Document:

EXHIBIT
10.6

    

    2010
OMNIBUS SECURITIES AND INCENTIVE PLAN

    

    
      
         

      

      
        1

        
          

        

      

      
         

      

    

    CHINA
SHANDONG INDUSTRIES, INC.

    2010
OMNIBUS SECURITIES AND INCENTIVE PLAN

    

    Table
of Contents

    
      
        
          
            
              
                	 
      	 
      	
                        Page

                      
	 
      	 
      	 
      
	
                        ARTICLE
      I

                      	
                        PURPOSE

                      	
                        4

                      
	 
      	 
      	 
      
	
                        ARTICLE
      II

                      	
                        DEFINITIONS

                      	      
                        4

                      
	 
      	 
      	 
      
	
                        ARTICLE
      III

                      	
                        EFFECTIVE
      DATE OF PLAN

                      	      
                        7

                      
	 
      	 
      	 
      
	
                        ARTICLE
      IV

                      	
                        ADMINISTRATION

                      	      
                        7

                      
	 
      	
                        Section
      4.1

                      	
                        Composition
      of Committee

                      	      
                        7

                      
	 
      	
                        Section
      4.2

                      	
                        Powers

                      	      
                        7

                      
	 
      	
                        Section
      4.3

                      	
                        Additional
      Powers

                      	      
                              
                          7

                        

                      
	 
      	
                        Section
      4.4

                      	
                        Committee
      Action

                      	      
                        7

                      
	 
      	 
      	 
      	 
      
	
                        ARTICLE
      V

                      	
                        STOCK
      SUBJECT TO PLAN AND LIMITATIONS THEREON

                      	      
                        8

                      
	 
      	
                        Section
      5.1

                      	
                        Stock
      Grant and Award Limits

                      	      
                        8

                      
	 
      	
                        Section
      5.2

                      	
                        Stock
      Offered

                      	      
                        8

                      
	 
      	 
      	 
      	 
      
	
                        ARTICLE
      VI

                      	
                        ELIGIBILITY
      FOR AWARDS; TERMINATION OF EMPLOYMENT, DIRECTOR STATUS OR CONSULTANT
      STATUS

                      	      
                        8

                      
	 
      	
                        Section
      6.1

                      	
                        Eligibility

                      	      
                        8

                      
	 
      	
                        Section
      6.2

                      	
                        Termination
      of Employment or Director Status

                      	      
                        8

                      
	 
      	
                        Section
      6.3

                      	
                        Termination
      of Consultant Status

                      	      
                        8

                      
	 
      	
                        Section
      6.4

                      	
                        Special
      Termination Rule

                      	      
                        9

                      
	 
      	
                        Section
      6.5

                      	
                        Termination
      for Cause

                      	      
                        9

                      
	 
      	 
      	 
      	 
      
	
                        ARTICLE
      VII

                      	
                        OPTIONS

                      	      
                        9

                      
	 
      	
                        Section
      7.1

                      	
                        Option
      Period

                      	      
                        9

                      
	 
      	
                        Section
      7.2

                      	
                        Limitations
      on Exercise of Option

                      	      
                        9

                      
	 
      	
                        Section
      7.3

                      	
                        Option
      Agreement

                      	
                        10

                      
	 
      	
                        Section
      7.4

                      	
                        Option
      Price and Payment

                      	      
                        10

                      
	 
      	
                        Section
      7.5

                      	
                        Stockholder
      Rights and Privileges

                      	      
                        10

                      
	 
      	
                        Section
      7.6

                      	
                        Options
      and Rights in Substitution for Stock Options Granted by Other
      Corporations

                      	      
                        10

                      
	 
      	
                        Section
      7.7

                      	
                        Prohibition
      against Repricing

                      	      
                        10

                      
	 
      	 
      	 
      	 
      
	
                        ARTICLE
      VIII

                      	
                        RESTRICTED
      STOCK AWARDS

                      	      
                        10

                      
	 
      	
                        Section
      8.1

                      	
                        Restriction
      Period to be established by Committee

                      	      
                        10

                      
	 
      	
                        Section
      8.2

                      	
                        Other
      Terms and Conditions

                      	      
                        11

                      
	 
      	
                        Section
      8.3

                      	
                        Payment
      for Restricted Stock

                      	      
                        11

                      
	 
      	
                        Section
      8.4

                      	
                        Restricted
      Stock Award Agreements

                      	      
                        11

                      
	 
      	 
      	 
      	 
      
	
                        ARTICLE
      IX

                      	
                        RECAPITALIZATION
      OR REORGANIZATION

                      	      
                        11

                      
	 
      	
                        Section
      9.1

                      	
                        Adjustments
      to Common Stock

                      	      
                        11

                      
	 
      	
                        Section
      9.2

                      	
                        Recapitalization

                      	      
                        12

                      
	 
      	
                        Section
      9.3

                      	
                        Other
      Events

                      	      
                        12

                      
	 
      	
                        Section
      9.4

                      	
                        Powers
      Not Affected

                      	      
                        12

                      
	 
      	
                        Section
      9.5

                      	
                        No
      Adjustment for Certain Awards

                      	      
                        12

                      
	 
      	 
      	 
      	 
      
	
                        ARTICLE
      X

                      	
                        AMENDMENT
      AND TERMINATION OF PLAN

                      	      
                        12

                      
	 
      	 
      	 
      	 
      
	
                        ARTICLE
      XI

                      	
                        MISCELLANEOUS

                      	      
                        13

                      
	 
      	
                        Section
      11.1

                      	
                        No
      Right to Award

                      	      
                        13

                      

              

            

          

        

      

    

    
      
         

      

      
        2

        
          

        

      

      
         

      

    

    

    
      
        
          
            	 
      	
                    Section
      11.2

                  	
                    No
      Rights Conferred

                  	      
                    13

                  
	 
      	
                    Section
      11.3

                  	
                    Other
      Laws; No Fractional Shares; Withholding

                  	      
                    13

                  
	 
      	
                    Section
      11.4

                  	
                    No
      Restriction on Corporate Action

                  	      
                    13

                  
	 
      	
                    Section
      11.5

                  	
                    Restrictions
      on Transfer

                  	      
                    13

                  
	 
      	
                    Section
      11.6

                  	
                    Beneficiary
      Designations

                  	      
                    13

                  
	 
      	
                    Section
      11.7

                  	
                    Rule
      16b-3

                  	      
                    14

                  
	 
      	
                    Section
      11.8

                  	
                    Section
      409A

                  	      
                    14

                  
	 
      	
                    Section
      11.9

                  	
                    Indemnification

                  	      
                    14

                  
	 
      	
                    Section
      11.10

                  	
                    Other
      Plans

                  	      
                          
                      14

                    

                  
	 
      	
                    Section
      11.11

                  	
                    Limits
      of Liability

                  	      
                    14

                  
	 
      	
                    Section
      11.12

                  	
                    Governing
      Law

                  	      
                    14

                  
	 
      	
                    Section
      11.13

                  	
                    Severability
      of Provisions

                  	      
                    14

                  
	 
      	
                    Section
      11.14

                  	
                    No
      Funding

                  	      
                    14

                  
	 
      	
                    Section
      11.15

                  	
                    Headings

                  	      
                    14

                  

          

        

      

    

    
      
         

      

      
        3

        
          

        

      

      
         

      

    

    CHINA
SHANDONG INDUSTRIES, INC.

    2010
OMNIBUS SECURITIES AND INCENTIVE PLAN

    

    ARTICLE
I

    PURPOSE

    

    The
purpose of this China Shandong Industries, Inc. 2010 Omnibus Securities and
Incentive Plan (the “Plan”) is to benefit the
stockholders of China Shandong Industries, Inc., a Delaware corporation (the
“Company”), by assisting
the Company to attract, retain and provide incentives to key management
employees and nonemployee directors of, and non-employee consultants to, the
Company and its Affiliates, and to align the interests of such employees,
nonemployee directors and nonemployee consultants with those of the Company’s
stockholders. Accordingly, the Plan provides for the grant of Options and
Restricted Stock Awards as may be best suited to the circumstances of the
particular Employee, Director or Consultant as provided herein.

