Document:

exhibit_10-1.htm

Exhibit 10.1

LICENSING & SERVICES AGREEMENT

This Licensing and Services Agreement (“Agreement”) is made as of June 21, 2011 by and between Crystal Research Corporation, an Arizona company with its principal office at 4952 East Encanto Street Mesa, AZ 85205 (“CRC”) and INFINERGY INC., located at 802 Southdown Road, Unit C2, Mississauga, Ontario, L5J 2Y4 Canada (“INFINERGY”) as of June 21, 2011. CRC and INFINERGY are sometimes hereinafter referred to collectively as the “Parties” hereto.

WHEREAS, CRC is engaged in the business of crystal technology and, in particular, the business of production, research & development of gas using calcium carbide as a source;

WHEREAS, INFINERGY is desirous of obtaining an exclusive license for the territory of China to use the technology, know-how, and intellectual property owned and provided by CRC for the purpose of the sales and distribution of CRC's process to convert limestone to Calcium Carbide to NuGasTM (the"NuGasTM Process").

NOW, THEREFORE, in consideration of the premises and the mutual covenants of the Parties hereto, the Parties hereby agree as follows:

	
  

	
1.

	
Services:  CRC shall be responsible for creating and/or providing to INFINERGY or any parties designated by INFINERGY (“Delivery Services”) as described in Exhibit A.

	
  

	
2.

	
Scope of Services:  INFINERGY agrees and understands that the Delivery Services provided by CRC are limited to the services described in Appendix A and are provided for use within the territory and in the manner described in Appendix A of this Agreement.

	
  

	
3.

	
Service and Support:  CRC shall provide necessary technical support for its Delivery Services, including providing customer support.

	
  

	
4.

	
Royalty Fees:  CRC will be entitled to an ongoing royalty fee as set forth in Appendix B, subject to the minimum annual guarantee that will be the basis of the Performance Thresholds throughout the term of the License, which Performance Thresholds will include an option for CRC to either terminate this Agreement or elect non-exclusive status for this Agreement if the minimum annual guarantees are not met.

4.a           INFINERGY has agreed to advance $250,000 (the “Advance") against future royalty payments payable as follows:

  

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·

	
$25,000 to be wired directly into the account of CRC as a non-refundable deposit on June 24, 2011

	
  

	
·

	
$100,000 to be wired into the CRC Trust Account by June 30, 2011

	
  

	
·

	
$125,000 to be wired into the CRC Trust Account by July 15, 2011

 

4b.           CRC will arrange with their attorney to hold in a third party Trust Account (the “CRC Trust Account") $225,000 of the Advance. The funds deposited into the CRC Trust Account may not be released in whole or in part without the signed joint approval of both a representative of CRC (Kiril Pandelisev) and a representative of CBD Group Limited (Marvyn Budd). Any funds from the CRC Trust Account that have not been used by April 30, 2012 will be transferred to a CRC operating account at the sole discretion of CRC either on April 30, 2012 or in the event of termination of this Agreement.

 

4c.           INFINERGY has agreed to the Advance and may recover the full $250,000 by deducting 25% of any royalty payments due to CRC during the Initial Term ("Royalty Deduction Plan”) and applying the amount deducted to the Advance repayment.

4d.           INFINERGY will be granted an option to not have the Advance repaid according to the terms of the Royalty Deduction Plan and may elect to convert the full $250,000 into shares from treasury of CRC (the “Debt Conversion”) with the shares to be priced at 80% of the average trading value of the CRC shares (OTC Symbol CYSA) during the preceding 60 trading days from the date INFINERGY gives notice of their desire to convert. The right granted to INFINERGY by CRC for the Debt Conversion may only be exercised between January 30, 2013 and July 31, 2013 and failure to do so will terminate the Debt Conversion option and INFINERGY may implement the Royalty Deduction Plan.

4e.           CRC will build a fully functioning demo lab (the “CRC Demo Lab”) accompanied by a fully documented manual of instruction that both explains and proves the process of converting limestone to Calcium Carbide and then into NuGas into power through use of a generator by no later than April 30, 2012 (the "Demo Lab Obligation"). The CRC Demo Lab will be located in the USA as the property of CRC or its wholly owned designated subsidiary. If CRC is unable to fulfill the Demo Lab Obligation then the Licensee has the right at anytime thereafter and for a period of one year to convert the $250,000 Advance into shares of CRC at 40% of the average trading value of the CRC shares during the preceding 60 trading days from the date the Licensee gives notice of their desire to convert in lieu of repayment of the Advance.

	
  

	
5.

	
Expenses:  Each Party shall be responsible for its own costs and expenses incurred in connection with fulfilling its responsibilities identified herein.

  

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6. 

