EX-10.12









Exhibit 10.12




LOAN AGREEMENT




BETWEEN



DEG — DEUTSCHE INVESTITIONS-



UND ENTWICKLUNGSGESELLSCHAFT MBH



(hereinafter “DEG”)



and



CHINA LINONG INTERNATIONAL LIMITED



(hereinafter the “BORROWER”)









 



2


TABLE OF CONTENTS




	 	 	 	 	 

	Article 1 DEFINITIONS AND INTERPRETATION
	 	 	3	 
	Article 2 LOAN AMOUNT AND LOAN PURPOSE
	 	 	3	 
	Article 3 CALL NOTICE AND DISBURSEMENT PROCEDURE
	 	 	5	 
	Article 4 CONDITIONS PRECEDENT TO DISBURSEMENT
	 	 	6	 
	Article 5 INTEREST
	 	 	8	 
	Article 6 FEES
	 	 	10	 
	Article 7 REPAYMENT
	 	 	10	 
	Article 8 PREPAYMENT
	 	 	11	 
	Article 9 PAYMENTS
	 	 	11	 
	Article 10 DELAYED PAYMENTS
	 	 	12	 
	Article 11 NEGATIVE PLEDGE / LAND RIGHTS
	 	 	13	 
	Article 12 REPORTING
	 	 	13	 
	Article 13 ENVIRONMENTAL SOCIAL & HEALTH COMPLIANCE
	 	 	15	 
	Article 14 REPRESENTATIONS AND WARRANTIES
	 	 	17	 
	Article 15 GENERAL COVENANTS
	 	 	19	 
	Article 16 EVENTS OF DEFAULT
	 	 	22	 
	Article 17 COSTS AND EXPENSES
	 	 	23	 
	Article 18 GOVERNING LAW AND JURISDICTION
	 	 	24	 
	Article 19 MISCELLANEOUS
	 	 	25	 






Schedules





	1.	 	Definitions
	 
	2.	 	Project Description
	 
	3.	 	Call Notice
	 
	4.	 	Form of Letter to Auditors
	 
	5.	 	Form of Certificate of Incumbency and Authority
	 
	6.	 	Form of Letter to Process Agent
	 
	7.	 	Excluded Activities
	 
	8.	 	Shareholders of the BORROWER










 




3







LOAN AGREEMENT



The BORROWER is a limited liability company incorporated and existing under the laws of the British
Virgin Islands (Reg. No. 1017713) having its registered office at P.O. Box 957, Offshore
Incorporations Centre, Road Town, Tortola, British Virgin Islands.



The BORROWER intends to establish farm land, greenhouses and irrigation system and accessory
facilities through its operating affiliates in the People’s Republic of China which requires an
investment of approximately USD 18,000,000.



DEG is a financial institution incorporated and
existing as a limited liability company under the
laws of the Federal Republic of Germany (Reg. No. — HRB 1005, AG
Köln) having its registered office
at Köln, Federal Republic of Germany.



At the BORROWER’s request, DEG intends to participate in the financing of the Project by means of
a long-term loan. Therefore, the BORROWER and DEG enter into the following Agreement:




Article 1

DEFINITIONS AND INTERPRETATION





	1.	 	In the context of this Agreement all capitalised terms shall have the meanings as set out in
Schedule 1.






	2.	 	Unless otherwise set forth, any reference to an Article or a Schedule is a reference to that
Article or Schedule of this Agreement.






	3.	 	The singular includes the plural and vice versa.





Article 2

LOAN AMOUNT AND LOAN PURPOSE





	1.	 	DEG undertakes to lend the BORROWER an amount of up to USD 18,000,000 (in words: eighteen
million United States Dollars) and the BORROWER accepts the Loan in accordance with the terms
and conditions of this Agreement.






	2.	 	The BORROWER shall transfer the Loan proceeds to the Chinese Affiliates where the Loan shall
exclusively be applied to finance the Project in accordance with the Project Description as
set out in Schedule 2. The Loan proceeds shall be transferred to the Chinese Affiliates by
way of increase in the registered capital of the Chinese Affiliates and in the form of
shareholder loans with a repayment schedule corresponding to the Loan in accordance with
applicable law as follows:










 



4







	 	 	 	 	 	 	 	 	 
	 	 	Maximum amount of Loan	 	 
	 	 	proceeds to be used to	 	Maximum amount of Loan
	 	 	increase the	 	proceeds to be used to
	 	 	registered capital	 	provide shareholder loan
	Linong (Huizhou)
	 	Nil	 	USD	6,000,000	 
	Linong (Fuzhou)
	 	USD	8,000,000	 	 	USD	4,000,000	 







	3.	(a)	 	 Subject to Article 2 (3) (b) and (c), in the event that the BORROWER decides at its
discretion to proceed with any Pre-lPO Financing,






	 	(i)	 	DEG shall have the right, but not the obligation, to subscribe for
new ordinary or preferred shares (as the case may be) in the BORROWER at the same
price and on the same payment terms (other than the manner of payment of the
subscription price) as the other subscribers in the Pre-lPO Financing are
subscribing by converting up to an aggregate amount of USD 5,000,000 outstanding
under the Loan.
	 
	 	(ii)	 	If the Loan has been repaid in full prior to such Pre-lPO Financing,
DEG shall have the right, but not the obligation, to subscribe for new ordinary
or preferred shares (as the case may be) in the BORROWER at the same price and on
the same payment terms as the other subscribers in the Pre-lPO Financing are
subscribing in the aggregate amount of up to USD 5,000,000.
	 
	 	(iii)	 	If the Loan has been repaid to the extent that the amount
outstanding under the Loan is less than USD 5,000,000, DEG shall have the right,
but not the obligation, to subscribe for new ordinary or preferred shares (as the
case may be) in the BORROWER at the same price and on the same payment terms
(other than the manner of payment of the subscription price) as the other
subscribers in the Pre-lPO Financing are subscribing in the aggregate amount of up
to USD 5,000,000, by converting the amount outstanding under the Loan and by
paying the balance of the subscription price on the same payment terms as the
other subscribers in the Pre-lPO Financing are subscribing.










 



5








	 	(iv)	 	In the event that DEG decides to exercise its right to subscribe
for new ordinary or preferred shares (as the case may be) in the BORROWER
pursuant to any Pre-lPO Financing, the shares to be issued to DEG pursuant to
this Article 2 (3) shall rank pari passu with all the other shares to be issued
to the other subscribers in such Pre-lPO Financing.
	 
	 	(v)	 	In the event that DEG decides to exercise its right to subscribe for
new ordinary or preferred shares (as the case may be) in the BORROWER pursuant to
any Pre-lPO Financing by converting any amount outstanding under the Loan pursuant
to this Article 2 (3), the amount so converted shall be deemed to be a repayment
under this Agreement and shall reduce the Repayment Instalments under Article 7 in
inverse order of maturity.






	 	(b)	 	The right granted to DEG under Article 2 (3) (a) shall not be exercisable
with respect to the first occasion on which the BORROWER decides to raise Pre-lPO
Financing after the signing of this Agreement, provided that (i) no more than
USD6,000,000 is being raised by the BORROWER on such occasion, (ii) such Pre-lPO
Financing is completed on or before 31 January 2010 and (iii) only existing
Shareholders and/or their affiliates will be invited by the BORROWER to participate
in such Pre-lPO Financing.
	 
	 	(c)	 	For the avoidance of doubt, any right conferred upon DEG under this Article 2
(3) shall only be exercisable by DEG in respect of any Pre-lPO Financing to be
conducted and completed by the BORROWER before an initial public offering of the
shares of the BORROWER, and such right shall terminate immediately upon such initial
public offering of the shares of the BORROWER.





Article 3

CALL NOTICE AND DISBURSEMENT PROCEDURE





	1.	 	The Loan will be disbursed in the maximum number of three instalments of at least USD
5,000,000 (in words: five million United States Dollars) each (other than the last
disbursement) according to the Project’s requirements upon the receipt of a call notice by
DEG.
	 
	2.	 	A call notice shall only be valid if






	 	a)	 	all conditions precedent pursuant to Article 4 have been fulfilled,
	 
	 	b)	 	it is in the form of Schedule 3,










 



6








	 	c)	 	it is received by DEG at least 10 Business Days prior to the requested date of
disbursement.






	3.	 	After each disbursement the BORROWER shall — if necessary under any applicable law -
register the transfer of funds promptly with the relevant authorities and shall send DEG a
confirmation of receipt together with copies of the registration and the bank statement
showing the date and amount of the Loan received.
	 
	4.	 	DEG may suspend or terminate the right of the BORROWER to disbursements of the undrawn
portion of the Loan if the total disbursement has not been made by 30 June 2010.





