Document:

Exhibit 10.40

Exhibit 10.40

EMPLOYMENT AGREEMENT

EMPLOYMENT AGREEMENT made and entered into as of the 13th day of April, 2007 by and
between ENERGY WEST, INCORPORATED (the “Company”), a Montana corporation, and DAVID C. SHIPLEY
(the “Executive”);

WHEREAS, the Company desires to secure the employment of the Executive as a Vice
President;

WHEREAS, the Executive is willing to commit himself to be employed by the Company on the terms
and conditions herein set forth and thus to forego opportunities elsewhere;

WHEREAS, the Executive (i) has represented and warranted to the Company that he is not bound
by any agreement which precludes him from either entering into this Agreement or performing the
duties and services described in this Agreement and (ii) acknowledges that such representation and
warranty is a material term and condition of this Agreement; and

WHEREAS, the parties desire to enter into this Agreement, as of the Effective Date, as
hereinafter defined, setting forth the terms and conditions for the employment relationship of the
Executive with the Company during the Employment Period (as hereinafter defined).

NOW, THEREFORE, IN CONSIDERATION of the premises, and the covenants and agreements set
forth below, it is hereby agreed as follows:

1. Employment and Term.

(a) Employment. The Company agrees to employ the Executive, and the Executive agrees
to be employed by the Company, in accordance with the terms and provisions of this Agreement during
the term hereof (as described below).

(b) Term. The term of this Agreement shall commence as of May 18, 2007 or such earlier
date as the parties shall mutually agree in writing (the “Effective Date”) and shall continue until
terminated in accordance with Section 4 hereof (the “Employment Period”).

2. Duties and Powers of Executive.

(a) Position, Location. The Executive shall serve as a Vice President of the Company
and shall report to the President and Chief Executive Officer of the Company. The Executive shall
perform such duties and services appertaining to such position as reasonably directed by the
President and Chief Executive Officer and commensurate with the duties and authority of officers
holding comparable positions in similar businesses of similar size in the United States. The
Executive shall use his reasonable best efforts to carry out such responsibilities faithfully and
efficiently. The Executive’s services shall initially primarily involve the management of the
Company’s operations in North Carolina and Maine.

 

 

 

(b) Attention. During the Employment Period, and excluding any periods of vacation and
sick leave to which the Executive is entitled, the Executive shall devote substantially all of his
business time, energy and best efforts to the business and affairs of the
Company. The Executive may not engage, directly or indirectly, in any other business, investment or
activity that interferes with the Executive’s performance of his duties hereunder, is contrary to
the interests of the Company, or requires any significant portion of the Executive’s business time.
It shall not be considered a violation of the foregoing for the Executive to serve on corporate,
industry, civic or charitable boards or committees, so long as such activities do not materially
interfere with the performance of the Executive’s responsibilities as an employee of the Company in
accordance with this Agreement. Following the first anniversary of the Effective Date, the
Executive may serve on the board of directors of up to one non-competing for-profit businesses
which does not materially interfere with his duties hereunder.

3. Compensation. The Executive shall receive the following compensation for
his services hereunder to the Company:

(a) Salary and Bonus. The Executive’s initial annual base salary (the “Annual Base
Salary”), payable in accordance with the Company’s general payroll practices, in effect from time
to time, shall be at the annual rate of $130,000. The Board shall review such base salary at least
annually and may from time to time direct such upward adjustments in Annual Base Salary as the
Board deems to be necessary or desirable, including, without limitation, adjustments in order to
reflect surveys of compensation for comparable positions at other companies. The Annual Base Salary
shall not be reduced after any increase thereof. Any increase in the Annual Base Salary shall not
serve to limit or reduce any other obligation of the Company under this Agreement. During each
calendar year during the Employment Period, the Executive shall be eligible to receive a
discretionary bonus targeted at twenty percent (20%) of his Annual Base Salary. The discretionary
bonus shall be based on performance criteria determined by the Company, which may include, but not
be limited to, revenue and customer additions in the North Carolina and Maine
operations areas.

(b) Retirement and Welfare Benefit Plans. During the Employment Period and so long as
the Executive is employed by the Company, he shall be eligible (subject to any generally applicable
waiting periods) to participate in all other savings, retirement and welfare plans, practices,
policies and programs applicable generally to employees and/or senior executive officers of the
Company in accordance with the terms of such plans. The Company reserves the right to modify,
eliminate or add to its retirement and welfare benefit plans, practices and policies at any time in
its sole discretion.

(c) Options. During the Employment Period, the Executive shall be eligible to receive
grants of stock options under the Company’s then existing stock option plan(s) under such terms and
conditions as determined by the Board of Directors of the Company (the “Board”) acting in its sole
discretion.

(d) Expenses. The Company shall reimburse the Executive for all expenses, including
those for travel and entertainment, properly incurred by him in the performance of his duties
hereunder, subject to any reasonable policies established from time to time by the Board.

