Document:

Exhibit
10.23

    

    

    SHAREHOLDERS
AGREEMENT

     

    of

     

    HYPOR
AGFEED BREEDING COMPANY INC.

    

    DATED
AS OF DECEMBER 11, 2009

     

    
      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

    

    TABLE
OF CONTENTS

    

    
      
        
          
            
              
                
                  	 
      	 
      	 	 
      	
                          Page

                        
	 
      	 
      	 	 
      	 
      
	
                          ARTICLE
      1

                        	 	
                          DEFINITIONS
      AND INTERPRETATION

                        	
                          1

                        
	 
      	
                          1.1

                        	 	
                          Defined
      Terms

                        	
                          1

                        
	 
      	
                          1.2

                        	 	
                          Company
      Documentation

                        	
                          7

                        
	 
      	
                          1.3

                        	 	
                          Interpretation
      and Rules of Construction

                        	
                          8

                        
	
                          ARTICLE
      2

                        	 	
                          CAPITAL
      /PERCENTAGE INTERESTS/FUTURE FINANCING

                        	
                          9

                        
	 
      	
                          2.1

                        	 	
                          Initial
      Capital Contributions

                        	
                          9

                        
	 
      	
                          2.2

                        	 	
                          Equity
      Interest/Cash Investment

                        	
                          9

                        
	 
      	
                          2.3

                        	 	
                          Additional
      Capital Commitments

                        	
                          9

                        
	
                          ARTICLE
      3

                        	 	
                          DISTRIBUTIONS
      TO SHAREHOLDERS

                        	
                          10

                        
	 
      	
                          3.1

                        	 	
                          Distributions

                        	
                          10

                        
	 
      	
                          3.2

                        	 	
                          Distribution
      of Assets in Kind

                        	
                          10

                        
	
                          ARTICLE
      4

                        	 	
                          REPRESENTATIONS
      AND WARRANTIES

                        	
                          11

                        
	 
      	
                          4.1

                        	 	
                          Representations
      and Warranties of the Shareholders

                        	
                          11

                        
	
                          ARTICLE
      5

                        	 	
                          MANAGEMENT
      AND CONTROL

                        	
                          12

                        
	 
      	
                          5.1

                        	 	
                          Board
      Composition

                        	
                          12

                        
	 
      	
                          5.2

                        	 	
                          Matters
      Requiring Consent of the Shareholders

                        	
                          13

                        
	 
      	
                          5.3

                        	 	
                          Matters
      Requiring Consent of AGFEED

                        	
                          14

                        
	 
      	
                          5.4

                        	 	
                          Matters
      Requiring Consent of HYPOR

                        	
                          14

                        
	 
      	
                          5.5

                        	 	
                          Rights
      of Shareholders

                        	
                          15

                        
	
                          ARTICLE
      6

                        	 	
                          REPORTS
      AND TAX RETURNS

                        	
                          15

                        
	 
      	
                          6.1

                        	 	
                          Annual
      Budget and Business Plan

                        	
                          15

                        
	 
      	
                          6.2

                        	 	
                          Tax
      Returns, Books and Records

                        	
                          15

                        
	
                          ARTICLE
      7

                        	 	
                          TRANSFERS
      OF SHARES

                        	
                          16

                        
	 
      	
                          7.1

                        	 	
                          Restrictions
      on Transferability

                        	
                          16

                        
	 
      	
                          7.2

                        	 	
                          Attempted
      Transfers in Contravention

                        	
                          16

                        
	 
      	
                          7.3

                        	 	
                          Transfers
      to Affiliates

                        	
                          16

                        
	 
      	
                          7.4

                        	 	
                          Permitted
      Disposition of an Interest

                        	
                          16

                        
	 
      	
                          7.5

                        	 	
                          Grant
      of Option

                        	
                          17

                        
	 
      	
                          7.6

                        	 	
                          Exercise
      of Option

                        	
                          17

                        
	 
      	
                          7.7

                        	 	
                          Bona
      Fide Offer

                        	
                          17

                        

                

              

            

          

        

      

    

    
      
         

      

      
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    TABLE
OF CONTENTS

    (continued)

     

    
      
        
          
            
              
                	 
      	 
      	 	 
      	
                        Page

                      
	 	 	 	 	 
	
                        ARTICLE
      8

                      	 	
                        PURCHASE
      PRICE

                      	
                        18

                      
	 
      	
                        8.1

                      	 	
                        Purchase
      Price

                      	
                        18

                      
	 
      	
                        8.2

                      	 	
                        Bona
      Fide Offer

                      	
                        18

                      
	
                        ARTICLE
      9

                      	 	
                        SUBSTITUTED
      SHAREHOLDERS/ADDITIONAL SHAREHOLDERS

                      	
                        18

                      
	 
      	
                        9.1

                      	 	
                        Substituted
      Shareholders

                      	
                        18

                      
	 
      	
                        9.2

                      	 	
                        Additional
      Shareholders

                      	
                        18

                      
	
                        ARTICLE
      10

                      	 	
                        CONFIDENTIALITY

                      	
                        19

                      
	 
      	
                        10.1

                      	 	
                        Confidentiality
      and Non-Disclosure

                      	
                        19

                      
	
                        ARTICLE
      11

                      	 	
                        DISSOLUTION
      OF THE COMPANY

                      	
                        20

                      
	 
      	
                        11.1

                      	 	
                        Dissolution
      Events

                      	
                        20

                      
	 
      	
                        11.2

                      	 	
                        Winding-Up

                      	
                        20

                      
	 
      	
                        11.3

                      	 	
                        Rights
      of Shareholders

                      	
                        20

                      
	
                        ARTICLE
      12

                      	 	
                        EVENT
      OF DEFAULT/TERMINATION

                      	
                        21

                      
	 
      	
                        12.1

                      	 	
                        Event
      of Default

                      	
                        21

                      
	 
      	
                        12.2

                      	 	
                        Effect
      of Event of Default

                      	
                        22

                      
	 
      	
                        12.3

                      	 	
                        Liquidation
      and Dissolution

                      	
                        22

                      
	 
      	
                        12.4

                      	 	
                        Power
      of Attorney in Event of Default

                      	
                        22

                      
	 
      	
                        12.5

                      	 	
                        Termination

                      	
                        23

                      
	
                        ARTICLE
      13

                      	 	
                        ACKNOWLEDGMENT/FEES

                      	
                        23

                      
	 
      	
                        13.1

                      	 	
                        Production
      and Distribution Agreement

                      	
                        23

                      
	 
      	
                        13.2

                      	 	
                        AgFeed
      Lease Agreement

                      	
                        23

                      
	 
      	
                        13.3

                      	 	
                        AGFEED
      Authorized Signatory

                      	
                        23

                      
	
                        ARTICLE
      14

                      	 	
                        MISCELLANEOUS

                      	
                        23

                      
	 
      	
                        14.1

                      	 	
                        Authority
      to Amend

                      	
                        23

                      
	 
      	
                        14.2

                      	 	
                        Notices

                      	
                        23

                      
	 
      	
                        14.3

                      	 	
                        Name
      Change

                      	
                        24

                      
	 
      	
                        14.4

                      	 	
                        Binding
      Effect

                      	
                        24

                      
	 
      	
                        14.5

                      	 	
                        Construction

                      	
                        24

                      
	 
      	
                        14.6

                      	 	
                        Entire
      Agreement

                      	
                        24

                      

              

            

          

        

      

    

    
      
         

      

      
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    TABLE
OF CONTENTS

    (continued)

     

    
      
        
          
            
              	 
      	 
      	 	 
      	
                      Page

                    
	 	 	 	 	 
	 
      	
                      14.7

                    	 	
                      Headings

                    	
                      24

                    
	 
      	
                      14.8

                    	 	
                      Severability

                    	
                      24

                    
	 
      	
                      14.9

                    	 	
                      Incorporation
      by Reference

                    	
                      24

                    
	 
      	
                      14.10

                    	 	
                      Further
      Action

                    	
                      24

                    
	 
      	
                      14.11

                    	 	
                      Variation
      of Pronouns

                    	
                      24

                    
	 
      	
                      14.12

                    	 	
                      Governing
      Law; Consent to Jurisdiction

                    	
                      25

                    
	 
      	
                      14.13

                    	 	
                      Specific
      Performance

                    	
                      25

                    
	 
      	
                      14.14

                    	 	
                      Counterpart
      Execution; Facsimile

                    	
                      25

                    

            

          

        

      

    

    
      
         

      

      
        iii

        
          

        

      

      
         

      

    

    EXHIBITS

    

    
      Exhibit A
– Shareholders'
Names, Addresses, Capital Contributions, Equity Interest and Number of
Shares

    

    Exhibit B
– AgFeed Lease Agreement

    Exhibit C
– Hypor Production and Distribution Agreement

    Exhibit D
– 2009 Approved Annual Budget and Business Plan

    Exhibit E
– Form of Share Transfer Form

    

    

    SCHEDULES

    

    Schedule
1 – Exception to Business Activities of the Company

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    
       

      SHAREHOLDERS
AGREEMENT

      

      THIS
SHAREHOLDERS AGREEMENT (this "Agreement")
is made and entered into as of December 11, 2009 (the "Effective
Date"), by and between AgFeed Industries, Inc., a company formed under
the laws of The British Virgin Islands ("AGFEED"),
and Hypor B.V., a company incorporated under the laws of The Netherlands ("HYPOR").  AGFEED,
HYPOR and any other parties that become a party hereto after the Effective Date
are hereinafter sometimes referred to collectively as the "Shareholders,"
and individually as a "Shareholder"
of Hypor Agfeed Breeding Company Inc. (the "Company").

       

      WHEREAS,
AGFEED is one of the largest commercial hog producers and one of the largest
premix feed companies in the Peoples Republic of China ("PRC");

       

      WHEREAS,
HYPOR is active in the field of breeding pigs and produces (great) grand parent
stock and semen of same stock levels for production of great grand parent, grand
parent and parent stock pigs and, in relation thereto, avails its expertise,
know-how and other information in relation to the selection and the production
of pigs (gilts and boars);

       

      WHEREAS,
in order to co-develop, co-operate and co-market a new genetic nucleus farm in
Wuning, China to produce great grand parent, grand parent and parent stock pigs
to supply farms owned by AGFEED and sell grand parent pigs and parent stock pigs
to customers of AGFEED and third parties within the Territory (as defined in
ARTICLE 1), AGFEED and
HYPOR shall incorporate the Company as a Chinese Wholly Owned Foreign Entity
(“WOFE”)  with
registered capital of Eighteen Million Five Hundred Thousand China Yuan Renminbi
(18,500,000 RMB) and enter into this Agreement on the Effective Date under the
laws of the State of Nevada, United States;

       

      WHEREAS,
AGFEED shall own 85% of the Shares (as defined in ARTICLE 1) and HYPOR own 15%
of the Shares; and

       

      WHEREAS,
the Shareholders wish to enter into this Agreement to provide for, among other
things, the respective rights and obligations of the Shareholders to each other
and to the Company, and certain other matters.

       

      NOW,
THEREFORE, in consideration of the foregoing premises and the mutual agreements,
promises and undertakings hereinafter set forth, the receipt and sufficiency of
which are hereby acknowledged, the Shareholders, intending to be legally bound,
hereby agree as follows:

       

      ARTICLE
1

       

      DEFINITIONS
AND INTERPRETATION

       

      1.1           Defined
Terms.  Unless the context otherwise requires or unless
otherwise provided in this Agreement, capitalized terms used in this Agreement
shall have the meanings ascribed to them in this Section 1.1.

      
        
           

        

        
           

          
            

          

        

        
           

        

      

       

      1.1.1         "Additional
Capital Contribution" refers to the working capital needs of the Company
that may arise from time-to-time and which a Shareholder is actually obligated
to contribute or alternatively satisfy pursuant to Section 2.3.1.

       

      1.1.2         "Additional
Shareholder" means any Person admitted as a Shareholder pursuant to Section 9.2
hereof.

       

      1.1.3         "Affected
Shareholder" has the meaning set forth in Section 7.5.

       

      1.1.4         "Affiliate"
means, with respect to any Person, (a) any other Person that, directly or
indirectly, through one or more intermediaries, controls, or is controlled by,
or is under common control with, such Person; (b) any Person owning or
controlling 10% or more of the outstanding voting securities of such Person; (c)
any officer, director, manager, trustee or general partner of such Person; (d)
any other Person that is owned by at least 80% of the same equity owners as such
Person; and (e) any Person who is an officer, director, manager, trustee or
general partner or holder of 10% or more of the voting securities of any Person
described in clauses (a) through (c); provided that the Company shall not be
deemed an Affiliate of any Shareholder or any Affiliate of any
Shareholder.  For purposes of this definition, "control,"
when used with respect to any specified Person, means the power to direct or
cause the direction of the management and policies of such Person, directly or
indirectly, by contract or otherwise, the term "controlled"
has the meaning correlative to the foregoing.

       

      1.1.5         "AGFEED"
has the meaning set forth in the preamble to this Agreement. 

       

      1.1.6         "AgFeed
Lease Agreement" means that Facilities Lease Agreement between the
Company and AGFEED dated as of the Effective Date attached hereto as Exhibit
B.

       

      1.1.7         "Agreement"
has the meaning set forth in the preamble to this Agreement.  Terms
such as "hereof," "hereto," "hereby," "hereunder" and "herein" refer to this
Agreement as a whole, unless the context otherwise requires.

