CALLOPTION AND COOPERATION AGREEMENT Regarding LongShengHorticulture Technology Co., Ltd. among ZHAOGuang and LongShengHorticulture Technology Co., Ltd. and ShenzhengZhihao Dongbo Technology Ltd. Datedthis 10 day of March, 2010

(1)

Zhao Guang, a PRC citizen with his identiy card number is 232330196808084611 (hereinafter referred to as the “Existing Shareholder”);

(2)

Shenzheng Zhihao Dongbo Technology Ltd. (hereinafter referred to as “WFOE”)

Registered address:

32E, CaiHuiGe, Rainbow New City, Caitian Road, Futian District, Shenzhen; and

(3)

LongSheng Horticulture Technology Co., Ltd. (hereinafter referred to as “LongSheng”)

Registered address:

Group1, Longsheng Village, Shancheng Town, ZhenAn District, Dandong, LiaoNing Province.

(1)

The Existing Shareholder is the enrolled shareholder of LongSheng and lawfully holds all equities of LongSheng.

(2)

WFOE is a limited liability company duly incorporated and validly existing in PRC, and it is an important partner of LongSheng providing technical support, consultancy and other relevant service for it.

(3)

The Existing Shareholder agrees to exclusively grant the WFOE with an irrevocable call option (the “Call Option”), pursuant to which and to the extent permitted by PRC laws, the Existing Shareholder shall, at the request of WFOE, transfer the Option Equity (as defined below) to WFOE and/or any other entity or individual designated by WFOE in accordance with this Agreement.

(4)

LongSheng agrees that the Existing Shareholder may grant to WFOE the Call Option in accordance with this Agreement.

(5)

WFOE agrees to cooperate with the Existing Shareholder and LongSheng according to this Agreement.

1.1

Unless otherwise required by the context, the following terms in this Agreement shall have the following meanings:

1.2

Reference to any PRC Law herein shall be construed as including references to:

 

(1)

the revise, amendment, supplement and reenactment of such law, irrespective of whether they come into force prior or after the formation of this Agreement; and

 

(2)

other decisions, notices or regulations enacted in accordance therewith or effective as a result thereof.

1.3

Unless otherwise stated in the context herein, references to any clause, item or paragraph shall refer to the relevant part of this Agreement.

2.1

The Existing Shareholder hereby agree to irrevocably and unconditionally grant the WFOE an exclusive call option, pursuant to which the WFOE shall be entitled (to the extent permitted by PRC laws) to request the Existing Shareholder to transfer the Option Equity to the WFOE and/or its designated entity or individual in accordance with the terms and conditions hereunder. WFOE also agrees to accept such Call Option.

2.2

LongSheng hereby agrees that the Existing Shareholder may grant WFOE with such Call Option in accordance with Clause 2.1 and other provisions of this Agreement

3.1

To the extent permitted by PRC Law, WFOE shall have the absolute discretion on determining the specific time, method and times of its Exercise of Option.

3.2

If the PRC Law then in effect permits the WFOE and/or other entity or individual designated by it to hold all equities of LongSheng, the WFOE shall have the right to exercise all of its Call Option by a single Exercise of Option, and the WFOE and/or its designated entity or individual will accept all Option Equity from the Existing Shareholder on a one-time basis. If the PRC Law then in effect only permits the WFOE and/or other entity or individual designated by it to hold part of LongSheng’s equities, the WFOE shall have the right to determine the amount of Transferred Equity within the upper limit of shareholding ratio set out by the PRC Law (the “Shareholder Limit”), and the WFOE and/or its designated entity or individual will accept such amount of the Transferred Equity from the Existing Shareholder. In the latter case, the WFOE shall be entitled to exercise its Call Option at multiple times in line with the gradual raise by the PRC Law in the Shareholding Limit, so as to eventually obtain all Option Equity.

