e10-17.htm


    
      EXHIBIT
10.17

       

      Facility
for Trade Financing Contract

       

      Contract
No.: Shanjiankaimaoyirongzi(2007) 044

       

      Party
A: Shaanxi Tianren Organic Food Co., Ltd

       

      Address:
A-4 Tongxiege Building, No.12, Gaoxin 2nd Rd,
Hi-tech Zone, Xi’an, China 710075

       

      Legal
Representative (Chief Officer): Xue Hongke

       

      Primary
Depositary Bank: Gaoxin Branch of China Construction Bank

       

      Account
No. with Party B: 61001920900052507096

       

      Telephone:
88386230

       

      Fax:  88386495

       

      Post
Code: 710075

       

      Party
B: China Construction Bank, [ Gaoxin Branch  ]

       

      Address:
No. 42 Gaoxin Road

       

      Chief
Officer: Zhou Cunxing

       

      Telephone:
88321414

       

      Fax:
88221824

       

      Post
Code: 710075


      
        
           


        

        
           


          
            

          

        

        
           


        

      


       

      In order
to promote cooperation between Party A and Party B in export-import trade
financing, Party B agrees to provide Party A with a revolving facility up to a
certain amount for a fixed term at the application by Party A and subject to the
satisfaction of conditions required by Party B. Party A and Party B hereby enter
into this Contract.

       

      Article
1. Facility for Trade Financing

       

       “Facility
for Trade Financing” (the “Facility”) shall mean the maximum amount of
outstanding principal that Party B agrees to provide to Party A for the purpose
of trade financing under certain conditions and within the Availability Period
provided in Article 4. At any time within the Availability Period, Party A may
apply for trade financing on a revolving basis in accordance with the terms and
conditions of this Contract and without limitation on frequency and amount of
each individual financing (unless this Contract provides otherwise), subject
always to:

       

      The
amount of the outstanding principals provided by Party B does not exceed the
Maximum Amount of the Facility; and

       

      The
aggregate of the amount of Party A’s any individual application and the amount
of the outstanding principal at the time of such application does not exceed the
Maximum Amount of the Facility.

       

      For the
purpose of this Contract, any service Party B agrees to provide under any
individual Line specified in Article 2 shall be deemed as a form of
financing.

       

      Article
2. Categories of the Facility

       

      The
Facility shall include Item(s) [3, 5] of the following individual
lines:

       

      Line for Issuance of L/C
refers to the credit line for sight Letter of Credit to be issued by Party B for
the account of Party A where Party B is able to have control over the title of
the underlying goods.

       

      Line for T/R refers to the
credit line under which Party B is to provide import financing to Party A upon
the issuance of a trust receipt by the latter. The Line for T/R is applicable to
the following forms of financing: issuance of sight L/C where Party B is unable
to have control over the title of the underlying goods; issuance of usance L/C;
issuance of Shipping Guarantee for Party A (Party B shall be the issuing bank of
the L/C in relation to such Shipping Guarantee); and Trust Receipt Loans
provided on the maturity date of the payment under L/C.

       

      Line for Packing Loan refers
to the credit line under which Party B is to provide Party A with loans for the
purpose of preparing the goods under L/C  on the condition that the
beneficiary under such L/C shall be Party A and the original copy of the L/C
and  of the amendment thereto (if any) shall be held by Party B. The
proceeds in foreign currencies under such L/C shall be applied with first
priority to repay the principal and interest of the Packing Loan and relevant
expenses.


      
        
           


        

        
           


          
            

          

        

        
           


        

      


       

      Line for Short Term Financing under
Export L/C refers to the credit line under which Party B is to pay the
negotiated amount to the exporter with recourse and in accordance with the
issuing bank’s authorization upon presentation by Party A of a full set of
documents conforming the terms of the L/C, and claim thereafter reimbursement
from the issuing bank for payment under the L/C by presenting such
documents.

       

      Line for Loan under Export
Collection refers to the credit line under which Party B is to provide
short term financing with recourse to Party A during the course of documentary
collection under export L/C upon the presentation by Party A of the documents.
The Line shall be applicable to D/P (Document against Payment) only, but not to
D/A (Document against Acceptance).

       

      Article
3. Amount of the Facility

       

      Party B
agrees to provide to Party A the Facility with an amount not exceeding [sixteen
million] (amount in words)(the “Maximum Amount “), and among other
things,

       

      (1) Line for Issuance of L/C
shall not exceed [0] (currency) zero] (amount in words).  For issuance
of each L/C under this Line, Party A shall provide to Party B a margin with an
amount not less than 0]% of the aggregate of the L/C amount and the
over-shipment value;

       

      (2) Line for T/R shall not exceed
[0 ] (currency) [zero] (amount  in words).  For issuance of
each L/C under this Line, Party A shall provide a margin with an amount not less
than [  ]%
of the aggregate of the L/C amount and the over-shipment value; and for
each Shipping Guarantee, Party A shall provide a margin with an amount not less
than [  ]%
of the value of the goods under such Shipping Guarantee;

       

      (3) Line for Packing Loan shall
not exceed [sixteen million]  (amount in words) and any individual
loan shall not exceed [90]% of the L/C amount;

       

      (4) Line for Short Tern Financing
under Export L/C shall
not exceed [0] (currency) [zero] (amount in words);

       

      (5) Line for Loan under Export
Collection shall not exceed
[sixteen                                                                                                                     million]
(amount in words), and each individual loan shall not exceed [90]% of the value
indicated on the draft or on the invoice.

       

      All
outstanding amounts under the Facility for Trade Financing
Contract No. Shanjiankaifamaoyirongzi(2007) 044 shall be deducted from
the Facility under this Contract, which can be reinstated after such outstanding
amounts are repaid in full.

       

      If any
security provider has performed its obligations in accordance with the security
contract, the Facility shall decrease by the amount of the principal which has
been repaid by such security provider.

       

      If Party
A provides a margin when applying for financing under the Facility, the amount
of such margin shall not affect the amount of the available Facility at the time
of such application.


      
        
           


        

        
           


          
            

          

        

        
           


        

      


       

      Article
4. Availability Period

       

      The
Facility under this Contract shall be available from [September 24, 2007] to
[June 7, 2008] (the “Availability Period”).