       

      1.1.8         "Annual
Budget and Business Plan" has the meaning set forth in Section 6.1.

       

      1.1.9         "Approved
Annual Budget and Business Plan" has the meaning set forth in Section 6.1.  The
2009 Approved Annual Budget and Business Plan is attached hereto as Exhibit
C.

       

      1.1.10       "Approved
Sale" means the sale of all or substantially all of the Company's
Property or any sale of the Company in a single transaction or a series of
related transactions to a third party or a group of third parties, other than to
an Affiliate of a Shareholder, acting in concert (a) pursuant to which such
third party or group desires to acquire all of the Shares (whether by merger,
consolidation, recapitalization, reorganization or otherwise), in each case for
cash or Marketable Securities (b) which has been approved by the Board pursuant
to Section 5.2 and (c)
pursuant to which all holders of Shares in the Company receive (whether in such
transaction or, with respect to an asset sale, upon a subsequent liquidation)
the same form and amount of consideration pro rata for its Shares or, if any
Shareholders are given an option as to the form and amount of consideration to
be received, all Shareholders are given the same option, in each as if the
proceeds of such transaction were distributed pursuant to Section 3.1.

      
        
           

        

        
          2

          
            

          

        

        
           

        

      

       

      1.1.11       "Assignee"
means a Person who has acquired Shares as are assigned to such Person, but who
has not been admitted as a substitute Shareholder.

       

      1.1.12       "Basis"
means, with respect to any Company's Property, the adjusted basis of such asset
for U.S. federal income tax purposes.

       

      1.1.13       "Board"
means the Directors, or such of those Directors present at a duly convened
meeting of the Directors at which a quorum is present, such quorum being a
majority of the Directors.

       

      1.1.14       "Bona Fide
Offer" has the meaning set forth in Section 7.5.5.

       

      1.1.15       "Business
Day" means any day other than a Saturday, a Sunday or a day on which
commercial banks in New York, New York are required or authorized to be
closed.

       

      1.1.16       "Capital
Contributions" means, with respect to any Shareholder the aggregate
amount of money, services and the Fair Market Value of any Contributed Property
contributed to the Company as consideration for the subscription for such
Shareholder's Shares, or the value attributed to such money, services and the
Fair Market Value of any Contributed Property being its reasonable present cash
value, such cash value being not less than the amount to be credited for the
issue of the Shareholder's Shares.

       

      1.1.17       "CEO"
has the meaning set forth in Section 5.2.1.

       

      1.1.18       "Code"
means the United States Internal Revenue Code of 1986, as amended from time to
time (or any corresponding provisions of succeeding law).

       

      1.1.19       "Company"
has the meaning set forth in the third WHEREAS to this Agreement.

       

      1.1.20       "Contributed
Property" shall mean property or other consideration contributed to the
capital of the Company by a Shareholder in consideration for the issue of
Shares.

       

      1.1.21       "Contribution
Date" has the meaning set forth in Section 2.3.1.

       

      1.1.22       "Contributing
Shareholder" has the meaning set forth in Section 2.

       

      
        1.1.23       "Debtor
Relief Laws" has the meaning set forth in Section
12.1.4.

      

      
        
           

        

        
          3

          
            

          

        

        
           

        

      

       

      1.1.24       "Defaulting
Shareholder" has the meaning set forth in Section 12.2.3.

       

      1.1.25       "Designated
Person" has the meaning set forth in Section 7.5.

       

      1.1.26       "Director"
means a duly appointed director of the Company for the time being or a duly
appointed alternate of any Director.

       

      1.1.27       "Dissolution
Event"
has the meaning set forth in Section
11.1

       

      1.1.28       "Distributable
Cash" means, with respect to any Fiscal Year or other applicable period,
the Company’s cash position, if it is determined that (a) the Company has no
current outstanding loans; (b) its retained earnings show a positive value under
US GAAP accounting treatment for the most recent audited period; and (c) the
Company’s cash position at the date of review exceeds the projected needs (or
those mandated by law, contract or the Company's Indebtedness), including,
without limitation, any amounts owed to HYPOR by the Company under the
Production and Distribution Agreement or AGFEED under the Facilities Lease
Agreement for the ensuing 6-month period or an amount which exceeds the cash
reserves deemed reasonable by the Board.

       

      1.1.29       "Effective
Date" has the meaning set forth in the preamble to this
Agreement.

       

      1.1.30       "Encumbrances"
means all claims, liens, charges, security interests, encumbrances, royalties,
debentures, pledges, options, equitable rights and interests, net profit
interests, rights of pre-emption, rights of first refusal, mortgages or any
other third party rights and any agreement or arrangement to create any of the
foregoing;

       

      1.1.31       "Equity
Interest" shall mean, as to any Shareholder, a percentage as determined
by dividing the number of Shares issued to and owned by such Shareholder by the
total number of Shares then issued and outstanding.  The Equity
Interest of each Shareholder initially shall be set forth opposite such
Shareholder's name on Exhibit
A.  The combined Equity Interest of all Shareholders shall at
all times equal 100%.

      1.1.32       "Fair
Market Value" means the fair market value of Shares that are subject to
purchase under this Agreement which shall be determined, as of the date of the
event giving rise to such determination, by mutual agreement between AGFEED and
HYPOR.  The Fair Market Value shall be computed as the amount which
could reasonably be expected to be realized, based upon the Equity Interest,
upon a sale of the Company at the time of the determination of Fair Market Value
and shall exclude any and all expenses, costs and damages incurred by the
Company as a result of the event giving rise to such
determination.  If AGFEED and HYPOR cannot agree upon the Fair Market
Value within 30 days of the date of notice from (a) an Affected Shareholder
(hereinafter defined) pursuant to Section 7.5 or (b) a
non-breaching Shareholder of its election to exercise its purchase rights under
Section 12.1.6.3, the
Fair Market Value shall be determined by independent appraisal by a mutually
selected appraiser.  If AGFEED and HYPOR are unable to agree on the
independent appraiser, upon 5 days after the expiration of the 30-day period
referenced above, either HYPOR or AGFEED may request that the American
Arbitration Association appoint an arbitrator according to its rules who shall
then select an appraiser.  AGFEED and HYPOR shall each, within 10 days
of the selection of the appraiser, submit written information to the appraiser
and a proposed valuation of the Fair Market Value.  The appraiser
shall, within 30 days of his or her selection, determine which of the proposed
valuations is closest to the appraiser's estimate of the Fair Market Value and
such proposed valuation shall be used as the Fair Market Value for purposes of
this Agreement.  The appraiser's determination shall be final and
binding and may be enforced by legal proceedings pursuant to this
Agreement.  The costs, including the compensation to the arbitrator
and the appraiser, shall be borne equally by AGFEED and HYPOR.

       

      
        
          
             

          

          
            4

            
              

            

          

          
             

          

        

      

       

      1.1.33       "Fiscal
Year" means the 12-month period ending on December 31 of each year or
such other fiscal year as the Board may select in its reasonable discretion from
time to time in accordance with the Code and the Treasury
Regulations.

       

      1.1.34       "Formation
Documentation" has the meaning set forth in Section 1.2.

       

      1.1.35       “Formation
Correction Resolution” has the meaning set forth in Section 1.2.

       

      1.1.36       "Formation
Defect" has the meaning set forth in Section 1.2.

       

      1.1.37       "Governmental
Entity" means any U.S. federal, state or local, or any foreign
government, governmental authority, regulatory or administrative agency,
governmental commission, court, tribunal or arbitrator (or any department,
bureau or division thereof).

       

      1.1.38       "HYPOR"
has the meaning set forth in the preamble to this Agreement.

       

      1.1.39       "Indebtedness"
means, with respect to any Person, any and all obligations of such Person (a)
for borrowed money, (b) evidenced by notes, bonds, debentures or similar
instruments, (c) under or relating to letters of credit (including any
obligation to reimburse the letter of credit issuer with respect to amounts
drawn on such instruments), (d) for the deferred purchase price of goods or
services (other than trade payables or accruals incurred and paid in the
ordinary course of the business), (e) under capital leases, (f) with respect to
bank overdrafts or otherwise reflected as negative cash in financial statements
of such Person, (g) for deferred compensation, (h) to pay any accrued dividends
or dividends that have otherwise been declared and not yet paid, and (i) in the
nature of guarantees of the obligations described in clauses (a) through (h)
above of any other Person.

       

      1.1.40       "Initial
Capital Contribution" has the meaning set forth in Section 2.1.

       

      1.1.41       "Interim
Budget" has the meaning set forth in Section 6.1.

       

      1.1.42       "IRS"
means the Internal Revenue Service.

       

      
        
          
             

          

          
            5

            
              

            

          

          
             

          

        

      

       

      1.1.43       "Laws"
means all laws, statutes, rules, regulations, codes, injunctions, judgments,
orders, decrees, rulings, constitutions, ordinances, or common law of any
federal, state, local or municipal Governmental Entity.

       

      1.1.44       "Major
Actions" has the meaning set forth in Section 5.2.

       

      1.1.45       "Non-Breaching
Shareholder" has the meaning set forth in Section 12.1.6.3.

       

      1.1.46       "Offer
Notice" has the meaning set forth in Section 7.6.

       

      1.1.47       "Persons"
means any individual, partnership, corporation, trust, limited liability company
or other entity.

       

      1.1.48       "PRC"
has the meaning set forth in the first WHEREAS to this Agreement.

       

      1.1.49       "Production
and Distribution Agreement" means that Production and Distribution
Agreement between the Company, HYPOR and AGFEED dated as of the Effective Date
attached hereto as Exhibit
C.

       

      1.1.50       "Property"
means all real and personal property owned by a Person from time to time during
the term of its existence and any improvements thereto, and shall include both
tangible and intangible property.

       

      1.1.51       "Pro Rata
Share" means the ratio of the number of Shares held by such Shareholder
compared to the total number of Shares held by all the Shareholders or, where
the context so requires, by a particular set of Shareholders.

       

      1.1.52       "Remaining
Shareholder" has the meaning set forth in Section 7.5.

       

      1.1.53       "Salaries"
has the meaning set forth in Section 7.7.

       

      1.1.54       "Shareholders"
has the meaning set forth in the preamble to this Agreement.  Solely
for purposes of the allocation and distribution provisions of Section 3.1 of this Agreement (and any
definitions relating thereto), a Shareholder shall also include an Assignee who
has not been admitted to the Company as a substitute Shareholder.

       

      1.1.55       "Shares"
means all of ordinary shares of a par value of US$0.0001 each of the
Company.

       

      1.1.56       "Subsidiary"
means any Person that more than 50% of the voting rights or beneficial ownership
of such Person is owned, either directly or indirectly, by the Company (or other
specified Person).

       

      
        
          
             

          

          
            6

            
              

            

          

          
             

          

        

      

       

      1.1.57       "Tax(es)"
means any U.S. federal, state, local or foreign income, gross receipts, license,
payroll, employment, excise, severance, stamp, occupation, premium, windfall
profits, environmental (including taxes under Section 59A of the Code), customs
duties, capital stock, franchise, profits, withholding, social security (or
similar, including FICA), unemployment, disability, real property, personal
property, sales, use, transfer, registration, value added, alternative or add-on
minimum, estimated or other tax of any kind whatsoever, including any Shares,
penalty or addition thereto.

       

      1.1.58       "Territory"
means the Provinces or Municipalities within the Peoples Republic of China
commonly known as Anhui, Hubei, Zhejiang, Jiangsu, Jiangxi, Hunan, Guangxi,
Fujian, Guangdong, Hainan Provinces and Shanghai.

       

      1.1.59       "Transfer"
(whether or not such term is capitalized) means, as a noun, any voluntary or
involuntary transfer, sale, pledge, hypothecation, assignment or other
disposition by a Shareholder of a Shareholder's Shares and, as a verb,
voluntarily or involuntarily to transfer, sell, pledge, hypothecate, assign or
otherwise dispose of a Shareholder's Shares.

       

      1.1.60       "Trigger
Event" has the meaning set forth in Section 7.5.

       

      1.1.61       "WOFE"
has the meaning set forth in the third WHEREAS to this Agreement.

       

      1.1.62       “WOFE
Act” means The China Foreign Invested Enterprise Law of 2000 and
accompanying Detailed Rules of 2001 for Implementation of China’s Foreign
Invested Enterprise Law.

