Exhibit 2.1
THIS AGREEMENT RELATES TO AN OFFERING OF SECURITIES IN AN OFFSHORE TRANSACTION
TO PERSONS WHO ARE NOT U.S. PERSONS (AS DEFINED IN REGULATION S UNDER THE 1933
ACT) PURSUANT TO REGULATION S UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS
AMENDED (THE "1933 ACT"). NONE OF THE SECURITIES TO WHICH THIS AGREEMENT RELATES
HAVE BEEN REGISTERED UNDER THE 1933 ACT, OR ANY U.S. STATE SECURITIES LAWS, AND,
UNLESS SO REGISTERED, NONE MAY BE OFFERED OR SOLD, DIRECTLY OR INDIRECTLY, IN
THE UNITED STATES OR TO U.S. PERSONS (AS DEFINED HEREIN) EXCEPT IN ACCORDANCE
WITH THE PROVISIONS OF REGULATION S UNDER THE 1933 ACT, PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE 1933 ACT, OR PURSUANT TO AN AVAILABLE EXEMPTION
FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE
1933 ACT AND IN EACH CASE ONLY IN ACCORDANCE WITH ALL APPLICABLE SECURITIES
LAWS. IN ADDITION, HEDGING TRANSACTIONS INVOLVING THE SECURITIES MAY NOT BE
CONDUCTED UNLESS IN ACCORDANCE WITH THE 1933 ACT.
SHARE PURCHASE AGREEMENT
THIS AGREEMENT is effective the 31st day of October, 2006
AMONG:
XXXXXXX MOUNTAIN RESOURCES CORP., a corporation formed
pursuant to the laws of the State of Nevada and having an
office for business located at # 29 B Ebony Tower, President
Park, 00 Xxxxxxxxx 00 Xxxx, Xxxxxxx 00000 Xxxxxxxx ("Xxxxxxx
Mountain")
AND:
NANCHANG BEST ANIMAL HUSBANDRY CO., LTD., a company formed
pursuant to the laws of the People's Republic of China and
having an office for business located at 0000 Xxxx Xxx
Xxxxxx, Xxxxxxxx and Technical Development Zone, Xxx Xxxxx
City, Jiangxi Province, China 330013
("Nanchang Best")
AND:
The shareholders of Nanchang Best, the name of each of whom
is set forth on the signature page of this Agreement. (the
"Nanchang Best Shareholders")
WHEREAS:
A. The Nanchang Best Shareholders own 6,756,800 registered shares of Nanchang
Best, constituting 100% of the presently issued and outstanding Nanchang Best
Shares;
X. Xxxxxxx Mountain is a reporting company whose common stock is quoted on the
NASD "Bulletin Board";
C. The respective Boards of Directors of Xxxxxxx Mountain, and Nanchang Best
deem it advisable and in the best interests of Xxxxxxx Mountain and Nanchang
Best that Nanchang Best become a wholly-owned subsidiary of Xxxxxxx Mountain
(the "Acquisition") pursuant to this Agreement; and
X. Xxxxxxx Mountain, the shareholders of Shanghai Best Animal Husbandry Co.,
Ltd. and Shanghai Best Animal Husbandry Co., Ltd. are contemporaneously entering
into a share purchase agreement pursuant to which Shanghai Best Animal Husbandry
Co., Ltd. shall have become a wholly owned subsidiary of Xxxxxxx Mountain, and
the completion of that transaction is a condition to the completion of the
transaction memorialized herein.
NOW THEREFORE THIS AGREEMENT WITNESSETH THAT in consideration of the premises
and the mutual covenants, agreements, representations and warranties contained
herein, and other good and valuable consideration, the receipt and sufficiency
of which is hereby acknowledged, the parties hereto hereby agree as follows:
ARTICLE 1. - DEFINITIONS AND INTERPRETATION:
1.1. In this Agreement the following terms will have the following
meanings:
1.1.1. "Acquisition" means the Acquisition, at the Closing, of
Nanchang Best by Xxxxxxx Mountain pursuant to this Agreement;
1.1.2. "Acquisition Shares" means the 5,376,000 Xxxxxxx Mountain
Common Shares to be issued to the Nanchang Best Shareholders at
Closing pursuant to the terms of the Acquisition;
1.1.3. "Agreement" means this share purchase agreement among Xxxxxxx
Mountain, the Xxxxxxx Mountain Signatory Shareholder, Nanchang
Best, and the Nanchang Best Shareholders;
1.1.4. "Closing" means the completion, on the Closing Date, of the
transactions contemplated hereby in accordance with ARTICLE 15
hereof;
1.1.5. "Closing Date" means the day on which all conditions precedent
to the completion of the transaction as contemplated hereby have
been satisfied or waived;
1.1.6. "Nanchang Best Accounts Payable and Liabilities" means all
accounts payable and liabilities of Nanchang Best, due and owing
or otherwise constituting a binding obligation of Nanchang Best
(other than a Nanchang Best Material Contract) as of June 30,
2006 as set forth in Schedule 1.1.6 hereto;
1.1.7. "Nanchang Best Accounts Receivable" means all accounts
receivable and other debts owing to Nanchang Best as of June 30,
2006 as set forth in Schedule 1.1.7 hereto;
1.1.8. "Nanchang Best Assets" means all the property and assets of the
Nanchang Best Business of every kind and description wheresoever
situated including, without limitation, Nanchang Best Equipment,
Nanchang Best Inventory, Nanchang Best Material Contracts,
Page 2 of 33
Nanchang Best Accounts Receivable, Nanchang Best Cash, Nanchang
Best Intangible Assets and Nanchang Best Goodwill, and all credit
cards, charge cards and banking cards issued to Nanchang Best;
1.1.9. "Nanchang Best Bank Accounts" means all of the bank accounts,
lock boxes and safety deposit boxes of Nanchang Best or relating
to the Nanchang Best Business as set forth in Schedule 1.1.1
hereto;
1.1.10. "Nanchang Best Business" means all aspects of the business
conducted by Nanchang Best;
1.1.11. "Nanchang Best Cash" means all cash on hand or on deposit to
the credit of Nanchang Best on the Closing Date;
1.1.12. "Nanchang Best Debt to Related Parties" means the debts owed
by Nanchang Best to the Nanchang Best Shareholders or to any
family member thereof, or to any affiliate, director or officer
of Nanchang Best or the Nanchang Best Shareholders as described
in Schedule 1.1.4;
1.1.13. "Nanchang Best Equipment" means all machinery, equipment,
furniture, and furnishings used in the Nanchang Best Business,
including, without limitation, the items more particularly
described in Schedule 1.1.13 hereto;
1.1.14. "Nanchang Best Financial Statements" means, collectively, the
audited financial statements of Nanchang Best for the two year
period ended December 31, 2005, together with the reviewed
financial statements for the six month period ended June 30,
2006, true copies of which are attached as Schedule 1.1.14
hereto;
1.1.15. "Nanchang Best Goodwill" means the goodwill of the Nanchang
Best Business together with the exclusive right of Xxxxxxx
Mountain to represent itself as carrying on the Nanchang Best
Business in succession of Nanchang Best subject to the terms
hereof, and the right to use any words indicating that the
Nanchang Best Business is so carried on including the right to
use the name "Nanchang Best" or "Nanchang Best Animal Husbandry"
or any variation thereof as part of the name of or in connection
with the Nanchang Best Business or any part thereof carried on or
to be carried on by Nanchang Best, the right to all corporate,
operating and trade names associated with the Nanchang Best
Business, or any variations of such names as part of or in
connection with the Nanchang Best Business, all telephone
listings and telephone advertising contracts, all lists of
customers, books and records and other information relating to
the Nanchang Best Business, all necessary licenses and
authorizations and any other rights used in connection with the
Nanchang Best Business;
1.1.16. "Nanchang Best Insurance Policies" means the public liability
insurance and insurance against loss or damage to Nanchang Best
Assets and the Nanchang Best Business as described in Schedule
1.1.16 hereto;
1.1.17. "Nanchang Best Intangible Assets" means all of the intangible
assets of Nanchang Best, including, without limitation, Nanchang
Best Goodwill, all trademarks, logos, copyrights, designs, and
other intellectual and industrial property of Nanchang Best ;
1.1.18. "Nanchang Best Inventory" means all inventory and supplies of
the Nanchang Best Business as of June 30, 2006 as set forth in
Schedule 1.1.18 hereto;
Page 3 of 33
1.1.19. "Nanchang Best Material Contracts" means the burden and
benefit of and the right, title and interest of Nanchang Best in,
to and under all trade and non-trade contracts, engagements or
commitments, whether written or oral, to which including, without
limitation Nanchang Best is entitled in connection with the
Nanchang Best Business whereunder Nanchang Best is obligated to
pay or entitled to receive the sum of $10,000 or more including,
without limitation, any pension plans, profit sharing plans,
bonus plans, loan agreements, security agreements, indemnities
and guarantees, any agreements with employees, lessees,
licensees, managers, accountants, suppliers, agents,
distributors, officers, directors, attorneys or others which
cannot be terminated without liability on not more than one
month's notice, and, including without limitation, those
contracts listed in Schedule 1.1.19 hereto;
1.1.20. "Nanchang Best Related Party Debts" means the debts owed by
the Nanchang Best Shareholders or by any family member thereof,
or by any affiliate, director or officer of Nanchang Best or the
Nanchang Best Shareholders, to Nanchang Best as described in
Schedule 1.1.20; and
1.1.21. "Nanchang Best Shares" means all of the issued and outstanding
shares of Nanchang Best's equity stock.
