Document:

ex10-1.htm

Exhibit 10.1

 

OPTION AGREEMENT

THIS AGREEMENT is dated for reference the 15th day of June 2010.

 

BETWEEN:

 

GLOBETECH VENTURES CORP., a company incorporated 

pursuant to the laws of British Columbia having an office at 

1128 – 789 West Pender Street, Vancouver, B.C. V6C 1H2

 

(“Globetech”)

 

OF THE FIRST PART

 

AND:

 

CAPSICUM MANAGEMENT CORP., a company 

incorporated pursuant to the laws of British Columbia having an office at 

1130 – 789 West Pender Street, Vancouver, B.C. V6C 1H2

 

(“Capsicum”)

 

OF THE SECOND PART

 

WHEREAS:

 

	
  

	
A. Capsicum has a 100%  beneficial interest in and to mineral claims known as the White Channel claims, as more particularly described in Schedule “A” attached hereto, and including any buildings and attachments thereon the White Channel claims (the “Property”);

 

	
  

	
B. Globetech desires to acquire and Capsicum has agreed to grant to Globetech:

 

	
  

	
(a) an exclusive and irrevocable option to acquire all of Capsicum’s rights, title and interest in and to the Property (the “Option”); and

 

	
  

	
(b) the exclusive and irrevocable right and authority during the term of the Option to:

 

	
  

	
(i) act in Capsicum’s name and stead with respect to all matters connected to the Property; and

 

	
  

	
(ii) enter on to the Property to conduct reconnaissance, exploration and development work;

 

NOW THEREFORE THIS AGREEMENT WITNESSES THAT, for good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged by the Parties, the Parties covenant and agree with each other as follows:

 

	
  

	
1. DEFINITIONS AND INTERPRETATION

 

	
  

	
1.1. Definitions

 

For the purposes of this Agreement, including the recitals and any schedules hereto, unless there is something in the subject matter or context inconsistent therewith, the following words and expressions shall have the following meanings:

 

“Agreement” means this Agreement, as amended from time to time;

 

  

  

  

 

“Mining Work” means every kind of work done on or in respect of the Property or the products there from by or under the direction of or on behalf of or for the benefit of a party and, without limiting the generality of the foregoing, includes assessment work, geophysical, geochemical and geological surveying, studies and mapping, investigating, drilling, designing, examining, equipping, improving, surveying, shaft sinking, raising, crosscutting and drifting, searching for, digging, trucking, sampling, working and procuring minerals, ores, metals and concentrates, surveying and bringing any mineral claims or other interest to lease or patent, reporting, and all other work usually considered to be prospecting, exploration, development and mining work;

 

“NSR” means net smelter return as more particularly defined in Schedule “B” attached hereto;

 

“Option” means the option granted by the Optionors to Globetech to acquire all of Capsicum’s direct and indirect right, title and interest in and to the Property in accordance with Section 3.1 of this Agreement;

 

“Property” means that mineral claim known as the White Channel claims, as more particularly described in Schedule “A” attached hereto, together with any surface rights, mineral rights, buildings, personal property and permits associated therewith, and shall include any renewal thereof and any other form of successor or substitute title thereto;

 

1.2 All references to currency in this Agreement, unless specified otherwise, are to lawful currency of Canada.

 

1.3 This Agreement shall be governed by and shall be construed and interpreted in accordance with the laws of British Columbia and the laws of Canada applicable in British Columbia.

 

1.4 The division of this Agreement into sections and/or subsections and the provision of headings for all or any of them are for convenience of reference only, do not form a part of this Agreement and are not intended to affect the interpretation of this Agreement.

 

1.5 The following Schedule is attached and forms part of this Agreement:

 

Schedule “A” – White Channel claims

 

Schedule “B” – Calculation and Payment of Net Smelter Royalty

 

Schedule “C” - Net Profits Interest

 

1.6 Whenever any provision of any schedule to this Agreement conflicts with any provision in the body of this Agreement, the provision in the body of this Agreement shall prevail.  References herein to a schedule shall mean a schedule of this Agreement.  Reference in any schedule of this Agreement to an agreement shall mean this Agreement.

 

1.7 Words used herein importing the singular number only shall include the plural, and vice-versa, and words importing the masculine gender shall include the feminine and neuter genders, and vice-versa, and words importing persons shall include firms, partnerships and corporations.

 

	
  

	
2. REPRESENTATIONS AND WARRANTIES

 

	
  

	
2.1 Globetech represents and warrants to the Optionors that:

 

	
  

	
(a) it is a company duly incorporated and validly subsisting and is in good standing with respect to the filing of its annual reports under the laws of the jurisdiction of its incorporation;

 

	
  

	
(b) it has full power and authority and capacity to enter into this Agreement and to carry out the transactions contemplated herein except where regulatory approval is required;

 

  

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(c) it has duly obtained all corporate authorizations for the execution, delivery and performance of this Agreement, and such execution, delivery and performance, and the consummation of the transactions herein contemplated, will not conflict with, or accelerate the performance required by, or result in any breach of any covenants or agreements contained in, or constitute a default under, or result in the creation of any encumbrance, lien or charge under the provisions of its constating documents or any shareholders' or directors' resolution, indenture, agreement or other instrument whatsoever to which it is a party or by which it is bound or to which it may be subject, and will not contravene any applicable law;

 

2.2 Capsicum, jointly and severally, represents and warrants to Globetech that:

 

	
  

	
(a) it holds 100% of all right, title and interest in and to the Property;

 

	
  

	
(b) the Property is properly and accurately described in Schedule “A” hereto and is in good standing under the laws of British Columbia and Canada;

 

	
  

	
(c) the Property, and any mineral or property rights which may result there from, is free and clear of any and all liens, charges, royalties or encumbrances of any kind and is not subject to any right, claim or interest of any other person;

 

	
  

	
(e) all taxes, assessments, rentals, levies or other payments relating to the Property and required to be made to any government authority have been made and to the best of Capsicum’s knowledge, the Property is in good standing with all applicable government authorities;

 

	
  

	
(g) it has not received from any government authority any notice of, or communication relating to, any actual or alleged environmental claims, and there are no outstanding work orders or actions required to be taken relating to environmental matters respecting the Property or any operations carried out thereon;

 

	
  

	
(h) it has and will continue to make available to Globetech all information in his possession or control relating to work done on or with respect to the Property which could possibly be considered to be materially significant in indicating whether the Property might or might not have the potential for economic mineralization;

 

	
  

	
(i) to the best of his knowledge after diligent enquiry, there is no adverse claim or challenge against or to the ownership of or title to the Property, or any portion thereof, nor, to the best of his knowledge, is there any basis therefor, and there are no outstanding agreements or options to acquire, purchase or explore the Property, or any portion thereof or interest therein, other than as set out herein; and no person has any royalty or interest whatsoever in production or profits from the Property or any portion thereof;

 

	
  

	
(j) except as permitted under the laws of British Columbia and Canada, to the best of his knowledge and belief, after having made reasonable inquiry:

 

	
  

	
(i) there has been no material spill, discharge, leak emission, ejection, escape, dumping, or any release or threatened release of any kind, of any toxic or hazardous substance or waste (as defined by any applicable law) from, on, in or under the Property, or into the environment;

 

	
  

	
(ii) no toxic or hazardous substance or waste has been disposed of or is located on the Property as a result of the activities of Capsicum or his predecessors in interest;

 

	
  

	
(iii) no toxic or hazardous substance or waste has been treated on or is now stored on the Property; and

 

	
  

	
(iv) there is no other matter which has been a breach of applicable environmental laws or which could result in liability to a party hereunder.