       

      Within
the Availability Period the term for each individual financing under the
Facility shall be determined as follows:

       

      1) Under
the Line for T/R the
term of any individual financing shall not exceed [  ]
days and among other things:

       

      For sight
L/C under which Party B is not able to control the title to the goods and for
usance L/C:

       

      This Line
shall be deducted accordingly upon the issuance of the L/C;

       

      For sight
L/C where Party B is unable to control the title to the goods, the term of
individual financing shall commence from the date of receipt of the
documents;

       

      For
usance L/C, the term of individual financing shall commence from the date on
which Party B agrees to make payment;

       

      The
interest on financing shall accrue from the date of payment by Party
B.

       

      For
issuance of Shipping Guarantee, this Line shall be deducted and the term of
individual financing shall commence upon such issuance.

       

      For T/R
Loan:

       

      For sight
L/C where Party B is able to control the title to the goods, if Party A submits
an Application for T/R Loan for payment under such L/C and Party B approves such
Application, the Line for Issuance of L/C shall be reinstated and the Line for
T/R shall be deducted accordingly on the date of payment by Party B; the term of
individual financing and the interest on such financing shall commence/accrue
from such payment date;

       

      For sight
L/C where Party B is unable to control the title to the goods and for usance
L/C, Party A shall submit an Application for T/R Loan before the maturity date
of such L/C if it needs T/R Loan for payment under such L/C. The term of such
T/R loan shall not exceed the remaining term of individual financing in respect
to such L/C and the interest thereon shall accrue from the date of payment by
Party B.

       

      2) For
Line for Packing Loan, the term of any individual loan shall not exceed [120]
days;

       

      3) For
Line for Short Term Financing under Export L/C, the term of individual financing
shall not exceed [60] days;


      
        
           


        

        
           


          
            

          

        

        
           


        

      


       

      The
Facility shall terminate automatically and the unused Facility shall become void
upon the expiration of the Availability Period. Party A may apply for a new
facility and enter into a new contract with Party B subject to Party B’s review
of and consent to such application.

       

      4.4 Party
A’s obligation to repay its indebtedness in respect to any individual financing
provided within the Availability Period shall not be affected by the expiration
of Availability Period even if the maturity date for such individual financing
comes after the Availability Period expires.

       

      Article
5.                      Interests
and Fees

       

      Interest
rate, calculation and payment of interests

       

      1) Under
the Packing Loan, the interest rate, calculation and payment of the interest
shall be as follows.

       

      (1) The
applicable interest rate on each individual RMB loan shall be Item [1] of the
following:

       

      (i) The
interest rate for loans with the same term as promulgated by the People’s Bank
of China (the “PBOC”) and applicable on the date of issuance of Notice of
Drawing (the “PBOC rate”).

       

      (ii) 100%
[minus/plus] % of the PBOC rate.

       

      (2) The
interest for each individual RMB loan shall be calculated and paid in accordance
with Item [   ]
of the following:

       

      (i) The
interest shall be calculated on a daily basis and shall be paid in full together
with the repayment of the principal;

       

      (ii)The
interest shall be calculated on a daily basis and shall be paid [     ]
(monthly/quarterly). The Interest Payment Date shall be the 20th day of
(each month/the last month of each quarter).

       

      Daily
interest rate = monthly interest rate/30.

       

      (3) Where
the loan under this Contract is in foreign currency, the interest rate and
calculation and payment of the interest shall be as follows:

       

      [                                                   ]

       

      2) The
interest rate for Short Term Financing under Export L/C and for Loan under
Export Collection shall be calculated and paid as follows:


      
        
           


        

        
           


          
            

          

        

        
           


        

      


       

      (1)Interest
rate for individual Short Term Financing under Export L/C shall be a fixed
interest rate, i.e. Item [    ]
of the following:

       

      (i)           LIBOR
for [  ]
period plus a margin of [   ].

       

      (ii)           HIBOR
for [  ]
period plus a margin of [   ].

       

      (iii)           [6.48]
per annum.

       

      (2) The
interest rate for individual Loan under Export Collection shall be a fixed
interest rate, i.e. Item [3] of the following:

       

      (i)           LIBOR
for [     ] period
plus a margin of [    ].

       

      (ii)           HIBOR
for [     ]
period plus a margin of [    ].

       

      (iii)           [6.48%]
per annum.

       

      (3) The
interest rate shall remain unchanged within the term of each individual
financing.

       

      (4)
Calculation and payment of interest

       

      Party A
shall repay the principal and interest in full upon the maturity date of each
individual financing. If the sum under relevant L/C or under export collection
has been received before such maturity date, Party A shall forthwith repay to
Party B such principal and interest.

       

      3) Under
the T/R Loan, the interest rate, calculation and payment of interest shall be as
follows.

       

      (1) The
interest rate for each individual loan shall be the annual rate and Item [   ] of
the following:

       

      (i) Fixed
interest rate, i.e. LIBOR for [   ]
month(s) period plus a margin of [   ],
which shall remain unchanged within each loan term.

       

      (ii)
Fixed interest rate, i.e. HIBOR for [  ] month(s) period plus a
margin of [   ]
, which shall remain unchanged within each loan term.

       

      (iii)
Fixed interest rate, i.e. [   ]
per annum, which shall remain unchanged within each loan
term.

       

      (iv)
Floating interest rate, i.e. LIBOR for [  ]
month(s) period plus a margin of [   ],
which shall be adjusted every [   ] months.

       

      (v)
Floating interest rate, i.e. HIBOR for [  ] month(s) period plus a
margin of [   ], which shall be
adjusted every [   ] months.

       

      (2) The
interest on T/R Loan shall be calculated and paid in accordance with the
following provisions:


      
        
           


        

        
           


          
            

          

        

        
           


        

      


       

      (i) For
T/R Loan with a fixed interest rate, the interest shall be calculated and paid
at the interest rate as agreed; for T/R Loan with a floating interest rate, the
interest shall be calculated and paid at the interest rate applicable to the
current floating interest period. If the floating interest period is shorter
than the Interest Payment Period, the interest that has accrued in each of the
floating interest periods shall be calculated first, and then be summed up and
paid on the Interest Payment Date.