3.3

At each Exercise of Option, the WFOE shall have the right to determine the amount of Transferred Equity to be transferred by the Existing Shareholder to the WFOE and/or any other entity or individual designated by it in such Exercise of Option, and the Existing Shareholder shall transfer the such amount of Transferred Equity as required by the WFOE to the WFOE and/or its designated entity or individual. WFOE and/or its designated entity or individual shall pay Transferring Price to the Existing Shareholder in respect of the Transferred Option accepted by it in each Exercise of Option.

3.4

In each Exercise of Option, the WFOE may accept the Transferred Option by itself, or designate any third party to accept all or part of the Transferred Equity.

3.5

After the WFOE has made its decision on each Exercise of Option, it shall serve a notice to the Existing Shareholder stating its intention of exercising Call Option (the “Exercise Notice”, the form of which is set out in Appendix 2 hereto). The Existing Shareholder shall, upon receipt of the Exercise Notice, forthwith transfer the Transferred Equity in accordance with the Exercise Notice to the WFOE and/or its designated entity or individual in such method as specified in Clause 3.3 herein.

3.6

The Existing Shareholder undertakes and guarantees that, once the WFOE issued the Exercise Notice, it shall:

 

(1)

immediately enter into an equity transfer agreement with the WFOE and/or other entity or individual designated by WFOE for transfer of all the Transferred Equity to the WFOE and/or such designated entity or individual;

 

(2)

offer necessary support to the WFOE (including providing and signing all relevant legal documents, processing all formalities for governmental approval and/or registration, and bearing all relevant obligations) in accordance with the requirements of laws and regulations, so as to enable the WFOE and/or its designated entity or individual to obtain all Transferred Equity free from any legal defect; and

 

(3)

immediately take all necessary actions (including but not limited to, delivering the official seal, business license, books of accounts and originals of other certificates and licenses of LongSheng to the WFOE and/or its designated entity or individual) to enable the WFOE and/or its designated entity or individual to obtain the actual control over LongSheng.

3.7

At the same time of executing this Agreement, the Existing Shareholder shall sign a power of attorney (the form of which is set out in Appendix 2 hereto, hereinafter referred to as the “Power of Attorney”) to authorize any person appointed by the WFOE to sign on behalf of the Existing Shareholder any and all legal documents, so as to ensure that the WFOE and/or its designated entity or individual may obtain all Transferred Equity free from any legal defect. Such Power of Attorney shall be delivered to and kept by the WFOE, and, if necessary, the WFOE may request the Existing Shareholder to execute multiple copies of the Power of Attorney at any time and submit such Power of Attorney to relevant governmental authorities.

5.1

The Existing Shareholder hereby represents and warrant as follows, and such representations and warranties shall be continually effective as if made at the time of transferring the Transferred Equity:

 

5.1.1

The Existing Shareholder is a PRC citizen with full capacity. The Existing Shareholder has full and independent legal status and legal capacity to execute, deliver and perform this Agreement, and may act independently as a litigant party.

 

5.1.2

The Existing Shareholder has full power and authorization to execute and deliver this Agreement as well as other documents relating to the transaction contemplated hereunder and to be executed by him. The Pledgor also has full power and authorization to complete the transaction contemplated herein.

 

5.1.3

This Agreement is duly executed and delivered by the Existing Shareholder and constitutes legal and binding obligations on the part of the Existing Shareholder. It is enforceable against him in accordance with its terms and conditions.

 

5.1.4

When this Agreement comes into force, the Existing Shareholder is the lawful owner of the Option Equity, and the Option Equity is free of any lien, pledge, claim and other encumbrance or third-party rights other than those rights created by this Agreement, the Equity Pledge Agreement and the Exclusive Technical Consulting and Service Agreement between the Existing Shareholder and the WFOE. Pursuant to this Agreement, the WFOE and/or its designated entity or individual may, upon Exercise of Option, obtain the proper title to the Transferred Equity free from any lien, pledge, claim and other encumbrances or third party rights.

