Exhibit 2.2
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:
SHANGHAI 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 Xx. 000 XxxXxxx
Xxxx, Xxx'xxx Xxxxxxxx, Xxxxx
("Shanghai Best")
AND:
The shareholders of Shanghai Best, the name of each of whom
is set forth on the signature page of this Agreement. (the
"Shanghai Best Shareholders")
WHEREAS:
A. The Shanghai Best Shareholders own 1,104,200 registered shares of Shanghai
Best, constituting 100% of the presently issued and outstanding Shanghai 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 Shanghai Best
deem it advisable and in the best interests of Xxxxxxx Mountain and Shanghai
Best that Shanghai Best become a wholly-owned subsidiary of Xxxxxxx Mountain
(the "Acquisition") pursuant to this Agreement; and
X. Xxxxxxx Mountain, the shareholders of Nanchang Best Animal Husbandry Co.,
Ltd. and Nanchang Best Animal Husbandry Co., Ltd. are contemporaneously entering
into a share purchase agreement pursuant to which Nanchang 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
Shanghai Best by Xxxxxxx Mountain pursuant to this Agreement;
1.1.2. "Acquisition Shares" means the 1,024,000 Xxxxxxx Mountain
Common Shares to be issued to the Shanghai 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, Shanghai
Best, and the Shanghai 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. "Shanghai Best Accounts Payable and Liabilities" means all
accounts payable and liabilities of Shanghai Best, due and owing
or otherwise constituting a binding obligation of Shanghai Best
(other than a Shanghai Best Material Contract) as of June 30,
2006 as set forth in Schedule 1.1.6 hereto;
1.1.7. "Shanghai Best Accounts Receivable" means all accounts
receivable and other debts owing to Shanghai Best as of June 30,
2006 as set forth in Schedule 1.1.7 hereto;
Page 2 of 32
1.1.8. "Shanghai Best Assets" means all the property and assets of the
Shanghai Best Business of every kind and description wheresoever
situated including, without limitation, Shanghai Best Equipment,
Shanghai Best Inventory, Shanghai Best Material Contracts,
Shanghai Best Accounts Receivable, Shanghai Best Cash, Shanghai
Best Intangible Assets and Shanghai Best Goodwill, and all credit
cards, charge cards and banking cards issued to Shanghai Best;
1.1.9. "Shanghai Best Bank Accounts" means all of the bank accounts,
lock boxes and safety deposit boxes of Shanghai Best or relating
to the Shanghai Best Business as set forth in Schedule 1.1.1
hereto;
1.1.10. "Shanghai Best Business" means all aspects of the business
conducted by Shanghai Best;
1.1.11. "Shanghai Best Cash" means all cash on hand or on deposit to
the credit of Shanghai Best on the Closing Date;
1.1.12. "Shanghai Best Debt to Related Parties" means the debts owed
by Shanghai Best to the Shanghai Best Shareholders or to any
family member thereof, or to any affiliate, director or officer
of Shanghai Best or the Shanghai Best Shareholders as described
in Schedule 1.1.4;
1.1.13. "Shanghai Best Equipment" means all machinery, equipment,
furniture, and furnishings used in the Shanghai Best Business,
including, without limitation, the items more particularly
described in Schedule 1.1.13 hereto;
1.1.14. "Shanghai Best Financial Statements" means, collectively, the
audited financial statements of Shanghai 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. "Shanghai Best Goodwill" means the goodwill of the Shanghai
Best Business together with the exclusive right of Xxxxxxx
Mountain to represent itself as carrying on the Shanghai Best
Business in succession of Shanghai Best subject to the terms
hereof, and the right to use any words indicating that the
Shanghai Best Business is so carried on including the right to
use the name "Shanghai Best" or "Shanghai Best Animal Husbandry"
or any variation thereof as part of the name of or in connection
with the Shanghai Best Business or any part thereof carried on or
to be carried on by Shanghai Best, the right to all corporate,
operating and trade names associated with the Shanghai Best
Business, or any variations of such names as part of or in
connection with the Shanghai Best Business, all telephone
listings and telephone advertising contracts, all lists of
customers, books and records and other information relating to
the Shanghai Best Business, all necessary licenses and
authorizations and any other rights used in connection with the
Shanghai Best Business;
1.1.16. "Shanghai Best Insurance Policies" means the public liability
insurance and insurance against loss or damage to Shanghai Best
Assets and the Shanghai Best Business as described in Schedule
1.1.16 hereto;
1.1.17. "Shanghai Best Intangible Assets" means all of the intangible
assets of Shanghai Best, including, without limitation, Shanghai
Best Goodwill, all trademarks, logos, copyrights, designs, and
other intellectual and industrial property of Shanghai Best ;
1.1.18. "Shanghai Best Inventory" means all inventory and supplies of