Article 4 

CONDITIONS PRECEDENT TO DISBURSEMENT



DEG shall be obliged to disburse the Loan in accordance with Article 3 (Call Notice and
Disbursement Procedure) only if





	1.	 	the following reports have been provided to DEG in the English language and are
satisfactory to DEG:






	 	a)	 	latest version of unaudited consolidated financial statements (balance sheet,
profit and loss account, management report) of the BORROWER for the Financial Years
2006/7 and 2007/8 with a confirmatory letter from the Auditor satisfactory in form and
substance to DEG stating that the audit procedure has been completed with the
exception of outstanding legal matters,
	 
	 	b)	 	the latest version of the unaudited consolidated financial statement (balance
sheet, profit and loss account, management report) of the BORROWER for the Financial
Year 2008/9 signed by Mr MA Shing Yung,
	 
	 	c)	 	consolidated management accounts for the period from April 2009 until
September 2009 signed by Mr MA Shing Yung;






	2.	 	the BORRWER has appointed an experienced financial professional satisfactory to DEG to
strengthen the reporting standards and the communication with DEG and international investors
and has provided to DEG evidence thereof;
	 
	3.	 	the Finance Agreements and the Project Documents are in place, in form and substance
satisfactory to DEG and shall have become unconditional and effective;










 



7








	4.	 	all Authorisations shall have been obtained;
	 
	5.	 	a lawyer in the British Virgin Islands appointed by DEG has rendered a legal opinion as to
the laws of the British Virgin Islands to DEG’s satisfaction on the following points:






	 	a)	 	the legal validity of the BORROWER’s establishment as a limited liability
company or other form of corporation under the law of the British Virgin Islands,
	 
	 	b)	 	the legal validity of all provisions of this Agreement, its enforceability in
the British Virgin Islands, and its admissibility as evidence, in particular the
validity of Article 19 (10),
	 
	 	c)	 	the legal validity and enforceability of the Finance Agreements and the
Project Documents to which the BORROWER is a party,
	 
	 	d)	 	the existence or procurement of all relevant Authorisations under the law of
the British Virgin Islands required for the BORROWER to enter into this Agreement,
	 
	 	e)	 	any priority or privilege that any creditor may have by operation of law;






	6.	 	a lawyer in the People’s Republic of China appointed by DEG has rendered a legal
opinion as to the laws of the People’s Republic of China to DEG’s satisfaction on the
following points:






	 	a)	 	the legal validity of the Chinese Affiliates’ establishment as limited
liability companies,
	 
	 	b)	 	the legal validity of Article 2 (2) and Schedule 2 of this Agreement with
respect to the transfer of the Loan proceeds to the Chinese Affiliates by way of
increase in the registered capital of the Chinese Affiliates and in the form of
shareholder loans and its enforceability in the People’s Republic of China,
	 
	 	c)	 	the existence or procurement of all Authorisations required under the laws of
the People’s Republic of China in connection with the transfer of the Loan proceeds to
the Chinese Affiliates.






	7.	 	evidence has been submitted to DEG of the BORROWER’s compliance with the
following:






	 	a)	 	the BORROWER and each of the Chinese Affiliates have appointed a member of
the senior management to be responsible for environmental and social issues,










 



8








	 	b)	 	the BORROWER has provided evidence that the PRC Members (other than Linong
(Quanzhou)) have obtained the land use permits for all sites (except for the farm
located at Nursery Street, Brook County, Guyuan Town, Zhangjiakou city, Hebei Province
of the People’s Republic of China with a total acreage of 3182mu), satisfactory to
DEG;
	 
	 	c)	 	the BORROWER has provided a schedule to the Environmental and Social Action
Plan for carrying out the Environmental Impact Assessment for all sites of the PRC
Members and for obtaining the environmental permits, satisfactory to DEG.






	8.	 	a copy of the letter from the BORROWER to the Auditors in the form of Schedule 4 (Form of
Letter to Auditors) has been submitted to DEG;
	 
	9.	 	evidence in writing has been submitted to DEG of the consent of the person authorised to
receive service in accordance with Article 18 (5) and Schedule 6 (Form of Letter to the
Process Agent) and DEG has received evidence of the payment of the fees due and payable to
such process agent;
	 
	10.	 	DEG has received the Certificate of Incumbency in the form of Schedule 5 as well as
(certified) copies of the identity cards or passport of the persons authorized thereunder;
	 
	11.	 	(not applicable for the first disbursement) evidence has been provided to DEG that the
BORROWER has used the Loan proceeds for the last disbursement in compliance with Article 2
(2) and the Project Description in Schedule 2;
	 
	12.	 	all fees, costs and expenses due and payable according to Article 6 (Fees) and Article 17
(Costs and Expenses) have been paid; and
	 
	13.	 	no Event of Default has occurred or is threatening to occur.




DEG shall notify the BORROWER promptly upon receiving all the documents and other evidence listed
in this Article 4.




Article 5

INTEREST





	1.	 	(a) 	Subject to paragraph (b) of this Article 5 (1), during the Relevant Period, the
BORROWER shall pay interest on the disbursed amount of the Loan at the six










 



9








	 	 	 	months USD LIBOR rate plus 12% p.a. determined in accordance with Articles 5(2)
and (3).
	 
	 	(b)	 	In respect of the first Interest Period for the first disbursement, the USD
LIBOR rate applicable shall be the USD LIBOR of such shorter period which is closest
in length to the duration of such Interest Period; in case the two periods differ
equally from the Interest Period, the rate for the longer period shall apply. The USD
LIBOR rate so determined shall similarly apply to any further disbursement until the
end of the first Interest Period.






	2.	 	On each Interest Determination Date during the Relevant Period, DEG shall fix the applicable
interest rate at the relevant USD interest rate applicable to the relevant Interest Period
rounded to 5 (five) decimal places quoted on Reuters’ Screen LIBOR 01 Page at 11:00 a.m.
London time. DEG shall promptly inform the BORROWER of the applicable interest rate. Subject
to Article 5 (4), the interest rate thus established shall apply to all disbursements of the
Loan made during that relevant Interest Period and shall be binding on the BORROWER except in
the event of manifest error.
	 
	3.	 	If the relevant LIBOR rate is not published on any Interest Determination Date during the
Relevant Period, DEG shall inform the BORROWER promptly thereof and shall fix the interest
rate at the arithmetic mean of the interest rates quoted by three leading commercial banks
active in the interbank market for United States Dollars in London selected by DEG after
consultation with the BORROWER.
	 
	4.	 	On the Interest Conversion Date, the interest rate pursuant to Article 5 (1) shall be
converted to a fixed interest rate. From the Interest Conversion Date until (and including) 14
May 2013 the BORROWER shall pay interest at the aggregate rate of 12% p.a. (twelve per cent
per annum) plus the DEG Base Rate prevailing two LIBOR Banking Days prior to the Interest
Conversion Date.
	 
	5.	 	On 15 May 2013 the fixed interest rate pursuant to Article 5 (4) shall be re-converted to a
variable interest rate and the BORROWER shall from then on pay interest on the disbursed
amount of the Loan at the six months USD LIBOR rate plus 12% p.a. The provisions of
sub-paragraphs (1) to (3) of this Article shall apply accordingly.
	 
	6.	 	Interest shall accrue from the date disbursement of the relevant Loan proceeds under this
Agreement is made to the BORROWER until the day immediately before repayment in respect of
such loan is credited to DEG’s bank account.
	 
	7.	 	Interest is payable semi-annually in arrears on each Payment Date.










 



10








	8.	 	Interest and commitment fee accruing under this Agreement will accrue from day to
day and is calculated on the basis of the actual number of days elapsed and a year of 360
days.





Article 6

FEES





	1.	 	The BORROWER shall pay a commitment fee on undisbursed Loan amounts
calculated at the rate of 0.5% p.a. (zero point five per cent per annum), for the period
from the date of this Agreement to the Interest Conversion Date.
	 
	 	 	The provisions of Article 5 (7) and (8) shall apply accordingly.
	 
	2.	 	The BORROWER shall pay a front-end-fee of USD 216,000 (in words: two hundred
sixteen thousand United States Dollars). An amount of USD 75,000 (in words:
seventy five thousand United States Dollars) has already been paid. The outstanding
balance of USD 141,000 (in words: one hundred forty one thousand United States
Dollars) is payable within 30 days of the date of this Agreement but in any event prior
to the first disbursement of the Loan.





Article 7

REPAYMENT





	1.	 	Subject to Article 2 (3) (a) (v), the BORROWER shall repay the Loan as follows:





	 	 	 	 	 
	Payment Dates	 	Repayment Instalments in USD
	15 May 2013
	 	 	2,250,000	 
	15 November 2013
	 	 	2,250,000	 
	15 May 2014
	 	 	2,250,000	 
	15 November 2014
	 	 	2,250,000	 
	15 May 2015
	 	 	2,250,000	 
	15 November 2015
	 	 	2,250,000	 
	15 May 2016
	 	 	2,250,000	 
	15 November 2016
	 	 	2,250,000	 







	2.	 	Undisbursed Loan amounts and any amount outstanding under the Loan which is
converted pursuant to Article 2 (3) shall be set off against the Repayment Instalments in
inverse order of their maturity.


















 





11




Article 8 

PREPAYMENT





	1.	 	The BORROWER may prepay the whole or any part of the Loan amount on any Payment Date by
giving not less than one month’s prior written notice to DEG. The prepaid amount shall be an
amount of not less than 2,250,000 or a multiple thereof.
	 
	2.	 	Any notice of prepayment shall be irrevocable and shall specify the Payment Date upon which
the prepayment is to be made and the amount of such prepayment.
	 
	3.	 	The BORROWER shall repay the indicated amount of the Loan and all accrued interest and any
other fees and/or payments outstanding on the principal amount to be prepaid on the Payment
Date following the notice under Article 8(1).
	 
	4.	 	Repaid amounts under Article 8 (3) shall be set off against the Repayment Instalments in
inverse order of maturity. The BORROWER may not reborrow any part of the amounts prepaid under
this Agreement.
	 
	5.	 	If the BORROWER prepays any amount of the Loan before 15 May 2013 while a fixed interest
rate in accordance with Article 5 (4) applies, the BORROWER shall pay an amount necessary to
compensate DEG for any loss DEG incurs in redeploying the prepaid amount in USD Treasury
Bonds with a maturity corresponding to the remaining maturity of the loan prepaid until 14
May 2013 plus reasonable costs and expenses relating to such prepayment. No compensation will
be applied on prepayments made on or after 15 May 2013 as long as prepayments are made on
Payment Dates.





Article 9 

PAYMENTS





	1.	 	Payment obligations of the BORROWER pursuant to this Agreement will be satisfied only if
and in so far as, the respective amount is credited in United States Dollars by no later than
11:00 a.m. EST on its due date to DEG’s bank account (Citibank New York, 3849-2573, swift
code: CITI US 33 / ABA 02 10000 89 [Chips 0008]), or such other DEG’s bank account notified
to the BORROWER not later than 7 Business Days prior to the respective obligation falling
due.
	 
	2.	 	The set off of counterclaims against DEG’s claims arising under this Agreement and the
BORROWER’s right to withhold payments is not permitted. This shall not apply to the set off
of the BORROWER’s claims that are undisputed or that have been adjudicated upon by way of a
final and binding judgement against DEG.