       

      (ii)
Under T/R Loan, the interest shall be paid in accordance with Mode [   ] of
the following:

       

      Mode 1:
The interest shall be paid every (month/quarter/half year) and on the date
corresponding to the Value Date; if no corresponding date exists in the month
for interest payment, the last day of such month shall be the Interest Payment
Date.

       

      Mode 2:
The interest shall be paid in full together with the repayment of the principal
upon maturity.

       

      4) The
interest on Short Term Financing under Export L/C and on Loan
under  Export Collection shall accrue from the date on which the loan
proceeds are deposited into Party A’s account. The interest on the loan and on
the advance payment under the Line for T/R shall accrue from the date of payment
by Party B. The aforementioned date of deposit or date of payment shall be the
Value Date of the financing. The interest under this Contract shall accrue on a
daily basis and such daily rate shall be on a 365-day year basis if the
financing is in Hong Kong dollars or English pounds or on a 360-day year basis
if the financing is in currency other than Hong Kong dollars and English pounds.
Each interest period shall include the first day of such period, but exclude the
last day.

       

      The term
“LIBOR” shall mean the inter-bank offered rate for the same currency and the
same period which is published by the British Bankers Association (BBA) and
which appears on the TELERATE page or similar banking display terminals as of
11:00 a.m. (London time) two banking days prior to the occurrence of any
individual financing or two banking days prior to an interest rate adjustment
day.

       

      The term
“HIBOR” shall mean the inter-bank offered rate for the same currency and the
same period which is published by the Hong Kong Bankers Association (HKBA) and
which appears on the TELERATE page or similar banking display terminals as of
11:30 a.m. (Hong Kong time) two banking days prior to the occurrence of any
individual financing or two banking days prior to an interest rate adjustment
day.

       

      Under
this Contract, Party A shall pay to Party B the following fees:

       

      (1)
Management Fees which shall be calculated and paid at [  ]% of the
Maximum Amount of the Facility;

       

      (2) All
expenses incurred by Party B in respect to all individual financing under this
Contract;

       

      (3) All
expenses incurred by Party B in collecting sums under and/or in respect of the
L/C, negotiable instruments, guarantee, mortgage, and pledge in connection with
the Facility;


      
        
           


        

        
           


          
            

          

        

        
           


        

      


       

      (4) All
expenses under this Contract or in connection with the security for this
Contract, including without limitation expenses for legal services, insurance,
evaluation, registration, safekeeping, authentication, and
notarization.

       

      Article
6 Utilization of the Facility

       

      6.1
Conditions Precedent for using the Facility

       

      Subject
to a waiver by Party B, Party B is not obligated to provide financing unless the
following conditions are satisfied:

       

      (1) Party
A has obtained and/or completed all necessary approvals, registrations,
deliveries, and other legal formalities relating to the Facility in accordance
with relevant laws and regulations; and

       

      (2) The
security contracts or other security documents satisfactory to Party B have
become effective and remain in full force and effect; and

       

      (3) No
event of default listed in this Contract has occurred; and

       

      (4) If
Party A shall pay Management Fees as required in this Contract, such Fees have
been paid to Party B within [   ]
banking days after the execution of this Contract;

       

      (5)  All
other documents required by Party B have been submitted;

       

      (6) The
Application for Drawing and other relevant documents have been examined and
approved by Party B;

       

      (7) Other
conditions precedent:

       

      [                                        ]

       

      6.2 At
any time during the Availability Period the aggregate of the outstanding
principal of all individual financings shall not exceed the Maximum Amount of
the Facility.

       

      6.3
Subject to the limitation of amount set on each individual Line, Party A may use
each individual Line repeatedly during the Availability Period without any
restriction on frequency or amount of individual financing.

       

      6.4 The
indebtedness owed by Party A to Party B shall occur upon Party A’s use of any
individual Line. Such indebtedness shall include without limitation all the
principal, interest, overdue interest, default interest, management fees,
banking charges, liquidated damages, compensations and other fees or expenses
incurred by Party B in realizing its creditor’s rights (including but not
limited to litigation fees, arbitration fees, property preservation fees,
traveling expenses, enforcement costs, evaluation fees and auction
fees.)

       

      6.5 Party
A shall use the Facility in accordance with this Contract and internal
regulations of Party B in respect to trade financing, provision of credit
facility, settlement and loan.


      
        
           


        

        
           


          
            

          

        

        
           


        

      


       

      6.6 No
separate contract is needed for Party A to use the Facility. Party A, however,
shall submit to Party B an Application for Drawing and/or other relevant
applications (including without limitation Application for Documentary Credit
and Commitment Letter, Application for Shipping Guarantee, Application for T/R
Loan under L/C, Application for Packing Loan, and Memorandum for Presentation of
Documents under Export L/C or Export Collection) and Party B shall issue a
Notice of Drawing upon its approval of such applications.

       

       Application
for Drawing, other relevant applications and Notice of Drawing shall be deemed
as attachments to and shall be integral parts of this Contract.

       

      6.7
During the Availability Period specified in Article 4 and subject always to
Party B’s approval, Party A may apply for drawing the Facility on a revolving
basis within the Maximum Amount specified in Article 3. Relevant individual
Lines may be reinstated accordingly under the following circumstances: (1) Party
A has repaid/paid in full the principal and interest under the Line for T/R
Loan, Line for Short Term Financing under Export L/C and/or Line for Packing
Loan; (2) Party A has made punctual payments under import L/C; (3) the guarantee
obligations of Party B have been released under the Shipping
Guarantee.

       

      Article
7. Rights and Obligations of the Parties

       

      7.1 Party
A has the right to require Party B to keep confidential relevant information and
trade secrets relating to production and operation of Party A unless otherwise
required by laws and regulations.

       

      7.2 Party
A may apply to Party B for utilizing the Facility at any time within the
Availability Period. Party B shall grant approval if Party B, after review,
affirms that the Application complies with relevant laws and regulations, this
Contract and relevant internal regulations of Party B.

       

      7.3 Party
A shall provide financial statements and information relating to planning,
statistics, production and operation as required by Party B and shall be
responsible for the authenticity, integrity and validity of such information and
documents.

       

      7.4 Party
A shall be subject to Party B’s inspection and supervision over its operation,
financial activities and the use of the Facility under this Contract and shall
provide assistance as required by Party B.

       

      7.5
Whenever Party A’s credit standing degrades or other circumstances happen that,
in Party B’s sole judgment, may affect Party A’s normal business operations,
Party B has the right to adjust or cancel the unused Facility.