1.1.22. "Place of Closing" means the offices of Xxxxxxx, Xxxxxxxxx &
Barandes, LLP, or such other place as Xxxxxxx Mountain and
Nanchang Best may mutually agree upon;
1.1.23. "Xxxxxxx Mountain Accounts Payable and Liabilities" means all
accounts payable and liabilities of Xxxxxxx Mountain due and
owing or otherwise constituting a binding obligation of Xxxxxxx
Mountain (other than a Xxxxxxx Mountain Material Contract) as of
June 30, 2006 as set forth in Schedule 1.1.23 hereto;
1.1.24. "Xxxxxxx Mountain Accounts Receivable" means all accounts
receivable and other debts owing to Xxxxxxx Mountain, on a basis,
as of June 30, 2006 as set forth in Schedule 1.1.24 hereto;
1.1.25. "Xxxxxxx Mountain Assets" means all the property and assets of
the Xxxxxxx Mountain Business of every kind and description
wheresoever situated including, without limitation, Xxxxxxx
Mountain Equipment, Xxxxxxx Mountain Inventory, Xxxxxxx Mountain
Material Contracts, Xxxxxxx Mountain Accounts Receivable, Xxxxxxx
Mountain Cash, Wallace Mountain Intangible Assets and Xxxxxxx
Mountain Goodwill, and all credit cards, charge cards and banking
cards issued to Xxxxxxx Mountain;
1.1.26. "Xxxxxxx Mountain Bank Accounts" means all of the bank
accounts, lock boxes and safety deposit boxes of Xxxxxxx Mountain
or relating to the Xxxxxxx Mountain Business as set forth in
Schedule 1.1.26 hereto;
1.1.27. "Xxxxxxx Mountain Business" means all aspects of any business
conducted by Xxxxxxx Mountain ;
1.1.28. "Xxxxxxx Mountain Cash" means all cash on hand or on deposit
to the credit of Xxxxxxx Mountain on the Closing Date;
1.1.29. "Xxxxxxx Mountain Common Shares" means the shares of common
stock in the capital of Xxxxxxx Mountain;
Page 4 of 33
1.1.30. "Xxxxxxx Mountain Debt to Related Parties" means the debts
owed by Xxxxxxx Mountain to any affiliate, director or officer of
Xxxxxxx Mountain as described in Schedule 1.1.30 hereto;
1.1.31. "Xxxxxxx Mountain Equipment" means all machinery, equipment,
furniture, and furnishings used in the Xxxxxxx Mountain Business,
including, without limitation, the items more particularly
described in Schedule 1.1.31 hereto;
1.1.32. "Xxxxxxx Mountain Financial Statements" means, collectively,
the audited financial statements of Xxxxxxx Mountain for the two
fiscal years ended March 30, 2006, together with the reviewed
financial statements for the six month period ended June 30,
2006, true copies of which are attached as Schedule 1.1.32
hereto;
1.1.33. "Xxxxxxx Mountain Goodwill" means the goodwill of the Xxxxxxx
Mountain Business including the right to all corporate, operating
and trade names associated with the Xxxxxxx Mountain Business, or
any variations of such names as part of or in connection with the
Xxxxxxx Mountain Business, all books and records and other
information relating to the Xxxxxxx Mountain Business, all
necessary licenses and authorizations and any other rights used
in connection with the Xxxxxxx Mountain Business;
1.1.34. "Xxxxxxx Mountain Insurance Policies" means the public
liability insurance and insurance against loss or damage to the
Xxxxxxx Mountain Assets and the Xxxxxxx Mountain Business as
described in Schedule 1.1.34 hereto;
1.1.35. "Xxxxxxx Mountain Intangible Assets" means all of the
intangible assets of Xxxxxxx Mountain , including, without
limitation, Xxxxxxx Mountain Goodwill, all trademarks, logos,
copyrights, designs, and other intellectual and industrial
property of Xxxxxxx Mountain;
1.1.36. "Xxxxxxx Mountain Inventory" means all inventory and supplies
of the Xxxxxxx Mountain Business as of June 30, 2006, as set
forth in Schedule 1.1.36 hereto;
1.1.37. "Xxxxxxx Mountain Material Contracts" means the burden and
benefit of and the right, title and interest of Xxxxxxx Mountain
in, to and under all trade and non-trade contracts, engagements
or commitments, whether written or oral, to which Xxxxxxx
Mountain is entitled whereunder Xxxxxxx Mountain is obligated to
pay or entitled to receive the sum of $10,000 or more including,
without limitation, any pension plans, profit sharing plans,
bonus plans, loan agreements, security agreements, indemnities
and guarantees, any agreements with employees, lessees,
licensees, managers, accountants, suppliers, agents,
distributors, officers, directors, attorneys or others which
cannot be terminated without liability on not more than one
month's notice, and including, without limitation, those
contracts listed in Schedule 1.1.37 hereto;
1.1.38. "Xxxxxxx Mountain Related Party Debt" means the debts owed by
the Xxxxxxx Mountain Signatory Shareholder or by any family
member thereof to Xxxxxxx Mountain, as described in Schedule
1.1.38;
1.1.39. "Other Terms" Any other terms defined within the text of this
Agreement will have the meanings so ascribed to them.
1.2. Captions and Section Numbers: The headings and section references in
this Agreement are for convenience of reference only and do not form a
part of this Agreement and are not intended to interpret, define or
limit the scope, extent or intent of this Agreement or any provision
thereof.
Page 5 of 33
1.3. Section References and Schedules Any reference to a particular
"Article", "section", "paragraph", "clause" or other subdivision is to
the particular Article, section, clause or other subdivision of this
Agreement and any reference to a Schedule by letter will mean the
appropriate Schedule attached to this Agreement and by such reference
the appropriate Schedule is incorporated into and made part of this
Agreement. The Schedules to this Agreement are as follows:
1.3.1. Information concerning Xxxxxxx Mountain
Schedule 1.1.23 Xxxxxxx Mountain Accounts Payable and Liabilities
Schedule 1.1.24 Xxxxxxx Mountain Accounts Receivable
Schedule 1.1.26 Xxxxxxx Mountain Bank Accounts
Schedule 1.1.30 Xxxxxxx Mountain Debt to Related Parties
Schedule 1.1.31 Xxxxxxx Mountain Equipment
Schedule 1.1.32 Xxxxxxx Mountain Financial Statements
Schedule 1.1.34 Xxxxxxx Mountain Insurance Policies
Schedule 1.1.36 Xxxxxxx Mountain Inventory
Schedule 1.1.37 Xxxxxxx Mountain Material Contracts
Schedule 1.1.38 Xxxxxxx Mountain Related Party Debt
1.3.2. Information concerning Nanchang Best
Schedule 1.1.6 Nanchang Best Accounts Payable and Liabilities
Schedule 1.1.7 Nanchang Best Accounts Receivable
Schedule 1.1.9 Nanchang Best Bank Accounts
Schedule 1.1.12 Nanchang Best Debt to Related Parties
Schedule 1.1.13 Nanchang Best Equipment
Schedule 1.1.14 Nanchang Best Financial Statements
Schedule 1.1.16 Nanchang Best Insurance Policies
Schedule 1.1.18 Nanchang Best Inventory
Schedule 1.1.19 Nanchang Best Material Contracts
Schedule 1.1.20 Nanchang Best Related Party Debt
1.4. Severability of Clauses If any part of this Agreement is declared or
held to be invalid for any reason, such invalidity will not affect the
validity of the remainder which will continue in full force and effect
and be construed as if this Agreement had been executed without the
invalid portion, and it is hereby declared the intention of the
parties that this Agreement would have been executed without reference
to any portion which may, for any reason, be hereafter declared or
held to be invalid.
ARTICLE 2. THE ACQUISITION
2.1. Sales of Shares Each of the Nanchang Best Shareholders hereby agrees
to sell to Xxxxxxx Mountain the Nanchang Best Shares owned by such
Shareholder in exchange for the applicable Acquisition Shares on the
Closing Date and to transfer to Xxxxxxx Mountain on the Closing Date a
100% undivided interest in and to such Nanchang Best Shares free from
all liens, mortgages, charges, pledges, encumbrances or other burdens
with all rights now or thereafter attached thereto.
Page 6 of 33
2.2. Allocation of Consideration The Acquisition Shares shall be allocated
to the Nanchang Best Shareholders, as set forth on Schedule 2.2
attached hereto and made a part hereof.
2.3. Adherence with Applicable Securities Laws: The Nanchang Best
Shareholders agree that they are acquiring the Acquisition Shares for
investment purposes and will not offer, sell or otherwise transfer,
pledge or hypothecate any of the Acquisition Shares issued to them
(other than pursuant to an effective Registration Statement under the
Securities Act of 1933, as amended) directly or indirectly unless:
2.3.1. the sale is to Xxxxxxx Mountain;
2.3.2. the sale is made pursuant to the exemption from registration
under the Securities Act of 1933, as amended, provided by Rule
144 thereunder; or
2.3.3. the Acquisition Shares are sold in a transaction that does not
require registration under the Securities Act of 1933, as
amended, or any applicable United States state laws and
regulations governing the offer and sale of securities, and the
vendor has furnished to Xxxxxxx Mountain an opinion of counsel to
that effect or such other written opinion as may be reasonably
required by Xxxxxxx Mountain.
2.4. Legend: The Nanchang Best Shareholders acknowledge that the
certificates representing the Acquisition Shares shall bear the
following legend:
"THESE SECURITIES WERE ISSUED IN AN OFFSHORE TRANSACTION TO
PERSONS WHO ARE NOT U.S. PERSONS (AS DEFINED HEREIN) PURSUANT TO
REGULATION S UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS
AMENDED (THE "1933 ACT"). ACCORDINGLY, NONE OF THE SECURITIES TO
WHICH THIS CERTIFICATE RELATES HAVE BEEN REGISTERED UNDER THE
1933 ACT, OR ANY U.S. STATE SECURITIES LAWS, AND, UNLESS SO
REGISTERED, NONE MAY BE OFFERED OR SOLD IN THE UNITED STATES OR,
DIRECTLY OR INDIRECTLY, TO U.S. PERSONS (AS DEFINED HEREIN)
EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT OR
PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT
TO, THE REGISTRATION REQUIREMENTS OF THE 1933 ACT AND IN EACH
CASE ONLY IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS. IN
ADDITION, HEDGING TRANSACTIONS INVOLVING THE SECURITIES MAY NOT
BE CONDUCTED UNLESS IN ACCORDANCE WITH THE 1933 ACT."
2.5. Securities Law Related Representations, Warranties and
Acknowledgements: The Nanchang Best Shareholders, jointly and
severally, further represent, warrant and acknowledge to Xxxxxxx
Mountain and the Xxxxxxx Mountain Signatory Shareholder that:
2.5.1. The Nanchang Best Shareholders are located outside the United
States;
2.5.2. The Nanchang Best Shareholders are not aware of any
advertisement of any of the shares be issued hereunder;
Page 7 of 33
2.5.3. The Nanchang Best Shareholders will not acquire the shares as a
result of, and will not itself engage in, any "directed selling
efforts" (as defined in Regulation S under the 0000 Xxx) in the
United States in respect of the shares which would include any
activities undertaken for the purpose of, or that could
reasonably be expected to have the effect of, conditioning the
market in the United States for the resale of the shares;
provided, however, that the Nanchang Best Shareholders may sell
or otherwise dispose of the shares pursuant to registration of
the shares pursuant to the 1933 Act and any applicable state and
provincial securities laws or under an exemption from such
registration requirements and as otherwise provided herein;
2.5.4. The Nanchang Best Shareholders agree that the Company will
refuse to register any transfer of the shares not made in
accordance with the provisions of Regulation S, pursuant to an
effective registration statement under the 1933 Act or pursuant
to an available exemption from the registration requirements of
the 1933 Act and in accordance with applicable state and
provincial securities laws; and
2.5.5. The Nanchang Best Shareholders understand and agree that offers
and sales of any of the shares, prior to the expiration of a
period of one year after the date of transfer of the shares (the
"Distribution Compliance Period"), shall only be made in
compliance with the safe harbor provisions set forth in
Regulation S, pursuant to the registration provisions of the 1933
Act or an exemption therefrom, and that all offers and sales
after the Distribution Compliance Period shall be made only in
compliance with the registration provisions of the 1933 Act or an
exemption therefrom and in each case only in accordance with all
applicable securities laws;
2.5.6. The Nanchang Best Shareholders understand and agree not to
engage in any hedging transactions involving the Acquisition
Shares prior to the end of the Distribution Compliance Period
unless such transactions are in compliance with the provisions of
the 1933 Act;
2.5.7. The Nanchang Best Shareholders hereby acknowledge and agree to
Xxxxxxx Mountain making a notation on its records or giving
instructions to the registrar and transfer agent of the Company
in order to implement the restrictions on transfer set forth and
described herein.
