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Exhibit 10.4    
    

	[LOGO]	DEAN HELLER

Secretary of State

204 North Carson Street, Suite 1

Carson City, Nevada 89701-4299

(775) 684 5708

Website: secretaryofstate.biz	 	 
	

	
 	

 
	Articles of Merger
 (PURSUANT TO NRS 92A.200)
 Page 1
	 	 
	Important: Read attached instructions before completing form.	 	ABOVE SPACE IS FOR OFFICE USE ONLY

(Pursuant to Nevada Revised Statutes Chapter 92A)

(excluding 92A.200(4b))
 SUBMIT IN DUPLICATE

	1)	 	Name and jurisdiction of organization of each constituent entity (NRS 92A.200). If there are more than four merging entities, check box  o  and attach an
8 1/2" x 11" blank sheet containing the required information for each additional entity.
	

 	
 	

Shaanxi New Taohuayuan Culture Tourism Co., Ltd.

	 	 	Name of merging entity	 	 
	

 	
 	

People's Republic of China
 Jurisdiction	
 	

corporation
 Entity type*
	

 	
 	
Name of merging entity	
 	

 
	

 	
 	

    
 Jurisdiction	
 	

    
 Entity type*
	

 	
 	
Name of merging entity	
 	

 
	

 	
 	

    
 Jurisdiction	
 	

    
 Entity type*
	

 	
 	
Name of merging entity	
 	

 
	

 	
 	

    
 Jurisdiction	
 	

    
 Entity type*
	

 	
 	
and,	
 	

 
	 	 	New Taohuayuan Culture Tourism Co., Ltd.
	 	 	Name of surviving entity	 	 
	

 	
 	

Nevada
 Jurisdiction	
 	

corporation
 Entity type*

	*
	Corporation, non-profit corporation, limited partnership, limited-liability company or business trust. 

	
This form must be accompanied by appropriate fees. See attached fee schedule.	
 	
Nevada Secretary of State AM Merger 2003

Revised on: 10/24/03

	[LOGO]	DEAN HELLER

Secretary of State

204 North Carson Street, Suite 1

Carson City, Nevada 89701-4299

(775) 684 5708

Website: secretaryofstate.biz	 	 
	

	
 	

 
	Articles of Merger
 (PURSUANT TO NRS 92A.200)
 Page 2
	 	 
	Important: Read attached instructions before completing form.	 	ABOVE SPACE IS FOR OFFICE USE ONLY

	2)	 	Forwarding address where copies of process may be sent by the Secretary of State of Nevada (if a foreign entity is the survivor in the merger—NRS 92A.1 90):
	

 	
 	

 	
 	

 	
 	

Attn:	
 	

    

	

 	
 	

 	
 	

 	
 	

c/o:	
 	

    
    
    
    

	
3)	
 	

(Choose one)
	

 	
 	

ý	
 	

The undersigned declares that a plan of merger has been adopted by each constituent entity (NRS 92A.200).
	

 	
 	

o	
 	
The undersigned declares that a plan of merger has been adopted by the parent domestic entity (NRS 92A.180).
	
4)	
 	

Owner's approval (NRS 92A.200)(options a, b, or c must be used, as applicable, for each entity) (if there are more than four merging entities, check box  o  and attach an 8 1/2" x
11" blank sheet containing the required information for each additional entity):
	

 	
 	

(a)	
 	

Owner's approval was not required from
	

 	
 	

 	
 	

Shaanxi New Taohuayuan Culture Tourism Co., Ltd.
Name of merging entity, if applicable
	

 	
 	

 	
 	

    
Name of merging entity, if applicable
	

 	
 	

 	
 	

    
Name of merging entity, if applicable
	

 	
 	

 	
 	

    
Name of merging entity, if applicable
	

 	
 	

 	
 	
and, or;
	 	 	 	 	New Taohuayuan Culture Tourism Co., Ltd.
Name of surviving entity, if applicable

	
This form must be accompanied by appropriate fees. See attached fee schedule.	
 	