       

      7.6 Party
A shall open the settlement account in RMB or a foreign currency with Party B
and have import and export settlements, trade financing and other settlements
conducted through Party B.

       

      7.7 Party
A shall utilize the Facility for the purpose as agreed by the
Parties.


      
        
           


        

        
           


          
            

          

        

        
           


        

      


       

      7.8 Party
A shall repay the principal and interest within the term agreed by the
Parties.

       

      7.9 Party
A shall bear the exchange rate risk. If the fluctuation of exchange rate may
result in the aggregate of individual financings that have been provided
exceeding the Maximum Amount of the Facility, Party A shall promptly provide
security satisfactory to Party B upon its receipt of notice from Party B. Party
B is under no obligation to provide financing for any additional amount arising
from the fluctuation of exchange rate.

       

      7.10
Party A shall deposit into its account opened with Party B such funds as
sufficient to pay the amount due to Party B before each Repayment Date specified
in this Contract or in any Attachment hereto, and Party B has the right to debit
the aforementioned account for such amount.  If Party A does not repay
any indebtedness punctually and in full, Party B has the right to directly debit
for such amount Party A’s margin account or any account opened by Party A with
any branch or office of the China Construction Bank. If Party A fails to repay
any amount due, Party B has the right to enforce the security or to take other
measures to realize its creditor’s rights.

       

      7.11
Party A shall not misappropriate or transfer its funds or assets to evade its
indebtedness to Party B.

       

      7.12 If
Party A intends to create any security for any third party within the term of
this Contract and such security may affect Party A’s ability for repayment under
this Contract, Party A shall give Party B a prior written notice for Party B’s
consent.

       

      7.13
Party A shall promptly arrange for other security satisfactory to Party B where
the Guarantor in respect to this Contract ceases or suspends production; its
corporate registration is canceled, or business license revoked; it is bankrupt
or dissolved; or it is operating at a loss or any other negative change has
occurred, and such aforementioned incidents result in loss or partial loss of
the Guarantor’s ability to secure the Facility, or where the mortgaged or
pledged property(ies) for securing the Facility depreciate(s) or is (are)
damaged or destroyed

       

      Before
the repayment of the indebtedness in full, Party A shall promptly inform Party B
of any change of its business name, legal representative (chief officer),
address, business purpose or registered capital and other relevant
matters.

       

      Where
Party A intends to carry out activity(ies) which may have an impact on the
realization of Party B’s creditor’s rights before the indebtedness hereunder is
repaid in full, Party A shall give Party B a [   ]
days prior written notice for its consent to such intended activity(ies) and
shall further take sufficient measures to safeguard the  repayment of
the indebtedness under this Contract and arrange for security in accordance with
Party B’s instructions. The aforementioned activities shall include without
limitation contracting, leasing, transformation to a stock company, forming an
economic association with another enterprise, consolidation, merger, division,
setting up a joint venture, application for suspension of production or for
winding up or for bankruptcy.

       

      7.16
Before the indebtedness hereunder is repaid in full, Party A shall promptly
inform Party B in writing, take sufficient measures to safeguard the repayment
of the indebtedness under this Contract and arrange for security in accordance
with Party B’s instructions if there has occurred to Party A incident(s) that
may have substantially negative effects on Party B’s performance of its
obligations hereunder. The aforementioned incidents shall include without
limitation the following: Party A ceases or


      
        
           


        

        
           


          
            

          

        

        
           


        

      


       

      suspends
production; its corporate registration is canceled, or business license revoked;
its legal representative or high-ranking officers are involved in illegal
activities or litigation with a major impact; great difficulties arise in
respect to its production or operation; or its financial standing
deteriorates.

       

      7.17
Party A shall not enter into with any third party any contract that is
detrimental to the rights and interests of Party B under this
Contract.

       

      7.18
Before the repayment of all the indebtedness hereunder, Party A shall not
provide security to any third party with the assets procured by using the
Facility the without prior written consent of Party B.

       

      7.19
Party A shall compensate Party B for all losses incurred by Party B in
connection with the disputes arising from the underlying Contract and all losses
caused by any third party.

       

      7.20 In
respect to L/C, Party A and Party B shall have the following additional rights
and obligations:

       

      (1) Party
A shall submit to Party B the underlying commercial contracts and other relevant
documents as required by Party B and shall be responsible for the authenticity
of all such documents.

       

      (2) All
settlements in both RMB and foreign currency under the L/C opened for the
account of Party A shall be conducted through Party B.

       

      (3) Party
B’s issuance of the L/C shall be subject to the International Chamber of
Commerce Uniform Custom and Practice for Documentary Credits (UCP 500), and
Party B shall be responsible for all liabilities arising from such
issuance.

       

      (4) Party
A shall repay all indebtedness under this Contract. The “indebtedness” herein
shall include but not be limited to the amount payable for the goods under the
L/C, relevant charges, telecommunication expenses, disbursements, overdue
interest payable by Party A for Party B’s advance payment under the L/C,
liquidated damages, compensations, relevant banking expenses refused by the
overseas beneficiary and the expenses incurred by Party B in realizing its
creditor’s rights.

       

      (5) Party
A shall submit to Party B an Application if any amendment needs to be made to
the L/C. Party A shall be responsible for all expenses relating to any amendment
to the L/C (including without limitation the banking expenses refused by the
overseas beneficiary).

       

      (6) Party
A shall instruct in writing Party B to make payment/give acceptance/confirm
deferred payment/refuse payment within the period stated in the Advice of Inward
Documents under Letter of Credit.  If Party A fails to give such
written instructions within such stated period, Party B has the right to
determine at its sole discretion to make payment/give acceptance/confirm
deferred payment/refuse payment. Party A shall be responsible for all
liabilities and consequences incurred in respect to the aforementioned
activities.


      
        
           


        

        
           


          
            

          

        

        
           


        

      


       

      (7) If
there is any discrepancy between the documents and the L/C and Party A intends
to instruct Party B to refuse payment/refuse acceptance/refuse to confirm
deferred payment, Party A shall instruct in writing Party B as to the
aforementioned refusals within the period stated in the Advice of Inward
Documents under Letter of Credit. Party A shall give reasons for such refusals
and provide a full list of all the discrepancies. Party A shall further return
all the documents provided by Party B. Notwithstanding all of the above, Party B
is entitled to determine and deal with the discrepancy at its sole discretion
and to decide whether or not to make payment/give acceptance/confirm deferred
payment.

