SECURITIES PURCHASE AGREEMENT
EXHIBIT
10.1
SECURITIES
PURCHASE AGREEMENT
(the
“Agreement”),
dated
as of February 25, 2008, by and among Agfeed Industries, Inc., a Nevada
corporation, with headquarters located at 0000 Xxxx Xxx Xxxxxx, Xxxxxxxx and
Technical Development Zone, Xxx Xxxxx City, Jiangxi Province (the ”Company”),
and
the investors listed on the Schedule of Buyers attached hereto (individually,
a
“Buyer”
and
collectively, the “Buyers”).
WHEREAS:
A. The
Company and each Buyer is executing and delivering this Agreement in reliance
upon the exemption from securities registration afforded by Section 4(2) of
the
Securities Act of 1933, as amended (the “1933
Act”),
and
Rule 506 of Regulation D (“Regulation D”)
as
promulgated by the United States Securities and Exchange Commission (the
“SEC”)
under
the 1933 Act.
B. The
Company has authorized a new series of senior secured convertible notes of
the
Company, which notes shall be convertible into the Company’s common stock, $.001
par value per share (the “Common
Stock”),
in
accordance with the terms of such notes.
C. Each
Buyer wishes to purchase, and the Company wishes to sell, upon the terms and
conditions stated in this Agreement, (i) that aggregate principal amount of
notes, in substantially the form attached hereto as Exhibit
A
(as
amended or modified from time to time, collectively, the “Notes”),
set
forth opposite such Buyer’s name in column (3) on the Schedule of Buyers (which
aggregate amount for all Buyers shall be $18,000,000) (as converted,
collectively, the “Conversion
Shares”)
and
(ii) warrants, in substantially the form attached hereto as Exhibit
B
(the
“Warrants”),
to
acquire a number of additional shares of Common Stock determined as set forth
in
the Warrants (as exercised, collectively, the ”Warrant
Shares”).
D. Contemporaneously
with the execution and delivery of this Agreement, the parties hereto are
executing and delivering a Registration Rights Agreement, substantially in
the
form attached hereto as Exhibit
C
(as
amended or modified from time to time, the “Registration
Rights Agreement”),
pursuant to which the Company has agreed to provide certain registration rights
with respect to the Conversion Shares and the Warrant Shares under the 1933
Act
and the rules and regulations promulgated thereunder, and applicable state
securities laws.
E. The
Notes, the Conversion Shares, the Warrants and the Warrant Shares collectively
are referred to herein as the “Securities”.
F. The
Notes
will rank senior to all outstanding and future indebtedness of the Company
and
its Subsidiaries other than as permitted hereunder.
G. The
proceeds from the sale of the Securities will be used for (i) general corporate
purposes, (ii) to satisfy the remaining installments on the Company’s most
recent hog farming acquisitions as they become due, and (iii) for acquisitions
of complementary businesses, technologies and other assets.
NOW,
THEREFORE,
the
Company and each Buyer hereby agree as follows:
1. PURCHASE
AND SALE OF NOTES AND WARRANTS.
(a) Purchase
of Notes and Warrants.
(i) Subject
to the satisfaction (or waiver) of the conditions set forth in Sections 6 and
7
below, the Company shall issue and sell to each Buyer, and each Buyer severally,
but not jointly, agrees to purchase from the Company on the Closing Date (as
defined below), (x) a principal amount of Notes as is set forth opposite such
Buyer’s name in column (3) on the Schedule of Buyers and (y) Warrants to acquire
a number of Warrant Shares determined as is set forth in the Warrants (the
“Closing”).
(ii) Closing.
The
date and time of the Closing (the “Closing
Date”)
shall
be the first business day following notification of satisfaction (or waiver)
of
the conditions to the Closing set forth in Sections 6 and 7 below at the offices
of Xxxxxxxxx Xxxxxxx Xxxxxx Xxxxxxxxxx Xxxxxxxx & Xxxxxxxxx LLP, 000 Xxxx
00xx
Xxxxxx,
Xxx Xxxx, Xxx Xxxx, 00000 (or such other place as mutually agreed upon by the
parties hereto). By agreement of the parties hereto, the Closing may be
alternatively accomplished by facsimile transmission to the respective offices
of legal counsel for the parties of the requisite documents, duly executed
where
required, with originals to be delivered by overnight courier service on the
next business day following the Closing Date.
(iii) Purchase
Price.
The
aggregate purchase price for the Notes and the Warrants to be purchased by
each
Buyer at the Closing (the “Purchase
Price”)
shall
be the amount set forth opposite such Buyer’s name in column (4) of the Schedule
of Buyers.
(b) Form
of Payment.
On the
Closing Date, (i) each Buyer shall pay its Purchase Price for the Notes and
the
Warrants to be issued and sold to such Buyer at the Closing, by wire transfer
of
immediately available funds in accordance with the Company’s written wire
instructions, and (ii) the Company shall deliver to each Buyer (A) the
Notes (in the principal amounts as such Buyer shall request) that such Buyer
is
then purchasing and (B) the Warrants (in the amounts as such Buyer shall
request) such Buyer is purchasing, in each case duly executed on behalf of
the
Company and registered in the name of such Buyer or its designee.
2. BUYER’S
REPRESENTATIONS AND WARRANTIES.
Each
Buyer represents and warrants that:
(a) No
Public Sale or Distribution.
Such
Buyer is (i) acquiring the Notes and the Warrants and (ii) upon conversion
of
the Notes and exercise of the Warrants (other than pursuant to a Cashless
Exercise (as defined in the Warrants)) will acquire the Conversion Shares
issuable upon conversion of the Notes and the Warrant Shares issuable upon
exercise of the Warrants, as the case may be, in each case, for its own account
and not with a view towards, or for resale in connection with, the public sale
or distribution thereof, except pursuant to sales registered or exempted under
the 1933 Act; provided,
however, that by making the representations herein, such Buyer does not agree
to
hold any of the Securities for any minimum or other specific term and reserves
the right to dispose of the Securities at any time in accordance with or
pursuant to a registration statement or an exemption under the Securities Act
of
1933, as amended (the “1933
Act”).
Such
Buyer does not presently have any agreement or understanding, directly or
indirectly, with any Person to distribute any of the Securities.
(b) Accredited
Investor/Qualified Institutional Buyer Status.
Such
Buyer is an “accredited investor” or a “qualified institutional buyer,” as such
term is defined in Rule 501(a) of Regulation D or Rule
144A
under the Securities Act, respectively.
(c) Reliance
on Exemptions.
Such
Buyer understands that the Securities are being offered and sold to it in
reliance on specific exemptions from the registration requirements of United
States federal and state securities laws and that the Company is relying in
part
upon the truth and accuracy of, and such Buyer’s compliance with, the
representations, warranties, agreements, acknowledgments and understandings
of
such Buyer set forth herein to determine the availability of such exemptions
and
the eligibility of such Buyer to acquire the Securities.
(d) Information.
Such
Buyer and its advisors, if any, have been furnished with all materials relating
to the business, finances and operations of the Company and materials relating
to the offer and sale of the Securities that have been requested by such Buyer.
Such Buyer and its advisors, if any, have been afforded the opportunity to
ask
questions of the Company. Neither such inquiries nor any other due diligence
investigations conducted by such Buyer or its advisors, if any, or its
representatives shall modify, amend or affect such Buyer’s right to rely on the
Company’s representations and warranties contained herein. Such Buyer
understands that its investment in the Securities involves a high degree of
risk. Such Buyer has sought such accounting, legal and tax advice as it has
considered necessary to make an informed investment decision with respect to
its
acquisition of the Securities.
