Hebei Lansheng Biotech Co., Ltd.
ShangHai Yuelian Biotech Co., Ltd.

China Agri-Business Acquired Shaanxi Qinfeng Agrochemicalqrcode

Jun. 28, 2011

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Jun. 28, 2011

China Agri-Business, Inc., a manufacturer and distributor of organic agricultural application products in China, announced that China Agri-Business, through its Chinese operating subsidiary, Shaanxi Xinsheng Centennial Agriculture & Technology Co., Ltd. acquired the right to manage and operate Shaanxi Qinfeng Agrochemical Inc. in Xi'an, China.

Qinfeng is an agrochemical manufacturer. Currently, Qinfeng has an annual production capacity of 400 metric tons of diafenthiuron, 600 metric tons of Prochloraz, and approximately 5,000 metric tons of seed coating agents and preparations. Qinfeng's estimated annual revenue is currently approximately RMB 90 million (approximately $13.9 million).

Pursuant to the management and operating agreement between the Company and Qinfeng, the Company will manage Qinfeng's operations from June 1, 2011 until December 31, 2013 (the "Term"). The Company is entitled to the net profits or losses from the operations of Qinfeng during the Term. During the Term, the Company has rights to use Qinfeng's production facilities and intangible assets (i.e. trade names, trademarks, and certain licenses), to hire and dismiss employees, to file all applicable registrations with government authorities, and to coordinate with third parties in connection with technical development and production.

The Company agreed: (1) to manage Qinfeng's assets and production lawfully; if production is unreasonably interrupted continually more than two months, Qinfeng may terminate the Agreement and hold the Company responsible for all resulting losses; (2) to be responsible for payment of all taxes and fees, except taxes relating to housing and land and pre-existing taxes and fees; (3) to be responsible for the safeguard of Qinfeng's assets and intangible assets; (4) to be responsible for the safety of production and annual safety production inspections; (5) to be responsible for the validation and registration of fertilizer licenses; (6) to be responsible for the maintenance of current facilities and new equipment if needed; (7) to be responsible for the purchase of workers' compensation insurance; (8) to be responsible for the payment of wages and salaries; (9) to be responsible for all civil administrative and criminal charges in connection with the operation of Qinfeng's assets that occur during the Term.

As consideration for entering into the agreement, the Company paid Qinfeng 1.2 million RMB (approximately $185,000) on June 14, 2011. From January 1, 2012 to December 31, 2013, the Company must pay an aggregate of 2.4 million RMB each year to Qinfeng, payable in installments of 1.2 million RMB (approximately $185,000) due within the first 15 business days of January and July of each year.

Mr. Liping Deng, Chief Executive Officer, President and Director of China Agri-Business, commented, "We are very pleased to have this great opportunity to manage the operations of Qinfeng. Qinfeng has a total of 43 products, licenses or permits registered with Chinese government authorities. Among these products, two agrochemical products, diafenthiuron and Prochloraz, are important raw materials for many lower-toxicity pesticide products. Both diafenthiuron and Prochloraz products may be sold in domestic markets or exported to European and South-Eastern Asia markets." Mr. Liping Deng continued, "We believe that acquiring the management and operating rights will enable us to expand our product mix quickly and to maintain a sustainable long-term growth. We hope that we will have the opportunity to acquire Qinfeng's business, including assets and intangible assets, in the future."

Source: PRNewswire

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