	
Verification:  During the term of the Agreement, INFINERGY shall maintain accurate accounting and engineering records showing the progress of projects associated with this Agreement.  CRC may, no more frequently than once per quarter and upon 30 days written notice, request access to such records for the purposes of inspection.   CRC may also, no more frequently than once per quarter and upon 30 days written notice, request access to and inspection of such records by an independent accounting firm during normal business hours.  The cost of such inspection shall be borne by CRC, unless the inspection by such accounting firm reveals a variance of 10 percent (10%) or more from the number provided by CRC, in which event the cost of such inspection shall be borne by INFINERGY.

	
  

	
7.

	
Term and Termination:

7.1  Term:  The term of this Agreement shall commence upon execution by the Parties (the “Effective Date”) and shall endure for a total of twenty (20) years from the execution subject to certain minimum performance clauses (the "Performance Thresholds") being met by INFINERGY, with the first term being five (5) years (the “Initial Term”) and if the Performance Thresholds continue to be met there will be automatic renewals for 3 subsequent five (5) year terms.

 

This Agreement shall automatically renew after this Initial Term, unless sooner terminated as set forth below, for successive five year periods on the same terms and conditions herein, unless either Party gives the other Party written notice of its intent to terminate not less than sixty (60) days prior to the expiration date of the then-current term.  No termination shall limit the obligations of either Party pursuant to Section 8 below.

7.2  Termination For Cause:  Each Party shall have the right, at its sole discretion, to immediately terminate this Agreement upon written notice to the other in the event of the occurrence of one or more of the following: (a) the other Party has made any material misrepresentation of this Agreement; (b) the other Party makes any assignment for the benefit of creditors or files a petition in bankruptcy or is adjudged bankrupt or becomes insolvent or is placed in the hands of a receiver or if the equivalent of any of the proceedings or acts referred to in this clause, though known and/or designated by some other name or term, occurs; or (c) the other Party materially breaches any term or provision of this Agreement and fails to cure such breach within thirty (30) days after the non-breaching Party delivers written notice thereof to the other Party.

	
  

	
8.

	
Confidentiality:  CRC and INFINERGY shall maintain the confidentiality of, and prevent the unauthorized use or disclosure of, any confidential and/or proprietary information of the other which comes into its possession, or the possession of its respective employees, agents, representatives, and contractors.  Upon either Party’s request or any termination or expiration of this Agreement, the other Party shall promptly return all such confidential and/or proprietary information of the other in its possession.  In the event of a breach or threatened breach of the provisions of this Section, the other Party shall be entitled to injunctive and/or other preliminary or equitable relief, in addition to any other remedies available at law.  Confidential information excludes information that was independently developed by the receiving party without reference to or knowledge of the disclosing party’s confidential information, information that was known to the receiving party prior to disclosure by the disclosing party and that is free from any obligation to keep it confidential, information that is within the public domain through no action on the part of the receiving party, and information that was received from a third party who was under no obligation to keep such information confidential.

  

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9.

	
Representations and Warranties:  Each Party represents and warrants to the other Party that (a) the execution and delivery by such Party of the Agreement and its performance of its obligations hereunder will not violate, contravene or conflict with any employment agreement, confidentiality agreement, non-competition agreement or other agreement or contract to which it is a party or by which it or any of its members or personnel may be bound; (b) it has the full power and authority to enter into this Agreement and perform its obligations hereunder; and (c) when executed and delivered, this Agreement will constitute the legal, valid and binding obligation of such party, enforceable against it in accordance with its terms.  CRC also expressly warrants its services, technology, and/or CRC Demo Lab with respect to its fitness for achieving the goal of obtaining NuGasTM from Calcium Carbide for the benefit of INFINERGY under this Agreement. Except for the express warranties set out in this section, CRC disclaims any and all warranties, whether express or implied or statutory, concerning the following: any non-CRC entity use of CRC services, technology, and/or CRC Demo Lab outside of the direct control and supervision of CRC; any implied warranty of merchantability, fitness for a particular purpose, title, non-infringement, quiet enjoyment, satisfactory quality or accuracy.

	
  

	
10.

	
Relationship of the Parties:  The relationship of the Parties established by this Agreement is that of independent contractors, and this Agreement does not create an agency, employment, partnership or joint venture relationship between the Parties.

	
  

	
11.

	
Limitation of Liability:  Except for the confidentiality provisions of Section 8, in no event shall INFINERGY or CRC be liable to the other (nor to any entity or person claiming rights derived from the other’s rights) under this Agreement for indirect, special, incidental, punitive, exemplary, or consequential damages, including loss of anticipated revenue, loss of information or material of any kind, lost profits, loss of business or other economic damage, and injury to property in connection with, arising out of, or as a result of the services, the technical systems, or breach of any warranty or other term of this agreement.  Such limitations shall apply regardless of whether the Party liable or allegedly liable was advised, had other reason to know, or in fact knew of the possibility of such damages.