       

      1.2           Company
Documentation.  The parties hereto acknowledge that the Company
is to be incorporated under the laws of the PRC as a WOFE with registered
capital of Eighteen Million Five Hundred Thousand China Yuan Renminbi
(18,500,000 RMB).  Appropriate formation documentation will be filed
with the appropriate governmental authority in the PRC (the “Formation
Documentation”).  From a business perspective, the Company
shall be a joint venture between AGFEED and HYPOR, two entities formed under
Laws of The British Virgin Islands and The Netherlands,
respectively.  In order to reflect the business agreement of the
parties hereto, the parties hereto desire to reflect their business agreement in
the form of a joint venture agreement as evidenced by entering into this
Agreement.  Therefore, the parties hereto intend, to the fullest
extent permitted by Law, that their business agreement and the business
activities and operations of the Company (including any matters addressed in or
regulated by the Formation Documentation, including without limitation, (a)
rights, privileges, restrictions or conditions therein attaching to any Share or
accruing in favor of or against any holder of the Shares and (b) any provisions
therein relating to the management of the Company) be governed by and construed
in accordance with the terms of this Agreement and not the Formation
Documentation.  If any conflict or inconsistency exists or arises
between the terms of this Agreement and the Formation Documentation, to the
fullest extent permitted by Law, this Agreement shall govern and prevail. To the
extent that any matter addressed in the Formation Documentation conflicts with
or is inconsistent with the provisions of this Agreement (a "Formation
Defect"), the Shareholders agree (forthwith upon becoming aware of the
same) to take all actions necessary, including the exercise of all voting rights
in respect of the Shares and the passing of all necessary resolutions of the
Shareholders, to effect such amendments to the Formation Documentation as may be
necessary and appropriate to give full effect to the provisions of this
Agreement and to correct the Formation Defect so that the Formation
Documentation is in all relevant respects consistent with (and does not conflict
with) this Agreement, and, without prejudice to the generality of the foregoing,
each Shareholder shall take all actions necessary to promptly cause a meeting of
all the holders of the Shares of the Company to be held for a Formation
Correction Resolution to be passed by the holders of the Shares in the Company.
For the purposes of this Agreement, "Formation
Correction Resolution" means a resolution which amends and restates any
of the Formation Documentation in order to correct a Formation Defect so that
the Formation Documentation is in all relevant respects consistent with (and
does not conflict with) this Agreement.

      
        
           

        

        
          7

          
            

          

        

        
           

        

      

       

      1.3           Interpretation and Rules of
Construction.  In this Agreement, except to the extent
otherwise provided or that the context otherwise requires:

       

      1.3.1         when
a reference is made in this Agreement to an Article, Section, Exhibit or
Schedule, such reference is to an Article or Section of, or an Exhibit or
Schedule to, this Agreement unless otherwise indicated;

       

      1.3.2         the
table of contents and headings for this Agreement are for reference purposes
only and do not affect in any way the meaning or interpretation of this
Agreement;

       

      1.3.3         references
to "dollars" or "$" are to United States dollars.

       

      1.3.4         whenever
the words "include," "includes" or "including" are used in this Agreement, they
are deemed to be followed by the words "without being limited to";

       

      1.3.5         the
words "hereof," "herein" and "hereunder" and words of similar import, when used
in this Agreement, refer to this Agreement as a whole and not to any particular
provision of this Agreement;

       

      1.3.6         all
terms defined in this Agreement have the defined meanings when used in any
certificate or other document made or delivered pursuant hereto, unless
otherwise defined therein;

       

      1.3.7         the
definitions contained in this Agreement are applicable to the singular as well
as the plural forms of such terms;

       

      1.3.8         references
to a Person are also to its successors and permitted assigns;
and

       

      1.3.9         the
use of "or" is not intended to be exclusive unless expressly indicated
otherwise.

       

      
        
          
             

          

          
            8

            
              

            

          

          
             

          

        

      

       

      ARTICLE
2

       

      CAPITAL
/PERCENTAGE INTERESTS/FUTURE FINANCING

       

      2.1           Initial Capital
Contributions.  As specified in Exhibit A, the
Shareholders shall contribute to the Company the relevant amounts or assets as
set forth next to their name on Exhibit A under the
column entitled "Initial Capital Contributions" (such Shareholder's "Initial
Capital Contribution") as consideration for the Company's allotment of
the Shares set out against such Shareholder's Name set forth on Exhibit
A.

       

      2.2           Equity Interest/Cash
Investment.  Each Shareholder's (a) Capital Contributions, (b)
Equity Interest in the Company and (c) Shares in the Company are set forth on
Exhibit
A.  The Board shall amend Exhibit A from time
to time to maintain the accuracy thereof, which shall be conclusive absent
manifest error.

       

      2.3           Additional Capital
Commitments.  Except as expressly set forth herein, no
Shareholder shall be requested to make (a) a loan to the Company or (b) any
additional contribution to the capital of the Company in consideration for an
issue of further Shares.

       

      2.3.1         AGFEED
and HYPOR recognize that the Company may require additional capital from time to
time, in addition to the Initial Capital Contribution, in order to accomplish
the purpose and business for which it is formed.  In the event that
the Company shall require funds in excess of those available, the Company,
through a Director or executive officer, shall request such Additional Capital
Contributions be made to the Company first in the form of a market-interest
bearing loan provided by a Shareholder or third party and thereafter convertible
into an alternative other than a loan or Shareholder contribution not altering
the original ownership Shares or Shares pursuant to the terms of this ARTICLE 2 (each, an "Additional
Capital Contribution"), but only if such Additional Capital Contribution
(a) has been authorized or directed by the Board in accordance with Section 5.2, (b) has been
provided for and agreed to in the Approved Annual Budget and Business Plan and
then only in accordance with the timing and conditions of such Additional
Capital Contribution set forth in the Approved Annual Budget and Business Plan,
or (c) if the Company does not have enough money (from operating revenue,
customer reimbursements or otherwise) to pay any amounts due to HYPOR under the
Production and Distribution Agreement or AGFEED under the Facilities Lease
Agreement.  The Company,
through a Director or executive officer, shall give written notice to AGFEED and
HYPOR of (i) the date on which the Additional Capital Contribution is requested,
which date (the "Contribution
Date") shall not be less than 15 days following the date of such notice,
and (ii) the amount of Additional Capital Contribution recommended from each of
them.

       

      2.3.2         In
the event a Shareholder agrees to pay the Additional Capital Contribution to the
Company on the Contribution Date (a “Contributing
Shareholder”),  the Contributing Shareholder will be deemed to
advance to the Company a loan equal to the Additional Capital Contribution
furnished by the Contributing Shareholder, with the following
results:

      
        
           

        

        
          9

          
            

          

        

        
           

        

      

       

      (a)     the
sum thus advanced shall constitute a loan to the Company;

       

      (b)    
such loan and all accrued unpaid interest thereon shall be due not later than
six (6) months after such advance is made; and

       

      (c)     the
loan shall bear interest at LIBOR plus 3%, as determined at the time such
advance is made.

       

      2.3.3         AGFEED
and HYPOR agree that the Board shall determine, pursuant to Section 5.2, whether any loans
made by a Contributing Shareholder under Section 2.3.2 and then
outstanding at October 15 of each year or more than six (6) months after such
advance is made (such determination not occur later than fifteen (15) days after
such date or as the Board shall duly determine), as applicable, shall remain a
loan or be converted to:

       

      (a)     an
alternative other than a loan or Shareholder contribution not altering the
original ownership Shares; or

       

      (b)     one-tenth
(1/10) additional Shares in consideration for each $1 of Additional Capital
Contribution made by the Contributing Shareholder then outstanding (excluding
accrued interest) or such other amount of additional Shares as the Board may
determine in accordance with Section 5.2.

       

      2.3.4         The
Company shall amend Exhibit A to reflect
the receipt by the Company of the Additional Capital Contributions and any other
amounts received pursuant to Section 2.3.2, and reflect the adjusted
Equity Interests and Shares of the Shareholders.

       

      ARTICLE
3

       

      DISTRIBUTIONS
TO SHAREHOLDERS

       

      3.1           Distributions.  Except
as provided upon the occurrence of a Dissolution Event in Section 11.2, and subject to
Section 3.2 and applicable Law, and if, upon conclusion
of the annual financial statement audit of the Company, it is determined that
the Company has no current outstanding loan, its retained earnings show a
positive value based on US GAAP accounting treatment for the most recent audited
period, and the Company’s cash position exceeds the reasonable cash reserves
deemed necessary by the Board, then the Company shall make distributions by way
of dividends from Distributable Cash to the Shareholders, pari passu, in
accordance with their respective Equity Interest on an annual basis, unless
otherwise approved under Section 5.2.

       

      3.2           Distribution of Assets in
Kind.  Except as otherwise provided herein, no Shareholder
shall have the right to require any distribution of any Company's Property in
kind.  The Company's Property may be distributed in kind, at the
election of the Board.  If any of the Company's Property is
distributed in kind, such Property shall be distributed pursuant to Section 3.1 on the basis of
its fair market value as reasonably determined by the Board as of the date of
such distribution, treating such distribution as a distribution of Distributable
Cash in an amount equal to such fair market value.

       

      
        
           

        

        
          10

          
            

          

        

        
           

        

      

       

      ARTICLE
4

       

      REPRESENTATIONS
AND WARRANTIES

       

      4.1           Representations and Warranties of the
Shareholders.  As of the Effective Date or the date on which
such Person becomes an Additional Shareholder or substitute Shareholder, each of
the Shareholders hereby makes each of the representations and warranties
applicable to such Shareholder as set forth below (and such representations and
warranties shall survive the execution of this Agreement):

       

      4.1.1         Due Incorporation or
Formation; Authorization of Agreement.  If such Shareholder is
a corporation or other entity, it is duly organized, duly incorporated or duly
formed (as the case may be), validly existing, and in good standing under the
laws of the jurisdiction of its organization or incorporation or formation (as
the case may be) and has the corporate or entity power and authority to own its
property and carry on its business as owned and carried on at the Effective
Date.  Such Shareholder is duly licensed or qualified to do business
and in good standing in each of the jurisdictions in which the failure to be so
licensed or qualified would have a material adverse effect on its financial
condition or its ability to perform its obligations hereunder.  Such
Shareholder has the individual, corporate, or entity power and authority to
execute and deliver this Agreement and to perform its obligations hereunder and,
if such Shareholder is a corporation, limited liability company or partnership,
the execution, delivery, and performance of this Agreement has been duly
authorized by all necessary corporate, company or partnership
action.  This Agreement constitutes the legal, valid, and binding
obligation of such Shareholder.

       

      4.1.2         No Conflict With
Restrictions; No Default.  Neither the execution, delivery, and
performance of this Agreement nor the consummation by such Shareholder of the
transactions contemplated hereby (a)  will conflict with, violate, or
result in a breach of any of the terms, conditions, or provisions of any law,
regulation, order, writ, injunction, decree, determination, or award of any
court, any governmental department, board, agency, or instrumentality, domestic
or foreign, or any arbitrator, applicable to such Shareholder, (b) will conflict
with, violate, result in a breach of, or constitute a default under any of the
terms, conditions, or provisions of its charter or articles of incorporation,
memorandum or articles of association, bylaws, or operating agreement of such
Shareholder, if such Shareholder is a corporation or limited liability company,
or of any material agreement or instrument to which such Shareholder is a party
or by which such Shareholder is or may be bound or to which any of its material
properties or assets is subject, (c) will conflict with, violate, result in a
breach of, constitute a default under (whether with notice or lapse of time or
both), accelerate or permit the acceleration of the performance required by,
give to others any material interest or rights, or require any consent,
authorization, or approval under any indenture, Encumbrance, mortgage, lease
agreement, or instrument to which such Shareholder is a party or by which such
Shareholder is or may be bound, or (d) will result in the creation or imposition
of any lien upon any of the material properties or assets of such
Shareholder.

      
        
           

        

        
          11

          
            

          

        

        
           

        

      

       

      4.1.3         Governmental
Authorizations.  Any registration, declaration or filing with
or consent, approval, license, permit or other authorization or order by, any
governmental or regulatory authority, domestic or foreign, that is required in
connection with the valid execution, delivery, acceptance, and performance by
such Shareholder under this Agreement or the consummation by such Shareholder of
any transaction contemplated hereby has been completed, made, or obtained on or
before the Effective Date.

       

      4.1.4         Litigation.  There
are no actions, suits, proceedings, or investigations pending or, to the
knowledge of such Shareholder, threatened against such Shareholder or any of
their properties, assets, or businesses in any court or before or by any
Governmental Entity which could, if adversely determined (or, in the case of an
investigation could lead to any action, suit, or proceeding, which if adversely
determined could) reasonably be expected to materially impair such Shareholder's
ability to perform its obligations under this Agreement or to have a material
adverse effect on the consolidated financial condition of such Shareholder; and
such Shareholder has not received any currently effective notice of any default,
and such Shareholder is not in default, under any applicable order, writ,
injunction, decree, permit, determination, or award of any court, any
Governmental Entity which could reasonably be expected to materially impair such
Shareholder's ability to perform its obligations under this Agreement or to have
a material adverse effect on the consolidated financial condition of such
Shareholder.

       

      ARTICLE
5

       

      MANAGEMENT
AND CONTROL

       

      5.1           Board
Composition.

       

      5.1.1         The
Shareholders agree that the provisions of this Section 5.1 apply in respect
of the appointment and removal of Directors and that they shall take all actions
as may be required under the Formation Documents, including the passing of any
resolutions of Shareholders, to give effect to the provisions of this Section 5.1.

       

      5.1.2         AGFEED
may from time to time, for so long as it holds an Equity Interest greater than
50%, appoint two (2) persons to be Directors, and, for so long as it holds an
Equity Interest equal to or less than 50%, appoint one (1) person to be a
Director, and at any time remove any such Directors from office and appoint
another person in his place.

       

      5.1.3         HYPOR
may from time to time, for so long as it holds an Equity Interest greater than
50%, appoint two (2) persons to be Directors, and, for so long as it holds an
Equity Interest equal to or less than 50%, appoint one (1) person to be a
Director, and at any time remove any such Directors from office and appoint
another person in his place.

       

      5.1.4         The
Chairman of the Board of Directors shall be elected by a majority vote of the
Board of Directors.

       

      5.1.5         Any
such appointments or removals shall be effected by an instrument in writing
signed by or on behalf of the relevant Shareholder and will take effect upon
lodgement at the registered office at the Company or on delivery to a meeting of
the Directors.