 

 

  

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2.3 The representations and warranties hereinbefore set out are conditions on which the parties have relied in entering into this Agreement, are to be construed as both conditions and warranties and shall, regardless of any investigation which may have been made by or on behalf of any party as to the accuracy of such representations and warranties, survive the closing of the transactions contemplated herein and the acquisition of any interest in the Property hereunder, and each of the parties will indemnify and save the other harmless from all loss, damage, costs, actions and suits arising out of or in connection with any breach of any representation or warranty contained in this Agreement.

	
  

	
3. OPTION

 

3.1 Capsicum hereby assigns all of his right, title and interest in the Property and grants to Globetech the  right and option to acquire an undivided 100% interest in and to the Property, for the consideration and upon the terms and conditions set forth in this Agreement

 

3.2 In aggregate consideration for the Option, Globetech shall:

 

	
  

	
(a) pay to Capsicum the sum of seventy five thousand dollars ($75,000) as follows:

 

	
  

	
(i.) twenty five thousand dollars ($25,000) on or before June 25, 2010;

 

	
  

	
(ii.) twenty five thousand dollars ($25,000) on or before July 31, 2010;

 

	
  

	
(iii.) twenty five thousand dollars ($25,000) on or before August 31, 2010;

 

	
  

	
(b) pay to Capsicum a further four hundred thousand dollars ($400,000.00) as follows:

 

	
  

	
(i.) one hundred thousand ($100,000.00) on or before the first anniversary of this agreement;

 

	
  

	
(ii.) one hundred thousand ($100,000.00) on or before the second anniversary of this Agreement;

 

	
  

	
(iii.) one hundred thousand ($100,000.00) on or before the third anniversary of this Agreement;

 

	
  

	
(iv.) one hundred thousand ($100,000.00) on or before the fourth anniversary of this Agreement;

 

	
  

	
(c) issue 2,000,000 shares of Globetech to Capsicum;

 

	
  

	
(d) pay Capsicum an NSR in accordance with the provisions of Section 3.4, 3.5, 3.6 and

 

	
  

	
(e) pay Capsicum an NSR in accordance with the provisions of Section 3.4. and

 

	
  

	
(f) hire Capsicum as a contractor for the minimum of $30,000 per year for three years.

 

(cumulatively, the “Option Price”).

 

3.3. Upon completion of the payments to Capsicum in accordance with 3.2(a), (b), (c) and (d) above, Globetech shall be deemed to have exercised the Option and earned an undivided 100% interest in and to the Property (the “Option Exercise”).

 

3.4. Capsicum shall be entitled to and Globetech shall pay to Capsicum a two percent (2%) NSR (the “Capsicum NSR”), calculated and paid as set forth in Schedule “B” hereafter.

 

3.5. Capsicum shall be entitled to a net profit interest of fifteen percent (“Net Profit Interest”), payable in the manner and at the times set out in schedule “C” attached hereto;

 

  

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3.6. Upon Commencement of Commercial Production from the Property, a royalty of $1.00 per tonne (“Capsicum Commercial Royalty”) (adjusted annually to ensure that the payment is calculated in terms of the value of the Canadian dollar on June 1, 2010 on all ores and other products mined from the Property and sold by the Purchaser, payable within 30 days after the end of each calendar quarter in each year.

 

3.7. Capsicum hereby grants Globetech an irrevocable option to purchase all of the Capsicum NSR, the Net Profit Interest and the Capsicum Commercial Royalty at any time within five years of the date of this Agreement, by the payment of $1,000,000.

 

4. GLOBETECH’S RIGHTS

 

4.1 Except as otherwise provided in this Agreement, until the Option is exercised or terminated in accordance with the terms of this Agreement, Globetech, its employees, agents and independent contractors shall have the sole and exclusive right(subject to applicable Legislation) to:

 

	
  

	
(a) enter in, under or upon the Property and to conduct Mining Work;

 

	
  

	
(b) exclusive and quiet possession of the Property;

 

	
  

	
(c) bring upon the Property and to erect thereon such mining facilities as it may consider advisable; and

 

	
  

	
(d) remove from the Property and dispose of for its own account ore or mineral products for the purpose of bulk sampling, pilot plant or test operations.

 

4.2 Subsequent to the exercising of the Option and prior to the completion of payments due pursuant to section 3.2(b), Globetech shall have the right to return all right, title and interest in and to the Properties to Capsicum and thereupon Globetech shall be released from all obligations to make any further payments in accordance with section 3.2(b).

 

5. POWERS, DUTIES AND OBLIGATIONS OF GLOBETECH

 

5.1 Until the Option is exercised or terminated in accordance with the terms of this Agreement, Globetech shall have the full right, power and authority to do everything necessary or desirable to carry out an exploration program on the Property and to determine the manner of exploration and development of the Property and, without limiting the generality of the foregoing, the right, power and authority to:

 

	
  

	
(a) regulate access to the Property, subject only to Section 5.2(b) below;

 

	
  

	
(b) employ and engage such employees, agents and contractors as it may consider necessary or advisable to carry Mining Work on the Property and in this connection to delegate any of its powers and rights hereunder;

 

	
  

	
(c) execute all documents, deeds and instruments, do or cause to be done all such acts and things and give all such assurances as may be necessary to maintain good and valid title to the Property and to give effect to the foregoing Capsicum hereby irrevocably constitutes Globetech it’s true and lawful attorney until the earlier of the termination of this Agreement and the exercise of the Option.

 

5.2 Until the Option is exercised or terminated in accordance with the terms of this Agreement, Globetech shall:

 

  

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(a) keep the Property free and clear of all liens and encumbrances arising from its operations hereunder (except liens contested in good faith by Globetech) and in good standing by the doing and filing, or payment in lieu thereof, of all necessary assessment work and payment of all taxes required to be paid and by the doing of all other acts and things and the making of all other payments required to be made which may be necessary in that regard;

 

	
  

	
(b) permit Capsicum and his representatives, at their own risk and expense, access to the Property at all reasonable times and to all records prepared by the Company in connection with the Mining Work.  Globetech shall prepare and deliver to Capsicum a comprehensive annual report on all Mining Work conducted by Globetech on the Property each year.  Globetech shall further provide to Capsicum frequent updates on Mining Work and all material results from Mining Work.

 

	
  

	
(c) conduct all work on or in respect to the Property in a careful and miner like manner and in accordance with the applicable laws of British Columbia and Canada, and indemnify and save Capsicum harmless from any and all claims, suits or actions made or brought against Capsicum as a result of work done by Globetech on or with respect to the Property; and

 

	
  

	
(d) maintain true and correct books, accounts and records of operations hereunder.

 

5.3 During the term of the Option, Globetech shall pay all taxes, complete and file all assessment work and make all necessary payments and do such further and other acts as may be required to maintain the Property in good standing and shall not abandon or terminate the Option at a time less than 60 days prior to the date on which any act is required to maintain the Property in good standing.

 

6. TERMINATION OF OPTION

 

6.1 In the event of default in the performance of the requirements of Section 3.2, then, subject to the provisions of Section 6.3 of this Agreement, the Option and this Agreement shall terminate.

 

6.2 Globetech shall have the right at any time to terminate this Agreement by giving 30 days written notice of such termination to Capsicum and upon the effective date of such termination this Agreement shall be of no further force and effect except Globetech shall be required to satisfy any requirements which may have accrued to that date under the provisions of this Agreement which have not been satisfied.