ARTICLE 3. REPRESENTATIONS AND WARRANTIES OF XXXXXXX MOUNTAIN AND THE
XXXXXXX MOUNTAIN SIGNATORY SHAREHOLDER: Xxxxxxx Mountain and the
Xxxxxxx Mountain Signatory Shareholder each hereby represents and
warrants, jointly and severally, to Nanchang Best and the Nanchang
Best Shareholders, with the intent that Nanchang Best and the Nanchang
Best Shareholders will rely thereon in entering into this Agreement
and in approving and completing the transactions contemplated hereby,
that:
3.1. Xxxxxxx Mountain - Corporate Status and Capacity
3.1.1. Incorporation. Xxxxxxx Mountain is a corporation duly
incorporated and validly subsisting under the laws of the State
of Nevada, and is in good standing with the office of the
Secretary of State for the State of Nevada;
Page 8 of 33
3.1.2. Carrying on Business. Xxxxxxx Mountain conducts the business
described in its filings with the Securities and Exchange
Commission and does not conduct any other business. Xxxxxxx
Mountain is duly authorized to carry on such business in British
Columbia, Canada. The nature of the Xxxxxxx Mountain Business
does not require Xxxxxxx Mountain to register or otherwise be
qualified to carry on business in any other jurisdictions;
3.1.3. Corporate Capacity. Xxxxxxx Mountain has the corporate power,
capacity and authority to own the Xxxxxxx Mountain Assets and to
enter into and carry out the terms of this Agreement;
3.1.4. Reporting Status; Listing. Xxxxxxx Mountain is required to file
current reports with the Securities and Exchange Commission
pursuant to Section 12(g) of the Securities Exchange Act of 1934,
as amended (the "Exchange Act"), the Xxxxxxx Mountain Common
Shares are quoted on the NASD "Bulletin Board", and all reports
required to be filed by Xxxxxxx Mountain with the Securities and
Exchange Commission or NASD have been timely filed;
3.2. Xxxxxxx Mountain - Capitalization
3.2.1. Authorized Capital. The authorized capital of Xxxxxxx Mountain
consists of 75,000,000 Xxxxxxx Mountain Common Shares, $0.001 par
value, of which 4,200,000 Xxxxxxx Mountain Common Shares are
presently issued and outstanding;
3.2.2. No Options, Warrants or Other Rights. No person, firm or
corporation has any agreement, option, warrant, preemptive right
or any other right capable of becoming an agreement, option,
warrant or right for the acquisition of Xxxxxxx Mountain Common
Shares or for the purchase, subscription or issuance of any of
the unissued shares in the capital of Xxxxxxx Mountain. The
warrants to purchase 800,000 Xxxxxxx Mountain Common Shares
referred to in the Xxxxxxx Mountain Financial Statements have
either been exercised.
3.3. Xxxxxxx Mountain - Records and Financial Statements
3.3.1. Charter Documents. The charter documents of Xxxxxxx Mountain
have not been altered since the date of its incorporation except
as filed in the record books of Xxxxxxx Mountain;
3.3.2. Corporate Minute Books. The corporate minute books of Xxxxxxx
Mountain are complete and each of the minutes contained therein
accurately reflect the actions that were taken at a duly called
and held meeting or by consent without a meeting. All actions by
Xxxxxxx Mountain which required director or shareholder approval
are reflected in the corporate minute books of Xxxxxxx Mountain.
Xxxxxxx Mountain is not in violation or breach of, or in default
with respect to, any term of its Articles of Incorporation (or
other charter documents) or by-laws;
3.3.3. Xxxxxxx Mountain Financial Statements. The Xxxxxxx Mountain
Financial Statements present fairly, in all material respects,
the assets and liabilities (whether accrued, absolute, contingent
or otherwise) of Xxxxxxx Mountain, as of the respective dates
thereof, and the sales and earnings of the Xxxxxxx Mountain
Business during the periods covered thereby, and have been
prepared in conformity with generally accepted accounting
principles consistently applied;
3.3.4. Xxxxxxx Mountain Accounts Payable and Liabilities. There are no
material liabilities, contingent or otherwise, of Xxxxxxx
Mountain which are not disclosed in Schedule 1.1.32 hereto or
reflected in the Xxxxxxx Mountain Financial Statements except
Page 9 of 33
those incurred in the ordinary course of business since the date
of the said schedule and the Xxxxxxx Mountain Financial
Statements and which in the aggregate do not exceed $1,000, and
Xxxxxxx Mountain has not guaranteed or agreed to guarantee any
debt, liability or other obligation of any person, firm or
corporation. Without limiting the generality of the foregoing,
all accounts payable and liabilities of Xxxxxxx Mountain as of
June 30, 2006, are described in Schedule 1.1.32 hereto;
3.3.5. Xxxxxxx Mountain Accounts Receivable. All the Xxxxxxx Mountain
Accounts Receivable result from bona fide business transactions
and services actually rendered without, to the knowledge and
belief of Xxxxxxx Mountain, any claim by the obligor for set-off
or counterclaim. Without limiting the generality of the
foregoing, all accounts receivable of Xxxxxxx Mountain as of June
30, 2006, are described in Schedule 1.1.24 hereto;
3.3.6. Xxxxxxx Mountain Bank Accounts. All of the Xxxxxxx Mountain
Bank Accounts, their location, numbers and the authorized
signatories thereto are as set forth in Schedule 1.1.26 hereto;
3.3.7. No Debt to Related Parties. Except as disclosed in Schedule
1.1.30 hereto, Xxxxxxx Mountain is not, and on Closing will not
be, indebted to any affiliate, director or officer of Xxxxxxx
Mountain except accounts payable on account of bona fide business
transactions of Xxxxxxx Mountain incurred in normal course of the
Xxxxxxx Mountain Business, including employment agreements, none
of which are more than 30 days in arrears;
3.3.8. No Related Party Debt to Xxxxxxx Mountain. No director or
officer or affiliate of Xxxxxxx Mountain is now indebted to or
under any financial obligation to Xxxxxxx Mountain on any account
whatsoever, except for advances on account of travel and other
expenses not exceeding $1,000 in total;
3.3.9. No Dividends. No dividends or other distributions on any shares
in the capital of Xxxxxxx Mountain have been made, declared or
authorized since the date of the Xxxxxxx Mountain Financial
Statements;
3.3.10. No Payments. No payments of any kind have been made or
authorized since the date of the Xxxxxxx Mountain Financial
Statements to or on behalf of officers, directors, shareholders
or employees of Xxxxxxx Mountain or under any management
agreements with Xxxxxxx Mountain , except payments made in the
ordinary course of business and at the regular rates of salary or
other remuneration payable to them;
3.3.11. No Pension Plans. There are no pension, profit sharing, group
insurance or similar plans or other deferred compensation plans
affecting Xxxxxxx Mountain;
3.3.12. No Adverse Events. Since the date of the Xxxxxxx Mountain
Financial Statements
3.3.12.i. there has not been any material adverse change in the
financial position or condition of Xxxxxxx Mountain, its
liabilities or the Xxxxxxx Mountain Assets or any damage,
loss or other change in circumstances materially and
adversely affecting Xxxxxxx Mountain, the Xxxxxxx Mountain
Business or the Xxxxxxx Mountain Assets or Xxxxxxx
Mountain's right to carry on the Xxxxxxx Mountain Business,
Page 10 of 33
3.3.12.ii. there has not been any damage, destruction, loss or
other event (whether or not covered by insurance) materially
and adversely affecting Xxxxxxx Mountain, the Xxxxxxx
Mountain Business or the Xxxxxxx Mountain Assets,
3.3.12.iii. there has not been any material increase in the
compensation payable or to become payable by Xxxxxxx
Mountain to any of Xxxxxxx Mountain's officers, employees or
agents or any bonus, payment or arrangement made to or with
any of them,
3.3.12.iv. the Xxxxxxx Mountain Business has been and continues
to be carried on in the ordinary course,
3.3.12.x. Xxxxxxx Mountain has not waived or surrendered any
right of material value,
0.0.00.xx. Xxxxxxx Mountain has not discharged or satisfied or
paid any lien or encumbrance or obligation or liability
other than current liabilities in the ordinary course of
business, and
3.3.12.vii. no capital expenditures in excess of $10,000
individually or $30,000 in total have been authorized or
made.