the Shanghai Best Business as of June 30, 2006 as set forth in
Schedule 1.1.18 hereto;
Page 3 of 32
1.1.19. "Shanghai Best Material Contracts" means the burden and
benefit of and the right, title and interest of Shanghai Best in,
to and under all trade and non-trade contracts, engagements or
commitments, whether written or oral, to which including, without
limitation Shanghai Best is entitled in connection with the
Shanghai Best Business whereunder Shanghai 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. "Shanghai Best Related Party Debts" means the debts owed by
the Shanghai Best Shareholders or by any family member thereof,
or by any affiliate, director or officer of Shanghai Best or the
Shanghai Best Shareholders, to Shanghai Best as described in
Schedule 1.1.20; and
1.1.21. "Shanghai Best Shares" means all of the issued and outstanding
shares of Shanghai 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
Shanghai 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 32
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
Page 5 of 32
limit the scope, extent or intent of this Agreement or any provision
thereof.
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 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 Shanghai Best
Schedule 1.1.6 Shanghai Best Accounts Payable and Liabilities
Schedule 1.1.7 Shanghai Best Accounts Receivable
Schedule 1.1.9 Shanghai Best Bank Accounts
Schedule 1.1.12 Shanghai Best Debt to Related Parties
Schedule 1.1.13 Shanghai Best Equipment
Schedule 1.1.14 Shanghai Best Financial Statements
Schedule 1.1.16 Shanghai Best Insurance Policies
Schedule 1.1.18 Shanghai Best Inventory
Schedule 1.1.19 Shanghai Best Material Contracts
Schedule 1.1.20 Shanghai 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 Shanghai Best Shareholders hereby agrees
to sell to Xxxxxxx Mountain the Shanghai 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 Shanghai Best Shares free from
all liens, mortgages, charges, pledges, encumbrances or other burdens
with all rights now or thereafter attached thereto.
Page 6 of 32
2.2. Allocation of Consideration The Acquisition Shares shall be allocated
to the Shanghai Best Shareholders, as set forth on Schedule 2.2
attached hereto and made a part hereof.
2.3. Adherence with Applicable Securities Laws: The Shanghai 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 Shanghai 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 Shanghai Best Shareholders, jointly and
severally, further represent, warrant and acknowledge to Xxxxxxx
Mountain and the Xxxxxxx Mountain Signatory Shareholder that:
2.5.1. The Shanghai Best Shareholders are located outside the United
States;
2.5.2. The Shanghai Best Shareholders are not aware of any
advertisement of any of the shares be issued hereunder;
Page 7 of 32
2.5.3. The Shanghai 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 Shanghai 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 Shanghai 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 Shanghai 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 Shanghai 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 Shanghai 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 Shanghai Best and the Shanghai Best Shareholders, with the
intent that Shanghai Best and the Shanghai 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 32
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 32
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 32
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 32
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 32
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 32
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 Shanghai 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 Shanghai Best
or the Shanghai 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 Shanghai Best
and the Shanghai 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 Shanghai Best or the
Shanghai 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 Shanghai Best and the Shanghai
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 32
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 Shanghai
Best Xxxxxxx Mountain's relationships with any third party having
business relations with Xxxxxxx Mountain;
4.1.3. Access. Until the Closing, give Shanghai Best, the Shanghai
Best Shareholders, and their representatives full access to all
of the properties, books, contracts, commitments and records of
Xxxxxxx Mountain, and furnish to Shanghai Best, the Shanghai 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 Shanghai 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 Shanghai 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 Shanghai Best
Shareholders. Xxxxxxx Mountain shall promptly execute and deliver to
the Shanghai Best Shareholders any and all consents to the release of
information and specific authorizations which the Shanghai 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 Shanghai Best and the Shanghai Best
Shareholders.