 

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(e) Fringe Benefits. During the Employment Period and so long as the Executive is
employed by the Company, he shall be entitled to receive vacation and fringe benefits in accordance
with the plans, practices, programs and policies of the Company from time to time in
effect, commensurate with his position; provided, however, the Company reserves the right to
modify, eliminate or add to its fringe benefits at any time in its sole discretion. It is agreed
and understood that within six months of the Effective Date, the Executive shall relocate his
primary residence within the Company’s North Carolina service territory or within a thirty-five
mile radius of that service territory. In addition, the Company shall reimburse the Executive for
his moving expenses actually incurred during the first six (6) months of the Employment Period up
to a maximum of $20,000. The Executive shall be required to provide documentation of such moving
expenses in a form reasonably satisfactory to the Company. The Executive shall also be eligible for
reimbursement of reasonable temporary housing expenses for up to ninety (90) days and reasonable
expenses related to two (2) house hunting trips to the North Carolina operations area involving
another adult.

4. Termination of Employment.

(a) Death. The Executive’s employment shall terminate automatically upon the
Executive’s death during the Employment Period.

(b) Disability. The Executive shall be relieved of his position as a Vice President of
the Company automatically upon the Executive being unable to perform the material duties of his
position due to physical or mental illness or injury for a period of 60 consecutive days, or for 90
days within any one-year time period and his employment shall terminate automatically 120 days
after the date that he is relieved of his position.

(c) By the Company for Cause. The Company may terminate the Executive’s employment
during the Employment Period for Cause. For purposes of this Agreement, “Cause” shall mean (i)
conduct which is a material breach of this Agreement and is not cured within 30 days after written
notice to Executive or willfully repeated thereafter, (ii) conduct which is a material violation of
Company policies; (iii) willful failure to perform substantially all of Executive’s duties as
lawfully delineated by the President and Chief Executive Officer;
(iv) conduct that constitutes fraud, gross negligence of willful misconduct; or (v) the Executive
is convicted of, or enters a plea of guilty or no contest to, any felony or other criminal offense
involving moral turpitude.

(d) By the Company Without Cause. During the term of this Agreement, the Company, by
action of the President and Chief Executive Officer, may terminate the Executive’s employment for
any reason other than for Cause during the Employment Period upon 30 days’ advance written notice.

(e) By the Executive. The Executive may terminate his employment during the Employment
Period, either with Good Reason, or without Good Reason upon 30 days’ advance written notice to the
Board. For purposes of this Agreement, “Good Reason” shall mean:

(i) Without the prior consent of the Executive: any diminution in
title; any material diminution in the Executive’s duties or authority; assignment
of duties materially inconsistent with the Executive’s duties; any change resulting
in Executive’s being required to report internally to a person other than the
President and Chief Executive Officer; any requirement imposed by the Company that
the
Executive relocate his principal residence once the Executive has relocated to the
North Carolina area; or

(ii) Any material breach by the Company of this Agreement not cured within
thirty days after written notice to the Company.

 

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5. Obligations of the Company Upon Termination.

(a) Obligations Upon Termination for any Reason. If, during the Employment Period, the
Executive’s employment shall terminate for any reason (termination in any such case being referred
to as a “Termination”), the Company shall pay to the Executive a lump sum amount in cash equal to
the sum of (A) the Executive’s salary at the rate of the Annual Base Salary earned through the date
of Termination to the extent not theretofore paid, provided that in the case of termination because
of the Executive’s disability, the Executive shall be entitled only to the amount provided in the
Company’s sick leave policy, (B) accrued but unpaid vacation pay. In addition, the Company shall
provide benefit continuation or conversion rights (including COBRA) as provided under Company
benefit plans and vested benefits under Company benefit plans. The amounts specified in this
Section 5(a)(A) and (B) shall be paid within 30 days after the date of Termination.

(b) Obligations Upon Termination with Good Reason or Without Cause. In the
event of Termination by the Executive with Good Reason or by the Company without Cause, in addition
to the amounts and benefits set out in Section 5(a), the Company shall pay to the Executive as
separation benefits (A) Annual Base Salary payable monthly for twelve months following the date of
Termination, medical benefits at active employee contribution rates for the Executive and his
eligible dependents for twelve months following the Termination Date, and up to $10,000 for
outplacement services by an outplacement firm selected by the Executive and reasonably approved by
the Company, and (B) if the Termination occurs within twenty-four (24) months of the Effective
Date, the Company shall reimburse Executive for his moving expenses actually incurred during the
six (6) month period following the Termination up to a maximum of $20,000. The Executive shall be
required to provide documentation of such moving expenses in a form reasonably satisfactory to the
Company.

The payment of separation benefits under this Agreement is expressly conditioned upon receipt
by the Company of an enforceable waiver and release from the Executive in a form
reasonably satisfactory to the Company.

