SHARE PURCHASE AGREEMENT
 
THIS AGREEMENT is effective the20thday of December, 2006 AMONG:
 
AGFEED INDUSTRIES INC., (“AgFeed”) a corporation formed pursuant to the laws of
the State of Nevada and having an office for business located at 1095 Qing Lan
Avenue, Economic and Technical Development Zone, Nan Chang City, Jiangxi
Province, China 330013
 

 
 
AND:
 
GUANGXI HUIJIE SCI. & TECH. FEED CO, LTD., ("Guangxi Huijie") a company formed
pursuant to the laws of the People’s Republic of China and having an office for
business located at South Zone, Coastal Industrial Park, Liangqing District,
Nanning, Guangxi Province, China
 

 
AND:
 
The shareholders of Guangxi Huijie, the name of each of whom is set forth on the
signature page of this Agreement (the “Guangxi Huijie Shareholders”)

FACTS:

A. The Guangxi Huijie Shareholders own 3,000,000 registered shares of Guangxi
Huijie, constituting 100% of the presently issued and outstanding Guangxi Huijie
Shares;
 
B. AgFeed is a reporting company whose common stock is quoted on the NASD
“Bulletin Board”; and
 
C. The respective Boards of Directors of AgFeed, and Guangxi Huijie deem it
advisable and in the best interests of AgFeed and Guangxi Huijie that Guangxi
Huijie become a wholly-owned subsidiary of AgFeed (the "Acquisition") pursuant
to this Agreement.
 
NOW THEREFORE in consideration of the premises and the mutual covenants,
agreements, representations and warranties contained herein, and other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereto hereby agree as follows:

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ARTICLE 1.
DEFINITIONS AND INTERPRETATION:

 

 
1.1.
In this Agreement the following terms will have the following meanings:

 
1.1.1. “Acquisition” means the Acquisition, at the Closing, of Guangxi Huijie by
AgFeed pursuant to this Agreement;
 
1.1.2. “Agreement” means this share purchase agreement among AgFeed, Guangxi
Huijie and the Guangxi Huijie Shareholders;
 
1.1.3. “Closing” means the completion, on the Closing Date, of the transactions
contemplated hereby in accordance with ARTICLE 14 hereof;
 
1.1.4. “Closing Date” means the day on which all conditions precedent to the
completion of the transaction as contemplated hereby have been satisfied or
waived;
 
1.1.5. “Guangxi Huijie Accounts Payable and Liabilities” means all accounts
payable and liabilities of Guangxi Huijie, due and owing or otherwise
constituting a binding obligation of Guangxi Huijie (other than a Guangxi Huijie
Material Contract) as of September 30, 2006 as set forth in Schedule 1.1.5
hereto;
 
1.1.6. “Guangxi Huijie Accounts Receivable” means all accounts receivable and
other debts owing to Guangxi Huijie as of September 30, 2006 as set forth in
Schedule 1.1.6 hereto;
 
1.1.7. “Guangxi Huijie Assets” means all the property and assets of the Guangxi
Huijie Business of every kind and description wheresoever situated including,
without limitation, Guangxi Huijie Equipment, Guangxi Huijie Inventory, Guangxi
Huijie Material Contracts, Guangxi Huijie Accounts Receivable, Guangxi Huijie
Cash, Guangxi Huijie Intangible Assets and Guangxi Huijie Goodwill, and all
credit cards, charge cards and banking cards issued to Guangxi Huijie;
 
1.1.8. “Guangxi Huijie Bank Accounts” means all of the bank accounts, lock boxes
and safety deposit boxes of Guangxi Huijie or relating to the Guangxi Huijie
Business as set forth in Schedule 1.1.8 hereto;
 
1.1.9. “Guangxi Huijie Business” means all aspects of the business conducted by
Guangxi Huijie;
 
1.1.10. “Guangxi Huijie Cash” means all cash on hand or on deposit to the credit
of Guangxi Huijie on the Closing Date;
 
1.1.11. “Guangxi Huijie Debt to Related Parties” means the debts owed by Guangxi
Huijie to the Guangxi Huijie Shareholders or to any family member thereof, or to
any affiliate, director or officer of Guangxi Huijie or the Guangxi Huijie
Shareholders as described in Schedule 1.1.11;
 
1.1.12. “Guangxi Huijie Equipment” means all machinery, equipment, furniture,
and furnishings used in the Guangxi Huijie Business, including, without
limitation, the items more particularly described in Schedule 1.1.12 hereto;

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1.1.13. “Guangxi Huijie Financial Statements” means, collectively, the audited
financial statements of Guangxi Huijie for the two year period ended December
31, 2005, together with the reviewed financial statements for the nine month
period ended September 30, 2006, true copies of which are attached as Schedule
1.1.13 hereto;
 
1.1.14. “Guangxi Huijie Goodwill” means the goodwill of the Guangxi Huijie
Business together with the exclusive right of AgFeed to represent itself as
carrying on the Guangxi Huijie Business in succession of Guangxi Huijie subject
to the terms hereof, and the right to use any words indicating that the Guangxi
Huijie Business is so carried on including the right to use the name “Guangxi
Huijie” or “Guangxi Huijie Sci. & Tech. Feed Co, Ltd.” or any variation thereof
as part of the name of or in connection with the Guangxi Huijie Business or any
part thereof carried on or to be carried on by Guangxi Huijie, the right to all
corporate, operating and trade names associated with the Guangxi Huijie
Business, or any variations of such names as part of or in connection with the
Guangxi Huijie Business, all telephone listings and telephone advertising
contracts, all lists of customers, books and records and other information
relating to the Guangxi Huijie Business, all necessary licenses and
authorizations and any other rights used in connection with the Guangxi Huijie
Business;
 
