ASSET PURCHASE CONTRACT

by and between

 
 

WUHAN FENGZE AGRICULTURAL SCIENCE AND
TECHNOLOGY DEVELOPMENT CO., LTD.

AND

AN PULUO FOOD DEVELOPMENT CO., LTD
And
WENPING LUO
 
 
 

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INDEX
   
CHAPTER I TRANSFERRED ASSETS
3
ARTICLE 1.1
TRANSFERRED ASSETS
3
ARTICLE 1.2
PURCHASE PRICE
3
     
CHAPTER II CLOSING
5
ARTICLE 2.1
ARTICLE 2.1
ARTICLE 2.3
CLOSING
CLOSING DELIVERIES
PAYMENTS
       
CHAPTER III CLOSING CONDITIONS
 
ARTICLE 3.1
ARTICLE 3.2
ARTICLE 3.3
ARTICLE 3.4
ARTICLE 3.5
ARTICLE 3.6
PREREQUISITE CONDITIONS FOR CLOSING AND PAYMENT OF PURCHASE PRICE
INDEMNITY
PURCHASER’S CONFIRMATION
RIGHT NOT TO CLOSE
FUTURE ASSISTANCE
CONFIRMATION OF RIGHTS
5
 
5
     
CHAPTER IV TAXES PAYABLE
 
CHAPTER V REPRESENTATIONS AND WARRANTIES OF ALL PARTIES
 
 
ARTICLE 8
DISCLOSURES, REPRESENTATIONS AND WARRANTIES OF SELLER
5
ARTICLE 9
GENERAL REPRESENTATIONS AND WARRANTIES OF SELLERS
6
ARTICLE 10
OWNERSHIP
6
ARTICLE 11
SPECIAL REPRESENTATIONS AND WARRANTIES OF SELLERS
6
     
CHAPTER VI DISCLOSURES, REPRESENTATIONS AND WARRANTIES OF SELLERS
8
ARTICLE 6.1
DISCLOSURES, REPRESENTATIONS AND WARRANTIES OF SELLERS
       
CHAPTER VII DISCLOSURES, REPRESENTATIONS AND WARRANTIES OF PURCHASER
 
ARTICLE 7.1
DISCLOSURES, REPRESENTATIONS AND WARRANTIES OF PURCHASER
       
CHAPTER VIII CONFIDENTIALITY
9
Article 8.1
CONFIDENTIALITY
       
CHAPTER IX BREACH OF CONTRACT
10
ARTICLE 9.1
Liabilities for Violation of Representations or Warranties
       
CHAPATER X FORCE MAJEURE
10
ARTICLE 10.1
FORCE MAJEURE
10
     
CHAPATER XI RESOLUTION OF DISPUTES
10
ARTICLE 11.1
ARBITRATION
10
ARTICLE 11.2
VALIDITY OF ARBITRAL AWARD
10
ARTICLE 11.3
CONTINUATION OF RIGHTS AND OBLIGATIONS
11
     
CHAPATER XII APPLICABLE LAW
11
ARTICLE 12.1
APPLICABLE LAW
11
     
CHAPATER XIII MISCELLANEOUS
11
     
APPENDIX I ASSETS LIST
14
     
APPENDIX II PRE-REQUISITE CONDITIONS
16

 
 
 

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Asset Purchase Contract
 
This Asset Purchase Contract (hereinafter referred to as the “Contract”) is made
as of May 12, 2011 (the “Signing Date”) in Wuhan City, Hubei Province, People’s
Republic of China (“PRC” or “China”) between the following Parties:

 
Wuhan Fengze Agricultural Science and Technology Development Co., Ltd., a
Chinese limited liability company with its legal address registered at Suite F,
23rd Floor, Building B, Jiangjing Mansion, 228 Yanjiang Ave., Jiangan District,
Wuhan City, Hubei Province, China 430010 (hereinafter referred to as “Fengze” or
the “Purchaser”).

 
An Puluo Food Development Co., Ltd, a company organized under the laws of the
People’s Republic of China (“PRC law”), with its legal address registered
at Food Industrial Zone, Hebaliang, Hangkong Road, Laifeng County, Hubei, China
(hereinafter referred to as the “Company”). Company’s controlling shareholder is
Wenping Luo hereinafter referred to as  the “Controlling Shareholder”), and

Company and Controlling Shareholder are hereinafter collectively referred to as
“Sellers”, and Sellers and Purchaser are hereinafter collectively referred to
as “Parties” and individually referred to as a “Party”.