  

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12. 

	
Notices:  Any notice required to be given under this Agreement shall be in writing and deemed to have been duly given (i) when delivered in person, (ii) on the first (1st) business day after dispatch by a nationally-recognized overnight delivery service or (iii) when delivered by telecopy or electronic mail to the account set forth below and promptly confirmed, in each case addressed to the Parties as follows:

If To CRC, to:

Kiril Pandelisev

Crystal Research Corporation

4952 East Encanto Street Mesa, AZ 85205, USA

Email:  kpandelisev@crccrystal.com

If to INFINERGY, to:

Mr. Jeff Mak

802 Southdown Road, Unit C2,

Mississauga, Ontario, L5J 2Y4 Canada

Email: jeffm@zbatt.com

Or to such other physical or email address as either Party may designate by notice to the other.

  

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13. 

	
Intellectual Property: Any inventions, patents, licenses, copyrights, computer software, computer programs or other intellectual property developed or previously owned by and used by either Party or its officers or employees in connection with work performed under this Agreement shall be the property of such Party.

 

	
  

	
14.

	
Arbitration:  The Parties agree to attempt to settle any claim, controversy, or dispute arising out of or relating to this Agreement (“Dispute”) through good faith settlement negotiations.  To the extent such settlement negotiations have not resulted in a mutually agreeable resolution of any Dispute within ten days after one Party delivers notice of the Dispute to the other Party, the Parties agree that such Dispute shall be settled by binding arbitration before the American Arbitration Association (“AAA”).  The arbitration shall take place at the AAA offices in Washington, DC before a single arbitrator.  Each Party shall pay its own expenses of arbitration, and the expense of the arbitrator shall be shared equally between the Parties.  Arbitration is the sole and exclusive method by which any Dispute arising out of or relating to this Agreement shall be resolved.  The arbitrator is not authorized to award exemplary or punitive damages.  All applicable statutes of limitation based upon the passage of time shall be tolled while the procedures referenced in this Section are being followed with respect to any Dispute.  Both Parties will have the right to seek to enforce any award of an arbitrator rendered pursuant to this Section, or to file for a temporary restraining order or other injunctive or equitable relief in order to prevent irreparable harm to the Party seeking such relief, in the state or federal courts of the state of Arizona.

 

	
  

	
15.

	
Assignment:  Neither Party may assign this Agreement, or assign any rights or delegate any obligations under this Agreement, without the prior written consent of the other Party (which consent will not be unreasonably withheld or delayed), except a first Party may assign this Agreement, or any or all of its respective  rights under this Agreement, and may delegate any or all of its obligations under this Agreement, with or without the other Party’s prior written consent, (i) to any Affiliate of the first Party; and (ii) in connection with (a) a merger, consolidation, or similar transaction involving (directly or indirectly) the first Party, (b) a sale, lease, license, or other disposition of all or substantially all of the assets of the first Party or all or substantially all of the assets of a division or other business unit of the first Party to which this Agreement relates, or (c) any other form of combination or reorganization involving (directly or indirectly) the first Party.  Any attempted or purported assignment or delegation by either Party in violation of the previous sentence will be null and void.

 

	
  

	
16.

	
Governing Law; Waiver of Jury Trial:  This Agreement shall be governed by, and construed and enforced in accordance with, the laws of the state of Arizona, without regard to the conflict provisions thereof.  Each Party hereby irrevocably waives all right to a trial by jury in any action, proceeding or counterclaim arising out of or relating to this Agreement or the transactions contemplated hereby.

	
  

	
17.

	
Effect of Invalid Provision:  If any term, provision, paragraph or clause of this Agreement or any application thereof shall be invalid or unenforceable for any reason in any particular jurisdiction, the remainder of this Agreement or any other application of such term, provision, paragraph or clause shall not be affected thereby in such jurisdiction (where such remainder or application shall be construed as if such invalid or unenforceable term, provision, paragraph or clause had not been inserted), and this Agreement and such application of such term, provision, paragraph, or clause shall not, in any manner, be affected in any other jurisdiction.

  

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18.

	
Force Majeure:  Except as set forth herein, neither party shall be responsible for any failure in performance of this Agreement if such failure arises, directly or indirectly, out of causes reasonably beyond its control, including but not limited to, default by subcontractors or suppliers of goods or services essential to the conduct of its business, acts of God, war, terrorism, governmental acts in sovereign capacity, labor disturbances and strikes, power failures or other outages, fire, flood or epidemic.