1.1.15. “Guangxi Huijie Insurance Policies” means the public liability insurance
and insurance against loss or damage to Guangxi Huijie Assets and the Guangxi
Huijie Business as described in Schedule 1.1.15 hereto;
 
1.1.16. “Guangxi Huijie Intangible Assets” means all of the intangible assets of
Guangxi Huijie, including, without limitation, Guangxi Huijie Goodwill, all
trademarks, logos, copyrights, designs, and other intellectual and industrial
property of Guangxi Huijie;
 
1.1.17. “Guangxi Huijie Inventory” means all inventory and supplies of the
Guangxi Huijie Business as of September 30, 2006 as set forth in Schedule 1.1.17
hereto;
 
1.1.18. “Guangxi Huijie Material Contracts” means the burden and benefit of and
the right, title and interest of Guangxi Huijie in, to and under all trade and
non-trade contracts, engagements or commitments, whether written or oral, to
which including, without limitation Guangxi Huijie is entitled in connection
with the Guangxi Huijie Business whereunder Guangxi Huijie is obligated to pay
or entitled to receive the sum of $10,000 or more including, without limitation,
any pension plans, profit sharing plans, bonus plans, loan agreements, security
agreements, indemnities and guarantees, any agreements with employees, lessees,
licensees, managers, accountants, suppliers, agents, distributors, officers,
directors, attorneys or others which cannot be terminated without liability on
not more than one month's notice, and, including without limitation, those
contracts listed in Schedule 1.1.18 hereto;
 
1.1.19. “Guangxi Huijie Related Party Debts” means the debts owed by the Guangxi
Huijie Shareholders or by any family member thereof, or by any affiliate,
director or officer of Guangxi Huijie or the Guangxi Huijie Shareholders, to
Guangxi Huijie as described in Schedule 1.1.19 hereto;
 
1.1.20. “Guangxi Huijie Shares” means all of the issued and outstanding shares
of Guangxi Huijie's equity stock.

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1.1.21. “Place of Closing” means the offices of AgFeed at 1095 Qing Lan Avenue,
Economic and Technical Development Zone, Nan Chang City, Jiangxi Province, China
330013, or such other place as AgFeed and Guangxi Huijie may mutually agree
upon;
 
Page 4 of 19

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1.1.22. “Other Terms” Any other terms defined within the text of this Agreement
will have the meanings so ascribed to them.
 

 
1.2.
Captions and Section Numbers: The headings and section references in this
Agreement are for convenience of reference only and do not form a part of this
Agreement and are not intended to interpret, define or limit the scope, extent
or intent of this Agreement or any provision thereof.

 

 
1.3.
Section References and Schedules: Any reference to a particular “Article”,
“section”, “paragraph”, “clause” or other subdivision is to the particular
Article, section, clause or other subdivision of this Agreement and any
reference to a Schedule by letter will mean the appropriate Schedule attached to
this Agreement and by such reference the appropriate Schedule is incorporated
into and made part of this Agreement. The Schedules to this Agreement are as
follows:

Schedule 1.1.5
Guangxi Huijie Accounts Payable and Liabilities
Schedule 1.1.6
Guangxi Huijie Accounts Receivable
Schedule 1.1.8
Guangxi Huijie Bank Accounts
Schedule 1.1.11
Guangxi Huijie Debt to Related Parties
Schedule 1.1.12
Guangxi Huijie Equipment
Schedule 1.1.13
Guangxi Huijie Financial Statements
Schedule 1.1.15
Guangxi Huijie Insurance Policies
Schedule 1.1.17
Guangxi Huijie Inventory
Schedule 1.1.18
Guangxi Huijie Material Contracts
Schedule 1.1.19
Guangxi Huijie Related Party Debt

 

 
1.4.
Severability of Clauses If any part of this Agreement is declared or held to be
invalid for any reason, such invalidity will not affect the validity of the
remainder which will continue in full force and effect and be construed as if
this Agreement had been executed without the invalid portion, and it is hereby
declared the intention of the parties that this Agreement would have been
executed without reference to any portion which may, for any reason, be
hereafter declared or held to be invalid.

 
ARTICLE 2.
THE ACQUISITION

 
2.1.
Sale of Shares - Purchase Price: Each of the Guangxi Huijie Shareholders hereby
agrees to sell to AgFeed the Guangxi Huijie Shares owned by such Shareholder in
exchange for a proportionate share of ¥8,600,000.00 RMB to be delivered on the
Closing Dateby Agfeed and to transfer to AgFeed on the Closing Date a 100%
undivided interest in and to such Guangxi Huijie Shares free from all liens,
mortgages, charges, pledges, encumbrances or other burdens with all rights now
or thereafter attached thereto.

 

 
2.2.
Allocation of Consideration: The Purchase Price shall be allocated to the
Guanghai Huijie Shareholders, as set forth on Schedule 2.1 attached hereto and
made a part hereof.

 
 
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ARTICLE 3. REPRESENTATIONS AND WARRANTIES OF AGFEED: AgFeed hereby represents
and warrants to Guangxi Huijie and the Guangxi Huijie Shareholders, with the
intent that Guangxi Huijie and the Guangxi Huijie Shareholders will rely thereon
in entering into this Agreement and in approving and completing the transactions
contemplated hereby, that:
 

 
3.1.
Incorporation. AgFeed is a corporation duly incorporated and validly subsisting
under the laws of the State of Nevada, and is in good standing with the office
of the Secretary of State for the State of Nevada;

 

 
3.2.
Corporate Capacity: AgFeed has the corporate power, capacity and authority to
own the AgFeed Assets and to enter into and carry out the terms of this
Agreement;

 

 
3.3.
Execution and Performance of Agreement: The execution and delivery of this
Agreement by AgFeed and the completion of the transactions contemplated hereby,
have been duly and validly authorized by all necessary corporate action on the
part of AgFeed.

