EXHIBIT 10.1
 
SECURITIES PURCHASE AGREEMENT
 
SECURITIES PURCHASE AGREEMENT (the “Agreement”), dated as of February 25, 2008,
by and among Agfeed Industries, Inc., a Nevada corporation, with headquarters
located at 1095 Qing Lan Avenue, Economic and Technical Development Zone, Nan
Chang City, Jiangxi Province (the ”Company”), and the investors listed on the
Schedule of Buyers attached hereto (individually, a “Buyer” and collectively,
the “Buyers”).
 
WHEREAS:
 
A. The Company and each Buyer is executing and delivering this Agreement in
reliance upon the exemption from securities registration afforded by Section
4(2) of the Securities Act of 1933, as amended (the “1933 Act”), and Rule 506 of
Regulation D (“Regulation D”) as promulgated by the United States Securities and
Exchange Commission (the “SEC”) under the 1933 Act.
 
B. The Company has authorized a new series of senior secured convertible notes
of the Company, which notes shall be convertible into the Company’s common
stock, $.001 par value per share (the “Common Stock”), in accordance with the
terms of such notes.
 
C. Each Buyer wishes to purchase, and the Company wishes to sell, upon the terms
and conditions stated in this Agreement, (i) that aggregate principal amount of
notes, in substantially the form attached hereto as Exhibit A (as amended or
modified from time to time, collectively, the “Notes”), set forth opposite such
Buyer’s name in column (3) on the Schedule of Buyers (which aggregate amount for
all Buyers shall be $18,000,000) (as converted, collectively, the “Conversion
Shares”) and (ii) warrants, in substantially the form attached hereto as Exhibit
B (the “Warrants”), to acquire a number of additional shares of Common Stock
determined as set forth in the Warrants (as exercised, collectively,
the ”Warrant Shares”).
 
D. Contemporaneously with the execution and delivery of this Agreement, the
parties hereto are executing and delivering a Registration Rights Agreement,
substantially in the form attached hereto as Exhibit C (as amended or modified
from time to time, the “Registration Rights Agreement”), pursuant to which the
Company has agreed to provide certain registration rights with respect to the
Conversion Shares and the Warrant Shares under the 1933 Act and the rules and
regulations promulgated thereunder, and applicable state securities laws.
 
E. The Notes, the Conversion Shares, the Warrants and the Warrant Shares
collectively are referred to herein as the “Securities”.
 
F. The Notes will rank senior to all outstanding and future indebtedness of the
Company and its Subsidiaries other than as permitted hereunder.
 
G. The proceeds from the sale of the Securities will be used for (i) general
corporate purposes, (ii) to satisfy the remaining installments on the Company’s
most recent hog farming acquisitions as they become due, and (iii) for
acquisitions of complementary businesses, technologies and other assets.
 

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NOW, THEREFORE, the Company and each Buyer hereby agree as follows:
 
1. PURCHASE AND SALE OF NOTES AND WARRANTS.
 
(a) Purchase of Notes and Warrants.
 
(i) Subject to the satisfaction (or waiver) of the conditions set forth in
Sections 6 and 7 below, the Company shall issue and sell to each Buyer, and each
Buyer severally, but not jointly, agrees to purchase from the Company on the
Closing Date (as defined below), (x) a principal amount of Notes as is set forth
opposite such Buyer’s name in column (3) on the Schedule of Buyers and (y)
Warrants to acquire a number of Warrant Shares determined as is set forth in the
Warrants (the “Closing”).
 
(ii) Closing. The date and time of the Closing (the “Closing Date”) shall be the
first business day following notification of satisfaction (or waiver) of the
conditions to the Closing set forth in Sections 6 and 7 below at the offices of
Gunderson Dettmer Stough Villeneuve Franklin & Hachigian LLP, 220 West 42nd
Street, New York, New York, 10036 (or such other place as mutually agreed upon
by the parties hereto). By agreement of the parties hereto, the Closing may be
alternatively accomplished by facsimile transmission to the respective offices
of legal counsel for the parties of the requisite documents, duly executed where
required, with originals to be delivered by overnight courier service on the
next business day following the Closing Date.
 
(iii) Purchase Price. The aggregate purchase price for the Notes and the
Warrants to be purchased by each Buyer at the Closing (the “Purchase Price”)
shall be the amount set forth opposite such Buyer’s name in column (4) of the
Schedule of Buyers.
 
