Service Agreement
Exhibit
10.2
This
service agreement (the “Service
Agreement”) is entered into on July 14, 2010 by the following parties in
Weifang, Shandong province of China:
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(1)
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Sellers: Haicheng
Songsen Farming Feed Co., Ltd. (hereinafter referred to as “Songsen”), a company
incorporated under the PRC law, with its legal address registered at
Yuanjia Village, Gengzhuang Town, Haicheng City. Its legal representative
is Sen Jiang and its controlling shareholder is Zhao Xxx Xxxxx
(hereinafter referred to as the “Controlling
Shareholder”) and
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(2)
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Purchaser: Weifang Yuhe
Poultry Co., Ltd. (hereinafter referred to as the “Purchaser”), a company
incorporated under the PRC law, with its legal address registered at North
of Bonan Road and West of Suncun Shengchan Road, Nansun Village, Hanting
District and its legal representative is Chengxiang Han
.
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Songsen
and Controlling Shareholder are hereinafter collectively referred to as “Sellers”, and Sellers and
Purchaser are hereinafter collectively as “Parties” and individually
referred to as a “Party”.
Whereas,
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(1)
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Sellers
and the Purchaser have entered into an asset purchase contract
(hereinafter referred to as the “Asset Purchase
Contract”) on July 14, 2010;
and
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(2)
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Yuhe
International, Inc. (“Yuhe”), a company with
its securities listing on National Association of Securities Dealers
Automated Quotations (“NASDAQ”), indirectly
holds 100% equity interests of the Purchaser;
and
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(3)
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The
Controlling Shareholder holds 100% equity interests of Songsen and agrees
to provide all services related to the Closing of assets transfer to the
Purchaser.
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Therefore,
the Sellers and the Purchaser have reached the following clauses:
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1.
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In
consideration of the closing services provided by the Controlling
Shareholder to the Purchaser, including but not limited to the delivery of
the original ownership materials, use right documents, technical documents
and specifications of the Transferred Assets, and the active assistance in
obtaining lawful ownership or use right of Transferred Assets, certain
amount of restricted shares (i.e. shares bearing the restricted legend in
accordance with relevant securities regulations of the United States) of
Yuhe valued at RMB20.04 million will be issued to the Controlling
Shareholder:
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Shares to
be issued to the Controlling Shareholder (“Shares”) equals to the amount
of Shares valued at RMB20.04 million
The day
of Shares issuance: calculated in accordance with the middle price of US Dollar
against RMB; and USD10 per share of Yuhe
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2.
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All
the Shares will be issued to the Controlling Shareholder as of the Closing
Date (as defined in the Asset Transfer Contract). However, 30% of the
Shares (“Escrowed
Shares”) shall be mutually escrowed by Yuhe and the Purchaser, and
shall be delivered to the Controlling Shareholder when the Sellers meet
all pre-requisite conditions set forth in Pre-requisite Conditions Two of
Appendix II
attached to the Asset Purchase
Contract.
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3.
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The
Sellers and the Purchaser agree to change the clause 11.14 under the Asset
Purchase Contract to: The Purchaser is entitled to directly deduct the
direct and indirect losses suffered by the Purchaser from the guarantee
money in case of any infringement of any representations and warranties
stated hereinabove by Sellers or in case that Sellers fails to meet any or
all pre-requisite conditions set forth in Conditions Two of Appendix II
attached hereto; provided that if the guarantee money can not make up for
the losses suffered by the Purchaser, the Purchaser shall be entitled to
compensation by Shares issued to the Controlling
Shareholder.
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4.
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The
Controlling Shareholder hereby represent, warrant and covenant
that:
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a)
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The
disposal of restricted shares of Yuhe shall comply with federal
and state laws. Sellers may engage American lawyers to issue an
opinion of counsel according to Rule 144 under the Securities Act of
1933 to remove the restricted legend of the restricted shares after the
Sellers have held the Shares for six
months.
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b)
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The
certificates of restricted shares that Controlling
Shareholder receives will bear the
legend.
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c)
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The
net properties of the Controlling Shareholder or the mutual net properties
of the Controlling Shareholder and his wife shall exceed USD1 million when
the Purchaser issues the shares of Yuhe to the Controlling
Shareholder.
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d)
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The
Controlling Shareholder hereby confirms that the Shares to be received by
the Controlling Shareholder will be acquired for investment for such
Controlling Shareholder’s own account, and not with a view to the sale or
the resale. Such Controlling Shareholder has such knowledge and
experience in financial and business matter that it is capable of
evaluating the merits and risks of the investment and acknowledges
that it can bear the high economic risk of its
investment.
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e)
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The
Controlling Shareholder hereby confirms that he acquires the restricted
shares not for the account of papers, magazines or similar mediums or any
meetings and mass advertising.
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5.
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This
Service Agreement shall be an integral part of the Asset Purchase Contact
and shall have the same legal effect as the Asset Purchase Contact. The
Asset Purchase Contact and this Service Agreement are both legally binding
on the Parties hereto. In case of any discrepancy between this Service
Agreement and the Asset Purchase Contract, this Service Agreement shall
prevail. Any amendment and supplement to Service Agreement and/or Asset
Purchase Contact shall achieve the mutual consent of Parties
hereto.
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6.
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This
Service Agreement shall be effective after it is duly executed and (or)
sealed by each Party hereto. The conclusion, validity, interpretation,
performance and controversy of this Service Agreement shall be governed by
the Law of New York State, United States. Any provision of this Service
Agreement that is invalid or unenforceable due to the laws and regulations
shall be ineffective without affecting in any way the remaining provisions
hereof.
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7.
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This
Service Agreement is written in Chinese, which will be executed in (4)
sets of original. Each Party hereto shall each hold one (1) set of
original.
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(This
page is intentionally left blank)
The
parties hereto have caused this Service Agreement to be executed by the
following Parties as of the date first above written.
Sellers:
Haicheng Songsen Farming Feed Co., Ltd.
(Seal)
Authorized
Representative(Signature)：_________
Controlling
Shareholder (Zhao Xxx Xxxxx)
ID
Number:
Signature：_________
Purchaser: Weifang Yuhe Poultry Co.,
Ltd.
(Seal)
Authorized
Representative(Signature)：_________
Yuhe
International, Inc. hereby confirms that it acknowledges the responsibilities it
shall be bearing in this Service Agreement.
Chairman
or CEO (Signature): ____________________