      
        
           

        

        
          12

          
            

          

        

        
           

        

      

       

      5.1.6         The
Shareholders agree that at all times the number of Directors shall be set at
three (3). Any vacancy in the directors not filled pursuant to the provisions of
Sections 5.1.1 to 5.1.3 above shall be filled by
a resolution of the Shareholders in accordance with the Formation
Documents.

       

      5.2           Matters Requiring Consent of the
Shareholders. The Shareholders
acknowledge and agree that the business and affairs of the Company shall be
managed by the Board.  All directors shall be
entitled to one vote on all matters submitted to the Board and the affirmative
vote of the majority of the directors then in office shall be the act of the
Board.  Notwithstanding the foregoing, the Shareholders acknowledge
and agree that the Board shall not have the authority to take the following
actions (collectively, the "Major
Actions") without the prior written consent of at least one director
appointed by AGFEED to the Board and at least one director appointed by HYPOR to
the Board, it being agreed that the casting of a vote in favor of any Major
Action recorded in the minutes of a duly constituted and convened Board meeting
or by execution of a written resolution shall also constitute such written
consent:

       

      5.2.1         appointment
of the Chief Executive Officer of the Company (the "CEO")
and establishment of the CEO's duties;

       

      5.2.2         requesting
Additional Capital Contributions pursuant to Section 2.3.1(a);

       

      5.2.3         exercise
of the option to convert a loan by a Contributing Shareholder or third party
pursuant to Section
2.3.2;

       

      5.2.4         admission
of any Additional Shareholder by the allotment or transfer of Shares, or
issuance of options, warrants or other securities, of the Company, including,
without limitation, any issuance of Shares to any employees of the Company or
its Subsidiaries;

       

      5.2.5         approval
of any employee benefit plans, including, without limitation, any stock option
plans or other employee incentive plans;

       

      5.2.6         approval
of the Annual Budget and Business Plan and any amendments thereto;

       

      5.2.7         approval
of expenditures not included in the Approved Annual Budget and Business Plan or
in excess of 105% of any line item in the Approved Annual Budget and Business
Plan;

       

      5.2.8         entering
into, amending or enforcing any contracts (i) in excess of $100,000, (ii) not in
the Approved Annual Budget and Business Plan, (iii) that are not cancellable
with 30 days prior notice, or (iv) that are otherwise material to the business
of the Company;

       

      5.2.9         engaging
in or settling any litigation in which the Company is a party;

       

      
        
          
             

          

          
            13

            
              

            

          

          
             

          

        

      

       

      5.2.10       approval
of the compensation on an annual basis for any employee or consultant receiving
compensation on an annual basis in excess of $150,000, which compensation shall
be included in the Approved Annual Budget and Business Plan;

       

      5.2.11       changing
the tax status or accounting methods of the Company;

       

      5.2.12       extending
the statute of limitations for assessing or computing any tax liability against
the Company or the amount of any Company tax item;

       

      5.2.13       commencing
the dissolution, winding-up or liquidation of the Company except pursuant to
Section
12.2.2;

       

      5.2.14       an
Approved Sale;

       

      5.2.15       a
merger, consolidation or other acquisition of the Company with or into any other
Person or any Public Offering of the Public Entity;

       

      5.2.16       any
amendment to the Formation Documents, provided that the Formation Documents may
be amended by a resolution of Shareholders in respect of which both AGFEED and
HYPOR vote in favor without the approval of any of the Directors;

       

      5.2.17       any
material Property sale, exchange, or other disposition of the Company not in the
ordinary course of business and not in the Approved Annual Budget and Business
Plan;

       

      5.2.18       the
borrowing of money, incurring Indebtedness or otherwise committing the credit of
the Company, the granting of any collateral or security interest in any
Company's Property, or the granting of any guaranty; and

       

      5.2.19       the
approval of any distributions of Distributable Cash to the Shareholders not in
accordance with Section
3.1.

       

      5.3           Matters Requiring Consent of
AGFEED. Notwithstanding anything
set forth in this ARTICLE
5, the Shareholders acknowledge and agree that the Board shall not have
the authority to (a) enter into, amend, terminate, rescind, enforce or waive any
rights under the Production and Distribution Agreement or any other agreements
between the Company and HYPOR or one of its Affiliates or (b) determine whether
a default has occurred thereunder, without the prior written consent of
AGFEED.

       

      5.4           Matters Requiring Consent of
HYPOR. Notwithstanding anything
set forth in this ARTICLE
5, the Shareholders acknowledge and agree that the Board shall not have
the authority to (a) enter into, amend, terminate, rescind, enforce or waive any
rights under the AgFeed Lease Agreement or any other agreements between the
Company and AGFEED or one of its Affiliates or (b) determine whether a default
has occurred thereunder, without the prior written consent of
HYPOR.

      
        
           

        

        
          14

          
            

          

        

        
           

        

      

       

      5.5           Rights of
Shareholders.  Except as otherwise expressly provided in this
Agreement, and subject to, and without prejudice to any rights and other powers
reserved to the Shareholders under the WOFE Act, no Shareholder shall be
entitled to participate in the control and management of the Company, nor shall
any Shareholder have the right to sign for or bind the Company except when
acting as a duly designated Director, officer, employee or agent of the Company
and provided such person acts or when acting within the scope of powers properly
delegated by the Board to such Director, Shareholder, officer, employee or agent
of the Company.

       

      ARTICLE
6

       

      REPORTS
& TAX RETURNS

       

      6.1           Annual Budget and Business
Plan.   The CEO shall submit an annual budget (including,
without limitation, capital expenditures, general and administrative expenses
and operating costs for assets owned by the Company) and business plan (each, an
"Annual
Budget and Business Plan") to AGFEED and HYPOR by October 15 of each
calendar year.  Not later than 15 days after the Annual Budget and
Business Plan is submitted for approval to AGFEED and HYPOR, AGFEED and HYPOR
shall either approve or disapprove the proposed Annual Budget and Business
Plan.  If AGFEED and HYPOR fails to approve a proposed Annual Budget
and Business Plan within the 15-day period (as the same may be extended by
agreement of the parties), the proposed Annual Budget and Business Plan shall be
deemed disapproved.  Upon the approval of an Annual Budget and
Business pursuant to this Section 6.1, such shall be
deemed an "Approved
Annual Budget and Business Plan" for the purposes
hereof.  Until such approval, the Company shall operate under the most
current Approved Annual Budget and Business Plan and the Board shall manage the
Company in a manner consistent with the Approved Annual Budget and Business
Plan.  The Board shall prepare and deliver to AGFEED and HYPOR a
revised budget (each, an "Interim
Budget") within 15 days of the preparation of an Interim Budget, to the
extent the Approved Annual Budget and Business Plan has been modified by any
business activity of the Company.  Any such Interim Budget shall be
for informational purposes only and shall be deemed approved until the approval
of the following Approved Annual Budget and Business Plan.

       

      6.2           Tax Returns, Books and
Records.  Unless the Board approves the hiring of the Company’s
own financial staff, HYPOR, or its affiliate, as approved by AGFEED, will
maintain the books and records of the Company, as well as prepare and submit any
tax returns or other filings of the Company with the relevant Chinese
authorities or the IRS, as applicable, at a fixed annual fee to the Company of
€70,000 (€40,000 of which shall be allocated to the hiring of a General Manager
and €30,000 of which shall be allocated to the hiring of a Controller) (the
“Salaries”), commencing
on the Effective Date and payable in twelve equal monthly
installments.  Board approval shall be required for such annual
percentage increases to the Salaries due to merit or increases in the rate of
inflation in China.  The Shareholders shall have the right to access
and inspect the books and records of the Company, and the Company shall, upon
advanced written notice to such effect, use reasonable efforts to promptly make
available to any Shareholder such books and records.

      
        
           

        

        
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      ARTICLE
7

       

      TRANSFERS
OF SHARES

       

      7.1           Restrictions on
Transferability.  Shareholders may not Transfer all or any part
of their Shares, whether voluntarily or by foreclosure, assignment in lieu
thereof or other enforcement of a pledge, hypothecation or collateral
assignment, without complying with the provisions of this ARTICLE 7.  If a Shareholder
Transfers any of his, her or its Shares to any Person pursuant to this ARTICLE 7, in addition to any other
requirements under this Agreement, no such Transfer shall be effective and no
such Transfer shall be registered in the register of members of the Company
unless and until (a) a duly executed share transfer form being substantially in
the form set out in Exhibit E is
delivered to the Company, and (b) the proposed transferee agrees in writing to
be bound by the terms and provisions and to assume all obligations of the
transferor and to be subject to all restrictions to which the transferor was and
is subject under both this Agreement and the Formation Documents; provided,
however, the admission of the transferee as a Shareholder shall not release the
transferor from liability to the Company under this Section 7.1 and Section 7.2.  Any
Additional Shareholder shall pay any reasonable expenses in connection with
admission as such.

       

      7.2           Attempted Transfers in
Contravention.  Any attempted Transfer in contravention of
Section 7.1 shall be
void and of no effect and shall not bind or be recognized by the Company and
shall not be registered in the register of members of the Company.  In
the case of an attempted Transfer not permitted hereby, the transferring
Shareholder shall indemnify and hold harmless (and hereby agrees to indemnify
and hold harmless), the Company and the other Shareholders from all costs,
liabilities and damages that any of such indemnified Persons may incur
(including, without limitation, incremental tax liability and attorneys' fees
and expenses) as a result of such attempted Transfer and efforts to enforce the
indemnity granted hereby.

       

      7.3           Transfers to
Affiliates.  Notwithstanding the terms of Section 7.1, AGFEED and HYPOR
may Transfer all or any portion of its Shares to any Affiliate of such
Shareholder, provided that, (a) such Affiliate agrees in writing to be bound by
the terms of this Agreement and (b) the transferring Shareholder shall remain
jointly and severally liable to the Company for all obligations of such
Affiliates hereunder.

       

      7.4           Permitted Disposition of an
Interest.  Dispositions of a Shareholder’s Shares shall be
subject to and made only in accordance with this ARTICLE 7 and any purported
disposition to the contrary shall be null and void ab initio and shall not
be recognized by or binding upon the Company.  A Shareholder may
dispose of all or any part of its Shares at any time after the fifth (5th)
anniversary of the Effective Date of this Agreement to any transferee upon the
occurrence of the following:  (i) such Shareholder having first
obtained the written consent to such disposition from the Remaining Shareholder
(hereinafter defined), not to be unreasonably withheld; and (ii) approval of at
least one director appointed by AGFEED to the Board and at least one director
appointed by HYPOR to the Board.

      
        
           

        

        
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      7.5           Grant of
Option.  Except as hereinafter provided, any Shareholder for
whom any of the events set forth in this Section 7.5 occurs (the “Affected
Shareholder”) hereby grants to the non-Affected Shareholder (the “Remaining
Shareholder”), or any Persons so designated by the Company (such
designation to be made on behalf of the Company by the Remaining Shareholder) to
purchase such Shares (a “Designated
Person”), in consideration of the mutual covenants herein contained, an
option to purchase any and all of the Shares now owned or held, or hereafter
acquired, by such Affected Shareholder, such option to be exercisable upon the
occurrence of any of the following events (a “Trigger
Event”):

       

      7.5.1         Any
attempt by such Shareholder to sell, assign, transfer or in any way dispose of
any or all of such Shareholder’s Shares, or the beneficial interests therein;
or

       

      7.5.2         Any
pledge or the creation of any encumbrance on any or all of the Shares held by
such Shareholder, except to secure an obligation owed to another Shareholder;
or

       

      7.5.3         Any
other transfer of any or all of the Shares held by such Shareholder, or the
beneficial interests therein, whether voluntary or involuntary, by operation of
law or otherwise, including all executions or legal processes attaching such
Shares and all processes affecting the interest of any Shareholder with respect
to such Shares; or

       

      7.5.4         Such
Shareholder becoming Bankrupt; or

       

      7.5.5         The
receipt by such Shareholder of a bona fide offer from a third party to purchase
all, but not less than all, of such Shareholder’s Shares (a "Bona Fide Offer"), which offer
such Shareholder desires to accept; or

       

      7.5.6         A
material breach by a Shareholder of any of the terms or covenants contained
herein or of the confidentiality or intellectual property provisions of any
agreement between the Company and such Shareholder; or any wrongful and
intentional act or omission by such Shareholder which has had or would
reasonably be expected to have a material adverse impact on the business,
properties, results of operations, condition (financial or otherwise) or
prospects of the Company.

       

      7.6           Exercise of
Option.   Except as hereinafter provided, immediately upon
the occurrence of a Trigger Event, the Affected Shareholder shall send notice in
writing to the Company of such fact ("Offer
Notice").  Except as hereinafter provided, during the period
which shall begin with the occurrence of such Trigger Event, and (a) if the
notice is given, ending forty-five (45) days after such notice is given, or (b)
if no notice is given, continuing without end, the Remaining Shareholder or a
Designated Person shall have the right to exercise its option to purchase the
Affected Shareholder’s Shares on the terms and conditions set forth
herein.  Notwithstanding anything herein contained to the contrary,
all determinations by the Company under ARTICLES 7 and 8 shall be made
by the Remaining Shareholder.

