Document:

EXHIBIT
10.11

     

    Renminbi
Loan Contract (Short-Term)

     

    No.:
[_______________]

     

    Borrower:
Shandong
Caopu Arts & Crafts Co., Ltd.

     

    Business
License: 371700400000825

     

    Legal
Representative/Principal: Li
Jinliang

     

    Address:
2888
Qinghe Rd., Qinghe Office, Cao County, Shandong Province

     

    Zip
Code: 274417

     

    A/C
No.:
408055022418091001 with Bank of
China Limited Cao County Sub-branch

     

    Tel:
0530-3431658 
Fax: 0530-3431221

     

    Lender:
Bank of
China Limited Cao County Sub-branch

     

    Legal
Representative/Principal: Cui
Youping

     

    Address:
1668 E.
Section, Gongye Rd., Cao County

     

    Zip Code:
274400

     

    Tel: 0530-3211721  Fax: 0530-3212488

     

    This
Renminbi Loan Contract witnesses that the Borrower and the Lender, through
friendly negotiation, hereby enter into agreement that the Lender grants
short-term Renminbi loan to the Borrower.

     

    Article
I Amount of Loan

     

    Amount of
Loan: Say Total
RMB [_________];

     

    RMB [_______].

     

    Article
II Term of Loan

     

    Term of
Loan: [   ]
months, from actual date of drawdown; or the actual date of the first drawdown
in case of installments;

     

    The
Borrower shall comply strictly with the time of drawdown. In the event that the
actual date of drawdown is later than the agreed date of drawdown, the Borrower
shall still make a repayment at the time as agreed in this
Contract.

     

    Article
III Purpose of Loan

     

    Purpose
of Loan: [_________]

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

    Without
written consent of the Lender, the Borrower shall not divert the funds under
this Contract to any other purpose or the aforesaid purpose, including but not
limited to investment in stock and other securities, items prohibited by any
laws, regulations, rules or national policies, or items unapproved by laws, and
items or purposes banning from bank loans.

     

    Article
IV Loan Rate, Computation and Accrual of Interest

     

    
      	
              1.

            	
              Loan
      Rate

            

    

     

    The fixed
annual interest rate of the said loan is [_  ]%.
The interest rate agreed herein shall remain unchanged during the duration of
this Contract.

     

    
      	
              2.

            	
              Interest
      Computation

            

    

     

    The
interest shall accrue from the actual date of drawdown and be based on the
actual amount of drawdown and actual days of use.

     

    Computation
Formula: interest=principal×actual days×daily rate.

     

    One year
shall be calculated as 360 days.

     

    Computation
Formula: daily rate=annual percentage rate/360.

     

    
      	
              3.

            	
              Mode
      of Settlement

            

    

     

    The
Borrower shall adopt [_  ] mode
for settlement:

     

    
      
        
          
            
              
                	
                      	
                        1)

                      	
                        Quarterly
      settlement: the 20th
      day of the last month of each quarter shall be the date for settlement of
      accrued interest, and the 21st
      day as the date for repayment of accrued
  interest.

                      

              

            

          

        

      

    

     

    
      
        
          
            
              
                
                  	
                        	
                          2)

                        	
                          Monthly
      settlement: the 20th
      day of each month shall be the date for settlement of accrued interest,
      and 21st
      day as the date for repayment of accrued
  interest.

                        

                

              

            

          

        

      

    

     

    In the
event that repayment of the principal for the last installment is not on the
repayment date, the date for liquidating the last installment of principal shall
be the date for repayment, on which the Borrower shall pay up accrued
interest.

     

    
      	
              4.

            	
              Default
      Interest

            

    

     

    
      
        
          
            	
                  	
                    1)

                  	
                    In
      the event that the Borrower fails to make the repayment as scheduled, the
      past-due amount shall accrue interest at the default interest rate for
      past-due loan from the due date until settlement of the principal and
      interest.

                  

          

        

      

    

     

    The
default interest rate for past-due loan shall add [_  ]% additionally
to the loan rate set forth in Paragraph 1 of this Article of this
Contract.

     

    
      
        
          
            	
                  	
                    2)

                  	
                    In
      the event that the Borrower fails to use the said loan for the purpose as
      agreed in this Contract, the amount embezzled shall accrue interest at the
      default interest rate for embezzlement of loan proceeds starting from the
      date of embezzlement until settlement of the principal and
      interest.

                  

          

        

      

    

     

    The
default interest rate for embezzlement of loan proceeds shall add [_  ]% additionally
to the loan rate set forth in Paragraph 1 of this Article of this
Contract.

     

    
      
        
          
            	
                  	
                    3)

                  	
                    The
      loan overdue and embezzled shall accrue interest at the default interest
      rate for embezzlement of loan
proceeds.

                  

          

        

      

    

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

    
      
        
          
            	
                  	
                    4)

                  	
                    In
      the event that the Borrower is unable to repay accrued interest on
      schedule, the compound interest shall accrue, in the mode of settlement
      set forth in Paragraph 3 of this Article of this Contract, at the loan
      rate set forth in Paragraph 1 of this Article of this Contract during the
      term of loan, or at the default interest rate set forth in this Paragraph
      of this Article of this Contract following the loan is
      overdue.

                  

          

        

      

    

     

    
      
        	
              	
                5)

              	
                In
      the event of adjustment to the loan rate aforementioned herein, default
      interest and compound interest shall accrue and be computed in stages from
      the date of adjustment.

              

      

    

     

    Article
V Conditions for Drawdown

     

    The
Borrower shall satisfy the conditions hereunder:

     

    
      	
              1.

            	
              This
      Contract and its appendix have officially come into force;
    and

            

    

     

    
      	
              2.

            	
              The
      Borrower has provided guarantee on the request of the Lender, and the
      Contract of Guarantee has come into force and gone through legal approval,
      registration or procedures for the record;
and

            

    

     

    
      	
              3.