 
ARTICLE 4.
REPRESENTATIONS AND WARRANTIES OF THE GUANGXI HUIJIE SHAREHOLDERS: The Guangxi
Huijie Shareholders hereby jointly and severally represent and warrant to
AgFeed, with the intent that it will rely thereon in entering into this
Agreement and in approving and completing the transactions contemplated hereby,
that:

 

 
4.1.
Guangxi Huijie- Company Status and Capacity

 
4.1.1.  Formation. Guangxi Huijie is a company duly formed and validly
subsisting under the laws of the People’s Republic of China;
 
4.1.2.  Carrying on Business. Guangxi Huijie carries on the Guangxi Huijie
Business primarily in the People’s Republic of China and does not carry on any
material business activity in any other jurisdiction. Guangxi Huijie is duly
authorized to carry on the Guangxi Huijie Business in the People’s Republic of
China. The nature of the Guangxi Huijie Business does not require Guangxi
Huijieto register or otherwise be qualified to carry on business in any other
jurisdiction;
 
4.1.3. Legal Capacity. Guangxi Huijie has the legal power, capacity and
authority to enter into and complete this Agreement;
 

 
4.2.
 Guangxi Huijie- Capitalization

 
4.2.1. Authorized Capital. The authorized capital of Guangxi Huijie is as stated
in its formation documents;
 
4.2.2. Ownership of Guangxi Huijie Shares. The registered, issued and
outstanding share capital of Guangxi Huijie on Closing shall be validly issued
and outstanding as fully paid and non-assessable shares. The Guangxi Huijie
Shareholders will be at Closing the registered and beneficial owners of 100% of
the outstanding Guangxi Huijie Shares. The Guangxi Huijie Shares owned by the
Guangxi Huijie Shareholders will on Closing be free and clear of any and all
liens, charges, pledges, encumbrances, restrictions on transfer and adverse
claims whatsoever.
 
4.2.3. No Option, Warrant or Other Right. No person, firm or corporation has any
agreement, option, warrant, preemptive right or any other right capable of
becoming an agreement, option, warrant or right for the acquisition of Guangxi
Huijie Shares held by the Guangxi Huijie Shareholders or for the purchase,
subscription or issuance of any of the unissued shares in the capital of Guangxi
Huijie;

 

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4.2.4. No Restrictions. There are no restrictions on the transfer, sale or other
disposition of Guangxi Huijie Shares contained in the charter documents of
Guangxi Huijie or under any agreement.
 

 
4.3.
Guangxi Huijie- Records and Financial Statements

 
4.3.1. Charter Documents. The charter documents of Guangxi Huijie have not been
altered since its formation date, except as filed in the record books of Guangxi
Huijie
 
4.3.2. Minute Books. The minute books of Guangxi Huijie are complete and each of
the minutes contained therein accurately reflect the actions that were taken at
a duly called and held meeting or by consent without a meeting. All actions by
Guangxi Huijie which required director or shareholder approval are reflected in
the corporate minute books of Guangxi Huijie. Guangxi Huijieis not in violation
or breach of, or in default with respect to, any term of its Certificate of
Incorporation (or other charter documents) or by-laws.
 
4.3.3. Guangxi Huijie Financial Statements. The Guangxi Huijie Financial
Statements present fairly, in all material respects, the assets and liabilities
(whether accrued, absolute, contingent or otherwise) of Guangxi Huijie as of the
date thereof, and the sales and earnings of the Guangxi Huijie Business during
the periods covered thereby, and have been prepared in conformity with generally
accepted accounting principles consistently applied;
 
4.3.4. Guangxi Huijie Accounts Payable and Liabilities. There are no
liabilities, contingent or otherwise, of Guangxi Huijie which are not disclosed
in Schedule 1.1.5 hereto or reflected in the Guangxi Huijie Financial Statements
except those incurred in the ordinary course of business since the date of the
said schedule, and Guangxi Huijie has not guaranteed or agreed to guarantee any
debt, liability or other obligation of any person, firm or corporation. Without
limiting the generality of the foregoing, all accounts payable and liabilities
of Guangxi Huijie as of September 30, 2006 are described in Schedule 1.1.5
hereto;
 
4.3.5. Guangxi Huijie Accounts Receivable. All the Guangxi Huijie Accounts
Receivable result from bona fide business transactions and services actually
rendered without, to the knowledge and belief of the Guangxi Huijie
Shareholders, any claim by the obligor for set-off or counterclaim. Without
limiting the generality of the foregoing, all accounts receivable of Guangxi
Huijie as of September 30, 2006, are described in Schedule 1.1.6 hereto;
 
4.3.6.  Guangxi Huijie Bank Accounts. All of the Guangxi Huijie Bank Accounts,
their location, numbers and the authorized signatories thereto are as set forth
in Schedule 1.1.8 hereto;
 
4.3.7. No Debt to Related Parties. Except as disclosed in Schedule 1.1.11
hereto, Guangxi Huijie is not and on Closing will not be, indebted to the
Guangxi Huijie Shareholders nor to any family member thereof, nor to any
affiliate, director or officer of Guangxi Huijie or the Guangxi Huijie
Shareholders except accounts payable on account of bona fide business
transactions of Guangxi Huijie incurred in the normal course of Guangxi Huijie
Business, including employment agreements with the Guangxi Huijie Shareholders,
none of which are more than 30 days in arrears;