(e) No
Governmental Review.
Such
Buyer understands that no United States federal or state agency or any other
government or governmental agency has passed on or made any recommendation
or
endorsement of the Securities or the fairness or suitability of the investment
in the Securities nor have such authorities passed upon or endorsed the merits
of the offering of the Securities.
(f) Transfer
or Resale.
Such
Buyer understands that except as provided in the Registration Rights Agreement:
(i) the Securities have not been and are not being registered under the 1933
Act
or any state securities laws, and may not be offered for sale, sold, assigned
or
transferred unless (A) subsequently registered thereunder, (B) such Buyer shall
have delivered to the Company an opinion of counsel selected by the Buyer,
in a
form reasonably acceptable to the Company, to the effect that such Securities
to
be sold, assigned or transferred may be sold, assigned or transferred pursuant
to an exemption from such registration, or (C) such Buyer provides the Company
with reasonable assurance that such Securities can be sold, assigned or
transferred pursuant to Rule 144 or Rule 144A promulgated under the 1933 Act,
as
amended, (or a successor rule thereto) (collectively, “Rule
144”);
(ii)
any sale of the Securities made in reliance on Rule 144 may be made only in
accordance with the terms of Rule 144 and further, if Rule 144 is not
applicable, any resale of the Securities under circumstances in which the seller
(or the Person (as defined in Section 3(s)) through whom the sale is made)
may
be deemed to be an underwriter (as that term is defined in the 0000 Xxx) may
require compliance with some other exemption under the 1933 Act or the rules
and
regulations of the SEC thereunder; and (iii) neither the Company nor any
other Person is under any obligation to register the Securities under the 1933
Act or any state securities laws or to comply with the terms and conditions
of
any exemption thereunder.
(g) Legends.
Such
Buyer understands that the certificates or other instruments representing the
Notes and Warrants and, until such time as the resale of the Conversion Shares
and the Warrant Shares have been registered under the 1933 Act as contemplated
by the Registration Rights Agreement, the stock certificates representing the
Conversion Shares and the Warrant Shares, except as set forth below, shall
bear
any legend as required by the “blue sky” laws of any state and a restrictive
legend in substantially the following form (and a stop-transfer order may be
placed against transfer of such stock certificates):
[NEITHER
THE ISSUANCE AND SALE OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE NOR
THE
SECURITIES INTO WHICH THESE SECURITIES ARE [CONVERTIBLE] [EXERCISABLE]
HAVE
BEEN][THE
SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN]
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE
SECURITIES LAWS. THE SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED
OR ASSIGNED (I) IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR
THE SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR (B) AN OPINION
OF COUNSEL (WHICH COUNSEL SHALL BE SELECTED BY THE HOLDER), IN A FORM REASONABLY
ACCEPTABLE TO THE COMPANY, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT
OR
(II) UNLESS SOLD PURSUANT TO RULE 144 OR RULE 144A UNDER SAID ACT.
NOTWITHSTANDING THE FOREGOING, THE SECURITIES MAY BE PLEDGED IN CONNECTION
WITH
A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN OR FINANCING ARRANGEMENT SECURED BY
THE
SECURITIES.
The
legend set forth above shall be removed and the Company shall issue a
certificate without such legend to the holder of the Securities upon which
it is
stamped, if, unless otherwise required by state securities laws, (i) such
Securities are registered for resale under the 1933 Act, (ii) in connection
with
a sale, assignment or other transfer, such holder provides the Company with
an
opinion of counsel, in a generally acceptable form, to the effect that such
sale, assignment or transfer of the Securities may be made without registration
under the applicable requirements of the 1933 Act, or (iii) such holder provides
the Company with reasonable assurance that the Securities can be sold, assigned
or transferred pursuant to Rule 144 or Rule 144A.
(h) Validity;
Enforcement.
This
Agreement and the Registration Rights Agreement to which such Buyer is a party
have been duly and validly authorized, executed and delivered on behalf of
such
Buyer and shall constitute the legal, valid and binding obligations of such
Buyer enforceable against such Buyer in accordance with their respective terms,
except as such enforceability may be limited by general principles of equity
or
applicable bankruptcy, insolvency, reorganization, moratorium, liquidation
and
other similar laws relating to, or affecting generally, the enforcement of
applicable creditors’ rights and remedies.
(i) Residency.
Such
Buyer is a resident of that jurisdiction specified below its address on the
signature page hereto.
(j) Broker.
The
undersigned acknowledges and agrees that the Company intends to pay commissions
to Deutsche Bank Securities Inc. of cash equal to eight and six-tenths percent
(8.6%) of the gross proceeds received by the Company from the transactions
contemplated by this Agreement. Buyers have incurred no obligations or liability
for brokerage or finders’ fees or agents’ commissions or other similar payment
in connection with the transactions contemplated by this Agreement.
(k) Short
Sales.
From
and after obtaining the knowledge of the transactions contemplated hereby,
Buyer
has not taken, and prior to the public announcement of the transaction Buyer
shall not take, any action that has caused or will cause Buyer to have, directly
or indirectly, sold or agreed to sell any shares of Common Stock, effected
any
short sale, whether or not against the box, established any “put equivalent
position” (as defined in Rule 16a-1(h) under the Exchange Act) with respect to
the Common Stock, granted any other right (including, without limitation, any
put or call option) with respect to the Common Stock or with respect to any
security that includes, related to or derives any significant part of its value
from the Common Stock, whether or not, direct or indirectly, in order to hedge
its positions in the Common Stock.
3. REPRESENTATIONS
AND WARRANTIES OF THE COMPANY.
The
Company represents and warrants to each of the Buyers that:
(a) Organization
and Qualification.
The
Company is duly incorporated or otherwise organized, validly existing and in
good standing under the laws of the jurisdiction of its incorporation or
organization, with the requisite power and authority to own and use its
properties and assets and to carry on its business as currently conducted.
The
Company is not in violation of any of the provisions of its certificate or
articles of incorporation, bylaws or other organizational or charter documents.
The Company is duly qualified to conduct its business and is in good standing
as
a foreign corporation or other entity in each jurisdiction in which the nature
of the business conducted or property owned by it makes such qualification
necessary.
(b) Authorization;
Enforcement; Validity.
The
Company has the requisite corporate power and authority to enter into and
perform its obligations under this Agreement, the Notes, the Registration Rights
Agreement, the Irrevocable Transfer Agent Instructions, the Warrants and each
of
the other agreements entered into by the parties hereto in connection with
the
transactions contemplated by this Agreement (collectively, the “Transaction
Documents”)
and
otherwise to carry out its obligations hereunder and thereunder (including
to
issue the Securities in accordance with the terms hereof and thereof). The
execution and delivery of each of the Transaction Documents by the Company
and
the consummation by it of the transactions contemplated hereby and thereby,
including without limitation the issuance of the Notes and the Warrants, the
reservation for issuance and the issuance of the Conversion Shares issuable
upon
conversion of the Notes, the reservation for issuance and issuance of Warrant
Shares issuable upon exercise of the Warrants, have been duly authorized by
all
necessary action on the part of the Company and no further action is required
by
the Company, its Board of Directors or its stockholders in connection therewith.