	
  

	
19.

	
Modifications in Writing:  No modification, alteration or addition to this Agreement, including addendums and exhibits hereto, shall be valid or effective unless in writing and signed by CRC and INFINERGY.

	
  

	
20.

	
Effect of Waiver:  No waiver of any breach of any of the covenants, terms and conditions contained in this Agreement shall be construed to be a waiver of any succeeding breach of such covenant, term or condition, or of any other covenant, term or condition.

	
  

	
21.

	
Non-Disparagement:  CRC and INFINERGY agree not to directly or indirectly disparage the other party, or the other party’s officers, directors, employees, stockholders, parents, subsidiaries, affiliates, and agents, in any manner likely to be harmful to them or their business, business reputation or personal reputation; provided that both CRC and INFINERGY shall respond accurately and fully to any question, inquiry or request for information when required by legal process.

	
  

	
22.

	
Entire Agreement:  This Agreement constitutes the entire agreement among the parties and supersedes any prior understandings, agreements or representations by or among the Parties, written or verbal, that may have related in any way to the subject matter hereof.

	
  

	
23.

	
Execution in Counterparts:  This Agreement may be executed in counterparts, each of which shall be deemed an original, but both of which together will constitute one and the same instrument.  Delivery by telecopy, e-mail or other electronic means shall be considered an original executed document, whether in counterpart form or otherwise.

	
  

	
24.

	
Headings:  The section headings contained in this Agreement are inserted for convenience only and shall not affect in any way the meaning or interpretation of this Agreement.

  

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25.

	
Construction:  The language used in this Agreement, including the addendums hereto, will be deemed to be the language chosen by the Parties to express their mutual intent.  If any ambiguity or question of intent or interpretation shall arise with respect to this Agreement, then this Agreement shall be construed as if drafted jointly by the Parties and no presumption or burden of proof will arise favoring or disfavoring either Party by virtue of the authorship of any provision of this Agreement.

	
  

	
26.

	
No Third Party Beneficiaries:  Nothing expressed or implied in this Agreement is intended or shall be construed to confer upon or give any person, other than the Parties, any right or remedy under or by reason of this Agreement.

	
  

	
27.

	
Publicity:  Either party may originate a press release relating to this Agreement, subject to the other party’s prior approval, which shall not to be unreasonably withheld.  Thereafter, neither party shall originate any publicity, news release or other public announcement relating to this Agreement or the existence of an arrangement between the Parties without the prior written approval of the other party, except as otherwise required by law; provided, however, that both parties shall have the right to list the other party as a customer or supplier in its marketing, press, or similar materials.

IN WITNESS WHEREOF, the undersigned have set their hands as of the day and year first written above,

 

	
CRC

Dr. Kiril Pandelisev     

Chief Executive Officer  

 

 

/S/ Kiril Pandelisev

Signature   

 

 

June 21, 2011

Date  	
INFINERGY

Mr. Jeff  Mak

President

 

 

/S/ Jeff Mak

Signature

 

 

June 21, 2011

Date

 

 

  

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APPENDIX A

DESCRIPTION AND SCOPE OF GOODS & SERVICES

The scope of service shall initially be limited to the China.  Additional countries may be added by mutual agreement.

CRC shall provide the following content and services:

	
  

	
1.

	
Completion of CRC Demo Lab in USA

	
  

	
2.

	
Consulting Services

	
  

	
3.

	
Specifications and Drawings (Manual)

 

 

 

 

 

 

 

 

 

 

  

A-1

  

 APPENDIX B

ROYALTY SCHEDULE

	
Product

	
Calcium Carbide and NuGasTM

	
Royalty

	
8%

	
Minimum Royalty

	  
	
Year 1

	
$250,000

	
Year 2

	
$500,000

	
Year 3

	
$650,000

	
Year 4

	
$800,000

	
Year 5

	
$1,000,000

Increase by 10% every year after. (For instance, Year 6 = 1.1 Million, etc.)

 

 

 

 

 

 

B-1Yayi International Inc.: Exhibit 10.49 - Filed by newsfilecorp.com

Exhibit 10.49 

TIANJIN RURAL COMMERCIAL BANK 

Working Capital Loan Agreement
(English
Translation)

The Borrower (Party A): Milkgoat (China) Goat Dairy Co.,
Ltd.

The Lender (Party B): Tianjin Rural Commercial Bank,
High-Tech Branch

The Borrower (Party A): Milkgoat (China) Goat Dairy Co., Ltd.

