STOCK PURCHASE AGREEMENT
|
This STOCK PURCHASE AGREEMENT (the "Agreement") is made
and entered into as of 2nd day of March, 2006 by and among China
Agritech, Inc., a corporation organized and existing under the laws of the
State of Delaware ("CAGC"), China Tailong Group Ltd., a corporation
organized and existing under the laws of the laws of the British Virgin
Islands, (the "Seller"), and Xxxxx Xx (the "Purchaser"). |
PRELIMINARY STATEMENT:
WHEREAS, the parties intend to memorialize the transfer of
certain stocks in CAGC to the Purchaser;
WHEREAS, the Seller desires to sell to Purchaser certain
stocks in CAGC held by it and the Purchaser desires to purchase such stocks in
CAGC held by the Seller, upon the terms and subject to the conditions set forth
herein
NOW, THEREFORE, in consideration of the mutual covenants and
premises contained herein, and for other good and valuable consideration, the
receipt and adequacy of which are hereby conclusively acknowledged, the parties
hereto, intending to be legally bound, agree as follows:
ARTICLE I SALE AND PURCHASE
OF CAGC 'S COMMON STOCK AND PURCHASE PRICE
SECTION 1.1
Sale of CAGC Stock. Upon the terms and subject to the
conditions set forth in this Agreement, and in accordance with applicable law,
at the Closing on the Closing Date (as those terms are defined in Section 2.1
hereof), the Seller agrees to sell, assign, transfer, convey and deliver to
Purchaser, and Purchaser agrees to purchase and acquire 483,881 shares of common
stock of CAGC held by the Seller (the " CAGC Stock" or "Company Stock").
Purchaser acknowledges that the Seller has deposited CAGC Stock with the
Company's corporate secretary.
SECTION 1.2
Purchase Price. The purchase price to be paid by the Purchaser to the Seller
for CAGC Stock is USD1,000 (the "Purchase Price").
ARTICLE II CLOSING DATE AND
DELIVERIES AT CLOSING
SECTION 2.1
Closing Date. The closing of the transactions contemplated by
this Agreement (the "Closing"), unless expressly determined herein, shall be
held by the Company's corporate secretary on the date and place
1
as may be mutually agreed by the parties, including closing by facsimile with
originals to follow. The date of the Closing is sometimes referred to herein as
the "Closing Date."
SECTION 2.2
Deliveries by the Seller. In addition to and without limiting any other
provision of this Agreement, the Seller agrees to deliver, or cause to be
delivered, to Purchaser, at or prior to Closing, the following:
(a)
Certificates representing CAGC Stock, which certificates shall be duly
endorsed to the Purchaser;
(b)
Such other documents or certificates as shall be reasonably requested by
the Purchaser or his counsel.
SECTION 2.3
Deliveries by Purchaser. In addition to and without limiting
any other provision of this Agreement, the Purchaser agrees to deliver, or cause
to be delivered, to the Seller, at or prior to Closing, the following:
(a)
The Purchase Price required to be delivered on or before Closing pursuant
to Section 1.2 hereof;
(b)
Such other documents or certificates as shall be reasonably requested by
the Seller or his counsel.
SECTION 2.4
Further Assurances. The Seller and the Purchaser shall, upon
request, on or after the Closing Date, cooperate with each other by furnishing
any additional information, executing and delivering any additional documents
and/or other instruments and doing any and all such things as may be reasonably
required by the parties or their counsel to consummate or otherwise implement
the transactions contemplated by this Agreement.
ARTICLE III REPRESENTATIONS AND
WARRANTIES OF CAGC
CAGC and the Seller jointly and severally represent and
warrant to Purchaser (which warranties and representations shall survive the
Closing regardless of what examination, inspections, audits and other
investigations the Purchaser has heretofore made or may hereinafter make with
respect to such warranties and representations) as follows:
SECTION 3.1
2
Organization and Qualification. CAGC is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware, and has the requisite corporate power and authority to own, lease and
operate its properties and to carry on its business as it is now being conducted
and is duly qualified to do business in any other jurisdiction by virtue of the
nature of the businesses conducted by it or the ownership or leasing of its
properties, except where the failure to be so qualified will not, when taken
together with all other such failures, have a material adverse effect on the
business, operations, properties, assets, financial condition or results of
operation of CAGC and its subsidiaries taken as a whole. (Any such material
adverse effect being hereinafter referred to as "Company Material Adverse
Effect").