 

6.3 Notwithstanding any other provision of this Agreement, in the event of termination of this Agreement, Globetech shall:

 

	
  

	
(a) deliver to Capsicum any and all reports, samples, drill cores and engineering data of any kind whatsoever pertaining to the Property or related to Mining Work which have not been previously delivered to Capsicum;

 

	
  

	
(b) remove all introduced materials, supplies and equipment form the Property, provided however, that Capsicum may retain ore and, at the cost of Globetech, dispose of any such materials, supplies or equipment not removed by Globetech from the Property within one hundred and eighty (180) days of termination;

 

	
  

	
(c) ensure that, at the effective date of termination of this Agreement, the Property are free and clear of all liens and encumbrances arising from its operations hereunder (except liens contested in good faith by Globetech) and in good standing for at least the next ensuing 24 months whether by having done and filed, or paid in lieu thereof, all assessment work necessary for that purpose.

 

  

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7. CONFIDENTIALITY

 

7.1 All information and data concerning or derived from Mining Work shall be confidential and, except to the extent required by law or by regulations of any securities commission, stock exchange or other regulatory body, shall not be disclosed to any person other than a party’s professional advisors with the prior written consent of the other party which consent shall not be unreasonably withheld.

 

8. NOTICE

 

8.1 Any formal notice between the Parties hereto shall be in writing and will be either personally delivered or sent by facsimile or by registered mail to the appropriate party at the address noted for that party on the first page of this Agreement, or such other address as may be designated by a party in a written notice sent to the other party in accordance with this paragraph.  Any notice or other communication will be effective five calendar days from the day that it was sent, or if given by personal delivery or facsimile, the day following its receipt.

 

9. FORCE MAJEURE

 

9.1 No party will be liable for its failure to perform any of its obligations under this Agreement due to a cause beyond its reasonable control including, but not limited to, acts of God, fire, storm, flood, explosion, strikes, lockouts or other industrial disturbances, acts of public enemy, war, riots, laws, rules and regulations or orders of any duly constituted governmental authority, or non-availability of materials or transportation (each an “Intervening Event”).

 

9.2 All time limits imposed by this Agreement will be extended by a period equivalent to the period of delay resulting from an Intervening Event.

 

9.3 A party relying on the provisions of 9.1 hereof, insofar as possible, shall promptly give written notice to the other party of the particulars of the Intervening Event, shall give written notice to all other parties as soon as the Intervening Event ceases to exist, shall take all reasonable steps to eliminate any Intervening Event and will perform its obligations under this Agreement as far as practicable, but nothing herein will require such party to settle or adjust any labour dispute or to question or to test the validity of any laws, rule, regulation or order of any duly constituted governmental authority or to complete its obligations under this Agreement if any Intervening event renders completion impossible.

 

10. DEFAULT

 

10.1 If a party (the “Defaulting Party”) is in default of any requirement herein set forth, the party affected by such default (the “Non-Defaulting Party”) shall give written notice to the Defaulting Party within thirty (30) days of becoming aware of such default, specifying the default.  Upon receiving notice of such default, the Defaulting Party shall have thirty days from the date of receipt of such notice to cure the default (the “Cure Period”) and if it does so within the Cure Period, it shall not loose any rights under this Agreement, nor shall the Agreement or the Option terminate, nor shall the Non-Defaulting Party have any rights, remedies or cause of action pursuant to this Agreement, or otherwise hereunder as a result of such default.   If the Defaulting Party fails to cure the default within the Cure Period, the Non-Defaulting Party shall thereafter be entitled to seek any remedy it may have on account of such default.

 

  

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11. ASSIGNMENT

 

11.1 Globetech may, at its sole discretion, upon giving written notice to Capsicum, assign its interest in this Agreement, in whole or in part, and the Option to a related or affiliated person without the consent or approval of Capsicum provided that such person agrees to abide by the terms of this Letter Agreement and to assume all of the liabilities and obligations of Globetech under this Agreement, whether accruing before or becoming due after such assignment.

 

11.2 Capsicum shall have the right, at any time after the third anniversary of this Agreement, to assign, transfer or otherwise dispose of all or any part of the Capsicum NSR.  If, after such assignment or transfer, the Capsicum NSR is held by more than one party, only the last party to be entitled to such NSR in its entirety shall be entitled to notices, statements and the rights of challenge pursuant to sections 4, 5 and 7 of Schedule “B”.

 

12. OPTION ONLY

 

12.1 This Agreement provides for an option only and, except as specifically provided otherwise, nothing herein contained shall be construed as obligating Globetech to do any acts or make any payments hereunder and any act or acts or payment or payments as shall be made hereunder shall not be construed as obligating Globetech to do any further act or make any further payment.

 

13. GENERAL

 

13.1 This Agreement embodies the entire agreement and understanding between the parties hereto and supersedes all prior agreements and undertakings, whether oral or written, relative to the subject matter hereof.

 

13.2 The recitals set out at the beginning of this Agreement form part of this Agreement.

 

13.3 This Agreement may only be changed by an agreement in writing, duly executed by the party or parties against which enforcement, waiver, change, modification or discharge is sought.

 

13.4 Time shall be of the essence of this Agreement.

 

13.5 Upon the written request of either of the parties hereto, the other party agrees to furnish such additional further assurances or documents as may be reasonably necessary to carry out the intent, purposes and terms of this Agreement.

 

13.6 This Agreement shall enure to the benefit of and be binding upon the parties hereto and their respective successors, permitted assigns, heirs, administrators and legal representatives.

 

13.7 If any provision of this Agreement is determined to be illegal, invalid or unenforceable in whole or in part, such illegality, invalidity or unenforceability will attach only to such provision or part thereof and the remaining part of such provision and all other provisions hereof will continue in full force and effect.

 

13.8 Waiver of any provisions herein by any party hereto shall not be construed as a waiver of any other provisions or terms of this Agreement.

 

13.9 This Agreement may be executed in counterparts each of which may be delivered by facsimile.  Each executed counterpart shall be deemed to be an original and all such counterparts when read together shall constitute one and the same instrument.

 

IN WITNESS WHEREOF the parties hereto have executed this Agreement as of the day and year first above written.

 

Globetech Ventures Corp.                 Capsicum Management Corp.

 

 

  

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SCHEDULE "A"

 

To the Option Agreement between Globetech

 

and Capsicum dated June 15, 2010

 

PROPERTY

 

For the purposes of this Agreement the following Mineral Claim in British Columbia shall constitute the “White Channel”:

	
Tenure Number

	 	
Tenure Type

	
Claim Name

	 	
Ownership

	 	 	
Map Number

	 	
Good To Date

	 	
Mining Division

	 	
Area

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	399611	 	
Mineral

	  	 	 	100	%	 	 	093A024	 	  	 	
CARIBOO

	 	  
	 	399044	 	
Mineral

	  	 	 	100	%	 	 	093A024	 	  	 	
CARIBOO

	 	  
	 	416708	 	
Mineral

	  	 	 	100	%	 	 	093A024	 	  	 	
CARIBOO

	 	  

 

  

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SCHEDULE "B"

 

To the Option Agreement between Globetech

 

and Capsicum dated June 15, 2010

 

NET SMELTER RETURN

Calculation

 

 An NSR shall consist of the specified percentage of the actual net proceeds received by Globetech from the sale of precious metals mined and removed from the Property after deduction from such proceeds all reasonable costs, charges and expenses to Globetech, both direct and indirect, including the following:

 

	
  

	
(a) custom smelting costs, treatment charges and penalties including, but not limited to, metal losses, penalties for impurities and charges for refining, selling and handling by the smelter, refinery or other purchaser; provided, however, in the case of leaching operations or other solution mining techniques, where the metal being treated is precipitated or otherwise directly derived from such leach solution, all processing and recovery costs incurred, beyond the point at which metal being treated is in solution, shall be considered treatment charges;

 

	
  

	
(b) costs of handling, transporting and insuring ores, minerals and other materials or concentrates from the Property or from a concentrator, whether situated on or off the Property, to a smelter, refinery or other place of treatment; and

 

	
  

	
(c) ad valorem taxes and royalties and taxes based upon production, but not income taxes.