(c) Stock Incentive Awards. No grants or awards of nonqualified stock options or
restricted stock will be made to the Executive on or after the date the notice of Termination is
given.

(d) Suspension. The Company may, in its sole discretion, suspend the Executive with or
without pay for any act or omission that may otherwise constitute a basis for termination of this
Agreement by the Company, or that is otherwise in violation of the Company’s policies, practices,
procedures, rules or regulations and/or this Agreement. Such suspension may be in lieu of
termination or as an interim action pending a final decision by the Company as to whether
termination of the Executive’s employment is appropriate.

 

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(e) Payments in the Event of Application of An Excise Tax. In the event that any
payments under this Agreement or any other compensation, benefit or other amount from the Company
for the benefit of the Executive are subject to the tax imposed by Section 4999 of the Internal
Revenue Code of 1986, as amended (the “Code”) (including any applicable interest and penalties, the
“Excise Tax”), the payments provided for under this Agreement shall be reduced (except for required
tax withholdings) to an amount that is $1.00 less than the amount that would trigger such Excise
Tax.

(f) Timing of Payments. In the event that at the time that Executive’s date of
termination from Company employment occurs the Company is publicly traded (as defined in Section
409A of the Internal Revenue Code), any amounts payable under Section 5(b) that would otherwise be
considered deferred compensation subject to the additional twenty percent (20%) tax imposed by
Section 409A if paid within six (6) months following the date of termination of Company employment
shall commence being paid at the later of the time otherwise provided in Section 5(b) or the time
period that will prevent such amounts from being considered deferred compensation. Any amounts that
would have otherwise been paid during such time period shall be accumulated and paid in a single
lump sum payment without interest upon the expiration of such time period that will prevent such
amounts from being considered deferred compensation.

6. Nonexclusivity of Rights. Except as provided in Section 5(d) and the last sentence
of this Section 6, nothing in this Agreement shall prevent or limit the Executive’s continuing or
future participation in any benefit, plan, program, policy or practice provided by the Company and
for which the Executive may qualify (except with respect to any benefit to which the Executive has
waived his rights in writing), nor, except as provided in Sections 5(d) and 12(g), shall anything
herein limit or otherwise affect such rights as the Executive may have under any other contract or
agreement entered into after the Effective Date with the Company. Amounts which are vested benefits
or which the Executive is otherwise entitled to receive under any benefit, plan, policy, practice
or program of, or any contract or agreement entered into with, the Company shall be payable in
accordance with such benefit, plan, policy, practice or program or contract or agreement except as
explicitly modified by this Agreement. Notwithstanding the foregoing, the benefits payable upon
Termination hereunder shall be in lieu of any severance pay or separation benefits under any other
severance plan, policy or practice of the Company, including the Company’s Change in Control
Severance Plan.

7. Full Settlement; Mitigation. In no event shall the Executive be obligated to seek
other employment or take any other action by way of mitigation of the amounts (including amounts
for damages for breach) payable to the Executive under any of the provisions of this Agreement and,
except as provided in Section 5(a), such amounts shall not be reduced whether or not the Executive
obtains other employment.

 

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8. Confidential Information. The Executive agrees not to disclose during the
Employment Period or thereafter any of the Company’s confidential or trade secret information,
except as required by law. The Executive recognizes that the Executive shall be employed in a
sensitive position in which, as a result of a relationship of trust and confidence, the Executive
will have access to trade secrets and other highly confidential and sensitive information. The
Executive further recognizes that the knowledge and information acquired by the Executive
concerning the Company’s materials regarding employer/employee contracts, customers, pricing
schedules, advertising and interviewing techniques, manuals, systems, procedures and forms
represent the most vital part of the Company’s business and constitute by their very nature, trade
secrets and confidential knowledge and information. The Executive hereby stipulates and agrees that
all such information and materials shall be considered trade secrets and confidential information.
If it is at any time determined that any of the information or materials identified in this
paragraph 8 are, in whole or in part, not entitled to protection as trade secrets, they shall
nevertheless be considered and treated as confidential information in the same manner as trade
secrets, to the maximum extent permitted by law. The Executive further agrees that all such trade
secrets or other confidential information, and any copy, extract or summary thereof, whether
originated or prepared by or for the Executive or otherwise coming into the Executive’s knowledge,
possession, custody, or control, shall be and remain the exclusive property of the Company.