SECTION 3.2
Articles of Incorporation and By-Laws. The complete and
correct copies of CAGC's Articles of Incorporation and By-Laws, as amended or
restated to date which have been filed with the Securities and Exchange
Commission are a complete and correct copy of such document as in effect on the
date hereof and as of the Closing Date.
SECTION 3.3
Capitalization. The authorized and outstanding capital stock
of CAGC is set forth in CAGC 's Annual Report on Form 10-KSB, filed with the
Securities and Exchange Commission, or its amendment. All shares of capital
stock have been duly authorized and are validly issued, and are fully paid and
no assessable, and free of preemptive rights.
(a)
Except pursuant to this Agreement
and the Agreement signed between the CAGC and Heritage, and as set forth in CAGC
's Annual Report on Form 10-KSB, filed with the Securities and Exchange
Commission, as of the date hereof and as of the Closing Date, there are not now
outstanding options, warrants, rights to subscribe for, calls or commitments of
any character whatsoever relating to, or securities or rights convertible into
or exchangeable for, shares of any class of capital stock of CAGC , or
agreements, understandings or arrangements to which CAGC is a party, or by which
CAGC is or may be bound, to issue additional shares of its capital stock or
options, warrants, scrip or rights to subscribe for, calls or commitment of any
character whatsoever relating to, or securities or rights convertible into or
exchangeable for, any shares of any class of its capital stock.
(b)
The Seller beneficially owns
of record CAGC Stock. The Purchaser (i) on the Closing Date will have full
right, power, and authority to sell, assign, transfer, and deliver, by reason of
record and beneficial ownership, to Purchaser, CAGC Stock hereunder, free and
clear of all liens, charges, claims, options, pledges, restrictions, and
encumbrances whatsoever; and (ii) upon delivery of and payment by Purchaser to
the Seller of the Purchase Price, Purchaser will acquire good and marketable
title to such Company Stock, free and clear of all liens, charges, claims,
options, pledges, restrictions, and encumbrances whatsoever.
3
SECTION 3.4
Authority. CAGC has
all requisite corporate power and authority, and the Seller has full power, to
execute and deliver this Agreement, to perform his obligations hereunder and to
consummate the transactions contemplated hereby. The execution and delivery of
this Agreement by CAGC and the Seller and the consummation of the transactions
contemplated hereby have been duly authorized by all necessary corporate action
and no other corporate proceedings on the part of CAGC is necessary to authorize
this Agreement or to consummate the transactions contemplated hereby except as
disclosed in this Agreement. This Agreement has been duly executed and delivered
by CAGC and the Seller and constitutes the legal, valid and binding obligation
of CAGC and the Seller enforceable against CAGC and the Seller in accordance
with its terms, except as may be limited by bankruptcy, insolvency,
reorganization, moratorium, or other similar laws affecting the enforcement of
creditors' rights generally and general principles of equity.
SECTION 3.5
No Conflict; Required Filings and Consents.
The execution and delivery of this Agreement by CAGC and the Seller does not,
and the performance by CAGC and the Seller of their respective obligations
hereunder will not: (i) conflict with or violate the Articles of Incorporation
or By-Laws of CAGC ; (ii) conflict with or violate any federal, state, foreign
or local law, statute, ordinance, rule, regulations, order, judgment or decree
(collectively, "Laws") in effect as of the date of this Agreement and applicable
to CAGC and the Seller; or (iii) result in any breach of, constitute a default
(or an event that with notice or lapse of time or both would become a default)
under, give to any other entity any right of termination, amendment,
acceleration or cancellation of, require payment under, or result in the
creation of a lien or encumbrance on any of the properties or assets of CAGC
pursuant to, any note, bond, mortgage, indenture, contract, agreement, lease,
license, permit, franchise or other instrument or obligation to which CAGC is a
party or by CAGC or any of its properties or assets is bound. Excluding from the
foregoing are such violations, conflicts, breaches, defaults, terminations,
accelerations, creations of liens, or incumbency that would not, in the
aggregate, have a Company Material Adverse Effect.
