Yayi International Inc.: Exhibit 10.1 - Prepared by newsfilecorp.com






Exhibit 10.1

LOAN AGREEMENT  

by and between

YAYI INTERNATIONAL
INC. 

as Borrower 

and

SAIF PARTNERS III
L.P. 

as Lender 

Dated: April 30, 2010




CONTENTS 

	Section 	Page 
	 	 
	1. 	Definitions 	1 
	2. 	LOAN 	4 
	3. 	Conditions to Closing 	5 
	4. 	Use of Proceeds 	6 
	5. 	Principal Repayment 	6 
	6. 	Representations and Warranties of the Borrower
    	6 
	7. 	Affirmative Covenants 	7 
	8. 	Negative Covenants 	8 
	9. 	Events of Default 	8 
	10. 	Notices 	10 
	11. 	Waivers; Amendments 	11 
	12. 	Expenses 	11 
	13. 	Successors and Assigns 	11 
	14. 	Counterparts; Integration; Effectiveness 	11 
	15. 	Severability 	12 
	16. 	Governing Law 	12 
	17. 	Jurisdiction 	12 
	18. 	Headings 	12 



	Exhibit A 	Form of
      Promissory Note 
	Appendix 1 	Form of First Amendment to the
      Pledge Agreement 






LOAN AGREEMENT 

THIS LOAN AGREEMENT (this “Agreement”) is dated
April 30, 2010 and made by and among: 

	(1) 	
      Yayi International Inc., a Delaware company with its
      address at No. 9 Xingguang Road, Northern Industrial Park of Zhongbei
      Town, Xiqing District, Tianjin 300384, China, as borrower (the
      “Borrower”); and

	 	 
	(2) 	
      SAIF Partners III L.P, an exempted limited partnership
      duly established and validly existing under the laws of the Cayman
      Islands, with its registered address at PO Box 309, Ugland House, Grand
      Cayman, KY1-1104, Cayman Islands, as lender (the
  “Lender”).



R E C I T A L S 

	A. 	
      The Borrower has requested that the Lender loan
      US$3,000,000 to the Borrower, and the Lender has agreed to make such a
      loan, upon the terms and subject to the conditions set forth in the
      Agreement.



NOW, THEREFORE, in consideration of the foregoing premises, the
respective representations and warranties, covenants and agreements contained
herein, the parties hereto agree as follows: 

	1. 	
      DEFINITIONS

	 	 
		
      As used in this Agreement, the following capitalized
      terms shall have the meanings set forth below:

	 	 
		
      “Affiliate” means, with respect to any Person, any
      other Person (i) which directly or indirectly through one or more
      intermediaries Controls, or is Controlled by, or is under common Control
      with, such first Person, (ii) which beneficially owns or holds 50% or more
      of any class of the voting stock of such first Person, or (iii) whereby
      50% or more of the voting stock (or in the case of a Person which is not a
      corporation, 50% or more of the equity interest) of such other Person is
      beneficially owned or held by such first Person or by a Subsidiary of such
      first Person.

	 	 
		
      “Business Day” means, with respect to any location
      (i.e., Hong Kong and/or the PRC), any day other than a Saturday,
      Sunday or other day with respect to which banks in such location are
      authorized or required to be closed; however, provided, that
      if such day relates to the making of the Loan or the repayment or
      prepayment of the Loan, then “Business Day” shall be further limited to
      refer to a Business Day in New York City.

	 	 
		
      “Control” means, when used with respect to any
      Person, the power to direct the management and policies of such Person,
      directly or indirectly, whether through the ownership of voting securities, by
contract or otherwise, and the terms “Controlling” and “Controlled” have
meanings correlative to the foregoing. 



1 




“Debt” means: (i) indebtedness
or liability for borrowed money, or for the deferred purchase price of property
or services (including trade obligations); (ii) obligations as lessee under
capital leases; (iii) obligations under letters of credit issued for the account
of any Person; (iv) all obligations arising under bankers’ acceptance
facilities; (v) all guaranties, endorsements (other than for collection or
deposit in the ordinary course of business), and other contingent obligations to
purchase, to provide funds for payment, to supply funds to invest in any Person,
or otherwise to assure a creditor against loss; and (vi) obligations secured by
any Lien on property owned, whether or not the obligations have been assumed.


“Default Rate” has the meaning
set forth in Section 9.2 hereof. 

“Dollars” and the symbol “$”mean
such coin or currency of the United States of America as is, at the relevant
time, legal tender for the payment of public and private debts. 

“Event of Default” has the
meaning set forth in Section 9.1 hereof. 