       

      (8) If
the L/C is a sight L/C and Party B determines in its judgment that there is no
discrepancy between the documents and the L/C, Party A shall pay to Party B all
amounts and relevant expenses within 3 banking days after Party B issues the
Advice of Inward Documents under Letter of Credit.

       

      If the
L/C is a usance L/C, Party A shall pay to Party B all amounts and relevant
expenses before the maturity date of payment under the L/C.

       

      (9) Party
A shall compensate Party B for any loss incurred in connection with any dispute
arising from the underlying commercial contract and for any loss caused by any
third party.

       

      (10)
Party B shall not be responsible for any delay or loss in transmission of any
message, letter or other document, nor for any delay, omission or mistake
arising in the course of telecommunication.

       

      (11)
Party A shall complete in English the Application for Amendment to Documentary
Credit and all expressly-required parts of the Application for Irrevocable
Documentary Credit. If Party A fills in Chinese where English is required, Party
B shall not be responsible for any ambiguity caused thereby.

       

      (12)
Party A shall be solely responsible for any illegibility or ambiguity in the
Application for Amendment to Documentary Credit and in the Application for
Irrevocable Documentary Credit.

       

      7.21 In
respect to Shipping Guarantee, Party A and Party B shall have the following
additional rights and obligations:

       

      (1) Party
B has the right to require Party A to issue a trust receipt and provide other
relevant documents. If the beneficiary raises any claims against Party B after
issuance of the Shipping Guarantee, Party A shall deposit within three banking
days after receipt of the Notice of Payment such amounts as sufficient to
satisfy the claim and relevant expenses into the account designated by Party
B.

       

      (2) Party
A shall not create mortgage or pledge over the goods under the Shipping
Guarantee in favor of any other institution or individual without the written
consent of Party B.

       

      (3) Party
A shall unconditionally make payment or accept upon receipt from Party B of the
Advice of Inward Documents under Letter of Credit whether or not there is any
discrepancy. If Party A fails to pay or accept within the stated period, Party B
has the right to debit for the corresponding amount Party A’s account opened
with any branch or office of China Construction Bank so as to make punctual
payment.


      
        
           


        

        
           


          
            

          

        

        
           


        

      


       

      (4) Party
A shall take the Shipping Guarantee back from the carrier or its agent and
return it to Party B within fifteen days after it receives the original bill of
lading. If Party A fails to retake the Shipping Guarantee within thirty days,
Party B has the right to present the bill of lading to the carrier or its agent
in exchange for the return of Shipping Guarantee and all expenses so incurred
shall be borne by Party A.

       

      (5) If
any legal action is instituted against Party B as a result of issuance of the
Shipping Guarantee, Party A shall provide Party B upon demand with sufficient
funds for defense, unconditionally assume all the liabilities and risks and
compensate Party B for all the expenses and losses so incurred. The said
liabilities, risks, expenses and losses shall include, without limitation,
compensations, litigation fees, legal fees and traveling fees.

       

      (6) If
the ship related to the Shipping Guarantee or other ships or assets of the owner
of that same ship are seized or are facing possible seizure due to the Shipping
Guarantee, Party A shall be responsible for their release on bail or shall take
all other necessary measures to prevent the aforementioned
occurrences.  Regardless of the legality or not of such seizure, Party
A shall compensate Party B for any and all losses, damage and expenses so
incurred.

       

      (7) Party
A shall compensate Party B for any other losses incurred by Party B in respect
to its issuance of the Shipping Guarantee.

       

      7.22 In
respect to T/R Loan, Party A and Party B shall have the following additional
rights and obligations:

       

      (1) Party
A has the right to require Party B to provide T/R Loan in accordance with this
Contract.

       

      (2) Party
B shall keep confidential all trade secrets of Party A.

       

      (3) All
settlements in both RMB and foreign currency under this Contract shall be
conducted through its account opened with Party B.

       

      (4) Party
B acquires upon payment the title to the documents and the title to the goods
under such documents (the “Goods”).

       

      (5) Party
B shall return the documents to Party A upon issuance of a Trust Receipt by the
latter.

       

      (6) As
trustor under the Trust Receipt, Party B is entitled to the interests and
benefits of the disposal of the trust property by Party A.

       

      (7) As
trustee under the Trust Receipt, Party A has the right to hold the documents
under the L/C and the Goods. Party A may determine at its discretion to unload,
store, manufacture, process or sell the Goods. The proceeds of the sale of the
Goods shall be used to repay Party A’s indebtedness under the Trust Receipt Loan
and any deficiency shall be repaid by Party A by drawing on other financial
sources.

       

      (8) Party
A shall bear all fees and expenses incurred in connection with the Goods or
disposal of the same.


      
        
           


        

        
           


          
            

          

        

        
           


        

      


       

      (9) After
the Goods have been sold, Party B has the right to collect the purchase price
from the buyer and issue effective receipts without the need to give prior
notice to Party A.

       

      (10)
Party A shall dispose of the Goods in accordance with any special requirements
by Party B.

       

      (11) The
documents and the Goods relating to the T/R Loan shall be the trust property of
Party B and independent of Party A. Such trust property shall not be subject to
liquidation in the event of bankruptcy or the dissolution of Party A. The
creditor’s rights derived by Party A from its management and disposal of the
aforementioned documents and Goods shall not be setoff against its indebtedness
arising from its own property.

       

      (12)
Before the principal, interest, fees and expenses under the Trust Receipt Loan
are repaid in full, Party A shall not create any mortgage (pledge) over the
documents or the Goods.

       

      (13)
Before the sale of the Goods, Party A shall deliver to Party B relevant
documents in respect to the Goods or to store the same pursuant to Party B’s
instructions and issue the warehouse receipt to the order of its
bank.

       

      (14)
Party A shall insure the Goods at its own expenses with reputable insurers
against fire and other risks in accordance with business practices for the full
value of the Goods and shall hold as trustee for Party B, and deliver upon Party
B’s demand the insurance policies or contracts under which Party B is designated
as the beneficiary or under which the beneficiary has been changed to Party B
through due endorsement. In the event of any claim in respect to the Goods under
the insurance policy, Party A shall inform Party B forthwith of such claim, and
shall pay to Party B all the insurance proceeds upon receipt of the
same.