Each Transaction Document has been (or upon delivery will have been) duly
executed by the Company and, when delivered in accordance with the terms hereof,
will constitute the valid and binding obligation of the Company enforceable
against the Company in accordance with their respective terms, except as such
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium, liquidation or similar laws relating to, or
affecting generally the enforcement of, creditors’ rights and remedies or by
other equitable principles of general application.
(c) Issuance
of Securities.
The
issuance of the Notes and Warrants have been duly authorized and, when issued
and paid for in accordance with the Transaction Documents, will be duly and
validly issued, fully paid and nonassessable, free and clear of all liens and
encumbrances. The Company has reserved from its duly authorized capital stock
the shares of Common Stock issuable pursuant to this Agreement and the Warrants
in order to issue the Conversion Shares and the Warrant Shares.
(d) No
Conflicts.
The
execution, delivery and performance of the Transaction Documents by the Company
and the consummation by the Company of the transactions contemplated hereby
and
thereby, including without limitation the issuance of the Notes and the
Warrants, the reservation for issuance and the issuance of the Conversion Shares
issuable upon conversion of the Notes, the reservation for issuance and issuance
of Warrant Shares issuable upon exercise of the Warrants, do not and will not
(i) conflict with or violate any provision of the certificate or articles of
incorporation, bylaws or other organizational or charter documents of the
Company or any Subsidiary, or (ii) conflict with, or constitute a default (or
an
event that with notice or lapse of time or both would become a default) under,
or give to others any rights of termination, amendment, acceleration or
cancellation (with or without notice, lapse of time or both) of, any agreement,
credit facility, debt or other instrument (evidencing a Company debt or
otherwise) or other understanding to which the Company or any Subsidiary is
a
party or by which any property or asset of the Company or any Subsidiary is
bound or affected, or (iii) result in a violation of any law, rule, regulation,
order, judgment, injunction, decree or other restriction of any court or
governmental authority to which the Company or any Subsidiary is subject
(including federal and state securities laws and regulations and the rules
and
regulations of the Nasdaq Stock Market (the “Principal
Market”)),
or
by which any property or asset of the Company or any Subsidiary is bound or
affected.
For
purposes of this Agreement, “Subsidiary”
shall
mean any corporation, partnership, joint venture, association or other business
enterprise in which the Company owns, directly or indirectly, at least fifty
percent (50%) of the outstanding securities or other interests, the holders
of
which are generally entitled to vote for the election of the board of directors
or other governing body or otherwise exercise control of such
entity.
(e) Consents.
The
Company is not required to obtain any consent, waiver, authorization or order
of, give any notice to, or make any filing or registration with, any court
or
other federal, state, local, foreign or other governmental authority or other
Person in connection with the execution, delivery and performance by the Company
of the Transaction Documents, other than (i) the filing with the United States
Securities and Exchange Commission (the “Commission”) of
one or
more Registration Statements in accordance with the requirements of the
Registration Rights Agreement, (ii) filings required by state securities laws,
(iii) the filing of a Notice of Sale of Securities on Form D with the Commission
under Regulation D of the 1933 Act, or (iv) registration with, any court,
governmental agency or any regulatory or self-regulatory agency or any other
Person in order for it to execute, deliver or perform any of its obligations
under or contemplated by the Transaction Documents, in each case in accordance
with the terms hereof or thereof.
(f) No
General Solicitation; Placement Agent’s Fees.
Neither
the Company, nor any of its affiliates, nor any Person acting on its or their
behalf, has engaged in any form of general solicitation or general advertising
(within the meaning of Regulation D) in connection with the offer or sale of
the
Securities. The Company shall be responsible for the payment of any placement
agent’s fees, financial advisory fees, or brokers’ commissions (other than for
persons engaged by the Buyer or its investment advisor) relating to or arising
out of the transactions contemplated hereby. The Company shall pay, and hold
the
Buyer harmless against, any liability, loss or expense (including, without
limitation, attorney’s fees and out-of-pocket expenses) arising in connection
with any such claim.
(g) No
Integrated Offering.
None of
the Company, its Subsidiaries, any of their affiliates, and any Person acting
on
their behalf has, directly or indirectly, made any offers or sales of any
security or solicited any offers to buy any security, under circumstances that
would require registration of any of the Securities under the 1933 Act or cause
this offering of the Securities to be integrated with prior offerings by the
Company for purposes of the 1933 Act or any applicable stockholder approval
provisions, including, without limitation, under the rules and regulations
of
any exchange or automated quotation system on which any of the securities of
the
Company are listed or designated.
(h) Dilutive
Effect.
The
Company understands and acknowledges that the number of Conversion Shares
issuable upon conversion of the Notes and the Warrant Shares issuable upon
exercise of the Warrants will increase in certain circumstances. The Company
further acknowledges that its obligation to issue Conversion Shares upon
conversion of the Notes in accordance with this Agreement and the Notes and
its
obligation to issue the Warrant Shares upon exercise of the Warrants in
accordance with this Agreement and the Warrants is, in each case, absolute
and
unconditional regardless of the dilutive effect, which may be substantial,
that
such issuance may have on the ownership interests of other stockholders of
the
Company.
(i) SEC
Documents; Financial Statements.
The
Company has filed all reports required to be filed by it under the 1933 Act
and
the Securities Exchange Act of 1934, as amended (the “1934 Act”),
including pursuant to Section 13(a) or 15(d) thereof, during the two (2) years
prior to the date hereof (the foregoing materials being collectively referred
to
herein as the“SEC
Reports”)
on a
timely basis or has timely filed a valid extension of such time of filing and
has filed any such SEC Reports prior to the expiration of any such extension.
As
of their respective dates, the SEC Reports complied in all material respects
with the requirements of the 1933 Act and the 1934 Act and the rules and
regulations of the Commission promulgated thereunder, and none of the SEC
Reports, when filed, contained any untrue statement of a material fact or
omitted to state a material fact required to be stated therein or necessary
in
order to make the statements therein, in light of the circumstances under which
they were made, not misleading. The financial statements of the Company included
in the SEC Reports comply in all material respects with applicable accounting
requirements and the rules and regulations of the Commission with respect
thereto as in effect at the time of filing. Such financial statements have
been
prepared in accordance with United States generally accepted accounting
principles (“GAAP”)
applied on a consistent basis during the periods involved, except as may be
otherwise specified in such financial statements or the notes thereto, and
fairly present in all material respects the financial position of the Company
as
of and for the dates thereof and the results of operations and cash flows for
the periods then ended, subject, in the case of unaudited statements, to normal,
immaterial, year-end audit adjustments.
(j) Xxxxxxxx-Xxxxx
Act.
Except
as set forth in Section 3(l) hereof, the Company is in compliance with any
and
all applicable requirements of the Xxxxxxxx-Xxxxx Act of 2002 that are effective
as of the date hereof, and any and all applicable rules and regulations
promulgated by the SEC thereunder that are effective as of the date hereof,
except where such noncompliance would not have, individually or in the
aggregate, a Material Adverse Effect.
For
purposes of this Agreement, “Material
Adverse Effect”
shall
mean any circumstance, condition, change in or effect on the Company or its
Subsidiaries that, individually or in the aggregate, is, or would reasonably
be
expected to be, materially adverse to the business, capitalization, assets,
liabilities (contingent or otherwise), properties, results of operations, or
condition, financial or otherwise, of the Company and its Subsidiaries, taken
as
a whole.
(k) Absence
of Certain Changes.