3.4. Xxxxxxx Mountain - Income Tax Matters
3.4.1. Tax Returns. All tax returns and reports of Xxxxxxx Mountain
required by law to be filed have been filed and are true,
complete and correct, and any taxes payable in accordance with
any return filed by Xxxxxxx Mountain or in accordance with any
notice of assessment or reassessment issued by any taxing
authority have been so paid;
3.4.2. Current Taxes. Adequate provisions have been made in the
accounts of Xxxxxxx Mountain for taxes payable for the current
period for which tax returns are not yet required to be filed and
there are no agreements, waivers, or other arrangements providing
for an extension of time with respect to the filing of any tax
return by, or payment of, any tax, governmental charge or
deficiency by Xxxxxxx Mountain. Xxxxxxx Mountain is not aware of
any contingent tax liabilities or any grounds which would prompt
a reassessment including aggressive treatment of income and
expenses in filing earlier tax returns;
3.5. Xxxxxxx Mountain - Applicable Laws and Legal Matters
3.5.1. Licenses. Xxxxxxx Mountain holds all licenses and permits as
may be requisite for carrying on the Xxxxxxx Mountain Business in
the manner in which it has heretofore been carried on, which
licenses and permits have been maintained and continue to be in
good standing except where the failure to obtain or maintain such
licenses or permits would not have a material adverse effect on
the Xxxxxxx Mountain Business;
3.5.2. Applicable Laws. Xxxxxxx Mountain has not been charged with or
received notice of breach of any laws, ordinances, statutes,
regulations, by-laws, orders or decrees to which it is subject or
which apply to it the violation of which would have a material
adverse effect on the Xxxxxxx Mountain Business, and to Xxxxxxx
Mountain' knowledge, Xxxxxxx Mountain is not in breach of any
laws, ordinances, statutes, regulations, bylaws, orders or
decrees the contravention of which would result in a material
adverse impact on the Xxxxxxx Mountain Business;
Page 11 of 33
3.5.3. Pending or Threatened Litigation. There is no material
litigation or administrative or governmental proceeding pending
or threatened against or relating to Xxxxxxx Mountain, the
Xxxxxxx Mountain Business, or any of the Xxxxxxx Mountain Assets
nor does Xxxxxxx Mountain have any knowledge of any act or
omission of Xxxxxxx Mountain that would form any basis for any
such action or proceeding;
3.5.4. No Bankruptcy. Xxxxxxx Mountain has not made any voluntary
assignment or proposal under applicable laws relating to
insolvency and bankruptcy and no bankruptcy petition has been
filed or presented against Xxxxxxx Mountain and no order has been
made or a resolution passed for the winding-up, dissolution or
liquidation of Xxxxxxx Mountain;
3.5.5. Labor Matters. Xxxxxxx Mountain is not a party to any
collective agreement relating to the Xxxxxxx Mountain Business
with any labor union or other association of employees and no
part of the Xxxxxxx Mountain Business has been certified as a
unit appropriate for collective bargaining or, to the knowledge
of Xxxxxxx Mountain, has made any attempt in that regard;
3.5.6. Environmental Compliance. Xxxxxxx Mountain has at all times had
and now has all environmental approvals, consents, licenses,
permits and orders required to conduct the businesses in which it
has been or is now engaged. Xxxxxxx Mountain has at all times
been and is now in compliance in all material respects with all
applicable environmental laws. There are no claims, actions,
suits or proceedings pending or, to Xxxxxxx Mountain's Knowledge,
threatened against or involving Xxxxxxx Mountain, or any assets
of Xxxxxxx Mountain, under any of the environmental laws (whether
by reason of any failure to comply with any of the environmental
laws or otherwise). No decree, judgment or order of any kind
under any of the environmental laws has been entered against
Xxxxxxx Mountain. There are no facts, conditions or situations,
whether now or heretofore existing, that could form the basis for
any claim against, or result in any liability of, Xxxxxxx
Mountain under any of the environmental laws
3.5.7. Finder's Fees. Xxxxxxx Mountain is not a party to any agreement
which provides for the payment of finder's fees, brokerage fees,
commissions or other fees or amounts which are or may become
payable to any third party in connection with the execution and
delivery of this Agreement and the transactions contemplated
herein;
3.6. Execution and Performance of Agreement
3.6.1. Authorization and Enforceability. The execution and delivery of
this Agreement by Xxxxxxx Mountain and the completion of the
transactions contemplated hereby, have been duly and validly
authorized by all necessary corporate action on the part of
Xxxxxxx Mountain;
3.6.2. No Violation or Breach. The execution and performance of this
Agreement by Xxxxxxx Mountain will not:
3.6.2.i. violate the charter documents of Xxxxxxx Mountain or
result in any breach of, or default under, any loan
agreement, mortgage, deed of trust, or any other agreement
to which Xxxxxxx Mountain is a party,
3.6.2.ii. give any person any right to terminate or cancel any
agreement including, without limitation, the Xxxxxxx
Mountain Material Contracts, or any right or rights enjoyed
by Xxxxxxx Mountain,
Page 12, of 33
3.6.2.iii. result in any alteration of Xxxxxxx Mountain's
obligations under any agreement to which Xxxxxxx Mountain is
a party including, without limitation, the Xxxxxxx Mountain
Material Contracts,
3.6.2.iv. result in the creation or imposition of any lien,
encumbrance or restriction of any nature whatsoever in favor
of a third party upon or against the Xxxxxxx Mountain
Assets,
3.6.2.v. result in the imposition of any tax liability to Xxxxxxx
Mountain relating to the Xxxxxxx Mountain Assets, or
0.0.0.xx. violate any court order or decree to which Xxxxxxx
Mountain is subject;
3.7. The Xxxxxxx Mountain Assets - Ownership and Condition
3.7.1. Business Assets. The Xxxxxxx Mountain Assets comprise all of
the property and assets of the Xxxxxxx Mountain Business, and no
other person, firm or corporation owns any assets used by Xxxxxxx
Mountain in operating the Xxxxxxx Mountain Business, whether
under a lease, rental agreement or other arrangement, other than
as disclosed in Schedules 1.1.31 or 1.1.37 hereto;
3.7.2. Title. Xxxxxxx Mountain is the legal and beneficial owner of
the Xxxxxxx Mountain Assets, free and clear of all mortgages,
liens, charges, pledges, security interests, encumbrances or
other claims whatsoever, save and except as disclosed in
Schedules 1.1.31 or 1.1.37 hereto;
3.7.3. No Option. No person, firm or corporation has any agreement or
option or a right capable of becoming an agreement for the
purchase of any of the Xxxxxxx Mountain Assets;
3.7.4. Xxxxxxx Mountain Insurance Policies. Xxxxxxx Mountain maintains
the public liability insurance and insurance against loss or
damage to the Xxxxxxx Mountain Assets and the Xxxxxxx Mountain
Business as described in Schedule 1.1.34 hereto;
3.7.5. Xxxxxxx Mountain Material Contracts. The Xxxxxxx Mountain
Material Contracts listed in Schedule 1.1.37 constitute all of
the material contracts of Xxxxxxx Mountain;
3.7.6. No Default. There has not been any default in any material
obligation of Xxxxxxx Mountain to be performed under any of the
Xxxxxxx Mountain Material Contracts, each of which is in good
standing and in full force and effect and unamended (except as
disclosed in Schedule 1.1.37 hereto), and Xxxxxxx Mountain is not
aware of any default in the obligations of any other party to any
of the Xxxxxxx Mountain Material Contracts;
3.7.7. No Compensation on Termination. There are no agreements,
commitments or understandings relating to severance pay or
separation allowances on termination of employment of any
employee of Xxxxxxx Mountain. Xxxxxxx Mountain is not obliged to
pay benefits or share profits with any employee after termination
of employment except as required by law;
3.8. Xxxxxxx Mountain Assets - Xxxxxxx Mountain Equipment The Xxxxxxx
Mountain Equipment has been maintained in a manner consistent with
that of a reasonably prudent owner and such equipment is in good
working condition;
Page 13 of 33
3.9. Xxxxxxx Mountain Assets - Xxxxxxx Mountain Goodwill and Other Assets
Xxxxxxx Mountain does not carry on the Xxxxxxx Mountain Business under
any other business or trade names. Xxxxxxx Mountain does not have any
knowledge of any infringement by Xxxxxxx Mountain of any patent,
trademarks, copyright or trade secret;
3.10. The Xxxxxxx Mountain Business:
3.10.1. Maintenance of Business: Since the date of the Xxxxxxx
Mountain Financial Statements, Xxxxxxx Mountain has not entered
into any material agreement or commitment except as disclosed
herein;
3.10.2. Subsidiaries. Xxxxxxx Mountain does not have any subsidiaries
and does not otherwise own, directly or indirectly, any shares or
interest in any other corporation, partnership, limited liability
company, joint venture or firm; and
3.10.3. Xxxxxxx Mountain - Acquisition Shares The Acquisition Shares
when delivered to the Nanchang Best Shareholders pursuant to the
Acquisition shall be validly issued and outstanding as fully paid
and non-assessable shares and the Acquisition Shares shall be
transferable upon the books of Xxxxxxx Mountain, in all cases
subject to the provisions and restrictions of all applicable
securities laws.
3.11. Non-Merger and Survival: The representations and warranties of
Xxxxxxx Mountain and the Xxxxxxx Mountain Signatory Shareholder
contained herein will be true at and as of Closing in all material
respects as though such representations and warranties were made as of
such time. Notwithstanding the completion of the transactions
contemplated hereby, the waiver of any condition contained herein
(unless such waiver expressly releases a party from any such
representation or warranty) or any investigation made by Nanchang Best
or the Nanchang Best Shareholders, the representations and warranties
of Xxxxxxx Mountain and the Xxxxxxx Mountain Signatory Shareholder
shall survive the Closing.
3.12. Indemnity: Xxxxxxx Mountain and the Xxxxxxx Mountain Signatory
Shareholder each agrees to indemnify and save harmless Nanchang Best
and the Nanchang Best Shareholders from and against any and all
claims, demands, actions, suits, proceedings, assessments, judgments,
damages, costs, losses and expenses, including any payment made in
good faith in settlement of any claim (subject to the right of Xxxxxxx
Mountain to defend any such claim), resulting from the breach by
Xxxxxxx Mountain or the Xxxxxxx Mountain Signatory Shareholder of any
representation or warranty made under this Agreement or from any
misrepresentation in or omission from any certificate or other
instrument furnished or to be furnished by Xxxxxxx Mountain or the
Xxxxxxx Mountain Signatory Shareholder to Nanchang Best or the
Nanchang Best Shareholders hereunder
ARTICLE 4. COVENANTS OF XXXXXXX MOUNTAIN AND THE XXXXXXX MOUNTAIN SIGNATORY
SHAREHOLDER
4.1. Covenants: Xxxxxxx Mountain and the Xxxxxxx Mountain Signatory
Shareholder covenant and agree with Nanchang Best and the Nanchang
Best Shareholders that they will:
4.1.1. Conduct of Business. Until the Closing, conduct the Xxxxxxx
Mountain Business diligently and in the ordinary course
consistent with the manner in which the Xxxxxxx Mountain Business
generally has been operated up to the date of execution of this
Agreement;
Page 14, of 33
4.1.2. Preservation of Business. Until the Closing, use their best
efforts to preserve the Xxxxxxx Mountain Business and the Xxxxxxx
Mountain Assets and, without limitation, preserve for Nanchang
Best Xxxxxxx Mountain's relationships with any third party having
business relations with Xxxxxxx Mountain;
4.1.3. Access. Until the Closing, give Nanchang Best, the Nanchang
Best Shareholders, and their representatives full access to all
of the properties, books, contracts, commitments and records of
Xxxxxxx Mountain, and furnish to Nanchang Best, the Nanchang Best
Shareholders and their representatives all such information as
they may reasonably request;
4.1.4. Procure Consents. Until the Closing, take all reasonable steps
required to obtain, prior to Closing, any and all third party
consents required to permit the Acquisition and to preserve and
maintain the Xxxxxxx Mountain Assets notwithstanding the change
in control of Xxxxxxx Mountain arising from the Acquisition;
4.1.5. Stock Dividend. Within ten (10) days from the Closing Date,
Xxxxxxx Mountain shall effectuate a three-for-one forward split
of the Xxxxxxx Mountain Common Shares by way of stock dividend;
4.1.6. Name Change. Forthwith after the Closing, take such steps are
required to change the name of Xxxxxxx Mountain to AgFeed
Industries, Inc. or such similar name as may be acceptable to the
board of directors of Nanchang Best;
4.1.7. Sale of Business. Within thirty (30) days from the Closing
Date, Xxxxxxx Mountain shall sell its business operations, as
they exist immediately prior to the Closing, to Xxxxxx Xxxxxxx.
In consideration of the sale, Xx. Xxxxxxx shall forgive all debt,
if any, owed to him by Xxxxxxx Mountain. Other than indebtedness
of Nanchang Best, Xxxxxxx Mountain shall have no indebtedness or
other liability of any kind or nature after the sale of the
business to Xx. Xxxxxxx, save and except for liabilities incurred
in connection with the Acquisition; and
4.1.8. Return of Shares. Concurrently with the Closing, Xxxxxx Xxxxxxx
shall return to Xxxxxxx Mountain, without further consideration,
2,600,000 Xxxxxxx Mountain Common Shares which he owns.
4.2. Authorization: Xxxxxxx Mountain hereby agrees to authorize and direct
any and all federal, state, municipal, foreign and international
governments and regulatory authorities having jurisdiction respecting
Xxxxxxx Mountain to release any and all information in their
possession respecting Xxxxxxx Mountain to the Nanchang Best
Shareholders. Xxxxxxx Mountain shall promptly execute and deliver to
the Nanchang Best Shareholders any and all consents to the release of
information and specific authorizations which the Nanchang Best
Shareholders reasonably requires to gain access to any and all such
information.
4.3. Survival: The covenants set forth in this Article shall survive the
Closing for the benefit of Nanchang Best and the Nanchang Best
Shareholders.