(b) Form of Payment. On the Closing Date, (i) each Buyer shall pay its Purchase
Price for the Notes and the Warrants to be issued and sold to such Buyer at the
Closing, by wire transfer of immediately available funds in accordance with the
Company’s written wire instructions, and (ii) the Company shall deliver to each
Buyer (A) the Notes (in the principal amounts as such Buyer shall request) that
such Buyer is then purchasing and (B) the Warrants (in the amounts as such Buyer
shall request) such Buyer is purchasing, in each case duly executed on behalf of
the Company and registered in the name of such Buyer or its designee.
 
2. BUYER’S REPRESENTATIONS AND WARRANTIES.
 
Each Buyer represents and warrants that:
 
(a) No Public Sale or Distribution. Such Buyer is (i) acquiring the Notes and
the Warrants and (ii) upon conversion of the Notes and exercise of the Warrants
(other than pursuant to a Cashless Exercise (as defined in the Warrants)) will
acquire the Conversion Shares issuable upon conversion of the Notes and the
Warrant Shares issuable upon exercise of the Warrants, as the case may be, in
each case, for its own account and not with a view towards, or for resale in
connection with, the public sale or distribution thereof, except pursuant to
sales registered or exempted under the 1933 Act; provided, however, that by
making the representations herein, such Buyer does not agree to hold any of the
Securities for any minimum or other specific term and reserves the right to
dispose of the Securities at any time in accordance with or pursuant to a
registration statement or an exemption under the Securities Act of 1933, as
amended (the “1933 Act”). Such Buyer does not presently have any agreement or
understanding, directly or indirectly, with any Person to distribute any of the
Securities.
 

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(b) Accredited Investor/Qualified Institutional Buyer Status. Such Buyer is an
“accredited investor” or a “qualified institutional buyer,” as such term is
defined in Rule 501(a) of Regulation D or Rule 144A under the Securities Act,
respectively.
 
(c) Reliance on Exemptions. Such Buyer understands that the Securities are being
offered and sold to it in reliance on specific exemptions from the registration
requirements of United States federal and state securities laws and that the
Company is relying in part upon the truth and accuracy of, and such Buyer’s
compliance with, the representations, warranties, agreements, acknowledgments
and understandings of such Buyer set forth herein to determine the availability
of such exemptions and the eligibility of such Buyer to acquire the Securities.
 
(d) Information. Such Buyer and its advisors, if any, have been furnished with
all materials relating to the business, finances and operations of the Company
and materials relating to the offer and sale of the Securities that have been
requested by such Buyer. Such Buyer and its advisors, if any, have been afforded
the opportunity to ask questions of the Company. Neither such inquiries nor any
other due diligence investigations conducted by such Buyer or its advisors, if
any, or its representatives shall modify, amend or affect such Buyer’s right to
rely on the Company’s representations and warranties contained herein. Such
Buyer understands that its investment in the Securities involves a high degree
of risk. Such Buyer has sought such accounting, legal and tax advice as it has
considered necessary to make an informed investment decision with respect to its
acquisition of the Securities.
 
(e) No Governmental Review. Such Buyer understands that no United States federal
or state agency or any other government or governmental agency has passed on or
made any recommendation or endorsement of the Securities or the fairness or
suitability of the investment in the Securities nor have such authorities passed
upon or endorsed the merits of the offering of the Securities.
 
(f) Transfer or Resale. Such Buyer understands that except as provided in the
Registration Rights Agreement: (i) the Securities have not been and are not
being registered under the 1933 Act or any state securities laws, and may not be
offered for sale, sold, assigned or transferred unless (A) subsequently
registered thereunder, (B) such Buyer shall have delivered to the Company an
opinion of counsel selected by the Buyer, in a form reasonably acceptable to the
Company, to the effect that such Securities to be sold, assigned or transferred
may be sold, assigned or transferred pursuant to an exemption from such
registration, or (C) such Buyer provides the Company with reasonable assurance
that such Securities can be sold, assigned or transferred pursuant to Rule 144
or Rule 144A promulgated under the 1933 Act, as amended, (or a successor rule
thereto) (collectively, “Rule 144”); (ii) any sale of the Securities made in
reliance on Rule 144 may be made only in accordance with the terms of Rule 144
and further, if Rule 144 is not applicable, any resale of the Securities under
circumstances in which the seller (or the Person (as defined in Section 3(s))
through whom the sale is made) may be deemed to be an underwriter (as that term
is defined in the 1933 Act) may require compliance with some other exemption
under the 1933 Act or the rules and regulations of the SEC thereunder; and
(iii) neither the Company nor any other Person is under any obligation to
register the Securities under the 1933 Act or any state securities laws or to
comply with the terms and conditions of any exemption thereunder.
 

