Exhibit 10.2


 


SHARE EXCHANGE AGREEMENT


 


By and Among


 


CHINA NEW BORUN CORPORATION


 


and


 


KING RIVER HOLDING LIMITED


 


and


 


GOLDEN DIRECTION LIMITED


 


Dated as of March 15, 2010


 

















 


TABLE OF CONTENTS


 


	
   

  	
   

  	
  PAGE

  
	
   

  	
   

  	
   

  
	
  ARTICLE I
    REPRESENTATIONS, COVENANTS, AND WARRANTIES
  OF KING RIVER AND GOLDEN DIRECTION

  	
  1

  
	
  Section 1.01

  	
  Organization

  	
  1

  
	
  Section 1.02

  	
  Capitalization

  	
  2

  
	
  Section 1.03

  	
  Subsidiaries

  	
  2

  
	
  Section 1.04

  	
  No
  Financial Statements

  	
  2

  
	
  Section 1.05

  	
  Absence
  of Certain Changes or Events

  	
  2

  
	
  Section 1.06

  	
  Litigation
  and Proceedings

  	
  3

  
	
  Section 1.07

  	
  Contracts

  	
  3

  
	
  Section 1.08

  	
  No
  Conflict With Other Instruments

  	
  3

  
	
  Section 1.09

  	
  Compliance
  With Laws and Regulations

  	
  3

  
	
  Section 1.10

  	
  Approval
  of Agreement

  	
  4

  
	
  Section 1.11

  	
  Valid
  Obligation

  	
  4

  
	
  Section 1.12

  	
  Information

  	
  4

  
	
  Section 1.13

  	
  Representations
  and Warranties of King River

  	
  4

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  II   REPRESENTATIONS, COVENANTS, AND WARRANTIES
  OF NEW BORUN

  	
  5

  
	
  Section 2.01

  	
  Organization

  	
  5

  
	
  Section 2.02

  	
  Capitalization

  	
  5

  
	
  Section 2.03

  	
  Subsidiaries
  and Predecessor Corporations

  	
  5

  
	
  Section 2.04

  	
  No
  Financial Statements

  	
  6

  
	
  Section 2.05

  	
  Options
  or Warrants

  	
  6

  
	
  Section 2.06

  	
  Absence
  of Certain Changes or Events

  	
  6

  
	
  Section 2.07

  	
  Litigation
  and Proceedings

  	
  6

  
	
  Section 2.08

  	
  Contracts

  	
  7

  
	
  Section 2.09

  	
  No
  Conflict With Other Instruments

  	
  7

  
	
  Section 2.10

  	
  Compliance
  With Laws and Regulations

  	
  7

  
	
  Section 2.11

  	
  Approval
  of Agreement

  	
  7

  
	
  Section 2.12

  	
  Material
  Transactions or Affiliations

  	
  7

  
	
  Section 2.13

  	
  Valid
  Obligation

  	
  8

  
	
  Section 2.14

  	
  Information

  	
  8

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  III   PLAN OF EXCHANGE AND RELATED
  AGREEMENTS

  	
  8

  
	
  Section 3.01

  	
  The
  Closing

  	
  8

  
	
  Section 3.02

  	
  Closing
  Events

  	
  8

  
	
  Section 3.03

  	
  Termination

  	
  9

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  IV   COVENANTS OF GOLDEN DIRECTION
  AND KING RIVER

  	
  9

  
	
  Section 4.01

  	
  Access
  and Investigation

  	
  9

  
	
  Section 4.02

  	
  Delivery
  of Books and Records

  	
  9

  
	
  Section 4.03

  	
  Operation
  of the Business of Golden Direction

  	
  9

  
	
  Section 4.04

  	
  No
  Transfers of Interests

  	
  10

  



 


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  Section 4.05

  	
  Required
  Filings and Approvals

  	
  10

  
	
  Section 4.06

  	
  Notification

  	
  10

  
	
  Section 4.07

  	
  Indemnification

  	
  10

  
	
  Section 4.08

  	
  Approval
  by Golden Direction and King River

  	
  11

  
	
  Section 4.09

  	
  Director’s
  Certificate of Golden Direction

  	
  11

  
	
  Section 4.10

  	
  Good
  Standing Certificate

  	
  11

  
	
  Section 4.11

  	
  Closing
  Conditions

  	
  11

  
	
   

  	
   

  	
   

  
	
  ARTICLE V   COVENANTS OF NEW BORUN

  	
  11

  
	
  Section 5.01

  	
  Access
  and Investigation

  	
  11

  
	
  Section 5.02

  	
  Issuance
  of Securities in New Borun

  	
  11

  
	
  Section 5.03

  	
  Required
  Filings and Approvals

  	
  11

  
	
  Section 5.04

  	
  Notification

  	
  12

  
	
  Section 5.05

  	
  Indemnification

  	
  12

  
	
  Section 5.06

  	
  Approval
  by New Borun

  	
  12

  
	
  Section 5.07

  	
  Closing
  Conditions

  	
  12

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  VI   CONDITIONS PRECEDENT TO
  OBLIGATIONS OF NEW BORUN

  	
  12

  
	
  Section 6.01

  	
  Accuracy
  of Representations

  	
  13

  
	
  Section 6.02

  	
  Performance
  by Golden Direction and King River

  	
  13

  
	
  Section 6.03

  	
  Consents

  	
  13

  
	
  Section 6.04

  	
  Officer’s
  Certificate

  	
  13

  
	
  Section 6.05

  	
  Certificate
  of King River

  	
  13

  
	
  Section 6.06

  	
  No
  Governmental Prohibition

  	
  13

  
	
  Section 6.07

  	
  Additional
  Documents

  	
  13

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  VII   CONDITIONS PRECEDENT TO OBLIGATIONS OF
  GOLDEN DIRECTION AND KING RIVER

  	
  14

  
	
  Section 7.01

  	
  Accuracy
  of Representations

  	
  14

  
	
  Section 7.02

  	
  Performance
  by New Borun

  	
  14

  
	
  Section 7.03

  	
  Consents

  	
  14

  
	
  Section 7.04

  	
  Officer’s
  Certificate

  	
  14

  
	
  Section 7.05

  	
  Director’s
  Certificate

  	
  15

  
	
  Section 7.06

  	
  Good
  Standing Certificate

  	
  15

  
	
  Section 7.07

  	
  Additional
  Documents

  	
  15

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  VIII   MISCELLANEOUS

  	
  15

  
	
  Section 8.01

  	
  Brokers

  	
  15

  
	
  Section 8.02

  	
  Governing
  Law; Jurisdiction; Venue; Waiver of Jury Trial

  	
  15

  
	
  Section 8.03

  	
  Attorney’s
  Fees

  	
  17

  
	
  Section 8.04

  	
  Confidentiality

  	
  17

  
	
  Section 8.05

  	
  Public
  Announcements and Filings

  	
  18

  
	
  Section 8.06

  	
  Recitals

  	
  18

  
	
  Section 8.07

  	
  Third
  Party Beneficiaries

  	
  18

  
	
  Section 8.08

  	
  Expenses

  	
  18

  
	
  Section 8.09

  	
  Survival;
  Termination

  	
  18

  
	
  Section 8.10

  	
  Counterparts.

  	
  18

  



 


ii

















 


	
  Section 8.11

  	
  Amendment
  or Waiver

  	
  19

  
	
  Section 8.12

  	
  Best
  Efforts

  	
  19

  
	
  Section 8.13

  	
  Remedies

  	
  19

  
	
  Section 8.14

  	
  Construction

  	
  19

  
	
  Section 8.15

  	
  Entire
  Agreement

  	
  19

  
	
   

  	
   

  	
   

  
	
  GOLDEN
  DIRECTION SCHEDULES

  	
  1

  
	
   

  	
   

  	
   

  
	
  NEW BORUN
  SCHEDULES

  	
  1

  



 


iii














 


SHARE EXCHANGE AGREEMENT


 


THIS SHARE
EXCHANGE AGREEMENT (this “Agreement”) is entered into as of
this 15th day of March, 2010, by and among CHINA NEW
BORUN CORPORATION, a company organized under the laws of the Cayman
Islands (“New Borun”), GOLDEN DIRECTION LIMITED,
a limited liability company organized under the laws of the British Virgin
Islands (“Golden Direction”) and KING RIVER HOLDING
LIMITED, a limited liability company organized under the laws of the
British Virgin Islands and the sole shareholder of Golden Direction (“King
River”), upon the following premises:


 


RECITALS:


 


WHEREAS, King River owns
100% of the issued share capital of Golden Direction (the “Golden Direction
Capital Stock”); and


 


WHEREAS, the parties
hereto desire for Golden Direction to be a wholly-owned subsidiary of New
Borun, whereby New Borun shall acquire from King River the Golden Direction
Capital Stock in exchange for the issuance by New Borun to King River of
14,847,810 newly issued ordinary shares of New Borun, par value US$0.001 per
share (“New Borun Ordinary Shares”).


 


AGREEMENT:


 


NOW
THEREFORE, on the stated premises and for and in
consideration of the mutual covenants and agreements hereinafter set forth and
the mutual benefits to the parties to be derived herefrom, and for other good
and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged by all parties hereto, and intending to be legally bound hereby,
New Borun, Golden Direction and King River hereby agree as follows:


 


ARTICLE I

REPRESENTATIONS, COVENANTS, AND WARRANTIES OF KING RIVER AND GOLDEN DIRECTION


 


As an inducement to, and to
obtain the reliance of New Borun, except as set forth in those schedules
prepared by Golden Direction which are attached and made a part hereto (the “Golden
Direction Schedules”), Golden Direction and King River hereby represent and
warrant to New Borun as follows as of the date hereof:


 


Section 1.01           Organization.  Golden Direction is a company duly organized,
validly existing, and in good standing under the laws of the British Virgin
Islands and has the corporate power and is duly authorized under all applicable
laws, regulations, ordinances and orders of public authorities to carry on its
business in all material respects as it is now being conducted.  Included in Item 1.01 of the Golden
Direction Schedules are complete and correct copies of Golden Direction’s
Certificate of Incorporation and the Memorandum and Articles of Association of
Golden Direction as in effect on the date hereof (together, the “Golden Direction
Charter”).  The execution and
delivery of this Agreement does not, and the consummation of the transactions
contemplated hereby will not, violate any provision of the Golden Direction 


 


1

















 


Charter.  Golden Direction has taken all actions
required by law, from its Golden Direction Charter, or otherwise to authorize
the execution and delivery of this Agreement. 
Golden Direction has full power, authority, and legal right and has
taken all action required by law, the Golden Direction Charter, and otherwise
to consummate the transactions herein contemplated.


 


Section 1.02           Capitalization.  Golden Direction is authorized to issue Fifty
Thousand (50,000) ordinary shares, par value $0.001 per share, of which one (1) share
is currently issued and outstanding and held by King River.  All of the issued and outstanding shares of
such Golden Direction Capital Stock are legally issued, fully paid and
non-assessable and not issued in violation of the preemptive or other rights of
any person.  Furthermore, (i) there
are no outstanding options, warrants, scrip, rights to subscribe to, calls or
commitments of any character whatsoever relating to, or securities or rights
convertible into, any shares of Golden Direction Capital Stock, or contracts,
commitments, understandings or arrangements by which Golden Direction is or may
become bound to issue additional shares of Golden Direction Capital Stock or
options, warrants, scrip, rights to subscribe to, calls or commitments of any
character whatsoever relating to, or securities or rights convertible into, any
shares of Golden Direction Capital Stock, (ii) there are no outstanding
debt securities of Golden Direction and (iii) there are no agreements or
arrangements under which Golden Direction is obligated to register the sale of
any of their securities.


 


Section 1.03           Subsidiaries.  Golden Direction does not have any
subsidiaries and does not own, beneficially or of record, any shares of any
corporation except that Golden Direction owns 8,000 ordinary shares of the
8,000 ordinary shares issued and outstanding of China High Enterprises Limited,
a Hong Kong investment company (“China High”), which is equivalent to
approximately 74.24% of the aggregate issued and outstanding shares of capital
stock in China High calculated on a fully diluted basis.


 


Section 1.04           No Financial Statements.


 


(a)           Golden Direction has
not had any operations since its incorporation and no financial statements have
been prepared.


 


(b)           Golden Direction has
no liabilities with respect to the payment of any federal, state, county, local
or other taxes (including any deficiencies, interest or penalties).


 


(c)           Golden Direction has
timely filed all income and/or franchise tax returns required to be filed by it
from its inception to the date hereof. 
Each of such income and/or franchise tax returns reflects the taxes due
for the period covered thereby, except for amounts which, in the aggregate, are
immaterial.


 


(d)           Golden Direction has
no liabilities, direct or indirect, matured or unmatured, contingent or
otherwise.


