Exhibit
10.1
 
 ASSET
PURCHASE CONTRACT
 
 by
and among
 
 WEIFANG
YUHE POULTRY CO., LTD.
 
 AND
 
 HAICHENG
SONGSEN FARMING FEED CO., LTD.
 
 INDEX
  
  INDEXCHAPATER
      I DEFINITION AND INTERPRETATION
                  2ARTICLE
      1
                  DEFINITION
                  2CHAPATER
      II TRANSFERRED ASSETS
                  3ARTICLE
      2
                  ASSETS
      TRANSFER
                  3ARTICLE
      3
                  TRANSFER
      PRICE
                  3ARTICLE
      4
                  PRE-REQUISITE
      CONDITIONS FOR THE PAYMENT OF TRANSFER PRICE AND CLOSING
                  3ARTICLE
      5
                  PAYMENT
                  5ARTICLE
      6
                  TAX
      PAYABLE
                  6CHAPATER
      III REPRESENTATIONS AND WARRANTIES OF ALL PARTIES
                  6CHAPATER
      IV DISCLOSURES, REPRESENTATIONS AND WARRANTIES OF SELLERS
                  6ARTICLE
      8
                  DISCLOSURES,
      REPRESENTATIONS AND WARRANTIES OF SELLERS
                  6ARTICLE
      9
                  GENERAL
      REPRESENTATIONS AND WARRANTIES OF SELLERS
                  7ARTICLE
      10
                  OWNERSHIP
                  7ARTICLE
      11
                  SPECIAL
      REPRESENTATIONS AND WARRANTIES OF SELLERS
                  8CHAPATER
      V DISCLOSURES, REPRESENTATIONS AND WARRANTIES OF THE
    PURCHASER
                  10ARTICLE
      12
                  DISCLOSURES,
      REPRESENTATIONS AND WARRANTIES OF THE PURCHASER
                  10CHAPATER
      VI CONFIDENTIALITY
                  10ARTICLE
      13
                  CONFIDENTIALITY
                  10CHAPATER
      VII BREACH OF CONTRACT
                  11ARTICLE
      14
                  LIABILITIES
      FOR VIOLATION OF REPRESENTATIONS OR WARRANTIES
                  11ARTICLE
      15
                  LIABILITIES
      FOR BREACH OF CONTRACT
                  12CHAPATER
      VIII FORCE MAJEURE
                  12ARTICLE
      16
                  FORCE
      MAJEURE
                  12CHAPATER
      IX RESOLUTION OF DISPUTES
                  13ARTICLE
      17
                  ARBITRATION
                  13ARTICLE
      18
                  VALIDITY
      OF ARBITRAL AWARD
                  13ARTICLE
      19
                  CONTINUATION
      OF RIGHTS AND OBLIGATIONS
                  13CHAPATER
      X APPLICABLE LAW
                  13ARTICLE
      20
                  APPLICABLE
      LAW
                  13CHAPATER
      XI MISCELLANEOUS
                  14ARTICLE
      21
                  NON-WAIVER
                  14  i
  ARTICLE
      22
                  TRANSFER
                  14ARTICLE
      23
                  AMENDMENT
                  14ARTICLE
      24
                  SEVERABILITY
                  14ARTICLE
      25
                  LANGUAGE
                  14ARTICLE
      26
                  EFFECTIVENESS
      OF TEXT AND APPENDIXES
                  14ARTICLE
      27
                  NOTIFICATION
                  14ARTICLE
      28
                  ENTIRE
      AGREEMENT
                  15APPENDIX
      I ASSETS LIST
                  17APPENDIX
      II PRE-REQUISITE CONDITIONS
                  19
 ii
 
  Asset
Purchase Contract
  
  This
Asset Purchase Contract (hereinafter referred to as the “Contract”) was made as of July
14, 2010 by and among the following Parties in Weifang, Shandong province of
China:
 
 (1)
                  Seller:
      Haicheng Songsen Farming Feed Co., Ltd. (hereinafter referred to as “Songsen”), a company
      incorporated under the PRC law, with its legal address registered at
      Yuanjia Village, Gengzhuang Town, Haicheng City. Its legal representative
      is Sen Jiang and its controlling shareholder is Zhao Lin Jiang
      (hereinafter referred to as  the “Controlling
      Shareholder”)
 
 (2)
                  Purchaser:
      Weifang Yuhe Poultry Co., Ltd. (hereinafter referred to as the “Purchaser”), a company
      incorporated under the PRC law, with its legal address registered at North
      of Bonan Road and West of Suncun Shengchan Road, Nansun Village, Hanting
      District and its legal representative is Chengxiang
  Han.
 
 Seller
and Controlling Shareholder are hereinafter collectively referred to as “Sellers”, and Sellers and
Purchaser are hereinafter collectively as“Parties” and individually
referred to as a “Party”.
 
 WHEREAS,
 
 (1)
                  The
      Seller mainly engages in broiler breeding, egg hatching and sale of those
      products;
 
 (2)
                  Controlling
      Shareholder owns 100% equity interests of Songsen and will receive
      considerable value derived from the proceeds of the transactions
      contemplated by this Contract;
 
 (3)
                  Weifang
      Yuhe Poultry Co., Ltd, a wholly foreign-owned enterprise established in
      Weifang City, Shandong Province PRC, will acquire and operate the assets
      being sold by Songsen pursuant to this
Contract;
 
 (4)
                  Songsen
      desires to sell to the Purchaser, and the Purchaser desires to purchase
      from Songsen, substantially
      all of the assets of Songsen used in or related to the business, in
      accordance with the terms and conditions of this Contract and relevant PRC
      laws and regulations.
 