Nevada Secretary of State AM Merger 2003

Revised on: 10/24/03

	[LOGO]	DEAN HELLER

Secretary of State

204 North Carson Street, Suite 1

Carson City, Nevada 89701-4299

(775) 684 5708

Website: secretaryofstate.biz	 	 
	

	
 	

 
	Articles of Merger
 (PURSUANT TO NRS 92A.200)
 Page 3
	 	 
	Important: Read attached instructions before completing form.	 	ABOVE SPACE IS FOR OFFICE USE ONLY

	

 	
 	
(b)	
 	

The plan was approved by the required consent of the owners of*:
	

 	
 	

 	
 	

    
 Name of merging entity, if applicable
	

 	
 	

 	
 	

    
Name of merging entity, if applicable
	

 	
 	

 	
 	

    
Name of merging entity, if applicable
	

 	
 	

 	
 	

    
Name of merging entity, if applicable
	

 	
 	

 	
 	
and, or;
	

 	
 	

 	
 	

    
 Name of surviving entity, if applicable
	 	 	 	 	  

  

  

  

  

  

  

    

	*
	Unless
otherwise provided in the certificate of trust or governing instrument of a business trust, a merger must be approved by all the trustees and beneficial owners of each business
trust that is a constituent entity in the merger. 

	
This form must be accompanied by appropriate fees. See attached fee schedule.	
 	
Nevada Secretary of State AM Merger 2003

Revised on: 10/24/03

	[LOGO]	DEAN HELLER

Secretary of State

204 North Carson Street, Suite 1

Carson City, Nevada 89701-4299

(775) 684 5708

Website: secretaryofstate.biz	 	 
	

	
 	

 
	Articles of Merger
 (PURSUANT TO NRS 92A.200)
 Page 4
	 	 
	Important: Read attached instructions before completing form.	 	ABOVE SPACE IS FOR OFFICE USE ONLY

	

 	
 	
(c)	
 	

Approval of plan of merger for Nevada non-profit corporation (NRS 92A.160):
	

 	
 	

 	
 	
The plan of merger has been approved by the directors of the corporation and by each public officer or other person whose approval of the plan of merger is required by the articles of incorporation of the domestic
corporation.
	

 	
 	

 	
 	

    
Name of merging entity, if applicable
	

 	
 	

 	
 	

    
Name of merging entity, if applicable
	

 	
 	

 	
 	

    
Name of merging entity, if applicable
	

 	
 	

 	
 	

    
Name of merging entity, if applicable
	

 	
 	

 	
 	
and, or:
	

 	
 	

 	
 	

    
 Name of surviving entity, if applicable
	 	 	 	 	  

  

  

  

  

  

  

    

	
This form must be accompanied by appropriate fees. See attached fee schedule.	
 	
Nevada Secretary of State AM Merger 2003

Revised on: 10/24/03

	[LOGO]	DEAN HELLER

Secretary of State

204 North Carson Street, Suite 1

Carson City, Nevada 89701-4299

(775) 684 5708

Website: secretaryofstate.biz	 	 
	

	
 	

 
	Articles of Merger
 (PURSUANT TO NRS 92A.200)
 Page 5
	 	 
	Important: Read attached instructions before completing form.	 	ABOVE SPACE IS FOR OFFICE USE ONLY

	5)	 	Amendments, if any, to the articles or certificate of the surviving entity. Provide article numbers, if available. (NRS 92A.200)*:
	

 	
 	

None
	

 	
 	

    	
 	

 
	
6)	
 	

Location of Plan of Merger (check a or b):
	

 	
 	

ý	
 	

(a)  The entire plan of merger is attached;
	

 	
 	

or,	
 	

 
	

 	
 	

o	
 	

(b)  The entire plan of merger is on file at the registered office of the surviving corporation, limited-liability company or business trust, or at the records office address if a limited partnership, or other place of business of the
surviving entity (NRS 92A.200).
	
7)	
 	

Effective date (optional)**:

	*
	Amended
and restated articles may be attached as an exhibit or integrated into the articles of merger. Please entitle them "Restated" or "Amended and Restated," accordingly. The form to
accompany restated articles prescribed by the secretary of state must accompany the amended and/or restated articles. Pursuant to NRS 92A.180 (merger of subsidiary into
parent—Nevada parent owning 90% or more of subsidiary), the articles of merger may not contain amendments to the constituent documents of the surviving entity except that the name of the
surviving entity may be changed.

	**
	A
merger takes effect upon filing the articles of merger or upon a later date as specified in the articles, which must not be more than 90 days after the articles are filed
(NRS 92A.240). 

	
This form must be accompanied by appropriate fees. See attached fee schedule.	
 	
Nevada Secretary of State AM Merger 2003

Revised on: 10/24/03

AGREEMENT AND PLAN OF MIGRATORY MERGER

BY AND AMONG

SHAANXI NEW TAOHUAYUAN CULTURE TOURISM CO., LTD.

