s creditor
rights;
	 
	 	11.9.7	 	Involvement in major economic disputes or worsening financial situations, etc. that
seriously affect or threaten the exercise of Party B’s creditor rights;
	 
	 	11.9.8	 	Fail to perform the information disclosure obligations of Party A or its related
parties are in one of the following situations, which might have negative influences on
Party B’s performance of its obligations under the contract:

	 	11.9.8.1	 	Worsening financial situation of Party A’s related parties;
	 
	 	11.9.8.2	 	Party A or any of its related parties is filed and punished or dealt with
punishment measures in accordance with the law by the judiciary department or
administrative law enforcement department of taxation, business, etc. and
administrative management department;
	 
	 	11.9.8.3	 	The relationship of controlling and being controlled between Party A and its
related parties changes;
	 
	 	11.9.8.4	 	Party A’s related parties are involved in or might be involved in major

 

 

	 	 	 	economic disputes, lawsuit and arbitration;

	 	11.9.8.5	 	Party A’s major individual investors, key management personnel undergo
abnormal changes or are investigated or restricted of personal freedom by the
judiciary department in accordance with the law due to suspected crime activities;
	 
	 	11.9.8.6	 	Other situations occurred to Party A’s related parties that might have
negative influences on Party A;

	 	11.9.9	 	Failure to repay any other debts of money payment assumed by Party A after their
maturity (including those announced as mature in advance), or failure to perform or
breach any obliged agreement or document that might affect Party A’s capacity to perform
the obligations under the contact;
	 
	 	11.9.10	 	Any other situations that might threaten the exercise of Party B’s creditor rights
under the loan contact or lead to great loss to be suffered by Party B.

Article XII      Effectiveness, change, dissolution and termination

	12.1	 	The contract shall come into effect from the day that legal representatives (responsible
persons) of Party A and Party B or their authorized agents sign or stamp the seal and stamp
the official seal, and shall come into effect after the guarantee contract comes into effect
if there is guarantee. The contract shall terminate on the day the principal, interest,
compound interest, penalty interest, liquidated damages and all other due costs are paid off.
	 
	12.2	 	Under one of the following circumstances, Party B shall have the right to require Party A to
repay the principal and interest of the loans in advance and compensate the loss:

	 	12.2.1	 	When Party A undergoes a business closure, dismissal, business suspension and
rectification, revocation or cancellation of the business license;
	 
	 	12.2.1	 	The guarantee under the contract has some negative changes on Party B’s creditor
rights, and Party A fails to provide the necessary guarantee according to party B’s
requirements;
	 
	 	12.2.3	 	Party A fails to repay the loans on time or fails to use the loans according to the
use as agreed, incurs overdue interests, or commits other serious breach of contract.

	12.3	 	If Party A requires an extension of the time limit of the loans, it shall submit a written
application and the surety’s written opinion of continuous suretyship to Party B 30 days prior
to the termination of the contract. Upon Party B’s approval after review and the signing of an
extension agreement, the time limit of the loans under the contract can be extended. Before
the two parties sign the extension agreement, this loan contract shall continue to be
implemented.
	 
	12.4	 	After the contract comes into effect, other than the agreement already in the contract,
neither Party A nor Party B shall unilaterally alter or terminate the contract in advance. If
it is deemed necessary to alter or terminate the contract, it shall be based on a consensus
between Party A and Party B through negotiations a resulting written agreement. Before the
written agreement is reached, this contract shall continue to be implemented.

Article XIII      Dispute resolution

 

 

	13.1	 	For the dispute occurred in the course of performing the contract between Party A and Party
B, it shall first be resolved by Party A and Party B through negotiations. If the negotiations
fail, then it shall be resolved according to Article 13.1.2:

	 	13.1.1	 	Arbitration by                   ;
	 
	 	13.1.2	 	Resolution through lawsuit in the court with jurisdiction over Party B.

Article XIV      Other issues agreed by parties

	14.1	 	In case of overspending in Party A’s projects, Party A shall solve it by self-raised
funds. 
	 
	14.2	 	Without the consent of Party B, it shall not add new external bank financing, provide
guarantee and external investment in the name of the project constructed under the
contract.
	 
	14.3	 	If Hanting Xingkong (Shanghai) Hotel Management Co., Ltd, Shanghai Yiju Hotel Management
Co., Ltd or Hanting (Tianjin) Investment Consultancy Co., Ltd commits a breach of any other
loan contract with Party B or with other banks, or fails to repay any other debts of money
payment after maturity (including those announced as mature in advance), then it shall be
regarded that Party A has breached this contract, and Party B shall have the right to suspend
or cancel the loans that Party A has not withdrawn or used, and shall have the right to
collect part or all of the loans in advance. For the loans that cannot be collected, the
liquidated damages shall be collected by the day according to the interest rate of overdue
loans. 
	 
	14.4	 	Party A shall purchase proper property insurances for all the stores under the project
(see the attachment for the specific names and locations of the stores), with Party B as the
first beneficiary. The insurance period shall cover the loan period of the project.
	 
	14.5	 	All the stores open for business of Hanting brand economic chain hotels (including all
the stores owned by Party A and its related parties, see the attachment for details) shall be
brought into Party B’s cash management platform (partner shop, contracting operation,
joint-venture, joint-stock shops excluded), the business revenues of all the stores shall be
accumulated into the cooperate account (that is, the capital accumulation account, account No.
1001266319890000068) opened by Party A or its related parties through Party B’s cash
management platform.
	 