 Now,
THEREFORE, in principle of equality and mutual benefits, through friendly
negotiation, Parties hereto agree to reach, in accordance with Company Law of People’s Republic of
Chinaand other applicable PRC laws and regulations, the following
contract.
 
 -1-
 
 Chapater I  Definition
and Interpretation
 
 Article 1
                  Definition
 
 Unless
otherwise prescribed and stipulated, the following terms defined in this
Contract shall have the meanings set forth as follows:
 
 “Songsen” refers to Haicheng
Songsen Farming Feed Co., Ltd, a limited liability company incorporated under
PRC law, registered at Yuanjia Village, Gengzhuang Town, Haicheng City, with
registered capital amounted to RMB 2,000,000, under registration number 210381009113113.
 
 “Transferred Assets” refers to
the portfolio of all assets transferred from Songsen to the Purchaser as listed
out in the Assets List of Appendix I hereto.
 
 “PRC” means, for purpose of the
Contract, People’s Republic of China, excluding Hong Kong, Taiwan and
Macau.
 
 “Claim” means claims, actions,
demands, proceedings judgments liabilities, damages amounts, costs and expenses
(including legal costs and disbursements) whatsoever and howsoever
arising.
 
 “Signing Date” means the date
on which this Asset Purchase Contract is signed.
 
 “Encumbrance” means any
mortgage, assignment, lien, charge, pledge, title retention, right to acquire,
security interest, option, pre-emptive right, and any other restriction and
conditions whatsoever including:
 
 (i)           any
interest or right granted or reserved in or over or affecting the Transferred
Assets; or
 
 (ii)           the
interest or right created or otherwise arising in or over the Transferred Assets
under a fiduciary transfer, charge, lien, pledge, power of attorney or other
form of encumbrance; or
 
 (iii)           any
security over the Transferred Assets for the payment of a debt or any other
monetary obligation or the performance of any other obligation.
 
 “Material Adverse Change” means
(1) Any investigation on Songsen by governmental authorities that may affect the
transfer of Transferred Assets; (2) Any law suit, arbitration or any other
judicial proceedings involving Songsen that may affect the transfer of
Transferred Assets; (3) Any change would cause or reasonably may cause material
adverse effect on the ownership, right of use or other rights of Transferred
Assets.
 
 “RMB” means the lawful currency
of China.
  -2-
  “Third Party” means any natural
person, legal person, other organization or entity, other than Parties
hereto.
 
 “Business Day” means any day on
which all banks in Weifang City, Shandong Province are open for
business.
 
 
 Chapater II Transferred
Assets
 
 Article 2
                  Assets
      Transfer
 
 Pursuant
to the terms stipulated in this Contract, at Closing Date (as defined in Article
4.6), Songsen hereby agree to transfer to the Purchaser and the Purchaser agrees
to accept from Songsen the Transferred Assets with all the rights, ownership and
interests, and free of any Claim or Encumbrances.
 
 Article 3
                  Transfer
      Price
 
 3.1           Sellers
and the Purchaser after consultations have finally determined that the Transfer
Price for the transfer of the Transferred Assets shall be RMB 21,252,540
(hereinafter referred to as “Transfer
Price”);
 
 3.2
                  Terms
      of Payment
 
 3.2.1 The
Purchaser shall pay RMB 16,252,540 to Songsen after the Sellers meet all
pre-requisite conditions set forth in Pre-requisite Conditions One of
AppendixII attached to
the Contract and the Transferred Assets are free of any Material Adverse Change
from Signing Date to Closing Date (as defined in Article 4.6).
 
 3.2.2 The
remaining RMB 5,000,000 will be paid to Songsen on the 1st
anniversary day of Initial Payment Date (as defined in Article 5.1) as the
guarantee money to guarantee the interests of Purchaser.
 
 Article 4
                  Pre-requisite
      Conditions for the Payment of Transfer Price and
  Closing
 
 4.1
                  Under
      this Contract, the pre-requisite conditions for the payment of Transfer
      Price of RMB 16,252,540 are: (1) The Sellers shall meet all Pre-requisite
      conditions set out in Pre-requisite Conditions One of AppendixII
      attached to the Contract, and (2) Transferred Assets are free of any
      Material Adverse Change from the Signing Date to Closing Date (as defined
      in Article 4.6).
  -3-
  4.2 Under
this Contract, the pre-requisite conditions for the payment of RMB 5,000,000
(“Guarantee Money”) on
the 1st
anniversary day of Initial Payment Date (as defined in Article 5.1) are: (1) The
Sellers have fulfilled the obligations pursuant to the terms and conditions of
this Contract, and no representation or warranty under this Contract is found to
be misleading or untrue; and (2) the Sellers meet all pre-requisite conditions
set forth in Pre-requisite Conditions Two of AppendixII attached to
the Contract. Otherwise the Purchaser shall have the right to deduct direct and
indirect losses that it suffers from the guarantee money and remit the remaining
guarantee money (“Remaining
Guarantee Money”) into the account of Songsen. Provided that the
guarantee money can not make up for the losses suffered by the Purchaser, the
Purchaser shall have the right to require Sellers to assume applicable
liabilities and hold harmless the Purchaser against and from any loss and
damages arisen thereto.
 