AND

NEW TAOHUAYUAN CULTURE TOURISM CO., LTD.  

TABLE OF CONTENTS  

	ARTICLE I—The Migratory Merger	 	1
	 	1.1	 	Merger	 	1
	

ARTICLE II—Terms of the Merger	
 	

1
	 	2.1	 	Terms of Merger; Effective Time	 	1
	 	2.2	 	Exemption from Registration	 	2
	

ARTICLE III—Representation and Warranties of New Tao	
 	

2
	 	3.1	 	Organization	 	2
	 	3.2	 	Capital	 	2
	 	3.3	 	Directors and Officers	 	2
	 	3.4	 	Authority	 	2
	

ARTICLE IV—Representations and Warranties of Shaanxi	
 	

3
	 	4.1	 	Organization	 	3
	 	4.2	 	Capital	 	3
	 	4.3	 	Directors and Officers	 	3
	 	4.4	 	Authority	 	3
	

ARTICLE V—Closing	
 	

3
	 	5.1	 	Closing	 	3
	

ARTICLE VI—Termination	
 	

3
	 	6.1	 	Termination by Mutual Consent	 	3
	

ARTICLE VII—Miscellaneous	
 	

4
	 	7.1	 	Captions and Headings	 	4
	 	7.2	 	No Oral Change	 	4
	 	7.3	 	Non-Waiver	 	4
	 	7.4	 	Time of Essence	 	4
	 	7.5	 	Entire Agreement	 	4
	 	7.6	 	Choice of Law	 	4
	 	7.7	 	Counterparts	 	4
	 	7.8	 	Notices	 	4
	 	7.9	 	Binding Effect	 	4
	 	7.10	 	Mutual Cooperation	 	4
	 	7.11	 	Announcements	 	4
	 	7.12	 	Exhibits	 	5
	 	7.13	 	Legal Counsel	 	5
	 	7.14	 	Facsimile Signatures	 	5

AGREEMENT AND PLAN OF MERGER  

        AGREEMENT AND PLAN OF MERGER ("Agreement") made this                day of November, 2004, by and between
Shaanxi New Taohuayuan Culture
Tourism Co., Ltd., a People's Republic of China corporation ("Shaanxi"), and New Taohuayuan Culture Tourism Co., Ltd., a Nevada
Corporation ("New Tao"). 

EXPLANATORY STATEMENT  

        A.    Shaanxi desires to acquire all of the issued and outstanding common stock of New Tao from New Tao's security holders in
exchange for newly issued unregistered shares of common stock of Shaanxi; and 

        B.    New Tao desires to redomicile its corporate existence from the People's Republic of China to Nevada, United States of
America. 

        C.    In furtherance of the foregoing, New Tao and Shaanxi are desirous of effecting a merger, all upon the terms and conditions
set forth herein. 

        NOW THEREFORE, in consideration of the foregoing Explanatory Statement, which is made a substantive part of this Agreement and the mutual
promises, covenants and representations contained herein, the parties agree as follows: 

ARTICLE I

  The Migratory Merger  

        1.1    Merger.    Subject to the terms and conditions of this Agreement, Shaanxi shall be merged with and into New Tao
in a transaction intended to qualify as a tax-free reorganization pursuant to Sections 368(a)(1)(A) and (a)(2)(E) of the Internal Revenue Code of 1986, as amended (the "Code"). 

ARTICLE II

  Terms of the Merger  

        2.1    Terms of Merger; Effective Time.    The terms of the merger (the "Merger") are as follows: 

        (a)   Shaanxi
shall be merged with and into New Tao in accordance with the statutory provisions of the Nevada Revised Statutes ("NRS"). 

        (b)   New
Tao shall be the surviving corporation (the "Surviving Corporation"), and the corporate identity, existence, purposes, powers, franchises, rights, and immunities of
New Tao shall continue unaffected and unimpaired by the Merger. The corporate identity, existence, purposes, powers, franchises, rights, and immunities of Shaanxi shall be merged into the
Surviving Corporation, and the Surviving Corporation shall be fully vested therewith. 

        (c)   Immediately
after the Closing (as hereinafter defined), the Merger shall be effected by filing with the Secretary of State of Nevada the Articles of Merger (the
"Articles of Merger") in accordance with the relevant provisions of the NRS. The time at which the Articles of Merger are filed with the Secretary of State of Nevada shall be the "Effective Time" of
the Merger. 