 



12








	3.	 	To the extent that any payment by the BORROWER is not sufficient to meet all due
obligations, such payment shall be applied first against costs and expenses, payable by the
Borrower under Article 17, then against interest and finally against principal amounts of
the Loan outstanding.
	 
	4.	 	All payments to be made by the BORROWER to DEG pursuant to this Agreement shall be made free
and clear of and without deduction or retention of any present or future tax liabilities,
charges or official payments whatsoever, except where such deduction or retention is
prescribed by law, in which case the sum payable by the BORROWER in respect of which such
deduction or withholding is required to be made shall be increased to the extent necessary to
ensure that, after the making of the required deduction or withholding, DEG receives and
retains a net sum equal to the sum which it would have received and so retained had no such
deduction or withholding been made or required to be made.





Article 10 

DELAYED PAYMENTS





	1.	 	If payments (other than interest) are not made on their due date, additional interest of 2%
p.a. (in words: two per cent per annum) to the applicable interest hereunder, calculated from
the due date to the actual date of payment, shall be payable. The additional interest shall be
paid on the next following Payment Date.
	 
	2.	 	In the event that interest due to DEG are not paid when due, the BORROWER shall pay to DEG
damages in respect of all overdue amounts for the period from the due date thereof until the
date on which the respective overdue amount has been received by DEG, calculated at the same
rate as stipulated in Article 10 (1) above, provided that the BORROWER shall be free to prove
that no damage has arisen, or that damage has not arisen in the asserted amount. The right of
DEG to claim further damages shall remain unaffected.
	 
	3.	 	The provisions of Article 5 (7) and (8) shall be applied accordingly to the calculation of
interest and penalty payments in accordance with this Article. Article 16 and any claims for
damages remain unaffected by the above.










 



13







Article 11 

NEGATIVE PLEDGE / LAND RIGHTS





	1.	 	The BORROWER confirms and represents that its assets are not encumbered by any mortgage,
charge, pledge, right of retention or set off or any other priority or security right or
interest.
	 
	2.	 	The BORROWER shall not encumber or pledge its assets or any part thereof without DEG’s prior
written consent unless DEG is offered the same security on a pro rata basis.
	 
	3.	 	The BORROWER undertakes that new land lease rights to be applied for the land which is used
by the Chinese Affiliates and Linong (Quanzhou) in connection with the Project shall be valid
until full repayment of the Loan.





Article 12 

REPORTING





	1.	 	The BORROWER undertakes to implement adequate financial and cost accounting and control and
reporting systems for the Project and the BORROWER’s operations within 9 months after the date of
this Agreement and to submit the following reports to DEG in the English language:






	 	a)	 	as soon as possible, but in any event not later than four months after the end
of each Financial Year, audited and consolidated annual accounts (balance sheet, profit
and loss statement, cash flow statement, notes to the financial statements) of the
Linong Group (consolidated annual accounts) and the BORROWER which are prepared in
accordance with IFRS, and which have been examined and audited by the Auditors in
accordance with auditing standards generally accepted by international accounting
firms;
	 
	 	b)	 	as soon as possible, but in no event later than four months after the end of
each Financial Year, the annual Management Letter and a confirmation from the Auditors
that the BORROWER is in compliance with its obligations set out in Article 15 (1)(d);
	 
	 	c)	 	quarterly consolidated interim results (balance sheet and profit and loss
statement) of the Linong Group as requested by DEG within 45 days of the end of the
reporting period;










 



14








	 	d)	 	at least 30 days before the start of each Financial Year, a running
consolidated annual business plan including a detailed investment budget and forecast
accounts for the following Financial Year;
	 
	 	e)	 	as soon as possible, but in no event later than three months after each Loan
disbursement, a report outlining (i) which of the Chinese Affiliates has received the
Loan proceeds, (ii) the major terms and condition of the respective shareholder loan
and/or increase in the registered capital (where relevant), (iii) the use of the Loan
proceeds by the Chinese Affiliate(s) (with evidence thereof), (iv) confirmation that
the transfer of the Loan proceeds is in compliance with Article 2 (2) and the Project
Description in Schedule 2;
	 
	 	f)	 	as soon as possible, but in no event later than 120 days after scheduled
implementation of the Environmental and Social Action Plan, an independent monitoring
report satisfactory to DEG;
	 
	 	g)	 	annually and not later than 120 days after the end of each Financial Year with
an Annual Environmental and Social Monitoring Report on the
BORROWER’s compliance with
Article 13 and shall cover each of the Chinese Affiliates. This Annual Environmental
and Social Monitoring Report shall be carried out by an independent external expert,
the terms of reference, expert and report being satisfactory to DEG;
	 
	 	 	 	In case the Annual Environmental and Social Monitoring Report is not delivered to DEG
when due or is not satisfactory to DEG, DEG may take measures to obtain an Annual
Environmental and Social Monitoring Report. This report may, at the choice of DEG, be
issued by an external social and environmental advisor or DEG’s internal social and
environmental department. In any event the BORROWER shall reimburse DEG for all costs
of up to a total amount of USD10,000 per annum reasonably incurred by DEG in connection
with the exercise of such right under this Article.






	2.	 	The BORROWER (if it has not done so) shall authorise the Auditors, in the form of Schedule 4,
to provide DEG directly with information on the BORROWER’s and Linong Group’s commercial and
financial position.
	 
	3.	 	The BORROWER shall notify DEG promptly of any legal action or any occurrence which may
substantially and adversely affect the commercial or financial position of the BORROWER or the
ability of the BORROWER to perform its obligations pursuant










 



15


	 	 	to this Agreement and of the occurrence or potential occurrence of any Event of Default.






	4.	 	The BORROWER shall notify DEG promptly of any event having a direct or potential material
adverse effect on environmental, occupational health & safety or labour issues or adjacent
populations in relation directly or indirectly to the BORROWER or any event that has
attracted the adverse attention of outside parties, created adverse press reports or created
potential liabilities in relation directly or indirectly to the BORROWER, including any
Environmental and Social Claim as well as any measures taken to mitigate or remedy the
effects or cause of such event.






	5.	 	In addition to DEG’s right according to Article 15 (1)(c) DEG shall have the right to
examine the BORROWER’s utilisation of the Loan and its performance under this Agreement after
having received the report referred to in Article 12 (1)(e).
	 
	6.	 	The BORROWER undertakes to promptly inform DEG of all amendments to its statutes, memorandum and
articles which the law stipulates must be published, as well as all transactions which would entail
a change in ownership relating to 10% or more of its issued share capital or a change in its
control, either directly or indirectly, before any such amendment or transaction is conducted. For
the avoidance of doubt, the BORROWER shall have the right to conduct any such amendment or
transaction without the prior consent of DEG, unless any other provision of this Agreement shall
stipulate otherwise.





Article 13 

ENVIRONMENTAL SOCIAL & HEALTH COMPLIANCE





	1.	 	The BORROWER undertakes to, and the BORROWER shall procure that each PRC Member shall, ensure
that it shall diligently design, construct, operate, maintain and monitor all of its plants, sites
and equipment in a safe, efficient and business-like manner and shall at all times comply with:






	 	a)	 	all environmental, labour and other social laws (including international
treaty obligations) applicable in any jurisdiction in which any PRC Member conducts
business,
	 
	 	b)	 	any environmental and social permit, license, consent, approval and other
authorisation necessary for any PRC Member to conduct its business and to ensure that
all such authorisations and approvals are valid, and










 



16








	 	c)	 	(only applicable to the PRC Members) the IFC Performance Standards and the
terms and standards as set out in any ILO convention signed and ratified by the PRC,
as well as ILO Core Labour Standards as set out in ILO Declaration on Fundamental
Principles and Rights at Work from 1998 and the Basic Terms and Conditions of
Employment, and
	 
	 	d)	 	the terms and standards as set out in any United Nations treaty, convention or
covenant on human rights signed and ratified by the country(ies)in which any PRC Member
operates.






	2.	 	The BORROWER shall not and the BORROWER shall ensure that none of the members of the Linong
Group will perform any of the excluded activities as listed in Schedule 7 (Excluded
Activities).






	3.	 	The BORROWER shall, and the BORROWER shall procure that each of the Chinese Affiliates
shall,






	 	a)	 	appoint a member of senior management to be responsible for environmental and
social issues; and
	 
	 	b)	 	suitably train an environmental and / or a social manager.






	4.	 	The BORROWER shall, and the BORROWER shall procure that all PRC Members (where relevant)
shall, at all times comply with the Environmental and Social Action Plan.






	5.	 	The BORROWER shall, and the BORROWER shall procure that the PRC Members shall, develop and
implement a supervision and grievance mechanism related to land lease issues and the
relationship with adjacent communities within 12 months from the date of signing this
Agreement.






	6.	 	The BORROWER shall, and the BORROWER shall procure that all PRC Members (where relevant)
shall, implement an Environmental and Social Management System as set out in the
Environmental and Social Action Plan.






	7.	 	The BORROWER shall, and the BORROWER shall procure that the PRC Members shall, implement and
comply with IFC General Environmental Health and Safety Guidelines, especially Guidelines
Annual Crop Production and Food and Beverage Production as outlined at www.ifc.org.










 



17








	8.	 	The BORROWER shall pay to DEG all costs and expenses (including consultancy costs and any
travel expenses) reasonably incurred by DEG in connection with environmental and social monitoring
of the Loan under this Agreement including any monitoring visits and audits permitted under this
Article of this Agreement. Such monitoring visits and audits shall be conducted no more than once a
year.