 4.3
Provided that Sellers fail to meet all pre-requisite conditions set forth in
Pre-requisite Conditions Two of AppendixII attached to
the Contract, Sellers hereby guarantee that the contracting prices under the
five land contracting management agreements executed between the Seller and
local rural committees shall remain the same during respective contracting
period. Otherwise the Seller and Controlling Shareholder shall assume jointly
and severally liabilities to the Purchaser and hold the Purchaser harmless
against and from any loss and damages arisen from any increase of contracting
prices.
 
 4.4 The
parties hereby confirm that the fulfillment of obligations that Sellers shall
assume pursuant to Appendix IIattached to the Contract shall be subject to the
written confirmation by the Purchaser. The pre-requisite conditions set forth in
Appendix II attached to the Contract shall not be deemed as having been satisfied
until the Sellers obtain the written confirmation issued by the
Purchaser.
 
 4.5 In
the event that any of the conditions set forth in Article 4.1 and /or Article
4.2 have not been satisfied or implemented, and the Purchaser has not indicated
its waiver of the said conditions or any one of them, in writing, the Purchaser
shall not be obliged to pay the Transfer Price to Songsen.
 
 4.6 The
Sellers and the Purchaser hereby agree that the closing date shall be the third
(3) Business Day from the date which Sellers fulfill all pre-requisite
conditions set forth in Pre-requisite Conditions One of Appendix II attached to
the Contract (“Closing
Date”).
 
 -4-
 4.7 The
Parties shall conduct the assets delivery at the location of the Transferred
Assets at the Closing Date: the Parties shall count and sort out the transferred
Assets according to the Assets List of Appendix I hereto and make confirmations,
and Sellers shall deliver relevant documents of Transferred Assets (including
but not limited to the original materials, use right documents, technical
documents and specifications of the Transferred Assets) to the Purchaser. The
delivery completion shall base on the achievement of delivery confirmation
letter in written form issued by the Purchaser, otherwise Sellers shall not be
deemed as having fulfilled the assets delivery obligations.
 
 4.8 After
the assets delivery completion, Sellers shall assist the Purchaser in conducting
relevant approval and filing procedures for the Purchaser’s continuing operation
of the Transferred Assets according to the laws of PRC, to ensure the Purchaser
can legally own or use the Transferred Assets.
 
 4.9 After
the assets delivery completion, the Purchaser immediately becomes the owner or
user of Transferred Assets and shall enjoy any rights and interests relating to
the Transferred Assets.
 
 Article 5
                  Payment
 
 5.1 The
Purchaser shall pay RMB 16,252,540 to the bank accounts of Songsen in five
Business Days after the Closing Date. The initial payment date shall be the date
when the Purchaser pays the RMB16,252,540 to Songsen (“Initial Payment
Date”).
 
 The
guarantee money will be paid to Songsen on the 1st
anniversary day of Initial Payment Date that is the second payment date. The
Purchaser shall remit the guarantee money or the remaining guarantee money to
Songsen on the second payment date.
 
 The bank
accounts information of Songsen is as follows:
 
 Name of Payee: Haicheng
Songsen Farming Feed Co., Ltd.,
 Name of Bank:
 Account No.:
 
 5.2
Songsen shall issue to the Purchaser the evidential document of each payment
received within five (5) business days. Provided that Songsen fails to issue the
evidential document to the Purchaser in the stipulated time, the Purchaser shall
have the right to refuse to pay the transfer price thereafter and shall not be
deemed as the breach of Contract.
  -5-
  Article 6
                  Tax
      Payable
 
 Any
      taxes or fees arising out of and payable pursuant to the fulfillment of
      the terms of this Contract by each of Sellers or the Purchaser shall be
      payable by the respective Party which is liable for the taxes or fees
      under the provisions of relevant laws and regulations of
      China.
 
 
 Chapater
III Representations and Warranties of All Parties
 
 Article
      7
                  Representations
      and Warranties of All Parties
 
 7.1
Sellers and the Purchaser confirm that from the Signing Date this Contract shall
be a document having legal binding effect on all Parties.
 
 7.2 At
the time of signing this Contract, Sellers and the Purchaser state that the
documents and information provided to any other Party or their agencies
(including without limitation to the lawyers, appraiser, financial consultants,
etc.) prior to the Signing Date shall remain effective and confirm that where
there are discrepancies therein with the terms of this Contract, this Contract
shall prevail.
 
 7.3
Sellers and the Purchaser hereby agree that the contracts or documents
pertaining to the assets transfer entered into between all Parties prior to this
Contract shall lapse automatically upon this Contract coming into
effect.
 
 7.4 All
rights and obligations enjoyed or assumed previously by Songsen over the
Transferred Assets shall be entirely transferred to the Purchaser after the
Closing date.
 