    

    ARTICLE
II

    DEFINITIONS

    

    The
following definitions shall be applicable throughout the Plan unless the context
otherwise requires:

    

    “Affiliate” shall mean any
corporation which, with respect to the Company, is a “subsidiary corporation”
within the meaning of Section 424(f) of the Code.

    

    “Award” shall mean,
individually or collectively, any Option or Restricted Stock Award.

    

    “Award Agreement” shall mean a
written agreement between the Company and the Holder with respect to an Award,
each of which shall constitute a part of the Plan.

    

    “Board” shall mean the Board of
Directors of the Company.

    

    “Cause” shall mean (i) if the
Holder is a party to an employment or similar agreement with the Company or an
Affiliate which agreement defines “Cause” (or a similar term) therein, “Cause”
shall have the same meaning as provided for in such agreement, or (ii) for a
Holder who is not a party to such an agreement, “Cause” shall mean termination
by the Company or an Affiliate of the employment (or other service relationship)
of the Holder by reason of the Holder’s (A) intentional failure to perform
reasonably assigned duties, (B) dishonesty or willful misconduct in the
performance of the Holder’s duties, (C) involvement in a transaction which is
materially adverse to the Company or an Affiliate, (D) breach of fiduciary duty
involving personal profit, (E) willful violation of any law, rule, regulation or
court order (other than misdemeanor traffic violations and misdemeanors not
involving misuse or misappropriation of money or property), (F) commission of an
act of fraud or intentional misappropriation or conversion of any asset or
opportunity of the Company or an Affiliate, or (G) material breach of any
provision of the Plan or the Holder’s Award Agreement or any other written
agreement between the Holder and the Company or an Affiliate, in each case as
determined in good faith by the Board, the determination of which shall be
final, conclusive and binding on all parties.

    

    “Change of Control” shall mean
(i) for a Holder who is a party to an employment or consulting agreement with
the Company or an Affiliate which agreement defines “Change of Control” (or a
similar term) therein, “Change of Control” shall have the same meaning as
provided for in such agreement, or (ii) for a Holder who is not a party to such
an agreement, “Change of Control” shall mean the satisfaction of any one or more
of the following conditions (and the “Change of Control” shall be deemed to have
occurred as of the first day that any one or more of the following conditions
shall have been satisfied):

    

    (a)           Any
person (as such term is used in paragraphs 13(d) and 14(d)(2) of the Exchange
Act, hereinafter in this definition, “Person”), other than the
Company or an Affiliate or an employee benefit plan of the Company or an
Affiliate, becomes the beneficial owner (as defined in Rule 13d-3 under the
Exchange Act), directly or indirectly, of securities of the Company representing
more than fifty percent (50%) of the combined voting power of the Company’s then
outstanding securities;

    
      
         

      

      
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    (b)           The
closing of a merger, consolidation or other business combination (a “Business Combination”) other
than a Business Combination in which holders of the Common Stock immediately
prior to the Business Combination have substantially the same proportionate
ownership of common stock of the surviving corporation immediately after the
Business Combination as immediately before;

    

    (c)           The
closing of an agreement for the sale or disposition of all or substantially all
of the Company’s assets to any entity that is not an Affiliate;

    

    (d)           The
approval by the holders of shares of Common Stock of a plan of complete
liquidation of the Company other than a liquidation of the Company into any
subsidiary or a liquidation a result of which persons who were stockholders of
the Company immediately prior to such liquidation have substantially the same
proportionate ownership of shares of common stock of the surviving corporation
immediately after such liquidation as immediately before; or

    

    (e)           Within
any twenty-four (24) month period, the Incumbent Directors shall cease to
constitute at least a majority of the Board or the board of directors of any
successor to the Company;  provided,  however, that any
director elected to the Board, or nominated for election, by a majority of the
Incumbent Directors then still in office, shall be deemed to be an Incumbent
Director for purposes of this paragraph (e), but excluding, for this purpose,
any such individual whose initial assumption of office occurs as a result of
either an actual or threatened election contest with respect to the election or
removal of directors or other actual or threatened solicitation of proxies or
consents by or on behalf of an individual, entity or “group” other than the
Board (including, but not limited to, any such assumption that results from
paragraphs (a), (b), (c), or (d) of this definition).

    

    Notwithstanding
the foregoing, a “Change of Control” shall not be deemed to occur if the Company
files for bankruptcy, liquidation or reorganization under the United States
Bankruptcy Code.

    

    “Code” shall mean the Internal
Revenue Code of 1986, as amended. Reference in the Plan to any section of the
Code shall be deemed to include any amendments or successor provisions to any
section and any regulation under such section.

    

    “Committee” shall mean a
committee comprised of not less than two (2) members of the Board who are
selected by the Board as provided in Section
4.1.

    

    “Common Stock” shall mean the
common stock, par value $0.0001 per share, of the Company.

    

    “Company” shall mean China
Shandong Industries, Inc., a Delaware corporation, and any successor
thereto.

    

    “Consultant” shall mean any
non-Employee (individual or entity) advisor to the Company or an Affiliate who
or which has contracted directly with the Company or an Affiliate to render bona
fide consulting or advisory services thereto.

    

    “Director” shall mean a member
of the Board or a member of the board of directors of an Affiliate, in either
case, who is not an Employee.

    

    “Effective Date” shall mean
July 1, 2010.

    

    “Employee” shall mean any
employee, including officers, of the Company or an Affiliate.

    

    “Exchange Act” shall mean the
Securities Exchange Act of 1934, as amended.

    
      
         

      

      
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    “Fair Market Value” shall mean,
as determined consistent with the applicable requirements of Sections 409A and
422 of the Code, as of any specified date, the closing sales price of the Common
Stock for such date (or, in the event that the Common Stock is not traded on
such date, on the immediately preceding trading date) on the Nasdaq Stock Market
or a domestic or foreign national securities exchange (including London’s
Alternative Investment Market) on which the Common Stock may be listed, as
reported in The Wall Street Journal or The Financial Times.  If the
Common Stock is not listed on the Nasdaq Stock Market or on a national
securities exchange, but is quoted on the OTC Bulletin Board or by the National
Quotation Bureau, the Fair Market Value of the Common Stock shall be the mean of
the bid and asked prices per share of the Common Stock for such
date.  If the Common Stock is not quoted or listed as set forth above,
Fair Market Value shall be determined by the Board in good faith by any fair and
reasonable means (which means, with respect to a particular Award grant, may be
set forth with greater specificity in the applicable Award
Agreement).  The Fair Market Value of property other than Common Stock
shall be determined by the Board in good faith by any fair and reasonable means,
and consistent with the applicable requirements of Sections 409A and 422 of the
Code.

    

    “Family Member” shall mean any
child, stepchild, grandchild, parent, stepparent, spouse, former spouse,
sibling, niece, nephew, mother-in-law, father-in-law, son-in-law,
daughter-in-law, brother-in-law or sister-in-law, including adoptive
relationships, any person sharing the Holder’s household (other than a tenant or
employee of the Holder), a trust in which such persons have more than fifty
percent (50%) of the beneficial interest, a foundation in which such persons (or
the Holder) control the management of assets, and any other entity in which such
persons (or the Holder) own more than fifty percent (50%) of the voting
interests.

    

    “Holder” shall mean an
Employee, Director or Consultant who has been granted an Award or any such
individual’s beneficiary, estate or representative, to the extent
applicable.

    

    “Incumbent Director” shall
mean, with respect to any period of time specified under the Plan for purposes
of determining whether or not a Change of Control has occurred, the individuals
who were members of the Board at the beginning of such period.