       

      7.7           Bona Fide Offer.  In
the event a Bona Fide Offer occurs pursuant to which the Remaining Shareholder
or a Designated Person, as applicable, may exercise its option to purchase and
the Remaining Shareholder or a Designated Person fails to so exercise its option
to purchase all of the Shares offered for sale within the allotted time, said
option to purchase with respect to such Bona Fide Offer shall terminate; provided, however, in the event
a proposed transfer or sale as a result of a Bona Fide Offer is not consummated
either (i) substantially in accordance with the price and on the terms set forth
in the notice sent to the Company pursuant to Section 7.6 hereof or
otherwise contained in a Bona Fide Offer or (ii) within sixty (60) days of the
date of said notice, such Affected Shareholder shall not be entitled to sell
such Shares unless reoffered to the Remaining Shareholder or a Designated
Person, as applicable, under the terms of this Agreement and at any lower price
and on any different terms.

       

      
        
          
             

          

          
            17

            
              

            

          

          
             

          

        

      

       

      ARTICLE
8

       

      PURCHASE
PRICE

       

      8.1           Purchase
Price.  Except as otherwise provided in this ARTICLE 8, the purchase price
to be paid for Shares purchased pursuant to this Agreement (the “Purchase
Price”) shall equal the Fair Market Value of such Shares.

       

      8.2           Bona Fide
Offer.  Notwithstanding the foregoing provisions of this ARTICLE 8, in the event an
option granted hereunder becomes exercisable pursuant to the provisions of Section 7.5.5 herein because
of a Bona Fide Offer for Shares, the Purchase Price with respect to such Shares
shall be the price set forth in the Bona Fide Offer.

       

      ARTICLE
9

       

      SUBSTITUTED
SHAREHOLDERS/ADDITIONAL SHAREHOLDERS

       

      9.1           Substituted Shareholders. Any transferee acquiring
the Shares of a Shareholder as permitted under ARTICLE 7 shall be deemed admitted as
a Shareholder with respect to the Shares transferred concurrently with the
registration of the Transfer in the Company's register of members (provided that
such transferee, unless already a Shareholder, shall, as a condition to such
admission, execute a counterpart of this Agreement, agreeing thereby to be bound
by all of the terms and conditions hereof), and such Shareholder shall be
entitled to all of the rights and benefits under this Agreement of the
transferor of such Shares.  No purported Transfer of any Shares, or
any portion thereof or Shares therein, in violation of the terms of this
Agreement (including any Transfer occurring by operation of law) shall vest the
purported transferee with any rights, powers, or privileges hereunder, and no
such purported transferee shall be deemed for any purposes as a Shareholder
hereunder or under the Formation Documents or have any right to vote or consent
with respect to Company matters, to inspect Company records to maintain
derivative proceedings, to maintain any action for an accounting or to exercise
any other rights of a Shareholder hereunder or under the Formation Documents or
the WOFE Act.

      9.2           Additional
Shareholders.  Additional Shareholders may be admitted to the
Company in accordance with Section 5.2.  The
Capital Contributions by any Additional Shareholder shall be as determined in
accordance with Section
5.2 (and the Equity Interest of other Shareholders shall be adjusted to
reflect the Equity Interest granted to the Additional
Shareholder.  Any Additional Shareholder shall execute a counterpart
of this Agreement, agreeing thereby to be bound by all of the terms and
provisions hereof.

       

      
        
          
             

          

          
            18

            
              

            

          

          
             

          

        

      

       

      ARTICLE
10

       

      CONFIDENTIALITY

       

      10.1         Confidentiality and
Non-Disclosure.  Except as otherwise consented to by the
Company (acting on the direction of the Board), all information which has been
furnished to a Shareholder in its capacity as a Shareholder or will be furnished
to a Shareholder in its capacity as a Shareholder, pursuant to this Agreement or
otherwise, relating to the Company or any of its Affiliates or the business of
any of them will be kept confidential, will not be used by such Shareholder, or
by any of its agents, representatives, or employees, for any purpose other than
evaluating and monitoring the investment in the Company and enforcing rights
hereunder, and except as permitted in this Section 10.1 will not be
disclosed by such Shareholder, or by any of its agents, representatives, or
employees, in any manner whatsoever, in whole or in part; provided, however,
that the foregoing shall not apply to any information that (a) was in such
Shareholder's possession prior to disclosure by the Company or any of its
Affiliates as evidenced by the written records of such Shareholders, (b) was
generally known, in the trade or business in which it is practiced by the
Company or its Affiliates, at the time of disclosure to such Shareholder, or
becomes generally known, through no act of such Shareholder or its employees or
agents or in violation of a confidentiality provision, or (c) has come into the
possession of such Shareholder from a third party who, to such Shareholder's
knowledge, after reasonable inquiry, is under no obligation to the Company or
any of its Affiliates to maintain the confidentiality of such
information.  Each Shareholder shall be permitted to disclose such
information: (a) to those of its agents, partners, Shareholders,
representatives, and employees who need to be familiar with such information in
connection with such Shareholder's investment in the Company for use solely for
such purpose; provided, however, that each such Person shall have been informed
of the covenants set forth in this Section 10.1 and such
Shareholder shall be liable for any breach by any such Person of such covenants;
(b) to the extent required by law, so long as such Shareholder shall have, to
the extent reasonably practicable, first afforded the Company with a reasonable
opportunity to contest the necessity of disclosing such information; and (c)
with the prior consent of the Company, which consent shall not be unreasonably
withheld, to any prospective transferee of such Shareholder; provided, however,
that such prospective transferee agrees to be bound by the provisions of this
Section
10.1.  Without intending to limit the remedies available to the
Company, each Shareholder acknowledges that a breach of this Section 10.1 may result in
material irreparable injury to the Company or its Affiliates for which there is
no adequate remedy at law, that it will not be possible to measure damages for
such injuries precisely and that, in the event of such a breach or threat
thereof, the Company shall be entitled to specifically enforce the covenants
contained herein without the posting of a bond and such Shareholder agrees not
to oppose the granting of such injunctive relief on the basis that monetary
damages are an adequate remedy.  The provisions of this Section 10.1 shall survive any
termination of this Agreement and shall continue to bind each Person who was
ever subject to this provision even if such Person would otherwise cease to be
subject to this provision.

      
        
           

        

        
          19

          
            

          

        

        
           

        

      

       

      ARTICLE
11

       

      DISSOLUTION
OF THE COMPANY

       

      11.1         Dissolution
Events.  The Company will appoint a liquidator and commence
liquidation and dissolution upon the first to occur of any of the following
(each, a "Dissolution
Event"):

       

      11.1.1       The
sale or other transfer of all or substantially all of the Company's Property or
assets; or

       

      11.1.2       A
vote in accordance with Section 5.2.13; or

       

      11.1.3       A
Shareholder, as the non-breaching party, exercises its rights under Section 12.2.2 of this
Agreement in respect of an Event of Default to require that the Company be
liquidated and dissolved.

       

      The
Shareholders hereby agree that the Company will not dissolve prior to the
occurrence of a Dissolution Event.

       

      11.2         Winding-Up.  Upon
the occurrence of a Dissolution Event, the Company will continue solely for the
purposes of winding up its affairs in an orderly manner, liquidating its assets,
and satisfying the claims of its creditors and Shareholders, provided always
that the same is carried out in accordance with the applicable provisions of the
Nevada Private Corporation Act.  No Shareholder will take any action
that is inconsistent with, or not necessary to or appropriate for, the
winding-up of the Company's business and affairs.  The Company's
assets will be liquidated as promptly as is consistent with obtaining the fair
value thereof, and the proceeds therefrom, to the extent sufficient therefore,
and will be applied and distributed in the following order:

       

      11.2.1       First,
to provide for the payment of, or to discharge, all claims, debts, liabilities
and obligations of the Company;

       

      11.2.2       Second,
distribute the surplus assets of the Company to Shareholders in accordance with
their pro-rata share.

       

      No
Shareholder will receive any additional compensation for any services performed
pursuant to this ARTICLE
11.

       

      11.3         Rights of
Shareholders.  Except as otherwise provided in this Agreement,
(a) each Shareholder will upon liquidation and/or dissolution of the Company
look solely to the surplus assets of the Company for the return of such
Shareholder's Capital Contribution and will have no right or power to demand or
receive property other than cash from the Company, and (b) no Shareholder will
have priority over any other Shareholder as to the return of such Shareholder's
Capital Contribution, distributions or allocations whether on a liquidation,
dissolution or otherwise, including prior to a liquidation and/or
dissolution.

      
        
           

        

        
          20

          
            

          

        

        
           

        

      

       

      ARTICLE
12

       

      EVENT
OF DEFAULT/TERMINATION

       

      12.1         Event of
Default.  The occurrence of any one or more of the following
events shall constitute an event of default (each, an "Event of
Default") under this Agreement:

       

      12.1.1       AGFEED
or HYPOR fails to make any Initial Capital Contribution;

       

      12.1.2       AGFEED
or HYPOR breaches any covenants set forth in ARTICLE 7 and ARTICLE 10 and such breach is not
cured by such party within 30 days after written notice is given to such party
by the Company or the other party;

       

      12.1.3       the
approval procedures set forth in Sections 5.2, 5.3 and 5.4 are violated by AGFEED or
HYPOR;

       

      12.1.4       AGFEED
or HYPOR shall (i) apply for or consent to the appointment of, or the taking of
possession by, a trustee, receiver, custodian, liquidator or the like of itself
or all or a substantial part of its property, (ii) admit in writing its
inability or be generally unable to pay its debts as such debts become due,
(iii) make a general assignment for the benefit of its creditors, (iv) commence
a voluntary case under Title 11, Section 101 et seq. of the United States Code
titled "Bankruptcy," as amended from time to time, and any successor statute
thereto or any applicable liquidation, dissolution, conservatorship, bankruptcy,
moratorium, rearrangement, insolvency, reorganization, readjustment of debt or
similar law affecting the rights or remedies of creditors generally, as in
effect from time to time, including Title 11, Section 101 et seq. of the United
States Code titled "Bankruptcy," (collectively, the "Debtor
Relief Laws"), (v) file a petition seeking to take advantage of any other
Debtor Relief Laws, (vi) fail to controvert in a timely and appropriate manner,
acquiesce in writing to, or file an answer admitting the material allegations of
any petition filed against it in an involuntary case under the any Debtor Relief
Laws or (vii) take any action for the purpose of effecting any of the
foregoing;

       

      12.1.5       a
proceeding or case shall be commenced without the application or consent of
AGFEED or HYPOR in any court of competent jurisdiction, seeking with respect to
such Person (i) its liquidation, reorganization, dissolution or winding up or
the composition or readjustment of its debts or similar action or (ii) the
appointment of a trustee, receiver, custodian, liquidator or the like of such
Person or all or a substantial part of its property under any Debtor Relief Laws
and such proceeding or case shall continue undismissed, or any order, judgment
or decree approving any of the foregoing shall be entered and continue unstayed
and in effect for a period of 60 or more consecutive days from and including the
date of commencement of such proceeding or case, or any order for relief against
such Person shall be entered in any involuntary case under any Debtor Relief
Laws;

       

      12.1.6       the
Company is not formed within three (3) months after this Agreement has been
signed by the duly authorized officers of AGFEED and HYPOR, or such reasonable
time greater than such three (3) months as the Parties may deem
appropriate.

        

      
        
          
             

          

          
            21

            
              

            

          

          
             

          

        

      

       

      12.2         Effect of Event of
Default.  Upon an Event of Default, the non-breaching party
(the "Non-Breaching
Shareholder") shall have the right to:

       

      12.2.1       terminate
this Agreement effective immediately but without prejudice to the rights and
obligations of the parties under this Agreement which have accrued as a the date
of such termination; and/or

       

      12.2.2       cause
the Company to be liquidated and dissolved in accordance with the Formation
Documents; and/or

       

      12.2.3       purchase
free from Encumbrances all of the Shares of the Shareholder being the defaulting
party (the "Defaulting
Shareholder") for a purchase price equal to 80% of the Fair Market Value
of such Shares.  In order to exercise such right, the Non-Breaching
Shareholder must provide written notice to the Defaulting Shareholder within 15
days after the event giving rise to such termination (or, if later, within 15
days of becoming aware of such event).  Within 30 days after the
determination of the Fair Market Value pursuant to this Section 12.1.6.3, the
Defaulting Shareholder shall deliver to the Non-Breaching Shareholder the Share
certificates evidencing the relevant Shares and a duly executed share transfer
form (substantially in the form set out in Exhibit E) in
relation thereto and the Non-Breaching Shareholder shall pay the Defaulting
Shareholder the purchase price for the Defaulting Shareholder's Shares
determined in accordance with this Section 12.2.3 in
cash.

       

      12.3         Liquidation and
Dissolution.  In the event that the Non-Breaching Shareholder
elects to exercise its rights under Section 12.2.2 to cause the
Company to be liquidated and dissolved in accordance with the Formation
Documents, the Shares held by the Defaulting Shareholder shall not carry the
right to vote on any resolution of Shareholders to liquidate and dissolve the
Company in accordance with Section 12.2.2 or any other
resolution of shareholders in connection with such liquidation and
dissolution.