 
 Chapater IV Disclosures,
Representations and Warranties of Sellers
 
 Article 8
                  Disclosures,
      Representations and Warranties of
Sellers
 
 Sellers
hereby jointly represent and warrant to the Purchaser that:
 
 8.1 All
information and facts relating to Transferred Asserts that are in the possession
of the Sellers or are known to any of the Sellers which will have a substantive
and adverse effect on the Sellers’ ability to fulfill any of its obligations in
this Contract or when disclosed to the Purchaser shall have a substantive effect
on the willingness of the Purchaser to sign and fulfill its obligations under
this Contract, have been disclosed to the Purchaser and the information provided
by Sellers to the Purchaser does not contain any representation that is untrue
or misleading.
  -6-
  8.2 No
lawsuits, arbitrations, or other legal or administrative proceedings or
governmental investigations are on-going against Sellers and/or Transferred
Assets that will materially affect its ability to sign this Contract or fulfill
its obligations under this Contract.
 
 8.3
                  Regarding
      the documents and information provided by Sellers to the Purchaser and/or
      Purchaser’s agencies (including but not limited to the lawyers, appraiser,
      financial consultants, etc.) prior to the Signing Date, Sellers hereby
      jointly undertake that:
 
 8.3.1
                  all
      copies made from original documents are true and complete and that such
      original documents are authentic and
complete;
 8.3.2
                  all
      documents provided to the Purchaser and/or Purchaser’s agencies as
      originals are authentic and
complete;
 8.3.3
                  all
      signatures appearing on documents provided to the Purchaser and/or
      Purchaser’s agencies as originals or copies of originals (seal) are
      genuine;
 8.3.4
                  Sellers
      have drawn to the attention of Purchaser and/or Purchaser’s agencies
      all matters that are material for the Purchaser to proceed with the
      transaction as contemplated in
  this Contract.
 
 Article 9
                  General
      Representations and Warranties of
Sellers
 
 9.1
                  Songsen
      is the legal entity that has been duly established in accordance with PRC
      laws and it is validly and legally in existence and also operating
      normally pursuant to PRC laws and regulations. Signing this Contract and
      fulfilling all of their obligations stipulated herein by Songsen will not
      contravene or result in the violation of or constitute a failure to
      fulfill or an inability to fulfill any of the stipulations in any laws,
      regulations, stipulations, any authorization or approval from any
      government body or department or the stipulations of any contract or
      agreement that Songsen is a party to or is bound
  by.
 
 9.2
                  The
      Controlling Shareholder is a PRC citizen with all civil abilities to enter
      into this Contract and fulfill all of their obligations stipulated herein.
      Signing this Contract and fulfilling all of their obligations stipulated
      herein by the Controlling Shareholder shall not contravene or result in
      the violation of or constitute a failure to fulfill or an inability to
      fulfill any of the stipulations in any laws, regulations, stipulations,
      any authorization or approval from any government body or department or
      the stipulations of any contract or agreement that Controlling Shareholder
      is a party to or is bound by.
 
 Article 10
                  Ownership
 
 10.1
Sellers legally own all land use right in the Transferred Assets and have full
authority and right to transfer the Transferred Assets to the
Purchaser.
 
 -7-
 10.2
Sellers hereby jointly undertake and warrant up to and including the Initial
Payment Date that the Transferred Assets are not subject to any Claims or
Encumbrances (including but not limited to any form of option, acquisition
right, mortgage, pledge, guarantee, lien or any other form of Third Party
rights).
 
 Article 11
                  Special
      Representations and Warranties of
Sellers
 
 Sellers
hereby specially represent and warrant to the Purchaser that:
 
 11.1
Songsen is the legal entity that has been duly established in accordance with
PRC laws and they are validly and legally in existence and also operating
normally pursuant to PRC laws and regulations. By the Initial Payment Date,
Transferred Assets are free of any Claim or Encumbrance (including but not
limited to any form of option, acquisition right, mortgage, pledge, guarantee,
lien or any other form of third party rights).
 
 11.2 Sellers hereby confirm and warrant
that provide that any failure to pay the registered capital,false
capital contribution, overrated capital contribution and flight of capital
contribution happens to Songsen, Sellers shall assume all the responsibilities
by themselves and the Purchaser shall never and ever assume any responsibility.
The Seller and Controlling Shareholder shall assume jointly and severally
liabilities to the Purchaser and hold the Purchaser harmless against and from
any direct and indirect losses arisen from any above-mentioned
acts.
 
 11.3 Sellers hereby confirm and warrant
to the Purchaser that Songsen will each execute a land contracting management
agreement with the Purchaser regarding five pieces of land in the Transferred
Assets, which provides that henhouses and equipments belong to the Purchaser,
office buildings are used by the Purchaser and any compensation arisen thereto
shall exclusively belong to the Purchaser. Provided that Sellers achieve such
compensation improperly, Sellers shall fully return such compensation to the
Purchaser.
 
 11.4
Songsen and the local rural committees haven’t stipulated the assets disposal in
the three land contacting management agreements, respectively 130 Mu (about
86,667 square meters), 25 Mu (about 16,666 square meters) and 70 Mu (about
46,667 square meters).Sellers
hereby confirm and warrant to the Purchaser that the Purchaser shall exclusively
enjoy the ownership, use right and all compensation achieved arisen from
governmental takeover no matter how assets on such three pieces of land will be
disposed. Provided that Sellers achieve such compensation improperly, Sellers
shall fully return such compensation to the Purchaser.
 
 11.5
There has not been and is not any investigation, prosecutions, disputes, claims
or other proceedings (whether current, pending or threatened) in respect of
Songsen, nor Songsen has been punished or Sellers can foresee any punishment to
be made by any administrative authorities of the PRC before the assets transfer
under this Contract and such punishment may affect the ownership and use of
Transferred Assets of the Purchaser, except for those disclosed to the Purchaser
prior to Closing Date.
 