Since
the date of the latest audited financial statements included within the SEC
Reports, except as specifically disclosed in the SEC Reports, (i) there has
been
no event, occurrence or development that has had or that could reasonably be
expected to result in a Material Adverse Effect on the Company, (ii) the Company
has not incurred any liabilities (contingent or otherwise) other than (A) trade
payables, accrued expenses and other liabilities incurred in the ordinary course
of business consistent with past practice and (B) liabilities not required
to be
reflected in the Company's financial statements pursuant to GAAP or required
to
be disclosed in filings made with the Commission, (iii) the Company has not
altered its method of accounting or the identity of its auditors, (iv) the
Company has not declared or made any dividend or distribution of cash or other
property to its stockholders or purchased, redeemed or made any agreements
to
purchase or redeem any shares of its capital stock, and (v) the Company has
not
issued any equity securities to any officer, director or affiliate, except
pursuant to existing Company stock option or restricted stock plans or otherwise
in the ordinary course of business. The Company does not have pending before
the
Commission any request for confidential treatment of information.
(l) Disclosure
Controls and Procedures.
Except
as set forth on Schedule 3(l), the Company is in the process of establishing
(i)
disclosure controls and procedures (as such term is defined in Rule 13a-15(e)
under the 1934 Act), which are (a) designed to ensure that information required
to be disclosed by the Company in the reports that it files or submits under
the
1934 Act is recorded, processed, summarized and reported, within the time
periods specified in the Commission's rules and forms, and is accumulated and
communicated to the Company's management, including its principal executive
officer or officers and principal financial officer or officers, as appropriate,
to allow timely decisions regarding disclosure and (b) effective in all material
respects to perform the functions for which they were established and (ii)
a
system of internal controls that complies with the requirements of the 1934
Act
and has been designed by the Company's principal executive officer and principal
financial officer, or under their supervision, sufficient to provide reasonable
assurances that: (A) transactions are executed in accordance with management’s
general or specific authorization; (B) transactions are recorded as necessary
to
permit preparation of financial statements in conformity with GAAP, the 1933
Act
and the 1934 Act and the rules and regulations of the Commission thereunder,
and
to maintain accountability for assets; (C) access to assets is permitted only
in
accordance with management’s general or specific authorization; and (D) recorded
assets are compared with existing assets at reasonable intervals and appropriate
action is taken with respect to any differences.
(m) Equity
Capitalization.
Except
as set forth on Schedule
3(m)
hereof,
the number of shares and type of all authorized, issued and outstanding capital
stock of the Company, and all shares of Common Stock reserved for issuance
under
the Company’s various option and incentive plans, is specified in the SEC
Reports. Except as specified in the SEC Reports, no securities of the Company
are entitled to preemptive or similar rights, and no Person has any right of
first refusal, preemptive right, right of participation, or any similar right
to
participate in the transactions contemplated by the Transaction Documents.
Except as specified in the SEC Reports, there are no outstanding options,
warrants, scrip rights to subscribe to, calls or commitments of any character
whatsoever relating to, or securities, rights or obligations convertible into
or
exchangeable for, or giving any Person any right to subscribe for or acquire,
any shares of Common Stock, or contracts, commitments, understandings or
arrangements by which the Company is or may become bound to issue additional
shares of Common Stock, or securities or rights convertible or exchangeable
into
shares of Common Stock. The issue and sale of the Securities will not,
immediately or with the passage of time, obligate the Company to issue shares
of
Common Stock or other securities to any Person (other than the undersigned)
and
will not result in a right of any holder of Company securities to adjust the
exercise, conversion, exchange or reset price.
(n) Indebtedness
and Other Contracts.
Except
as
disclosed in Schedule
3(n),
neither
the Company nor any of its Subsidiaries (i) has any outstanding Indebtedness
(as
defined below), (ii) is a party to any contract, agreement or instrument, the
violation of which, or default under which, by the other party(ies) to such
contract, agreement or instrument would result in a Material Adverse Effect,
(iii) is in violation of any term of or in default under any contract, agreement
or instrument relating to any Indebtedness, except where such violations and
defaults would not result, individually or in the aggregate, in a Material
Adverse Effect, or (iv) is a party to any contract, agreement or instrument
relating to any Indebtedness, the performance of which, in the judgment of
the
Company’s officers, has or is expected to have a Material Adverse Effect.
Schedule
3(n)
provides
a detailed description of the material terms of any such outstanding
Indebtedness. For purposes of this Agreement: (x) “Indebtedness”
of
any
Person means, without duplication (A) all indebtedness for borrowed money,
(B)
all reimbursement or payment obligations with respect to letters of credit,
surety bonds and other similar instruments, (C) all obligations evidenced by
notes, bonds, debentures or similar instruments, including obligations so
evidenced incurred in connection with the acquisition of property, assets or
businesses, (D) all indebtedness created or arising under any conditional sale
or other title retention agreement, or incurred as financing, in either case
with respect to any property or assets acquired with the proceeds of such
indebtedness (even though the rights and remedies of the seller or bank under
such agreement in the event of default are limited to repossession or sale
of
such property), (E) all indebtedness referred to in clauses (A) through (D)
above secured by (or for which the holder of such Indebtedness has an existing
right, contingent or otherwise, to be secured by) any mortgage, lien, pledge,
charge, security interest or other encumbrance upon or in any property or assets
(including accounts and contract rights) owned by any Person, even though the
Person which owns such assets or property has not assumed or become liable
for
the payment of such indebtedness, and (F) all Contingent Obligations in respect
of indebtedness or obligations of others of the kinds referred to in clauses
(A)
through (E) above; (y) “Contingent
Obligation”
means,
as to any Person, any direct or indirect liability, contingent or otherwise,
of
that Person with respect to any indebtedness, lease, dividend or other
obligation of another Person if the primary purpose or intent of the Person
incurring such liability, or the primary effect thereof, is to provide assurance
to the obligee of such liability that such liability will be paid or discharged,
or that any agreements relating thereto will be complied with, or that the
holders of such liability will be protected (in whole or in part) against loss
with respect thereto; and (z) “Person”
means
an individual, a limited liability company, a partnership, a joint venture,
a
corporation, a trust, an unincorporated organization and a government or any
department or agency thereof.
(o) Ranking
of Notes.
Except
as set forth on Schedule
3(o),
no
Indebtedness of the Company is senior to or ranks pari
passu
with the
Notes in right of payment, whether with respect of payment of redemptions,
interest, damages or upon liquidation or dissolution or otherwise.
(p) Form
S-3 Eligibility.
The
Company is eligible to register the Conversion Shares and the Warrant Shares
for
resale by the Buyers using Form S-3 promulgated under the 1933 Act.
(q) Manipulation
of Price.
The
Company has not, and to its knowledge no one acting on its behalf has, (i)
taken, directly or indirectly, any action designed to cause or to result in
the
stabilization or manipulation of the price of any security of the Company to
facilitate the sale or resale of any of the Securities, or (ii) sold, bid for,
purchased, or paid any compensation for soliciting purchases of, any of the
Securities.
(r) Disclosure.
The
Company confirms that neither it nor any other Person acting on its behalf
has
provided the Buyer or its agents or counsel with any information that
constitutes or could reasonably be expected to constitute material, nonpublic
information. The Company understands and confirms that the Buyer will rely
on
the foregoing representations in effecting transactions in securities of the
Company. No event or circumstance has occurred or information exists with
respect to the Company or any of its Subsidiaries or its or their business,
properties, prospects, operations or financial conditions, which, under
applicable U.S. law, rule or regulation, requires public disclosure or
announcement by the Company but which has not been so publicly announced or
disclosed.