9. Conflict of Interest. The Executive acknowledges and agrees that he owes a
fiduciary duty of loyalty, fidelity and allegiance to act at all times in the best interests of the
Company and to do no act which would injure the Company’s business, its interests or its
reputation. It is agreed that any direct or indirect interest in, connection with, or benefit from
any outside activities, particularly commercial activities, which interest might in any way
adversely affect the Company or any of its affiliates, involves a possible conflict of interest. In
keeping with the Executive’s fiduciary duty to the Company, the Executive agrees that he shall not
knowingly become involved in a conflict of interest with the Company affiliates, or upon discovery
thereof, allow such a conflict to continue. Moreover, the Executive agrees that he shall disclose
to the Board any facts which might involve such a conflict of interest that has not been approved
by the Board. The Executive and the Company recognize that it is impossible to provide an
exhaustive list of actions or interests which constitute a conflict of interest. Moreover, the
Executive and the Company recognize there are many borderline situations. In some instances, full
disclosure of facts by the Executive to the Board may be all that is necessary to enable the
Executive, the Company or its affiliates to protect its interests. In others, if no improper
motivation appears to exist and the interests of the Company or its affiliates have not suffered,
prompt elimination of the outside interest will suffice. In still others, it may be necessary for
the Company to terminate the employment relationship. The Company and the Executive agree that the
Company’s determination as to whether a conflict of interest exists shall be conclusive. The
Company reserves the right to take such action as, in its judgment, will end the conflict.

10. Nonsolicitation. During the period of his business affiliation with, or
employment by, the Company and for a period of two years after the Executive’s termination of
employment for any reason whatsoever, the Executive will not directly or indirectly, individually
or as a consultant to, or as employee, officer, director, stockholder, partner or other owner or
participant in any business entity other than the Company, solicit or endeavor to entice away from
the Company, or otherwise materially interfere with the business relationship of the Company with,
(i) any person who is, or was within the 12-month period immediately prior to the termination of
the Executive’s business affiliation with or employment by the Company, employed by or associated
with the Company or (ii) any person or entity who is, or was within the 12-month period immediately
prior to the termination of the Executive’s business affiliation
with or employment by the Company, a customer or client of the Company.

 

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11. Successors.

(a) Assignment by Executive. This Agreement is personal to the Executive and without
the prior written consent of the Company shall not be assignable by the Executive otherwise than by
will or the laws of descent and distribution. This Agreement shall inure to the benefit of and be
enforceable by the Executive’s legal representatives. Without the prior written consent of the
Executive, no assignment of this Agreement by the Company or any successor of the Company shall
relieve the assignor of its financial responsibility for performance of the Company’s obligations
hereunder.

(b) Successors and Assigns of Company. This Agreement shall inure to the benefit
of and be binding upon the Company, its successors and assigns.

12. Miscellaneous.

(a) Remedies. The Company and the Executive agree that if a dispute arises out of or
is related to this Agreement or Executive’s employment by the Company, such dispute shall, if not
earlier resolved by negotiations of the parties, be submitted to binding arbitration by a single
arbitrator under the American Arbitration Association National Rules for Resolution of Employment
Disputes in Great Falls, Montana, or the equivalent. Either party may provide written notice to the
other party that the dispute is not able to be resolved by negotiation and such notifying party
shall then contact the American Arbitration Association for appointment of an arbitrator to resolve
such dispute. Attorneys’ fees and costs shall be awarded to the prevailing party as determined by
the arbitrator.

(b) Governing Law. This Agreement shall be governed by and construed in accordance
with the laws of the State of Montana, without reference to its principles of conflict of laws. The
captions of this Agreement are not part of the provisions hereof and shall have no force or effect.
This Agreement may not be amended, modified, repealed, waived, extended or discharged except by an
agreement in writing signed by the party against whose enforcement of such amendment, modification,
repeal, waiver, extension or discharge is sought. No person, other than pursuant to a resolution of
the Board or a committee thereof, shall have authority on behalf of the Company to agree to amend,
modify, repeal, waive, extend or discharge any provision of this Agreement or anything in reference
thereto.

(c) Notices. All notices and other communications hereunder shall be in writing and
shall be given by hand delivery to the other party or by registered or certified mail,
return-receipt requested, postage prepaid, addressed, in either case, at the Company’s headquarters
or to such other address as either party shall have furnished to the other in writing in
accordance herewith. Notices and communications shall be effective when actually received by the
addressee.

(d) Severability. The invalidity or unenforceability of any provision of
this Agreement shall not affect the validity or enforceability of any other provision of
this Agreement.

(e) Withholding. The Company may withhold from any amounts payable under this
Agreement such federal, state or local taxes as shall be required to be withheld pursuant to any
applicable law or regulation.

 

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(f) No Waiver. The Executive’s or the Company’s failure to insist upon strict
compliance with any provision hereof or any other provision of this Agreement or the failure to
assert any right the Executive or the Company may have hereunder, including, without limitation,
the right of the Executive to terminate employment for Good Reason pursuant to Section 4(e) of this
Agreement, or the right of the Company to terminate the Executive’s employment for Cause pursuant
to Section 4(b) of this Agreement shall not be deemed to be a waiver of such provision or right or
any other provision or right of this Agreement.

(g) Entire Agreement. This instrument contains the entire agreement of the Executive,
the Company or any predecessor or subsidiary thereof with respect to the subject matter hereof, and
may be modified only by a writing signed by the parties hereto. All promises, representations,
understandings, arrangements and prior agreements, are merged herein and superseded hereby. Any
agreement with regard to severance benefits entered into after the Effective Date shall be
effective only if it expressly references this Agreement.