“GAAP” means generally accepted
accounting principles as in effect in an applicable jurisdiction from time to
time. 

“Governmental Approval” means
any authorization, consent, approval, license, franchise, concession, lease,
ruling, permit, certification, exemption, filing or registration by or with any
Governmental Authority or legal or administrative body material and necessary
for the authority of the Borrower or each of the Group Companies to conduct
their respective businesses or for the execution and delivery of this Agreement
or the Note. 

“Governmental Authority” means
any nation or government, any state or other political subdivision thereof, and
any entity exercising executive, legislative, judicial, regulatory or
administrative authority or functions of or pertaining to government. 

“Group Company” means any
Subsidiary of the Borrower and any Person (other than a natural person) that is
controlled by the Borrower. 

“Lien” means, with respect to
any property, any security interest, mortgage, pledge, lien, claim, charge or
other encumbrance in, of, or on such property or the income therefrom,
including, without limitation, the interest of a vendor or lessor under a
conditional sale agreement, capital lease or other title retention agreement, or
any other agreement or arrangement providing any of the foregoing or having a
similar effect. 

“Loan Amount” has the meaning
set forth in Section 2.1. 

2 




“Loan Closing Date” has the
meaning set forth in Section 2.4.


“Loan Documents” has the meaning set
forth in Section 6.2.


“Loan” has the meaning set forth in Section 2.1.


“Material Adverse Effect” means
a material adverse effect on (i) the business, assets, operations, prospects or
financial or other condition of the Borrower or any Group Company; (ii) the
ability of the Borrower or any Group Company to pay or perform the Obligations
in accordance with the terms hereof and to avoid an Event of Default, or an
event which, with the giving of notice or the passage of time or both, would
constitute an Event of Default, under any Loan Document; or (iii) the rights and
remedies of the Lender under any Loan Document or any related document,
instrument or agreement. 

“Maturity Date” has the meaning
set forth in Section 2.3. 

“Note” has the meaning set forth
in Section 2.4. 

“Obligations” means and includes
all loans, advances, debts, liabilities and obligations, howsoever arising, owed
by the Borrower or any Group Company to the Lender of every kind and description
(whether or not evidenced by any note or instrument and whether or not for the
payment of money), now existing or hereafter arising under or pursuant to the
terms of this Agreement and the Note, including, all interest, fees, charges,
expenses, attorneys’ fees and costs and accountants’ fees and costs chargeable
to and payable by the Borrower hereunder and thereunder, in each case, whether
direct or indirect, absolute or contingent, due or to become due. 

“Ordinary Course of Business”,
with respect to the Borrower or any Group Company, means the ordinary course of
the research, development, planting, processing, and sale of organic cereals,
fishing services, storage of cereals, development of agricultural products and
other related businesses, consistent with past practice or as otherwise
contemplated by the business plan of the Borrower or any Group Company.

“Permitted Indebtedness”, with
respect to the Borrower or any Group Company, means (i) the Obligations; (ii)
indebtedness incurred in the Ordinary Course of Business; (iii) indebtedness of
a company that becomes a Subsidiary after the date hereof; provided,
however, that (A) the Lender has approved the acquisition or
establishment of such Subsidiary and (B) the indebtedness existed at the time
such company became a Subsidiary; (iv) indebtedness existing on the date hereof
and has been disclosed to the Lender; (v) any refinancing, extension or renewal
of any existing Permitted Indebtedness hereunder not involving an increase in
the principal amount thereof; and “(vi) any other indebtedness incurred with the
prior written consent of the Lender.

3 




“Permitted Liens” means, as of
any particular time, (i) Liens of taxes, assessments or governmental charges not
then delinquent or being contested as provided below, (ii) any mechanic’s, worker’s, repairer’s,
supplier’s, vendor’s or like Liens securing obligations arising in the ordinary
course of business that (A) are not mature or not overdue for more than fifteen
(15) days, or (B) both (x) are being contested in good faith and (y) as to which
adequate reserves have been established on the books of the Borrower in
accordance with GAAP, (iii) Liens upon tangible personal property acquired after
the date hereof (provided that the aggregate cost of all such tangible personal
property acquired by the Borrower after the date hereof shall not exceed
$10,000) granted by the Borrower, each of which Liens was created solely to
secure Debt incurred to finance the cost of such property (provided that no such
Lien shall extend to cover any property other than the property so acquired),
and (iv) Liens not otherwise permitted hereunder that secure Permitted
Indebtedness not exceeding $20,000 in aggregate amount outstanding at any time.
A contest referred to in this definition shall be permitted only if the
execution or enforcement of the Lien being contested shall have been stayed or
is taxed as a result thereof and such contest could not be reasonably expected
to have a Material Adverse Effect. 