(s) Foreign
Corrupt Practices Act.
The
Company has not made, offered or agreed to offer anything of value to any
government official, political party or candidate for political office (or
any
Person that the Company knows or has reason to know will offer anything of
value
to any such Person) in violation of the Foreign Corrupt Practices Act of 1977,
as amended.
(t) Compliance
with Money Laundering Rules.
The
business and operations of the Company are being conducted in compliance in
all
material respects with, and are not in default in any material respect under
any
applicable statutes, laws, rules, regulations, judgments, orders or decrees
of
and commitments to any United States governmental authority relating to money
laundering, bank secrecy, anti-bribery and other corrupt practices. There is
no
pending or threatened charge by any United States governmental authority that
the Company has materially violated any such law, rule, regulation, judgment,
order, decree or commitment, nor is there any pending or threatened
investigation by any United States governmental authority with respect to
possible material violations of any such law, rule, regulation, judgment, order,
decree or commitment, except for such violations which would not, individually
or in the aggregate, result in a Material Adverse Effect.
4. COVENANTS.
(a) Efforts
to Satisfy Conditions.
Each
party shall use its commercially reasonable efforts to satisfy each of the
conditions to be satisfied by it as provided in Sections 6 and 7 of this
Agreement.
(b) Form
D
and Blue Sky.
The
Company agrees to file a Form D with respect to the Securities as required
under
Regulation D and to provide a copy thereof to the Buyer promptly after such
filing. The Company shall, on or before the Closing Date, take such action
as
the Company shall reasonably determine is necessary in order to obtain an
exemption for or to qualify the Securities for sale to the Buyer at the Closing
pursuant to this Agreement under applicable securities or “Blue Sky” laws of the
states of the United States (or to obtain an exemption from such qualification),
and shall provide evidence of any such action so taken to the Buyer on or prior
to the Closing Date. The Company shall make all filings and reports relating
to
the offer and sale of the Securities required under applicable securities or
“Blue Sky” laws of the states of the United States following the Closing
Date.
(c) Reporting
Status.
Until
the date on which the Investors (as defined in the Registration Rights
Agreement) shall have sold all the Conversion Shares and Warrant
Shares and
none
of the Notes or Warrants
is outstanding (the “Reporting
Period”),
the
Company shall timely file all reports required to be filed with the SEC pursuant
to the 1934 Act, and the Company shall not terminate its status as an issuer
required to file reports under the 1934 Act even if the 1934 Act or the rules
and regulations thereunder would otherwise permit such termination.
(d) Financial
Information.
Unless
the following are filed with the SEC through XXXXX and are available to the
public through the XXXXX system, the Company agrees to send the following to
each Investor during the Reporting Period (i) within one (1) Business Day after
the filing thereof with the SEC, a copy of its Annual Reports on Form 10-K
or
10-KSB, any interim reports or any consolidated balance sheets, income
statements, stockholders’ equity statements and/or cash flow statements for any
period other than annual, any Current Reports on Form 8-K and any registration
statements (other than on Form S-8) or amendments filed pursuant to the 1933
Act, (ii) within one (1) Business Day after the release thereof, facsimile
copies of all material press releases issued by the Company or any of its
Subsidiaries, (iii) within two (2) Business Days after the release thereof,
facsimile copies of all other press releases issued by the Company or any of
its
Subsidiaries and (iv) copies of any notices and other information made available
or given to the stockholders of the Company generally, contemporaneously with
the making available or giving thereof to the stockholders.
(e) Listing.
The
Company shall use its commercially reasonable efforts to promptly secure the
listing of all of the Registrable Securities (as defined in the Registration
Rights Agreement) upon each national securities exchange and automated quotation
system, if any, upon which the Common Stock is then listed (subject to official
notice of issuance) and shall use its commercially reasonable efforts to
maintain such listing of all Registrable Securities from time to time issuable
under the terms of the Transaction Documents. The Company shall use its
commercially reasonable efforts to maintain the Common Stock’s authorization for
quotation on the Principal Market. The Company shall not, nor shall it cause
or
permit any of its Subsidiaries to, take any action that would be reasonably
expected to result in the delisting or suspension of the Common Stock on the
Principal Market. The Company shall pay all fees and expenses in connection
with
satisfying its obligations under this Section 4(e).
(f) Fees.
Upon
the Closing, the Company shall reimburse the Buyer or its designee(s) for all
reasonable costs and expenses incurred in connection with the transactions
contemplated by the Transaction Documents (including all reasonable legal fees
and disbursements in connection therewith, documentation and implementation
of
the transactions contemplated by the Transaction Documents and due diligence
in
connection therewith), which amount shall be withheld by the Buyer from its
Purchase Price at the Closing. The Company shall be responsible for the payment
of any placement agent’s fees, financial advisory fees, or broker’s commissions
(other than for Persons engaged by the Buyer) relating to or arising out of
the
transactions contemplated hereby, including, without limitation, any fees or
commissions payable to the Agent. The Company shall pay, and hold the Buyer
harmless against, any liability, loss or expense (including, without limitation,
reasonable attorney’s fees and out-of-pocket expenses) arising in connection
with any claim relating to any such payment. Except as otherwise set forth
in
the Transaction Documents, each party to this Agreement shall bear its own
expenses in connection with the sale of the Securities to the
Buyer.
(g) Pledge
of Securities.
The
Company acknowledges and agrees that the Securities may be pledged by the Buyer
in connection with a bona fide margin agreement or other loan or financing
arrangement that is secured by the Securities. The pledge of Securities shall
not be deemed to be a transfer, sale or assignment of the Securities hereunder,
and the Buyer shall not be required to provide the Company with any notice
thereof or otherwise make any delivery to the Company pursuant to this Agreement
or any other Transaction Document, including, without limitation, Section 2(f)
hereof; provided that the Buyer and its pledgee shall be required to comply
with
the provisions of Section 2(f) hereof in order to effect a sale, transfer or
assignment of Securities to such pledgee. The Company hereby agrees to execute
and deliver such documentation as a pledgee of the Securities may reasonably
request in connection with a pledge of the Securities to such pledgee by the
Buyer.
(h) Disclosure
of Transactions and Other Material Information.
On or
before 8:30 a.m., New York Time, on the
first
Trading Day following the date hereof, the Company shall issue a press release
describing the terms of the transactions contemplated by the Transaction
Documents. On or before 8:30 a.m., New York Time, on the
fourth Trading Day following the date hereof, the Company shall file a Current
Report on Form 8-K describing the terms of the transactions contemplated by
the
Transaction Documents in the form required by the 1934 Act and the substance
of
the disclosure set forth in Section 3(l) hereof, and attaching the material
Transaction Documents (including, without limitation, this Agreement (and all
schedules to this Agreement), the form of each of the Notes, the form of
Warrant, and the Registration Rights Agreement as exhibits to such filing
(including all attachments, the “8-K
Filing”).