 


Section 1.05           Absence of Certain Changes or
Events.  Since its inception:


 


(a)           There has not been
any business or operations of Golden Direction and Golden Direction owns no
assets or properties;


 


2

















 


(b)           Golden Direction has
not (i) amended the Golden Direction Charter beyond that which has been
provided for in connection with this Agreement; (ii) declared or made, or
agreed to declare or make any payment of dividends or distributions of any
assets of any kind whatsoever; (iii) made any material change in its
method of management, operation or accounting; (iv) entered into any
transactions or agreements other than in connection with this Agreement and the
transactions contemplated herein; or (v) made any adoption of any profit
sharing, bonus, deferred compensation, insurance, pension, retirement, or other
employee benefit plan, payment, or arrangement, made to, for or with its
officers, directors, or employees; and


 


(c)           Golden Direction has
not (i) granted or agreed to grant any options, warrants, or other rights
for its stock, bonds, or other corporate securities calling for the issuance
thereof; (ii) borrowed or agreed to borrow any funds or incurred, or
become subject to, any material obligation or liability (absolute or
contingent) except liabilities incurred in the ordinary course of business; (iii) sold
or transferred, or agreed to sell or transfer, any of its assets, properties,
or rights, or canceled, or agreed to cancel, any debts or claims; or (iv) issued,
delivered or agreed to issue or deliver, any stock, bonds or other corporate
securities including debentures (whether authorized and unissued or held as
treasury stock), except in connection with this Agreement.


 


Section 1.06           Litigation and Proceedings.  There are no actions, suits, proceedings or
investigations pending or threatened by or against Golden Direction or
affecting Golden Direction or its properties, at law or in equity, before any
court or other governmental agency or instrumentality, domestic or foreign, or
before any arbitrator of any kind. 
Golden Direction has no knowledge of any default on its part with
respect to any judgment, order, writ, injunction, decree, award, rule or
regulation of any court, arbitrator, or governmental agency or instrumentality
or any circumstance which after reasonable investigation would result in the
discovery of such default.


 


Section 1.07           Contracts.  All contracts, agreements, franchises,
license agreements, and other commitments to which Golden Direction is a party
or by which its properties are bound and which are material to the operations
of Golden Direction taken as a whole are valid and enforceable by Golden
Direction in all respects, except as limited by bankruptcy and insolvency laws
and by other laws affecting the rights of creditors generally.


 


Section 1.08           No Conflict With Other Instruments.  The execution of this Agreement and the
consummation of the transactions contemplated by this Agreement will not result
in the breach of any term or provision of, constitute a default under, or
terminate, accelerate or modify the terms of any indenture, mortgage, deed of
trust, or other material agreement, or instrument to which Golden Direction is
a party or to which any of its assets, properties or operations are subject.


 


Section 1.09           Compliance With Laws and
Regulations.  To the best of its
knowledge, Golden Direction has complied with all applicable foreign and
domestic statutes and regulations of any federal, state, provincial or other
governmental entity or agency thereof, except to the extent that noncompliance
would not materially and adversely affect the business, 


 


3

















 


operations,
properties, assets, or condition of Golden Direction except to the extent that
noncompliance would not result in the occurrence of any material liability for
Golden Direction.


 


Section 1.10           Approval of Agreement.  The board of directors of Golden Direction
has unanimously authorized the execution and delivery of this Agreement by
Golden Direction and has approved this Agreement and the transactions
contemplated hereby.


 


Section 1.11           Valid Obligation.  This Agreement and all agreements and other
documents executed by Golden Direction in connection herewith constitute the
valid and binding obligation of Golden Direction, enforceable in accordance
with its terms, except as may be limited by bankruptcy, insolvency, moratorium
or other similar laws affecting the enforcement of creditors’ rights generally
and subject to the qualification that the availability of equitable remedies is
subject to the discretion of the court before which any proceeding therefore
may be brought.


 


Section 1.12           Information.  The information concerning Golden Direction
set forth in this Agreement and in the Golden Direction Schedules is complete
and accurate in all material respects and does not contain any untrue statement
of a material fact or omit to state a material fact required to make the
statements made, in light of the circumstances under which they were made, not
misleading.


 


Section 1.13           Representations and Warranties of
King River.  In addition to the
representations and warranties made by King River in Sections 1.01 through 1.12
hereof, King River represents and warrants to New Borun as of the date hereof
and as of the Closing Date as follows:


 


(a)          Authority.  King River is a company duly organized,
validly existing, and in good standing under the laws of the British Virgin
Islands and has the corporate power and is duly authorized under all applicable
laws, regulations, ordinances and orders of public authorities to carry on its
business in all material respects as it is now being conducted.  The execution and delivery of this Agreement
does not, and the consummation of the transactions contemplated hereby will
not, violate any provision of King River’s Certificate of Incorporation and the
Memorandum and Articles of Association as in effect on the date hereof (the “King
River Charter”).  King River has taken
all actions required by law, from its King River Charter, or otherwise to
authorize the execution and delivery of this Agreement.  King River has full power, authority, and
legal right and has taken all action required by law, the King River Charter,
and otherwise to consummate the transactions herein contemplated.  .


 


(b)          No Conflicts.  The execution, delivery and performance of
this Agreement by King River and the consummation by King River of the
transactions contemplated hereby do not and will not conflict with or result in
a violation of or default (or be an event that with notice or lapse of time or
both would become a conflict, violation or default) under any contract or
agreement applicable to King River or any law, rule, regulation, order, decree,
ruling or pronouncement to which King River is subject or by which any property
or asset of King River is bound or affected.


 


4

















 


(c)          No General Solicitation.  King River is not acquiring the securities of
New Borun hereunder as a result of any advertisement, article, notice or other
communication regarding such securities published in any newspaper, magazine or
similar media or broadcast over television, radio the internet or presented at
any seminar or any other general advertisement.


 


(d)          Investment Intent.  King River: (i) is acquiring the
securities of New Borun hereunder as a principal for its own account and not with a view to or for distributing or reselling
them in violation of any applicable law, rule or regulation, (ii) has
no present intention of distributing any of such securities in violation of any
applicable law, rule or regulation and (iii) has no direct or
indirect arrangement or understandings with any other persons to distribute or
regarding their distribution of such securities.


 


ARTICLE
II

REPRESENTATIONS, COVENANTS, AND WARRANTIES OF NEW BORUN


 


As an inducement to, and to
obtain the reliance of Golden Direction and King River, except as set forth in
those schedules prepared by New Borun which are attached and made a part
hereto (the “New Borun Schedules”), New Borun represents and
warrants to Golden Direction and King River as follows:


 


Section 2.01           Organization.  New Borun is an exempted company
incorporated, validly existing, and in good standing under the laws of the
Cayman Islands and has the corporate power and is duly authorized under all
applicable laws, regulations, ordinances, and orders of public authorities to
carry on its business in all material respects as it is now being conducted.  Set forth in Item 2.01 of the New Borun
Schedules is a complete and correct copy of the Memorandum and Articles of
Association of New Borun as of the date hereof 
(the “New Borun Charter”). 
The execution and delivery of this Agreement does not, and the
consummation of the transactions contemplated hereby will not, violate any
provision of the New Borun Charter.  New
Borun has taken all action required by law, the New Borun Charter or otherwise
to authorize the execution and delivery of this Agreement, and New Borun has
full power, authority, and legal right and has taken all action required by
law, the New Borun Charter or otherwise to consummate the transactions herein
contemplated.


 


Section 2.02           Capitalization.  New Borun’s authorized share capital consists
of (a) One Hundred Million (100,000,000) New Borun Ordinary Shares
with a par value of $0.001 each, of which one (1) share was issued and
outstanding prior to the transaction contemplated by the Exchange and (b) Five
Million (5,000,000) preference shares with a par value of US$0.001 each  (“New Borun Preference Shares”), zero (0) of which
were issued or outstanding immediately preceding the consummation of the
Exchange.


 


Section 2.03           Subsidiaries and Predecessor
Corporations.  New Borun does not have
any predecessors or subsidiaries and does not own, beneficially or of record,
any shares of any other corporation.


 


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Section 2.04           No Financial Statements.


 


(a)           New Borun has not
had any operations since its incorporation and no financial statements have
been prepared.


 


(b)           New Borun has no
liabilities with respect to the payment of any federal, state, county, local or
other taxes (including any deficiencies, interest or penalties).


 


(c)           New Borun has timely
filed all income and/or franchise tax returns required to be filed by it from
its inception to the date hereof.  Each
of such income and/or franchise tax returns reflects the taxes due for the
period covered thereby, except for amounts which, in the aggregate, are
immaterial.


 


(d)           New Borun has no
liabilities, direct or indirect, matured or unmatured, contingent or otherwise.


 


Section 2.05           Options or Warrants.  There are no existing options, warrants,
calls, or commitments of any character relating to the authorized and unissued
stock of New Borun.


 


Section 2.06           Absence of Certain Changes or
Events.  Since its inception:


 


(a)           There has not been
any business or operations of New Borun and New Borun owns no assets or
properties;


 


(b)           New Borun has not (i) amended
the New Borun Charter beyond that which has been provided for in connection
with this Agreement; (ii) declared or made, or agreed to declare or make
any payment of dividends or distributions of any assets of any kind whatsoever;
(iii) made any material change in its method of management, operation or
accounting; (iv) entered into any transactions or agreements other than in
connection with this Agreement and the transactions contemplated herein; or (v) made
any adoption of any profit sharing, bonus, deferred compensation, insurance,
pension, retirement, or other employee benefit plan, payment, or arrangement,
made to, for or with its officers, directors, or employees; and


 


(c)           New Borun has not (i) granted
or agreed to grant any options, warrants, or other rights for its stock, bonds,
or other corporate securities calling for the issuance thereof; (ii) borrowed
or agreed to borrow any funds or incurred, or become subject to, any material
obligation or liability (absolute or contingent) except liabilities incurred in
the ordinary course of business; (iii) sold or transferred, or agreed to
sell or transfer, any of its assets, properties, or rights, or canceled, or
agreed to cancel, any debts or claims; or (iv) issued, delivered or agreed
to issue or deliver, any stock, bonds or other corporate securities including
debentures (whether authorized and unissued or held as treasury stock), except
in connection with this Agreement.


 


Section 2.07           Litigation and Proceedings.  There are no actions, suits, proceedings or
investigations pending or threatened by or against New Borun or affecting New
Borun or its properties, at law or in equity, before any court or other
governmental agency or instrumentality, domestic or foreign, or before any
arbitrator of any kind.  New Borun has no
knowledge of any default on its part with respect to any judgment, order, writ,
injunction, decree, 


 


6

















 


award, rule or regulation of any court, arbitrator, or
governmental agency or instrumentality or any circumstance which after
reasonable investigation would result in the discovery of such default.


 


Section 2.08           Contracts.  Except as set forth in Item 2.08 of the
New Borun Schedules:


 


(a)           New Borun is not a
party to any contract, franchise, license agreement, agreement, debt instrument
or other commitments or instruments whether such agreement is in writing or
oral.


 


(b)           New Borun is not a
party to or bound by any charter or other corporate restriction or any
judgment, order, writ, injunction, decree, or award; and


 


(c)           New Borun is not a
party to any oral or written (i) contract for the employment of any
officer or employee; (ii) profit sharing, bonus, deferred compensation,
stock option, severance pay, pension benefit or retirement plan; (iii) agreement,
contract, or indenture relating to the borrowing of money; (iv) guaranty
of any obligation; (vi) collective bargaining agreement; or (vii) agreement
with any present officer or director of New Borun.


 


Section 2.09           No Conflict With Other Instruments.  The execution of this Agreement and the
consummation of the transactions contemplated by this Agreement will not result
in the breach of any term or provision of, constitute a default under, or
terminate, accelerate or modify the terms of, any indenture, mortgage, deed of
trust, or other material agreement or instrument to which New Borun is a party
or to which any of its assets, properties or operations are subject.


 


Section 2.10           Compliance With Laws and
Regulations.  New Borun has
materially complied with all applicable statutes and regulations of any
applicable governmental entity or agency thereof.


 


Section 2.11           Approval of Agreement.  The sole director of New Borun has authorized
the execution and delivery of this Agreement by New Borun and has approved this
Agreement and the transactions contemplated hereby.


 


Section 2.12           Material Transactions or
Affiliations.  Except as set forth in
Item 2.12 of the New Borun Schedules, there exists no contract,
agreement or arrangement between New Borun and any person who was at the time
of such contract, agreement or arrangement an officer, director, or person
owning of record or known by New Borun to own beneficially, five percent (5%)
or more of the issued and outstanding common stock of New Borun and which is to
be performed in whole or in part after the date hereof or was entered into
prior to the date hereof since inception. 
Neither any officer, director, nor five percent (5%) stockholder of New
Borun has, or has had since inception of New Borun, any known interest, direct
or indirect, in any such transaction with New Borun which was material to the
business of New Borun.  New Borun has no
commitment, whether written or oral, to lend any funds to, borrow any money from,
or enter into any other transaction with, any such affiliated person.


 


7














 


Section 2.13           Valid Obligation.  This Agreement and all agreements and other
documents executed by New Borun in connection herewith constitute the valid and
binding obligation of New Borun, enforceable in accordance with its terms,
except as may be limited by bankruptcy, insolvency, moratorium or other similar
laws affecting the enforcement of creditors’ rights generally and subject to
the qualification that the availability of equitable remedies is subject to the
discretion of the court before which any proceeding therefore may be brought.


 


Section 2.14           Information.  The information concerning New Borun set
forth in this Agreement and the New Borun Schedules is complete and accurate in
all material respects and does not contain any untrue statements of a material
fact or omit to state a material fact required to make the statements made, in
light of the circumstances under which they were made, not misleading.


 


ARTICLE
III

PLAN OF EXCHANGE AND RELATED AGREEMENTS


 


Section 3.01           The Closing.