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(g) Legends. Such Buyer understands that the certificates or other instruments
representing the Notes and Warrants and, until such time as the resale of the
Conversion Shares and the Warrant Shares have been registered under the 1933 Act
as contemplated by the Registration Rights Agreement, the stock certificates
representing the Conversion Shares and the Warrant Shares, except as set forth
below, shall bear any legend as required by the “blue sky” laws of any state and
a restrictive legend in substantially the following form (and a stop-transfer
order may be placed against transfer of such stock certificates):
 
[NEITHER THE ISSUANCE AND SALE OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE
NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE [CONVERTIBLE] [EXERCISABLE]
HAVE BEEN][THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN]
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE
SECURITIES LAWS. THE SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED
OR ASSIGNED (I) IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR
THE SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR (B) AN OPINION
OF COUNSEL (WHICH COUNSEL SHALL BE SELECTED BY THE HOLDER), IN A FORM REASONABLY
ACCEPTABLE TO THE COMPANY, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR
(II) UNLESS SOLD PURSUANT TO RULE 144 OR RULE 144A UNDER SAID ACT.
NOTWITHSTANDING THE FOREGOING, THE SECURITIES MAY BE PLEDGED IN CONNECTION WITH
A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN OR FINANCING ARRANGEMENT SECURED BY THE
SECURITIES.
 
The legend set forth above shall be removed and the Company shall issue a
certificate without such legend to the holder of the Securities upon which it is
stamped, if, unless otherwise required by state securities laws, (i) such
Securities are registered for resale under the 1933 Act, (ii) in connection with
a sale, assignment or other transfer, such holder provides the Company with an
opinion of counsel, in a generally acceptable form, to the effect that such
sale, assignment or transfer of the Securities may be made without registration
under the applicable requirements of the 1933 Act, or (iii) such holder provides
the Company with reasonable assurance that the Securities can be sold, assigned
or transferred pursuant to Rule 144 or Rule 144A.
 
(h) Validity; Enforcement. This Agreement and the Registration Rights Agreement
to which such Buyer is a party have been duly and validly authorized, executed
and delivered on behalf of such Buyer and shall constitute the legal, valid and
binding obligations of such Buyer enforceable against such Buyer in accordance
with their respective terms, except as such enforceability may be limited by
general principles of equity or applicable bankruptcy, insolvency,
reorganization, moratorium, liquidation and other similar laws relating to, or
affecting generally, the enforcement of applicable creditors’ rights and
remedies.
 

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(i) Residency. Such Buyer is a resident of that jurisdiction specified below its
address on the signature page hereto.
 
(j) Broker. The undersigned acknowledges and agrees that the Company intends to
pay commissions to Deutsche Bank Securities Inc. of cash equal to eight and
six-tenths percent (8.6%) of the gross proceeds received by the Company from the
transactions contemplated by this Agreement. Buyers have incurred no obligations
or liability for brokerage or finders’ fees or agents’ commissions or other
similar payment in connection with the transactions contemplated by this
Agreement.
 
(k) Short Sales. From and after obtaining the knowledge of the transactions
contemplated hereby, Buyer has not taken, and prior to the public announcement
of the transaction Buyer shall not take, any action that has caused or will
cause Buyer to have, directly or indirectly, sold or agreed to sell any shares
of Common Stock, effected any short sale, whether or not against the box,
established any “put equivalent position” (as defined in Rule 16a-1(h) under the
Exchange Act) with respect to the Common Stock, granted any other right
(including, without limitation, any put or call option) with respect to the
Common Stock or with respect to any security that includes, related to or
derives any significant part of its value from the Common Stock, whether or not,
direct or indirectly, in order to hedge its positions in the Common Stock.
 
3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.
 
The Company represents and warrants to each of the Buyers that:
 
(a) Organization and Qualification. The Company is duly incorporated or
otherwise organized, validly existing and in good standing under the laws of the
jurisdiction of its incorporation or organization, with the requisite power and
authority to own and use its properties and assets and to carry on its business
as currently conducted. The Company is not in violation of any of the provisions
of its certificate or articles of incorporation, bylaws or other organizational
or charter documents. The Company is duly qualified to conduct its business and
is in good standing as a foreign corporation or other entity in each
jurisdiction in which the nature of the business conducted or property owned by
it makes such qualification necessary.
 