Page 15 of 33
ARTICLE 5. REPRESENTATIONS AND WARRANTIES OF THE NANCHANG BEST SHAREHOLDERS: The
Nanchang Best Shareholders hereby jointly and severally represent and
warrant to Xxxxxxx Mountain and to the Xxxxxxx Mountain Signatory
Shareholder, with the intent that they will rely thereon in entering into
this Agreement and in approving and completing the transactions
contemplated hereby, that:
5.1. Nanchang Best - Company Status and Capacity
5.1.1. Formation. Nanchang Best is a company duly formed and validly
subsisting under the laws of the People's Republic of China;
5.1.2. Carrying on Business. Nanchang Best carries on the Nanchang
Best Business primarily in the People's Republic of China and
does not carry on any material business activity in any other
jurisdiction. Nanchang Best is duly authorized to carry on the
Nanchang Best Business in the People's Republic of China. The
nature of the Nanchang Best Business does not require Nanchang
Best to register or otherwise be qualified to carry on business
in any other jurisdiction;
5.1.3. Legal Capacity. Nanchang Best has the legal power, capacity and
authority to own Nanchang Best Assets, to carry on the Business
of Nanchang Best and to enter into and complete this Agreement;
5.2. Nanchang Best - Capitalization
5.2.1. Authorized Capital. The authorized capital of Nanchang Best is
as stated in its formation documents;
5.2.2. Ownership of Nanchang Best Shares. The registered, issued and
outstanding share capital of Nanchang Best will on Closing
consist of 6,756,800 capital shares (being the Nanchang Best
Shares), which shares on Closing shall be validly issued and
outstanding as fully paid and non-assessable shares. The Nanchang
Best Shareholders will be at Closing the registered and
beneficial owners of the 6,756,800 Nanchang Best Shares. The
Nanchang Best Shares owned by the Nanchang Best Shareholders will
on Closing be free and clear of any and all liens, charges,
pledges, encumbrances, restrictions on transfer and adverse
claims whatsoever other than restrictions on transfer imposed
pursuant to the 1933 Act;
5.2.3. No Option, Warrant or Other Right. No person, firm or
corporation has any agreement, option, warrant, preemptive right
or any other right capable of becoming an agreement, option,
warrant or right for the acquisition of Nanchang Best Shares held
by the Nanchang Best Shareholders or for the purchase,
subscription or issuance of any of the unissued shares in the
capital of Nanchang Best;
5.2.4. No Restrictions. There are no restrictions on the transfer,
sale or other disposition of Nanchang Best Shares contained in
the charter documents of Nanchang Best or under any agreement;
5.3. Nanchang Best - Records and Financial Statements
5.3.1. Charter Documents. The charter documents of Nanchang Best have
not been altered since its formation date, except as filed in the
record books of Nanchang Best;
5.3.2. Minute Books. The minute books of Nanchang Best are complete
and each of the minutes contained therein accurately reflect the
actions that were taken at a duly called and held meeting or by
Page 16 of 33
consent without a meeting. All actions by Nanchang Best which
required director or shareholder approval are reflected in the
corporate minute books of Nanchang Best. Nanchang Best is not in
violation or breach of, or in default with respect to, any term
of its Certificate of Incorporation (or other charter documents)
or by-laws.
5.3.3. Nanchang Best Financial Statements. The Nanchang Best Financial
Statements present fairly, in all material respects, the assets
and liabilities (whether accrued, absolute, contingent or
otherwise) of Nanchang Best as of the date thereof, and the sales
and earnings of the Nanchang Best Business during the periods
covered thereby, and have been prepared in conformity with
generally accepted accounting principles consistently applied;
5.3.4. Nanchang Best Accounts Payable and Liabilities. There are no
material liabilities, contingent or otherwise, of Nanchang Best
which are not disclosed in Schedule 1.1.6 hereto or reflected in
the Nanchang Best Financial Statements except those incurred in
the ordinary course of business since the date of the said
schedule and the Nanchang Best Financial Statements, and Nanchang
Best has not guaranteed or agreed to guarantee any debt,
liability or other obligation of any person, firm or corporation.
Without limiting the generality of the foregoing, all accounts
payable and liabilities of Nanchang Best as of June 30, 2006 are
described in Schedule 1.1.6 hereto;
5.3.5. Nanchang Best Accounts Receivable. All the Nanchang Best
Accounts Receivable result from bona fide business transactions
and services actually rendered without, to the knowledge and
belief of the Nanchang Best Shareholders, any claim by the
obligor for set-off or counterclaim. Without limiting the
generality of the foregoing, all accounts receivable of Nanchang
Best as of June 30, 2006, are described in Schedule 1.1.7 hereto;
5.3.6. Nanchang Best Bank Accounts. All of the Nanchang Best Bank
Accounts, their location, numbers and the authorized signatories
thereto are as set forth in Schedule 1.1.9 hereto;
5.3.7. No Debt to Related Parties. Except as disclosed in Schedule
1.1.12 hereto, Nanchang Best is not and on Closing will not be,
indebted to the Nanchang Best Shareholders nor to any family
member thereof, nor to any affiliate, director or officer of
Nanchang Best or the Nanchang Best Shareholders except accounts
payable on account of bona fide business transactions of Nanchang
Best incurred in the normal course of Nanchang Best Business,
including employment agreements with the Nanchang Best
Shareholders, none of which are more than 30 days in arrears;
5.3.8. No Related Party Debt to Nanchang Best. Except as set forth on
Schedule 1.1.20 hereto, no Nanchang Best Shareholder nor any
director, officer or affiliate of Nanchang Best is now indebted
to or under any financial obligation to Nanchang Best on any
account whatsoever, except for advances on account of travel and
other expenses not exceeding $5,000 in total;
5.3.9. No Dividends. No dividends or other distributions on any shares
in the capital of Nanchang Best have been made, declared or
authorized since the date of the Nanchang Best Financial
Statements;
5.3.10. No Payments. No payments of any kind have been made or
authorized since the date of the Nanchang Best Financial
Statements to or on behalf of the Nanchang Best Shareholders or
Page 17 of 33
to or on behalf of officers, directors, shareholders or employees
of Nanchang Best or under any management agreements with Nanchang
Best, except payments made in the ordinary course of business and
at the regular rates of salary or other remuneration payable to
them;
5.3.11. No Pension Plans. There are no pension, profit sharing, group
insurance or similar plans or other deferred compensation plans
affecting Nanchang Best, except as set forth in the Nanchang Best
Financial Statements;
5.3.12. No Adverse Events. Since the date of the Nanchang Best
Financial Statements:
5.3.12.i. there has not been any material adverse change in the
financial position or condition of Nanchang Best, its
liabilities or the Nanchang Best Assets or any damage, loss
or other change in circumstances materially and adversely
affecting Nanchang Best, the Nanchang Best Business or the
Nanchang Best Assets or Nanchang Best's right to carry on
the Nanchang Best Business, other than changes in the
ordinary course of business,
5.3.12.ii. there has not been any damage, destruction, loss or
other event (whether or not covered by insurance) materially
and adversely affecting Nanchang Best, the Nanchang Best
Business or the Nanchang Best Assets,
5.3.12.iii. there has not been any material increase in the
compensation payable or to become payable by Nanchang Best
to the Nanchang Best Shareholders or to any of Nanchang
Best's officers, employees or agents or any bonus, payment
or arrangement made to or with any of them,
5.3.12.iv. the Nanchang Best Business has been and continues to
be carried on in the ordinary course,
5.3.12.v. Nanchang Best has not waived or surrendered any right
of material value,
0.0.00.xx. Nanchang Best has not discharged or satisfied or paid
any lien or encumbrance or obligation or liability other
than current liabilities in the ordinary course of business,
and
5.3.12.vii. no capital expenditures in excess of $10,000
individually or $30,000 in total have been authorized or
made;
5.4. Nanchang Best - Income Tax Matters
5.4.1. Tax Returns. All tax returns and reports of Nanchang Best
required by law to be filed have been filed and are true,
complete and correct, and any taxes payable in accordance with
any return filed by Nanchang Best or in accordance with any
notice of assessment or reassessment issued by any taxing
authority have been so paid;
5.4.2. Current Taxes. Adequate provisions have been made for taxes
payable for the current period for which tax returns are not yet
required to be filed and there are no agreements, waivers, or
other arrangements providing for an extension of time with
respect to the filing of any tax return by, or payment of, any
tax, governmental charge or deficiency by Nanchang Best. Nanchang
Best is not aware of any contingent tax liabilities or any
grounds which would prompt a reassessment including aggressive
treatment of income and expenses in filing earlier tax returns;
Page 18 of 33
5.5. Nanchang Best - Applicable Laws and Legal Matters
5.5.1. Licenses. Nanchang Best holds all licenses and permits as may
be requisite for carrying on the Nanchang Best Business in the
manner in which it has heretofore been carried on, which licenses
and permits have been maintained and continue to be in good
standing except where the failure to obtain or maintain such
licenses or permits would not have a material adverse effect on
the Nanchang Best Business;
5.5.2. Applicable Laws. Nanchang Best has not been charged with or
received notice of breach of any laws, ordinances, statutes,
regulations, by-laws, orders or decrees to which it is subject or
which applies to it the violation of which would have a material
adverse effect on the Nanchang Best Business, and, to the
knowledge of the Nanchang Best Shareholders, Nanchang Best is not
in breach of any laws, ordinances, statutes, regulations,
by-laws, orders or decrees the contravention of which would
result in a material adverse effect on the Nanchang Best
Business;
5.5.3. Pending or Threatened Litigation. There is no material
litigation or administrative or governmental proceeding pending
or threatened against or relating to Nanchang Best, the Nanchang
Best Business, or any of the Nanchang Best Assets, nor do the
Nanchang Best Shareholders have any knowledge of any act or
omission of Nanchang Best that would form any basis for any such
action or proceeding;
5.5.4. No Bankruptcy. Nanchang Best has not made any voluntary
assignment or proposal under applicable laws relating to
insolvency and bankruptcy and no bankruptcy petition has been
filed or presented against Nanchang Best and no order has been
made or a resolution passed for the winding-up, dissolution or
liquidation of Nanchang Best;
5.5.5. Labor Matters. Nanchang Best is not party to any collective
agreement relating to the Nanchang Best Business with any labor
union or other association of employees and no part of the
Nanchang Best Business has been certified as a unit appropriate
for collective bargaining or, to the knowledge of the Nanchang
Best Shareholders, has made any attempt in that regard;
5.5.6. Environmental Compliance. Nanchang Best has at all times had
and now has all environmental approvals, consents, licenses,
permits and orders required to conduct the businesses in which it
has been or is now engaged. Nanchang Best has at all times been
and is now in compliance in all material respects with all
applicable environmental laws. There are no claims, actions,
suits or proceedings pending or, to Nanchang Best's Knowledge,
threatened against or involving Nanchang Best, or any assets of
Nanchang Best, under any of the environmental laws (whether by
reason of any failure to comply with any of the environmental
laws or otherwise). No decree, judgment or order of any kind
under any of the environmental laws has been entered against
Nanchang Best. There are no facts, conditions or situations,
whether now or heretofore existing, that could form the basis for
any claim against, or result in any liability of, Nanchang Best
under any of the environmental laws;
5.5.7. Finder's Fees. Nanchang Best is not a party to any agreement
which provides for the payment of finder's fees, brokerage fees,
commissions or other fees or amounts which are or may become
payable to any third party in connection with the execution and
