STOCK PURCHASE AGREEMENT
This
STOCK PURCHASE AGREEMENT
(this
“Agreement”)
is
made and entered into as of November 6, 2007, by and among AGFEED
INDUSTRIES, INC.,
a
Nevada Corporation (the “Buyer”), and Xxxxxxx Xxxx and Xxxxxxx Xxx (the
“Sellers”), being the holders of ninety percent (90%) of the issued and
outstanding shares of LUSHAN
BREEDER PIG FARM CO., LTD (the
“Company”), a Peoples Republic of China company located in HuaLin Town of XingZi
County in JiangXi Province.
RECITALS
The
Sellers desire to sell to the Buyer, and the Buyer desires to purchase from
the
Sellers, ninety percent (90%) of the issued and outstanding shares of the common
stock of the Company (the “Shares”), pursuant to the terms and conditions set
forth in this Agreement. Both Buyer and Sellers acknowledge that Buyer intends
to promptly assign the Shares, once purchased, to Xxx Xxxxx Best Animal
Husbandry Co., Ltd, a wholly owned subsidiary of Buyer (the Sub”).
AGREEMENT
NOW,
THEREFORE,
in
consideration of the foregoing, and for other good and valuable consideration,
the receipt and sufficiency of which is hereby acknowledged, the parties hereto
hereby agree as follows:
1. AGREEMENT TO PURCHASE AND SELL STOCK
1.1. Agreement to Purchase and Sell.
The
Sellers agrees to sell to Buyer at the Closing, and Buyer agrees to purchase
from the Sellers at the Closing the Shares for an aggregate purchase price
of
RMB20,112,020 (equivalent of US$2,699,600 at US$1 = RMB7.45) (the “Purchase
Price”).
The
Shares purchased and sold pursuant to this Agreement will be collectively
referred to as the “Purchased Shares.”
2. CLOSING.
The
Closing hereunder (the “Closing”) shall take place following this Agreement’s
execution at a time and place mutually agreed by the parties (the “Closing
Date”).
3. REPRESENTATIONS
AND WARRANTIES OF SELLERS AND THE COMPANY.
Sellers
and the Company each, jointly and severally, hereby represent and warrant to
the
Buyer that the statements in the following paragraphs of this Section
3
are all
true and correct as of the date hereof and as of the Closing Date:
3.1. Organization,
Good Standing and Qualification.
The
Company is a corporation duly organized, validly existing and in good standing
under the laws of the Peoples Republic of China and has all requisite corporate
power and authority to lease and/or own its properties and assets and to carry
on its business as now conducted and as presently proposed to be
conducted.
3.2. Capitalization.
Immediately prior to the Closing, the Sellers shall own free and clear all
Shares to be sold to Buyer, and that collectively they own ninety percent (90%)
of the Company’s common stock on a fully dilutive basis. There are no options,
warrants, or other securities outstanding that dilute Sellers’ Share ownership
interest below ninety percent (90%) of the common stock issued and
outstanding.
3.3. Subsidiaries.
The
Company does not presently own or control, directly or indirectly, any interest
in any other corporation, partnership, trust, joint venture, association, or
other entity.
3.4. Due
Authorization.
All
corporate action on the part of the Company, its officers, directors and
stockholders necessary for the authorization, execution, delivery of, and the
performance of all obligations of the Company under, this Agreement has been
taken or will be taken prior to the Closing Date, and this Agreement, when
executed, will constitute, valid and legally binding obligations of the Company,
enforceable in accordance with their respective terms, except as may be limited
by (i) applicable bankruptcy, insolvency, reorganization or others laws of
general application relating to or affecting the enforcement of creditors’
rights generally and (ii) the effect of rules of law governing the availability
of equitable remedies.
3.5. Valid
Transfer of Shares.
Sellers
will take all necessary steps to transfer or otherwise effect registration
of
full and complete ownership of the Shares to Buyer or Sub to effectuate the
purposes of this Agreement.
3.6. Governmental Consents.
No
consent, approval, order or authorization of, or registration, qualification,
designation, declaration or filing with, any governmental authority on the
part
of the Company is required in connection with the consummation of the
transactions contemplated by this Agreement.