        (d)   Except
insofar as specifically otherwise provided by law, Shaanxi shall cease to exist at the Effective Time, whereupon the separate existence of New Tao and Shaanxi
shall become a single corporation. 

        (e)   The
Articles of Incorporation and Bylaws of New Tao shall be the certificate of incorporation and bylaws of the Surviving Corporation. 

        (f)    At
the Effective Time, without any action by the holder thereof, all 100,000,000 issued and outstanding shares of Shaanxi's common stock (collectively, "Shaanxi Common
Stock") shall be deemed cancelled and converted on a pro-rata basis, into the right to receive 17,027,328 shares of common stock, $.001 par value, of New Tao (the "New Tao Common Stock")
as of the Closing 

 

Date
(the "Merger Consideration"). The Merger Consideration shall be prorated among the Shaanxi stockholders in accordance with their fractional ownership of Shaanxi. 

        (g)   At
the Effective Time, New Tao shall issue certificates evidencing such number of shares of New Tao Common Stock issuable to holders of Shaanxi Common
Stock in the Merger pursuant to Section 2.1(f). 

        (h)   Each
option to purchase shares of New Tao Common Stock (collectively, the "New Tao Options") that is outstanding immediately prior to the Effective Time,
without regard to whether such option is then exercisable, shall, by virtue of the Merger and without any further action on the part of the holder thereof, be assumed by New Tao and converted
into an option (a "Substitute Option") to purchase that number of shares of New Tao Common Stock equal to the number of shares of Shaanxi Common Stock subject to such Shaanxi Option immediately
prior to the Effective Time in accordance with Schedule 2.1, at an exercise price per share of Shaanxi Common Stock equal to the exercise price per share of such New Tao Option
immediately prior to the Effective Time. The terms and conditions of each Substitute Option, including any acceleration of vesting and/or exercisability thereof, shall otherwise be the same as the
related Shaanxi Option. 

        (i)    If
any certificate representing Shaanxi Common Stock shall have been lost, stolen or destroyed, upon the making of an affidavit of that fact by the person claiming such
certificate to be lost, stolen or destroyed and, if required by New Tao, the posting by such person of a bond, in such reasonable amount as New Tao may direct, as indemnity against any
claim that may be made against it with respect to such certificate, New Tao will issue in exchange for such lost, stolen or destroyed certificate the Merger Consideration and any dividends or
other distributions to which the holders thereof are entitled pursuant to this Agreement. 

        2.2    Exemption from Registration.    The parties hereto intend that all Shaanxi common stock to be issued to the
stockholders of New Tao (collectively, the "New Tao Stockholders") shall be exempt from the registration requirements of the Securities Act of 1933, as amended (the "Act"), pursuant to
Section 4(2) and/or Rule 506 of the Act and the rules and regulations promulgated thereunder. 

ARTICLE III

  Representations and Warranties of New Tao  

        New Tao hereby represents and warrants to Shaanxi that: 

        3.1    Organization.    New Tao is a corporation duly organized, validly existing and in good standing under
the laws of Nevada, has all necessary corporate powers to own its properties and to carry on its business as now owned and operated by it, and is duly qualified to do business and is in good standing
in each of the states where required. 

        3.2    Capital.    The authorized capital stock of New Tao consists of 50,000,000 authorized shares of $.001
par value common stock and 10,000,000 authorized shares of $.001 par value preferred stock. There are currently no shares of New Tao Common Stock outstanding and no shares of preferred stock
outstanding. There are no other outstanding subscriptions, options, rights, warrants, debentures, instruments, convertible securities or other agreements or commitments obligating New Tao to
issue or to transfer from treasury any additional shares of its capital stock of any class. 

        3.3    Directors and Officers.    The names and titles of the directors and officers of New Tao as of the date
of this Agreement are as follows: Chen Jingmin—Board Chairman, Cai Danmei—Chief Executive Officer and Board Vice Chairman, Liu Bo—Director and Secretary, Hu
Yangxiong—Director, Zhao Jianwen—Director and Wang Changzhu—Director. 

        3.4    Authority.    The Board of Directors and stockholders of New Tao have authorized the execution of this
Agreement and the consummation of the transactions contemplated herein, and 

2

 

New Tao
has full power and authority to execute, deliver and perform this Agreement, and this Agreement is a legal, valid and binding obligation of New Tao and is enforceable in
accordance with its terms and conditions. 