	14.6	 	Each day Party B shall monitor Hanting system’s capital in-flow of the above mentioned
capital accumulation account in Party B, and make necessary calculations at the end of each
month. If for two consecutive months, the collected capital per day is less than 50% of the
average daily amount of the operation revenue of the opened stores in that month that have
been brought into the cash management platform, Party B shall have the right to suspend or
cancel the loans that Party A has not withdrawn or used and shall have the right to collect
part or all of the loans in advance. For the loans that cannot be collected, the liquidated
damages shall be collected on daily basis according to the interest rate of overdue loans.
	 
	14.7	 	For the mortgage guarantee addressed in Articles 9.1 and 9.2 of the contract, the
guaranteed principal creditor rights is the 27301575 Yuan in the loan contract. The loan
contract system shall be respectively provided by Hanting Xingkong (Shanghai) Hotel Management
Co., Ltd, Shanghai Yiju Hotel Management Co., Ltd or Hanting (Tianjin) Investment Consultancy
Co., Ltd. The three parties jointly and severally provide the suretyship guarantee for the
172000000.00 Yuan in the loan contract.

 

 

Article XV      Supplementary provisions

	15.1	 	The appendixes of the contract comprise an indispensable part of the contract and shall have
equal legal effects along with the text of the contract.
	 
	15.2	 	During the performance of the contract, if a certain withdrawal day or repayment day is not a
working day of the bank, then it shall be prolonged accordingly to the next working day of the
bank.
	 
	15.3	 	The contract is made out in twenty-four copies of one format, with Party A holding
one copy, Party B holding one copy, and with the           mortgagor, surety           party
holding one copy. All copies shall have equal legal effects.

Party A (official seal):

Lishan Senbao (shanghai) Investment Management Co., Ltd.

Legal representative (or entrusted agent): Zhang Tuo

September 22, 2008

Party B (official seal):

Shanghai Caohejing Hi-Tech Park Branch, Industrial and Commercial Bank of China Co., Ltd.

Legal representative (or entrusted agent): Xu Guanghua

September 22, 2008exv10w8

Exhibit 10.8

Contract No.: 16093500519

Fixed Assets Loan Contract

(2009 Version)

     Special reminder: The contract is formulated, in accordance with the law, through consultation
between the borrower and the lender on an equal, voluntary basis, and all the terms of contract are
the genuine expression of the two parties’ intention. In order to safeguard the legitimate rights
and interests of the borrower, the lender hereby proposes that the borrower pay full attention to
all terms on the rights and obligations of the two parties, especially the part of the contract
shown in bold.

 

 

Lender: Shanghai Caohejing Hi-Tech Park Branch, Industrial and Commercial Bank of China
Co., Ltd.

Responsible person: Xu Guanghua               Contact person: Cheng Jiamin     

Domicile (address): No. 900 Yishan Road, Shanghai               Zip code: 200233     

Telephone: 54235423          Fax: 64956495

E-mail: chengjiamin_ch@sh.icbc.com.cn

Borrower:
HanTing Xingkong (Shanghai) Hotel Management Co., Ltd.

Legal Representative: Zhang Tuo          Contact person: Qian Lei

Domicile (address): 3rd floor of No. 57 Building, No. 461 Hongcao Road

Zip code: 200233

Telephone: 51156767          Fax: 51156767-1717          E-mail: lqian@htinns.com

     Through consultation on the basis of equality, the borrower and the lender have reached an
agreement on lender’s granting of loans to the borrower, and hereby formulated this contract.

Part I Conditions for the Loans

Article I Purpose of the loans

     The purpose of the loans under the contract is: the expenditure of altered construction
and decoration of 38 stores, without the lender’s written consent, the borrower shall not use
the loans for other purposes, and the lender shall have the right to supervise the use of the
loans.

Article II Amount and term of the loans

     2.1
The currency of the loans under the contract is Renminbi, the
amount is 150,000,000 (amount in words: one hundred million and five thousand) Yuan (in case
the amount in figures is inconsistent with the amount in words, the amount in words shall be the
norm).

     2.2 The term of the loans under the contract is three years, the counting starts from
the actual withdrawal date (for withdrawal by many times, the counting starts from the first
withdrawal date), and the actual withdrawal date is subject to the loan note.

Article III Interest rate and interest-bearing of the loans

     3.1 [Ways of determining the interest rate of Renminbi loans]

     The interest rate of Renminbi loans is determined in accordance with way  (2)  as
follows:

     (1) Fixed interest rate, the annual interest rate is ___%, and the interest rate will not
change within the valid period of the contract.

 

 

     (2) Floating interest rate, the lending interest rate is determined by the benchmark
interest rate plus the floating range, in which the benchmark interest rate is the benchmark
loan interest rate of the People’s Bank of China on the level corresponding to the
withdrawal date (withdrawal date /effective date of the contract) and the loan term
specified by Article 2.2, the floating range is to float upward (float upward/float
downward/zero) 10%, and the floating range will not change within the period of the
contract. After the borrower withdraws the money, each period of the lending interest rate
consists of 12 (1/3/6/12) months, the lending rate will be adjusted once for each
period, and the accrued interest computed by each section. The date of determining the interest
rate of the second period is the corresponding day of one period after the withdrawal date; if
there is no such date corresponding to the withdrawal date in the month of adjustment, then the
last day of that month shall be the corresponding day, and all the other periods shall be
inferred by analogy. If the borrower withdraws the money by many times, the lending interest
rate shall be adjusted in accordance with way B as follows:

     A. No matter by how many times the money is withdrawn in one period, the lending
interest rate of the current period as determined on the day of determining the interest
rate of the period shall be followed, and shall be simultaneously adjusted in the next
period.

