Document:

Silvan Industries Ltd.: Exhibit 10.3 - Filed by newsfilecorp.com

Exhibit 10.3 

Working Capital Loan Contract for Bank of Chongqing 

(English
Translation) 

 

 

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

Party B (Borrower): Qian Xi Nan Aosen Forestry Company,
Limited 

 

 

 

Bank of Chongqing Co., Ltd. 

Working Capital Loan Contract for Bank of Chongqing 

Contract No.:(2011) (Chong Yin Qian Dai) No.0577 

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

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

Tel.: 0851-8577397   Fax: 0851-8577377 

Director: Huang Changsheng   Position: Sub-branch Manager 

Party B (Borrower): Qian Xi Nan Aosen Forestry Company, Limited. 

Address: Hexin Village, Dingxiao Town, Xingyi 

Tel.: 0851-5855580-8040   Fax: 0851-5525598 

Director: Bai Yulu   Position: Executive Director

Whereas Party B applies for a loan from Party A and Party A agrees to grant a loan to Party B after examination, both parties hereby enter into this Loan Contract after negotiation in accordance with the relevant laws, regulations and rules of PRC,
and shall abide by all provisions of the Contract. 

Article 1: Contents of Loan 

1. Amount of Loan (Currency: RMB) : RMB twenty million ( in words)

2. Term of Loan: from June 29, 2011 to June 28, 2012. 

The computation method for the term of loan is as follows: the term of loan shall begin as of the practical origination date. The practical origination and due date of the loan shall be the date stated on the indebtedness certificate between
Party A and Party B, which shall be equally legally effective with the Contract as an attachment to the Contract.  

3. Interest Rate and Adjustment 

The benchmark interest rate of the corresponding grade of the People’s Bank of China hereunder is 6.31% . Both parties agree that the interest rate of the Contract is calculated at 20 % (upwards) or / % (downwards) from the benchmark interest
rate. The practical interest rate hereunder is 7.572 %. 

After the signature of the Contract, in case PBC adjusts the above-mentioned benchmark interest rate, the practical interest rate hereunder shall:

[   ] Not be adjusted

[   ] Automatically float on the new benchmark interest rate as specified in this
Article; the adjusted practical interest rate shall apply from the second day to the first interest settlement day after the interest rate adjustment date. The interest shall accrue from the application day according to the practical interest rate.

[X] Automatically float on the new benchmark interest rate as specified in this
Article; the adjusted practical interest rate shall apply from the interest rate
adjustment date. The interest shall accrue from the application day according to
the practical interest rate.

In case the practical interest rate hereunder changes, the overdue interest rate
and penalty interest rate shall change correspondingly, apply simultaneously
with the practical interest rate and be calculated by installment.  Both
parties don’t need to sign agreement for the interest rate adjustment as
specified herein. Neither party shall obtain the consent of the other, nor
notify the guarantor or gain his/her consent.

4. Purpose of Loan: circulating and turnover.

5. Guarantee of Loan

The loan guarantee method hereunder is: (tick in the option)

[X] Mortgage, the guarantor shall sign a Mortgage Contract with Party A. [the
details can be found in (2011) (Chong Yin Qian Di) No.0578 “Mortgage Contract
for Bank of Chongqing”].

[X]  Guarantee, the guarantor shall sign a Guarantee Contract with Party A.
[the details can be found in (2011) (Chong Yin Qian Bao) No.0579 “Guarantee
Contract for Bank of Chongqing”]. 

[  ] , the guarantor shall sign a Contract with Party A. [the details can be found
in (__ ) (__) No. “ ”]. 

[  ] Others
________________________________________________________________________________________________

Article 2 Origination and Payment of Loan 

1. Where Party A requires a guarantee for the Contract (the loan hereunder), the
following requirements shall be met before the loan origination: 

(1) Where the loan guarantee hereunder is suretyship, the Suretyship Contract
shall be effective. 

(2) Where the loan guarantee hereunder is mortgage, the Mortgage Contract shall
be effective and the mortgage registration procedures have been handled. 

(3) Where the loan guarantee hereunder is pledge, the Pledge Contract shall be
effective and the pledge (right) registration procedures have been handled or
the pledge (right certificate) has been submitted to Party A. 

(4) Where the loan guarantee hereunder is in other forms, the guarantee has been
effective and can defend against the claims of third party. 

If Party A requires the guarantee hereunder in multiple forms including
suretyship and mortgage etc, the multiple forms of guarantee shall
simultaneously meet the abovementioned conditions. 

2. The origination method of the loan to Party B shall be 

[X] Origination once for all 

[  ] Origination by installment as specified on the 《indebtedness certificate》 .
The due dates after the first installment (not included) shall be the same with
the due date of the fist installment. 

3. In the origination of loan, indebtedness certificate shall be filled as
specified herein. 

4. Payment and use of Loan Capital 

The payment of the loan capital shall be managed and controlled by Party A.
Party B shall submit the relevant information proving the use of capital
compliant with the uses as specified herein. Party A agrees to pay after 

examination. The loan capital is paid: 

[  ] Wholly in entrusted payment 

[X] Partially in entrusted payment, and the entrusted paid part shall account
for at least 80% of the loan. 

[  ] Wholly independently 

Entrusted payment means that Party confirms the use of loan is compliant with
the uses specified herein, and directly pays the loan to the transaction party
of Party B compliant with the uses specified herein in accordance with
the《Payment Order》 (affixed with the seal of Party B) of Party B. 