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4.3.8. No Related Party Debt to Guangxi Huijie. Except as set forth on Schedule
1.1.19 hereto, no Guangxi Huijie Shareholder nor any director, officer or
affiliate of Guangxi Huijie is now indebted to or under any financial obligation
to Guangxi Huijie on any account whatsoever, except for advances on account of
travel and other expenses not exceeding $5,000 in total;
 
4.3.9. No Dividends. No dividends or other distributions on any shares in the
capital of Guangxi Huijie have been made, declared or authorized since the date
of the Guangxi Huijie Financial Statements;
 
4.3.10. No Payments. No payments of any kind have been made or authorized since
the date of the Guangxi Huijie Financial Statements to or on behalf of the
Guangxi Huijie Shareholders or to or on behalf of officers, directors,
shareholders or employees of Guangxi Huijie nor under any management agreements
with Guangxi Huijie, except payments made in the ordinary course of business and
at the regular rates of salary or other remuneration payable to them;
 
4.3.11. No Pension Plans. There are no pension, profit sharing, group insurance
or similar plans or other deferred compensation plans affecting Guangxi Huijie,
except as set forth in the Guangxi Huijie Financial Statements;
 
4.3.12. No Adverse Events. Since the date of the Guangxi Huijie Financial
Statements:
 
4.3.12.1. there has not been any material adverse change in the financial
position or condition of Guangxi Huijie, its liabilities or the Guangxi Huijie
Assets or any damage, loss or other change in circumstances materially and
adversely affecting Guangxi Huijie, the Guangxi Huijie Business or the Guangxi
Huijie Assets or Guangxi Huijie’s right to carry on the Guangxi Huijie Business,
other than changes in the ordinary course of business,
 
4.3.12.2.  there has not been any damage, destruction, loss or other event
(whether or not covered by insurance) materially and adversely affecting Guangxi
Huijie, the Guangxi Huijie Business or the Guangxi Huijie Assets,
 
4.3.12.3.  there has not been any material increase in the compensation payable
or to become payable by Guangxi Huijie to the Guangxi Huijie Shareholders or to
any of Guangxi Huijie's officers, employees or agents or any bonus, payment or
arrangement made to or with any of them,
 
4.3.12.4. the Guangxi Huijie Business has been and continues to be carried on in
the ordinary course,
 
4.3.12.5. Guangxi Huijie has not waived or surrendered any right of material
value,
 
4.3.12.6. Guangxi Huijie has not discharged or satisfied or paid any lien or
encumbrance or obligation or liability other than current liabilities in the
ordinary course of business, and
 
4.3.12.7. no capital expenditures in excess of $10,000 individually or $30,000
in total have been authorized or made;

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4.4.
. Guangxi Huijie- Income Tax Matters

 
4.4.1.  Tax Returns. All tax returns and reports of Guangxi Huijie required by
law to be filed have been filed and are true, complete and correct, and any
taxes payable in accordance with any return filed by Guangxi Huijie or in
accordance with any notice of assessment or reassessment issued by any taxing
authority have been so paid;
 
4.4.2. Current Taxes. Adequate provisions have been made for taxes payable for
the current period for which tax returns are not yet required to be filed and
there are no agreements, waivers, or other arrangements providing for an
extension of time with respect to the filing of any tax return by, or payment
of, any tax, governmental charge or deficiency by Guangxi Huijie. Guangxi Huijie
is not aware of any contingent tax liabilities or any grounds which would prompt
a reassessment including aggressive treatment of income and expenses in filing
earlier tax returns;
 

 
4.5.
. Guangxi Huijie- Applicable Laws and Legal Matters

 
4.5.1.  Licenses. Guangxi Huijie holds all licenses and permits as may be
requisite for carrying on the Guangxi Huijie Business in the manner in which it
has heretofore been carried on, which licenses and permits have been maintained
and continue to be in good standing except where the failure to obtain or
maintain such licenses or permits would not have a material adverse effect on
the Guangxi Huijie Business;
 
4.5.2.  Applicable Laws. Guangxi Huijie has not been charged with or received
notice of breach of any laws, ordinances, statutes, regulations, by-laws, orders
or decrees to which it is subject or which applies to it the violation of which
would have a material adverse effect on the Guangxi Huijie Business, and, to the
knowledge of the Guangxi Huijie Shareholders, Guangxi Huijie is not in breach of
any laws, ordinances, statutes, regulations, by-laws, orders or decrees the
contravention of which would result in a material adverse effect on the Guangxi
Huijie Business;
 
4.5.3. Pending or Threatened Litigation. There is no material litigation or
administrative or governmental proceeding pending or threatened against or
relating to Guangxi Huijie, the Guangxi Huijie Business, or any of the Guangxi
Huijie Assets, nor do the Guangxi Huijie Shareholders have any knowledge of any
act or omission of Guangxi Huijie that would form any basis for any such action
or proceeding;
 
4.5.4.  No Bankruptcy. Guangxi Huijie has not made any voluntary assignment or
proposal under applicable laws relating to insolvency and bankruptcy and no
bankruptcy petition has been filed or presented against Guangxi Huijie and no
order has been made or a resolution passed for the winding-up, dissolution or
liquidation of Guangxi Huijie;
 
4.5.5.  Labor Matters. Guangxi Huijie is not party to any collective agreement
relating to the Guangxi Huijie Business with any labor union or other
association of employees and no part of the Guangxi Huijie Business has been
certified as a unit appropriate for collective bargaining or, to the knowledge
of the Guangxi Huijie Shareholders, has made any attempt in that regard;
 