Article 14 

REPRESENTATIONS AND WARRANTIES





	1.	 	The BORROWER hereby represents and warrants to DEG that at the time of
execution of this Agreement:






	 	a)	 	(i) the Shareholders are the legal and beneficial owner of 100% of the issued
share capital of the BORROWER and no other person has any actual or contingent right or
option to subscribe for, purchase, otherwise acquire or require the transfer of any
share (or any other interest in the share capital of the BORROWER) or any other
commitment or claim of any nature in relation to any share (or any other interest in
the share capital of the BORROWER) (other than (1) DEG’s rights under this Agreement;
(2) the rights of the holder and beneficiaries of the Option; (3) the rights of the
beneficiary(ies) under the Employee Equity Incentive Plans; and (4) the rights of the
holders of the options to subscribe for 50,246 ordinary shares of the BORROWER in
aggregate pursuant to the resolutions of the BORROWER’s directors passed on 16 April
2009); to the best of its knowledge and belief, and after making due enquiry, no
material fund invested in the BORROWER’s issued share capital or used for the financing
of the Project is of illicit origin nor related to drug trafficking, corruption,
bribery, organised crime or terrorism and the BORROWER furthermore warrants to promptly
inform DEG, if the BORROWER should at any time be informed of an illicit origin of any
such fund; (ii) the BORROWER is the legal and beneficial owner of 100% of the issued
share capital of Land V. Group who in turn is the legal and beneficial owner of 100% of
the registered capital of each of the Chinese Affiliates;; (iii) all members of the
Linong Group (other than the BORROWER) are directly or indirectly wholly-owned by the
BORROWER;
	 
	 	b)	 	(i) it is a company duly incorporated and validly existing under the laws of
the British Virgin Islands and has the corporate power to conduct its business as
presently conducted and as proposed to be conducted and to enter into this Agreement;
(ii) each of the PRC Members (other than Linong (Quanzhou)) is a company duly
incorporated and validly existing under the laws of the People’s










 



18


	 	 	 	Republic of China and has the corporate power to conduct its business as presently conducted
and as proposed to be conducted;






	 	c)	 	it has the power to enter into, perform and deliver, and has taken all necessary action to
authorise its entry into, performance and delivery of the Finance Agreements and the Project
Documents to which it is a party and the transactions contemplated by those documents;
	 
	 	d)	 	the BORROWER’s unaudited consolidated financial statements (balance sheet, profit and loss
account, management report) prepared by the Auditors for the year ended 31 March 2008 and the
year ended 31 March 2007 and the BORROWER’ unaudited consolidated financial statements for
the year ended 31 March 2009 are true and correct at the relevant dates and for the
respective period covered and have been prepared in conformity with accounting principles
generally accepted in People’s Republic of China; since the date of the latest of its
financial statements, the BORROWER has not suffered any material adverse change in its
business prospects nor, since such date has the BORROWER incurred any substantial or unusual
loss or liability;
	 
	 	e)	 	all tax returns and reports of the BORROWER have been filed as required by law and all fees
and other governmental charges payable by the BORROWER have been duly paid;
	 
	 	f)	 	none of the members of the Linong Group is engaged in or threatened by any litigation, the
outcome of which might materially adversely affect the financial position of the Linong Group
or the implementation of the Project and the BORROWER and each of the Chinese Affiliates are
not in violation of any statute or regulation of any governmental authority, the violation of
which has a material adverse effect on its operation and financial position;
	 
	 	g)	 	each of the BORROWER and each of the Chinese Affiliates has good title to all premises at
which its business is carried on and have the right to all concessions, trade names, trade
marks, patents and licence agreements necessary for the conduct of its business as now
conducted and as intended to be conducted;
	 
	 	h)	 	the BORROWER and the Chinese Affiliates are not in breach of any agreement, a breach of
which has a material adverse effect on their financial position;
	 
	 	i)	 	neither the conclusion of this Agreement nor the compliance with its terms will conflict
with the terms of or require any consent under, any agreement or










 



19








	 	 	 	arrangement to which the BORROWER is a party (other than the shareholders’ agreement
dated 28 March 2008 and entered into between, among others, the BORROWER and the
Shareholders) or violate any of the terms of the BORROWER’s constitutional documents
and
	 
	 	j)	 	none of the members of the Linong Group, nor any of their agents, contractors,
sub-contractors or employees or anyone acting on their behalf, has offered, given or
agreed to give to any person employed by or on behalf of any government authority or
any other public body, any improper, dishonest or unlawful gift, commission or
consideration in connection with the Project or any transaction contemplated by this
Agreement;






	2.	 	The rights and remedies of DEG in relation to any misrepresentation or breach of warranty on
the part of the BORROWER shall not be prejudiced by any investigation by or on behalf of DEG
into the affairs of the BORROWER.






	3.	 	Each of the representations set out in Article 14 (1) (other than those under paragraphs (a)
and (d) of Articles 14 (1)) is made on the date of this Agreement, shall survive the execution
hereof and the making of each disbursement hereunder and shall be deemed to be repeated, by
reference to the then existing circumstances, by the BORROWER on each day so long as any
amount is or may be outstanding hereunder.





Article 15 

GENERAL COVENANTS





	1.	 	Unless DEG otherwise agrees the BORROWER shall, and the BORROWER shall procure that each of the
Chinese Affiliates shall,






	 	a)	 	implement the Project and conduct its business activities in accordance with
generally accepted principles of care, prudence and commercial practice as well as in
conformity with sound engineering and technical practices and standards;
	 
	 	b)	 	obtain and maintain in full force and effect and comply with the terms of all
necessary Authorisations;
	 
	 	c)	 	permit DEG’s authorised representatives access to its business and works
premises at any time during normal working hours upon reasonable notice to inspect and
examine its financial records and all documents related to the Project if the BORROWER
does not comply with any material obligation under










 



20


	 	 	 	this Agreement or if DEG has reasonable grounds to believe that the performance of the
BORROWER’s material obligations pursuant to this Agreement is endangered; in such
event the BORROWER shall reimburse DEG for all costs reasonably incurred in connection
with the exercise of such inspection right (business class air fares and reasonable
accommodation expenses for up to 5 days);






	 	d)	 	(only in case of the BORROWER) maintain at all times the following financial
ratios on a consolidated basis:






	 	•	 	Debt / EBITDA Ratio: not exceeding 2.0
	 
	 	•	 	Debt / Equity Ratio: not exceeding 1.5
	 
	 	•	 	Current Ratio: not less than 1.5






	 	e)	 	notify DEG promptly of any legal action or any occurrence which may
substantially and adversely affect the financial position of the BORROWER or the
ability of the BORROWER to perform its obligations pursuant to this Agreement and of
the occurrence or potential occurrence of any Event of Default;






	2.	 	Unless DEG otherwise agrees the BORROWER shall not, and the BORROWER
shall procure that any member of the Linong Group (where relevant) shall not, effect the
following acts:






	 	a)	 	amendment of the purpose or the constitutional documents of the BORROWER or
any of the Chinese Affiliates in a way which is inconsistent with this Agreement;
	 
	 	b)	 	sale, transfer or other disposal of significant components of the fixed assets
(except for intra-group transfers among members of the Linong Group);
	 
	 	c)	 	violation, amendment or termination of the Finance Agreements and Project
Documents or allowing to subsist any grounds for the termination thereof by the
BORROWER or any of the Chinese Affiliates, save as expressly provided for in the
relevant Finance Agreements or Project Documents;
	 
	 	d)	 	entering into or continuing business relations by any member of the Linong
Group with its shareholders, employees and associated companies not being a member of
the Linong Group except on proper commercial terms negotiated at arms’ length;










 



21








	 	e)	 	entering into or continuing business relationships by any member of the Linong Group with
specially designated nationals and blocked persons or entities maintained on the relevant
lists by the European Union or Germany in relation to embargoes or the fight against
terrorism by the European Union or Germany;
	 
	 	f)	 	making any dividend or other capital distribution or similar payment by any member of the
Linong Group on or in respect of any shareholder loan or advance (except for the purpose of
performing any obligation under this Agreement) which would have a material adverse effect on
the ability of the BORROWER to repay the Loan, as long as an Event of Default is subsisting
or is threatening to occur;
	 
	 	g)	 	entering into any partnership, profit-sharing or other similar arrangement (except for the
purpose of performing any obligation under this Agreement) whereby
the BORROWER’s income or
profit can be shared with any other person (other than (1) its shareholders; (2) the holder
and beneficiaries of the Option; (3) the beneficiary(ies) of the Employee Equity Incentive
Plans; (4) the holders of the options to subscribe for 50,246 ordinary shares of the BORROWER
in aggregate pursuant to the resolutions of the BORROWER’s directors passed on 16 April 2009
and (5) any other beneficiary(ies) of any equity incentive plan adopted by any member of the
Linong Group from time to time);
	 
	 	h)	 	offering, giving or agreeing to give (or authorizing any of its agents, contractors,
sub-contractors or employees or anyone acting on their behalf to offer, give or agree to give)
by any member of the Linong Group to any person employed by or on behalf of any government
authority or any other public body, any improper, dishonest or unlawful gift, commission or
consideration in connection with the Project or any transaction contemplated by this
Agreement. The BORROWER further covenants that should DEG notify the BORROWER of its concerns
that there has been a material violation of the provisions of this Article or of any Article
of this Agreement, to the extent permitted by applicable laws, it shall cooperate in good
faith with DEG and its representatives in determining whether such a violation has occurred,
and shall respond promptly and in reasonable detail to any such notice from DEG, and shall
furnish documentary support for such response upon DEG’s reasonable request.