 


(a)          The closing (the
“Closing”) of the Exchange will occur at the offices of New Borun’s U.S.
securities counsel, K&L Gates LLP, located at 200 South Biscayne Boulevard,
Suite 3900, Miami, Florida 33131-2399 on such date as shall be one (1) business
day after all of the conditions set forth in Articles VI and VII have been
satisfied or waived (the “Closing Date”).  The Closing may be undertaken remotely by
delivery of facsimile/email and/or pdf signatures and documents.


 


(b)          On the Closing Date, King
River shall assign and transfer, free and clear of all liens, pledges,
encumbrances, charges, restrictions or known claims of any kind, nature, or
description, all of the shares of Golden Direction Capital Stock, including
voting power, of Golden Direction to New Borun. 
In exchange for the transfer of all of the Golden Direction Capital
Stock by King River to New Borun, New Borun shall issue Fourteen Million Eight
Hundred Forty-Seven Thousand Eight Hundred and Ten (14,847,810) newly-issued
New Borun Ordinary Shares to King River.


 


(c)          On the Closing
Date, King River shall surrender its certificate or
certificates representing 100% of the shares of Golden Direction Capital Stock
to New Borun, New Borun’s counsel or New Borun’s registrar or transfer agent.


 


(d)          As a result of the Exchange
as contemplated herein, (i) King River will beneficially own 14,847,811 New Borun Ordinary Shares,
representing 100% of the issued share capital of New Borun on the Closing Date
and (ii) Golden Direction will be a wholly-owned subsidiary of New Borun.


 


Section 3.02           Closing Events.  On the Closing Date, New Borun, Golden
Direction and King River shall execute, acknowledge, and deliver (or shall
ensure to be executed, acknowledged, and delivered), any and all certificates,
opinions, financial statements, schedules, agreements, resolutions, rulings or
other instruments required by this Agreement to be so delivered on or prior to
the Closing Date, together with such other items as may be reasonably 


 


8

















 


requested by the parties hereto and their respective legal counsel in
order to fully effectuate or evidence the transactions contemplated hereby.


 


Section 3.03           Termination.  This Agreement may only be terminated prior
to the Closing Date by (a) New Borun in the event that Golden Direction or
King River fail to meet all non-waived conditions set forth in Article VI
herein in all material respects and (b) Golden Direction or King River
only in the event that New Borun fails to meet all non-waived conditions set
forth in Article VII herein in all material respects.  If this Agreement is terminated pursuant this
Section 3.06, this Agreement shall be of no further force or effect, and
no obligation, right or liability shall arise hereunder, except as set forth herein
below.


 


ARTICLE
IV

COVENANTS OF GOLDEN DIRECTION AND KING RIVER


 


Section 4.01           Access and Investigation.  Between the date of this Agreement and the
Closing Date, Golden Direction will (a) afford New Borun and its agents,
advisors and attorneys during normal business hours, and upon reasonable
notice, full and free access to Golden Direction’s properties, contracts, books
and records, and other documents and data, (b) furnish New Borun and its
agents, advisors and attorneys with copies of all such contracts, books and
records, and other existing documents and data as New Borun may reasonably
request and (c) furnish New Borun and its agents, advisors and attorneys
with such additional financial, operating, and other data and information as
New Borun may reasonably request.


 


Section 4.02           Delivery of Books and
Records.  On or prior to the Closing
Date, Golden Direction shall deliver to New Borun the originals of the
corporate minute books, books of account, contracts, records, and all other
books or documents of Golden Direction now in the possession of Golden
Direction or its representatives.


 


Section 4.03           Operation of the Business of
Golden Direction.


 


(a)           Between the
date of this Agreement and the Closing Date, Golden Direction will:


 


(i)            conduct its
business only in the ordinary course of business consistent with past practice;


 


(ii)           use its best
efforts to preserve intact its current business organization and business
relationships;


 


(iii)          not create any
new, or capitalize or conduct any business through, any subsidiary;


 


(iv)          not issue any
equity securities (or any interest therein); and


 


(v)           not perform any
act that would require the consent of King River.


 


(b)           Notwithstanding
the foregoing, between the date of this Agreement and the Closing Date, Golden
Direction will not directly or indirectly, without the prior 


 


9

















 


written
consent of New Borun, engage in any transaction with, or enter into any
agreement with any officer, director or stockholder of Golden Direction, or any
affiliate thereof.


 


Section 4.04           No Transfers of Interests. Between the
date of this Agreement and the Closing Date, King River shall not assign,
transfer, mortgage, pledge or otherwise dispose of any or all of the Golden
Direction Capital Stock (or any interest therein) or grant any person the
option or right to acquire any Golden Direction Capital Stock (or any interest
therein).


 


Section 4.05           Required Filings and
Approvals.  As promptly
as possible after the date of this Agreement, Golden Direction will make all
filings and obtain all approvals required to be made by it in order to
consummate the transactions contemplated by this Agreement.  Between the date of this Agreement and the
Closing Date, Golden Direction and King River will (i) cooperate with New
Borun with respect to all filings that New Borun elects to make or is required
to make in connection with the transactions contemplated by this Agreement and (ii) cooperate
with New Borun in obtaining any consents or approvals required to be obtained
by New Borun in connection herewith.


 


Section 4.06           Notification.  Between the date of this Agreement and the
Closing Date, Golden Direction and King River will promptly notify New Borun in
writing if Golden Direction or King River becomes aware of any fact or
condition that causes or constitutes a breach of any of the representations and
warranties of Golden Direction or King River, as the case may be, as of the
date of this Agreement, or if Golden Direction or King River becomes aware of the
occurrence after the date of this Agreement of any fact or condition that would
(except as expressly contemplated by this Agreement) cause or constitute a
breach of any such representation or warranty had such representation or
warranty been made as of the time of occurrence or discovery of such fact or
condition.  Should any such fact or
condition require any change in the Schedules to this Agreement if such
Schedules were dated the date of the occurrence or discovery of any such fact
or condition, Golden Direction or King River, as the case may be, will promptly
deliver to New Borun a supplement to the Schedules to this Agreement specifying
such change; provided, however, that such delivery shall not materially
adversely affect any rights of New Borun set forth herein.  During the same period, Golden Direction and
King River will promptly notify New Borun of the occurrence of any breach of
any covenant of Golden Direction or King River in this Article IV or in Article III
herein or of the occurrence of any event that may make the satisfaction of the
conditions in Article VI impossible or unlikely.


 


Section 4.07           Indemnification.  Golden Direction and King River hereby
jointly and severally agree to indemnify New Borun and each of the officers,
attorneys, agents and directors of New Borun as of the date of execution of
this Agreement against any loss, liability, claim, damage, or expense
(including, but not limited to, any and all expense whatsoever reasonably
incurred in investigating, preparing, or defending against any litigation,
commenced or threatened, or any claim whatsoever) (as used in this paragraph
alone, a “Loss”), to which it or they may become subject arising out of
or based on any inaccuracy appearing in or misrepresentations made under Article I
of this Agreement.  The indemnification
provided for in this paragraph shall survive the Closing and the consummation
of the transactions 


 


10

















 


contemplated hereby and termination of this Agreement for two (2) years
following the Closing Date.


 


Section 4.08           Approval by Golden Direction
and King River.  This
Agreement and the transactions contemplated hereby shall have been approved by
the board of directors of Golden Direction and by King River prior to the date
hereof.


 


Section 4.09           Director’s Certificate of
Golden Direction.  On the date
hereof, Golden Direction shall deliver to New Borun a certificate, executed by
Golden Direction’s sole director certifying attached copies of (i) the
organizational documents of Golden Direction and (ii) the resolutions of
Golden Direction’s board of directors approving this Agreement and the
transactions contemplated hereby.


 


Section 4.10           Good Standing Certificate.  On the date hereof, Golden Direction shall
deliver to New Borun a certificate of good standing or the equivalent from the
appropriate authority in the British Virgin Islands, dated as of a date within
ten (10) business days prior to the date hereof certifying that
Golden Direction is in good standing as a company in the British Virgin
Islands.


 


Section 4.11           Closing Conditions.  Between the date of this Agreement and the
Closing Date, each of Golden Direction and King River will use its best efforts
to cause the conditions in Article VI to be satisfied as promptly as
possible.


 


ARTICLE V


COVENANTS OF NEW BORUN


 


Section 5.01           Access and Investigation.  Between the date of this Agreement and the
Closing Date, New Borun will (a) afford Golden Direction, King River and
their respective agents, advisors and attorneys during normal business hours
and upon reasonable notice, full and free access to New Borun’s senior
personnel, properties, contracts, books and records, and other documents and
data, (b) furnish Golden Direction, King River and their respective
agents, advisors and attorneys with copies of all such contracts, books and
records, and other existing documents and data as Golden Direction may
reasonably request and (c) furnish Golden Direction, King River and their
respective agents, advisors and attorneys with such additional financial,
operating, and other data and information as Golden Direction or King River may
reasonably request.


 


Section 5.02           Issuance of Securities in
New Borun.  Between the
date of this Agreement and the Closing Date, New Borun will not issue any
equity securities (or any interest therein).


 


Section 5.03           Required Filings and
Approvals.  As promptly
as practicable after the date of this Agreement, New Borun will make all
filings required to be made by it in order to consummate the transactions
contemplated by this Agreement.  Between
the date of this Agreement and the Closing Date, New Borun will cooperate with
Golden Direction and King River with respect to all filings that Golden
Direction and/or King River elects to make or is required to make in connection
with the transactions contemplated by this Agreement, and 


 


11

















 


cooperate with Golden Direction and/or King River in obtaining any
consents or approvals required to be obtained by Golden Direction and/or King
River in connection herewith.


 


Section 5.04           Notification.  Between the date of this Agreement and the
Closing Date, New Borun will promptly notify Golden Direction and King River in
writing if New Borun becomes aware of any fact or condition that causes or
constitutes a breach of any of the representations and warranties of New Borun,
as of the date of this Agreement, or if New Borun becomes aware of the
occurrence after the date of this Agreement of any fact or condition that would
(except as expressly contemplated by this Agreement) cause or constitute a
breach of any such representation or warranty had such representation or
warranty been made as of the time of occurrence or discovery of such fact or
condition.  Should any such fact or
condition require any change in the Schedules to this Agreement if the
Schedules to the Agreement were dated the date of the occurrence or discovery
of any such fact or condition, New Borun will promptly deliver to Golden
Direction and King River a supplement to the Schedules to the Agreement
specifying such change; provided, however, that such delivery shall not
materially adversely affect any rights of Golden Direction and King River set
forth herein.  During the same period,
New Borun will promptly notify Golden Direction and King River of the
occurrence of any breach of any covenant of New Borun in this Article V or
of the occurrence of any event that may make the satisfaction of the conditions
in Article VII impossible or unlikely.


 


Section 5.05           Indemnification.  New Borun hereby agrees to indemnify Golden
Direction and King River and each of their respective officers, attorneys,
agents, and directors as of the date of execution of this Agreement against any
loss, liability, claim, damage, or expense (including, but not limited to, any
and all expense whatsoever reasonably incurred in investigating, preparing, or
defending against any litigation, commenced or threatened, or any claim
whatsoever) (as used in this paragraph alone, a “Loss”) to which it or they
may become subject arising out of or based on any inaccuracy appearing in or
misrepresentation made under Article II of this Agreement.  The indemnification provided for in this
paragraph shall survive the Closing hereunder and the consummation of the
transactions contemplated hereby and termination of this Agreement for
two (2) years following the Closing Date.


 


Section 5.06           Approval by New Borun.  This Agreement and the transactions
contemplated hereby shall have been approved by the board of directors of New
Borun prior to the date hereof.


 


Section 5.07           Closing Conditions.  Between the date of this Agreement and the
Closing Date, New Borun will use its best efforts to cause the conditions in Article VII
to be satisfied as promptly as possible.


 


ARTICLE
VI

CONDITIONS PRECEDENT TO OBLIGATIONS OF NEW BORUN


 


The obligations of New Borun
under this Agreement are subject to the satisfaction, on or before the Closing
Date, of the following conditions (any of which may be waived by New Borun, in
whole or in part):


 


12

















 


Section 6.01           Accuracy of Representations.  The representations and warranties made by
Golden Direction and King River in this Agreement were true when made and shall
be true at the Closing Date with the same force and effect as if such
representations and warranties were made at and as of the Closing Date (except
for changes therein permitted by this Agreement).


 


Section 6.02           Performance by Golden
Direction and King River.


 


(a)           All of the
covenants and obligations that Golden Direction and King River are required to
perform or to comply with pursuant to this Agreement at or prior to the Closing
(considered collectively), and each of these covenants and obligations
(considered individually), must have been duly performed and complied with in
all material respects.


 


(b)           Each document
required to be delivered by Golden Direction and/or King River pursuant to this
Agreement at or prior to Closing must have been delivered.


 


Section 6.03           Consents.  All consents, waivers, approvals,
authorizations or orders pursuant to all contracts, licenses, laws, rules or
regulations, permits, trademarks and other intangibles required to be obtained,
and all filings required to be made, by Golden Direction and/or King River for
the authorization, execution and delivery of this Agreement and the
consummation by them of the transactions contemplated by this Agreement or for
the continued operation of Golden Direction as presently operated as a
subsidiary of New Borun after the Closing Date to the extent required by law,
shall have been obtained and made by Golden Direction and/or King River, as the
case may be.