4.5.6.  Environmental Compliance. Guangxi Huijie has at all times had and now
has all environmental approvals, consents, licenses, permits and orders required
to conduct the businesses in which it has been or is now engaged. Guangxi Huijie
has at all times been and is now in compliance in all material respects with all
applicable environmental laws. There are no claims, actions, suits or
proceedings pending or, to Guangxi Huijie’s Knowledge, threatened against or
involving Guangxi Huijie, or any assets of Guangxi Huijie, under any of the
environmental laws (whether by reason of any failure to comply with any of the
environmental laws or otherwise). No decree, judgment or order of any kind under
any of the environmental laws has been entered against Guangxi Huijie. There are
no facts, conditions or situations, whether now or heretofore existing, that
could form the basis for any claim against, or result in any liability of,
Guangxi Huijie under any of the environmental laws; and

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4.5.7.  Finder's Fees. Guangxi Huijie is not a party to any agreement which
provides for the payment of finder's fees, brokerage fees, commissions or other
fees or amounts which are or may become payable to any third party in connection
with the execution and delivery of this Agreement and the transactions
contemplated herein.
 

 
4.6.
 Execution and Performance of Agreement

4.6.1. Authorization and Enforceability. The execution and delivery of this
Agreement by Guangxi Huijie and the completion of the transactions contemplated
hereby, have been duly and validly authorized by all necessary corporate action
on the part of Guangxi Huijie;
 
4.6.2. No Violation or Breach. The execution and performance of this Agreement
will not:
 
4.6.2.1. violate the charter documents of Guangxi Huijie or result in any breach
of, or default under, any loan agreement, mortgage, deed of trust, or any other
agreement to which Guangxi Huijie is a party,
 
4.6.2.2. give any person any right to terminate or cancel any agreement
including, without limitation, Guangxi Huijie Material Contracts, or any right
or rights enjoyed by Guangxi Huijie,
 
4.6.2.3. result in any alteration of Guangxi Huijie's obligations under any
agreement to which Guangxi Huijie is a party including, without limitation, the
Guangxi Huijie Material Contracts,
 
4.6.2.4. result in the creation or imposition of any lien, encumbrance or
restriction of any nature whatsoever in favor of a third party upon or against
the Guangxi Huijie Assets,
 
4.6.2.5. result in the imposition of any tax liability to Guangxi Huijie
relating to Guangxi Huijie Assets or the Guangxi Huijie Shares, or
 
4.6.2.6. violate any court order or decree to which Guangxi Huijie is subject.
 

 
4.7.
 Guangxi Huijie Assets - Ownership and Condition

 
4.7.1.  Business Assets. The Guangxi Huijie Assets comprise all of the property
and assets of the Guangxi Huijie Business, and neither the Guangxi Huijie
Shareholders nor any other person, firm or corporation owns any assets used by
Guangxi Huijie in operating the Guangxi Huijie Business, whether under a lease,
rental agreement or other arrangement, other than as disclosed in Schedules
1.1.12 or 1.1.18 hereto;

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4.7.2. Title. Guangxi Huijie is the legal and beneficial owner of the Guangxi
Huijie Assets, free and clear of all mortgages, liens, charges, pledges,
security interests, encumbrances or other claims whatsoever, save and except as
disclosed in Schedules 1.1.12 or 1.1.18 hereto;
 
4.7.3. No Option. No person, firm or corporation has any agreement or option or
a right capable of becoming an agreement for the purchase of any of the Guangxi
Huijie Assets;
 
4.7.4. Guangxi Huijie Insurance Policies. Guangxi Huijie maintains the public
liability insurance and insurance against loss or damage to the Guangxi Huijie
Assets and the Guangxi Huijie Business as described in Schedule 1.1.15 hereto;
 
4.7.5.Guangxi Huijie Material Contracts. The Guangxi Huijie Material Contracts
listed in Schedule 1.1.18 constitute all of the material contracts of Guangxi
Huijie;
 
4.7.6. No Default. There has not been any default in any material obligation of
Guangxi Huijie to be performed under any of Guangxi Huijie Material Contracts,
each of which is in good standing and in full force and effect and unamended
(except as disclosed in Schedule 1.1.18), and Guangxi Huijie is not aware of any
default in the obligations of any other party to any of the Guangxi Huijie
Material Contracts;
 
4.7.7. No Compensation on Termination. There are no agreements, commitments or
understandings relating to severance pay or separation allowances on termination
of employment of any employee of Guangxi Huijie. Guangxi Huijie is not obliged
to pay benefits or share profits with any employee after termination of
employment except as required by law;
 

 
4.8.
Guangxi Huijie Assets - Guangxi Huijie Equipment: The Guangxi Huijie Equipment
has been maintained in a manner consistent with that of a reasonably prudent
owner and such equipment is in good working condition;

 
4.9. Guangxi Huijie Assets - Guangxi Huijie Goodwill and Other Assets: Guangxi
Huijie carries on the Guangxi Huijie Business only under the name “Guangxi
Huijie Sci. & Tech. Feed Co, Ltd." and variations thereof and under no other
business or trade names. The Guangxi Huijie Shareholders do not have any
knowledge of any infringement by Guangxi Huijie of any patent, trademark,
copyright or trade secret;
 
4.10. The Business of Guangxi Huijie:
 
4.10.1. Maintenance of Business. Since the date of the Guangxi Huijie Financial
Statements, the Guangxi Huijie Business has been carried on in the ordinary
course and Guangxi Huijie has not entered into any material agreement or
commitment except in the ordinary course; and
 
4.10.2. Subsidiaries. Guangxi Huijie does not have any subsidiaries and does not
otherwise own, directly or indirectly, any shares or interest in any other
corporation, partnership, limited liability company, joint venture or firm.