 



22







Article 16 

EVENTS OF DEFAULT



1. Any of the following shall constitute an Event of Default:





	 	a)	 	the BORROWER fails to pay any amount due under this Agreement or under any
other Finance Agreements;
	 
	 	b)	 	the BORROWER is in default in the due performance of any of its other
obligations under this Agreement and such default remains unremedied for 30 days after
written notice thereof has been given to the BORROWER by DEG;
	 
	 	c)	 	the BORROWER is in payment default in respect of an amount exceeding RMB
5,000,000 or its equivalent in any other currency under any loan agreement with any
party other than DEG or any of the BORROWER’s lenders (other than DEG) declares a loan
to the BORROWER in an amount exceeding RMB 5,000,000 or its equivalent in any other
currency immediately due and payable as a result of an event of default;
	 
	 	d)	 	any representation or statement made or confirmed by the BORROWER or any
Shareholder in or in connection with the Project Documents or Finance Agreements or
any other document delivered by or on behalf of the BORROWER (including any call for
disbursement) shall be found to have been incorrect or misleading in any material
respect when made;
	 
	 	e)	 	any insolvency, bankruptcy, liquidation, winding-up, receivership, execution,
sequestration or similar process is initiated or enforced against the BORROWER or a
substantial part of its assets;
	 
	 	f)	 	any government or governmental authority shall have condemned, nationalised,
assumed custody or control or otherwise expropriated all or any substantial part of
the assets of the BORROWER or of its share capital or shall have taken any similar
action that would prevent the BORROWER from carrying on its business;
	 
	 	g)	 	a breach of the Share Retention Letter;
	 
	 	h)	 	any of the Finance Agreements, Project Documents and/or Authorizations which
are material to the Project have been found to be invalid or unenforceable or have been
amended, terminated and/or violated without DEG’s prior written consent;










 



23








	 	i)	 	the transfer of Loan proceeds to the Chinese Affiliates and the use of the
Loan proceeds is not in compliance with the obligations under Articles 2(2) and the
Project Description in Schedule 2 and such non-compliance remains unremedied for 30
days after written notice thereof has been given to the BORROWER by DEG;
	 
	 	j)	 	any event occurs or circumstance arises or threatens to arise which, in the
reasonable opinion of DEG, is likely to have a material adverse effect on the
implementation of the Project, the conduct of the BORROWER’s or the Chinese
Affiliates’ business, or the performance of the BORROWER’s obligations under this
Agreement or which restricts DEG’s rights under this Agreement.






	2.	 	On and at any time after the occurrence of an Event of Default which has not been remedied
or waived, DEG shall be entitled to cancel the total outstanding commitment of the Loan
and/or to demand immediate repayment of the Loan or any part thereof together with accrued
interest and other sums due by the BORROWER under this Agreement and/or to terminate this
Agreement promptly.





Article 17 

COSTS AND EXPENSES





	1.	 	The BORROWER shall bear all costs, taxes, fees and other charges and expenses reasonably
incurred in connection with the execution and implementation of this Agreement, including
(without limitation) those with respect to






	 	a)	 	all payments to be made under this Agreement;
	 
	 	b)	 	the issuance of the legal opinion in accordance with Article 4 (5) and (6); and
	 
	 	c)	 	the pursuance and enforcement of rights in connection with this Agreement.






	2.	 	If the BORROWER fails to pay the amount referred to in Article 17(1) within 7 Business Days
of demand by DEG, DEG shall have the right to pay any amount referred to in Article 17 (1) on
behalf of the BORROWER. The expenses so paid by DEG shall be reimbursed by the BORROWER within
7 Business Days after demand by DEG.










 



24







Article 18 

GOVERNING LAW AND JURISDICTION





	1.	 	This Agreement shall be governed by and construed in accordance with the laws of the
Federal Republic of Germany. If the English term and its legal meaning differs from the
German term and its legal meaning in this Agreement, the German term and its legal meaning
shall prevail.






	2.	 	All legal disputes arising out of or in connection with this Agreement (including all legal
dispute concerning the existence, validity, termination or consequence of invalidity of any
Finance Document) shall be heard and finally settled by an arbitration panel established in
accordance with the arbitration rules of the International Chamber of Commerce, Paris; the
arbitration award rendered by such arbitration panel shall be final and binding upon the
parties. The seat of the arbitration shall be Zurich and the language of the proceedings
shall be English.






	3.	 	Prior to calling upon an arbitration panel, DEG or the BORROWER may, in a written
notification to the other party, demand that all disputes or a specific legal dispute,
controversy or claim be heard by an ordinary court of law. In such case, the dispute is to be
treated as set out in Article 18 (4).






	4.	 	In case DEG or the BORROWER has issued a written notification in accordance with Article 18
(3) to the other party, the parties agree that the ordinary courts in Cologne, Federal
Republic of Germany, shall have exclusive jurisdiction and venue. The BORROWER hereby submits
irrevocably to the jurisdiction of such court. This submission to the jurisdiction of the
ordinary courts in Cologne shall not restrict DEG’s right to file a claim or a lawsuit
against the BORROWER at any other ordinary court having jurisdiction over the BORROWER or the
BORROWER’s assets.






	5.	 	The BORROWER appoints FIDEUROP GmbH, Westhafen Tower, Westhafenplatz 1, 60327 Frankfurt a.M.,
Germany, Telefax: +49-69-756095-512 as its authorised recipient, which in this capacity shall
be the recipient of all documents relating to any legal disputes or other legal proceedings
arising from or in connection with this Agreement or any amendment thereof, in accordance with
a process agent letter from the Borrower to the process agent in the form as set out in
Schedule 6 (Form of Letter to the Process Agent). As long as this Agreement remains in force
and any obligation pursuant hereto remains outstanding, the BORROWER shall maintain a duly
appointed recipient for the receipt of service within the Federal Republic of Germany and
shall notify DEG of the name and address thereof.


















 




25


Article 19

MISCELLANEOUS





	1.	 	All communications in connection with this Agreement shall be sent in writing in the
English language to the parties at the following address or telefax number:
	 
	 	 	For the BORROWER:
	 
	 	 	China Linong International Limited

Unit 1505-06

The Metropolis Tower

10 Metropolis Drive

Hung Hom

Hong Kong

Telefax: + 852-2330-6739
	 
	 	 	For DEG:
	 
	 	 	DEG — Deutsche Investitions — und Entwicklungsgesellschaft mbH

Kämmergasse 22

50676 Köln

Federal Republic of Germany

Telefax: + 49-221-4986-1198
	 
	 	 	Each party undertakes to notify the other party of any change of address.
	 
	2.	 	The BORROWER will provide DEG with, if requested by DEG, certified translations into the
English language of all documents (which are not in English or in German) to be submitted
according to this Agreement.
	 
	3.	 	All Schedules annexed hereto form an integral part of this Agreement.
	 
	4.	 	Any right or obligation under this Agreement may be transferred, provided, however, that any
transfer by any party to this Agreement is subject to the prior written consent of the other
party.






	5.	a)	 	The BORROWER is aware that DEG is a wholly-owned subsidiary of Kreditanstalt
für Wiederaufbau (“KfW”) and a member of the KfW Bankengruppe. The members of the KfW
Bankengruppe are KfW, DEG, FuB — Finanzierungs- und Beratungsgesellschaft mbH, Berlin and
such further entities as listed on the website of the KfW Bankengruppe
(www.kfw.de).






	 	b)	 	DEG shall be entitled to disclose confidential information (e.g. any data as to legal
















 



26








status, business and financial condition, privacy data, etc.) it receives in
connection with this financing to any member of the KfW Bankengruppe at any given date.
Since within the KfW Bankengruppe a central corporate risk management and a standardised
controlling will be performed, it may be necessary to forward special client data and/or
documents within KfW Bankengruppe. This client data and/or documents include:




	 	•	 	data provided by the client;
	 
	 	•	 	documents and data developed by DEG relating to the client.






	 	 	 	The client data and/or documents will be forwarded exclusively to members of the KfW
Bankengruppe and will not be made available to any person outside the KfW Bankengruppe.
All members of the KfW Bankengruppe will treat any client data forwarded to them in
compliance with the legal provisions as prescribed by the Federal Data Protection Law
(“Bundesdatenschutzgesetz”) and the rules on banking secrecy.
	 
	 	c)	 	With reference to the above information under a) and b) the BORROWER hereby
agrees to the transfer of client data within the KfW Bankengruppe for the purposes of
central corporate risk management and standardised controlling and, to such extent,
expressly release DEG from banking secrecy rules, the provisions of the Federal Data
Protection Law (“Bundesdatensschutzgesetz”) and any separately concluded
confidentiality agreement.
	 
	 	d)	 	If an entity ceases to be a member of the KfW Bankengruppe, DEG shall no
longer be entitled to disclose information to the relevant entity. The relevant entity
shall promptly destroy or return the information disclosed to it.
	 
	 	e)	 	The disclosure by DEG may also be required or requested in order to fulfil
legal, judicial or regulatory requirements. The BORROWER consents to any such
disclosure.






	6.	 	Any modification or amendment to this Agreement, including this provision, must be in
writing.
	 
	7.	 	Should any provision of this Agreement be or become invalid or unenforceable for any reason,
the validity of the remaining provisions shall not thereby be affected.
	 
	8.	 	In the event that any party does not exercise any right to which it is entitled under this
Agreement, such omission shall not be considered to constitute a waiver of such right.










 




27








	9.	 	This Agreement shall be effective upon the date of the last signature and shall remain
effective as long as any amount is due to DEG.
	 
	10.	 	The limitation period for the BORROWER’s payment obligations under this
Agreement shall be five years.





COLOGNE this 10 NOVEMBER 2009




DEG — DEUTSCHE INVESTITIONS- UND ENTWICKLUNGSGESELLSCHAFT MBH




	 	 	 	 	 	 	 	 	 	 	 

	By

	 	/s/ Joachim Schumacher
	 	 
	 	By
	 	/s/ Markus Bracht
	 	 
	 

	 	 
	 	 	 	 	 	 	 	 
	 

	 	Joachim Schumacher
	 	 	 	 	 	Markus Bracht	 	 
	 

	 	First Vice President
	 	 	 	 	 	Vice President	 	 






________________________
this ____________




CHINA LINONG INTERNATIONAL LIMITED




For and on behalf of

China Linong International Limited





	 	 	 	 	 	 	 	 	 	 	 

	/s/
Shing  Yung Ma

	 	 
	 	 	 	 
	 	 	 	 	 	 	 
	Authorised Signature(s)

	 	 	 	 	 	 	 	 
	By

	 	(CEO)
	 	 	 	By	 	 	 	 
	 

	 	 	 	 	 	 	 	 	 	 











 



28


Schedule 1




DEFINITIONS




	 	 	 

	“Agreement”

	 	This loan agreement.
	 