(b) Authorization; Enforcement; Validity. The Company has the requisite
corporate power and authority to enter into and perform its obligations under
this Agreement, the Notes, the Registration Rights Agreement, the Irrevocable
Transfer Agent Instructions, the Warrants and each of the other agreements
entered into by the parties hereto in connection with the transactions
contemplated by this Agreement (collectively, the “Transaction Documents”) and
otherwise to carry out its obligations hereunder and thereunder (including to
issue the Securities in accordance with the terms hereof and thereof). The
execution and delivery of each of the Transaction Documents by the Company and
the consummation by it of the transactions contemplated hereby and thereby,
including without limitation the issuance of the Notes and the Warrants, the
reservation for issuance and the issuance of the Conversion Shares issuable upon
conversion of the Notes, the reservation for issuance and issuance of Warrant
Shares issuable upon exercise of the Warrants, have been duly authorized by all
necessary action on the part of the Company and no further action is required by
the Company, its Board of Directors or its stockholders in connection therewith.
Each Transaction Document has been (or upon delivery will have been) duly
executed by the Company and, when delivered in accordance with the terms hereof,
will constitute the valid and binding obligation of the Company enforceable
against the Company in accordance with their respective terms, except as such
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium, liquidation or similar laws relating to, or
affecting generally the enforcement of, creditors’ rights and remedies or by
other equitable principles of general application.
 

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(c) Issuance of Securities. The issuance of the Notes and Warrants have been
duly authorized and, when issued and paid for in accordance with the Transaction
Documents, will be duly and validly issued, fully paid and nonassessable, free
and clear of all liens and encumbrances. The Company has reserved from its duly
authorized capital stock the shares of Common Stock issuable pursuant to this
Agreement and the Warrants in order to issue the Conversion Shares and the
Warrant Shares.
 
(d) No Conflicts. The execution, delivery and performance of the Transaction
Documents by the Company and the consummation by the Company of the transactions
contemplated hereby and thereby, including without limitation the issuance of
the Notes and the Warrants, the reservation for issuance and the issuance of the
Conversion Shares issuable upon conversion of the Notes, the reservation for
issuance and issuance of Warrant Shares issuable upon exercise of the Warrants,
do not and will not (i) conflict with or violate any provision of the
certificate or articles of incorporation, bylaws or other organizational or
charter documents of the Company or any Subsidiary, or (ii) conflict with, or
constitute a default (or an event that with notice or lapse of time or both
would become a default) under, or give to others any rights of termination,
amendment, acceleration or cancellation (with or without notice, lapse of time
or both) of, any agreement, credit facility, debt or other instrument
(evidencing a Company debt or otherwise) or other understanding to which the
Company or any Subsidiary is a party or by which any property or asset of the
Company or any Subsidiary is bound or affected, or (iii) result in a violation
of any law, rule, regulation, order, judgment, injunction, decree or other
restriction of any court or governmental authority to which the Company or any
Subsidiary is subject (including federal and state securities laws and
regulations and the rules and regulations of the Nasdaq Stock Market (the
“Principal Market”)), or by which any property or asset of the Company or any
Subsidiary is bound or affected.
 
For purposes of this Agreement, “Subsidiary” shall mean any corporation,
partnership, joint venture, association or other business enterprise in which
the Company owns, directly or indirectly, at least fifty percent (50%) of the
outstanding securities or other interests, the holders of which are generally
entitled to vote for the election of the board of directors or other governing
body or otherwise exercise control of such entity.
 

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(e) Consents. The Company is not required to obtain any consent, waiver,
authorization or order of, give any notice to, or make any filing or
registration with, any court or other federal, state, local, foreign or other
governmental authority or other Person in connection with the execution,
delivery and performance by the Company of the Transaction Documents, other than
(i) the filing with the United States Securities and Exchange Commission (the
“Commission”) of one or more Registration Statements in accordance with the
requirements of the Registration Rights Agreement, (ii) filings required by
state securities laws, (iii) the filing of a Notice of Sale of Securities on
Form D with the Commission under Regulation D of the 1933 Act, or (iv)
registration with, any court, governmental agency or any regulatory or
self-regulatory agency or any other Person in order for it to execute, deliver
or perform any of its obligations under or contemplated by the Transaction
Documents, in each case in accordance with the terms hereof or thereof.
 
(f) No General Solicitation; Placement Agent’s Fees. Neither the Company, nor
any of its affiliates, nor any Person acting on its or their behalf, has engaged
in any form of general solicitation or general advertising (within the meaning
of Regulation D) in connection with the offer or sale of the Securities. The
Company shall be responsible for the payment of any placement agent’s fees,
financial advisory fees, or brokers’ commissions (other than for persons engaged
by the Buyer or its investment advisor) relating to or arising out of the
transactions contemplated hereby. The Company shall pay, and hold the Buyer
harmless against, any liability, loss or expense (including, without limitation,
attorney’s fees and out-of-pocket expenses) arising in connection with any such
claim.
 