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ARTICLE 5. NON-MERGER AND SURVIVAL: The representations and warranties of the
Guangxi Huijie Shareholders contained herein will be true at and as of Closing
in all material respects as though such representations and warranties were made
as of such time. Notwithstanding the completion of the transactions contemplated
hereby, the waiver of any condition contained herein (unless such waiver
expressly releases a party from any such representation or warranty) or any
investigation made by AgFeed, the representations and warranties of the Guangxi
Huijie Shareholders shall survive the Closing.
 
ARTICLE 6. INDEMNITY: The Guangxi Huijie Shareholders agree to indemnify and
save harmless AgFeed from and against any and all claims, demands, actions,
suits, proceedings, assessments, judgments, damages, costs, losses and expenses,
including any payment made in good faith in settlement of any claim (subject to
the right of the Guangxi Huijie Shareholders to defend any such claim),
resulting from the breach by any of them of any representation or warranty of
such party made under this Agreement or from any misrepresentation in or
omission from any certificate or other instrument furnished or to be furnished
by Guangxi Huijie or the Guangxi Huijie Shareholders to AgFeed hereunder,
including, without limitation, the existence or assertion against AgFeed of
claims for liabilities of Guangxi Huijie not disclosed in Schedule1.1.5 hereto
or set forth in the Guangxi Huijie Financial Statements.
 
ARTICLE 7.
COVENANTS OF GUANGXI HUIJIE AND THE GUANGXI HUIJIE SHAREHOLDERS

 

 
7.1.
Covenants: Guangxi Huijie and the Guangxi Huijie Shareholders covenant and agree
with AgFeed that they will:

 
7.1.1. Conduct of Business. Until the Closing, conduct the Guangxi Huijie
Business diligently and in the ordinary course consistent with the manner in
which the Guangxi Huijie Business generally has been operated up to the date of
execution of this Agreement;
 
7.1.2. Preservation of Business. Until the Closing, use their best efforts to
preserve the Guangxi Huijie Business and the Guangxi Huijie Assets and, without
limitation, preserve for AgFeed Guangxi Huijie’s relationships with their
suppliers, customers and others having business relations with them;
 
7.1.3. Access. Until the Closing, give AgFeed and its representatives full
access to all of the properties, books, contracts, commitments and records of
Guangxi Huijie relating to Guangxi Huijie, the Guangxi Huijie Business and the
Guangxi Huijie Assets, and furnish to AgFeed and its representatives all such
information as they may reasonably request; and
 
7.1.4. Procure Consents. Until the Closing, take all reasonable steps required
to obtain, prior to Closing, any and all third party consents required to permit
the Acquisition and to preserve and maintain the Guangxi Huijie Assets,
including the Guangxi Huijie Material Contracts, notwithstanding the change in
control of Guangxi Huijie arising from the Acquisition.
 

 
7.2.
Authorization: Guangxi Huijie hereby agrees to authorize and direct any and all
federal, state, municipal, foreign and international governments and regulatory
authorities having jurisdiction respecting Guangxi Huijie to release any and all
information in their possession respecting Guangxi Huijie to AgFeed. Guangxi
Huijie shall promptly execute and deliver to AgFeed any and all consents to the
release of information and specific authorizations which AgFeed reasonably
require to gain access to any and all such information. Guangxi Huijie
Shareholders hereby authorize Mr. Lin Deyuan to execute all certificates or
other representations required to complete the transactions contemplated by this
Agreement.

 

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7.3.
Survival: The covenants set forth in this Article shall survive the Closing for
the benefit of AgFeed.

 
ARTICLE 8.  CONDITIONS PRECEDENT IN FAVOR OF AGFEED
 

 
8.1.
Conditions Precedent to Closing: The obligations of AgFeed to carry out the
transactions contemplated hereby are subject to the fulfillment of each of the
following conditions precedent on or before the Closing:

 
8.1.1. all documents or copies of documents required to be executed and
delivered to AgFeed hereunder will have been so executed and delivered;
 
8.1.2. all of the terms, covenants and conditions of this Agreement to be
complied with or performed by Guangxi Huijie or the Guangxi Huijie Shareholders
at or prior to the Closing will have been complied with or performed;
 
8.1.3. title to the Guangxi Huijie Shares held by the Guangxi Huijie
Shareholders and to the Guangxi Huijie Assets will be free and clear of all
mortgages, liens, charges, pledges, security interests, encumbrances or other
claims whatsoever, save and except as disclosed herein, and the Guangxi Huijie
Shares shall be duly transferred to AgFeed;
 
8.1.4. subject to ARTICLE 9 hereof, there will not have occurred
 
8.1.4.1. any material adverse change in the financial position or condition of
Guangxi Huijie, its liabilities or the Guangxi Huijie Assets or any damage, loss
or other change in circumstances materially and adversely affecting Guangxi
Huijie, the Guangxi Huijie Business or the Guangxi Huijie Assets or Guangxi
Huijie's right to carry on the Guangxi Huijie Business, other than changes in
the ordinary course of business, none of which has been materially adverse, or
 
8.1.4.1.1. any damage, destruction, loss or other event, including changes to
any lawsor statutes applicable to Guangxi Huijieor the Guangxi Huijie
Business(whether or not covered by insurance) materially and adversely affecting
Guangxi Huijie, the Guangxi Huijie Business or the Guangxi Huijie Assets; and
 
8.1.4.1.2. the transactions contemplated hereby shall have been approved by all
regulatory authorities having jurisdiction over the subject matter hereof, if
any.
 