In the event of any difference between the terms of this Agreement and the terms of any
Company benefit, option or other plan or policy, the terms of this Agreement shall control, unless
such terms violate applicable law, or would require shareholder approval or would cause the Company
to be in material breach of its obligations under such other benefit, option or other plan or
policy. The Company shall not amend any benefit, option or other plan or policy in a manner that
would cause the agreements set forth herein to be nullified, provided that nothing herein shall
limit the Company’s discretion in establishing, maintaining and amending its generally applicable
welfare benefit programs such as health coverage.

(h) Indemnification. The Company shall indemnify the Executive pursuant to the
Company’s bylaws and the articles of incorporation. In addition, the Company shall maintain
directors and officers liability insurance coverage covering the Executive during the term of
employment and thereafter, so long as the Company elects to continue such coverage for its active
officers and directors.

(i) Survivorship. The respective rights and obligations of the parties hereunder
shall survive any termination of this Agreement to the extent necessary to the intended
preservation of such rights and obligations.

(j) Headings. All descriptive headings of sections and paragraphs in this
Agreement are intended solely for convenience, and no provision of this Agreement is to be
construed by reference to the heading of any section or paragraph.

(k) Counterparts. This Agreement may be executed in counterparts, each of which
shall be deemed an original, but all of which together shall constitute one and the same
instrument.

(l) Construction. The parties acknowledge that this Agreement is the result of
arm’s-length negotiations between sophisticated parties each afforded representation by legal
counsel. Each and every provision of this Agreement shall be construed as though both parties
participated equally in the drafting of same, and any rule of construction that a document shall be
construed against the drafting party shall not be applicable to this Agreement.

 

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IN WITNESS WHEREOF, the Executive and, pursuant to due authorization from its Board of
Directors, the Company have caused this Agreement to be executed as of the day and year first above
written.

	 	 	 	 	 	 	 
	 	 	/s/ David C. Shipley	 	 
	 	 	 	 	 
	 	 	David C. Shipley	 	 
	 
	 	 	 	 	 	 
	 	 	ENERGY WEST, INCORPORATED	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ David Cerotzke	 	 
	 

	 	 	 	 

Name: David Cerotzke

Title:   President and Chief Executive Officer
	 	 

 

9exhibit10_26.htm

     

    Exhibit:
10.26

    Facility
for Trade Financing Contract

    

    

     Contract No.: jianshankaidai (2008)
055 

     

    Party A: Shaanxi Tianren Organic Food
Co., Ltd. 

     

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

      

    Legal
Representative (Chief Officer): Xue Hongke

      

    Telephone:
029-88386415

      

    Fax:
029-88386230

      

    Post
Code: 710075

     

     

     

    Party B: China Construction Bank,
[Gaoxin Branch] 

     

    Address: No. 42 Gaoxin
Road 

     

    Chief Officer: Zhou
Cunxing 

     

    Telephone:
029-88333539 

     

    Fax:
029-88321414

      

    Post
Code: 710075

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

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

     

    Article 1.  Facility for
Trade Financing 

     

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

     

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

     

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

      

     Article 2. Categories and Amount of
the Facility 

     

    Party B
agrees to provide to Party A the Facility with an amount not exceeding RMB twelve million
(the “Maximum Amount ”), and among other things, 

     

    1. Line for Issuance of Sight
L/C where Party B is able to have control over the title of the
underlying goods is                            (amount
in words)(the “Maximum Amount ”);

      

    2. Line for Issuance of Sight
L/C where Party B is unable to have control over the title of the
underlying goods is                             
 (amount in words)(the “Maximum Amount ”); 

     

    3. Line for Issuance of Usance
L/C where the committed term is within 90 days shall be                  
.. (amount in words)(the “Maximum Amount ”);

      

    4. Line for Issuance of Usance
L/C where the committed term is 90 days or more shall be                         (amount
in words)(the “Maximum Amount ”); 

     

    5. Line for T/R under L/C shall be                            
(amount in words)(the “Maximum Amount ”);

     

    6. Line for T/R under
Unconfirmed-L/C shall
be                      (amount
in words)(the “Maximum Amount ”);

      

    7. Line
for the goods under such Shipping Guarantee shall be   (amount in
words)(the “Maximum Amount ”);

     

    8. Line for Packing Loan shall
be RMB twelve
million (the “Maximum Amount ”);

     

     9. Line for Short Term Financing
under Export L/C shall
be RMB twelve
million (the “Maximum Amount ”);

      

    10. Line for Export Bill Purchase
shall be RMB twelve
million (the “Maximum Amount ”);

      

    11. Line for Bill of Exchange Discount /
Purchase of Account Receivable under Usance L/C shall be twelve million RMB
(the “Maximum Amount ”);

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    12. Line for Export Collection Loan
under D/P shall be RMB twelve million
(the “Maximum Amount ”);

      

    13. Line for Export Collection Loan
under D/A shall be RMB twelve million
(the “Maximum Amount ”); 

      

    14. Others.
Line for Export Order
Financing under O/A shall be RMB twelve million
(the “Maximum Amount ”).

     

        Article 3. Availability
Period 

     

    1. The
Facility under this Contract shall be available from October 15, 2008 to
September 23,
2009 (the “Availability Period”).

