UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10-K

 

☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the fiscal year ended: December 31, 2019

 

☐ TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the transition period from ____________to ____________

 

Commission File Number: 001-34449

 

PLANET GREEN HOLDINGS CORP.
(Exact name of registrant as specified in its charter)

 

Nevada

  87-0430320
(State or other jurisdiction of   (I.R.S. Employer
incorporation or organization)   Identification Number)

 

Suite 200, 9841 Washingtonian Blvd

Gaithersburg, MD 20878
(Address of principal executive office and zip code)

 

(202) 891-8907
(Registrant’s telephone number, including area code)

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class   Trading Symbol(s)   Name of each exchange on which registered
Common Stock, par value $0.001 per share   PLAG   NYSE American

 

Securities registered pursuant to Section 12(g) of the Act: None

 

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☐      No ☒

 

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ☐      No ☒

 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the issuer was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒      No ☐

 

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒      No ☐

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

 

Large accelerated filer ☐

Accelerated filer ☐
Non-accelerated filer ☒ Smaller reporting company ☒
  Emerging growth company ☐

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

 

Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C.7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☐

 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐      No ☒

 

The number of shares and aggregate market value of common stock held by non-affiliates as of the last business day of the registrant’s most recently completed second fiscal quarter were 3,881,060 and $18,163,361, respectively.

 

There were 9,227,765 shares of common stock outstanding as of May 13, 2020.

 

Documents Incorporated by Reference: None.

 

EXPLANATORY NOTE

 

The registrant is relying on the Securities and Exchange Commission’s Order under Section 36 of the Securities Exchange Act of 1934 Modifying Exemptions from the Reporting and Proxy Delivery Requirements for Public Companies (Release No. 34-88465 dated March 25, 2020), which concerns exemptions from certain filing deadlines in light of COVID-19. The registrant could not file this Annual Report on Form 10-K for the fiscal year ended December 31, 2019 on a timely basis because the outbreak of COVID-19 in China and restrictions on travel and operations, which included, among others, finance team were unable to complete the preparation of the registrant’s consolidated financial statements for the fiscal year ended December 31, 2019, caused delays in completing the required work.

 

 

 

 

 

  

FORM 10-K INDEX

 

   PART I   
ITEM 1.  BUSINESS  1
ITEM 1A.  RISK FACTORS  6
ITEM 1B.  UNRESOLVED STAFF COMMENTS  6
ITEM 2.  PROPERTIES  6
ITEM 3.  LEGAL PROCEEDINGS  6
ITEM 4.  MINE SAFETY DISCLOSURES  6
   PART II   
ITEM 5.  MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES  7
ITEM 6.  SELECTED FINANCIAL DATA  7
ITEM 7.  MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS  7
ITEM 7A.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK  10
ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA  10
ITEM 9.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE  10
ITEM 9A  CONTROLS AND PROCEDURES.  11
ITEM 9B.  OTHER INFORMATION  12
   PART III   
ITEM 10.  DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE  13
ITEM 11.  EXECUTIVE COMPENSATION  17
ITEM 12.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS  18
ITEM 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR INDEPENDENCE  19
ITEM 14.  PRINCIPAL ACCOUNTING FEES AND SERVICES  19
   PART IV   
ITEM 15.  EXHIBITS AND FINANCIAL STATEMENT SCHEDULES  20
ITEM 16.  FORM 10-K SUMMARY  22

 

i

 

 

PART I

 

Use of Certain Defined Terms

 

In this annual report on Form 10-K:

 

“Beijing Lorain” refers to Beijing Green Foodstuff Co., Ltd.
“China” and “PRC” refer to the People’s Republic of China (excluding Hong Kong, Macau and Taiwan for the purposes of this report only).
“Lucky Sky HK” refers to Lucky Sky Holdings Corporations (HK) Limited, a company incorporated in Hong Kong and formerly known as JianShi Technology Holding Limited.
“Lucky Sky Petrochemical” or “WFOE” refers to Lucky Sky Petrochemical Technology (Xianning) Co., Ltd., a PRC limited liability company and a wholly foreign-owned enterprise.
“Luotian Lorain” refers to Luotian Green Foodstuff Co., Ltd., a PRC limited liability company.
“PLAG,” “we,” “us”, “our” and the “Company” refer to Planet Green Holdings Corp., a Nevada corporation, and except where the context requires otherwise, our wholly-owned subsidiaries and VIEs.
“RMB” refers to Renminbi, the legal currency of China.
“Shandong Greenpia” refers to Shandong Greenpia Foodstuff Co., Ltd., a PRC limited liability company.
“Shanghai Xunyang” refers to Shanghai Xunyang Internet Technology Co., Ltd., a PRC limited liability company.
“Shenzhen Lorain” refers to Lorain Food Stuff (Shenzhen) Co., Ltd., a PRC limited liability company.
“Taishan Muren” refers to Taishan Muren Agriculture Co. Ltd., a PRC limited liability company.
“U.S. dollar”, “$” and “US$” refer to the legal currency of the United States.
“VIE” refers to variable interest entity.
“Xianning Bozhuang” refers to Xianning Bozhuang Tea Products Co., Ltd., a PRC limited liability company.

 

This report contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934 (“Exchange Act”), including, without limitation, statements regarding our expectations, beliefs, intentions or future strategies that are signified by the words “expect,” “anticipate,” “intend,” “believe,” or similar language. All forward-looking statements included in this document are based on information available to us on the date hereof, and we assume no obligation to update any such forward-looking statements. Our business and financial performance are subject to substantial risks and uncertainties. Actual results could differ materially from those projected in the forward-looking statements. Readers are cautioned not to place undue reliance on these forward-looking statements.

 

ITEM 1. BUSINESS

 

Overview of Our Business

 

We are headquartered in Gaithersburg, MD. After a series of acquisitions and dispositions in 2018 and 2019, our primary business, which is carried out by Taishan Muren and Xianning Bozhuang, is:

 

to develop and market products, such as sauces and tea products, from herbs and spices, in China; and
to sell brown rice syrup and tea bags developed using our unique recipes in China.

 

Coronavirus (COVID-19) Update

 

Recently, there is an ongoing outbreak of a novel strain of coronavirus (COVID-19) first identified in China and has since spread rapidly globally. The pandemic has resulted in quarantines, travel restrictions, and the temporary closure of stores and business facilities globally for the past few months. In March 2020, the World Health Organization declared the COVID-19 as a pandemic. Given the rapidly expanding nature of the COVID-19 pandemic, and because substantially all of our business operations and our workforce are concentrated in China, our business, results of operations and financial condition have been and will continue to be adversely affected. Potential impact to our results of operations will also depend on future developments and new information that may emerge regarding the duration and severity of the COVID-19 and the actions taken by government authorities and other entities to contain the COVID-19 or mitigate its impact, almost all of which are beyond our control.

 

1

 

 

The impacts of COVID-19 on our business, financial condition, and results of operations include, but are not limited to, the following:

 

 

We temporally closed our offices and production facilities to adhere to the policy from February 2020 until April 2020, as required by relevant PRC regulatory authorities. Our offices are slowly reopening pursuant to local guidelines. In the first quarter of 2020, the COVID-19 outbreak has caused disruptions in our manufacturing operations, which have resulted in delays in the shipment of products to certain of our customers.

     
 

Some of our employees were in mandatory self-quarantine from January 2020 to April 2020.

 

  Our customers have been negatively impacted by the outbreak, which may reduce the demand of our products. As a result, our revenue and income may be negatively impacted in 2020.

 

  The situation may worsen if the COVID-19 pandemic continues. We will continue to closely monitor our collections throughout 2020.

 

A prolonged disruption or any further unforeseen delay in our operations of the manufacturing, delivery and assembly process within any of our production facilities could continue to result in delays in the shipment of products to our customers, increased costs and reduced revenue.

 

We cannot foresee whether the outbreak of COVID-19 will be effectively contained, nor can we predict the severity and duration of its impact. If the outbreak of COVID-19 is not effectively and timely controlled, our business operations and financial condition may be materially and adversely affected as a result of the deteriorating market outlook, the slowdown in regional and national economic growth, weakened liquidity and financial condition of our customers or other factors that we cannot foresee. Any of these factors and other factors beyond our control could have an adverse effect on the overall business environment, cause uncertainties in the regions where we conduct business, cause our business to suffer in ways that we cannot predict and materially and adversely impact our business, financial condition and results of operations.

 

Organizational Structure

 

PLAG was incorporated on February 4, 1986 and was formerly known as “American Lorain Corporation.” Effective November 12, 2009, PLAG reincorporated in Nevada from Delaware.

 

The following diagram illustrates our corporate structure as of the date of this annual report on Form 10-K, including our subsidiaries and our VIEs.

 

 

VIE Arrangement

 

On September 27, 2018, through Shanghai Xunyang, the Company entered into exclusive VIE agreements with Beijing Lorain, Luotian Lorain, Shandong Greenpia, Taishan Muren, and Shenzhen Lorain and their shareholders that give the Company the ability to substantially influence those companies’ daily operations and financial affairs and appoint their senior executives. The Company is considered the primary beneficiary of these operating companies.

 

On May 14, 2019, through Shanghai Xunyang, the Company entered into a series of VIE agreements with Xianning Bozhuang and its equity holders to obtain control and became the primary beneficiary of Xianning Bozhuang. The Company consolidated Xianning Bozhuang’s accounts as its VIE.

 

On December 20, 2019, we sold 100% of equity interest in Shanghai Xunyang and terminated its VIE agreements with Xianning Bozhuang, Shenzhen Lorain and Taishan Muren.

 

On December 20, 2019, through Lucky Sky Petrochemical, the Company entered into exclusive VIE agreements (“VIE Agreements”) with Taishan Muren, Xianning Bozhuang and Shenzhen Lorain, as well as their shareholders, which give the Company the ability to substantially influence those companies’ daily operations and financial affairs and appoint their senior executives. The Company is considered the primary beneficiary of these operating companies and it consolidates their accounts as VIEs. Each of the VIE Agreements is described in detail below:

 

2

 

 

Consultation and Service Agreement. Pursuant to the Consultation and Service Agreement, WFOE has the exclusive right to provide consultation and services to the operating entities in China in the area of business management, human resource, technology and intellectual property rights. WFOE exclusively owns any intellectual property rights arising from the performance of this Consultation and Service Agreement. The amount of service fees and payment term can be amended by the WFOE and operating companies’ consultation and the implementation. The term of the Consultation and Service Agreement is 20 years. WFOE may terminate this agreement at any time by giving 30 day’s prior written notice.

 

Business Cooperation Agreement. Pursuant to the Business Cooperation Agreement, WFOE has the exclusive right to provide complete technical support, business support and related consulting services, including but not limited to technical services, business consultations, equipment or property leasing, marketing consultancy, system integration, product research and development, and system maintenance. WFOE exclusively owns any intellectual property rights arising from the performance of this Business Cooperation Agreement. The rate of service fees may be adjusted based on the services rendered by WFOE in that month and the operational needs of the operating entities. The Business Cooperation Agreement shall maintain effective unless it was terminated or was compelled to terminate under applicable PRC laws and regulations. WFOE may terminate this Business Cooperation Agreement at any time by giving 30 day’s prior written notice.

 

Equity Pledge Agreements. Pursuant to the Equity Pledge Agreements among WFOE, operating entities and each of operating entities’ shareholder, shareholders of the operating entities pledge all of their equity interests in the operating entities to WFOE to guarantee their performance of relevant obligations and indebtedness under the Technical Consultation and Service Agreement and other control agreements. In addition, shareholders of the operating entities are in the process of registering the equity pledge with the competent local authority.

 

Equity Option Agreements. Pursuant to the Equity Option Agreements, WFOE has the exclusive right to require each shareholder of the operating companies to fulfill and complete all approval and registration procedures required under PRC laws for WFOE to purchase, or designate one or more persons to purchase, each shareholder’s equity interests in the operating companies, once or at multiple times at any time in part or in whole at WFOE’s sole and absolute discretion. The purchase price shall be the lowest price allowed by PRC laws. The Equity Option Agreements shall remain effective until all the equity interest owned by each operating entities shareholder has been legally transferred to WFOE or its designee(s).

 

Voting Rights Proxy Agreements. Pursuant to the Voting Rights Proxy Agreements, each shareholder irrevocably appointed WFOE or WFOE’s designee to exercise all his or her rights as the shareholders of the operating entities under the Articles of Association of each operating entity, including but not limited to the power to exercise all shareholder’s voting rights with respect to all matters to be discussed and voted in the shareholders’ meeting. The term of each Voting Rights Proxy Agreement is 20 years. WOFE has the right to extend each Voting Proxy Agreement by giving written notification.

 

As of December 31, 2019, the following entities were de-consolidated from the structure as a result of the termination agreements, dated as of December 11, 2019, to terminate the VIE arrangement between Shanghai Xunyang and Beijing Lorain, Luotian Lorain and Shandong Greenpia:

 

Products

 

We grew 32 herbs and spices on farmland that we lease in Guangdong Province, China. We sell sauces and other products developed from these herbs and spices. Customers use these products for seasoning, refining of foods and odor elimination, among other uses. 

 

We also offer a variety of food and beverage products, including packaged sauce, tea and brown rice syrup, to consumers and foodservice businesses.

 

Our tea products business is held by our newly acquired company, Xianning Bozhuang.

 

Our Manufacturing Facilities

 

General

 

We currently manufacture our products in Taishan City, Guangdong Province and Xianning City, Hubei Province, China.

 

The following table indicates the year that operations commenced at each of the facilities and the size of the facilities.

 

Facility  Year Operations Commenced   Facility Size (square meters) 
Taishan Muren *   2016    9,500 
Xianning Bozhuang **   2013    33,333 

 

*Became a VIE in September 2018.
**Became a VIE in May 2019.

 

Production Lines

 

We currently manufacture our products using production lines. The production process for our sauce products involves sorting, cleaning the raw spice, mixing the spice based on our special formula, and grinding, boiling and final packaging. The production process for our dry spice products involves sorting, cleaning the raw spice and drying. We outsource the production of brown rice syrup and tea bag to third party factories, and we provide the manufacturer with the recipe and products standards. The production process for our cyan brick tea products involves, primary processing of fresh leaves, piling and fermenting, storing and aging, picking, pressing, and baking. The production process for our black tea products involves selecting and sorting the fresh leaves, withering, rolling, fermenting, baking and drying, grading according to color, prompting fragrance, packing and warehousing. The production process for our green tea products involves selecting and sorting the fresh leaves, airing, fixating, cooling, rolling, stir drying, selecting and grading, prompting fragrance, packing and warehousing.

 

3

 

 

The following table shows the number and types of production lines, the types of products produced and the production capacity as of the date of this report:

 

Facility   Production Lines   Product
Portfolio
  Capacity
Taishan Muren   1 sauce line and 1 drying production line   Sauce and dried spice   Production line with 10 tons of production capacity and herb drying production line of 25 tons of production capacity.
Xianning Bozhuang  

There are six production lines:

the production line of cyan brick tea with traditional handicraft the production line of cyan brick tea the clean production line of cyan brick tea the production line of teabag the production line of green tea the production line of black tea

  Cyan brick tea,black tea and green tea   Production line with 5,020 tons of production capacity.

 

We operate our production lines year round. 

  

Agricultural Operations

 

We began growing herbs and spices by leasing land of 1,949 acres in Taishan City since 2016. We grow 32 species spices including roselle, mint, curry, pandan leave, lemon, citronella and others.

 

Raw Materials

 

Our Supply Sources

 

Our business depends on obtaining a reliable supply of various agricultural products of spice and tea. We believe that our raw materials are currently in adequate supply.

 

We obtain our spice raw materials primarily from our self-supply, and tea and other raw materials are mainly from external procurement. We produced approximately 290 metric tons and 440 metric tons of spice from our own agricultural operations in 2019 and 2018, respectively. We purchase approximately 400 tons of tea from suppliers in 2019.

 

We select suppliers based on price and product quality. We typically rely on numerous domestic suppliers, including some with whom we have a long-term relationship. Our suppliers generally include wholesale agricultural product companies, food production companies and tea bag processing companies. Our top ten suppliers accounted for 88.3% and 81.2% of the total procurement in 2019 and 2018 in value terms, respectively. We purchase rice syrup, tea and tea bags from suppliers and farmers pursuant to supply contracts and underlying purchase orders. We have not entered into any long-term contracts with any of our suppliers.

 

Our Customers

 

Our products are sold exclusively in Chinese domestic markets. Our top ten customers contributed 63% and 61% of our total revenues in 2019 and 2018, respectively.

 

We sell our agricultural products in first-tier cities in China, including Beijing, Shanghai, Tianjin and Guangzhou. Our sales team sells our products directly to supermarket chains, mass merchandisers, large wholesalers, restaurants and others in these markets. In second-tier and third-tier cities, we currently sell our products to third-party distributors, such as food companies or trading companies with established distribution channels in such regions, rather than through our own sales team. The terms of a typical sales contract between us and our distributors provide that we are responsible for transportation costs and the distributors are responsible for storage costs. Furthermore, the distributors have the right to return products that fail to satisfy specified quality standards, at our cost. The majority of such contracts require the distributors to pay us in cash in full upon delivery, and the remaining contracts provide for short-term credit, usually two to three weeks. We also operate an online store on Tmall, an open business-to-consumer (B2C) platform in China, to sell tea products to consumers directly.

 

Our Sales and Marketing Efforts

 

We have not spent a significant amount of capital on advertising in the past, and our advertising budget continues to be limited. In 2019, our marketing and branding efforts mainly focus on internet advertising.

 

4

 

 

Competition and Market Position

 

The overall food market is diverse, both globally and in China. We do not have a significant market share in China.

 

Our spice, sauce and beverage products compete with both large agribusiness companies and natural and organic packaged foods companies. Many of these competitors have significantly greater resources. Large agribusiness companies include Guangzhou Baihua Spice Corp. and natural and organic packaged foods companies include Shanghai House Food Corp. and Ankee Food Corporation. Given limited retailer shelf space and merchandising events, competitors actively support their respective brands with marketing, advertising and promotional spending. In addition, most retailers market similar items under their own private label, which compete for the same shelf space.

  

Black tea is produced in Guangxi, Sichuan, Yunnan, Hunan, Hubei, Shanxi and Anhui provinces in China. Our black tea products are processed in our factory in Hubei province and distributed nationwide. There are few large players on the market but we face fierce competition from numerous small black tea manufactures and distributors. However, as our brand has over hundreds of year’s history, we have accumulated loyal consumers and gained favorable market reputation over years.

 

Competitive factors in our industry include product innovation, product quality, price, brand recognition and loyalty, product variety and ingredients, product packaging and package design, effectiveness of marketing and promotional activity, and our ability to identify and satisfy consumer tastes and preferences.

 

Intellectual Property

 

We take reasonable steps to protect our proprietary information and trade secrets, such as limiting disclosure of proprietary plans, methods and other similar information on a need-to-know basis and requiring employees with access to our proprietary technology to enter into confidentiality arrangements. We believe that our proprietary technology and trade secrets are adequately protected.

 

Our Employees

 

As of December 31, 2019, we had a total of 238 employees. Approximately 148 of our full-time employees are directly employed by our subsidiaries and VIEs and the remaining employees are employed by outsourcing agents that we use to meet our staffing needs. Compared to 2018, the total employees increased by 49% due to the acquisition of Xianning Bozhuang.

 

The following table sets forth the allocation of employees, both direct and leased, by job function.

 

   Number of 
Department  Employees 
Production   169 
Human Resources   2 
Research and Development   2 
Sales   25 
Finance   5 
Procurement   6 
Administration   29 
Total   238 

 

We have not experienced any significant problems or disruption to our operations due to labor disputes, nor have we experienced any difficulties in recruitment and retention of experienced staff.

 

We compensate our production line employees by unit produced (piece work) and compensate other employees with a base salary and bonus based on performance. We also provide training for our staffs from time to time to enhance their technical and product knowledge, including knowledge of industry quality standards.

 

Our employees participate in state pension scheme and various types of social insurance organized by municipal and provincial governments. Outsourcing agents are responsible for contributions on behalf of the leased employees. 

5

 

  

Our Research and Development Activities

 

We have research and development staffs at each of our facilities. In total, 2 employees are dedicated to research and development.

 

We rely heavily on customer feedback to assist us in the modification and development of our products. We also utilize customer feedback to assist us in the development of new products.

 

The amount we spent on research and development activities during the years ended December 31, 2019 and 2018 was not a material portion of our total expenses for those years.

 

Government Regulation

 

As a manufacturer and distributor of food products, we are subject to regulations of China’s Agricultural Ministry and Ministry of Health. This regulatory scheme governs the manufacture (including composition and ingredients), labeling, packaging and safety of food. It also regulates manufacturing practices, including quality assurance programs, for foods through its current manufacturing practice regulations, and specifies the standards of identity for certain foods.

 

We have obtained approvals from Chinese authorities for products that requires the approval under regulations, including quality safety approval from government.

 

ITEM 1A. RISK FACTORS

 

Not required for smaller reporting companies.

 

ITEM 1B. UNRESOLVED STAFF COMMENTS

 

None.

 

ITEM 2. PROPERTIES

 

Our primary facilities, which are owned except where otherwise indicated, are as follows:

 

Facility  Location  Approximate Size
(Square Meters)
  Owned or Leased
Taishan Muren *  Taishan, Guangdong, PRC  9,500  Leased
          
Xianning Bozhuang **  Xianning County,  33,333  Land Use Rights Obtained
   Hubei Province, PRC      

 

*Became a VIE in September 2018.

**Became a VIE in May 2019.

 

In the aggregate, we currently have land use rights to, or lease, 2 properties with approximately 42,833 square meters, consisting of manufacturing facilities and office buildings for future expansion. We believe our current facilities provide adequate capacity for our current and projected needs.

 

All land in China is owned by the government. Individuals and companies are permitted to acquire land use rights for specific purposes. In the case of land used for industrial purposes, the land use rights are granted for a period of up to 50 years. This period may be renewed at the expiration of the initial and any subsequent terms. Granted land use rights are transferable and may be used as security for borrowings and other obligations. 

  

ITEM 3. LEGAL PROCEEDINGS

 

Not Applicable.

 

ITEM 4. MINE SAFETY DISCLOSURES

 

Not applicable.

 

6

 

  

PART II

 

ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES.

 

Market for our Common Stock

 

Our common stock is quoted on the NYSE American (formerly known as the American Stock Exchange, the NYSE Amex Equities Exchange and the NYSE MKT) under the symbol “PLAG”.

 

Approximate Number of Holders of Our Common Stock

 

As of May 13, 2020, there were 321 stockholders of record of our common stock. This does not include the holders whose shares are held in a depository trust in “street” name.

 

Dividend

 

We have not declared or paid cash dividends other than the payment of a dividend in April 2007 in connection with our reverse merger. Any future decisions regarding dividends will be made by our Board of Directors. We currently intend to retain and use any future earnings for the development and expansion of our business and do not anticipate paying any cash dividends in the foreseeable future.

 

Issuances of Unregistered Securities

 

On May 9, 2019, we and Shanghai Xunyang entered into a share exchange agreement with Xianning Bozhuang and each of the original shareholders of Xianning Bozhuang. Such transaction closed on May 14, 2019. Pursuant to the share exchange agreement, we issued an aggregate of 1,080,000 shares of common stock of the Company to the Sellers in exchange for the transfer of all of the equity interest of Xianning Bozhuang to Shanghai Xunyang.

 

On June 17, 2019, the Company entered into a securities purchase agreement, pursuant to which five individuals residing in the PRC agreed to purchase an aggregate of 1,300,000 shares of the Company’s common stock, par value $0.001 per share, for an aggregate purchase price of $5,460,000, representing a purchase price of $4.20 per share. The transaction closed on June 19, 2019.

 

Securities Authorized for Issuance under Equity Compensation Plans

 

We currently do not have any equity compensation plans.

 

ITEM 6. SELECTED FINANCIAL DATA

 

Not applicable.

 

ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

 

Overview

 

We are headquartered in Gaithersburg, MD. After a series of acquisitions and dispositions in 2018 and 2019, our primary business, which is carried out by Taishan Muren and Xianning Bozhuang, is:

 

to develop and market products, such as sauces and tea products, from herbs and spices, in China; and
to sell brown rice syrup and tea bags developed using our unique recipes in China;
to sell various black tea products in China.

 

7

 

  

Results of Operations

 

The following tables set forth key components of our results of operations for the periods indicated, and the differences between the two periods expressed in dollars and percentages.

 

       Increase /   Increase / 
       Decrease   Decrease 
(In Thousands of USD)  2019   2018   ($)   (%) 
Net revenues   4,113    6,829    (2,716)   (40)
Cost of revenues   2,980    6,524    (3,544)   (54)
Gross profit   1,133    305    828    271 
Operating expenses:                    
Selling and marketing expenses   40    14    26    186 
General and administrative expenses   1,918    875    1,043    119 
Operating loss   (825)   (584)   (241)   41 
Government subsidy income   -    -           
Interest and other income   29    435    (406)   (93)
Other expenses   (6)   -    (6)   

N/A

 

Write off receivables from disposal of former subsidiaries

   (5,025)   -    (5,025)   N/A 
Interest expense   (10)   -    (10)   

N/A

 
Gain from investment   -    -    -    - 
Loss before tax from continuing operations   (5,837)   (149)   (5,986)   4,017 
Income tax expense/(income)   -    164    (164)   (100)
Net loss from continuing operations   (5,837)   (313)   (6,150)   1,965 
Net income from discontinued operations   -    17,145    (17,145)   (100)

Gain on disposal

   8,784    -    8,784    N/A 
Net income   2,947   16,831    (13,884)   (82)
Non-controlling interests   -    (3,758)   3,758    (100)
Net income of common stockholders   2,947   20,590    (17,643)   (86)

 

Year Ended December 31, 2019 Compared to Year Ended December 31, 2018

 

Revenue

 

Net Revenues. Our net revenues amounted to $4.1 million in 2019, which represents a decrease of approximately $2.7 million, or 40%, from 2018, in which our net revenue was $6.8 million. This decrease was attributable to disposal and discontinue of certain subsidiaries and VIEs.

 

Cost of Revenues. In 2019, we experienced a decrease in cost of revenue of $3.5 million, in comparison to 2018, from approximately $6.5 million to $3.0 million, reflecting a decrease of 54%. This decrease was related to disposal and discontinue of certain subsidiaries and VIEs.

 

Gross Profit. Our gross profit increased by $0.83million, or 271%, to $1.13 million in 2019 from $0.31 million in 2018, attributable to the disposal of certain of our subsidiaries and VIEs and acquisition of Xianning Bozhuang.

 

Operating Expenses

 

Selling and Marketing Expenses. Our selling and marketing expenses increased by $0.03 million, or 186%, to $0.04 million in 2019, as compared to $0.01 million in 2018. The increase of our selling and marketing expenses is mainly due to an increase in sales activities because of the need to develop new customers.

 

General and Administrative Expenses. We experienced an increase in general and administrative expense of $1.0 million from $0.9 million to approximately $1.9 million in 2019, compared to 2018. The increase of our general and administrative expenses is mainly due to an increase in salary expenses and depreciation expenses.

 

8

 

  

Net Income

 

Our net income decreased by $13.9 million, or 82%, to a net income of $2.9 million in 2019 from $16.8 million in net income in 2018.Such decrease was primarily the result of provision for bad debts and disposal and discontinue of certain subsidiaries and VIEs.

 

Non-Controlling Interest

 

Our non-controlling interest was $0 million in 2019 and negative $3.8 million in 2018. Such decrease was primarily the result of disposal of Shandong Greenpia.

 

Income/Loss attributable to common stockholders

 

Income attributable to common stockholders decreased approximately $17.6 million, or 86%, to $2.9 million in 2019 from $20.6 million in 2018, mainly due to provision for bad debts and disposal and discontinue of certain subsidiaries and VIEs.

 

Liquidity and Capital Resources

 

In the reporting period in 2019, our primary sources of financing have been cash generated from operations and private placements. We raised funds in the following private placement in the second quarter of 2019:

 

On June 17, 2019, the Company entered into a securities purchase agreement, pursuant to which five individuals residing in the PRC agreed to purchase an aggregate of 1,300,000 shares of the Company’s common stock, par value $0.001 per share, for an aggregate purchase price of $5,460,000, representing a purchase price of $4.20 per share.

 

General

 

Management anticipates that our existing capital resources and anticipated cash flows from operations are adequate to satisfy our liquidity requirements for the next 12 months. Our primary capital needs have been to fund our working capital requirements. In the past, our primary sources of financing have been cash generated from operations and financing activities.

 

As of December 31, 2019, we had cash and cash equivalents (including restricted cash) of $7.40 million, as compared to $1.06 million as of December 31, 2018. The debt to assets ratio was 19.9% and 57.7% as of December 31, 2019 and 2018, respectively. We expect to continue to finance our operations and working capital needs in 2020 from cash generated from operations and, if needed, private financings. If available liquidity is not sufficient to meet our operating and loan obligations as they come due, our plans include pursuing alternative financing arrangements or reducing expenditures as necessary to meet our cash requirements. However, there is no assurance that we will be able to raise additional capital or reduce discretionary spending to provide liquidity, if needed. We cannot be sure of the availability or terms of any alternative financing arrangements.

 

The following table provides detailed information about our net cash flow for all financial statement periods presented in this report.

 

Cash Flows Data:

  For year ended December 31, 
(In thousands of U.S. dollars)  2019   2018 
Net cash flows used in operating activities   (3,939)   (14,153)
Net cash flows used in investing activities   (520)   (492)
Net cash flows provided by financing activities   

10,792

    15,487 

 

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Operating Activities

 

Net cash used in operating activities was $3.9 million and $14.2 million for 2019 and 2018, respectively. The decrease in net cash used in operating activities was mainly due to a decrease of $5.5 million in accounts and other receivables, a decrease of $3.9 million in payables and other current liabilities, gain of $8.8 million from disposal of subsidiary and VIEs, write off receivables from disposal of former subsidiaries of $5.0 million.