Independent payment means that after Party A originates the loan to the account
of Party B, Party B pays the loan to the transaction party of Party B compliant
with the uses specified herein. Party B shall provide in time the record and
information on use of loan to Party A after payment, and regularly summarize and
report the proofs on loan payment and compliant uses. 

In case of independent payment, in any of the following circumstances, the loan
shall be paid in entrusted payment by Party A: 

1.____________________________________________

2.____________________________________________

3.____________________________________________

5. In case Party B’s credit condition deteriorates, profitability ability of main business weakens or the use of loan has any abnormality in the origination and payment of loan, Party A has right to adopt the following (one or more) measures:
change the origination and payment conditions of the loan; change the payment method of the loan; stop the origination and payment of the loan. 

Article 3 Interest Settlement of Loan 

1. Interest shall accrue from the practical origination date in accordance with the practical amount and term of loan. Interest shall be settled as specified in the (1): 

(1) settled monthly, and the settlement date is the 20th day
every month. 

(2) settled seasonally, and the settlement date is the 20th day of the last month every season.

(3) (3) Others:                               /                                       
. 

2. Party B shall pay the interest on every interest settlement day. Party B irrevocably authorizes Party A to directly deduct the interest from the account of Party B. In case Party B fails to duly pay the interest, Party A has right to charge
compound interest on the unpaid interest. The compound interest rate shall be 50% upwards on the basis of the practical interest rate as specified in the Clause 3, Article 1 herein. 

Article 4 Repayment of Loan 

1. Party B shall repay all principal and interest of the loan on the due date; Where Party B fails to duly repay with justifiable reasons, Party B shall notify Party A in written form 1 month in advance and negotiate with Party A on the repayment
issues. 

2. Where Party B repays the loan in advance, Party B shall notify Party A 7 days in advance and obtain the consent of Party A. Where Party B repays the loan in advance, Party A may claim the loss to Party B on the corresponding interest of the part
repaid in advance from the advance repayment date to the due date. 

3. Party B irrevocably authorizes Party A to deduct all due principal and interest of the loan from the account of Party B. 

4. Where Party A agrees repayment by installment by Party B, the repayment by installment by Party B shall be as follows:
__________________________________________________________

Party B shall repay the loan in the following order; However, Party A keeps the right to change the order: (1) liquidated damages; (2) compensation damage; (3) compound interest; (4) penalty interest; (5) interest; (6) principal; (7) other payables.

Article 5 Penalty Interest of Loan 

Where Party B fails to duly repay the principal and interest of the loan when the loan is due or due in advance, Party A has right to charge penalty interest and compound interest whose rates shall be 50% upwards on the basis of the practical
interest rate as specified in the Provision 3, Article 1 herein.  

Where Party B fails to use the loan as specified herein, Party A has right to charge penalty interest from the use change date. The penalty interest rate shall be 100% upwards on the basis of the practical interest rate as specified in the
Provision 3, Article 1 herein. 

Article 6 Advance Maturity of Loan 

Any of the following circumstances shall be deemed as advance maturity of the
loan. Party A has right to immediately take back all originated loan and stop
originating the left part hereunder from the exact day when the violation is
found.  

1. Party B violates any obligation as specified herein, or refuses to perform
the obligations hereunder by express statement or action.  

2. Party B is forced or take the initiative to close down, reduce registered
capital; 

3. Party B’s loan project is cancelled or unable to continue; 

4. Party B has financial loss due to major operational mistake; 

5. Party B suffers from
administrative sanction die to major illegal operational behavior; 

6. Party B has division, merger, liquidation, reorganization, revocation,
bankruptcy or dissolution etc; 

7. Party B’s interest is overdue for over 1 month; 

8. Party B fails to use the loan as specified herein or otherwise; 

9. Party B violates other similar contracts signed with Party A or any third
party, or has any lawsuit or arbitration due to dispute arising therefrom; 

10. The guarantor breaches the related guarantee contract attached hereto,
including but not limited to false guarantee information and procedures provided
by the guarantor, and forced or voluntary close-down etc; 

11. Party B fails to provide complete and real annual financial report; fails to
maintain the financial indicators as required by the bank; fails to duly provide
related transaction on over 10% of net assets. 

12. Party B’s profit distribution exceeds certain proportion of net profit after
tax without Party A’s consent. 

13. Party B’s capital expenditure exceeds the proportion required by Party A; 

14. Party B sells specific assets (mainly fixed assets), changes the liability
provisions with other credit grantors, applies for credit to other credit
grantors, mortgage assets to other creditors or credit grantors, settles other
long-term liabilities in advance, conduct merger and acquisition, or provide
extra liability guarantee for third party without Party A’s consent; 

15. The document, information and data provided by Party B in loan application
are proven false; 

16. Party B fails to keep commitment, or Party B’s commitment is proven false; 

17. Party B has any major cross default; 

18. Other circumstances endangering or possibly endangering the safety of Party
A’s loan. 

Article 7 Party B’s Right 

1. Party B has right to withdraw and use all loan as specified herein; 

2. Party B has right to refuse any additional condition unspecified herein; 

3. Party B has right to transfer liability to third party with Party A’s written
consent. 

Article 8 Party B’s Obligation and Promise 

1. Provide authentic, complete and effective information and situation on
account number and deposit and loan balance as required by Party A, and
cooperate with Party A’s investigation, examination and check; 

2. Cooperate with Party A on the payment management, after-loan management and
related checks of the loan; accept Party A’s supervision on credit fund and
related production, operation and financial activities, duly provide monthly
financial statements and updates on registration to Party A, and not break the
specified financial indicators;

3. Use the loan as specified herein, fully and duly repay the principal and
interest of the loan as specified herein; 

4. Party B shall gain Party A’s consent before wholly or partially transfer the
liability hereunder to any third party, make external investment, substantially
increase debt financing, or conduct merger, split or equity transfer; 

5. Party B promises to duly notify Party A in written form where major adverse
event that may influence its solvency ability occurs in the term of loan. 

