Working Capital Loan Contract


 


(Loan No. 1011122002)


 


(Selective and Summary Translation)


 


The Borrower:Inner Mongolia Yongye Nongfeng Biotechnology
Co., Ltd.


(“Party A”)


 


The Lender:China International Trust and Investment Corporation
(CITIC), Hohhot Branch 


(“Party B”)


 


Place of Execution:Hohhot Branch


Date of Execution: December ____. 2011


 


Article 1          Loan Type


 


1.1        Working
capital loan


 


Article 2          Amount and Term of the Loan


 


2.1        Amount:     RMB120,000,000.00
(ONE HUNDRED TWENTY MILLION)


 


2.2        Term:          Six
Months (December __, 2011 to June __, 2012)


  


Article 3          Purpose of the Loan


 


3.1        To
be used for purchasing raw material. Without Party B’s written authorization, the loan cannot be used for investment in fixed
capital or equity, nor can it be used in the production and operation or for any other purposes.


 


Article 4          Interest and Interest Rate of the Loan


 


4.1        Interest
rate 30.000000 (% or basis points) in addition to the base rate for the same type of loan for the same period published by the
People’s Bank of China on the date of the loan withdrawal.         


  



    	 



    	 



    
 


4.2        The
interest rate for the loan hereunder is fixed and will not change during the term of the loan.


 


4.3        The
interest starts to accrue from the date of the withdrawal of the loan and is calculated according to this formula: Interest = the
actual balance of the loan x the actual number of days x the annual rate/360 days.


 


4.4        On
the loan that is not to be repaid in one lump sum, the first interest settlement date is January 20, 2012 and the settlement date
thereafter is the 20th day of each month.


 


4.5        Party
A must have sufficient balance in the account set up with Party B (Account No.: 7271110182600055798) before each interest settlement
date to allow Party B to deduct interest from the account.


 


4.6        Upon
the expiration of the term, the principal and interest of loan must be repaid.


 


Article 5          Release and Withdrawal of the Loan


 


5.1        Preconditions
for the first withdrawal (none).


 


5.2        Preconditions
for each withdrawal:


 


Party A has no violation of the obligations and responsibilities
hereunder and under the guarantee agreement;


 


No occurrence of breach event specified herein;


 


The guarantee document remains valid and effective;
in Party B’s reasonable judgment, there is no adverse change in Party A’s financial situation that will harm, delay
or obstruct its performance of the obligations and responsibilities hereunder and under the guarantee agreement;


 


Party A has executed or provided to Party B all necessary
documents or documents reasonable requested by Party B;


 


Party A has set up the bank account with Party B in
accordance with the provisions herein; and other requirements from Party B.


 


5.3        Loan
withdrawal plan (not specified)


 


5.4        Party
A agrees that Party B has the right to modify the withdrawal plan if Party A or its guarantor fails to fulfill all the obligations
hereunder.


 


5.5        Party
A must withdraw the loan in accordance with the withdrawal plan specified herein.


 






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5.6        If
Party A unilaterally cancels the loan, thus causing any change to Party B in the loan amount actually released, the principal of
the loan will be calculated based on the loan note actually issued.


 


5.7        Release
and payment of the loan


 


Party A must submit an application to Party
B for loan withdrawal, along with other required loan documents, before each withdrawal date; each application is irrevocable;
Party B, after review and approval, must transfer the amount of the loan applied for into Party A’s account (Account No.:
7271110182600055798) set up with Party B according to the date specified or pay the amount to Party A’s trading partner designated
by Party A under entrusted payment method.


 


After the release of the loan, Party B shall
have the right to review periodically or from time to time if the loan is used in accordance with the provisions herein, and Party
A must provide assistance to Party B.


 


Article 6          Repayment of the Loan


 


6.1        The
principal of the loan hereunder must be repaid upon the expiration of the term with interest paid each month.


 


6.2        Repayment
schedule (none).


 


6.3        Party
A must have an amount of the balance in the account set up with Party B no less than the sum of the principal and interest of the
loan before the loan repayment date, and Party A hereby authorizes Party B to deduct automatically from such account the amount
of principal and interest of the loan as repayment.


 


6.4        If
the amount paid by Party A is not sufficient to pay off all the amount payable hereunder, the payment shall be applied in the following
order: penalty interest and compound interest, interest payable and loan principal.


 


6.5        If
Party A desires to repay the loan in advance, Party A must submit an application for early repayment 20 bank business days in advance
to Party B for approval.