 

Investing Activities

 

Net cash used in investing activities for 2019 was $0.5 million, representing an increase of $0.03 million in net cash used in investing activities from $0.5 million for the same period of 2018. This is mainly due to an increase in investment in fixed assets.

 

Financing Activities

 

Net cash provided by financing activities for the year ended December 31, 2019 was $10.8 million, representing a decrease of $4.7 million in net cash provided by financing activities from $15.5 million for the same period of 2018. This is mainly due to reduced financing.

 

Critical Accounting Policies

 

The preparation of financial statements in conformity with United States generally accepted accounting principles requires our management to make assumptions, estimates and judgments that affect the amounts reported in the financial statements, including the notes thereto, and related disclosures of commitments and contingencies, if any.

 

We consider our critical accounting policies to be those that require the more significant judgments and estimates in the preparation of financial statements, including those set forth in Note 2 to the financial statements included herein.

 

The Company has evaluated the timing and the impact of the aforesaid guidance on the financial statements.

 

As of December 31, 2019, there were no other recently issued accounting standards not yet adopted that would or could have a material effect on the Company’s consolidated financial statements.

 

Off-Balance Sheet Arrangements

 

We do not have any off-balance arrangements.

 

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK

 

Not applicable.

 

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY FINANCIAL DATA

 

The full text of our audited consolidated financial statements as of December 31, 2019 begins on page F-1 of this annual report on Form 10-K.

 

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.

 

None.

 

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ITEM 9A. CONTROLS AND PROCEDURES

 

Disclosure Controls and Procedures

 

We maintain disclosure controls and procedures (as defined in Rule 13a-15(e) under the Exchange Act) that are designed to ensure that information required to be disclosed in Exchange Act reports is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including to our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.

 

As required by Rule 13a-15 under the Exchange Act, our management, including our Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures as of December 31, 2019. Based on that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that as of December 31, 2019, our disclosure controls and procedures were not effective due to the material weakness in our internal control over financial reporting described below.

 

Internal Controls over Financial Reporting

 

Management’s Annual Report on Internal Control over Financial Reporting.

 

Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Rule 13a-15(f) of the Exchange Act. Under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, we conducted an evaluation of the effectiveness of our internal control over financial reporting based upon the framework in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Based on that evaluation, our management concluded that, as of December 31, 2019, our internal controls over financial reporting were not effective.

 

The material weakness and significant deficiency identified by our management as of December 31, 2019 relates to the ability of the Company to record transactions and provide disclosures in accordance with generally accepted accounting principles in the United States (“U.S. GAAP”). We did not have sufficient and skilled accounting personnel with an appropriate level of experience in the application of U.S. GAAP commensurate with our financial reporting requirements. For example, our staff members do not hold licenses such as Certified Public Accountant or Certified Management Accountant in the U.S., have not attended U.S. institutions for training as accountants, and have not attended extended educational programs that would provide sufficient relevant education relating to U.S. GAAP. Our staff will require substantial training to meet the demands of a U.S. public company and our staff’s understanding of the requirements of U.S. GAAP-based reporting are inadequate.

 

Remediation Initiative

 

We plan to provide U.S. GAAP training sessions to our accounting team. The training sessions will be organized to help our corporate accounting team gain experience in U.S. GAAP reporting and to enhance their awareness of new and emerging pronouncements with potential impact over our financial reporting. We plan to continue to recruit experienced and professional accounting and financial personnel and participate in educational seminars, tutorials, and conferences and employ more qualified accounting staff in future.

 

Changes in Internal Controls over Financial Reporting.

 

Other than as described above, during the fiscal year ended December 31, 2019, there were no material changes in our internal control over financial reporting identified in connection with the evaluation performed during the fiscal year covered by this annual report that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

 

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Inherent Limitations over Internal Controls.

 

Our internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with U.S. GAAP. Our internal control over financial reporting includes those policies and procedures that:

 

(i)pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of our assets;

 

(ii)provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with U.S. GAAP, and that our receipts and expenditures are being made only in accordance with authorizations of our management and directors; and

 

(iii)provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of our assets that could have a material effect on the financial statements.

 

Management, including our Chief Executive Officer and Chief Financial Officer, does not expect that our internal controls will prevent or detect all misstatements. A control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of such controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of internal controls can provide absolute assurance that all control issues and instances of misstatements, if any, have been detected or prevented. Also, projections of any evaluation of the effectiveness of controls in future periods are subject to the risk that those internal controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

 

ITEM 9B. OTHER INFORMATION.

 

None.

 

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PART III

 

ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

 

Directors and Officers

 

The following table sets forth the name, age and position of each of our current directors and officers.

 

Name   Age   Position
Bin Zhou   30   Chairman and Chief Executive Officer
Lili Hu   41   Chief Financial Officer
Daqi Cui   53   Chief Operating Officer
Hongxiang Yu   41   Director
Chao Chen   34   Director
King Fai Leung   48   Director
Yang Cao   28   Director

  

Mr. Bin Zhou has served as a director of the Company since May 2019. He has served as chairman of the board of directors of Xianning Bozhuang since March 2019. Mr. Zhou was the general manager and legal representative of Hubei Qianding Equipment Manufacturing Co., Ltd., a mechanical equipment manufacturing company, from March 2016 to March 2019. He also served as supervisor of Hubei Henghao Real Estate Development Co., Ltd., a real estate development company, from April 2014 to June 2018. Mr. Zhou received his Bachelor of Law degree from National Judges College in Beijing, China.

 

Ms. Lili Hu was appointed to serve as the Chief Financial Officer of the Company in June 2019. She has over ten years of accounting experience. Ms. Hu has served as the financial director of Xianning Bozhuang Tea Products Co., Ltd., a wholly-owned subsidiary of the Company, since July 2018. From June 2016 to June 2018, Ms. Hu worked as an audit project manager with Hubei Puhua Lixin LLP, an audit firm in Hubei, China. From May 2014 to May 2016, Ms. Hu was a financial manager of Houfu Medical Device Co., Ltd., a medical device company in China. From January 2009 to December 2013, Ms. Hu served as the financial director of Hebei Rentian Gaopeng Mechanical Co., Ltd., a manufacturing company in China. From January 2006 to June 2008, Ms. Hu was the Chief Financial Officer of Hubei Hongfa Telecommunications Co., Ltd., a telecommunications company in China. Ms. Hu graduated from Hubei University of Science and Technology with a major in accounting. Ms. Hu is a Certified Public Accountant in China.

 

Mr. Daqi Cui was appointed to serve as the Chief Operating Officer of the Company in June 2019. He has significant experience in corporate finance and legal matters. From June 2013 to June 2019, Mr. Cui served as chief executive officer of Bezalel International LLC, a consulting firm based in the U.S. From December 2010 to June 2013, Mr. Cui served as counsel at Michael Lu Law Office. From September 2004 to December 2010, he practiced corporate law at Beijing Jiahao Law Firm. Mr. Cui obtained his LL.M degree from Temple Law School in 2004 and obtained his LL.B. degree from People’s Public Security University of China in 1988.

 

Mr. Hongxiang Yu has served as a director of the Company since August 2016 and the Chief Executive Officer and President of the Company since September 2018. Mr. Yu has served as the head of the internal auditing department of Hongrun Construction Group Co., Ltd., a company listed on the Shenzhen Stock Exchange, and as general manager for Hongrun’s foundation engineering subsidiary, since August 2006. In September 2015, Mr. Yu established, and has been the Chairman of, Shanghai Highlights Asset Management Co., Ltd., a company engaged in assets management and private equity investment in China. Since April 2016, Mr. Yu has also served as the Vice Chairman of Tianjin Dragon Film Limited, a company engaged in investment in film industry including the both upstream and downstream chain of film production business in China. Mr. Yu received his Bachelor degree in International Trade in 2004 from University of Portsmouth in the United Kingdom and his Master degree in International Human Resources Management in 2006 from University of Portsmouth.

 

13

 

  

Ms. Chao Chen has served as a director of the Company since April 2019. She has been an attorney at Beijing QianCheng law firm since August 2019. Prior to that, she was an attorney at Beijing Lanpeng Law Firm from May 2015 to August 2019. Her practice includes litigation, mergers and acquisitions and general corporate representation. Ms. Chen served as the legal manager of LightInTheBox Holding Co., Ltd., an international online retail company that is listed on New York Stock Exchange, from November 2018 to January 2019. From September 2013 to May 2015, Ms. Chen served as the senior project manager of China Aviation Supplies Holding Company, a company that provides aircraft procurement and support services on aviation supplies, and was responsible for the planning, procurement and execution of cross-border projects. Ms. Chen received her Master of Law degree from Beijing Institute of Technology and her Bachelor of Law degree from Southwest University for Nationalities.

 

Mr. King Fai Leung has served as a director of the Company since July 2019. He has over 20 years’ experience in finance and accounting. He has been the executive director of Maxima Energy Limited, an energy company in Hong Kong, since December 2018. Mr. Leung has also served as an independent director since November 2017 and was re-designated in March 2019 as an executive director and Chief Financial Officer of Chineseinvestors.com, Inc., a financial information website for Chinese-speaking investors (OTCQB: CIIX). He has also served as an independent director, chairman of the audit committee and a member of the remuneration and nomination committee of Daisho Microline Holdings Ltd., a Hong Kong-based investment holding company principally engaged in the manufacture and sales of printed circuit boards (HKG: 0567), since June 2015. In addition, Mr. Leung served as directors in various public companies, including Kirin Group Holdings Limited, an investment holding company principally engaged in the financial related business (HKG: 8109), Biostar Pharmaceuticals, Inc., a pharmaceutical and medical nutrient products company (OTC Pink: BSPM), and Hao Wen Holdings Limited, an investment holding company principally engaged in the manufacture and trading of biomass fuel in China (HKG: 8019). Mr. Leung earned his Bachelor of Commerce in Accounting and Finance from Deakin University in Victoria, Australia. He is a Certified Public Account in both Hong Kong and Australia.

 

Ms. Yang Cao has served as a director of the Company since March 2020. She has been practicing commercial law as an attorney with Hubei Kaicheng Law Office since November 2019. Prior to that, she served as a legal counsel to Xianning High-Tech Industrial Zone, a municipal government authority providing infrastructure and resources to high-tech companies, from November 2016 to November 2019. From October 2015 to November 2016, Ms. Cao worked as a compliance officer at Qingdao Inter-Credit Group Wuhan Branch, a business consulting company. Ms. Cao received her LL.B. degree from Hankou College and an LL.M. degree from Central China Normal University

 

There are no arrangements or understandings between any of our directors, officers and any other person pursuant to which any director was selected to serve as a director or officers of our company. Directors are elected until their successors are duly elected and qualified. Our executive officers are appointed by our Board and serve at their discretion. There are no family relationships among our directors or officers.

 

Board of Directors

 

Our Board met on five occasions during fiscal year 2019. Each of the members of our Board attended more than 75% of the total number of meetings held by our Board and the committees on which each director served during fiscal year 2019.

 

Committees of the Board

 

Audit Committee

 

The Audit Committee assists our Board in monitoring:

 

  our accounting, auditing, and financial reporting processes;
     
  the integrity of our financial statements;
     
  internal controls and procedures designed to promote our compliance with accounting standards and applicable laws and regulations; and
     
  the appointment and evaluation of the qualifications and independence of our independent auditors.

 

14

 

  

King Fai Leung, Yang Cao and Chao Chen, all of whom are independent directors under SEC rules and the rules of NYSE American, are currently serving as members of the Audit Committee. Mr. Leung is the chairman of the Audit Committee and is our audit committee financial expert.

 

The Audit Committee has adopted a written charter, a copy of which is available on our website at www.planetgreenholdings.com, and a printed copy of which is available to any stockholder requesting a copy by writing to: Planet Green Holdings Corp., c/o Board of Director Office, Suite 200, 9841 Washingtonian Blvd, Gaithersburg, MD 20878. During the fiscal year ended December 31, 2019, our Audit Committee held 5 meetings.

 

Compensation Committee

 

The functions of the Compensation Committee are as follows:

 

to assist our Board in discharging its responsibilities with respect to compensation of our executive officers and directors;
to evaluate the performance of our executive officers;
to assist our Board in developing succession plans for executive officers; and
to administer our stock and incentive compensation plans and recommend changes in such plans to our Board as needed.

 

The current members of the Compensation Committee are Chao Chen, King Fai Leung and Yang Cao. Ms. Chen is the chairman of the Compensation Committee. All current members of the Compensation Committee are independent directors, and all past members were independent directors at all times during their service on such Committee. None of the past or present members of our Compensation Committee are present or past employees or officers of the Company or any of our subsidiaries. No member of the Compensation Committee has had any relationship with us requiring disclosure under Item 404 of Regulation S-K. None of our executive officers serves on the Board of Directors or compensation committee of a company that has an executive officer that serves on our Board of Directors or Compensation Committee.

 

The Compensation Committee may not delegate its responsibilities to another committee, individual director or member of management.

 

The Compensation Committee meets on an annual basis and holds special meetings as needed. The Compensation Committee meetings may be called by the Committee chairman, the Chairman of the Board of Directors or a majority of Committee members. The Chief Executive Officer and Chief Financial Officer also provide recommendations to the Compensation Committee relating to compensation of other executive officers. The Compensation Committee held five meetings in fiscal year 2019.

 

15

 

 

Nominating and Corporate Governance

 

The Nominating and Corporate Governance assists the Board of Directors in identifying individuals qualified to become our directors and in determining the composition of the Board of Directors and its committees. The Nominating and Corporate Governance is responsible for, among other things:

  

to make recommendations to the Board of Directors with respect to the size and composition of the Board of Directors;
to make recommendations to the Board of Directors on the minimum qualifications and standards for director nominees and the selection criteria for the Board members;
to review the qualifications of potential candidates for the Board of Directors;
to make recommendations to the Board of Directors on nominees to be elected at the annual meeting of stockholders; and
to seek and identify a qualified director nominee, in the event that a director vacancy occurs, to be recommended to the Board of Directors for either appointment by the Board of Directors to serve the remainder of the term of a director position that is vacant or election at the annual meeting of the stockholders.

 

The current members of the Nominating and Corporate Governance are Yang Cao, Chao Chen and King Fai Leung. Ms. Cao is the chairman of the Compensation Committee. During the fiscal year 2019, our Nominating and Corporate Governance Committee held five meetings.

 

Stockholder Nominations for Director

 

Stockholders may propose candidates for board membership by writing to: Planet Green Holdings Corp., c/o Board of Director Office, Suite 200, 9841 Washingtonian Blvd, Gaithersburg, MD 20878. Any such proposal shall contain the name, holdings of our securities and contact information of the person making the nomination; the candidate’s name, address and other contact information; any direct or indirect holdings of our securities by the nominee; any information required to be disclosed about directors under applicable securities laws and/or stock exchange requirements; information regarding related party transactions with our company and/or the stockholder submitting the nomination; any actual or potential conflicts of interest; the nominee’s biographical data, current public and private company affiliations, employment history and qualifications and status as “independent” under applicable securities laws and stock exchange requirements. Nominees proposed by stockholders will receive the same consideration as other nominees.

 

Compensation Committee Interlocks and Insider Participation

 

None of our officers currently serves, or in the past year has served, as a member of the Board of Directors or compensation committee of any entity that has one or more officers serving on our Board of Directors.

 

Code of Ethics

 

Our Board adopted a Code of Ethics that applies to all of our directors, executive officers, including our principal executive officer, principal financial officer and principal accounting officer, and employees. The Code of Ethics addresses, among other things, honesty and ethical conduct, conflicts of interest, compliance with laws, regulations and policies, including disclosure requirements under the federal securities laws, confidentiality, trading on inside information, and reporting of violations of the code. The Code of Ethics is available on our website at http://www.planetgreenholdings.com, and a copy of the Code of Ethics is available to any stockholder requesting a copy by writing to: Planet Green Holdings Corp., c/o Board of Director Office, Suite 200, 9841 Washingtonian Blvd, Gaithersburg, MD 20878. We intend to disclose on our website, in accordance with all applicable laws and regulations, amendments to, or waivers from, our Code of Ethics.

  

Legal Proceedings

 

To the Company’s knowledge, there are no material proceedings to which any of our directors and officers or affiliates of the Company is a party adverse to the Company or has a material interest adverse to the Company.

 

16

 

 

ITEM 11. EXECUTIVE COMPENSATION

 

Summary Compensation Table

 

The following table sets forth information concerning all forms of compensation earned by our named executive officers during the fiscal years ended December 31, 2019 and 2018 for services provided to us and our subsidiaries and VIEs. None of our current executive officers earned compensation that exceeded $100,000 during the fiscal years ended December 31, 2019 or 2018.

 

              Stock   Option   All Other     
Name and Principal Position  Year   Salary   Bonus   Awards   Awards   Compensation   Total 
(a)  (b)   (c)   (d)   (e)   (f)   (g)   (h) 
Bin Zhou,   2019   $96,000   $-   $-   $-   $-   $96,000 
Chairman, Chief Executive Officer and Director   2018   $-   $-   $-   $-   $-   $-0- 
              -    -    -    -      
Lili Hu,   2019   $48,000   $-   $-   $-   $-   $48,000 
Chief Financial Officer   2018   $-   $-   $-   $-   $-   $-0- 
              -    -    -    -      
Daqi Cui,   2019   $96,000   $-   $-   $-   $-   $96,000 
Chief Operating Officer   2018   $-   $-   $-   $-   $-   $-0- 
                                    
Hongxiang Yu,   2019   $16,154   $-   $-   $-   $-   $16,154 
Former President, Former Chief Executive Officer    2018   $16,154   $-   $-   $-   $-   $16,154 
and Director                                   
                                    
Yu Li,   2019   $16,154   $-   $-   $-   $-   $16,154 
Former Chief Financial Officer   2018   $16,154   $-   $-   $-   $-   $16,154 
                                    
Yimin Jin,   2019   $16,154   $-   $-   $-   $-   $16,154 
Former Chief Strategic Officer and Director   2018   $16,154   $-   $-   $-   $-   $16,154 

 

On June 24, 2019, the Board appointed Lili Hu to serve as the Chief Financial Officer. Pursuant to the employment agreement with Ms. Hu, we are obligated to pay Ms. Hu a compensation of $48,000 per year.

 

On June 18, 2019, the Board appointed Daqi Cui to serve as the Chief Operating Officer. Pursuant to the employment agreement with Mr. Cui, we are obligated to pay Mr. Cui a compensation of $96,000 per year.

 

On May 14 and October 25, 2019, the Board appointed Bin Zhou as a member of the Board and the Chief Executive Officer, respectively. Pursuant to the employment agreement with Mr. Zhou, we are obligated to pay Mr. Zhou a compensation of $96,000 per year.

 

On September 27, 2018, the Board appointed Yu Li as the Chief Financial Officer. Pursuant to the employment agreement with Ms. Li, we are obligated to pay Ms. Li a compensation of $16,154 per year. Ms. Li resigned on June 24, 2019. 

  

On September 27, 2018, the Board appointed Hongxiang Yu to serve as the Chief Executive Officer and President of the Company. Pursuant to the employment agreement with Mr. Yu, we are obligated to pay Mr. Yu a compensation of $16,154 per year. Mr. Yu resigned on October 25, 2019.

 

On November 8, 2017, the Board appointed Yimin Jin as a member of the Board and the Chief Strategic Officer. Pursuant to the employment agreement with Mr. Jin, we are obligated to pay Mr. Jin a compensation of $16,154 per year. Mr. Jin resigned on May 14, 2019.

 

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ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED SHAREHOLDER MATTERS

 

The following table sets forth information regarding beneficial ownership of our common stock as of May 13, 2020 (i) by each person who is known by us to beneficially own more than 5% of our common stock; (ii) by each of our named executive officers and directors and (iii) by all of our officers and directors as a group. Beneficial ownership is determined in accordance with the rules of the SEC that deem shares to be beneficially owned by any person who has voting or investment power with respect to such shares. Except as otherwise indicated, the persons listed below have advised us that they have direct sole voting and investment power with respect to the shares listed as owned by them.

 

Unless otherwise specified, the address of each of the persons set forth below is c/o Planet Green Holdings Corp., Suite 200, 9841 Washingtonian Blvd, Gaithersburg, MD 20878.

 

In the table below, percentage ownership is based on 9,227,765 shares of our common stock outstanding as of May 13, 2020.

 

Name and title of beneficial owner  Amount and nature of beneficial ownership   Percent of
class
 
         
5% or Greater Stockholders        
Dai Zhen   800,000    8.7%
Mengru Xu(1)   700,000    7.6%
Zhichao Du(1)   650,000    7.0%
Loujie Pu   560,000    6.1%
           
Executive Officers, Directors and Director Nominees          
Bin Zhou, Chairman, Chief Executive Officer and Director (2)   972,000    10.5%
Lili Hu, Chief Financial Officer   -    - 
Daqi Cui, Chief Operating Officer   -    - 
Hongxiang Yu, Director(3)     1,176,471    12.7%
Chao Chen, Director   -    - 
King Fai Leung, Director   -    - 
Yang Cao, Director   -    - 
All executive officers, directors and director nominees as a group (seven individuals)   2,148,471    23.3%

 

(1) On February 10, 2020, the Company entered into a securities purchase agreement with Mengru Xu and Zhichao Du, pursuant to which Ms. Xu and Mr. Du agreed to invest an aggregate of $3.51 million in the Company in exchange for an aggregate of 1,350,000 shares of common stock, representing a purchase price of approximately $2.60 per share. On February 28, 2020, the Company closed the transaction.
   
(2) 972,000 shares of common stock, which were acquired on May 14, 2019 in exchange for Bin Zhou’s 90% equity ownership in Xianning Bozhuang, pursuant to a share exchange agreement, dated as of May 9, 2019.
   
(3) On August 8, 2018, the Company entered into an amended and restated securities purchase agreement with Hongxiang Yu, pursuant to which Mr. Yu agreed to invest an aggregate of $5 million in the Company in exchange for an aggregate of 1,176,471 shares of common stock, representing a purchase price of approximately $4.25 per share (taking into account the reverse stock split subsequently effected by the Company). On October 16, 2018, the Company closed the transaction.

 

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Changes in Control

 

There are currently no arrangements which would result in a change in control of us.

 

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE.

 

Related Party Transactions

 

On May 14, 2019, Bin Zhou, the Chief Executive Officer and Chairman of the Company acquired 972,000 shares of common stock, in exchange for Mr. Zhou’s 90% equity ownership in Xianning Bozhuang, pursuant to a share exchange agreement, dated as of May 9, 2019.

 

As of December 31, 2019 and 2018, the outstanding balance of $2,003,390 and $Nil due to Mr. Bin Zhou, Chief Executive Officer and Chairman of the Company, respectively, was advances for working capital of the Company which were due on March 30, 2020, non-interest bearing, and unsecured, unless further disclosed. The advances were paid off on March 20, 2020.

 

Policy for Approval of Related Party Transactions

 

Our Audit Committee Charter provides that all related party transactions required to be disclosed under SEC rules are to be reviewed by the Audit Committee.

 

Director Independence

 

NYSE American listing standards require that a majority of our Board of Directors be independent. An “independent director” is defined generally as a person other than an officer or employee of the company or its subsidiaries or any other individual having a relationship which in the opinion of the company’s board of directors, would interfere with the director’s exercise of independent judgment in carrying out the responsibilities of a director. Our Board of Directors has determined that Chao Chen, King Fai Leung, Yang Cao are “independent directors” as defined in the NYSE American listing standards and applicable SEC rules.

 

ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES.

 

WWC, P.C. is the Company’s independent registered public accounting firm for the fiscal years ended December 31, 2018 and 2019 and the accounting fees in each such period were $140,000 and $160,000. Such fees related to audit services provided by WWC, P.C. No audit-related or tax services were provided by WWC, P.C. during such periods.

 

19

 

 

PART IV

 

ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES

 

(a) (1 and 2) Financial Statement and Schedules

 

The financial statements contained in the “Audited Financial Statements” beginning on page F-1 of this annual report on Form 10-K.

 

(b) Exhibits

 

Exhibit No.  Description
    
3.1  Articles of Incorporation of the registrant, as filed with the Nevada Secretary of State on June 15, 2009. Incorporated by reference to Exhibit 3.1 to the registrant’s registration statement on Form S-3 filed on January 29, 2010.
    
3.2  Certificate of Amendment of the registrant, as filed with the Nevada Secretary of State on September 28, 2018. Incorporated by reference to Exhibit 3.1 to the registrant’s current report on Form 8-K filed on October 2, 2018.
    
3.3  Bylaws of the registrant. Incorporated by reference to Exhibit 3.2 to the registrant’s registration statement on Form S-3 filed on January 29, 2010.
    
4.1*  Description of securities registered pursuant to Section 12 of the Securities Exchange Act of 1934, as amended
    
10.1  Consultation and Service Agreement, dated September 27, 2018, by and between Shanghai Xunyang Interment Technology Co., Ltd. and Taishan Muren Farming Co., Ltd. Incorporated by reference to Exhibit 10.9 to the registrant’s annual report on Form 10-K filed on April 16, 2019.
    
10.2  Business Cooperation Agreement, dated September 27, 2018, by and between Shanghai Xunyang Interment Technology Co., Ltd. and Taishan Muren Farming Co., Ltd.  Incorporated by reference to Exhibit 10.10 to the registrant’s annual report on Form 10-K filed on April 16, 2019.
    
10.3  Equity Pledge Agreement, dated September 27, 2018, by and among Shanghai Xunyang Interment Technology Co., Ltd., Shenzhen Jiamingrui Xinnong Co., Ltd. and Taishan Muren Farming Co., Ltd. Incorporated by reference to Exhibit 10.11 to the registrant’s annual report on Form 10-K filed on April 16, 2019.
    
10.4  Equity Option Agreement, dated September 27, 2018, by and among Shanghai Xunyang Interment Technology Co., Ltd., Shenzhen Jiamingrui Xinnong Co., Ltd. and Taishan Muren Farming Co., Ltd. Incorporated by reference to Exhibit 10.12 to the registrant’s annual report on Form 10-K filed on April 16, 2019.
    
10.5  Voting Rights Proxy and Financial Supporting Agreement, dated September 27, 2018, by and among Shenzhen Jiamingrui Xinnong Co., Ltd., Shanghai Xunyang Interment Technology Co., Ltd. and Taishan Muren Farming Co., Ltd. Incorporated by reference to Exhibit 10.13 to the registrant’s annual report on Form 10-K filed on April 16, 2019.
    
10.6  Share Exchange Agreement, dated as of May 9, 2019, by and among Planet Green Holdings Corp., Shanghai Xunyang Internet Technology Co., Ltd., Xianning Bozhuang Tea Products Co., Ltd. and sellers named therein. Incorporated by reference to Exhibit 10.1 to the registrant’s current report on Form 8-K filed on May 15, 2019.
    
10.7  Lock-Up Agreement, dated as of May 14, 2019, by and among Planet Green Holdings Corp. and the persons named therein. Incorporated by reference to Exhibit. 10.2 to the registrant’s current report on Form 8-K filed on May 15, 2019.
    
10.8  Non-Competition and Non-Solicitation Agreement, dated as of May 14, 2019, by and among Planet Green Holdings Corp., Shanghai Xunyang Internet Technology Co., Ltd., Xianning Bozhuang Tea Products Co., Ltd. and the persons named therein. Incorporated by reference to Exhibit 10.3 to the registrant’s current report on Form 8-K filed on May 15, 2019.
    
10.9  Consultation and Service Agreement, dated as of May 14, 2019, by and between Shanghai Xunyang Internet Technology Co., Ltd. and Xianning Bozhuang Tea Products Co., Ltd. Incorporated by reference to Exhibit 10.4 to the registrant’s current report on Form 8-K filed on May 15, 2019.

 

20

 

  

Exhibit No.  Description
    
10.10  Business Cooperation Agreement, dated as of May 14, 2019, by and between Shanghai Xunyang Internet Technology Co., Ltd. and Xianning Bozhuang Tea Products Co., Ltd. Incorporated by reference to Exhibit 10.5 to the registrant’s current report on Form 8-K filed on May 15, 2019.
    
10.11  Equity Pledge Agreement, dated as of May 14, 2019, by and among Shanghai Xunyang Internet Technology Co., Ltd., Bin Zhou, Wuyuan Zuo, Gongwei Lu and Xianning Bozhuang Tea Products Co., Ltd. Incorporated by reference to Exhibit 10.6 to the registrant’s current report on Form 8-K filed on May 15, 2019.
    
10.12  Equity Option Agreement, dated as of May 14, 2019, by and among Shanghai Xunyang Internet Technology Co., Ltd., Bin Zhou, Wuyuan Zuo, Gongwei Lu and Xianning Bozhuang Tea Products Co., Ltd. Incorporated by reference to Exhibit 10.7 to the registrant’s current report on Form 8-K filed on May 15, 2019.
    
10.13  Voting Rights Proxy and Financial Supporting Agreement, dated as of May 14, 2019, by and among Bin Zhou, Wuyuan Zuo, Gongwei Lu, Shanghai Xunyang Internet Technology Co., Ltd. and Xianning Bozhuang Tea Products Co., Ltd. Incorporated by reference to Exhibit 10.8 to the registrant’s current report on Form 8-K filed on May 15, 2019.
    