 -8-
 11.6
Sellers hereby warrant that all tax, fees, charges, penalties and expenses
payable to or required to pay to any PRC governmental authorities have been
fully paid. By the Signing Date of this Contract, there has been no default in
the payment of such tax, fees, charges, penalties and expenses. The Seller and
Controlling Shareholder shall assume the joint and several liabilities in case
of any losses, damages or any penalties suffered by the Purchaser due to any
investigation, prosecutions, disputes, claims or other proceedings prior to the
assets transfer under this Contract and shall fully indemnify the Purchaser all
losses arisen thereto.
 
 11.7
Sellers hereby confirm and warrant to the Purchaser that no matter before or
after the assets transfer, the Purchaser shall assume no responsibilities of any
debts of Sellers and Sellers shall have no right to repay such debts with
Transferred Assets, except for those debts disclosed to the Purchaser prior to
Closing Date.
 
 11.8
Sellers hereby irrevocably represent and warrant that Transferred Assets are
free of any mortgage, pledge and guarantee. The Seller and Controlling
Shareholder shall assume joint and several liabilities in case of any losses or
damages suffered by the Purchaser due to the undisclosed security (if any) and
shall indemnify the Purchaser all losses arisen thereto.
 
 11.9
Prior to the signing of this Contract, Sellers have entirely disclosed all
information regarding any Encumbrances in the Transferred Assets. As of the
Initial Payment Date, such information remains complete, authentic, accurate and
true.
 
 11.10
Sellers hereby confirm and warrant to the Purchaser that they will ensure the
normal operation and management of Transferred Assets prior to the Closing
Date and the Transferred Assets will be free of any Encumbrances and any
Material Adverse Change.
 
 11.11
After the Closing Date, Sellers shall actively assist the Purchaser in achieving
relevant approvals, permits and consents to operate broiler breeding farms and
try the best to obtain fiscal support regarding broiler breeding from
governmental authorities.
 
 11.12
Sellers hereby confirm and warrant to the Purchaser that Sellers will try the
best to obtain approvals and registrations to ensure the lawful operation by the
Purchaser of Transferred Assets. Provided that transfer of Transferred Assets
are deemed to be void or rights of the Purchaser are harmed arisen from Sellers’
failure to obtain such approvals and registrations, the Seller and Controlling
Shareholder shall assume jointly and severally liabilities to the Purchaser and
hold the Purchaser harmless against and from any direct and indirect losses
suffered by the Purchaser.
 
 -9-
 11.13
Before the Closing Date, Sellers hereby confirm and warrant to the Purchaser
that all losses, damages and destruction of Transferred Assets shall be born by
Sellers themselves.
 
 11.14 The
Purchaser is entitled to require Sellers to undertake the joint and several
liabilities and indemnify and hold harmless the Purchaser against and from any
direct and indirect losses or damages in case of any infringement of any
representations and warranties stated hereinabove by Sellers or in case that
Sellers fails to meet any or all pre-requisite conditions set forth in
Conditions Two of Appendix II attached hereto.
 
 
 Chapater V Disclosures,
Representations and Warranties of the Purchaser
 
 Article 12
                  Disclosures,
      Representations and Warranties of the
Purchaser
 
 The
Purchaser hereby represents and warrants to Sellers that:
 
 12.1 The
Purchaser is a legal entity that has been duly established and it is validly and
legally in existence and also operating normally in accordance with the PRC
laws.
 
 12.2 The
execution and performance of this Contract by the Purchaser will not contravene
or result in the violation of or constitute a failure to fulfill or an inability
to fulfill any of the stipulations of Purchaser’s articles of association or its
internal rules, any laws, regulations, stipulations, or any authorizations or
approvals from any government body or department or any contract or agreement
that the Purchaser is a party to or is bound by.
 
 12.3 No
lawsuits, arbitrations, or other legal or administrative proceedings or
governmental investigations are on-going against the Purchaser that will
materially affect its ability to sign this Contract or fulfill its obligations
under this Contract.
 
 
 Chapater
VI Confidentiality
 
 Article 13
                  Confidentiality
 
 13.1 All
Parties agree unless otherwise provided for in another relevant
confidentiality
 agreement
that with regard to the confidential and exclusive information that have been
disclosed to or may be disclosed to the other Parties by any Party to this
Contract pertaining to their respective businesses, or financial situations and
other confidential matters, all Parties to this Contract which have received the
aforesaid confidential information (including written information and
non-written information, hereinafter referred to as “Confidential Information”)
shall:
 
 -10-
 13.1.1
                  Keep
      the aforesaid Confidential Information
  confidential;
 
 13.1.2
                    Save
      for the disclosure of the Confidential Information by a Party to this
      Contract to its employees solely for the performance of their duties and
      responsibilities, neither Party to this Contract shall disclose the
      Confidential Information to any Third Party or any
  entity.
 
 13.2
                    The
      provisions of the aforesaid Article 13.1 shall not apply to the following
      Confidential Information:
 
 13.2.1
                    which
      was available to the receiving Party from the written record before the
      disclosing Party disclosed the information to the receiving Party and the
      written record can prove that the confidential information was already
      known to the receiving Party;
 
 13.2.2
                    which
      has become public information by means not attributable to any breach by
      the receiving Party;
 
 13.2.3
                    which
      was obtained, by the receiving Party from a Third Party not subject to any
      confidentiality obligation affecting the said Confidential
      Information.
 