Article 9 Party A’s Right 

1. Party has right to ask Party B to provide the information related to loan; 

2. Party has right to ask Party B to duly repay the principal and interest of
loan; 

3. Party has right to get to know about Party B’s production, operation, financial activities and repayment plan; 

4. Party has right to monitor Party B to use the loan as specified herein; 

5. Party has right to directly deduct the principal and interest of loan from the account of Party B. 

6. Where Party B fails to perform the obligations as specified herein, Party A
has right to ask Party B to repay the loan in advance or stop paying Party B the
unused loan; 

7. Where Party B has major property title transfer, systematic change, transfer
of liabilities or creditor’s right, Party A has right to ask Party B to pay off
the principal and interest of the loan hereunder and all other related fees,
assign all liabilities hereunder to an assignee who Party A agrees to accept, or
provide the guarantee measures that Party A agrees to accept. 

Article 10 Party A’s Obligation 

1. Originate loan to Party B as specified herein; 

2. Keep Party B’s financial, production and operational situation secret, unless
otherwise specified legally; 

Article 11 Disbursement Clause 

1. Party B shall afford the fees occurred from credit investigation, check, notarization, witness and registration etc related hereto. 

2. Party B shall afford any fee occurred from Party A’s collection of the loan due to Party B’s failure to repay the loan, including announcement, sending, and authentication fee, attorney fee, legal cost, travel expense, appraisal fee,
auction fee, property preservation fee and enforcement fee etc. 

Article 12 Party B shall open a settlement account in Party A, make settlement on economic transaction through this account, and Party B promises that Party A has right to collect the loan in advance according to Party B’s fund withdrawal
situation. 

Article 13 Liability for Breach of Contract 

1. Where Party B violates the obligation as specified in Clause 1 and 2, Article
8 herein, Party A has right to stop originating the loan unused by Party B and
collect all or part of the loan in advance; 

2. Where Party B violates the obligation and promises as specified in Clause 3,
Article 8 herein, Party A has right to charge penalty interest, stop originating
the loan unused by Party B and collect all or part of the loan in advance; 

3. Where Party B violates the obligation and promises as specified in Clause 4
and 5, Article 8 herein and thus causes any frustration of the liability
hereunder, Party A has right to stop originating the loan unused and collect the
originated loan in advance. Party A has right to wholly or partially claim to
Party B for any loss on credit assets of Party A thus occurred; 

4. Where Party B violates the provisions herein, Party A has right to raise the
floating proportion of interest rate of the loan. 

Article 14 Amendment and Termination of Contract 

Both parties may amend or terminate the Contract through consultation. The contract amendment or termination agreement shall be in written form.  

Article 15 Miscellaneous 

1. In the effective term of the Contract, Party A’s any tolerance or grace on Party B’s any breach or delay behavior or Party A’s postponed execution of its rights and interest due herein shall not damage, influence or limit Party
A’s any right and interest due as creditor in accordance with the Contract and related laws, shall not be deemed as Party A’s permission or consent on any violation of the Contract, or Party A’s waiver of the right to take actions
against current or future breach behavior. 

2. Where the Contract becomes legally ineffective or partially ineffective for whatever causes, Party B shall still perform all repayment obligations. In case of the above-mentioned situation, Party A has right to terminate the
Contract and immediately collect the loan and other related amounts hereunder
from Party B. 

3. The notice of both parties related hereto shall be in written form. 

Article 16 Party B’s Representations and Warranties 

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

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

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

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

Article 17 Law Application and Dispute Resolution 

The Contract is formulated in accordance with the law of PRC, and shall be governed by the law of PRC. Where any dispute arises in the performance of the Contract, both parties shall have consultation or conciliation; where the consultation or
conciliation fails, the dispute shall be resolved as specified in the following clause 1.  

1. Lodge a lawsuit to the local people’s court of Party A. 

2. Apply for arbitration to Chongqing Arbitration Committee. 

3.  Where Party B fails to perform or fails to fully perform the obligations specified herein after both parties have handled with the notarization with enforcement potency over the Contract, Party A has right to apply for enforcement certificate to
the original notarial organization and apply for enforcement to competent people’s court with the original notarial deed and the enforcement certificate, Party B is willing to accept the enforcement of the people’s court. 

4.
______________________________________________________________________________________________.                 

Article 18 Other issues agreed by both parties:
____________________________________________________________. 

Article 19 The Contract is in four copies. Party A holds two copies, and Party B and the Guarantor holds one. All copies shall be equally legally effective. 

Article 20 Party A has asked Party B to take notice to have a full and accurate understanding on the articles hereof, and has made corresponding explanations as required by Party B. Both parties have consistent understanding on the Contract. 