 


Section 6.04           Officer’s Certificate.  Golden Direction shall have delivered to New
Borun a certificate dated as of the Closing Date and signed by a duly
authorized officer of Golden Direction to the effect that (a) each of the
conditions set forth in Sections 6.01, 6.02 and 6.03 have been fully satisfied
and (b) no litigation, proceeding, investigation, or inquiry is pending,
or to the best knowledge of Golden Direction threatened, which might result in
an action to enjoin or prevent the consummation of the transactions
contemplated by this Agreement, or, to the extent not disclosed in the Golden
Direction Schedules, by or against Golden Direction, which might result in any
material adverse change in any of the assets, properties, business, or
operations of Golden Direction.


 


Section 6.05           Certificate of King River.  King River shall have delivered to New Borun
a certificate dated as of the Closing Date executed by King River certifying
the satisfaction of the conditions specified in Sections 6.01, 6.02 and 6.03
herein above.


 


Section 6.06           No Governmental Prohibition.  No order, statute, rule, regulation,
executive order, injunction, stay, decree, judgment or restraining order shall
have been enacted, entered, promulgated or enforced by any court or
governmental or regulatory authority or instrumentality which prohibits the
consummation of the transactions contemplated hereby.


 


Section 6.07           Additional Documents.  Golden Direction and King River shall have
delivered to New Borun such other documents as New Borun may have reasonably
requested for the purpose of (i) evidencing the accuracy of any of the
representations and 


 


13

















 


warranties of Golden Direction and King River in this Agreement, (ii) evidencing
the performance of, or compliance by Golden Direction and King River with, any
covenant or obligation required to be performed or complied with hereunder by
Golden Direction or King River, as the case may be, (iii) evidencing the
satisfaction of any condition referenced herein (including, without limitation
such opinions of PRC counsel to Golden Direction and King River that all consents
and approvals of all governmental authorities of the British Virgin Islands
necessary or required to consummate the transactions contemplated herein, free
and clear of all encumbrances have been obtained and are in full force and
effect) or (iv) otherwise facilitating the consummation or performance of
any of the transactions contemplated by this Agreement.


 


ARTICLE
VII

CONDITIONS PRECEDENT TO OBLIGATIONS OF GOLDEN DIRECTION

AND KING RIVER


 


The obligations of Golden
Direction and King River under this Agreement are subject to the satisfaction,
at or before the Closing Date, of the following conditions (any of which may be
waived by Golden Direction and King River, in whole or in part):


 


Section 7.01           Accuracy of Representations.  The representations and warranties made by
New Borun in this Agreement were true when made and shall be true at the
Closing Date with the same force and effect as if such representations and
warranties were made at and as of the Closing Date (except for changes therein
permitted by this Agreement).


 


Section 7.02           Performance by New Borun.


 


(a)           All of the
covenants and obligations that New Borun is required to perform or to comply
with pursuant to this Agreement at or prior to the Closing (considered
collectively), and each of these covenants and obligations (considered
individually), must have been duly performed and complied with in all material
respects.


 


(b)           Each document
required to be delivered by New Borun pursuant to this Agreement at or prior to
Closing must have been delivered.


 


Section 7.03           Consents.  All consents, waivers, approvals,
authorizations or orders pursuant to all contracts, licenses, laws, rules or
regulations, permits, trademarks and other intangibles required to be obtained,
and all filings required to be made, by New Borun for the authorization,
execution and delivery of this Agreement and the consummation of the
transactions contemplated by this Agreement to the extent required by law,
shall have been obtained and made by New Borun.


 


Section 7.04           Officer’s Certificate.  New Borun shall have delivered to Golden
Direction and King River a certificate dated as of the Closing Date and signed
by a duly authorized officer of New Borun to the effect that (a) each of
the conditions set forth in Sections 7.01, 7.02 and 7.03 have been fully
satisfied and (b) no litigation, proceeding, investigation, or inquiry is
pending, or to the best knowledge of New Borun threatened, which might result
in an action to enjoin or prevent the consummation of the transactions contemplated
by this Agreement, or, to the extent not disclosed in the New Borun Schedules,
by or against New 


 


14

















 


Borun, which might result in any material adverse change in any of the
assets, properties, business, or operations of New Borun.


 


Section 7.05           Director’s Certificate.  On the Closing Date, New Borun shall deliver
to Golden Direction and King River a certificate, executed by New Borun’s sole
director certifying attached copies of (i) the organizational documents of
New Borun and (ii) the resolutions of New Borun’s board of directors
approving this Agreement and the transactions contemplated hereby.


 


Section 7.06           Good Standing Certificate.  On the Closing Date, New Borun shall deliver
to Golden Direction and King River a certificate of good standing from the
Registrar of Companies, dated as of a date within ten (10) business days
of the Closing Date, certifying that New Borun is in good standing as a company
in the Cayman Islands.


 


Section 7.07           Additional Documents.  New Borun shall have delivered such other
documents as Golden Direction and King River may have reasonably requested
prior to the date hereof for the purpose of (i) evidencing the accuracy of
any of the representations and warranties of New Borun in this Agreement, (ii) evidencing
the performance of, or compliance by New Borun with, any covenant or obligation
required to be performed or complied with hereunder by New Borun, (iii) evidencing
the satisfaction of any condition referenced herein or (iv) otherwise
facilitating the consummation or performance of any of the transactions
contemplated by this Agreement.


 


ARTICLE
VIII

MISCELLANEOUS


 


Section 8.01           Brokers.  New Borun, Golden Direction and King River
agree that there were no finders or brokers involved in bringing the parties
together or who were instrumental in the negotiation, execution or consummation
of this Agreement.  New Borun, on the one
hand, and Golden Direction and King River, on the other hand, agree to
indemnify the other against any claim by any third person other than those
described above for any commission, brokerage, or finder’s fee arising from the
transactions contemplated hereby based on any alleged agreement or
understanding between the indemnifying party and such third person, whether
express or implied from the actions of the indemnifying party.


 


Section 8.02           Governing
Law; Jurisdiction; Venue; Waiver of Jury Trial.  This Agreement shall be governed by,
enforced, and construed under and in accordance with the laws of the United
States of America and, with respect to matters of State law, with the laws of
the State of New York.  Venue for all
matters shall be in the City of New York, New York, without giving effect to
principles of conflicts of law thereunder. 
Each of the parties irrevocably consents and agrees that any legal or
equitable action or proceedings arising under or in connection with this
Agreement shall be brought exclusively in the federal courts of the United
States sitting in New York City, New York. 
By execution and delivery of this Agreement, each party hereto
irrevocably submits to and accepts, with respect to any such action or
proceeding, generally and unconditionally, the jurisdiction of the aforesaid
court, and irrevocably waives any and all rights such party may now or
hereafter have to object to such jurisdiction. 
EACH PARTY (ON BEHALF OF 


 


15

















 


ITSELF AND, TO THE FULLEST EXTENT
PERMITTED BY LAW, ON BEHALF OF ITS RESPECTIVE EQUITY HOLDERS) HEREBY WAIVES ANY
RIGHT THEY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY CLAIM BASED UPON,
ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT AND THE TRANSACTIONS
CONTEMPLATED BY THIS AGREEMENT.


 


Notices.  Any notice or other communications required
or permitted hereunder shall  be in
writing and shall be sufficiently given if personally delivered to it or sent
by telecopy, overnight courier or registered mail or certified mail, postage
prepaid, addressed as follows:


 


	
  If
  to New Borun, to:

  	
  China
  New Borun Corporation

  
	
   

  	
   

  
	
   

  	
  Bohai
  Industrial Park (Yangkou Town)

  
	
   

  	
   

  
	
   

  	
  Shouguang,
  Shandong 262715

  
	
   

  	
   

  
	
   

  	
  The
  People’s Republic of China

  
	
   

  	
   

  
	
   

  	
  Attention:    Mr. WANG
  Jinmiao

  
	
   

  	
   

  
	
   

  	
  Telephone:
   +86-536-5451199/5451006

  
	
   

  	
   

  
	
   

  	
  Facsimile:
    +86-536-5451199

  



 


16














 


	
  With copies to:

  	
  K&L Gates LLP

  
	
   

  	
   

  
	
   

  	
  Wachovia Financial Center

  
	
   

  	
   

  
	
   

  	
  200 South Biscayne Blvd.,
  Suite 3900

  
	
   

  	
   

  
	
   

  	
  Miami, FL 33131

  
	
   

  	
   

  
	
   

  	
  Attention:

  	
  Clayton E.
  Parker, Esq.

  
	
   

  	
   

  	
   

  
	
   

  	
  Telephone:

  	
  (305) 539-3300

  
	
   

  	
   

  	
   

  
	
   

  	
  Facsimile:

  	
  (305) 358-7095

  
	
   

  	
   

  	
   

  
	
  If to King River or Golden
  Direction, to:

  	
  Golden Direction Limited

  
	
   

  	
   

  
	
   

  	
  Bohai Industrial Park
  (Yangkou Town)

  
	
   

  	
   

  
	
   

  	
  Shouguang, Shandong 262715

  
	
   

  	
   

  
	
   

  	
  The People’s Republic of
  China

  
	
   

  	
   

  
	
   

  	
  Attention:

  	
  WANG Jinkun

  
	
   

  	
   

  	
   

  
	
   

  	
  Telephone:

  	
  +86-536-5451199

  
	
   

  	
   

  	
   

  
	
   

  	
  Facsimile:

  	
  +86-536-5451199

  



 


or such other addresses as shall be furnished in
writing by any party in the manner for giving notices hereunder, and any such
notice or communication shall be deemed to have been given (i) upon
receipt, if personally delivered, (ii) on the day after dispatch, if sent
by overnight courier and (iii) upon dispatch, if transmitted by facsimile
or telecopy and receipt is confirmed by telephone.


 


Section 8.03   Attorney’s Fees.  In
the event that either party institutes any action or suit to enforce this
Agreement or to secure relief from any default hereunder or breach hereof, the
prevailing party shall be reimbursed by the losing party for all costs,
including reasonable attorney’s fees, incurred in connection therewith and in
enforcing or collecting any judgment rendered therein.


 


Section 8.04   Confidentiality. 
Each party hereto agrees with the other that, unless and until the
transactions contemplated by this Agreement have been consummated, it and its
representatives will hold in strict confidence all data and information
obtained with respect to another party or any subsidiary thereof from any
representative, officer, director or employee, or from any books or records or
from personal inspection, of such other party, and shall not use 


 


17

















 


such data or information or
disclose the same to others, except (i) to the extent such data or
information is published, is a matter of public knowledge, or is required by
law to be published; or (ii) to the extent that such data or information
must be used or disclosed in order to consummate the transactions contemplated
by this Agreement.  In the event of the
termination of this Agreement, each party shall return to the other party all
documents and other materials obtained by it or on its behalf and shall destroy
all copies, digests, work papers, abstracts or other materials relating
thereto, and each party will continue to comply with the confidentiality
provisions set forth herein.


 


Section 8.05   Public Announcements and Filings.  The parties hereto hereby acknowledge and
agree that this Agreement will be filed as an Exhibit to New Borun’s
registration statement on Form F-1 to be filed with the U.S. Securities
and Exchange Commission (the “Commission”) in connection with the initial
public offering of American Depositary Shares representing New Borun Ordinary
Shares, and that such registration statement will be made publicly available
upon such filing.  With the exception of
such filing, and unless required by applicable law or regulatory authority,
including, without limitation, the Commission, none of the parties will issue
any report, statement or press release to the general public, to the general
trade or trade press, or to any third party (other than its advisors and representatives
in connection with the transactions contemplated hereby) or file any document,
relating to this Agreement and the transactions contemplated hereby, except as
may be mutually agreed by the parties. 
Copies of any such filings, public announcements or disclosures,
including any announcements or disclosures mandated by law or regulatory
authorities with the exception of any such filings, announcements or
disclosures made to the Commission, shall be delivered to each party at least
one (1) business day prior to the release thereof.


 


Section 8.06   Recitals.  The
recitals to this Agreement are true and correct and are incorporated herein, in
their entirety, by this reference.


 


Section 8.07   Third Party Beneficiaries. 
This Agreement is strictly between New Borun, Golden Direction and King
River, and, except as specifically provided herein, including, without
limitation, those persons indemnified pursuant to Sections 4.07 and 5.05
herein, no director, officer, stockholder (other than King River), employee, agent,
independent contractor or any other person or entity shall be deemed to be a
third party beneficiary of this Agreement.


 


Section 8.08   Expenses.  Subject to
Section 8.04 above, whether or not the Exchange is consummated, each of
New Borun, Golden Direction and King River will bear its own respective
expenses, including legal, accounting and professional fees, incurred in
connection with the Exchange or any of the other transactions contemplated
hereby.


 


Section 8.09   Survival; Termination. 
The representations, warranties, and covenants of the respective parties
shall survive the Closing Date and the consummation of the transactions herein
contemplated for a period of two (2) years.


 


Section 8.10   Counterparts.  This
Agreement may be executed in multiple counterparts, each of which shall be
deemed an original and all of which taken together shall be but a single
instrument.  In the event that any
counterpart signature is delivered by facsimile or 


 


18

















 


other electronic
transmission, such signature shall create a valid and binding obligation of the
party executing (or on whose behalf such signature is executed) with the same
force and effect as if such facsimile or other electronic signature page were
an original thereof.