10.14  Securities Purchase Agreement, dated as of June 17, 2019, by and among Planet Green Holdings Corp. and the purchasers named therein. Incorporated by reference to Exhibit 10.1 to the registrant’s current report on Form 8-K filed on June 21, 2019.
    
10.15  Employment Agreement, dated as of October 25, 2019, by and between Planet Green Holdings Corp. and Bin Zhou. Incorporated by reference to Exhibit 10.1 to the registrant’s current report on Form 8-K filed on October 30, 2019.
    
10.16*  Consultation and Service Agreement, dated as of December 20, 2019, by and between Lucky Sky Petrochemical and Taishan Muren 
    
10.17*  Business Cooperation Agreement, dated as of December 20, 2019, by and between Lucky Sky Petrochemical and Taishan Muren
    
10.18*  Equity Pledge Agreement, dated as of December 20, 2019, by and among Lucky Sky Petrochemical, Shenzhen Jiamingrui New Agriculture Co., Ltd. and Taishan Muren
    
10.19*  Equity Option Agreement, dated as of December 20, 2019, by and among Lucky Sky Petrochemical, Shenzhen Jiamingrui New Agriculture Co., Ltd. and Taishan Muren
    
10.20*  Voting Rights Proxy and Financial Supporting Agreement, dated as of December 20, 2019, by and among Lucky Sky Petrochemical, Shenzhen Jiamingrui New Agriculture Co., Ltd. and Taishan Muren
    
10.21*   Consultation and Service Agreement, dated as of December 20, 2019, by and between Lucky Sky Petrochemical and Xianning Bozhuang
     
10.22*   Business Cooperation Agreement, dated as of December 20, 2019, by and between Lucky Sky Petrochemical and Xianning Bozhuang
     
10.23*   Equity Pledge Agreement, dated as of December 20, 2019, by and among Lucky Sky Petrochemical, Bin Zhou, Wuyuan Zuo, Gongwei Lu and Xianning Bozhuang
     
10.24*   Equity Option Agreement, dated as of December 20, 2019, by and among Lucky Sky Petrochemical, Bin Zhou, Wuyuan Zuo, Gongwei Lu and Xianning Bozhuang
     
10.25*   Voting Rights Proxy and Financial Supporting Agreement, dated as of December 20, 2019, by and among Lucky Sky Petrochemical, Bin Zhou, Wuyuan Zuo, Gongwei Lu and Xianning Bozhuang
     
10.26*   Consultation and Service Agreement, dated as of December 20, 2019, by and between Lucky Sky Petrochemical and Shenzhen Lorain
     
10.27*   Business Cooperation Agreement, dated as of December 20, 2019, by and between Lucky Sky Petrochemical and Shenzhen Lorain
     
10.28*   Equity Pledge Agreement, dated as of December 20, 2019, by and among Lucky Sky Petrochemical, Mingyue Cai and Shenzhen Lorain
     
10.29*   Equity Option Agreement, dated as of December 20, 2019, by and among Lucky Sky Petrochemical, Mingyue Cai and Shenzhen Lorain
     
10.30*   Voting Rights Proxy and Financial Supporting Agreement, dated as of December 20, 2019, by and among Lucky Sky Petrochemical, Mingyue Cai  and Shenzhen Lorain

21

 

 

Exhibit No.  Description
    
14.1  Business Ethics Policy and Code of Conduct, adopted on April 30, 2007. Incorporated by reference to Exhibit 14 to the registrant’s current report on Form 8-K filed on May 9, 2007.
    
21.1*  List of subsidiaries of the registrant
    
31.1*  Certification of Chief Executive Officer, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
    
31.2*  Certification of Chief Financial Officer, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 *
    
32.1**  Certification of Chief Executive Officer, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
    
32.2**  Certification of Chief Financial Officer, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
    
101.INS*  XBRL Instance Document
    
101.SCH*  XBRL Taxonomy Extension Schema
    
101.CAL*  XBRL Taxonomy Calculation Linkbase

 

101.LAB*  XBRL Taxonomy Label Linkbase
    
101.PRE*  XBRL Definition Linkbase Document
    
101.DEF*  XBRL Definition Linkbase Document
    

 

* Filed herewith
** Furnished herewith

 

ITEM 16. FORM 10-K SUMMARY

 

Not applicable. 

 

22

 

 

SIGNATURES

 

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

  PLANET GREEN HOLDINGS CORP.
   
Date: May 13, 2020 By: /s/ Bin Zhou
    Bin Zhou, Chief Executive Officer and Chairman
(Principal Executive Officer)
   
  By: /s/ Lili Hu
 

 

Lili Hu, Chief Financial Officer

(Principal Financial and Accounting Officer)

 

Pursuant to the requirements of the Securities Exchange Act of 1934, this annual report has been signed by the following persons in the capacities and on the dates indicated.

 

Signature   Title   Date
       
/s/ Bin Zhou   Chief Executive Officer and Chairman   May 13, 2020
Bin Zhou   (Principal Executive Officer)    
       
    Chief Financial Officer    
/s/ Lili Hu   (Principal Financial Officer and   May 13, 2020
Lili Hu   Principal Accounting Officer)    
         
/s/ Hongxiang Yu   Director   May 13, 2020
Hongxiang Yu        
         
/s/ Chao Chen   Director   May 13, 2020
Chao Chen        
         
/s/ King Fai Leung   Director   May 13, 2020
King Fai Leung        
         
/s/ Yang Cao   Director   May 13, 2020
Yang Cao        

 

23

 

  

PLANET GREEN HOLDINGS CORP.

 

AUDITED CONSOLIDATED FINANCIAL STATEMENTS

 

DECEMBER 31, 2019 AND 2018

 

(Stated in US Dollars) 

 

CONTENTS

  PAGES
     
Report of Independent Registered Public Accounting Firm   F-2
     
Audited Consolidated Balance Sheets   F- 3
     
Audited Consolidated Statements of Operations and Comprehensive Loss   F-4
     
Audited Consolidated Statements of Cash Flows   F-6
     
Notes to Consolidated Financial Statements   F-7 to F-18

 

F-1 

 

   

 

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

 

 

To:The Board of Directors and Stockholders of

Planet Green Holdings Corp.

 

 

Opinion on the Financial Statements

 

We have audited the accompanying consolidated balance sheets of Planet Green Holdings Corp. (the Company) as of December 31, 2019 and 2018, and the related consolidated statements of operations and comprehensive income, changes in shareholders’ equity, and cash flows for the two year period ended December 31, 2019, and the related notes (collectively referred to as the financial statements). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2019 and 2018, and the results of its operations and its cash flows for the two year period ended December 31, 2019, in conformity with accounting principles generally accepted in the United States of America.

 

Basis for Opinion

 

These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

 

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.

 

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

 

 

 

/s/ WWC, P.C.

Certified Public Accountants

 

We have served as the Company’s auditor since 2007

 

San Mateo, California

May 13, 2020

 

 

F-2 

 

  

PLANET GREEN HOLDINGS CORP.
AUDITED CONSOLIDATED BALANCE SHEETS
AS OF DECEMBER 31, 2019 AND 2018
(Stated in US Dollars)

 

   2019   2018 
Assets        
Current assets        
Cash and cash equivalents  $7,403,323   $1,062,643 
Trade receivables, net   1,116,211    6,528,072 
Inventories   1,946,548    - 
Advances and prepayments to suppliers   7,414,066    7,381,785 
Other receivables and other current assets   275,288    16,316 
Related party receivable   2,162    2,208 
Total current assets  $18,157,598   $14,991,024 
           
Non-current assets          
Plant and equipment, net   4,972,700    1,371,518 
Intangible assets, net   1,533,927    - 
Construction in progress, net   834,337    846,441 
Deposits   1,454    1,477 
Right-of-use assets   398,082    - 
Total Assets  $25,898,098   $17,210,460 
           
Liabilities and Stockholders’ Equity          
Current liabilities          
Short-term bank loans  $136,044   $- 
Accounts payable   952,520    579,228 
Taxes payable   106,423    155,135 
Accrued liabilities and other payables   1,489,665    496,799 
Customers deposits   52,722    3,499 
Related party payable   2,027,729    78,656 
Lease payable-current portion   24,761    - 
Discontinued operations - liabilities   -    8,607,813 
Total current liabilities  $4,789,864   $9,921,130 
           
Lease payable- non-current  $373,728   $- 
           
Total Liabilities  $5,163,592   $9,921,130 
           
Stockholders’ Equity          
Preferred Stock, $0.001 par value, 5,000,000 shares authorized; 0 shares issued and outstanding at December 31, 2019 and 2018, respectively  $-   $- 
Common Stock, $0.001 par value, 200,000,000 shares authorized; 7,877,765 and 5,497,765 shares issued and outstanding as of December 31, 2019 and 2018, respectively   7,878    5,498 
Additional paid-in capital   85,803,421    74,739,031 
Statutory reserves   -    2,810,953 
Accumulated deficit   (73,280,734)   (79,038,883)
Accumulated other comprehensive income   8,203,941    9,792,283 
Non-controlling interests   -    (1,019,552)
Total Stockholders’ Equity  $20,734,506   $7,289,330 
Total Liabilities and Stockholders’ Equity  $25,898,098   $17,210,460 

 

See Accompanying Notes to the Financial Statements

 

F-3 

 

  

PLANET GREEN HOLDINGS CORP.
AUDITED CONSOLIDATED STATEMENTS OF OPERATIONS
AND COMPREHENSIVE INCOME (LOSS)
FOR THE YEARS ENDED DECEMBER 31, 2019 AND 2018
(Stated in US Dollars)

 

   2019   2018 
         
Net revenues  $4,113,077   $6,828,887 
Cost of revenues   2,979,728    6,524,228 
Gross profit   1,133,349    304,659 
           
Operating expenses:          
Selling and marketing expenses   40,293    14,409 
General and administrative expenses   1,918,455    874,675 
Total operating expenses   1,958,748    889,084 
           
Operating loss   (825,399)   (584,425)
           
Other income (expenses):          
Interest income   186    369 
Interest expense   (9,742)   (13)
Other income   29,145    11,877 
Other expenses   (5,808)   (227)

Write off receivables from disposal of former subsidiaries

   (5,025,034)   - 
Gain on acquisition   -    423,338 
Total other (expenses) income    (5,011,253)   435,344 
           
Loss before taxes from continuing operations   (5,836,652)   (149,081)
           
Income tax expense   -    164,384 
           
Loss from continuing operations   (5,836,652)   (313,465)
           
Discontinued operations:          
Loss from discontinued operations   -    (24,049,343)
Gain on disposal, net of taxes   8,783,848    41,194,029 
Income from discontinued operations, net of taxes   8,783,848    17,144,686 
           
Net income   2,947,196  16,831,221 
           
Net income available (loss attributable) to:          
- Common shareholders   2,947,196   20,589,664 
- Non-controlling interests   -    (3,758,443)
           
Other comprehensive income:          
Foreign currency translation loss   (1,588,342)   (3,796,445)
Comprehensive income  $1,358,854  $13,034,776 
           
Loss per share from continuing operations - Basic and diluted  $(0.85)   (0.11)
           
Income per share from discontinued operations - Basic and diluted  $-   $7.02 
           
Income per share available to common shareholders - Basic and diluted   0.43  $6.91 
           
Basic and diluted weighted average shares outstanding   6,897,710    2,978,233 

 

See Accompanying Notes to the Financial Statements

 

F-4 

 

 

PLANET GREEN HOLDINGS CORP.
Consolidated Statements of Stockholders’ Equity
For the years ended December 31, 2019 and 2018

 

                       Accumulated         
           Additional           Other   Non-     
   Number   Common   Paid-in   Statutory   Accumulated   Comprehensive   Controlling     
   of Shares   Stock   Capital   Reserves   Deficit   Income   Interests   Total 
Balance, January 1, 2018   1,530,980   $1,531   $57,888,993   $25,103,354   $(99,628,547)  $13,588,726   $(7,745,353)  $(10,791,296)
Rounding from reverse split   1,843    2                             2 
Net income   -    -    -    -    16,831,221    -    -    16,831,221 
Issuance of shares for acquisition   400,000    400    1,399,600    -    -    -    -    1,400,000 
Issuance of common stock for cash   3,564,942    3,565    15,450,438    -    -    -    -    15,454,003 
Disposition   -    -    -    (22,292,401)   -    -    7,745,353    (14,547,048)
Reorganization   -    -    -    -    -    -    2,738,891    2,738,891 
Allocation to non-controlling interests   -    -    -    -    3,758,443    -    (3,758,443)   - 
Foreign currency translation adjustment   -    -    -    -    -    (3,796,443)   -    (3,796,443)
Balance, December 31, 2018   5,497,765    5,498    74,739,031    2,810,953    (79,038,883)   9,792,283    (1,019,552)   7,289,330 
                                         
Balance, January 1, 2019   5,497,765   $5,498   $74,739,031   $2,810,953   $(79,038,883)  $9,792,283   $(1,019,552)  $7,289,330 
Net income   -    -    -    -    2,947,196    -    -    2,947,196
Issuance of shares for acquisition   1,080,000    1,080    4,783,212                        4,784,292 
Issuance of common stock for cash   1,300,000    1,300    5,458,700    -    -    -    -    5,460,000 
Allocation to non-controlling interests   -    -    -    -    -    -    -    - 
Disposition                  (2,810,953)   2,810,953         1,019,552    1,019,552 
Acquiring corporation             822,478                        822,478 
Foreign currency translation adjustment   -    -    -    -    -    (1,588,342)   -    (1,588,342)
Balance, December 31, 2019   7,877,765   $7,878   $85,803,421   $-   $(73,280,734)  $8,203,941   $-   $20,734,506 

 

See Accompanying Notes to the Financial Statements

 

F-5 

 

 

PLANET GREEN HOLDINGS CORP.
AUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 2019 AND 2018
(STATED IN US DOLLARS)

 

   2019   2018 
Cash flows from operating activities        
Net income  $2,947,196  $16,831,221 
Gain from disposal of investment and subsidiaries   (8,783,848)   (41,145,631)

Write off receivables from disposal of former subsidiaries

   5,025,034    - 
Write down of assets in discontinued operations   -    24,049,343 
Gain on acquisition   -    (423,338)

Bad debt expenses

   504,786    - 
Amortization   13,319    59,821 
Depreciation   742,482    733,370 
Increase in accounts and other receivables   (19,960)   (6,416,399)
Decrease in related party receivables   14    - 
(Increase) / decrease in inventory   (442,021)   21,548 
Increase in prepayments and other current assets   (49,363)   (7,657,937)
Decrease in payables and other current liabilities   (3,876,581)   (205,279)
Net cash used in operating activities  $(3,938,942)  $(14,153,281)
           
Cash flows from investing activities          
Purchase of plant and equipment and construction in progress   (582,303)   (490,694)
Sale of intangible assets   62,274    - 
Payment for deposits   -    (1,534)
Net cash used in investing activities  $(520,029)  $(492,228)
           
Cash flows from financing activities          
Proceeds from issuance of common stock   9,746,712    15,454,005 
Receiving bank loans   137,612    - 
Repayment of borrowings   (1,108,584)   - 
Proceeds from related party   2,015,916    32,977 
Net cash provided by financing activities  $10,791,656   $15,486,982 
           
Net increase (decrease) in cash and cash equivalents   6,332,685    841,473 
           
Effect of foreign currency translation on cash and cash equivalents   (8,892)   131,958 
           
Cash and cash equivalents–beginning of year   1,079,530    89,212 
           
Cash and cash equivalents–end of year  $7,403,323   $1,062,643 
           
Supplementary cash flow information:          
Interest received  $186   $369 
Interest paid  $9,742   $- 
Income taxes paid  $-   $198 

 

See Accompanying Notes to the Financial Statements

 

F-6 

 

 

PLANET GREEN HOLDINGS CORP.
NOTES TO AUDITED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 2019 AND 2018
(Stated in US Dollars)

 

1. Organization and Principal Activities
   
  Planet Green Holdings Corp. (the “Company” or “PLAG”), a Nevada corporation, engages in the business of growing, developing, manufacturing, and marketing fresh foods, spices, convenience foods and tea products through its subsidiaries and VIEs in China.
   
   
2. Summary of Significant Accounting Policies
   
  Method of accounting
 

 

Management has prepared the accompanying financial statements and these notes in accordance to generally accepted accounting principles in the United States (“GAAP”). The Company maintains its general ledger and journals with the accrual method accounting.

   
  Principles of consolidation
   
  The accompanying consolidated financial statements include the assets, liabilities, and results of operations of the Company, and its subsidiaries, which are listed below:

 

   Place of  Attributable equity   Registered 
Name of company  incorporation  interest %   capital 
Planet Green Holdings Corporation  British Virgin Islands   100   $10,000 
Lucky Sky Holdings Corporations (HK) Limited  Hong Kong   100    1,277 
Lucky Sky Petrochemical Technology (Xianning) Co., Ltd.  PRC   100    14,242,782 
Taishan Muren Agriculture Co., Ltd.  PRC   VIE    1,913,049 
Lorain Food Stuff (Shenzhen) Co., Ltd.  PRC   VIE    80,000 
Xianning Bozhuang Tea Products Co., Ltd.  PRC   VIE    6,277,922 

  

Management has eliminated all significant inter-company balances and transactions in preparing the accompanying consolidated financial statements. Ownership interests of subsidiaries that the Company does not wholly-own are accounted for as non-controlling interests.

 

On May 18, 2018, the Company incorporated Planet Green Holdings Corporation, a limited company incorporated in the British Virgin Islands. On September 27, 2018, the Company acquired Lucky Sky HK and Shanghai Xunyang, a wholly foreign-owned enterprise incorporated in Shanghai, China. The formation and acquisition of these companies was to implement the Company’s restructuring plans.

 

On August 12, 2019, through Lucky Sky HK, the Company established Lucky Sky Petrochemical, a wholly foreign-owned enterprise incorporated in Xianning City, Hubei Province, China.

 

On December 20, 2019, we sold 100% of equity interest in Shanghai Xunyang

 

Consolidation of Variable Interest Entity

 

VIEs are entities that lack sufficient equity to finance their activities without additional financial support from other parties or whose equity holders lack adequate decision-making ability. Any VIE with which the Company is involved must be evaluated to determine the primary beneficiary of the risks and rewards of the VIE. Management makes ongoing reassessments of whether the Company is the primary beneficiary. 

 

On September 27, 2018, through Shanghai Xunyang Internet Technology Co. Ltd., the Company entered into exclusive arrangements with Beijing Lorain Co., Ltd., Luotian Lorain Co., Ltd., Shandong Greenpia Foodstuff Co., Ltd., Taishan Muren Agriculture Co. Ltd., and Lorain Foodstuff (Shenzhen) Co., Ltd. and its shareholders that give the Company the ability to substantially influence Shenzhen Lorain’s daily operations and financial affairs and appoint its senior executives. The Company is considered the primary beneficiary of these companies and it consolidates its accounts as a VIE.

 

On May 9, 2019, the Company entered into a Share Purchase Agreement (the “Purchase Agreement”) with Bin Zhou, Wuyuan Zuo, Gongwei Lu (collectively “Sellers”) and Xianning BoZhuang Tea Products Co., Ltd. (“BoZhuang”), a company incorporated in China engaging in the sale of tea products. Pursuant to the Purchase Agreement, Planet Green Holdings Corporation shall issue an aggregate of 1,080,000 shares of Planet Green Holdings Corporation’s common stock to the BoZhuang Shareholders, in exchange for BoZhuang Shareholders’ agreement to enter into, and their agreement to cause BoZhuang to enter into, certain VIE Agreements (the “BoZhuang VIE Agreements”) with Shanghai Xunyang Internet Technology Co., Ltd. WFOE, through which Shanghai Xunyang Internet Technology Co., Ltd. WFOE shall have the right to control, manage and operate BoZhuang in return for a service fee approximately equal to 100% of BoZhuang’s net income (“Acquisition”). On May 14, 2019, Shanghai Xunyang Internet Technology Co., Ltd. WFOE, the Company’s subsidiary, entered into a series of VIE Agreements with BoZhuang and the BoZhuang Shareholders. The VIE Agreements are designed to provide Shanghai Xunyang Internet Technology Co., Ltd WFOE with the power, rights and obligations equivalent in all material respects to those it would possess as the sole equity holder of BoZhuang, including absolute rights to control the management, operations, assets, property and revenue of BoZhuang. The Acquisition closed on May 14, 2019. Starting on May 14, 2019, the Company’s business activities added the production line of green tea and black tea and sales of tea products, of which business activities are carried out in Xianning City, Huibei Province, PRC. The Company is considered the primary beneficiary of these operating companies and it consolidates their accounts as VIEs.

 

On May 14, 2019, through Shanghai Xunyang, the Company entered into a series of VIE agreements with Xianning Bozhuang and its equity holders to obtain control and become the primary beneficiary of Xianning Bozhuang. The Company consolidated Xianning Bozhuang’s accounts as its VIE.

 

On December 20, 2019, through Lucky Sky Petrochemical, the Company entered into exclusive VIE agreements with Taishan Muren,Xianning Bozhuang and Shenzhen Lorain and their shareholders that give the Company the ability to substantially influence those companies’ daily operations and financial affairs and appoint their senior executives. The Company is considered the primary beneficiary of these operating companies and it consolidates their accounts as VIEs.

 

Consultation and Service Agreement

 

Pursuant to the Consultation and Service Agreement, WFOE has the exclusive right to provide consultation and services to the operating entities in China in the area of business management, human resource, technology and intellectual property rights. WFOE exclusively owns any intellectual property rights arising from the performance of this Consultation and Service Agreement. The amount of service fees and payment term can be amended by the WFOE and operating companies’ consultation and the implementation. The term of the Consultation and Service Agreement is 20 years. WFOE may terminate this agreement at any time by giving 30 day’s prior written notice.

 

Business Cooperation Agreement

 

Pursuant to the Business Cooperation Agreement, WFOE has the exclusive right to provide complete technical support, business support and related consulting services, including but not limited to technical services, business consultations, equipment or property leasing, marketing consultancy, system integration, product research and development, and system maintenance. WFOE exclusively owns any intellectual property rights arising from the performance of this Business Cooperation Agreement. The rate of service fees may be adjusted based on the services rendered by WFOE in that month and the operational needs of the operating entities. The Business Cooperation Agreement shall maintain effective unless it was terminated or was compelled to terminate under applicable PRC laws and regulations. WFOE may terminate this Business Cooperation Agreement at any time by giving 30 day’s prior written notice.

 

Equity Pledge Agreements

 

Pursuant to the Equity Pledge Agreements among WFOE, operating entities and each of operating entities’ shareholder, shareholders of the operating entities pledge all of their equity interests in the operating entities to WFOE to guarantee their performance of relevant obligations and indebtedness under the Technical Consultation and Service Agreement and other control agreements. In addition, shareholders of the operating entities are in the process of registering the equity pledge with the competent local authority.

 

Equity Option Agreements

 

Pursuant to the Equity Option Agreements, WFOE has the exclusive right to require each shareholder of the operating companies to fulfill and complete all approval and registration procedures required under PRC laws for WFOE to purchase, or designate one or more persons to purchase, each shareholder’s equity interests in the operating companies, once or at multiple times at any time in part or in whole at WFOE’s sole and absolute discretion. The purchase price shall be the lowest price allowed by PRC laws. The Equity Option Agreements shall remain effective until all the equity interest owned by each operating entities shareholder has been legally transferred to WFOE or its designee(s).

 

Voting Rights Proxy Agreements

 

Pursuant to the Voting Rights Proxy Agreements, each shareholder irrevocably appointed WFOE or WFOE’s designee to exercise all his or her rights as the shareholders of the operating entities under the Articles of Association of each operating entity, including but not limited to the power to exercise all shareholder’s voting rights with respect to all matters to be discussed and voted in the shareholders’ meeting. The term of each Voting Rights Proxy Agreement is 20 years. WOFE has the right to extend each Voting Proxy Agreement by giving written notification.

 

F-7 

 

 

As of December 31, 2019, the following entities were de-consolidated from the structure as a result of the sale agreement executed on December 11, 2019:

 

   Place of  Attributable equity  Registered 
Name of company  incorporation  interest %  capital 
Beijing Green Foodstuff Co., Ltd.  PRC  VIE   1,540,666 
Luotian Green Foodstuff Co., Ltd.  PRC  VIE   3,797,774 
Shandong Greenpia Foodstuff Co., Ltd.  PRC  VIE   2,303,063 

 

As a result of sale agreement, the accumulated deficit of Luotian Green Foodstuff Co., Ltd. and Shangdong Greenpia Foodstuff Co., Ltd. with total amount of $18,622,782 are written off. In addition, the Company also recognized a long-term investment loss with total amount of $9,838,934. The net effect is a gain on disposal of VIEs with the total amount of $8,783,848. 

 

Discontinued operations

 

See financial note 16.

 

Use of estimates

 

The preparation of the financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Management makes these estimates using the best information available at the time the estimates are made; however, actual results could differ materially from those estimates. 

 

Cash and cash equivalents

 

The Company considers all highly liquid investments purchased with original maturities of three months or less to be cash equivalents.

 

Investment securities

 

The Company classifies securities it holds for investment purposes into trading or available-for-sale. Trading securities are bought and held principally for the purpose of selling them in the near term. All securities not included in trading securities are classified as available-for-sale.

 

Trading and available-for-sale securities are recorded at fair value. Unrealized holding gains and losses on trading securities are included in the net income. Unrealized holding gains and losses, net of the related tax effect, on available for sale securities are excluded from net income and are reported as a separate component of other comprehensive income until realized. Realized gains and losses from the sale of available-for-sale securities are determined on a specific-identification basis.

 

A decline in the market value of any available-for-sale security below cost that is deemed to be other-than-temporary results in a reduction in carrying amount to fair value. The impairment is charged as an expense to the statement of income and comprehensive income and a new cost basis for the security is established. To determine whether impairment is other-than-temporary, the Company considers whether it has the ability and intent to hold the investment until a market price recovery and considers whether evidence indicating the cost of the investment is recoverable outweighs evidence to the contrary. Evidence considered in this assessment includes the reasons for the impairment, the severity and duration of the impairment, changes in value subsequent to year end, and forecasted performance of the investee.

 

Premiums and discounts are amortized or accreted over the life of the related available-for-sale security as an adjustment to yield using the effective-interest method. Dividend and interest income are recognized when earned.

 

F-8 

 

 

Trade receivables

 

Trade receivables are recognized and carried at the original invoice amount less allowance for any uncollectible amounts. An estimate for doubtful accounts is made when collection of the full amount is no longer probable. Bad debts are written off as incurred.

 

Inventories

 

Inventories consist of raw materials and finished goods which are stated at the lower of cost or market value. Finished goods are comprised of direct materials, direct labor, inbound shipping costs, and allocated overhead. The Company applies the weighted average cost method to its inventory. 

 

Advances and prepayments to suppliers

 

The Company makes advance payment to suppliers and vendors for the procurement of raw materials. Upon physical receipt and inspection of the raw materials from suppliers the applicable amount is reclassified from advances and prepayments to suppliers to inventory.

 

Plant and equipment

 

Plant and equipment are carried at cost less accumulated depreciation. Depreciation is provided over their estimated useful lives, using the straight-line method. The Company typically applies a salvage value of 0% to 10%. The estimated useful lives of the plant and equipment are as follows:

 

Buildings 20-40 years
Landscaping, plant and tree 30 years
Machinery and equipment 1-10 years
Motor vehicles 5-10 years
Office equipment 5-20 years

 

The cost and related accumulated depreciation of assets sold or otherwise retired are eliminated from the accounts, and any gain or loss are included in the Company’s results of operations. The costs of maintenance and repairs are recognized to expenses as incurred; significant renewals and betterments are capitalized.

 

Intangible assets

 

Intangible assets are carried at cost less accumulated amortization. Amortization is provided over their useful lives, using the straight-line method. The estimated useful lives of the intangible assets are as follows: 

  

Land use rights   50 years
Software licenses   2 years
Trademarks   10 years

 

Construction in progress and prepayments for equipment

 

Construction in progress and prepayments for equipment represent direct and indirect acquisition and construction costs for plants, and costs of acquisition and installation of related equipment. Amounts classified as construction in progress and prepayments for equipment are transferred to plant and equipment when substantially all the activities necessary to prepare the assets for their intended use are completed. Depreciation is not provided for assets classified in this account.

 

Goodwill

 

Goodwill represents the excess of the purchase price over the fair value of the net identifiable assets acquired in a business combination. The Company conducts an annual assessment of its goodwill for impairment. If the carrying value of its goodwill exceeds its fair value, then impairment has incurred; accordingly, a charge to the Company’s results of operations will be recognized during the period. Fair value is generally determined using a discounted expected future cash flow analysis.

 

Accounting for the impairment of long-lived assets

 

The Company annually reviews its long-lived assets for impairment or whenever events or changes in circumstances indicate that the carrying amount of assets may not be recoverable. Impairment may be the result of becoming obsolete from a change in the industry, introduction of new technologies, or if the Company has inadequate working capital to utilize the long-lived assets to generate the adequate profits. Impairment is present if the carrying amount of an asset is less than its expected future undiscounted cash flows.

 

F-9 

 

 

If an asset is considered impaired, a loss is recognized based on the amount by which the carrying amount exceeds the fair market value of the asset. Assets to be disposed are reported at the lower of the carrying amount or fair value less costs to sell.

 

Statutory reserves

 

Statutory reserves are referring to the amount appropriated from the net income in accordance with laws or regulations, which can be used to recover losses and increase capital, as approved, and are to be used to expand production or operations. PRC laws prescribe that an enterprise operating at a profit must appropriate and reserve, on an annual basis, an amount equal to 10% of its profit. Such an appropriation is necessary until the reserve reaches a maximum that is equal to 50% of the enterprise’s PRC registered capital.