       

      (15)
Party B has the right to determine/examine the modes of transportation, the
place(s) and method(s) for storage of the goods and types of insurance. Party A
shall provide necessary cooperation including but not limited to allowing Party
B’s personnel to enter the warehouses and sites which are owned, occupied or
managed by Party A. Party A shall execute upon the demand of Party B all such
documents as necessary to facilitate the delivery taking of the goods and claims
by Party B.

       

      (16)
Party B has the right to supervise the sale of the Goods and the collection of
the proceeds. Party A shall forthwith advise Party B in writing of relevant
information at the request of Party B.

       

      (17) If
Party A fails to dispose of the trust property in accordance with Party B’s
instructions, Party B has the right to terminate the trust, repossess the trust
property and dispose of the same at its sole discretion. Party A shall return
upon demand to Party B the full set of title certificates and documents in
relation to the Goods and other relevant documents or the Goods in accordance
with Party B’s instructions.

       

      7.23 In
respect to Packing Loan, Party A and Party B shall have the following additional
rights and obligations:


      
        
           


        

        
           


          
            

          

        

        
           


        

      


       

      (1) The
L/C relating to the Packing Loan shall be either L/C under which Party B is the
advising bank or L/C which is negotiable if Party B is not the advising bank.
Any delivery of documents and collection of payments in connection with exports
under the Packing Loan shall be made through Party B.

       

      (2) All
settlements in both RMB and foreign currencie under the Packing Loan shall be
conducted through its accounts opened with Party B.

       

      (3) The
proceeds received by Party A from its export and/or short term financing under
export L/C shall promptly be used to repay the principal, the interest and other
expenses. In relation to the L/C for shipment in installments, each installment
payment received by Party A shall promptly be used to repay the principal,
interest and other expenses. When the loan is due, Party A shall repay
outstanding principal, interest and other expenses in full. If the issuing bank
of the L/C in respect to the Packing Loan refuses to make payment, Party B has
the right to accelerate forthwith the Packing Loan. If Party A fails to deliver
the documents conforming to the L/C within the validity period of the L/C, Party
B has the right to forthwith accelerate the Packing Loan.

       

      (4) The
proceeds of the loan shall be used by Party A exclusively for the preparation of
goods under the L/C relating to the Packing Loan and shall not be used for any
other purposes.

       

      (5)
Except as otherwise agreed in writing by Party B and the security provider,
Party A shall not require or accept any amendment to or revocation of the
L/C.

       

      (6) If
amendments are made to the terms and conditions of the L/C within the loan term
that may materially and adversely affect Party B’s rights and interests,
including but not limited to any decrease of the amount under the L/C, any
extension of the payment period, or revocation of the L/C, Party A shall make
prepayment in accordance with the notice by Party B of accelerating the
loan.

       

      (7)
Except as otherwise agreed by Party B in writing, Party A shall not transfer its
rights and/or obligations under the L/C or under this Contract to any third
party.

       

      (8) Party
A shall provide to Party B information relating to the use of the loan and the
preparation of goods under the L/C. Party A shall dispatch the goods as required
under the L/C subject to Party B’s supervision and shall submit to Party B the
full set of original and clean documents under the L/C.

       

      7.24 In
respect to Short Term Financing under Export Credit, Party A and Party B shall
have the following additional rights and obligations:

       

      (1) Party
A has the right to request Party B to provide such Financing.

       

      (2) All
settlements in both RMB and foreign currencies under such Financing shall be
conducted through its accounts opened with Party B. (3) Party A shall submit to
Party B original copies of the L/C and amendments thereto (if any) and a
complete set of documents as provided for in the L/C in order for Party B to
claim reimbursement against the issuing bank upon presentation of those
documents. All the proceeds received by Party B from the issuing bank shall be
applied directly for the repayment of the principal and interests of such
Financing and other expenses. The deficiency, if any, shall be paid by Party A
by drawing on other financial sources. Party B also has the right to debit for
the corresponding amount any account opened by Party A with any branch or office
of China Construction Bank.


      
        
           


        

        
           


          
            

          

        

        
           


        

      


       

      If the
issuing bank refuses to make payment, Party B has the right to accelerate
forthwith such Financing.

       

      (4) In
case of any discrepancy between the documents and the L/C, Party B has the right
to refuse to provide such financing.

       

      (5) Party
B is entitled to hold Party A liable for all unpaid principal, interest,
expenses and any other losses and to debit for such amount any account opened by
Party A with any branch or office of China Construction Bank, and to set off
other account receivables of Party A against such amount if the overseas banks
(including the issuing bank and its nominated bank) (“Overseas Banks”) refuse
payment, or delay in payment, or make any deduction from payment due to the
occurrence of any event that is not caused by Party B’s fault including without
limitation the discrepancy between the documents and the L/C, social unrest,
wars, financial crisis in the countries where the Overseas Banks are located,
bankruptcy of such Overseas Banks, late delivery or loss of the documents during
the course of mailing, telecommunication errors/omissions or other events of
force majeure. Party B also has the right to dispose of at its sole discretion
upon the occurrence of any event mentioned above the documents and the goods
under this Contract and to get compensated from the proceeds of such disposal.
If such proceeds are insufficient, Party B is entitled to demand Party A for
payment of the deficiency.

       

      (6) Party
A has the right to prepay such Financing. The interest shall be calculated at
the Interest Rate as specified in this Contract and on the basis of the actual
number of days elapsed.

       

      7.25 In
respect to Loan under Export Collection, Party A and Party B shall have the
following additional rights and obligations:

       

      (1) Party
A has the right to require Party B to provide the loan under the terms and
conditions of this Contract.

       

      (2) All
settlements in both RMB and foreign currencies under this Contract shall be
conducted through its accounts opened with Party B.

       

      (3) Party
A shall assign to Party B the rights and interests under the export credit
insurance arranged by Party A. Party A shall submit to Party B a complete set of
the collection documents under this Contract so that Party B can claim
reimbursement against relevant obligors with those documents. All the proceeds
received by Party B shall be applied directly for the repayment of the
principal, interest and other expenses under this Contract and the deficiency
(if any) shall be repaid by Party A.

