Unassociated Document


 




Operating Agreement










 



EXECUTION VERSION


 


Operating Agreement


 


This Operating Agreement (this “Agreement”) is entered into by and among Guangzhou Kanghui Agricultural Technology Co., Ltd. (“Kanghui”), Guangzhou Tanke Industry Co., Ltd. (“Tanke”), and the undersigned shareholders of Tanke (collectively the “Shareholders”) as of January 3, 2011 in Guangzhou, the People’s Republic of China (the “PRC” or “China”). Kanghui, Tanke and the Shareholders are each referred to in this Agreement as a “Party” and collectively as the “Parties”.


 


RECITALS


 



	
a)

	
Kanghui, a company incorporated in the PRC as a foreign invested enterprise, has the expertise in consultancy of agricultural technology and animal husbandry technology.







 



	
b)

	
Tanke is a company incorporated in China, and is engaged in the business of development and research regarding technology of premixed additive feed and feed additive; distribution and retail; import and export of goods and technology.







 



	
c)

	
The undersigned Shareholders of Tanke collectively own 100% of the equity interest of Tanke (the “Equity Interest”).







 



	
d)

	
Kanghui has entered into a Consulting Services Agreement with Tanke (the “Consulting Services Agreement”) to provide consulting and other relevant services relating to the Business to Tanke.







 



	
e)

	
Pursuant to the Consulting Services Agreement with Kanghui and Tanke dated January 3, 2011, Tanke is obligated to make regular payment of consulting services fee to Kanghui during the term of the Consulting Services Agreement. Tanke’s daily operation has a material influence on its ability to make such payment to Kanghui.







 


NOW, THEREFORE, the Parties to this Agreement hereby agree as follows through negotiation to clarify certain matters in connection with Tanke’s operations:


 



	
1.

	
Kanghui agrees, subject to Tanke’s agreement to relevant provisions of this Agreement, to be Tanke’s guarantor in connection with the contracts, agreements and transactions executed between Tanke and any other third party, and to provide full guarantee for the performance of such contracts, agreements of transactions by Tanke. Tanke agrees, as a counter-guarantee, to pledge all of its relevant assets, including accounts receivable, to Kanghui. Pursuant to such guarantee arrangement, Kanghui wishes to enter into written guarantee agreements with Tanke’s counter-parties thereof, to assume the guarantee liability as the guarantor when applicable. As such, Tanke and the Shareholders shall take all necessary actions (including but not limited to, executing relevant documents and proceeding with relevant registrations) to carry out the counter-guarantee arrangements provided by Kanghui thereof.







 




  





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2.

	
In consideration of Clause 1 herein and to assure the performance of the various arrangements between Kanghui and Tanke, and the payment of the accounts payable by Tanke to Kanghui, Tanke and the Shareholders thereby jointly agree that Tanke shall not, without the prior written consent of Kanghui, conduct any transaction which may materially affect the assets, obligations, rights or the operations of Tanke (excluding proceeding with Tanke’s normal business operation and the lien obtained by relevant counter parties due to such agreements). Such transactions shall include, without limitation, the following:







 



	 	
2.1

	
To borrow money from any third party or assume any debt;







 



	
  

	
2.2

	
To sell or acquire from any third party any asset or right, including but not limited to any intellectual property rights;







 



	
  

	
2.3

	
To provide any guarantee to any third party using its assets or intellectual property rights; or







 



	 	
2.4

	
To assign to any third party its business agreements.







 



	
3.

	
In order to ensure the performance of the various operation agreements between Kanghui and Tanke and the payments of various accounts payable by Tanke to Kanghui, Tanke and the Shareholders hereby jointly agree to accept the corporate policies provided by Kanghui in connection with Tanke’s daily operations, financial management and the employment and dismissal of Tanke’s employees.







 



	
4.

	
Tanke and the Shareholders hereby jointly agree that the Shareholders shall appoint the members recommended by Kanghui as the Directors of Tanke, and shall appoint members of Kanghui’s senior management as Tanke’s CEO and President, Chief Financial Officer, and other senior officers. If any member of such senior management leaves or is dismissed by Kanghui, he or she will lose the qualification to take any position with Tanke, and Tanke shall appoint another member of Kanghui’s senior management to take such position, as recommended by Kanghui. The person recommended by Kanghui in accordance with this section shall have the qualifications of a Director, General Manager, Chief Financial Officer, and/or other relevant senior officers pursuant to applicable laws.