    

    “Option” shall mean an Award
granted under Article
VII of the Plan of an option to purchase shares of Common
Stock.  All Options granted under the Plan shall be Non-Qualified
Stock Options.

    

    “Option Agreement” shall mean a
written agreement between the Company and a Holder with respect to an
Option.  A form of such agreement is attached hereto as Exhibit
A.

    

    “Plan” shall mean this China
Shandong Industries, Inc. 2010 Omnibus Securities and Incentive Plan, as amended
from time to time, together with each of the Award Agreements utilized
hereunder.

    

    “Restricted Stock Award” shall
mean an Award granted under Article
VIII of the Plan of shares of Common Stock, the transferability of which
by the Holder shall be subject to Restrictions.

    

    “Restricted Stock Award
Agreement” shall mean a written agreement between the Company and a
Holder with respect to a Restricted Stock Award.  A form of such
agreement is attached hereto as Exhibit
B.

    

    “Restriction Period” shall mean
the period of time for which shares of Common Stock subject to a Restricted
Stock Award shall be subject to Restrictions, as set forth in the applicable
Restricted Stock Award Agreement.

    

    “Restrictions” shall mean
forfeiture, transfer and/or other restrictions applicable to shares of Common
Stock awarded to an Employee, Director or Consultant under the Plan pursuant to
a Restricted Stock Award and set forth in a Restricted Stock Award
Agreement.

    

    “Rule 16b-3”shall mean Rule
16b-3 promulgated by the Securities and Exchange Commission under the Exchange
Act, as such may be amended from time to time, and any successor rule,
regulation or statute fulfilling the same or a substantially similar
function.

    

     “Total and Permanent
Disability” shall mean the inability to engage in any substantial gainful
activity by reason of any medically determinable physical or mental impairment
which can be expected to result in death or which has lasted or can be expected
to last for a continuous period of not less than twelve (12) months, all as
described in Section 22(e)(3) of the Code.

    
      
         

      

      
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    ARTICLE
III

    EFFECTIVE DATE OF
PLAN

    

    The Plan
shall be effective as of the Effective Date.

    

    ARTICLE
IV

    ADMINISTRATION

    

    Section
4.1          Composition of
Committee.  The Plan shall be administered by the Committee,
which shall be appointed by the Board.  The Committee shall consist of
no less than two (2) or more Directors who are each (i) “outside directors”
within the meaning of Section 162(m) of the Code (“Outside Directors”), (ii)
“non-employee directors” within the meaning of Rule 16b-3 and (iii)
“independent” for purposes of any applicable listing requirements (“Non-Employee
Directors”);  provided,  however, that the Board or
the Committee may delegate to a committee of one or more members of the Board
who are not (x) Outside Directors, the authority to grant Awards to eligible
persons who are not (A) then “covered employees” within the meaning of Section
162(m) of the Code and are not expected to be “covered employees” at the time of
recognition of income resulting from such Award, or (B) persons with respect to
whom the Company wishes to comply with the requirements of Section 162(m) of the
Code, and/or (y) Non-Employee Directors, the authority to grant Awards to
eligible persons who are not then subject to the requirements of Section 16 of
the Exchange Act. If a member of the Committee shall be eligible to receive an
Award under the Plan, such Committee member shall have no authority hereunder
with respect to his or her own Award.

    

    Section
4.2          Powers.
Subject to the provisions of the Plan, the Committee shall have the sole
authority, in its discretion, to make all determinations under the Plan,
including but not limited to determining which Employees, Directors or
Consultants shall receive an Award, the time or times when an Award shall be
made (the date of grant of an Award shall be the date on which the Award is
awarded by the Committee), what type of Award shall be granted, the term of an
Award, the date or dates on which an Award vests (including acceleration of
vesting), the form of any payment to be made pursuant to an Award, the terms and
conditions of an Award (including the forfeiture of the Award (and/or any
financial gain) if the Holder of the Award violates any applicable restrictive
covenant thereof), the Restrictions under a Restricted Stock Award and the
number of shares of Common Stock which may be issued under an Award, all as
applicable. In making such determinations the Committee may take into account
the nature of the services rendered by the respective Employees, Directors and
Consultants, their present and potential contribution to the Company’s (or the
Affiliate’s) success and such other factors as the Committee in its discretion
shall deem relevant.

    

    Section
4.3          Additional
Powers.  The Committee shall have such additional powers as are
delegated to it under the other provisions of the Plan. Subject to the express
provisions of the Plan, the Committee is authorized to construe the Plan and the
respective Award Agreements executed hereunder, to prescribe such rules and
regulations relating to the Plan as it may deem advisable to carry out the
intent of the Plan, and to determine the terms, restrictions and provisions of
each Award, and to make all other determinations necessary or advisable for
administering the Plan. The Committee may correct any defect or supply any
omission or reconcile any inconsistency in any Award Agreement in the manner and
to the extent it shall deem expedient to carry it into effect. The
determinations of the Committee on the matters referred to in this Article
IV shall be conclusive and binding on the Company and all
Holders.

    

    Section
4.4          Committee
Action.  In the absence of specific rules to the contrary,
action by the Committee shall require the consent of a majority of the members
of the Committee, expressed either orally at a meeting of the Committee or in
writing in the absence of a meeting.  No member of the Committee shall
have any liability for any good faith action, inaction or determination in
connection with the Plan.

    
      
         

      

      
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    ARTICLE
V

    STOCK SUBJECT TO PLAN AND
LIMITATIONS THEREON

    

    Section
5.1          Stock Grant and
Award Limits.  The Committee may from time to time grant Awards
to one or more Employees, Directors and/or Consultants determined by it to be
eligible for participation in the Plan in accordance with the provisions of
Article
VI. Subject to Article
IX, the aggregate number of shares of Common Stock that may be issued
under the Plan shall not exceed ten percent (10%) of the aggregate number of
shares of the Common Stock which are issued and outstanding. Shares shall be
deemed to have been issued under the Plan solely to the extent actually issued
and delivered pursuant to an Award. To the extent that an Award lapses, expires,
is canceled, is terminated unexercised or ceases to be exercisable for any
reason, or the rights of its Holder terminate, any shares of Common Stock
subject to such Award shall again be available for the grant of a new
Award.

    

    Section
5.2          Stock
Offered.  The stock to be offered pursuant to the grant of an
Award may be authorized but unissued Common Stock, Common Stock purchased on the
open market or Common Stock previously issued and outstanding and reacquired by
the Company.

    

    ARTICLE
VI

    ELIGIBILITY
FOR AWARDS; TERMINATION OF

    EMPLOYMENT, DIRECTOR STATUS
OR CONSULTANT STATUS

    

    Section
6.1          Eligibility.  Awards
made under the Plan may be granted solely to persons or entities who, at the
time of grant, are Employees, Directors or Consultants. An Award may be granted
on more than one occasion to the same Employee, Director or Consultant, and,
subject to the limitations set forth in the Plan, such Award may include an
Option and a Restricted Stock Award.

    

    Section
6.2          Termination of
Employment or Director Status.  Except to the extent
inconsistent with the terms of the applicable Award Agreement and/or the
provisions of Section
6.4, the following terms and conditions shall apply with respect to the
termination of a Holder’s employment with, or status as a Director of, the
Company or an Affiliate, as applicable, for any reason, including, without
limitation, Total and Permanent Disability or death:

    

    (a)          The
Holder’s rights, if any, to exercise any then exercisable Options shall
terminate:

    

    (1)           If
such termination is for a reason other than the Holder’s Total and Permanent
Disability or death, ninety (90) days after the date of such termination of
employment or after the date of such termination of Director
status;

    

    (2)           If
such termination is on account of the Holder’s Total and Permanent Disability,
one (1) year after the date of such termination of employment or Director
status; or

    

    (3)           If
such termination is on account of the Holder’s death, one (1) year after the
date of the Holder’s death.

    

    Upon such
applicable date the Holder (and such Holder’s estate, designated beneficiary or
other legal representative) shall forfeit any rights or interests in or with
respect to any such Options.