     B. The lending interest rate of each withdrawal is separately determined and
adjusted.

     (3) Others:             
                  
                  
                 
                 
                  

     3.2 [Ways of determining the interest rate of foreign currency loans]

     The interest rate of foreign currency loans is determined in accordance with way        
as follows:

     (1) Fixed interest rate, the annual interest rate is ___%, and the interest rate will
remain unchanged within the valid period of the contract.

     (2) Floating interest rate, the lending interest rate is determined by the benchmark
interest rate of ___ (LIBOR/HIBOR) of ___
months plus the interest margin of ___
basis point (that is, 0.01%). Within the period of the contract, the spread interest rate will
remain unchanged. After the borrower withdraws the money, the benchmark interest rate shall be
adjusted in accordance with way         as follows, and the accrued interest computed by
each section:

     A. The benchmark interest rate floats in accordance with its corresponding period.
The date of adjusting the benchmark interest rate of the second period is the
corresponding day of one period after the withdrawal date; if there is no such date
corresponding to the withdrawal date in the month of adjustment, then the last day of that
month shall be the corresponding day, and all the other periods shall be inferred by
analogy.

     B. Adjust the benchmark interest rate on the first day of each interest period.

     (3) Others:
                
                 
                 
                 
                 
                 
                 
  

 

 

     3.3 The interest of the loans under the contract shall be computed by the day starting from
the actual withdrawal date, and the interest shall be settled by the month
(month/season/half-year). When the loans expire, the interest shall be clear together with the
principal. In which the daily interest rate= annual interest rate/360.

     3.4 The interest rate of overdue penalty interest under the contract is determined by adding
40% on the basis of the original lending interest rate, the interest rate of loan
embezzlement penalty interest under the contract is determined by adding 70% on the basis
of the original lending interest rate.

Article IV Withdrawal

     The borrower shall withdraw the loans according to the actual money demand, among which the
first sum of loan must be withdrawn before January 6, 2010, the last sum of loan must be withdrawn
before September 26, 2011, otherwise the lender shall have the right to cancel all or part of the
loans.

Article V Repayment

     5.1 The borrower shall repay the loans according to the following repayment plan (Additional
pages can be attached in case of relatively many items):

	 	 	 	 	 
	Planned time of repayment

	 	Planned amount of repayment (ten thousand Yuan)

	 
	 	 	 	 
	2011-1-3

	 	 	2600	 
	 
	 	 	 	 
	2012-1-3

	 	 	6000	 
	 
	 	 	 	 
	2013-1-3

	 	 	6400	 

     5.2 If the loans under the contract is under the following circumstances, the borrower shall
immediately repay the loans after the corresponding capital is in place, for advance repayment
resulted hereby, the borrower does not need to make compensation payment:

                                                                           
                                                  

                                                                           
                                                  

     5.3 Unless under the circumstances specified in Article 5.2, for advance repayment, the
borrower shall make compensation payment to the lender by ___% of the amount of advance repayment.

     Article VI Special provisions on revolving loans (Optional term, this article o applicable þ not
applicable)

     The
borrower can, taking ___ (half-year/one year/two years/three years/four years/five
years) as one period (hereafter names as unit lending period), revolve the use of loans under the
contract. After handling necessary formalities, the principal of loans not repaid in the previous
unit lending period can be used continuously in the next unit lending period; however the
expiration date of any withdrawal shall not exceed the loan termination date specified in Article
II mentioned above.

 

 

Article VII Guarantee

     7.1 The loans under the contract are      guarantee      (credit/guarantee) loans.

     7.2 In case the loans under the contract are guarantee loans, see the separately signed
guarantee contract for issues of guarantee. If the related guarantee is maximum amount guarantee,
the corresponding maximum amount guarantee contract is as follows:

     Name
of the maximum amount guarantee contract: Maximum Amount Suretyship Contract  (No.
16093500519101, 16093500519102, 16093500519103)

     Guarantor: Shanghai Hanting Hotel Management Co., Ltd., Yiju (Shanghai) Hotel Management
Co., Ltd., Hanting (Tianjin) Investment Consulting Co., Ltd. 

Article VIII Financial arrangement (Optional term, this article o applicable þ not applicable)

     Within the valid period of the contract, the borrower shall abide by the following financial
indicator arrangements:

                                                                           
                                                  

                                                                           
                                                  

Article IX Dispute resolution

     The way of resolving disputes under the contract is      (2)     :

     (1) Submit the disputes to
                    
Arbitration Commission; the arbitration shall be
conducted at                     
(place of arbitration) according to the effective arbitration rules
of the commission at the time of submitting the arbitration application. The adjudication of the
arbitration is final in nature, and shall be binding on both parties.

     (2) Resolution through lawsuit in the court with jurisdiction over the lender.

Article X Miscellaneous

     10.1 The contract is made out in two copies of one format, with the borrower and the
lender each holding one copy, and the two copies being equal in legal effects.

     10.2 The following appendixes and other appendixes jointly confirmed by the two parties
constitute an indispensable part of the contract, and shall have equal legal effects with the
contract.