“Person” means an individual, a
partnership, a corporation, a limited liability company, an association, a joint
stock company, a trust, a joint venture, an unincorporated organization and a
governmental entity or any department, agency or political subdivision thereof.


“PRC” means the People’s
Republic of China, excluding Hong Kong, Macau and Taiwan. 

“Preferred Shares” means the
shares of Series A Preferred Stock of the Borrower that the Lender holds. 

“Security Documents” means First
Amendment to the Pledge Agreement and any other document executed from time to
time by any person as a further guarantee of or security for the Borrower’s
obligations hereunder or under any other Loan Document. 

“Share Pledge Agreement” means
First Amendment to the Pledge Agreement by and between Global Rock Stone
Industrial Ltd, a British Virgin Island company (the “Pledgor”) and the
Lender, in form and substance as set forth in Appendix 1 attached hereto,
as the same may be supplemented, amended or otherwise in effect from time to
time. 

“Subsidiary” means any
“significant subsidiary” as defined in Rule 1-02(w) of the Regulation S-X
promulgated by the U.S. Securities and Exchange Commission under the Exchange
Act of 1934, as amended.

4 




	2. 	
      LOAN

	 	
       


	2.1 	
      Loan Amount. Subject to the terms and conditions
      set forth herein, the Lender agrees to make a term loan (the
      “Loan”) to the Borrower on or before May 7, 2010, which Loan shall
      be in the amount three million U.S. Dollars (US$3,000,000) (the “Loan
      Amount”).

	 	 
	2.2 	
      Interest Rate. The Loan shall bear interest at a
      rate of twelve percent (12%) per annum, calculated on the basis of the
      actual number of days elapsed during the relevant period and a 360-day
      year.

	 	 
	2.3 	
      Term. The entire principal amount of the Loan and
      any accrued interest on the Loan shall become fully due and payable on the
      date (the “Maturity Date”) that is the earlier to occur of (i) the
      date that is six (6) months after the Loan Closing Date (as defined
      below), unless extended in the sole discretion of the Lender;
      provided, however, that such date may be extended with the
      written consent of the Lender, and (ii) the acceleration of the maturity
      of the Loan upon the occurrence of an Event of Default (as defined in
      Section 9.1 below), without further action on the part of the Lender. The
      Borrower can repay the entire principal and the accrued interest before
      Maturity Date without any prepayment penalty.

	 	 
	2.4 	
      Closing. Subject to the conditions to Closing in
      Section 3 hereof, on or before May 7, 2010 (the “Loan Closing
      Date”), the Lender shall wire funds equal to the Loan Amount to a bank
      account designated by the Borrower which is under co-signature management
      of the Borrower and the Lender. The Borrower shall issue an executed
      promissory note (the “Note”) in favor of the Lender in form and
      substance as set forth in Exhibit A attached hereto. The Note shall
      be dated the Loan Closing Date and shall mature on the Maturity
    Date.

	 	 
	3. 	
      CONDITIONS TO CLOSING

	 	 
		
      The Lender’s obligations at the Closing are subject to
      the satisfaction, on or prior to the Loan Closing Date, of each of the
      following conditions, any of which may be waived in whole or in part by
      the Lender:

	 	 
	3.1 	
      Representations and Warranties. The
      representations and warranties made by the Borrower in Section 6 hereof
      shall have been true, correct and complete when made, and shall be true
      and correct on the Loan Closing Date.

	 	 
	3.2 	
      Legal Requirements. The sale and issuance by the
      Borrower, and the purchase by the Lender, of the Note shall be legally
      permitted by all laws and regulations to which the Lender or the Borrower
      is subject.

	 	 
	3.3 	
      Proceedings and Documents. All corporate
      proceedings, including board resolutions, in connection with the
      transactions contemplated hereby and all documents incident to such
      transactions shall be reasonably satisfactory in form and substance to the
      Lender, and the Lender shall have received such counterpart original or
      other copies of such documents as it may reasonably
  request.



5 





	3.4 	
      Loan Agreements and Security Documents. (i) The
      Borrower shall have duly executed and delivered to the Lender this
      Agreement; (ii) the Borrower shall have duly executed and delivered to the
      Lender the Note issued hereunder; and (iii) the Pledgor shall have duly
      executed and delivered to the Lender the Share Pledge Agreement.