Page 15 of 32
ARTICLE 5. REPRESENTATIONS AND WARRANTIES OF THE SHANGHAI BEST SHAREHOLDERS: The
Shanghai 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. Shanghai Best - Company Status and Capacity
5.1.1. Formation. Shanghai 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. Shanghai Best carries on the Shanghai
Best Business primarily in the People's Republic of China and
does not carry on any material business activity in any other
jurisdiction. Shanghai Best is duly authorized to carry on the
Shanghai Best Business in the People's Republic of China. The
nature of the Shanghai Best Business does not require Shanghai
Best to register or otherwise be qualified to carry on business
in any other jurisdiction;
5.1.3. Legal Capacity. Shanghai Best has the legal power, capacity and
authority to own Shanghai Best Assets, to carry on the Business
of Shanghai Best and to enter into and complete this Agreement;
5.2. Shanghai Best - Capitalization
5.2.1. Authorized Capital. The authorized capital of Shanghai Best is
as stated in its formation documents;
5.2.2. Ownership of Shanghai Best Shares. The registered, issued and
outstanding share capital of Shanghai Best will on Closing
consist of 1,104,200 capital shares (being the Shanghai Best
Shares), which shares on Closing shall be validly issued and
outstanding as fully paid and non-assessable shares. The Shanghai
Best Shareholders will be at Closing the registered and
beneficial owners of the 1,104,200 Shanghai Best Shares. The
Shanghai Best Shares owned by the Shanghai 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 Shanghai Best Shares held
by the Shanghai Best Shareholders or for the purchase,
subscription or issuance of any of the unissued shares in the
capital of Shanghai Best;
5.2.4. No Restrictions. There are no restrictions on the transfer,
sale or other disposition of Shanghai Best Shares contained in
the charter documents of Shanghai Best or under any agreement;
5.3. Shanghai Best - Records and Financial Statements
5.3.1. Charter Documents. The charter documents of Shanghai Best have
not been altered since its formation date, except as filed in the
record books of Shanghai Best;
5.3.2. Minute Books. The minute books of Shanghai 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
consent without a meeting. All actions by Shanghai Best which
Page 16 of 32
required director or shareholder approval are reflected in the
corporate minute books of Shanghai Best. Shanghai 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. Shanghai Best Financial Statements. The Shanghai Best Financial
Statements present fairly, in all material respects, the assets
and liabilities (whether accrued, absolute, contingent or
otherwise) of Shanghai Best as of the date thereof, and the sales
and earnings of the Shanghai Best Business during the periods
covered thereby, and have been prepared in conformity with
generally accepted accounting principles consistently applied;
5.3.4. Shanghai Best Accounts Payable and Liabilities. There are no
material liabilities, contingent or otherwise, of Shanghai Best
which are not disclosed in Schedule 1.1.6 hereto or reflected in
the Shanghai Best Financial Statements except those incurred in
the ordinary course of business since the date of the said
schedule and the Shanghai Best Financial Statements, and Shanghai
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 Shanghai Best as of June 30, 2006 are
described in Schedule 1.1.6 hereto;
5.3.5. Shanghai Best Accounts Receivable. All the Shanghai Best
Accounts Receivable result from bona fide business transactions
and services actually rendered without, to the knowledge and
belief of the Shanghai Best Shareholders, any claim by the
obligor for set-off or counterclaim. Without limiting the
generality of the foregoing, all accounts receivable of Shanghai
Best as of June 30, 2006, are described in Schedule 1.1.7 hereto;
5.3.6. Shanghai Best Bank Accounts. All of the Shanghai 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, Shanghai Best is not and on Closing will not be,
indebted to the Shanghai Best Shareholders nor to any family
member thereof, nor to any affiliate, director or officer of
Shanghai Best or the Shanghai Best Shareholders except accounts
payable on account of bona fide business transactions of Shanghai
Best incurred in the normal course of Shanghai Best Business,
including employment agreements with the Shanghai Best
Shareholders, none of which are more than 30 days in arrears;
5.3.8. No Related Party Debt to Shanghai Best. Except as set forth on
Schedule 1.1.20 hereto, no Shanghai Best Shareholder nor any
director, officer or affiliate of Shanghai Best is now indebted
to or under any financial obligation to Shanghai 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 Shanghai Best have been made, declared or
authorized since the date of the Shanghai Best Financial
Statements;