Address: Block D1C, Xinmao Science and Technology Park, Huayuan Industrial
Park, Tianjin, China. 300384 
Legal representative: Li Liu

The Lender (Party B): Tianjin Rural Commercial Bank, High-Tech
Branch 
Address: 148-6, Yinshui Road, Huayuan Industrial Park, Tianjin,
China. 300384 
Legal representative (person in charge): Liqiang Cao

Due to the business operation, the Borrower applies for a loan
from the Lender. Pursuant to its review, the Lender grants the loan according to
the provisions and conditions of this Agreement.

To set forth both parties’ rights and duties, Borrower and
Lender have entered into the following agreement after negotiation in accordance
with relevant laws and regulations of China.

Article One - Definition 

1.1. Withdrawal means that Brower applies for using the loan
and requesting Lender to disburse the loan under this Agreement.

1.2. Withdrawal Term: after the Agreement becomes effective,
the period of time during which Borrower may withdraw the loan in
installments.

1.3. Withdrawal Date: the date for the withdrawal of the loan
during the Withdrawal Term 

1.4. Discretionary Use by Borrower: after Lender disburses the
loan to Borrower’s account with Lender as designated, Borrower has the
discretion to use the loan to pay any third party according to this Agreement

1.5. Use by Lender: according to Borrower’s application and
payment request, Lender directly pays any third party through Borrower’s account
with Lender with the loan.

Article Two - Use of the Loan

2.1. The loan under this Agreement shall only be used as
working capital.

2.2 Without Lender’s prior written consent, Borrower may not
change the use of the loan under this Agreement.

Article Three - Currency, Amount and Term of the
Loan

3.1. The currency of the loan under this Agreement is RMB, in
an amount of RMB 30,000,000 yuan.

3.2. The term of the loan is 12 months from June 10, 2011 till
June 9, 2012.

Article Four – Withdrawal 

4.1. The deadline to withdraw loan under this Agreement is June
9, 2012, during which Borrower may withdraw the loan in installments. Upon the
expiration of the term of loan, Borrow may not withdraw loan further. Borrower
may apply for use the loan if the followings conditions are met (unless waived
by Lender):

4.1.1. Borrower has submitted all documents in terms of
formality and contents as required by Lender; the guaranty agreement is
effective if there is guarantee on the loan and all necessary governmental
approval and registration procedures have been completed;

4.1.2. Borrower shall have completed all governmental
authorization, approval, registration and other procedures; if requested by
Lender, Borrower shall complete the notarization for the Agreement;

4.1.3. Borrower shall have opened an account with Lender for
the disbursement of the loan;

4.1.4. All the representations and warranties of Borrower
included in this Agreement are true, complete and accurate;

4.1.5. There is no ongoing or potential default of
Borrower;

4.1.6. Borrower shall have completed all relevant receipts and
other documents in connection with this withdrawal. Such receipts and relevant
documents are an integral part of this Agreement and have the same legal forces
as this Agreement;

4.1.7. All the conditions under Chinese laws and regulations or
set forth by both parties shall have been satisfied;

4.1.8. Borrower shall submit the Application for Withdrawal to
Lender (Borrower may request for withdrawals for multiple times during the
Withdrawal Term on any business day of Lender. Borrower shall submit the
application at least 5 business days before the proposed Withdrawal Date. The
application is irrevocable and shall be legally binding on Borrower once
submitted) and other documents evidencing the underlying transactions as
requested by Lender;

4.2. Based on the documents and materials submitted by
Borrower, Lender has sole discretion to determine whether conditions set forth
under Section 4.1 have been satisfied.

4.3. In the event that the third party has been identified and
the amount of any single withdrawal is at least RMB 5 million, the Use by Lender
payment shall be adopted. In other events, Discretionary Use by Borrower will be
permitted.

4.4. [reserved] 

4.5. Provided that no changes under Section 4.7 take place nor
there is any default of Borrower under Section 12.1, Lender may disburse loan
under Use by Lender:

	Withdraw
      Amount 	Third Party Name 	Payment Method 
	RMB 30 Million 	Fuping
      Milkgoat Dairy Co., Ltd. 	Electronic remittance 

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4.6. [Reserved] 

4.7. [Reserved] 

4.8. [Reserved]

Article Five - Interest Rate and Interest
Calculation

5.1. Borrower shall pay the interest of the loan to Lender
according to the Agreement. The interest rate under this Agreement is 20% higher
than the corresponding benchmark interest rate of the People’s Bank of China
(6.3% per annum), which is 7.572% per annum.

5.2. After the execution of the Agreement but before the first
withdrawal, if the People’s Bank of China adjusts the benchmark interest rate,
which is applicable to the loan under this Agreement, Lender is entitled to
adjust the interest rate according to Section 5.1 of this Agreement.

5.3. If Borrower fails to repay the principal of the loan under
this Agreement, Lender is entitled to charge an additional 50% of the contracted
interest rate as the overdue penalty interest starting on the date of overdue
until Borrower pays off all the principal and accrued interest of the misused
loan.