       

      12.4         Power of Attorney in Event of
Default.  The Defaulting Shareholder, for value received, by
way of security and in order more fully to secure the performance of its
obligations under Section 12.2.3, hereby irrevocably
appoints the Non-Breaching Shareholder and the persons deriving title under it
(including, but without any limitation, any receiver) jointly and also severally
(with full power of substitution and delegation) to be its
attorney-in-fact:

       

      12.4.1       to
execute and complete on behalf of the Defaulting Shareholder or its nominees any
deeds, transfers or other documents which the Non-Breaching Shareholder may from
time to time require for perfecting the Non-Breaching Shareholder's title to the
Shares purchased by the non-breaching party pursuant to Section 12.2.3; and

      12.4.2       generally
for the Defaulting Shareholder and in its name and on its behalf and as its act
and deed or otherwise to execute, seal and deliver and otherwise perfect and do
any such legal assignments and other assurances, charges, authorities and
documents and all such deeds, instruments, acts and things which may be required
for the full exercise of all or any of the powers conferred or which may be
deemed proper on or in connection with any of the purposes aforesaid including
directing that the directors of the Company register the transfer of Shares
pursuant to Section
12.2.3.

       

      
        
          
             

          

          
            22

            
              

            

          

          
             

          

        

      

       

      12.4.3       The
power conferred by Section
12.4 shall be a general power of attorney and the Defaulting Shareholder
hereby ratifies and confirms and agrees to ratify and confirm any instrument,
act or thing which any attorney appointed pursuant hereto may execute or do. In
relation to the power referred to herein, the exercise by the Non-Breaching
Shareholder of such power shall be conclusive evidence of its right to exercise
the same.

       

      12.5         Termination.  This
Agreement may be terminated by mutual written consent of AGFEED and
HYPOR.

       

      ARTICLE
13

       

      ACKNOWLEDGMENT/FEES

       

      13.1     Production and Distribution
Agreement.  Each party hereto acknowledges that HYPOR and
AGFEED will be entering into a Production and Distribution Agreement with the
Company as of the Effective Date.

       

      13.2     AgFeed Lease
Agreement.  Each party hereto acknowledges that the AGFEED will
be entering into the AgFeed Lease Agreement with the Company as of the Effective
Date.

       

      13.3     AGFEED Authorized
Signatory.  Each party hereto acknowledges that [Dr. Songyan Li] has been
designated as the Person authorized to execute any agreement on behalf of the
Company, including, without limitation, this Agreement, the Production and
Distribution Agreement and the AgFeed Lease Agreement.

       

      ARTICLE
14

       

      MISCELLANEOUS

       

      14.1         Authority to
Amend.  Amendments to this Agreement shall require the approval
of AGFEED and HYPOR.  Notwithstanding the foregoing, the parties
hereto agree that, in the event AGFEED, HYPOR or the Company exercises any of
its repurchase rights set forth in ARTICLE 7 or Section 12.2.3 and this
Agreement is not terminated, any reference in this Agreement to the selling
party (i.e., HYPOR or AGFEED, as applicable) shall mean to refer to
the repurchasing party (i.e., AGFEED or HYPOR, as applicable).

       

      14.2         Notices.  All
notices, requests, demands and other communications under this Agreement must be
in writing and will be deemed duly given, unless otherwise expressly indicated
to the contrary in this Agreement, (a) when personally delivered, (b) 2 days
after having been deposited in the United States mail, postage prepaid, (c) 1
Business Day after having been dispatched by a nationally recognized overnight
courier service, addressed to the parties or their permitted assigns with an
acknowledgment of receipt requested at the following addresses, or (d) upon
receipt of confirmation of a facsimile or other electronic
transmission:

      
        
           

        

        
          23

          
            

          

        

        
           

        

      

       

      14.2.1       If
to the Company, to the Company at AgFeed Industries, Inc., Rm. A1001-1002, Tower
16, Hengmao Int’l Center, 333 S. Guangchang Rd., Nanchang, Jiangxi, China
330003; and

       

      14.2.2       If
to a Shareholder, to the addresses set forth on Exhibit A to this
Agreement.  Any Person may from time to time specify a different
address by written notice to the Company in accordance with this Section 14.2.

       

      14.3         Name Change.  In the
event this Agreement is terminated or HYPOR or AGFEED cease being Shareholders
of the Company, then, at such time, the Company shall (i) no longer be entitled
to use the name “Hypor” or “AgFeed,” as applicable; and (ii) the Company shall
further refrain from the use of a name similar to “Hypor” or “AgFeed,” as
applicable, as (or as part of) its company name so as not to cause confusion to
a third party in relation to the products the Company markets or the ownership
of the Company.

       

      14.4         Binding
Effect.  Except as otherwise provided in this Agreement, every
covenant, term, and provision of this Agreement will be binding upon and inure
to the benefit of the Shareholders and their respective heirs, legatees, legal
representatives, successors, transferees and permitted assigns.

       

      14.5         Construction.  Every
covenant, term and provision of this Agreement will be construed simply
according to its fair meaning and not strictly for or against any
Shareholder.

       

      14.6         Entire
Agreement.  This Agreement, as it may be amended in writing
from time to time, contains the entire understanding among the parties hereto
and supersedes any prior understandings and agreements among them respecting the
subject matter of this Agreement.

       

      14.7         Headings.  The table
of contents, section and other headings contained in this Agreement are for
reference purposes only and are not intended to describe, interpret, define or
limit the scope or extent of this Agreement or any provision
hereof.

       

      14.8         Severability.  Every
provision of this Agreement is intended to be severable.  If any term
or provision hereof is invalid for any reason whatsoever, such illegality or
invalidity will not affect the validity or legality of the remainder of this
Agreement.

       

      14.9         Incorporation by
Reference.  Every appendix, exhibit, schedule, and other
document attached to this Agreement and referred to herein is hereby
incorporated into this Agreement by reference.

       

      14.10       Further
Action.  Each Shareholder agrees to perform all further acts
and execute, acknowledge, and deliver any documents that maybe reasonably
necessary, appropriate, or desirable to carry out the provisions of this
Agreement.

       

      14.11       Variation of
Pronouns.  All pronouns and any variations will be deemed to
refer to masculine, feminine, or neuter, singular or plural, as the identity of
the Person or Persons may require.

       

      
        
          
             

          

          
            24

            
              

            

          

          
             

          

        

      

       

      14.12       Governing Law; Consent to
Jurisdiction.  This Agreement shall be governed by, and
construed in accordance with, the laws of the State of Nevada, United States,
save as regards to the application of any non-Nevada law statutes, laws or
regulations referred to herein.  To the fullest extent applicable Law
permits, each Shareholder hereby consents to the jurisdiction of any court
located in Philadelphia County, Pennsylvania, United States for the purposes of
enforcement of this Agreement and waives personal service of any and all
process.  To the fullest extent applicable Law permits, each
Shareholder waives any objection to venue of any action instituted under this
Agreement.

       

      14.13       Specific
Performance.  The parties hereto acknowledge that it is
impossible to measure, in money, the damages that shall accrue to a party from a
failure of a party to perform any of the obligations under this
Agreement.  Therefore, if any party enters into any action or
proceeding to enforce the provisions of this Agreement, any Person (including
the Company) against whom the action or proceeding is brought waives the claim
or defense that the moving party has or shall have an adequate remedy at law,
and the Person shall not urge in the action or proceeding the claim or defense
that an adequate remedy at law exists.

       

      14.14       Counterpart Execution;
Facsimile.  This Agreement may be executed in any number of
counterparts with the same effect as if all of the Shareholders had signed the
same document.  All counterparts will be construed together and will
constitute one agreement.  This Agreement may be executed via
facsimile or other electronic transmission.

       

      [REMAINDER
OF PAGE INTENTIONALLY LEFT BLANK]

      
        
           

        

        
          25

          
            

          

        

        
           

        

      

    

    

      IN WITNESS WHEREOF, the
parties hereto have executed this Agreement as a Deed as of the Effective
Date.

      

      
        
          
            
              	
                      SHAREHOLDERS:

                    
	 
      	 
      	 
      
	 
      	
                      AGFEED
      INDUSTRIES, INC.

                    
	 
      	 
      	 
      
	 
      	
                      By:

                    	
                      /s/ Li Songyan

                    
	 
      	
                      Name:

                    	
                      Li
      Songyan

                    
	 
      	
                      Title:

                    	
                      Chairman

                    
	 
      	 
      	 
      
	 
      	
                      EXECUTED
      IN CHINA

                    
	 
      	 
      	 
      
	 
      	
                      HYPOR
      B.V.

                    
	 
      	 
      	 
      
	 
      	
                      By:

                    	
                      /s/ M. H. M. Hendrix

                    
	 
      	
                      Name:

                    	
                      M.
      H. M. Hendrix

                    
	 
      	
                      Title:

                    	
                      President

                    
	 
      	 
      	 
      
	
                      THE
      COMPANY:

                    
	 
      	 
      
	 
      	
                      Executed
      as a Deed for and on behalf of

                    
	 
      	 
      	 
      
	 
      	
                      HYPOR
      AGFEED BREEDING COMPANY

                      INC.

                    
	 
      	 
      	 
      
	 
      	
                      By:

                    	
                      /s/ Li Songyan

                    
	 
      	
                      Name:

                    	
                      Li
      Songyan

                    
	 
      	
                      Title:

                    	
                      Authorized
      Signatory

                    

            

          

        

      

      
        
           

        

        
          26

          
            

          

        

        
           

        

      

      SCHEDULE
1

      

      EXCEPTION
TO BUSINESS ACTIVITIES OF THE COMPANY

      

      None.

      
        
           

        

        
          2

          
            

          

        

        
           

        

      

      EXHIBIT
A

      SHAREHOLDERS'
NAMES, ADDRESSES, EQUITY INTEREST AND SHARES

      AS
OF DECEMBER 11, 2009

      (Capitalized
terms used herein shall have the meaning given to them in the
Shareholders

      Agreement,
dated December 11, 2009, as amended from time to time)

      

      Parties
have agreed to an Initial Capital Contribution of Thirty Seven Million China
Yuan Renminbi (37,000,000 RMB). This Initial Capital Contribution will be made
available to the Company in accordance with the schedule stated
hereunder.

      

      
        
          
            
              
                
                  
                    
                      
                        
                          
                            
                              
                                
                                  
                                    
                                      
                                        	
                                                TOTAL
      INVESTMENT

                                              	 	 	37,000,000	 	 	 	 	 
	
                                                Capital

                                              	 	 	50	%	 	 	 	 
	
                                                Loan

                                              	 	 	50	%	 	 	 	 

                                      

                                    

                                  

                                

                              

                            

                          

                        

                      

                    

                  

                

              

            

          

        

      

      

      
        
          
            
              
                
                  
                    
                      	 	 	 	
                              Capital

                              Contribution

                            	 	 	
                              Loan

                            	 	 	
                              Total

                            	 
	
                              AgFeed

                            	 	 	85	%	 	 	15,725,000	 	 	 	15,725,000	 	 	 	31,450,000	 
	
                              Hypor

                            	 	 	15	%	 	 	2,775,000	 	 	 	2,775,000	 	 	 	5,550,000	 

                    

                  

                

              

            

          

        

      

      (Note 1, this assumes an exchange rate
to the Euro of 10,1, this is the rate to transfer the euro amount of the animal
purchased to RMB)

      (Note 2, Hypor to contribute capital and
loan as part of the value of the animals supplied under the Production and
Distribution Agreement.)

      

      A.           As
to the Eighteen Million Five Hundred Thousand China Yuan Renminbi
(18,500,000RMB) to be paid as registered capital of the Company, the Parties
have agreed as follows:

      

      
        
          
            
              
                
                  	
                          Names and Addresses

                          of Shareholders

                        	 	
                          Number of Shares

                        	 	 	
                          Amount Paid for Share

                          (RMB 1,000 per Share)

                        	 	 	
                          Equity

                          Interest of the

                          Company

                        	 
	
                          AgFeed
      Industries, Inc.

                          Akara
      Bldg., 24 De Castro Street,

                          Wickhams
      Cay 1, Road Town,

                          Tortola,
      British Virgin Islands

                        	 	 	15,725	 	 	 	15,725,000	 	 	 	85	%
	 
      	 	 	 	 	 	 	 	 	 	 	 	 
	
                          HYPOR
      B.V.

                          Spoorstraat
      69,

                          5831
      CK Boxmeer

                          The
      Netherlands

                          Attn:  Managing
      Director

                        	 	 	2,775	 	 	 	2,775,000	 	 	 	15	%
	 
      	 	 	 	 	 	 	 	 	 	 	 	 
	
                          TOTAL ISSUED

                        	 	 	18,500	 	 	 	18,500,000	 	 	 	100	%

                

              

            

          

        

      

      

      B.           As
to the Eighteen Million Five Hundred Thousand China Yuan Renminbi
(18,500,000RMB) to be paid under a shareholders loan agreement, the Parties have
agreed to the shareholders loan agreement between the Company and AGFEED and
HYPOR respectively, a format of such shareholders loan agreement has been
attached hereto as Exhibit AA.Exhibit
10.24

    PRODUCTION
AND DISTRIBUTION AGREEMENT

    

    This
Agreement will enter into force on December 11, 2009 by and
between:

    

    1.           Hypor
B.V., a company incorporated under the laws of The Netherlands, whose registered
office is situated at Spoorstraat 69, 5831 CK Boxmeer, The Netherlands
(hereinafter called "Hypor");

    

    2.           AgFeed
Industries, Inc., a company formed under the laws of The State of Nevada, whose
principal place of business is located at Rm. A1001-1002, Tower 16, Hengmao
Int’l Center, 333 S. Guangchang Rd., Nanchang, Jiangxi, China 330003
(hereinafter called “AgFeed”);

    

    and

    

    3.           Hypor
Agfeed Breeding Company,
Inc.,
a private company organized under the laws of the People’s Republic of China,
whose registered office is at Rm. A1001-1002, Tower 16, Hengmao Int’l Center,
333 S. Guangchang Rd., Nanchang, Jiangxi, China 330003, (hereinafter called
"HABC," and together with Hypor, the “Parties”).