	 	 
	“Annual
Environmental and
Social Monitoring
Report” (“AESMR”)

	 	The annual monitoring report describing the environmental and
social performance of the BORROWER and each of the Chinese
Affiliates, demonstrating compliance by the BORROWER and the
Chinese Affiliates’ with the environmental and social
stipulations under this Agreement, and, if the BORROWER or
any of the Chinese Affiliates fails to comply with any of the
environmental and social stipulations under this Agreement,
detailing such noncompliance together with the action being
taken to remedy such failure, substantially in the form as
provided by DEG.
	 
	 	 
	“Auditors”

	 	KPMG or such other firm of auditors acceptable to DEG.
	 
	 	 
	“Authorisations”

	 	Any consent, registration, filing, notarisation, certificate,
licence, approval, permit, authority, confirmation or tax
exemption from or by or with any national, supranational or
regional government or administrative, fiscal, judicial or
governmental body, commission, agency, authority, central
bank or similar entity and all corporate, creditors’ and
shareholders’ approvals or consents required to be obtained
by any member of the Linong Group which are (a) necessary for
the implementation of the Project, the Loan or any part
thereof and (b) are material to the operation of the business
of all members of the Linong Group (except Linong (Quanzhou)
for as long as Linong (Quanzhou) is not properly incorporated
as a limited liability company under the laws of the People’s
Republic of China).
	 
	 	 
	“Basic Terms and
Conditions of
Employment”

	 	Refer to wage, working hours, labour contract and
occupational health & safety based upon relevant ILO
conventions (26 and 131 (on Remuneration), 1 (on Working
Hours), 155 (on Health and Safety)) and recommendations.
	 
	 	 
	“Business Day”

	 	Each day on which banks are open for general business in New
York, Hong Kong and the People’s Republic of China and,
solely for the purpose of determining the applicable Interest
Rate in accordance with this Agreement, in London, England.
	 
	 	 
	“Cash”

	 	At any time, cash at bank credited to an account in the name
of the Borrower with a reputable financial institution and to
which the Borrower is alone beneficially entitled and for so
long as that cash is repayable on demand.
	 
	 	 
	“Cash Equivalent
Investments”

	 	Investments that are short term investments which are readily
convertible into cash without incurring any significant
premium or penalty.
	 
	 	 
	“Certificate of
Incumbency”

	 	The certificate of incumbency in the form of Schedule 5.
	 
	 	 
	“Chinese Affiliates”

	 	Linong (Huizhou) and Linong (Fuzhou).
	 
	 	 
	“Core Labour

	 	Refers child and forced labour, discrimination and freedom of












 



29


	 	 	 

	Standards”

	 	association and collective bargaining as set out in ILO Declaration on Fundamental
Principles and Rights at Work.
	 
	 	 
	“Current Assets”

	 	The aggregate of cash, stocks, marketable securities, trade and other receivables
realisable within one year, inventories and prepaid expenses which are to be
charged to income within one year, the debtors and deposits of the Linong Group payable
on demand or within one year from the date of computation and any other assets of the
Linong Group which would, in accordance with IFRS be considered as current assets,
but excluding funds temporarily on hand pending application to property, plant and
equipment included in the Project.
	 
	 	 
	“Current Liabilities”

	 	The aggregate of all liabilities falling due on demand or within one year from the date
of computation, including dividends to be disbursed and the portion of Long-term Debt
falling due within one year, but excluding liabilities for property, plant and equipment
to the extent of the amount of funds therefore excluded from the calculation of Current
Assets and excluding any such liabilities, dividends and Long Term Debt owed to any
member of the Linong Group.
	 
	 	 
	“Current Ratio”

	 	The result obtained by dividing Current Assets by Current Liabilities.
	 
	 	 
	“Debt”

	 	The aggregate of all obligations and accrued liabilities then outstanding for the
payment or repayment of money, including:
	 
	 	 
	 

	 	(a) any amounts payable by the BORROWER under leases or similar arrangements over

their respective periods and
	 
	 	 
	 

	 	(b) any credit to the BORROWER from a supplier of goods or under any instalment
purchase or other similar arrangement,
	 
	 	 
	 

	 	but excluding any such obligations and liabilities to any other member of the Group, and
deducting the aggregate amount of freely available Cash and Cash Equivalent Investments
held by any member of the Linong Group at such time.
	 
	 	 
	“Debt/Equity Ratio”

	 	The result obtained by dividing Debt by Equity.
	 
	 	 
	“Debt/EBITDA Ratio”

	 	The result obtained by dividing Debt by EBITDA.
	 
	 	 
	“DEG Base Rate”

	 	The percentage rate per annum determined by DEG acting in good faith and in a
commercially reasonable manner two LIBOR Banking Days prior to the Interest Conversion
Date, which shall be a rate equal to the London interbank market fixed offer
rate then applicable for a notional fixed/floating rate swap referencing six month USD
LIBOR (where USD LIBOR has the meaning given to it in Article 5(2)) terminating on 14 May
2013 with a notional amount equal to the principal amount of the Loan outstanding as at
the Interest Conversion Date.
	 
	 	 
	“EBITDA”

	 	The sum of the Linong Group’s (consolidated) net income, financing costs
paid in respect of any Debt, taxes, depreciation and amortisation and other finance
charges.












 



30


	 	 	 

	“Employee
Equity Incentive
Plans”

	 	The employee equity incentive plans approved
by the compensation committee of the BORROWER, pursuant to
which up to 151,430 ordinary shares of the BORROWER are reserved
for issuance upon exercise of options granted.
	 
	 	 
	“Environmental and
Social Action
Plan”

	 	A corrective plan with respect to environmental and social
matters and all updates of this Environmental and Social Action
Plan, defining actions, budgets and a timeframe for the
measures required to remedy the known non-compliances
with the environmental and/or social stipulations under this
Agreement and for any other measure agreed upon between the
BORROWER and DEG as set out in the ERM Report “Environmental and
Social Assessment and Environmental and Social Action Plan”
dated 2 September 2009.
	 
	 	 
	“Environmental and
Social Claim”

	 	Any claim, proceeding or investigation against the BORROWER with
respect to any environmental or social law, any environmental
and social permit or any other environmental or social
requirement.
	 
	 	 
	“Environmental and
Social Management
System (ESMS)”

	 	The part of the overall management system that
includes organisational structure, planning activities,
responsibilities, practices, procedures and resources for
developing, implementing, achieving, reviewing and
maintaining compliance with the environmental and social
stipulations under this Agreement.
	 
	 	 
	“Environmental
Impact Assessment”

	 	An instrument to identify and assess the potential environmental
and social impacts of project, to evaluate alternatives, and
to design appropriate mitigation, management, and
monitoring measures as required by Chinese laws and regulations.
	 
	 	 
	“Equity”

	 	The aggregate of the par value of all paid-in stock of
the BORROWER, capital paid-in in excess of par value,
retained earnings and losses, net result for the current period,
increased by any Revaluation Reserve arising from an independent
certified appraisal of the BORROWER’s fixed assets, increased
further by any unsecured and subordinated shareholder loans;
Revaluation Reserve means in this context the reserve created by
revaluation of fixed assets as determined by an
independent and certified appraisal effected in
accordance with local and international accounting
standards and certified by the Auditors.
	 
	 	 
	“EST”

	 	Eastern Standard Time
	 
	 	 
	“Event of Default”

	 	Any of the events as set out in Article 16(1).
	 
	 	 
	“Finance Agreements”

	 	This Agreement and the Share Retention Letter.
	 
	 	 
	“Financial Year”

	 	The financial year of the BORROWER commencing on 1 April and
ending on 31 March each year
	 
	 	 
	“Hong Kong”

	 	The Hong Kong Special Administrative Region of the People’s
Republic of China.
	 
	 	 
	“IFC”

	 	International Finance Corporation
	 
	 	 
	“IFC Performance

	 	The general terms and standards defining the responsibilities to












 



31


	 	 	 

	Standards”

	 	manage the environmental and social performance (Please refer to
www.ifc.org)
	 
	 	 
	”IFRS”

	 	International Financial Reporting Standards
	 
	 	 
	“ILO”

	 	International Labour Organisation
	 
	 	 
	“International
Chamber of
Commerce”

	 	The International Chamber of Commerce having its seat in Paris, France.
	 
	 	 
	“Interest
Conversion Date”

	 	The date when the Loan has been fully disbursed or the cut off date as
mentioned in Article 3 (4), whichever occurs first.
	 
	 	 
	“Interest
Determination
Date”

	 	Two LIBOR Banking Days prior to the beginning of an Interest Period
unless market practice differs in the relevant interbank market, in
which case the Interest Determination Date will be determined in
accordance with market practice in the relevant interbank market.
	 
	 	 
	“Interest Period”

	 	The period from and including the day of the first disbursement and
ending the day before the first Payment Date after the date of this
Agreement as well as each period from and including a Payment Date and
ending the day immediately before the next following Payment Date.
	 
	 	 
	“Knowledge”

	 	With respect to any particular fact, actual knowledge (“positive
Kenntnis”) or knowledge that one using reasonable care or
diligence should have (“grob fahrlässige Unkenntnis”).
	 
	 	 
	Land V. Group

	 	Land V. Group Limited, a limited liability company incorporated and
existing under the laws of the British Virgin Islands having its
registered office at P.O. Box 957, Offshore Incorporations Centre,
Road Town, Tortola, British Virgin Islands.
	 
	 	 
	Land V. Limited

	 	Land V. Limited, a limited liability company incorporated and
existing under the laws of Hong Kong having its registered office at
Unit 1505-06, The Metropolis Tower, 10 Metropolis Drive, Hung Hom,
Kowloon, Hong Kong.
	 
	 	 
	“LIBOR Banking Day”

	 	Each day on which banks are open for general business in London.
	 
