Fufaiting Financing Contract


 


(Contract No. 2012DY-F1205)


 


(This is a Summary Translation for Reference
Only)


 


Party A:           
Inner Mongolia Yongye Nongfeng Biotechnology Co., Ltd.


Legal Representative:


 


Party B:           
CITIC Bank Corporation Limited (CITIC), Hohhot Branch 


	Legal Representative:	SUN Xiaofan



 


	Place of Execution:	Hohhot Branch
	Date of Execution:	December 5, 2012


 


Party A applies to Party B for financing
by selling in the Fufaiting method Party A’s accounts receivable from its export business and Party B accepts Party A’s
application. The two parties have entered into the following contract in accordance with the applicable law and statutes.


 


Article I            Definition


 


1.        “Fufaiting”
means the financing activity provided by Party B by buying out with the waiver of recourse the long-term promissory bills and long-term
debts guaranteed or confirmed by bank letter of credit/acceptance notes obtained legitimately by Party A from its export business,
long-term promissory bills issued by Party A guaranteed by an importer’s bank, or long-term promissory bills issued by an
importer.


 


2.        “Buy-out
target” means accounts receivable represented in the form of certain notes and invoices and all the associated rights, including
but not limited to right to demand payment, guarantee interest, recourse against a third party but excluding Party A’s responsibilities
and obligations under any trade contracts with regard to any person and/or relevant third party.


 


3.        “Term
of the buy-out” means the period from the day of Party B’s buy-out of such debts to the due date of the bank letter
of credit/acceptance note or other predetermined due date, or to the due date of the bank letter of credit/acceptance note from
an importer’s bank, plus at least a 3-day grace period.


 


4.        “Buy-out
net amount” means the amount of the face value of the debt claims minus the buy-out interest.


 




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Article II           Notes
and Invoices That Party A Must Provide


 


At the time of transferring the debt claims
underlying the long-term letters of credit by Party A to Party B, Party A must provide the following to Party B:


 


1.        Copies
of letters of credit and their amendments (if any);


 


2.        Copies
of all the notes and invoices underlying such letters of credit;


 


3.        The
original copies of the bank promissory notes or acceptance bills;


 


4.        Other
documents requested by Party B.


 


If the debt claims transferred by Party
A are not under any letters of credit (including but not limited to bank promissory notes or acceptance bills), Party A must provide
to Party B the following notes and invoices:


 


1.        Original
bank promissory notes or acceptance bills with words “guarantee” or “acceptance” and seals from the issuing
bank;


 


2.       Original
letters of credit and their amendments (if any) and confirmation letters/telegraphs from the issuing bank agreeing to the transfer
of the rights underlying such letters of credit;


 


3.        Copies
of all notes and invoices underlying bank promissory notes or acceptance bills;


 


4.        Other
documents requested by Party B.           


 


Article III          Business
Procedures


 


During the effective period of this contract,
Party A must submit a “Fufaiting Financing Application” to Party B for each Fufaiting service. Such application will
be the irrevocable offer from Party A and will be the component part of this contract. Upon approval, Party B will deposit the
buy-out net amount to following Party A’s account:


 


Bank:    CITIC Bank Corporation Limited (CITIC), Hohhot
Branch


 


Account Number:           7271310182200023199


 


Article IV          Calculation
of the Buy-out Net Amount


 


The two parties agree that the calculation
method for the buy-out net amount is:


 




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Fufaiting buy-out net amount = face value
of the debt claims – buy-out interest – relevant fees;


 


Buy-out interest = face value of the debt
claims x term of the buy-out (number of days) x buy-out rate/360;


 


Buy-out rate = LIBOR + risk rate (risk rate
is to be determined by the country rating of the importing country and the credit assessment of the letters of credit issuing bank);


 


Grace period is the number of days between
the due dates of the accounts receivable and the actual dates when Party B receives payments.


 


Relevant fees mean expenses involved in
settlements.


 


Article V           Party
A’s Representations and Warranties


 


1.        When
applying for Fufaiting service hereunder, Party A must promptly provide to Party B the letters of credit and bank promissory notes
or acceptance bills mentioned in Article II. Party B has the right to refuse to handle the Fufaiting service if the bank promissory
notes or acceptance bills do not meet Party B’s requirements.