 


Article 7          Restructuring of the Loan


 


7.1        If
Party A is unable to repay the loan when due, Party A must submit an application for loan restructuring one month prior to the
due date to Party B for approval, and must sign loan restructuring agreement if approved. If not approved, Party A must repay the
loan at the repayment date specified herein. Otherwise, Party B shall have the right to treat the loan as delinquent loan.


 






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Article 8          Guarantee of the Loan


 


8.1        The
loan hereunder is guaranteed by a pledge guarantee, and the contract number of the Pledge Guarantee is: 1011122002


 


Article 9          Party A’s Representations and Warranties


 


9.1        Party
A is a Chinese legal person established in accordance with the law of the PRC and has the capacity and power to conduct civil activities
and other actions necessary for the execution and perform of this contract and to bear civil responsibility for its actions. Party
A has obtained all due approval and authorization, both internal and external, necessary for the execution of this contract.


 


9.2       All
the documents, financial statements and representations provided in accordance with the law and at Party B’s request in connection
with this loan are valid, legal, truthful, accurate and complete.


 


Article 10        Party A’s Covenants


 


10.1      Party
A must provide periodically or from time to time at Party B’s request financial statements and other documents that truthfully
reflect its operations and financial conditions and warrant that the documents mentioned above are valid, truthful and complete.


 


10.2     During
the term of the loan, if there is any major change in its operational decision or strategy, including but not limited to share
transfer, reorganization, major financing, sale of assets, acquisition, M&A, spin-off, equity restructuring, joint capital
or joint venture or joint operation, contracting or lease, external investment, substantial increase of debt financing, change
in the scope of operation and registered capital, bankruptcy or liquidation, that may affect Party B’s rights and interests,
Party A must notify Party B in writing 30 days in advance and obtain Party B’s written approval.


 


10.3     Party
A must actively provide assistance to Party B in Party B’s supervision on its operation, the loan payment management and
the use of the loan, major operation management matters, financial situation, payment settlement and the trades with its partners.


 


10.4     Party
A shall not transfer or change the loan obligations hereunder in any matter without prior written approval from Party B.


 


10.5     If
Party A disposes of its major assets or of all or significant part of its operational income by means of transfer or lease or any
other method, Party A must notify Party B in writing 30 days in advance and obtain Party B’s written approval.


 






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10.6     If
there is occurrence of any event, including but not limited to involvement in litigation, arbitration, criminal action, administrative
sanction, ceasing of business, suspension of operation, dissolution, filing for bankruptcy, revocation or suspension of business
license or deterioration of financial situation, that will have adverse impact on the performance of the loan hereunder, Party
A must notify Party B in writing within 3 days after the occurrence or likely occurrence of such event.


 


10.7     If
there is any occurrence of any adverse event, including but not limited to ceasing of business, suspension of operation, dissolution,
filing for bankruptcy, revocation or suspension of business license or deterioration of financial situation, on the part of Party
A’s guarantor that causes the guarantor to lose all or part of its ability to provide guarantee, or any decrease in the value
of the pledged objects or mortgaged properties, Party A must provide additional guarantee approved by Party B.


 


10.8     During
the term of the loan, Party A must notify Party B in writing of any change in its legal name, legal representative, address or
telephone or fax numbers within 7 days of such change.


 


10.9     Party
A must provide written report to Party B on any related party transactions involving 10% or more of its net assets that have taken
place or about to take place, including the relationship with the related party, item, nature and amount of the transaction or
the corresponding ratio or pricing policy.


 


10.10   Party
B shall have the right to recall all or part of the loan based on the situation of Party A’s cash returns.


 


Article 11      Rights and Obligations of Each Party


 


11.1    Party
A shall have the right to withdraw and use the loan in accordance with the provisions herein.


 


11.2    Party
A must repay the principal and interest of the loan in accordance with the provisions herein.


 


11.3    Party
B shall have the right to learn, supervise and review Party A’s operations, use of the loan and the related party transactions.


 


11.4    Party
B shall have the right to pursue Party A according to the law for any insufficient part if the proceeds from disposing of Party
B’s pledged or mortgaged items or properties are insufficient toward the repayment of the loan within the scope of the guarantee
hereunder.


 


11.5    Upon
the fulfillment by Party A of the obligations provided herein and the satisfaction by Party A of the preconditions specified herein
for loan withdrawal, Party B must release the amount of loan in full according to the schedule.