 

2.  Timing of Calculation

 

The Capsicum NSR shall be calculated as at the end of each quarter of the applicable fiscal year.

 

3. Payment

 

Globetech shall pay the Capsicum NSR on or before the last day of the next following quarter and shall be delivered along with a statement indicating in reasonable detail the calculation of the Capsicum NSR paid.

 

4. Audited Statements

 

Globetech shall have an audited statement prepared by its auditors for each year in which the Capsicum NSR is payable by the 30th of June in the following year and Globetech shall deliver a copy of this statement to Capsicum.

 

5. All Payments Final

 

All payments of the Capsicum NSR shall be deemed final and in full satisfaction of all obligations of Globetech with regard to the Capsicum NSR if such payment or the calculation thereof are not disputed by the recipient within 90 days after receipt of the audited statement.

 

6. Bulk Sampling

 

Globetech may remove reasonable quantities of ore and rock from the Property to a maximum of 10,000 tonnes for the purpose of bulk sampling and of testing, and there shall be no Capsicum NSR payable with respect thereto, unless revenues are derived therefrom.

 

  

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7. Commingling of Ore

 

Ore from the Property may be commingled with ores from the other or with ores produced from other Property owned or controlled by Globetech or any other party, provided that reasonable practices and procedures for weighing, sampling and assaying are adopted in order to determine the amounts of products derived from, or attributable to, ore mined or produced from the Property.  Globetech shall ensure that accurate records of the results of such sampling, weighing and assaying with respect to any ore mined and produced from the Property.  Capsicum shall have the right to examine such records at all reasonable times.

 

8. Decision to Produce

 

Any decision to place the Property into production shall be at the sole discretion of Globetech, which shall be under no obligation to place the Property into production and, in the event that the Property are placed into production, Globetech shall have the unfettered right to suspend or curtail any such operation as it may determine at its sole discretion.

 

  

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SCHEDULE “C”

To the Option Agreement between Globetech

 

and Capsicum dated June 15, 2010

 

NET PROFITS INTEREST

DEFINITIONS

	
  

	
1. For the purposed of this Agreement the following words and phrases shall have the following meanings, namely:

	
  

	
(a) “Assessment Work” means exploration and/or development work on or related to any part of the Property for which value as such work is credited by the Chief Gold Commissioner pursuant to Section 2 of Part C of the Mineral Act Regulations (Reg. 587/77) under the Mineral Act, as the same may from time to time be revised or replaced;

	
  

	
(b) “Commencement of Commercial Production” means that last day of the first period of 30 consecutive days during which ore has been shipped from the Property on a reasonably regular basis for the purpose of earning revenues; but no period of time during which ore or concentrate is shipped from the Property for testing purposes, and no period of time during which milling operations are undertaken as initial tune-up, shall be taken into account in determining the date of Commencement of Commercial Production;

	
  

	
(c) “Mill” means the crusher, concentrator and other processing facilities to be constructed on or in proximity to the Property and to be used for the processing of production from the Property, whether or not in conjunction with or after production from any other mineral property.

	
  

	
(d) “Mining Operation” means a mine and related facilities with respect to which the Net Profits Interest is payable;

	
  

	
(e) “Net Profits” with respect to any Mining Operation shall mean the gross annual cash receipts received by the Purchaser in its own fiscal year for its own account which are derived from carrying on the business relating to the mining, milling and/or other treatment of ores or other products derived from such mining operation, less all “Operating Expenses” incurred by the Purchaser in connection with such mining operation;

	
  

	
(f) “Net Profits Interest” means the amount from time to time payable to the Vendors pursuant to Section 3;

	
  

	
(g) “Operating Expenses” shall mean all costs, obligations, liabilities and expenses of whatsoever nature, including any payment of damages, resulting from or in connection with the preparation, equipping and operation of the Mining Operation which are incurred or become chargeable after the Commencement of Commercial Production at such Mining Operation, including all prior operating losses incurred by the Purchaser with respect thereto, but excluding charges for depletion or depreciation.  Without limiting the generality of the foregoing and without intending to enumerate all items of Operating Expenses, Operating Expenses shall include the following items which are incurred or become chargeable on or after the Commencement of Commercial Production:

 

 

  

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(i) all costs of or related to the mining, milling and/or other treatment of the ores or other products and the operation of any mining, milling or ancillary facilities related to the carrying on of such Mining Operation;

	
  

	
(ii) all costs of or related to marketing any of the ores or other products, including, without limitation, transportation, commissions and/or discounts;

	
  

	
(iii) all taxes, rates, assessments, fees and duties payable to either the federal, provincial or any municipal or other governmental body, charged, levied or imposed on such Mining Operation, or payable on or in respect of or measured by the products of such Mining Operation, including all government royalties relating thereto and mining duties or mining taxes (even though based on profits), but there shall be excluded all taxes based on profits other than governmental royalties and mining duties and mining taxes based on profits;

	
  

	
(iv) all reasonable costs and fees payable for providing management and supervisory services as normally would be charged by a third party contractor with the same level of competence, whether to the Purchaser or a third party;

	
  

	
(v) all costs of consulting, legal, accounting, insurance and other services or protection in connection with the carrying on of or related to the Mining Operation;

	
  

	
(vi) all milling and smelter costs, including custom milling costs (with respect to the milling and smelting of the ores or other products of such Mining Operation) and transportation costs of such ores and/or other products to the Mill and/or to the smelter and/or to the purchaser thereof;

	
  

	
(vii) all maintenance and repair costs;

	
  

	
(viii) all costs for pollution control, reclamation or any other similar costs incurred or to be incurred as a result of any governmental regulations or requirements;

	
  

	
(ix) all costs or expenses incurred with respect to the termination of such Mining Operation;

(x) all royalties payable to any third party.

All Operating Expenses shall be determined in accordance with generally accepted accounting principles consistently applied;

  

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(j) “Option Period” means the period during the term of this Agreement from the date hereof to and including the date of exercise of the Option;

	
  

	
(k) “Post Production Expenditures” shall mean the aggregate of all costs (whether capital or otherwise) except only Operating Expenses, incurred after the date of Commencement of Commercial Production, in order to increase the size of or make more efficient or replace the production facilities for such Mining Operation, whether same are located on or off the Property;

	
  

	
(l) “Preproduction Expenditures” shall mean the aggregate of costs (whether capital or otherwise) incurred after the date of the Agreement, relating to the exploration or development of the Property and the construction of facilities on or off such Property related to such Mining Operation, and prior to the Commencement of Commercial Production, including, without limiting the generality of the foregoing:

	
  

	
(i) all amounts expended in staking or otherwise acquiring any right, title and interest in and to the Property , but excluding option payments;

	
  

	
(ii) all costs of or related to the construction of the Mill or building, crushing, grinding, washing, concentrating and/or other treatment facility and/or any facilities ancillary thereto;

	
  

	
(iii) all costs of or related to exploration or mining of the ore body or ore bodies situate on the Property;

	
  

	
(iv) all costs of or related to the construction of storage and warehouse facilities, the construction or roads, the construction of employee facilities, including housing, whether same are located on or off the Property;

	
  

