ex10_3.htm


     

    
      

      

    

    
      PRODUCTION
PURCHASE AGREEMENT

      


      This Production Purchase Agreement (the
“Agreement”) is entered into this ___ day of January 2010 by and between
NaturalShrimp Corporation, a Delaware corporation whose address for notice
purposes is 2068 N. Valley Mills Dr., Waco, Texas 76710 (hereafter “Seller”) and
Nature’s Prime Organic Farms LLC, a Minnesota corporation, whose address for
notice purposes is 2420 Chaska Blvd., Chaska, Minnesota 55318 (hereafter,
“Purchaser”).  Each of the parties is herein referred to singularly as
a “Party” and collectively as the “Parties.”

      


      Recitals

      


      a.           Seller
is a producer and is engaged in the business of growing shrimp in a regulated
closed and secure environment on a wholesale and retail basis and desires to
sell or have distributed Seller’s shrimp production in a timely manner;
and

      


      b.           Purchaser
is a purchaser of natural organic foods, which are appropriately certified by
applicable governmental agencies as “organic” and desires to acquire Seller’s
shrimp production under terms and conditions hereafter set forth.

      


      Agreements

      


      NOW THEREFORE, for and in consideration
of the mutual promises and obligations hereafter set forth, the parties hereto,
intending to be legally bound, hereby agree as follows:

      


      1.           Minimum
Quantities.  Seller will produce, sell and make available to
Purchaser and Purchaser will purchase Seller’s shrimp production grown at
Seller’s La Coste, Texas facilities and other facilities that may be constructed
from time to time (collectively, the “Facilities”).  It is anticipated
that the initial shrimp production from the Facilities shall not be less than
500 pounds of shrimp per two-week period (the “Minimum
Quantity”).  Upon commencement of the Initial Delivery Date (scheduled
for the first week in February 2010), Seller will deliver to Purchaser shrimp
production for each two-week period at the Facilities, FOB, La Coste,
Texas.  Unless otherwise agreed in writing and annexed here to as an
amendment, each pound of shrimp shall consist of approximately 18-25 heads-on
shrimp per pound delivered to Purchaser.  In the event that Seller
produces shrimp in amounts in excess of the Minimum Quantities, Seller shall
sell and deliver the excess production to Purchaser and Purchaser shall accept
and pay for (as hereafter set forth) all shrimp production in excess of the
Minimum Quantity.

       
 

      2.           Price/Payment.  The
price charged by Seller to Purchaser for each pound of shrimp will be $6.00 per
pound.  Purchaser agrees to send a fifty percent deposit on each order
maturing for delivery thirty days before scheduled shipment and pay the balance
by electronic bank transfer seven days before shipment. If during the initial
growing period, Seller has more shrimp available than the Minimum Quantity for
the delivery period, Seller shall notify Purchaser of the amount of shrimp in
excess of the Minimum Quantity ten (10) days prior to the projected shipment
date and Purchaser shall purchase the excess quantity, less amounts received by
Seller in advance, by electronic bank transfer.

      


      3. Rolling
Grow-Out.  Seller will continue to stock its tanks with new
crops of post-larvae shrimp (PLs) so that as one crop matures, is sold and
delivered, new crops of shrimp will be available for purchase on a weekly or
bi-weekly basis.

      


      


      


      4.           Territory.  As
long as Purchaser purchases, accepts delivery of and pays for
the  shrimp delivered or available for delivery as set forth herein
and is not otherwise in default hereof, Purchaser shall have the exclusive right
to market, sell and distribute Seller’s shrimp in the following
States:  Minnesota, Iowa, Wisconsin, Illinois, North Dakota, South
Dakota, Nebraska, Wyoming, Montana and Colorado (the “Territory”).

      


      5.           Term.  Except
as otherwise provided herein, this Agreement will commence on the date first set
forth above and will continue for a period of twelve (12) months (the “Initial
Term”).  The Agreement shall automatically renew for an additional
twelve (12) months on the anniversary of this Agreement unless terminated by
either Party on sixty (60) days prior written notice (the Subsequent
Term”).  Notwithstanding the foregoing, this Agreement may further be
terminated by the Parties as follows:

      


      a.           By
Seller in the event that Purchaser materially breaches this Agreement or is in
default hereunder and such default continues, after written notice and
opportunity to cure for a period of thirty (30) days.