 

Foreign currency translation

 

The accompanying financial statements are presented in United States dollars. The functional currency of the Company is the Renminbi (RMB). The Company’s assets and liabilities are translated into United States dollars from RMB at year-end exchange rates, and its revenues and expenses are translated at the average exchange rate during the period. Capital accounts are translated at their historical exchange rates when the capital transactions occurred.

 

   12/31/2019   12/31/2018 
Period/year end RMB: US$ exchange rate   6.9762    6.8764 
Period/annual average RMB: US$ exchange rate   6.8967    6.5137 

 

The RMB is not freely convertible into foreign currencies and all foreign exchange transactions must be conducted through authorized financial institutions.

 

Revenue recognition

 

The Company adopted ASC 606 “Revenue Recognition”, and recognizes revenue when control of the promised goods or services is transferred to customers, in an amount that reflects the consideration we expect to be entitled to in exchange for those goods or services.

 

The Company derives its revenues from the sale of fresh foods, spices, convenience foods and tea products. The Company applies the following five steps in order to determine the appropriate amount of revenue to be recognized as it fulfils its obligations under each of its agreements:

 

  identify the contract with a customer;
  identify the performance obligations in the contract;
  determine the transaction price;
  allocate the transaction price to performance obligations in the contract; and
  recognize revenue as the performance obligation is satisfied.

 

Advertising

 

All advertising costs are expensed as incurred.

 

Shipping and handling

 

All outbound shipping and handling costs are expensed as incurred.

 

Research and development

 

All research and development costs are expensed as incurred.

 

Retirement benefits

 

Retirement benefits in the form of mandatory government sponsored defined contribution plans are charged to the either expenses as incurred or allocated to inventory as part of overhead.

 

Income taxes

 

The Company accounts for income tax using an asset and liability approach and allows for recognition of deferred tax benefits in future years. Under the asset and liability approach, deferred taxes are provided for the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. A valuation allowance is provided for deferred tax assets if it is more likely than not these items will either expire before the Company is able to realize their benefits, or that future realization is uncertain. 

F-10 

 

  

Comprehensive income

 

The Company uses Financial Accounting Standards Board (“FASB”) ASC Topic 220, “Reporting Comprehensive Income.” Comprehensive income is comprised of net income and all changes to the statements of stockholders’ equity, except the changes in paid-in capital and distributions to stockholders due to investments by stockholders.

 

Earnings per share

 

The Company computes earnings per share (“EPS”) in accordance with ASC Topic 260, “Earnings per share”. Basic EPS is measured as the income or loss available to common shareholders divided by the weighted average common shares outstanding for the period. Diluted EPS presents the dilutive effect on a per share basis from the potential conversion of convertible securities or the exercise of options and or warrants; the dilutive effects of potentially convertible securities are calculated using the as-if method; the potentially dilutive effect of options or warrants are calculated using the treasury stock method. Securities that are potentially an anti-dilutive effect (i.e. those that increase income per share or decrease loss per share) are excluded from the calculation of diluted EPS.

 

Financial instruments

 

The Company’s financial instruments, including cash and equivalents, accounts and other receivables, accounts and other payables, accrued liabilities and short-term debt, have carrying amounts that approximate their fair values due to their short maturities. ASC Topic 820, “Fair Value Measurements and Disclosures,” requires disclosure of the fair value of financial instruments held by the Company. ASC Topic 825, “Financial Instruments,” defines fair value, and establishes a three-level valuation hierarchy for disclosures of fair value measurement that enhances disclosure requirements for fair value measures. The carrying amounts reported in the consolidated balance sheets for receivables and current liabilities each qualify as financial instruments and are a reasonable estimate of their fair values because of the short period of time between the origination of such instruments and their expected realization and their current market rate of interest. The three levels of valuation hierarchy are defined as follows:

 

  Level 1 - inputs to the valuation methodology used quoted prices for identical assets or liabilities in active markets.
  Level 2 - inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument.
  Level 3 - inputs to the valuation methodology are unobservable and significant to the fair value measurement.

 

  The Company analyzes all financial instruments with features of both liabilities and equity under ASC 480, “Distinguishing Liabilities from Equity,” and ASC 815.
   
  Commitments and contingencies
   
  Liabilities for loss contingencies arising from claims, assessments, litigation, fines and penalties and other sources are recorded when it is probable that a liability has been incurred and the amount of the assessment can be reasonably estimated.
   
  Recent accounting pronouncements
 

 

In February 2018, the FASB issued ASU 2018-02, Income Statement - Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income. The amendments in this Update affect any entity that is required to apply the provisions of Topic 220, Income Statement – Reporting Comprehensive Income, and has items of other comprehensive income for which the related tax effects are presented in other comprehensive income as required by GAAP. The amendments in this Update are effective for all entities for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years. Early adoption of the amendments in this Update is permitted, including adoption in any interim period, (1) for public business entities for reporting periods for which financial statements have not yet been issued and (2) for all other entities for reporting periods for which financial statements have not yet been made available for issuance. The amendments in this Update should be applied either in the period of adoption or retrospectively to each period (or periods) in which the effect of the change in the U.S. federal corporate income tax rate in the Tax Cuts and Jobs Act is recognized. The Company does not believe the adoption of this ASU would have a material effect on the Company’s consolidated financial statements.

 

The Company does not believe other recently issued but not yet effective accounting standards, if currently adopted, would have a material effect on the Company’s consolidated balance sheets, statements of income and comprehensive income and statements of cash flows.

   
3. Restricted Cash
   
  Restricted cash represents interest bearing deposits placed with banks to secure banking facilities in the form of loans and notes payable. The funds are restricted from immediate use and are designated for settlement of loans or notes when they become due.

 

F-11 

 

 

 

4. Business Combination

 

On May 14, 2019, the Company and its wholly owned subsidiary Shanghai Xunyang Internet Technology Co., Ltd. entered into a series of VIE agreements with Xianning Bozhuang and its equity holders to obtain control and become the primary beneficiary of Xianning Bozhuang. The Company consolidated Xianning Bozhuang’s accounts as its VIE. Pursuant to the VIE agreements, the Company issued an aggregate of 1,080,000 shares of common stock of the Company to the equity holders of Xianning Bozhuang in exchange for the transfer of all of the equity interest of Xianning Bozhuang to the Shanghai Xunyang Internet Technology Co., Ltd. The significant terms of these VIE agreements are summarized in “Note 2 - Summary of Significant Accounting Policies” above.

 

The Company’s acquisition of Xianning Bozhuang was accounted for as a business combination in accordance with ASC 805. The Company has allocated the purchase price of Xianning Bozhuang based upon the fair value of the identifiable assets acquired and liabilities assumed on the acquisition date. Other current assets and current liabilities were valued using the cost approach. Management of the Company is responsible for determining the fair value of assets acquired, liabilities assumed, plant and equipment, and intangible assets identified as of the acquisition date and considered a number of factors including valuations from independent appraisers. Acquisition-related costs incurred for the acquisitions are not material and have been expensed as incurred in general and administrative expense.

 

The following table summarizes the fair value of the identifiable assets acquired and liabilities assumed at the acquisition date, which represents the net purchase price allocation at the date of the acquisition of BoZhuang:

 

Total consideration at fair value   $ 4,784,292  

 

   Fair Value 
Cash  $4,486,561 
Other current assets   2,058,018 
Plant and equipment   3,925,197 
Other noncurrent assets   1,672,556 
Total asset   12,142,332 
Total liabilities   (6,503,174)
Net asset acquired  $5,639,158 

 

As of the date of the acquisition, the net asset acquired $5,639,158 is more than total consideration at fair value $4,784,292. The difference of $854,866 will be added to the additional paid in capital.

 

F-12 

 

 

 

5. Trade Receivables
 

 

The Company extends credit terms of 15 to 60 days to the majority of its domestic customers, which include third-party distributors, supermarkets and wholesalers.

 

  12/31/2019  12/31/2018 
Trade accounts receivable  $1,615,245   $6,528,072 
Less: Allowance for doubtful accounts   (499,034)   - 
   $1,116,211   $6,528,072 
           
Allowance for doubtful accounts:          
Beginning balance  $-   $(804,937)
Reclassified to discontinued operations   -    804,937 
Additions to allowance   (499,034)   - 
Bad debt written-off   -    - 
Ending balance  $(499,034)  $- 

 

6. Inventories
   
  Inventories consisted of the following as of December 31, 2019 and 2018.

 

   12/31/2019   12/31/2018 
Raw materials  $640,990   $            - 
Inventory of supplies   12,489    - 
Work in progress   1,071,363    - 
Finished goods   221,706    - 
   $1,946,548   $- 

 

7. Plant and Equipment
   
  Property, plant, and equipment consisted of the following as of December 31, 2019 and 2018:

 

   12/31/2019   12/31/2018 
At Cost:        
   Buildings  $4,512,606   $1,116,941 
   Machinery and equipment   980,196    31,066 
   Office equipment   53,376    - 
   Motor vehicles   150,412    - 
   Lemon trees, mint plants, pepper trees   317,720    2,078,012 
   $6,014,310   $3,226,018 
           
Less: Accumulated depreciation   (1,041,610)   (1,854,500)
           
   $4,972,700   $1,371,518 

 

  Depreciation expense for the years ended December 31, 2019 and 2018 was $742,482 and $59,821, respectively.

 

8.Intangible Assets

 

   12/31/2019   12/31/2018 
At Cost:        
Land use rights   750,224              - 
Software licenses   2,552      
Trademark   895,187    - 
   $1,647,963   $- 
           
Less: Accumulated amortization   (114,036)   - 
   $1,533,927   $- 

 

Land use rights: the land use rights of a parcel of industrial land of 31,585 square meters was obtained on April 15, 2019 with a consideration of $750,224, located at Xianning City, Huibei Province, China with the land use right until June 12, 2068.

 

Trademark: a tea brand trademark was obtained on March 28, 2014 with a consideration of $895,187, registered with the China National Intellectual Property Administration, registration number is 16964992A.

 

  Amortization expense for the years ended December 31, 2019 and 2018 was $13,319 and $0, respectively.

 

F-13 

 

  

9.Bank Loans

 

Short-term bank loans consisted of the following as of December 31, 2019 and 2018:

 

Short-term Bank Loans  12/31/2019   12/31/2018 
         
Loan from China Construction Bank, Taishan Branch        
● Interest rate at 3.915% per annum; due 12/12/2020   136,044                - 
   $136,044   $- 

 

The short-term loans, which are denominated in Renminbi, were primarily obtained for general working capital. The loan was secured by Yongjun Huang’s bank certificate of deposit.

 

10. Related Parties Transaction

   

As of December 31, 2019 and 2018, the outstanding balance due to related parties is $2,027,729 and $78,656, respectively.

 

As of December 31, 2019 and 2018, the outstanding balance of $2,003,390 and $Nil due to Mr. Bin Zhou, Chief Executive Officer and Chairman of the Company, respectively, is advances for working capital of the Company which are due on March 30, 2020, non-interest bearing, and unsecured, unless further disclosed.

 

As of December 31, 2019 and 2018, the outstanding balance of $16,885 and $Nil due to Mr. Yong Jun Huang, an executive of a subsidiary, respectively, is advances for working capital of the Company, non-interest bearing, and unsecured, unless further disclosed.

 

As of December 31, 2019 and 2018, the outstanding balance of $7,454 and $Nil due to Mr. Ming Yue Cai, an executive of a subsidiary, respectively, is advances for working capital of the Company, non-interest bearing, and unsecured, unless further disclosed.

 

As of December 31, 2018, the outstanding balance of $78,656 due to Mr. Biaoyang Yang, an executive of a subsidiary, is advances for working capital of the Company, non-interest bearing, and unsecured, unless further disclosed.

 

11. Equity

 

 

On May 9, 2019, the Company and its wholly owned subsidiary Shanghai Xunyang Internet Technology Co., Ltd. (“Subsidiary”) entered into a Share Exchange Agreement with Xianning Bozhuang Tea Products Co., Ltd. (“Target”) and each of the shareholders of Target (collectively, “Sellers”). Such transaction closed on May 14, 2019. Pursuant to the Share Exchange Agreement, the Subsidiary acquired all outstanding equity interests of Target, a company that produces tea products and sells such products in China. Pursuant to the Share Exchange Agreement, the Company issued an aggregate of 1,080,000 shares of common stock of the Company to the Sellers in exchange for the transfer of all of the equity interest of the Target to the Subsidiary.

 

On June 17, 2019, the Company entered into a securities purchase agreement, pursuant to which five individuals residing in the PRC agreed to purchase an aggregate of 1,300,000 shares of the Company’s common stock, par value $0.001 per share, for an aggregate purchase price of $5,460,000, representing a purchase price of $4.20 per share. The transaction closed on June 19, 2019.

   
  As of December 31, 2019, there were 7,877,765 shares of common stock outstanding.
   
  For the years ended December 31, 2019 and 2018, the Company did not issued shares as stock compensation to employees.
   
12. Income Taxes
   
  All of the Company’s continuing operations are located in the PRC. The corporate income tax rate in the PRC is 25%.
   
  The following tables provide the reconciliation of the differences between the statutory and effective tax expenses following as of December 31, 2019 and 2018:

 

   12/31/2019   12/31/2018 
Loss attributed to PRC continuing operations  $(15,675,586)  $(492,419)
Income attributed to BVI   -    423,338 
Loss attributed to U.S. operations   -    (80,000)
Loss before tax  $(15,675,586)  $(149,081)
           
PRC Statutory Tax at 25% Rate   

(3,918,897

)   (123,105)
Non-deductible GAAP expenses in the PRC   

3,918,897

    287,489 
Income tax  $-   $164,384 
           
Per Share Effect of Tax Exemption          
   12/31/2019   12/31/2018 
Effect of tax exemption granted  $-   $- 
Weighted-Average Shares Outstanding Basic   6,897,710    2,978,233 
Per share effect  $-   $- 

 

The difference between the U.S. federal statutory income tax rate and the Company’s effective tax rate was as follows as of December 31, 2019 and 2018:

 

   12/31/2019   12/31/2018 
U.S. federal statutory income tax rate   21.00%   21.00%
Higher (lower) rates in PRC, net   4.00%   4.00%
Non-recognized deferred tax benefits in the PRC   -25.00%   -25.00%
The Company’s effective tax rate   0.00%   0.00%

 

Deferred tax assets

 

Bad debt allowances must be approved by the Chinese tax authority prior to being deducted as an expense item on the tax return. Therefore, deferred tax assets are not likely realized.

 

F-14 

 

  

13. Earnings/(Loss) Per Share
   
  Components of basic and diluted earnings per share were as follows:

 

   For the years ended 
   December 31, 
   2019   2018 
Basic and diluted (loss) earnings per share numerator:          
Loss from continuing operations attributable to common stockholders  $(5,836,652)  $(313,465)
Income/(loss) from discontinued operations available to (attributable to) common stockholders  $-   $20,903,129 
Income available to (attributable to) common stockholders  $2,947,196  $20,589,664 
           
Basic and diluted (loss) earnings per share denominator:          
Original Shares:   5,497,765    1,530,980 
Additions from Actual Events -Issuance of Common Stock   1,399,945    3,964,942 
Basic Weighted Average Shares Outstanding   6,897,710    2,978,233 
           
Loss per share from continuing operations - Basic and diluted  $(0.85)  $(0.11)
           
Income/(loss) per share from discontinued operations - Basic and diluted  $-   $7.02 
           
Income per share - Basic and diluted  $0.43  $6.91 
           
Weighted Average Shares Outstanding - Basic and diluted   6,897,710    2,978,233 

 

F-15 

 

  

Planet Green Holdings Corporation
Notes to Financial Statements

 

14. Lease Commitments
 

 

During the year ended December 31, 2016, Taishan Muren entered into one operating lease agreement leasing one plot of land where biological assets are grown, one building, and farming facilities. During the year ended December 31, 2017, Taishan Muren entered into two operating lease agreements leasing three additional plots of land where biological assets are grown and two buildings. During the year ended December 31, 2018, Taishan Muren entered into two operating lease agreements leasing two buildings.

   
  The leases entered and expires as follows:

 

Lease   Date Commenced   Date of expiration
Lease #1   March 1, 2016   February 28, 2031
Lease #2   January 1, 2017   February 28, 2031
Lease #3   January 1, 2017   February 28, 2031
Lease #4   January 1, 2018   February 28, 2031
Lease #5   June 1, 2018   February 28, 2031

 

Effective January 1, 2019, the Company adopted ASU 2016-02, “Leases” (Topic 842), and elected the package of practical expedients that does not require us to reassess: (1) whether any expired or existing contracts are, or contain, leases, (2) lease classification for any expired or existing leases and (3) initial direct costs for any expired or existing leases. The Company adopted the practical expedient that allows lessees to treat the lease and non-lease components of a lease as a single lease component. The impact of the adoption on January 1, 2019 increased the right-of-uses and lease liabilities by approximately $421,382.

 

Upon adoption of ASU 2016-02, the Company recognized lease labilities of approximately $421,382, with corresponding Right-of-use (“ROU”) assets of the same amount based on the present value of the future minimum rental payments of the new lease, using an effective interest rate of 5.0025%, which is determined using an incremental borrowing rate.

 

The weighted average remaining lease term of its existing leases is 13.7 years.

 

The Company’s lease agreements do not contain any material residual value guarantees or material restrictive covenants.

 

For the year ended December 31, 2019 and 2018, rent expenses amounted to $ 44,892 and $46,194, respectively.

 

The thirteen-year maturity of the Company’s lease obligations is presented below:

 

Twelve months ended December 31,  Operating lease amount 
2020  $25,046 
2021   26,852 
2022   28,927 
2023   30,928 
2024   33,206 
Thereafter   258,123 
Total lease payment   403,082 
Less: interest   (4,593)
Present value of lease liabilities  $398,489 

 

F-16 

 

 

15. Concentrations

 

Customers Concentrations

 

The following table sets forth information as to each customer that accounted for 10% or more of the Company’s revenues as of December 31, 2019 and 2018.

 

    For the year ended  
Customers   December 31, 2019     December 31, 2018  
    Amount $     %     Amount $     %  
A     210,716       20       831,309       13  
B     283,822       27       1,583,678       24  
C     -       -       1,270,799       19  
D     -       -       1,108,286       17  
E     207,273       20       625,444       10  
F     277,302       25       -       -  

 

Suppliers Concentrations

 

The following table sets forth information as to each supplier that accounted for 10% or more of the Company’s purchase as of December 31, 2019 and December 31, 2018.

 

    For the period ended  
Suppliers   September 30, 2019     December 31, 2018  
    Amount $     %     Amount $     %  
A     -       -       155,238       82  
B     -       -       34,902       18  
C     196,899       36       -       -  
D     79,878       15       -       -  

  

16.Discontinued Operations

 

As of December 31, 2019, the Company has reclassified the results of operations and the financial position of Luotian Lorain and Shandong Greenpia as discontinued operations. Selected details regarding those discontinued operations are provided below.

 

   For the years ended December 31, 
Results of Operations  2019   2018 
         
Sales  $-   $2,072,253 
Cost of sales   -    1,305,382 
Gross profit   -    475,177 
Operating expenses   -    632,640 
Other expenses   -    (24,232,157)
Loss before Taxes   -    (24,097,926))
Taxes   -    (48,583)
Net loss  $-   $(24,049,343)

  

   For the years ended December 31, 
Other Income (Expenses)  2019   2018 
Other income  $-   $- 
Write-off of accounts receivable and other current assets   -    (1,266,022)
Write-off of inventory   -    (6,338,588)
Impairment of property and equipment and land use rights   -    (9,877,127)
Other   -    (6,750,420)
   $-   $(24,232,157)

 

   As of December 31, 
Financial Position  2019   2018 
Current Assets  $-   $- 
Non-Current Assets   -    - 
Total Assets  $-   $- 
           
Current Liabilities  $-   $8,607,813 
Total Long-Term Liabilities   -    - 
Total Liabilities  $    $8,607,813 
           
Net Assets  $-   $(8,607,813)
           
Total Liabilities & Net Assets  $-   $(8,607,813)

 

F-17 

 

 

17. Risks
     
  A. Credit risk
     
    The Company’s deposits are made with banks located in the PRC. They do not carry federal deposit insurance and may be subject to loss of the banks become insolvent.
     
    Since the Company’s inception, the age of account receivables has been less than one year indicating that the Company is subject to minimal risk borne from credit extended to customers.
     
  B. Interest risk
     
    The company is subject to interest rate risk when short term loans become due and require refinancing.
     
  C. Economic and political risks
     
    The Company’s operations are conducted in the PRC. Accordingly, the Company’s business, financial condition, and results of operations may be influenced by changes in the political, economic, and legal environments in the PRC.
     
    The Company’s operations in the PRC are subject to special considerations and significant risks not typically associated with companies in North America and Western Europe. These include risks associated with, among others, the political, economic and legal environment and foreign currency exchange. The Company’s results may be adversely affected by changes in the political and social conditions in the PRC, and by changes in governmental policies with respect to laws and regulations, anti-inflationary measures, currency conversion, remittances abroad, and rates and methods of taxation, among other things.

 

  D. Environmental risks
     
    The Company has procured environmental licenses required by the PRC government. The Company has both a water treatment facility for water used in its production process and secure transportation to remove waste off site. In the event of an accident, the Company has purchased insurance to cover potential damage to employees, equipment, and local environment.
     
  E. Inflation Risk
     
    Management monitors changes in prices levels. Historically inflation has not materially impacted the company’s financial statements; however, significant increases in the price of raw materials and labor that cannot be passed to the Company’s customers could adversely impact the Company’s results of operations.
     
18. Subsequent Events
   

 

On February 10, 2020, the Company entered into a securities purchase agreement with Mengru Xu and Zhichao Du, pursuant to which Ms. Xu and Mr. Du agreed to invest an aggregate of $3.51 million in the Company in exchange for an aggregate of 1,350,000 shares of common stock, representing a purchase price of approximately $2.60 per share. On February 28, 2020, the Company closed the transaction.

     
    On March 20, 2020, $2,003,390 had been returned to Mr. Bin Zhou.

 

F-18 

 

Exhibit 4.1

 

DESCRIPTION OF THE REGISTRANT’S SECURITIES

REGISTERED PURUSANT TO SECTION 12 OF THE SECURITIES

EXCHNAGE ACT OF 1934, AS AMENDED

 

As of December 31, 2019, Planet Green Holdings Corp. (“we,” “our,” “us” or the “Company”) had one class of securities registered under Section 12 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”): its common stock with a par value of $0.001 per share (“Common Stock”).

 

Pursuant to our articles of incorporation, our authorized capital stock consists of (i) 200,000,000 shares of Common Stock and (ii) 5,000,000 shares of preferred stock, with a par value of $0.001 per share. The following description summarizes the material terms of our capital stock. For a complete description of the matters set forth herein, you should refer to our articles of incorporation, our bylaws, and the applicable provisions of Nevada law.

 

Defined terms used herein and not defined herein shall have the meaning ascribed to such terms in the Company’s Annual Report on Form 10-K.

 

Common Stock

 

The holders of the Common Stock shall be entitled to one vote for each share so held with respect to each matter voted on by the stockholders of the Company. There is no cumulative voting.

 

Liquidation, Dividend and Preemptive Rights

 

Subject to the rights of any outstanding preferred stock, upon any liquidation, dissolution or winding up of the affairs of the Company, whether voluntary or involuntary, the holders of stock shall be entitled to receive all remaining assets of the Company and such assets shall be distributed ratably among the holders of stock on the basis of the number of shares of stock held by each of them.

 

Dividend may be paid on the stock as and when declared by the Board of Directors of the Company. No holders of any shares of stock shall, as such holder, have any rights, preemptive or otherwise, to purchase, subscribe for or otherwise acquire any shares of stock, whether now or hereafter authorized, which at any time are offered for sale or sold by the Company.

 

Exhibit 10.16

 

咨询与服务协议

 

Consultation and Service Agreement

  

本咨询与服务协议(以下简称“本协议”)由以下各方于2019年12月20日在中国咸宁签署:

 

This Consultation and Services Agreement (the “Agreement”) is entered into as of December 20, 2019 in Xianning, China between the following two parties:

 

甲方:   祥天石化科技(咸宁)有限公司
地址:   湖北省咸宁市黄畈村一组金色海湾2幢3层
Party A:   Lucky Sky Petrochemical Technology (Xianning) Co., Ltd.
Address:   3/F, Building 2, Golden Bay, Group 1, Huangfan Village, Xianning City, Hubei Province
     
乙方:   台山市牧仁农业有限公司
地址:   台山市海宴华侨农场南丰村216
Party B:   Taishan Muren Agriculture Co.,Ltd.
Address:   No.216, Nanfeng Village, Haiyan Overseas Chinese Farm, Taishan City

 

鉴于:

 

Whereas,

 

1.甲方是一家在中国注册的外商独资企业,拥有提供管理和咨询服务的必要资源;

 

Party A is a wholly foreign owned enterprise established in China, and has the necessary resources to provide management and consulting services;

 

2.乙方是一家在中国注册的内资公司,经营过程中需要甲方为其提供支持与服务;

 

Party B is a company with exclusively domestic capital registered in China and needs Party A’s support and services during its business.

 

基于上述,甲乙双方通过友好协商,特同意如下条款,以兹共同遵守:

 

NOW THEREFORE, through friendly consultation, Party A and Party B hereby agree to enter into and perform this Agreement.

 

1

 

 

第一条 管理咨询和服务

 

MANAGEMENT CONSULTING AND SERVICES

 

1. 甲方同意依照本协议的条款和条件向乙方提供资金、人力、管理和知识产权等方面的支持和技术服务,乙方同意依照本协议的条款和条件接受甲方提供的支持和服务,甲方提供的管理咨询与服务的具体内容如下:

 

Party A hereby agrees to provide consultation and services to Party B in the area of fund, human, management and intellectual properties, and Party B hereby agrees to accept such management consultation and services in accordance with the terms and conditions under this Agreement. The management consultation and services provided by Party A include:

 

(1) 为乙方员工提供培训及支持;

 

be responsible for providing training and support to the staff of Party B;

 

(2) 为乙方提供市场营销方面的咨询服务;

 

be responsible for providing consultation services regarding the marketing of Party B;

 

(3) 提供和管理、运行与乙方业务相关的咨询服务和协助;

 

be responsible for providing general advice and assistance relating to the management and operation of Party B’s business;

 

(4) 提供乙方业务所需要的其他相关的支持与服务。

 

be responsible for providing other consultation and services which are necessary for Party B’s businesses.

 

2. 乙方应当为甲方完成前述工作提供适当的配合,包括但不限于负责提供相关数据、提供所需的咨询要求、说明等。

 

Party B shall provide appropriate assistance to Party A for its work, including but not limited to providing the relevant data, requirement and directions.

 

3. 本协议有效期限为三十年。双方同意,在本协议期满前,甲方有权以书面通知的方式延长本协议的期限,乙方必须无条件地同意该延期。若乙方经营期限需延长时,除非甲方事先书面通知另行指示,乙方应尽最大努力更新营业执照并延长其经营期限。

 

The term of this Agreement is thirty (30) years. The Parties agree that, this Agreement can be extended only if Party A gives its written consent of the extension of this Agreement before the expiration of this Agreement and Party B shall agree with this extension without reserve. If Party B’s operation term is required to extended, Party B shall use its best efforts to renew its business license and extend its operation term until and unless otherwise instructed in Party A’s prior written notice.

 

2

 

 

4. 甲方是向乙方提供本协议项下咨询与服务的独家提供者;除非甲方事先书面同意,乙方不得接受任何第三方提供的与甲方服务相同或相类似的其他服务,并不得与任何第三方就本协议所述事项建立任何类似的合作关系。双方同意,甲方可以指定其他方为乙方提供本协议约定的服务和/或支持。

 

Party A is the exclusive consultation and services provider of Party B; Party B shall not utilize third party to provide services which are same as or similar with Party A’s services and shall not establish similar corporation relationship with any third party regarding the matters contemplated by this Agreement without the prior written consent of Party A. Party A may appoint other parties to provide Party B with the consultations and/or services under this Agreement.

 

第二条 服务费

 

SERVICES FEES

 

甲乙双方同意,作为本协议第1条第1款项下甲方向乙方提供的管理和咨询服务的对价,乙方应向甲方支付服务费,服务费的数额及支付方式详见本协议附件。该附件可根据双方商议并根据实施情况进行修改。

 

The Parties agree that, Party B shall pay relevant services fees to Party A which shall be determined according to the Appendix of this Agreement. This Appendix can be amended by the Parties in considering the circumstances.

 

第三条 知识产权和保密

 

INTELLECTUAL PROPERTY AND CONFIDENTIALITY

 

1. 除非双方另行书面约定,甲方对履行本协议而产生的任何知识产权包括但不限于著作权、专利权、技术秘密、商业机密及其他,无论是由甲方还是由乙方开发的,均享有独占的和排他的权利和利益。乙方须签署所有适当的文件,采取所有适当的行动,递交所有的文件和/或申请,提供所有适当的协助,以及做出所有其他依据甲方的自行决定认为是必要的行为,以将任何对该等知识产权的所有权、权利和权益赋予甲方,和/或完善对甲方此等知识产权权利的保护。双方同意,不论本协议是否变更、解除或终止,本条款将持续有效。

 

Unless otherwise stipulated in writing by the Parties, Party A shall be the sole and exclusive owner of all rights and interests to any and all intellectual property rights arising from the performance of this Agreement, including, but not limited to, any copyrights, patent, know-how and otherwise, whether developed by Party A or Party B. Party B shall execute all appropriate documents, take all appropriate actions, submit all filings and/or applications, render all appropriate assistance and otherwise conduct whatever is necessary as deemed by Party A in its sole discretion for the purposes of vesting any ownership, right or interest of any such intellectual property rights in Party A, and/or perfecting the protections for any such intellectual property rights in Party A. The Parties agree that this Section shall survive changes to, and rescission or termination of, this Agreement.