            	
              The
      Lender has kept documents, certificates, seal, personnel roster and
      specimen signature in relation to concluding and performing this Contract
      in reserve at the Lender, and has filled in relevant vouchers;
      and

            

    

     

    
      	
              4.

            	
              The
      Borrower has already opened, on the request of the Lender, an account
      required for fulfilling this Contract;
and

            

    

     

    
      	
              5.

            	
              The
      Borrower has presented the Lender with a written application for drawdown
      and relevant certification on purpose of loan on the date of drawdown, and
      has gone through formalities for drawdown;
and

            

    

     

    
      	
              6.

            	
              The
      Borrower has presented the Lender with Resolution and Power of Attorney of
      the board of directors or other authorized department regarding the
      consent of signing and performing this Contract;
  and

            

    

     

    
      	
              7.

            	
              Other
      requirements for drawdown stipulated in relevant laws and agreed by both
      parties.

            

    

     

    In the
event that the aforementioned conditions could not be satisfied, the Lender is
entitled to reject the Borrower’s application for drawdown, except that the
Lender assents drawdown.

     

    Article
XI Timing and Method of Drawdown

     

    
      	
              1.

            	
              The
      Borrower shall drawdown the entire loan amount within [_  ]
      days starting from the [_  ]th
      day of [_  ].

            

    

     

    
      	
              2.

            	
              The
      Borrower shall have the right to reject the Lender’s reapplication for
      withdrawing the undrawdown amount in the event of exceeding aforesaid
      timing.

            

    

     

    In the
event that the Lender assents drawdown, the Lender shall have the right to
charge commitment fee for the delayed drawdown amount at an annual
rate of [_  ]% on a quarterly basis; the Lender shall have the
right to charge commitment fee for the amount rejected by the Lender for
drawdown at an annual
rate of [_  ]% on a quarterly basis.

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

    Article
VII Repayment

     

    
      	
              1.

            	
              Unless
      otherwise specified, the Borrower shall pay off the said loan in full on
      the due date.

            

    

     

    The
Borrower shall submit a written application to the Lender [_  ]
working days prior to the maturity of the corresponding loan for any change to
the aforementioned repayment plan. Such change shall be subject to mutual
confirmation in writing.

     

    
      	
              2.

            	
              Unless
      otherwise specified, in the event that the Borrower defaults in payment of
      both principal and interest at the same time, the Lender shall have the
      right to decide on the sequence of repayment of either principal or
      interest; under the circumstance of repayment in installments, in the
      event of several loans due or past-due under this Contract, the Lender
      shall have the right to decide on the sequence of repayment of which kind
      of loan; in the event of loans due under several loan contracts between
      the Borrower and the Lender, the Lender shall have the right to decide on
      the sequence of repayment of which
loan.

            

    

     

    
      	
              3.

            	
              Unless
      otherwise specified, the Borrower might make prepayment ahead of the
      maturity on the condition that the Borrower notifies the Lender in writing
      [_  ]
      working days in advance. The prepayment shall be used for paying
      off the final matured loan and other past-due loans in reverse
      order.

            

    

     

    The
Lender shall have the right to accrue and charge compensation for prepaid amount
at a rate of [_  ].

     

    
      	
              4.

            	
              The
      Borrower shall make repayment by the [_  ]
      method hereunder.

            

    

     

    
      	
               
      

            	
              i)

            	
              The
      Borrower shall deposit fund in full into the account hereinbelow not later
      than [_  ]
      working day before the maturity of principal and interest of each
      installment. The Lender shall have the right to take the initiative in
      deducting such amount from the undermentioned account on the due date for
      repayment of principal and interest of each
  installment.

            

    

     

      Account
Name: [_
_____________ ]

     

      Account
No.: [_
_______________ ].

     

    
      	
               
      

            	
              ii)

            	
              Other
      repayment methods agreed by both sides herein: [_  ].

            

    

     

    Article
VIII Security

     

    
      	
              1.

            	
              The
      indebtedness under this Contract shall be secured as prescribed
      hereinunder:

            

    

     

    This
Contract is the master contract of Contract of Guarantee, numbered [_
___________ ] reached between the Guarantor, [_
__________ ], and the Lender. The guarantor shall bear joint and several
liabilities.

     

    
      	
              2.

            	
              The
      Lender shall be entitled to request the Borrower to and the Borrower shall
      be liable to provide new security, replace the Guarantor or other measures
      in order to guarantee liabilities under this Contract in the event that
      the Borrower or the Guarantor herein encounters any one of occurrences
      mentioned hereinafter: the Lender assuming any possibility that might
      impair the Borrower’s solvency, or Contract of Guarantee becoming invalid,
      rescinded or terminated, or the Borrower or the Guarantor suffering
      financial deterioration or involving in major lawsuit or arbitration or
      other reasons that might impair the Borrower’s solvency, or the
      Guarantor’s default in Contract of Guarantee or other contracts with the
      Lender, or depreciation/damage/loss/seizure to the collateral resulting in
      depreciation or loss of collateral
value.

            

    

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

    Article
IX Representations and Warranties

     

    
      	
              1.

