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Agreement Regarding the Collective Responsibilities of the Contractors


Between


Party A: China Huaren Organic Products, Inc. (“CHRN”) and Jilin Province Huaren Organic Products Co. Ltd.  (the “Company”)


Representative: Jinzhong Fang

                                                                And


Party B:    Haizhen Li, Daiwei Zhang,   Qinrao Shi, Xiufang Zhang and Shouyu Lian (collectively as “Management”).


Representative:  Haizhen Li



The above parties (the “Parties”) hereby do enter into a business relationship founded on the principles of equality and mutual benefit in respect to the operation of the Company. This Agreement sets forth and standardizes the rights and obligations of each of the Parties during the course of this relationship. Both Parties are equally bound by the terms of this Agreement.

 

Article One: The purpose of the Agreement:

1.1           The Company is a subsidiary of CHRN, a public company listed for trading in the United States.  Therefore, both parties shall obey by the laws in both the United States of America and China in the business and capital operations of the Company. The terms of the Agreement are to be interpreted according to the Contract Law of the People’s Republic of China .

1.2   Haizhen Li shall be the Chief Executive Officer of the Company during the contract period.  He and the other members of the Management shall be the Directors of the



1



Company.  The Management shall pursue the management objectives set forth in this agreement and any other agreements made in the future between the Board of Directors of CHRN and the Management.   

1.3   The Board of Directors of CHRN shall thoroughly inspect the work reports and financial statements monthly, quarterly, and annually prepared by the Management. During the contract period, either Party may raise objection and terminate the Agreement in the event of any violation of any law or any term of this Agreement. If it gives notice of termination, the objecting Party shall make clear its objection to the offending Party, point out its responsibilities and specify the compensation for damages associated with the violation.

Article Two: Target Revenue and Compensation


2.1  Target Revenue .  


Period

Sales revenue target (RMB Yuan)

8 th Aug.-Dec. 2007

15 million

Jan. – Dec. 2008

65 million

Jan. – Dec. 2009

130 million

Jan. – Dec. 2010

260 million

Jan. – Dec. 2011

500 million



2.2

 Cash Compensation As compensation for its services during the contract period, Management shall be entitled to retain from the revenue of the Company a “Management Fee.”  The Management Fee will equal the sum of (a) the net after-tax earnings of the Company calculated in accordance with U.S. GAAP but before deduction of the Management Fee, less (b) the “Profit” shown in the table below, less (c) the expenses of CHRN itemized in Article Nine of this agreement.  The members of Management shall allocated payment of the Management Fee among themselves as they decide from time to time.  The table below indicates the monthly and annual “Profit” that must be achieved by the Company before any Management Fee will be earned by Management.  



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