Guarantee Contract

 

(No. (2013) SDXTHS08 – YYFM01)

 

(Unofficial Selective Summary Translation)

 

Guarantor:

Inner Mongolia Yongye Nongfeng Biotechnology Co., Ltd.

Legal Representative: SUN Xiaofeng

 

Creditor:Shandong International Trust Company Limited

Legal Representative: XIANG Kaijin

 

To ensure the performance by the debtor, Inner Mongolia Yongye Fumin
Biotechnology Co., Ltd., of the Trust Loan Contract (contract No. (2013)
SDXTHS08 – YYFM) (“Master Contract) between the debtor and the creditor, the
Guarantor is willing to provide guarantee to the Creditor and the two parties
have entered into agreement as follows.

 

Article 1Claims Guaranteed and Scope of the Guarantee

 

1.1          The claims guaranteed by the Guarantor are the claims under the
Master Contract, in the amount of ¥80,000,000.00 as a liquid capital trust loan.
The interest rate and term of the loan are specified in the Master Contract.

 

1.2          The scope of the guarantee is the loan principal, interest,
compound and penalty interest, default damages and all the fees and expenses
incurred in the course of realizing the Creditor’s claims.

 

Article 2Responsibilities and Term of the Guarantee

 

2.1          The guarantee hereunder is joint and several responsibility
guarantee. If there are more than one guarantor for the Master Contract, the
Guarantor shall still bear full responsibility for guarantee within its scope.

 

2.2          The Guarantor agrees that, if the debtor or any third party
provided pledge or mortgage, the Creditor shall have the right to demand that
the Creditor immediately repay all the loan past due without having to exercise
other rights.

 

2.3          The term of the guarantee is one year after the expiration of the
performance period for the debt under the Master Contract.

 

 

 

 

Article 3The Guarantor’s Representations and Warranties

 

3.1          The Guarantor is a legal person duly established in accordance with
the law of the PRC or a natural person with full capacity for civil activities.

 

3.2          The Guarantor fully understands the contents of the Master Contract
and the execution and performance of this contract is the expression of the
Guarantor’s true intent. If the Guarantor is a legal, the Guarantor has obtained
all due approval and authorization, both internal and external, necessary for
the execution of this contract. If the Guarantor is a natural person, the
Guarantor has obtained all necessary authorization and consent.

 

3.3          The execution and performance of this contract will not violate any
restrictions on the Guarantor or the Guarantor’s assets, nor will they violate
any other contracts or legal documents to which the Guarantor is a party.

 

3.4          All the documents and information provided in during the course of
execution and performance of this contract are valid, legal, truthful, accurate
and complete.

 

3.5          As of the date of execution, the Guarantor is not involved in any
litigation, arbitration, or administrative sanction; there exists no instances
of delinquency, material deterioration of repayment ability or insolvency or
other adverse events that will affect the Guarantor’s ability to provide
guarantee.

 

Article 4The Guarantor’s Rights and Obligations

 

4.1          If the debtor under the Master Contract fails to repay the
principal and interest of the loan in full when it is due, the Creditor must,
within the scope of the guarantee, unconditionally repay all the amounts due to
the Creditor.

 

4.2          The Creditor agrees to provide cooperation, during the term of the
guarantee, to the Creditor in its monitoring and review of the Creditor’s
income, business operation and financial situation.

 

4.3          Before the full repayment of all the debt under the Master
Contract, the Guarantor cannot exercise its right for compensation against the
debtor on the ground of the performance of this contract, except when such
exercise leads to the performance of the obligation to repay the Creditor on
behalf of the Creditor or other guarantors.

 

4.4          In event of the following, the Guarantor must notify the Creditor
in advance or within 2 days of its occurrence:

 

(1)          Change of operation structure such as subcontracting, lease, joint
venture, M&A, spin-off, equity restructuring, etc.

 

(2)          Change in the scope of operation, registered capital, equity or
partners.

 

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(3)          Involvement in major economic dispute or likelihood to be forced to
pay compensation or fines.

 

(4)          Ceasing of business, suspension of operation, dissolution, filing
for bankruptcy, revocation or suspension of business license (Note: if the
Guarantor is a natural person, the joint property owner must notify the Creditor
in the event of the Guarantor’s death).