Preliminary Statement
 

 
Purchaser, is engaged in the business of hog farming and is controlled  by Wuhan
Fengxin Agricultural Science and Technology Development Co., Ltd., a Chinese
limited liability company and a wholly foreign-owned enterprise established in
Wuhan City, Hubei Province PRC;

 
The Company possesses certain rights in land (the “Land”) located in  Sci-tech
Zone, Huangmaoping, Xiangfeng Town, Laifeng County [Hubei Province] on which
there are farm buildings/structures and farm equipment (collectively with the
Land, the “Property”);

 
Controlling Shareholder owns 100% of the equity interests of the Company and
will receive considerable value from the proceeds of the transactions
contemplated by this Contract;

 
Company desires to sell to Purchaser and Purchaser desires to purchase from
Company, substantially all of the assets of Company specified herein, in
accordance with the terms and conditions of this Contract and relevant PRC laws
and regulations.

Now, THEREFORE, in principle of equality and mutual benefits, through friendly
negotiation, the Parties, in accordance with the Company Law of People’s
Republic of China  (“PRC”) and other applicable PRC laws and regulations, hereto
agree as follows:

 
Chapter I  

   

Transferred Assets

Article 1.1
Transferred Assets

Pursuant to the terms stipulated in this Contract, at the Closing (as defined in
Chapter II), the Company shall sell and transfer to Purchaser and Purchaser will
acquire from Company all the rights, ownership and interests in all assets
located on the Property, including without limitation, the assets listed on
Appendix I hereto (collectively, the “Transferred Assets”), free of any Claim or
Encumbrance.
 
 
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For purposes of this Contract the term Claim means all claims, actions, demands,
proceedings judgments liabilities, damages amounts, costs and expenses
(including legal costs and disbursements) whatsoever and howsoever arising and
the term Encumbrance means any mortgage, assignment, lien, charge, pledge, title
retention, right to acquire, security interest, option, pre-emptive right, and
any other restriction and conditions whatsoever including:

 
(i) 
any interest or right granted or reserved in or over or affecting the
Transferred Assets; or

 

 
(ii) 
the interest or right created or otherwise arising in or over the Transferred
Assets under a fiduciary transfer, charge, lien, pledge, power of attorney or
other form of encumbrance; or

 

 
(iii) 
any security over the Transferred Assets for the payment of a debt or any other
monetary obligation or the performance of any other obligation.

Article 1.2
Purchase Price

The Company and the Purchaser after consultations have finally determined that
the price for the Transferred Assets shall be RMB 14,200,000 (hereinafter
referred to as the “Purchase Price”).  For the avoidance of doubt, RMB means the
lawful currency of China.  The Purchaser previously delivered RMB 9,500,000 to
the Company (the “deposit”).  The remaining portion of the Purchase Price RMB
4,700,000 will be paid to Seller before July 15th, 2011.

Chapter II

   

Closing

Article 2.1             Closing
 
The closing at which Company  shall transfer and convey the Transferred Assets
to Purchaser will take place at the offices of the Purchaser on such date (the
“Closing Date”) as the Purchaser and Company shall agree but in no event later
than May 31, 2011 (the “Outside Date”).
 
Article 2.2             Closing Deliveries
 
At the Closing Company shall deliver:
 
 
(a)
such bills of sale, documents of transfer and other instruments as are necessary
to transfer ownership of the Transferred Assets to Purchaser, together with such
keys and information as are necessary to enter upon the land and utilize the
equipment and buildings;

 
 
(b)
documents of title and certificates of registration for all trucks, trailers and
registered motor vehicles included in the Transferred Assets;

 
 
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(c)
copies of resolutions adopted by the board of directors or governing body of
Company, authorizing the execution and delivery of this Purchase Agreement and
the sale of the Transferred Assets in accordance with the terms and provisions
hereof;

 
 
(d)
releases for all secured indebtedness, Claims or Encumbrances upon the
Transferred Assets;

 