	 	 
	4. 	
      USE OF PROCEEDS

	 	 
		
      The Borrower shall use the proceeds of the Loan for the
      benefit of the Borrower and the Group Company and shall obtain the
      Lender’s written permit before each tranche of the use of the proceeds,
      which written permit shall not be unreasonably withheld, conditioned or
      delayed.

	 	 
	5. 	
      PRINCIPAL REPAYMENT

	 	 
		
      The Borrower hereby unconditionally promises to pay to
      the Lender the entire outstanding principal amount of the Loan and any
      accrued interest thereon in immediately available funds on the Maturity
      Date.

	 	 
	6. 	
      REPRESENTATIONS AND WARRANTIES OF THE
    BORROWER

	 	 
		
      The Borrower hereby represents and warrants to the Lender
      as follows:

	 	 
	6.1 	
      Organization; Good Standing. The Borrower is duly
      organized, validly existing and in good standing under the laws of the
      State of Delaware. The Borrower has all requisite corporate power and
      authority to carry on its business as now conducted and as proposed to be
      conducted and is duly qualified and licensed to do business in each
      jurisdiction in which the failure to be so qualified or licensed could
      reasonably be expected to have a Material Adverse Effect.

	 	 
	6.2 	
      Due Authorization. All corporate actions on the
      part of the Borrower, its directors and its shareholders necessary for the
      authorization, execution and delivery of this Agreement and the Note
      (together with this Agreement, the “Loan Documents”) by the
      Borrower, and the performance of the obligations of the Borrower under the
      Loan Documents, as applicable, have been taken or will be taken prior to
      the Loan Closing Date. The Loan Documents constitute the valid and legally
      binding obligations of the Borrower, enforceable against the Borrower in
      accordance with their terms, except as limited by (i) applicable
      bankruptcy, insolvency or other laws of general application affecting
      enforcement of creditors’ rights generally and (ii) laws relating to the
      availability of specific performance, injunctive relief or other equitable
      remedies (whether enforcement is sought by proceedings in equity or at
      law).

	 	 
	6.3 	
      Governmental Consents. All consents, approvals,
      orders and authorizations of, and all registrations, qualifications,
      designations, declarations and filings with, any governmental authority or
      other third party required on the part of the Borrower in connection with
      the valid execution and delivery of the Loan Documents, the
      offer, sale or issuance of the Note, or the consummation of any other
      transaction contemplated hereby shall have been obtained and will be
      effective at the Loan Closing Date.



6 





	6.4 	
      No Judgments or Litigation. There is no action,
      suit, proceeding or investigation pending or, to the knowledge of the
      Borrower, threatened against the Borrower, that questions the validity of
      this Agreement or the right of the Borrower to consummate the transactions
      contemplated hereby or that might result, either individually or in the
      aggregate, in any material adverse change in the assets, condition,
      affairs or prospects of the Borrower, nor is the Borrower aware that there
      is any basis for the foregoing. The Borrower is not a party or subject to
      the provisions of any order, writ, injunction, judgment or decree of any
      court or government agency or instrumentality.

	 	 
	6.5 	
      Compliance with Other Instruments;
      Non-Contravention. The authorization, execution and delivery of the
      Loan Documents, and the consummation of the transactions contemplated
      under the Loan Documents, do not and will not (i) constitute or result in
      a default or violation of any law or regulation applicable to the Borrower
      or any term or provision of the Borrower’s current Certificate of
      Incorporation , or any material judgment, order, writ, decree, statute,
      rule or regulation applicable to the Borrower; (ii) violate any provision
      of, or result in the breach or the acceleration of, or entitle any other
      Person to accelerate (whether after the giving of notice or lapse of time
      or both), any material mortgage, indenture, agreement, instrument or
      contract to which the Borrower is a party or by which any of them is
      bound; or (iii) result in the creation or imposition of any material Lien
      upon any property, asset or revenue of the Borrower, or the suspension,
      revocation, impairment, forfeiture, or nonrenewal of any material permit,
      license, authorization or approval applicable to the Borrower, its
      business or operations, or any of its assets or properties.

	 	 
	7. 	
      AFFIRMATIVE COVENANTS

	 	 
		
      So long as any portion of the Loan remains outstanding,
      the Borrower shall:

	 	 
	7.1 	
      Inspection Rights. Permit the Lender to visit and
      inspect its facilities and properties, to examine its books of account and
      records and to discuss its affairs, business, finances, accounts and
      operations with its directors, officers, employees, accountants, legal
      counsel and investment bankers, all at such reasonable times as may be
      requested by the Lender.

	 	 
	7.2 	
      Compliance with Laws. Comply in all material
      respects with applicable laws, rules, regulations and orders, such
      compliance to include, without limitation, paying before the same become
      delinquent all taxes, assessments, and governmental charges imposed upon
      it or upon its property except for good faith contests for which adequate
      reserves are being maintained.

	 	 
	7.3 	
      Notice of Litigation. Provide to Lender promptly
      after the commencement thereof, notice of all actions, suits, and
      proceedings before any court or governmental entity in which
  the Borrower is named as a party.



7 





	7.4 	
      Notice of Defaults and Events of Defaults. Provide
      to Lender, as soon as possible and in any event within five (5) days after
      the occurrence thereof, with written notice of each event which either (i)
      is an Event of Default, or (ii) with the giving of notice or lapse of time
      or both would constitute an Event of Default, in each case setting forth
      the details of such event and the action which is proposed to be taken by
      the Borrower with respect thereto.

	 	 
	7.5 	
      Governmental Approvals. Promptly obtain and
      maintain all Governmental Approvals as are necessary for the operation of
      its business.

	 	 
	7.6 	
      Continuance of Business. Maintain its corporate
      existence, licenses and privileges in good standing under and in
      compliance with all applicable laws and continue to operate the business
      it currently conducts.

	 	 
	7.7 	
      Maintenance. Conduct its business in a manner
      consistent with relevant industry standards, keep its material assets and
      properties in good working order and condition and make all necessary and
      proper repairs, replacements and improvements thereof so that such
      business may be properly and prudently conducted at all times.

	 	 
	8. 	
      NEGATIVE COVENANTS

	 	 
	8.1 	
      Protective Provisions. So long as any portion of
      the Loan remains outstanding, the Borrower shall not permit any Group
      Company to, take any of the actions as listed in section 8 (Protective
      Provisions) of the valid CERTIFICATE OF DESIGNATION OF SERIES A PREFERRED
      STOCK of the Borrower dated June 16, 2009 without the prior written
      consent of the Lender or the director appointed by the Lender in the
      Borrower.

	 	 
	8.2 	
      Liens. The Borrower shall not create or suffer to
      exist any Lien on any of its assets except Permitted Liens and Liens in
      existence on the date hereof of which it has provided the Lender written
      notice or documents evidencing such Liens. For the avoidance of doubt, the
      Borrower may make (i) pledges or deposits in connection with workers’
      compensation, employee welfare and other social security legislation and
      (ii) deposits to secure the performance of bids, trade contracts, leases,
      statutory obligations, performance bonds and other obligations of a like
      nature incurred in the Ordinary Course of Business of the Borrower without
      the Lender’s prior consent.

	 	 
	9. 	
      EVENTS OF DEFAULT

	 	 
	9.1 	
      Each of the following shall constitute an event of
      default (each, an “Event of Default”) under this Agreement and the
      Note:



8 





	 	(a) 	
      The Borrower fails to pay on the Maturity Date any unpaid
      principal, accrued interest or other amounts owing under any Loan
      Document;

	 	 	 
	 	(b) 	
      Any representation or warranty made by the Borrower in
      the Loan Documents, or any representation or warranty made by the Pledgor
      in the Security Documents shall prove, when given, to have been false or
      misleading in any material respect;

	 	 	 
	 	(c) 	
      The Borrower or the Pledgor, as applicable, breaches any
      covenant set forth in any of the Loan Documents and the Security
      Documents;

	 	 	 
	 	(d) 	
      The Borrower defaults in the observance or performance of
      any other agreement contained in the Loan Documents (other than as
      provided in paragraphs (a) through (c) above in this Section 9.1), and
      such default shall continue unremedied for a period of thirty (30) days;
      provided, however, that the Borrower shall have notified the
      Lender within five (5) days of the occurrence of such default;

	 	 	 
	 	(e) 	
      The Borrower or any Group Company shall fail to make any
      payment in respect of any Debt in principal amount of $200,000 or more
      when due or within any applicable grace period;

	 	 	 
	 	(f) 	
      Any event or condition shall occur which results in the
      acceleration of the maturity of any Debt in principal amount of $200,000
      or more of the Borrower or any Group Company or enables the holder of such
      Debt to accelerate the maturity thereof;

	 	 	 
	 	(g) 	
      The Borrower or any Group Company files any petition or
      action for relief under any bankruptcy, reorganization, insolvency or
      moratorium law or any other law for the relief of, or relating to,
      debtors, now or hereafter in effect, makes any general assignment for the
      benefit of creditors or takes any corporate action in furtherance of any
      of the foregoing or fails to pay its debts as they become due;
or

	 	 	 
	 	(h) 	
      An involuntary petition is filed against the Borrower or
      any Group Company (unless such petition is dismissed or discharged within
      forty-five (45) days) under any bankruptcy statute now or hereafter in
      effect, or a custodian, receiver, trustee, assignee for the benefit of
      creditors (or other similar official) is appointed to take possession,
      custody or control of any property of the Borrower or any Group
      Company.