    

    (b)          If
a Holder’s employment with, or status as a Director of, the Company or an
Affiliate, as applicable, terminates for any reason prior to the actual or
deemed satisfaction and/or lapse of the Restrictions, vesting requirements,
terms and conditions applicable to a Restricted Stock Award and/or Restricted
Stock Unit Award, such Restricted Stock and/or Restricted Stock Units shall
immediately be canceled, and the Holder (and such Holder’s estate, designated
beneficiary or other legal representative) shall forfeit any rights or interests
in and with respect to any such Restricted Stock and/or Restricted Stock Units.
The immediately preceding sentence to the contrary notwithstanding, the
Committee, in its sole discretion, may determine, prior to or within thirty (30)
days after the date of such termination of employment or Director status, that
all or a portion of any such Holder’s Restricted Stock and/or Restricted Stock
Units shall not be so canceled and forfeited.

    

    Section
6.3         Termination of
Consultant Status. Except to the extent inconsistent with the terms of
the applicable Award Agreement and/or the provisions of Section 6.4, the
following terms and conditions shall apply with respect to the termination of a
Holder’s status as a Consultant, for any reason:

    
      
         

      

      
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    (a)           The
Holder’s rights, if any, to exercise any then exercisable Options and/or Stock
Appreciation Rights shall terminate:

    

    (1)           If
such termination is for a reason other than the Holder’s death, ninety (90) days
after the date of such termination; or

    

    (2)           If
such termination is on account of the Holder’s death, one (1) year after the
date of the Holder’s death.

    

    (b)           If
the status of a Holder as a Consultant terminates for any reason prior to the
actual or deemed satisfaction and/or lapse of the Restrictions, vesting
requirements, terms and conditions applicable to a Restricted Stock Award, such
Restricted Stock shall immediately be canceled, and the Holder (and such
Holder’s estate, designated beneficiary or other legal representative) shall
forfeit any rights or interests in and with respect to any such Restricted
Stock. The immediately preceding sentence to the contrary notwithstanding, the
Committee, in its sole discretion, may determine, prior to or within thirty (30)
days after the date of such termination of such a Holder’s status as a
Consultant, that all or a portion of any such Holder’s Restricted Stock shall
not be so canceled and forfeited.

    

    Section
6.4          Special
Termination Rule. Except to the extent inconsistent with the terms of the
applicable Award Agreement, and notwithstanding anything to the contrary
contained in this Article
VI, if a Holder’s employment with, or status as a Director of, the
Company or an Affiliate shall terminate, and if, within ninety (90) days of such
termination, such Holder shall become a Consultant, such Holder’s rights with
respect to any Award or portion thereof granted thereto prior to the date of
such termination may be preserved, if and to the extent determined by the
Committee in its sole discretion, as if such Holder had been a Consultant for
the entire period during which such Award or portion thereof had been
outstanding. Should the Committee effect such determination with respect to such
Holder, for all purposes of the Plan, such Holder shall not be treated as if his
or her employment or Director status had terminated until such time as his or
her Consultant status shall terminate, in which case his or her Award, as it may
have been reduced in connection with the Holder’s becoming a Consultant, shall
be treated pursuant to the provisions of Section
6.3.  Should a Holder’s status as a Consultant terminate, and
if, within ninety (90) days of such termination, such Holder shall become an
Employee or a Director, such Holder’s rights with respect to any Award or
portion thereof granted thereto prior to the date of such termination may be
preserved, if and to the extent determined by the Committee in its sole
discretion, as if such Holder had been an Employee or a Director, as applicable,
for the entire period during which such Award or portion thereof had been
outstanding, and, should the Committee effect such determination with respect to
such Holder, for all purposes of the Plan, such Holder shall not be treated as
if his or her Consultant status had terminated until such time as his or her
employment with the Company or an Affiliate, or his or her Director status, as
applicable, shall terminate, in which case his or her Award shall be treated
pursuant to the provisions of Section
6.2.

    

    Section
6.5          Termination for
Cause.  Notwithstanding anything in this Article
VI or elsewhere in the Plan to the contrary, and unless a Holder’s Award
Agreement specifically provides otherwise, should a Holder’s employment,
Director status or engagement as a Consultant with or for the Company or an
Affiliate be terminated by the Company or Affiliate for Cause, all of such
Holder’s then outstanding Awards shall expire immediately and be forfeited in
their entirety upon such termination.

    

    ARTICLE
VII

    OPTIONS

    

    Section
7.1         Option Period.  The
term of each Option shall be as specified in the Option Agreement; provided,
however, that no Option shall be exercisable after the expiration of ten (10)
years from the date of its grant.

    

    Section
7.2          Limitations on Exercise of
Option.  An Option shall be exercisable in whole or in such
installments and at such times as specified in the Option
Agreement.

    
      
         

      

      
        9

        
          

        

      

      
         

      

    

    Section
7.3         Option Agreement. Each Option
shall be evidenced by an Option Agreement in such form and containing such
provisions not inconsistent with the provisions of the Plan as the Committee
from time to time shall approve.  An Option Agreement may provide for
the payment of the Option price, in whole or in part, by the delivery of a
number of shares of Common Stock (plus cash if necessary) that have been owned
by the Holder for at least six (6) months and having a Fair Market Value equal
to such Option price, or such other forms or methods as the Committee may
determine from time to time, in each case, subject to such rules and regulations
as may be adopted by the Committee. Each Option Agreement shall, solely to the
extent inconsistent with the provisions of Sections 6.2, 6.3,
6.4 and 6.5, as applicable, specify the effect of termination of employment,
Director status or Consultant status on the exercisability of the Option.
Moreover, without limiting the generality of the foregoing, an Option Agreement
may provide for a “cashless exercise” of the Option by establishing procedures
whereby the Holder, by a properly-executed written notice, directs (i) an
immediate market sale or margin loan respecting all or a part of the shares of
Common Stock to which he is entitled upon exercise pursuant to an extension of
credit by the Company to the Holder of the Option price, (ii) the delivery of
the shares of Common Stock from the Company directly to a brokerage firm and
(iii) the delivery of the Option price from sale or margin loan proceeds from
the brokerage firm directly to the Company. Each Option Agreement shall, solely
to the extent inconsistent with the provisions of Sections 6.2, 6.3,
6.4 and 6.5, as applicable, specify the effect of the termination of the
Holder’s employment, Director status or Consultant status on the exercisability
of the Option. An Option Agreement may also include provisions relating to (i)
subject to the provisions hereof, accelerated vesting of Options, including but
not limited to upon the occurrence of a Change of Control, (ii) tax matters
(including provisions covering any applicable Employee wage withholding
requirements and requiring additional “gross-up” payments to Holders to meet any
excise taxes or other additional income tax liability imposed as a result of a
payment made upon a Change of Control resulting from the operation of the Plan
or of such Option Agreement) and (iii) any other matters not inconsistent with
the terms and provisions of the Plan that the Committee shall in its sole
discretion determine. The terms and conditions of the respective Option
Agreements need not be identical.

    

    Section
7.4         Option Price and
Payment.  The price at which a share of Common Stock may be
purchased upon exercise of an Option shall be determined by the Committee;
provided, however, that such Option price (i) shall not be less than the Fair
Market Value of a share of Common Stock on the date such Option is granted, and
(ii) shall be subject to adjustment as provided in Article
IX. The Option or portion thereof may be exercised by delivery of an
irrevocable notice of exercise to the Company. The Option price for the Option
or portion thereof shall be paid in full in the manner prescribed by the
Committee as set forth in the Plan and the applicable Option
Agreement.

    

    Section
7.5         Stockholder Rights and
Privileges. The Holder of an Option shall be entitled to all the
privileges and rights of a stockholder of the Company solely with respect to
such shares of Common Stock as have been purchased under the Option and for
which certificates of stock have been registered in the Holder’s
name.

