EXHIBIT 10.8
Subcontracting Contract
Party A: Shandong Longfeng Group Company
Party B: Sanhe New Dragon Asia Food Company Limited
Shandong Longfeng Group Company ("Party A") has invested 20.36% of the
registered capital in Sanhe New Dragon Asia Food Company Limited ("Party B").
Based on the actual production condition and the consideration of obligations,
power, profits of the shareholder, Party A and Party B agreed to sign this
Contract after consultation.
1. Subcontract Period
Subcontracting period is 50 years, i.e. from December 26, 1998 to
December 25, 2048
2. Subcontract Fee
Party B shall paid RMB400,000 as Subcontract Fee to Party A for each
financial year within the Subcontract Period.
3. Both parties' responsibilities
(i) Party A :
Party A shall advise, provide services and monitor on major
decisions and production management to Party B. Party A shall also
audit the operation condition and economic responsibilities of
Party B within and at the end of the Subcontract Period.
(ii) After Party A received the Subcontract Fee, it does not entitled
to receive the undistributed profits according to the actual
proportion of investment in registered capital after deducting the
Subcontract Fee.
(iii) Party B:
(1) Party B must obey the PRC laws and regulations, operate the
business according to the approved business areas and use
its operation power correctly.
(2) Party B should improve its decision-making and management
ability, enhance its operation capacity and profitability,
expand the market and increase the incomes.
(3) Party B shall strictly execute the policies of the company
and ensure every target can be successfully achieved.
(4) Party B shall improve the equipment maintenance, quality
management, market expansion and self-development based on
the long-term business view.
4. If Party B encounters earthquake, fire, typhoon, etc such unforeseeable or
unavoidable natural accidents which directly affect the completion of
economic targets during Party B's operation period, then Party A and Party
B can negotiate to reduce the Subcontract Fee. Normal change in market
conditions and changes in competitive environments shall not be an excuse
to change the Subcontract Fee.
5. Party A and Party B can negotiate to adjust the Subcontract Period.
6. Any other matters not stated in this Contract shall be negotiated by both
Parties. Supplemental agreement can be signed if necessary.
7. This Contract has 3 copies and is effective after signing with company
chop.
Party A's legal representative:
Party B's representative:
December 26, 1998