      


      b.           By
Purchaser in the event that Seller materially breaches this Agreement or is in
default hereunder and such default continues, after written notice and
opportunity to cure for a period of thirty (30) days.

      


      In the
event that the default if of such a nature that same cannot be cured within such
thirty (30) day period, the Party receiving the written notice shall not be in
default hereunder if such Party commences a cure within such thirty (30) day
period and proceeds with due diligence to cure same.

      


      6.           Marketing/Packaging.  Seller’s
shrimp production will be private labeled by Purchaser, using Purchaser’s name
and logo.  Purchaser is responsible for the content of its labels and
packaging and will provide all of such packaging to Seller at no cost or expense
to Seller for use by Seller in packaging the shrimp production for delivery to
Purchaser.  Purchaser will ensure that all packaging, labels and
disclaimers satisfy all state and federal requirements and will defend, save and
hold Seller harmless and indemnify Seller of and from any claims or causes
action that may arise as a result of mis-labeling any packaging.

      


      7.           Indemnification.  Seller
will indemnify, defend and hold harmless Purchaser against any claims, demands,
liabilities, damages, losses, actions, judgments, fines, costs, and fees related
to or arising out of in any way:  (i) Seller’s negligence, (ii) claims
for product liability, product defects, or other such similar claims, if such
claims are related to Seller’s actions, statements or representations, (iii)
Seller’s violation of any applicable federal, state or local laws, ordinances or
regulations, or (iv) Seller’s breach of any of its representations, warranties,
duties or obligations in this Agreement.  Purchaser will indemnify,
defend and hold harmless Seller from or against any claims, demands,
liabilities, damages, losses, actions, judgments, fines, costs, and fees related
to or arising out of in any way:  (i) Purchaser’s negligence, (ii)
claims for product liability, product defects, or other such similar claims if
such claim is related to Purchaser’s labels, actions, statements, or
representations, (iii) Purchaser’s violation of any applicable federal, state or
local laws, ordinances or regulations including, without limitation claims
arising out of labeling or packaging, or (iv) Purchaser’s breach of any of its
representations, warranties, duties or obligations in this
Agreement.

      


      8.           Notices.  All
notices under this Agreement will be written and delivered by the United States
mail, postage prepaid, by fax or by FedEx, to the party to be
notified.  Such notices will be deemed properly given and addressed if
addressed at the addresses specified in this Agreement.

      


      9.           Assignment.  Neither
party may assign or transfer this Agreement without the parties’ written
consent.  However, either party may assign this Agreement to any
related division or a related or successor corporation.

      


      10.           Modification and
Waiver.  This Agreement may only be modified in writing, signed
by the parties.  The waiver by either party of a default or a breach
of any provision of this Agreement will not operate or be construed as a waiver
of any subsequent default or breach.

      


      11.           Compliance with
Laws.  Purchaser and Seller will comply with all applicable
laws, regulations and ordinances in performing its obligations under this
Agreement.

      


      12.           Applicable
Law.  The laws of the State of Texas will govern this
Agreement, and its validity, interpretation, construction or
performance.

      


      13.           Severability.  If
any provision of this Agreement is declared to be illegal, invalid or
unenforceable, such provision(s) will be severed from this
Agreement.  Any illegal, invalid or unenforceable provision will not
affect the validity or the enforceability of this Agreement or its remaining
provisions. In lieu of such provision, a provision that is as similar in terms
to such illegal, invalid or unenforceable provision as may be possible but that
is legal, valid or enforceable will be automatically added to this
Agreement.

      


      14.           Entire
Agreement.  This Agreement contains the entire understanding
and agreement of the parties.  There are no other representations,
covenants, promises or undertakings other than those in this
Agreement.  Neither party is relying upon any representation,
covenant, promise or undertaking other than those in this
Agreement.  Neither party has been induced into entering into this
Agreement by any promise, representation, warranty, covenant, warning or
inducement of the other party, except for those in this
Agreement.  Each party represents that it has read and understands
this Agreement and its terms.  Each party agrees that this Agreement
is enforceable against it in accordance with its terms.

      


      Dated and effective as of the date
first set forth above.

      


      


      NATURES PRIME ORGANIC FARMS
LLC

      


      __________________________________

      By
_______________________________

      Title
______________________________

      


      


      NATURALSHRIMP CORPORATION

      


      


      /s/ Bill G.
Williams

      By       Bill G.
Williams

      Title    Chief
Executive Officer