 
(e)
an appraisal report evidencing that the value of the Transferred Assets is at
least equal to the Purchase Price, together with such opinions of local counsel
as may be necessary to obtain any certificates or approvals required of the PRC,
provincial or local governments;

 
 
(f)
a Land Management Agreement wherein the Company agrees that if a necessary
consent of the local government is not obtained it will operate the Transferred
Assets as the agent of and at the direction of and for the benefit of
Purchaser.  In such event, Purchaser will receive any profit derived from the
operation of the Transferred Assets or will reimburse the Company for any loss
derived from the operation of the Transferred Assets subsequent to the Closing
Date;

 

 
(g) 
a certificate of the Sellers confirming (i) that there are no liens or
Encumbrances on the Transferred Assets other than those for which the Seller is
delivering releases or which are agreed to by the Company and (ii) that the
representations of the Sellers contained in this Agreement are true and correct
as of the Closing Date; and

 

 
(h)
such other documents as the Purchaser or its counsel may reasonably request.

 
Article 2.3             Payments

The Purchaser has paid RMB 9,500,000 to the Company as the deposit.  The
remaining portion of the Purchase Price will be paid to Company before July
15th, 2011.

Within five (5) business days of receipt of each payment, Company shall issue to
Purchaser a document confirming such receipt; provided that if Company fails to
issue the evidential document to Purchaser in the stipulated time with respect
to the deposit, the Purchaser shall have the right to refuse to pay the
remaining balance of the Purchase Price and such failure shall not be deemed a
breach of this Contract.

 
Chapter III

   

Closing Conditions

Article 3.1
Prerequisite Conditions for Closing and Payment of Purchase Price
   

Under this Contract, the prerequisite conditions for Closing and payment of the
Purchase Price are:
 
 
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(1)
The Sellers shall meet all prerequisite conditions set out in Prerequisite
Conditions One of Appendix Ⅱ attached to this Contract,

 
(2)
The Transferred Assets shall not have incurred any Material Adverse Change from
the Signing Date to Closing Date, and

 
(3)
The Sellers shall have delivered all documents required to be delivered by it at
Closing.

For purposes of this Contract, the term Material Adverse Change means (1) any
investigation of Sellers or the Transferred Assets by governmental authorities
that may affect the transfer or use of the Transferred Assets; (2) any lawsuit,
arbitration or other judicial or regulatory proceeding involving Sellers or the
Transferred Assets that may affect the transfer of Transferred Assets; (3) any
change that would cause or reasonably may cause material adverse effect on the
ownership, right of use or other rights to the Transferred Assets.

Under this Contract, the prerequisite conditions for the payment of the
remaining balance of the Purchase Price due prior to July 15, 2011 are:

 
(1)
The Sellers have fulfilled all of their obligations pursuant to the terms and
conditions of this Contract, and no representation or warranty of Sellers under
this Contract is found to be misleading or untrue;

 
(2)
the Sellers meet all pre-requisite conditions set forth in Prerequisite
Conditions Two of AppendixⅡ attached to this Contract.

If Sellers shall fail to comply with the preceding (1) or (2) the Purchaser
shall have the right to deduct any direct and indirect losses that it suffers as
a result of such failure from the remaining balance of the Purchase Price and
remit the remaining amount to Company. If the direct and indirect losses
incurred by the Purchaser as a result of Sellers’ failure exceed the amount of
the remaining balance of the Purchase Price, Purchaser shall have the right to
require Sellers to assume all applicable liabilities and hold harmless the
Purchaser against and from any loss and damages arisen thereto.

Article 3.2             Indemnity

If Company is unable to obtain any governmental consent required for the
transfer of the right to use the real estate or any of the other Transferred
Assets, Sellers hereby guarantee that the amount that Purchaser must pay to use
the Transferred Assets during the term of the land rights currently held by
Company shall be the same as the contracting prices under the land contracting
management agreements executed between the Company and the local rural
committees. Otherwise the Company and Controlling Shareholder jointly and
severally shall be liable to the Purchaser for any excess and shall hold the
Purchaser harmless against and from any loss and damages arising from any
increase of contracting prices.

Article 3.3             Purchaser’s Confirmation

The parties hereby confirm that the fulfillment of the obligations that Company
shall assume pursuant to AppendixⅡattached to the Contract shall be subject to
the written confirmation by the Purchaser. The prerequisite conditions set forth
in Appendix Ⅱ attached to the Contract shall not be deemed as having been
satisfied until the Company obtains the written confirmation issued by the
Purchaser.
 