delivery of this Agreement and the transactions contemplated
herein;
5.6. Execution and Performance of Agreement
5.6.1. Authorization and Enforceability. The execution and delivery of
this Agreement, by Nanchang Best and the completion of the
Page 19 of 33
transactions contemplated hereby, have been duly and validly
authorized by all necessary corporate action on the part of
Nanchang Best;
5.6.2. No Violation or Breach. The execution and performance of this
Agreement will not:
5.6.2.i. violate the charter documents of Nanchang Best or result
in any breach of, or default under, any loan agreement,
mortgage, deed of trust, or any other agreement to which
Nanchang Best is a party,
5.6.2.ii. give any person any right to terminate or cancel any
agreement including, without limitation, Nanchang Best
Material Contracts, or any right or rights enjoyed by
Nanchang Best,
5.6.2.iii. result in any alteration of Nanchang Best's
obligations under any agreement to which Nanchang Best is a
party including, without limitation, the Nanchang Best
Material Contracts,
5.6.2.iv. result in the creation or imposition of any lien,
encumbrance or restriction of any nature whatsoever in favor
of a third party upon or against the Nanchang Best Assets,
5.6.2.v. result in the imposition of any tax liability to
Nanchang Best relating to Nanchang Best Assets or the
Nanchang Best Shares, or
0.0.0.xx. violate any court order or decree to which Nanchang
Best is subject;
5.7. Nanchang Best Assets - Ownership and Condition
5.7.1. Business Assets. The Nanchang Best Assets, comprise all of the
property and assets of the Nanchang Best Business, and neither
the Nanchang Best Shareholders nor any other person, firm or
corporation owns any assets used by Nanchang Best in operating
the Nanchang Best Business, whether under a lease, rental
agreement or other arrangement, other than as disclosed in
Schedules 1.1.13 or 1.1.19 hereto;
5.7.2. Title. Nanchang Best is the legal and beneficial owner of the
Nanchang Best Assets, free and clear of all mortgages, liens,
charges, pledges, security interests, encumbrances or other
claims whatsoever, save and except as disclosed in Schedules
1.1.13 or 1.1.19 hereto;
5.7.3. No Option. No person, firm or corporation has any agreement or
option or a right capable of becoming an agreement for the
purchase of any of the Nanchang Best Assets;
5.7.4. Nanchang Best Insurance Policies. Nanchang Best maintains the
public liability insurance and insurance against loss or damage
to the Nanchang Best Assets and the Nanchang Best Business as
described in Schedule 1.1.16 hereto;
5.7.5. Nanchang Best Material Contracts. The Nanchang Best Material
Contracts listed in Schedule 1.1.19 constitute all of the
material contracts of Nanchang Best;
5.7.6. No Default. There has not been any default in any material
obligation of Nanchang Best to be performed under any of Nanchang
Best Material Contracts, each of which is in good standing and in
Page 20 of 33
full force and effect and unamended (except as disclosed in
Schedule 1.1.19), and Nanchang Best is not aware of any default
in the obligations of any other party to any of the Nanchang Best
Material Contracts;
5.7.7. No Compensation on Termination. There are no agreements,
commitments or understandings relating to severance pay or
separation allowances on termination of employment of any
employee of Nanchang Best. Nanchang Best is not obliged to pay
benefits or share profits with any employee after termination of
employment except as required by law;
5.8. Nanchang Best Assets - Nanchang Best Equipment: The Nanchang Best
Equipment has been maintained in a manner consistent with that of a
reasonably prudent owner and such equipment is in good working
condition;
5.9. Nanchang Best Assets - Nanchang Best Goodwill and Other Assets:
Nanchang Best carries on the Nanchang Best Business only under the
name "Nanchang Best Animal Husbandry Co., Ltd." and variations thereof
and under no other business or trade names. The Nanchang Best
Shareholders do not have any knowledge of any infringement by Nanchang
Best of any patent, trademark, copyright or trade secret;
5.10. The Business of Nanchang Best:
5.10.1. Maintenance of Business. Since the date of the Nanchang Best
Financial Statements, the Nanchang Best Business has been carried
on in the ordinary course and Nanchang Best has not entered into
any material agreement or commitment except in the ordinary
course; and
5.10.2. Subsidiaries. Nanchang Best does not have any subsidiaries and
does not otherwise own, directly or indirectly, any shares or
interest in any other corporation, partnership, limited liability
company, joint venture or firm.
ARTICLE 6. NON-MERGER AND SURVIVAL: The representations and warranties of the
Nanchang Best Shareholders contained herein will be true at and as of
Closing in all material respects as though such representations and
warranties were made as of such time. Notwithstanding the completion of the
transactions contemplated hereby, the waiver of any condition contained
herein (unless such waiver expressly releases a party from any such
representation or warranty) or any investigation made by Xxxxxxx Mountain,
the representations and warranties of the Nanchang Best Shareholders shall
survive the Closing.
ARTICLE 7. INDEMNITY: The Nanchang Best Shareholders agree to indemnify and save
harmless Xxxxxxx Mountain from and against any and all claims, demands,
actions, suits, proceedings, assessments, judgments, damages, costs, losses
and expenses, including any payment made in good faith in settlement of any
claim (subject to the right of the Nanchang Best Shareholders to defend any
such claim), resulting from the breach by any of them of any representation
or warranty of such party made under this Agreement or from any
misrepresentation in or omission from any certificate or other instrument
furnished or to be furnished by Nanchang Best or the Nanchang Best
Shareholders to Xxxxxxx Mountain hereunder.
ARTICLE 8. COVENANTS OF NANCHANG BEST AND THE NANCHANG BEST SHAREHOLDERS
8.1. Covenants: Nanchang Best and the Nanchang Best Shareholders covenant
and agree with Xxxxxxx Mountain and the Xxxxxxx Mountain Signatory
Shareholder that they will:
Page 21 of 33
8.1.1. Conduct of Business. Until the Closing, conduct the Nanchang
Best Business diligently and in the ordinary course consistent
with the manner in which the Nanchang Best Business generally has
been operated up to the date of execution of this Agreement;
8.1.2. Preservation of Business. Until the Closing, use their best
efforts to preserve the Nanchang Best Business and the Nanchang
Best Assets and, without limitation, preserve for Xxxxxxx
Mountain Nanchang Best's relationships with their suppliers,
customers and others having business relations with them;
8.1.3. Access. Until the Closing, give Xxxxxxx Mountain and its
representatives full access to all of the properties, books,
contracts, commitments and records of Nanchang Best relating to
Nanchang Best, the Nanchang Best Business and the Nanchang Best
Assets, and furnish to Xxxxxxx Mountain and its representatives
all such information as they may reasonably request;
8.1.4. Procure Consents. Until the Closing, take all reasonable steps
required to obtain, prior to Closing, any and all third party
consents required to permit the Acquisition and to preserve and
maintain the Nanchang Best Assets, including the Nanchang Best
Material Contracts, notwithstanding the change in control of
Nanchang Best arising from the Acquisition;
8.1.5. Reporting and Internal Controls. From and after the Closing,
the Nanchang Best Shareholders shall forthwith take all required
actions to implement internal controls on the business of
Nanchang Best to ensure that Nanchang Best and Xxxxxxx Mountain
comply with Section 13(b)(2) of the Exchange Act;
8.1.6. Stock Dividend. Within ten (10) days from the Closing Date,
Nanchang Best and the Nanchang Best Shareholders shall cause
Xxxxxxx Mountain to effectuate a three-for-one forward split of
the Xxxxxxx Mountain Common Shares by way of stock dividend;
8.1.7. Name Change. Forthwith after the Closing, Nanchang Best and the
Nanchang Best Shareholders shall take such steps are required to
change the name of Xxxxxxx Mountain to "AgFeed Industries, Inc."
or such similar name as may be acceptable to the board of
directors of Xxxxxxx Mountain;
8.1.8. Sale of Business. Within thirty (30) days from the Closing
Date, Xxxxxxx Mountain shall sell its business operations, as
they exist immediately prior to the Closing, to Xxxxxx Xxxxxxx.
In consideration of the sale, Xx. Xxxxxxx shall forgive all debt,
if any, owed to him by Xxxxxxx Mountain, and shall agree to
assume, pay and discharge all liabilities resulting from such
business operations;
8.1.9. No Reverse Stock Splits. For a period of twelve (12) months
following the Closing, take any action to cause or result in any
way in a reverse stock split of the capital stock of Xxxxxxx
Mountain; and
8.1.10. Exchange Act Reports. From and after the Closing Date, take
all such steps as are necessary to discharge all reporting
obligations imposed upon them by the Exchange Act.
8.2. Authorization: Nanchang Best hereby agrees to authorize and direct any
and all federal, state, municipal, foreign and international
governments and regulatory authorities having jurisdiction respecting
Nanchang Best to release any and all information in their possession
respecting Nanchang Best to Xxxxxxx Mountain. Nanchang Best shall
Page 22 of 33
promptly execute and deliver to Xxxxxxx Mountain any and all consents
to the release of information and specific authorizations which
Xxxxxxx Mountain reasonably require to gain access to any and all such
information. Nanchang Best Shareholders hereby authorize Xxxxx Xxxxxxx
to execute all certificates or other representations required to
complete the transactions contemplated by this Agreement.
8.3. Survival: The covenants set forth in this Article shall survive the
Closing for the benefit of Xxxxxxx Mountain and the Xxxxxxx Mountain
Signatory Shareholder.
ARTICLE 9. CONDITIONS PRECEDENT IN FAVOR OF XXXXXXX MOUNTAIN AND THE XXXXXXX
MOUNTAIN SIGNATORY SHAREHOLDER
9.1. Conditions Precedent to Closing: The obligations of Xxxxxxx Mountain
and the Xxxxxxx Mountain Signatory Shareholder to carry out the
transactions contemplated hereby are subject to the fulfillment of
each of the following conditions precedent on or before the Closing:
9.1.1. all documents or copies of documents required to be executed
and delivered to Xxxxxxx Mountain hereunder will have been so
executed and delivered;
9.1.2. all of the terms, covenants and conditions of this Agreement to
be complied with or performed by Nanchang Best or the Nanchang
Best Shareholders at or prior to the Closing will have been
complied with or performed;
9.1.3. title to the Nanchang Best Shares held by the Nanchang Best
Shareholders and to the Nanchang Best Assets will be free and
clear of all mortgages, liens, charges, pledges, security
interests, encumbrances or other claims whatsoever, save and
except as disclosed herein, and the Nanchang Best Shares shall be
duly transferred to Xxxxxxx Mountain;
9.1.4. Xxxxxxx Mountain and the Xxxxxxx Mountain Signatory Shareholder
shall have received an opinion of counsel of Nanchang Best
addressed to it in substantially the form of Schedule 9.1.4
hereto;
9.1.5. contemporaneously with the closing under this Agreement,
Xxxxxxx Mountain, the shareholders of Shanghai Best Animal
Husbandry Co., Ltd. and Shanghai Best Animal Husbandry Co., Ltd.
shall have effected a closing under a share purchase agreement
pursuant to which Shanghai Best Animal Husbandry Co., Ltd. shall
have become a wholly owned subsidiary of Xxxxxxx Mountain;
9.1.6. subject to ARTICLE 14 hereof, there will not have occurred
9.1.6.i. any material adverse change in the financial position or
condition of Nanchang Best, its liabilities or the Nanchang
Best Assets or any damage, loss or other change in
circumstances materially and adversely affecting Nanchang
Best, the Nanchang Best Business or the Nanchang Best Assets
or Nanchang Best's right to carry on the Nanchang Best
Business, other than changes in the ordinary course of
business, none of which has been materially adverse, or
9.1.6.ii. any damage, destruction, loss or other event, including
changes to any laws or statutes applicable to Nanchang Best
or the Nanchang Best Business (whether or not covered by
insurance) materially and adversely affecting Nanchang Best,
the Nanchang Best Business or the Nanchang Best Assets; and
Page 23 of 33
9.1.6.iii. the transactions contemplated hereby shall have been
approved by all regulatory authorities having jurisdiction
over the subject matter hereof, if any.