ARTICLE IV

  Representations and Warranties of Shaanxi  

        Shaanxi represents and warrants to New Tao that: 

        4.1    Organization.    Shaanxi is a corporation duly organized, validly existing and in good standing under the laws
of the People's Republic of China. Shaanxi has all necessary corporate powers to carry on its business, and is duly qualified to do business and is in good standing in each jurisdiction as required. 

        4.2    Capital.    The authorized capital stock of Shaanxi consists of 100,000,000 shares of Shaanxi Common Stock of
which 100,000,000 shares of Shaanxi Common Stock are issued and outstanding and no shares of preferred stock are outstanding. All of Shaanxi's outstanding securities are duly and validly issued, fully
paid and nonassessable. There are (i) no shares of Shaanxi Common Stock held in treasury and (ii) no outstanding subscriptions, options, rights, warrants, debentures, instruments,
convertible securities or other agreements or commitments obligating Shaanxi to issue or to transfer from treasury any shares of its capital stock of any class except shares issuable under this
Agreement. 

        4.3    Directors and Officers.    The names and titles of the officers and directors of Shaanxi as of the date of this
Agreement are as follows: Chen Jingmin—Board Chairman, Cai Danmei—Chief Executive Officer and Board Vice Chairman, Liu Bo—Director and Secretary, Hu
Yangxiong—Director, Zhao Jianwen—Director and Wang Changzhu—Director. 

        4.4    Authority.    Shaanxi and the stockholders of Shaanxi have authorized the execution of this Agreement and the
transactions contemplated herein, Shaanxi has full power and authority to execute, deliver and perform this Agreement, and this Agreement is the legal, valid and binding obligation of Shaanxi and is
enforceable in accordance with its terms and conditions. 

ARTICLE V

  Closing  

        5.1    Closing.    The Closing of this Agreement shall be held at the offices of Shaanxi's law firm, the Law Office of
Gary A. Agron, 5445 DTC Parkway, Suite 520, Greenwood Village, Colorado 80111, at any mutually agreeable time on November     , 2004 (the "Closing Date"), unless
extended by mutual agreement. At the Closing: 

        (a)   New Tao
shall deliver to the Shaanxi Stockholders the shares of New Tao set forth in Section 2.1(f) above. 

        (b)   Shaanxi
shall deliver to New Tao such documents as are reasonably requested by New Tao's counsel for implementation of this Agreement and consummation of
the transaction contemplated hereby. 

ARTICLE VI

  Termination  

        6.1    Termination by Mutual Consent.    This Agreement may be terminated at any time prior to Closing by the mutual
consent of Shaanxi and New Tao. 

3

 
ARTICLE VII

  Miscellaneous  

        7.1    Captions and Headings.    The article and paragraph headings throughout this Agreement are for convenience and
reference only and shall not define, limit or add to the meaning of any provision of this Agreement. 

        7.2    No Oral Change.    This Agreement and any provision hereof may not be waived, changed, modified or discharged
orally, but only by an agreement in writing signed by the party against whom enforcement of any such waiver, change, modification or discharge is sought. 

        7.3    Non-Waiver.    The failure of any party to insist in any one or more cases upon the performance of any of the
provisions, covenants or conditions of this Agreement or to exercise any option herein contained shall not be construed as a waiver or relinquishment for the future of any such provisions, covenants
or conditions. No waiver by any party of one breach by another party shall be construed as a waiver with respect to any other subsequent breach. 

        7.4    Time of Essence.    Time is of the essence of this Agreement and of each and every provision hereof. 

        7.5    Entire Agreement.    This Agreement contains the entire Agreement and understanding between the parties hereto
and supersedes all prior agreements and understandings. 

        7.6    Choice of Law.    This Agreement and its application shall be governed by the laws of the state of Nevada. 

        7.7    Counterparts.    This Agreement may be executed simultaneously in one or more counterparts, each of which shall
be deemed an original, but all of which together shall constitute one and the same instrument. 

        7.8    Notices.    All notices, requests, demands and other communications under this Agreement shall be in writing
and shall be deemed to have been duly given on the date of service if served personally on the party to whom notice is to be given, or on the third day after mailing if mailed to the party to whom
notice is to be given, by first class mail, registered or certified, postage prepaid, and properly addressed as follows: 

	 	 	Shaanxi:	 	Shaanxi New Taohuayuan Culture Tourism Co., Ltd.