 
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Article 3.4             Right to Not Close

If any of the conditions set forth in Article 3.1 have not been satisfied or
implemented, and the Purchaser has not indicated its waiver of the said
conditions, in writing, the Purchaser shall not be obliged to pay the Purchase
Price to Company, or in the case of the obligations to be fulfilled prior to
Closing, to acquire the Transferred Assets, in which case the Company shall
return to Purchaser the deposit and any portion of the Purchase Price previously
paid.

Article  3.5            Future Assistance

After the Closing, Sellers shall assist Purchaser in conducting relevant
approval and filing procedures for the Purchaser’s continuing operation of the
Transferred Assets according to the laws of PRC, to ensure the Purchaser can
legally own or use the Transferred Assets.  Further, Sellers agree from time to
time after the Closing Date, at Purchaser's request and expense, to execute,
acknowledge and deliver such instruments of conveyance and transfer, documents
and certificates, and to take such other actions as Purchaser may reasonably
require in order to vest more effectively in Purchaser, or to put Purchaser more
fully in possession of, any of the Company’s rights or assets.  Each of the
Parties hereto will cooperate with the other and execute and deliver to the
other Parties hereto such other instruments and documents and take such other
actions as may be reasonably requested from time to time by any other Party
hereto as necessary to carry out, evidence, and confirm the intended purposes of
this Agreement.

Article 3.6             Confirmation of Rights

From and after the Closing Date, Purchaser shall be the owner or user of
Transferred Assets and shall enjoy any rights and interests relating to the
Transferred Assets.

Chapter IV

   

Taxes

Article 4
Tax Payable

Any taxes or fees arising out of the performance of this Contract or necessary
to fulfill of the terms of this Contract shall be paid by the respective Party
which is liable for the taxes or fees under the provisions of the relevant laws
and regulations of China.

Chapter V 
 
Representations and Warranties of All Parties

Article 5
Representations and Warranties of All Parties

5.1           Sellers and the Purchaser confirm that from the Signing Date this
Contract shall be a document having legal binding effect on all Parties.

5.2           At the time of signing this Contract, Sellers and the Purchaser
state that the documents and information provided to any other Party or their
agents (including without limitation to the lawyers, appraiser, financial
consultants, etc.) prior to the Signing Date were true and accurate and shall
remain effective, and confirm that if there are discrepancies between the terms
of any such documents and the terms of this Contract, the terms of this Contract
shall prevail.
 
 
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5.3           Any prior agreements entered into between all Parties prior to
this Contract pertaining to the Transferred Assets shall lapse automatically
upon this Contract coming into effect.

5.4           All rights and obligations enjoyed or assumed previously by
Company over the Transferred Assets shall be entirely transferred to the
Purchaser after the Closing Date.

Chapter VI
 
Disclosures, Representations and Warranties of Sellers

Article 6
Disclosures, Representations and Warranties of Sellers

Sellers hereby jointly represent and warrant to the Purchaser that:

6.1           All information and facts relating to Transferred Asserts that are
in the possession of Sellers or are known to any of the Sellers which will have
a substantive and adverse effect on the Sellers’ ability to fulfill their
obligations in this Contract or when disclosed to the Purchaser shall have a
substantive effect on the willingness of the Purchaser to sign and fulfill its
obligations under this Contract, have been disclosed to Purchaser and the
information provided by Sellers to Purchaser does not contain any representation
that is untrue or misleading.
 
6.2           No lawsuits, arbitrations, or other legal or administrative
proceedings or governmental investigations are on-going against Sellers and/or
the Transferred Assets that will materially affect Sellers’ ability to sign this
Contract or fulfill their obligations under this Contract.

6.3           Regarding the documents and information provided by Sellers to
Purchaser and/or Purchaser’s agents (including but not limited to the lawyers,
appraiser, financial consultants, etc.) prior to the Signing Date, Sellers
hereby jointly undertake that:

 
6.3.1
all copies made from original documents are true and complete and that such
original documents are authentic and complete;
 
6.3.2
all documents provided to the Purchaser and/or Purchaser’s agencies as
originals are authentic and complete;

 
6.3.3
all signatures appearing on documents provided to the Purchaser and/or
Purchaser’s agencies as originals or copies of originals are genuine;
 
6.3.4
Sellers have drawn to the attention of Purchaser and/or Purchaser’s agencies all
matters that are material for the Purchaser to proceed with the transaction as
contemplated in this Contract.
   