            	
              The
      Borrower represents that:

            

    

     

    
      	
               
      

            	
                i)

            	
              The
      Borrower is a company duly organized and validly existing under the law of
      the People’s Republic of China, and has full capacity for civil rights and
      civil conduct to conclude and execute this Contract;
  and

            

    

     

    
      	
               
      

            	
                ii)

            	
              This
      Contract is concluded and executed on the basis of the genuine intention
      of the Borrower, and has acquired lawful and effective authorization in
      accordance with requirements by its Articles of Association or other
      internal administrative documents, and would not breach any agreement,
      contract and other legal instrument that is binding on the Borrower; the
      Borrower has gone through or would go through approval, permission, filing
      or registration procedures required for conclusion and execution of this
      Contract; and

            

    

     

    
      	
               
      

            	
                iii)

            	
              All
      documents, financial statements, vouchers and other materials provided by
      the Borrower to the Lender are true, integrated, accurate, lawful and
      effective; and

            

    

     

    
      	
               
      

            	
                iv)

            	
              The
      Borrower’s application for the said loan to the Lender shall base on true
      and legitimate background of transaction and is not for the use of
      illegitimate purposes, such as money laundering, etc.;
  and

            

    

     

    
      	
               
      

            	
                v)

            	
              The
      Borrower does not conceal from the Lender any event that might impair the
      financial condition or solvency of the Borrower or the Guarantor;
      and

            

    

     

    
      	
               
      

            	
                vi)

            	
              Other
      matters the Borrower represents: [_  ].

            

    

     

    
      	
              2.

            	
              The
      Borrower warrants that:

            

    

     

    
      	
               
      

            	
                i)

            	
              On
      the request of the Lender, the Borrower would submit, on schedule or on
      time, financial statements (including but not limited to annual report,
      quarterly report and monthly report) and other relevant materials;
      and

            

    

     

    
      	
               
      

            	
                ii)

            	
              The
      Borrower has entered into or would enter into, with the Guarantor,
      Counter-Guarantee Agreement or similar agreement in regard to the secured
      obligations, which would not impair any right of the Lender under this
      Contract; and

            

    

     

    
      	
               
      

            	
                iii)

            	
              The
      Borrower would accept credit check-up and monitoring conducted by the
      Lender and grant sufficient assistance and cooperation;
  and

            

    

     

    
      	
               
      

            	
                iv)

            	
              In
      the event of any one of undermentioned occurrences that might impair the
      financial conditions or solvency of the Borrower or the Guarantor,
      including but not limited to any form of changes to the mode of operation,
      such as separation, merger, joint operation, joint
      venture/cooperation/contractual operation with foreign investment,
      reorganization, restructuring, planning for public trading, etc., or
      decrease in registered capital, transfer of substantial assets and equity,
      great debt burden, collateral for a new great debt, seizure of the
      collateral, dissolution/rescission/application for or being applied for
      bankruptcy, etc., involving in major lawsuit or arbitration, suffering
      business difficulties, financial deterioration, or the Borrower’s default
      in other contracts, etc., the Borrower shall notify the Lender on time; in
      the event that any one of aforementioned actions might exert adverse
      effect on the Borrower’s solvency, the Borrower shall request the consent
      of the Lender in advance; and

            

    

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

    
      
        	
              	
                v)

              	
                The
      Borrower’s liquidation of debt to the Lender shall be prior to repayment
      of borrowings to the Borrower’s shareholders, and not second to
      indebtedness of the same kind to other creditors;
  and

              

      

    

     

    
      
        	
              	
                vi)

              	
                In
      the event that after-tax profit of one related fiscal year is zero or
      negative, or after-tax profit is unable to make up for accumulated loss
      carried forward from previous fiscal years, or the pre-tax profit is not
      used for repayment of principal, interest and expenses that shall be
      payable within the current fiscal year or the pre-tax profit is not enough
      for repayment of principal, interest and expenses of the next installment,
      the Borrower shall not allocate dividend or bonus, in any form, to
      shareholders; and

              

      

    

     

    
      
        	
              	
                vii)

              	
                The
      Borrower shall not dispose of its assets by impairing solvency, and shall
      commit itself the amount of guarantee not higher than [_  ]of
      its net assets, and total amount guaranteed and amount of each guarantee
      shall not exceed the limit prescribed under its Articles of
      Association.

              

      

    

     

    
      
        	
              	
                viii)

              	
                Other
      matters the Borrower warrants: [_  ].

              

      

    

     

    Article
X Events of Default and Disposition

     

    Any one
of the occurrences hereunder happened to the Borrower shall constitute or be
deemed as event of default under this Contract:

     

    
      	
              1.

            	
              The
      Borrower fails to honor its obligations of repayment and liquidation to
      the Lender as agreed under this Contract;
or

            

    

     

    
      	
              2.

            	
              The
      Borrower fails to use the loan for the purpose as agreed in this Contract;
      or

            

    

     

    
      	
              3.

            	
              The
      Borrower has made untrue representations in this Contract or breaches its
      commitments aforementioned; or

            

    

     

    
      	
              4.

            	
              In
      the event of the occurrence aforementioned in Subparagraph 4 of Paragraph
      2 of Article IX of this Contract, the Lender assumes any possibility that
      might impair the financial condition and solvency of the Borrower or the
      Guarantor, while the Borrower fails to provide new security or replace the
      Guarantor as agreed under this Contract;
or

            

    

     

    
      	
              5.

            	
              The
      Borrower breaches any other stipulations in respect of rights and
      obligations of parties concerned in this Contract;
  or

            

    

     

    
      	
              6.

            	
              Any
      event of default in other contracts between the Borrower and the Lender or
      other institutions of Bank of China Limited occurs;
  or

            

    

     

    
      	
              7.

            	
              The
      Guarantor breaches stipulations prescribed in Counter-Guarantee Agreement,
      or defaults in other contracts between the Borrower and the Lender or
      other institutions of Bank of China Limited;
or

            

    

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

    
      	
              8.

            	
              The
      Borrower liquidates the business or involves in such event as dissolution,
      rescission, or bankruptcy.

            

    

     

    In the
event of any one of foregoing events of default, the Lender shall have the right
to take undermentioned measures respectively or simultaneously in the light of
actual conditions:

     

    
      	
              1.

            	
              Raise
      a claim against the Borrower and the Guarantor to rectify the default
      within a time limit; or

            

    

     

    
      	
              2.

            	
              Decrease
      in whole or in part, reduce/suspend/terminate the line of credit to the
      Borrower; or

            

    

     

    
      	
              3.