    

    WITNESSETH:

    

    WHEREAS,
Hypor is active in the field of the breeding of pigs and produces (great) grand
parent stock and semen of same stock levels for production of great grand
parent, grand parent and parent stock pigs and, in relation thereto, avails its
expertise, know-how and other information in relation to the selection and the
production of pigs (gilts and boars);

     

    WHEREAS,
HABC would like to produce great grand parent, grand parent and parent stock
pigs and sell grand parent and parent stock pigs from Hypor’s (great) grand
parent stock within the the Territory (as further defined hereinafter) and in
connection therewith would like to receive related breeding know-how and other
information;

     

    WHEREAS,
AgFeed, one of the largest hog producers in the People’s Republic of China,
desires to purchase Grand Parent and Parent Stock pigs (all such terms as
defined hereinafter) from HABC;

     

    WHEREAS,
Hypor possesses the trademark “Hypor” to be used in combination with the sale of
(Great) Grand parent stock pigs and Parent Stock pigs as produced by means of
(semen of) (great) grand parent stock pigs delivered by Hypor (hereinafter
referred to as “Trademark”); and

    

    WHEREAS,
HABC desires to use the Trademark solely in connection with the utilization,
marketing and sale of (grand) parent stock pigs in the Territory.

    

    NOW,
THEREFORE, in consideration of the premises and of the mutual covenants and
conditions herein contained, the undersigned have agreed and do by these
presents agree as follows:

    
      
         

      

      
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    ARTICLE 1
- DEFINITIONS

    

    
      	
              1.1

            	
              For
      the purpose of this Agreement, the following terms shall have the
      following meanings:

            

    

    

    (a.)           “Effective
Date” means December 11, 2009.

     

    (b.)           “Great
Grand Parent Stock” means; genetic nucleus animals (boar and sow) that produce
Great Grand Parent and Grand Parent Stock for the production nucleus and
multiplication levels of the breeding pyramid.

     

    (c.)           “Grand
Parent stock” means; the parents (boar and sow) of the Parent Stock (boar and
sow).

     

    (d.)           “Parent
Stock” means the parents (boar and sow) of the final commercial product, being
slaughter pigs.

     

    
      (e.)           “(Great)
Grand Parent Stock” means both Great Grand Parent Stock as well as Grand Parent
Stock.

    

    

    
      (f.)           “(Grand)
Parent Stock” means both Grand Parent Stock as well as Parent
Stock.

    

    

    
      (g.)           “Territory”
means: the Provinces or Municipalities within the Peoples Republic of China
commonly known as Anhui, Hubei, Zhejiang, Jiangsu, Jiangxi, Hunan, Guangxi,
Fujian, Guangdong, Hainan Provinces and Shanghai.

    

    

    ARTICLE 2
– SCOPE OF THE AGREEMENT

    

    2.1           From
and after the Effective Date, HABC shall purchase (Great) Grand Parent Stock and
the semen therof from Hypor and Hypor shall, with regard to the Territory, sell
(Great) Grand Parent Stock and the semen thereof to HABC in such quantities as
HABC will order according to Article 7 hereinafter.

    

    2.2           In
addition to section 2.1, Hypor will provide HABC with expertise, know-how and
other information in relation to the production and the selection of (Great)
Grand Parent Stock (the “Information”). For this purpose, HABC shall provide
Hypor with information consistent with the instructions of Hypor. Upon receipt
thereof, Hypor will calculate and communicate to HABC the breeding values of the
Grand Parent Stock as produced by means of the Great Grand Parent Stock or
related semen as supplied by Hypor. Additionally, Hypor will advise HABC whether
or not the thus produced Grand Parent Stock can be used as a Great Grand Parent
Stock for HABC’s breeding program.

    

    2.3           Any
and all expenses incurred by HABC in respect of its services under this
Agreement, including sales promotion and sampling, shall be for its own account,
unless it is expressly agreed to otherwise in writing.

    

    
      
        
        

      

      
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    ARTICLE 3
-  RESTRICTIONS

    

    3.1           It
is understood that HABC will purchase semen of as well as (Great) Grand Parent
Stock from Hypor not for reselling purposes but for the sole purpose of HABC
producing and distributing (Grand) Parent Stock, in its own name and for its own
account, unless it is expressly agreed to otherwise in writing and in advance
thereof. In addition, HABC agrees that it shall not encumber, permit the
attachment of any liens, pledge, mortgage, sell or in any other way transfer to
a third party the rights, title or interest in the semen of (Great) Grand Parent
Stock as well as (Great) Grand Parent Stock purchased from Hypor.

    

    3.2           In
addition to section 2.1, the sale of semen of (Great) Grand Parent Stock as well
as (Great) Grand Parent Stock by Hypor to HABC hereunder is conditional upon
HABC mating the (Great) Grand Parent Stock or using the semen of (Great) Grand
Parent stock as Hypor shall reasonably direct.

    

    3.3           During
the term of this Agreement, HABC will refrain, directly or indirectly, from
promoting, selling, distributing or otherwise handling in the Territory –
whether for its own account or on behalf of any third party – any products of
the same or similar nature, conception or applicability as (Great) Grand Parent
Stock, (Grand) Parent Stock and/or other product whose sale is competitive with
that of the (Grand) Parent Stock, unless with the written consent of Hypor, not
to be unreasonably withheld.

    

    3.4           HABC
will not attempt to include any one (1) or more of either the genetic lines of
Hypor or genetic lines from other sources in any foundation or pedigree breeding
of pigs that may be controlled directly or indirectly by HABC or a third party,
during the course of this Agreement and within five (5) years after its
termination.

    

    3.5           In
the event HABC becomes aware of a sales opportunity for (Grand) Parent Stock
outside the Territory, HABC will make commercially reasonable efforts to inform
Hypor of such opportunity, upon which the latter, in consultation with HABC,
will decide on how to proceed with such opportunity.

    

    3.6           HABC
agrees that it shall purchase all non-internal replacement animals from Hypor,
and AgFeed shall purchase, and HABC or Hypor, as applicable, shall sell to
AgFeed, all of AgFeed’s, Grand Parent Stock annual requirements for its Lushan
and Gangda hog farms, as well as such requirements for any additional multiplier
farms added by AgFeed during the term of this Agreement, first, from HABC and,
second, from a Hypor breeding farm in the event of a health issue regarding the
supply of animals from HABC.

    

    ARTICLE 4
– TRADEMARK

    

    4.1           Hypor
hereby grants to HABC the right to use the Trademark, as is defined in Schedule
4.1, in connection with the sale of the (Grand) Parent Stock by HABC in the
Territory, and HABC agrees to use the Trademark solely in connection with the
sale by HABC of (Grand) Parent Stock in the Territory at all times during the
term of this Agreement, unless otherwise agreed to by Hypor in writing and in
advance.

    
      
         

      

      
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      During
the term of this Agreement, Hypor shall at all times remain the owner of the
Trademark in the Territory and HABC shall not have the right to use the
Trademark after the termination or expiration of this
Agreement.

    

    

    4.2          HABC
shall not display or use the Trademark in such manner that its distinctiveness,
reputation or validity might be impaired, and HABC will not display the
Trademark in such relation to a mark of HABC or of any other third party as to
suggest that the two marks constitute a single or composite mark.

    

    4.3          HABC
will not conduct its business under a business name or trading style identical
with or in a manner that, in the reasonable opinion of Hypor, is confusingly
similar to the Trademark or which might impair the validity, reputation or
distinctiveness of the Trademark.

    

    4.4          HABC
shall not attempt to register any trademark that is similar to the Trademark or
use any trademark that is similar to the Trademark whatsoever, whether during
the term of this Agreement or after its termination.

    

    4.5          HABC
hereby acknowledges that it has no right in or to the Trademark, and HABC agrees
neither to claim any rights in or to the Trademark or dispute or assist others
to dispute the validity or ownership of the Trademark in relation to any pig
activities or to any pig products whatsoever or wheresoever.

     

    4.6         
In the event any claim shall be made against HABC by a third party for trademark
infringement arising from the use of the Trademark by HABC, the latter shall
promptly notify Hypor and Hypor will undertake the defence of such
action.

    

    4.7          HABC
shall promptly notify Hypor if it discovers that any third party is infringing
the Trademark. Upon reasonable request, HABC shall cooperate with Hypor in the
prosecution of such action, and all payments of damages received by Hypor in any
suit shall be the property of Hypor.

    

    4.8          HABC
shall not give, or imply that it is authorised to give or that it is giving any
permission to any third party to use the Trademark.

    

    4.9         
HABC shall co-operate with and assist Hypor in obtaining recordal of HABC as a
registered user of the Trademark if such is not yet registered at the date of
this Agreement,. In connection therewith, HABC hereby agrees that it will sign
any such documents as may be required by Hypor and supply all such information
as may be necessary to assist Hypor in obtaining the said recordal or
registration of the Trademark.

    

    ARTICLE 5
– SALES PROMOTION

    

    5.1          HABC
undertakes to stimulate the sale of (Grand) Parent Stock as provided for herein
to the best of its ability. In connection herewith, HABC will maintain on its
staff an adequate technical service charged with the responsibility of imparting
this technical information and assistance to the customers of (Grand) Parent
Stock.

    

    5.2          Hypor
shall, in its sole discretion, support the promotional efforts of HABC by
supplying, free of charge, technical and commercial
information.

    
      
         

      

      
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    5.3           Printing
proofs of all labels, folders, leaflets, written articles, pamphlets or other
printings or materials that HABC wishes to use in connection with the (Grand)
Parent Stock or the promotion or sale of the (Grand) Parent Stock shall be
submitted to Hypor for prior approval.

    

    ARTICLE 6
- REGISTRATION AND AUTHORIZATION

    

    6.1           HABC
undertakes to have this Agreement and the (Great) Grand Parent Stock or related
semen (insofar applicable) registered with and authorized by the relevant
authorities in the Territory as may be required in the Territory for the sale of
(Grand) Parent Stock within the scope of this Agreement. At Hypor’s request,
HABC will forward to Hypor copies of any and all relevant files and documents
pursuant to any such registration or authorization.

    

    After
termination or expiration of this Agreement, HABC will cooperate with Hypor, at
Hypor’s request, to promptly transfer the above registrations or authorizations
to Hypor or a third party designated by Hypor.

    

    HABC will
make commercially reasonable efforts to ensure that the registrations or
authorizations mentioned herein are maintained during the term of this Agreement
and thereafter until the earlier of:  (i) effectuation of the
aforesaid transfer or (ii) the one year anniversary of the termination or
expiration of this Agreement.

    

    ARTICLE 7
- PURCHASE ESTIMATES

    

    7.1           In
order to assure HABC of an adequate supply of (Great) Grand Parent Stock and/or
related semen and to secure a proper planning of the production thereof, HABC
shall submit to Hypor, before the first business day of each calendar quarter, a
written estimate of the quantities of (Great) Grand Parent Stock and/or related
semen it expects to purchase during the period of four (4) calendar quarters
commencing with the signing of this Agreement.

    

    HABC’s
estimate shall be accepted by Hypor unless restricted by the limits of its
available production capacity or its commitments to third parties. Hypor shall
inform HABC within three (3) weeks after the date of receipt of the written
estimate whether or not Hypor can accept the estimate submitted by
HABC.

    

    ARTICLE 8
– ORDER PROCEDURE, PRICE, PAYMENT AND DELIVERY

    

    8.1
Without detriment to the provisions of the previous articles: (i) as an initial
placement of (Great) Grand Parent Stock, HABC shall purchase from Hypor a volume
of (Great) Grand Parent Stock as stated in Annex 8.1 and under the conditions as
stipulated therein; and (ii) for the duration of this Agreement, HABC shall
order quantities of semen of Great Grand Parent Stock in order to genetically
link the HABC nucleus farm with other Hypor Nucleus farms, under the conditions
as stipulated in Annex 8.1. Hypor’s obligation to sell any specific amount of
(Great) Grand Parent Stock animals and/or semen of the Great Grand Parent shall
be contingent upon receipt of a purchase order therefore.

    
      
         

      

      
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    8.2           Such
purchase orders shall set forth the quantities of (Great) Grand Parent Stock
and/or related semen to be purchased, the delivery dates and shipping
instructions. Hypor shall deliver the quantities requested in any purchase order
on the delivery date specified and in accordance with the shipping instructions
set forth in such purchase order.

    

    Each
delivery to HABC of (Great) Grand Parent Stock, Parent Stock or related semen
will be separately invoiced by Hypor.

    

    8.3           The
price of the (Great) Grand Parent Stock, Parent Stock and related semen, as well
as the royalty by HABC to Hypor, are listed in Annex 8.1 and attached
hereto.

    

    8.4           All
payments accruing hereunder will be made by HABC within thirty (30) days of the
date of the relevant invoice, in the currency indicated therein and to the bank
account designated by Hypor.

    

    However,
it is agreed that if and when, in the opinion of Hypor, circumstances should
render it desirable, all deliveries under this Agreement will as of then be made
on the basis of a confirmed irrevocable documentary credit or any other form of
pre-payment.