(g) No Integrated Offering. None of the Company, its Subsidiaries, any of their
affiliates, and any Person acting on their behalf has, directly or indirectly,
made any offers or sales of any security or solicited any offers to buy any
security, under circumstances that would require registration of any of the
Securities under the 1933 Act or cause this offering of the Securities to be
integrated with prior offerings by the Company for purposes of the 1933 Act or
any applicable stockholder approval provisions, including, without limitation,
under the rules and regulations of any exchange or automated quotation system on
which any of the securities of the Company are listed or designated.
 
(h) Dilutive Effect. The Company understands and acknowledges that the number of
Conversion Shares issuable upon conversion of the Notes and the Warrant Shares
issuable upon exercise of the Warrants will increase in certain circumstances.
The Company further acknowledges that its obligation to issue Conversion Shares
upon conversion of the Notes in accordance with this Agreement and the Notes and
its obligation to issue the Warrant Shares upon exercise of the Warrants in
accordance with this Agreement and the Warrants is, in each case, absolute and
unconditional regardless of the dilutive effect, which may be substantial, that
such issuance may have on the ownership interests of other stockholders of the
Company.
 

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(i) SEC Documents; Financial Statements. The Company has filed all reports
required to be filed by it under the 1933 Act and the Securities Exchange Act of
1934, as amended (the “1934 Act”), including pursuant to Section 13(a) or 15(d)
thereof, during the two (2) years prior to the date hereof (the foregoing
materials being collectively referred to herein as the“SEC Reports”) on a timely
basis or has timely filed a valid extension of such time of filing and has filed
any such SEC Reports prior to the expiration of any such extension. As of their
respective dates, the SEC Reports complied in all material respects with the
requirements of the 1933 Act and the 1934 Act and the rules and regulations of
the Commission promulgated thereunder, and none of the SEC Reports, when filed,
contained any untrue statement of a material fact or omitted to state a material
fact required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading. The financial statements of the Company included in the SEC Reports
comply in all material respects with applicable accounting requirements and the
rules and regulations of the Commission with respect thereto as in effect at the
time of filing. Such financial statements have been prepared in accordance with
United States generally accepted accounting principles (“GAAP”) applied on a
consistent basis during the periods involved, except as may be otherwise
specified in such financial statements or the notes thereto, and fairly present
in all material respects the financial position of the Company as of and for the
dates thereof and the results of operations and cash flows for the periods then
ended, subject, in the case of unaudited statements, to normal, immaterial,
year-end audit adjustments.
 
(j) Sarbanes-Oxley Act. Except as set forth in Section 3(l) hereof, the Company
is in compliance with any and all applicable requirements of the Sarbanes-Oxley
Act of 2002 that are effective as of the date hereof, and any and all applicable
rules and regulations promulgated by the SEC thereunder that are effective as of
the date hereof, except where such noncompliance would not have, individually or
in the aggregate, a Material Adverse Effect.
 
For purposes of this Agreement, “Material Adverse Effect” shall mean any
circumstance, condition, change in or effect on the Company or its Subsidiaries
that, individually or in the aggregate, is, or would reasonably be expected to
be, materially adverse to the business, capitalization, assets, liabilities
(contingent or otherwise), properties, results of operations, or condition,
financial or otherwise, of the Company and its Subsidiaries, taken as a whole.

(k) Absence of Certain Changes. Since the date of the latest audited financial
statements included within the SEC Reports, except as specifically disclosed in
the SEC Reports, (i) there has been no event, occurrence or development that has
had or that could reasonably be expected to result in a Material Adverse Effect
on the Company, (ii) the Company has not incurred any liabilities (contingent or
otherwise) other than (A) trade payables, accrued expenses and other liabilities
incurred in the ordinary course of business consistent with past practice and
(B) liabilities not required to be reflected in the Company's financial
statements pursuant to GAAP or required to be disclosed in filings made with the
Commission, (iii) the Company has not altered its method of accounting or the
identity of its auditors, (iv) the Company has not declared or made any dividend
or distribution of cash or other property to its stockholders or purchased,
redeemed or made any agreements to purchase or redeem any shares of its capital
stock, and (v) the Company has not issued any equity securities to any officer,
director or affiliate, except pursuant to existing Company stock option or
restricted stock plans or otherwise in the ordinary course of business. The
Company does not have pending before the Commission any request for confidential
treatment of information.
 