3.7. Litigation.
There
is no action, suit, proceeding, claim, arbitration or investigation
(“Action”)
pending or, to the best of the Company’s and Sellers’ Knowledge (as defined
below), currently threatened against the Company, its activities, properties
or
assets or, to the best of the Company’s and Sellers’s Knowledge, against any
shareholder, officer, director or employee of the Company in connection with
such shareholder’s, officer’s, director’s or employee’s relationship with, or
actions taken on behalf of, the Company. To the best of the Company’s and
Sellers’ Knowledge, there is no factual or legal basis for any such Action that
might result, individually or in the aggregate, in any material adverse change
in the business, properties, assets, financial condition, affairs or prospects
of the Company. By way of example but not by way of limitation, there are no
Actions pending or, to the best of the Company’s and Sellers’ Knowledge,
threatened (or any basis therefor known to the Company) relating to the prior
employment of any of the Company’s employees or consultants, their use in
connection with the Company’s business of any information, technology or
techniques allegedly proprietary to any of their former employers, clients
or
other parties, or their obligations under any agreements with prior employers,
clients or other parties. The Company is not a party to or subject to the
provisions of any order, writ, injunction, judgment or decree of any court
or
government agency or instrumentality and there is no Action by the Company
currently pending or which the Company intends to initiate. For the purposes
of
this Agreement, “Knowledge”
means
(i) the actual knowledge of such party’s shareholders, partners, officers,
directors, principals, affiliates or agents; and (ii) the knowledge that a
prudent business person would have obtained in the conduct of his or her
business after making reasonable inquiry and exercising reasonable diligence
with respect to the particular matter in question.
2
3.8. Status
of Proprietary Assets.
(a) Ownership.
To the
best of the Company’s and Sellers’ Knowledge, the Company has full title and
ownership of, or has license to, all patents, patent applications, trademarks,
service marks, trade names, copyrights, moral rights, mask works, trade secrets,
confidential and proprietary information, compositions of matter, formulas,
designs, proprietary rights, know-how and processes (all of the foregoing
collectively referred to as the “Proprietary
Assets”)
necessary to enable it to carry on its business as now conducted and as
presently proposed to be conducted, without any conflict with or infringement
of
the rights of others. To the best of the Company’s and Sellers’ Knowledge, no
third party has any ownership right, title, interest, claim in or lien on any
of
the Company’s Proprietary Assets and the Company has taken, and in the future
the Company will use its best efforts to take, all steps reasonably necessary
to
preserve its legal rights in, and the secrecy of, all its Proprietary Assets,
except those for which disclosure is required for legitimate business or legal
reasons.
(b) Licenses;
Other Agreements.
The
Company has not granted, and, there are not outstanding, any options, licenses
or agreements of any kind relating to any Proprietary Asset of the Company,
nor
is the Company bound by or a party to any option, license or agreement of any
kind with respect to any of its Proprietary Assets. The Company is not obligated
to pay any royalties or other payments to third parties with respect to the
marketing, sale, distribution, manufacture, license or use of any Proprietary
Asset or any other property or rights.
(c) No
Infringement.
To the
best of the Company’s and Sellers’ Knowledge, the Company has not violated or
infringed, and is not currently violating or infringing, and the Company has
not
received any communications alleging that the Company (or any of its employees
or consultants) has violated or infringed or, by conducting its business as
proposed, would violate or infringe, any Proprietary Asset of any other person
or entity.
3.9. Compliance
with Law and Charter Documents.
The
Company is not in violation or default of any provisions of its governing and
constituent documents that established the Company and
to
the best of the Company’s and Sellers’ Knowledge, the Company is in compliance
in all material respects with all applicable statutes, laws, regulations and
executive orders of the Peoples Republic of China, and all states, provinces,
foreign countries or other governmental bodies and agencies having jurisdiction
over the Company’s business or properties. The Company has not received any
notice of any violation of such statutes, laws, regulations or orders which
has
not been remedied prior to the date hereof. The execution, delivery and
performance of this Agreement and the consummation of the transactions
contemplated hereby or thereby will not be in conflict with or constitute,
with
or without the passage of time or the giving of notice or both, either a
violation of or default under the Company’s governing and constituent
documents,
or
any
agreement or contract of the Company, or, to the best of the Company’s and
Sellers’ Knowledge, result in a violation in any material respect of any such
statutes, laws, regulations or orders (whether judicial, administrative or
executive), or an event which results in the creation of any lien, charge or
encumbrance upon any asset of the Company.