 


2.        The
bank promissory notes or acceptance bills mentioned in Article II submitted are authentic and valid and meet the international
standards or customs, the state’s relevant regulations and Party B’s requirements.


 


3.        Party
A has the complete rights to the debt claims transferred to Party B in accordance with the provisions herein, there are no defects
on such rights, and such rights have not been transferred either in part or in whole to any third party.


 


4.        The
transfer of the claims hereunder is complete transfer and Party B will have the complete rights to such claims.


 


5.        The
background of trades involved in this contract is true and legitimate and there is no situation where there are fraud or any trade
in violation of law, any stop orders from any bank or judicial organization, thus causing Party A to be unable to recover such
debt claims.


 


6.        All
the conditions (buy-out net amount, buy-out rate and term as determined by Party B) governing such buy-out are to be based on those
set forth in the review section of the “Fufaiting Financing Application,” and Party A completely accept such conditions.


 


7.        Party
A transfers completely and legally the debt claims hereunder to Party A; however such transfer will not cause Party B to be responsible
for any of Party A’s obligations under any specific trade contract, and Party A is still responsible for any such obligations.


 




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8.        After
obtaining financing, if Party A receives any payment applicable to the accounts receivable hereunder, Party A must notify Party
B immediately and hand over such payment to Party B.


 


9.        Party
A must assist Party B at Party B’s request in collecting payments for such accounts receivable.


 


Article VI          Waiver
of Recourse and Exceptions


 


After Party B has processed the Fufaiting
service applied for by Party A, Party B will obtain the notes and invoices corresponding to the debt claims and Party B will waive
recourse against Party A except under the following circumstances:


 


1.        The
notes and invoices involving the trades are not authentic or are in violation of laws, statutes and regulations;


 


2.        The
notes and invoices corresponding to the debt claims transferred hereunder are fraudulent;


 


3.        Party
A violates the representations and warranties made in Article V herein or other provisions stipulated herein;


 


4.        There
are stop-payment orders placed by any court on the letters of credit corresponding to the notes and invoices regarding the debt
claims;


 


5.        Party
A willfully, or Party A’s negligence, causes any defects to the effectiveness of this contract or obstructs Party B’s
exercise of any rights transferred.


 


Upon the occurrence of any of the above,
Party B shall have the right to demand that Party A return all the amount that Party B has paid to Party A and assume responsibility
for all losses suffered by Party B. In addition, Party B shall have the right to charge Party A a default penalty at the following
rate starting from the date of the buy-out until the full repayment of all the buy-out amount:


 


(1)      At
the daily rate of 0.05% on the buy-out net amount;


 


(2)      (N/A)


 


(3)      (N/A)


 


Upon the occurrence of the above, Party
B shall have the right to deduct the relevant amount directly from Party A’s account with Party B or to pursue Party A by
other means.


 


If Party A’s breach causes Party B
to resort to litigation, arbitration or other means to realize its claims, Party A must be responsible for the collection fees,
litigation fees (or arbitration fees), insurance fees, public announcement fees, enforcement fees, attorney fees, travel and lodging
expenses and other fees incurred by Party B.


 




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Article VII         Other
Matters


 


1.        All the “Fufaiting Financing Applications”
hereunder are the inseparable parts of this contract.


 


Article VIII       Governing
Law


 


This contract is governed by the law of
the People’s Republic of China


 


Article IX         Resolution
of Dispute


 


All disputes arising from this contract
must be resolved through consultation between the two parties; if such consultation fails, either party may submit such disputes
to the court at Party B’s location for resolution.


 


Article X           Effectuation,
Modification and Dissolution


 


This agreement shall become effective upon
execution by the respective representatives of the parties hereto;


 


After this contract has become effective,
neither party can make modify or dissolve it without the other party’s approval; if the contract does need to be modified
or dissolved, written notice must be given at least 30 days in advance and the parties hereto must enter into written agreement
regarding its dissolution.


 


Article XI         This
contract is in duplicates with one to each party.


 


	Party A:	(Seal or Special Business Seal)
	 	/seal/   Inner Mongolia Yongye Nongfeng Biotechnology Co., Ltd.


Legal Representative:   /s/ ZHAO Shijun


 


	Party B:	(Seal or Special Business Seal)
	 	/seal/ CITIC Bank Corporation Limited (CITIC), Hohhot Branch,


Legal Representative:   /s/ SUN Xiaofan


 




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