     Appendix 1: Notice of withdrawal (format)

     Appendix 2: Entrusted payment agreement

     Appendix 3:

Article XI Other issues agreed by the two parties

     11.1 In case of overspending in the borrower’s projects, the borrower shall solve it by
self-raised funds;

 

 

     11.2 The lender takes the capital accumulation account of Hanting system in the lender’s
premise as the established special capital account, all revenues of this project and related
construction funds shall be deposited into this account, and the lender will supervise and manage
the capital accumulation account;

     11.3 Without the lender’s consent, the borrower shall not add new external bank financing,
provide guarantee or make external investment;

     11.4 If Hanting Xingkong (Shanghai) Hotel Management Co., Ltd or Yiju (Shanghai) Hotel
Management Co., Ltd or Hanting (Tianjin) Investment Consulting Co., Ltd conducted breach of
contract for the loans in other banks or the lender or failed to repay any other debts of money
payment after maturity (including those being announced as advance expiration), or fail to perform
or breach any agreement or document for which the borrower is liable, then the case shall be
regarded as the borrower’s breach of contract for the loans under the contact, the lender shall
have the right to suspend or cancel the loans that the borrower has not withdrawn or used, and
shall have the right to collect part or all of the loans in advance; for the loans that cannot be
collected, the liquidated damages shall be collected by the day according to the interest rate of
overdue loans;

     11.5 (1) The borrower shall regularly report and send the status of external guarantee to
the lender, and shall promise that the information and amount of money on the part of the external
guarantee provided to the lender is integrated, authentic, and accurate;

     (2) The borrower shall honestly report the use of each loan to the lender, and promise
that the loans borrowed from the lender will not flow into the securities market, futures
market in any form, and will not use it in equity capital investment in violation of related
national regulations.

     (3) Under one of the following circumstances, the lender shall have the right to
announce the advance termination of the loans, stop to grant the loans not granted yet, and
require the borrower to repay the granted part or all loans in advance, or require the borrower
to provide legal, effective guarantee approved by the lender.

     (a) Without the lender’s consent in writing, the lender sets mortgage (pledge) to
others or provides external suretyship with its positive operation assets, which leads to
increased loan risk for the lender.

     (b) The borrower’s indicators such as credit rating, profit level, liability/asset
ratio, net cash flow in operation activities, etc. do not conform to the lender’s conditions
for credit loan, or the material changes in its production & operation and financial situation
have caused great adverse influence on the lender’s loan safety. 

     11.6 In case of equity change or transfer of assets, the borrower shall notify the lender
in advance and obtain the lender’s consent.

     11.7 Properly handle the property insurance of all the stores of the project, with the
lender as the first beneficiary, the insurance period shall cover the loan period of the
project;

 

 

Part II Terms of the Fixed Assets Loan Contract

Article I Interest rate and interest-bearing of the loans

     1.1 In foreign currency loans, LIBOR is the inter-bank offered rate for the currency of the
loans under the contract as revealed by the “LIBO=” page of REUTER’s finance & telecommunications
terminal two bank working days (at midday 11:00 London time) before the withdrawal date or the
adjustment date of benchmark interest rate; HIBOR is the inter-bank offered rate for the currency
of the loans under the contract as revealed by the “LIBO=” page of REUTER’s finance &
telecommunications terminal two bank working days (at midday 11:00 Hong Kong time) before the
withdrawal date or the adjustment date of benchmark interest rate.

     1.2 If the interest-bearing of the loans is settled by the month, the interest settlement date
is the 20th day of each month; if the interest-bearing of the loans is settled by the
season, the interest settlement date is the 20th day of the last month of each season;
If the interest-bearing of the loans is settled each half a year, the interest settlement date is
the July 20th and December 20th of each year.

     1.3 The first interest period starts from the borrower’s actual withdrawal date and ends on
the first interest settlement date; the last interest period is from the next day of the ending of
the previous interest period to the final repayment date; the other interest periods is from the
next day of the ending of the previous interest period to the next interest settlement date.

     1.4 If the loans under the contract adopt floating interest rate, the rules of interest rate
adjustment shall still be carried out in accordance with the original method after the loans become
overdue.

     1.5 If the People’s Bank of China adjusts the method to determine the loan interest rate that
is applicable to the loans under the contract, then it shall be handled in accordance with the
related regulations of the People’s Bank of China, and the lender will not separately notify the
borrower again.

Article II Distribution and payment of the loans

     2.1 To withdraw the loans, the borrower must satisfy the preconditions for withdrawal
specified by the contract; otherwise the lender is under no obligations to grant any loans to the
borrower, unless the lender agrees to beforehand distribution of the loans.

     2.2 Preconditions for the first withdrawal

     (1) The loan project has been examined and approved, or recorded by responsible state
authorities; (unless no corresponding examination, approval or record is required before the
distribution of the loans according to related regulations);

     (2) The project capital or other funds to be duly raised are of full amount in place in
accordance with the specified time and proportion;

 

 

     (3) Except credit loans, the borrower has provided corresponding guarantee following the
lender’s requirements and has finished handling related formalities for the guarantee;

     (4) Submit the notice of withdrawal to the lender in accordance with terms of the contract.

     2.3 Before each time of withdrawal, besides satisfying the preconditions for the first
withdrawal, the borrower shall also satisfy the following preconditions:

     (1) In case the project capital gets in place by several periods, the capital of that period
is of full amount in place in accordance with the specified proportion;

     (2) No overspending of the cost or the overspending of the cost had been solved through
self-financing;

     (3) Having accomplished the project progress according to the plan, and the actual project
progress being proportionate to the invested amount of loans;

     (4) No breach of contract under this contract or other contract signed with the lender;

     (5) The materials provided to certify the use of the loans conform to the use as agreed.

     2.4 Upon the time of withdrawal, the written documents that the borrower submits to the lender
must be the original; if failing to submit the original, duplicates bearing the borrower’s official
seal can be submitted after obtaining the lender’s consent.

     2.5 To apply for withdrawal, the borrower shall submit the notice of withdrawal to the lender
at lease 5 bank working days in advance. Once it is submitted, the notice of withdrawal cannot be
cancelled without the lender’s consent in writing.