5.4. If Borrower does not use the loan in a way set forth under
Section 2 of this Agreement, Lender is entitled to charge an additional 100% of
the contracted interest rate as the penalty interest starting on the date of
misuse until Borrower pays off all the principal and accrued interest of the
loan.

5.5. The interest of the loan shall be paid on a quarterly
basis on the 20th day of the last month of each quarter. The interest
shall be calculated based on the actual amount disbursed and the actual days of
loan after the loan is withdrew.

5.6. After the loan has been disbursed, the interest rate of
the loan will be adjusted if the People’s Bank of China adjusts the benchmark
interest rate. The new interest rate will be applicable starting on the first
date of the next month after the adjustment. The interest rate under this
Agreement is 20% higher than the corresponding benchmark interest rate of the
People’s Bank of China after adjustment. The penalty interest rate and overdue
interest rate under this Agreement shall be adjusted accordingly.

5.7. The penalty interest rate and overdue interest rate under
this Agreement shall be adjusted accordingly.

5.8. If Borrower fails to pay interests on the due date, Lender
is entitled to charge penalty based on the penalty interest rate until Borrower
pays off all of the overdue interests.

5.9. Borrower shall deposit sufficient amount of funds in the
account with Lender before the due date of interest payment under this
Agreement. Lender is entitled to deduct the interest payable from Borrower’s
bank account on the payment date.

Article Six - Loan Repayment

6.1. Borrower shall repay the full principal according to
Section 6.1.1 below. The loan shall be repaid with the same currency.

6.1.1. The full principal and accrued interest shall be repaid
in one lump sum by June 9, 2012.

6.1.2. [Reserved]

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6.2. If the maturity date is a legal holiday, the loan shall be
repaid by the next business day. This legal holiday shall be included in the
period of the loan.

6.3. Borrower shall come to Lender’s office to complete the
loan repayment procedure on the maturity date.

6.4. Borrower shall repay the full principal and accrued
interest of the loan under the Agreement on the maturity date. If Borrower fails
to repay the full principal and interest promptly, Lender is entitled to deduct
any expenses occurred, penalty interest, accrued interest of the loan, and
principal of the loan from any Borrower’s accounts within Lender. 

6.5. If the funds that Borrower deposits in its account are not
sufficient to repay the accrued interest on any payment date, the funds shall be
used first to repay the relevant expenses incurred, then the interest of the
loan, and the principal of the loan and penalty interest finally.

Article Seven – Prepayment

7.1. Borrower is entitled to prepay the loan, provided that it
gives a written application to Lender at least 10 business days before the
payment.

7.2. The prepayment application becomes binding upon delivery
to Lender and is irrevocable. Borrower has the obligation to prepay the loan
according to the prepayment application.

7.3. [Reserved]

Article Eight – Extension of Term 

8.1. Borrower may submit an extension application to Lender at
least 30 business days prior to the maturity date. Lender has the full
discretion to determine whether to grant the extension. If Lender agrees to
grant the extension, the parties shall enter into an extension agreement.

8.2. If the aggregated loan term after the extension requires
the application of a different benchmark interest rate, the new interest rate
shall apply starting on the first day of the extension.

Article Nine - Guarantee

9.1. The loan has been guaranteed by Tianjin Haitai Investment
Guarantee Co., Ltd. for joint and several liability.

Article Ten - Expenses and Compensation

10.1. Borrower shall be responsible for all the expenses
related to the execution and fulfillment of the Agreement and the guarantee
contract, including but not limited to legal services, accounting services,
auditing, insurance, notarization, appraisal, evaluation, and registration fee.
Upon Lender’s request, Borrower shall pay the expenses described above
promptly.

10.2. Upon Lender’s request, Borrower shall immediately pay off
and compensate all costs and expenses that incurred under the Agreement,
including but not limited to litigation costs, attorney fees, travel fees and
other costs to make the claims.

Article Eleven - Borrower’s Representations and
Warranties.

11.1. Borrower is a validly existing legal entity /other
organization formed in accordance with Chinese laws with independent civil
capacity, to enjoy full rights, authority and powers to operate business
activities with all of its assets to bear civil liability.

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11.2. Borrower has full rights, authorization and powers to
sign the Agreement and carry out transactions contemplated by the Agreement, and
has taken or obtained all necessary corporate acts and other actions and
agreement to authorize the execution and performance of the Agreement. The
Agreement is effective by the effective signature of Borrower’s legal
representative or the agent and with official seal.