5.3.10. No Payments. No payments of any kind have been made or
authorized since the date of the Shanghai Best Financial
Statements to or on behalf of the Shanghai Best Shareholders or
to or on behalf of officers, directors, shareholders or employees
of Shanghai Best or under any management agreements with Shanghai
Page 17 of 32
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 Shanghai Best, except as set forth in the Shanghai Best
Financial Statements;
5.3.12. No Adverse Events. Since the date of the Shanghai Best
Financial Statements:
5.3.12.i. there has not been any material adverse change in the
financial position or condition of Shanghai Best, its
liabilities or the Shanghai Best Assets or any damage, loss
or other change in circumstances materially and adversely
affecting Shanghai Best, the Shanghai Best Business or the
Shanghai Best Assets or Shanghai Best's right to carry on
the Shanghai 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 Shanghai Best, the Shanghai Best
Business or the Shanghai Best Assets,
5.3.12.iii. there has not been any material increase in the
compensation payable or to become payable by Shanghai Best
to the Shanghai Best Shareholders or to any of Shanghai
Best's officers, employees or agents or any bonus, payment
or arrangement made to or with any of them,
5.3.12.iv. the Shanghai Best Business has been and continues to
be carried on in the ordinary course,
5.3.12.v. Shanghai Best has not waived or surrendered any right
of material value,
0.0.00.xx. Shanghai 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. Shanghai Best - Income Tax Matters
5.4.1. Tax Returns. All tax returns and reports of Shanghai 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 Shanghai 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 Shanghai Best. Shanghai
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 32
5.5. Shanghai Best - Applicable Laws and Legal Matters
5.5.1. Licenses. Shanghai Best holds all licenses and permits as may
be requisite for carrying on the Shanghai 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 Shanghai Best Business;
5.5.2. Applicable Laws. Shanghai 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 Shanghai Best Business, and, to the
knowledge of the Shanghai Best Shareholders, Shanghai 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 Shanghai 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 Shanghai Best, the Shanghai
Best Business, or any of the Shanghai Best Assets, nor do the
Shanghai Best Shareholders have any knowledge of any act or
omission of Shanghai Best that would form any basis for any such
action or proceeding;
5.5.4. No Bankruptcy. Shanghai 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 Shanghai Best and no order has been
made or a resolution passed for the winding-up, dissolution or
liquidation of Shanghai Best;
5.5.5. Labor Matters. Shanghai Best is not party to any collective
agreement relating to the Shanghai Best Business with any labor
union or other association of employees and no part of the
Shanghai Best Business has been certified as a unit appropriate
for collective bargaining or, to the knowledge of the Shanghai
Best Shareholders, has made any attempt in that regard;
5.5.6. Environmental Compliance. Shanghai 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. Shanghai 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 Shanghai Best's Knowledge,
threatened against or involving Shanghai Best, or any assets of
Shanghai 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
Shanghai 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, Shanghai Best
under any of the environmental laws;
5.5.7. Finder's Fees. Shanghai 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 Shanghai Best and the completion of the
Page 19 of 32
transactions contemplated hereby, have been duly and validly
authorized by all necessary corporate action on the part of
Shanghai 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 Shanghai Best or result
in any breach of, or default under, any loan agreement,
mortgage, deed of trust, or any other agreement to which
Shanghai Best is a party,
5.6.2.ii. give any person any right to terminate or cancel any
agreement including, without limitation, Shanghai Best
Material Contracts, or any right or rights enjoyed by
Shanghai Best,
5.6.2.iii. result in any alteration of Shanghai Best's
obligations under any agreement to which Shanghai Best is a
party including, without limitation, the Shanghai 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 Shanghai Best Assets,
5.6.2.v. result in the imposition of any tax liability to
Shanghai Best relating to Shanghai Best Assets or the
Shanghai Best Shares, or
0.0.0.xx. violate any court order or decree to which Shanghai
Best is subject;
5.7. Shanghai Best Assets - Ownership and Condition
5.7.1. Business Assets. The Shanghai Best Assets, comprise all of the
property and assets of the Shanghai Best Business, and neither