 

3

 

 

2. 为本协议之目的,秘密信息一词包括但不限于下列信息:本协议一方提供给另一方的技术的开发、设计、研究、生产、制造、维修有关的技术信息、资料、方案、图纸、数据、参数、标准、软件、电脑程序、网络设计资料;双方为本协议目的而签署的任何合同、协议、备忘录、附件、草案或记录(包括本协议);以及本协议一方为本协议之目的而给予对方的在提供时说明应予保密的任何信息。一旦本协议终止,乙方应将载有保密信息的任何文件、资料或软件,按甲方要求归还甲方,或予以自行销毁,并从任何有关记忆装置中删除任何保密信息,并且不继续使用这些保密信息。

 

For the purpose of this Agreement, Confidential Information includes, but not limited to, (i) technical information, materials, program, drawing, data, parameter, standard, software, computer program, web design in connection with the development, design, research, produce and maintenance of technology disclosed by one Party to the other Party; (ii) any contracts, agreement, memo, annexes, draft or record (including this Agreement) entered into by the Parties for the purpose of this Agreement; and (iii) any information designated to be proprietary or confidential when it is disclosed by one Party to the other Party. Upon termination or expiration of this Agreement, Party B shall, return all and any documents, materials or software contained any of such Confidential Information to Party A or destroy it, delete all of such Confidential Information from memory devices, and cease to use them.

 

3. 除非事先得到本协议另一方的书面同意,一方不得将秘密信息以任何方式泄露给任何第三方。

 

Any Party shall not disclose any Confidential Information to any third party in any way without the other Party’s prior written consent.

 

4. 协议双方仅可向必须知晓该信息的职员、代理人或顾问披露保密信息,该职员、代理人应至少按照本协议第三条相同的限制程度接受保密义务的约束。

 

The Parties may disclose Confidential Information solely to its employees, agents or consultant who must know such information, subject to such employees, agents or consultant being bound by confidentiality obligations at least as restrictive as this Section 3.

 

5. 尽管有上述规定,保密信息不应包括以下信息:

 

Notwithstanding the foregoing, Confidential Information shall not be deemed to include the following information:

 

4

 

 

(1)公众人士知悉或将会知悉的任何信息(惟并非由接受保密信息之一方擅自向公众披露);或

 

is or will be in the public domain (other than through the receiving Party’s unauthorized disclosure); or

 

(2)根据适用法律法规、股票交易规则、或政府部门或法院的命令而所需披露之任何信息;在此等情况下,接受保密信息的一方应及时通知另一方,并应采取合理及合法的措施减少披露的范围。

 

is under the obligation to be disclosed pursuant to the applicable laws or regulations, rules of any stock exchange, or orders of the court or other government authorities, in which case the receiving Party will promptly notify the disclosing Party, and will take reasonable and lawful steps to minimize the extent of the disclosure.

 

6. 协议一方违反本条款的规定,应当赔偿对方的损失。

 

Any Party breaching confidentiality obligations under this Section shall indemnity all losses of the other Party.

 

第四条 陈述与保证

 

REPRESENTATIONS AND WARRANTIES

 

1. 甲方陈述和保证如下:

 

Party A hereby represents and warrants as follows:

 

(1) 甲方是按照中国法律合法注册并有效存续的中外合资企业。

 

Party A is a sino-foreign joint venture legally registered and validly existing in accordance with the laws of China.

 

(2) 甲方已采取所有必要的公司行为,获得必要的授权,并取得第三方和政府部门的同意及批准(若需)以签署和履行本协议;甲方对本协议的签署和履行并不违反法律法规的明确规定。

 

Party A has taken all necessary corporate actions, obtained all necessary authorization and the consent and approval from third parties and government agencies (if any) for the execution and performance of this Agreement. Party A’s execution and performance of this Agreement do not violate any explicit requirements under any law or regulation binding on Party A.

 

5

 

 

(3) 本协议构成对甲方合法、有效、有约束力并依本协议之条款对其强制执行的义务。

 

This Agreement constitutes Party A’s legal, valid and binding obligations, enforceable in accordance with its terms.

 

2. 乙方陈述和保证如下:

 

Party B hereby represents and warrants as follows:

 

(1) 乙方是按照中国法律合法注册且有效存续的公司,乙方获得从事主营业务所需的政府许可、牌照,具有独立的法人资格;具有完全、独立的法律地位和法律能力签署、交付并履行本协议,可以独立地作为一方诉讼主体。

 

Party B is a company legally registered and validly existing in accordance with the laws of China and has obtained the relevant permit and license for engaging in its business in a timely manner. It has independent legal person status, and has full and independent civil and legal capacity to execute, deliver and perform this Agreement. It can sue and be sued as a separate entity;

 

(2) 乙方已采取所有必要的公司行为,获得必要的授权,并取得第三方和政府部门的同意及批准(若需)以签署和履行本协议;乙方对本协议的签署和履行并不违反法律法规的明确规定。

 

Party B has taken all necessary corporate actions, obtained all necessary authorization and the consent and approval from third parties and government agencies (if any) for the execution and performance of this Agreement. Party B’s execution and performance of this Agreement do not violate any explicit requirements under any law or regulation binding on Party B.

 

(3) 本协议构成对乙方合法、有效、有约束力并依本协议之条款对其强制执行的义务。

 

This Agreement constitutes Party B’s legal, valid and binding obligations, enforceable in accordance with its terms.

 

6

 

 

第五条 违约责任

 

LIABILITY FOR BREACH OF AGREEMENT

 

1. 双方同意并确认,任何一方违反本协议的规定,或未履行本协议项下的任何一项义务,即构成本合同项下的违约,守约方有权要求违约方在合理期限内补正或采取补救措施。如违约方在合理期限内或在守约方书面通知违约方并提出补正要求后30天内仍未补正或采取补救措施的,则守约方有权自行决定:(1)终止本协议,并要求违约方给予全部的损害赔偿;或者(2)要求强制履行违约方在本协议项下的义务,并要求违约方给予全部的损害赔偿。

 

The Parties agree and confirm that, if either Party is in breach of any provisions herein or fails to perform its obligations hereunder, such breach or failure shall constitute a default under this Agreement, which shall entitle the non-defaulting Party to request the defaulting Party to rectify or remedy such default with a reasonable period of time. If the defaulting Party fails to rectify or remedy such default within the reasonable period of time or within 30 days of non-defaulting Party’s written notice requesting for such rectification or remedy, then the non-defaulting Party shall be entitled to elect any one of the following remedial actions: (a) to terminate this Agreement and request the defaulting Party to fully compensate its losses and damages; (b) to request the specific performance by the defaulting Party of its obligations hereunder and request the defaulting Party to fully compensate all losses and damages of the non-defaulting Party.

 

2. 本协议当事人对违约方违约行为的弃权仅以书面形式作出方为有效。当事人未行使或迟延行使其在本协议项下的任何权利或救济不构成该当事人的弃权;部分行使权利或救济亦不应阻碍其行使其他权利或救济。

 

No waiver of rights in respect of any default hereunder shall be valid unless it was made in writing. Any failure to exercise or delay in exercising any rights or remedy by any Party under this Agreement shall not be deemed as a waiver of such Party. Any partial exercise of any right or remedy shall not affect the exercise of any other rights and remedies.

 

3. 虽然5.1条规定,双方同意并确认,乙方在任何情况下,均不得以任何理由要求终止本合同,除非法律另有规定或甲方事先书面同意。

 

Notwithstanding Clause 5.1 above, the Parties agree and confirm that in no circumstance shall Party B early terminate this Agreement unless the applicable law provides otherwise or it has obtained the prior written consent of Party A.

 

4. 本条规定的效力不受本协议终止或解除的影响。

 

The validity of this Section shall not be affect by the suspension or termination of this Agreement.

 

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第六条 不可抗力

 

FORCE MAJEURE

 

1. 本协议项下不可抗力系指:地震、战争等无法预见、无法控制和无法避免的情况。

 

In this Agreement, “Force Majeure” will mean war, earthquake and other events which are unforeseen, inevitable and beyond the control of the Party.

 

2. 本协议当事人因受不可抗力的影响而不能继续履行本协议,应免于承担相应的责任,但应在不可抗力的影响消除后继续履行。

 

If the Force Majeure causes any one party to the Agreement the impossibility to further perform this Agreement, the Parties agree that the suffering party will waive any liability to the other party for any loss that result from any such Force Majeure, provided that the suffering party shall continue to perform this Agreement after the Force Majeure.

 

第七条 协议变更与终止

 

AMENDMENT AND TERMINATION

 

1. 任何有关本协议的变更需经双方书面签署。否则,任何有关本协议的变更不得约束协议双方。

 

Any amendment of this Agreement shall come into force only after a written agreement is signed by both Parties.

 

2. 本协议有效期内,除非甲方对乙方有重大过失或存在欺诈行为,乙方不得提前终止本协议。尽管如此,甲方可在任何时候通过提前30天向乙方发出书面通知的方式终止本协议。

 

During the term of this Agreement, unless Party A commits gross negligence, or a fraudulent act, against Party B, Party B shall not terminate this Agreement prior to its expiration date. Nevertheless, Party A shall have the right to terminate this Agreement upon giving 30 days’ prior written notice to Party B at any time.

 

3. 在本协议期限内,若甲乙任何一方进入清算程序(无论是否自愿),或被政府主管部门禁止营业,协议另一方有权要求解除本协议。解除通知自发出之日起生效。

 

During the term of this Agreement, if any Party is going into liquidation (either voluntary or compulsory), or is prohibited to conduct business by the governmental authority, the other Party shall be entitled to terminate this Agreement. The termination notice shall come into force upon the notice is sent.

 

4. 协议的变更及解除不影响当事人要求损害赔偿的权利。因变更或解除协议造成协议一方遭受损失的,除依法可以免除责任的以外,应由责任方负责赔偿。

 

The amendment and termination of this Agreement shall not affect the exercise of any other remedies under this Agreement. Except when it may be exempted from liability according to law, the Party that is held responsible shall compensate the other Party for all losses and damages thus caused by such amendment or termination.

 

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第八条 法律适用和争议解决

 

GOVERNING LAW AND DISPUTE RESOLUTION

 

1. 本协议的订立、效力、解释、履行、修改和终止以及争议的解决均适用中国法律。

 

The execution, effectiveness, interpretation, performance, amendment, termination and dispute resolution shall be governed by the law of the People’s Republic of China.

 

2. 一切因执行本协议或与本协议有关的争执,应由双方通过友好方式协商解决。如经协商不能得到解决时,应提交位于深圳的中国国际经济贸易仲裁委员会华南分会,根据提交仲裁时中国国际经济贸易仲裁委员会的仲裁规则进行仲裁,仲裁地点在深圳,仲裁语言为中文。仲裁裁决是终局性的,对各方均由约束力。

 

In the event of any dispute with respect to this Agreement, the Parties shall first resolve the dispute through friendly negotiations. In the event the Parties fail to reach an agreement on the dispute, either Party may submit the relevant dispute to the Southern China Commission of China International Economic and Trade Arbitration Commission for arbitration, in accordance with its Arbitration Rules. The arbitration shall be conducted in Shenzhen,and the language used in arbitration shall be Chinese. The arbitration award shall be final and binding on all Parties.

 

3. 因解释和履行本协议而发生任何争议或任何争议正在进行仲裁时,除争议的事项外,本协议双方仍应继续行使各自在本协议项下的其他权利并履行各自在本协议项下的其他义务。

 

Upon the occurrence of any disputes arising from the construction and performance of this Agreement or during the pending arbitration of any dispute, except for the matters under dispute, the Parties to this Agreement shall continue to exercise their respective rights under this Agreement and perform their respective obligations under this Agreement.

 

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第九条 通知

 

NOTICES

 

1. 本协议项下要求或发出的所有通知和其他通信应通过专人递送、挂号邮寄、邮资预付或商业快递服务的方式发到该方下列地址。每一通知还应再以电子邮件送达。该等通知视为有效送达的日期按如下方式确定:

 

All notices and other communications required or permitted to be given pursuant to this Agreement shall be delivered personally or sent by registered mail, postage prepaid, by a commercial courier service to the address of such Party set forth below. A confirmation copy of each notice shall also be sent by email. The dates on which notices shall be deemed to have been effectively given shall be determined as follows:

 

2. 通知如果是以专人递送、快递服务或挂号邮寄、邮资预付发出的,则以于设定为通知的地址在签收或拒收之日为有效送达日。

 

Notices given by personal delivery, by courier service or by registered mail, postage prepaid, shall be deemed effectively given on the date of acceptance or refusal at the address specified for notices.

 

3. 任何一方变更接收通知的地址或联系人的,应按本条规定给另一方发出通知。

 

If any Party change its address for notices or its contact person, a notice shall be delivered to the other Party in accordance with the terms hereof.

 

第十条 协议的转让

 

ASSIGNMENT

 

1. 乙方不得将其在本协议项下的权利与义务转让给第三方,除非事先征得甲方的书面同意。

 

Without Party A’s prior written consent, Party B shall not assign its rights and obligations under this Agreement to any third party.

 

2. 乙方在此同意,甲方可以在其需要时向其他第三方转让其在本协议项下的权利和义务,并在该等转让发生时甲方仅需向乙方发出书面通知,并且无需再就该等转让征得乙方的同意。

 

Party B agrees that Party A may assign its obligations and rights under this Agreement to any third party upon a prior written notice to Party B but without the consent of Party B.

 

第十一条 附则

 

MISCELLANEOUS

 

1. 本协议自双方签署之日起生效。

 

This Agreement shall become effective upon and from the date on which it is signed by the authorized representative and seal of each Party.

 

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2. 双方可以书面协议方式对本协议作出修改和补充。经过双方签署的有关本协议的修改协议和补充协议是本协议组成部分,具有与本协议同等的法律效力。

 

Any amendments and supplements to this Agreement shall be in writing. The amendment agreements and supplementary agreements that have been signed by the Parties and that relate to this Agreement shall be an integral part of this Agreement and shall have the same legal validity as this Agreement.

 

3. 本协议保密条款、争议解决条款、违约责任条款在本协议解除或中止之后仍然有效。

 

The clauses in connection with confidentiality obligations, disputes resolution and default responsibilities shall survive rescission or termination of this Agreement.

 

4. 如果本协议有任何一条或多条规定根据任何法律或法规在任何方面被裁定为无效、不合法或不可执行,本协议其余规定的有效性、合法性或可执行性不应因此在任何方面受到影响或损害。双方应通过诚意磋商,争取以法律许可以及双方期望的最大限度内有效的规定取代那些无效、不合法或不可执行的规定,而该等有效的规定所产生的经济效果应尽可能与那些无效、不合法或不能强制执行的规定所产生的经济效果相似。

 

In the event that one or several of the provisions of this Agreement are found to be invalid, illegal or unenforceable in any aspect in accordance with any laws or regulations, the validity, legality or enforceability of the remaining provisions of this Agreement shall not be affected or compromised in any aspect. The Parties shall strive in good faith to replace such invalid, illegal or unenforceable provisions with effective provisions that accomplish to the greatest extent permitted by law and the intentions of the Parties, and the economic effect of such effective provisions shall be as close as possible to the economic effect of those invalid, illegal or unenforceable provisions.

 

5. 本协议采用中文、英文两种文本,中文文本与英文文本具有同等法律效力,中文文本与英文文本不一致的,以中文文本为准。本协议正本一式二份,双方各持一份,各份具有相同之效力。

 

This Agreement shall be signed in Chinese and English language bearing the same legal effect. In the event of any inconsistency between the Chinese and English language, the Chinese version of this Agreement shall prevail. This Agreement shall have two counterparts, with each party holding one original. All counterparts shall be given the same legal effect.

 

本页其余部分刻意留为空白

 

The Remainder of this page is intentionally left blank

 

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有鉴于此,双方已使得其授权的代表于文首所述日期签署了本咨询与服务协议并即生效,以昭信守。

 

IN WITNESS WHEREOF, the Parties have caused their authorized representatives to execute this Consultation and Service Agreement as of the date first above written.

 

甲方: 祥天石化科技(咸宁)有限公司

 

Party A:   Lucky Sky Petrochemical Technology (Xianning) Co., Ltd. [Corporate Seal Affixed Herein]

 

签字:

By:/s/ Bin Zhou  

姓名: 周彬

Name: Bin Zhou

职务: 法定代表人

Title: Legal Representative

 

乙方: 台山市牧仁农业有限公司

Party B: Taishan Muren Agriculture Co., Ltd. [Corporate Seal Affixed Herein]

 

签字:

By:/s/ Yongjun Huang  

姓名: 黄拥军

Name: Yongjun Huang

职务: 法定代表人

Title: Legal Representative

 

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附件 关于管理和咨询服务费支付标准、方式的约定

 

Exhibit Provisions on the payment standard and method of management and consultation service fee

 

1. 甲、乙双方同意,作为本协议第1条第1款项下甲方向乙方提供的管理和咨询服务的对价,乙方应按照下述规定向甲方支付服务费:

 

Both Parties agreed that Party B should pay service fee relating to Article 1, paragraph 1 to Party A based on the following terms:

 

(1) 基本年费

 

Annual Fee

 

乙方应每年向甲方支付相当于乙方根据美国一般公认会计准则确定的税后净利润的百分之一百(100%),作为本协议项下管理和咨询服务的基本年费,该等基本年费按季度分四期平均支付,乙方应分别在每个季度开始之日起的十五(15)个工作日内支付至甲方指定之银行帐户。

 

Party B should pay 100% of net profit after tax of Party B accepted by US GAAP to Party A as the annual fee (the “Annual Fee”) of management and consultation service herein. The Annual fee should be paid to the designed bank account of Party A within 15 working days after the first day of each quarter of the year.

 

(2) 浮动费用

 

Floating Charge

 

在上述(1)款所规定之基本年费之外,乙方应每季度根据管理和咨询服务提供的具体情况向甲方支付浮动服务费用。浮动费用应按季度支付,浮动费用不超过乙方除去基本年费后的根据美国一般公认会计准则确定的税后净利润总额。每个季度浮动费用的数额由双方考虑下述因素后商定:

 

Besides the Annual Fee, Party B should pay Floating Charge (the “Floating Charge”), the amount of which should not be exceed total net profit accepted by the US GAAP deducting the Annual Fee of Party B, to Party A in each quarter of the year according to management and consultation service provided by Party A. The amount of the Floating Charge should be determined by both Parties based on the following factors:

 

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A. 甲方为乙方提供该季度支持服务所动用的雇员人数及该等雇员的资历;

 

The number and qualification of the employees provided by Party A for the technology support and service in a certain quarter;

 

B. 甲方雇员提供该季度支持服务所花费的时间;

 

The service time costed for the technology support and service in a certain quarter;

 

C. 甲方为提供该季度支持服务所进行的各项投入;

 

The investment made for the technology support and service in a certain quarter;

 

D. 甲方所提供之该季度支持服务的具体内容及其价值;

 

The service and the value of the service provided for the technology support and service in a certain quarter;

 

E. 乙方的营业收入数额。

 

The operation revenue of Party B.

 

2. 在每季度结束后15日内,乙方应要求甲方提供计算该季度的浮动费用所需的一切财务资料,并于每季度结束后30日内将浮动费用支付给甲方。如果甲乙双方对计算浮动费用之财务资料提出质疑,可委派信誉良好的独立会计师对有关资料进行审计。该审计应于正常营业时间进行,且不应影响乙方的正常业务,在此前提下乙方应予以配合。

 

Within 15 days of the end of each quarter, Party A should provide all the required financial information to be used to calculate (the “Financial Information”) the Floating Charge on the certain quarter with Party B and should pay the Floating Charge within 30 days of the end each quarter. Both Parties can engage independent accountants with good reputation to audit on the Financial Information, if any Party has a doubt on it. The audit would be conducted during the business hour and should not be affect the normal business of Party B.

 

3. 如果甲方认为本附件第1条约定的费用数额不能适应客观情况变化而需要做出调整,乙方应在甲方提出调整费用的书面要求之日后七个工作日内积极并诚信地与甲方进行协商,以确定新的收费标准或机制。

 

Party B should negotiate with Party B within 7 working days after receiving the written notice regarding the adjustment of the Annual Fee or the Floating Charge from Party A.

 

4. 如果在乙方有义务向甲方支付服务费时,根据美国一般公认会计准则确定乙方处于亏损状态,甲方需要合并乙方的亏损,并有义务向乙方支付亏损额,以弥补其亏损。

 

If Party B is in a status of loss accepted by the US GAAP, Party A is obliged to absorb all the loss of Party B and to pay the amount of loss to Party B.

 

 

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Exhibit 10.17

 

业务合作协议

 

Business Cooperation Agreement

 

本业务合作协议(下称”本协议”)由以下双方于2019年12月20日在中华人民共和国(下称”中国”)咸宁签署。

 

This Business Cooperation Agreement (this “Agreement”) is made and entered into by and between the following parties on December 20, 2019 in Xianning, the People’s Republic of China (“China” or the “PRC”).

 

甲方:   祥天石化科技(咸宁)有限公司
地址:   湖北省咸宁市黄畈村一组金色海湾2幢3层
Party A:   Lucky Sky Petrochemical Technology (Xianning) Co., Ltd.
Address:   3/F, Building 2, Golden Bay, Group 1, Huangfan Village, Xianning City, Hubei Province
     
乙方:   台山市牧仁农业有限公司
地址:   台山市海宴华侨农场南丰村216
Party B:   Taishan Muren Agriculture Co., Ltd.
Address:   No.216, Nanfeng Village, Haiyan Overseas Chinese Farm, Taishan City

 

甲方和乙方以下各称为”一方”,统称为”双方”。

 

Each of Party A and Party B shall be hereinafter referred to as a “Party” respectively, and as the “Parties” collectively.

 

鉴于:

 

Whereas,

 

1.甲方是一家在中国注册的外商独资企业,拥有提供管理和咨询服务的必要资源;

 

Party A is a wholly foreign owned enterprise established in China, and has the necessary resources to provide management and consulting services;

 

2.乙方是一家在中国注册的内资公司,依法从事食品制品生产销售业务(以下简称”主营业务”);

 

Party B is a company with domestic capital registered in China and engages in food products manufacture and sales and other businesses (the “Principal Business”).

 

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3.甲方同意利用其管理、人员和商业优势,在本协议期间向乙方提供有关主营业务的独家管理和咨询服务,乙方同意接受甲方或其指定方按本协议条款的规定提供的管理和咨询服务。

 

Party A is willing to provide Party B with management, consulting services and other commercial services on exclusive basis in relation to the Principal Business during the term of this Agreement, utilizing its advantages in management, human resources, and information, and Party B is willing to accept such services provided by Party A or Party A’s designee(s), each on the terms set forth herein.

 

据此,甲方和乙方经协商一致,达成如下协议:

 

Now, therefore, through mutual discussion, the Parties have reached the following agreements:

 

1. 服务提供

 

Services Provided by Party A

 

1.1 按照本协议条款和条件,乙方在此委任甲方在本协议期间作为乙方的独家服务提供者向乙方提供全面的管理和咨询服务,具体内容包括所有在乙方主营业务范围内由甲方不时决定必要的服务,包括但不限于以下内容:管理咨询、业务咨询、企业形象策划。

 

Party B hereby appoints Party A as Party B’s exclusive services provider to provide Party B with complete management support, business support and related consulting services during the term of this Agreement, in accordance with the terms and conditions of this Agreement, which may include all necessary services within the scope of the Principal Business as may be determined from time to time by Party A, such as but not limited to technical services, business consultations, management consultancy, and enterprise image design.

 

1.2 乙方接受甲方的咨询和服务。乙方进一步同意,除非经甲方事先书面同意,在本协议期间,就本协议约定的服务或其他事宜,乙方不得直接或间接地从任何第三方获得任何与本协议相同或类似的咨询和/或服务,并不得与任何第三方就本协议所述事项建立任何类似的合作关系。双方同意,甲方可以指定其他方(该被指定方可以与乙方签署本协议第1.3条描述的某些协议)为乙方提供本协议约定的服务和/或支持。

 

Party B agrees to accept all the consultations and services provided by Party A. Party B further agrees that unless with Party A’s prior written consent, during the term of this Agreement, Party B shall not directly or indirectly accept the same or any similar consultations and/or services provided by any third party and shall not establish similar corporation relationship with any third party regarding the matters contemplated by this Agreement. Party A may appoint other parties, who may enter into certain agreements described in Section 1.3 with Party B, to provide Party B with the consultations and/or services under this Agreement.

 

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1.3 服务的提供方式

 

Service Providing Methodology

 

1.3.1 甲、乙双方同意在本协议有效期内,视情况而定,乙方可以与甲方或甲方指定的其他方进一步签订管理协议和咨询服务协议,对各项管理服务、咨询服务的具体内容、方式、人员、收费等进行约定。

 

Party A and Party B agree that during the term of this Agreement, where necessary, Party B may enter into further management service agreements or consulting service agreements with Party A or any other party designated by Party A, which shall provide the specific contents, manner, personnel, and fees for the specific management services and consulting services.

 

1.3.2 为更好地履行本协议,甲乙双方同意,视情况而定,乙方在本协议有效期内可以与甲方或甲方指定的其他方根据业务进展需要随时签署设备、资产的租用协议,由甲方或其指定方将有关的设备、资产提供给乙方使用。

 

To fulfill this Agreement, Party A and Party B agree that during the term of this Agreement, where necessary, Party B may enter into equipment or property leases with Party A or any other party designated by Party A which shall permit Party B to use Party A’s or its designee’s relevant equipment or property based on the needs of the business of Party B.

 

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2. 服务的价格和支付方式

 

The Calculation and Payment of the Service Fees

 

双方同意,就本协议项下甲方向乙方提供的各项服务,乙方应将相当于其税后净利润(根据美国一般公认会计准则确定)的百分之一百(100%)的款项支付给甲方作为服务费(”服务费”),但经双方协商和甲方事先书面同意,服务费的金额可以根据甲方当季度的服务内容和乙方的经营需要进行调整。甲方为提供本协议项下的服务而发生的实际支出,包括但不限于各项差旅费、交通费、印刷费和邮资等,应由乙方支付。服务费应当按季度支付;乙方应于每季度开始之日起的十五个工作日内支付,(a) 向甲方提供乙方当季度的管理报表和经营数据,包括乙方在当季度的税后利润额(”每季度利润额”);(b) 将每季度净利润额的100%或甲方同意的其他金额支付给甲方(”季度付款”)。乙方应于每个财政年度末的90日内,(a) 向甲方提供乙方在本财政年度的经审计的财务报表,该财务报表应当经由甲方批准的独立注册会计师审计并认证;(b) 如果按照经审计的财务报表显示,本财政年度内乙方向甲方支付的月付款的总额有任何不足,乙方应向甲方支付差额。除非双方另行协商一致或根据法律的要求,否则乙方根据本协议向甲方支付的服务费应不经任何扣减或抵销(如银行手续费等)。乙方提供的管理报表、经营数据和财务报表应真实、有 效、准确和完整,a若乙方提供的前述材料存在瑕疵而导致甲方产生损失的,乙方应对该等损失承担全额的赔偿责任。如果由于乙方向甲方提供了虚假材料而导致减轻或免除乙方在本协议项下的付款义务,对于由此而减轻或免除的付款数额,乙方不可撤销地承诺向甲方作出相应赔偿。

 

Both Parties agree that, in consideration of the services provided by Party A, Party B shall pay to Party A the fees (the “Service Fees”) equal to 100% of the after-tax income determined by U.S. GAAP of Party B, provided that upon mutual discussion between the Parties and the prior written consent by Party A, the rate of Service Fees may be adjusted based on the services rendered by Party A in that quarter and the operational needs of Party B. All out-of-pocket expenses (including without limitation the travelling expenses, accommodation, transportation, printing and postage fees etc) that Party A may incur as a result of the provision of the Services hereunder shall be solely borne by Party B. The Service Fees shall be due and payable on a quarterly basis; within 15 working days after the beginning of each quarter, Party B shall (a) deliver to Party A the management accounts and operating statistics of Party B for such quarter, including the after-tax income of Party B during such quarter (the “Quarterly Income”), and (b) pay 100% of such Quarterly Income, or other amount agreed by Party A, to Party A (each such payment, a “Quarterly Payment”). Within ninety (90) days after the end of each fiscal year, Party B shall (a) deliver to Party A audited financial statements of Party B for such fiscal year, which shall be audited and certified by an independent certified public accountant approved by Party A, and (b) pay an amount to Party A equal to the shortfall, if any, of the net income of Party B for such fiscal year, as shown in such audited financial statements, as compared to the aggregate amount of the Quarterly Payments paid by Party B to Party A in such fiscal year. Unless the Parties agree otherwise or the law provides otherwise, the Service Fees payable by Party B hereunder shall not be subject to any deduction or set-off (e.g. bank handling fees etc). The management report, operation data and financial statements provided by Party B shall be true, valid, accurate and complete. If Party A suffers any losses as a result of any defect of the aforesaid documents, Party B shall be fully responsible for such losses. In the event that Party B’s payment obligation hereunder is reduced or released because of the provision by Party B of any fraudulent materials to Party A, Party B hereby irrevocably undertakes to compensate Party A accordingly for the amount so reduced or released.

 

如果在乙方有义务向甲方支付服务费时,根据美国一般公认会计准则确定乙方处于亏损状态,甲方需要合并乙方的亏损,并有义务向乙方支付亏损额,以弥补其亏损。

 

If Party B is operating at losses determined by U.S. GAAP when Party B is obligated to pay the Services fees to Party A, Party A needs to absorb Party B’s losses and be responsible and required to reimbursement Party B for those losses.