	
    
    
	
    
    

	

Party A (Stamp): Director: (Or entrusted agent)  

    	Party B (Stamp): Legal
    representative
	
    	(Or entrusted agent)
    

    

    Signature Date: June 29, 2011 

    Signature Place: Guiyang Sub-branch, Bank of ChongqingSilvan Industries Ltd.: Exhibit 10.4 - Filed by newsfilecorp.com

	
Guizhou Xingyi Rural Cooperative Bank
	
	
                                                                      
                                                                     
                             No.: XNHY (2011) LDZi No. 082
	

Exhibit 10.4 

Working Capital Loan Contract 

(English Translation) 

 

 

between 

Borrower: Qian Xi Nan Aosen Forestry Company, Limited 

and 

Lender: Guizhou Xingyi Rural Cooperative Bank 

 

 

 

Prepared by Guizhou Xingyi Rural Cooperative Bank 

1 

Guizhou Xingyi Rural Cooperative Bank 

Liquid Fund Borrowing Contract 

This Contract is entered into by and between the Borrower: Qian Xi Nan Aosen Forestry Company, Limited (organization code: 76608081-7) (“Party A”), having its address at Hexing Village, Dingxiao Development Zone,
Guizhou Province, and the Lender: Guizhou Xingyi Rural Cooperative Bank (“Party B”) (referred to as the Parties collectively and the Party individually).  

WHEREAS Party A applies to Party B for a loan and Party B agrees to off such loan, THEREFORE, after friendly negotiations, the Parties agree to reach the following terms and conditions for mutual observance, in accordance with applicable laws and
regulations. IT IS AGREED AS FOLLOWS:  

Article 1 Amount of the Loan  

Party A hereby applies to Party B a loan amounting to RMB 5,000,000.00 (in words: five million) (in case of any conflict between the number in figures and in words, the number in words shall control, the same below) (the
“Loan”).  

Article 2 Purpose of the Loan  

The Loan is used for the purpose of liquid fund (for material purchasing). 

Article 3 Term of the Loan  

The term of the Loan contemplated hereunder is 12 months, commencing from August 03, 2011 and ending on August 02, 2012.  During the term of this Contract, the actual granting day and due day hereunder shall be subject to the
Loan Receipt. The Loan Receipt and the Withdrawal Evidence shall be an integral part of this Contract and legally authentic to this Contract.  

Article 4 Loan Interest Rate, Default Interest Rate and Calculation & Settlement of Interests   

1. Loan Interest Rate 

The interest rate of the Loan hereunder is 9.5667 ‰ (on a yearly/monthly basis), which is i) detailed below:  

(1) fixed interest rate, i.e. the interest rate hereunder remains unchanged even
in case of adjustment of state interest rate within the effective term of this
Contract; 

(2) floating interest rate, i.e. increase/decrease by ___% based on the
benchmark rate, from the value day, in case of change of benchmark interest
rate, Party B will make corresponding adjustment according to the regulations of
the People’s Bank of China and it is not necessary to sign a contract or obtain
Party A’s consent otherwise for such purpose. 

2. Default Interest Rate 

(1) If Party A fails to use the Loan for the purpose as specified herein, the default interest rate shall be increased by 100% based on the interest rate as stated in this Contract; 

(2) If Party A’s Loan hereunder is overdue, the default
interest rate is increased by 50% based on the interest rate as stated in
this Contract; 

3. The “value day” hereof shall mean such day when the Loan granted initially
hereunder is deposited into Party A’s account. 

When the Loan is granted for the first time, the benchmark interest rate is defined as the interest rate of the loan at the same level as issued by the People’s Bank of China on the value day; thereafter, when the interest rate of the loan or
default interest rate is adjusted according to abovementioned provisions, the benchmark interest rate shall mean the interest rate of the loan at the same level as issued by the People’s Bank of China on the adjustment day; if no interest rate
of the loan at the same level is issued by the People’s Bank of China, the benchmark interest rate is the interest rate of the loan generally accepted in the banking industry or at the same level, except otherwise stated by the Parties. 

4. The interest rate of the Loan shall be calculated from the day when the Loan is deposited into Party A’s account. The Loan hereunder is calculated the interest rate on a daily basis. The daily interest rate = monthly interest rate/30 =
annual interest rate / 360. If Party A fails to pay the interests in schedule, the compound interest will be collected from the next day. 

5. Settlement of Interests  

(1) As for the Loan subject to the fixed interest rate, upon settlement of interests, the interests shall be calculated as per the specified
interest rate. As for the Loan subject to the floating interest rate, the interests shall be calculated according to the interest rate determined according to the floating period; If there are several floating interest rates in a single settlement
period, it is required to first calculate the interests of each floating period, and then calculate the interests during the interest settlement period based on the sum of the interest rates in different floating periods on the interest settlement
day. 

2 

(2) The Loan hereunder will be settled the interests on a quarterly basis. The interest settlement day is generally the 20th day of the last month of a quarter (each month/the last month of a quarter).  

