Document:

Silvan Industries Ltd.: Exhibit 10.7 - Filed by newsfilecorp.com

Exhibit 10.7 

Pledge Agreement

 (English Translation) 

No.: YingZi No. 1011200025 in the year of 2011 

	
Mortgagee: Guiyang branch of China Merchant Bank Co., LTD
		
(hereinafter Party A)
	
	
Principal person: Zhang QingDian
		
 
	

Pledger (legal person or other organization): Guizhou Huacheng Real Estate Co., LTD. (hereinafter referred to as Party B) Legal representative or principal person: Ji YuDong 

	
Pledger (natural person)
		
(hereinafter Party B)
	
	
ID number:
		
 
	

Whereas: 

1. Party B applies for loan/acceptance/bills discounting with the total amount of ____ yuan in the currency of _____. Party A agrees to provide Party B with loan/business acceptance/bills discounting. Both parties enter into ____ No.___
(hereinafter referred to as main contract). or  

2. Qian Xi Nan Aosen Forestry Company, Limited (hereinafter referred to as "debtor") applies to Party A for loan/business acceptance/bills discounting with the total amount of RMB
25million. Party A agrees to provide loan/business acceptance/bills discounting to the debtor. Party A and the debtor therefore sign Loan Contract YingZi No. 1011200025 in the year of 2011 (hereinafter referred to as Main Contract).  

To guarantee debt interest under the contract and other all expenses related can be fully paid back as scheduled, Party B will mortgage the property owned or the property penalized according to laws, which Party A reviews and agrees to accept. Both
parties agree on the following terms and enter into the contract in accordance with the provisions of relevant laws through equal consultation.  

Article 1 Mortgaged property of Party B 

1.1 Name: Huacheng Arch of Triumph No. 1 and No.2 of negative 1st floor, Building A and Building B 

1.2 Quantity or area: 2377.29 m2 

1.3 Assessment price and mortgage rate: RMB 48,132,000 

1.4 Time limit: March 3, 2011 ~ September 2,
2012 

1.5 Premises: No.56-58 North Zhonghua Road, YunYan District  

1.6 Ownership certificate: YunYan Zi No. 010017995 of property right certificate 

Article 2 Ways of mortgage guarantee  

2.1 Upon expiration of the time limit for paying debts, Party B fulfills its duty according to article 3 of the contract for loan, business acceptance or bills accounting which is not yet paid. Prior to the time limit, if Party A claims loan in
advance, Party B can fulfill its duty with mortgaged property. 

2.2 In case both parties enter into an extension on time limit, interest rate and amount under the main contract, or change relevant clauses, or Party A adjusts the interest rate during the time limit under the contract, Party A does not have to ask
for consent of Party B or notify Party B, all of which the latter shall recognize and won’t impair Party B’s mortgage guarantee responsibility under the contract.  

Article 3 Scope of mortgage guarantee   

Scope of guaranty under the contract includes but is not limited to debt principal as well as its corresponding debt interest, penalty, compound interest, liquidated damages and fees for realizing mortgage rights, including:  

1 

3.1 loan principal issued by Party A under the contract as well as its
corresponding debt interest, penalty, compound interest, liquidated damages and
related fees; or  

3.2 principal balance paid by Party A in advance for fulfilling its duty of
accepting commercial draft under the contract as well as its corresponding
interest, penalty, compound interest, liquidated damages and related fees; or  

3.3 principal of commercial draft discounted by Party A as well as its
corresponding interest, penalty, compound interest, liquidated damages and
related fees; or  

3.4 expenses incurred when Party A exercises its mortgage rights (including but
not limited to legal fees, attorney fees, announcement fee, service fee, travel,
etc)  

Article 4 Custody and responsibility of certificates of mortgaged property and its ownership  

4.1 During the mortgage, the mortgaged property is kept by party B or its entrusted agent, who shall properly keep, repair and maintain the property and be ready for check by Party A at any time.  

The mortgage period refers to the period of time from the day as of the contract
comes into force to the date of expiration of legal action concerning the
obligatory rights 

4.2 During the mortgage, Party B shall not devalue any mortgaged property. If
so, Party A shall be entitled to require party B to cease and restore its value,
or provide new mortgage agreed by Party A. Party B shall bear the costs incurred
by restoring the property or adding new mortgaged property. 