     2.6 Once the lender agrees to the borrower’s withdrawal after examination and approval, the
lender will transfer the loans to the designated borrower account, which is deemed as the lender
has granted the loans to the borrower in accordance with terms of the contract.

     2.7 In accordance with related supervision regulations and lender management requirements,
loans exceeding certain amount or conforming to certain conditions shall adopt the form of lender
entrusted payment, in which the lender, according to the borrower’s withdrawal application and
payment entrustment, makes payment of the loan capital to the target of payment that conforms to
the use specified by the contract. For this purpose, the borrower shall separately sign an
entrustment payment agreement with the lender as an appendix to the contract, and open or designate
a special account in the lender’s premise to handle the issues of entrusted payment.

Article III Repayment

     3.1 The borrower shall repay the principal, interest of the loans and other accounts payable
in due time and amount according to terms of the contract. On the repayment day and the bank
working day before each interest settlement date, the borrower shall deposit in full amount the
payable principal, interest and other accounts payable of that period into the repayment accounted
opened in the lender’s premise, the lender shall have the right to actively collect via transfer on
the repayment date or interest settlement date, or ask the borrower to cooperate in handling
related transfer formalities. If the money in the repayment account is not sufficient to pay off
all of the borrower’s expired, payable accounts, the lender shall have the right to decide the
order of discharging.

 

 

     3.2 In case of applying for the advance repayment of all or part of the loans, the borrower
shall submit application in writing to the lender at least 10 bank working days in advance, obtain
the lender’s consent, and make the compensation payment to the lender in accordance with the
standard specified by the contract.

     3.3 For advance repayment upon the lender’s consent, the borrower shall, on the date of
advance repayment, simultaneously pay off the principal, interest of the loans and other accounts
expired and payable until the date of advance repayment in accordance with terms of the contract.

     3.4 As to the shortening loan term caused by the borrower’s advance repayment or the lender’s
advance collection of the loans in accordance with terms of the contract, the corresponding level
of interest rate will not be adjusted, and still implement the original lending interest rate.

Article IV Revolving loans

     4.1 If the loans under the contract is subject to revolving use, the starting date of the
first unit lending period is the first withdrawal date, the starting date of the second unit
lending period is the corresponding day of one period after the first withdrawal date, if there is
no corresponding day to the first withdrawal date in the starting month of a certain unit lending
period, then the last day of that month shall be the corresponding day, and the rest shall be
inferred in analogy. Once it is determined, the unit lending period shall not be adjusted without
the lender’s consent.

     4.2 After the first unit lending period, the loan balance of each unit lending period must be
less than the loan balance of the previous unit lending period, upon the expiration of each unit
lending period, the borrower shall repay the loans according to the arranged repayment plan. The
loans within each unit lending period cannot put into revolving use.

     4.3 If the Rennminbi revolving loans adopt floating interest rate, the benchmark interest rate
shall be determined in accordance with the benchmark loan interest rate of the People’s Bank of
China corresponding to the unit lending period.

Article V Guarantee

     5.1 Except for credit loans, the borrower shall provide legal and effective guarantee approved
by the lender for its performance of obligations under the contract. The guarantee contract shall
be signed separately.

     5.2 In case that damage, devaluation, ownership dispute, seizure, or detention occur to the
guarantee under the contract get damage, or the mortgagor disposes the guarantee without
authorization, or adverse changes occur or other changes not beneficial to the lender’s credit
occur to the financial situations of the guarantor with suretyship guarantee, the borrower shall
timely notify the lender, and separately provide other guarantee approved by the lender.

     5.3 If the pledge guarantee for the loans under the contract is provided with accounts
receivable, within the valid period of the contract, under one of the following circumstances, the
lender shall have the right to announce the advance expiration of the loans, and ask the borrower
to immediately repay part or all the principal and interest of the loans, or supplement legal,

 

 

effective, sufficient guarantee approved by the lender:

     (1) As for the pledgor of accounts receivable to the payer, the rate of bad account in
accounts receivable rises for 2 consecutive months;

     (2) As for the pledgor of accounts receivable to the payer, the expired yet uncollected
accounts receivable account for more than 5% of the payer’s balance of accounts receivable;

     (3) The pledgor of accounts receivable and the payer or other third party have trade
disputes (including but not limited to disputes in quality, technology, service, etc.) or
debt disputes, which render the failure of timely payment of the accounts receivable.

Article VI Insurance

     6.1 The borrower shall, in accordance with the lender’s requirements, take out an insurance
policy of the equipment, project construction, freight transport related to the loan project as
well as the risks during the project construction and operation in the insurance company approved
by the lender, the types of insurance and insurance period in the insurance policy shall conform to
the lender’s requirements, and the insured amount shall cover the loan risks.

     6.2 Within the valid period of the contract, the borrower shall not interrupt the insurance
for any reasons. If the insurance is interrupted, the lender shall have the right to handle the
formalities to renew the insurance or take out an insurance policy on Party B’s behalf, and the
borrower shall assume all the costs. If the borrower or related party conducted substantial
modification or advance termination of the insurance policy, it shall notify the lender 30 days in
advance and obtain the lender’s consent, otherwise, the borrower shall be held accountable for the
loss suffered by the lender caused by insurance interruption or termination, and insurance policy
modification.

     6.3 The insurance policy shall give clear indication that, in case of loss, the lender shall
be the party with priority of claim (first beneficiary), the insurer shall directly make payment of
the insurance benefits to the lender. In the insurance policy there shall be no terms restricting
the lender’s rights and interests.