SECTION 3.6
Report and Financial Statements. CAGC 's
Quarterly Report on Form 10-QSB, was filed with the Securities and Exchange
Commission contains the financial statements of CAGC as of September 30, 2005
(the "Financial Statements"). Each of the balance sheets contained in or
incorporated by reference into any such Financial Statements (including the
related notes and schedules thereto) fairly presented the financial position of
CAGC as of its date, and each of the statements of income and changes in
stockholders' equity and cash flows or equivalent statements in such Financial
Statements (including any related notes and schedules thereto) fairly presents
and will fairly present the results of operations, changes in stockholders'
equity and changes in cash flows, as the case may be, of CAGC for the periods to
which they relate, in each case in accordance with United States generally
accepted accounting principles ("U.S. GAAP") consistently applied during the
periods involved, except in each
4
case as may be noted therein, subject to normal year-end
audit adjustments in the case of unaudited statements. The books and records of
CAGC have been, and are being, maintained in all material respects in accordance
with U.S. GAAP and any other applicable legal and accounting requirements and
reflect only actual transaction. Without limiting the foregoing, the Purchaser
shall not assume, undertake or accept, and shall have no responsibility with
respect to, liabilities and obligations related to CAGC or operation of CAGC
prior to the Closing Date, except as disclosed herein (up to the maximum agreed
to herein).
SECTION 3.7
Compliance with Applicable Laws. CAGC is not in violation of,
or, to the knowledge of CAGC or the Seller, is not under investigation with
respect to or has not been given notice or has not been charged with the
violation of any Law of a governmental agency, except for violations which
individually or in the aggregate do not have a Company Material Adverse Effect.
SECTION 3.8
Brokers. No broker, finder or investment banker is entitled
to any brokerage, finder's or other fee or commission in connection with the
transactions contemplated by this Agreement based upon arrangements made by or
on behalf of CAGC or the Seller.
SECTION 3.9
SEC Requirements. The Purchaser acknowledges that CAGC is a
publicly held company and that the Purchaser has received from the Company
reports with the Securities and Exchange Commission and with the NASD.
SECTION 3.10
Litigation. To the knowledge of CAGC and the Seller, no litigation, claim, or
other proceeding before any court or governmental agency is pending or
threatened against CAGC.
SECTION 3.11
Full Disclosure. No representation or warranty made by CAGC
or the Seller in this Agreement and no certificate or document furnished or to
be furnished to the Purchaser pursuant to this Agreement contains or will
contain any untrue statement of a material fact, or omits or will omit to state
a material fact necessary to make the statements contained herein or therein not
misleading.
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF THE PURCHASER
5
The Purchaser represents and warrants to the Seller (which
warranties and representations shall survive the Closing regardless of what
examinations, inspections, audits and other investigations The Seller has
heretofore made or may hereinafter make with respect to such warranties and
representations) as follows:
SECTION 4.1
No Conflict; Required Filings and Consents. The execution and
delivery of this Agreement by the Purchaser does not, and the performance by the
Purchaser of its obligations hereunder will not conflict with, breach or violate
any Laws in effect as of the date of this Agreement and applicable to the
Purchaser.
SECTION 4.2
Brokers. No broker, finder or investment banker is entitled
to any brokerage, finder's or other fee or commission in connection with the
transactions contemplated by this Agreement based upon arrangements made by or
on behalf of the Purchaser.
SECTION 4.3
Full Disclosure. No representation or warranty made by the
Purchaser in this Agreement and no certificate or document furnished or to be
furnished to CAGC or the Seller pursuant to this Agreement contains or will
contain any untrue statement of a material fact, or omits or will omit to state
a material fact necessary to make the statements contained herein or therein not
misleading.
ARTICLE V CONDITIONS PRECEDENT TO SELLER'S OBLIGATIONS
The obligation of the Seller to consummate the transactions contemplated
hereby shall be subject to the fulfillment, on or prior to Closing Date, of the
following conditions:
SECTION 5.1
No Termination. This Agreement shall not have been terminated pursuant to
Article 7 hereof.
SECTION 5.2
Representations True and Correct. The representations and
warranties of the Purchaser contained in this Agreement shall be true and
correct in all material respects on and as of the Closing Date with the same
force and effect as if made on as of the Closing Date.
SECTION 5.3
6
Compliance with Covenants. The Purchaser shall have performed
and complied in all material respects with all covenants, agreements, and
conditions required by this Agreement to be performed or complied by it prior to
or at the Closing Date.
SECTION 5.4
No Adverse Proceedings. On the Closing Date, no action or
proceeding shall be pending by any public authority or individual or entity
before any court or administrative body to restrain, enjoin, or otherwise
prevent the consummation of this Agreement or the transactions contemplated
hereby or to recover any damages or obtain other relief as a result of the
transactions proposed hereby.
ARTICLE VI CONDITIONS PRECEDENT TO PURCHASER'S OBLIGATIONS
The obligation of the Purchaser to consummate the transactions contemplated
hereby shall be subject to the fulfillment, on or prior to Closing Date unless
specified otherwise, of the following conditions:
SECTION 6.1
No Termination. This Agreement shall not have been terminated pursuant to
Article 7 hereof.