From
and after the Closing, the Buyer shall not be in possession of any material,
nonpublic information received from the Company, any of its Subsidiaries or
any
of its respective officers, directors, employees or agents, that is not
disclosed in this Agreement or the 8-K Filing. The Company shall not, and shall
cause each of its Subsidiaries and its and each of their respective officers,
directors, employees and agents, not to, provide the Buyer with, and the Buyer
shall not request, any material, nonpublic information regarding the Company
or
any of its Subsidiaries from and after the Closing without the express written
consent of the Buyer. In the event of a breach of the foregoing covenant by
the
Company, any of its Subsidiaries, or any of its or their respective officers,
directors, employees and agents, in addition to any other remedy provided herein
or in the Transaction Documents, the Buyer shall have the right to request
the
Company to make a public disclosure, in the form of a press release, public
advertisement or otherwise, of such material, nonpublic information without
the
prior approval by the Company, its Subsidiaries, or any of its or their
respective officers, directors, employees or agents. The Buyer shall not have
any liability to the Company, its Subsidiaries, or any of its or their
respective officers, directors, employees, stockholders or agents for any such
disclosure. Subject to the foregoing, neither the Company nor the Buyer shall
issue any press releases or any other public statements with respect to the
transactions contemplated hereby; provided,
however,
that
the Company shall be entitled, without the prior approval of the Buyer, to
make
any press release or other public disclosure with respect to such transactions
(i) in substantial conformity with the 8-K Filing and contemporaneously
therewith and (ii) as is required by applicable law and regulations (provided
that in the case of clause (i) the Buyer shall be consulted by the Company
in
connection with and given an opportunity to review and comment on any such
press
release or other public disclosure prior to its release). Notwithstanding the
foregoing, the Company shall not publicly disclose the name of the Buyer, or
include the name of the Buyer in any filing with the SEC or any regulatory
agency or the Principal Market, without the prior written consent of such Buyer,
except (i) for disclosure thereof in the 8-K Filing or Registration Statement
or
(ii) as required by law or Principal Market regulations or any order of any
court or other governmental agency, in which case the Company shall provide
such
Buyer with prior notice of such disclosure.
(i) Integration.
None of
the Company, its Subsidiaries, their affiliates and any Person acting on their
behalf will take any action or steps referred to in Section 3(g) that would
require registration of any of the Securities under the 1933 Act or cause the
offering of the Securities to be integrated with other offerings.
(j) Form
S-3 Eligibility.
The
Company shall use its commercially reasonable efforts to maintain the
eligibility of its registration statement on Form S-3 so that it is available
for the registration of the resale of Registrable Securities.
(k) Holding
Period.
For the
purposes of Rule 144, the Company acknowledges that the holding period of the
Conversion Shares may be tacked onto the holding period of the Notes and the
holding period of the Warrant Shares may be tacked onto the holding period
of
the Warrants (in the case of Cashless Exercise (as defined in the Warrants))
and
the Company agrees not to take a position contrary to this Section
4(k).
(l) Restrictions
on Future Indebtedness.
For so
long as the Notes remain outstanding, the Company shall not, without the prior
written consent of the holders of at least a majority of the aggregate number
of
Registrable Securities issued and issuable hereunder, assume or incur (by
guaranty or otherwise) Indebtedness, other than purchase
money mortgages and installment purchases on hog farm acquisitions,
that (i)
ranks senior or pari
passu
with the
Notes, or (ii) individually or in the aggregate, exceeds $250,000.
5. REGISTER;
TRANSFER AGENT INSTRUCTIONS.
(a) Register.
The
Company shall maintain at its principal executive offices (or such other office
or agency of the Company as it may designate by notice to each holder of
Securities), a register for the Notes and the Warrants, in which the Company
shall record the name and address of the Person in whose name the Notes
and the
Warrants have been issued (including the name and address of each transferee),
the principal amount of Notes held by such Person, the number of Conversion
Shares issuable upon conversion of the Notes and Warrant Shares issuable upon
exercise of the Warrants held by such Person. The Company shall keep the
register open and available at all times during business hours for inspection
of
any Buyer or its legal representatives.
(b) Transfer
Agent Instructions.
The
Company shall issue irrevocable instructions to its transfer agent, and any
subsequent transfer agent, to issue certificates or credit shares to the
applicable balance accounts at The Depository Trust Company (“DTC”),
registered in the name of each Buyer or its respective nominee(s), for the
Conversion Shares and the Warrant Shares issued at the Closing or upon
conversion of the Notes or exercise of the Warrants in such amounts as specified
from time to time by each Buyer to the Company upon conversion of the Notes
or
exercise of the Warrants in the form of Exhibit D attached hereto (the
“Irrevocable
Transfer Agent Instructions”).
The
Company warrants that no instruction other than the Irrevocable Transfer Agent
Instructions referred to in this Section 5(b), and stop transfer instructions
to
give effect to Section 2(g) hereof, will be given by the Company to its transfer
agent, and that the Securities shall otherwise be freely transferable on the
books and records of the Company as and to the extent provided in this Agreement
and the other Transaction Documents. If a Buyer effects a sale, assignment
or
transfer of the Securities in accordance with Section 2(f), the Company shall
permit the transfer and shall promptly instruct its transfer agent to issue
one
or more certificates or credit shares to the applicable balance accounts at
DTC
in such name and in such denominations as specified by such Buyer to effect
such
sale, transfer or assignment. In the event that such sale, assignment or
transfer involves Conversion Shares or Warrant Shares sold, assigned or
transferred pursuant to an effective registration statement or pursuant to
Rule
144, the transfer agent shall issue such Securities to the Buyer, assignee
or
transferee, as the case may be, without any restrictive legend. The Company
acknowledges that a breach by it of its obligations hereunder will cause
irreparable harm to a Buyer. Accordingly, the Company acknowledges that the
remedy at law for a breach of its obligations under this Section 5(b) will
be
inadequate and agrees, in the event of a breach or threatened breach by the
Company of the provisions of this Section 5(b), that a Buyer shall be entitled,
in addition to all other available remedies, to an order and/or injunction
restraining any breach and requiring immediate issuance and transfer, without
the necessity of showing economic loss and without any bond or other security
being required.
6. CONDITIONS
TO THE COMPANY’S OBLIGATION TO SELL. The obligation of the Company hereunder
to issue and sell the Notes and the related Warrants to each Buyer at the
Closing is subject to the satisfaction, at or before the Closing Date, of each
of the following conditions, provided that these conditions are for the
Company’s sole benefit and may be waived by the Company at any time in its sole
discretion by providing each Buyer with prior written notice
thereof:
(a) Such
Buyer shall have executed each of the Transaction Documents to which it is
a
party and delivered the same to the Company.
(b) Such
Buyer and each other Buyer shall have delivered to the Company the Purchase
Price (less any amounts withheld pursuant to Section 4(f)) for the Notes and
the
related Warrants and being purchased by such Buyer at the Closing by wire
transfer of immediately available funds pursuant to the wire instructions
provided by the Company.
(c) The
representations and warranties of such Buyer shall be true and correct in all
material respects (except for those representations and warranties that are
qualified by materiality or Material Adverse Effect, which shall be true and
correct in all respects) as of the date of this Agreement and (except to the
extent such representations and warranties speak as of an earlier date) as
of
the Closing Date as though made on and as of the Closing Date, and such Buyer
shall have performed, satisfied and complied in all material respects with
the
covenants, agreements and conditions required by this Agreement to be performed,
satisfied or complied with by such Buyer at or prior to the Closing
Date.
7. CONDITIONS
TO EACH BUYER’S OBLIGATION TO PURCHASE. The obligation of each Buyer
hereunder to purchase the Notes and
the
related Warrants at the Closing is subject to the satisfaction, at or before
the
Closing Date, of each of the following conditions, provided that these
conditions are for each Buyer’s sole benefit and may be waived by such Buyer at
any time in its sole discretion by providing the Company with prior written
notice thereof:
(a) The
Company shall have executed and delivered to such Buyer (i) each of the
Transaction Documents, (ii) the Notes (in such principal amounts as such Buyer
shall request) being purchased by such Buyer at the Closing pursuant to this
Agreement and (iii) the Warrants (in such amounts as such Buyer shall request)
being purchased by such Buyer at the Closing pursuant to this
Agreement.