            	
              Cancel
      in whole or in part or terminate the Borrower’s application for drawdown
      or other services under this Contract or other contracts with the Lender;
      cancel in whole or in part or terminate drawdown and transaction of
      undrawndown amount or unsettled trade financing;
  or

            

    

     

    
      	
              4.

            	
              Proclaim
      principal, interest and other payables of outstanding loan/trade financing
      under this Contract or other contracts between the Borrower and the
      Lender become immediately matured in whole or in part;
    or

            

    

     

    
      	
              5.

            	
              Cancel
      or terminate this Contract, Cancel or terminate, in whole or in part,
      other contracts between the Borrower and the Lender;
  or

            

    

     

    
      	
              6.

            	
              Claim
      compensation against the Borrower for losses caused by its default to the
      Lender; or

            

    

     

    
      	
              7.

            	
              Simply
      notify, beforehand or afterwards, the Borrower of deductions from accounts
      opened with the Lender or other institutions of Bank of China Limited to
      pay off debts, in whole or in part, under this Contract. The debt undue
      shall be treated as early maturity. In the event that the currency(ies) in
      foregoing accounts is(are) different from the currency invoicing of the
      Lender’s service, the Lender shall make deduction and conversion at
      applicable real-time exchange rate;
or

            

    

     

    
      	
              8.

            	
              Exercise
      real rights for security; or

            

    

     

    
      	
              9.

            	
              Require
      the Guarantor’s performance of guarantee obligations;
  or

            

    

     

    
      	
              10.

            	
              Take
      other measures that the Lender considers necessary and
      possible.

            

    

     

    Article
XI Reservation of Right

     

    Any
failure of one party to exercise rights under this Contract in whole or in part,
or any failure to request the other party to perform and bear obligations and
liabilities, in whole or in part, shall not be deemed as waiver of such rights,
or release from such obligations and liabilities.

     

    Any grace
and extension of or moratorium on exercising rights under this Contract by one
party against the other party shall not influence on its enjoying any right in
accordance with this Contract, laws and regulations, nor be deemed as waiver of
such rights.

     

    Article
XII Modification, Amendment or Rescission

     

    Modification
or amendment to this Contract shall come to unanimous agreement in writing by
both parties hereto. Any modification or amendment shall constitute an integral
and inseparable part of this Contract.

     

    Unless
otherwise specified by laws and regulations or otherwise agreed by both parties
concerned, this Contract shall not be terminated until rights and obligations
under this Contract have been completely enforced.

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

    Unless
otherwise specified by laws and regulations or agreed by both parties concerned,
the invalidity of any clause under this Contract shall not affect the legal
effect of any other clause.

     

    Article
XIII Law Applicability and Dispute Settlement

     

    This
Contract is applicable to any law of People's Republic of China.

     

    As long
as this Contract comes into force, any controversy or dispute arising out of
concluding or enforcing this Contract or regarding this Contract might be
settled through negotiations. In case any negotiation fails, either party shall
bring an accusation, in accordance with laws, against the other party at the
court where the Lender or any other institution of Bank of China Limited that
performs rights and obligations pursuant to this Contract or single arrangement
resides.

     

    In the
event that the dispute that is now being solved does not affect the enforcement
of other clauses hereof, other clauses shall continue to be
exercised.

     

    Article
XIV Expenditure

     

    Unless
otherwise established by reference to laws or stipulated by parties concerned,
the expenses arising out of conclusion, enforcement of this Contract and dispute
settlement (including but not limited to lawyer’s fees) shall be borne by the
Borrower.

     

    Article
XV Appendix

     

    The
undermentioned appendix or other appendices acknowledged by both parties shall
constitute an integral part of this Contract and have the same force of law as
this Contract.

     

    
      	
              1.

            	
              Drawdown
      Application.

            

    

     

    Article
XVI Other Stipulation

     

    
      	
              1.

            	
              Unless
      with the written consent of the Lender, the Borrower shall not assign any
      right or obligation hereof to a third
party.

            

    

     

    
      	
              2.

            	
              In
      the event that the Borrower, due to business needs, has to entrust any
      other institution of Bank of China Limited to enforce rights and
      obligations hereof, or assign the said loan to any other institution of
      Bank of China Limited for continuation and management, the Borrower shall
      acknowledge such act. The authorized or assigned institution of Bank of
      China Limited shall be entitled to execute all rights hereof, bring an
      action in court, submit to arbitration or apply for compulsory execution,
      in its name, over dispute in respect of this
  Contract.

            

    

     

    
      	
              3.

            	
              On
      the condition of not affecting other stipulations hereof, this Contract
      shall be legally binding to both sides hereto, respective heirs and
      grantees generated according to the
law.

            

    

     

    
      	
              4.

            	
              Unless
      otherwise stipulated, both parties hereto shall take the domiciles
      mentioned herein for communication and contact and shall notify the other
      party in written form of the changes to communication and contact
      addresses.

            

    

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

    
      	
              5.

            	
              The
      deal under this Contract shall proceed on the basis of respective
      independent interests. In accordance with related laws, rules and
      supervisions, any other party of this deal shall constitute the related
      party or related person of the Lender, and any party involved shall not
      affect fairness of the deal by taking advantage of such affiliated
      transaction.

            

    

     

    
      	
              6.

            	
              The
      headlines and names of services indicated hereof shall be only for
      convenient use and not be used as explanation of clauses or obligations of
      parties concerned.

            

    

     

    Article
XVII Execution of Contract

     

    This
Contract takes effect as of the date on which legal representatives
(persons-in-charge) or their authorized signatories of both parties hereto
autographed and the official seals affixed.

     

    This
Contract has [_  ]
original copies that are respectively under the custody of the Borrower, the
Lender and the Guarantor and have the same legal effect.

    

     

    The
Borrower: Shandong
Caopu Arts & Crafts Co., Ltd. (sealed)

     

    Authorized
Signatory: Wang Zhiyu (signed)

     

    Date:
[_  ]

    

     

    The
Lender: Bank of China Limited Cao County Sub-branch (sealed)

     

    Authorized
Signatory: Wang Jianhan (signed)

     

    Date:
[_  ]EXHIBIT
10.12

     

    Contract
No.: [_____________]

     

    Loan
Contract

     

    Borrower
(Party A): Shandong Caopu Arts &
Crafts Co., Ltd.

     

    Lender
(Party B): Laishang Bank Heze
Branch

     

    In
accordance with provisions of Contract Law of the People’s Republic of China and
General Provisions on Lending, after reviewing the status and the request of the
Borrower, the Lender agrees to grant the Borrower a line of credit. The Borrower
and the Lender, through friendly negotiation, have executed this Contract as
follows:

     

    Article
I Particulars

     

    
      	
              1.

            	
              Type
      of Loan: Short-term
      loan;

            

    

     

    
      	
              2.

            	
              Amount
      of Loan: Say Total
      RMB [____];

            

    

     

    
      	
              3.

            	
              Purpose
      of Loan: As [_____];

            

    

     

    
      	
              4.

            	
              Term
      of Loan: From [_____]
      to
      [_____];

            

    

     

    
      	
              5.

            	
              Interest
      Rate:

            

    

     

    
      	
               
      

            	
              A.

            	
              The
      interest rate for the Loan under the Contract shall be [__]%
      per annum, namely [__]‰
      each month. The interest rate shall be accrued on a day-to-day basis from
      the first day of draw-down and the calculation shall be made [__],
      with the 20th day of [__]as
      interest settlement date. The Borrower must pay the accrued interest on
      each settlement day. In the event that the payment for the last
      installment is not on the settlement date, the unpaid interest shall be
      settled along with the principal (i.e. daily interest rate=monthly
      interest rate/30).

            

    

     

    
      	
               
      

            	
              B.

            	
              During
      the loan term, in the event that the People's Bank of China adjusts the
      interest rate on borrowings, which applies to the loan under this
      Contract, Party B is not obliged to notify Party A of the change and has
      the right to compute interest in accordance with the newly adjusted rate
      and calculation method.

            

    

     

    
      	
              6.

            	
              Type
      of Repayment: [__].

            

    

     

    
      	
              7.

            	
              Source
      of Repayment:
      [__].

            

    

     

    
      	
              8.

            	
              Guarantee:
      [__]shall
      act as the Guarantor for the loan under this Contract and take joint
      and several liabilities. The Contract of Guarantee is to be
      otherwise concluded.

            

    

     

    
      	
              9.

            	
              In
      the event that the amount, interest rate and term of the loan stated in
      this Contract are different from those recorded on the loan certificate,
      the recordation is subject to the loan certificate. The loan certificate
      shall be treated as part of the Contract and share the same legal
      effectiveness with this
Contract.

            

    

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

    Article
II In the event that the following conditions are not satisfied, Party B shall
be entitled not to provide the loan under this Contract:

     

    
      	
            	
              A.

            	
              Party
      A opens a general
      settlement account with Party
B.

            

    

     

    
      	
            	
              B.

            	
              Party
      A has provided all documents and materials as required by Party B and has
      gone through necessary procedures.

            

    

     

    
      	
            	
              C.

            	
              In
      the event that the loan under this Contract involves in guarantee of
      mortgage or pledge, related procedures pertaining to registration and/or
      insurance have been complied with the requirements of the Lender and such
      guarantee and insurance remains in effect. In the event that the loan
      under this Contract involves in suretyship guarantee, the suretyship
      guarantee has been entered into and come into
  effect.

            

    

     

    
      	
            	
              D.

            	
              In
      the event that foreign exchange loan is involved under this Contract,
      Party A has gone through approval, registration and other legal procedures
      in accordance with relevant
regulations.

            

    

     

    Article
III Rights and Obligations of Party A and Party B

     

    
      	
              1.

            	
              Rights
      and Obligations of Party A

            

    

     

    
      	
               
      

            	
              A.

            	
              Rights

            

    

     

    Party A
shall have the right to draw down and use the entire loan as stipulated in this
Contract.

     

    
      	
               
      

            	
              B.

            	
              Obligations

            

    

     

    
      	
               
      

            	
              a.

            	
              Party
      A shall repay, on time, the loan principal and interest as stipulated in
      this Contract.

            

    

     

    
      	
               
      

            	
              b.

            	
              Party
      A shall use the loan for purposes as agreed in this Contract, and shall
      not appropriate or embezzle the said
loan.

            

    

     

    
      	
               
      

            	
              c.

            	
              Party
      A shall settle accounts and make deposits in relation to the said loan
      proceeds through the account as agreed in Article II under this
      Contract.

            

    

     

    
      	
               
      

            	
              d.

            	
              In
      the event that foreign exchange loan is involved under this Contract,
      Party A shall go through approval, registration and other legal procedures
      in respect of the said loan in accordance with relevant
      regulations.

            

    

     

    
      	
               
      

            	
              e.

            	
              Party
      A shall present to Party B authentic, integrated and valid financial
      statements and other materials and information on a monthly basis, and be
      cooperative with any supervision or inspection, carried out by Party B, on
      production and business operations, financial activities and use of loan
      proceeds.

            

    

     

    
      	
               
      

            	
              f.

            	
              In
      the event that Party A had been engaged, before paying up the loan
      principal and accrued interest, in contracting, leasing, shareholding
      reform, joint operation, merger, acquisition, separation, joint venture,
      transfer of assets, change to ownership, application for winding-up of
      business for rectification, application for dissolution, application for
      bankruptcy, or other actions that might cause variations to the
      debtor-creditor relationship of this Contract or affect realization of
      creditor’s rights of the said loan, Party A shall notify Party B in
      writing 30 days in advance and fix on obligations of debt repayment or
      discharge of debt before maturity upon the written consent from Party B,
      failing which, Party A shall not proceed with any of the acts
      aforementioned.

            

    

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

    
      	
               
      

            	
              g.

            	
              In
      the event that any other occurrences, with the exception of the acts
      aforementioned, happen to Party A, which might exert material adverse
      effects on its ability of repayment of the said loan, such as cease of
      production, interruption of business, cancellation of registration,
      revocation of license, legal representative or principal(s) engaging in
      illegal activities, involving in major lawsuit or arbitration, suffering
      major productive and operational difficulties, deterioration of financial
      condition, etc., Party A shall immediately notify Party B in writing and
      arrive at an agreement with Party B on the warranty measures to preserve
      its rights as a creditor on terms accepted by Party
  B.

            

    

     

    
      	
               
      

            	
              h.

            	
              In
      the event that Party A provides security for other’s/others’ debts or
      provides mortgage or pledge to a third party with its principal property,
      which might affect its ability of repayment of the said loan, Party A
      shall send prior written notice to Party B and secure consent from Party
      B.

            

    

     

    
      	
               
      

            	
              i.

            	
              Party
      A and its investors shall not surreptitiously withdraw fund, transfer
      assets, or transfer shares without consent of Party B, with the purpose of
      evading its obligations to Party B.

            

    

     

    
      	
               
      

            	
              j.

            	
              Party
      A shall notify Party B, on time, such changes as the business name, legal
      representative, premise, business scope and other items in written
      instruction.

            

    

     

    
      	
               
      

            	
              k.

            	
              In
      the event that suspension of production, out of business, cancellation of
      registration, revocation of license, bankruptcy, loss from operations or
      other situations happen to the Guarantor of the said loan, which result in
      the incapacity of guarantee in respect of the said loan, in part or in
      whole, or in the event that the collateral, pledge or right of pledge
      in respect of the said loan depreciates, Party A shall provide, on time,
      other security measures accepted by Party
B.

            

    

     

    
      	
               
      

            	
              l.

            	
              Party
      A shall bear all correlative charges in connection with registration,
      insurance, notarization, authentication, evaluation, transportation as
      well as attorney fees of Party B in relation to this Contract and/or its
      Contract of Guarantee. In so far as any fees paid by Party B on behalf of
      Party A, Party B shall be entitled to make deductions directly from the
      account of Party A.

            

    

     

    
      	
              2.

            	
              Rights
      and Obligations of Party B

            

    

     

    
      	
               
      

            	
              A.

            	
              Rights

            

    

     

    
      	
               
      

            	
              a.

            	
              Party
      B shall be entitled to demand Party A present authentic business
      activities and financial situations in relation to the said
      loan.

            

    

     

    
      	
               
      

            	
              b.

            	
              Party
      B shall be empowered to check and monitor the use of the loan
      proceeds.

            

    

     

    
      	
               
      

            	
              c.

            	
              Party
      B shall have the right to be aware of Party A’s productive operations,
      financial activities, inventory, use of loan proceeds or the equivalent,
      and to claim for financial reports, materials and information on
      schedule.

            

    

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

    
      	
               
      

            	
              d.

            	
              In
      the event that Party A fails to fulfill obligations as agreed in this
      Contract, Party A shall agree with Party B to deduct loan principal,
      interest, compound interest, default interest, liquidated damage,
      compensation for damage and expenses arising from realization of
      creditor’s right directly from Party A’s account or entrust another bank
      to deduct from any account opened by Party A with the
    trustee.

            

    

     

    
      	
               
      

            	
              e.

            	
              In
      the event that Party A fails to perform obligations as agreed in this
      Contract, Party B shall be entitled to suspend draw-down of the loan,
      recall the loan prior to its maturity or cancel this Contract. Party A
      shall be liable for the economic losses caused as a result
      thereof.

            

    

     

    
      	
               
      

            	
              f.

            	
              Party
      B shall be entitled to request Party A to provide other guarantee measures
      acknowledged by Party B, to suspend draw-down of the said loan, and/or
      recall the loan prior to its maturity, in the event that Party A or
      Guarantor of this Contract encounters any other occurrences mentioned
      hereinafter: deteriorating operations or financial conditions, dispute
      over debt, guarantee incapacity to the Guarantor, damage/loss/obvious
      depreciation to collateral/pledge, or other situations that might endanger
      loan safety.

            

    

     

    
      	
               
      

            	
              g.

            	
              Party
      B shall have the right to suspend draw-down of the said loan, and/or
      recall the loan prior to its maturity, and take corresponding measures to
      preserve creditor’s rights, in the event that Party A’s business model,
      system of its organization or the same has changed or might endanger the
      safety of the said loan.

            

    

     

    
      	
               
      

            	
              h.

            	
              In
      the event that the amount refunded by Party A is not enough for the loan
      repayment due under this Contract, Party B shall be at its option to use
      such amount in repaying the principal, interest, default interest,
      compound interest or other fees.

            

    

     

    
      	
               
      

            	
              i.

            	
              In
      the event that Party A fails to assume the obligation of repayment, Party
      B shall have the right for public disclosure of such
    default.

            

    

     

    
      	
               
      

            	
              B.

            	
              Obligations

            

    

     

    
      	
               
      

            	
              a.

            	
              Party
      B shall grant loans to Party A as agreed in this
  Contract.

            

    

     

    
      	
               
      

            	
              b.

            	
              Party
      B shall keep information provided by Party A covering debt, finance
      production and business secret, with the exception of inquiring
      application put forward by the authority for legal
  use.

            

    

     

    Article
IV Default Liability

     

    
      	
              1.