 


Section 8.11   Amendment or Waiver. 
Every right and remedy provided herein shall be cumulative with every
other right and remedy, whether conferred herein, at law, or in equity, and may
be enforced concurrently herewith, and no waiver by any party of the
performance of any obligation by the other shall be construed as a waiver of
the same or any other default then, theretofore, or thereafter occurring or
existing.  At any time prior to the
Closing Date, this Agreement may by amended by a writing signed by all parties
hereto, with respect to any of the terms contained herein, and any term or
condition of this Agreement may be waived or the time for performance may be
extended by a writing signed by the party or parties for whose benefit the
provision is intended.


 


Section 8.12   Best Efforts. 
Subject to the terms and conditions herein provided, each party shall
use its best efforts to perform or fulfill all conditions and obligations to be
performed or fulfilled by it under this Agreement so that the transactions
contemplated hereby shall be consummated as soon as practicable.  Each party also agrees that it shall use its
best efforts to take, or cause to be taken, all actions and to do, or cause to
be done, all things necessary, proper or advisable under applicable laws and
regulations to consummate and make effective this Agreement and the
transactions contemplated herein.


 


Section 8.13   Remedies.  In
addition to being entitled to exercise all rights provided herein or granted by
law, including recovery of damages, each of the parties hereto will be entitled
to specific performance of their respective obligations hereunder.  The parties agree that monetary damages may
not be adequate compensation for any loss incurred by reason of any breach of
obligations described in the foregoing sentence and hereby agrees to waive in
any action for specific performance of any such obligation the defense that a
remedy at law would be adequate.


 


Section 8.14   Construction.  The
parties agree that each of them and/or their respective counsel has reviewed
and had an opportunity to revise this Agreement and, therefore, the normal rule of
construction to the effect that any ambiguities are to be resolved against the
drafting party shall not be employed in the interpretation of Agreements or any
amendments hereto or the transactions contemplated hereby.


 


Section 8.15   Entire Agreement. 
This Agreement represents the entire agreement between the parties
relating to the subject matter thereof and supersedes all prior agreements,
understandings and negotiations, written or oral, with respect to such subject
matter.


 


[Remainder of Page Intentionally Left Blank]


 


19

















 


IN WITNESS WHEREOF, the corporate
parties hereto have caused this Share Exchange Agreement to be executed by
their respective officers, hereunto duly authorized, as of the date first-above
written.


 


	
   

  	
  CHINA NEW BORUN CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Shan Junqin

  
	
   

  	
   

  	
   

  
	
   

  	
  Name:

  	
  Shan Junqin

  
	
   

  	
   

  	
   

  
	
   

  	
  Title:

  	
  Director

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  GOLDEN DIRECTION LIMITED

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Shan Junqin

  
	
   

  	
   

  	
   

  
	
   

  	
  Name:

  	
  Shan Junqin

  
	
   

  	
   

  	
   

  
	
   

  	
  Title:

  	
  Director

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  KING RIVER HOLDING LIMITED

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Shan Junqin

  
	
   

  	
   

  	
   

  
	
   

  	
  Name:

  	
  Shan Junqin

  
	
   

  	
   

  	
   

  
	
   

  	
  Title:

  	
  Director

  



 


20

















 


GOLDEN DIRECTION
SCHEDULES


 


	
  Item 1.01

  	
   

  	
  Certificate
  of Incorporation of Golden Direction

   

  Please see Annex A
  attached hereto.

   

  Memorandum
  and Articles of Association of Golden Direction

   

  Please
  see Annex B attached hereto.

  



 

















 


NEW BORUN
SCHEDULES


 


	
  Item 2.01

  	
   

  	
  Memorandum and Articles of Association

   

  Please see Exhibits 3.2 and 3.3 to the Company’s
  Registration Statement on Form F-1 as filed with the SEC on April 27, 2010.

  
	
   

  	
   

  	
   

  
	
  Item 2.08

  	
   

  	
  Contracts:
  

   

  None.

  
	
   

  	
   

  	
   

  
	
  Item 2.12

  	
   

  	
  Material
  Transactions or Affiliations: 

   

  (1) Share
  Exchange Agreement, dated February 28, 2010, by and among China New
  Borun Corporation, Golden Direction Limited, Star Elite Enterprises Limited,
  Earnstar Holding Limited and TDR Advisors, Inc. (please see
  Exhibit 2.1 to the Company’s Registration Statement on Form F-1 as
  filed with the SEC on April 23, 2010) 

   

  (2) Shareholders Agreement, dated
  March 31, 2010, by and among China New Borun Corporation, King River
  Holding Limited, Star Elite Enterprises Limited, Earnstar Holding Limited and
  TDR Advisors, Inc. (please see Exhibit 4.4 to the Company’s
  Registration Statement on Form F-1 as filed with the SEC on
  April 23, 2010)

  



 

















 


ANNEX A


 


TERRITORY OF THE BRITISH VIRGIN
ISLANDS


BVI BUSINESS COMPANIES ACT, 2004


 


CERTIFICATE OF INCORPORATION


(SECTION 7)


 


The REGISTRAR of
CORPORATE AFFAIRS, of the British Virgin Islands HEREBY CERTIFIES, that
pursuant to the BVI Business Companies Act, 2004, all the requirements of the
Act in respect of incorporation having been complied with,


 


GOLDEN DIRECTION LIMITED


 


BVI COMPANY NUMBER:
1472637


 


is incorporated in the
BRITISH VIRGIN ISLANDS as a BVI BUSINESS COMPANY, this 28th day of March, 2008.


 


 


	
  

  	
  

  for REGISTRAR OF CORPORATE AFFAIRS

  28th day of March, 2008

  



 

















 


ANNEX B


 














 


	
  TERRITORY
  OF THE BRITISH VIRGIN ISLANDS

  	
  

  
	
   

  
	
  THE
  BVI BUSINESS COMPANIES ACT (No. 16 of 2004)

  

  Memorandum

  

  and

  

  Articles of
  Association

  

  of

  



 


GOLDEN
DIRECTION LIMITED


 


BVI
BC No.:


 


Incorporated
the 28th day of March, 2008


 


ILS
FIDUCIARY (B.V.I.) LIMITED

MILL MALL, SUITE 6 

WICKHAMS CAY 1, PO BOX 3085 

ROAD TOWN, TORTOLA


BRITISH
VIRGIN ISLANDS


 

















 


TERRITORY OF THE VIRGIN ISLANDS


 


THE BVI BUSINESS COMPANIES ACT, 2004


 


MEMORANDUM OF ASSOCIATION


 


OF


 


GOLDEN DIRECTION LIMITED


 


A COMPANY LIMITED BY SHARES


 


1.           NAME


 


The name of the Company is GOLDEN DIRECTION LIMITED.


 


2.           INCORPORATION


 


The Company is incorporated as a company limited by shares.


 


3.           REGISTERED OFFICE


 


The first registered office of the Company shall be
situated at ILS FIDUCIARY (B.V.I) LIMITED, Mill Mall, Suite 6, Wickhams Cay 1, P.O. Box
3085, Road Town, Tortola, British Virgin Islands.


 


4.           REGISTERED AGENT


 


The first registered agent of the Company shall be
at ILS FIDUCIARY (B.V.I) LIMITED of Mill Mall, Suite 6, Wickhams Cay 1,
P.O. Box 3085, Road Town, Tortola, British Virgin Islands.


 


5.           OBJECTS AND POWERS


 


(a)          The object for which the
Company is incorporated is to engage without limitation in any act or
activities which are not prohibited under any law for the time being in force
in the British Virgin Islands.


 


(b)        The Company shall have full capacity, power, right
and privilege to:


 


(i)       engage in any business or
businesses whatsoever, or in any act or activities which are not prohibited
under any law for the time being in force in the British Virgin Islands;


 


(ii)      carry on business with
persons resident in the British Virgin Islands.


 


1

















 


(iii)     carry on banking or trust
business, pursuant to a license issued to it under the Banks and Trust Companies Act,
1990 and to act as trustee of a Virgin Islands Special Trust;


 


(iv)     carry on business as an
insurance company or as a reinsurance company, insurance agent, or insurance
broker, pursuant to a license issued to it under the Insurance Act, 1994;


 


(v)      carry on the business of
company management pursuant to a license issued to it under the Company Management
Act, 1990;


 


(vi)     act a as a custodian of
shares in a company incorporated under the laws of the British Virgin Islands,
pursuant to a license issued to it under the Financial Services Commission Act,
2001;


 


(vii)    issue, cancel, and hold
treasury shares, grant options over unissued shares in the Company and treasury
shares, issue securities that are converted into shares, and give financial
assistance to any person in connection with the acquisition of its own shares;


 


(viii)   issue debentures, guarantee
a liability or obligation of any person and secure any of its obligations by mortgage,
pledge or other charge of any of its assets;


 


(ix)      protect the assets of the
Company for the benefit of the Company, its creditors and its members and, at
the discretion of the directors, for any person having a direct or indirect
interest in the Company;


 


(x)       buy, sell, underwrite,
invest in, exchange or otherwise acquire and hold, manage, develop, deal with
and turn to account any bonds, debentures, shares, (whether fully paid or not)
stocks, options, commodities, futures, forward contracts, notes or securities
of Governments, States, municipalities, public authorities or public or private
limited or unlimited companies in any part of the world, precious metals, gems,
works of art and other articles of value and whether on a cash or margin basis
and including short sales, and to lend money against the security of any of the
aforementioned property;


 


(xi)      buy, own, hold, subdivide,
lease, sell, rent, prepare building sites, construct, reconstruct, alter,
improve, decorate, furnish, operate, maintain, reclaim or otherwise deal with
and/or develop land and buildings and otherwise deal in real estate in all
its branches, make advances upon the


 


2

















 


security of land or houses or other property or any
interest therein, and whether erected or in course of erection and whether on first
mortgage or charge or subject to prior mortgage or charge, and to develop land
and buildings as may seem expedient to the Company;


 


(xii)     borrow or raise money by the
issue of debentures, debenture stock (perpetual or terminable), bonds,
mortgages, or any other securities founded or based upon all or any of the
assets or property of the Company or without any such security and upon such
terms as to priority or otherwise as the Company may think fit;


 


(xiii)    do all such other things as
are incidental to, or which the company may think conducive to the attainment
of all the above objects, powers, rights and privileges.


 


(c)          For the purposes of Section 9(4) of
the Act, there are no limitations on the business that the Company may carry
on.


 


6.           SHARES IN THE COMPANY


 


(1)          The Company shall be
authorised to issue a maximum of 50,000 shares with a par value of US$1.00 for
each share.


 


(2)          The shares in the Company
shall be issued in the currency of the United States of America.


 


(3)          Shares in the Company shall be
issued as registered shares only.


 


(4)          The shares may be divided
into such number of classes and series as the directors may by resolution from
time to time determine, and until so divided shall comprise one class and
series.


 


(5)          The Company shall not be
authorized to issue bearer shares; convert registered shares to bearer shares;
or exchange registered shares for bearer shares.


 


7.           DESIGNATIONS,
RIGHTS, PRIVILEGES, RESTRICTIONS AND CONDITIONS ATTACHING TO SHARES


 


The directors shall by resolution have the power to issue any class or
series of shares that the Company is authorized to issue, with or subject to
any designations, powers, preferences, rights, qualifications, limitations and
restrictions.


 


3

















 


8.             VARIATION OF
CLASS RIGHTS


 


If at any time the
number of shares which the Company is authorised to issue is divided into
different classes of shares, the rights attached to any class (unless otherwise
provided by the terms of issue of the shares of that class) shall whether or
not the Company is being wound up, be varied by way of resolution or with the
consent in writing of the holders of not less than 51% of the issued shares of
that class and of the holders of not less than 30% of the issued shares of any
other class of shares which may be affected by such variation.


 


9.             RIGHTS NOT VARIED BY
THE ISSUE OF SHARES PARI PASSU


 


Rights conferred
upon the holders of the shares of any class issued with preferred or other
rights shall not, unless otherwise expressly provided by the terms of issue of
the shares of that class, be deemed to be varied by the creation or issue of
such further shares ranking pari passu therewith.


 


10.           AMENDMENTS


 


(1)           The
Company may by resolution of the members, or by a resolution of directors if no
shares have been issued, amend this Memorandum of Association and the Articles
of Association of the Company.


 


(2)           Amendments to this Memorandum of
Association and to the Articles of Association may include changing the name of
the Company; and increasing the number of shares which the Company is
authorised to issue.


 


(3)           No
amendment may be made by a Resolution of Directors:


 


(i)    to
restrict the rights or powers of members to amend the Memorandum of Association
or the Articles of Association;


 


(ii)   to change
the percentage of members required to pass a resolution of members to amend the
Memorandum of Association or Articles of Association;


 


(iii)  to clauses
7,  8, 9, and 10 of this
Memorandum of Association of the Company;


 


(iv)  to prohibit
members from amending the Memorandum of Association or Articles of Association;
or


 


(v)   to
Regulations 122, 126, or 127 of the Articles of Association of the Company.


 


4

















 


(4)          Where a resolution is passed
to amend the Memorandum or Articles of Association, the Company shall file for
registration with the Registrar of Corporate Affairs:


 


(i)            a notice of amendment in the
approved form; or


 


(ii)          a restated Memorandum or
Articles of Association incorporating the amendment made.


 


5

















 


We, ILS FIDUCIARY (BVI) LIMITED,
Mill Mall, Suite 6, Wickhams Cay 1, P.O. Box 3085, Road Town,
Tortola, British Virgin Islands for the purpose of incorporating a BVI Business
Company under the laws of the British Virgin Islands hereby sign this
Memorandum of Association the 28 March, 2008.