6.4           Company is a legal entity that has been duly established in
accordance with PRC laws and it is validly and legally in existence and also
operating normally pursuant to PRC laws and regulations. Signing this Contract
and fulfilling all of their obligations stipulated herein by Company will not
contravene or result in the violation of or constitute a failure to fulfill or
an inability to fulfill any of the stipulations in any laws, regulations,
stipulations, any authorization or approval from any government body or
department or the stipulations of any contract or agreement that Seller is a
party to or is bound by.

6.5           The Controlling Shareholder is a PRC citizen with all civil
abilities necessary to enter into this Contract and fulfill all of his
obligations stipulated herein. Signing this Contract and fulfilling all of his
obligations stipulated herein by the Controlling Shareholder shall not
contravene or result in the violation of or constitute a failure to fulfill or
an inability to fulfill any of the stipulations in any laws, regulations,
stipulations, any authorization or approval from any government body or
department or the stipulations of any contract or agreement that Controlling
Shareholder is a party to or is bound by.
 
 
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6.6           Company legally owns all land use and other rights in the
Transferred Assets and has full authority and right to transfer such rights to
the Transferred Assets to Purchaser.
 
6.7           Sellers hereby jointly undertake and warrant that up to and
including the Closing Date the Transferred Assets will not be subject to any
Claims or Encumbrances (including but not limited to any form of option,
acquisition right, mortgage, pledge, guarantee, lien or any other form of Third
Party rights).

Sellers hereby specially represent and warrant to the Purchaser that:

6.8            Sellers hereby confirm and warrant that if any claim is made
against Purchaser related to Sellers’ failure to pay the registered capital,
false capital contribution, overrated capital contribution and flight of capital
contribution, Sellers shall assume all the responsibilities by themselves and
the Purchaser shall never assume any responsibility and shall be held harmless
by Sellers for any damages arising out of such claims. The Company and
Controlling Shareholder shall assume jointly and severally any liabilities to
the Purchaser and hold the Purchaser harmless against and from any direct and
indirect losses arising from any above-mentioned acts.

6.9           Sellers hereby confirm and warrant to the Purchaser that each of
them will execute a Land Management Agreement with the Purchaser regarding the
pieces of land included in the Transferred Assets, which agreement provides that
the buildings/structures and equipments belong to the Purchaser, the buildings
are to be used exclusively by the Purchaser and any compensation arising out of
the use of the buildings shall exclusively belong to the Purchaser. If Sellers
receives any such compensation, Sellers shall fully promptly deliver such
compensation to the Purchaser.

6.10           There has not been and currently is, no civil, criminal or
administrative action, suit, claim, hearing, investigation or proceeding pending
or, to Sellers’ knowledge, threatened, against the Company or Controlling
Shareholder, in any court, by any governmental entity or any other person or
before any arbitrator or other tribunal and, to any Sellers’ knowledge, there is
no reasonable basis for any such civil, criminal or administrative action, suit,
claim, hearing, investigation or proceeding.  Neither the Company nor the
Controlling Shareholder has been or is currently subject to any action, order,
writ, judgment, injunction or decree of any governmental entity and, to Sellers’
knowledge, there is no reasonable basis for either Seller or the Controlling
Shareholder to become subject to any such action, order, writ, judgment,
injunction or decree.
 
6.11           Sellers hereby warrant that all tax, fees, charges, penalties and
expenses payable to or required to pay to any PRC governmental authorities have
been fully paid. By the Signing Date of this Contract, there has been no default
in the payment of such tax, fees, charges, penalties and expenses. The Seller
and Controlling Shareholder shall assume the joint and several liabilities in
case of any losses, damages or any penalties suffered by the Purchaser due to
any investigation, prosecutions, disputes, claims or other proceedings prior to
the assets transfer under this Contract and shall fully indemnify the Purchaser
all losses arisen thereto.