    

    Section
7.6         Options and Rights in
Substitution for Stock Options Granted by Other
Corporations.  Options may be granted under the Plan from time
to time in substitution for stock options held by individuals employed by
entities who become Employees as a result of a merger or consolidation of the
employing entity with the Company or any Affiliate, or the acquisition by the
Company or an Affiliate of the assets of the employing entity, or the
acquisition by the Company or an Affiliate of stock of the employing entity with
the result that such employing entity becomes an Affiliate.

    

    Section
7.7         Prohibition Against
Repricing.  Except to the extent (i) approved in advance by
holders of a majority of the shares of the Company entitled to vote generally in
the election of directors, or (ii) as a result of any Change of Control or any
adjustment as provided in Article
IX, the Committee shall not have the power or authority to reduce,
whether through amendment or otherwise, the exercise price of any outstanding
Option or Stock Appreciation right, or to grant any new Award or make any
payment of cash in substitution for or upon the cancellation of Options
previously granted.

    

    ARTICLE
VIII

    RESTRICTED STOCK
AWARDS

    

    Section
8.1         Restriction Period to
be Established by Committee.  At the time a Restricted Stock
Award is made, the Committee shall establish the Restriction Period applicable
to such Award. Each Restricted Stock Award may have a different Restriction
Period, in the discretion of the Committee. The Restriction Period applicable to
a particular Restricted Stock Award shall not be changed except as permitted by
Section
8.2.

    
      
         

      

      
        10

        
          

        

      

      
         

      

    

    Section
8.2         Other Terms and
Conditions.  Common Stock awarded pursuant to a Restricted
Stock Award shall be represented by a stock certificate registered in the name
of the Holder of such Restricted Stock Award. If provided for under the
Restricted Stock Award Agreement, the Holder shall have the right to vote Common
Stock subject thereto and to enjoy all other stockholder rights, including the
entitlement to receive dividends on the Common Stock during the Restriction
Period, except that (i) the Holder shall not be entitled to delivery of the
stock certificate until the Restriction Period shall have expired, (ii) the
Company shall retain custody of the stock certificate during the Restriction
Period (with a stock power endorsed by the Holder in blank), (iii) the Holder
may not sell, transfer, pledge, exchange, hypothecate or otherwise dispose of
the Common Stock during the Restriction Period and (iv) a breach of the terms
and conditions established by the Committee pursuant to the Restricted Stock
Award Agreement shall cause a forfeiture of the Restricted Stock Award. At the
time of such Award, the Committee may, in its sole discretion, prescribe
additional terms and conditions or restrictions relating to Restricted Stock
Awards, including, but not limited to, rules pertaining to the effect of
termination of employment, Director status or Consultant status prior to
expiration of the Restriction Period. Such additional terms, conditions or
restrictions shall, to the extent inconsistent with the provisions of Sections 6.2, 6.3 and
6.4, as applicable, be set forth in a Restricted Stock Award Agreement made in
conjunction with the Award. Such Restricted Stock Award Agreement may also
include provisions relating to (i) subject to the provisions hereof, accelerated
vesting of Awards, including but not limited to accelerated vesting upon the
occurrence of a Change of Control, (ii) tax matters (including provisions
covering any applicable Employee wage withholding requirements and requiring
additional “gross-up” payments to Holders to meet any excise taxes or other
additional income tax liability imposed as a result of a payment made in
connection with a Change of Control resulting from the operation of the Plan or
of such Restricted Stock Award Agreement) and (iii) any other matters not
inconsistent with the terms and provisions of the Plan that the Committee shall
in its sole discretion determine. The terms and conditions of the respective
Restricted Stock Award Agreements need not be identical.  All shares
of Common Stock delivered to a Holder as part of a Restricted Stock Award shall
be delivered and reported by the Company or the Affiliate, as applicable, to the
Holder by no later than by the fifteenth (15th) day of
the third (3rd)
calendar month next following the end of the Company’s fiscal year in which the
Holder’s entitlement to such shares becomes vested.

    

    Section
8.3         Payment for Restricted
Stock.  The Committee shall determine the amount and form of
any payment from a Holder for Common Stock received pursuant to a Restricted
Stock Award, if any, provided that in the absence of such a determination, a
Holder shall not be required to make any payment for Common Stock received
pursuant to a Restricted Stock Award, except to the extent otherwise required by
law.

    

    Section
8.4          Restricted Stock
Award Agreements. At the time any Award is made under this Article
VIII, the Company and the Holder shall enter into a Restricted Stock
Award Agreement setting forth each of the matters contemplated hereby and such
other matters as the Committee may determine to be appropriate.

    

    ARTICLE
IX

    RECAPITALIZATION OR
REORGANIZATION

    

    Section
9.1        Adjustments to Common
Stock.  The shares with respect to which Awards may be granted
under the Plan are shares of Common Stock as presently
constituted;  provided,  however, that if, and whenever,
prior to the expiration or distribution to the Holder of shares of Common Stock
underlying an Award theretofore granted, the Company shall effect a subdivision
or consolidation of shares of Common Stock or the payment of a stock dividend on
Common Stock without receipt of consideration by the Company, the number of
shares of Common Stock with respect to which such Award may thereafter be
exercised or satisfied, as applicable, (i) in the event of an increase in the
number of outstanding shares, shall be proportionately increased, and the
purchase price per share of the Common Stock shall be proportionately reduced,
and (ii) in the event of a reduction in the number of outstanding shares, shall
be proportionately reduced, and the purchase price per share of the Common Stock
shall be proportionately increased.

    
      
         

      

      
        11

        
          

        

      

      
         

      

    

    Section
9.2        Recapitalization.  If
the Company recapitalizes or otherwise changes its capital structure, thereafter
upon any exercise or satisfaction, as applicable, of a previously granted Award,
the Holder shall be entitled to receive (or entitled to purchase, if applicable)
under such Award, in lieu of the number of shares of Common Stock then covered
by such Award, the number and class of shares of stock and securities to which
the Holder would have been entitled pursuant to the terms of the
recapitalization if, immediately prior to such recapitalization, the Holder had
been the holder of record of the number of shares of Common Stock then covered
by such Award.

    

    Section 9.3        Other
Events.  In the event of changes to the outstanding Common
Stock by reason of extraordinary cash dividend, reorganization, mergers,
consolidations, combinations, split-ups, spin-offs, exchanges or other relevant
changes in capitalization occurring after the date of the grant of any Award and
not otherwise provided for under this Article
IX, any outstanding Awards and any Award Agreements evidencing such
Awards shall be adjusted by the Board in its discretion as to the number and
price of shares of Common Stock or other consideration subject to such Awards.
In the event of any adjustment pursuant to Sections 9.2 or this
Section 9.3,
the aggregate number of shares available under the Plan may be appropriately
adjusted by the Board, the determination of which shall be
conclusive.  In addition, the Committee may make provision for a cash
payment to a Participant or a person who has an outstanding
Award.  The number of shares of Common Stock subject to any Award
shall be rounded to the nearest whole number.

    

    Section
9.4        Powers Not
Affected.  The existence of the Plan and the Awards granted
hereunder shall not affect in any way the right or power of the Board or of the
stockholders of the Company to make or authorize any adjustment,
recapitalization, reorganization or other change of the Company’s capital
structure or business, any merger or consolidation of the Company, any issue of
debt or equity securities ahead of or affecting Common Stock or the rights
thereof, the dissolution or liquidation of the Company or any sale, lease,
exchange or other disposition of all or any part of its assets or business or
any other corporate act or proceeding.

    

    Section
9.5        No Adjustment for Certain
Awards.  Except as hereinabove expressly provided, the issuance
by the Company of shares of stock of any class or securities convertible into
shares of stock of any class, for cash, property, labor or services, upon direct
sale, upon the exercise of rights or warrants to subscribe therefor or upon
conversion of shares or obligations of the Company convertible into such shares
or other securities, and in any case whether or not for fair value, shall not
affect previously granted Awards, and no adjustment by reason thereof shall be
made with respect to the number of shares of Common Stock subject to Awards
theretofore granted or the purchase price per share, if applicable.