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(l) Disclosure Controls and Procedures. Except as set forth on Schedule 3(l),
the Company is in the process of establishing (i) disclosure controls and
procedures (as such term is defined in Rule 13a-15(e) under the 1934 Act), which
are (a) designed to ensure that information required to be disclosed by the
Company in the reports that it files or submits under the 1934 Act is recorded,
processed, summarized and reported, within the time periods specified in the
Commission's rules and forms, and is accumulated and communicated to the
Company's management, including its principal executive officer or officers and
principal financial officer or officers, as appropriate, to allow timely
decisions regarding disclosure and (b) effective in all material respects to
perform the functions for which they were established and (ii) a system of
internal controls that complies with the requirements of the 1934 Act and has
been designed by the Company's principal executive officer and principal
financial officer, or under their supervision, sufficient to provide reasonable
assurances that: (A) transactions are executed in accordance with management’s
general or specific authorization; (B) transactions are recorded as necessary to
permit preparation of financial statements in conformity with GAAP, the 1933 Act
and the 1934 Act and the rules and regulations of the Commission thereunder, and
to maintain accountability for assets; (C) access to assets is permitted only in
accordance with management’s general or specific authorization; and (D) recorded
assets are compared with existing assets at reasonable intervals and appropriate
action is taken with respect to any differences.
 
(m) Equity Capitalization. Except as set forth on Schedule 3(m) hereof, the
number of shares and type of all authorized, issued and outstanding capital
stock of the Company, and all shares of Common Stock reserved for issuance under
the Company’s various option and incentive plans, is specified in the SEC
Reports. Except as specified in the SEC Reports, no securities of the Company
are entitled to preemptive or similar rights, and no Person has any right of
first refusal, preemptive right, right of participation, or any similar right to
participate in the transactions contemplated by the Transaction Documents.
Except as specified in the SEC Reports, there are no outstanding options,
warrants, scrip rights to subscribe to, calls or commitments of any character
whatsoever relating to, or securities, rights or obligations convertible into or
exchangeable for, or giving any Person any right to subscribe for or acquire,
any shares of Common Stock, or contracts, commitments, understandings or
arrangements by which the Company is or may become bound to issue additional
shares of Common Stock, or securities or rights convertible or exchangeable into
shares of Common Stock. The issue and sale of the Securities will not,
immediately or with the passage of time, obligate the Company to issue shares of
Common Stock or other securities to any Person (other than the undersigned) and
will not result in a right of any holder of Company securities to adjust the
exercise, conversion, exchange or reset price.
 

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(n) Indebtedness and Other Contracts. Except as disclosed in Schedule 3(n),
neither the Company nor any of its Subsidiaries (i) has any outstanding
Indebtedness (as defined below), (ii) is a party to any contract, agreement or
instrument, the violation of which, or default under which, by the other
party(ies) to such contract, agreement or instrument would result in a Material
Adverse Effect, (iii) is in violation of any term of or in default under any
contract, agreement or instrument relating to any Indebtedness, except where
such violations and defaults would not result, individually or in the aggregate,
in a Material Adverse Effect, or (iv) is a party to any contract, agreement or
instrument relating to any Indebtedness, the performance of which, in the
judgment of the Company’s officers, has or is expected to have a Material
Adverse Effect. Schedule 3(n) provides a detailed description of the material
terms of any such outstanding Indebtedness. For purposes of this Agreement: (x)
“Indebtedness” of any Person means, without duplication (A) all indebtedness for
borrowed money, (B) all reimbursement or payment obligations with respect to
letters of credit, surety bonds and other similar instruments, (C) all
obligations evidenced by notes, bonds, debentures or similar instruments,
including obligations so evidenced incurred in connection with the acquisition
of property, assets or businesses, (D) all indebtedness created or arising under
any conditional sale or other title retention agreement, or incurred as
financing, in either case with respect to any property or assets acquired with
the proceeds of such indebtedness (even though the rights and remedies of the
seller or bank under such agreement in the event of default are limited to
repossession or sale of such property), (E) all indebtedness referred to in
clauses (A) through (D) above secured by (or for which the holder of such
Indebtedness has an existing right, contingent or otherwise, to be secured by)
any mortgage, lien, pledge, charge, security interest or other encumbrance upon
or in any property or assets (including accounts and contract rights) owned by
any Person, even though the Person which owns such assets or property has not
assumed or become liable for the payment of such indebtedness, and (F) all
Contingent Obligations in respect of indebtedness or obligations of others of
the kinds referred to in clauses (A) through (E) above; (y) “Contingent
Obligation” means, as to any Person, any direct or indirect liability,
contingent or otherwise, of that Person with respect to any indebtedness, lease,
dividend or other obligation of another Person if the primary purpose or intent
of the Person incurring such liability, or the primary effect thereof, is to
provide assurance to the obligee of such liability that such liability will be
paid or discharged, or that any agreements relating thereto will be complied
with, or that the holders of such liability will be protected (in whole or in
part) against loss with respect thereto; and (z) “Person” means an individual, a
limited liability company, a partnership, a joint venture, a corporation, a
trust, an unincorporated organization and a government or any department or
agency thereof. 
 