 
8.2.
Waiver by AgFeed: The conditions precedent set out in the preceding section are
inserted for the exclusive benefit of AgFeed and any such condition may be
waived in whole or in part by AgFeed at or prior to the Closing by delivering to
Guangxi Huijie a written waiver to that effect signed by AgFeed. In the event
that the conditions precedent set out in the preceding section are not satisfied
on or before the Closing, AgFeed shall be released from all obligations under
this Agreement.

 

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ARTICLE 9.  CONDITIONS PRECEDENT IN FAVOR OF GUANGXI HUIJIE AND THE GUANGXI
HUIJIE SHAREHOLDERS:
 

 
9.1.
Conditions Precedent to Closing: The obligations of Guangxi Huijie and the
Guangxi Huijie Shareholders to carry out the transactions contemplated hereby
are subject to the fulfillment of each of the following conditions precedent on
or before the Closing:

 
9.1.1. all documents or copies of documents required to be executed and
delivered to Guangxi Huijie hereunder will have been so executed and delivered;
 
9.1.2. all of the terms, covenants and conditions of this Agreement to be
complied with or performed by AgFeed at or prior to the Closing will have been
complied with or performed;
 
9.1.3. the transactions contemplated hereby shall have been approved by all
regulatory authorities having jurisdiction over the subject matter hereof, if
any; and
 

 
9.2.
Waiver by Guangxi Huijie and the Guangxi Huijie Shareholders: The conditions
precedent set out in the preceding section are inserted for the exclusive
benefit of Guangxi Huijie and the Guangxi Huijie Shareholders and any such
condition may be waived in whole or in part by Guangxi Huijie or the Guangxi
Huijie Shareholders at or prior to the Closing by delivering to AgFeed a written
waiver to that effect signed by Guangxi Huijie and the Guangxi Huijie
Shareholders. In the event that the conditions precedent set out in the
preceding section are not satisfied on or before the Closing, Guangxi Huijie and
the Guangxi Huijie Shareholders shall be released from all obligations under
this Agreement.

 
ARTICLE 10.  NATURE OF CONDITIONS PRECEDENT: The conditions precedent set forth
in this Agreement are conditions of completion of the transactions contemplated
by this Agreement and are not conditions precedent to the existence of a binding
agreement.
 
ARTICLE 11.  TERMINATION: Notwithstanding any provision herein to the contrary,
if the Closing does not occur on or before January 31, 2007, this Agreement will
be at an end and will have no further force or effect, unless otherwise agreed
upon by the parties in writing.
 
ARTICLE 12.  CONFIDENTIALITY: Notwithstanding any provision herein to the
contrary, the parties hereto agree that the existence and terms of this
Agreement are confidential and that if this Agreement is terminated pursuant to
the preceding section the parties agree to return to one another any and all
financial, technical and business documents delivered to the other party or
parties in connection with the negotiation and execution of this Agreement and
shall keep the terms of this Agreement and all information and documents
received from Guangxi Huijie and AgFeed and the contents thereof confidential
and not utilize nor reveal or release same, provided, however, that AgFeed will
be required to issue a news release regarding the execution and consummation of
this Agreement and file a Current Report on Form 8-K with the Securities and
Exchange Commission respecting the proposed Acquisition contemplated hereby
together with such other documents as are required to maintain the currency of
AgFeed’s filings with the Securities and Exchange Commission.

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ARTICLE 13.  Material Change in the Business of Guangxi Huijie: If any material
loss or damage to the Guangxi Huijie Business occurs prior to Closing and such
loss or damage, in AgFeed' reasonable opinion, cannot be substantially repaired
or replaced within sixty (60) days, AgFeed shall, within two (2) days following
any such loss or damage, by notice in writing to Guangxi Huijie, at its option,
either:
 

 
13.1.
terminate this Agreement, in which case no party will be under any further
obligation to any other party; or

 

 
13.2.
elect to complete the Acquisition and the other transactions contemplated
hereby, in which case the proceeds and the rights to receive the proceeds of all
insurance covering such loss or damage will, as a condition precedent to
AgFeed's obligations to carry out the transactions contemplated hereby, be
vested in Guangxi Huijie or otherwise adequately secured to the satisfaction of
AgFeed on or before the Closing Date.

 
ARTICLE 14.  CLOSING
 

 
14.1.
Closing: The Acquisition and the other transactions contemplated by this
Agreement will be closed at the Place of Closing in accordance with the closing
procedure set out in this Article.

 

 
14.2.
Documents to be Delivered by Guangxi Huijie: On or before the Closing, Guangxi
Huijie and the Guangxi Huijie Shareholders will deliver or cause to be delivered
to AgFeed :

 
14.2.1. the original or certified copies of the charter documents of Guangxi
Huijie and all corporate records documents and instruments of Guangxi Huijie,
the corporate seal of Guangxi Huijie and all books and accounts of Guangxi
Huijie;
 
14.2.2. all reasonable consents or approvals required to be obtained by Guangxi
Huijie for the purposes of completing the Acquisition and preserving and
maintaining the interests of Guangxi Huijie under any and all Guangxi Huijie
Material Contracts and in relation to Guangxi Huijie Assets;
 
14.2.3. certified copies of such resolutions of the shareholders and directors
of Guangxi Huijie as are required to be passed to authorize the execution,
delivery and implementation of this Agreement;
 
14.2.4.  an acknowledgement from Guangxi Huijie and the Guangxi Huijie
Shareholders of the satisfaction of the conditions precedent set forth in
section 7.1 hereof;
 
14.2.5. the certificates or other evidence of ownership of the Guangxi Huijie
Shares, together with such other documents or instruments required to effect
transfer of ownership of the Guangxi Huijie Shares to AgFeed; and
 
14.2.6. such other documents as AgFeed may reasonably require to give effect to
the terms and intention of this Agreement.
 