11.3. Borrower has obtained all the necessary government
approvals and third-party consent for executing the Agreement. The act of
execution of contract by Borrower and the performance of the Agreement will not
violate the constitutive documents/approval (if any) of the legal entity and as
a party to any other contracts or agreements.

11.4. Borrower has carefully reviewed this Agreement and fully
understands the provisions of this Agreement. It is voluntary activity of
Borrower to sign and perform this Agreement.

11.5. All the documents, information and evidence provided by
Borrower in connection with the execution and performance of the Agreement are
all true, complete, accurate and effective. The financial statements provided by
Borrower give a true reflection of Borrower’s financial situation when they were
issued.

11.6. The source of repayment funds is legal.

11.7. Borrower shall report the disbursement of funds
periodically according to the request of Lender. Lender has the right to request
documents, materials and other information from Borrower, inspect and record
Borrower’s use of the funds and determine whether the funds are used pursuant to
this Agreement.

11.8. Borrower is not involved in any litigation, arbitration
or administrative proceedings that may cause material, adverse consequences to
Borrower’s repayment ability.

11.9. Borrower shall provide all true documents (unless
required by laws) and actively cooperate with Lender’s inspection and
investigation.

11.10. Borrower shall cooperate with Lender in connection with
its inspection, review and supervision on Borrower’s business operations and
financial conditions.

11.11. Borrower authorizes Lender to inquire the information
related to Borrower and Guarantor through personal credit data, enterprise
credit data and other credit data systems for the purposes of this
Agreement.

11.12. Prior to the repayment of all of the debts under this
Agreement, if Borrower plans to change its name, legal representative, legal
address, outsource, or for equity reorganization or change of shareholders,
consolidate, merge, jointly operation, joint venture, spin-off, transfer of
assets with consideration, applying for suspension, dissolution, bankruptcy or
other events which may result in change of creditor rights of Lender, Borrower
shall notify Lender at least 30 business days in advance and acquire the written
consent of Lender. 

11.13. Borrower makes the representation that during the term
of the loan, it will not provide guaranty to any third party for their debts or
grant security interests in its assets or rights to any third party or use its
assets or rights to make investments without Lender’s consent.

11.14. In the event of deterioration of credit of Guarantor,
changes in the name, legal representative, legal address or outsource, or equity
reorganization or change of shareholders, consolidation, merge, jointly
operation, joint venture, spin-off, transferring of assets with consideration,
applying for suspension, dissolution, bankruptcy or other events which may
aversely affect the Guarantor’s fulfillment of its guarantor obligations,
Borrower shall consult with Lender or present new guaranty and sign new
guarantee contract accepted by Lender.

11.15. In the event that the collaterals are confiscated,
damaged and other activities that reduce the value of the collaterals, Borrower
shall consult with Lender re repayment or execute new guarantee contracts
accepted by Lender.

5 

11.16. [Reserved]

11.17. Borrower shall notify Lender in a written form if any
other events take place that may create dangerous situation to Lender’s
operations or materially, adversely affect Borrower’s capability to repay the
loan.

11.18. All of Borrower’s representations and warrants shall be
complete and accurate during the term of loan.

Article Twelve - Event of default

12.1. Any of the following events may constitute Borrower’s
default:

12.1.1. Borrower violates any activity under Article 1 to
Article 11.

12.1.2. Borrower intentionally evades the disbursement of funds
using the Use by Lender method.

12.1.3. Borrower presents to Lender balance sheets, income
statements and other financial statements with untrue information or material
omission, or refuse to accept inspection of use of loan, business operations and
financial activities.

12.1.4. The representations and warranties of Borrower or the
Guarantor are proved to be untrue or misleading.

12.1.5. Borrower or the Guarantor is at default under other
contracts to which Borrower or the Guarantee is a party.

12.1.6. Deterioration of operation and financial situation of
Borrower and the Guarantor 

12.1.7. Borrower or the Guarantor has already been or will be
under suspension, dissolution, liquidation or its business licenses have been
revoked.

12.1.8. The collaterals under this Agreement are depreciated in
value, damaged or lost.

12.1.9. In the event that Borrower or the Guarantor is merged,
separated or reorganized, it fails to make arrangements for debt payment that
are satisfactory to Lender 

12.1.10. Has been involved in or may be involved in any
material, economic disputes, litigation, arbitration or assets are sealed up,
seized or enforced or reported for violation of state regulations or policies by
medias, its performance of the Agreement may be or has already been
affected.