Article 5 Granting and Payment of the Loan  

1. Prior Conditions for Granting of the Loan  

(1) Except entire or partial waiving by Party B, Party B is obliged to grant the
Loan, provided, however, that: 

a) Party A has completed the legal formalities for approval, registration,
delivery and others relating to the Loan hereunder, in accordance with the
applicable regulations. 

b) If any guaranty is set up hereunder, the guaranty contract to the
satisfaction of Party B or other guaranty mode has become effective; 

c) In the course of application for the Loan, the Loanee has
provided the Loaner with all documents and materials as requested by the Loaner and the documents and materials remain effective;  

d) Party A doesn’t fall within any of breaches as specified in this Contract; 

e) If Party A adopts the trusted payment, Party A shall have the formalities for
application for withdrawal and trusted payment done and provide relevant
transaction materials consistent with the Loan purpose; if Party A adopts the
payment by itself, Party A shall handle the withdrawal application and provide
relevant materials and fund use plan consistent with the Loan purpose; 

f) The competent authority fails to set up any restrictions on or prohibits
granting of the Loan hereunder; 

g) Party A shall open a settlement account as the fund custody account at Party
B; 

h) The prior conditions for granting of the Loan as specified by the Parties:  The loan will not be released until the guarantor Guizhou Ding Sheng Xin Guaranteed Investment Co., Ltd
deposited the security fund equal to 10% of the loan amount.. 

(2) Party B will, within seven legal working days after satisfaction of
said prior conditions, issue the Loan.  

2. Mode of Payment, Payment Amount and Payment Counterparty of the Loan
As for the single payment amounting to more than RMB300,000, Party A adopts the payment by means of trusted payment. The Loanee irrevocably authorizes or trusts the Loaner to pay the Loan to the Loanee’s counterparty consistent with the
specified purpose hereunder according to the withdrawal application and payment trustment after the guaranty becomes effective (or is filed).  

As for the single payment amounting to not more than RMB300,000 and with an undefined counterparty, Party A adopts the payment by itself. The Loaner will directly deposit the Loan to the Loanee’s account according to the withdrawal application
and the Loanee will pay the Loan to the counterparty consistent with the specified purpose hereunder.  

The specific amount of the Loan and the counterparty shall be the payment amount and counterparty as designated in the Loanee’s withdrawal application. The Loanee’s withdrawal application and the Letter of Authorization for Payment are an
integral part of this Contract and shall be equally authentic to this Contract. 

3. Withdrawal Plan  

(1) On August 3, 2011    , amount: 5,000,000.00

(2) On ________________, amount: ______________

(3) On ________________, amount: ______________
 

If Party A indeed delays the withdrawal date, Party A is required to get consent of Party B ___ days before withdrawal and pay Party B the loss of interests caused thereby (the interests for the period of delayed withdrawal – interests for
current deposit at the same period = loss of interests incurred to the Loaner).      

Article 6 Repayment 

1. Repayment Principle  

The repayment amount of Party A hereunder shall be repaid according to the following principles: 

(1) As for the Loan with the principal overdue for 90 day that is not recovered, the Loan with the interests overdue for 90 days that
is not recovered, the Loan that is not due or that is overdue not exceeding 90 days, but for which Party A has stopped its operations or production or the projects are stopped, or the Loan for which the laws or regulations have otherwise specified,
it is subject to the principle of “first repaying the principal and then repaying the interests thereof”. 

3 

(2) As for the Loan other than those specified in item i), it is subject to the principle of “first repaying the interests and then repaying the principal and the interests to be cleared with the principal”.  

2. Payment of Interests 

Party A shall pay the interests due to Party B on the interest settlement day. The initial interest repayment day shall be the first interest settlement day after granting of the Loan. Upon the last repayment, the interests shall be cleared with the
principal. 

3. Repayment Plan  

Party A shall repay the principal of the Loan according to the following schedule:  

(1) On August 3, 2012    , amount: 5,000,000.00      

(2) On ________________, amount: ______________

(3) On ________________,
amount: ______________

(4) On ________________, amount: ______________

4. Repayment Mode  

(1) Party A shall, before the repayment day as contemplated hereunder, deposit adequate amount payable at that period into the account opened at Party B and repay the Loan by transfer, or on the repayment day as specified herein, transfer the amount
from any other account for repayment of the Loan; if Party A fails to make repayment in schedule, Party B is entitled to deduct the amount out of the deposit account opened at Party B and any of its branches. This Article shall be deemed such
irrevocable authorization by Party A to Party B to directly deduct the principal and the interests thereof.  

(2) If Party A’s repayment account is registered for loss, frozen, stopped payment, settled, or Party A needs to change the repayment account, Party A shall go to Party B’s premises to handle the formalities for repayment change. Before
the change formalities are valid, if the original repayment account has no adequate amount for transfer, Party A shall go to Party B’s premises to handle the counter repayment procedures. Where Party A fails to handle the formalities for change
of repayment account in a timely manner or fails to handle the counter repayment formalities in a timely manner, thereby causing that the principal of the Loan and the interests thereof and other fees incurred are not settled in schedule, Party A
shall bear the liabilities for breach of contract.  

5. Advanced Repayment  

(1) When Party A repays the interests of the Loan, it just notifies Party B of the same in advance.  

(2) When Party A repays the principal of the Loan, it shall file written application ___ legal working days in advance and after consent of Party B, may repay all or part of the principal of the Loan in advance.  

If Party A repays the principal of the Loan in advance, Party A agrees to pay Party B the penalties amounting to (advanced repayment amount x __% x days in advance).  

If Party A repays the Loan by installments, in the event of repayment of part of the principal of the Loan, Party A shall repay the amount according to the sequence opposite to the repayment plan. After advanced repayment, the Loan that is not
repaid yet shall be subject to the interest rate as specified in this Contract.  