(b) Such
Buyer shall have received the opinions of (i) Xxxxx Xxxxxxx, LLP, the Company’s
outside counsel and (ii) Xxxx Xxxx Peek Xxxxxxxx and Xxxxxx, the Company’s
Nevada counsel, each dated as of the Closing Date, which, when taken together,
shall be in substantially the form of Exhibit E
attached
hereto.
(c) The
Company shall have delivered to such Buyer a copy of the Irrevocable Transfer
Agent Instructions, in the form of Exhibit D
attached
hereto, which instructions shall have been delivered to and acknowledged in
writing by the Company’s transfer agent.
(d) The
Company shall have delivered to such Buyer (x) a certificate evidencing the
formation and good standing of the Company in such entity’s jurisdiction of
formation issued by the Secretary of State (or comparable office) of such
jurisdiction, as of a date within ten (10) days of the Closing Date and (y)
a
facsimile or other acceptable method of confirmation from such Secretary of
State (or comparable office) as of the Closing Date as to the continued good
standing of such entity.
(e) The
representations and warranties of the Company shall be true and correct in
all
material respects (except for those representations and warranties that are
qualified by materiality or Material Adverse Effect, which shall be true and
correct in all respects) as of the date of this Agreement and (except to the
extent such representations and warranties speak as of an earlier date) as
of
the Closing Date as though made on and as of the Closing Date, and the Company
shall have performed, satisfied and complied in all material respects with
the
covenants, agreements and conditions required by this Agreement to be performed,
satisfied or complied with by the Company at or prior to the Closing Date and
such Buyer shall have received a certificate dated as of the Closing Date
executed by an authorized officer of the Company to such effect.
(f) The
Company shall have delivered to such Buyer a certified copy of the Articles
of
Incorporation as certified by the Secretary of State of the State of Nevada
within five (5) days of the Closing Date.
(g) The
Common Stock (I) shall be designated for quotation or listed on the Principal
Market and (II) shall not have been suspended, as of the Closing Date, by the
Commission or the Principal Market from trading on the Principal Market nor
shall suspension by the Commission or the Principal Market have been threatened,
as of the Closing Date, either (A) in writing by the Commission or the Principal
Market or (B) by falling below the minimum listing maintenance requirements
of
the Principal Market.
(h) The
Company shall have obtained all governmental, regulatory or third party consents
and approvals, if any, necessary for the sale of the Securities.
(i) The
Company shall have delivered to such Buyer a notice stating that (a) the Company
has received an aggregate of $22 million from the issuance of its common stock
under its shelf registration statement on Form S-3 (Registration Number
333-148386)
(the “Registration Funds”) and (b) that the Registration Funds (except
approximately US$3,000,000, which shall be funded in RMB) are being held in
a
limited access account (to which the Company has no access) until such funds
are
released to the Company simultaneously upon the closing of the transactions
contemplated hereby.
8. TERMINATION.
In the event that the Closing shall not have occurred with respect to a buyer
on
or before Monday, March 3, 2008 due to the Company’s or such Buyer’s failure to
satisfy the conditions set forth in Sections 6 and 7 above (and the nonbreaching
party’s failure to waive such unsatisfied condition(s)), the nonbreaching party
shall have the option to terminate this Agreement with respect to such breaching
party at the close of business on such date without liability of any party
to
any other party.
9. MISCELLANEOUS.
(a) Governing
Law; Jurisdiction; Jury Trial.
All
questions concerning the construction, validity, enforcement and interpretation
of this Agreement shall be governed by the internal laws of the State of New
York, without giving effect to any choice of law or conflict of law provision
or
rule (whether of the State of New York or any other jurisdictions) that would
cause the application of the laws of any jurisdictions other than the State
of
New York. Each party hereby irrevocably submits to the exclusive jurisdiction
of
the state and federal courts sitting in The City of New York, Borough of
Manhattan, for the adjudication of any dispute hereunder or in connection
herewith or with any transaction contemplated hereby or discussed herein, and
hereby irrevocably waives, and agrees not to assert in any suit, action or
proceeding, any claim that it is not personally subject to the jurisdiction
of
any such court, that such suit, action or proceeding is brought in an
inconvenient forum or that the venue of such suit, action or proceeding is
improper. Each party hereby irrevocably waives personal service of process
and
consents to process being served in any such suit, action or proceeding by
mailing a copy thereof to such party at the address for such notices to it
under
this Agreement and agrees that such service shall constitute good and sufficient
service of process and notice thereof. Nothing contained herein shall be deemed
to limit in any way any right to serve process in any manner permitted by law.
EACH
PARTY HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE, AND AGREES NOT TO
REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN
CONNECTION WITH OR ARISING OUT OF THIS AGREEMENT OR ANY TRANSACTION CONTEMPLATED
HEREBY.
(b) Counterparts.
This
Agreement may be executed in two or more identical counterparts, all of which
shall be considered one and the same agreement and shall become effective when
counterparts have been signed by each party and delivered to the other party;
provided that a facsimile signature shall be considered due execution and shall
be binding upon the signatory thereto with the same force and effect as if
the
signature were an original, not a facsimile signature.
(c) Headings.
The
headings of this Agreement are for convenience of reference and shall not form
part of, or affect the interpretation of, this Agreement.
(d) Severability.
If any
provision of this Agreement shall be invalid or unenforceable in any
jurisdiction, such invalidity or unenforceability shall not affect the validity
or enforceability of the remainder of this Agreement in that jurisdiction or
the
validity or enforceability of any provision of this Agreement in any other
jurisdiction.
(e) Entire
Agreement; Amendments.
This
Agreement supersedes all other prior oral or written agreements between the
Buyer, the Company, their affiliates and Persons acting on their behalf with
respect to the matters discussed herein, and this Agreement and the instruments
referenced herein contain the entire understanding of the parties with respect
to the matters covered herein and therein and, except as specifically set forth
herein or therein, neither the Company nor the Buyer makes any representation,
warranty, covenant or undertaking with respect to such matters. No provision
of
this Agreement may be amended other than by an instrument in writing signed
by
the Company and
the
holders of at least a majority of the aggregate number of Registrable Securities
issued and issuable hereunder,
and any
amendment to this Agreement made in conformity with the provisions of this
Section 9(e) shall be binding on the Buyer and holders of Securities, as
applicable. No provision hereof may be waived other than by an instrument in
writing signed by the party against whom enforcement is sought. No such
amendment shall be effective to the extent that it applies to less than all
of
the holders of the applicable Securities then outstanding. No consideration
shall be offered or paid to any Person to amend or consent to a waiver or
modification of any provision of any of the Transaction Documents unless the
same consideration also is offered to all of the parties to the Transaction
Documents, holders of Notes, or holders of the Warrants, as the case may be.
The
Company has not, directly or indirectly, made any agreements with the Buyer
relating to the terms or conditions of the transactions contemplated by the
Transaction Documents except as set forth in the Transaction
Documents.
(f) Notices.