12.1.11. Changes of key management members or subject to
investigation by law enforcement which may affect the performance of this
Agreement

12.1.12 Using fake contracts with related parties or other
untrue transactions to obtain funds 

12.1.13. Any accidents due to its violation of laws,
regulations, or industry standards related to food safety and environment
protection, which may affect the performance of this Agreement

12.1.14. Borrower fails to notify Lender timely for the
following events:

	 	(1) 	
      any material changes to its articles of association or
      substantial changes to its business

	 	(2) 	
      any material changes to its accounting policies

	 	(3) 	
      any material changes related to financial, economic and
      other corporate matters of itself, itssubsidiaries, or its
  parent

12.1.15. Borrower’s own funds are not sufficient to pay off the
loan 

6 

12.1.16. Borrower defaults under agreements with other
financial institutes and such financial institutes are entitled to accelerate
any outstanding loans and request for immediate repayment 

12.1.17. Occurrence of any other events that may materially
adversely affect Lender’s rights under this Agreement.

12.2. Lender is entitled to make the decision on whether any
event of default has taken place and notify Borrower accordingly. In an event of
default, Lender is entitled to take one or more measures as follows:

12.2.1. Request Borrower to cure the breach within certain
period of time 

12.2.2. Suspend the disbursement of funds under this
Agreement

12.2.3. Declare the acceleration of the loan and request
Borrower to repay all the outstanding principal of the loan, accrued interest of
the loan and other payables.

12.2.4. Negotiate with Borrower to change the terms of the loan

12.2.5. Change the methods of funds disbursement 

12.2.6. Request Borrower to increase or change the Guarantor
and pledge 

12.2.7. Deduct from any of Borrower’s accounts with Lender any
unpaid fees under this Agreement 12.2.8. Announce the exercise of any rights
under the guarantee contract 12.2.9. Request Borrower to pay damages for its
violation 12.2.10. Other remedies that Lender may deem appropriate.

Article Thirteen – Governing Law and Dispute
Settlement

13.1. This Agreement and all matters related to this Agreement
are governed by laws of China and shall be interpreted pursuant to laws of
China.

13.2. Any disputes arising from the performance of the
Agreement shall be resolved through negotiation. Any dispute that may not be
solved through negotiation shall be submitted to the court with
jurisdiction.

Article Fourteen – Effectiveness, Assignment, Amendment and
Termination

14.1. The Agreement becomes effective upon signing by both
parties’ legal representatives or the agents and being attached with official
seals of both parties.

14.2. After the Agreement becomes effective, either party may
not terminate the contract or amend the Agreement without other party’s consent.
The parties shall reach written agreement to amend or terminate this
Agreement.

14.3. Without prior consent of Lender, Borrower may not assign
or otherwise dispose its all or part of its obligations under this
Agreement.

14.4. Lender may, without Borrower’s consent, assign its rights
under the Agreement to any third party and provide a written notice to Borrower
after such transfer.

7 

14.5. In any event that any provisions of the Agreement at any
aspect become illegal, invalid or unenforceable; other provisions of the
Agreement shall not be affected. 

Article Fifteen – Notice and Delivery 

15.1. Any and all communications to be provided hereunder shall
be in writing and shall be delivered to the address or via facsimile as included
in this Agreement.

15.2. Any and all notices or requests are deemed given and
effective on the earliest of (a) the date of transmission, if such communication
is delivered via facsimile (b) the third days after the date of transmission, if
such communication is delivered via registered mail or (c) upon receipt by the
courier if such communication is to be delivered by a courier. The documents
submitted by Borrower to Lender shall be deemed delivered upon actual receipt by
Lender.

Article Sixteen – Miscellaneous

16.1. All of the payables under this Agreement by Borrower
shall be paid in full and may not be offset, deducted or withheld for any
balances that Lender may owe to Borrower.

16.2. Any extension or preferential treatment provided by
Lender to Borrower shall not be deemed as waiver of Lender’s rights under the
Agreement or affect or limit the rights of Lender according to the Agreement.

16.3. Lender is entitled to provide this Agreement and other
relevant information to the individual credit data, enterprise credit data and
other credit data established by the People’s Bank, according to relevant laws
and regulations.

Article Seventeen – Supplemental Provisions

17.1. Both parties may reach a separate written agreement
regarding issues not covered under this Agreement. Such a supplemental agreement
is an integral part of this Agreement and has the same legal effect as this
Agreement.

17.2. [Reserved] 

17.3. [Reserved] 

17.4. There are four original copies of this Agreement. Each of
Borrower and the Guarantor holds one, and Lender holds two copies.

17.5. This Agreement was signed by both parties at Tianjin on
June 10, 2011.

	Party A: 	Party B: 
	  	Tianjin Rural Commercial Bank, High-Tech Branch
    
	Milkgoat (China) Goat Dairy Co., Ltd. (company seal) 	(company seal) 
	Legal representative: /s/ Li Liu 	Legal representative (or person in charge): /s/
      Liqiang Cao 
	(or authorized agent) 	(or authorized agent) 

8

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