4.3 During the mortgage, Party B shall hand in certificates of mortgaged property and its documents to Party A for safekeeping. Party A shall properly keep all the certificates of mortgaged property. In case of any loss for improper custody, Party A
shall bear the expenses.  

Article 5 Registration of mortgaged property  

5.1 Party B should cooperatively go to register mortgaged property in the agent
along with the contract and relevant documents during the period as scheduled;  

5.2 Party B should cooperatively go through the formalities as required. In case
Party B fails, Party B shall bear the liability for compensation for any loss  

Article 6 Insurance  

Party B shall insure the mortgaged property in ________insurance company with a full amount of property insurance, the proper type and Party A as the first beneficiary as required. Time limit of Insurance shall be longer than the period
under the contract. If the period under the contract prolongs, Party A is entitled to claim principal and interest of loan/acceptance/discount and all other related expenses, or deposit insurance compensation in the margin account which is set up by
Party B in advance or automatically generated when loan guarantees are deposited, or handle procedures of drawings after consultation with Party B so as to withdraw the payable upon expiration under the contract.  

If Party B fails to insure the mortgaged property or extend the time limit, Party A is entitled to represent Party B to go through formalities directly.  

Article 7 Restrictions on disposing mortgaged property  

7.1 During the period, Party B is not entitled to transfer the mortgaged
property under the contract by means of selling, exchanging and giving away
without authorization; if Party B has to transfer the mortgaged property under
the contract, the following conditions shall be met with:  

7.1.1 The transfer shall be approved in written consent by Party A and the
transferee shall be notified in advance. If not, the transfer is deemed void;  

7.1.2 If the payment of transferred property is so below its value that it
cannot afford to pay the principal and interest and relevant fees under the
contract, Party A is entitled to require Party B to provide corresponding
mortgaged property in full amount; the transfer is not allowed unless Party B
can afford to offer.  

7.1.3 The transfer pay directly goes into the account appointed by Party A to pay principal and interest and other expenses in advance or upon expiration, or is deposited in Party A’s margin account opened by Party B. Since the capital enters
into the margin account, it is deemed as specified and possessed by Party A, which shall serve as
mortgage guarantee under the contract. Party B has no objection to it and shall go through related formalities as required. 

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When Party B transfers the full amount of mortgaged property into the margin account, Party A may assist Party B in handling registration cancellation procedures and return certificates of property ownership to Party B. 

7.2 without the written consent of Party A, Party B shall not transfer, lease, re-mortgage or dispose the property in any other appropriate ways.  

Article 8 Expense bearing  

Fees of insurance, notarization, registration, transportation and warehousing shall be borne by Party B. 

Article 9 Change or terminate the contract  

When the contract comes into force, one party shall not unilaterally modify or terminate the contract without the written consent of the other party. In case of any modification or termination of the contract, a written agreement shall be reached
through consultations of both parties. Before that, the contract remains effective.  

Article 10 During the effective period of the contract, if Party B divides or mergers, it’s up to the new organization to undertake or separately undertake obligations under the contract. If Party B breaks up or goes bankrupt, Party A is
entitled to dispose the mortgaged property in advance.  

Article 11 Under one of the following circumstances, Party A is entitled to lawfully dispose the property.  

11.1 Party B (or the debtor) violates the contract;  

11.2 Party B or mortgagor/pledgor/guarantor violates the contract; or Party B
fails to fulfill the obligations under the contract;  

11.3 Party B guarantees loan/acceptance/discount by means of movable property,
and its market value drops below the percentage of ____ of the principal of
loan/acceptance/discount;  

11.4 Party B is natural person, and has no heir or legatee upon death;  

11.5 Party B is natural person, and its heir or legatee disclaims inheritance or
bequest and refuses to pay back principal and interest;  

11.6 Party B as legal person or other organization closes, or its business
license is revoked or cancel led, or it applies for or is filed for bankruptcy,
or it breaks up;

11.7 Other reasons for Party’s failure to fulfill its rights.  

Article 12 In case Party B guarantees loan/acceptance/discount by means of movable property, and its market value drops below the percentage of ____ of the principal of loan/acceptance/discount, Party B shall provide the margin as required,
or add or replace the mortgage to make up for the gap that arises for the drop of the market value.  