 






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11.6     Party
B shall have the right to request Party A to provide additional documents necessary for the approval of the loan release; however
Party B must maintain confidential all information, documents and material provided by Party A, except for any inquiry or disclosure
as required by or in accordance with provisions of the law and statutes.


 


Article 12       Account


 


12.1     
Party A must set up an account with Party B; the account number is: 7271110182600055798.


 


Article 13       Liability for Breach


 


13.1      After
this contract has become effective, Party A and Party B must both perform its respective obligations specified herein and bear
the corresponding liabilities for breach.


 


13.2      If
Party A fails to withdraw the loan according to the withdrawal date specified herein, Party B shall have the right to charge a
penalty fee at the interest rate specified herein based on the actual number of days of delay.


 


13.3      Upon
the occurrence of any of the following, Party B shall have the right to suspend or terminate unilaterally the release of any remaining
amount of the loan, demand the immediate repayment of the amount already released and all corresponding interest and fees and take
other corresponding measures.


 


Party A fails to repay the principal and interest of
the loan according to the schedule;


 


Party A fails to perform any of its obligations specified
herein;


 


The certificates and documents provided by Party A in
connection with this loan or the representations and warranties made by Party A in Article 9 herein are proven to be false, inaccurate,
incomplete or deliberately misleading;


 


Party A withholds any material fact about its operations
or financial situation;


 


Party A has obtained the loan by using forged contract
with its controlling shareholders and other related parties;


 


Party A ceases to make repayment of the loan amount
due or is unable or unwilling to make repayments;


 


Party A’s ceasing of business, suspension of operation,
dissolution, filing for bankruptcy, revocation or suspension of business license or deterioration of financial situation, on its
involvement in litigation, arbitration, criminal action, administrative sanction that is adverse to its operations or financial
situation;


 






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Party A’s change in its address, scope of operation,
legal representative or AIC registration or external investment that is adverse to or threatens the realization of Party B’s
creditor’s claims;


 


Party A’s experience of major financial loss,
asset loss or other capital loss due to the guarantee it has provided to other parties or of other financial crisis, which in Party
B’s estimation is likely to affect or harm, or has already affected or harmed, Party B’s rights and interests hereunder;


 


Experience of major crisis in the operation and financial
situation by Party A’s controlling shareholder and other related parties, or the occurrence of major related party transactions
between Party A and its controlling shareholder and other related parties, that adversely affects Party A’s normal operation
or the realization of Party B’s creditor’s claims;


 


Party A’s undertaking any major acquisition or
reorganization that, in Party B’s view, may affect the realization of Party B’s creditor’s claims;


 


Occurrence of any adverse change in the industry in
which Party A is engaged (except events of Force Majeure) that seriously affects or threatens the realization of Party B’s
creditor’s claims;


 


Party A’s failure to settle accounts in accordance
with the provisions herein;


 


Party A’s use of the loan for any other purpose
without Party B’s authorization or in any illegal or non-compliant trades;


 


Party A’s failure to make loan payment in accordance
with the provisions herein;


 


Party A’s violation of its promises made in Article
10 herein;


 


Party A’s refusal to accept Party A’s monitoring
of its cash return; any occurrence of breach that has not been cured in time that results in other breaches, thus constituting
cross breaches.


 


Party A’s refusal to accept Party A’s supervision
and review of its use of the loan and relevant financial activities;


 


Involvement of Party A’s senior officers in fraud,
bribery, embezzlement or other illegal operation that, in Party B’s view, is likely to affect or harm, or has already affected
or harmed, Party B’s rights and interests hereunder;


 


Party A’s breach of contracts with other creditors;


 






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The breach of Party A’s guarantor of the provisions
of, or the occurrence of other event of breach specified in, the Guarantee Contract;


 


The pledged or mortgaged items or properties hereunder
are frozen, seized, lost or involved in other enforcement action or in ownership dispute, and Party A fails to provide additional
guarantee that meets Party B’s requirements;


 


Occurrence of other events on Party A’s part that
have endangered or damaged, or are likely to endanger or damage, Party B’s rights and interests;


 


13.4      If
Party A fails to repay the principal in accordance with the provisions herein, Party B shall have the right, in addition to the
rights provided herein, to assess a penalty interest at an additional 50% of the interest rate of the loan based on the number
of past-due days.