 13.3 As
far as any natural person or legal entity which is a Party to this Contract is
concerned, notwithstanding that it has ceased to be a Party to this Contract
because of the transfer of its rights and obligations pursuant to the terms of
this Contract, the stipulations set forth in this Chapter VII shall remain
binding on it.
 
 
 Chapater VII Breach of
Contract
 
 Article 14
                  Liabilities
      for Violation of Representations or
Warranties
 
 14.1 If
any representation or warranty made by any Party to this Contract is found to be
a material error, or if any fact that has or is likely to have a major or
substantial effect on the signing of this Contract by any Party has been
omitted, or if any representation or warranty is found to be misleading or
untrue in any material respect, the non-breaching Party shall be entitled to
look to the Party (ies) in breach for full compensation for any loss, damage,
cost or expense (including any attorneys’ fee and litigation and arbitration
fee) arising from the erroneous, misleading or untrue representation or warranty
of the Party (ies) in breach or arising from any other breach of any
representation and warranty given by the Party (ies) in breach.
 
 -11-
 14.2 Each
representation and warranty set forth in this Contract is to be construed
independently.
 
 14.3 For
the avoidance of doubt, Sellers hereby unconditionally and irrevocably agree and
confirm that they shall be jointly liable for any liability for any breach of
representation or warranty.
 
 Article 15
                  Liabilities
      for Breach of Contract
 
 15.1 In
the event of a breach committed by any Party to this Contract, the said
defaulting Party shall be liable to the other Party (ies) for any liabilities
arising out of that defaulting Party’s breach of contract in accordance with the
provisions of this Contract and the laws and regulations of PRC. In case of
breach of Contract by all Parties hereto, a Party shall respectively assume
liabilities for any loss or damage, or any other liabilities, arising out of its
breach of Contract, against other Parties.
 
 15.2 In
the event that Sellers fail to meet any conditions set forth in Appendix II or
violates any representation, warranty or obligations under this Contract,
without account of the intention or gross negligence of the Purchaser, Sellers
shall pay RMB 1,000,000 to the Purchaser, in addition to the compensation for
any direct or indirect loss arising therefrom.
 
 
 Chapater VIII Force
Majeure
 
 Article 16
                  Force
      Majeure
 
 16.1 The
Force Majeure shall include earthquake, typhoon, flood, fire, war, political
unrest and such special incidents or events that are deemed to be Force Majeure
occurrences under the provisions of the relevant laws and regulations of
PRC.
 
 16.2 In
the event of the occurrence of a Force Majeure event, the
obligations of the Party to
 this
Contract affected by thisForce Majeureevent shall cease during the period of the Force Majeure event and any
term or period set forth in this Contract and to which the affected party is
subject shall automatically be extended by a period equal to the term or period
of the Force Majeure
event, the period of extension shall be the same as the period of cessation of
the obligations by reason of the Force Majeureevent, and the
said Party shall not be liable for any liabilities arising out of a breach of
contract as provided for in this Contract for the duration of the Force Majeure.
 
 16.3 The
Party claiming the occurrence of a Force Majeure event shall
promptly inform the
 other
Party (ies) in writing, and within seven (7) days thereafter, it shall provide
sufficient evidence (issued by the notary organization) of the occurrence and
the continuity of the Force
Majeureevent. It shall also do its best to eliminate the adverse effect
of the Force Majeure
event.
 
 -12-
 
 Chapater IX Resolution of
Disputes
 
 Article 17
                  Arbitration
 
 Any
dispute arising out of this Contract between the Parties to this Contract shall
firstly be resolved through friendly consultation. In the event that sixty (60)
days after the commencement of the friendly consultations, the dispute cannot be
resolved through such means, either Party may submit the dispute to the China
International Economic and Trade Arbitration Commission in Beijing for
arbitration in accordance with its prevailing valid arbitration
rules.
 
 Article 18
                  Validity
      of Arbitral Award
 
 The
arbitration award shall be final and shall be binding on all Parties to this
Contract. All Parties to this Contract agree to be bound by the said award, and
to act according to the terms of the said award.
 
 Article 19
                  Continuation
      of Rights and Obligations
 
 After a
dispute has arisen and during its arbitration process, other than the disputed
matter, all Parties to this Contract shall continue to exercise their other
respective rights stipulated in this Contract, and shall also continue to
fulfill their other respective obligations stipulated in this
Contract.
 
 
 Chapater X Applicable
Law
 
 Article 20
                  Applicable
      Law
 
 The laws
and regulations of the PRC shall govern and be binding on the establishment,
validity, interpretation and execution of this Contract. All disputes arising
out of this Contract shall be determined according to the laws of the PRC. In
the event the laws of the PRC do not make provision for a certain issue relating
to this Contract, reference shall be made to general international business
practice.
 
 -13-
 
 Chapater
XI Miscellaneous
 
 Article 21
                  Non-Waiver
 
 The
non-exercise or delay in the exercise of an entitlement stipulated in this
Contract by any Party to this Contract shall not be regarded as a waiver of the
said entitlement. Any single exercise or partial exercise of an entitlement
shall not rule out any future re-exercise of the said entitlement.
 