     6.4 The borrower shall notify the lender in writing within 3 days from the date of knowing or
ought to know the happening of insurance accident, and timely make claim for compensation to the
insurance company in accordance with the related regulations of the insurance contract. The
insurance compensation money or smart money shall be used in advance repayment of the loans under
the contract, or be used to restore the value of the project upon the lender’s consent, or
deposited into the account designated by the lender, serving as the guarantee money for the
borrower’s performance of debts under the contract.

Article VII Statements and suretyship

     The borrower makes the following statement and suretyship to the lender, which will remain
valid throughout the valid period of the contract:

     7.1 The loan project and its loan issues conform to the requirements of laws and regulations;

     7.2 Being eligible for the subject qualifications of the lender in accordance with the law,
with

 

 

qualifications and capacity for signing and performance of the contract.

     7.3 Signing the contract has acquired all the necessary authorization or approval, signing and
performance of the contract neither breach the articles of association of the company and the
provisions of related laws and regulations, nor conflict with the obligations to be duly shouldered
under other contracts.

     7.4 Other debts payable have been paid off as scheduled, no malicious default act of the
principal and interest of bank loans.

     7.5 With sound organizations and financial management system, no serious act violating the law
and discipline in the production and operation process in the past one year, no serious bad record
of senior management personnel currently in office.

     7.6 All the documents or materials provided to the lender are authentic, accurate, complete
and effective, with no false record, major omission or misleading statement.

     7.7 The financial accounting statement provided to the lender is formulated in accordance to
China accounting standards, which truthfully, fairly, completely reflects the lender’s operation
status and debt situation, and from the latest financial accounting statement until this day, no
material adverse changes happed to the lender’s financial situations.

     7.8 No concealment of its involved lawsuit, arbitration or claim for compensation to the
lender.

Article VIII The borrower’s commitment

     8.1 Withdraw and use the loans according to the term and purpose specified by the contract,
the borrowed money will not flow into the securities market, futures market in any form or other
purposes forbidden or restricted by related laws and regulations.

     8.2 Pay off the principal, interest of the loans and other accounts payable in accordance with
terms of the contract.

     8.3 Accept and actively cooperate the lender’s inspection and supervision of the use of the
loan capital including the purposes in the way of account analysis, certificate checking, on-site
investigation, etc., and regularly summarize and report the situations of loan capital use in line
with the lender’s requirements.

     8.4 Accept the lender’s credit inspection, provide finance and accounting materials such as
the balance sheet, breakeven statement, etc. and other materials that reflect the borrower’s
repayment capacity in accordance with the lender’s requirements, assist and cooperate the lender in
the investigation, understanding and supervision of its production & operation and financial
situations.

     8.5 Before paying off the principal and interest of the loans under the contract and other
accounts payable, do not distribute dividend and bonus in any form.

     8.6 In carrying out merger, separation, capital reduction, equity change, major asset and
credit transfer, major foreign investment, substantial increase of debt financing as well as other
activities that may affect the lender’s rights and interests, proceed until obtaining the lender’s

 

 

consent in writing in advance or making arrangements on the realization of the lender’s credit
right that is satisfying to the lender.

     8.7 Under one of the following circumstances, the borrower shall timely notify the lender:

     (1) Changes in the articles of association, scope of business, registered capital, legal
representative;

     (2) Business closure, dissolution, liquidation, winding-up of business for rectification,
business license being revoked, being cancelled or applying (being applied) for bankruptcy;

     (3) Getting involved or possibly getting involved in major economic dispute, lawsuit,
arbitration, or the property being seized, detained or monitored;

     (4) Shareholder, director or senior management personnel currently in office are suspected
of being involved in major cases or economic disputes.

     8.8 Timely, completely, accurately disclose the related party relationship and related
transaction to the lender.

     8.9 Timely sign for various notices sent out or delivered in other forms by the lender.

     8.10 Do not dispose self-owned assets in the way of lowering the debt paying ability; without
obtaining the lender’s consent, do not provide guarantee to a third party with the assets formed
with the loans under the contract.

     8.11 If the loans under the contract are granted in the mode of credit, completely,
truthfully, accurately report the external guarantee situations to the lender on a regular basis,
and according to the lender’s requirements, sign the account supervision agreement. If providing
external guarantee may affect its performance of obligations under the contract, the lender’s
consent in writing is required.

     8.12 Support the lender in participating in activities of the loan project such as
three-calculation (budgetary estimate, budget, final accounts) review, project tender invitation,
and project completion acceptance, etc.

     8.13 Assume the costs occurred in the establishment and performance of the contract, as well
as the expenses paid or payable by the lender to realize the credit rights under the contract,
including but not limited to lawsuit or arbitration cost, property preservation cost, lawyer cost,
enforcement cost, evaluation cost, auction cost, announcement cost, etc.

     8.14 The order of discharging the debts under the contract prioritizes the borrower’s debt to
its shareholders, and shall at least get placed on an equal status with the same kind of debts to
the borrower’s other creditors.

Article IX The lender’s commitment

     9.1 Grant the loans to the borrower in accordance with terms of the contract.

     9.2 Keep confidential of the non-public material and information provided by the borrower,
unless it is regulated otherwise by laws and regulations and specified otherwise by the contract.