5.2

LongSheng hereby represents and warrant as follows:

 

5.2.1

LongSheng is a limited liability company duly incorporated and validly existing under the PRC Law and has an independent status as a legal person. LongSheng has full and independent legal status and legal capacity to execute, deliver and perform this Agreement, and may act independently as a litigant party.

 

5.2.2

LongSheng has the full power and authorization to execute and deliver this Agreement as well as other documents to be signed by it in relation to the transaction contemplated herein, and it has full power and authorization to complete the transaction hereunder.

 

5.2.3

This Agreement is duly executed and delivered by LongSheng and constitutes legal and binding obligations on it.

 

5.2.4

The Existing Shareholder is the only enrolled lawful shareholder of LongSheng as of the effective date hereof. Pursuant to this Agreement, the WFOE and/or its designated entity or individual may, upon Exercise of Option, obtain the proper title to the Transferred Equity free from any lien, pledge, claim and other encumbrances or third-party rights.

6.1

Within the term of this Agreement, the Existing Shareholder shall not (unless and until it has informed the WFOE thereof and obtained the prior written consent from WFOE, or it is subject to a compulsory requirement provided by laws):

 

6.1.1

transfer or otherwise dispose of any Option Equity or create any encumbrance or other third-party rights on any Option Equity;

 

6.1.2

increase or decrease the registered capital of LongSheng;

 

6.1.3

declare the distribution of or actually distribute any distributable profits, dividends or bonus shares;

 

6.1.4

agree or causes the merger or division of LongSheng;

 

6.1.5

directly or indirectly hold any equity in, or become the director or employee of, or provide any services (save for services in the ordinary business course of LongSheng) for entities engaging in any business that is similar to or competing with LongSheng;

 

6.1.6

cause LongSheng to be terminated, liquidated or dissolved; and

 

6.1.7

amend the articles of association of LongSheng.

6.2

Within the term of this Agreement, the Existing Shareholder must ensure that LongSheng is in compliance with its undertakings specified in Clause 7.1 below.

6.3

During the term of this Agreement, the Existing Shareholder shall make his best efforts to develop LongSheng’s business and ensure that the business operation of LongSheng is legal and consistent to the regulations. The Existing Shareholder shall not engage in any actions or inactions which may (i) harm Longsheng Assets or reputation of LongSheng, or (ii) affect the validity of those certificates, licenses or qualifications necessary for LongSheng’s various businesses. When the Existing Shareholder ceases to be a shareholder of LongSheng, it shall cause its successor to accept in writing the rights and obligations hereunder with equal validity.

7.1

LongSheng hereby undertakes that, within the term of this Agreement, it shall not (unless it has obtained the prior written consent of WFOE or is subject to any compulsory provisions of laws):

 

7.1.1

dispose of any Longsheng Assets (other than in the ordinary business course);

 

7.1.2

dispose of in any way its operation rights and/or profit-sharing rights in connection with any of its business other than in the ordinary course of business;

 

7.1.3

terminate any Material Agreements signed by it or enter into any other agreements in conflict with the existing Material Agreements;

 

7.1.4

lend or borrow any loan, or provide any guarantee or any other forms of security, or bear any substantial obligations other than in the ordinary business activity;

 

7.1.5

purchase or invest in any entity;

 

7.1.6

deposit or permit any capitals of LongSheng to be deposited in the account of any other entities or individuals (save for the temporary situation arising out of the ordinary business course); and

 

7.1.7

incur any liabilities or contracts with an amount exceeding RMB500,000 (other than in the ordinary business course).

7.2

If any consent, permission, waiver or authorization by any third party, or any governmental approval, license, exemption or filing procedures with any governmental agency (if required by laws) are required by the execution and performance of this Agreement as well as the grant of Call Option hereunder, LongSheng shall make its best efforts to fulfill above conditions.

7.3

Without the prior written consent of the WFOE, LongSheng shall not assist or permit the Existing Shareholder to transfer or otherwise dispose of any Option Equity, or create any encumbrance or other third-party rights on any Option Equity.