 Article 22
                  Transfer
 
 Unless
otherwise described and prescribed in this Contract, neither Party to this
Contract shall transfer nor assign all or any part of this Contract or transfer
or assign that Party’s entitlement or obligations as stipulated in this
Contract.
 
 Article 23
                  Amendment
 
 23.1 This
Contract has been executed for the benefit of all Parties to this Contract and
their respective lawful successor(s) and assignees, and shall have legal binding
effect on them.
 
 23.2 This
Contract may not be amended verbally. Only a written document signed by
all
 Parties
indicating their consent to such amendment shall be effective.
 
 Article 24
                  Severability
 
 The
invalidity of any term in this Contract shall not affect the validity of the
other terms in this Contract.
 
 Article 25
                  Language
 
 This
Contract is written in the Chinese Language.
 
 Article 26
                  Effectiveness
      of Text and Appendixes
 
 26.1 The
Contract shall be effective from the execution of Parties hereof. The Contract
shall be executed in three (3) original sets in Chinese, with Parties hereto
holding one (1) set respectively.
 
 26.2 The
Appendixes to this Contract shall form an integral part of this Contract, and
shall have the same effect as this Contract.
 
 Article 27
                  Notification
  -14-
  27.1
Unless otherwise specified and prescribed, any Party issuing any notification or
written communication to the other Party (ies) according to the provisions of
this Contract shall have them written in the Chinese Language and shall send
them as a letter by a courier service company, or by facsimile. Letters sent by
a courier service company, will require a confirmation to be given seven (7)
business days after handing over the notification or communication to the
courier service company. Any notification or written communication sent in
accordance with the stipulations of this Contract shall be deemed to be
effective on the date of receipt.  If they are sent by facsimile, the
date of receipt shall be deemed to be three (3) business days after
transmission, subject to a facsimile confirmation report evidencing
this.
 
 27.2 All
notices or communications shall be sent to the following addresses, unless and
until any such address is changed by a written notice to the other
Party:
 
 Address
of Sellers:
 Tel:
 Fax
Number:
 To:
 
 
 
 Address
of the Purchaser: No. 301, Hailong Road, Hanting District, Weifang, Shandong
Province
 Tel:
0536-7363788
 Fax
Number: 0536-7363788
 To:           Zhentao
Gao
 
 Article 28
                  Entire
      Agreement
 
 This
Contract constitutes the entire agreement of all Parties to this Contract
pertaining to the transaction agreed upon in this Contract, and shall replace
all the previous discussions, negotiations and agreements among all Parties to
this Contract in respect of the transaction of this Contract.
 (The remainder of this page
is intentionally left blank)
  -15-
  IN
WITNESS WHEREOF, the duly authorized representatives of Sellers and the
Purchaser have signed this Contract on the date first above
written.
 
 
 
 Sellers:
Haicheng Songsen Farming Feed Co., Ltd.
 
 (Seal)
 
 
 Authorized
Representative(Signature):__________
 
 
 
 
 Zhao
Lin Jiang
 
 Signature:__________
 
 
 
 Purchaser:Weifang Yuhe Poultry Co.,
Ltd.
 
 (Seal)
 
 
 Authorized
Representative(Signature):__________
 
 -16-
  Appendix
I Assets List
  
 Transferred
Assts
 
 1.
Five pieces of land
 
 Information
      of the five land contracting management contractsContractees
                    Contractors
                    Signing
      Date
                    Contracting
      Period
                    Area
      of land
                    Contracting
      Fees
                    Term
      of PaymentShanshui
      Villager Committee, Gengzhuang County, Haicheng City
                    Songsen
                    1
      March 2005
                    Twenty
      years, from 1 March 2005 to 28 February 2025
                    70
      Mu (about 46,667 square meters)
                    RMB500/Mu
      per
                      year,
      amounted to
                      RMB700,000
                    Pay
      in twice: RMB400,000 before the end of March 2005; and RMB300,000 before
      the end of year 2015Banzitun
      Villager
                      Committee,
                      Chagou
      County, Haicheng City
                    Songsen
                    20
      April 2005
                    Thirty
      yeas, from 20 April 2005 to 19 April 2035
                    49
      Mu (about 32,667 square meters)
                    Amounted
      to RMB740,000
                    Pay
      up the contracting fee in
                      one
      time at the signing date,
                      that
      is 20 April 2005Houshantaizi
      Villager Committee, Dongsi County, Haicheng City
                    Songsen
                    10
      February  2006
                    Twenty
      years, from 26 February 2006 to 25 February 2026
                    25
      Mu (about 16,667square meters
                    RMB500/Mu
      per
                      year,
      amounted to
                      RMB250,000
                    Pay
      in twice: RMB125,000 before the end of February 2006; and RMB125,000
      before the end of year 2016Banzitun
      Villager
                      Committee,
                      Chagou
      County, Haicheng City
                    Songsen
                    1
      January 2007
                    Twenty
      years, from 10 January 2007 to 10 January 2027
                    40
      Mu (about 26,667 square meters)
                    Amounted
      to RMB400,000
                    Pay
      up the contracting fee in
                      one
      time at the signing date,
                      that
      is 1 January 2007Zhaopi
      Villager
                      Committee,
                      Wangtai
      County, Haicheng City
                    Songsen
                    14
      March 2008
                    Twenty
      years, from 24 March 2008 to 24 March 2028-
                    130Mu
      (about 86,667 square meters)
                    RMB500/Mu
      per
                      year,
      amounted to
                      RMB1,300,000
                    Pay
      in six times:
                      RMB195,000
      before the end
                      of
      March 2008; RMB195,000 before the end
                      of
      March 2010; RMB195,000 before the end
                      of
      March 2014; RMB195,000 before the end
                      of
      March 2017; RMB195,000 before the end
                      of
      March 2021; and RMB325,000 before the end
                      of
      March 2025
  -17-
  2.
House property
  Name
                    Structure
                    Number
      of Rooms
                    Area
      of Offices(square
      meters)
                    Number
      of Henhouses
                    Specification(Length/width)
                    Area
      of Henhouses(square
      meters)
                    Total
      building area (square meters)Chicken
      Farm 1
                    Brick-concrete
      and Steel Structure
                    60
                    1,080
                    40
                    52m*13m
                    27,040
                    28,120Chicken
      Farm 2
                    Brick-concrete
      and Steel Structure
                    30
                    540
                    20
                    44m*13m
                    11,440
                    11,980Chicken
      Farm 3
                    Brick-concrete
      Structure
                    20
                    360
                    8
                    50m*12m
                    4,800
                    5,160Chicken
      Farm 4
                    Brick-concrete
      Structure
                    25
                    450
                    10
                    50m*12m
                    6,000
                    6,450Chicken
      Farm 5
                    Brick-concrete
      Structure
                    30
                    540
                    20
                    60m*9m
                    10,800
                    11,340
 