3
3.10. Material
Agreements.
(a) List
of Material Agreements.
The
Company and Sellers have disclosed a complete list of all agreements, contracts,
leases, licenses, instruments and commitments (oral or written) to which the
Company is a party or is bound that, individually or in the aggregate, are
material to the business, properties, financial condition, results of operation,
affairs or prospects of the Company (“Material
Agreements”)
to
Buyer’s management.
(b) No
Breach.
The
Company has not breached, nor does the Company or Sellers have any Knowledge
of
any claim or threat that the Company has breached, any term or condition of
(i)
any Material Agreement disclosed to Buyer’s management or (ii) any other
agreement, contract, lease, license, instrument or commitment that, individually
or in the aggregate, would have a material adverse effect on the business,
properties, financial condition, results of operations or affairs or prospects
of the Company. Each Material Agreement disclosed to Buyer’s management is in
full force and effect and, to the Company’s and Sellers’ Knowledge, no other
party to such Material Agreement is in default thereunder. The Company is not
a
party to any agreement that restricts its ability to market or sell any of
its
products (whether by territorial restriction or otherwise).
3.11. Title
to Property and Assets.
Except
for the RMB4,919,980 (equivalent of US$660,400 at US$1 = RMB7.45) debt owed
by
the Company (the “Debt”), which will be paid-off by Buyer upon the Closing, the
Company owns its properties and assets free and clear of all mortgages, deeds
of
trust, liens, encumbrances, security interests and claims except for statutory
liens for the payment of current taxes that are not yet delinquent and liens,
encumbrances and security interests which arise in the ordinary course of
business and which do not affect material properties and assets of the Company.
With respect to the property and assets it leases, the Company is in compliance
with such leases and, to the best of the Company’s and Sellers’ Knowledge, the
Company holds valid leasehold interests in such assets free of any liens,
encumbrances, security interests or claims of any party other than the lessors
of such property and assets.
4
3.12. Financial
Statements.
Attached
to this Agreement as Schedule
1.0
are
audited financial statements (“Financial
Statements”).
Such
Financial Statements (a) are in accordance with the books and records of the
Company in all material respects; (b) are true, correct and complete in all
material respects and present fairly the financial condition of the Company
at
the date or dates therein indicated and the results of operations for the period
or periods therein specified and (c) have been prepared in accordance with
generally accepted accounting principles applied on a consistent basis, except,
as to the unaudited financial statement, for the omission of notes thereto
and
normal year-end audit adjustments. Specifically, but not by way of limitation,
the respective balance sheets of the Financial Statements disclose all of the
Company’s material debts, liabilities and obligations of any nature, whether due
or to become due, as of their respective dates (including, without limitations,
absolute liabilities, accrued liabilities, and contingent liabilities). The
Company has good and marketable title to all assets set forth on the balance
sheets of the Financial Statements, except for such assets as have been spent,
sold or transferred in the ordinary course of business.
3.13. Certain
Actions.
Since
preparation of the Financial Statements, the Company has not: (a) declared
or
paid any dividends, or authorized or made any distribution upon or with respect
to any class or series of its capital stock; (b) incurred any indebtedness
for
money borrowed or incurred any other liabilities individually in excess of
US$5,000 or in excess of US$10,000 in the aggregate; (c) made any loans or
advances to any person, other than ordinary advances for travel expenses; (d)
sold, exchanged or otherwise disposed of any material assets or rights other
than the sale of inventory in the ordinary course of its business; or (d)
entered into any transactions with any of its shareholders, officers, directors
or employees or any entity controlled by any of such individuals.
3.14. Environmental
Matters.
(a) To
the
Company’s and Sellers’ Knowledge, none of the Company’s properties or facilities
is in material violation of any governmental law relating to industrial hygiene
or to the environmental conditions on, under or about such properties or
facilities, including, but not limited to, soil and ground water condition.
During the time that the Company has owned or leased its properties and
facilities, neither the Company nor, to the Company’s and Sellers’ Knowledge,
any third party, has used, generated, manufactured or stored on, under or about
such properties or facilities or transported to or from such properties or
facilities any hazardous materials.