Any
notices, consents, waivers or other communications required or permitted to
be
given under the terms of this Agreement must be in writing and will be deemed
to
have been delivered: (i) upon receipt, when delivered personally; (ii) upon
receipt, when sent by facsimile (provided confirmation of transmission is
mechanically or electronically generated and kept on file by the sending party);
or (iii) one Business Day after deposit with an overnight courier service,
in
each case properly addressed to the party to receive the same. The addresses
and
facsimile numbers for such communications shall be:
If
to the
Company:
0000
Xxxxxxx Xxxxxx
Economic
and Technology Development Zone
Nanchang
City
Jiangxi
Province
| Telephone: |
00-000-0000000
|
| Facsimile: |
00-000-0000000
|
| Attention: |
Dr.
Songyan Li
|
Copy
to:
Xxxxx
Xxxxxxx, LLP
000
Xxxx
Xxxxxx
Xxx
Xxxx,
XX 00000
| Telephone: |
(000)
000-0000
|
| Facsimile: |
(000)000-0000
|
| Attention: |
Xxxxx
X. Xxxxx, Esq.
|
If
to the
Transfer Agent:
Interwest
Transfer Company, Inc.
0000
Xxxx
Xxxxxx Xxxxxxxx Xxxx, Xxxxx 000
X.X.
Xxx
00000
Xxxx
Xxxx
Xxxx, Xx 00000
| Telephone: |
(000)000-0000
|
| Facsimile: |
(000)000-0000
|
| Attention: |
Xxxxxxx
Xxxx
|
If
to a
Buyer, to its address and facsimile number set forth on the Schedule of Buyers,
with copies to such Buyer’s representatives as set forth on the Schedule of
Buyers, or to such other address and/or facsimile number and/or to the attention
of such other Person as the recipient party has specified by written notice
given to each other party five (5) days prior to the effectiveness of such
change. Written confirmation of receipt (A) given by the recipient of such
notice, consent, waiver or other communication, (B) mechanically or
electronically generated by the sender’s facsimile machine containing the time,
date, recipient facsimile number and an image of the first page of such
transmission or (C) provided by an overnight courier service shall be rebuttable
evidence of personal service, receipt by facsimile or receipt from an overnight
courier service in accordance with clause (i), (ii) or (iii) above,
respectively; provided however that the foregoing clause (B) shall only be
valid
if such communication contained in the facsimile is delivered by an overnight
courier service within 24 hours of the transmission of facsimile.
(g) Successors
and Assigns.
This
Agreement shall be binding upon and inure to the benefit of the parties and
their respective successors and assigns, including any purchasers of the Notes
or the Warrants. The Company shall not assign this Agreement or any rights
or
obligations hereunder without the prior written consent of the holders of at
least a majority of the aggregate number of Registrable Securities issued and
issuable hereunder, including by way of a Fundamental Transaction (unless the
Company is in compliance with the applicable provisions governing Fundamental
Transactions set forth in the Notes and the Warrants). A Buyer may assign some
or all of its rights hereunder without the consent of the Company, in which
event such assignee shall be deemed to be a Buyer hereunder with respect to
such
assigned rights.
(h) No
Third Party Beneficiaries.
This
Agreement is intended for the benefit of the parties hereto and their respective
permitted successors and assigns, and is not for the benefit of, nor may any
provision hereof be enforced by, any other Person.
(i) Survival.
Unless
this Agreement is terminated under Section 8, the representations and warranties
of the Company and the Buyers contained in Sections 2 and 3 and the agreements
and covenants set forth in Sections 4, 5 and 9 shall survive the Closing. Each
Buyer shall be responsible only for its own representations, warranties,
agreements and covenants hereunder.
(j) Further
Assurances.
Each
party shall do and perform, or cause to be done and performed, all such further
acts and things, and shall execute and deliver all such other agreements,
certificates, instruments and documents, as any other party may reasonably
request to carry out the intent and accomplish the purposes of this Agreement
and the consummation of the transactions contemplated hereby.
(k) No
Strict Construction.
The
language used in this Agreement will be deemed to be the language chosen by
the
parties to express their mutual intent, and no rules of strict construction
will
be applied against any party.
(l) Independent
Nature of Buyers’ Obligations and Rights.
The
obligations of each Buyer under any Transaction Document are several and not
joint with the obligations of any other Buyer, and no Buyer shall be responsible
in any way for the performance of the obligations of any other Buyer under
any
Transaction Document. Nothing contained herein or in any other Transaction
Document, and no action taken by any Buyer pursuant hereto or thereto, shall
be
deemed to constitute the Buyers as a partnership, an association, a joint
venture or any other kind of entity, or create a presumption that the Buyers
are
in any way acting in concert or as a group with respect to such obligations
or
the transactions contemplated by the Transaction Documents. Each Buyer confirms
that it has independently participated in the negotiation of the transaction
contemplated hereby with the advice of its own counsel and advisors. Each Buyer
shall be entitled to independently protect and enforce its rights, including,
without limitation, the rights arising out of this Agreement or out of any
other
Transaction Documents, and it shall not be necessary for any other Buyer to
be
joined as an additional party in any proceeding for such purpose.
(m) Remedies.
Each
Buyer and each holder of the Securities shall have all rights and remedies
set
forth in the Transaction Documents and all rights and remedies which such
holders have been granted at any time under any other agreement or contract
and
all of the rights which such holders have under any law. Any Person having
any
rights under any provision of this Agreement shall be entitled to enforce such
rights specifically (without posting a bond or other security), to recover
damages by reason of any breach of any provision of this Agreement and to
exercise all other rights granted by law. Furthermore, the Company recognizes
that in the event that it fails to perform, observe, or discharge any or all
of
its obligations under the Transaction Documents, any remedy at law may prove
to
be inadequate relief to such Buyer. The Company therefore agrees that each
Buyer
shall be entitled to seek temporary and permanent injunctive relief in any
such
case without the necessity of proving actual damages and without posting a
bond
or other security.
[Signature
Page Follows]
IN
WITNESS WHEREOF,
each
Buyer and the Company have caused their respective signature page to this
Securities Purchase Agreement to be duly executed as of the date first written
above.
|
COMPANY:
|
||
|
By:
|
/s/
Xxxxx Xxx Xxxx
|
|
|
Name:
Xxxxx
Xxx Xxxx
|
||
|
Title:
CEO
|
||
IN
WITNESS WHEREOF,
each
Buyer and the Company have caused their respective signature page to this
Securities Purchase Agreement to be duly executed as of the date first written
above.
|
BUYERS:
|
||
|
APOLLO
ASIA OPPORTUNITY
MASTER
FUND, L.P.
|
||
|
By:
Apollo Asia Management GP, LLC
|
||
|
By:
|
/s/
Xxxxxxxx X. Xxxxx
|
|
|
Name:
Xxxxxxxx
X. Xxxxx
|
||
|
Title:
Vice President
|
||
|
JABCAP
MULTI-STRATEGY MASTER
FUND
LIMITED
|
||
|
J-Invest
Ltd
|
||
|
By:
|
/s/
Tse-Ern,
Chia
|
|
|
Name:
Tse-Ern,
Chia
|
||
|
Title:
Director
|
||
|
J-
INVEST LTD.
|
||
|
By:
|
/s/
Tse-Ern, Chia
|
|
|
Name:
Tse-Ern,
Chia
|
||
|
Title:
Director
|
||
|
DEUTSCHE
BANK AG LONDON
|
||
|
By:
|
/s/ Simon Rani | |
|
Name:
Simon
Rani
|
||
|
Title:
Director
|
||