the Shanghai Best Shareholders nor any other person, firm or
corporation owns any assets used by Shanghai Best in operating
the Shanghai 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. Shanghai Best is the legal and beneficial owner of the
Shanghai 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 Shanghai Best Assets;
5.7.4. Shanghai Best Insurance Policies. Shanghai Best maintains the
public liability insurance and insurance against loss or damage
to the Shanghai Best Assets and the Shanghai Best Business as
described in Schedule 1.1.16 hereto;
5.7.5. Shanghai Best Material Contracts. The Shanghai Best Material
Contracts listed in Schedule 1.1.19 constitute all of the
material contracts of Shanghai Best;
5.7.6. No Default. There has not been any default in any material
obligation of Shanghai Best to be performed under any of Shanghai
Best Material Contracts, each of which is in good standing and in
Page 20 of 32
full force and effect and unamended (except as disclosed in
Schedule 1.1.19), and Shanghai Best is not aware of any default
in the obligations of any other party to any of the Shanghai 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 Shanghai Best. Shanghai Best is not obliged to pay
benefits or share profits with any employee after termination of
employment except as required by law;
5.8. Shanghai Best Assets - Shanghai Best Equipment: The Shanghai 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. Shanghai Best Assets - Shanghai Best Goodwill and Other Assets:
Shanghai Best carries on the Shanghai Best Business only under the
name "Shanghai Best Animal Husbandry Co., Ltd." and variations thereof
and under no other business or trade names. The Shanghai Best
Shareholders do not have any knowledge of any infringement by Shanghai
Best of any patent, trademark, copyright or trade secret;
5.10. The Business of Shanghai Best:
5.10.1. Maintenance of Business. Since the date of the Shanghai Best
Financial Statements, the Shanghai Best Business has been carried
on in the ordinary course and Shanghai Best has not entered into
any material agreement or commitment except in the ordinary
course; and
5.10.2. Subsidiaries. Shanghai 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
Shanghai 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 Shanghai Best Shareholders shall
survive the Closing.
ARTICLE 7. INDEMNITY: The Shanghai 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 Shanghai 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 Shanghai Best or the Shanghai Best
Shareholders to Xxxxxxx Mountain hereunder.
ARTICLE 8. COVENANTS OF SHANGHAI BEST AND THE SHANGHAI BEST SHAREHOLDERS
8.1. Covenants: Shanghai Best and the Shanghai Best Shareholders covenant
and agree with Xxxxxxx Mountain and the Xxxxxxx Mountain Signatory
Shareholder that they will:
8.1.1. Conduct of Business. Until the Closing, conduct the Shanghai
Best Business diligently and in the ordinary course consistent
Page 21 of 32
with the manner in which the Shanghai 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 Shanghai Best Business and the Shanghai
Best Assets and, without limitation, preserve for Xxxxxxx
Mountain Shanghai 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 Shanghai Best relating to
Shanghai Best, the Shanghai Best Business and the Shanghai 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 Shanghai Best Assets, including the Shanghai Best
Material Contracts, notwithstanding the change in control of
Shanghai Best arising from the Acquisition;
8.1.5. Reporting and Internal Controls. From and after the Closing,
the Shanghai Best Shareholders shall forthwith take all required
actions to implement internal controls on the business of
Shanghai Best to ensure that Shanghai 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,
Shanghai Best and the Shanghai 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, Shanghai Best and the
Shanghai 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: Shanghai Best hereby agrees to authorize and direct any
and all federal, state, municipal, foreign and international
governments and regulatory authorities having jurisdiction respecting
Shanghai Best to release any and all information in their possession
respecting Shanghai Best to Xxxxxxx Mountain. Shanghai Best shall
Page 22 of 32
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. Shanghai 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 Shanghai Best or the Shanghai
Best Shareholders at or prior to the Closing will have been
complied with or performed;
9.1.3. title to the Shanghai Best Shares held by the Shanghai Best
Shareholders and to the Shanghai 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 Shanghai 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 Shanghai 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 Nanchang Best Animal
Husbandry Co., Ltd. and Nanchang Best Animal Husbandry Co., Ltd.