    

    ARTICLE
X

    AMENDMENT AND TERMINATION OF
PLAN

    

    The Plan
shall continue in effect, unless sooner terminated pursuant to this Article
X, until the tenth (10th)
anniversary of the date on which it is adopted by the Board (except as to Awards
outstanding on that date).  The Board in its discretion may terminate
the Plan at any time with respect to any shares for which Awards have not
theretofore been granted; provided, however, that the Plan’s termination shall
not materially and adversely impair the rights of a Holder with respect to any
Award theretofore granted without the consent of the Holder. The Board shall
have the right to alter or amend the Plan or any part hereof from time to time;
provided, however, that without the approval by a majority of the votes cast at
a meeting of shareholders at which a quorum representing a majority of the
shares of the Company entitled to vote generally in the election of directors is
present in person or by proxy or, in the alternative, the written consent of
holders of no less than a majority of the shares of the Company issued and
outstanding, subject to compliance with information statement requirements set
forth in Section 14(c) of the Exchange Act and the rules and regulations
promulgated thereunder, no amendment or modification of the Plan may (i)
materially increase the benefits accruing to Holders, (ii) except as otherwise
expressly provided in Article
IX, materially increase the number of shares of Common Stock subject to
the Plan or the individual Award Agreements specified in Article
V, (iii) materially modify the requirements for participation in the
Plan, or (iv) amend, modify or suspend Section 7.7
(repricing prohibitions) or this Article
X.  In addition, no change in any Award theretofore granted may
be made which would materially and adversely impair the rights of a Holder with
respect to such Award without the consent of the Holder (unless such change is
required in order to exempt the Plan or any Award from Section 409A of the
Code).

    
      
         

      

      
        12

        
          

        

      

      
         

      

    

    ARTICLE
XI

    MISCELLANEOUS

    

    Section
11.1        No Right to
Award.  Neither the adoption of the Plan by the Company nor any
action of the Board or the Committee shall be deemed to give an Employee,
Director or Consultant any right to an Award except as may be evidenced by an
Award Agreement duly executed on behalf of the Company, and then solely to the
extent and on the terms and conditions expressly set forth therein.

    

    Section
11.2       No Rights
Conferred.  Nothing contained in the Plan shall (i) confer upon
any Employee any right with respect to continuation of employment with the
Company or any Affiliate, (ii) interfere in any way with any right of the
Company or any Affiliate to terminate the employment of an Employee at any time,
(iii) confer upon any Director any right with respect to continuation of such
Director’s membership on the Board, (iv) interfere in any way with any right of
the Company or an Affiliate to terminate a Director’s membership on the Board at
any time, (v) confer upon any Consultant any right with respect to continuation
of his or her consulting engagement with the Company or any Affiliate, or (vi)
interfere in any way with any right of the Company or an Affiliate to terminate
a Consultant’s consulting engagement with the Company or an Affiliate at any
time.

    

    Section
11.3       Other Laws; No Fractional Shares;
Withholding.  The Company shall not be obligated by virtue of
any provision of the Plan to recognize the exercise of any Award or to otherwise
sell or issue shares of Common Stock in violation of any laws, rules or
regulations, and any postponement of the exercise or settlement of any Award
under this provision shall not extend the term of such Award.  Neither
the Company nor its directors or officers shall have any obligation or liability
to a Holder with respect to any Award (or shares of Common Stock issuable
thereunder) (i) that shall lapse because of such postponement, or (ii) for any
failure to comply with the requirements of any applicable law, rules or
regulations, including but not limited to any failure to comply with the
requirements of Section 409A of this Code.  No fractional shares of
Common Stock shall be delivered, nor shall any cash in lieu of fractional shares
be paid. The Company shall have the right to deduct in cash (whether under this
Plan or otherwise) in connection with all Awards any taxes required by law to be
withheld and to require any payments required to enable it to satisfy its
withholding obligations. In the case of any Award satisfied in the form of
shares of Common Stock, no shares shall be issued unless and until arrangements
satisfactory to the Company shall have been made to satisfy any tax withholding
obligations applicable with respect to such Award. Subject to such terms and
conditions as the Committee may impose, the Company shall have the right to
retain, or the Committee may, subject to such terms and conditions as it may
establish from time to time, permit Holders to elect to tender, Common Stock
(including Common Stock issuable in respect of an Award) to satisfy, in whole or
in part, the amount required to be withheld.

    

    Section
11.4       No Restriction on Corporate
Action.  Nothing contained in the Plan shall be construed to
prevent the Company or any Affiliate from taking any corporate action which is
deemed by the Company or such Affiliate to be appropriate or in its best
interest, whether or not such action would have an adverse effect on the Plan or
any Award made under the Plan. No Employee, Director, Consultant, beneficiary or
other person shall have any claim against the Company or any Affiliate as a
result of any such action.

    

    Section
11.5       Restrictions on Transfer.
No Award under the Plan or any Award Agreement and no rights or interests herein
or therein, shall or may be assigned, transferred, sold, exchanged, encumbered,
pledged or otherwise hypothecated or disposed of by a Holder except (i) by will
or by the laws of descent and distribution, or (ii) by gift to any Family Member
of the Holder. An Award may be exercisable during the lifetime of the Holder
only by such Holder or by the Holder’s guardian or legal representative unless
it has been transferred by gift to a Family Member of the Holder, in which case
it shall be exercisable solely by such transferee. Notwithstanding any such
transfer, the Holder shall continue to be subject to the withholding
requirements provided for under Section 11.3
hereof.

    

    Section
11.6       Beneficiary
Designations.  Each Holder may, from time to time, name a
beneficiary or beneficiaries (who may be contingent or successive beneficiaries)
for purposes of receiving any amount which is payable in connection with an
Award under the Plan upon or subsequent to the Holder’s death. Each such
beneficiary designation shall serve to revoke all prior beneficiary
designations, be in a form prescribed by the Company and be effective solely
when filed by the Holder in writing with the Company during the Holder’s
lifetime. In the absence of any such written beneficiary designation, for
purposes of the Plan, a Holder’s beneficiary shall be the Holder’s
estate.

    
      
         

      

      
        13

        
          

        

      

      
         

      

    

    Section
11.7        Rule
16b-3.  It is intended that the Plan and any Award made to a
person subject to Section 16 of the Exchange Act shall meet all of the
requirements of Rule 16b-3. If any provision of the Plan or of any such Award
would disqualify the Plan or such Award under, or would otherwise not comply
with the requirements of, Rule 16b-3, such provision or Award shall be construed
or deemed to have been amended as necessary to conform to the requirements of
Rule 16b-3.

    

    Section
11.8        Section
409A.  Notwithstanding any other provision of the Plan, the
Committee shall have no authority to issue an Award under the Plan with terms
and/or conditions which would cause such Award to constitute non-qualified
“deferred compensation” under Section 409A of the Code.  Accordingly,
by way of example but not limitation, no Option shall be granted under the Plan
with a per share Option exercise price which is less than the Fair Market Value
of a share of Common Stock on the date of grant of the
Option.  Notwithstanding anything herein to the contrary, no Award
Agreement shall provide for any deferral feature with respect to an Award which
constitutes a deferral of compensation under Section 409A of the
Code.  The Plan and all Award Agreements are intended to comply with
the requirements of Section 409A of the Code (so as to be exempt therefrom) and
shall be so interpreted and construed.