 


 


Incorporator


 


	
  /s/ Bernadette Rawlins

  	
   

  
	
  Bernadette Rawlins

  	
   

  
	
  Authorised Signatory

  	
   

  
	
  ILS
  FIDUCIARY (B.V.I.) LIMITED

  	
   

  
	
  Mill
  Mall, Suite 6

  	
   

  
	
  Wickhams
  Cay 1

  	
   

  
	
  P.O.
  Box 3085

  	
   

  
	
  Road
  Town, Tortola

  	
   

  
	
  British
  Virgin Islands

  	
   

  



 


6






 










 


TERRITORY OF THE VIRGIN ISLANDS


 


THE BVI BUSINESS COMPANIES ACT, 2004


 


ARTICLES OF ASSOCIATION


 


OF


 


GOLDEN DIRECTION LIMITED


 


A COMPANY LIMITED BY SHARES


 


INTERPRETATION


 


1.             References in these Articles to the “Act”
shall mean the BVI Business Companies Act, 2004 and shall include amendments to
the Act and any regulations as may from time to time be made under the Act.


 


2.             (1) The following Regulations shall constitute the
Articles of the Company.


 


(2) In these Articles words and expressions defined in the Act shall
have the same meaning.


 


(3) Unless otherwise required by the context, the
singular shall include the plural and vice versa, and the masculine gender
shall include the feminine and the neuter genders.


 


(4) References to
“person” shall include corporations and all other entities which are capable of
having legal existence.


 


ISSUE
OF SHARES AND VARIATION OF RIGHTS


 


3.   (1)     Subject
to the provisions of these Articles, the unissued shares of the Company shall
be at the disposal of the directors who may offer, allot, grant options over,
or otherwise dispose of them to such persons at such times and for such
consideration, and upon such terms and conditions as the directors may
determine.


 


(2)   The directors shall not issue a share for
a consideration which shall be less than the par value of the share.


 


(3)   Section 46 of the Act in respect of
pre-emptive rights shall not apply to the issue, allotment, transfer, purchase,
redemption, or acquisition of shares in the Company.


 


(4)   The Company shall not be authorized to
issue bearer shares; convert registered shares to bearer shares; or exchange
registered shares for bearer shares.


 


(5)   The directors shall issue no shares for a
consideration other than money, unless the directors have passed a resolution
stating:


 


7

















 


(a)   the amount to be credited for the issue
of the Shares;


 


(b)   their determination of the reasonable
present cash value of the non-money consideration for the issue; and


 


(c)   that, in their opinion, the present cash
value of the non money consideration for the issue is not less that the amount
to be credited for the issue of the Shares.


 


4.             The directors may issue shares in the
Company with such preferred, deferred or other special rights or such restrictions,
whether in regard to dividend, voting, return of capital or otherwise as the
directors may determine.


 


5.             The Company shall keep a register of members which
shall contain the following:


 


(a)   the names and addresses of the persons
who hold registered shares in the Company;


 


(b)   the number of each class and series of
shares held by each shareholder;


 


(c)   the date on which the name of each
shareholder was entered in the register of members; and


 


(d)   the date on which a person ceased to be a
shareholder.


 


6.   (1)     Every
person whose name is entered as a member in the register of members, being the
holder of shares shall, without payment, be entitled to a certificate signed by
two directors or two officers or by one director or one officer of the Company
or under the common seal of the Company with or without the signature of any
director or officer of the Company.


 


(2)   The certificate shall specify the share
or shares held and the par value thereof (if any) provided that in respect of a
share, or shares, held jointly by several persons, the Company shall not be
bound to issue more than one certificate, and delivery of a certificate for a
share to one of several joint holders shall be sufficient delivery to all.


 


(3)   If a certificate is worn out or lost it
may be renewed on production of the worn out certificate, or on satisfactory
proof of its loss together with such indemnity as the directors may reasonably
require.


 


(4)   Any member receiving a share certificate
shall indemnify and hold the Company and its officers harmless from any loss or
liability which it or they may incur by reason of wrongful or fraudulent use or
representation made by any person by virtue of the possession of such a
certificate.


 


7.             A share issued by the Company upon
conversion of, or in exchange for, another share or a debt obligation or other
security in the Company, shall be treated for all purposes as having been
issued for money equal to the consideration received or


 


8

















 


deemed to have
been received by the Company in respect of the other share, debt obligation or
security.


 


8.             The Company may issue fractions of a
share and a fractional share shall have the same corresponding fractional
liabilities, limitations, preferences, privileges, qualifications,
restrictions, rights and other attributes of a whole share of the same class or
series of shares.


 


9.             The consideration in respect of the
shares constitutes capital to the extent designated by the directors and the
excess constitutes surplus, except that the directors must designate as capital
an amount of the consideration that is at least equal to the amount that the
share is entitled to as a preference, if any, in the assets of the Company upon
liquidation of the Company.


 


10.           Subject to the provisions of the Act,
shares may be issued on the terms that they are redeemable, or at the option of
the Company be liable to be redeemed on such terms and in such manner as the
directors before or at any time of the issue of the shares may determine.


 


ACQUISITION
OF OWN SHARES AND REDEMPTION OF SHARES


 


11.  (1)    The
directors may, in accordance with the Act, on behalf of the Company purchase,
redeem, or otherwise acquire any of the Company’s own shares for such
consideration as they consider fit, and may either cancel or hold such shares
as treasury shares.


 


(2)   The directors may dispose of any shares
held as treasury shares on such terms and conditions as they may from time to time
determine. Shares may be purchased or otherwise acquired in exchange for newly
issued shares in the Company.


 


(3)   The directors may redeem any such share
at a premium.


 


(4)   The directors shall by resolution determine whether
sections 60, 61, and 62 of the Act shall apply to the acquisition of shares.


 


(5)   Upon cancellation of a share, the amount
included as capital of the Company with respect to that share shall be deducted
from the capital of the Company.


 


NOTICE OF TRUST


 


12.           No notice of a trust, whether expressed,
implied or constructive, shall be entered in the register  of
members.


 


13.           Except as required by law, no person
shall be recognized by the Company as holding any share upon any trust, and the
Company shall not be bound by or be compelled in any way to recognize (even
when having notice thereof) any equitable, contingent, future, or partial
interest in any share or any interest in any fractional part of a share.


 


9

















 


TRANSFER
OF SHARES


 


14.  (1)    Registered shares in the Company may be transferred by
a written instrument signed by the transferor and containing the name and
address of the transferee or such other manner or form and subject to such
evidence as the directors shall consider appropriate.


 


(2)   The Instrument of transfer shall be signed by the
transferee if registration as a holder of the share imposes a liability to the
Company on the transferee.


 


(3)   The Instrument of transfer of a
registered share shall be sent to the Company for registration.


 


15.  (1)    The directors shall pass a resolution to register or
refuse to register a transfer of shares.


 


(2)   The directors having resolved to register
the shares shall enter the name of the transferee of the shares in the register
of members.


 


(3)   If the directors of the Company are
satisfied that an instrument of transfer relating to Shares has been signed but
that the instrument has been lost or destroyed, they may resolve by Resolution:


 


(a)   to accept such evidence of the transfer of shares as
they consider appropriate; and


 


(b)   that the transferee’s name should be
entered in the register of members notwithstanding the absence of the
instrument of transfer.


 


TRANSMISSION
OF SHARES


 


16.  (1)    The
personal representative of a deceased member, the guardian of an incompetent
member, or the trustee of a bankrupt member shall be the only person recognized
by the Company as having any title to his share.


 


(2)   Such personal representative, guardian, or trustee
shall not be entitled to exercise any rights as a member of the Company until
that person has proceeded in the manner set out below.


 


(3)   The production to the Company of any document which is
evidence of:


 


(a)   a grant of probate of the will, or grant
of letters of administration of the estate, or confirmation of the appointment
as executor, of a deceased member; or


 


(b)   the appointment of a guardian of an
incompetent member; or


 


(c)   the trustee of a bankrupt member; or


 


10

















 


(d)         any other documentation
providing reasonable evidence of the applicants beneficial ownership of the
shares,


 


shall be accepted by the Company.


 


(4)  If the deceased, incompetent
member or bankrupt member is domiciled outside the British Virgin Islands the
Company shall accept the documents referred to in sub-regulation (3) above,
if such documents are issued by a foreign court which had competent
jurisdiction in the matter.


 


(5)  For the purposes of
establishing whether or not a foreign court had competent jurisdiction in the
matter the directors may obtain appropriate legal advice.


 


(6)  The directors may also
require an indemnity to be given by the personal representative, guardian, or
trustee of the member.


 


17.        An application by any such
person to be registered as a member shall for all purposes be deemed to be a
transfer of shares of the deceased, incompetent, or bankrupt member and the
directors shall treat it as such.


 


18.        Any person who has become
entitled to a share in consequence of the death, incompetence, or bankruptcy of
any member may, instead of being registered himself, request in writing that
some person to be named by him be registered as the transferee of such share
and such request shall likewise be treated as if it were a transfer.


 


19.        What amounts to incompetence
on the part of a person is a matter to be determined by the court having regard
to all the relevant evidence and the circumstances of the case.


 


LIEN


 


20.  (1) The Company shall
have a first and paramount lien on every share which has been registered in the
name of a member, whether singly or jointly with any other person, for all the
debts incurred before or after the notice to the Company of any interest of any
person other than such member, and whether the time for the payment or
discharge of the same shall have actually arrived or not, and notwithstanding
that the same are joint debts or liabilities of such member or his estate and
any other person, whether a member of the Company or not.


 


(2)  The Company’s lien on a share shall extend to all
dividends payable thereon.


 


(3)  The directors may at any
time either generally, or in any particular case, waive any lien that has
arisen or may declare any share to be wholly or in part exempt from the
provisions of this regulation.


 


21.         The Company may sell, in
such manner as the directors may by resolution determine, any share on which
the Company has a lien, but no sale shall be made


 


11

















 


unless the sum in respect of which the lien exists is payable nor until
the expiration of twenty one days after a notice in writing, demanding payment
of the sum payable and giving notice of the intention to sell in default of
such payment, has been served on the holder for the time being of the share.


 


22.  (1)    The net proceeds of the sale
by the Company of any share on which it has a lien shall be applied in or
towards payment in respect of which the lien exists so far as the same is
payable and any residue shall (subject to a like lien for debts or liabilities
not payable as existed upon the share prior to the sale) be paid to the holder
of the share immediately before such sale.


 


(2)   For giving effect to any
such sale the directors may authorise some person to transfer the share sold to
the purchaser thereof.


 


(3)   The purchaser shall be registered as the
holder of the share and he shall not be bound to see the application of the
purchase money, nor shall his title to the share be affected by any
irregularity or invalidity in the proceedings in reference to the sale.


 


MEETINGS OF MEMBERS


 


23.           The directors shall convene
meetings of the members of the Company at such times and in such manner and
place as the directors consider necessary or desirable, and they shall convene
such a meeting upon the written request of members holding no less than 30% of
the votes of the issued voting shares in the Company.


 


24.           Seven days’ notice at the
least specifying the place, the day and the hour of the meeting and general
nature of the business to be conducted shall be given in the manner hereinafter
mentioned to such persons whose names on the date the notice is given appear as
members in the register of members of the Company and who are entitled to vote.


 


25.           A meeting of
the members shall be deemed to have been validly held, notwithstanding that it
is held in contravention of the requirement to give notice.


 


26.           Notice of a meeting may be
waived by an absolute majority in number of the members having a right to
attend and vote at the meeting.


 


27.           The inadvertent
failure of the directors to give notice of a meeting to a member, or the fact
that a member has not received the notice, does not invalidate the meeting.


 


28.           A meeting of the members may
on the application of a member, a director or the directors of the Company be
ordered by the Court if:


 


(a)     it is impracticable to call
or conduct a meeting of the members of the Company in the manner specified in
the Act or in these Articles; or


 


(b)     if it is in the interest of
the members of the Company that a meeting of members is held.


 


12

















 


PROCEEDINGS AT MEETINGS OF MEMBERS


 


29.           No business shall be
transacted at any meeting unless a quorum of members is present at the time
when the meeting proceeds to business. A quorum shall consist of the holder or
holders present in person or by proxy of a majority in excess of 50% of the
voting shares.


 


30.           If, within half an hour from
the time appointed for the meeting, a quorum is not present, the meeting shall
be dissolved.


 


31.           At every meeting the members
present shall choose someone of their number to be the chairman. If the members
are unable to choose a chairman for any reason, then the person representing
the greatest number of shares entitled to vote and who is present at the
meeting shall preside as chairman failing which the oldest individual person
shall take the chair.


 


32.           The chairman may, with the
consent of the meeting, adjourn any meeting from time to time, and from place
to place, but no business shall be transacted at any adjourned meeting other
than the business left unfinished at the meeting form which the adjournment
took place.


 


33.           At any meeting a resolution
put to the vote shall be decided on a show of hands by a simple majority unless
a poll is (before or on the declaration of the result of the show of hands)
demanded:


 


(a)   by the chairman; or


 


(b)   by any member present in
person, voting trustee, committee or by proxy and representing not less than
one tenth of the shares entitled to vote.


 


34.           Unless a poll be so
demanded, a declaration by the chairman that a resolution has, on a show of
hands, been carried, and an entry to that effect in the book containing the
minutes of the proceedings of the Company, shall be sufficient evidence of the
fact, without proof of the number or proportion of the votes recorded in favour
of or against such resolution.