1# Dongfeng Road

Xi'an Weiyang Tourism Development District

Xi'an, China
	

 	
 	
New Tao:	
 	

New Taohuayuan Culture Tourism Co., Ltd.

1# Dongfeng Road

Xi'an Weiyang Tourism Development District

Xi'an, China

        7.9    Binding Effect.    This Agreement shall inure to and be binding upon the heirs, executors, personal
representatives, successors and assigns of each of the parties to this Agreement. 

        7.10    Mutual Cooperation.    The parties hereto shall cooperate with each other to achieve the purpose of this
Agreement and shall execute such other and further documents and take such other and further actions as may be necessary or convenient to effect the transaction described herein. 

        7.11    Announcements.    The parties will consult and cooperate with each other as to the timing and content of any
public announcements regarding this Agreement. 

4

 

        7.12    Exhibits.    As of the execution hereof, the parties have provided each other with the Exhibits described
herein. Any material changes to the Exhibits shall be immediately disclosed to the other party. 

        7.13    Legal Counsel.    Each of the parties has been represented by its own legal counsel. 

        7.14    Facsimile Signatures.    A facsimile signature shall be deemed an original signature for all purposes. 

        In
witness whereof, the parties have executed this Agreement on the date indicated above. 

	SHAANXI NEW TAOHUAYUAN

CULTURE TOURISM CO., LTD.	 	NEW TAOHUAYUAN CULTURE

TOURISM CO., LTD.
	

By:	
 	

/s/  CAI DANMEI      
 Cai Danmei, Chief Executive Officer	
 	

By:	
 	

/s/  CAI DANMEI      
 Cai Danmei, Chief Executive Officer

5

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Exhibit 10.4QuickLinks
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Exhibit 10.5  

 
 

Employment Agreement    
    

Party
A Shaanxi New Taohuayuan Culture Tourism Co., Ltd. 

Party
B Cai Danmei 

Printed
by Xi'an Labor and Social Security Bureau 

1

 

Party A (Employer)  

	Name:	 	Shaanxi New Taohuayuan Culture Tourism Co., Ltd.
	

Economic Nature:	
 	

The company is a perpetually existing stockholding limited company.
	

Domicile:	
 	

No. 1 Dongfeng Road, WeiYang Tourism Development Zone, Xi'an city, Shaanxi province.

Party B (Employee)  

	Name:	 	Cai Danmei
	

Sex:	
 	

Female
	

Address:	
 	

No.28, building, Jian xi rode Beilin district, Xi'an city.
	

Telephone number:	
 	

13909251131
	

Number of ID card:	
 	

610103601228282
	

Date of Birth:	
 	

Dec 28, 1960

        In
accordance with Labor Law of PRC and other related laws, regulations, rules and policies, both parties, on the principle of free will and equality, arrived at a consensus after
consultation and signed the contract in order to observe the articles hereinafter together. 

Article 1 Duration of contract and probationary period  

        (1)   Both
parties choose the (3) one hereinafter as the designated duration of this contract: 

        (1)   Fixed
terms,    years, commencing on            ,20        , and terminating
on            ,20        . 

        (2)   Flexible
terms, commencing on            ,20        . 

        (3)   Commencing on May 3, 2004, and terminating on May 3, 2007

(till
the work is completed). 

        (2)   The
period on probation is 0 months, commencing on            ,20        , and terminating
on            ,20        . 

2.    Work post and type of work (in production)  

        (1).  Party A,
in accordance with the demand of work or production, engages Party B to serve as the post of CEO, not belonging to a poisonous and harmful post. 

        (2).  Party B,
in line with Party A's demand, shall complete the work and meet the work standard. 

        (3).  While
Party B is fit for the work or the post, or not competent for the work, Party A may train Party B or change Party B's work post or
type of work. 

3.    Working time  

        (1)   In
line with the Party B's work post, the (3) working time system hereinafter is followed. 

        (1)   Standard
working system; (2) Flexible working system; (3) Comprehensive working system. 

2

 

        (2)   The
daily working time of standard working system is not more than 8 hours with the total working time in a week not more than 40 hours on average. 

        (3)   Party A,
in line with its demand of production and operation, may prolong the working time after the consultation with the Workers' Union and Party B,
whereas the working time shall not be more than 1 hour; when there is a special occasion that prolonging the working time is needed, the prolonged working period shall not be more than
3 hours per day and not more than 36 hours per month in total on terms that may ensure Party B's health. 