6. Extension or Delay of the Loan 

(1) Party A shall make repayment in schedule. If Party A needs to extend or delay the repayment schedule, Party A shall file an application for such purpose within 30 days before the Loan is due. Party B will carry out the credit extension review of
Party A according to Party A’s application and after consent of Party B, handle the formalities for extension or delay.  

(2) After Party B agrees to handle the formalities for extension or delay, the term of the Loan and the term of guaranty shall remain effective until the principal of the Loan and the interests thereof are cleared or postponed accordingly.  

(3) If Party B objects extension, Party A shall repay the principal of the Loan and the interests thereof pursuant to this Contract.  

Article 7 Loan Guaranty  

The guaranty mode of the Loan hereunder is: The guarantee means for he loan under the Contract is: Guizhou Ding Sheng Xin Guaranteed Investment Co., Ltd provides the guarantee. 

4 

Article 8 Party A’s Rights and Obligations  

1. Party A’s Rights  

(1) Request Party B to grant the Loan under the terms of this Contract;  

(2) Use the Loan for such purpose as specified in this Contract;  

(3) Under such conditions as required by Party B, apply to Party B for extension or delay of the Loan;  

(4) Request Party B to keep confidential relevant financial documents and commercial secrets relating to the production and operation as provided by Party A, except otherwise regulated by the laws and regulations; 

2. Party A’s Obligations  

(1) As requested by Party B, provide such materials relating to the financial
and accounting and production and operation; being liable for authenticity,
completeness and effectiveness of the materials as provided; 

(2) Use the Loan for the purpose as specified in this Contract; being prohibited
from occupying, embezzling or using them for such investment like fixed assets
and equities; being prohibited from using them in the field or for such purpose
as prohibited for production and operation by the state; 

(3) In case of trusted payment, handle the formalities for withdrawal application and payment trustment at Party B and, under such circumstance, Party B shall pay the Loan to the Loanee’s counterparty consistent with the purpose as
specified in this Contract;  

(4) The Loanee shall designate a special fund recovery account and provide the outflow and inflow of the funds in such account in a timely manner; 

(5) Party A undertakes to cooperate Party B with the management of the
payment of the Loan and post-loan management and relevant check and in case of any major adverse matter that affects repayment ability, shall inform Party B of the same in a timely manner;  

(6) In case of repayment by the Loanee, Party A shall regularly summarize and
report the payment of the Loan and shall, as requested by Party B, provide the
fund use records and materials in a timely manner; 

(7) Take initiative to cooperate with Party B and actively accept Party B’s
check and supervision of its operation and production, financial activities and
use of the Loan hereunder; 

(8) Has the consistent operating ability and legal repayment sources and repay
the principal of the Loan and the interests thereof in schedule under the terms
of this Contract; 

(9) Party A and its investors shall not draw or escape or transfer their assets
to avoid the debts to Party B; 

(10) Before repayment of the principal of the Loan and the interests thereof,
without consent of Party B, being prohibited from providing any guaranty to any
third parties by using the assets generating from the Loan hereunder; 

(11) Within the effective term, if Party A provides guaranty for others’ debts,
which may affect the repayment ability hereunder, it is required to inform in
writing Party B of the same in advance and obtain Party B’s consent; 

(12) If the guarantor hereunder is shut down, goes out of business, is cancelled
registration, is revoked the Business License, is bankrupt, is cancelled the
operation qualification, or is in the red, thus losing the guaranty ability
corresponding to the Loan entirely or partially, or resulting in reduction of
the value of the pledged properties, accidental damage or loss, Party A shall
provide other guaranty as recognized by Party B in a timely manner; 

(13) Within the effective term of this Contract, Party A shall inform Party B of
any change of Party A’s name, legal representative or person in charge, address,
operation scope or registered capital, etc. in a timely manner; 

(14) Within the effective term of this Contract, if Party A falls within such
acts as external investment, substantial increase of debt financing,
contracting, leasing, transfer of equities, reforming of stock system, joint
operation, M&A, separation, joint venture, application for shutdown, application
for dissolution, application for bankruptcy, which adequately affect realization
of Party B’s creditor’s rights, Party A shall, upon a prior 15-day written
notice to Party B, inform Party B of the same and obtain Party B’s consent and
shall, as requested by Party B, exercise the settlement and guaranty of the
debts hereunder; 

(15) Within the effective term of this Contract, if Party A is shut down, goes
out of business, is revoked registration, is revoked the Business License, or
its legal representative or person n charge is involved in the illegal
activities or relates to any gross lawsuit activity, or Party A has difficulty
in production and operation and Party A’s financial status is aggravating, thus
substantially affecting its repayment obligations adversely, Party A shall
immediately notify Party B of the same and shall, as requested by
Party B, exercise the settlement and guaranty of the debts hereunder; 

5 

(16) Bear the fees for attorney’s service, insurances, evaluation, registration, custody, verification, notarization, etc. in connection with this Contract and/or the guaranty hereunder. 

Article 9 Party B’s Rights and Obligations 

1. Party B’s Rights  

(1) Know Party A’s production and operation and financial activities and request
Party A to provide relevant plan & statistics and financial statements, etc.;  

(2) As for the payables to Party B hereunder, deduct such payables out of the
account opened at Party B and any of its branches;  

(3) Designate a dedicated fund recovery account and if necessary, monitor such
account and take back the Loan in advance according to the fund recovery
situations;  

(4) In the course of payment of the Loan, if Party A’s credit declines, Party
A’s main business ability is weak or Party A’s use of the Loan is abnormal,
supplement the conditions for granting and payment of the Loan, change the mode
of payment of the Load and stop the granting and payment of the Loan.  