 


35.           If a poll is duly demanded
it shall be taken in such manner as the chairman directs, and the result of the
poll shall be deemed to be the resolution of the meeting at which the poll was
demanded.


 


36.           The demand for a poll may be
withdrawn.


 


37.           In the case of an equality
of votes, whether on a show of hands, or on a poll, the chairman of the meeting
at which the show of hands takes place, or at which the poll is demanded, shall
be entitled to a second or casting vote.


 


13

















 


VOTES OF MEMBERS


 


38.           At any meeting of members
whether on a show of hands or on a poll, every member entitled to vote and who
is present in person, by a voting trustee, by a committee, or by proxy shall
have one vote for every voting share of which he is the holder.


 


39.           A member may be represented
at a meeting of members by a voting trustee, by a committee, or by proxy who
may speak and vote on behalf of that member.


 


40.           A resolution which has been
notified to all members and which has been approved by a majority in excess of
50% of the votes of those members in the form of one or more documents in
writing or by telex, telegram, cable, or other written electronic communication
shall forthwith, without the need for any notice, become effectual as a resolution of the members.


 


41.           If a committee shall be
appointed for any member who is entitled to vote and who is of unsound mind
that member may vote by his committee.


 


42.           If two or  more persons are jointly entitled to a
share or shares and if more than one of such persons shall vote in person or by
voting trustee or by committee or by proxy at any meeting of members, the vote
of that person whose name appears first among such voting joint holders in the
register of members shall alone be counted.


 


43.           The instrument appointing a
proxy shall be in such form as the chairman of the meeting shall accept as
properly evidencing the wishes of the member appointing the proxy.


 


44.           The instrument appointing a
proxy shall be in writing under the hand of the appointer unless the appointer
is a corporation or other form of legal entity other than one or more
individuals holding as joint owners in which case the instrument appointing a
proxy shall be in writing under the hand of an individual duly authorised by such
corporation or legal entity to execute the same.


 


45.           The chairman of any meeting
at which a vote is cast by proxy so authorised may call for a notarially
certified copy of such authority which shall be produced within seven days of
being so requested or the vote or votes cast by such proxy shall be disregarded.


 


46.           The instrument appointing a
proxy shall be produced at the place appointed for the meeting before the time
for holding the meeting at which the person named in such instrument proposes
to vote.


 


47.           A member of the Company
shall be deemed to be present at a meeting of members if:


 


(a)   he participates by telephone
or other electronic means; and


 


(b)   all members participating in
the meeting are able to hear each other.


 


14

















 


CORPORATIONS ACTING BY
REPRESENTATIVES AT MEETINGS


 


48.           A corporation or other form
of corporate legal entity which is a member of the Company may by resolution of
its directors or other governing body authorise such person as it thinks fit to
act as its representative at any meeting of the members of the Company, and the
person so authorised shall be entitled to exercise the same powers on behalf of
the corporation which he represents as that corporation could exercise if it
were an individual member of the Company.


 


49.           An action that may be taken
by members of the Company at a meeting of members may also be taken by a
resolution of members consented to in writing, or by telex, telegram, cable, or
other written electronic communication without the need for any notice.


 


50.           A resolution consented to in
writing may consist of several documents including electronic communication in
like form each signed or assented to by one or more members.


 


DIRECTORS


 


51.           The number of the directors
shall be not less than one nor more than seven.


 


52.  (1)    The first director or
directors shall be appointed by the first Registered Agent of the Company
within such period after the date of incorporation as may be prescribed by law.
Thereafter, the directors shall be elected by the members who are entitled to
vote for such period as the members may determine.


 


(2)   Where the Company has only
one member who is an individual and that member is also the sole director of
the Company, that sole member/director may, by instrument in writing, nominate
a person who is not disqualified from being a director of the Company under the
Act, as a reserve director of the Company to act in the place of the sole
director/member.


 


(3)   The nomination of a person as a reserve director of
the Company shall cease if:


 


(a)   before the death of the sole
member/director who nominated him


 


(i)    he resigns as a reserve
director, or


 


(ii)   the sole member/director
revokes the nomination in writing; or


 


(b)   the sole member/director who
nominated him ceases to be the sole member/director of the Company for any
reason other than the death of the sole member/director.


 


53.           The directors shall only be
removed by the members.


 


15

















 


54.           A person shall not be
appointed as a director of the Company or be nominated as a reserve director
unless that person has consented in writing to be a director, or a reserve
director as the case may be.


 


55.           The Company
shall keep and maintain a register of directors which shall contain:


 


(a)   the names and addresses of
the persons who are directors of the Company or who has been nominated as a
reserve director of the Company;


 


(b)   the date on which each
person whose name is entered in the register was appointed as a director of the
Company or who has been nominated as a reserve director of the Company;


 


(c)   the date on which each
person named as a director or who has been nominated as a reserve director of
the Company ceased to be a director of the Company or a reserve director; and


 


(d)   such other information as
may be prescribed by law.


 


56.           Each director holds office
until his successor takes office or until his earlier death, resignation, or
removal.


 


57.           A vacancy in the board of
directors may be filled by a resolution of the members who are entitled to
vote.


 


58.           The office of director shall
be vacated if the director:


 


(a)   dies; or


 


(b)   is removed from office by a
resolution of members; or


 


(c)   becomes bankrupt or makes
any arrangement or composition with his creditors generally; or


 


(d)   becomes of unsound mind, or
of such infirm health as to be incapable of managing his affairs; or


 


(e)   resigns his office by a
notice in writing to the Company.


 


59.  (1)    A director shall not require
a share qualification, but nevertheless shall be entitled to attend and speak
at any meeting of the members.


 


(2)   A trustee of designated
shares in the Company which may be held under a Virgin Islands Special Trust
shall not be a director of the Company.


 


60.  (1)    A director by writing under
his hand deposited at the Registered Office of the Company, may from time to
time appoint another director or another person to be his alternate.


 


16

















 


(2)   Every such alternate shall
be entitled to be given notice of meetings of the directors and to attend and
vote as a director at any such meeting at which the director appointing him is
not personally present and generally at such meeting to have and exercise all
the powers, rights, duties and authorities of the director appointing him


 


61.           Every such alternate shall
be deemed to be an officer of the Company and shall not be deemed to be an
agent of the director appointing him.


 


62.           If undue delay or difficulty
would be occasioned by giving notice to a director of a resolution of which his
approval is sought, his alternate (if any) shall be entitled to signify
approval of the same on behalf of that director.


 


63.           The remuneration of an
alternate shall be payable out of the remuneration payable to the director
appointing him, and shall consist of such portion of the last mentioned
remuneration as shall be agreed between such alternate and the director
appointing him.


 


64.           A director by writing under
his hand deposited at the Registered Office of the Company may at any time
revoke the appointment of an alternate appointed by him.


 


65.           If a director shall die or
cease to hold the office of director, the appointment of his alternate shall
thereupon cease.


 


66.           The directors may, by
resolution, fix the emoluments of directors in respect of services rendered or
to be rendered in any capacity to the Company. The directors may also be paid
such traveling, hotel, and other expenses properly incurred by them in
attending and returning from meetings of the directors, or any committee of the
directors or meeting of the members, or in connection with the business of the
Company as shall be approved by resolution of the directors.


 


67.           A director who, by request,
goes or resides abroad for any purposes of the Company, or who performs
services which in the opinion of the Board go beyond the ordinary duties of a
director, may be paid such extra remuneration (whether by way of salary,
commission, participation in profits or otherwise) as shall be approved by
resolution of the directors.


 


68.           The Company may pay to a
director who at the request of the Company holds any office (including a
directorship) in, or renders services to, any company in which the Company may
be interested, such remuneration (whether by way of salary, commission,
participation in profits or otherwise) in respect of such office or services as
shall be approved by resolution of the directors.


 


69.           A director may hold any
other office or position of profit under the Company (except that of auditor)
in conjunction with his office of director, and may act in a professional
capacity to the Company on such terms as to remuneration or otherwise as the
directors shall determine.


 


17

















 


CONFLICT
OF INTEREST


 


70. (1)     A director may be or become
a director or officer of, or otherwise be interested in any company promoted by
the Company, or in which the Company may be interested, as a member or
otherwise and no such director shall be accountable for any remuneration or
other benefits received by him as director or officer or from his interest in
such other company.


 


(2)   A director may also exercise
the voting powers conferred by the shares in any other company held or owned by
the Company in such manner in all respects as they think fit, including the
exercise thereof in favour of any resolutions appointing them, or of their
number, directors or officers of such other company, or voting or providing for
the payment of remuneration to the directors or officers of such other company.


 


(3)   A director may vote in
favour of the exercise of such voting rights in the manner aforesaid
notwithstanding that he may be, or be about to become a director or officer of
such other company, and as such in any other manner is, or may be, interested
in the exercise of such voting rights in the manner aforesaid.


 


(4)   No director shall be
disqualified by his office from contracting with the Company either as a
vendor, purchaser or otherwise, nor shall any such contract or arrangement
entered into by or on behalf of the Company in which any director shall in any
way interested be voided, nor shall any director so contracting or being so  interested be liable to account to the
Company for any profit realized by any such contract or arrangement, by reason
of such director holding that office or of the fiduciary relationship thereby
established.


 


(5)     The nature of a
director’s interest must be declared by him at the meeting of the directors at
which the question of entering into the contract or arrangement is first taken
into consideration, and if the director was not at the date of the meeting
interested in the proposed contract or arrangement, or shall become interested
in a contract or arrangement after it is made, he shall forthwith after
becoming so interested, advise the Company in writing of the fact and nature of
his interest.


 


(6)   A general notice to the
directors by a director that he is a member of a special firm or company, and
is to be regarded as interested in any contract or transaction which may, after
the date of notice, be made with such firm or company shall (if such director
shall give the same at a meeting of the directors, or shall take reasonable
steps to secure that the same is brought up and read at the next meeting of the
directors after it is given) be a sufficient declaration of interest in
relation to such contract or transaction with such firm or company.


 


(7)   A director may be counted as
one of a quorum upon a motion in respect of any contract or arrangement which
he shall make with the Company, or in which he is so interested as aforesaid, and may vote upon such motion.


 


18






 










 


POWERS OF DIRECTORS


 


71.           The business and affairs of
the Company shall be managed by the directors who may pay all expenses incurred
preliminary to and in connection with the formation and registration of the
Company, and may exercise all such powers of the Company as are not by the Act
or by these Articles required to be exercised by the members subject to any
delegation of such powers as may be authorised by these Articles and to such
requirements as may be prescribed by resolution of the members, but no
requirement made by resolution of the members shall prevail if it be
inconsistent with these Articles nor shall such requirement invalidate any
prior act of the directors which would have been valid if such requirement had
not been made.


 


72.           The Board may entrust to and
confer upon any director or officer any of the powers exercisable by it upon
such terms and conditions and with such restrictions as it thinks fit, and
either collaterally with, or to the exclusion of, its powers, and may from time
to time revoke, withdraw, alter or vary all or any of such powers.


 


73.           The directors may delegate
any of their powers to committees consisting of such member or members of their
body as they think fit. Any committee so formed shall in the exercise of powers
so delegated conform to any regulations that may be imposed on it by the
directors.


 


74.           Subject to the provisions of
the Act, the directors may from time to time by power of attorney appoint any
company, firm or person or body of persons, whether nominated directly or
indirectly by the directors, to be the attorney or attorneys of the Company for
such purposes and with such powers authorities and discretions (not exceeding
those vested in or exercisable by the directors under these Articles) and for
such period and subject to such conditions as they think fit, and any such
powers of attorney may contain such provisions for the protection and
convenience of persons dealing with any such attorney to delegate all or any of
the powers authorities and discretions vested in him.


 


75.           Any director who is a body
corporate may appoint any person its duly authorised representative for the
purpose of representing it at Board meetings and of transacting any of the
business of the directors.


 


76.           All cheques, promissory notes,
drafts, bills of exchange and other negotiable instruments and all receipts for
monies paid to the Company, shall be signed, drawn, accepted, endorsed or
otherwise executed as the case may be, in such manner as the directors shall by
resolution determine.


 


77.           The directors may exercise
all of the powers of the Company to borrow money and to mortgage or charge its
undertakings, property and uncalled capital or any part thereof, to issue
debentures, debenture stock and other securities whenever money is borrowed or
as security for any debt, liability or obligation of the Company or of any
third party.


 


78.           If the number of directors
shall have been fixed at two or more persons and by reason of vacancies having
occurred in the Board there shall be only one


 


19

















 


continuing director, he shall be authorised to act alone only for the
purpose of appointing another director.


 


PROCEEDINGS OF DIRECTORS


 


79.  (1)   The
meetings of the Board of Directors and any committee thereof shall be held at
such place or places as the directors shall determine.


 


(2)   Any one or more directors may convene a meeting of
directors.


 


80.           A director may at any time
summon a meeting of the directors.


 


81.           A director shall be given no
less than seven days’ notice of a meeting of directors.


 


82.           If the Company shall have only
one director, the provisions hereinafter contained for meetings of the
directors shall not apply but such sole director shall have full power to
represent and act for the Company in all matters and in lieu of minutes of a
meeting shall record in writing and sign a note or memorandum of all matters
requiring a resolution of the directors. Such note or memorandum shall
constitute sufficient evidence of such resolution for all purposes.