Article 13 Liability for breach of contract 

13.1 In case Party B is against the provisions of article 4 and fails to maintain and manage the property so that it devalues, or Party B’s behavior
endangers the property so that it devalues, Party A is entitled to require Party
B to cease and provide other acceptable property, and Party A is entitled to
dispose the property in advance;  

13.2 If Party B violates the provisions of article 7 and disposes the property
without authorization, it is deemed void; Party A is entitled to require Party B
to cease and provide other acceptable property, and Party A is entitled to
dispose the property in advance;  

13.3 In case Party B conceals the property co-ownership, dispute, close-down,
detainment, lease, prior mortgage and priority (including but not limited to
priority of construction payment ) or Party B doesn’t have ownership or right of
disposition, Party A is entitled to require Party B to provide other acceptable
property;  

13.4 Under one of the circumstances above, if Party B fails to provide new
guarantee, Party B shall pay 5% of principal and interest of
loan/acceptance/discount under the contract. If it brings any economic loss to
Party A, Party B shall make the payment.  

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Article 14 Independence of the contract   

The contract is independent and unconditional, the effectiveness of which is neither influenced by the main contract nor any agreement or document signed by Party B with others, or is not subject to change for Party B’s fraud, reorganization,
closure, breakup, bankruptcy, liquidation and so on. In case there is another mortgage guarantee or guarantor, and Party A gives up syn-position of the mortgage, gives up or changes or cancels other mortgage guarantee, or changes or cancels the
liability of guarantor, or Party A requires Party B to undertake the liability of guarantee in advance, Party B still has to undertake the liability of guarantee under the contract. 

If Party A ceases to loan, accept or discount, or claims loan or acceptance issued, it shall not affect the liabilities borne by Party B under the contract. 

Article 15 If Party B (or the debtor) fails to pay off principal and interest under the contract, Party A can claim the mortgage rights. If the property is seized or detained by the people's court, Party A is entitled to charge natural fruits
separated from mortgaged property and legal fruits Party B can collect from the property. 

Article 16 Materialization of mortgage rights  

16.1 When one individual item or items of Article 11, 13.1, 13.2 arise, mortgage
rights can be materialized by one of the means:  

16.1.1 Both parties reach an agreement of converting mortgaged property into
money or auctioning or selling off mortgaged property. In case no agreement can
be reached with 15 days since one individual item or items of Article 11, 13.1,
13.2 arise, Party A is entitled to ask the people's court to auction or sell off
mortgaged property;  

16.1.2 The property is legally disposed according to the contract.  

16.1.3 After compulsory execution granted by both parties is notarized, Party A can apply for compulsory execution to the competent people's court.  

16.2 Party A is entitled to money claimed for disposing the property. If it exceeds principal and interest and its related fees, the excess goes to Party B. Otherwise, Party A can recover the deficiency.  

Article 17 Extermination of mortgage rights  

When or before the contract expires, if principal and interest of loan/discount and related fees are paid off, or commercial draft accepted is paid off, mortgage rights terminate. Certificates of property rights or insurance policy kept by Party A
shall be returned to Party B. Party A can assist Party B in handling formalities of cancellation of mortgaged property registration.  

Article 18 Settlement of applicable laws and disputes: 

18 1 Formation and interpretation of the contract and its dispute settlement are applicable to laws of the People's Republic of China.  

18.2 Disputes that arise shall be settled by consultation or mediation of both parties. Otherwise, both parties agree to settle disputes according to the contract.  

Article 19 Notice  

Notices and requirements related to the contract shall be sent in a written form.  

If they are delivered by hand, signature by hand is deemed service (if the receipt refuses, the very day when refusal occurs is deemed service); in case they are delivered by post, 7 days is deemed service; if they are delivered by fax, that the
receipt’s fax receives notices or requirements is deemed as service.  

Party A’s address: 

Party B’s address: 

One party shall be informed of any change made by the other party. Otherwise, loss incurred should be borne by itself. 

Article 20 Terminology 

The terminology used in the contract, unless otherwise specified, bears the same meaning as the main contract. 