(b) During
the time that the Company has owned or leased its properties and facilities,
there has been no litigation brought or, to the Company’s and Sellers’
Knowledge, threatened against the Company, or any settlement reached by the
Company with, any party or parties alleging the presence, disposal, release
or
threatened release of any hazardous materials on, from or under any of such
properties or facilities.
3.15. No
Material Undisclosed Liabilities.
(a) There
is
no liability or obligation of the Company of any nature, whether absolute,
accrued, contingent, or otherwise, in the amount of US$5,000 or more
individually, or US$10,000 or more in the aggregate, other than the liabilities
and obligations that are fully reflected, accrued or reserved against on the
balance sheets of the Financial Statements, for which the reserves are
appropriate and reasonable, or incurred in the ordinary course of business
and
consistent with past practices.
5
(b) The
Company is not signatory to, and is not in any manner a guarantor, endorser,
assumptor or otherwise primarily or secondarily liable for or responsible for
the payment of, any notes payable or other obligations other than those set
forth in the Financial Statements.
3.16. Accounts
Receivable.
The
accounts receivable of the Company reflected on the Financial Statements
represent usual, customary and reasonable charges for services actually rendered
or equipment and supplies sold and delivered, are valid and enforceable claims
for services rendered and/or goods supplied by the Company and are not subject
to any defenses, offsets, claims or counterclaims of any kind. To the best
of
the Company’s and Sellers’s Knowledge, such receivables are current and
collectible net of any reserves shown in the Financial Statements (which
reserves are adequate and were calculated consistent with past
practice).
4. REPRESENTATIONS,
WARRANTIES AND CERTAIN AGREEMENTS OF BUYER.
The
Buyer each hereby, severally and not jointly, represent and warrant to, and
agree with, the Company that:
4.1. Authorization.
Buyer
is a legally registered company in good standing in the State of Nevada. This
Agreement constitutes Buyer’s valid and legally binding obligation, enforceable
in accordance with its terms except as may be limited by (i) applicable
bankruptcy, insolvency, reorganization or other laws of general application
relating to or affecting the enforcement of creditors’ rights generally and (ii)
the effect of rules of law governing the availability of equitable remedies.
Buyer represents that it has full power and authority to enter into this
Agreement.
4.2. Purchase
Purpose.
The
Purchased Shares to be purchased by Buyer will be acquired for purposes of
owning and operating the Company’s business.
5. CONDITIONS
TO BUYER’S OBLIGATIONS AT CLOSING.
The
obligations of Buyer to the Company under this Agreement are subject to the
fulfillment or waiver, on or before the Closing Date, of each of the following
conditions, the waiver of which shall not be effective against the Buyer if
the
Buyer does not consent to such waiver, which consent may be given by written
communication to the Company or its counsel:
5.1. Representations and Warranties.
Each of
the representations and warranties of the Company and Sellers contained in
Section
3
shall be
true and correct on the Closing Date with the same effect as though such
representations and warranties had been made on and as of the Closing Date.
5.2. Performance.
The
Company shall have performed and complied with all agreements, obligations
and
conditions contained in this Agreement that are required to be performed or
complied with by it on or before the Closing and shall have obtained all
approvals, consents and qualifications necessary to complete the purchase and
sale described herein.
6
5.3. No
Material Change.
There
shall have been no material adverse change in the business, affairs, prospects,
operations, properties, assets or condition of the Company.
5.4. No
Defaults.
The
Company shall not be in default in any material respect under any Material
Agreement to which it is a party.
6. CONDITIONS
TO THE COMPANY’S OBLIGATIONS AT CLOSING.
The
obligations of the Company and Sellers to the Buyer under this Agreement are
subject to the fulfillment or waiver, on or before the Closing Date, of each
of
the following conditions, the waiver of which shall not be effective against
the
Company if the Company does not consent to such waiver, which consent may be
given by written communication to the Buyer or its counsel:
6.1. Representations
and Warranties.
The
representations and warranties of the Buyer contained in Section
4
shall be
true and correct on the Closing Date with the same effect as though such
representations and warranties had been made on and as of the Closing
Date.
6.2. Payment
of Purchase Price.