 
14.3.
Documents to be Delivered by AgFeed: On or before the Closing, AgFeed shall
deliver or cause to be delivered to Guangxi Huijie and the Guangxi Huijie
Shareholders:

 
14.3.1. the Purchase Price;

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14.3.2. certified copies of such resolutions of the directors of AgFeed as are
required to be passed to authorize the execution, delivery and implementation of
this Agreement;
 
14.3.3. an acknowledgement from AgFeed of the satisfaction of the conditions
precedent set forth in section 8.1 hereof; and
 
14.3.4. such other documents as Guangxi Huijie and the Guangxi Huijie
Shareholders may reasonably require to give effect to the terms and intention of
this Agreement.
 

ARTICLE 15.  GENERAL PROVISIONS
 

 
15.1.
Notice

 
15.1.1. Method of Delivery: Any notice required or permitted to be given by any
party will be deemed to be given when in writing and delivered to the address
for notice of the intended recipient by personal delivery, prepaid single
certified or registered mail, or telecopier. Any notice delivered by mail shall
be deemed to have been received on the fourth business day after and excluding
the date of mailing, except in the event of a disruption in regular postal
service in which event such notice shall be deemed to be delivered on the actual
date of receipt. Any notice delivered personally or by telecopier shall be
deemed to have been received on the actual date of delivery.
 
15.1.2. Addresses for Service: The address for service of notice of each of the
parties hereto is as follows:
 
AgFeed:

AgFeed Industries Inc.
1095 Qing Lan Avenue, Economic and Technical Zone Nan Chang City, Jiangxi
Province
Attn: Mr. Li Songyan
Phone: 86-791-2189636
Telecopier: 86-791-2189858

Guangxi Huijie
Guangxi Huijie Sci. & Tech. Feed Co, Ltd
South Zone
Coastal Industrial Park

Liangqing District, Nanning, Guangxi Province
China
Attn: Mr. Lin Deyuan
Phone:86-771-4014802
Telecopier: 86-771-4014828

 
15.1.3. Change of Address: Any party may, by notice to the other parties change
its address for notice to some other address and will so change its address for
notice whenever the existing address or notice ceases to be adequate for
delivery by hand. A post office box may not be used as an address for service.

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15.2.
Further Assurances: Each of the parties will execute and deliver such further
and other documents and do and perform such further and other acts as any other
party may reasonably require to carry out and give effect to the terms and
intention of this Agreement.

 

 
15.3.
Time of the Essence: Time is expressly declared to be the essence of this
Agreement.

 

 
15.4.
Entire Agreement: The provisions contained herein constitute the entire
agreement among Guangxi Huijie, the Guangxi Huijie Shareholders, and AgFeed
respecting the subject matter hereof and supersede all previous communications,
representations and agreements, whether verbal or written, among Guangxi Huijie,
the Guangxi Huijie Shareholders and AgFeed with respect to the subject matter
hereof.

 

 
15.5.
Binding Effect and Benefit: This Agreement will enure to the benefit of and be
binding upon the parties hereto and their respective heirs, executors,
administrators, successors and permitted assigns.

 

 
15.6.
Assignment: This Agreement is not assignable without the prior written consent
of the parties hereto.

 

 
15.7.
Counterparts: This Agreement may be executed in counterparts, each of which when
executed by any party will be deemed to be an original and all of which
counterparts will together constitute one and the same Agreement. Delivery of
executed copies of this Agreement by telecopier will constitute proper delivery,
provided that originally executed counterparts are delivered to the parties
within a reasonable time thereafter.

 

 
15.8.
Applicable Law: This Agreement is subject to the laws of the People’s Republic
of China.

 
[Remainder of page intentionally left blank.]

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IN WITNESS WHEREOF the parties have executed this Agreement effective as of the
day and year first above written.

AGFEED INDUSTRIES, INC.
 
 
 
By: /s/ Li Songyan
Li Songyan, Chairman
GUANGXI HUIJIE SCI. & TECH. FEED CO, LTD.
 
 
 
By:/s/  Lin Deyuan
 Lin Deyuan, Chairman

 

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Schedule 2.1
 
SHAREHOLDERS OF GUANGXI HUIJIE SCI. & TECH. FEED CO, LTD.
 

Name and Signature
Number of Shares
Portion of Purchase Price to be received
Xiao Penghua
/s/ Xiao Penghua                                              
 
1,515,000
RMB4,343,000
Lin Deyuan
/s/ Lin Deyuan                                                  
 
495,000
RMB1,419,000
 
Su Hong
/s/ Su Hong                                                      
 
495,000
RMB1,419,000
 
Chen Zeyi
/s/ Chen Zeyi                                                  
 
495,000
RMB1,419,000
 
_________________________________
 
   
 
________________________________
 
   
 
________________________________
 
   
 
________________________________
 
   

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SCHEDULES

Schedule 1.1.5
Guangxi Huijie Accounts Payable and Liabilities
Schedule 1.1.6
Guangxi Huijie Accounts Receivable
Schedule 1.1.8
Guangxi Huijie Bank Accounts
Schedule 1.1.11
Guangxi Huijie Debt to Related Parties
Schedule 1.1.12
Guangxi Huijie Equipment
Schedule 1.1.13
Guangxi Huijie Financial Statements
Schedule 1.1.15
Guangxi Huijie Insurance Policies
Schedule 1.1.17
Guangxi Huijie Inventory
Schedule 1.1.18
Guangxi Huijie Material Contracts
Schedule 1.1.19
Guangxi Huijie Related Party Debt

 

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