shall have effected a closing under a share purchase agreement
pursuant to which Nanchang 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 Shanghai Best, its liabilities or the Shanghai
Best Assets or any damage, loss or other change in
circumstances materially and adversely affecting Shanghai
Best, the Shanghai Best Business or the Shanghai Best Assets
or Shanghai Best's right to carry on the Shanghai 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 Shanghai Best
or the Shanghai Best Business (whether or not covered by
insurance) materially and adversely affecting Shanghai Best,
the Shanghai Best Business or the Shanghai Best Assets; and
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.
Page 23 of 32
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 Shanghai 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 SHANGHAI BEST AND THE SHANGHAI BEST
SHAREHOLDERS:
10.1. Conditions Precedent to Closing: The obligations of Shanghai Best and
the Shanghai 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 Shanghai 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 Shanghai
Best at the Closing and the Acquisition Shares will be registered
on the books of Xxxxxxx Mountain in the names of the holders of
Shanghai 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 Shanghai 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 Nanchang Best Animal
Husbandry Co., Ltd. and Nanchang Best Animal Husbandry Co., Ltd.
shall have effected a closing under a share purchase agreement
pursuant to which Nanchang 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
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
Page 24 of 32
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 Shanghai Best and the Shanghai Best Shareholders: The
conditions precedent set out in the preceding section are inserted for
the exclusive benefit of Shanghai Best and the Shanghai Best
Shareholders and any such condition may be waived in whole or in part
by Shanghai Best or the Shanghai 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
Shanghai Best and the Shanghai Best Shareholders. In the event that
the conditions precedent set out in the preceding section are not
satisfied on or before the Closing, Shanghai Best and the Shanghai
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 Shanghai 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 32
ARTICLE 14. RISK
14.1. Material Change in the Business of Shanghai Best: If any material
loss or damage to the Shanghai 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 Shanghai 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 Shanghai 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 Shanghai Best's reasonable
opinion, cannot be substantially repaired or replaced within sixty
(60) days, Shanghai 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 Shanghai Best's
obligations to carry out the transactions contemplated hereby, be
vested in Xxxxxxx Mountain or otherwise adequately secured to the
satisfaction of Shanghai 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 Shanghai Best: On or before the Closing,
Shanghai Best and the Shanghai 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
Shanghai Best and all corporate records documents and instruments
of Shanghai Best, the corporate seal of Shanghai Best and all
books and accounts of Shanghai Best;
15.2.2. all reasonable consents or approvals required to be obtained
by Shanghai Best for the purposes of completing the Acquisition
and preserving and maintaining the interests of Shanghai Best
under any and all Shanghai Best Material Contracts and in
relation to Shanghai Best Assets;
15.2.3. certified copies of such resolutions of the shareholders and
directors of Shanghai Best as are required to be passed to
authorize the execution, delivery and implementation of this
Agreement;
Page 26 of 32
15.2.4. an acknowledgement from Shanghai Best and the Shanghai 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
Shanghai Best Shares, together with such other documents or
instruments required to effect transfer of ownership of the
Shanghai 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 Shanghai Best and the
Shanghai Best Shareholders:
15.3.1. share certificates representing the Acquisition Shares duly
registered in the names of the holders of shares of Shanghai 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
Shanghai Best as officers of Shanghai Best and appointing the
nominee of the Shanghai 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 Shanghai 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, Shanghai Best and the Shanghai
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 Shanghai Best, as well as pro forma financial
information of Shanghai 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
Shanghai 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
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.
Page 27 of 32
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
Shanghai Best or the Shanghai Best Shareholders:
Shanghai Best Animal Husbandry Co., Ltd.