 


13.5      If
Party A fails to pay interest on time, Party B shall have the right to assess compound interest at the penalty rate specified in
Section 13.4 based on the number of past-due days.


 


13.6      If
Party A uses the loan for any purpose other than that specified herein, Party B shall have the right, in addition to the rights
provided herein, to assess a penalty interest at an additional 100% of the interest rate on that portion of the loan starting from
the date of such misappropriation.


 


13.7      Party
A shall be responsible for all fees and expenses incurred by Party B in the realization of Party B’s creditor claims.


 


Article 14        
Continuity of Obligations


 


14.1      All
of Party A’s obligations hereunder shall continue and be binding to Party A’s successors, designees, transferees and
all surviving entities after merger, reorganization and change of names, and shall not be subject to any dispute, claims, orders
from superiors, provisions of Party A’s contracts with other parties, nor shall they be affected by the debtor’s bankruptcy,
loss of ability to repay the debt or of business qualifications or any other events.


 


Article
15         Certification


 


15.1  Party A shall be responsible for all the associated
fees if this contract needs to be certified at the request of any party hereto.


 


15.2      If
Party B requires the issuance of certification of enforceability, Party A agrees that Party B may apply to public certification
agencies for such certification and that Party A shall be responsible for any fees.


 






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Article 16         Other Provisions


 


If there is any conflict between the provisions
in this Section and others herein, those in this Section shall prevail.


 


Article 17         Applicable Law and Dispute Resolution


 


17.1      This
contract is governed by the law of PRC.


 


17.2      Any
dispute that cannot be resolved through consultation between the parties hereto must be resolved through legal action submitted
to the people’s court at Party B’s location or through application for enforcement actions.


 


Article 18         Force Majeure


 


18.1      The
event of Force Majeure referenced herein means any unforeseeable, unpreventable and insurmountable object event that renders any
party hereto unable to perform normally its obligations, including war, strike, curfew, serious flood, fire, hurricane, earthquake
and other such events acknowledge by both parties.


 


18.2      Any
party that is rendered unable to perform its obligations by such event must notify the other party immediately in writing and provide
documents of proof at the time of, or during, such occurrence and take all necessary efforts to reduce the impact of such event
on the other party.


 


18.3      After
the occurrence of such event, both parties must engage in consultation to seek fair and reasonable solution and to minimize the
damage of such event.


 


Article 19         Cumulative Nature of Party B’s Rights


 


19.1      Party
B’s rights hereunder are cumulative and shall not affect and exclude Party B’s other rights entitled under the law.
Unless expressly stated by Party B, Party B’s failure to exercise any of its rights, or its delay of such exercise or partial
exercise, shall not constitute a waiver of such rights nor shall affect, prevent or obstruct its future exercise of such rights.


 


Article 20         Contract Effectuation, Amendment and Dissolution


 


20.1      The
contract shall become effective upon its execution by both parties.


 


20.2      After
the contract has become effective, neither party can modify, change or dissolve this contract without prior consultation and agreement
with the other party.


 






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20.3      After
the contract has become effective, Party B may transfer all or part of its claims hereunder to a third party without the need to
obtain Party A’s approval, but Party A must notify Party B in writing.


 


20.4      After
the contract has become effective, if Party A transfers all or part of its debt obligations to a third party, Party A must provide
to Party B its guarantor’s consent to such transfer and to its responsibility to continue the guarantee and obtain Party
B’s approval.


 


Article 21         Others


 


21.1      “Bank
Business Day” is any day on which the bank is open for business.


 


21.2      “Related
Party” is as defined in “Business Accounting Principal No. 36—Disclosure of Related Parties” issued by
the Ministry of Finance.


 


21.3      Other
matters not covered herein may be provided in supplemental agreement, which shall have the same legal effect.


 


21.4      Any
provision or content herein that are determined to be invalid shall not affect the validity of any other provision or content herein.


 


21.5      Any
notice sent by Party B to Party A shall be considered received if it is sent by telex, telegram or faxed or received three days
after it is posted in registered mail.


 





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




Legal Representative:/s/ WU Zishen


 


	Party B:	(Seal or Special Business Seal)
	 	/seal/ China International Trust and Investment Corporation (CITIC),
	 	Hohhot Branch


Legal Representative:/s/ SUN Xiaofan


 


[Attachment 1: Sample of Party A’s Seal Imprint]


 


[Attachment 2: Entrusted Payment Form]


 






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