 

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3. 知识产权和保密条款

 

Intellectual Property Rights and Confidentiality Clauses

 

3.1 在中国法律允许的范围内,甲方对履行本协议而产生或创造的任何权利、所有权、权益和所有知识产权包括但不限于著作权、专利权、专利申请权、软件、技术秘密、商业机密及其他均享有独占的和排他的权利和利益。乙方须签署所有适当的文件,采取所有适当的行动,递交所有的文件和/或申请,提供所有适当的协助,以及做出所有其他依据甲方的自行决定认为是必要的行为,以将任何对该等知识产权的所有权、权利和权益赋予甲方,和/或完善对甲方此等知识产权权利的保护。

 

To the extent permitted under the PRC laws, Party A shall have exclusive and proprietary rights and interests in all rights, ownership, interests and intellectual properties arising out of or created during the performance of this Agreement, including but not limited to copyrights, patents, patent applications, software, technical secrets, trade secrets and others. Party B shall execute all appropriate documents, take all appropriate actions, submit all filings and/or applications, render all appropriate assistance and otherwise conduct whatever is necessary as deemed by Party A in its sole discretion for the purposes of vesting any ownership, right or interest of any such intellectual property rights in Party A, and/or perfecting the protections for any such intellectual property rights in Party A.

 

3.2 双方承认及确定有关本协议、本协议内容,以及彼此就准备或履行本协议而交换的任何口头或书面资料均被视为保密信息。双方应当对所有该等保密信息予以保密,而在未得到另一方书面同意前,不得向任何第三者披露任何保密信息,惟下列信息除外:(a)公众人士知悉或将会知悉的任何信息(惟并非由接受保密信息之一方擅自向公众披露);(b)根据适用法律法规、股票交易规则、或政府部门或法院的命令而所需披露之任何信息;或(c)由任何一方就本协议所述交易而需向其股东、投资者、法律或财务顾问披露之信息,而该股东、法律或财务顾问亦需遵守与本条款相类似之保密责任。如任何一方工作人员或聘请机构的泄密均视为该方的泄密,需依本协议承担违约责任。无论本协议以任何理由终止,本条款仍然生效。

 

The Parties acknowledge that the existence and the terms of this Agreement and any oral or written information exchanged between the Parties in connection with the preparation and performance this Agreement are regarded as confidential information. Each Party shall maintain confidentiality of all such confidential information, and without obtaining the written consent of the other Party, it shall not disclose any relevant confidential information to any third parties, except for the information that: (a) is or will be in the public domain (other than through the receiving Party’s unauthorized disclosure); (b) is under the obligation to be disclosed pursuant to the applicable laws or regulations, rules of any stock exchange, or orders of the court or other government authorities; or (c) is required to be disclosed by any Party to its shareholders, investors, legal counsels or financial advisors regarding the transaction contemplated hereunder, provided that such shareholders, investors, legal counsels or financial advisors shall be bound by the confidentiality obligations similar to those set forth in this Section. Disclosure of any confidential information by the staff members or agencies hired by any Party shall be deemed disclosure of such confidential information by such Party, which Party shall be held liable for breach of this Agreement. This Section shall survive the termination of this Agreement for any reason.

 

3.3 双方同意,不论本协议是否变更、解除或终止,本条款将持续有效。

 

The Parties agree that this Section shall survive changes to, and rescission or termination of, this Agreement.

 

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4. 陈述和保证

 

Representations and Warranties

 

4.1 甲方陈述和保证如下:

 

Party A hereby represents and warrants as follows:

 

4.1.1 甲方是按照中国法律合法注册并有效存续的外商独资企业。

 

Party A is a wholly foreign owned enterprise legally registered and validly existing in accordance with the laws of China.

 

4.1.2 甲方已采取必要的公司行为,获得必要的授权,并取得第三方和政府部门的同意及批准(若需)以签署和履行本协议;甲方对本协议的签署和履行并不违反法律法规的明确规定。

 

Party A has taken all necessary corporate actions, obtained all necessary authorization and the consent and approval from third parties and government agencies (if any) for the execution and performance of this Agreement. Party A’s execution and performance of this Agreement do not violate any explicit requirements under any law or regulation binding on Party A.

 

4.1.3 本协议构成对其合法、有效、有约束力并依本协议之条款对其强制执行的义务。

 

This Agreement constitutes Party A’s legal, valid and binding obligations, enforceable in accordance with its terms.

 

4.2 乙方陈述和保证如下:

 

Party B hereby represents and warrants as follows:

 

4.2.1 乙方是按照中国法律合法注册且有效存续的公司,乙方获得从事主营业务所需的政府许可、牌照,具有独立的法人资格;具有完全、独立的法律地位和法律能力签署、交付并履行本协议,可以独立地作为一方诉讼主体。

 

Party B is a company legally registered and validly existing in accordance with the laws of China and has obtained the relevant permit and license for engaging in the Principal Business in a timely manner. It has independent legal person status, and has full and independent civil and legal capacity to execute, deliver and perform this Agreement. It can sue and be sued as a separate entity;

 

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4.2.2 乙方已采取必要的公司行为,获得必要的授权,并取得第三方和政府部门的同意及批准(若需)以签署和履行本协议;乙方对本协议的签署和履行并不违反法律法规的明确规定。

 

Party B has taken all necessary corporate actions, obtained all necessary authorization and the consent and approval from third parties and government agencies (if any) for the execution and performance of this Agreement. Party B’s execution and performance of this Agreement do not violate any explicit requirements under any law or regulation binding on Party B.

 

4.2.3 本协议构成对其合法、有效、有约束力并依本协议之条款对其强制执行的义务。

 

This Agreement constitutes Party B’s legal, valid and binding obligations, and shall be enforceable against it.

 

5. 生效和有效期

 

Effectiveness and Term

 

本协议于文首标明的协议日期签署并同时生效。除非依本协议第6.1条被终止,或依照有关的适用中国法律和法规的要求必须被终止,本协议将持续有效。

 

This Agreement is executed on the date first above written and shall take effect as of such date. This Agreement shall maintain effective unless terminated in accordance with Article 6.1 or was compelled to terminate under applicable PRC laws and regulations.

 

6. 终止

 

Termination

 

6.1 本协议有效期内,除非甲方对乙方有重大过失或存在欺诈行为,乙方不得提前终止本协议。尽管如此,甲方可在任何时候通过提前30天向乙方发出书面通知的方式终止本协议。

 

During the term of this Agreement, unless Party A commits gross negligence, or a fraudulent act, against Party B, Party B shall not terminate this Agreement prior to its expiration date. Nevertheless, Party A shall have the right to terminate this Agreement upon giving 30 days’ prior written notice to Party B at any time.

 

6.2 在本协议终止之后,双方在第3、7和8条项下的权利和义务将继续有效。

 

The rights and obligations of the Parties under Articles 3, 7 and 8 shall survive the termination of this Agreement.

 

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7. 适用法律和争议解决

 

Governing Law and Resolution of Disputes

 

7.1 本协议的订立、效力、解释、履行、修改和终止以及争议的解决适用中国的法律。

 

The execution, effectiveness, construction, performance, amendment and termination of this Agreement and the resolution of disputes hereunder shall be governed by the laws of China.

 

7.2 因解释和履行本协议而发生的任何争议,本协议双方应首先通过友好协商的方式加以解决。如果在一方向其他方发出要求协商解决的书面通知后30天之内争议仍然得不到解决,则任何一方均可将有关争议提交给中国国际经济贸易仲裁委员会华南分会,由该会按照中国国际经济贸易仲裁委员会仲裁规则仲裁解决。仲裁应在深圳进行,使用之语言为中文。仲裁裁决是终局性的,对各方均有约束力。

 

In the event of any dispute with respect to the construction and performance of this Agreement, the Parties shall first resolve the dispute through friendly negotiations. In the event the Parties fail to reach an agreement on the dispute within 30 days after either Party’s request to the other Parties for resolution of the dispute through negotiations, either Party may submit the relevant dispute to the Southern China Commission of China International Economic and Trade Arbitration Commission for arbitration, in accordance with its Arbitration Rules. The arbitration shall be conducted in Shenzhen, and the language used in arbitration shall be Chinese. The arbitration award shall be final and binding on all Parties.

 

7.3 因解释和履行本协议而发生任何争议或任何争议正在进行仲裁时,除争议的事项外,本协议双方仍应继续行使各自在本协议项下的其他权利并履行各自在本协议项下的其他义务。

 

Upon the occurrence of any disputes arising from the construction and performance of this Agreement or during the pending arbitration of any dispute, except for the matters under dispute, the Parties to this Agreement shall continue to exercise their respective rights under this Agreement and perform their respective obligations under this Agreement.

 

8. 违约责任

 

8.1 双方同意并确认,如任何一方(以下称”违约方”)违反本协议项下所作的任何一项约定,或未履行本协议项下的任何一项义务,即构成本协议项下的违约(以下称”违约”),守约方有权要求违约方在合理期限内补正或采取补救措施。如违约方在合理期限内或在守约方书面通知违约方并提出补正要求后30天内仍未补正或采取补救措施的,则守约方有权自行决定(1)终止本协议,并要求违约方给予全部的损害赔偿;或者(2)要求强制履行违约方在本协议项下的义务,并要求违约方给予守约方因此而遭受的全部损害赔偿

 

The Parties agree and confirm that, if either Party (the “Defaulting Party”) is in breach of any provisions herein or fails to perform its obligations hereunder, such breach or failure shall constitute a default under this Agreement (the “Default”), which shall entitle the non-defaulting Party to request the Defaulting Party to rectify or remedy such Default with a reasonable period of time. If the Defaulting Party fails to rectify or remedy such Default within the reasonable period of time or within 30 days of non-defaulting Party’s written notice requesting for such rectification or remedy, then the non-defaulting Party shall be entitled to elect any one of the following remedial actions: (a) to terminate this Agreement and request the Defaulting Party to fully compensate its losses and damages; (b) to request the specific performance by the Defaulting Party of its obligations hereunder and request the Defaulting Party to fully compensate non-defaulting Party’s losses and damages.

 

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8.2 本协议当事人对违约方违约行为的弃权仅以书面形式作出方为有效。当事人未行使或迟延行使其在本协议项下的任何权利或救济不构成该当事人的弃权;部分行使权利或救济亦不应阻碍其行使其他权利或救济。

 

No waiver of rights in respect of any Default hereunder shall be valid unless it was made in writing. Any failure to exercise or delay in exercising any rights or remedy by any Party under this Agreement shall not be deemed as a waiver of such Party. Any partial exercise of any right or remedy shall not affect the exercise of any other rights and remedies.

 

8.3 虽然有以上第8.1条的规定,双方同意并确认,乙方在任何情况下,均不得以任何理由要求终止本协议,除非法律或本协议另有规定。

 

Notwithstanding Clause 8.1 above, the Parties agree and confirm that in no circumstance shall Party B early terminate this Agreement unless the applicable law or this Agreement provides otherwise.

 

8.4 尽管有本协议其它规定,本条规定的效力不受本协议中止或者终止的影响。

 

Notwithstanding any other provisions under this Agreement, the validity of this Clause shall not be affected by the suspension or termination of this Agreement.

 

9. 通知

 

Notices

 

9.1 本协议项下要求或发出的所有通知和其他通信应通过专人递送、挂号邮寄、邮资预付或商业快递服务的方式发到该方下列地址。每一通知还应再以电子邮件送达。该等通知视为有效送达的日期按如下方式确定:

 

All notices and other communications required or permitted to be given pursuant to this Agreement shall be delivered personally or sent by registered mail, postage prepaid, by a commercial courier service to the address of such Party set forth below. A confirmation copy of each notice shall also be sent by email. The dates on which notices shall be deemed to have been effectively given shall be determined as follows:

 

9.2 通知如果是以专人递送、快递服务或挂号邮寄、邮资预付发出的,则以于设定为通知的地址在签收或拒收之日为有效送达日。

 

Notices given by personal delivery, by courier service or by registered mail, postage prepaid, shall be deemed effectively given on the date of delivery or refusal at the address specified for notices.

 

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9.3 任何一方变更接收通知的地址或联系人的,应按本条规定给另一方发出通知。

 

If any Party change its address for notices or its contact person, a notice shall be delivered to the other Party in accordance with the terms hereof.

 

10. 协议的转让

 

Assignment

 

10.1 乙方不得将其在本协议项下的权利与义务转让给第三方,除非事先征得甲方的书面同意。

 

Without Party A’s prior written consent, Party B shall not assign its rights and obligations under this Agreement to any third party.

 

10.2 乙方在此同意,甲方可以在其需要时向其他第三方转让其在本协议项下的权利和义务,并在该等转让发生时甲方仅需向乙方发出书面通知,并且无需再就该等转让征得乙方的同意。

 

Party B agrees that Party A may assign its obligations and rights under this Agreement to any third party upon a prior written notice to Party B but without the consent of Party B.

 

11. 协议的分割性

 

Severability

 

如果本协议有任何一条或多条规定根据任何法律或法规在任何方面被裁定为无效、不合法或不可执行,本协议其余规定的有效性、合法性或可执行性不应因此在任何方面受到影响或损害。双方应通过诚意磋商,争取以法律许可以及双方期望的最大限度内有效的规定取代那些无效、不合法或不可执行的规定,而该等有效的规定所产生的经济效果应尽可能与那些无效、不合法或不能强制执行的规定所产生的经济效果相似。

 

In the event that one or several of the provisions of this Agreement are found to be invalid, illegal or unenforceable in any aspect in accordance with any laws or regulations, the validity, legality or enforceability of the remaining provisions of this Agreement shall not be affected or compromised in any aspect. The Parties shall strive in good faith to replace such invalid, illegal or unenforceable provisions with effective provisions that accomplish to the greatest extent permitted by law and the intentions of the Parties, and the economic effect of such effective provisions shall be as close as possible to the economic effect of those invalid, illegal or unenforceable provisions.

 

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12. 协议的修改、补充

 

Amendments and Supplements

 

双方可以书面协议方式对本协议作出修改和补充。经过双方签署的有关本协议的修改协议和补充协议是本协议组成部分,具有与本协议同等的法律效力。

 

Any amendments and supplements to this Agreement shall be in writing. The amendment agreements and supplementary agreements that have been signed by the Parties and that relate to this Agreement shall be an integral part of this Agreement and shall have the same legal validity as this Agreement.

 

13. 语言和副本

 

Language and Counterparts

 

本协议以中文和英文书就,一式二份,甲乙双方各持一份,具有同等效力;中英文版本如有冲突,应以中文版为准。

 

This Agreement is written in both Chinese and English language in two copies, each Party having one copy with equal legal validity; in case there is any conflict between the Chinese version and the English version, the Chinese version shall prevail.

 

本页其余部分刻意留为空白

 

The Remainder of this page is intentionally left blank

 

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有鉴于此,双方已使得经其授权的代表于文首所述日期签署了本业务合作协 议并即生效,以昭信守。

 

IN WITNESS WHEREOF, the Parties have caused their authorized representatives to execute this Business Cooperation Agreement as of the date first above written.

 

甲方: 祥天石化科技(咸宁)有限公司

Party A:   Lucky Sky Petrochemical Technology (Xianning) Co., Ltd. [Corporate Seal Affixed Herein]

 

签字:

By:/s/ Bin Zhou  
姓名: 周彬  
Name:  Bin Zhou    
职务: 法定代表人  
Title: Legal Representative  

 

乙方: 台山市牧仁农业有限公司

Party B: Taishan Muren Agriculture Co., Ltd. [Corporate Seal Affixed Herein]

 

签字:

By:/s/ Yongjun Huang  
姓名: 黄拥军  
Name:  Yongjun Huang  
职务: 法定代表人  
Title: Legal Representative  

 

 

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Exhibit 10.18

 

股权质押合同

 

Equity Pledge Agreement

 

本股权质押合同 (下称”本合同”)由下列各方于2019年12月20日在中华人民共和国(下称”中国”)咸宁签订:

 

This Equity Pledge Agreement (this “Agreement”) has been executed by and among the following parties on December 20, 2019 in Xianning, the People’s Republic of China (“China” or the “PRC”):

 

甲方:   祥天石化科技(咸宁)有限公司 (下称”质权人”)
地址:   湖北省咸宁市黄畈村一组金色海湾2幢3层
Party A:   Lucky Sky Petrochemical Technology (Xianning) Co., Ltd. (thereinafter “Pledgee.”)
Address:   3/F, Building 2, Golden Bay, Group 1, Huangfan Village, Xianning City, Hubei Province
     
乙方:   深圳市嘉铭瑞新农有限公司 (下称”出质人”)(thereinafter “Pledger.”)
地址:   深圳市南山区南海大道以西美年广场1栋1104F
Party B:   Shenzhen Jiamingrui New Agriculture Co., Ltd.
Address:   Suite 1104F, Building 1, Meinian Plaza, West Nanhai Avenue, Nanshan District, Shenzhen
     
丙方:   台山市牧仁农业有限公司
地址:   台山市海宴华侨农场南丰村216
Party C:   Taishan Muren Agriculture Co., Ltd.
Address:   No.216, Nanfeng Village, Haiyan Overseas Chinese Farm, Taishan City

 

在本合同中,质权人、出质人和丙方以下各称”一方”,合称”各方”。

 

In this Agreement, each of Pledgee, Pledger and Party C shall be referred to as a “Party” respectively, and they shall be collectively referred to as the “Parties”.

 

鉴于:

 

Whereas:

 

1.出质人实际拥有丙方100%的股权。丙方是一家在中国台山市成立的有限责任公司。丙方在此确认出质人和质权人在本合同下的权利和义务并提供必要的协助以登记该质权;

 

Pledger holds 100% of the equity interest in Party C in fact. Party C is a limited liability company registered in Taishan City, China. Party C acknowledges the respective rights and obligations of Pledger and Pledgee under this Agreement, and intends to provide any necessary assistance in registering the Pledge;

 

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2.质权人是一家在中国注册的外商独资企业。质权人与出质人、出质人所拥有的丙方签订了咨询与服务协议等一系列旨在形成质权人控制丙方的协议(”控制协议”);

 

Pledgee is a wholly foreign owned enterprise registered in China. Pledgee, Pledger and Party C owned by Pledger have executed a Consultation and Service Agreement and other control agreements (the “Control Agreements”);

 

3.为了保证出质人及丙方履行控制协议项下的义务,按照约定向质权人支付咨询和服务费等到期款项,出质人以其在丙方中拥有的全部股权向质权人就控制协议项下丙方的付款义务做出质押担保。

 

To ensure that Pledger and Party C fully perform their obligations under the Control Agreements, and pay the consulting and service fees thereunder to the Pledgee when the sum becomes due, Pledger hereby pledges to the Pledgee all of the equity interest he holds in Party C as security for payment of the consulting and service fees by Party C under the Control Agreements.

 

为了履行控制协议的条款,各方商定按照以下条款签订本合同。

 

To perform the provisions of the Control Agreements, the Parties have mutually agreed to execute this Agreement upon the following terms.

 

1. 定义

 

Definitions

 

除非本合同另有规定,下列词语含义为:

 

Unless otherwise provided herein, the terms below shall have the following meanings:

 

1.1 质权:指出质人根据本合同第2条给予质权人的担保物权,即指质权人所享有的,以出质人质押给质权人的股权折价或拍卖、变卖该股权的价款优先受偿的权利。

 

Pledge: shall refer to the security interest granted by Pledger to Pledgee pursuant to Section 2 of this Agreement, i.e., the right of Pledgee to be compensated on a preferential basis with the conversion, auction or sales price of the Equity Interest.

 

1.2 股权:指出质人现在和将来合法持有的其在丙方的全部股权权益。

 

Equity Interest: shall refer to all of the equity interest lawfully now held and hereafter acquired by Pledger in Party C.

 

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1.3 质押期限:指本合同第3条规定的期间。

 

Term of Pledge: shall refer to the term set forth in Section 3 of this Agreement.

 

1.4 控制协议:指出质人、丙方与质权人于2019年12月20日签订的咨询与服务协议、业务合作协议等一系列控制性协议。

 

Control Agreements: shall refer to Consultation and Service Agreements, Business Cooperation Agreement and other relevant control agreements executed by and among Pledger, Party C and Pledgee on December 20, 2019.

 

1.5 违约事件:指本合同第7条所列任何情况。

 

Event of Default: shall refer to any of the circumstances set forth in Section 7 of this Agreement.

 

1.6 违约通知:指质权人根据本合同发出的宣布违约事件的通知。

 

Notice of Default: shall refer to the notice issued by Pledgee in accordance with this Agreement declaring an Event of Default.

 

2. 质权

 

The Pledge

 

作为出质人、丙方完全履行控制协议,以及按时和全额支付控制协议项下质权人应得的任何或全部的款项,包括但不限于控制协议中规定的咨询和服务费的担保(无论该等费用的到期应付是由于到期日的到来、提前收款的要求或其它原因),出质人特此将其现有或将拥有的丙方的全部股权权益质押给质权人。

 

As collateral security for the performance of the Control Agreements and the timely and complete payment when due (whether at stated maturity, by acceleration or otherwise) of any or all of the payments due by Party C and/or Pledger, including without limitation the consulting and services fees payable to the Pledgee under the Control Agreements, Pledger hereby pledges to Pledgee a first security interest in all of Pledger’s right, title and interest, whether now owned or hereafter acquired by Pledger, in the Equity Interest of Party C.

 

3. 质押期限

 

Term of Pledge

 

3.1 本协议签署后,本协议各方应尽快完成股权质押工商登记。质权有效期持续到出质人不再担任丙方的股东或丙方履行所有控制协议项下义务为止。出质人应当将质押在公司股东名册上载明。

 

Upon signing this Agreement, the Parties should complete the pledge of the Equity Interest contemplated registered with relevant administration for industry and commerce (the “AIC”) as soon as possible. The Pledge shall be continuously valid until the Pledger is no longer a shareholder of Party C or the satisfaction of all its obligations by the Party C under the Control Agreements. The Pledgers shall be responsible for recording of this Agreement in the Company’s Register of Shareholders.

 

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3.2 质押期限内,如丙方未按控制协议交付咨询服务费等费用,质权人有权但无义务按本合同的规定处分质权。

 

During the Term of Pledge, in the event Party C fails to pay the exclusive consulting or service fees in accordance with the Control Agreements, Pledgee shall have the right, but not the obligation, to dispose of the Pledge in accordance with the provisions of this Agreement.

 

4. 质权凭证的保管

 

Custody of Records for Equity Interest subject to Pledge

 

4.1 在本合同规定的质押期限内,出质人应将其在丙方的股权出资证明书及记载质权的股东名册交付质权人保管。出质人应在本合同签订之日起一周内将上述股权出资证明书及股东名册交付给质权人。质权人将在本合同规定的全部质押期间一直保管这些项目。

 

During the Term of Pledge set forth in this Agreement, Pledger shall deliver to Pledgee’s custody the capital contribution certificate for the Equity Interest and the shareholders’ register containing the Pledge within one week from the execution of this Agreement. Pledgee shall have custody of such items during the entire Term of Pledge set forth in this Agreement.

 

4.2 在质押期限内,质权人有权收取股权所产生的红利。

 

Pledgee shall have the right to collect dividends generated by the Equity Interest during the Term of Pledge.

 

5. 出质人的声明和保证

 

Representations and Warranties of Pledger

 

5.1 出质人是股权登记所有人。

 

Pledger is the owner of the Equity Interest in record of register of shareholder.

 

5.2 质权人有权以本合同规定的方式处分并转让股权。

 

Pledgee shall have the right to dispose of and transfer the Equity Interest in accordance with the provisions set forth in this Agreement.

 

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5.3 除本质权之外,出质人未在股权上设置任何其他质押权利或其他担保权益。

 

Except for the Pledge, Pledger has not placed any security interest or other encumbrance on the Equity Interest.

 

6. 出质人的承诺和确认

 

Covenants and Further Agreements of Pledger

 

6.1 在本合同存续期间,出质人向质权人承诺,出质人将:

 

Pledger hereby covenants to the Pledgee, that during the term of this Agreement, Pledger shall:

 

6.1.1 除履行由出质人与质权人、丙方于本合同签署日签订的《股权处分合同》(”股权处分合同”)外,未经质权人事先书面同意,不得转让股权,不得在股权上设立或允许存在任何担保或其他债务负担;

 

not transfer the Equity Interest, place or permit the existence of any security interest or other encumbrance on the Equity Interest, without the prior written consent of Pledgee, except for the performance of the Equity Option Agreement (the “Equity Option Agreement”) executed by Pledger, the Pledgee and Party C on the execution date of this Agreement;

 

6.1.2 遵守并执行所有有关权利质押的法律、法规的规定,在收到有关主管机关就质权发出或制定的通知、指令或建议时,于五个工作日内向质权人出示上述通知、指令或建议,同时遵守上述通知、指令或建议,或按照质权人的合理要求或经质权人同意就上述事宜提出反对意见和陈述;

 

comply with the provisions of all laws and regulations applicable to the pledge of rights, and within 5 working days of receipt of any notice, order or recommendation issued or prepared by relevant competent authorities regarding the Pledge, shall present the aforementioned notice, order or recommendation to Pledgee, and shall comply with the aforementioned notice, order or recommendation or submit objections and representations with respect to the aforementioned matters upon Pledgee’s reasonable request or upon consent of Pledgee;

 

6.1.3 将任何可能导致对出质人股权或其任何部分的权利产生影响的事件或收到的通知,以及可能改变出质人在本合同中的任何保证、义务或对出质人履行其在本合同中义务可能产生影响的任何事件或收到的通知及时通知质权人。

 

promptly notify Pledgee of any event or notice received by Pledger that may have an impact on Pledgee’s rights to the Equity Interest or any portion thereof, as well as any event or notice received by Pledger that may have an impact on any guarantees and other obligations of Pledger arising out of this Agreement.

 

6.2 出质人同意,质权人按本合同条款取得的对质权享有的权利,不应受到出质人或出质人的继承人或出质人之委托人或任何其他人通过法律程序的中断或妨害。

 

Pledger agrees that the rights acquired by Pledgee in accordance with this Agreement with respect to the Pledge shall not be interrupted or harmed by Pledger or any heirs or representatives of Pledger or any other persons through any legal proceedings.

 

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6.3 出质人向质权人保证,为保护或完善本合同对偿付控制协议项下咨询服务费等费用的担保,出质人将诚实签署、并促使其他与质权有利害关系的当事人签署质权人所要求的所有的权利证书、契约和/或履行并促使其他有利害关系的当事人履行质权人所要求的行为,并为本合同赋予质权人之权利、授权的行使提供便利,与质权人或其指定的人(自然人/法人)签署所有的有关股权所有权的文件,并在合理期间内向质权人提供其认为需要的所有的有关质权的通知、命令及决定。

 

To protect or perfect the security interest granted by this Agreement for payment of the consulting and service fees under the Control Agreements, Pledger hereby undertakes to execute in good faith and to cause other parties who have an interest in the Pledge to execute all certificates, agreements, deeds and/or covenants required by Pledgee. Pledger also undertakes to perform and to cause other parties who have an interest in the Pledge to perform actions required by Pledgee, to facilitate the exercise by Pledgee of its rights and authority granted thereto by this Agreement, and to enter into all relevant documents regarding ownership of Equity Interest with Pledgee or designee(s) of Pledgee (natural persons/legal persons). Pledger undertakes to provide Pledgee within a reasonable time with all notices, orders and decisions regarding the Pledge that are required by Pledgee.

 

6.4 出质人向质权人保证,出质人将遵守、履行本合同项下所有的保证、承诺、协议、陈述及条件。如出质人不履行或不完全履行其保证、承诺、协议、陈述及条件,出质人应赔偿质权人由此遭受的一切损失。

 

Pledger hereby undertakes to comply with and perform all guarantees, promises, agreements, representations and conditions under this Agreement. In the event of failure or partial performance of its guarantees, promises, agreements, representations and conditions, Pledger shall indemnify Pledgee for all losses resulting therefrom.

 

6.5 出质人应在本协议签订后尽可能快地向工商行政管理局办理质押登记手续。

 

The Pledgers shall process the registration procedures with the Administration for Industry and Commerce concerning the Pledge as soon as practical after the execution of this Agreement.

 

6.6 未经事先书面通知质权人并获得其事先书面同意,出质人不得将股权转让,出质人的所有拟转让股权的行为无效。出质人转让股权所得价款应首先用于提前向质权人清偿担保债务或向与质权人约定的第三人提存。

 

Without notifying Pledgee in advance and obtaining Pledgee’s prior written consent, Pledger shall not transfer the Equity Interest and any action for the proposed transfer of the Equity Interest of Pledger shall be invalid. Any payment received by Pledger for transfer of the Equity Interest shall be firstly used to repay the secured obligations to Pledgee or be placed in escrow with a third party as agreed with Pledgee.

 

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7. 违约事件

 

Event of Breach

 

7.1 下列事项均被视为违约事件:

 

The following circumstances shall be deemed Event of Default:

 

7.1.1 丙方未能按期、完整履行控制协议项下任何责任,包括但不限于丙方未能按期足额支付控制协议项下的应付的咨询服务费等费用或有违反该协议其他义务的行为;

 

Party C fails to fully and timely fulfill any liabilities under the Control Agreements, including without limitation failure to pay in full any of the consulting and service fees payable under the Control Agreements or breaches any other obligations of Party C thereunder;

 

7.1.2 出质人或丙方实质违反本合同的任何条款;

 

Pledger or Party C has committed a material breach of any provisions of this Agreement;

 

7.1.3 除履行股权处分合同外,出质人舍弃出质的股权或未获得质权人书面同意而擅自转让或意图转让出质的股权;

 

Except for the performance of the Equity Option Agreement, Pledger transfers or purports to transfer or abandons the Equity Interest pledged or assigns the Equity Interest pledged without the written consent of Pledgee; and

 

7.1.4 丙方的继承人或代管人只能履行部分或拒绝履行控制协议项下的支付责任;

 

The successor or custodian of Party C is capable of only partially performing or refusing to perform the payment obligations under the Control Agreements.