SECTION 6.2
Representations True and Correct. The representations and
warranties of CAGC and the Seller contained in this Agreement shall be true and
correct in all material respects on and as of the Closing Date with the same
force and effect as if made on as of the Closing Date.
SECTION 6.3
Compliance with Covenants. CAGC and the Seller shall have
performed and complied in all material respects with all covenants, agreements,
and conditions required by this Agreement herein attached to the
Agreement to be performed or complied by it prior to or at the Closing Date.
SECTION 6.4
No Adverse Proceedings. On the Closing Date, no action or
proceeding shall be pending by any public authority or individual or entity
before any court or administrative body to restrain, enjoin, or otherwise
prevent the consummation of this Agreement or the transactions contemplated
hereby or to recover any damages or obtain other relief as a result of the
transactions proposed hereby.
ARTICLE VII TERMINATION, AMENDMENT AND WAIVER
SECTION 7.1
7
Termination. This Agreement may be terminated at any time prior to the
Closing Date:
(a)
by mutual written
consent of the Purchaser and the Seller;
(b)
by the Seller upon a
material breach of any representation, warranty, covenant or agreement on the
part of the Purchaser set forth in this Agreement, or by the Purchaser upon a
material breach of any representation, warranty, covenant or agreement on the
part of CAGC or the Seller set forth in this Agreement, or if any representation
or warranty of CAGC or The Seller or the Purchaser, respectively, shall have
become untrue, in either case such that any of the conditions set forth in
Article V or Article VI hereof would not be satisfied (a "Terminating Breach"),
and such breach shall, if capable of cure, not have been cured within ten (10)
days after receipt by the party in breach of a notice from the non-breaching
party setting forth in detail the nature of such breach;
(c)
by either the Seller or the
Purchaser, if there shall be any court order which has become final and non
applicable, except if the party seeking to terminate this Agreement pursuant to
this Section 8.1
(d)
has not
complied with its obligations under Section 6 or 7 respectively; or
SECTION 7.2
Effect of Termination. In the event of the termination of
this Agreement pursuant to Section 7.1 hereof, there shall be no liability on
the party of CAGC , the Seller or the Purchaser or any of their respective
officers, directors, agents or other representatives and all rights and
obligations of any party hereto shall cease, except as expressed herein.
SECTION 7.3
Amendment. This Agreement may be amended by the parties hereto any time prior
to the Closing Date by an instrument in writing signed by the parties hereto.
SECTION 7.4
Waiver. At any time prior to the Closing Date, the Seller or the Purchaser,
as appropriate, may:
(a)
extend the time for
the performance of any of the obligations or other acts of other party or;
(b)
waive any inaccuracies in the
representations and warranties contained herein or in any document delivered
pursuant hereto which have been made to it or them; or
(c)
waive compliance with any of
the agreements or conditions contained herein for its or their benefit. Any such
extension or waiver shall be valid only if set forth in an instrument in writing
signed by the party or parties to be bound hereby.
8
ARTICLE VIII GENERAL PROVISIONS
SECTION 8.1
Transaction Costs. Except as otherwise provided herein, each
of the parties shall pay all of his or its costs and expenses (including
attorney fees and other legal costs and expenses and accountants' fees and other
accounting costs and expenses) incurred by that party in connection with this
Agreement.
SECTION 8.2
Indemnification. The Seller agrees to defend and hold the
Purchaser and CAGC (following the Closing Date) and its officers and directors
harmless against and in respect of any and all claims, demands, losses, costs,
expenses, obligations, liabilities or damages, including interest, penalties and
reasonable attorney's fees, that it shall incur or suffer, which arise out of,
result from or relate to any breach of this Agreement or failure by the Seller
to perform with respect to any of its representations, warranties or covenants
contained in this Agreement or in any exhibit or other instrument furnished or
to be furnished under this Agreement.
SECTION 8.3
Indemnification. The Purchaser agrees to defend and hold the
Seller harmless against and in respect of any and all claims, demands, losses,
costs, expenses, obligations, liabilities or damages, including interest,
penalties and reasonable attorney's fees, that it shall incur or suffer, which
arise out of, result from or relate to any breach of this Agreement or failure
by the Purchaser to perform with respect to any of its representations,
warranties or covenants contained in this Agreement or in any exhibit or other
instrument furnished or to be furnished under this Agreement.