 

 

Article X Breach of contract

     10.1 The occurrence of one of the following circumstances shall constitute the borrower’s
breach of contract:

     (1) The borrower fails to repay the principal and interest of the loans under the contract and
other accounts payable according to terms of the contract, or fails to perform any other
obligations under the contract, or breach the statement, suretyship or commitment, etc. under the
contract;

     (2) The guarantee under the contract has occurred changes adverse to the lender’s credit
rights, the borrower fails to separately provide other guarantee approved by the lender;

     (3) The borrower fails to pay off any other debts after expiration (including those being
announced as advance expiration), or fail to perform or breach the obligations under other
agreement, which affected or may affect its performance of obligations under the contract;

     (4) The borrower’s financial indicators such as the profit capability, debt paying ability,
operation capacity or cash flow, etc. break through the contracted standard, or get deteriorated,
which affected or may affect its performance of obligations under the contract;

     (5) Material adverse changes in the lender’s equity structure, production and operation,
foreign investment, etc., which affected or may affect its performance of obligations under the
contract;

     (6) The borrower gets involved or may get involved in major economic dispute, lawsuit,
arbitration, or the property is seized, detained or monitored, or is punished in cases or taken
penalty measures by the judiciary or administrative organizations in accordance with the law, or
get exposed by the media because of the violation of related national regulations or policies,
which affected or may affect its performance of obligations under the contract;

     (7) Abnormal change, disappearance or being under the legal investigation of restriction of
personal freedom by the judiciary on the part of the borrower’s principal investor individuals, key
management personnel, which affected or may affect its performance of obligations under the
contract;

     (8) The borrower makes use of the false contract with the related party, makes use of
transactions without practical transaction background to fraudulently obtain the lender’s capital
or credit granting, or intends to escape or nullify the lender’s credit rights through related
transactions;

     (9) The lender has undergone or may under go business closure, dissolution, liquidation,
winding-up of business for rectification, business license being revoked, being cancelled or
applying (being applied) for bankruptcy;

     (10) The borrower has responsible accident caused by the violation of related laws and
regulations, supervision and management measures or trade standards on food safety, safety
production, environment protection, etc., which affected or may affect its performance of
obligations under the contract;

 

 

     (11) The project capital is not in place according to the plan or proportion, or fails to be
made up within the time limit specified by the lender;

     (12) Failure to complete the project construction according to the progress, or material
adverse changes in the environment, conditions for project construction and operation;

     (13) If the loans under the contract is granted in the form of credit, the borrower’s
indicators such as credit rating, profit level, liability/asset ratio, net cash flow in operation
activities, etc. do not conform to the lender’s conditions for credit loan; or without the lender’s
consent in writing, the lender sets mortgage/pledge guarantee to others or provides external
suretyship with its positive operation assets, which affected or may affect its performance of
obligations under the contract;

     (14) Other circumstances that may lead to adverse influence on the realization of the lender’s
credit rights under the contract.

     10.2 In case of the borrower’s breach of contract, the lender shall have the right to adopt
one or several of the following measures:

     (1) Ask the borrower to rectify the breach of contract within a time limit;

     (2) Stop to grant the loans and other financing accounts to the borrower in accordance with
the contract and under other contract between the lender and the borrower, cancel part or all of
the loans and other financing accounts not withdrawn by the borrower;

     (3) Announce the immediate expiration of loans not repaid under the contract and under other
contract between the lender and the borrower and other financing account, and the immediate
collection of accounts not repaid;

     (4) Ask the borrower to compensate for the loss suffered by the lender due to its breach of
contract;

     (5) Other measures stipulated in laws and regulations, specified by the contract or deemed by
the lender as necessary.

     10.3 If the borrower fails to make repayment according to the contract when the loans expire
(including being announced as immediate expiration), the lender shall have the right to compute and
collect the penalty interest according to the overdue penalty interest rate specified by the
contract starting from the date of overdue. For the interest that the borrower fails to pay on
time, compound interest shall be computed and collected following the overdue penalty interest
rate.

     10.4 If the borrower fails to use the loans in accordance with the purposes specified by the
contract, the lender shall have the right, from the date of loan embezzlement, for the embezzled
part, to compute and collect the penalty interest according to the loan embezzlement penalty
interest rate specified by the contract, for the interest that the borrower fails to pay on time
during the period of embezzlement, compound interest shall be computed and collected following the
loan embezzlement penalty interest rate.

     10.5 If the borrower is simultaneously under the circumstances listed in Article 10.3, 10.4 as
mentioned above, the penalty interest rate shall be determined by the heavier, but not the

 

 

implementation of both.

     10.6 If the borrower fails to repay the principal, interest (including the penalty interest
and compound interest) of the loans or other accounts payable, the lender shall have the right to
carry out announcement press for payment through the media.

     10.7 The relationship of controlling and being controlled between the lender’s related party
and the lender changes, or the lender’s related party is under circumstances in Article 10.1 other
than the two items (1), (2), which affected or may affect the borrower’s performance of obligations
under the contract, the lender shall have the right to take all measures specified by the contract.

Article XI Collection by deduction

     11.1 If the borrower fails to make repayment of the expired debt (including those being
announced as immediate expiration) according to the contract, the lender shall have the right to
deduct and collect the corresponding money from all the RMB and foreign currency accounts that the
borrower opened in the lender’s premise or other branch institutions of the Industrial and
Commercial Bank of China to pay off the debt, until all the borrower’s debts under the contract get
paid off.

     11.2 If the money deducted is inconsistent with the currency of the contract, it will be
converted according to the exchange rate applicable to the lender on the day of deduction. The
interest and other costs occurred during the period from the day of deduction to the day of paying
off (the day when the lender converts the deducted money into the contract currency and practically
pays off the debt under the contract in accordance with national policies on foreign exchange
management), as well as the difference derived from the fluctuation of the exchange rate during
this period shall be assumed by the borrower.

     11.3 If the money deducted by the lender is not sufficient to pay off all of the lender’s
debts, the lender shall have the right to decide the order of discharging.