2. Party B’s Obligations 

(1) Grant the Loan in full amount and in a timely manner under the terms of this
Contract, except for delay for any reason attributable to Party A;  

(2) Keep confidential the financial materials and production & operation
information as provided by Party A, unless otherwise specified by the laws and
regulations.  

Article 10 Liabilities for Breach of Contract 

1. Breach Circumstances  

(1) Party A’s Breach of Contract  

In case of any or more of the following circumstances hereunder, Party A is deemed breach of this Contract:  

a) Fail to follow or perform any of its commitments, warranties, obligations or responsibilities hereunder fully or adequately;  

b) Fail to
provide, as requested by Party B, true, complete and effective financial statements and operation & production situations, etc. or hide any critical facts;  

c) Fail to use the Loan as agreed upon by the Parties;  

d) Fail to pay the Loan in such matter as specified in this Contract;  

e) Break through the restrictions on the financial indices as specified;  

f) Fall within any gross cross breach event;  

g) Fail to repay the principal of the Loan and the interests thereof in
schedule;

h) Decline or hamper Party B’s supervision and check of the use of the Loan;

i) Transfer the assets, draw and escape the funds, in order to escape from the debts;  

j) The operations and financial status are aggravating, thus failing to clear
the due debts, or involving or being about to involving any lawsuit or
arbitration proceedings and other legal disputes, in Party B’s opinion, they may
affect or have affected Party B’s rights and interests hereunder;  

k) Any other debt burden by Party A may affect or has affected Party B’s
performance of its obligations hereunder;  

l) Party A is in the red or behind in payment of the principal of any loan and the interests thereof of any other institution;  

m) Party A’s
legal representative or person in charge is dead or declared dead, missing, or becoming the person whose civil acts are limited or lost, in Party B’s opinion, which may affect or damage or have affected or damaged Party B’s rights and
interests hereunder;  

n) The Loanee or its legal representative, shareholder or contributor, etc. is
suspected of involvement in any illegal activity or criminal case;  

o) Within the effective term of this Contract, in case of any act of changing
the operation mode or transferring the operation system like contracting,
leasing, M&A, joint venture, separation, joint operation, reforming of stock
system, etc., in Party B’s opinion, which may affect or have affected Party B’s
rights and interests hereunder;  

p) Other circumstances, in Party B’s opinion, affecting realization of Party B’s
creditor’s rights;  

6 

q) Breach of other obligations as specified in this Contract. 

(2) If the guarantor falls within any of the following circumstances and Party A
fails to provide any new guaranty to the satisfaction of Party B, it will be
deemed breach of contract: 

a) The guarantor falls within contracting, leasing, M&A, joint venture,
separation, joint operation, reforming of stock system, bankruptcy, revocation,
etc., which affect the joint and several guaranty liabilities of the guarantor; 

b) The guarantor provides such guaranty exceeding its burden ability to any
third party; 

c) The guarantor loses or may lose the guaranty ability; 

d) Other breach circumstances as specified in the guaranty contract. 

(3) If the mortgagor falls within any of the following circumstances and Party A
fails to provide any new guaranty to the satisfaction of Party B, it will be
deemed breach of contract: 

a) The mortgagor fails to handle the insurances for the mortgaged properties, or
after occurrence of any insurance accident, fails to handle the insurance
compensations in accordance with the terms of the mortgage contract concerned; 

b) In case of damage to, loss or devaluation of the mortgaged property for any
reason attributable to any third party, the mortgagor fails to handle the
insurance compensations in accordance with the terms of the mortgage contract
concerned; 

c) Without written consent of Party B, the mortgagor donates, transfer, leases
or repeats the mortgage of, transfers or otherwise disposes of the mortgaged
properties; 

d) After consent of Party B, the mortgagor disposes of the mortgaged properties;
however, the amount from disposal of the mortgaged properties is not handled
according to the mortgage contract concerned; 

e) In case of damage to or loss or devaluation of the mortgaged properties,
which affects the clearance of the debts hereunder, the mortgagor fails to
recover the value of the mortgaged properties in a timely manner or fails to
provide other guaranties as recognized by Party B; 

f) Other breach circumstances as specified in the mortgage contract concerned. 

(4) If the pledgor falls within any of the following circumstances and Party A fails to provide any new guaranty to the satisfaction of Party B, it will be deemed breach of contract: 

a) The pledgor fails to handle the insurances for the pledged
properties, or after occurrence of any insurance accident, fails to handle the insurance compensations in accordance with the terms of the pledge contract concerned;  

b) In case of damage to, loss or devaluation of the pledged property for any
reason attributable to any third party, the pledgor fails to handle the insurance compensations in accordance with the terms of the pledge contract concerned;  

c) After consent of Party B, the pledgor disposes of the pledged properties;
however, the amount from disposal of the pledged properties is not handled
according to the pledge contract concerned; 

d) In case of damage to or loss or devaluation of the pledged properties, which
affects the clearance of the principal of the Loan and the interests thereof
hereunder, the mortgagor fails to recover the value of the pledged properties in
a timely manner or fails to provide other guaranties as recognized by Party B; 

e) Other breach circumstances as specified in the pledge contract concerned. 

(5) If the guaranty contract or other guaranty is not effected, is invalid or is cancelled, or the guarantor falls within other circumstances of loss of all or part of its guaranty ability or rejects to perform the guaranty obligations, Party A
fails to exercise any new guaranty to the satisfaction of Party B, it is deemed breach by Party A of this Contract. 