       

      (4) If
Party B receives notice from the collecting bank stating that the payer refuses
to make payment, the loan shall forthwith become due and payable.

       

      (5) If
the payer refuses to make payment, or delays in payment, or makes deduction from
any payment or does so due to the occurrence of any event that is not caused by
Party B’s fault, including without limitation any delay or loss of the documents
during the mailing process, telecommunication omissions or other events of force
majeure, Party B is entitled to hold Party A liable for all losses incurred by
Party B in respect to principal and interest, expenses and any other losses.
Party B has the right to debit for such amount any account opened by Party A
with any branch or office of China Construction Bank, or to set off other
account receivables of Party A against such amount. Party B also has
the


      
        
           


        

        
           


          
            

          

        

        
           


        

      


       

      right to
dispose of at its sole discretion the documents and the goods under this
Contract and to get compensated from the proceeds of such disposal. Party B is
further entitled to hold Party A liable for the deficiency, if any.

       

      (6) Party
A has the right to prepay the loan. The interest shall be calculated on the
basis of the actual number of days elapsed and at the interest rate specified in
this Contract.

       

      Article
8. Security

       

      8.1 The
security(ies) available hereunder shall be Item [1.2] of the
following:

       

      (1)           Guarantee

       

      (2)           Mortgage

       

      (3)           Pledge

       

      (4)           Deposit

       

      (5)           Standby
Letter of Credit

       

      (6)           Credit
Insurance

       

      (7)           Other
Forms of
Security:                       .

       

      8.2 Where
Party A cannot pay any due amount punctually and such amount is converted into
Working Capital Loan, the security(ies) mentioned above shall be available to
Party B for securing the indebtedness in respect to such Working Capital
Loan.  Party B has the right to request Party A to change security
provider or to provide other security as the case may be.

       

      Article
9. Liabilities for Default

       

      Events of
Default

       

      Events of
Default by Party A

       

      Party A
fails to provide true, complete and valid financial information or information
relating to its production and operation or other relevant documents as required
by Party B.

       

      Party A
fails to utilize the Facility for the purpose agreed by the
Parties.

       

      (III)
Party A fails to punctually repay the principal and/or interest.

       

      (IV)
Party A refuses Party B’s demand for supervision and/or inspection over the
utilization of the loan or hinders Party B from doing so.


      
        
           


        

        
           


          
            

          

        

        
           


        

      


       

      (V) Party
A transfers or misappropriates funds or assets in order to evade its
debts.

       

      Party A
is in breach of Article 7 of this Contract.

       

      Party A’s
operational and financial conditions deteriorate and as a result it is unable to
repay its debts on the due date or it is involved or likely to be immediately
involved in litigation or arbitration with a major impact or other legal
disputes, and any of the aforementioned incidents, in Party B’s judgment, may or
has affect(ed) or impair(ed) Party B’s rights and interests
hereunder.

       

      Any other
indebtedness owed by Party A has affected or may affect its ability to perform
its obligations to Party B hereunder.

       

      Party A
fails to repay any other indebtedness due to China Construction Bank upon
maturity.

       

      During
the term of this Contract, Party A carries out activity(ies) which may change
its operational or managerial modes or equity structure and which in Party B’s
sole judgment may affect or has affected the rights and interests of Party B
hereunder. The aforementioned activities shall include without limitation
contracting, leasing, transformation to a stock company, forming an economic
association with another enterprise, consolidation, merger, division, setting up
a joint venture, application for suspension of production or for winding up or
for bankruptcy.

       

      Other
events which Party B believes may affect the realization of Party B’s creditor’s
rights.

       

      Party A
fails to perform or comply with any of its other obligations
hereunder.

       

      Any of
the following events in relation to the Guarantor for this Contract shall be
deemed as an event of default by Party A unless Party A provides new security in
favor of, and satisfactory to, Party B:

       

      (I) There
occur to the Guarantor such incident(s) as may affect its ability to act as a
joint and several liability guarantor and such incidents shall include without
limitation contracting, leasing, consolidation, merger, setting up a joint
venture, division, forming an economic association with another enterprise,
transformation to a stock company, bankruptcy and dissolution.

       

      (II) The
Guarantor provides beyond its capacity any security for any third
party.

       

      (III) The
Guarantor loses or may lose its capability to act as a guarantor.

       

      (IV)
Other events of default by the Guarantor as provided for in the guarantee
contract.

       

      Any of
the following events in relation to the Mortgager for this Contract shall be
deemed as an event of default by Party A unless Party A provides new security in
favor of, and satisfactory to, Party B:


      
        
           


        

        
           


          
            

          

        

        
           


        

      


       

      (I) The
Mortgager fails to effect or maintain insurance for the mortgaged property, or
fails to dispose of insurance proceeds in accordance with the mortgage contract
upon occurrence of any insured event.

       

      (II) The
Mortgager fails to dispose of proceeds of compensation in accordance with the
mortgage contract where the mortgaged property is damaged or destroyed or its
value decreases as a result of the act of any third party.

       

      (III) The
Mortgager transfers, leases, re-mortgages or disposes of by any other means the
mortgaged property without Party B’s written consent.

       

      (IV) The
Mortgager fails to handle the proceeds of the disposal of the mortgaged property
in accordance with the mortgage contract, although such disposal is effected
with Party B’s consent.

       

      (V) The
Mortgager fails to restore the value of the mortgaged property promptly, or
fails to provide other security(ies) acceptable to Party B where the mortgaged
property is damaged, destroyed or decreases in value, which may affect the
repayment of the indebtedness hereunder.

       

      (VI)
Other events of default by the Mortgager provided for in the mortgage
contract.

       

      Any of
the following events in relation to the Pledger for this Contract shall be
deemed as an event of default by Party A unless Party A provide new security in
favor of, and satisfactory to, Party B:

       

      (I) The
Pledger fails to effect or maintain insurance for the pledged property, or fails
to dispose of insurance proceeds in accordance with the pledge contract upon
occurrence of any insured event.

       

      (II) The
Pledger fails to dispose of the proceeds of compensation in accordance with the
pledge contract, where the pledged property is damaged or destroyed or its value
decreases as a result of the act of any third party.