            	
              Default
      Liability for Party A

            

    

     

    
      
        	
              	
                A.

              	
                Within
      the validity of this Contract, Party A shall be deemed as breach of
      contract, in the event of any one of the occurrences listed hereunder, and
      the circumstances of which are serious or rectifications have not been
      conducted within prescribed time limit. Party B shall be entitled to
      suspend draw-down of the said loan, and/or recall the loan prior to its
      maturity.

              

      

    

     

    
      	
               
      

            	
              a.

            	
              Provide
      Party B with financial reports with false information or concealment of
      material fact(s), or conceal major financial or business
      activities.

            

    

     

    
      	
               
      

            	
              b.

            	
              Fail
      to truthfully provide Party B with all bank accounts, savings deposits and
      loans, guarantee, and other
materials.

            

    

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

    
      	
               
      

            	
              c.

            	
              Refuse
      to accept supervision performed by Party B in respect of use of loan
      proceeds, activities pertaining to production, operation and
      finance.

            

    

     

    
      
        	
              	
                B.

              	
                Within
      the validity of this Contract, Party A shall be deemed as breach of
      contract, in the event of any one of the occurrences listed hereunder, and
      Party B shall be entitled to suspend draw-down of the said loan, and/or
      recall the loan prior to its maturity, record interest in accordance with
      related regulations of the People's Bank of China until such time as the
      entire principal and interest have been totally
  repaid.

              

      

    

     

    
      	
               
      

            	
              a.

            	
              Fail
      to use the loan for purposes as agreed in this
  Contract.

            

    

     

    
      	
               
      

            	
              b.

            	
              Utilize
      the said loan to engage in equity investment or as registered
      capital.

            

    

     

    
      	
               
      

            	
              c.

            	
              Utilize
      the said loan to engage in such speculative activities as securities,
      futures, real estate, etc.

            

    

     

    
      	
               
      

            	
              d.

            	
              Obtain
      loan purposely and use it in lending to seek illegitimate
      income.

            

    

     

    
      	
               
      

            	
              e.

            	
              Obtain
      loan through fraudulent means.

            

    

     

    Party B
shall be entitled to charge a default interest and compound interest at a
monthly rate of [__]‰
based on the amount embezzled for the period of embezzlement of
loan.

     

    
      
        	
              	
                C.

              	
                Party
      A shall be charged by Party B the compound interest accrued at a rate
      agreed in this Contract in the event that Party A fails to pay accrued
      interest within the term of the said loan. Party A shall pay Party B the
      default interest at a rate of [__]‰
      on a monthly basis for the overdue outstanding principal, until such time
      as the entire principal and interest have been totally
    repaid.

              

      

    

     

    
      
        	
              	
                D.

              	
                In
      the event that Party A fails to notify, as agreed, Party B of variations
      to its business model, system of its organization or legal status, or to
      perform obligations of debt settlement as agreed in written instrument,
      Party B shall be entitled to suspend draw-down of the said loan, and/or
      recall the loan prior to its maturity, take other measures in accordance
      with laws. At the same time, Party A shall pay Party B liquidated damage
      at 5% of the loan principal.

              

      

    

     

    
      
        	
              	
                E.

              	
                Party
      A shall be deemed as breach of contract in the event of making untrue or
      inaccurate statement or guarantee, concealing material fact(s), and Party
      B shall have the right to suspend draw-down of the said loan, and/or
      recall the loan prior to its maturity, take other measures in accordance
      with laws. At the same time, Party A shall pay Party B liquidated damage
      at 5% of the loan principal.

              

      

    

     

    
      
        	
              	
                F.

              	
                In
      the event that Party A fails to perform any one liability as agreed under
      this Contract or Contract of Guarantee and has hindered Party B in
      achievement of creditor’s rights, Party B shall be entitled to suspend
      draw-down of the said loan, and/or recall the loan prior to its maturity,
      take corresponding measures as agreed in this Contract or Contract of
      Guarantee.

              

      

    

     

    
      
        	
              	
                G.

              	
                In
      the event that the economic losses caused by Party A’s default to Party B
      exceed liquidated damage, Party A shall pay compensation for damage for
      the excess portion.

              

      

    

     

    
      
        	
              	
                H.

              	
                In
      the event that Party B goes to court or arbitration over Party A’s default
      to achieve creditor’s right, Party A shall assume lawyer’s fees,
      travelling expenses and other fees arising from realization of creditor’s
      right.

              

      

    

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

    
      	
              2.

            	
              Default
      Liability for Party B

            

    

     

    In the
event that Party B fails to draw down the loan proceeds as agreed under this
Contract within the validity of this Contract, Party B shall grant the said loan
in full. Besides, Party B shall pay Party A liquidated damage by Party B’s
demand deposit interest rate over the same period in terms of amount not yet
released and delay days.

     

    
      	
              3.

            	
              Payment
      Methods for Liquidated Damage and Compensation for
  Damage

            

    

     

    Liquidated
damage and compensation for damage in connection with this Contract shall be
paid by Party A or Party B on a voluntary basis. In the event of failure of
performance, the two parties hereinto have reached agreement to deduct the
amount directly from the other party’s account.

     

    Article
V Prepayment and Extension of Loan

     

    
      	
              1.

            	
              Prepayment

            

    

     

    Party A
shall notify Party B in writing 10 days earlier of loan prepayment and
prepayment shall be subject to the consent from Party B. The interest of prepaid
amount shall accrue at a rate specified in this Contract and actual days of
use.

     

    
      	
              2.

            	
              Loan
      Extension

            

    

     

    
      	
              A.

            	
              In
      the event that Party A is still unable to repay the loan when the loan
      becomes due through much effort, Party A might apply for extension of
      loan.

            

    

     

    
      	
              B.

            	
              Party
      A shall present, 15 days prior to the due date, a written application for
      extension and the written consent from the Guarantor who would resume the
      guarantee responsibility upon extension, or a new letter of guarantee
      acknowledged by Party B.