2. Remedies 

In case of any of breach events as described in items (1) ~ (5), Party B is
entitled to exercise one or more of the following rights:  

1) Terminate this Contract in advance, stop the Loan not granted yet, stop the
granting and payment of the Loan, announce that the Loan is immediately
terminated and request Party A to immediately repay the principal of the debts
due and not due and the interests thereof and other fees incurred caused
thereby.  

2) Collect the penalties as per ___‰ of the principal of the Loan. 

3) If Party A fails to use the Loan for such purpose as specified in this Contract, as for the part embezzled by Party A, collect the interests and compound interests as per the default interest rate and interest settlement mode hereunder from the
day upon use of the Loan for such purpose as specified in this Contract to the day upon clearance of the principal of the Loan and the interests
thereof. 

7 

4) Before the Loan is mature, the interests not repaid in a timely manner are subject to the compound interests according to the interest rate of the Loan and interest settlement mode as specified in Article 4 hereof. 

5) After the Loan is overdue, as for the principal of the Loan and the interests thereof not cleared by Party A in schedule (including the principal of the Loan and the interests thereof mature in advance as declared by Party B), the interests and
compound interests will be collected according to the interest settlement mode as specified in this Contract, from the overdue day to the day upon clearance of the principal of the Loan and the interests thereof. The term “overdue” hereof
shall mean such act that Party A fails to repay the Loan in schedule or according to the installments as specified in this Contract.  

6) If the Loaner needs to realize its creditor’s rights by means of lawsuit or arbitration due to Party A’s breach of contract, Party A shall pay Party B such fees for realization of the creditor’s rights incurred by Party B like
legal costs, arbitration fees, public notification fees, demanding fees, attorney’s fees, inquiry fees, traveling fees, etc.  

7) Deduct the amount out of the account opened by Party A at Party B and any of its branches to repay the principal of the Loan and the interests thereof and other fees to be borne by Party A under the terms of this Contract.  

8) Request Party A to provide any new guaranty to the satisfaction of Party B
for all of the debts hereunder.  

9) Perform the guaranty rights and exercise the security interest.  

10) Terminate this Contract.  

Article 11 Custody of Funds in the Account 

Party A hereby designates the account (account name: Qianxinan Aosen Wooden Co., Ltd., account number: 2881010001201100024254, bank: Guizhou Xingyi Rural Cooperative Bank) opened at Party B as the custody account. Party B is
responsible for supervising the use of the Loan by Party A pursuant to this Contract. Party A shall report in time the outflow and inflow of the fund in this account. It is required to first use the Loan in respect of the use of the fund in the
custody account, after completion of the Loan, the remaining funds shall be paid and settled in accordance with the Measures for the Administration of the Payment and Settlement of the People’s Bank of China.  

Article 12 Special Provisions on Trusted Payment by the Loanee  

In the case of trusted payment by the Loanee as specified by the Parties, Party A will irrevocably authorize or trust the trusted payment to Party B. Party A shall be liable for authenticity, accuracy and legality of the name, account number and
bank information of the counterparty as provided by Party B.  

Party B is entitled to review the Loanee’s conditions according to the requirements for trusted payment, and has the right to request the Loanee to provide corresponding documentation and to provide the inflow and outflow of the current fund
custody account.  

Article 13 Miscellaneous  

(1) In case of trusted payment, Party B shall make payment according to Party A’s withdrawal application and the Letter of Authorization for Payment of Loan. Party B assumes no liabilities for payment error attributable to Party A or
economic dispute between Party A and any third party; Party A shall undertake any and all of legal liabilities caused thereby. 

(2)
____________________________________________________________________________________________________________________________________________________.  

Article 14 Dispute Resolution  

Any disputes arising out of or in connection with this Agreement shall be settled through mutual consultations between the Parties, if no agreement is reached through consultations, such disputes will be settled by means of    1   
below:  

1. To file a suit in the Party B’s local people’s court;  

2. To be submitted for arbitration to ____________Arbitration Commission.  

During the litigation or arbitration, the terms that don’t involve disputes still need to be performed. 

Article 15 Validity  

This Contract shall become effective after signature and seal of the Parties.  

Article 16 This Contract is prepared in three copies, each of which shall be held by Party A, Party B and the Guarantor respectively and shall have the same legal effects.  

8 

THE LOANEE HAS CAREFULLY READ ALL OF THE TERMS AND CONDITIONS ABOVEMENTIONED. THE LOANER HAS EXPLAINED THE TERMS AND CONDITIONS HEREIN
CONTAINED, AS REQUESTED BY THE LOANEE, HAS PERFORMED THE OBLIGATIONS OF
REASONABLE PROMPTING AND INSTRUCTIONS. THE LOANEE HAS FULLY KNOWN THEIR MEANING
AND FILED NO OBJECTION AGAINST THE CONTENTS OF THIS CONTRACT. 

 

	Loanee (seal): Qian Xi Nan Aosen Forestry Company,
      Limited
     

    Legal Representative (Person in Charge) or Authorized Person
(signature or seal): 

     

    

    August 3, 2011
	Loaner (seal): Guizhou Xingyi Rural
      Cooperative Bank
     

    Legal Representative (Person in Charge) or Authorized Person
(signature or seal): 

    Handled by:

    August 3, 2011

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