       

      (III) The
Pledger fails to handle the proceeds of disposal of the pledged property in
accordance with the pledge contract, although such disposal is effected with the
consent of Party B.

       

      (IV) The
Pledger fails to restore the value of the pledged property promptly, or fails to
provide other security acceptable to Party B where the pledged property is
damaged, destroyed or decreases in value, which may have an impact on the
repayment of the indebtedness hereunder.

       

      (V) Other
events of default by the Pledger provided for in the pledge
contract.

       

      Any of
the following shall constitute an Event of Default by Party A unless Party A
provides new security as required by Party B: the security documents or other
securities do not take effect, or are void or rescinded, or the security
provider totally or partially loses its capacity to secure the indebtedness or
refuses to perform its obligations.


      
        
           


        

        
           


          
            

          

        

        
           


        

      


       

      Remedies

       

      If any
Event of Default in Items (1) to (5) above occurs, Party B is entitled to
enforce its rights hereunder by taking one or more of the following
measures:

       

      Party B
is entitled to adjust or cancel the Facility or any individual Line under this
Contract.

       

      Party B
is entitled to accelerate forthwith the indebtedness under this Contract, and to
require Party A to repay forthwith all principal, interest and fees, whether
they are due or not.

       

      (3) If
Party B makes advance payment under the L/C due to Party A’s breach of this
Contract, Party B is entitled to overdue interest payable by Party A at the
overdue interest rate for the period commencing from the date of such advance
payment. Such overdue interest rate shall be 50%.

       

      Before
the maturity date of the Packing Loan, Party A shall pay compound interest on
the interest not paid punctually at the Interest Rate and in accordance with the
interest payment provisions set forth in Article 5 of this Contract; where Party
A defaults in repayment of the RMB Loan upon maturity, with respect to such Loan
(including all or part of the Loan which is accelerated by Party B), Party A
shall pay interest and compound interest at the overdue interest rate as
promulgated by the People’s Bank of China and applicable at the time of such
default and in accordance with the interest payment provisions set forth in this
Contract for the period commencing from the date of such failure; where Party A
defaults in repayment of the Loan in foreign currency upon maturity, with
respect to such loan (including all or part of the loan which is accelerated by
Party B), Party A shall pay interest and compound interests at the overdue
interest rate and in accordance with the interest payment provisions set forth
in this Contract for the period commencing from the date of such
default.

       

      Where
Party A defaults in repayment of Short Term Financing under Export Credit or
Loan under Export Collection upon maturity, Party A shall pay interest and
compound interest at the overdue interest rate on a quarterly basis commencing
from the date of such default. Such overdue interest rate shall be 50% [         ].

       

      Before
the Trust Receipt Loan matures, and where Party A defaults in payment of the due
interests, Party A shall pay compound interest on such unpaid interest at the
interest rate and in accordance with the interest payment provisions set forth
in this Contract; where the principal and the interest shall be paid in a number
of installments and Party A defaults in repayment of any indebtedness upon
maturity, with respect to the indebtedness not repaid punctually, Party A shall
pay interest and compound interest at the overdue interest rate and in
accordance with the interest payment provisions set forth in this Contract for
the period commencing from the date of such default; where the principal and the
interest shall be repaid in one installment and Party A defaults in repayment of
the indebtedness upon maturity, with respect to such indebtedness, Party A shall
pay the interest and compound interest on a quarterly basis at the overdue
interest rate for the period commencing from the date of such default. Such
overdue interest rate shall be [50%].

       

      (4) Party
B is entitled to debit any account in any currency opened by Party A with any
branch or office of China Construction Bank for any unpaid
amount.


      
        
           


        

        
           


          
            

          

        

        
           


        

      


       

      (5) Party
B is entitled to require Party A to provide new security(ies) for all the
indebtedness in respect to the Facility.

       

      (6) Party
B is entitled to enforce its security rights.

       

      (7) Party
B is entitled to terminate this Contract.

       

      Article
10. Amendment to this Contract

       

      Upon
taking effect of this Contract, any Party intending to amend this Contract shall
notify the other Party promptly and a written agreement shall be executed if the
Parties so agree, unless otherwise provided in this Contract or any other
agreement.

       

      Article
11. Miscellaneous

       

      1  

       

      2  

       

      3  

       

      4   

       

      Article
12. Dispute Resolution

       

      Any
dispute arising out of or in connection with this Contract shall be settled
through friendly consultation. If no agreement is reached through such friendly
consultation, such dispute shall be settled in accordance with _____ of the
following:

       

      (1)
Instituting legal proceedings with the People’s Court in the location of Party
B.

       

      (2)
Submitting the disputes to the [                ]
for arbitration (the venue for such arbitration shall be __________), which
shall be conducted in accordance with the arbitration rules in effect as of the
date of submission. The arbitration award shall be final and binding on both
Parties.

       

      The
Parties shall perform this Contract in accordance with the undisputed parts
during the course of such legal proceedings or arbitration.

       

      Article
13. Effectiveness


      
        
           


        

        
           


          
            

          

        

        
           


        

      


       

      This
Contract shall take effect upon the execution by the legal representative (chief
officer) or authorized representative of Party A and by chief officer or
authorized representative of Party B with the company chops of both Parties
affixed.

       

      Article
14. Counterparts

       

      This
Contract shall be made in [    ]
counterparts.

       

      All
documents created within the Availability Period and within the Maximum Amount
which underlie the debtor-creditor relationship between the Parties (including
but not limited to Application
for Drawing, Notice of Drawing, or other certificates and documents)
shall be integral parts of this Contract.

       

      Article
15.  Representations

       

      Party A
is fully informed and aware of the business purpose and powers of Party
B.

       

      Party A
has read all the terms of this Contract and Party B has given explanation as
required by Party A. Party A hereby acknowledges that it fully understands all
terms of this Contract and the corresponding legal consequences
thereof.

       

      Party A
has the right and power to execute this Contract.

       

      Party A
(Company Chop): Shaanxi Tianren Organic Food
Co., Ltd.

       

      Legal
Representative (or Chief Officer) or Authorized Representative
(Signature):  /s/ Xue Hongke


       

      Date:

       

      Party B
(Company Chop): Gaoxin
Branch of China Construction Bank

      Chief
Officer or Authorized Representative (Signature): /s/ Zhou
Cunxing

       

      Date: