Document:

Unassociated Document

Exhibit 10.3

No.: Sibaozi -2012-001-01

 

Short-term Loan Guarantee Agreement

Jilin Credit Guarantee Investment Co., Ltd.

Siping Heat Exchanger Industry Branch Company

 

  

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[All parties of this agreement]

Party A: Jilin Credit Guarantee Investment Co., Ltd.  Siping Heat Exchanger Industry Branch Company

Address: No. 637, Central West Road, Tiexi District, Siping City

Person in charge: Chen Zhitao      Position: General Manager

Post Code: 136000

Telephone :0434 -7773777

Party B: Jilin Hengchang Agriculture Development Co., Ltd.

Address: 998 km point of Line 102, National Agricultural Technology Park, Gongzhuling City.

Legal Representative: Wei Yushan

Post Code: 136100

Telephone: 0434—6278415

 

	
Solemn Statement

This agreement is carefully read and signed by Party A and B through consultation. Two parties desire to perform all the terms of this agreement.

 

  

2

  

 

Party A (in accordance to Party B’s application and accompanying documents ) provides Party B with joint liability guarantee on repaying principal and interests on the short term loan obtained by Party B from China Construction Bank Siping Branch

for. This agreement is signed through full consultation and jointly fulfilled by both parties by following the principle of voluntariness and equality, mutual benefit in accordance with relevant laws and regulations.

 

Article 1 scope and method of the suretyship, discharge suretyship liability during the quarantee period.

1, The scope that Party A provides suretyship for Party B includes the loan principal of RMB80 million and corresponding interests and the cost of claims. The loan was signed on a Loan Contract numbered as Jiecheng 001PIFV220620000201200023 between Party B and China Construction Bank Siping Branch.

2 Party A provides Party B with the joint liability surtyship for repaying principal and interest

3 Party A’s surtyship period for the Loan Contract is two years since the agreed maturity date of repayment.

4 Party A’s suretyship responsibility shall be correspondingly reduced or discharged as Party B fulfill its repayment obligations, or the banks recalls the loan before maturity or Party A repays the loan for Party B

Article 2 The risk mortgage funds for guarantee fees

1 Party B agrees to pay a guarantee fees to Party A as per the following terms:

(1)  The payment standard is 2%

(2)  The specific amount is RMB 1.6 million

(3)  The time of payment: before the guarantee contract is signed

Payment method: lump sum

 

  

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2 Party B agrees to pay to Party A the quarantee risk deposit, which is 2% of the loan principal, equaling a total of RMB2 million and shall be paid to the designated account of Party A in lump sum prior to Party A signs a guarantee contract with the bank. When the surtyship responsibility is discharged, Party A shall return the deposit to Party B. If Party A has made any payment on behalf of Party B, Party A shall offset such payment with the deposit directly.

Article 3 The right of defenses and subrogation of Party A

Party A assumes the suretyship responsibility in accordance with the law and also enjoy Party B's right of recovery.

Party A enjoys all the defense rights that Party B enjoys. When Party B gives up the defense right on debts, Party A still enjoys the defense right to the lending bank.

Article 4 Counter-collateral measures

In order to reduce the possibility of compensatory loss, Party B agrees to provide counter-guarantee for the Party A. Specific counter-collateral terms shall be separately negotiated by both parties  and sign a counter-guarantee contract.

Article 5 Commitment of Party B

1 Party B shall use the loans for the purpose as stipulated in the loan contract and  not used for other purposes.

2 Party B shall strictly implement the repayment plan in accordance with the method, time and amount of repayment and sources of funds.

3 Party B shall provide Party A with the financial reports requested by Party A which reflect the production and operation status, credit and debt status, the use of loans, project progress etc (including but not limited to the balance sheet, profit and profit distribution statement, cash flow statement ), and ensure that financial reports are authentic and legitimate.

4 Without the consent of Party A, Party B shall not rent, sell, transfer the counter-collateral that Party A provides.

5 Without the consent of Party A, Party B shall not change the loan contract (e.g. changes the use of loans, etc.) on their own or transfer the debt to any third party.

 

  

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Article 6 In the suretyship period, Party B shall notify Party A in advance of any of its following acts that may affect the repayment of bank loans, resulting in Party A’s possible subrogated compensation and seek Party A’s prior written consent, otherwise, Party A is entitled to require the lending bank to recall the loan before maturity, and require Party B to pay for liquidated damages equaling to 5% of the total amount of loans.

1 External investment of more than 10% of the line of credit loan

2 External financing or lending acts of more than 10% of the line of credit loan

3 External security of more than 10% of the line of credit loan

4 The change of shareholders who hold more than 20% of the registered capital.

5 Dispose assets of more than 10% of the line of credit loan

6 External compensation and accidental property damages of more than 10% of the line of credit loan;

7 Other major economic disputes that may affect the repayment of loan.

Article 7 Liabilities for breach of contract

1 If Party B fails to repay the principal and interest as stipulated in the "Loan Contract", Party A shall not relieve its surtyship responsibility and shall charge twice of the guarantee fees from the due date.

2 If Party B fails to repay the principal and interest as stipulated in the "Loan Contract" and cause Party A’s subrogated compensation. When Party A pursues the recovery, Party A is entitled to require Party B to pay the liquidated damages, equaling to 15% of the totally subrogated compensation. If other economic loss incur on Party A thereof and the liquidated damages do not cover it, Party B shall pay the appropriate compensation accordingly.

Article 8 Signature and notarization

This contract comes into effect after signature and seal by legal representatives or the authorized agents of both parties. After effectiveness of this Contract, any supplement, modification, alteration related to this Contract shall be negotiated and entered into a written agreement by mutual agreement.

The contract and the counter-guarantee contract are required by Party A to enforce the notarization.

 

  

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Article 9 Dispute solution

Any dispute and recovery issues related to this Contract shall be solved through two parties’ consultation. If two parties fail to reach an agreement, Party A can directly plea to the local court at the domicile of Party A for enforcement with this notarized  Contract and compensatory credentials. Party B agrees that this notarized Contract has enforceable power.

Article 10 Other matters:

Article 11This Contract has triplicate copies, and each party holds one copy and another one is for the notary organization. Each copy has the same legal effect.

Party A (seal): Jilin Credit Guarantee Investment Co., Ltd. Siping Heat Exchanger Industry Branch Company

Legal representative (or authorized agent): Chen Zhitao

Party B (Seal): Jilin Hengchang Agricultural Development Co., Ltd.

Legal representative (or authorized agent): Wei Yushan

The time of signing: February 20, 2012

The place of signing: Party A’s Conference Room

 

  

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The guarantor makes the commitments that: if the guaranteed loan fails to be repaid totally at the maturity, the creditor is entitled to seek forcible execution to the notary organization, and agree that the notary organization shall verify the fact that the borrower does not perform or improperly perform its repayment obligations by mail or telephone within seven days before issuing the letters of forcible execution. We shall automatically assume the warranty obligations and voluntarily give up the right to defense, a notary organization can directly issue the letter of forcible execution.

Seal: Jilin Hengchang Agricultural Development Co., Ltd.

Wei Yushan

Seal: Jilin Credit Guarantee Investment Co., Ltd. Siping Heat Exchanger Industry Branch Company

Chen Zhitao

February 20, 2012

 

7Unassociated Document

Exhibit 10.4

 

Hybrid Corn Seeds Appointed Production Contract

 

Contract Number: ZY20120210

 

Party A: Jilin Hengchang Agricultural Development Co., Ltd.

Party B: Niu Miao

Place of signature: Gongzhuling City

Time of signature: February 10, 2012

 

Under the provisions of the relevant legal provisions of the Contract Law of the People's Republic of China, the Seed Law of the People's Republic of China, Regulations on the Crop Seeds for Xinjiang Autonomous Region, the Approach on Managing Crop Production Base for the Xinjiang Autonomous Region, two parties hereby enter into this contract (the “Contract”) by consensus to clarify the rights and obligations of both parties.

 

Article 1 Party A refers to the enterprises and individuals who obtain the seed production license. Party B refers to the villagers' committee or the specialized cooperative economic organizations on farmers’ seed production. Party B shall accept the commission of the whole farmers’ seed production and sign seed production contract on behalf of all seed production farmers or enterprises.

Article 2 the species, quantities, qualities and prices of crop seeds produced under the contract, etc.

	
Crops

	
Species(Combination)

	
Areas(mu)

	
Quantities(ton)

	
Quality index

	
Purchasing price(RMB/ton)

	
Purity

≥%

	
Neatness

≥%

	
Germination rate percentage

≥%

	
Moisture

≤%

	  
	
Corn

	
San Yuan Deng 28

	
2500

	
1000

	
97

	
99

	
95

	
13

	
9600.00

	
Corn

	
Hengyu218

	
15000

	
7500

	
97

	
99

	
95

	
13

	
9600.00

	
Corn

	
Hengyu398

	
6000

	
2500

	
97

	
99

	
95

	
13

	
9600.00

 

  

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Article 3 Seed breeding materials

 

 

	
Crops

	
Seed

parent

name(or code name)

	
Quality index

	
Quantity

(ton)

	
Price(RMB/ton)

	
Purity

≥%

	
Neatness

≥%

	
Germination rate≥%

	
Moisture

≤%

	
San Yuan Deng 28—

	
S101

	
98

	
99

	
92

	
13

	
7.5

	
20000

	
San Yuan Deng 28—

	
S801

	
98

	
99

	
92

	
13

	
2.5

	
20000

	
Heng Yu 218—

	
DX311

	
98

	
99

	
92

	
13

	
45

	
20000

	
Heng Yu 218—

	
DX419

	
98

	
99

	
92

	
13

	
15

	
20000

	
Heng Yu 398—

	
F198

	
98

	
99

	
92

	
13

	
18

	
20000

	
Heng Yu 398—

	
M197

	
98

	
99

	
92

	
13

	
6

	
20000

	 	
94

	
RMB1.88 million

Article 4 Seed production service fees

Seed production services are charged RMB 1.0/kg based on the total number of qualified seeds (ears) that have been purchased.

 

Article 5 Packaging and transportation

Seeds are packed in plastic woven bags and freight is borne by Party A.

 

Article 6 Obligations of Party A

1 Party A shall provide qualified seed breeding material which shall be paid by Party B under this contract. Party A shall deduct the seed breeding materials funds from the payments for cultivated seeds.

2 Party A shall arrange the suitable varieties (combinations) in accordance with the actual area of ​​the base, isolation and natural ecological and production conditions.

 

  

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3 Party A shall provide production deposit to Party B before March 15, 2012 based on RMB 1.0 per kilogram for the appointed production volume, this deposit shall be used to offset the last payment. Party B, according to the actual needs of production base, shall. as appropriate, pay the advanced funds for plastic film, pesticide and other production materials for local peasants of the base with the price of no higher than the market price of product with the same quality and brand. The advanced payment shall be deducted when the total payment of seeds production is finalized.

 

4 The seed purchase price shall be determined as stipulated in the article 2 of this contract.

5 Party A shall provide detailed production and technical information, develop the corn seed production and technical regulations, assign technical staff to the base during the seed production period, responsible for technical guidance and training.

 

6 Party A shall supervise and manage the whole process of seed production, direct Party B to implement various technical measures. At the critical periods like rouging, tassling, pollination, timely organize to conduct a comprehensive inspection and identification and apply for identification of seeds which did not meet quality standards to the Seed Management Station at or above the county level in a timely manner.

 

7 Party A shall timely purchase all seeds produced by Party B which meet the contract quality at the agreed upon time.

8 Party A shall bear all losses to Party B due to mistakenly providing incorrect varieties or wrong technical guidance to Party B. All economic losses caused by above reasons, which have been identified by the experts of seed management station at or above the county level, shall be borne by Party A.

9 After settling the seed payment, Party A shall timely pay for the seed production services amounts as stipulated in article 4 of this contract.

10 Party A shall have a valid "Crop Seed Production Permit License."

 

11 Technical regulations and standards relevant to the national seed production, seed inspection, and quarantine in the production process shall be strictly enforced.

 

12 Establishment of the seed production file. The seed production files shall describe seed production location, environment of production area, preceding crop, breeding material and quality, technical director, implementation of technical measures on the field, field inspection records, local meteorological records, seed acquisition, processing and seeds sales, etc.

 

  

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Article 7 Obligations of Party B

 

1 Party B shall choose appropriate arable land for seed production, ensure production and management conditions required by seed production, i.e. the fertile land, irrigation and drainage in even and good condition, adequate water and fertilizer, the implementation of weed control, disease prevention, pest control, watering, fertilizing, and field management practices, and accurately report the production area to Party A.

 

2 The lands used for planting engaged crops shall be isolated for security, shall not be mixed-planted and inter-planted other species of crops.

 

3 Party B shall follow with the seed production technical regulations and seeds (seedlings) quarantine rules and regulations stipulated in the Contract, comply with Party A’s technical guidance; strictly organize and implement “technical production regulations on corn seed” and ensure that all technical measures are implemented in place.

 

4 Party B shall provide all qualified seeds to Party A as per the number, time, venue stipulated in the Contract and guarantee that parental seed (species) provided by Party A are not provided to any other party, or retained by Party B itself. Unqualified seeds shall be purchased by Party A at the market price and discarded as worthless under the supervision of the Seed Management Station.

 

5 Party B shall accept the supervision and inspection from the Seed Management Station and seed users and timely cooperate with relevant department to deal with the unqualified seeds.

6 The quality of produced seeds shall meet the standards stipulated in the Contract.

 

7 Party B shall bear the economic loss due to improper cultivation and management of production, failure in compliance with seed production technology requirements, delayed drying and wrong way of drying after harvest etc.

Article 8 Liability for breach of contract

 

1 If breeding material provided by Party A does not meet national quality standards, resulting in economic losses to Party B, Party A shall bear the full economic loss.

 

2 If the technical production specification on corn seed provided by Party A is not standardized, and technical guidance by Party A is improper, resulting in economic losses to Party B, such losses shall be borne by Party A.

3 If Party A gives up, without appropriate reason, production and technical guidance and inspection for the seed fields, or reject the qualified and produced seed without justifiable reason, resulting in economic losses to Party B, Party A shall compensate one time of the total amount of economic loss for Party B.

 

  

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4 If Party A does not pay off the payment for seed production at the designated time, Party A shall pay liquidated damages equaling to 5% of the outstanding amount.

 

5 If Party B fails to provide qualified seeds due to failure in complying with the technical specification on corn seed production, or technical guidance given by Party A’s technical staff, Party B shall bear all economic losses.

6 If Party B violates the sub-paragraph 4 of article 5, the seed management station at or above county shall deal with the breaching behavior according to the relevant provisions of the management approach on crop seed production base for Xinjiang Autonomous Region.

7 If economic losses in seed production are caused by natural disasters and other factors, it shall be assessed by the expert of seed management station at or above the state and county level and negotiated by two parties.

 

8 Party A shall not pay for seeds which do not meet with the agreed quality stipulated in the Contract. If Party B has any objections, it shall submit a written application within 15 days after result is reported, as well as intact samples sealed by two parties, shall be re-examined by seed quality testing center at or above the county or state level and two parties shall resolve the issue through negotiation.

 

Article 9 Supplementary provisions

 

1 Affected by the market factors, the prices of seeds may rise accordingly when they are purchased. Party A shall appropriately increase the purchase price, which shall be negotiated and signed by two parties.

2 Two parties shall take sample from each batch of seeds and seal them respectively for re-examination, verification, arbitration, litigation. Sealed sample shall be stored till the time when all seeds are produced and harvested as stipulated in the Contract.

 

3 After Party A receives the seeds, it shall be responsible for inspecting purity, germination rate, neatness and moisture, and re-examining them after two germination cycle and timely finding out problems, otherwise, the seeds shall be regarded as qualified if the inspection period is passed.

 

4 If Party A and Party B have any disputes arising from the performance of this contract, they can apply to seed management station at or above the county level for coordination. Otherwise, they shall plea to the people's court for coordination.

 

  

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5 When two parties have disputes on the production area, it shall be re-determined by two parties arranged by seed management station at or above county level.

 

6 For any issues that are not mentioned in the Contract, two parties shall negotiate to reach an agreement and make supplementary regulations according to the General Principles of Civil Law of the People's Republic of China, the Contract Law of the People's Republic of China, the Seed Law of the People's Republic of China, Ordinance on Crop Seeds of Xinjiang Autonomous Region, Management Approach on Crop Seed Production Base of Xinjiang Autonomous Region, and relevant state regulations. If security is required to provide, two parties shall sign a separate "contract guarantee" as an annex to this Contract.

 

Article 10 This contract is valid for one year, since the effective date upon signature and seal of two parties and expires on December 31, 2012.

 

Article 11 This Contract has triplicate copies. Party A and B hold one copy respectively and every copy has the same legal effect. Party A shall send the contract to seed management station at the county level in the production area for archive within 15 days after signing the contract.

 

	Party A (seal): Jilin Hengchang Agricultural	Party B (Seal): Niu Miao
	 	Development Co., Ltd.	 
	 	 
	 
Entrusted agent (signature): Zhao Liankui

	 
	 	 
	February 10, 2012 	February 10, 2012

 

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