            

    

     

    
      	
              C.

            	
              Where
      Party B agrees to extension, both sides hereinto shall enter into
      additional agreement on extension of
payment.

            

    

     

    Article
VI Assignment, Modification or Rescission of Contract

     

    
      	
              1.

            	
              As
      long as this Contract comes into effect, Party B might not request the
      consent of Party A on assignment of liabilities, in whole or in part,
      under this Contract to a third party, while shall present Party B a
      written notification.

            

    

     

    
      	
              2.

            	
              In
      the event that Party A intends to assign liabilities, in whole or in part,
      under this Contract to a third party as long as this Contract comes into
      effect, Party A shall submit a written guarantee beforehand describing the
      Guarantor assents to resume guarantee responsibility following assignment
      of obligations or present a new letter of guarantee acknowledged by Party
      B.

            

    

     

    
      	
              3.

            	
              As
      long as this Contract comes into effect, neither party hereinto shall make
      any modification without approval from the other party. In the event of
      any modification, besides the written guarantee describing the Guarantor
      assents to resume guarantee responsibility following any modification or a
      new letter of guarantee, both sides concerned shall reach a written
      agreement on modification.

            

    

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

    
      	
              4.

            	
              As
      long as this Contract comes into effect, Party B shall have the right to
      rescind this Contract unilaterally, in the event of situations happens to
      or probably happens to Party A, prior to draw-down of the said loan, that
      might endanger the loan safety or impair payment
  capacity.

            

    

     

    
      	
              5.

            	
              The
      terms under this contract shall remain in effect before agreement on
      assignment, modification and rescission of this Contract enters into
      force.

            

    

     

    Article
VII Representations and Warranties of Party A

     

    
      	
              1.

            	
              Party
      A is a company duly organized and validly existing under the law of the
      People’s Republic of China or a natural person with full capacity for
      civil conduct, and has the power and authority to dispose of its property
      in operation, to carry out operations in connection with the loan purposes
      as specified under this Contract, and to conclude and fulfill this
      Contract.

            

    

     

    
      	
              2.

            	
              Party
      A has already obtained approval from its superior authority or the Board
      of Directors (Shareholders Meeting or Annual General Meeting) or other
      authority to acquire all necessary
  authorization.

            

    

     

    
      	
              3.

            	
              Conclusion
      and performance of this Contract would not breach provisions (including
      Articles of Association) and other stipulations, including but not limited
      to provision of guarantee for others and/or itself, that are binding on
      Party A and its assets.

            

    

     

    
      	
              4.

            	
              All
      documents, materials provided to Party B by Party A, including but not
      limited to financial reports and Loan Contract concluded with the other
      financial institution(s) and being in effect, and information guaranteeing
      others and/or itself shall be true, integrated, accurate, lawful and
      effective.

            

    

     

    The
representative, principal or authorized agent of Party A shall bear legal
liability for aforementioned declarations and warranties.

     

    Article
VIII Special Provisions and Other Provisions

     

    
      	
              1.

            	
              Special
      Provisions

            

    

     

    
      	
               
      

            	
              A.

            	
              Party
      A shall not be exempt of repayment obligation under this Contract for the
      sake of nullity and rescission of this Contract, variations to financial
      status, mode of business, system of its organization or legal status, or
      any other agreement or documentation concluded with
  others.

            

    

     

    
      	
               
      

            	
              B.

            	
              As
      far as this Contract comes into effect, in the event that Party A fails to
      notify Party B in writing any variation to its legal name, legal
      representative, statutory domicile, etc., all materials delivered by Party
      B to Party A in line with materials mentioned in this Contract shall be
      deemed as acknowledgement of
service.

            

    

     

    
      	
              2.

            	
              Other
      Provisions

            

    

     

    N/A

     

    Matters
not covered herein, if any, shall be construed by reference to laws and
regulations of the People’s Republic of China. For matters not stipulated in
applicable laws and regulations, Party A and Party B shall come into
supplementary agreement in writing. Upon endorsed by the Guarantor, the
supplementary agreement shall be deemed as an appendix to this Contract and have
the same legal force as this Contract.

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

    Article
IX Dispute Resolution

     

    In the
event that any dispute over performance of this Contract is aroused, both
parties hereinto shall seek negotiated settlement. In the event that negotiation
fails and both sides have to turn to litigation, the dispute shall be governed
at the local court where Party B resides.

     

    Article
X Execution and Termination of Contract

     

    This
Contract shall come into effect after being signed and sealed by Party A and
Party B hereinto from the date of signing to the date on which the loan
principal, interest, compound interest, default interest, liquidated damage,
compensation for damage and expenses arising from the realization of creditor’s
right by Party B have been cleared off.

     

    Article
XI Contract Wording

     

    This
Contract is drawn up in duplicate.
Both parties hereinto shall hold one copy
respectively and each copy has equal legal effect.

     

    Article
XII Special Announcement

     

    Party B
has already adopt reasonable ways to call Party A’s attention to terms
pertaining to exemption or limitation of its liabilities under this Contract,
and has given full explanations on related terms in regard to Party A’s request.
There is no objection to understanding of all clauses and contents between Party
A and Party B.

     

     

    Party A:
Caopu Arts & Crafts Co., Ltd. (Stamped)

     

    Legal
Representative or

     

    Authorized
Agent of Party A: Li Jinliang (Sealed)

     

    Address:
2888 Qinghe Rd., Qinghe Office, Cao County

     

    Tel:
3430928

     

     

    Party B:
Laishang Bank Heze Branch (Stamped)

     

    Legal
Representative or

     

    Authorized
Agent of Party A: [__]
(Sealed)

     

    Address:
436 Zhonghua Rd., Mudan District, Heze City

     

    Tel:
0530-5267567

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