	
(v) all costs of or related to the transportation facilities for moving ore or concentrates and/or any products derived therefrom;

	
  

	
(vi) all costs of or related to financing arrangements for the Mining Operation, including standby charges and other fees;

	
  

	
(vii) all costs incurred for or in relation to men engaged in work on, in or in relation to the Property and without limiting the generality of the foregoing, such costs shall include amounts expended in paying wages, salaries, fringe benefits, transportation and housing expenses;

	
  

	
(viii) all amounts for taxes, fees, charges, payments or rental, including, without limitation, payments made in lieu of assessment work or otherwise paid or expended to acquire or to keep in good standing the Property; and

	
  

	
(ix) an amount for general overhead of the Purchaser equal to:

	
  

	
(A) 5% of all payments made to keep the Property in good standing and all payments made with respect to the acquisition of the Property, including deposits, instalments of purchase moneys, option payments, rental payments or any other such payments; and

 

 

  

14

  

 

	
  

	
(B) 5% of all amounts paid during the period to third party contractors and/or consulting, including, without limitation, amounts paid for drilling, geophysical services and helicopter, aircraft, vehicle and equipment rentals; and

	
  

	
(C) 2% of all amounts expended during the period for fixed assets, excluding the Property, but including, without limitation, plant, equipment and materials, and

	
  

	
(D) 15% of all other amounts expended in doing work hereunder.

The percentage overhead rates provided for in this paragraph (k) shall be amended if in practice such rates are found to be either excessive or insufficient.

	
  

	
(l) “Property” means the mineral claims described in Recital A to the Agreement.

	
  

	
(m) “Property Rights” means all licenses, permits, easements, right-of-way, certificates and other approvals obtained by either of the parties either before or after the date of this Agreement and necessary for the development of the Property, or for the purpose of placing the Property into production or continuing production therefrom;

	
  

	
(n) “Working Capital” means the amount by which the current assets of the Mining Operation exceed the current liabilities thereof, as determined in accordance with generally accepted accounting principles consistently applied.  The total amount of Working Capital for any Mining Operation for the purpose of calculating the Net Profits thereof, shall be limited to an amount sufficient to operate the Mining Operation and to maintain markets in an efficient manner including, without limitation, maintaining adequate levels of inventories of raw materials, supplies, replacement parts, work in progress and finished goods, accounts receivable, prepared expenses and cash or short term securities, all at the discretion of the Purchase.  The initial amount of Working Capital shall be deducted from Net Profits until deducted in full and thereafter increases or decreases in Working Capital will be deducted or added to Net Profits.

NET PROFITS INTEREST

2.

	
  

	
(a) No payment in respect to the Net Profits Interest will be paid by the Purchaser to the Vendors hereunder until the Purchaser has been first reimbursed or recouped for its own account out of the Net Profits from any Mining Operation on the Property, an amount in the aggregate equal to:

	
  

	
(i) all moneys expended for Preproduction Expenditures with respect to such Mining Operation by the Purchaser;

	
  

	
(ii) all moneys expended for Post Production Expenditures by the Purchaser with respect to such Mining Operation; and

	
  

	
(iii) all moneys advanced or caused to be advanced by the Purchaser for Working Capital with respect to such Mining Operation;

 

 

  

15

  

 

together, in each instance, with an amount equal to the actual interest paid by the Purchaser to borrow such moneys from any lender or lenders for the above purposes.  Such reimbursement or recoupment shall be made from time to time as Net Profits are received by the Purchaser.  In the event that the Purchaser elects not to borrow all or part of the moneys required to be expended by it for the purposes referred to above in this paragraph 2 (a), and uses its own moneys for such purposes, it is agreed that the Purchaser shall be entitled to receive interest on such of its own moneys at the prime bank rate of interest of the Bank of Montreal for Canadian dollar loans, plus one percentage point, such interest to accrue from the end of each calendar month in which such moneys were so expended by the Purchaser such interest in either case to be paid out of Net Profits from such Mining Operation prior to the payment of any Net profits Interest to the Vendors hereunder.

	
  

	
(b) For the first year in which aggregate Net Profits for that year and all prior years exceeds the aggregate of all amounts payable under paragraph 2 (a), the Vendors shall be paid as participants in Net Profits an amount equal to 15% of such excess, and for each year thereafter the Vendors shall be paid as participants in Net Profits an amount equal to 15% of Net Profits, if any, for that year.

	
  

	
(c) Instalments in respect of the Net Profits Interest payable under Paragraph 2 (b) shall be paid by the Purchaser as follows:

	
  

	
(i) within 30 days after the end of each calendar quarter in each year the Purchaser shall pay to the Vendors an amount equal to 25% of the estimated Net Profits Interest, if any, for the year; and

	
  

	
(ii) on or before January 15 in each year the Purchaser shall pay to the Vendors the balance, if any, of the Net Profits Interest payable in respect of the year last completed.

	
  

	
(d) After Commencement of Commercial Production, the Purchaser shall, within 30 days after the end of each calendar quarter, furnish to the Vendors quarterly unaudited statements respecting operations on the Property, together with a statement of Net Profits for the quarter last completed.

	
  

	
(e) Forthwith after the end of each calendar year commencing with the year in which Commencement of Commercial Production occurs, the accounts of the Purchaser related to operations on the Property shall be audited by the auditors of the Purchaser and the statement of operations, which shall include the statement of Net Profits for the year last completed and, until an amount in respect of the Net Profits Interest first becomes payable hereunder a statement of Preproduction Expenditures, Post Production Expenditures and Working Capital advances, and aggregate Net Profits, shall be furnished to the Vendors not later than January 15 in each year.  The Vendors shall have 45 days after receipt of such statements to question the accuracy thereof in writing and, failing such objection, the statements shall be deemed to be correct and unimpeachable thereafter.

 

 

  

16

  

 

	
  

	
(f) If the audited financial statements furnished pursuant to Paragraph 2 (e) disclose any overpayment of Net Profits by the Purchaser during the year, the amount of the overpayment shall be debited against future instalments of Net Profits payable hereunder or shall, if requested by the Optionee, be refunded by the Vendors forthwith.

	
  

	
(g) If the audited financial statements furnished pursuant to the Paragraph 2 (e) disclose any underpayment of Net Profits by the Purchaser during the year, the amount thereof shall be paid immediately to the Vendors.

  

17ex10-1.htm

                                                                    Exhibit 10.1

                                 LOAN AGREEMENT

     This Loan  Agreement  (this  "Agreement")  is made and entered  into by and
between the parties below as of 23August2010 in Beijing,  the People's  Republic
of China ("China"):

(1)  ARKI (BEIJING) E-COMMERCE TECHNOLOGY CO., LTD. ("Lender"), a wholly foreign
     owned  enterprise duly registered  under the laws of China with its address
     at  No.15 # 0301,  China  Central  Place,  No.89,  Jianguo  Road,  Chaoyang
     District, Beijing

(2)  GAO   JIANMIN   ("Borrower"),   a  citizen  of  China,   with  his  Chinese
     identification No.: 21080219540202205x.

     Each of Lender and Borrower shall be  hereinafter  referred to as a "Party"
respectively, and as the "Parties" collectively.