 

7.1.5 出质人因其所拥有的财产出现不利变化,致使质权人认为出质人履行本合同项下的义务的能力已受到影响;

 

The occurrence of any adverse change to the assets or property of the Pledger, which in Pledgee’s determination, may impact the ability of the Pledger to perform its obligations hereunder.

 

7.1.6 按有关法律规定质权人不能或可能不能行使处分质权的其他情况。

 

The occurrence of any other circumstances under which the Pledgee is not or may not able to exercise its rights hereunder in accordance with the applicable law.

 

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7.2 如知道或发现本第7.1条所述的任何事项或可能导致上述事项的事件已经发生,出质人应立即以书面形式通知质权人。

 

Upon notice or discovery of the occurrence of any circumstances or event that may lead to the aforementioned circumstances described in Section 7.1, Pledger shall immediately notify Pledgee in writing accordingly.

 

7.3 除非第7.1部分下的违约事件在质权人向出质人发出要求其修正此违约行为通知后的二十(20)天之内已经按质权人要求获得救济,质权人在其后的任何时间,可向出质人发出书面违约通知,要求立即依据本合同第8条行使质权权利。

 

Unless an Event of Default set forth in this Section 7.1 has been successfully resolved to Pledgee’s satisfaction within twenty (20) days after the Pledgee delivers a notice to the Pledger requesting ratification of such Event of Default, Pledgee may issue a Notice of Default to Pledger in writing at any time thereafter, demanding to immediately dispose of the Pledge in accordance with the provisions of Section 8 of this Agreement.

 

8. 质权的行使

 

Exercise of Pledge

 

8.1 在控制协议所述的咨询服务费等费用未全部偿付前,未经质权人书面同意,出质人不得转让其拥有的丙方股权。

 

Prior to the full payment of the consulting and service fees described in the Control Agreements, without the Pledgee’s written consent, Pledger shall not assign the Equity Interest in Party C.

 

8.2 在质权人行使其质押权利时,质权人可以向出质人发出书面通知。

 

Pledgee may issue a written notice to Pledger when exercising the Pledge.

 

8.3 受限于第7.3条的规定,质权人可在按第7.3条发出违约通知之后的任何时间里对质权行使处分的权利。质权人决定行使处分质权的权利时,出质人即不再拥有任何与股权有关的权利和利益。

 

Subject to the provisions of Section 7.3, Pledgee may exercise the right to enforce the Pledge at any time after the issuance of the Notice of Default in accordance with Section 7.3. Once Pledgee elects to enforce the Pledge, Pledger shall cease to be entitled to any rights or interests associated with the Equity Interest.

 

8.4 在违约时,根据中国有关法律的规定,质权人有权按照法定程序处置质押股权。在中国法律允许的范围内,对于处置的所得,质权人无需给付出质人;出质人特此放弃其可能有的能向质权人要求任何质押股权处置所得的权利。

 

In the event of default, Pledgee is entitled to dispose of the Equity Interest in accordance with applicable PRC laws. Only to the extent permitted under applicable PRC laws, Pledgee has no obligation to account to Pledger for proceeds of disposition of the Equity Interest, and Pledger hereby waives any rights it may have to demand any such accounting from Pledgee.

 

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8.5 质权人依照本合同处分质权时,出质人和丙方应予以必要的协助,以使质权人实现其质权。

 

When Pledgee disposes of the Pledge in accordance with this Agreement, Pledger and Party C shall provide necessary assistance to enable Pledgee to enforce the Pledge in accordance with this Agreement.

 

9. 转让

 

Assignment

 

9.1 除非经质权人事先同意,出质人无权赠予或转让其在本合同项下的权利义务。

 

Without Pledgee’s prior written consent, Pledger shall not have the right to assign or delegate its rights and obligations under this Agreement.

 

9.2 本合同对出质人及其继任人和经许可的受让人均有约束力,并且对质权人及每一继任人和受让人有效。

 

This Agreement shall be binding on Pledger and its successors and permitted assigns, and shall be valid with respect to Pledgee and each of its successors and assigns.

 

9.3 质权人可以在任何时候将其在控制协议项下的所有或任何权利和义务转让给其指定的人(自然人/法人),在这种情况下,受让人应享有和承担本合同项下质权人享有和承担的权利和义务,如同其作为原合同方应享有和承担的一样。质权人转让控制协议项下的权利和义务时,应质权人要求,出质人应就此转让签署有关协议和/或文件。

 

At any time, Pledgee may assign any and all of its rights and obligations under the Control Agreements to its designee(s) (natural/legal persons), in which case the assigns shall have the rights and obligations of Pledgee under this Agreement, as if it were the original party to this Agreement. When the Pledgee assigns the rights and obligations under the Control Agreements, upon Pledgee’s request, Pledger shall execute relevant agreements or other documents relating to such assignment.

 

9.4 因转让所导致的质权人变更后,应质权人要求,出质人应与新的质权人签订一份内容与本合同一致的新质押合同,并在相应的工商行政管理机关进行登记。

 

In the event of a change in Pledgee due to an assignment, Pledger shall, at the request of Pledgee, execute a new pledge agreement with the new pledgee on the same terms and conditions as this Agreement, and register the same with the relevant AIC.

 

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9.5 出质人应严格遵守本合同和各方单独或共同签署的其他有关合同的规定,包括股权处分合同和对质权人的授权委托书,履行各合同项下的义务,并不得进行任何足以影响合同的有效性和可强制执行性的作为/不作为行为。除非根据质权人的书面指示,出质人不得行使其对质押股权还留存的权利。

 

Pledger shall strictly abide by the provisions of this Agreement and other contracts jointly or separately executed by the Parties hereto or any of them, including the Equity Option Agreement and the Power of Attorney granted to Pledgee, perform the obligations hereunder and thereunder, and refrain from any action/omission that may affect the effectiveness and enforceability thereof. Any remaining rights of Pledger with respect to the Equity Interest pledged hereunder shall not be exercised by Pledger except in accordance with the written instructions of Pledgee.

 

10. 终止

 

Termination

 

在控制协议项下的咨询服务费等费用偿还完毕,并且丙方不再承担控制协议项下的任何义务之后,本合同终止,并且在尽早合理可行的时间内,质权人应解除本合同下的股权质押。

 

Upon the full payment of the consulting and service fees under the Control Agreements and upon termination of Party C’s obligations under the Control Agreements, this Agreement shall be terminated, and Pledgee shall then terminate the equity pledge under this Agreement as soon as reasonably practicable.

 

11. 手续费及其他费用

 

Handling Fees and Other Expenses

 

一切与本合同有关的费用及实际开支,其中包括但不限于法律费用、工本费、印花税以及任何其他税收、费用等全部由丙方承担。

 

All fees and out of pocket expenses relating to this Agreement, including but not limited to legal costs, costs of production, stamp tax and any other taxes and fees, shall be borne by Party C.

 

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12. 保密责任

 

Confidentiality

 

各方承认及确定有关本合同、本合同内容,以及彼此就准备或履行本合同而交换的任何口头或书面资料均被视为保密信息。各方应当对所有该等保密信息予以保密,而在未得到另一方书面同意前,不得向任何第三者披露任何保密信息,惟下列信息除外:(a)公众人士知悉或将会知悉的任何信息(惟并非由接受保密信息之一方擅自向公众披露);(b)根据适用法律法规、股票交易规则、或政府部门或法院的命令而所需披露之任何信息;或(c)由任何一方就本合同所述交易而需向其股东、投资者、法律或财务顾问披露之信息,而该股东、法律或财务顾问亦需遵守与本条款相类似之保密责任。如任何一方工作人员或聘请机构的泄密均视为该方的泄密,需依本合同承担违约责任。无论本合同以任何理由终止,本条款仍然生效。

 

The Parties acknowledge that the existence and the terms of this Agreement and any oral or written information exchanged between the Parties in connection with the preparation and performance this Agreement are regarded as confidential information. Each Party shall maintain confidentiality of all such confidential information, and without obtaining the written consent of the other Party, it shall not disclose any relevant confidential information to any third parties, except for the information that: (a) is or will be in the public domain (other than through the receiving Party’s unauthorized disclosure); (b) is under the obligation to be disclosed pursuant to the applicable laws or regulations, rules of any stock exchange, or orders of the court or other government authorities; or (c) is required to be disclosed by any Party to its shareholders, investors, legal counsels or financial advisors regarding the transaction contemplated hereunder, provided that such shareholders, investors, legal counsels or financial advisors shall be bound by the confidentiality obligations similar to those set forth in this Section. Disclosure of any confidential information by the staff members or agencies hired by any Party shall be deemed disclosure of such confidential information by such Party, which Party shall be held liable for breach of this Agreement. This Section shall survive the termination of this Agreement for any reason.

 

13. 适用法律和争议的解决

 

Governing Law and Resolution of Disputes

 

13.1 本合同的订立、效力、解释、履行、修改和终止以及争议的解决均适用中国法律。

 

The execution, effectiveness, construction, performance, amendment and termination of this Agreement and the resolution of disputes hereunder shall be governed by the laws of China.

 

13.2 因解释和履行本合同而发生的任何争议,本合同各方应首先通过友好协商的方式加以解决。如果在一方向其他方发出要求协商解决的书面通知后30天之内争议仍然得不到解决,则任何一方均可将有关争议提交给位于深圳的中国国际经济贸易仲裁委员会华南分会,由该会按照中国国际经济贸易仲裁委员会仲裁规则仲裁解决。仲裁应在深圳进行,使用之语言为中文。仲裁裁决是终局性的,对各方均有约束力。

 

In the event of any dispute with respect to the construction and performance of this Agreement, the Parties shall first resolve the dispute through friendly negotiations. In the event the Parties fail to reach an agreement on the dispute within 30 days after either Party’s request to the other Parties for resolution of the dispute through negotiations, either Party may submit the relevant dispute to the Southern China Commission of China International Economic and Trade Arbitration Commission for arbitration, in accordance with its Arbitration Rules. The arbitration shall be conducted in Shenzhen, and the language used in arbitration shall be Chinese. The arbitration award shall be final and binding on all Parties.

 

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13.3 因解释和履行本合同而发生任何争议或任何争议正在进行仲裁时,除争议的事项外,本合同各方仍应继续行使各自在本合同项下的其他权利并履行各自在本合同项下的其他义务。

 

Upon the occurrence of any disputes arising from the construction and performance of this Agreement or during the pending arbitration of any dispute, except for the matters under dispute, the Parties to this Agreement shall continue to exercise their respective rights under this Agreement and perform their respective obligations under this Agreement.

 

14. 通知

 

Notices

 

14.1 本合同项下要求或发出的所有通知和其他通信应通过专人递送、挂号邮寄、邮资预付或商业快递服务的方式发到该方下列地址。每一通知还应再以电子邮件送达。该等通知视为有效送达的日期按如下方式确定:

 

All notices and other communications required or permitted to be given pursuant to this Agreement shall be delivered personally or sent by registered mail, postage prepaid, by a commercial courier service to the address of such party set forth below. A confirmation copy of each notice shall also be sent by E-mail. The dates on which notices shall be deemed to have been effectively given shall be determined as follows:

 

14.2 通知如果是以专人递送、快递服务或挂号邮寄、邮资预付发出的,则以于设定为通知的地址在签收或拒收之日为有效送达日。

Notices given by personal delivery, by courier service or by registered mail, postage prepaid, shall be deemed effectively given on the date of acceptance or refusal at the address specified for notices.

 

14.3 任何一方变更接收通知的地址或联系人的,应按本条规定给其他方发出通知。

 

If any Party change its address for notices or its contact person, a notice shall be delivered to the other Parties in accordance with the terms hereof.

 

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15. 分割性

 

Severability

 

如果本合同有任何一条或多条规定根据任何法律或法规在任何方面被裁定为无效、不合法或不可执行,本合同其余规定的有效性、合法性或可执行性不应因此在任何方面受到影响或损害。各方应通过诚意磋商,争取以法律许可以及各方期望的最大限度内有效的规定取代那些无效、不合法或不可执行的规定,而该等有效的规定所产生的经济效果应尽可能与那些无效、不合法或不能强制执行的规定所产生的经济效果相似。

 

In the event that one or several of the provisions of this Agreement are found to be invalid, illegal or unenforceable in any aspect in accordance with any laws or regulations, the validity, legality or enforceability of the remaining provisions of this Agreement shall not be affected or compromised in any respect. The Parties shall strive in good faith to replace such invalid, illegal or unenforceable provisions with effective provisions that accomplish to the greatest extent permitted by law and the intentions of the Parties, and the economic effect of such effective provisions shall be as close as possible to the economic effect of those invalid, illegal or unenforceable provisions.

 

16. 附件

 

Attachments

 

本合同所列附件,为本合同不可分割的组成部分。

 

The attachments set forth herein shall be an integral part of this Agreement.

 

17. 生效

 

Effectiveness

 

17.1 本协议经各方适当签署时生效。

 

This Agreement shall become effective when the Parties have duly executed this Agreement.

 

17.2 本合同的任何修改、补充或变更,均须采用书面形式,经各方签字或盖章后生效。

 

Any amendments, changes and supplements to this Agreement shall be in writing and shall become effective after the affixation of the signatures or seals of the Parties.

 

17.3 本合同以中文和英文书就,一式三份,质权人、出质人和丙方各持一份,具有同等效力;中英文版本如有冲突,应以中文版为准。

 

This Agreement is written in Chinese and English in three copies. Pledger, Pledgee and Party C shall hold one copy respectively. Each copy of this Agreement shall have equal validity. In case there is any conflict between the Chinese version and the English version, the Chinese version shall prevail.

 

本页其余部分刻意留为空白

 

The Remainder of this page is intentionally left blank

 

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有鉴于此,各方已使得经其授权的代表于文首所述日期签署了本股权质押合同并即生效,以昭信守。

 

IN WITNESS WHEREOF, the Parties have caused their authorized representatives to execute this Equity Pledge Agreement as of the date first above written.

 

甲方: 祥天石化科技(咸宁)有限公司

Party A:  Lucky Sky Petrochemical Technology (Xianning) Co., Ltd. [Corporate Seal Affixed Herein]

 

签字:

By:/s/ Bin Zhou  
姓名: 周彬  
Name:  Bin Zhou  
职务: 法定代表人  
Title: Legal Representative  

 

乙方:深圳市嘉铭瑞新农有限公司

Party B: Shenzhen Jiamingrui New Agriculture Co., Ltd. [Corporate Seal Affixed Herein]

签字:

By:/s/ Xuemei Li  
姓名: 李雪梅  
Name:  Xuemei Li  
职务: 法定代表人  
Title: Legal Representative  

 

丙方: 台山市牧仁农业有限公司

Party C: Taishan Muren Agriculture Co., Ltd. [Corporate Seal Affixed Herein]

 

签字:

By:/s/ Yongjun Huang  
姓名: 黄拥军  
Name:  Yongjun Huang  
职务: 法定代表人  
Title: Legal Representative  

 

附件:

 

Attachments:

 

1.台山市牧仁农业有限公司股东名册;

 

Register of shareholders of Taishan Muren Agriculture Co.,Ltd.;

 

2.台山市牧仁农业有限公司的出资证明书;

 

The Capital Contribution Certificate for Taishan Muren Agriculture Co.,Ltd.;

 

3.咨询与服务协议

 

Consultation and Service Agreement

 

4.业务合作协议

 

Business Cooperation Agreement

 

 

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Exhibit 10.19

 

股权处分合同

 

Equity Option Agreement

 

本股权处分合同(下称”本合同”)由以下各方于2019年12月20日在中华人民共和国(下称”中国”)咸宁市签订:

 

This Equity Option Agreement (this “Agreement”) is executed by and among the following Parties as of December 20, 2019 in Xianning, the People’s Republic of China (“China” or the “PRC”):

 

甲方:   祥天石化科技(咸宁)有限公司
地址:   湖北省咸宁市黄畈村一组金色海湾2幢3层
Party A:   Lucky Sky Petrochemical Technology (Xianning) Co., Ltd.
Address:   3/F, Building 2, Golden Bay, Group 1, Huangfan Village, Xianning City, Hubei Province
     
乙方:   深圳市嘉铭瑞新农有限公司
地址:   深圳市南山区南海大道以西美年广场1栋1104F
Party B:   Shenzhen Jiamingrui New Agriculture Co., Ltd.
Address:   Suite 1104F, Building 1, Meinian Plaza, West Nanhai Avenue, Nanshan District, Shenzhen
     
丙方:   台山市牧仁农业有限公司
地址:   台山市海宴华侨农场南丰村216
Party C:   Taishan Muren Agriculture Co.,Ltd.
Address:   No.216, Nanfeng Village, Haiyan Overseas Chinese Farm, Taishan City

 

在本合同中,甲方、乙方和丙方以下各称”一方”,合称”各方”。

 

In this Agreement, each of Party A, Party B and Party C shall be referred to as a “Party” respectively, and they shall be collectively referred to as the “Parties”.

 

鉴于:乙方持有丙方100%的股权权益。甲方与丙方签订了咨询与服务协议、业务合作合同等一系列控制性协议(”控制协议”)。

 

Whereas: Party B holds 100% of the equity interest in Party C. Party A and Party C have executed a Consultation and Service Agreement, Business Cooperation Agreement and other control agreements (the “Control Agreements”).

 

现各方协商一致,达成如下协议:

 

Now therefore, upon mutual discussion and negotiation, the Parties have reached the following agreement:

 

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1. 股权买卖

 

Sale and Purchase of Equity Interest

 

1.1 授予权利

 

Option Granted

 

鉴于甲方向乙方支付了人民币1元作为对价,且乙方确认收到并认为该对价足够,乙方在此不可撤销地同意,在中国法律允许的前提下,甲方可以按照自行决定的行使步骤,并按照本合同第1.3条所述的价格,要求乙方履行和完成中国法律要求的一切审批和登记手续,使得甲方可以随时一次或多次从乙方购买,或指定一人或多人(“被指定人”)从乙方购买乙方所持有的丙方的全部或部分股权 (“股权购买权”)。甲方的该股权购买权为独家的。除甲方和被指定人外,任何第三人均不得享有股权购买权或其他与乙方股权有关的权利。丙方特此同意乙方向甲方授予股权购买权。本款及本合同所规定的”人”指个人、公司、合营企业、合伙、企业、信托或非公司组织。

 

In consideration of the payment of RMB 1 by Party A, the receipt and adequacy of which is hereby acknowledged by Party B, Party B hereby irrevocably agrees that, on the condition that it is permitted by the PRC laws, Party A has the right to require Party B to fulfill and complete all approval and registration procedures required under PRC laws for Party A to purchase, or designate one or more persons (each, a “Designee”) to purchase, Party B’s equity interests in Party C, once or at multiple times at any time in part or in whole at Party A’s sole and absolute discretion and at the price described in Section 1.3 herein (such right being the “Equity Interest Purchase Option”). Party A’s Equity Interest Purchase Option shall be exclusive. Except for Party A and the Designee(s), no other person shall be entitled to the Equity Interest Purchase Option or other rights with respect to the equity interests of Party B. Party C hereby agrees to the grant by Party B of the Equity Interest Purchase Option to Party A. The term “person” as used herein shall refer to individuals, corporations, partnerships, partners, enterprises, trusts or non-corporate organizations.

 

1.2 行使步骤

 

Steps for Exercise of Equity Interest Purchase Option

 

甲方行使其股权购买权以符合中国法律和法规的规定为前提。甲方行使股权购买权时,应向乙方发出书面通知(“股权购买通知”),股权购买通知应载明以下事项:(a)甲方关于行使股权购买权的决定;(b)甲方拟从乙方购买的股权份额(“被购买股权”) ;和(c) 被购买股权的购买日/转让日。

 

Subject to the provisions of the laws and regulations of China, Party A may exercise the Equity Interest Purchase Option by issuing a written notice to Party B (the “Equity Interest Purchase Option Notice”), specifying: (a) Party A’s decision to exercise the Equity Interest Purchase Option; (b) the portion of equity interests to be purchased from Party B (the “Optioned Interests”); and (c) the date for purchasing the Optioned Interests and/or the date for transfer of the Optioned Interests.

 

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1.3 股权买价

 

Equity Interest Purchase Price

 

被购买股权的买价(”基准买价”)应为中国法律所允许的最低价格。如果在甲方行权时中国法律要求评估股权,各方通过诚信原则另行商定,并在评估基础上对该股权买价进行必要调整,以符合当时适用之任何中国法律之要求(统称,”股权买价”)。如果当基准买价高于丙方的注册资本时(若非购买全部股权时,按比例计算),乙方应按照甲方指定的方式将高出部分返还给甲方或其指定的人士。

 

The purchase price of the Optioned Interests (the “Base Price”) shall be shall be the lowest price allowed by the laws of China. If appraisal is required by the laws of China at the time when Party A exercises the Equity Interest Purchase Option, the Parties shall negotiate in good faith and based on the appraisal result make necessary adjustment to the Equity Interest Purchase Price so that it complies with any and all then applicable laws of China (collectively, the “Equity Interest Purchase Price”). When the price is higher than the registered capital of Party C, calculated pro rata for purchase of less than all of the Equity Interest, the excessive part of the price shall be returned to Party A or its designee in a manner as instructed by Party A.

 

1.4 转让被购买股权

 

Transfer of Optioned Interests

 

甲方每次行使股权购买权时:

 

For each exercise of the Equity Interest Purchase Option:

 

1.4.1 乙方应责成丙方及时召开股东会会议,在该会议上,应通过批准乙方向甲方和/或被指定人转让被购买股权的决议;

 

Party B shall cause Party C to promptly convene a shareholders’ meeting, at which a resolution shall be adopted approving Party B’s transfer of the Optioned Interests to Party A and/or the Designee(s);

 

1.4.2 乙方应就其向甲方和/或被指定人转让被购买股权取得丙方其他股东同意该转让并放弃优先购买权的书面声明。

 

Party B shall obtain written statements from the other shareholders of Party C giving consent to the transfer of the equity interest to Party A and/or the Designee(s) and waiving any right of first refusal related thereto.

 

1.4.3 乙方应与甲方和/或 (在适用的情况下)被指定人按照本合同及股权购买通知的规定,为每次转让签订股权转让合同;

 

Party B shall execute a share transfer contract with respect to each transfer with Party A and/or each Designee (whichever is applicable), in accordance with the provisions of this Agreement and the Equity Interest Purchase Option Notice regarding the Optioned Interests;

 

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1.4.4 有关方应签署所有其他所需合同、协议或文件,取得全部所需的政府批准和同意,并采取所有所需行动,在不附带任何担保权益的情况下,将被购买股权的有效所有权转移给甲方和/或被指定人并使甲方和/或被指定人成为被购买股权的登记在册所有人。为本款及本合同的目的,”担保权益”包括担保、抵押、第三方权利或权益,任何购股权、收购权、优先购买权、抵销权、所有权扣留或其他担保安排等;但为了明确起见,不包括在本合同、乙方股权质押合同项下产生的任何担保权益。本款及本合同所规定的”乙方股权质押合同”指甲方、乙方和丙方于本合同签署之日签订的股权质押合同(下称”乙方股权质押合同”),根据乙方股权质押合同,乙方为担保丙方能履行丙方与甲方签订的控制协议项下的义务,而向甲方质押其在丙方的全部乙方股权。

 

The relevant Parties shall execute all other necessary contracts, agreements or documents, obtain all necessary government licenses and permits and take all necessary actions to transfer valid ownership of the Optioned Interests to Party A and/or the Designee(s), unencumbered by any security interests, and cause Party A and/or the Designee(s) to become the registered owner(s) of the Optioned Interests. For the purpose of this Section and this Agreement, “security interests” shall include securities, mortgages, third party’s rights or interests, any stock options, acquisition right, right of first refusal, right to offset, ownership retention or other security arrangements, but shall be deemed to exclude any security interest created by this Agreement and Party B’s Equity Pledge Agreement. “Party B’s Equity Pledge Agreement” as used in this Section and this Agreement shall refer to the Equity Pledge Agreement (“Party B’s Equity Pledge Agreement”) executed by and among Party A, Party B and Party C as of the date hereof, whereby Party B pledges all of its equity interests in Party C to Party A, in order to guarantee Party C’s performance of its obligations under the Control Agreements executed by and between Party C and Party A.

 

2. 承诺

 

Covenants

 

2.1 有关丙方的承诺

 

Covenants regarding Party C

 

乙方(作为丙方的股东)和丙方在此承诺:

 

Party B (as the shareholders of Party C) and Party C hereby covenant as follows:

 

2.1.1 未经甲方的事先书面同意,不以任何形式补充、更改或修改丙方公司章程文件,增加或减少其注册资本,或以其他方式改变其注册资本结构;

 

Without the prior written consent of Party A, they shall not in any manner supplement, change or amend the articles of association and bylaws of Party C, increase or decrease its registered capital, or change its structure of registered capital in other manners;

 

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2.1.2 按照良好的财务和商业标准及惯例,保持其公司的存续,审慎地及有效地经营其业务和处理事务;

 

They shall maintain Party C’s corporate existence in accordance with good financial and business standards and practices by prudently and effectively operating its business and handling its affairs;

 

2.1.3 未经甲方的事先书面同意,不在本合同签署之日起的任何时间出售、转让、抵押或以其他方式处置丙方的任何资产、业务或收入的合法或受益权益,或允许在其上设置任何其他担保权益;

 

Without the prior written consent of Party A, they shall not at any time following the date hereof, sell, transfer, mortgage or dispose of in any manner any assets of Party C or legal or beneficial interest in the business or revenues of Party C, or allow the encumbrance thereon of any security interest;

 

2.1.4 未经甲方的事先书面同意,不发生、继承、保证或容许存在任何债务,但(i)正常或日常业务过程中产生而不是通过借款方式产生的债务;和(ii)已向甲方披露和得到甲方书面同意的债务除外;

 

Without the prior written consent of Party A, they shall not incur, inherit, guarantee or suffer the existence of any debt, except for (i) debts incurred in the ordinary course of business other than through loans; and (ii) debts disclosed to Party A for which Party A’s written consent has been obtained;

 

2.1.5 一直在正常业务过程中经营所有业务,以保持丙方的资产价值,不进行任何足以影响其经营状况和资产价值的作为/不作为;

 

They shall always operate all of Party C’s businesses during the ordinary course of business to maintain the asset value of Party C and refrain from any action/omission that may affect Party C’s operating status and asset value;

 

2.1.6 未经甲方的事先书面同意,不得让丙方签订任何重大合同,但在正常业务过程中签订的合同除外(就本段而言,如果一份合同的总金额超过人民币100,000元,即被视为重大合同);

 

Without the prior written consent of Party A, they shall not cause Party C to execute any major contract, except the contracts in the ordinary course of business (for purpose of this subsection, a contract with a price exceeding RMB 100,000 shall be deemed a major contract);

 

2.1.7 未经甲方的事先书面同意,丙方不得向任何人提供贷款或信贷;

 

Without the prior written consent of Party A, they shall not cause Party C to provide any person with any loan or credit;

 

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2.1.8 应甲方要求,向其提供所有关于丙方的营运和财务状况的资料;

 

They shall provide Party A with information on Party C’s business operations and financial condition at Party A’s request;

 

2.1.9 如甲方提出要求,丙方应从甲方接受的保险公司处购买和持有有关其资产和业务的保险,该保险的金额和险种应与经营类似业务的公司一致;

 

If requested by Party A, they shall procure and maintain insurance in respect of Party C’s assets and business from an insurance carrier acceptable to Party A, at an amount and type of coverage typical for companies that operate similar businesses;

 

2.1.10 未经甲方的事先书面同意,丙方不得与任何人合并或联合,或对任何人进行收购或投资;

 

Without the prior written consent of Party A, they shall not cause or permit Party C to merge, consolidate with, acquire or invest in any person;

 

2.1.11 将发生的或可能发生的与丙方资产、业务或收入有关的诉讼、仲裁或行政程序立即通知甲方;

 

They shall immediately notify Party A of the occurrence or possible occurrence of any litigation, arbitration or administrative proceedings relating to Party C’s assets, business or revenue;

 

2.1.12 为保持丙方对其全部资产的所有权,签署所有必要或适当的文件,采取所有必要或适当的行动和提出所有必要或适当的控告或对所有索偿进行必要和适当的抗辩;

 

To maintain the ownership by Party C of all of its assets, they shall execute all necessary or appropriate documents, take all necessary or appropriate actions and file all necessary or appropriate complaints or raise necessary and appropriate defenses against all claims;

 

2.1.13 未经甲方事先书面同意,不得以任何形式派发股息予各股东,但一经甲方要求,丙方应立即将其所有可分配利润全部立即分配给其各股东;及

 

Without the prior written consent of Party A, they shall ensure that Party C shall not in any manner distribute dividends to its shareholders, provided that upon Party A’s written request, Party C shall immediately distribute all distributable profits to its shareholders; and

 

2.1.14 根据甲方的要求,委任由其指定的任何人士出任丙方的董事;未经甲方事先书面同意,不得更换丙方的董事。

 

At the request of Party A, they shall appoint any persons designated by Party A as directors of Party C; without the prior written consent of Party A, they shall not replace the directors of Party C.