 3.
Equipments
 
 Name
      of Chicken Farms
                      Specification
                      Number1、HencoopChicken
      Farm 1
                      1.9m*0.42m*0.42m
                      22,000Chicken
      Farm 2
                      1.88m*0.4m*0.35m
                      10,000Chicken
      Farm 3
                      1.9m*0.42m*0.42m
                      3,520Chicken
      Farm 4
                      1.9m*0.42m*0.42m
                      4,400Chicken
      Farm 5
                      1.9m*0.42m*0.42m
                      6,6002.Feeding
      EquipmentsChicken
      Farm 1
                      Feed
      Tank
                      11,000Chicken
      Farm 2
                      Feed
      Tank
                      5,000Chicken
      Farm 3
                      Feed
      Tank
                      1,760Chicken
      Farm 4
                      Feed
      Tank
                      2,200Chicken
      Farm 5
                      Feed
      Tank
                      3,3003、Water Supply
      EquipmentsChicken
      Farm 1
                      Shanghai
      Jiabao
                      66,000Chicken
      Farm 2
                      Shanghai
      Jiabao
                      30,000Chicken
      Farm 3
                      Shanghai
      Jiabao
                      10,560Chicken
      Farm 4
                      Shanghai
      Jiabao
                      13,200Chicken
      Farm 5
                      Shanghai
      Jiabao
                      19,8004、Ventilation
      EquipmentsChicken
      Farm 1
                      Shandong
      Damuren1400
                      180Chicken
      Farm 2
                      Shandong
      Damuren1400
                      40Chicken
      Farm 3
                      Shandong
      Damuren1400
                      32Chicken
      Farm 4
                      Shandong
      Damuren1400
                      40Chicken
      Farm 5
                      Shandong
      Damuren1400
                      605、Heating
      EquipmentsChicken
      Farm 1
                      hot-blast
      stove
                      20
      setsChicken
      Farm 2
                      hot-blast
      stove
                      20
      sets6、Cooling
      equipmentsChicken
      Farm 1
                      Brick
      drencher curtain
                      40Chicken
      Farm 3
                      Brick
      drencher curtain
                      8Chicken
      Farm 4
                      Brick
      drencher curtain
                      8Chicken
      Farm 5
                      Brick
      drencher curtain
                      20
 
 -18-
  Appendix II Pre-requisite Conditions
  
 Pre-requisite
Conditions
 
 Pre-requisite
ConditionsOne
 
 Sellers
hereby irrevocably confirm and guarantee to fulfill all following conditions
precedent within the time limit on their own costs:
 
 (A)
                  Purchaser’s
      satisfaction with the results of legal and financial due diligence on the
      transferred assets;
 
 (B)
                  Songsen
      each enters into the land contracting management agreement with the
      Purchaser regarding the five pieces of land in the Transferred
      Assets;
 
 (C)
                  Songsen
      lawfully holds transferred assets which are free of any Claims or
      Encumbrances (including but not limited to any form of mortgage, pledge,
      guarantee, lien or any other form of Third Party
  rights);
 
 (D)
                  Resolution
      of the board of directors’ or shareholders’ meeting of Songsen to approve
      transfer of Transferred Assets
 
 Pre-requisite
ConditionsTwo
 
 Within
one year from the Closing Date of this Contract, Sellers shall try their best to
achieve all approvals, registrations for its lawful transfer of Transferred
Assets to the Purchaser in accordance with PRC Law, and ensure that the
Purchaser can legally manage the Transferred Assets, including but not limited
to following procedures:
 
 (A)
Songsen confirms that the five land contracting management agreements has been
approved by at least two thirds of peasants of Village Meeting or one third
peasant representatives of local collective economic organization;
 
 (B)
Songsen confirms that it will achieve the consent of local village committees
regarding its transfer of land contracting management rights of five pieces of
land to the Purchaser and will register the transfer of land contracting
management rights in the local village committee
  -19-