    

    Section
11.9      Indemnification.  Each
person who is or shall have been a member of the Committee or of the Board shall
be indemnified and held harmless by the Company against and from any loss, cost,
liability, or expense that may be imposed upon or reasonably incurred thereby in
connection with or resulting from any claim, action, suit, or proceeding to
which such person may be made a party or may be involved by reason of any action
taken or failure to act under the Plan and against and from any and all amounts
paid thereby in settlement thereof, with the Company’s approval, or paid thereby
in satisfaction of any judgment in any such action, suit, or proceeding against
such person;  provided, however, that such person shall give the
Company an opportunity, at its own expense, to handle and defend the same before
he or she undertakes to handle and defend it on his or her own
behalf.  The foregoing right of indemnification shall not be exclusive
and shall be independent of any other rights of indemnification to which such
persons may be entitled under the Company’s Certificate of Incorporation or
By-laws, by contract, as a matter of law, or otherwise.

    

    Section
11.10    Other Plans.  No Award, payment or
amount received hereunder shall be taken into account in computing an Employee’s
salary or compensation for the purposes of determining any benefits under any
pension, retirement, life insurance or other benefit plan of the Company or any
Affiliate, unless such other plan specifically provides for the inclusion of
such Award, payment or amount received.  Nothing in the Plan shall be
construed to limit the right of the Company to establish other plans or to pay
compensation to its employees, in cash or property, in a manner which is not
expressly authorized under the Plan.

    

    Section
11.11     Limits of Liability.  Any
liability of the Company with respect to an Award shall be based solely upon the
contractual obligations created under the Plan and the Award Agreement. None of
the Company, any member of the Board nor any member of the Committee shall have
any liability to any party for any action taken or not taken, in good faith, in
connection with or under the Plan.

    

    Section
11.12     Governing Law.  Except as
otherwise provided herein, the Plan shall be construed in accordance with the
laws of the State of Delaware, without regard to principles of conflicts of
law.

    

    Section
11.13     Severability of
Provisions.  If any provision of the Plan is held invalid or
unenforceable, such invalidity or unenforceability shall not affect any other
provision of the Plan, and the Plan shall be construed and enforced as if such
invalid or unenforceable provision had not been included in the
Plan.

    

    Section
11.14    No Funding.  The Plan shall be
unfunded. The Company shall not be required to establish any special or separate
fund or to make any other segregation of funds or assets to ensure the payment
of any Award.

    

    Section
11.15     Headings. Headings used throughout the
Plan are for convenience only and shall not be given legal
significance.

    
      
         

      

      
        14Unassociated Document

    EXHIBIT
10.7

    Exclusive
Patent License Agreement

    

    This
Exclusive Patent License Agreement (this “Agreement”) is made and
entered into by and between the following Parties on July 2, 2010 in Shandong
Province of the People's Republic of China (“China” or the “PRC”).

    

    
      Party A: Li Jinliang (李金亮)

    

    
      ID
Number:

    

    
      Address:

    

    

    
      Party B: Shandong Caopu Arts
& Crafts Co., Ltd (山东曹普工艺有限公司)

    

    
      Address:
No. 2888 Qing He Road, Qing He Office, Cao County, Shan Dong (山东省曹县青菏办事处青菏路2888号)

    

    

    Party A
and Party B are at times each referred to herein as a “Party” and collectively
as the “Parties.”

    

    1            
   Definitions

    1.1                  “Products”
shall mean a variety of indoor and outdoor furniture and wicker products and any
other products currently produced by Party B and / or to be produced by Party B
during its operations in the future.

    

    1.2                  “Territory”
shall mean the People’s Republic of China and any other place where the Licensed
Patents may be protected.

    

    1.3                  Licensed
Patents” shall mean the patents listed in Exhibit I attached
hereto.

    

    1.4                  “Term”
shall mean the term as provided in Section 11.

    

    2          
     Patents License and
Sub-license

    The
Agreement is an Exclusive Patents License Agreement. Party A hereby grants Party
B an exclusive license during the Term of the Agreement to use the Licensed
Patents specified in Exhibit I attached hereto on a royalty free basis in the
Territory for the purpose of manufacturing, selling, distribution, exporting,
and otherwise marketing the Products.  Party A agrees, acknowledges
and accepts that he will under no circumstances use any of the Licensed Patents
in the Territory himself, or license or otherwise permit any third party to use
any of such Licensed Patents in any manner in the Territory at any time without
procuring the express prior written approval from Party B.  Party B
shall have the right to sub-license any third party to use any or all of the
Licensed Patents without obtaining the prior consent of Party A.

    

    3          
     Representations, Warranties
and Covenants

    Party A
represents, warrants and covenants to Party B as follows:

    

    3.1           Party
A is a PRC citizen with complete civil capacity to legally execute and perform
this Agreement under the laws of China.  This Agreement constitutes
Party A’s legal, valid and binding obligations enforceable in accordance with
its terms once it is duly executed;

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    3.2           The
execution by Party A of this Agreement, and the performance by Party A of its
obligations hereunder will not result in (1) violation of any applicable PRC
Laws; or (2) breach of any contracts or documents to which Party A is a party or
is otherwise bound;

    

    3.3           The
Licensed Patents are effective and valid under the PRC law and Party A is the
sole and legitimate owner of the Licensed Patents. Each of the Licensed Patents
is free from any pledge, lien, option, restrictions, preemptive rights, or any
form of rights or interests of any other party and there is no pending, or, to
the knowledge of Party A, any threatened or potential disputes, claims,
lawsuits, arbitrations, enforcement, administrative proceedings or other legal
proceedings relating to the Licensed Patents in any respect.  The
Licensed Patents constitute all patents of which Party A is the owner or
rightful user;

    

    3.4           None
of the Licensed Patents has constituted or will constitute an infringement of
any intellectual property rights owned by any third party;

    

    3.5           Party
A shall strictly comply with all applicable laws and regulations in performing
his obligations hereunder.  Party A shall ensure that this Agreement
be submitted to the State Intellectual Property Office of PRC (the “SIPO”) for filing within 10
business days following the execution hereof and shall obtain the acceptance of
such filing issued by the SIPO as soon as practicable but no later than 60 days
from the date of execution hereof;

    

    3.5           Party
A will pay any and all fees, including but not limited to annual fees, required
to maintain the validity and effectiveness of the Licensed Patents;
and

    

    3.6           Party
A will under no circumstances use any of the Licensed Patents in the Territory
himself, or license or otherwise permit any third party to use any of such
Licensed Patents in any manner in the Territory at any time without procuring
the express prior written approval from Party B.

    

    4.              Delivery of the Technology
Materials

    Party A
shall deliver all the technology materials and the materials list to Party B
within 3 days after the execution of the Agreement by post. The delivery shall
be made to the principal office of Party B.

    

    5.              Intellectual Property
Improvements

    Both
Parties acknowledge that Party B shall have exclusive and proprietary rights and
interests in all rights, ownership, interests and intellectual properties
arising out of or created during the performance of this Agreement (the “Developed Intellectual Property
Rights”).  Party A shall take all appropriate actions and
render all appropriate assistance for the purposes of vesting any ownership,
title or interest of any Developed Intellectual Property Rights in Party B as
well as to vest in Party B any new patents hereafter developed by Party A, which
future patents shall be fully incorporated under this Agreement as if such
patents were listed on Exhibit I on the date hereof.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    6.         
  Liabilities for Breach of
the Agreement

    

    If Party
A should breach this Agreement in any respect, including but limited to Section
3 hereof, Party B shall have the right to require Party A to immediately cease
and desist, as well as to immediately cure, any such breach, including but not
limited to using a Licensed Patent for his own purposes or permitting the use
thereof by a third party; Party B also has the right to terminate the Agreement
and demand that Party A pay a default fine in the amount caused by the breach of
the Agreement.  Party A hereby agrees to pay any such amount within
five (5) days of receipt of Party B’s demand therefor.

    

    7.        
   Resolution of
Infringement

    7.1           During
the term of the Agreement, if there should arise any third party claims that any
of the Licensed Patents constitutes infringement, Party A shall be fully
responsible for defending any such claim.