 

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Article 21 Execution of contract

The contract comes into effect after legal representative (or responsible person) or authorized agent of both parties signs/stamps, or after Party A signs/stamps if Party B is legal person, and becomes void until principal and interest are paid off.
 

21 Other matters  

21.1
________________________________________________________________________________

21.2
________________________________________________________________________________

21.3
________________________________________________________________________________

Article 21 Bylaw 

The contract in quadruplicate is effective. Both parties, the debtor and the mortgage registration institution each have one copy.  

(No text followed) 

 

 

 

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(Signature Page) 

Party A: Guiyang branch of China Merchant Bank Co., LTD (stamp)  

Main person in charge or authorized: 

Party B: Guizhou Huacheng Real Estate Co., LTD. (stamp) 

Signed or stamped by legal representative/person in charge or authorized agent (signature or stamp): 

Signing date: March 7, 2011 

 

	
6Silvan Industries Ltd.: Exhibit 10.8 - Filed by newsfilecorp.com

Exhibit 10.8 

Pledge Agreement for Bank of Chongqing 

(English Translation)  

 

 

 

Party A (Creditor): Guiyang Sub-Branch (Section), Bank of Chongqing Co., Ltd. 

Party B (Pledgor): Guizhou Huacheng Real Estate Development Co., Ltd. 

 

 

Bank of Chongqing Co., Ltd. 

Pledge Agreement 

Contract No.: (2011) (Chong Yin Qian Di) No.0578 

Party A (Mortgagee): Guiyang Branch, Bank of Chongqing Co., Ltd. 

Address: No.1, 2 and 3, Shengshihuating, No.51, Jiefang Road, Nanming District, Guiyang  

Tel.: 0851-8577397                                  Fax: 0851-8577377

Director: Huang Changsheng               Position: Sub-branch Manager  

 

Party B (Mortgagor): Guizhou Huacheng Real Estate Development Co., Ltd. 

Address: Floor E, Huacheng Kaixuanmen, No.56-58, North Zhonghua Road, Yunyan Road, Guiyang

Tel.:                                             
                  Fax:                                                                        

 Director: Ji Yudong                                                 Position: Executive Director 

Legal
Reprrsentative: Ji Yudong              Position: Executive Director 

 

To guarantee the performance of (2011) (Chong Yin Qian Dai) No. 0577 “Working Capital Loan Contract for Bank of Chongqing” (hereinafter referred to as Principal contract) signed on June 29, 2011 between
Party A and Qian Xi Nan Aosen Forestry Company, Limited, Party B is willing to mortgage its own property (hereinafter referred to as “mortgaged property) to Party A. Both parties hereby enter into the Contract and abide by the
following provisions through consultation. 

Article 1 Scope of Mortgage Guarantee. The scope of mortgage guarantee herein is the following type 1: 

1. All principal, interest, penalty interest, compound interest and expenses for enforcing the claim of the liability afforded by debtor under the principal contract. The principal thereof is RMB (in words): twenty million, and the interest, penalty
interest and compound interest thereof shall be calculated as specified in the principal contract. 

2.
________________________________________________________________________________________________________

Article 2 Mortgaged Properties 

1. The details of mortgaged property can be found in the Attachment hereto “List of Mortgaged Property”. Party B is willing to guarantee to Party A with the mortgaged property listed in the List. 

2. Keeping of Mortgaged Property and Its Ownership Certificate and Responsibilities 

In the term of mortgage, Party B or its entrusted agent shall keep the mortgaged property. They shall well keep the mortgaged property, be responsible for its repair and maintenance to keep it intact, and accept Party A’s check any time.  In
the term of mortgage, where Party B’s behavior is likely to cause the value of the mortgaged property to decline, Party A has right to ask Party B to stop the behavior. Where the value of the mortgaged property is declined, Party has right to
ask Party B to restore its value, or provide new mortgaged property recognized by Party A. Party B shall afford the expenses occurred from restoring the original state of the mortgaged property or providing new mortgaged property. Where Party B
fails to take the above-mentioned measures as required by Party A, Party B shall be jointly and severally liable for payment thereof. 