     WHEREAS,  Lender intends to provide Borrower with a loan to be used for the
purpose set forth under this Agreement. After friendly consultation, the Parties
agree as follows:

1. LOAN

1.1  In  accordance  with the terms and  conditions  of this  Agreement,  Lender
     agrees to  provide a loan  equivalent  to the  amount of RMB  500,000  (the
     "Loan") to Borrower,  and the Loan will be provided according to the amount
     specified  in the written  notice from the  Borrower.  The term of the Loan
     shall be ten (10)  years  from the  date of this  Agreement,  which  may be
     extended upon mutual written consent of the Parties. During the term of the
     Loan or the extended term of the Loan, Borrower shall immediately repay the
     full  amount  of the  Loan in the  event  any one or more of the  following
     circumstances occur:
<PAGE>
     1.1.130 days elapse  after  Borrower  receives  written  notice from Lender
          requesting repayment of the Loan;

     1.1.2 Borrower's death, lack or limitation of civil capacity;

     1.1.3Borrower  ceases to be a shareholder  of Borrower  Company (as defined
          below);

     1.1.4Borrower   engages  in  criminal   act  or  is  involved  in  criminal
          activities;

     1.1.5Any  third  party  filed  a  claim   against   Borrower  that  exceeds
          RMB100,000; or

     1.1.6The  Lender  decides  to  exercise  the  exclusive  option  under  the
          Exclusive   Option  Agreement  (the  "Exclusive   Option   Agreement")
          described in Sections 4.1.1 and 4.2.5 of this Agreement.

1.2  Lender  agrees  to remit  the total  amount  under the Loan to the  account
     designated   by  Borrower   within  20  days  after   receiving  a  written
     notification  from the Borrower  regarding the same,  provided that all the
     conditions  precedent in Section 2 are  fulfilled.  Borrower  shall provide
     Lender with a written  receipt for the Loan upon  receiving  the Loan.  The
     Loan  provided by Lender  under this  Agreement  shall inure to  Borrower's
     benefit only and not to Borrower's successors or assigns.

1.3  Borrower agrees to accept the  aforementioned  Loan provided by Lender, and
     hereby  agrees  and  warrants  using the Loan to  increase  the  registered
     capital  of  America  Arki  Networkservice  Beijing  Co.,  Ltd.  ("Borrower
     Company"),  and Borrower shall remain a Borrower Company's  shareholder who
     shall own 50%  equity  interests  in  Borrower  Company  (such  50%  equity
     interests,  hereinafter  referred to as the  "Borrower  Equity  Interest").
     Without Lender's prior written consent, Borrower shall not use the Loan for
     any purpose other than as set forth herein.

                                       2
<PAGE>
1.4  Lender and Borrower hereby agree and acknowledge that Borrower's  method of
     repayment shall be at the sole discretion of Lender, (1) at Lender's option
     take the form of Borrower's  transfer the Borrower Equity Interest in whole
     to  Lender or  Lender's  designated  persons  (legal  or  natural  persons)
     pursuant to the  Lender's  exercise  of its right to acquire  the  Borrower
     Equity Interest under the Exclusive  Option  Agreement;  and (2) in case of
     liquidation,  the  Borrower  shall  repay all the  residuary  estate of the
     Borrower Compay distributed after liquidation to Lender or the designees of
     the Lender.

1.5  Lender and Borrower hereby agree and acknowledge that any proceeds from the
     transfer of the Borrower Equity Interest (to the extent  permissible) shall
     be used to repay the Loan to Lender,  in accordance with this Agreement and
     in the manner designated by Lender.

1.6  Lender  and  Borrower  hereby  agree  and  acknowledge  that to the  extent
     permitted  by  applicable  laws,  Lender  shall  have the right but not the
     obligation  to  purchase  or  designate  other  persons  (legal or  natural
     persons) to purchase  Borrower  Equity  Interest in part or in whole at any
     time, at the price stipulated in the Exclusive Option Agreement.

1.7  Borrower also  undertakes to execute an irrevocable  Power of Attorney (the
     "Power of Attorney",  referred to in Section 4.2.4),  which  authorizes the
     Lender or a legal or natural person designated by Lender to exercise all of
     Borrower's rights as a shareholder of Borrower Company.

1.8  When  Borrower  transfers  Borrower  Equity  Interest to Lender or Lender's
     designated  person(s),  in the event that the transfer price of such equity
     interest  equals or is lower  than the  principal  of the Loan  under  this
     Agreement,  the Loan under this Agreement shall be deemed an  interest-free
     loan. In the event that the transfer price of such equity interest  exceeds
     the  principal  of the Loan  under  this  Agreement,  the  excess  over the

                                       3
<PAGE>
     principal  shall be deemed the  interest  of the Loan under this  Agreement
     payable by Borrower to Lender, subject to applicable laws and regulations.

2. CONDITIONS PRECEDENT

     The  obligation of Lender to provide the Loan to Borrower  contemplated  in
     Section  1.1  shall  be  subject  to  the  satisfaction  of  the  following
     conditions, unless waived in writing by Lender.

2.1  Lender receives the written  notification  for drawdown under the Loan sent
     by Borrower according to Section 1.2.

2.2  All the representations and warranties by Borrower in Section 3.2 are true,
     complete, correct and not misleading.

2.3  Borrower has not violated the covenants in Section 4 of this Agreement, and
     no event which may affect  Borrower's  performance of its obligations under
     this Agreement has occurred or is expected to occur.

3. REPRESENTATIONS AND WARRANTIES

3.1  Between  the date of this  Agreement  and the date of  termination  of this
     Agreement, Lender hereby makes the following representations and warranties
     to Borrower:

     3.1.1Lender is a company duly organized and legally  existing in accordance
          with the laws of China;

     3.1.2Lender has the legal  capacity to execute and perform this  Agreement.
          The  execution  and   performance  by  Lender  of  this  Agreement  is
          consistent  with  Lender's  scope of business  and the  provisions  of
          Lender's  corporate  bylaws and other  organizational  documents,  and
          Lender  has  obtained  all   necessary   and  proper   approvals   and
          authorizations  for the execution and  performance of this  Agreement;
          and

                                       4
<PAGE>
     3.1.3This  Agreement   constitutes   Lender's  legal,   valid  and  binding
          obligations, enforceable in accordance with its terms.

3.2  Between  the date of this  Agreement  and the date of  termination  of this
     Agreement,   Borrower  hereby  makes  the  following   representations  and
     warranties:

     3.2.1Borrower has the legal capacity to execute and perform this Agreement.
          Borrower  has  obtained  all  necessary   and  proper   approvals  and
          authorizations for the execution and performance of this Agreement;

     3.2.2This  Agreement  constitutes   Borrower's  legal,  valid  and  binding
          obligations enforceable in accordance with its terms; and

     3.2.3There  are  no  disputes,  litigations,  arbitrations,  administrative
          proceedings or any other legal proceedings  relating to Borrower,  nor
          are  there  any   potential   disputes,   litigations,   arbitrations,
          administrative  proceedings or any other legal proceedings relating to
          Borrower.