9.2. Waiver by Xxxxxxx Mountain: The conditions precedent set out in the
preceding section are inserted for the exclusive benefit of Xxxxxxx
Mountain and the Xxxxxxx Mountain Signatory Shareholder and any such
condition may be waived in whole or in part by Xxxxxxx Mountain and
the Xxxxxxx Mountain Signatory Shareholder at or prior to the Closing
by delivering to Nanchang Best a written waiver to that effect signed
by Xxxxxxx Mountain and the Xxxxxxx Mountain Signatory Shareholder. In
the event that the conditions precedent set out in the preceding
section are not satisfied on or before the Closing, Xxxxxxx Mountain
and the Xxxxxxx Mountain Signatory Shareholder shall be released from
all obligations under this Agreement.
ARTICLE 10. CONDITIONS PRECEDENT IN FAVOR OF NANCHANG BEST AND THE NANCHANG BEST
SHAREHOLDERS:
10.1. Conditions Precedent to Closing: The obligations of Nanchang Best and
the Nanchang Best Shareholders to carry out the transactions
contemplated hereby are subject to the fulfillment of each of the
following conditions precedent on or before the Closing:
10.1.1. all documents or copies of documents required to be executed
and delivered to Nanchang Best hereunder will have been so
executed and delivered;
10.1.2. all of the terms, covenants and conditions of this Agreement
to be complied with or performed by Xxxxxxx Mountain and the
Xxxxxxx Mountain Signatory Shareholder at or prior to the Closing
will have been complied with or performed;
10.1.3. Xxxxxxx Mountain will have delivered the Acquisition Shares to
be issued pursuant to the terms of the Acquisition to Nanchang
Best at the Closing and the Acquisition Shares will be registered
on the books of Xxxxxxx Mountain in the names of the holders of
Nanchang Best Shares at the time of Closing;
10.1.4. title to the Acquisition Shares will be free and clear of all
mortgages, liens, charges, pledges, security interests,
encumbrances or other claims whatsoever;
10.1.5. the Nanchang Best Shareholders shall have received an opinion
of counsel of Xxxxxxx Mountain addressed to them in substantially
the form of Schedule 10.1.5 hereto;
10.1.6. contemporaneously with the closing under this Agreement,
Xxxxxxx Mountain, the shareholders of Shanghai Best Animal
Husbandry Co., Ltd. and Shanghai Best Animal Husbandry Co., Ltd.
shall have effected a closing under a share purchase agreement
pursuant to which Shanghai Best Animal Husbandry Co., Ltd. shall
have become a wholly owned subsidiary of Xxxxxxx Mountain;
10.1.7. subject to ARTICLE 14 hereof, there will not have occurred
10.1.7.i. any material adverse change in the financial position
or condition of Xxxxxxx Mountain, its liabilities or the
Xxxxxxx Mountain Assets or any damage, loss or other change
in circumstances materially and adversely affecting Xxxxxxx
Mountain, the Xxxxxxx Mountain Business or the Xxxxxxx
Mountain Assets or Xxxxxxx Mountain's right to carry on the
Xxxxxxx Mountain Business, other than changes in the
ordinary course of business, none of which has been
materially adverse, or
Page 24 of 33
10.1.7.ii. any damage, destruction, loss or other event,
including changes to any laws or statutes applicable to
Xxxxxxx Mountain or the Xxxxxxx Mountain Business (whether
or not covered by insurance) materially and adversely
affecting Xxxxxxx Mountain, the Xxxxxxx Mountain Business or
the Xxxxxxx Mountain Assets;
10.1.7.iii. the transactions contemplated hereby shall have been
approved by all regulatory authorities having jurisdiction
over the subject matter hereof, if any; and
10.1.7.iv. the satisfaction of all liabilities of Xxxxxxx
Mountain on or prior to the Closing Date, other than those
liabilities to be transferred to Xx. Xxxxxxx, save and
except for liabilities incurred in connection with the
Acquisition.; and
10.1.7.v. a single designee jointly selected by the Shanghai Best
Shareholders and the Nanchang Best Shareholders shall have
been elected as a member of the Board of Directors of
Xxxxxxx Mountain.
10.2. Waiver by Nanchang Best and the Nanchang Best Shareholders: The
conditions precedent set out in the preceding section are inserted for
the exclusive benefit of Nanchang Best and the Nanchang Best
Shareholders and any such condition may be waived in whole or in part
by Nanchang Best or the Nanchang Best Shareholders at or prior to the
Closing by delivering to Xxxxxxx Mountain and the Xxxxxxx Mountain
Signatory Shareholder a written waiver to that effect signed by
Nanchang Best and the Nanchang Best Shareholders. In the event that
the conditions precedent set out in the preceding section are not
satisfied on or before the Closing, Nanchang Best and the Nanchang
Best Shareholders shall be released from all obligations under this
Agreement.
ARTICLE 11. NATURE OF CONDITIONS PRECEDENT: The conditions precedent set forth
in this Agreement are conditions of completion of the transactions
contemplated by this Agreement and are not conditions precedent to the
existence of a binding agreement. Each party acknowledges receipt of the
sum of $1.00 and other good and valuable consideration as separate and
distinct consideration for agreeing to the conditions precedent in favor of
the other party or parties set forth in this Article.
ARTICLE 12. TERMINATION: Notwithstanding any provision herein to the contrary,
if the Closing does not occur on or before December 31, 2006, this
Agreement will be at an end and will have no further force or effect,
unless otherwise agreed upon by the parties in writing.
ARTICLE 13. CONFIDENTIALITY: Notwithstanding any provision herein to the
contrary, the parties hereto agree that the existence and terms of this
Agreement are confidential and that if this Agreement is terminated
pursuant to the preceding section the parties agree to return to one
another any and all financial, technical and business documents delivered
to the other party or parties in connection with the negotiation and
execution of this Agreement and shall keep the terms of this Agreement and
all information and documents received from Nanchang Best and Xxxxxxx
Mountain and the contents thereof confidential and not utilize nor reveal
or release same, provided, however, that Xxxxxxx Mountain will be required
to issue a news release regarding the execution and consummation of this
Agreement and file a Current Report on Form 8-K with the Securities and
Exchange Commission respecting the proposed Acquisition contemplated hereby
together with such other documents as are required to maintain the currency
of Xxxxxxx Mountain's filings with the Securities and Exchange Commission.
Page 25 of 33
ARTICLE 14. RISK
14.1. Material Change in the Business of Nanchang Best: If any material
loss or damage to the Nanchang Best Business occurs prior to Closing
and such loss or damage, in Xxxxxxx Mountain' reasonable opinion,
cannot be substantially repaired or replaced within sixty (60) days,
Xxxxxxx Mountain shall, within two (2) days following any such loss or
damage, by notice in writing to Nanchang Best, at its option, either:
14.1.1. terminate this Agreement, in which case no party will be under
any further obligation to any other party; or
14.1.2. elect to complete the Acquisition and the other transactions
contemplated hereby, in which case the proceeds and the rights to
receive the proceeds of all insurance covering such loss or
damage will, as a condition precedent to Xxxxxxx Mountain'
obligations to carry out the transactions contemplated hereby, be
vested in Nanchang Best or otherwise adequately secured to the
satisfaction of Xxxxxxx Mountain on or before the Closing Date.
14.2. Material Change in the Xxxxxxx Mountain Business: If any material
loss or damage to the Xxxxxxx Mountain Business occurs prior to
Closing and such loss or damage, in Nanchang Best's reasonable
opinion, cannot be substantially repaired or replaced within sixty
(60) days, Nanchang Best shall, within two (2) days following any such
loss or damage, by notice in writing to Xxxxxxx Mountain, at its
option, either:
14.2.1. terminate this Agreement, in which case no party will be under
any further obligation to any other party; or
14.2.2. elect to complete the Acquisition and the other transactions
contemplated hereby, in which case the proceeds and the rights to
receive the proceeds of all insurance covering such loss or
damage will, as a condition precedent to Nanchang Best's
obligations to carry out the transactions contemplated hereby, be
vested in Xxxxxxx Mountain or otherwise adequately secured to the
satisfaction of Nanchang Best on or before the Closing Date.
ARTICLE 15. CLOSING
15.1. Closing: The Acquisition and the other transactions contemplated by
this Agreement will be closed at the Place of Closing in accordance
with the closing procedure set out in this Article.
15.2. Documents to be Delivered by Nanchang Best: On or before the Closing,
Nanchang Best and the Nanchang Best Shareholders will deliver or cause
to be delivered to Xxxxxxx Mountain and the Xxxxxxx Mountain Signatory
Shareholder:
15.2.1. the original or certified copies of the charter documents of
Nanchang Best and all corporate records documents and instruments
of Nanchang Best, the corporate seal of Nanchang Best and all
books and accounts of Nanchang Best;
15.2.2. all reasonable consents or approvals required to be obtained
by Nanchang Best for the purposes of completing the Acquisition
and preserving and maintaining the interests of Nanchang Best
under any and all Nanchang Best Material Contracts and in
relation to Nanchang Best Assets;
Page 26 of 33
15.2.3. certified copies of such resolutions of the shareholders and
directors of Nanchang Best as are required to be passed to
authorize the execution, delivery and implementation of this
Agreement;
15.2.4. an acknowledgement from Nanchang Best and the Nanchang Best
Shareholders of the satisfaction of the conditions precedent set
forth in section 7.3 hereof;
15.2.5. the certificates or other evidence of ownership of the
Nanchang Best Shares, together with such other documents or
instruments required to effect transfer of ownership of the
Nanchang Best Shares to Xxxxxxx Mountain; and
15.2.6. such other documents as Xxxxxxx Mountain may reasonably
require to give effect to the terms and intention of this
Agreement.
15.3. Documents to be Delivered by Xxxxxxx Mountain and the Xxxxxxx
Mountain Signatory Shareholder: On or before the Closing, Xxxxxxx
Mountain and the Xxxxxxx Mountain Signatory Shareholder shall deliver
or cause to be delivered to Nanchang Best and the Nanchang Best
Shareholders:
15.3.1. share certificates representing the Acquisition Shares duly
registered in the names of the holders of shares of Nanchang Best
Common Stock;
15.3.2. certified copies of such resolutions of the directors of
Xxxxxxx Mountain as are required to be passed to authorize the
execution, delivery and implementation of this Agreement;
15.3.3. a certified copy of a resolution of the directors of Xxxxxxx
Mountain dated as of the Closing Date appointing the nominees of
Nanchang Best as officers of Nanchang Best and appointing the
nominee of the Nanchang Best Shareholders to the board of
directors of Xxxxxxx Mountain; and
15.3.4. an acknowledgement from Xxxxxxx Mountain of the satisfaction
of the conditions precedent set forth in section 7.1 hereof;
15.3.5. such other documents as Nanchang Best may reasonably require
to give effect to the terms and intention of this Agreement.