 


83.           The directors may elect a
chairman of their meeting and determine the period for which he is to hold
office; but if no such chairman is elected, or if at any meeting the chairman
is not present at the time appointed for holding the same, the directors
present may choose one of their number to be chairman for the meeting.


 


84.           The directors may meet
together for the dispatch of business, adjourn and otherwise regulate their
meetings as they think fit.


 


85.           Questions arising at any
meeting shall be decided by a majority of votes. In case of an equality in
votes the Chairman shall have a second or casting vote.


 


86.           A meeting of the directors
held in contravention of the notice requirement shall be valid if a majority of
the directors entitled to vote at the meeting have waived notice of the
meeting.


 


87.           The inadvertent failure to
give notice of a meeting to a director, or the fact that a director has not
received the notice, shall not invalidate the meeting.


 


88.           A meeting of the directors
is duly constituted for all purposes if at the commencement of the meeting
there are present in person or by alternate, a majority of the total number of
directors. If the total number of directors is two, a meeting shall be duly
constituted for all purposes with both directors. If the total number of
directors is three, a meeting of directors shall be duly constituted for all
purposes if, at the commencement of that meeting, there are present in person,
or by alternate, no less than two directors.


 


89.           If within half an hour from
the time appointed for the meeting a quorum is not present, the meeting shall
be dissolved.


 


20

















 


90.           Any one or more members of the Board of Directors or
any committee thereof may participate in a meeting of such Board or committee
by means of a conference telephone or similar communications equipment allowing
all persons participating in the meeting to hear each other at the same time.
Participation by such means shall constitute presence in person at a meeting.


 


91.           A resolution approved by a
majority of the directors for the time being entitled to receive notice of a
meeting of the directors or of a committee of the directors and taking the form
of one or more documents in writing or by telex, telegram, cable or other
written or electronic communication shall be as valid and effectual as if it
had been passed at a meeting of the directors or of such committee duly
convened and held, without the need for notice.


 


OFFICERS AND AGENTS


 


92.           The directors of the Company
may, by resolution, appoint officers of the Company at such times as shall be
considered necessary or expedient, and such officers may consist of a
President, one or more Vice Presidents, a Secretary, and a Treasurer and such
other officers as may from time to time be deemed desirable.


 


93.           The officers shall perform
such duties as shall be prescribed at the time of their appointment subject to
any modifications in such duties as may be prescribed by the directors. In the absence
of any specific allocation of duties it shall be the responsibility of the
President to manage the day to day affairs of the Company, the Vice Presidents
to act in order of seniority in the absence of the President, but otherwise to
perform such duties as may be delegated to them by the President; the Secretary
to maintain the registers, minute books and records (other than financial records)
of the Company and to ensure compliance with all procedural requirements
imposed on the Company by law; and the Treasurer to be responsible for the
financial affairs of the Company.


 


94.           A person may hold more than
one office and no officer need be a director or member of the Company. The
officers shall remain in the office until removed from office by the directors
whether or not a successor is appointed.


 


95.           An officer who is a body
corporate may appoint any person its duly authorised representative for the
purpose of representing it and of transacting any of the business of the
Company.


 


INDEMNITY


 


96.           Subject to the provisions of
the Act and of any other statute for the time being in force every director or
other officer of the Company shall be entitled to be indemnified out of the
assets of the Company against all losses or liabilities which he may sustain or
incur in or about the execution of the duties of his office or otherwise in
relation thereto, and no director or other officer shall be liable for any loss,
damage, or misfortune which may happen to, or be incurred by the Company in the
execution of the duties of his office, or in relation thereto.


 


21

















 


SEAL


 


97.  (1)   The
Company shall have a Common Seal, an imprint of which shall be kept at the office
of the registered agent of the Company.


 


(2)   The directors
shall provide for the safe custody of the common seal of the Company.


 


(3)   The common seal
when affixed to any instrument except as provided herein, shall be witnessed by a director or any
other person so authorised from time to time by the directors to witness the
application of the seal.


 


98.           The directors may provide
for a facsimile of the common seal and approve the signature of any director or
authorised person which may be reproduced by printing or other means on any
instrument and it shall have the same force and validity as if the seal had
been affixed to such instrument and the same had been signed as hereinbefore described.


 


DIVIDENDS AND RESERVES


 


99.           The directors may,
by resolution, declare a dividend.


 


100.         No dividend shall be declared
and paid except out of surplus and unless the directors determine that
immediately after the payment of the dividend


 


(a)     the Company wilt be able to
satisfy its liabilities as they become due in the ordinary course of its
business; and


 


(b)     the realisable value of the
assets of the Company will not be less than the sum of its total liabilities,
other than deferred taxes, as shown in the books of account, and its capital.


 


101.         The Directors may pay dividends
in money, shares, or other property of the Company.


 


102.         In computing the surplus for
the purpose of resolving to declare and pay a dividend, the directors may
include in their computation the net unrealised appreciation of the assets of
the Company.


 


103.         The directors
may from time to time pay to the members such interim dividends as appear to
the directors to be justified by the surplus of the Company.


 


104.         Subject to the rights of the
holders of shares entitled to special rights as to dividends, all dividends
shall be declared and paid according to the par value of the shares in issue,
excluding those shares which are held by the Company as treasury shares at the
date of declaration of the dividend.


 


22

















 


105.         The directors may, before
recommending any dividend, set aside out of the profits of the Company such
sums as they think proper as a reserve or reserves which shall, at their
discretion, either be employed in the business of the Company or be invested in
such investments as the directors may think fit.


 


106.         If several persons are
registered as joint holders of any share, any of them may give effectual
receipt for any dividend or other monies payable on or in respect of the share.


 


107.         Notice of any dividend that
may have been declared shall be given to each member and all dividends
unclaimed for three years after having been declared may be forfeited by the
directors for the benefit of the Company.


 


108.         No dividend shall bear
interest against the Company.


 


BOOKS AND RECORDS


 


109.         The Company shall keep such
accounts and records as the directors consider necessary or desirable in order
to reflect the financial position of the Company.


 


110.         The Company shall keep
minutes of all meetings of directors, members, committees of directors,
committees of officers and committees of members, and copies of all resolutions
consented to by the directors, members, committees of directors, committees of
officers and committees of members.


 


111.         The books, records, and
minutes shall be kept at the Registered Office of the Company or at such other
place as the directors may determine, and shall be open to the inspection of
the directors at all times.


 


112. (1)   The directors
shall from time to time determine whether and to what extent and at what times
and places and under what conditions or regulations the books, records and
minutes of the Company or any of them shall be open to the inspection of members
not being directors, and no member (not being a director) shall have any right
of inspecting any book, record, minute or document of the Company except as
conferred by law or authorised by resolution of the directors.


 


(2)   The Company shall keep the
following documents at the office of its registered agent:


 


(a)     the Memorandum of
Association and the Articles of Association;


 


(b)     the register of members, or
a copy of the register of members;


 


(c)     the register of directors,
or a copy of the register of directors; and


 


(d)     copies of all notices and
other documents filed by the Company with the Registrar of Corporate Affairs in
the previous 10 (ten) years.


 


23

















 


(3)   If the Company
shall maintain only a copy of the register of members or a copy of the register
of directors at the office of its registered agent, it shall within such period
as may be prescribed by law, in either register, notify the registered agent in
writing of the change.


 


(4)   The Company
shall keep the following records at the office of its registered agent or at
such other place or places:


 


(a)      minutes of meetings and
resolutions of shareholders and classes of shareholders;


 


(b)      minutes of meetings and
Resolutions of Directors and committees of directors; and


 


(c)      an impression of the Seal.


 


(5)   Where the
original records referred to in these Regulations are maintained other than at
the office of the registered agent of the Company, and the place at which the
original records is changed, the Company shall within such time as may be
prescribed by law provide the registered agent with the physical address of the
new location of the records.


 


(6)   The records
kept by the Company under this Regulation shall be in written form or either
wholly or partly as electronic records complying with the requirements of the
Electronic Transactions Act (No. 5 of 2001)


 


REGISTER OF CHARGES


 


113.         The Company shall keep at
the office of its registered agent a register of charges in which there shall
be entered the following particulars regarding each charge created by the
Company:


 


(a)      the date of creation of the
charge;


 


(b)      a short description of the
liability secured by the charge;


 


(b)      a short description of the
property charged;


 


(c)      the name and address of the
trustee for the security or, if there is no such trustee, the name and address
of the chargee;


 


(d)      unless the charge is a
security to bearer, the name and address of the holder of the charge; and


 


(e)      details of any prohibition
or restriction contained in the instrument creating the charge on the power of
the Company to create any future charge ranking in priority to or equally with
the charge.


 


24

















 


AUDIT


 


114.         The directors may, by
resolution call for the accounts of the Company to be examined by an auditor or
auditors to be appointed by them at such remuneration as may from time to time
be agreed.


 


115.         The auditor may be a member
of the Company but no director or officer shall be eligible to be an auditor of
the Company during his continuance in office.


 


116.         Every auditor of the Company
shall have a right of access at all times to the books of accounts and vouchers
of the Company, and shall be entitled to require from the officers of the
Company such information and explanations as he may think necessary for the
performance of his duties.


 


117.         The report of the auditor
shall be annexed to the accounts upon which he reports, and the auditor shall
be entitled to receive notice of, and to attend, any meeting at which the
Company’s audited Profit and Loss Account and Balance Sheet are to be presented.


 


NOTICES


 


118.         Any notice, information, or
written statement required to be given to members shall be served by air-mail
service addressed to each member at the address shown in the register of
members.


 


119.         All notices directed to be
given to the members shall, with respect to any registered shares to which
persons are jointly entitled, be given to whichever of such persons is named
first in the register of members, and notice so given shall be sufficient
notice to all the holders of such shares.


 


120.         Any notice served by post
shall be deemed to have been served within ten days of posting, and in proving
such service it shall be sufficient to prove that the letter containing the
notice was properly addressed and put into the Post Office.


 


PENSION AND SUPERANNUATION FUND


 


121.         The directors may establish,
maintain, or procure the establishment and maintenance of any non-contributory
or contributory pension or superannuation fund for the benefit of, and give or
procure the giving of donations, gratuities, pensions, allowances or emoluments
to any directors, officers or any other persons who are or were at any time in
the employment or service of the Company or any company which is a subsidiary
of the Company or is allied to or associated with the Company or with any of its
subsidiaries, and to the wives, widows, families and dependents of any such
persons. The Company may any of the matters aforesaid either alone or in
conjunction with any such other company as aforesaid. All persons described
above shall be entitled to participate in and retain for his own benefit any
such donation, gratuity, pension, allowance, or emolument.


 


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WINDING UP


 


122.   (1)   The Company may
voluntarily commence to wind up and dissolve by resolution of members.


 


(2)   If the Company
has never issued shares, it may voluntarily commence to wind up and dissolve by
a Resolution of Directors.


 


(4)   If the Company
shall be wound up, the Liquidator may, in accordance with a resolution of
members, divide amongst the members in specie or in kind the whole or any part
of the assets of the Company and may for such purpose set such value as he
deems fair upon any such property to be divided as aforesaid and may determine
how such division shall be carried out as between the members or different
classes of members.


 


123.    The Liquidator may vest the whole or any part of
such assets in trustees upon such trust for the benefit of the contributors as
the Liquidator shall think fit, but so that no member shall be compelled to
accept any shares or other securities whereon there is any liability.


 


ARBITRATION


 


124.    Whenever any difference
arises between the Company on the one hand and any of the members, their
personal representatives or assigns on the other hand touching the true intent
and construction or the incidence or consequences of these presents or of the
Act. The parties agree to refer the same to a single arbitrator, or failing that,
be referred to two arbitrators, one to be chosen by each of the parties and the
arbitrators shall before
entering on the reference appoint an umpire.


 


125.    If either party to the
reference makes default in appointing an arbitrator either originally or by way
of substitution (in the event that an appointed arbitrator shall die, be
incapable of acting, or refuse to act) for ten days after the other party has given
him notice to appoint the same, such other party may appoint an arbitrator to
set  in the place of the
arbitrator of the defaulting party.


 


MERGER, CONSOLIDATION AND ARRANGEMENTS


 


126.    The Company may by
resolution of members or by a resolution of Directors if no shares have been issued,
merge, consolidate or arrange with other companies in the manner prescribed in
the Act.


 


CONTINUATION


 


127.    The Company may by a
resolution of members or by a resolution of Directors if no shares have been
issued, continue as a company incorporated under the laws of a jurisdiction outside
the Virgin Islands.


 


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We, ILS FIDUCIARY (BVI) LIMITED,
Mill Mall, Suite 6, Wickhams Cay 1, P.O. Box 3085, Road Town,
Tortola, British Virgin Islands for the purpose of incorporating a BVI Business
Company under the laws of the British Virgin Islands hereby sign these Articles
of Association the 28 March, 2008.


 


 


Incorporator


 


 


	
  /s/ Bernadette Rawlins

  	
   

  
	
  Bernadette Rawlins

  	
   

  
	
  Authorised Signatory

  	
   

  
	
  ILS
  FIDUCIARY (B.V.I.) LIMITED

  	
   

  
	
  Mill
  Mail, Suite 6

  	
   

  
	
  Wickhams
  Cay 1

  	
   

  
	
  P.O.
  Box 3085

  	
   

  
	
  Road
  Town, Tortola

  	
   

  
	
  British
  Virgin Islands

  	
   

  



 


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