Xx. 000 XxxXxxx Xxxx
Xxx'xxx Xxxxxxxx, Xxxxx
Attn: Xxxxx Xxxxxxx, CEO
Phone:
Telecopier:
Page 28 of 32
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 Shanghai Best, the Shanghai 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 Shanghai Best, the Shanghai 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 32
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
SHANGHAI BEST ANIMAL HUSBANDRY CO., LTD.
By: /s/ Li Songyan
-------------------------------
Li Songyan, Chairman
SHAREHOLDERS OF SHANGHAI BEST ANIMAL HUSBANDRY CO., LTD.
------------------------------------------------------ ------------------------------------ ----------------------------------------
Name and Signature Number of Shares Number of Shares
Shanghai Xxxxxxx
------------------------------------------------------ ------------------------------------ ----------------------------------------
/s/
---------------------------------
Xxxxx Xxxxxxx 772,940 716,800
------------------------------------------------------ ------------------------------------ ----------------------------------------
/s/
---------------------------------
Deng Xiancai 121,462 112,640
------------------------------------------------------ ------------------------------------ ----------------------------------------
/s/
---------------------------------
Tu Yaoliang 121,462 112,640
------------------------------------------------------ ------------------------------------ ----------------------------------------
/s/
---------------------------------
Xxxxx Xxxxxx 88,336 81,920
------------------------------------------------------ ------------------------------------ ----------------------------------------
TOTAL SHARES
------------------------------------------------------ ------------------------------------ ----------------------------------------
Page 30 of 32
TABLE OF CONTENTS
ARTICLE 1. - DEFINITIONS AND INTERPRETATION.......................................................................2
ARTICLE 2. THE ACQUISITION........................................................................................3
ARTICLE 3. REPRESENTATIONS AND WARRANTIES OF XXXXXXX MOUNTAIN AND THE XXXXXXX MOUNTAIN SIGNATORY SHAREHOLDER......3
ARTICLE 4. COVENANTS OF XXXXXXX MOUNTAIN AND THE XXXXXXX MOUNTAIN SIGNATORY SHAREHOLDER...........................3
ARTICLE 5. REPRESENTATIONS AND WARRANTIES OF THE SHANGHAI BEST SHAREHOLDERS.......................................3
ARTICLE 6. NON-MERGER AND SURVIVAL................................................................................3
ARTICLE 7. INDEMNITY..............................................................................................3
ARTICLE 8. COVENANTS OF SHANGHAI BEST AND THE SHANGHAI BEST SHAREHOLDERS..........................................3
ARTICLE 9. CONDITIONS PRECEDENT IN FAVOR OF XXXXXXX MOUNTAIN AND THE XXXXXXX MOUNTAIN SIGNATORY SHAREHOLDER.......3
ARTICLE 10. CONDITIONS PRECEDENT IN FAVOR OF SHANGHAI BEST AND THE SHANGHAI BEST SHAREHOLDERS.....................3
ARTICLE 11. NATURE OF CONDITIONS PRECEDENT........................................................................3
ARTICLE 12. TERMINATION...........................................................................................3
ARTICLE 13. CONFIDENTIALITY.......................................................................................3
ARTICLE 14. RISK..................................................................................................3
ARTICLE 15. CLOSING...............................................................................................3
ARTICLE 16. POST-CLOSING MATTERS..................................................................................3
ARTICLE 17. GENERAL PROVISIONS....................................................................................3
Page 31 of 32
SCHEDULES
Schedule 1.1.6 Shanghai Best Accounts Payable and Liabilities
Schedule 1.1.7 Shanghai Best Accounts Receivable
Schedule 1.1.9 Shanghai Best Bank Accounts
Schedule 1.1.12 Shanghai Best Debt to Related Parties
Schedule 1.1.13 Shanghai Best Equipment
Schedule 1.1.14 Shanghai Best Financial Statements
Schedule 1.1.16 Shanghai Best Insurance Policies
Schedule 1.1.18 Shanghai Best Inventory
Schedule 1.1.19 Shanghai Best Material Contracts
Schedule 1.1.20 Shanghai 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 Shanghai Best
Schedule 10.1.5 Opinion of Counsel for Xxxxxxx Mountain
Page 32 of 32