ARTICLE 16. POST-CLOSING MATTERS: Forthwith after the Closing, Xxxxxxx Mountain,
the Xxxxxxx Mountain Signatory Shareholder, Nanchang Best and the Nanchang
Best Shareholders, as the case may be, agree to use all their best efforts
to:
16.1. issue a news release reporting the Closing;
16.2. file a Form 8-K with the Securities and Exchange Commission
disclosing the terms of this Agreement within 4 business days of the
Closing which includes full Form 10 disclosure and the audited
financial statements of Nanchang Best, as well as pro forma financial
information of Nanchang Best and Xxxxxxx Mountain as required by Item
310 of Regulation SB promulgated by the Securities and Exchange
Commission;
16.3. file reports on Forms 13D and 3 with the Securities and Exchange
Commission disclosing the acquisition of the Acquisition Shares by the
Nanchang Best Shareholders;
16.4. within 10 days of the Closing, take such steps are required to change
the name of Xxxxxxx Mountain to AgFeed Industries, Inc. or such
similar name as may be acceptable to the board of directors of Xxxxxxx
Mountain; and
Page 27 of 33
16.5. within 10 days of the Closing, take such steps are required to
effectuate a three-for-one forward split of the Xxxxxxx Mountain
Common Shares by way of stock dividend.
ARTICLE 17. GENERAL PROVISIONS
17.1. Arbitration: The parties hereto shall attempt to resolve any dispute,
controversy, difference or claim arising out of or relating to this
Agreement by negotiation in good faith. If such good negotiation fails
to resolve such dispute, controversy, difference or claim within
fifteen (15) days after any party delivers to any other party a notice
of its intent to submit such matter to arbitration, then any party to
such dispute, controversy, difference or claim may submit such matter
to arbitration in the City of New York, New York in accordance with
rules of the American Arbitration Association, and each of the parties
irrevocably consents to arbitration in the City of New York in
accordance with such rules, and the jurisdiction of any state or
federal court located in the City of New York to enforce arbitration
and any arbitral award.
17.2. Notice
17.2.1. Method of Delivery: Any notice required or permitted to be
given by any party will be deemed to be given when in writing and
delivered to the address for notice of the intended recipient by
personal delivery, prepaid single certified or registered mail,
or telecopier. Any notice delivered by mail shall be deemed to
have been received on the fourth business day after and excluding
the date of mailing, except in the event of a disruption in
regular postal service in which event such notice shall be deemed
to be delivered on the actual date of receipt. Any notice
delivered personally or by telecopier shall be deemed to have
been received on the actual date of delivery.
17.2.2. Addresses for Service: The address for service of notice of
each of the parties hereto is as follows:
Xxxxxxx Mountain or the Xxxxxxx Mountain Signatory Shareholder:
Xxxxxxx Mountain Resources Corp.
#00X Xxxxx Xxxxx, Xxxxxxxxx Xxxx
00 Xxxxxxxxx 00 Xxxx
Xxxxxxx 00000 Xxxxxxxx
Attn: Xxxxxx Xxxxxxx, President
Phone: x(000) 000-0000
Telecopier: (000) 000-0000
With a copy to (which shall not be deemed notice):
Xxxxx Xxxxxxx
Xxxxxxx Law Firm
2070 Skyline Tower, 00000 XX 0xx Xxxxxx
Xxxxxxxx, XX 00000
Phone: 000-000-0000
Telecopier: 000-000-0000
Page 28 of 33
Nanchang Best or the Nanchang Best Shareholders:
Nanchang Best Animal Husbandry Co., Ltd.
0000 Xxxx Xxx Xxxxxx, Xxxxxxxx and Technical Zone
Xxx Xxxxx City, Jiangxi Province
China 330013
Attn: Xxxxx Xxxxxxx, CEO
Phone:
Telecopier:
With a copy to (which shall not be deemed notice):
Xxxxxxx, Xxxxxxxxx & Xxxxxxxx, LLP
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxx Xxxxxxxx, Esq.
Phone: (000) 000-0000
Telecopier: (000) 000-0000
17.2.3. Change of Address: Any party may, by notice to the other
parties change its address for notice to some other address and
will so change its address for notice whenever the existing
address or notice ceases to be adequate for delivery by hand. A
post office box may not be used as an address for service.
17.3. Further Assurances: Each of the parties will execute and deliver such
further and other documents and do and perform such further and other
acts as any other party may reasonably require to carry out and give
effect to the terms and intention of this Agreement.
17.4. Time of the Essence: Time is expressly declared to be the essence of
this Agreement.
17.5. Entire Agreement: The provisions contained herein constitute the
entire agreement among Nanchang Best, the Nanchang Best Shareholders,
Xxxxxxx Mountain and the Xxxxxxx Mountain Signatory Shareholder
respecting the subject matter hereof and supersede all previous
communications, representations and agreements, whether verbal or
written, among Nanchang Best, the Nanchang Best Shareholders, Xxxxxxx
Mountain and the Xxxxxxx Mountain Signatory Shareholder with respect
to the subject matter hereof.
17.6. Binding Effect and Benefit: This Agreement will enure to the benefit
of and be binding upon the parties hereto and their respective heirs,
executors, administrators, successors and permitted assigns.
17.7. Assignment: This Agreement is not assignable without the prior
written consent of the parties hereto.
17.8. Counterparts: This Agreement may be executed in counterparts, each of
which when executed by any party will be deemed to be an original and
all of which counterparts will together constitute one and the same
Agreement. Delivery of executed copies of this Agreement by telecopier
will constitute proper delivery, provided that originally executed
counterparts are delivered to the parties within a reasonable time
thereafter.
17.9. Applicable Law: This Agreement is subject to the laws of the State of
New York.
[Remainder of page intentionally left blank.]
Page 29 of 33
IN WITNESS WHEREOF the parties have executed this Agreement effective as of
the day and year first above written.
XXXXXXX MOUNTAIN RESOURCES CORP.
By: /s/ Xxxxxx Xxxxxxx
-------------------------
Xxxxxx Xxxxxxx, President
/s/ Xxxxxx Xxxxxxx
----------------------------------
Xxxxxx Xxxxxxx, in his individual capacity
NANCHANG BEST ANIMAL HUSBANDRY CO., LTD.
By: /s/ Li Songyan
---------------------------------
Li Songyan, Chairman
SHAREHOLDERS OF NANCHANG BEST ANIMAL HUSBANDRY CO., LTD.
-------------------------------------------- ----------------------- ----------------------------
Name and Signature Number of Shares Number of Shares
Nanchang Xxxxxxx
-------------------------------------------- ----------------------- ----------------------------
/s/
---------------------------------
Xxxxx Xxxxxxx 790,000 628,558
-------------------------------------------- ----------------------- ---------------------------
/s/
---------------------------------
Zhou Feng 790,000 628,558
-------------------------------------------- ----------------------- ---------------------------
/s/
---------------------------------
Xxxxx Zhengru 790,000 628,558
-------------------------------------------- ----------------------- ---------------------------
/s/
---------------------------------
Zheng Yunlin 790,000 628,558
-------------------------------------------- ----------------------- ---------------------------
/s/
---------------------------------
Li Songyan 740,000 588,776
-------------------------------------------- ----------------------- ---------------------------
/s/
--------------------------------
Xxxxx Xxxxxxx 450,000 358,039
-------------------------------------------- ----------------------- ---------------------------
/s/
--------------------------------
Zhu Jiang 225,000 179,020
-------------------------------------------- ----------------------- ---------------------------
Page 30 of 33
/s/
--------------------------------
Xiao Qiusheng 250,000 198,911
-------------------------------------------- ----------------------- ---------------------------
/s/
--------------------------------
Hu Guoliang 175,000 139,238
-------------------------------------------- ----------------------- ---------------------------
Leader Industrial Development Ltd.
By:/s/
----------------------------
Name:
Title: 1,756,800 1,397,784
-------------------------------------------- ----------------------- ---------------------------
TOTAL SHARES
-------------------------------------------- ----------------------- ---------------------------
Page 31 of 33
TABLE OF CONTENTS
ARTICLE 1. - DEFINITIONS AND INTERPRETATION.......................................................................2
ARTICLE 2. THE ACQUISITION........................................................................................6
ARTICLE 3. REPRESENTATIONS AND WARRANTIES OF XXXXXXX MOUNTAIN AND THE XXXXXXX MOUNTAIN SIGNATORY SHAREHOLDER......8
ARTICLE 4. COVENANTS OF XXXXXXX MOUNTAIN AND THE XXXXXXX MOUNTAIN SIGNATORY SHAREHOLDER..........................14
ARTICLE 5. REPRESENTATIONS AND WARRANTIES OF THE NANCHANG BEST SHAREHOLDERS......................................15
ARTICLE 6. NON-MERGER AND SURVIVAL...............................................................................21
ARTICLE 7. INDEMNITY.............................................................................................21
ARTICLE 8. COVENANTS OF NANCHANG BEST AND THE NANCHANG BEST SHAREHOLDERS.........................................21
ARTICLE 9. CONDITIONS PRECEDENT IN FAVOR OF XXXXXXX MOUNTAIN AND THE XXXXXXX MOUNTAIN SIGNATORY SHAREHOLDER......23
ARTICLE 10. CONDITIONS PRECEDENT IN FAVOR OF NANCHANG BEST AND THE NANCHANG BEST SHAREHOLDERS....................24
ARTICLE 11. NATURE OF CONDITIONS PRECEDENT.......................................................................25
ARTICLE 12. TERMINATION..........................................................................................25
ARTICLE 13. CONFIDENTIALITY......................................................................................25
ARTICLE 14. RISK.................................................................................................26
ARTICLE 15. CLOSING..............................................................................................26
ARTICLE 16. POST-CLOSING MATTERS.................................................................................27
ARTICLE 17. GENERAL PROVISIONS...................................................................................28
Page 32 of 33
SCHEDULES
Schedule 1.1.6 Nanchang Best Accounts Payable and Liabilities
Schedule 1.1.7 Nanchang Best Accounts Receivable
Schedule 1.1.9 Nanchang Best Bank Accounts
Schedule 1.1.12 Nanchang Best Debt to Related Parties
Schedule 1.1.13 Nanchang Best Equipment
Schedule 1.1.14 Nanchang Best Financial Statements
Schedule 1.1.16 Nanchang Best Insurance Policies
Schedule 1.1.18 Nanchang Best Inventory
Schedule 1.1.19 Nanchang Best Material Contracts
Schedule 1.1.20 Nanchang Best Related Party Debt
Schedule 1.1.23 Xxxxxxx Mountain Accounts Payable and Liabilities
Schedule 1.1.24 Xxxxxxx Mountain Accounts Receivable
Schedule 1.1.26 Xxxxxxx Mountain Bank Accounts
Schedule 1.1.30 Xxxxxxx Mountain Debt to Related Parties
Schedule 1.1.31 Xxxxxxx Mountain Equipment
Schedule 1.1.32 Xxxxxxx Mountain Financial Statements
Schedule 1.1.34 Xxxxxxx Mountain Insurance Policies
Schedule 1.1.36 Xxxxxxx Mountain Inventory
Schedule 1.1.37 Xxxxxxx Mountain Material Contracts
Schedule 1.1.38 Xxxxxxx Mountain Related Party Debt
Schedule 9.1.4 Opinion of Counsel for Nanchang Best
Schedule 10.1.5 Opinion of Counsel for Xxxxxxx Mountain
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