        (4)   Party A,
in line with the demand of work, has the power to arrange Party B's working shift and holidays in a reasonable way. 

4.    Compensation  

        (1)   Party A
implement the annual salary system, the monthly pay of Party B is "37,000 Rmb yuan" = USD4,498.00. 

        The
pay is distributed on the 15th day every month and it shall be distributed to Party B in full amount and cannot be pocketed and in arrears without reason. 

        Party
B's pay rises with the remuneration institution and standard of Party A's, and the pay granted by Party A shall not be less than the minimum local remuneration
standard in legal working hours. 

        (3)   Remuneration
for working extra shifts or extra hours is to be implemented according to the pertinent regulations of state. 

        (4)   Party
B enjoys the pay granted by Party A when in legal holidays, wedding vacation, bereavement leave and participating in social activities. 

5.    Labour conditions and protection  

        (1)   Party
A is to provide various kinds of working places and instruments met the national labor safety and hygiene standards and rules for Party B. 

        (2)   Party A
is to provide essential work protection articles and health care treatment and working conditions met the national work security and sanitary standards
for Party B. 

        (3)   Party A
is to implement the national laws and regulations regarding labor protection strictly and carry on health examination for Party B who is engaged in
dangerous jobs regularly to ensure the life security and health of her/him in the course of working. 

6.    Social insurance and welfare  

        (1)   Party
A is to be in line with "Labor law of the People's Republic of China "and the national or local relevant regulations and handle the social insurances such as
endowment insurance, unemployment insurance and medical insurance, industrial injury insurance, begetting insurance, etc. for Party B. Both parties are to pay the social insurance premium
according to the regulation. 

        (2)   The
treatment for employee's disability and occupational diseases caused by the injury in the process of working or other diseases, and injury not for the employer's
interest, female employee's begetting treatment, and the home leave, wedding and bereavement leave are to be carried out in line with the national pertinent regulations. 

        (3)   Party
B enjoys the legal festivals or holidays, weekends, wedding and bereavement leave, female employee's maternity leave, etc. If Party B works for more than
one year in succession, who is to enjoy annual leave with pay. 

3

 

7.    Labor discipline  

        (1)   Party
B shall observe rules and regulations made by Party through democratic procedure in line with the laws and regulations of the state; 

        (2)   Party
B shall strictly observe Party A's operational procedure and safety regulations; 

        (3)   Party
B shall cherish the property of Party A and safeguard Party A's trade secret. 

8.    The alteration, cancellation and renewal of contract  

        (1)   Both
parties may require the alteration of the contents of the contract, but the alteration of the contract will come into force after both parties have consulted and
agreed with each other. 

        (2)   Within
the indentured period, the labor contract can be cancelled after the both parties arrive at a consensus. 

        (3)   Party
A may cancel the contract in the following situations, if Party B: 

        (1)   is
proved to be not qualified for employment premises on probation; 

        (2)   violates
labor disciplines or Party A's rules and regulations seriously; 

        (3)   neglects
his or her duty seriously and engages in malpractices for selfish ends, which have caused great harm to Party A's interests; 

        (4)   ascertains
criminal responsibility in accordance with the law. 

        (4)   Party
A may cancel the contract but shall notify Party B in written form 30 days ahead of time in the following situations: 

        (1)   While
Party B is ill or is injured not-for-work, after his or her medical treatment expires, if he or she still can not engage in the original
work and other work assigned by Party A as well; 

        (2)   Party
B is not competent for the post, and is still not competent for the work through training or alteration of work; 

        (3)   The
objective situations based on conclusion of the said contract have materially altered, which cause the contract unable to be fulfilled, after both parties
consultation, the said two still can not reach an agreement on altering the contract; 

        (4)   Party
A may reduce the staff ,while moving the sites of the factory for preventing and curing the industrial pollution sources, or being carried on legal rectification
on the edge of bankruptcy, or undergoing serious management difficulties, or in line with "the regulations of enterprise's economic layoffs "and other relevant regulations. 

        (5)   If
Party A cancel the said labor contract according to this article section 2, section 4, it shall offer economic compensation to Party B in accordance
with relevant state regulations. In addition, while the contract is cancelled in accordance with the item 4 of section 4 of the contract, if Party employs personnel within six months, it should
give preference to Party B. 