(o) Ranking of Notes. Except as set forth on Schedule 3(o), no Indebtedness of
the Company is senior to or ranks pari passu with the Notes in right of payment,
whether with respect of payment of redemptions, interest, damages or upon
liquidation or dissolution or otherwise.
 
(p) Form S-3 Eligibility. The Company is eligible to register the Conversion
Shares and the Warrant Shares for resale by the Buyers using Form S-3
promulgated under the 1933 Act.
 
(q) Manipulation of Price. The Company has not, and to its knowledge no one
acting on its behalf has, (i) taken, directly or indirectly, any action designed
to cause or to result in the stabilization or manipulation of the price of any
security of the Company to facilitate the sale or resale of any of the
Securities, or (ii) sold, bid for, purchased, or paid any compensation for
soliciting purchases of, any of the Securities.
 
(r) Disclosure. The Company confirms that neither it nor any other Person acting
on its behalf has provided the Buyer or its agents or counsel with any
information that constitutes or could reasonably be expected to constitute
material, nonpublic information. The Company understands and confirms that the
Buyer will rely on the foregoing representations in effecting transactions in
securities of the Company. No event or circumstance has occurred or information
exists with respect to the Company or any of its Subsidiaries or its or their
business, properties, prospects, operations or financial conditions, which,
under applicable U.S. law, rule or regulation, requires public disclosure or
announcement by the Company but which has not been so publicly announced or
disclosed.
 
(s) Foreign Corrupt Practices Act. The Company has not made, offered or agreed
to offer anything of value to any government official, political party or
candidate for political office (or any Person that the Company knows or has
reason to know will offer anything of value to any such Person) in violation of
the Foreign Corrupt Practices Act of 1977, as amended.
 

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(t) Compliance with Money Laundering Rules. The business and operations of the
Company are being conducted in compliance in all material respects with, and are
not in default in any material respect under any applicable statutes, laws,
rules, regulations, judgments, orders or decrees of and commitments to any
United States governmental authority relating to money laundering, bank secrecy,
anti-bribery and other corrupt practices. There is no pending or threatened
charge by any United States governmental authority that the Company has
materially violated any such law, rule, regulation, judgment, order, decree or
commitment, nor is there any pending or threatened investigation by any United
States governmental authority with respect to possible material violations of
any such law, rule, regulation, judgment, order, decree or commitment, except
for such violations which would not, individually or in the aggregate, result in
a Material Adverse Effect.
 
4. COVENANTS.
 
(a) Efforts to Satisfy Conditions. Each party shall use its commercially
reasonable efforts to satisfy each of the conditions to be satisfied by it as
provided in Sections 6 and 7 of this Agreement.
 
(b) Form D and Blue Sky. The Company agrees to file a Form D with respect to the
Securities as required under Regulation D and to provide a copy thereof to the
Buyer promptly after such filing. The Company shall, on or before the Closing
Date, take such action as the Company shall reasonably determine is necessary in
order to obtain an exemption for or to qualify the Securities for sale to the
Buyer at the Closing pursuant to this Agreement under applicable securities or
“Blue Sky” laws of the states of the United States (or to obtain an exemption
from such qualification), and shall provide evidence of any such action so taken
to the Buyer on or prior to the Closing Date. The Company shall make all filings
and reports relating to the offer and sale of the Securities required under
applicable securities or “Blue Sky” laws of the states of the United States
following the Closing Date.
 
(c) Reporting Status. Until the date on which the Investors (as defined in the
Registration Rights Agreement) shall have sold all the Conversion Shares and
Warrant Shares and none of the Notes or Warrants is outstanding (the “Reporting
Period”), the Company shall timely file all reports required to be filed with
the SEC pursuant to the 1934 Act, and the Company shall not terminate its status
as an issuer required to file reports under the 1934 Act even if the 1934 Act or
the rules and regulations thereunder would otherwise permit such termination.
 