 



	
5.

	
Tanke, together with the Shareholders, hereby jointly agree and confirm that Tanke shall first seek guarantee from Kanghui if Tanke requires any guarantee for its performance of any contract or loan in the course of its business operation. Under such circumstances, Kanghui shall have the right, but not the obligation, to provide the appropriate guarantee to Tanke at its sole discretion. If Kanghui decides not to provide such guarantee, Kanghui shall issue a written notice to Tanke immediately and Tanke shall seek a guarantee from other third party.







 




  





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6.

	
In the event that any of the agreements between Kanghui and Tanke terminates or expires, Kanghui shall have the right, but not the obligation, to terminate any or all of the agreements between Kanghui and Tanke, including but not limited to, this Agreement and the Consulting Services Agreement.







 



	
7.

	
Any amendment to this Agreement shall be made in writing. The amendments duly executed by all Parties shall be deemed as an integral part of this Agreement.







 



	
8.

	
If any provision of this Agreement is held to be invalid, illegal, unenforceable or in conflict with the laws and regulations of the jurisdictions, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby.







 



	
9.

	
Tanke and the Shareholders shall not assign any right or obligation under this Agreement to any third party without the prior written consent of Kanghui. Tanke and the Shareholders hereby agree that Kanghui may assign its rights and obligations under this Agreement if necessary and such transfer shall only be subject to a written notice sent to Tanke and the Shareholders by Kanghui, and no any further consent from Tanke or the Shareholders will be required.







 



	
10.

	
The Parties of this Agreement shall acknowledge and ensure the confidentiality of all oral and written materials exchanged relating to this Agreement. No Party shall disclose the confidential information to any other third party without the other Party’s prior written approval, unless: (a) it is already in the public domain at the time when it is communicated (unless it enters the public domain without the authorization of the disclosing Party); (b) the disclosure is in response to the relevant laws, regulations, or stock exchange rules; or (c) the disclosure is required by any of the Party’s legal counsel or financial consultant for the purpose of the transaction of this Agreement. However, such legal counsel and/or financial consultant shall also comply with the confidentiality as stated hereof. The disclosure of confidential information by employees of hired institutions of the disclosing Party is deemed to be an act of the disclosing Party, and such disclosing Party shall bear all liabilities of the breach of confidentiality.







 



	
11.

	
If any provision of this Agreement is found by a proper authority to be unenforceable or invalid such unenforceable or invalidity shall not render this Agreement unenforceable or invalid as a whole.







 



	
12.

	
Notice or other communications required to be given by any Party pursuant to this Agreement shall be written in English and Chinese and delivered personally or sent by registered mail or by a recognized courier service or by facsimile transmission to the address of the relevant Party set forth below. The date when the notice is deemed to be duly served shall be determined as the follows: (a) a notice delivered personally is deemed duly served upon the delivery; (b) a notice sent by mail is deemed duly served the third (3rd) day after the date; and (c) a notice sent by facsimile transmission is deemed duly served upon the time shown on the transmission confirmation of relevant documents.







 




  





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Operating Agreement










 



	
  

	
To Kanghui








	 	
Address:

	
No 281, Building 2, Changxing Road, Tianhe District, Guangzhou








	
  

	
Attn:

	
Chun Rui Wu








	
  

	
Fax:

	
+86-20-38859482








	
  

	
Tel:

	
+86-20-38859499







 



	
  

	
To Tanke








	 	
Address:

	
Room 2801, East Tower of Hui Hao Building, No. 519 Machang Road, Pearl River New City, Guangzhou, PR China 510627








	
  

	
Attn:

	
Guixiong Qiu








	
  

	
Fax:

	
+86-20-38859077








	
  

	
Tel:

	
+86-20-38859025







 



	
  

	
To the Shareholders








	 	
Address:

	
Room 2801, East Tower of Hui Hao Building, No. 519 Machang Road, Pearl River New City, Guangzhou, PR China 510627








	
  

	
Attn:

	
Guixiong Qiu








	
  

	
Fax:

	
+86-20-38859077








	
  

	
Tel:

	
+86-20-38859025







 



	
13.