6.12           Sellers hereby confirm and warrant to the Purchaser that no
matter before or after the assets transfer, the Purchaser shall assume no
responsibilities of any debts of Company and the Company shall have no right to
repay any of its debts with Transferred Assets.
 
 
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6.14           Sellers hereby confirm and warrant to the Purchaser that they
will ensure the normal operation and management of the Transferred Assets prior
to the Closing Date and the Transferred Assets will be free of any Encumbrances
and any Material Adverse Change.
 
6.15           Before the Closing Date, Sellers hereby confirm and warrant to
the Purchaser that all losses, damages and destruction of Transferred Assets
shall be borne by Sellers themselves.

6.16           The Purchaser is entitled to require Sellers to undertake the
joint and several liabilities and indemnify and hold harmless the Purchaser
against and from any direct and indirect losses or damages in case of any
infringement of any representations and warranties stated hereinabove by Sellers
or in case that Sellers fails to meet any or all pre-requisite conditions set
forth in Conditions Two of Appendix II attached hereto.

Chapter VII
 
Disclosures, Representations and Warranties of the Purchaser

Article 7
Disclosures, Representations and Warranties of the Purchaser

The Purchaser hereby represents and warrants to Sellers that:

7.1           Purchaser is a legal entity that has been duly established and it
is validly and legally in existence and also operating normally in accordance
with the PRC laws.

7.2           The execution and performance of this Contract by Purchaser will
not contravene or result in the violation of or constitute a failure to fulfill
or an inability to fulfill any of the stipulations of Purchaser’s articles of
association or its internal rules, any laws, regulations, stipulations, or any
authorizations or approvals from any government body or department or any
contract or agreement that the Purchaser is a party to or is bound by.

7.3           No lawsuits, arbitrations, or other legal or administrative
proceedings or governmental investigations are on-going against the Purchaser
that will materially affect its ability to sign this Contract or fulfill its
obligations under this Contract.

Chapter VIII
 
Confidentiality

Article 8.1
Confidentiality

8.1           All Parties agree that unless otherwise provided for in another
relevant confidentiality
agreement that with regard to the confidential and exclusive information that
have been disclosed to or may be disclosed to the other Parties by any Party to
this Contract pertaining to their respective businesses, or financial situations
and other confidential matters, all Parties to this Contract which have received
the aforesaid confidential information (including written information and
non-written information, hereinafter referred to as “Confidential Information”)
shall:

 
8.1.1 
Keep the aforesaid Confidential Information confidential;

 
8.1.2
Save for the disclosure of the Confidential Information by a Party to this
Contract to its employees solely for the performance of their duties and
responsibilities, neither Party to this Contract shall disclose the Confidential
Information to any Third Party or any entity.
   

 
 
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8.2           The provisions of this Article shall not apply to the following
Confidential Information:
 

 
8.2.1
which was available to the receiving Party from the written record before the
disclosing Party disclosed the information to the receiving Party and the
written record can prove that the confidential information was already known to
the receiving Party;

 
8.2.2
which has become public information by means not attributable to any breach by
the receiving Party;

 
8.2.3
which was obtained, by the receiving Party from a Third Party not subject to any
confidentiality obligation affecting the said Confidential Information.

8.3           As far as any natural person or legal entity which is a Party to
this Contract is concerned, notwithstanding that it has ceased to be a Party to
this Contract because of the transfer of its rights and obligations pursuant to
the terms of this Contract, the stipulations set forth in this Chapter shall
remain binding on it.

Chapter IX
 
Breach of Contract

Article 9
Liabilities for Violation of Representations or Warranties

9.1           If any representation or warranty made by any Party to this
Contract is found to be a material error, or if any fact that has or is likely
to have a major or substantial effect on the signing of this Contract by any
Party has been omitted, or if any representation or warranty is found to be
misleading or untrue in any material respect, the non-breaching Party shall be
entitled to look to the Party (ies) in breach for full compensation for any
loss, damage, cost or expense (including any attorneys’ fee and litigation and
arbitration fee) arising from the erroneous, misleading or untrue representation
or warranty of the Party (ies) in breach or arising from any other breach of any
representation and warranty given by the Party (ies) in breach.

9.2           Each representation and warranty set forth in this Contract is to
be construed independently.

9.3           For the avoidance of doubt, Sellers hereby unconditionally and
irrevocably agree and confirm that they shall be jointly liable for any
liability for any breach of representation or warranty.