In the term of mortgage, Party B shall submit the ownership certificate and other related certificates thereof to Party A for keeping, who shall well keep them. Party A shall afford the post-registration fees where the certificates are lost due to
improper keeping. 

In the term of mortgage, with Party A’s written consent, Party B may transfer the registered mortgaged property. Where the proceeds expected from the transfer is evidently less than its value, Party A can ask Party B to provide an additional
guarantee; the mortgaged property shall not be transferred where Party B fails to provide it. 

The proceeds which Party B obtains from the transfer of the mortgaged property shall first be used to liquidate the claim
secured by the mortgage or it shall be deposited with a third party agreed upon by Party A. 

1 

If the proceeds exceed the claim, the balance shall belong to Party B; if the proceeds do not cover the claim, the difference shall be paid by the debtor. 

3. Registration of Mortgaged Property 

The mortgaged property hereunder must be registered in accordance with related laws. Both parties shall handle with the registration for mortgaged property with the Contract and the related materials in the competent authority within 15 work days
from the signature hereof. 

Article 3 Insurance of Mortgaged Property 

1. Where Party A believes it necessary to handle with property insurance, Party
B shall handle with the insurance of the mortgaged property until the
termination of mortgage. If the insurance is discontinued, Party A has right to
handle with the insurance for Party B who shall afford the insurance cost 

2. Party B shall take Party A as the first beneficiary of the insurance; where
Party B has handled with insurance for the mortgaged property before the
mortgage, Party B shall change the first beneficiary to Party B within the term
specified by Party A ( if the original sum insured is insufficient, the sum
shall be complemented as specified above), provide the original copy of
insurance policy to Party A, and irrevocably authorize Party A to accept the
insurance indemnity to enjoy the preferred payment for the mortgaged debt. 

Article 4 Enforcement of Mortgage Right 

I. Where the debtor fails to repay the principal and interest of the liability under the principal contract, both parties may handle with the mortgaged property with agreement and a preferred payment is given to the debtor’s due debt with the
proceeds thus gained.  

II. In any of the following circumstances, Party A has right to be paid out of the proceeds from the conversion of the mortgaged property or from the auction or sale of the mortgaged property: 

1. The debtor fails to repay its due debt (including due
as specified in contract and due in advance) as required by law; 

2. Party B or any third party disposes of the mortgaged property without authorization;  

3. Party B’s legal successor or legatee refuses to repay the due debt; 

4. Party B is
declared dissolved or bankrupt; 

5. Party B, debtor or any third party violates Party A’s legal right and interest, or have any other behavior severely influencing Party A’s timely and full collection of its claim. 

III. In any of the above-mentioned circumstances, Party A has right to dispose of the mortgaged property. The proceeds from the conversion of the mortgaged property or from the auction or sale thereof shall be used for repaying all debts under the
principal contract. If the proceeds exceed the claim, the balance shall be returned to Party B; if the proceeds do not cover the claim, Party A may continue to perform its right of recourse to the debtor. 

Article 5 Party B’s Representations and Warranties 

Party B has legal right to sign and perform the Contract, and its signature and performance of the Contract has gained full authorization of its Board or any other competent organization (if needed). 

Party B promises that the application information provided to Party A is real, legitimate and effective and doesn’t include any major mistake incompliant with fact or omits any major fact. Party B has legal right to mortgage the mortgaged
property and has no dispute with any third party. Party B’s signature and performance of the Contract does not contradict with its signature and performance of any other contract.  

Party B promises that the application information provided to Party A is real, legitimate and effective and doesn’t include any major mistake incompliant with fact or omits any major fact. 

Party B promises to notify Party A in written form within 10 days after any change of premises, correspondence address, contact number, scope of business, legal representative and name etc. 

Party B has fully known and understood all provisions of the Contract. Signature of the Contract is the expression of both parties’ real intention. 

Party B agrees to accept and cooperate with Party A in the investigation on its property and operational conditions,
including through telephone, on site or through other information enquiry organizations etc. 

2 

Without Party A’s written consent, Party B shall not rent, transfer, gift, sub-mortgage or re-mortgage the mortgaged property. Where Party A agrees Party B to dispose of the mortgaged property as abovementioned, The proceeds thus gained shall
be used to repay Party A’s claim secured with the mortgaged property in advance or used with Party A’s monitoring. 