	
This Agreement shall be governed and construed in accordance with the PRC law.







 



	
14.

	
The Parties agree that in the event a dispute shall arise from this Agreement, the Parties shall settle their dispute through amicable negotiations and/or arbitration in accordance with this Clause 14. If the Parties fail to reach a settlement within forty-five (45) days following the negotiations, the dispute shall be submitted to be determined through arbitration by China International Economic and Trade Arbitration Commission (“CIETAC”), Shanghai Branch, in accordance with CIETAC arbitration rules. There shall be three (3) arbitrators. Kanghui, and all the Shareholders collectively as one side, shall each select one (1) arbitrator, and both arbitrators shall be selected within thirty (30) days after giving or receiving the demand for arbitration. The chairman of the CIETAC shall select the third arbitrator. If a Party fails to appoint an arbitrator within thirty (30) days after giving or receiving the demand for arbitration, the relevant appointment shall be made by the chairman of the CIETAC. The arbitration shall be conducted in Shanghai. The award of CIETAC is final and shall be conclusively binding upon the Parties and shall be enforceable in any court of competent jurisdiction. For avoidance of doubt, Tanke, who may or may not select arbitrator, shall be bound by the award of CIETAC.







 




  





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15.

	
This Agreement has been executed by each Party or its duly authorized representative on the date first written above and shall become effective simultaneously.







 



	
16.

	
The Parties confirm that this Agreement shall constitute the entire agreement of the Parties with respect to the subject matters herein and shall supersede and replace all prior verbal and written agreements and understandings among the Parties.







 



	
17.

	
The term of this Agreement shall commerce from the execution date and shall last for the maximum period of time permitted by law unless early terminated in accordance with the relevant provisions herein or by any other agreements reached by all Parties. Within the term of the Agreement, if Kanghui shall terminate this Agreement (including any extension of such term) or if this Agreement shall terminate due to any other reason, this Agreement shall be terminated upon the termination of such Party, unless such Party has already assigned its rights and obligations in accordance with Clause 9 hereof.







 



	
18.

	
This Agreement shall be terminated on the expiration date unless it is renewed in accordance with the relevant provisions herein. During the effective term of this Agreement, Tanke and the Shareholders shall not terminate this Agreement. Notwithstanding the above stipulation, Kanghui shall have the right to terminate this Agreement at any time by giving a thirty (30)-day prior written notice to Tanke and the Shareholders.







 



	
19.

	
This Agreement has been executed in six (6) originals in English and all originals shall be equally valid. Each Party shall retain one (1) original.







 


[No Text Below]


 




  





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Operating Agreement










 


[Signature Page]


 


IN WITNESS THEREOF this Agreement is duly executed by each Party or its legal representatives on the date first set forth above.


 







 


Guangzhou Kanghui Agricultural Technology Co., Ltd.


 


 




	/s/ Chun Rui Wu	 







Name: Chun Rui Wu


Title:


 


 


Guangzhou Tanke Industry Co., Ltd.


 


 




	/s/ Guixiong Qiu	 







Name: Guixiong Qiu


Title:  CEO and President


 


 


[Signature of Shareholders of Tanke]


 


 



	/s/ Guixiong Qiu	 







 



 


Qiu Guixiong


 


ID Card No.:


 


Owns 45% of the Equity Interest


 


 



Signature page to Operating Agreement




 




  





  











  


Operating Agreement










 


[Signature Page continued]


 


 




	/s/ Gao Bi	 





 




Gao Bi


 


ID Card No.:


 


Owns 32% of the Equity Interest


 


 



	/s/ Liang Xiuzhen	 








 


Liang Xiuzhen


 


ID Card No.:


 


Owns 20% of the Equity Interest


 









	/s/ Teng Bing	 





 




Teng Bing


 


ID Card No.:


 


Owns 3% of the Equity Interest


 


 


Signature page to Operating Agreement