4. BORROWER'S COVENANTS

4.1  For so long as  Borrower  remains a  shareholder  of Borrower  Company,  he
     covenants  irrevocably  that  during the term of this  Agreement,  he shall
     cause Borrower Company:

     4.1.1to execute the Exclusive  Option  Agreement  with Borrower and Lender,
          under which  Borrower  shall  irrevocably  grant  Lender an  exclusive
          option to purchase all of the Borrower Equity Interest; to execute the
          Exclusive  Business  Cooperation  Agreement entered into by Lender and
          Borrower  Company (the "Exclusive  Business  Cooperation  Agreement"),
          under which the Lender, as an exclusive service provider, will provide
          Borrower  Company  with  technical  service  and  business  consulting

                                       5
<PAGE>
          service;  to execute the Equity  Interest  Pledge  Agreement  with the
          Lender and Borrower (the "Equity  Interest Pledge  Agreement"),  under
          which the  parties  will  agree on the pledge of the  Borrower  Equity
          Interest to the Lender;  to enter into the Exclusive  Option Agreement
          and the Equity  Interest Pledge  Agreement on the date hereof,  and to
          complete  all the related  governmental  approvals,  registrations  or
          fillings (as applicable);

     4.1.2to  strictly  abide  by  the   provisions  of  the  Exclusive   Option
          Agreement, Equity Interest Pledge Agreement and the Exclusive Business
          Cooperation  Agreement,  and to refrain from any action/omission  that
          may affect  the  effectiveness  and  enforceability  of the  Exclusive
          Option  Agreement,  Equity Interest Pledge Agreement and the Exclusive
          Business Cooperation Agreement;

     4.1.3at the  request  of  Lender  (or a party  designated  by  Lender),  to
          execute contracts/agreements on business cooperation with Lender (or a
          party   designated  by  Lender),   and  to  strictly   abide  by  such
          contracts/agreements;

     4.1.4to  provide  Lender  with  all of  the  information  on  its  business
          operations and financial condition at Lender's request;

     4.1.5to immediately notify Lender of the occurrence or possible  occurrence
          of any litigation,  arbitration or administrative proceedings relating
          to its assets, business or income;

     4.1.6at the request of Lender, to appoint any persons  designated by Lender
          as executive director of Borrower Company;

     4.1.7without Lender's prior written consent,  not to supplement,  change or
          amend its articles of association in any manner,  increase or decrease
          its  registered  capital or change its share capital  structure in any
          manner;

                                       6
<PAGE>
     4.1.8to maintain its corporate  existence in accordance with good financial
          and business  standards  and  practices by prudently  and  effectively
          operating its business and handling its affairs;

     4.1.9without  Lender's  prior  written  consent,  not  to  sell,  transfer,
          mortgage  or  dispose of in any other  manner its legal or  beneficial
          interest  in any of its  assets,  business or revenue at any time from
          the date of this  Agreement,  or permit the  encumbrance  of any other
          security interest thereon;

     4.1.10 without  Lender's  prior  written  consent,  not to incur,  inherit,
          guarantee or otherwise allow for the existence of any debt, except for
          (i) debt  incurred  in the  ordinary  course of  business  other  than
          through any loans; and (ii) debt already disclosed to Lender for which
          Lender's written consent has been obtained;

     4.1.11 to operate its businesses in the ordinary course and to maintain the
          value of its assets;

     4.1.12 without  the prior  written  consent of Lender,  not to execute  any
          major  contract,  except  for  contracts  in the  ordinary  course  of
          business  (for  purpose of this  subsection,  a contract  with a value
          exceeding RMB100,000 shall be deemed a major contract);

     4.1.13 without  the prior  written  consent of Lender,  not to provide  any
          person with any loan or credit;

     4.1.14  without  the  prior  written  consent  of  Lender,  not  to  merge,
          consolidate with, acquire, or invest in any person;

     4.1.15 to  maintain  the  ownership  of  all  of its  assets,  execute  all
          necessary or appropriate documents,  take all necessary or appropriate
          actions and file all  necessary  or  appropriate  complaints  or raise
          necessary and appropriate defenses against all claims; and

                                       7
<PAGE>
     4.1.16 without  the prior  written  consent  of Lender,  not to  distribute
          dividends  to  shareholders,   provided  that  upon  Lender's  written
          request,  to distribute the distributable  profits in whole or in part
          to its shareholders.

4.2  Borrower covenants that during the term of this Agreement, he shall:

     4.2.1ensure that  Borrower  Company  shall be a limited  liability  company
          without  foreign  investment,  and  Borrower  shall  hold  50%  equity
          interest of Borrower Company;

     4.2.2Contribute the registed capital in full  corresponding to the Borrower
          Equity  Interest  in  accordance  with the laws of China,  and provide
          Lender  with a  capital  contribution  verification  report  regarding
          paid-in capital issued by a qualified accounting firm;

     4.2.3 endeavor to cause Borrower Company to engage in its current business;

     4.2.4execute an irrevocable Power of Attorney,  which authorizes a legal or
          natural  person  designated  by Lender to exercise  all of  Borrower's
          rights  as  a  shareholder  in  Borrower  Company,  and  refrain  from
          exercising any such  shareholder  rights except to the extent required
          under  this  Agreement  or  the  Equity  Interest   Pledge   Agreement
          (hereinafter Section 4.2.6) or as requested by Lender;

     4.2.5execute  the  Exclusive  Option  Agreement  with  Lender and  Borrower
          Company,  under which  Borrower shall  irrevocably  grant to Lender an
          exclusive option to purchase all of the Borrower Equity Interest;

     4.2.6execute  a  Equity  Interest  Pledge  Agreement  with the  Lender  and
          Borrower  Company,  under which  Borrower  shall  pledge the  Borrower
          Equity Interest to the Lender;

                                       8
<PAGE>
     4.2.7enter into the  aforementioned  Power of  Attorney,  Exclusive  Option
          Agreement and Equity Interest Pledge Agreement on the date hereof, and
          complete  all the related  governmental  approvals,  registrations  or
          fillings (as applicable);

     4.2.8abide by the provisions of this Agreement,  the Power of Attorney, the
          Equity Interest Pledge Agreement and the Exclusive  Option  Agreement,
          perform his obligations  under this Agreement,  the Power of Attorney,
          the  Equity  Interest  Pledge   Agreement  and  the  Exclusive  Option
          Agreement,  and refrain from any  action/omission  that may affect the
          effectiveness  and  enforceability  of this  Agreement,  the  Power of
          Attorney,  the Equity  Interest  Pledge  Agreement  and the  Exclusive
          Option Agreement;

     4.2.9not sell,  transfer,  mortgage  or dispose of in any other  manner the
          legal or beneficial interest in Borrower Equity Interest, or allow the
          encumbrance  thereon  of any  security  interest  or the  encumbrance,
          except in accordance with the Equity Interest Pledge Agreement;

     4.2.10 cause any shareholders' meeting and/or executive director of Party C
          not to approve  the sale,  transfer,  mortgage or  disposition  in any
          other manner of any legal or  beneficial  interest in Borrower  Equity
          Interest,  or allow the encumbrance  thereon of any security interest,
          without  the prior  written  consent  of  Lender,  except to Lender or
          Lender's designated person;

     4.2.11 cause any  shareholders'  meeting and/or  executive  director of the
          Borrower  Company  not to  approve  the  merger  or  consolidation  of
          Borrower Company with any person,  or its acquisition of or investment
          in any person, without the prior written consent of Lender;

     4.2.12 immediately  notify Lender of the occurrence or possible  occurrence
          of any litigation,  arbitration or administrative proceedings relating
          to Borrower Equity Interest;

                                       9
<PAGE>
     4.2.13 to the extent  necessary to maintain  his  ownership of the Borrower
          Equity Interest,  execute all necessary or appropriate documents, take
          all  necessary  or  appropriate  actions  and  file all  necessary  or
          appropriate  complaints  or raise  necessary and  appropriate  defense
          against all claims;

     4.2.14 without  the prior  written  consent  of  Lender,  refrain  from any
          action/omission  that  may  have a  material  impact  on  the  assets,
          business and liabilities of Borrower Company;

     4.2.15 appoint  any  designee of Lender as  executive  director of Borrower
          Company, at the request of Lender;

     4.2.16 to the  extent  permitted  by the laws of China,  at the  request of
          Lender at any  time,  promptly  and  unconditionally  transfer  all of
          Borrower   Equity   Interest   to   Lender  or   Lender's   designated
          representative(s)  at any time,  and cause the other  shareholders  of
          Borrower Company to waive their right of first refusal with respect to
          the share transfer described in this Section;

     4.2.17 to the  extent  permitted  by the laws of China,  at the  request of
          Lender at any time,  cause the other  shareholders of Borrower Company
          to promptly and unconditionally  transfer all of their equity interest
          to Lender or Lender's  designated  representative(s)  at any time, and
          Borrower  hereby  waives  his  right of first  refusal  (if any)  with
          respect to the share transfer described in this Section;

     4.2.18 in the event that Lender  purchases  Borrower  Equity  Interest from
          Borrower in accordance  with the  provisions  of the Exclusive  Option
          Agreement,  use such purchase price obtained thereby to repay the Loan
          to Lender; and

     4.2.19 without the prior written  consent of Lender,  not to cause Borrower
          Company to supplement, change, or amend its articles of association in
          any manner, increase or decreases its registered capital or change its
          share capital structure in any manner.