 

(5)          Material adverse effect on the Guarantor’s ability to perform its
obligations to provide guarantee because of other guarantee, pledge or mortgage
to a third party.

 

(6)          Execution of other contracts that will have a material adverse
effect on the Guarantor’s ability to perform its obligations to provide
guarantee.

 

(7)          Deterioration of the Guarantor’s operation or financial situation
or of the Guarantor’s income if the Guarantor is a natural person.

 

(8)          Engagement in related party transactions with the Guarantor’s
control person or major shareholder, thus affecting its normal operation.

 

(9)          Major crisis in the operation or financial situation of Guarantor’s
control person or affiliates, thus affecting its normal operation.

 

(10)        Change of the Guarantor’s name, legal representative, address and
contact information.

 

(11)        Other events that will adversely affect the Guarantor’s ability to
provide guarantee.

 

Article 5The Creditor’s Rights and Obligations

 

5.1          The Creditor right to request the Guarantor to provide report on
its income, operation and financial situation and other information regarding
its assets.

 

5.2          The Creditor has the right to demand that the Guarantor assume the
joint and several responsibilities for guarantee if the debtor fails to repay
the loan under the Master Contract.

 

5.3          The Creditor has the right to transfer its claims without the need
to obtain the approval of the Guarantor and the Guarantor must still bear
responsibility for guarantee with the scope specified herein.

 

5.4          During the effective term of this contract, if the Guarantor
changes its name, legal representative, address and contact information without
notifying the Creditor promptly, all notices or documents sent to the Guarantor
based on contact information set forth herein will be considered received by the
Guarantor.

 

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5.5          The Creditor has the right to provide information on the
Guarantor’s credit to bank regulatory organization, People’s Bank of China or
other financial monitoring agencies.

 

5.6          The Creditor has the right to make announcement or publish
information in the media if the Guarantor’s attempts to circumvent the
Creditor’s supervision, delay the performance of its obligation to guarantee or
evade debts.

 

Article 6Deduction Provision

 

6.1          If the debtor under the Master Contract fails to repay the loan in
full at the expiration of the loan performance period, the Guarantor hereby
authorizes the Creditor to deduct funds from any of the Guarantor’s accounts set
up with Baoshang Bank as repayment of the loan without further authorization.

 

6.2          After making such deduction, the Creditor must notify the Guarantor
of the details of such deduction.

 

6.3          If the deducted fund is in a different currency, the Creditor will
make currency conversion at the rate published on the day of such deduction.

 

Article 7Other Provisions

 

[None]

 

Article 8Contract Effectuation and Effectiveness

 

8.1          This contract becomes effective after it is executed by the legal
representatives of both parties.

 

8.2          The effectiveness of this contract is independent of the Master
Contract, and the invalidity of the Master Contract or the provisions therein
shall not the validity of this contract.

 

Article 9Liability for Breach

 

9.1          If the representations made by the Guarantor in Article 3 herein
are false, thus causing loss to the Creditor, the Guarantor must be liable for
damages.

 

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9.2          If the Guarantor refuses to perform its obligations specified
herein or fails to perform them completely, the Guarantor must pay damages to
the Creditor in the amount of 10% of the loan principal under the Master
Contract and compensate the Creditor for any losses.

 

9.3          If this contract becomes invalid due to the Guarantor’s fault, the
Guarantor must compensate the Creditor for all the resulting losses within the
scope of the guarantee.

 

Article 10Dispute Resolution

 

10.1        The execution, performance and interpretation of this contract and
the resolution of any dispute arising from this contract are governed by the law
of the People’s Republic of China.

 

10.2        Any dispute arising from this contract must be resolved through
consultation; if such consultation fails, it can be submitted to the people’s
court at Party B’s location.

 

10.3        If the parties hereto have processed certification of enforcement
power, the Creditor may directly appeal to the people’s court for enforcement
action.

 

This contract has one format and five counterparts and all have the same legal
effect.

 

Guarantor:/seal/ Inner Mongolia Yongye Nongfeng Biotechnology Co., Ltd.

Legal Representative:   /s/ SUN Xiaofeng

 

Creditor:/seal/ Shandong International Trust Company Limited

Legal Representative:   /s/ LI Xiaopeng

 

Guarantor:/s/ WU Zishen

 

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