   

9.4           In the event of a breach committed by any Party to this Contract,
the said defaulting Party shall be liable to the other Party (ies) for any
liabilities arising out of that defaulting Party’s breach of contract in
accordance with the provisions of this Contract and the laws and regulations of
PRC.

9.5           In the event that Sellers fail to meet any conditions set forth in
Appendix II or violate any representation, warranty or obligations under this
Contract, without account of the intention or gross negligence of the Purchaser,
Sellers shall pay RMB 3,000,000 to the Purchaser, in addition to the
compensation for any direct or indirect loss arising therefrom.
 
 
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Chapter X
 
Force Majeure

Article 10
Force Majeure

10.1           The Force Majeure shall include earthquake, typhoon, flood, fire,
war, political unrest and such special incidents or events that are deemed to be
Force Majeure occurrences under the provisions of the relevant laws and
regulations of PRC.

10.2           In the event of the occurrence of a Force Majeure event, the
obligations of the Party to
this Contract affected by this Force Majeure event shall cease during the period
of the Force Majeure event and any term or period set forth in this Contract and
to which the affected party is subject shall automatically be extended by a
period equal to the term or period of the Force Majeure event, the period of
extension shall be the same as the period of cessation of the obligations by
reason of the Force Majeure event, and the said Party shall not be liable for
any liabilities arising out of a breach of contract as provided for in this
Contract for the duration of the Force Majeure.

10.3           The Party claiming the occurrence of a Force Majeure event shall
promptly inform the
other Party (ies) in writing, and within seven (7) days thereafter, it shall
provide sufficient evidence (issued by the notary organization) of the
occurrence and the continuity of the Force Majeure event. It shall also do its
best to eliminate the adverse effect of the Force Majeure event.
 
Chapter XI
 
Resolution of Disputes

Article 11.1
Arbitration

Any dispute arising out of this Contract between the Parties to this Contract
shall firstly be resolved through friendly consultation. In the event that
thirty (30) days after the commencement of the friendly consultations, the
dispute cannot be resolved through such means, either Party may submit the
dispute to the China International Economic and Trade Arbitration Commission in
Beijing for arbitration in accordance with its prevailing valid arbitration
rules.

Article 11.2
Validity of Arbitral Award

The arbitration award shall be final and shall be binding on all Parties to this
Contract. All Parties to this Contract agree to be bound by the said award, and
to act according to the terms of the said award.

Article 11.3
Continuation of Rights and Obligations

After a dispute has arisen and during its arbitration process, other than the
disputed matter, all Parties to this Contract shall continue to exercise their
other respective rights stipulated in this Contract, and shall also continue to
fulfill their other respective obligations stipulated in this Contract.

Chapter XII
 
Applicable Law

Article 12
Applicable Law

The laws and regulations of the PRC shall govern and be binding on the
establishment, validity, interpretation and execution of this Contract. All
disputes arising out of this Contract shall be determined according to the laws
of the PRC. In the event the laws of the PRC do not make provision for a certain
issue relating to this Contract, reference shall be made to general
international business practice.
 
 
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Chapter XIII
 
Miscellaneous
 
13.1           The non-exercise or delay in the exercise of an entitlement
stipulated in this Contract by any Party to this Contract shall not be regarded
as a waiver of the said entitlement. Any single exercise or partial exercise of
an entitlement shall not rule out any future re-exercise of the said
entitlement.
 
13.2           Unless otherwise described and prescribed in this Contract,
neither Party to this Contract shall transfer nor assign all or any part of this
Contract or transfer or assign that Party’s entitlement or obligations as
stipulated in this Contract.
 
13.3           This Contract has been executed for the benefit of all Parties to
this Contract and their respective lawful successor(s) and assignees, and shall
have legal binding effect on them.

13.4           This Contract may not be amended verbally. Only a written
document signed by all
Parties indicating their consent to such amendment shall be effective.
 
13.5           The invalidity of any term in this Contract shall not affect the
validity of the other terms in this Contract.

13.6           This Contract is an English language translation of an original
contract written in the Chinese Language. In the event of any conflict between
this contract and the original Chinese version, the Chinese version shall
govern.