      

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

     

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

     

    Article
4. Interests and Fees

     

       1.
The following items including starting date, expiration date, amount, interest
rate, type of interest calculation, type of interest settlement, expense
categories or limits, rate, type of expense calculation and type of payment
regarding single business of trade financing will be decided in accordance with
relevant laws and documents. For those disagreed upon terms, Party B has the
right to decline the application of Party A.

     

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

     

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

     

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

     

    (1)                 Management
Fees which shall be calculated and paid at 0.2% of the Maximum
Amount of the Facility; 

     

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

     

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

     

    (4)                 Other
expenses under this Contract.

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    Article
5. Utilization of the Facility

      

    1.
Conditions Precedent for using the Facility

     

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

    

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

     

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

     

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

     

    (4)                 If
Party A shall pay Management Fees as required in this Contract, such Fees have
been paid to Party B; 

     

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

     

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

     

    (7)                 Other
conditions precedent.

      

        2.
At any time during the Availability Period, the aggregate of the outstanding
principal of all individual financings shall not exceed the Maximum Amount of
the Facility; the aggregate of the outstanding principal of all individual
financings under sub-item facilities shall not exceed the Maximum Amount of such
Facility. 

    

    Article
6. Law Document Related to This Contract

      

    1. When
Party A applies Party B for use of the facility under this trade financing
contract, Party A should sign the following exhibits No. four, No. five, No. six,
No. seven, No. eight and No. nine with the Company Stamps of both Parties
on them, which are indivisible parts of this contract and peform the legal
effect of binding. Neither Party should raise an objection to the legal effect
of relevant exhibits for the reason that the signatures of both Parties are not
on these exhibits. 

     

    (1).
Exhibit 1: Special Agreement on Issuance of L/C; 

     

    (2).
Exhibit 2: Special Agreement on Trust Receipt Loans; 

     

    (3).
Exhibit 3: Special Agreement on Shipping Guarantee; 

     

    (4).
Exhibit 4: Special Agreement on Packing Loan; 

     

    (5).
Exhibit 5: Special Agreement on Export Bill Purchase;

    

    (6).
Exhibit 6: Special Agreement on Export Negotiation; 

     

    (7).
Exhibit 7: Special Agreement on Export Collection Loan;

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    (8).
Exhibit 8: Special Agreement on Bill of Exchange Discount / Purchase of Account
Receivable under Usance L/C;

      

    (9).
Others: Special Agreement on Export Order Finance. 

     

    2. When
party A applies to Party B for trade financing business, Party A should submit
the applications thereafter. The confirmed applications of Party B are the
indivisible parts of this contract and its exhibits. These applications
include: 

     

    (1) Party
A should submit application for issuance of L/C in order to handle the issuance
business of L/C;

     

    (2) Party
A should submit application for Trust Receipt Loans in order to handle the
business of Trust Receipt Loans; 

     

    (3) Party
A should submit application for Shipping Guarantee in order to handle the
business of Shipping Guarantee;

      

    (4) Party
A should submit application for Packing Loan in order to handle the business of
Packing Loan;

      

    (5) Party
A should submit application for Export Bill Purchase in order to handle the
business of Export Bill Purchase; 

     

    (6) Party
A should submit application for Export Negotiation in order to handle the
business of Export Negotiation; 

     

    (7) Party
A should submit application for Export Collection in order to handle the
business of Export Collection;

      

    (8) Party
A should submit application for Bill of Exchange Discount / Purchase of Account
Receivable under Usance L/C in order to handle the business of Bill of Exchange
Discount / Purchase of Account Receivable under Usance L/C;

      

    (9)
Others: Party A should submit Export Order Financing Application in order to
handle the business of
Export Order Finance;

     

    3. When
Party A applies for issuance of Usance L/C, for Sight L/C where Party B could
not control the rights of goods, for Shipping Guarantee and for Trust Receipt
Loan,Party A
should submit Trust Receipt according to Party B's request.   

     

    Article
7.                            Rights
and Obligations of the Parties 

     

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

     

    2. Party
A shall provide financial statements and information relating to planning,
statistics, production and operation as required by Party B and shall be
responsible for the authenticity, integrity and validity of such information and
documents.  If Party A belongs to the class of group client, Party A
should disclose any related transaction exceeding 10% of the net assets to Party
B, including: (1) the relation among the related parties; (2) project and
nature; (3) amount and percentage of the transaction; (4) Price determination
Policy. 