7.4

LongSheng shall not conduct or permit any behavior or activity that may adversely affect the interest of WFOE under this Agreement.

9.1

Notwithstanding the termination of this Agreement, the Existing Shareholder shall be obliged to keep the following information in confidential:

 

(1)

the execution, performance and the contents of this Agreement;

 

(2)

trade secret, proprietary information and customer information in relation to the WFOE known to or received by it as a result of execution and performance of this Agreement; and

 

(3)

trade secret, proprietary information and customer information in relation to LongSheng known to or received by it as LongSheng’s shareholder (collectively referred to as the “Confidential Information”).

9.2

Upon termination of this Agreement, the Existing Shareholder shall, at request of the WFOE, return, destroy or otherwise dispose of all documents, materials or software containing the Confidential Information, and stop using such Confidential Information.

9.3

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

11.1

Any notice, request, requirement or other communications hereunder shall be made in writing and delivered to the relevant receiving Party.

11.2

Above notices or other communications shall be deemed to have been given when (i) it is sent out if sent by facsimile or email, or (ii) when it is delivered if deliver by person, or (iii) five (5) days following post if posted by mail.

12.1

The Parties agree and acknowledge that, if either Party (the “Defaulting Party”) substantially breaches any terms hereunder, or substantially fails to perform any of the obligations hereunder, it shall constitute a default under this Agreement (the “Default”). The non-defaulting Party shall have the right to require the Defaulting Party to make corrections or remedies within a reasonable period. If the Defaulting Party fails to make correction or remedy within ten (10) days following receipt of the written notice from the non-defaulting Party, the non-defaulting shall have the right to (at its/his own discretion):

 

(1)

terminate this Agreement, and to request the Defaulting Party to make full compensation for losses and damages; or

 

(2)

enforce the Defaulting Party to perform its/his obligations hereunder, and to request the Defaulting Party to compensate for all losses and damages.

12.2

The Parties agree and acknowledge that, in any circumstances, the Existing Shareholder and LongSheng shall not request the termination of this Agreement for any reason.

12.3

The rights and remedies provided herein are accumulative and shall not preclude any other rights or remedies under the laws.

12.4

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

13.1

13.2

This Agreement shall be governed by and construed in accordance with the PRC Laws.

13.3

Any dispute arising out of or in connection with this Agreement shall be settled by the Parties through friendly consultation. If no agreement has been reached within thirty (30) days following the occurrence of such dispute, it shall be submitted to the competent court for resolution.

13.4

Any right, power or remedy granted to any Party under any provisions herein shall not preclude any other rights, powers or remedies that a Party may be entitled to in accordance with laws or other provisions hereof. A Party’s exercise of its rights, powers or remedies shall not preclude it from exercising other rights, powers or remedies granted to such Party.

13.5

Any failure or delay by a Party in exercising any of its rights, powers and remedies hereunder or in accordance with laws (the “Party’s Rights”) shall not be deemed as a waiver thereof, and any single or partial exercise of the Party’s Rights shall not preclude (i) such Party’s further exercise of such rights and (ii) exercise of other Party’s Rights.

13.6

The headings of this Agreement are for easy reference only and shall not be used for or affect the interpretation hereof in any circumstances.

13.7

Each provision hereunder shall be severable and independent from each other, and, if any provision(s) hereunder has been held invalid, illegal or unenforceable at any time, the validity, legality and enforceability of the remaining provision shall not be affected thereby.

13.8

Upon execution, this Agreement shall supersede any other legal documents previously executed by the Parties in respect of the same subject. Any amendment or supplement to this Agreement shall be made in writing, and no amendment or supplement to this Agreement shall be effective without being duly signed by the Parties

13.9

Without the prior written consent of the WFOE, neither the Existing Shareholder nor LongSheng may transfer its rights and/or obligations hereunder to any third party. WFOE shall have the right to transfer its rights and/or obligations to any of its designated third party upon notice to the Existing Shareholder and LongSheng.

13.10

This Agreement shall be binding upon the lawful successor of each Party.