    

    8.5           Delivery
shall be Ex Works Hypor premises (“Ex Works” meaning Ex Works in accordance with
the “INCOTERMS”, as established by the International Chamber of Commerce, most
recent version) in conformity with the shipping instructions or on such other
terms as may be agreed upon separately. Hypor shall not be responsible for the
failure to deliver under, or the incorrect execution of, any purchase order due
to incorrect, incomplete or misleading information supplied to Hypor by
HABC.

    

    HABC
shall designate a delivery date not earlier than ninety (90) days following the
date of receipt of the relevant purchase order.

    

    ARTICLE 9
– INFORMATION AND REPORTS

    

    9.1           HABC
will make reasonable efforts to keep Hypor informed of any changes in local or
general conditions which may affect the sale of (Grand) Parent Stock in the
Territory, including all pertinent current information on competitive products,
and HABC will inform Hypor promptly of any substitution or imitation of (Grand)
Parent Stock, which comes to the attention of HABC.

    

    Furthermore,
HABC will inform Hypor promptly of any complaints or remarks from its clients
with regard to (Grand) Parent Stock.

    

    HABC will
also provide Hypor with quarterly reports setting forth:

    

    
      	
               
      

            	
              (i.)

            	
              sales
      of (Grand) Parent Stock realized in the previous calendar quarter
      specified by area, market and application, with comment on any deviation
      from the previous quarterly
prognosis;

            

    

    
      
         

      

      
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              (ii.)

            	
              a
      program for the coming calendar quarter which will include a forecast of
      the expected sales volume, a marketing and sales promotion plan and any
      other planned activity that could reasonably be regarded to be of interest
      to Hypor.

            

    

    

    9.2          Upon
reasonable advance notice, Hypor representatives will be granted access to
HABC’s premises for the purpose of inspecting HABC’s production facilities and
records related to the production of the (Grand) Parent Stock and to determine
the proper use by HABC of the (Grand) Parent Stock.

    

    9.3          HABC
shall be obliged to keep an accurate registration system according to the Hypor
guidelines. HABC will purchase and use the sow management program to be supplied
and installed by Hypor. Distributor shall pay the purchase fee and annual
maintenance service fee for this program to the supplier of the
programs.

    

    ARTICLE
10 –
CONFIDENTIALITY

    

    
      	
              10.1

            	
              During
      and subsequent to the term of this Agreement, HABC
      shall:

            

    

    

     (i.)           only
use any and all data, know-how, instructions, technical, commercial and other
information as provided by Hypor (the “Information”) for the sole purpose as
mentioned in this Agreement and for no other purpose whatsoever;

    

     (ii.)           return
any physical materials and delete any electronically stored data after
termination of this Agreement.

    

    10.2         In
addition to section 10.1, HABC
shall keep at all times strictly secret from third parties, including those of
its own employees who are not involved in the activities under this agreement,
the Information HABC
may obtain in its contacts with Hypor inclusive of its subsidiaries and/or
affiliates, unless a proper execution of this Agreement is impeded by such
keeping secret. This secrecy obligation shall not apply to knowledge, data,
samples and/or other information referred to above, which are in the public
domain or which have, by no fault of HABC,
come into the public domain.

    

    10.3         In
addition to the preceding sections, HABC
shall at no time derive, directly or indirectly, any right, title or interest
whatsoever from (i) the Information placed at its disposal by Hypor or (ii) any
and all knowledge, data, samples or such other information stemming from the
collaboration under this Agreement, of which HABC
hereby declares to waive any such right, title or interest.

    

    ARTICLE
11 – DURATION, EXPIRATION AND TERMINATION

    

    11.1         This
Agreement will come into effect as of the Effective Date for a period of five
(5) consecutive years. After the initial period of five (5) years, this
Agreement may be extended for subsequent period(s) of two (2) consecutive years,
only by written instrument signed by the authorised officers of each of the
undersigned. Notwithstanding the expiration of the initial or extension
period(s), the obligation of HABC
to pay a royalty under Article 8 shall always remain in effect for an additional
period of one (1) year directly following the initial or extension
period(s).

    
      
         

      

      
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                        11.2 

                      	
                        a)         
      Hypor
      may terminate this Agreement without notice of liability in the event of
      HABC’s
      bankruptcy, voluntary liquidation, change of control, change of
      management, or the merger of HABC.

                      

              

            

          

        

      

    

    

    
      b)           Any of
the undersigned may terminate this Agreement as to another undersigned (a
“Defaulting Undersigned”) without notice in the case where the Defaulting
Undersigned has not complied with its obligations under this Agreement within
thirty (30) days after such Defaulting Undersigned’s receipt of a notice
requiring it to cure its default, sent within thirty (30) days after discovery
of such default.

    

    

    
      	
               
      

            	
              In
      the cases indicated within this Section 11.2, the cancellation will take
      effect immediately, without judicial
  intervention.

            

    

     

    
      	
               
      

            	
              Termination
      or continuation of this Agreement according to 11.2 (b) above does not
      relieve the Defaulting Undersigned of its obligation to indemnify any of
      the other undersigneds for all losses and
  damages.

            

    

    

    
      	
              11.3

            	
              Hypor
      may furthermore terminate this Agreement by registered air-letter at sixty
      (60) days’ notice in the event HABC is not able to sell a minimal annual
      volume of Grand Parent Stock and/or Parent Stock in accordance with the
      business plan as agreed by the shareholders of
  HABC.

            

    

    

    
      	
              11.4

            	
              The
      termination of the present Agreement on one or more of the grounds
      mentioned above shall not imply the renunciation of any rights to be
      derived from this Agreement and shall not relieve the counterparty from
      the fulfilment of all of its obligations
  hereunder.

            

    

    

    
      	
              11.5

            	
              Except
      in the event that as a consequence of breach of agreement this Agreement
      is terminated, no undersigned shall be required to make any payment for
      termination or expiration of this Agreement to any of the other
      undersigneds.

            

    

    

    
      	
              11.6

            	
              Within
      fourteen (14) days of receipt of a termination notice, HABC shall submit
      to Hypor a program under which it will have (i) slaughtered all (Great)
      Grand Parent stock or (ii) destroyed all semen it has purchased from Hypor
      prior to the final day of the initial term of the Agreement or, if the
      Agreement has been extended under Section 11.1, then prior to the last day
      of the extension period.

            

    

    

    
      ARTICLE
12 – MISCELLANEOUS

    

    

    
      	
              12.1

            	
              Liability:
      With respect to liability for any damage suffered by HABC or any third
      party caused by (Grand) Parent Stock, Hypor will be liable only if and
      insofar as such damage is directly caused by the (Grand) Parent Stock at
      issue not being in accordance with its specifications due to the
      negligence of Hypor, such liability being limited to the amount equal to
      the invoice value of the goods in
question.

            

    

    

    
      	
              12.2

            	
              No
      Warranties: Other than as specifically stated in this Agreement, Hypor
      grants no warranty, representation or guarantee, with respect to the
      productiveness, merchantability, or fitness for any purpose of the (Great)
      Grand Parent Stock or (Grand) Parent Stock and no oral or written
      representation by Hypor shall be interpreted to contain any such warranty
      or guarantee.

            

    

    
      
         

      

      
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              12.3

            	
              Force
      Majeure: Notwithstanding Article 11, each of the undersigned shall be
      excused from the performance of its obligations hereunder in the event
      such performance is prevented by Force Majeure, provided that the
      undersigned concerned shall use its best efforts to complete such
      performance by other means.

            

    

    

    
      	
               
      

            	
              For
      the purpose of this Agreement, Force Majeure shall be understood to
      include any circumstances beyond the control of Hypor, HABC or AgFeed,
      even if such circumstances were already foreseeable at the time this
      Agreement was concluded, that permanently or temporarily prevent
      fulfilment of the present Agreement, in total or in part, including, but
      not limited to: acts of God, acts, regulations or laws of any government,
      war, civil commotion, destruction of production facilities or materials by
      fire, earthquake or storm, labour disturbances, epidemic and failure of
      public utilities or carriers.

            

    

    

    
      	
              12.4

            	
              Assignment:
      This Agreement is personal to HABC and the rights and obligations of HABC
      under this Agreement cannot be passed to any third party nor are they
      assignable by HABC to any third party, unless with prior written consent
      of Hypor.

            

    

    

    
      	
               
      

            	
              Without
      detriment thereto, no assignment or transfer shall be valid and effective
      unless and until the assignee/transferee shall agree in writing to be
      bound by all of the provisions of this
  Agreement.

            

    

    

    
      	
              12.5

            	
              Waiver:
      No omission or delay on the part of any of the undersigned in requiring a
      due and punctual fulfilment by any of the other undersigned of the
      obligations of such other undersigned shall be deemed to constitute a
      waiver by the omitting or delaying party of any of its rights to require
      such due and punctual fulfilment of any other obligations hereunder
      whether similar or otherwise, or a waiver of any remedy it might have
      hereunder.

            

    

    

    
      	
               
      

            	
              The
      failure on the part of any of the undersigned to exercise or enforce any
      right conferred upon it hereunder shall not be a waiver of any such right
      nor operate to bar the exercise of enforcement thereof at any time or
      times thereafter.

            

    

    

    
      	
               
      

            	
              Waiver
      of any breach of any provision hereof shall not be deemed to be a waiver
      of any other breach of said provision or any breach of any other provision
      hereof.

            

    

    

    
      	
              12.6

            	
              Annexes:
      The Annexes annexed to this Agreement or to be added thereto shall, for
      the purpose of this Agreement, be deemed to form part of this Agreement,
      it being understood and agreed that in case of any deviation or
      discrepancy between the text of this Agreement and any stipulation made in
      one or more of the Annexes hereto, the text of the former shall
      prevail.

            

    

    

    
      	
              12.7

            	
              Entire
      understanding: The terms and conditions of this Agreement constitute the
      entire agreement and understanding of the undersigned, supersede all
      previous communications, whether oral or written, between the undersigned,
      including any previous agreement or understanding varying or extending the
      same, and there are no further or other agreements or understandings,
      written or oral, in effect between the undersigned with respect to the
      subject matter hereof.

            

    

    
      
         

      

      
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              The
      making, execution and delivery of this Agreement have been induced by no
      representations, statements, warranties or agreements other than those
      herein expressed.

            

    

    

    
      	
              12.8

            	
              Applicable
      law: Regardless of the place of agreement, the place of performance or
      otherwise, this Agreement, and all amendments, modifications, alterations,
      or supplements hereto, shall be construed under, governed by, and the
      legal relations between the undersigned determined in accordance with the
      Laws of The Netherlands.

            

    

    

    
      	
              12.9

            	
              Settlement
      of disputes: Any controversy, claim or dispute arising out of or relating
      to any provision of this Agreement which can’t be resolved in an amicable
      manner, shall be finally settled by arbitration in accordance with the
      Rules of Arbitration of the International Chamber of Commerce by one or
      more arbitrators to be appointed in accordance with the said Rules. The
      place of arbitration shall be The
Hague.

            

    

    

    
      	
              12.10

            	
              Amendments:
      This Agreement may be amended or modified only by an instrument in writing
      of equal formality, signed by the duly authorized representatives of the
      respective undersigned.

            

    

    

    
      	
              12.11

            	
              Severability:
      The undersigned agree that no provision of this Agreement which may be
      deemed unenforceable shall in any way invalidate any other provision of
      this Agreement, all of which shall remain in full force and
      effect.

            

    

    

    
      	
              12.12

            	
              Notices:
      Any notice or communication provided for herein shall be deemed
      sufficiently sent if in writing and delivered or sent by airmail, or by
      registered airmail where that is specifically provided for by this
      Agreement, to HABC, Hypor or AgFeed at their respective addresses
      hereinabove set forth.

            

    

    

    
      	
               
      

            	
              Any
      notice or communication sent by airmail shall be deemed to have been
      received by the addressee on the third business day after the date of
      mailing, when the substance thereof has been sent to addressee by email on
      or before the said third business
day.

            

    

    

    
      	
              12.13

            	
              Paragraph
      headings: The paragraph headings in this Agreement have been incorporated
      for the sole purpose of more convenient reference but not for an
      interpretation of the clauses to which they
  refer.

            

    

    

    
      	
              12.14

            	
              General
      Terms. All services and deliveries of Hypor are subject to the General
      Conditions filed at the Chamber of Commerce for Oost Brabant at ‘s
      Hertogenbosch, The Netherlands and can be consulted at and downloaded from
      the website www.hypor.com. Should there be any discrepancy between the
      said General Conditions and the terms and conditions of this Agreement
      than the latter will prevail.

            

    

    

    [signature
page follows]

    
      
         

      

      
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    IN
WITNESS WHEREOF,

    

    The
undersigned have caused this Agreement to be executed by their respective duly
authorized officers.

    

    
      
        	
                HYPOR
      B.V.

              
	 
      	 
      
	
                By:

              	
                /s/ M. H. M. Hendrix

              
	
                Name:

              	
                M.
      H. M. Hendrix

              
	
                Title:

              	
                President

              
	 
      	 
      
	
                AGFEED
      INDUSTRIES, INC.

              
	 
      	 
      
	
                By:

              	
                /s/ Li Songyan

              
	
                Name:

              	
                Li
      Songyan

              
	
                Title:

              	
                Chairman

              
	 
      	 
      
	
                HYPOR
      AGFEED BREEDING COMPANY

                INC.

              
	 
      	 
      
	
                By:

              	
                /s/ Li Songyan

              
	
                Name:

              	
                Li
      Songyan

              
	
                Title:

              	
                Authorized
      Signatory

              

      

    

    
      
         

      

      
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