     

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

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    4. Should
something happen to Party A that will, in Party B's opinion, impact the regular
management of Party A, Party B will have the right to adjust or even cancel the
facilities that have not been used by Party A. 

     

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

     

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

     

    7. Party
A shall repay the principal and interest within the terms agreed upon by the
Parties. 

     

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

     

    9. Party
A should not use the false contract signed with a related party, or receivable
invoice, or receivable account without actual deals to rebate or pledge to the
bank in order to get money or credit by fraud. 

     

    10. Party
A shall promptly inform Party B of any change of its business name, legal
representative (chief officer), address, business purpose or registered capital
and other relevant matter, and attach changed relevant
materials. 

    

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

     

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

     

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

      

    Article
8.                            Liabilities
for Default and Remedies 

     

    1. Events
of Default by Party B and Liabilities 

     

    (1) If
Party B deviates from this contract, its exhibits and agreements under relevant
transactions application which have been approved by Party A, Party A shall
require Party B to perform its obligations in accordance with these relevant
agreements.

      

    (2) If
Party B charges the interest and expense by violation of national laws and
regulations, Party A is entitled to the requirement of repayment from Party
A. 

     

    2. Events
of Default by Party A and Liabilities 

     

    (1)When Party A
deviates from this contract, its exhibits or agreements under relevant
transactions application which have been approved by Party B or any obligation
required by law.

      

    (2)Party A certainly
suggests or shows through its actions that Party A will not peform this
contract,its
exhibits or any obligation under relevant transaction application which have
been approved by Party B.

    
      
         

      

      
         

        
          

        

      

      
         

      

    

       

    3. Events
that will Jeopardize Party B's Rights 

     

    (1) If
Party A carries out any of the following activities during the term of this
Contract that Party B thinks will have an impact on the creditor's rights under
this contract, and the aforesaid activities may include without limitation
contracting, leasing, transformation to a stock company, forming an economic
association with another enterprise, consolidation, merger, division, setting up
a joint venture, application for suspension of production or for winding up or
for bankruptcy, Party A ceases or suspends production; or its corporate
registration is canceled, or business license revoked; or its legal
representative or high-ranking officers are involved in illegal activities; or
it is involved in litigation with a major impact; or great difficulties arise in
respect to its production or operation; or its financial standing
deteriorates. 

     

    (2) If
Party A carries out any of the following activities during the term of this
Contract that Party B thinks will have an impact on the creditor's right under
this contract, and the aforesaid activities may include without the performance
of other mature debts, low-price or free transference of assets, derate the debt
of the third Parties,remiss to execute
debt obligations or other rights, or provide securities for the third
party. 

     

    (3) Any
premise for trade finance provided by Party B in this contract, in its exhibits
and in an individual business have not been satisfied continuously by Party
A.

      

    (4)
Should any of the following events happen to guarantor, the debt obligation
under this contract can be regarded in danger by Party B, and the aforesaid
activities may include: 

     

    (a) Violation
of any of items in guaranty contract or false, incorrect, missed statements
against the item in the guaranty. 

     

    (b) Without
limitation contracting, leasing, transformation to a stock company, forming an
economic association with another enterprise, consolidation, merger, division,
setting up a joint venture, application for suspension of production or for
winding up or for bankruptcy, Party A ceases or suspends production; or its
corporate registration is canceled, or business license revoked; or its legal
representative or high-ranking officers are involved in illegal activities; or
it is involved in litigation with a major impact; or great difficulties arise in
respect to its production or operation; or its financial standing deteriorates
which will influence the ability of guarantor to bear the liabilities of
guaranty.

     

    (c) Failure
or possible failure to bear the liabilities of guaranty. 

     

       (5)
Should any of the following events happen in mortgage or pledge, the debt
obligation under this contract can be regarded in danger by Party B, and the
aforesaid activities may include: 

     

          
(a) For the act of the third party, the following activities happened:
collection, confiscation, expropriation, free recovery and demolition by the
government,changes in the
market or any other events which result in damages or destruction or value
decrease of the pledged or mortgaged property.

    

          
(b) The pledged or mortgaged property is sealed up, detained, frozen, withheld,
indwelt, auctioned, supervised by the government or in dispute of its
ownership.

      

    (d) Mortgagor
or pledger violates any of the items in guaranty contract or falsely,
incorrectly states or misses the item in the guaranty. 

     

    (e) Other
events that will imperil the realization of mortgage and
pledge.

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

       (6)
Any of the following shall be regarded by Party B as insecure to debt obligation
under this contract, including: the security documents or other securities do
not take effect, or are void or rescinded, or the security provider totally or
partially loses its capacity to secure the indebtedness or refuses to perform
its obligations; or

      

       (7)
Other cases in Party B's view that will imperil the debt obligation under this
contract. 