	9.2 	
      Upon the occurrence of any Event of Default specified in
      paragraphs 9.1(c), 9.1(g) and 9.1(h) above in Section 9.1, all unpaid
      principal on the Note, accrued and unpaid interest thereon and all other
      amounts owing under this Agreement and the Note shall become immediately
      due and payable without any action on the part of the Lender, and the
      Borrower shall immediately pay to the Lender all such amounts. Upon the
      occurrence of any other Event of Default, the Borrower shall notify the
      Lender in writing within five (5) days of the occurrence of such Event of
      Default. Upon receipt of the notice, the Lender may by notice to the Borrower declare the Loan to be due and
payable forthwith, whereupon the Loan shall become immediately due and payable.
From and after an Event of Default, all Indebtedness hereunder shall accrue
interest at a rate of seventeen percent (17%) per annum (the “Default
Rate”). In the event of any Event of Default, the Borrower shall pay all
reasonable attorneys’ fees and any other reasonable costs incurred by the Lender
in enforcing the Note and the other Loan Documents and in any effort to collect
Indebtedness hereunder. No right or remedy conferred upon or reserved to the
Lender under this Agreement is intended to be exclusive of any other right or
remedy, and every right and remedy shall be cumulative and in addition to every
other right and remedy given hereunder or now and hereafter existing under
applicable law. 



9 




	 	
       
	10. 	
      NOTICES

	 	 
		
      All notices, request, demands, claims, and other
      communications hereunder shall be in writing. Any notice, request, demand,
      claim, or other communication hereunder shall be deemed duly given (i)
      when delivered personally to the recipient, (ii) one (1) Business Day
      after being sent to the recipient by reputable courier service (charges
      prepaid), (iii) one (1) Business Day after being sent to the recipient by
      facsimile transmission or electronic mail, or (iv) four (4) Business Days
      after being mailed to the recipient by certified or registered mail,
      return receipt requested and postage prepaid, and addressed to the
      intended recipient as set forth below:





	 	If to the Lender, to: 	SAIF Partners III L.P. 
	 	  	c/o Maples Corporate Services Limited 
	 	  	PO Box 309, Ugland House 
	 	  	Grand Cayman, KY1-1104 
	 	  	Cayman Islands 
	 	  	Fax: +852 2234-9116 
	 	 	 
	 	With a copy to: 	SAIF Advisors Ltd. 
	 	  	Suites 2115-2118, Two Pacific Place 
	 	  	88 Queensway, Hong Kong 
	 	  	Attention: Andrew. Y. Yan/Jason So 
	 	  	Fax: +852 2234-9116 
	 	 	 
	 	If to the Borrower, to: 	c/o Tianjin Yayi Industrial Co., Ltd., 
	 	  	No. 9 Xingguang Road, 
	 	  	Northern Industrial Park of 
	 	  	Zhongbei Town, Xiqing District, 
	 	  	Tianjin 300384, China 
	 	  	Attention: Li Liu 
	 	  	Fax: 86 (22) 2798-4358




10 





		
      Any Party may change the address to which notices,
      requests, demands, claims, and other communications hereunder are to be
      delivered by giving the other Parties notice in the manner herein set
      forth.

	 	 
	11. 	
      WAIVERS; AMENDMENTS

	 	 
		
      Neither this Agreement or the Note nor any terms hereof
      or thereof may be changed, waived, discharged, or terminated unless such
      change, waiver, discharge, termination or release is in writing signed by
      the parties. Neither failure or delay by the parties hereto in exercising
      any right or power hereunder shall operate as a waiver thereof, nor shall
      any single or partial exercise of any such right or power, or any
      abandonment or discontinuance of steps to enforce such a right or power,
      preclude any other or further exercise thereof or the exercise of any
      other right or power. The rights and remedies of the parties hereunder are
      cumulative and are not exclusive of any rights or remedies that the
      parties would otherwise have.