	 	 
	“Linong Group”

	 	A group of companies comprising of the BORROWER, Land V. Group, Land
V. Limited, the Chinese Affiliates and all their direct and indirect
subsidiaries.
	 
	 	 
	“Linong (Fuzhou)”

	 	Fuzhou Land V. Group Co., Ltd., a limited liability company
incorporated and existing under the laws of the People’s Republic of
China (Reg. No. 350100400011959) having its registered office at Unit
417-418, The Western Tower, 173 Wusi Road, Gulou District, Fuzhou
of Fujian Province, People’s Republic of China.
	 
	 	 
	“Linong (Huizhou)”

	 	Linong Agriculture Technology Co. Ltd. (Huizhou), a limited liability
company incorporated and existing under the laws of the People’s
Republic of China (Reg. No. 441300400026279) having its
registered office at Dabu Village, Huidong County, Huizhou of
Guangdong Province, People’s Republic of China.












 



32


	 	 	 

	“Linong (Quanzhou)”

	 	Linong Agriculture Technology Co. Ltd. (Quanzhou), a
limited liability company currently being incorporated under the
laws of the People’s Republic of China.
	 
	 	 
	“Loan”

	 	The funds to be made available to the BORROWER under this
Agreement or any portion thereof.
	 
	 	 
	“Long-term Debt”

	 	The aggregate of all Debt with a maturity of more than one year.
	 
	 	 
	“Management Letter”

	 	The management letter issued by the Auditors.
	 
	 	 
	“Option”

	 	The option granted by the BORROWER to Winsome Group Limited on
23 May 2007 in respect of 66,580 ordinary shares of the
BORROWER.
	 
	 	 
	“Payment Date”

	 	15 May and 15 November in each year. Should this date not fall
on a Business Day, the Payment Date will be the first Business
Day thereafter.
	 
	 	 
	“PRC Members”

	 	Members of the Linong Group other than the BORROWER, Land V.
Group, Land V. Limited and Hong Kong Linong Limited (a company
incorporated in Hong Kong), and each a “PRC Member”.
	 
	 	 
	“Pre-lPO Financing”

	 	The raising of new equity financing, whether in the form of
ordinary or preferred shares to be offered by the BORROWER to
any or all of its then existing shareholders and/or any new
investor(s) on one or more occasions, by the BORROWER prior to
the initial public offering of the shares of the BORROWER.
	 
	 	 
	“Project”

	 	The establishing of farm land, greenhouses and irrigation system
and accessory facilities through operating affiliates in the
People’s Republic of China and as set out in more detail in the
Project Description.
	 
	 	 
	“Project Description”

	 	The description of the Project as set out in Schedule 2.
	 
	 	 
	“Project Documents”

	 	The memorandum and articles of association of the BORROWER and
each of the Chinese Affiliates.
	 
	 	 
	“Relevant Period”

	 	The periods (1) between the date of this Agreement and the
Interest Conversion Date and (2) from 15 May 2013 onwards.
	 
	 	 
	“Repayment Instalments”

	 	The repayment instalments as set forth in Article 7 (1).
	 
	 	 
	“Reuters’ Screen LIBOR 01
Page”

	 	Indication of the London Interbank Offered Rates (LIBOR) for
United States Dollar deposits determined by the British Bankers
Association (BBA) represented by page LIBOR 01 in “Reuters’
Monitor Money Rates Service”.
	 
	 	 
	“Shareholders”

	 	As outlined in Schedule 8.
	 
	 	 
	“Share Retention Letter”

	 	A letter provided by Mr. Ma Shing Yung with an undertaking not
to sell and/or pledge his shares in the BORROWER in accordance
with the terms thereof.












 



33


	 	 	 

	“USD” or “United
States Dollars”

	 	United States Dollars being the
lawful currency of the United States
of America.












 



34


Schedule 2




PROJECT DESCRIPTION





	I.	 	Project (Technical description)




The Linong Group was founded in 2004 and consists of several fast-growing vegetable farming
companies at various locations in mainland China with focus on quality and food safety. The Linong
Group manages a land base encompassing 18,600 mu (=1,200ha) including 4,100mu with greenhouses. The
objective of this project is to expand the greenhouse farm operations at the Linong (Huizhou) and
Linong (Fuzhou). This loan will be used to build a greenhouse farm area of approx. 2,300-3,000 mu
including preparatory infrastructure works and accessory facilities (as set out in the table
below). Capex will be spent mainly on greenhouse constructions (from bamboo to steel construction),
infrastructure works (land leveling, roads), irrigation systems and accessory facilities (storage
etc.).





	II.	 	Project Costs (Investment plan) and Financing





	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Investment	 	Linong 
(Huizhou)	 	Linong 
(Fuzhou)	 	Mio 
USD	 	Source of 
Funds	 	Mio 
USD
	Greenhouses
	 	 	3.5	 	 	 	7.0	 	 	 	10.5	 	 	DEG	 	 	18.0	 
	Infrastructure
	 	 	1.2	 	 	 	2.4	 	 	 	3.6	 	 	 	 	 	 	 	 	 
	Irrigation systems
	 	 	0.7	 	 	 	1.3	 	 	 	2.0	 	 	 	 	 	 	 	 	 
	Accessory facilities
	 	 	0.6	 	 	 	1.3	 	 	 	1.9	 	 	 	 	 	 	 	 	 
	 
	Total
	 	 	6.0	 	 	 	12.0	 	 	 	18.0	 	 	Total	 	 	18.0	 
	 






	III.	 	Time






	The project will be implemented within one year from the date of the first drawdown of the Loan
pursuant to this Agreement with a maximum of three drawdowns of at least USD5,000,000 each (except
for the last drawdown).










 



35







Schedule 3




CALL NOTICE




DEG —
Deutsche Investitions- und

Entwicklungsgesellschaft mbH

Kämmergasse 22

50676 Köln

Germany




Ladies and Gentlemen,



We refer to Article 3 of the Loan Agreement between our Company and DEG concluded
on _________ (“Agreement”) and request disbursement of the Loan/a partial amount of the
Loan of USD____________



Please remit the said amount for value on _________ (date) in available cleared funds to our
account as follows:




	 	 	 

	Name/address of Account-holder:
	 	 
	 

	 	 
	Account currency
	 	 
	 

	 	 
	Account No.
	 	 
	 

	 	 
	Bank/SWIFT code
	 	 
	 

	 	 
	via (name/address/SWIFT CODE of correspondent bank)
	 	 
	 

	 	 
	Account No. of beneficiary bank at the correspondent Bank
	 	 
	 

	 	 




The funds made available will be applied as follows: [detailed description of the use of funds
including evidence by respective invoices etc.]



We confirm that the conditions precedent to disbursement according to Article 4 of the Agreement
have been fulfilled and that since the Agreement was signed no deterioration in financial or other
respects has occurred which might jeopardise the implementation of the Project.



We also declare that the representations and warranties made under Article 14(1) of the Agreement
(in case of a disbursement which is not the first disbursement: other than those under paragraphs
(a) and (d) of Article 14(1)) are true and correct as of the date hereof.



[We confirm that the loan amount(s) of
USD_________ already disbursed to us have been used in accordance
with Article 2 of the Agreement.]




Yours faithfully,




[BORROWER]










 



36


Schedule 4




FORM OF LETTER TO THE AUDITORS




(Letterhead of the BORROWER)




To the Auditors

(Address)




Dear Sirs,



We hereby authorise and request you to give to DEG — Deutsche Investitions — und
Entwicklungsgeselischaft mbH (“DEG”), Kammergasse 22, 50676 Köln, Federal Republic of Germany, all
such information as they may request with regard to our commercial and financial situation. This
authorisation is a requirement under a loan agreement between ourselves and DEG; for your
information we enclose a copy of the said loan agreement.



For our records, please ensure that you send us a copy of every letter which you receive from DEG
immediately upon receipt and a copy of each reply made by you promptly upon the issue thereof.



Yours faithfully,




[BORROWER]




Encl.: DEG Loan Agreement
















 




37



Schedule 5




FORM OF CERTIFICATE OF INCUMBENCY AND AUTHORITY




DEG - Deutsche Investitions- und

Entwicklungsgesellschaft mbH

Kämmergasse 22

50676 Köln

Federal Republic of Germany




Telefax: 0049 - 221 - 4986-1290




[Date]




Ladies and Gentlemen:




Certificate of Incumbency and Authority



With reference to the Loan Agreement dated                     , 2009. (the “Loan Agreement”), I,
the undersigned Director of China Linong International Limited (the “Borrower”), duly authorized
to do so, hereby certify that the following are the names, offices and true specimen signatures of
the persons each of whom are, and will continue to be authorized:





	 	a)	 	to sign on behalf of the Borrower the requests for the disbursement of funds
provided for in Article 3 of the Loan Agreement;
	 
	 	b)	 	to sign any certifications provided for in the Loan Agreement; and
	 
	 	c)	 	to take any other action required or permitted to be taken, done, signed or executed
under the Loan Agreement or any other related agreement to which DEG and the Borrower may
be parties:





	 	 	 	 	 
	Name	 	Office	 	Specimen Signature
	MA Shing Yung

	 	CEO/Director
	 	 

	Winston Li1

	 	Director
	 	 

	 
	 	 	 	 
	 


	 	 

	 	 






You may assume that any such person continues to be so authorized until you receive authorized
written notice from the Borrower that they, or any of them, is no longer so authorized.




Yours faithfully,




/s/ Winston Li
 

Winston Li






 




			
	1	 	Jointly with any other director.










 



38






Schedule 6




FORM OF LETTER TO PROCESS AGENT




(Letterhead of the BORROWER)




FIDEUROP GmbH

Herrn Dr. Klaus Zimmermann

Westhafen Tower

Westhafenplatz 1

60327 Frankfurt am Main

Federal Republic of Germany




Date:



Re: Loan Agreement between DEG and [___] dated [___] (“Loan Agreement”)




Dear Sirs,



We refer to Article (___) of the referenced Loan Agreement, a copy of which is enclosed herewith.