    

    7.2           Each
of the Parties shall promptly inform the other about any infringement by a third
party, and Party A shall be solely responsible for negotiating with the third
party, or submitting a claim to the Administration of Patents, or initiating a
lawsuit against the infringing party with the people’s court; Party B shall
provide any necessary assistance to Party A, provided that Party A shall be
responsible for any and all costs associated with Party B’s
assistance.

    

    8.        
   Termination

    8.1           During
the term of the Agreement, if the Licensed Patents are revoked or invalidated to
the detriment of Party B, the Agreement shall, if Party B so elects, be
terminated and be of no further force or effect.  In either case,
Party A shall fully compensate Party B for any losses incurred.

    

    8.2           
Other termination events:

     If:

     (1)           the
Licensee applies for liquidation or bankruptcy; or

     (2)           a
court of competent jurisdiction determines that the Licensee is insolvent or
bankrupt,

    

    then,
this Agreement shall terminate automatically without any notice.

    

    9.            Governing Law and Resolution
of Disputes

    9.1           The
execution, effectiveness, construction, performance, amendment and termination
of this Agreement and the resolution of disputes hereunder shall be governed by
the laws of China.

    

    9.2           In
the event of any dispute with respect to the construction and performance of
this Agreement, the Parties shall first negotiate in good faith to resolve the
dispute. In the event the Parties fail to reach an agreement on the resolution
of such a dispute within 30 days after any Party's written request for
resolution of the dispute through negotiations, any 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. The ruling shall be final
and binding on both Parties.

    

    9.3           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.

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    10.         Indemnification; Limitation
on Liabilities

    Party A
agrees to indemnify and hold Party B, its officers, directors, stockholders,
employees, and agents and representatives safe and harmless from and against all
losses, liabilities, claims, demands and expenses, including attorney’s fees,
resulting from any breach by such Party of its representations, warranties,
covenants or agreements under this Agreement.

    

    11          Effectiveness and
Term

    This
Agreement is executed on the date first above written and shall take effect as
of such date. Unless earlier terminated by Party B in writing, the term of this
Agreement shall be as long as the last of the Licensed Patents remains effective
and valid.

    

    12          Miscellaneous

    12.1         This
Agreement, including Exhibit I hereto and the other documents referred to herein
embody the complete agreement and understanding among the parties and supersede
and preempt any prior understandings, agreements or representations by or among
the parties, written or oral, which may have related to the subject matter
hereof in any way, including, but not limited to, Authorization Letter to Use
Patents dated April 19, 2010.

    

    12.2         Without
Party B’s prior written consent, Party A shall not have the right to assign any
of his rights and/or obligations under this Agreement to any third party.
However, both Party A and Party B acknowledge that Party B may assign any and
all of its obligations and rights under this Agreement to any third party at any
time without obtaining the consent of Party A.

    

    12.3         In
the event that one or several of the provisions of this Agreement are found to
be invalid, illegal or unenforceable in any respect 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.

    

    12.4         This
Agreement may only be amended, changed or supplemented through written agreement
signed by both Party A and Party B. Such written amendment agreements and/or
supplementary agreements that have been signed by the Parties and that relate to
this Agreement shall be an integral part of this Agreement and shall have the
same legal validity as this Agreement.

    

    12.5         This
Agreement may be executed in two (2) counterparts in both English and Chinese
versions, and each counterpart, upon execution and delivery, shall constitute an
original instrument, but all such separate counterparts shall constitute only
one and the same instrument.

    

    12.6         The
language used in this Agreement shall be deemed to be the language chosen by the
parties hereto to express their mutual intent, and no rule of strict
construction shall be applied against any party

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    [signature page
follows]

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    IN WITNESS WHEREOF, the
Parties have caused their authorized representatives to execute this Agreement
as of the date first above written.

    

    
      	
              Party
      A:

            	
              Li
      Jinliang (李金亮)

            

    

    

    
      
        
          
            
              	
                      By:

                    	/s/
      Li Jinliang     
	
                      Name:

                    	
                      Li
      Jinliang

                    
	
                      ID
      Number:  

                    

            

          

        

      

    

    

    
      Party
B:     Shandong
Caopu Arts & Crafts Co., Ltd (山东曹普工艺有限公司)

    

    

    
      
        
          	
                  By:

                	 /s/
      Li Jinliang    
	
                  Name:

                	Jinliang
      Li  
	
                  Title:

                	Legal
      Representative  

        

      

    

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    EXHIBIT
I

    

    LICENSED
PATENTS

    

    
      
        
          
            
              
                	
                        No.

                      	 
      	
                        Design Patents

                      	 
      	
                        Certificate

                        No.

                      	 
      	
                        Design Patents

                        No.

                      	 
      	
                        Designer

                      	 
      	
                        Application Date

                      	 
      	
                        Authorized

                        Announcement

                      	 
      	
                        Owner

                      
	
                        1

                      	 
      	
                        Disposal
      Container (1)

                      	 
      	
                        685809

                      	 
      	
                        ZL
      200630095723.0

                      	 
      	
                        Jinliang
      Li

                      	 
      	
                        September
      8, 2006

                      	 
      	
                        August
      29, 2007

                      	 
      	
                        Jinliang
      Li

                      
	
                        2

                      	 
      	
                        Disposal
      Container (2)

                      	 
      	
                        685890

                      	 
      	
                        ZL
      200630095724.5

                      	 
      	
                        Jinliang
      Li

                      	 
      	
                        September
      8, 2006

                      	 
      	
                        August
      29, 2007

                      	 
      	
                        Jinliang
      Li

                      
	
                        3

                      	 
      	
                        Chair
      Container

                      	 
      	
                        685796

                      	 
      	
                        ZL
      200630095733.4

                      	 
      	
                        Jinliang
      Li

                      	 
      	
                        September
      8, 2006

                      	 
      	
                        August
      29, 2007

                      	 
      	
                        Jinliang
      Li

                      
	
                        4

                      	 
      	
                        Cabinet
      with Eight Drawer

                      	 
      	
                        693607

                      	 
      	
                        ZL 200630095728.3

                      	 
      	
                        Jinliang
      Li

                      	 
      	
                        September
      8, 2006

                      	 
      	
                        September
      19, 2007

                      	 
      	
                        Jinliang
      Li

                      
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                        No.

                      	 
      	
                        Invention
      Patents

                      	 
      	
                        Certificate

                        No.

                      	 
      	
                        Utility
      Models

                        No.

                      	 
      	
                        Designer

                      	 
      	
                        Application
      Date

                      	 
      	
                        Authorized

                        Announcement

                      	 
      	
                        Owner *

                      
	
                        5

                      	 
      	
                        A
      technical method preventing poplar plank split

                      	 
      	
                        685930

                      	 
      	
                        ZL
      200630095722.6

                      	 
      	
                        Jinliang
      Li

                      	 
      	
                        September
      8, 2006

                      	 
      	
                        August
      29, 2007

                      	 
      	
                        Jinliang
      Li

                      
	
                        6

                      	 
      	
                        A
      technical method of automatic splicing board

                      	 
      	
                        685850

                      	 
      	
                        ZL
      200630095727.9

                      	 
      	
                        Jinliang
      Li

                      	 
      	
                        September
      8, 2006

                      	 
      	
                        August
      29, 2007

                      	 
      	
                        Jinliang
      Li

                      
	
                        7

                      	
                          

                      	
                        A
      technical method accelerating plank to dry

                      	
                          

                      	
                        685866

                      	
                          

                      	
                        ZL 200630095732.X

                      	
                          

                      	
                        Jinliang
      Li

                      	
                          

                      	
                        September
      8, 2006

                      	
                          

                      	
                        August
      29, 2007

                      	
                          

                      	
                        Jinliang
      Li

                      

              

            

          

        

      

    

    

    
      
        
          
            
              	
                      (1)  

                    	 
        
	
                      (2)  

                    	 
        
	
                      *

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00175-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00175-of-00352.parquet"}]]