Article 6 In any of the following circumstance, Party B shall take the
initiative to take remedial measures and notify Party A in time in written form: 

1. The value of mortgaged property is lost or decline as it’s lost, damaged, or
destroyed. 

2. The ownership of the mortgaged property changes or any dispute arises from
it.

3. The mortgaged property is sealed up or frozen. 

Article 7 The mortgage provided by Party B is an independent mortgage and shall not be affected or replaced by mortgage provided by other guarantors. 

Article 8 Where the Contract becomes legally ineffective or partially ineffective for whatever causes, the debtor of the principal contract shall still perform all repayment obligations, and Party B shall afford the guarantee obligation for
the repayment obligation of the debtor under the principal contract as specified herein. Where an effective mortgage registration is not made on the mortgage hereunder due to Party B’s fault, Party B shall be jointly and severally
(compensation) liable to Party A for all debts under the principal contract. 

Article 9 All expenses of both parties from the concluding and performance of the Contract, including the cost from notarization or witness, registration fee, and fees from sale or auction shall be afforded by Party B. 

Article 10 Party A shall have its claim repaid with the proceeds from the disposing of the mortgaged property in the following order; However, Party A keeps the right to change the order: (1) liquidated damages; (2) compensation damage; (3)
compound interest; (4) penalty interest; (5) interest; (6) principal; (7) other payables. 

Article 11 Modification of Contract 

1. Where either party hereunder needs to modify or terminate the Contract, it shall notify the other party in advance in written form and reach a written agreement with the other party. The Contract shall keep effective until a written agreement on
modification or termination of the Contract is concluded.  

2. Party A’s tolerance on Party B shall not deemed as the modification or termination of the Contract, unless a written modification agreement has been conclude as specified above. 

3. Where the principal contract is modified, unless the principal of the loan under the principal contract is increased and Party B’s guarantee obligation is thus expanded, it’s not necessary to gain Party B’s consent in advance if
other contents of the principal contract change, and Party B still affords guarantee obligation for the modified principal contract; however, Party A has obligation to notify Party B with the above-mentioned modified contents. 

Article 12 The Contract shall come into effect after the signature and stamping of both parties. 

Article 13 Law Application and Dispute Resolution 

1. The Contract is formulated in accordance with the law of PRC, and shall be
governed by the law of PRC. 

2. Any dispute arises from the Contract shall be resolved as specified in the
principal contract. 

Article 14 Other issues agreed by both parties:
___________________________________________________________________________________________________________________

Article 15 The Contract is in four copies. Party A holds one copy, and Party B, the debtor and registration authority each holds one. All copies shall be equally legally effective. 

3 

	
Party A (Stamp): 	
 
	
  	
 Party B (Stamp): 
	
Director:
		
 
	
  	
 Legal representative: 
	
(Or entrusted agent) 
	
 
	
 	
 
	
	
  	
 (Or entrusted agent)
	
	
 	
 
	
	
  	
                                                                      
                                                                     
                                                     Signature Date: June 29, 2011
	

2011 Chong Yin Qian Di No. 0578 Attachment to “Mortgage
Contract” 

List of Mortgaged Property

Total value of mortgaged property RMB 39,665,500  

Page 1 of 1 page 

	No. 	Name of
    

    Mortgaged 

    Property 	Size 	Amount 	
    Place
	
    Registration 

    Authority 	Insurance
    

    Condition 	No. of Ownership Certificate
	Evaluated Value or 
    

      Confirmed Value 	
    Notes
	1 	Property of Guizhou Huacheng
      Real Estate Development Co., Ltd. 	
    M2	1114.2 	No.3,4 and 5, Floor 1,
      Building A, Huacheng Kaixuanmen, No.56-58, North Zhonghua Road, Yunyan
      Road, Guiyang 	 		No.010026924 	RMB 39,665,500 	 
	2 					 				 
	3 					 				 
	4 					 				 
	... 					 				 

	Party A (Stamp):
    	  
	  	Party B (Stamp):
    
	  	  
	Director: 	Legal representative:
    
	  	(Or authorized signatory) 
	(Or authorized signatory)
    	June 29, 2011

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