Article XII Transfer of rights and obligations

     12.1 The lender shall have the right to transfer part or all of its rights under the contract
to a third party, the lender’s act of transfer need not obtain the borrower’s consent. Without the
lender’s consent in writing, the borrower shall not transfer any of its rights or obligations under
the contract.

     12.2 The lender or the Industrial and Commercial Bank of China Co., Ltd. (“Industrial and
Commercial Bank”) can, in accordance with the needs of operation management, authorize or entrust
other branch institutions of the Industrial and Commercial Bank to performance the rights and
obligations under the contract, or incorporate the loan credit rights under the contract into the
succession and management of other branch institutions of the Industrial and Commercial Bank, the
borrower expresses approval of such arrangements, and the lender’s above-mentioned action need not
obtain the borrower’s consent again. Other branch institutions of the Industrial and Commercial
Bank that succeed the lender’s rights and obligations shall have the right to exercise all the
rights under the contract, and have the right to file a lawsuit, propose arbitration or apply for
compulsory enforcement of the disputes under the contract to the court in the name of that
institution.

 

 

Article XIII Effectiveness, modification and termination

     13.1 The contract shall come into effect from the date of signing, and shall terminate until
the borrower has performed all the obligations under the contract.

     13.2 Any modification of the contract shall be based on the agreement of the two parties and
made in written form. The modified terms or agreement constitute a part of the contract, and shall
be equal in legal effects with the contract. Except for the modified part, the remainder part of
the contract remains effective; before the modified part comes into effect, the original terms
remain effective.

     13.3 The modification and termination of the contract shall not affect the rights of each
contracting party to claim compensation for damages. The termination of the contract shall not
affect the effectiveness of the terms on dispute resolution.

Article XIV Legal applicability and dispute resolution

     The law of the People’s Republic of China shall be applicable to the establishment,
effectiveness, interpretation, performance and dispute resolution of the contact. For any
disagreement and dispute derived from the contract or related to the contract, Party A and Party B
shall resolve through consultation, if the negotiations fail, then the disagreement and dispute
shall be resolved by the way specified by the contract.

Article XV Integrated contract

     Part I “Conditions for the Loans” and Part II “Terms of the Fixed Assets Loan Contract” of the
contract jointly form an integrated loan contract, the same word in the two parts shall have the
same connotations. The loan of the lender is under the common binding of the two parts mentioned
above.

Article XVI Notice

     16.1 All notices under the contract shall be sent out in writing. Except agreed otherwise, the
two parties designate the domicile clearly indicated in the contract as the correspondence and
contact address. If the correspondence address or other contact information of either party has
changed, the counterpart shall be timely notified in writing.

     16.2 In case that either party of the contract refuses to sign for or other situations of
delivery failure, the notifying party may carry out the delivery by means of notarization or
declaration.

Article XVII Miscellaneous

     17.1 The lender’s non-exercise or partial exercise or delayed exercise of any rights under the
contract shall not constitute the abandoning or changes of such rights or other rights, and shall
not affect the lender’s further exercise of such rights or other rights.

     17.2 The invalidity or non-performance of any terms of the contract shall neither affect the
validity and performance of the other terms, nor affect the effectiveness of the whole contract.

     17.3 The lender shall have the right, in accordance with the provisions of related laws and

 

 

regulations or the requirements of finance regulatory organizations, to provide the
information on the contract and other related information of the borrower to the credit reporting
system of the People’s Bank of China or other credit information database established in accordance
with the law, for inquiry and use by institutions or individuals with proper qualifications. The
lender shall also have the right, for the purpose of formulating and performing the contract,
inquire the related information of the borrower through the credit reporting system of the People’s
Bank of China or other credit information database established in accordance with the law.

     17.4 Words such as the “related party”, “related party relationship”, “related party
transaction” “principal investor person”, “key management personnel”, etc. mentioned in the
contract shall have identical connotations with the same words in the “Accounting Standard for
Business Enterprises No. 36 — Related party disclosure” (MOF Accountant [2006] No.3) and the
following amendment to the standard promulgated by the Ministry of Finance.

     17.5 The invoices and certificates on the loans under the contract that is made and saved by
the lender in accordance with its business rules, shall constitute the effective evidence to prove
the debtor-creditor relationship of the borrower and the lender, and shall be binding on the
lender.

     17.6 In this contract, (1) any mentioning of the contract shall include the amendment or
supplement to the contract; (2) the titles of the terms are only for reference, and shall not
constitute any interpretation of the contract or any restrictions on the content or its scope under
the title; (3) if the withdrawal date, repayment date is not bank working day, then it shall be
postponed to the next bank working day.

 

 

     The Two Parties Confirm That: the borrower and the lender have carried out full consultation
on all terms of the contract. The lender has proposed that the borrower pay special attention to
all terms on the rights and obligations of the two parties so as to acquire a full and accurate
understanding of the terms, and has offered explanations and statements on related terms upon the
borrower’s request. The borrower has carefully read and fully understood all terms of the contract
(including Part I “Conditions for the Loans” and Part II “Terms of the Fixed Assets Loan
Contract”), the borrower and the lender have reached complete agreement on the interpretation of
the contract terms, with no objections to the content of the contract.

     Lender (seal):
Shanghai Caohejing Hi-Tech Park Branch, Industrial and Commercial
Bank of China Co., Ltd.

     Responsible person/ entrusted agent:
 /s/ Guanghua Xu                  
                      
                    
                 
        

     Borrower (seal):
HanTing XingKong (Shanghai) Hotel Management Co., Ltd.               
                    
               

     Legal representative/ entrusted agent:
 /s/ Tuo Zhang                    
                    
                  
                                

Date of signing: January 4, 2010

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00169-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00169-of-00352.parquet"}]]