	 	 
	12. 	
      EXPENSES

	 	 
		
      The Borrower shall bear any expenses (including, without
      limitation, legal fees) incurred by the Borrower or the Lender with
      respect to this Agreement and the transactions contemplated hereby in
      connection with the Loan made hereunder, including all such out- of-pocket
      expenses reasonably incurred during any negotiations.

	 	 
	13. 	
      SUCCESSORS AND ASSIGNS

	 	 
		
      The provisions of this Agreement shall be binding upon
      and inure to the benefit of the parties hereto and their respective
      successors and assigns permitted hereby. The Borrower may not assign,
      encumber or otherwise transfer any of its rights or obligations hereunder
      without the prior written consent of the Lenders, and any attempted
      assignment or transfer by the Borrower without such consent shall be null
      and void. The Lender may assign, encumber or otherwise transfer any or all
      of its rights or obligations hereunder without the prior written consent
      of the Borrower. Nothing in this Agreement, expressed or implied, shall be
      construed to confer upon any person (other than the parties hereto, their
      respective successors and assigns permitted hereby) any legal or equitable
      right, remedy or claim under or by reason of this Agreement.

	 	 
	14. 	
      COUNTERPARTS; INTEGRATION; EFFECTIVENESS

	 	 
		
      This Agreement may be executed in counterparts (and by
      different parties hereto on different counterparts), each of which shall
      constitute an original, but all of which when taken together shall
      constitute a single contract. This Agreement, including all exhibits and
      schedules hereto, which are expressly incorporated herein by reference,
      and any amendments hereto shall constitute the entire contract among the
      parties relating to the subject matter hereof and supersede any and all
      previous agreements and understandings, oral or written, relating to the
      subject matter hereof. Delivery of an executed
  counterpart of a signature page of this Agreement by facsimile shall
      be as effective as delivery of a manually executed counterpart of this
      Agreement.



11 





	15. 	
      SEVERABILITY

	 	 
		
      Any provision of this Agreement held to be invalid,
      illegal or unenforceable in any jurisdiction shall, as to such
      jurisdiction, be ineffective to the extent of such invalidity, illegality
      or unenforceability without affecting the validity, legality and
      enforceability of the remaining provisions hereof; and the invalidity of a
      particular provision in a particular jurisdiction shall not invalidate
      such provision in any other jurisdiction.

	 	 
	16. 	
      GOVERNING LAW

	 	 
		
      This Agreement and the rights and obligations of the
      parties hereunder shall be construed in accordance with and governed by
      the laws of the State of New York without giving effect to choice of law
      provisions.

	 	 
	17. 	
      JURISDICTION

	 	 
	17.1 	
      Arbitration. In the event the Parties are unable
      to settle any dispute between them regarding this Agreement within thirty
      (30) days after the occurrence of the dispute, such dispute may he
      referred to and finally settled by arbitration at the Hong Kong
      International Arbitration Centre in accordance with the UNCITRAL
      Arbitration Rules (the “UNCITRAL Rules”) in effect, which
      rules are deemed to be incorporated by reference into this Section 18.1.
      The arbitration tribunal shall consist of three (3) arbitrators; one (1)
      of whom shall be appointed by the claimant, one (1) of whom shall be
      appointed by the respondent, and the third arbitrator, who shall be the
      presiding arbitrator, shall be appointed by the Hong Kong International
      Arbitration Centre. The language of the arbitration shall be English. By
      agreeing to arbitration, the Parties do not intend to deprive any court of
      its jurisdiction to issue a pre-arbitral injunction, pre-arbitral
      attachment or other order in aid of arbitration proceedings and
      enforcement of any award.

	 	 
	18. 	
      HEADINGS

	 	 
		
      Article and Section headings used herein are for
      convenience of reference only, are not part of this Agreement and shall
      not affect the construction of, or be taken into consideration in
      interpreting, this Agreement.



[NO FURTHER TEXT ON THIS PAGE] 

12 




[SIGNATURE PAGE 1 – LOAN AGREEMENT] 

IN WITNESS WHEREOF, the Parties hereto have caused this
Agreement to be duly executed by their respective authorized officers as of the
day and year first above written. 

THE BORROWER: 

Yayi International Inc. 

By: /s/ Li
Liu                                                    

       Name: Li Liu 
       Title: Chief Executive Officer


[Signatures Continued on the Following Page] 

13 




[SIGNATURE PAGE 2 – LOAN AGREEMENT] 

IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed by their respective authorized officers as of the
day and year first above written. 

THE LENDER: 

SAIF Partners III L.P, 

By:/s/ Andrew
Yan                                  

      Name: Andrew Yan 
      Title: Authorized Signatory 


1 




Exhibit A 

Promissory Note 

PROMISSORY NOTE 

Yayi International Inc. 