13.7           The Contract shall be effective from the execution of Parties
hereof. The Contract shall be executed in three (3) original sets in Chinese,
with Parties hereto holding one (1) set respectively.

13.8           The Appendixes to this Contract shall form an integral part of
this Contract, and shall have the same effect as this Contract.

   

13.9           Unless otherwise specified and prescribed, any Party issuing any
notification or written communication to the other Party (ies) according to the
provisions of this Contract shall have them written in the Chinese Language and
shall send them as a letter by a courier service company, or by facsimile.
Letters sent by a courier service company, will require a confirmation to be
given seven (7) business days after handing over the notification or
communication to the courier service company. Any notification or written
communication sent in accordance with the stipulations of this Contract shall be
deemed to be effective on the date of receipt.  If they are sent by facsimile,
the date of receipt shall be deemed to be three (3) business days after
transmission, subject to a facsimile confirmation report evidencing this.
 
 
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13.10           All notices or communications shall be sent to the following
addresses, unless and until any such address is changed by a written notice to
the other Party:

Address of Sellers: Sci-tech Zone, Huangmaoping, Xiangfeng Town, Laifeng County,
Hubei, China
Tel: 0718-6285168
Fax Number: 0718-6288576
Attention: Liang Zhang                           

 
Address of the Purchaser: 
 
 
Telephone Number:
Fax Number:
Attention:
Suite F, 23rd Floor, Building B, Jiangjing Mansion
228 Yanjiang Ave., Jiangan District
Wuhan City, Hubei Province, China 430010
(+86) 27 8274 0726
(+86) 27 8274 0906.
Hanying Li

 

13.11           This Contract constitutes the entire agreement of all Parties to
this Contract pertaining to the transaction agreed upon in this Contract, and
shall replace all the previous discussions, negotiations and agreements among
all Parties to this Contract in respect of the transaction of this Contract.

 
IN WITNESS WHEREOF, the duly authorized representatives of Sellers and the
Purchaser have signed this Contract on the date first above written.

Purchaser: Wuhan Fengze Agricultural Science and Technology Development Co.,
Ltd.

(Seal)

/s/ _____________________
Authorized Representative

Seller:  An Puluo Food Development Co., Ltd

(Seal)

/s/___________________
Authorized Representative

 Controlling Shareholder: /s/ Wenping Lu______
Wenping Lu
 
 
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Appendix I Assets List
 
Transferred Assts

1. Land rights [legal description of premises and rights related thereto]

2. Buildings/Structures [description, including general identifying
characteristics, location, square footage]

 
3. Equipment [list items of equipment to be conveyed include serial numbers or
other identifying characters and location]

 

4. Other Assets [identify other assets to be conveyed, include serial numbers or
other identifying characters and location]

 

 
 
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AppendixII
 
Prerequisite Conditions

Prerequisite Conditions One

Sellers hereby irrevocably confirm and guarantee to fulfill all following
conditions precedent within the time limit on their own costs:

(A)
Purchaser’s satisfaction with the results of legal and financial due diligence
on the transferred assets;

(B)
Sellers each enter into a Land Management Agreement with the Purchaser regarding
the ____  pieces of land in the Transferred Assets;

(C)
Seller lawfully holds transferred assets which are free of any Claims or
Encumbrances (including but not limited to any form of mortgage, pledge,
guarantee, lien or any other form of Third Party rights);

(D)
Resolution of the [board of directors’ or shareholders’ meeting of] Seller to
approve transfer of Transferred Assets

Pre-requisite Conditions Two

Sellers shall use their best efforts to obtain all approvals or registrations
required for the lawful transfer within one year from the Closing Date of this
Contract of the Transferred Assets to the Purchaser in accordance with PRC Law,
including Seller’s right to the real estate included within the Transferred
Assets.  Among other required items:

(A) Seller will obtain the approval of at least two thirds of the peasants at a
Village Meeting or one third of the peasant representatives of local collective
economic organization to the transfer to Purchaser of the rights currently held
by Seller to use the real estate included in the Transferred Assets or, is such
approval is not obtained, Seller will obtain the necessary approvals of the Land
management Agreement;

(B) Seller will obtain the consent of the local village committees regarding its
transfer to Purchaser of the rights to use the five pieces of land included in
the Transferred Assets and will register the transfer of land contracting
management rights in the local village committee.
 

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