 

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2.2 乙方的承诺

 

Covenants of Party B

 

乙方承诺:

 

Party B hereby covenants as follows:

 

2.2.1 未经甲方的事先书面同意,不出售、转让、抵押或以其他方式处置其拥有的丙方的股权的合法或受益权益,或允许在其上设置任何其他担保权益,但根据乙方股权质押合同在该股权上设置的质押则除外;

 

Without the prior written consent of Party A, Party B shall not sell, transfer, mortgage or dispose of in any other manner any legal or beneficial interest in the equity interests in Party C held by Party B, or allow the encumbrance thereon of any security interest, except for the pledge placed on these equity interests in accordance with Party B’s Equity Pledge Agreement;

 

2.2.2 促使丙方股东会和/或董事会不批准在未经甲方的事先书面同意的情况下,出售、转让、抵押或以其他方式处置任何乙方持有之丙方的股权的合法权益或受益权,或允许在其上设置任何其他担保权益,但批准根据乙方股权质押合同在乙方股权上设置的质押则除外;

 

Party B shall cause the shareholders’ meeting and/or the board of directors of Party C not to approve the sale, transfer, mortgage or disposition in any other manner of any legal or beneficial interest in the equity interests in Party C held by Party B, or allow the encumbrance thereon of any security interest, without the prior written consent of Party A, except for the pledge placed on these equity interests in accordance with Party B’s Equity Pledge Agreement;

 

2.2.3 未经甲方的事先书面同意的情况下,对于丙方与任何人合并或联合,或对任何人进行收购或投资,乙方将促成丙方股东会或董事会不予批准;

 

Party B shall cause the shareholders’ meeting or the board of directors of Party C not to approve the merger or consolidation with any person, or the acquisition of or investment in any person, without the prior written consent of Party A;

 

2.2.4 将发生的或可能发生的任何关于其所拥有的股权的诉讼、仲裁或行政程序立即通知甲方;

 

Party B shall immediately notify Party A of the occurrence or possible occurrence of any litigation, arbitration or administrative proceedings relating to the equity interests in Party C held by Party B;

 

2.2.5 促使丙方股东会或董事会表决赞成本合同规定的被购买股权的转让并应甲方之要求采取其他任何行动;

 

Party B shall cause the shareholders’ meeting or the board of directors of Party C to vote their approval of the transfer of the Optioned Interests as set forth in this Agreement and to take any and all other actions that may be requested by Party A;

 

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2.2.6 为保持其对股权的所有权,签署所有必要或适当的文件,采取所有必要或适当的行动和提出所有必要或适当的控告或对所有索偿进行必要和适当的抗辩;

 

To the extent necessary to maintain Party B’s ownership in Party C, Party B shall execute all necessary or appropriate documents, take all necessary or appropriate actions and file all necessary or appropriate complaints or raise necessary and appropriate defenses against all claims;

 

2.2.7 应甲方的要求,委任由其指定的任何人士出任丙方的董事和/或执行董事;未经甲方事先书面同意,不得更换丙方的董事;

 

Party B shall appoint any designee of Party A as director and/or executive director of Party C, at the request of Party A; without the prior written consent of Party A, they shall not replace the directors of Party C;

 

2.2.8 应甲方的要求,不时向甲方和/或其指定的个人出具授权委托书,授权甲方和/或其指定的个人行使与丙方有关的股东表决权;

 

Party B shall issue such power of attorney as Party A may request from time to time, to authorize Party A and/or the individual designated by Party A to exercise Party B’s voting rights as a shareholder in Party C.

 

2.2.9 经甲方随时要求,应向其指定的代表在任何时间无条件地根据本合同的股权购买权立即转让其股权,并放弃其对另一现有股东进行其相应股权转让所享有的优先购买权(如有的话);和

 

At the request of Party A at any time, Party B shall promptly and unconditionally transfer its equity interests in Party C to Party A’s Designee(s) in accordance with the Equity Interest Purchase Option under this Agreement, and Party B hereby waives its right of first refusal to the respective share transfer by the other existing shareholder of Party C (if any); and

 

2.2.10 严格遵守本合同及乙方、丙方与甲方共同或分别签订的其他合同的各项规定,切实履行该等合同项下的各项义务,并不进行任何足以影响该等合同的有效性和可执行性的作为/不作为。如果乙方对于本合同项下或本合同各方签署的乙方股权质押合同项下或对甲方和/或其指定的个人出具的授权委托书中的股权,还留存有任何权利,除非甲方书面指示,否则乙方仍不得行使该权利。

 

Party B shall strictly abide by the provisions of this Agreement and other contracts jointly or separately executed by and among Party B, Party C and Party A, perform the obligations hereunder and thereunder, and refrain from any action/omission that may affect the effectiveness and enforceability thereof. If Party B retains any additional rights other than those rights provided for under this Agreement, Party B’s Equity Pledge Agreement and the powers of attorney issued to Party A and/or the individual designated by Party A, Party B shall not exercise such rights without Party A’s written direction.

 

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3. 陈述和保证

 

Representations and Warranties

 

乙方和丙方特此在本合同签署之日向甲方共同及分别陈述和保证如下:

 

Party B and Party C hereby represent and warrant to Party A, jointly and severally, as of the date of this Agreement that:

 

3.1 其具有签订和交付本合同和其为一方的、根据本合同为每一次转让被购买股权而签订的任何股权转让合同(各称为”转让合同”),并履行其在本合同和任何转让合同项下的义务的权力和能力。乙方和丙方同意在甲方行使购买权时,他们将签署与本合同条款一致的转让合同。本合同和其是一方的各转让合同一旦签署后,构成或将对其构成合法、有效及具有约束力的义务并可按照其条款对其强制执行;

 

They have the authority to execute and deliver this Agreement and any share transfer contracts to which they are parties concerning the Optioned Interests to be transferred thereunder (each, a “Transfer Contract”), and to perform their obligations under this Agreement and any Transfer Contracts. Party B and Party C agree to enter into Transfer Contracts consistent with the terms of this Agreement upon Party A’s exercise of the Equity Interest Purchase Option. This Agreement and the Transfer Contracts to which they are parties constitute or will constitute their legal, valid and binding obligations and shall be enforceable against them in accordance with the provisions thereof;

 

3.2 无论是本合同或任何转让合同的签署和交付还是其在本合同或任何转让合同项下的义务的履行均不会:(i)导致违反任何有关的中国法律;(ii)与丙方章程或其他组织文件相抵触;(iii)导致违反其是一方或对其有约束力的任何合同或文件,或构成其是一方或对其有约束力的任何合同或文件项下的违约;(iv)导致违反有关向任何一方颁发的任何许可或批准的授予和(或)继续有效的任何条件;或(v)导致向任何一方颁发的任何许可或批准中止或被撤销或附加条件;

 

The execution and delivery of this Agreement or any Transfer Contracts and the obligations under this Agreement or any Transfer Contracts shall not: (i) cause any violation of any applicable laws of China; (ii) be inconsistent with the articles of association, bylaws or other organizational documents of Party C; (iii) cause the violation of any contracts or instruments to which they are a party or which are binding on them, or constitute any breach under any contracts or instruments to which they are a party or which are binding on them; (iv) cause any violation of any condition for the grant and/or continued effectiveness of any licenses or permits issued to either of them; or (v) cause the suspension or revocation of or imposition of additional conditions to any licenses or permits issued to either of them;

 

3.3 乙方对其在丙方拥有的股权拥有良好和可出售的所有权,除乙方股权质押合同外,乙方在上述股权上没有设置任何担保权益;

 

Party B has a good and merchantable title to the equity interests in Party C he holds. Except for Party B’s Equity Pledge Agreement, Party B has not placed any security interest on such equity interests;

 

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3.4 丙方对所有资产拥有良好和可出售的所有权,丙方在上述资产上没有设置任何担保权益;

 

Party C has a good and merchantable title to all of its assets, and has not placed any security interest on the aforementioned assets;

 

3.5 丙方没有任何未偿还债务,除(i)在其正常的业务过程中发生的债务,及(ii)已向甲方披露及经甲方书面同意债务除外;

 

Party C does not have any outstanding debts, except for (i) debt incurred in the ordinary course of business; and (ii) debts disclosed to Party A for which Party A’s written consent has been obtained.

 

3.6 丙方遵守适用于股权、资产的收购的所有法律和法规;和

 

Party C has complied with all laws and regulations of China applicable to equity or asset acquisitions; and

 

3.7 目前没有悬而未决的或构成威胁的与股权、丙方资产有关的或与丙方有关的诉讼、仲裁或行政程序。

 

There are no pending or threatened litigation, arbitration or administrative proceedings relating to the equity interests in Party C, assets of Party C or Party C.

 

4. 生效日

 

Effective Date

 

本合同于各方签署本合同之日生效,本协议在乙方拥有的全部丙方股权根据本协议的约定依法转让至甲方和/或被指定人名下后终止。

 

This Agreement shall become effective upon the date hereof, and remain effective until all the equity interest owned by Party B in Party C has been legally transferred to Party A or the Designee(s) in accordance with this Agreement.

 

5. 适用法律与争议解决

 

Governing Law and Resolution of Disputes

 

5.1 适用法律

 

Governing law

 

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本合同的订立、效力、解释、履行、修改和终止以及争议解决均适用中国正式公布并可公开得到的法律。对中国正式公布并可公开得到的法律没有规定的事项,将适用国际法律原则和惯例。

 

The execution, effectiveness, construction, performance, amendment and termination of this Agreement and the resolution of disputes hereunder shall be governed by the formally published and publicly available laws of China. Matters not covered by formally published and publicly available laws of China shall be governed by international legal principles and practices.

 

5.2 争议的解决方法

 

Methods of Resolution of Disputes

 

因解释和履行本合同而发生的任何争议,本合同各方应首先通过友好协商的方式加以解决。如果在一方向其他方发出要求协商解决的书面通知后30天之内争议仍然得不到解决,则任何一方均可将有关争议提交给位于深圳的中国国际经济贸易仲裁委员会华南分会,由该会按照中国国际经济贸易仲裁委员会仲裁规则仲裁解决。仲裁应在深圳进行,使用之语言为中文。仲裁裁决是终局性的,对各方均有约束力。

 

In the event of any dispute with respect to the construction and performance of this Agreement, the Parties shall first resolve the dispute through friendly negotiations. In the event the Parties fail to reach an agreement on the dispute within 30 days after either Party’s request to the other Parties for resolution of the dispute through negotiations, either Party may submit the relevant dispute to the Southern China Commission of China International Economic and Trade Arbitration Commission for arbitration, in accordance with its Arbitration Rules. The arbitration shall be conducted in Shenzhen, and the language used in arbitration shall be Chinese. The arbitration award shall be final and binding on all Parties.

 

6. 税款、费用

 

Taxes and Fees

 

每一方应承担根据中国法律因准备和签署本合同和各转让合同以及完成本合同和各转让合同拟定的交易而由该方发生的或对其征收的任何和全部的转让和注册的税、花费和费用。

 

Each Party shall pay any and all transfer and registration tax, expenses and fees incurred thereby or levied thereon in accordance with the laws of China in connection with the preparation and execution of this Agreement and the Transfer Contracts, as well as the consummation of the transactions contemplated under this Agreement and the Transfer Contracts.

 

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7. 通知

 

Notices

 

7.1 本合同项下要求或发出的所有通知和其他通信应通过专人递送、挂号邮寄、邮资预付或商业快递服务的方式发到该方下列地址。每一通知还应再以电子邮件送达。该等通知视为有效送达的日期按如下方式确定:

 

All notices and other communications required or permitted to be given pursuant to this Agreement shall be delivered personally or sent by registered mail, postage prepaid, by a commercial courier service to the address of such Party set forth below. A confirmation copy of each notice shall also be sent by email. The dates on which notices shall be deemed to have been effectively given shall be determined as follows:

 

7.2通知如果是以专人递送、快递服务或挂号邮寄、邮资预付发出的,则以于设定为通知的地址在签收或拒收之日为有效送达日。

 

Notices given by personal delivery, by courier service or by registered mail, postage prepaid, shall be deemed effectively given on the date of acceptance or refusal at the address specified for notices.

 

7.3 任何一方变更接收通知的地址或联系人的,应按本条规定给另一方发出通知。

 

If any Party change its address for notices or its contact person, a notice shall be delivered to the other Party in accordance with the terms hereof.

 

8. 保密责任

 

Confidentiality

 

各方承认及确定有关本合同、本合同内容,以及彼此就准备或履行本合同而交换的任何口头或书面资料均被视为保密信息。各方应当对所有该等保密信息予以保密,而在未得到另一方书面同意前,不得向任何第三者披露任何保密信息,惟下列信息除外:(a)公众人士知悉或将会知悉的任何信息(惟并非由接受保密信息之一方擅自向公众披露);(b)根据适用法律法规、股票交易规则、或政府部门或法院的命令而所需披露之任何信息;或(c)由任何一方就本合同所述交易而需向其股东、投资者、法律或财务顾问披露之信息,而该股东、法律或财务顾问亦需遵守与本条款相类似之保密责任。如任何一方工作人员或聘请机构的泄密均视为该方的泄密,需依本合同承担违约责任。无论本合同以任何理由终止,本条款仍然生效。

 

The Parties acknowledge that the existence and the terms of this Agreement and any oral or written information exchanged between the Parties in connection with the preparation and performance this Agreement are regarded as confidential information. Each Party shall maintain confidentiality of all such confidential information, and without obtaining the written consent of the other Party, it shall not disclose any relevant confidential information to any third parties, except for the information that: (a) is or will be in the public domain (other than through the receiving Party’s unauthorized disclosure); (b) is under the obligation to be disclosed pursuant to the applicable laws or regulations, rules of any stock exchange, or orders of the court or other government authorities; or (c) is required to be disclosed by any Party to its shareholders, investors, legal counsels or financial advisors regarding the transaction contemplated hereunder, provided that such shareholders, investors, legal counsels or financial advisors shall be bound by the confidentiality obligations similar to those set forth in this Section. Disclosure of any confidential information by the staff members or agencies hired by any Party shall be deemed disclosure of such confidential information by such Party, which Party shall be held liable for breach of this Agreement. This Section shall survive the termination of this Agreement for any reason.

 

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9. 进一步保证

 

Further Warranties

 

各方同意迅速签署为执行本合同的各项规定和目的而合理需要的或对其有利的文件,以及为执行本合同的各项规定和目的而采取合理需要的或对其有利的进一步行动。

 

The Parties agree to promptly execute documents that are reasonably required for or are conducive to the implementation of the provisions and purposes of this Agreement and take further actions that are reasonably required for or are conducive to the implementation of the provisions and purposes of this Agreement.

 

10. 其他

 

Miscellaneous

 

10.1 修订、修改与补充

 

Amendment, change and supplement

 

对本合同作出修订、修改与补充,必须经每一方签署书面协议。

 

Any amendment, change and supplement to this Agreement shall require the execution of a written agreement by all of the Parties.

 

10.2 完整合同

 

Entire agreement

 

除了在本合同签署后所作出的书面修订、补充或修改以外,本合同构成本合同各方就本合同标的物所达成的完整合同,取代在此之前就本合同标的物所达成的所有口头或书面的协商、陈述和合同。

 

Except for the amendments, supplements or changes in writing executed after the execution of this Agreement, this Agreement shall constitute the entire agreement reached by and among the Parties hereto with respect to the subject matter hereof, and shall supercede all prior oral and written consultations, representations and contracts reached with respect to the subject matter of this Agreement.

 

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10.3 标题

 

Headings

 

本合同的标题仅为方便阅读而设,不应被用来解释、说明或在其他方面影响本合同各项规定的含义。

 

The headings of this Agreement are for convenience only, and shall not be used to interpret, explain or otherwise affect the meanings of the provisions of this Agreement.

 

10.4 语言

 

Language

 

本合同以中文和英文书就,一式三份,甲乙丙三方各持一份,具有同等效力;中英文版本如有冲突,应以中文版为准。

 

This Agreement is written in both Chinese and English language in three copies, each Party having one copy with equal legal validity; in case there is any conflict between the Chinese version and the English version, the Chinese version shall prevail.

 

10.5 可分割性

 

Severability

 

如果本合同有任何一条或多条规定根据任何法律或法规在任何方面被裁定为无效、不合法或不可执行,本合同其余规定的有效性、合法性或可执行性不应因此在任何方面受到影响或损害。各方应通过诚意磋商,争取以法律许可以及各方期望的最大限度内有效的规定取代那些无效、不合法或不可执行的规定,而该等有效的规定所产生的经济效果应尽可能与那些无效、不合法或不能强制执行的规定所产生的经济效果相似。

 

In the event that one or several of the provisions of this Agreement are found to be invalid, illegal or unenforceable in any aspect in accordance with any laws or regulations, the validity, legality or enforceability of the remaining provisions of this Agreement shall not be affected or compromised in any respect. The Parties shall strive in good faith to replace such invalid, illegal or unenforceable provisions with effective provisions that accomplish to the greatest extent permitted by law and the intentions of the Parties, and the economic effect of such effective provisions shall be as close as possible to the economic effect of those invalid, illegal or unenforceable provisions.

 

10.6 继任者

 

Successors

 

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本合同对各方各自的继任者和各方所允许的受让方应具有约束力并对其有利。

 

This Agreement shall be binding on and shall inure to the interest of the respective successors of the Parties and the permitted assigns of such Parties.

 

10.7 弃权

 

Waivers

 

任何一方可以对本合同的条款和条件作出弃权,但必须经书面作出并经各方签字。一方在某种情况下就其他方的违约所作的弃权不应被视为该方在其他情况下就类似的违约已经对其他方作出弃权。

 

Any Party may waive the terms and conditions of this Agreement, provided that such a waiver must be provided in writing and shall require the signatures of the Parties. No waiver by any Party in certain circumstances with respect to a breach by other Parties shall operate as a waiver by such a Party with respect to any similar breach in other circumstances.

 

10.8 继续有效

 

Survival

 

10.8.1 合同期满或提前终止前因本合同而发生的或到期的任何义务在本合同期满或提前终止后继续有效。

 

Any obligations that occur or that are due as a result of this Agreement upon the expiration or early termination of this Agreement shall survive the expiration or early termination thereof.

 

10.8.2 本合同第5、7、8条和本第10.8条的规定在本合同终止后继续有效。

 

The provisions of Sections 5, 7, 8 and this Section 10.8 shall survive the termination of this Agreement.

 

10.9 补偿

 

Indemnification

 

10.9.1 各方同意并确认,如一方(以下称”违约方”)实质性地违反本合同项下所作的任何一项约定,或实质性地未履行本合同项 下的任何一项义务,即构成本合同项下的违约(以下称”违约”),守约方有权要求违约方在合理期限内补正或采取补救措施。如违约方在合理期限内或在守约方书面通知违约方并提出补正要求后十(10)天内仍未补正或采取补救措施的,则守约方有权自行决定选择以下的任一种违约救济方式:(1)终止本合同,并要求违约方给予全部的损害赔偿;(2)要求强制履行违约方在本合同项下的义务,并要求违约方给予全部的损害赔偿;或者(3)按照乙方股权质押合同的约定以质押股权折价,拍卖或者变卖,并以折价、拍卖或者变卖的价款优先受偿,并要求违约方承担由此造成的全部损失;

 

The Parties agree and confirm that, if any Party (the “Defaulting Party”) is in material breach of any provisions herein or fails to perform any obligations hereunder in any material respect, such breach or failure shall constitute a default under this Agreement (the “Default”), which shall entitle non-defaulting Party to request Defaulting Party to rectify or remedy such Default with a reasonable period of time. If the Defaulting Party fails to rectify or remedy such Default within the reasonable period of time or within 10 days of non-defaulting Party’s written notice requesting for such rectification or remedy, the non-defaulting Party shall be entitled to elect any one of the following remedial actions: (a) to terminate this Agreement and request the Defaulting Party to fully compensate its losses and damages; (b) to request the specific performance by the Defaulting Party of its obligations hereunder and request the Defaulting Party to fully compensate non-defaulting Party’s losses and damages; or (c) to enforce the pledge under the Party B’s Equity Pledge Agreement by selling, auctioning or exchanging the pledged equity thereunder and receive payment in priority from the proceeds derived therefrom, and in the meantime, request the Defaulting Party to fully compensate non-defaulting Party for any losses as a result thereof.

 

10.9.2 本合同规定的权利和救济是累积的,并不排斥法律规定的其他权利或者救济;

 

The rights and remedies provided for in this Agreement shall be accumulative and shall not affect any other rights and remedies stipulated at law.

 

本页其余部分刻意留为空白

 

The Remainder of this page is intentionally left blank

 

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有鉴于此,双方已使得经其授权的代表于文首所述日期签署了本股权处分合同并即生效,以昭信守。

 

IN WITNESS WHEREOF, the Parties have caused their authorized representatives to execute this Equity Option Agreement as of the date first above written.

 

甲方: 祥天石化科技(咸宁)有限公司

Party A:  Lucky Sky Petrochemical Technology (Xianning) Co., Ltd. [Corporate Seal Affixed Herein]

 

签字:

By: /s/ Bin Zhou  
姓名: 周彬  
Name:  Bin Zhou  
职务: 法定代表人  
Title: Legal Representative  

 

乙方:深圳市嘉铭瑞新农有限公司

Party B: Shenzhen Jiamingrui New Agriculture Co., Ltd. [Corporate Seal Affixed Herein]

签字:

By: /s/ Xuemei Li  
姓名: 李雪梅  
Name:  Xuemei Li  
职务: 法定代表人  
Title: Legal Representative  

 

丙方: 台山市牧仁农业有限公司

Party C: Taishan Muren Agriculture Co., Ltd. [Corporate Seal Affixed Herein]

 

签字:

By: /s/ Yongjun Huang  
姓名: 黄拥军  
Name:  Yongjun Huang  
职务: 法定代表人  
Title: Legal Representative  

 

 

16

 

Exhibit 10.20

 

股东表决权委托协议

 

Voting Rights Proxy and Financial Supporting Agreement

 

本股东表决权委托协议(以下称”本协议”)于2019年12月20日由以下各方在咸宁签订:

 

This Voting Rights Proxy and Financial Supporting Agreement (the “Agreement”) is made in Xianning, China on December 20, 2019 among the following parties:

 

甲方:   深圳市嘉铭瑞新农有限公司 (”委托方”)
地址:   深圳市南山区南海大道以西美年广场1栋1104F
Party A:   Shenzhen Jiamingrui New Agricuture Co., Ltd. (“Entrusting Party”)
Address:   Suite 1104F, Building 1, Meinian Plaza, West Nanhai Avenue, Nanshan District, Shenzhen
     
乙方:   祥天石化科技(咸宁)有限公司 (”受托人”
地址:   湖北省咸宁市黄畈村一组金色海湾2幢3层
Party B:   Lucky Sky Petrochemical Technology (Xianning) Co., Ltd. (“Designee”)
Address:   3/F, Building 2, Golden Bay, Group 1, Huangfan Village, Xianning City, Hubei Province
     
丙方:   台山市牧仁农业有限公司
地址:   台山市海宴华侨农场南丰村216
Party C:   Taishan Muren Agriculture Co., Ltd.
Address:   No.216, Nanfeng Village, Haiyan overseas Chinese Farm, Taishan City

 

(在本协议中,以上各方分别称为”一方”,合称为”各方”。)

 

(In this Agreement, each of Party A, Party B and Party C shall be referred to as a “Party” respectively, and they shall be collectively referred to as the “Parties”.)

 

鉴于:

 

Whereas:

 

1. 委托方是丙方现时的股东,登记为持有丙方100%的股权的股东;

 

The Entrusting Party, the shareholders of Party C, collectively own 100% of the equity interest in Party C in record.

 

2. 委托方有意分别不可撤销地委托乙方或乙方指定的个人行使其在丙方中享有的表决权,乙方有意接受该等委托。

 

The Entrusting Party is willing to unconditionally entrust Party B or Party B’s designee to vote on his or her behalf at the shareholders’ meeting of Party C, and Party B is willing to accept such proxy on behalf of Entrusting Party.

 

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各方经友好协商,兹一致协议如下:

 

Therefore, the Parties hereby agree as follows:

 

第一条 表决权委托

 

Proxy of Voting Rights

 

1.1 委托方兹不可撤消地承诺,其在本协议签订后将签署内容和格式如本协议附件一的授权委托书(“授权委托书”),分别授权乙方或乙方届时指定的人士(以下称”受托人”)代表其行使委托方作为丙方的股东,依据丙方届时有效的章程所分别享有的权利,包括但不限于(以下统称”委托权利”):

 

Entrusting Party hereby irrevocably covenants that, he/she shall execute the Power of Attorney (“POA”) set forth in Exhibit A upon signing this Agreement and entrust Party B or Party B’s designee (“Designee”) to exercise all his or her rights as the shareholders of Party C under the Articles of Association of Party C, including without limitation to:

 

(1) 作为委托方的代理人,根据丙方的章程提议召开和出席丙方的股东会会议;

 

propose to hold a shareholders’ meeting in accordance with the Articles of Association of Party C and attend shareholders’ meetings of Party C as the agent and attorney of Entrusting Party;

 

(2) 代表委托方对所有需要股东会讨论、决议的事项行使表决权,包括但不限于指定和选举丙方的董事、总经理及其他应由股东任免的高级管理人员;

 

exercise all shareholder’s voting rights with respect to all matters to be discussed and voted in the shareholders’ meeting of Party C, including but not limited to designate and appoint the director, the chief executive officer and other senior management members of Party C;

 

(3) 不时修订的中国法律法规规定的股东所应享有的其他表决权;以及

 

exercise other voting rights the shareholders are entitled to under the laws of China promulgated from time to time; and

 

(4) 不时修订的丙方章程项下的其他股东表决权。

 

exercise other voting rights the shareholders are entitled to under the Articles of Association of Party C amended from time to time;

 

乙方特此同意接受第1.1条所述该等委托。当收到乙方向委托方发出的更换受托人的书面通知,委托方应立即指定乙方届时指定的其他人行使第1.1条的委托权利;除此外,委托方不得撤销向受托人做出的委托和授权。

 

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Party B hereby agrees to accept such proxy as set forth in Clause 1.1. Upon receipt of the written notice of change of Designee from Party B, the Entrusting Party shall immediately entrust such person to exercise the rights set forth in Clause 1.1. Except the aforesaid situation, the proxy shall be irrevocable and continuously valid.

 

1.2 对受托人行使上述委托权利所产生的任何法律后果,委托方均予以认可并承担相应责任。

 

The Entrusting Party hereby acknowledges and ratify all the actions associated with the proxy conducted by the Designee.

 

1.3 委托方兹确认,受托人在行使上述委托权利时,无需事先征求委托方的意见。

 

The Parties hereby confirm that, Designee is entitled to exercise all proxy rights without the consent of Entrusting Party.

 

第二条 知情权

 

Rights to Information

 

2.1 为行使本协议下委托权利之目的,受托人有权要求丙方提供相关信息,查阅丙方相关资料,丙方应对此予以充分配合。

 

For the purpose of this Agreement, the Designee is entitled to request relevant information of Party C and inspect the materials of Party C. Party C shall provide appropriate assistance to the Designee for his/her work.

 

2.2 发生本协议项下的委托事项时,委托方及丙方应及时通知乙方。

 

The Entrusting Party and Party C shall immediately inform Party B once the proxy matter happens.

 

第三条 委托权利的行使

 

Performance of Proxy Rights

 

3.1 委托方将就受托人行使委托权利提供充分的协助,包括在必要时及时签署及执行受托人已作出的股东会决议或其他相关的法律文件。

 

The Entrusting Party shall provide appropriate assistance to the Designee for the performance of proxy rights provided in this Agreement, including signing and executing the shareholders’ resolution and other relevant legal documents (if applicable) which have been confirmed by the Designee.

 

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3.2 如果本协议有任何一条或多条规定根据任何法律或法规在任何方面被裁定为无效、不合法或不可执行,本协议其余规定的有效性、合法性或可执行性不应因此在任何方面受到影响或损害。双方应通过诚意磋商,争取以法律许可以及双方期望的最大限度内有效的规定取代那些无效、不合法或不可执行的规定,而该等有效的规定所产生的经济效果应尽可能与那些无效、不合法或不能强制执行的规定所产生的经济效果相似。

 

In the event that one or several of the provisions of this Agreement are found to be invalid, illegal or unenforceable in any aspect in accordance with any laws or regulations, the validity, legality or enforceability of the remaining provisions of this Agreement shall not be affected or compromised in any aspect. The Parties shall strive in good faith to replace such invalid, illegal or unenforceable provisions with effective provisions that accomplish to the greatest extent permitted by law and the intentions of the Parties, and the economic effect of such effective provisions shall be as close as possible to the economic effect of those invalid, illegal or unenforceable provisions.

 

第四条 财务支持

 

Financial Supporting

考虑到委托方授予的上述投票权,受托人同意安排向丙方提供有关于其业务的必要的资金(”财务支持”)。受托人同意如果因正常商业运作失败而丙方不能偿还其财务支持,丙方将无返还义务。

 

In consideration of the foregoing grant of voting rights by the Entrusting Party, Party B agrees to arrange for funds to be provided as necessary to Party C in connection with the business (the “Financial Support”). Party B further agrees that should the business fails in the ordinary course of business, and as a result Party C is unable to repay the Financial Support, the Party C shall have no repayment obligation.

 

第五条 声明与保证

 

Representations and Warranties

5.1 委托方兹分别地声明与保证如下:

 

The Entrusting Party hereby represents and warrants to Party B as follows:

 

5.1.1 其拥有签订和履行本协议及授权委托书项下义务的完全权力和授权。本协议构成对其的合法的、具有约束力的义务,并可根据本协议条款对其强制执行。

 

The Entrusting Party has full power and legal right to enter into this Agreement and perform his or her obligations under this Agr