We hereby confirm that we have appointed you to act as our agent to accept for and on behalf of
the undersigned any service of process in respect of any litigation or other legal proceedings
before German courts and arbitration panels arising out of or in connection with the Loan
Agreement and any amendment thereof (the “Disputes”).



We understand that you have indicated your preparedness to accept such appointment, and we agree
that your only obligations will be:





	(i)	 	promptly upon receipt of any notice of legal process relating to the Dispute to accept
service on our behalf and to notify us by cable or facsimile to our address specified below
(or to such other address, person, firm or company as we may from time to time notify you) to
the effect that you have accepted such service on our behalf; and
	 
	(ii)	 	to confirm acceptance of such service by letter to us as aforesaid, enclosing the original
of the documents which you have received in connection with such service.




Upon request of any person delivering any notice of such legal process, you shall present to such
person this letter in executed form together with the copy of the Loan Agreement.



Our address is:



In
consideration of your accepting this appointment, we agree to pay to you a flat fee of EUR [___]
and to indemnify you upon demand from and against all costs, charges and expenses reasonably
incurred by you in performance of your duties hereunder.



This appointment and its acceptance shall be governed by the laws of the Federal Republic of
Germany. The place of jurisdiction for any dispute arising out of or in connection with this
appointment letter shall be Frankfurt am Main.




	 	 	 	 	 	 	 

	Yours faithfully,

	 	 	 	Accepted:
	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	 	 	 
	[BORROWER]

	 	 	 	FIDEUROP GmbH	 	 






Encl.: Loan Agreement














 



39




Schedule 7




Excluded Activities



DEG - Deutsche Investitions- und Entwicklungsgesellschaft mbH has adopted the following Exclusion
List:





	1)	 	Production or activities involving forced
labor2 or
child labor3
	 
	2)	 	Production or trade in any product or activity deemed illegal under host country laws or
regulations or international conventions and agreements.
	 
	3)	 	Any business relating to pornography or prostitution.
	 
	4)	 	Trade in wildlife or wildlife products regulated under CITES4
	 
	5)	 	Production or use of or trade in hazardous materials such as radioactive
materials5, unbounded asbestos fibers and products containing PCBs6.
	 
	6)	 	Cross-border trade in waste and waste products unless compliant to the Basel Convention
and the underlying regulations.
	 
	7)	 	Drift net fishing in the marine environment using nets in excess of 2.5 km in length
	 
	8)	 	Production, use of or trade in pharmaceuticals, pesticides/herbicides, chemicals, ozone
depleting substances7 and other hazardous substances subject to international
phase-outs or bans.
	 
	9)	 	Destruction8 of Critical Habitat9
	 
	10)	 	Production and distribution of racist, anti-democratic and/or neo-nazi media.




In addition to the above, the financing of projects is excluded, when the following activities form
a substantial10 part of a project sponsor’s primary operations or those of the project:





	11)	 	Production or trade in11






	 	a)	 	weapons and munitions
	 
	 	b)	 	tobacco
	 
	 	c)	 	hard liquor







 




			
	2	 	Forced labor means all work or service, not voluntarily performed, that is
extracted from an individual under
threat of force or penalty as defined by ILO conventions.
	 
	3	 	Employees may only be taken if they are at least 14 years old, as defined in the
ILO Fundamental Human
Rights Conventions (Minimum Age Convention C138, Art. 2), unless local legislation specifies
compulsory
school attendance or the minimum age for working. In such cases the higher age shall apply.
	 
	4	 	CITES: Convention on International Trade in Endangered Species or Wild Fauna and Flora.
	 
	5	 	This does not apply to the purchase of medical equipment, quality control
(measurement) equipment and any
other equipment where DEG considers the radioactive source to be trivial and/or adequately
shielded.
	 
	6	 	PCBs: Polychiorinated biphenyls, a group of highly toxic chemicals. PCBs are likely to be
found in oil-filled electrical transformers, capacitors and switchgear dating from
1950-1985.
	 
	7	 	Ozone Depleting Substances: Chemical compounds, which react with and delete
stratospheric ozone,
resulting in “holes in the ozone layer”. The Montreal Protocol lists ODs and their target
reduction and phase-out dates.
	 
	8	 	Destruction means the (1) elimination or severe diminution of the integrity of a
habitat caused by a major,
long-term change in land or water use or (2) modification of a habitat in such a way that the
habitat’s ability to
maintain its role (see footnote 10) is lost.
	 
	9	 	Critical habitat is a subset of both natural and modified habitat that deserves particular
attention. Critical habitat includes areas with high biodiversity value that meet the criteria
of the World Conservation Union (IUCN) classification, including habitat required for the
survival of critically endangered or endangered species as defined by the IUCN Red List of
Threatened Species or as defined in any national legislation; areas having special
significance for endemic or restricted-range species; sites that are critical for the survival
of migratory species; areas supporting globally significant concentrations or numbers of
individuals of congregatory species; areas with unique assemblages of species or which are
associated with key evolutionary processes or provide key ecosystem services; and areas having
biodiversity of significant social, economic or cultural importance to local communities.
Primary Forest or forests of High Conservation Value shall be considered Critical Habitats.
	 
	10	 	A benchmark for substantial is 5 - 10% of the balance sheet or the financed volume.
	 
	11	 	In Financial Institutions this is calculated with regard to the portfolio volume financing such
activities.










 



40




			
	12)	 	Gambling, casinos and equivalent enterprises10



















 



41


Schedule 8




Shareholders of the BORROWER




	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	Shares	 	 	 	
	Shareholders	 	Types	 	Shares	 	%	 	Ultimate Shareholders
	 	1	 	 	Grow Grand Limited

	 	Ordinary
Series A1
	 	 	613,000

24,213	 	 	 	 	

	36.600

1.446	%

%	 	Ma Shing Yung: 100%
	 	 	 	 	 

	 	   Total:
	 	 	637,213	 	 	Total:
	 	 	38.046	%	 	 
	 	2	 	 	Magnetic Star Holdings Limited

	 	Ordinary
	 	 	60,000	 	 	 	 	 	3.582	%	 	Liang Kang: 50%
	 	 	 	 	 

	 	 	 	 	 	 	 	 	 	 	 	 	 	Luan Li: 50%
	 	3	 	 	Limewater Limited

	 	Ordinary
	 	 	60,000	 	 	 	 	 	3.582	%	 	XiaYu: 100%
	 	4	 	 	Natural Eternity Limited

	 	Ordinary
	 	 	60,000	 	 	 	 	 	3.582	%	 	Law Kin Ip: 100%
	 	5	 	 	Honeycomb Assets Management Limited

	 	Ordinary
Series A1
	 	 	70,000

16,142	 	 	 	 	 	4.179

0.964	%

%	 	Fu Ming Xia: 50%

Hiroko Hishikawa: 50%
	 	 	 	 	 

	 	   Total:
	 	 	86,142	 	 	Total:
	 	 	5.143	%	 	 
	 	6	 	 	Win Seasons Finance Ltd

	 	Ordinary
	 	 	60,000	 	 	 	 	 	3.582	%	 	Wang Xiao Gang: 100%
	 	7	 	 	Valuetrue Investments Limited

	 	Ordinary
	 	 	77,000	 	 	 	 	 	4.597	%	 	Ma Wen Lie: 100%
	 	8	 	 	Natural Scent Limited

	 	Ordinary
	 	 	50,000	 	 	 	 	 	2.985	%	 	Li Jin:
	 	 	 	 	 

	 	 	 	 	 	 	 	 	 	 	 	 	 	Lu Rong:
	 	9	 	 	Sequoia Capital China L.L.P.

	 	Series A
Series A1
	 	 	169,380

31,784	 	 	 	 	 	10.113

1.898	%

%	 	 
	 	 	 	 	 

	 	   Total:
	 	 	201,164	 	 	Total:
	 	 	12.011	%	 	 












 



42






	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	Shares	 	 	 	
	Shareholders	 	Types	 	Shares	 	%	 	Ultimate Shareholders
	 	10	 	 	Sequoia Capital China Partners Fund I, L.P.

	 	Series A
Series A1
	 		19,460

3,652		 	 	 	 	1.162

0.218	%

%	 	 
	 	 	 	 	 

	 	   Total:
	 	 	23,112	 	 	Total:
	 	 	1.380	%	 	 
	 	11	 	 	Sequoia Capital China Principals Fund I, L.P.

	 	Series A
Series A1
	 	 	26,220

4,919	 	 	 	 	 	1.565

0.294	%

%	 	 
	 	 	 	 	 

	 	   Total:
	 	 	31,139	 	 	Total:
	 	 	1.859	%	 	 
	 	12	 	 	Sequoia Capital China Growth Fund I, L.P.

	 	Series B
	 	 	65,796	 	 	 	 	 	3.928	%	 	 
	 	13	 	 	Sequoia Capital China Growth Partners Fund
I, L.P.

	 	Series B
	 	 	1,554	 	 	 	 	 	0.093	%	 	 
	 	14	 	 	Sequoia Capital China GF Principals Fund I.
L.P.

	 	Series B
	 	 	8,070	 	 	 	 	 	0.482	%	 	 
	 	15	 	 	SIG China Investments One, Ltd.

	 	Series B
	 	 	130,270	 	 	 	 	 	7.778	%	 	 
	 	16	 	 	Walden International
Pacven Walden Ventures VI, L.P.

Pacven Walden
Ventures Parallel VI, L.P.

	 	Series B


Series B
	 	
	89,056


6,934	

	 	 	 	
	5.317


0.414	%


%	 	 












 



43


	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Shareholders	 	Shares	 	%	 	Ultimate Shareholders
	 	 	 	 	 	 	Types	 	Shares	 	 	 	 	 	 	 	 
	 	17	 	 	Made In China Ltd.

	 	Series B
	 	 	27,420	 	 	 	 	 	1.637	%	 	 
	 	 	 	 	 

	 	Shares Grand Total
	 	 	1,674,870		 	% Total
	 	 	100	%