                                       10
<PAGE>
5. LIABILITY FOR DEFAULT

5.1  In the event either Party breaches this  Agreement or otherwise  causes the
     non-performance  of this Agreement in part or in whole,  the Party shall be
     liable  for  such  breach  and  shall  compensate  all  damages  (including
     litigation and attorneys fees) resulting therefrom.  In the event that both
     Parties  breach  this  Agreement,  each  Party  shall  be  liable  for  its
     respective breach.

5.2  In the event that Borrower fails to perform the repayment  obligations  set
     forth in this Agreement,  Borrower shall pay overdue  interest of 0.01% per
     day for the  outstanding  payment,  until the day Borrower  repays the full
     principal of the Loan, overdue interests and other payable amounts.

6. NOTICES

6.1  All notices and other  communications  required  or  permitted  to be given
     pursuant  to  this  Agreement  shall  be  delivered  personally  or sent by
     registered  mail,  postage prepaid,  by a commercial  courier service or by
     facsimile  transmission  to the  address of such party set forth  below.  A
     confirmation  copy of each notice shall also be sent by email. The dates on
     which  notices  shall be  deemed to have been  effectively  given  shall be
     determined as follows:

     6.1.1Notices  given  by  personal  delivery,   by  courier  service  or  by
          registered mail, postage prepaid, shall be deemed effectively given on
          the date of receipt or refusal at the address specified for notices.

     6.1.2Notices given by facsimile  transmission  shall be deemed  effectively
          given on the  date of  successful  transmission  (as  evidenced  by an
          automatically generated confirmation of transmission).

6.2  For the purpose of notices, the addresses of the Parties are as follows:

     LENDER: ARKI (BEIJING) E-COMMERCE TECHNOLOGY CO., LTD.

                                       11
<PAGE>
     Address: Room 301, Building No.15, China Central Place, No.89,
              Jianguo Road, Chaoyang District, Beijing
              010-65305285
     Facsimile: 010-65305285

     BORROWER: GAO JIANMIN

     Address: Room 301, Building No.15, China Central Place, No.89,
              Jianguo Road, Chaoyang District, Beijing
              010-65305285
     Facsimile: 010-65305285

6.3  Any  Party may at any time  change  its  address  for  notices  by a notice
     delivered to the other Party in accordance with the terms hereof.

7. CONFIDENTIALITY

     The  Parties  acknowledge  that any oral or written  information  exchanged
     among them with respect to this Agreement is confidential information.  The
     Parties shall maintain the  confidentiality  of all such  information,  and
     without the written consent of other Party, either Party shall not disclose
     any  relevant  information  to any third  party,  except  in the  following
     circumstances:  (a) such  information  is or will be in the  public  domain
     (provided  that  this is not  the  result  of a  public  disclosure  by the
     receiving party); (b) information  disclosed as required by applicable laws
     or rules or regulations of any stock exchange;  or (c) information required
     to be  disclosed  by any Party to its legal  counsel or  financial  advisor
     regarding the transaction contemplated hereunder, and such legal counsel or
     financial advisor are also bound by  confidentiality  duties similar to the
     duties in this section.  Disclosure of any confidential  information by the
     staff  members or agency hired by any Party shall be deemed  disclosure  of
     such  confidential  information  by such  Party,  which Party shall be held
     liable  for  breach of this  Agreement.  This  section  shall  survive  the
     termination of this Agreement for any reason.

8. GOVERNING LAW AND RESOLUTION OF DISPUTES

                                       12
<PAGE>
8.1  The  execution,  effectiveness,  construction,  performance,  amendment and
     termination  of this  Agreement  and the  resolution  of disputes  shall be
     governed by the laws of China.

8.2  In  the  event  of  any  dispute  with  respect  to  the  construction  and
     performance of this Agreement,  the Parties shall first resolve the dispute
     through  friendly  negotiations.  In the event the Parties fail to reach an
     agreement  on the  dispute  within 30 days  after  either  Party's  written
     request  to  the  other  Party  for  resolution  of  the  dispute   through
     negotiations,  either  Party may submit the  relevant  dispute to the China
     International Economic and Trade Arbitration Commission for arbitration, in
     accordance with its then effective arbitration rules. The arbitration shall
     be conducted  in Beijing,  and the language  used in  arbitration  shall be
     Chinese. The arbitration award shall be final and binding on all parties.

8.3  Upon the  occurrence  of any  disputes  arising from the  construction  and
     performance  of this  Agreement  or during the pending  arbitration  of any
     dispute,  except  for  the  matters  under  dispute,  the  parties  to this
     Agreement  shall  continue to exercise their  respective  rights under this
     Agreement and perform their respective obligations under this Agreement.

9. MISCELLANEOUS

9.1  This Agreement shall become effective on the date thereof, and shall expire
     upon the  date of full  performance  by the  Parties  of  their  respective
     obligations under this Agreement.

9.2  This Agreement shall be written in both Chinese and English language in two
     copies, each Party having one copy with equal legal validity. In case there
     is any conflict  between the Chinese version and the English  version,  the
     Chinese version shall prevail.

9.3  This Agreement may be amended or supplemented  through written agreement by
     and  between  the  Parties.   Such  written   amendment   agreement  and/or
     supplementary agreement executed by and between the Parties are an integral
     part of this  Agreement,  and shall  have the same legal  validity  as this
     Agreement.

                                       13
<PAGE>
9.4  In the event that one or several of the  provisions  of this  Agreement are
     found to be invalid,  illegal or  unenforceable in any aspect in accordance
     with any laws or regulations,  the validity,  legality or enforceability of
     the  remaining  provisions  of this  Agreement  shall  not be  affected  or
     compromised  in any  respect.  The  Parties  shall  strive in good faith to
     replace such invalid,  illegal or  unenforceable  provisions with effective
     provisions that accomplish to the greatest extent  permitted by law and the
     intentions  of the  Parties,  and the  economic  effect  of such  effective
     provisions  shall be as close as possible to the  economic  effect of those
     invalid, illegal or unenforceable provisions.

9.5  The  attachments  (if any) to this  Agreement  shall be an integral part of
     this Agreement and shall have the same legal validity as this Agreement.

                                       14
<PAGE>
IN WITNESS  WHEREOF,  the Parties  have  executed,  or caused  their  authorized
representatives  to  execute,  this Loan  Agreement  as of the date first  above
written.

Lender: Arki (Beijing) E-commerce Technology Co., Ltd.

By: /s/ Gao Jianmin
    --------------------------
Name: Gao Jianmin
Title: Legal Representative

Borrower: Gao Jianmin

By: /s/ Gao Jianmin
    --------------------------

                                       15

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