SECTION 8.4
Notices. All notices and other communications hereunder shall be in writing
and shall be deemed to have been given
(i)
on the date they are delivered if
delivered in person;
(ii) on the date initially received if delivered by facsimile transmission
followed by registered or certified mail confirmation;
(iii) on the date delivered by an overnight courier service; or
(iv) on the third business day after it is mailed by registered or certified
mail, return receipt requested with postage and other fees prepaid, to the
addresses provided by each party to the other parties.
SECTION 8.5
9
Headings. The table of contents and headings contained in this Agreement are
for reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
SECTION 8.6
Severability. If any term or other provision of this
Agreement is invalid, illegal or incapable of being enforced by any rule of aw
or public policy, all other conditions and provisions of this Agreement hall
nevertheless remain in full force and effect so long as the economic or legal
substance of the transactions contemplated hereby is not affected in any manner
materially adverse to any party. Upon such determination that any such term or
other provision is invalid, illegal or incapable of being enforced, the parties
hereto shall negotiate in good faith to modify this Agreement so as to effect
the original intent of the parties as closely as possible in an acceptable
manner to the end that the transactions contemplated hereby are fulfilled to the
extent possible.
SECTION 8.7
Entire Agreement. This Agreement (together with the
Schedules, Exhibit, certificates and documents referred to herein) constitute
the entire agreement of the parties and supersede all prior agreements and
undertakings, both written and oral, between the parties, or any of them, with
respect to the subject matter hereof.
SECTION 8.8
Binding Effect. All the terms and provisions of this
Agreement, whether so expressed or not, shall be binding upon, inure to the
benefit of, and be enforceable by the parties and their respective
administrators, executors, legal representatives, heirs, successors and
assignees.
SECTION 8.9
Preparation of Agreement. This Agreement shall not be
construed more strongly against any party regardless of who is responsible for
its preparation. The parties acknowledge each contributed and is equally
responsible for its preparation.
SECTION 8.10
Governing Law. This Agreement shall be governed by, and construed in
accordance with, the laws of the State of Delaware, without giving effect to
applicable principles of conflicts of law.
SECTION 8.11
Preparation and Filing of Tax Returns and Securities and
Exchange Commission filings. CAGC shall reasonably assist and cooperate with the
Purchaser in the preparation of all the federal, state and local tax returns of
CAGC and all filings with the Securities and Exchange Commission after the
10
Closing Date due after the Closing Date relating to periods
prior to the Closing Date. After the Closing Date, the decision on whether to
file short period returns up to the Closing Date or for a period other than CAGC
's current consolidated tax years, shall be made at the sole discretion of the
Purchaser.
SECTION 8.12
Further Assurances, Cooperation. Each party shall, upon
reasonable request by the other party, execute and deliver any additional
documents necessary or desirable to complete the merger pursuant to and in the
manner contemplated by this agreement. The parties hereto agree to cooperate and
use their respective best efforts to consummate the transactions contemplated by
this agreement.
SECTION 8.13
Survival. The representations, warranties, covenants and agreements made
herein shall survive the Closing of the transaction contemplated hereby.
SECTION 8.14
Third Parties Nothing in this Agreement, whether express or
implied, is intended to confer any rights or remedies under or by reason of this
Agreement on any persons other than the parties hereto and their respective
administrators, executors, legal representatives, heirs, successors and
assignees. Nothing in this Agreement is intended to relieve or discharge the
obligation or liability of any third persons to any party to this Agreement, nor
shall any provision give any third persons any right of subrogation or action
over or against any party to this Agreement.
SECTION 8.15
Failure or Indulgence Not Waiver; Remedies Cumulative. No
failure or delay on the part of any party hereto in the exercise of any right
hereunder shall impair such right or be construed to be a waiver of, or
acquiescence in, any breach of any representation, warranty, covenant or
agreement herein, nor shall nay single or partial exercise of any such right
preclude other or further exercise thereof or of any other right. All rights and
remedies existing under this Agreement are cumulative to, and not exclusive of,
any rights or remedies otherwise available.
SECTION 8.16
Counterparts. This Agreement may be executed in one or more
counterparts, and by the different parties hereto in separate counterparts, each
of which when executed shall be deemed to be an original, but all of which taken
together shall constitute one and the same agreement.
IN WITNESS WHEREOF,
11
The
Purchaser, The Seller, and CAGC have as of the date first written above
executed this Agreement. |
|
|
|
PURCHASER |
CHINA AGRITECH, INC. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
By: Xx
Xxxxx |
By: Xx Xxxxx |
|
|
Title: President |
|
|
|
|
|
|
SELLER |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
By: China
Tailong Group Ltd. |
|
Name: Xx
Xxxxx |
|
Title: CEO |
|
|
12