        (6)   In
one of the following situations, Party A may not cancel the labor contract according to the 4th section of this article, if Party B: 

        (1)   suffers
from the occupational disease, being injured for work and confirmed losing labor capacity partly or wholly; 

        (2)   is
diseased or injured nor for work and in stipulated medical treatment period; 

        (3)   is
in pregnancy period, childbirth period and nursing period if she is a female employee; 

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        (4)   Other
situations that laws, administrative statutes have stipulated. 

        (7)   If
Party B cancels the labor contract, he or she shall notify Party A in written form 30 days ahead of time. If Party B has caused damages to
Party A, which has not been resolved yet, or is under investigation for other problems, he or she can' not cancel the contract. 

        (8)   Party
B can tell Party A to cancel the labor contract at any time if there exists the following situations: 

        (1)   Within
probationary period; 

        (2)   Party
A forced Party B to work with violence, threatening means or limiting his or her freedom illegally; 

        (3)   Party
A has not paid Party B's remuneration or offered labor condition in accordance with the said labor contract. 

        (9)   The
contract terminates at once while its duration expires. If both parties agree to renew the contract, it shall notify the other party and renew the contract before
the labor contract expires. 

        (10) This
contract terminates at once while Party B is dead or reaches retirement, resignation from office conditions ruled by legal provisions, and the agreed terminating
terms in the contract appear. 

        (11) After
the cancellation and rescission of the contract, both parties shall fulfill the formalities of leaving office and transferring of personal file and other relevant
formalities within 7 days. 

9.    Liability for breach of contract  

        (1)   The
party with fault assumes the liability for breach of contract for the failure or incomplete fulfillment of the contract arising from the faults of any party; If the
fault belongs to the both parties', each party is to assume the respective liabilities for breach of contract separately according to the actual conditions. 

        (2)   If
one party violates the contract articles and does harm to the other, one shall pay the damages to the other according to the consequence and responsibility of the
failure of contract. 

        (3)   Party
A shall assume the compensation responsibility in accordance with the law in the following situations: 

        (1)   The
rules and regulations that Party A made has violated the laws and regulations, and caused damages to Party B; 

        (2)   Party
A pockets or is in arrears with the salary without reason, refuses to pay for work extra shifts or hours, distributes the pay under the minimum criterion and does
not pay the economic compensation that shall be paid after the cancellation of the contract and other situations which cause economic damages to Party B; 

        (3)   Party
A violates the labor protection regulations regarding the female employees and teenage workers, which have harm the interest of Party B. 

        (4)   Party
B shall bear the compensation responsibility in the following situations: 

        (1)   Party
A has the right to collect recruitment fee, training expenses and the other economic losses arising from Party B's breach of contract, while Party B
is trained with the funds by Party A or employed by Party A and then Party B cancels the contract without good reason. 

        (2)   Party
B does not to fulfill the contract, which causes direct economic losses to Party A 's production, management and work. 

5

 

        (3)   Party
B causes direct economic losses to Party A for violating the secret items of the agreement. 

10.    Dispute settlement  

        After there is a labor dispute, it may be resolve through the two parties' consultation or both parties can apply mediation to Labor Dispute Mediation Committees
(group) of Party A or apply arbitration to Labor Dispute Arbitration Commission directly too. Application for arbitration shall be proposed in written form in 60 days from the day of the labor
dispute. 

11.    The other clauses need to be ascertained or the above-mentioned clauses both parties think that need to be altered or need to be
consulted are as follows: 

12.    While unaccomplished matters in this contract or contract terms are contradictory to the current labor laws and regulations, the
current labor laws and regulations will be abided by and carried out. 

13.    The contract comes into force from the date, on which both parties sign (stamp) the contract, and all the formalities with the
administrative department of the social security shall be fulfilled in one month after the contract is signed. This contract is done in duplicate, and each party holds one copy. 

14.    Enclosured are the attachments to the contract, which have the equal effect as the said contract. 

	(1)	 	 
	 	 	

	(2)	 	 
	 	 	

	(3)	 	 
	 	 	

	(4)	 	 
	 	 	

	Party A: (stamp)	 	Party B: Cai Danmei
	Shaanxi New Taohuayuan Culture Tourism Co., Ltd.	 	 
	 	 	 
	 	 	 
	 	 	 
	Legal representative (or its agent):	 	 
	 	 	 
	 	 	 
	 	 	 
	Date: May 3, 2004	 	Date: May 3, 2004
	 	 	 
	Unit governing the labor contract:	 	(stamp)
	 	 	 
	 	 	 
	 	 	 
	Date: May 4, 2004	 	 

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