US$3,000,000 

FOR VALUE RECEIVED, Yayi International Inc., a company duly
incorporated and validly existing under the laws of Delaware (the
“Payor”) promises to pay to the order of SAIF Partners III L.P, an
exempted limited partnership duly established and validly existing under the
laws of the Cayman Islands (together with its successors and assigns, the
“Payee”), the principal sum of three million U.S. Dollars (US$3,000,000),
together with all accrued and unpaid interest thereon as set forth below. 

Terms defined in the Loan Agreement dated as of April 30, 2010
by and between the Payor and the Payee (the “Loan Agreement”) are used
herein with the same meanings. This Promissory Note (this “Note”) is the
promissory note referred to in Section 2.4 of the Loan Agreement and is issued
pursuant to and entitled to the benefits of the Loan Agreement, to which
reference is hereby made for a more complete statement of the terms and
conditions under which the Loan evidenced hereby was made and is to be repaid.


The entire principal amount of the Loan and all unpaid accrued
interest thereon shall become fully due and payable on the date (the
“Maturity Date”) that is the earlier to occur of (i) the date that is six
(6) months after the Loan Closing Date (unless extended at the discretion of the
Payee), or (ii) the acceleration of the maturity of the Loan upon the occurrence
of an Event of Default, without further action on the part of the Payee. Payment
of principal and interest hereunder shall be made by wire transfer of
immediately available funds to a bank account furnished by the Payee to the
Payor for that purpose. 

Reference is made to the Loan Agreement and the Security
Documents for (i) provisions for the prepayment hereof and the acceleration of
the maturity hereof and (ii) a description of the property mortgaged, charged,
pledged, assigned and transferred pursuant to the Security Documents and the
nature and extent of the security and rights of the Payor and the Payee in
respect of such security. 

Payment of the principal and interest payable thereon in
respect of this Note shall be made in lawful money of the United States of
America in same day funds at such place as shall be designated in writing for
such purpose in accordance with the terms of the Loan Agreement. Unless and
until this Note has been assigned pursuant to Section 13 of the Loan Agreement,
the Payor shall be entitled to deem and treat the Payee as the owner and holder
of this Note and the Loan evidenced hereby. The Payee hereby agrees, by its
acceptance hereof, that before disposing of this Note or any part hereof it will make a
notation hereon of all principal and interest payments previously made
hereunder; provided, however, that the failure to make a notation of any payment
made on this Note shall not limit or otherwise affect the obligations of the
Payor hereunder with respect to payments of principal and interest of this Note. 

Exhibit A




Whenever any payment on this Note shall be stated to be due on
a day which is not a business day, such payment shall be made on the next
succeeding Business Day. 

The LOAN Agreement and this Note shall be governed by, and
shall be construed and enforced in accordance with, the laws of the State of New
York without giving effect to choice of law provisions. 

The terms of this Note are subject to amendment only in the
manner provided in the Loan Agreement. 

No reference herein to the Loan Agreement and no provision of
this Note or the Loan Agreement shall alter or impair the obligations of the
Payor, which are absolute and unconditional, to pay the principal and interest
of this Note at the place, at the respective times, and in the currency herein
prescribed. 

The Payor hereby waives diligence, presentment, protest, demand
and notice of every kind and, to the full extent permitted by law, the right to
plead any statute of limitations as a defense to any demand hereunder. Upon the
occurrence and during the continuance of any Event of Default, the entire
principal balance and any accrued and unpaid interest on this Note shall become
immediately due and payable in full in accordance with Section 9.2 of the Loan
Agreement. In the event of any Event of Default, the Payor shall pay all
reasonable attorneys’ fees and any other costs incurred by the Payee in
collecting any Indebtedness and enforcing its rights under this Note. Payor may
not prepay this Note prior to the Maturity Date without the express written
consent of the Payee. 

This Note and the Payee’s rights hereunder may not be assigned
or otherwise transferred by the Payee, or any interest of any sort whatsoever
transferred, directly or indirectly, to any person or entity other than the
Payee, in whole or in part, except in compliance with Section 13 of the Loan
Agreement. 

Exhibit A




IN WITNESS WHEREOF, the Payor has caused this Note to be duly
executed and delivered by its officer thereunto duly authorized as of the date
and at the place first written above. 

Yayi International Inc. 

By:                                                                    

Name: 
Title: 


Exhibit A




Appendix 1 

Form of First Amendment to the Pledge Agreement