Buyer
shall have delivered to the Sellers the Purchase Price in accordance with the
provisions of Section
1.
6.3. Payment
of Debt.
At the
time of closing, Buyer shall pay-off the Company’s Debt in full.
6.4. Litigation.
No
action or proceeding before any governmental body shall have been instituted
or
threatened to restrain or prohibit the sale of the Purchased
Shares.
6.5. Performance.
The
Buyer shall have performed and complied with all agreements, obligations and
conditions contained in this Agreement that are required to be performed or
complied with by it on or before the Closing, and shall have obtained all
approvals, consents and qualifications necessary to complete the purchase and
sale described herein.
7. MISCELLANEOUS.
7.1. Survival
of Warranties.
The
representations, warranties and covenants of the Company, Sellers and the Buyer
contained in or made pursuant to this Agreement shall survive the execution
and
delivery of this Agreement and the Closing and shall in no way be affected
by
any investigation of the subject matter thereof made by or on behalf of the
Buyer, its counsel or the Company, as the case may be.
7
7.2. Successors
and Assigns.
The
terms and conditions of this Agreement shall inure to the benefit of and be
binding upon the respective successors and assigns of the parties.
7.3. Governing
Law.
This
Agreement shall be governed by and construed under the internal laws of the
Peoples Republic of China, without reference to principles of conflict of laws
or choice of laws.
7.4. Counterparts.
This
Agreement may be executed in two or more counterparts, each of which shall
be
deemed an original, but all of which together shall constitute one and the
same
instrument.
7.5. No
Finder’s Fees.
Neither
the Buyer, the Sellers, the Company, or any shareholder, officer, director,
or
employee of the Buyer, the Sellers or the Company (i) employed any broker or
finder, or (ii) incurred any liability whatsoever, for any brokerage fees,
commissions, or finder’s fees in connection with the transaction contemplated
hereby.
7.6. Amendments
and Waivers.
Any
term of this Agreement may be amended and the observance of any term of this
Agreement may be waived (either generally or in a particular instance and either
retroactively or prospectively), only with the written consent of the Company,
the Sellers and the Buyer.
7.7. Severability.
If one
or more provisions of this Agreement are held to be unenforceable under
applicable law, such provision(s) shall be excluded from this Agreement and
the
balance of the Agreement shall be interpreted as if such provision(s) were
so
excluded and shall be enforceable in accordance with its terms.
7.8. Entire
Agreement.
This
Agreement, together with the schedule hereto, constitutes the entire agreement
and understanding of the parties with respect to the subject matter hereof
and
supersedes any and all prior negotiations, correspondence, agreements,
understandings duties or obligations between the parties with respect to the
subject matter hereof.
7.9. Further
Assurances.
From
and after the date of this Agreement, upon the request of any party, the Buyer,
the Sellers and/or the Company shall execute and deliver such instruments,
documents or other writings as may be reasonably necessary or desirable to
confirm and carry out and to effectuate fully the intent and purposes of this
Agreement.
[Remainder
of page intentionally left blank]
[Signature
page to follow]
8
IN
WITNESS WHEREOF,
the
parties hereto have executed this Stock Purchase Agreement as of the date first
above written.
|
BUYER:
|
|||
|
a
Nevada registered company
|
|||
|
By:
|
/s/ Songyan Li
|
||
|
Name: Dr. Songyan Li
|
|||
|
Title: Chairman
|
|||
|
SELLERS:
|
|||
|
By:
|
/s/ Xxxxxxx Xxxx
|
||
|
Name: Xxxxxxx
Xxxx
|
|||
|
By:
|
/s/ Xxxxxxx Xxx
|
||
|
Name: Xxxxxxx
Xxx
|
|||
|
COMPANY:
|
|||
|
LUSHAN
BREEDER PIG FARM CO., LTD
|
|||
|
a
Peoples Republic of China registered company
|
|||
|
By:
|
/s/ Xxxxxxx Xxx
|
||
|
Name: Xxxxxxx Xxx
|
|||
|
Title: Executive Director
|
|||
9
LIST OF SCHEDULES
SCHEDULES
|
Schedule 1.0
|
Financial
Statements as disclosed to Buyer’s Board of Directors and
management
|
10