     

    4. Remedies 

     

     If
any Event of Default in Items (2) to (3) above occurs, Party B is entitled to
enforce its rights hereunder by taking one or more of the following
measures: 

     

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

     

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

     

     (3)
Collection of penalty interest and compound interest. 

     

     (4)
Performance of security rights

      

     
(5)Other
remedies, including but not limited to: 

     

    
      	
              (a)  

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

            

    

     

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

      

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

     

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

     

    Article 9.
Others 

     

    1.
Expenses 

     

    All the
costs concerning this contract and the guaranty under it will be born by Party
A, including: attorney fees, insurance fees, assessment charges, registration
costs, keeping charges,cost of
identification, notarization fees, etc., except by special
agreement. 

     

    In order
to realize the creditor's rights of Party B, all the actual costs (including but
not limited to attorney fees, insurance fees, assessment charges,
registration costs, keeping charges,cost of
identification, notarization fees, etc.) will be born by Party
A. 

     

    2. Use of
the Information of Party A

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    Party A
agrees with Party B to inquire into the credit status of Party A from People's
Bank of China, credit databases approved and constructed by the department in
charge of credit information or from the related institute, and also agrees to
provide the information of Party A to People's Bank of China, credit databases
approved and constructed by the department in charge of credit information, and
agrees to properly use and disclose this information when it is necessary for
work. 

     

    3.
Collection through Announcement 

     

       As
to loan principal or interest default and other cases occurred due to the breach
of contract,Party B is granted
the right to report to related departments or units and collect debt through
media.

     

    4.
Effectiveness of Evidence Recorded by Party B 

     

    Unless
with the reliable and assured opposite evidence, all the following can
definitely prove the relationship in debt obligation between both parties: inner
accounting records about principal, interest, cost and payment of Party A,
invoices and vouchers which are made and reserved by Party B in the case when
Party A deposits money, repays debt, repays interest and does such transaction,
as well as related records and vouchers when collecting debt by Party
B.

      

    5. Rights
Reservation 

     

    Party B's
rights stated in this contract will not be an obstacle to Party B to enjoy any
other rights prescribed in the law, rules and other contracts. For default and
delayed acts, if they were treated with tolerance,grace limit,favor or stayed
exercise of any rights under this contract,all these
treatment will not be regarded as abandonment of rights and benefits under this
contract or approval of any default, nor do they prevent,restrict,disturb the
consequent implementation of certain rights or any other rights. In
addiction,they will not be
reasons that Party B will bear responsibility and obligations for Party
A. 

     

    6.
Besides the debt under this contract,if Party A holds
any other matured liabilities,Party B is
entitled to debit any account opened by Party A with any branch or office of
China Commerce Bank for any amount due to Party B under this Contract to clear
off any of the debt, for which Party A holds no objection. 

     

    7. With
regard to changes in contact information,Party A should
promptly give Party B a written notice; if not, all the damages will be born by
Party A.

      

    8. Debit
of Accounts Payable 

     

    As to all
the accounts payable of Party A under this contract, Party B is entitled to
debit any account opened by Party A with any branch or office of China Commerce
Bank for any amount due to Party A without any notification to Party A. If it is
necessary to handle the procedures of exchange settlement and sales or foreign
exchange dealings, Party A is obligated to assist the transaction of Party B,
and the risk in exchange rate will be born by Party B.

      

    9.
Dispute Resolution 

     

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

    

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

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

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

      

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

     

       10.
Effectiveness 

     

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

     

    11.
Counterparts 

     

    This
Contract shall be made in 5 counterparts. 

     

    12. Miscellaneous

      

       (1)
Party A declares that
there is no violation of laws and regulations on environment protection,
energy-savings and ejection-decreasing, and environment pollution reducing in
the process of contract-making, and also promises that after the contract has
been signed,Party A will strictly abide
by relevant laws and regulations on environment protection, energy-savings and
ejection-decreasing, and environment pollution reducing;
or 

     

    (2) If the aforesaid
declaration is found to be false or promises have not been kept, or certain
energy consumption and environmental pollution risks happen to Party A, Party B
has the right to terminate the credit to Party A(including, without
limitation, to refusal to grant loans,to provide
financing,to issue guarantee or L/C or
acceptance bill of Bank), or to declare the debt obligation (including, without
limitation, to loans, financing, money advanced which occurred or might occur)
to expire in advance,or to take other remedies
granted by laws or contractually agreed upon; or 

     

      (3)
                                                                           ; 

     

      (4)
                                                                             ; 

     

    13.
Within the effective period and the Lines for facilities of trade finance, all
the legal document (including but not limited to exhibits of this contract,
relevant business applications, and any vouchers) which can prove the
debtor-creditor relationship formed between both Parties shall be the component
parts of this contract. 

     

    Article
10.                            
Representations 

     

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

      

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

     

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

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

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

     

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

      

    Date:  10/15/2008    

     

      

     

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

     

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

     

    Date:   10/15/2008

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