(d) Financial Information. Unless the following are filed with the SEC through
EDGAR and are available to the public through the EDGAR system, the Company
agrees to send the following to each Investor during the Reporting Period (i)
within one (1) Business Day after the filing thereof with the SEC, a copy of its
Annual Reports on Form 10-K or 10-KSB, any interim reports or any consolidated
balance sheets, income statements, stockholders’ equity statements and/or cash
flow statements for any period other than annual, any Current Reports on Form
8-K and any registration statements (other than on Form S-8) or amendments filed
pursuant to the 1933 Act, (ii) within one (1) Business Day after the release
thereof, facsimile copies of all material press releases issued by the Company
or any of its Subsidiaries, (iii) within two (2) Business Days after the release
thereof, facsimile copies of all other press releases issued by the Company or
any of its Subsidiaries and (iv) copies of any notices and other information
made available or given to the stockholders of the Company generally,
contemporaneously with the making available or giving thereof to the
stockholders.
 

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(e) Listing. The Company shall use its commercially reasonable efforts to
promptly secure the listing of all of the Registrable Securities (as defined in
the Registration Rights Agreement) upon each national securities exchange and
automated quotation system, if any, upon which the Common Stock is then listed
(subject to official notice of issuance) and shall use its commercially
reasonable efforts to maintain such listing of all Registrable Securities from
time to time issuable under the terms of the Transaction Documents. The Company
shall use its commercially reasonable efforts to maintain the Common Stock’s
authorization for quotation on the Principal Market. The Company shall not, nor
shall it cause or permit any of its Subsidiaries to, take any action that would
be reasonably expected to result in the delisting or suspension of the Common
Stock on the Principal Market. The Company shall pay all fees and expenses in
connection with satisfying its obligations under this Section 4(e).
 
(f) Fees. Upon the Closing, the Company shall reimburse the Buyer or its
designee(s) for all reasonable costs and expenses incurred in connection with
the transactions contemplated by the Transaction Documents (including all
reasonable legal fees and disbursements in connection therewith, documentation
and implementation of the transactions contemplated by the Transaction Documents
and due diligence in connection therewith), which amount shall be withheld by
the Buyer from its Purchase Price at the Closing. The Company shall be
responsible for the payment of any placement agent’s fees, financial advisory
fees, or broker’s commissions (other than for Persons engaged by the Buyer)
relating to or arising out of the transactions contemplated hereby, including,
without limitation, any fees or commissions payable to the Agent. The Company
shall pay, and hold the Buyer harmless against, any liability, loss or expense
(including, without limitation, reasonable attorney’s fees and out-of-pocket
expenses) arising in connection with any claim relating to any such payment.
Except as otherwise set forth in the Transaction Documents, each party to this
Agreement shall bear its own expenses in connection with the sale of the
Securities to the Buyer.
 
(g) Pledge of Securities. The Company acknowledges and agrees that the
Securities may be pledged by the Buyer in connection with a bona fide margin
agreement or other loan or financing arrangement that is secured by the
Securities. The pledge of Securities shall not be deemed to be a transfer, sale
or assignment of the Securities hereunder, and the Buyer shall not be required
to provide the Company with any notice thereof or otherwise make any delivery to
the Company pursuant to this Agreement or any other Transaction Document,
including, without limitation, Section 2(f) hereof; provided that the Buyer and
its pledgee shall be required to comply with the provisions of Section 2(f)
hereof in order to effect a sale, transfer or assignment of Securities to such
pledgee. The Company hereby agrees to execute and deliver such documentation as
a pledgee of the Securities may reasonably request in connection with a pledge
of the Securities to such pledgee by the Buyer.
 

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(h) Disclosure of Transactions and Other Material Information. On or before 8:30
a.m., New York Time, on the first Trading Day following the date hereof, the
Company shall issue a press release describing the terms of the transactions
contemplated by the Transaction Documents. On or before 8:30 a.m., New York
Time, on the fourth Trading Day following the date hereof, the Company shall
file a Current Report on Form 8-K describing the terms of the transactions
contemplated by the Transaction Documents in the form required by the 1934 Act
and the substance of the disclosure set forth in Section 3(l) hereof, and
attaching the material Transaction Documents (including, without limitation,
this Agreement (and all schedules to this Agreement), the form of each of the
Notes, the form of Warrant, and the Registration Rights Agreement as exhibits to
such filing (including all attachments, the “8-K Filing”). From and after the
Closing, the Buyer shall not be in possession of any material, nonpublic
information received from the Company, any of its Subsidiaries or any of its
respective officers, directors, employees or agents, that is not disclosed in
this Agreement or the 8-K Filing. The Company shall not, and shall cause each of
its Subsidiaries and its and each of their respective officers, directors,
employees and agents, not to, provide the Buyer with, and the Buyer shall not
request, any material, nonpublic information regarding the Company or any of its
Subsidiaries from and after the Closing without the express written consent of
the Buyer. In the event of a breach of the foregoing covenant by the Company,
any of its Subsidiaries, or any of its or their respective officers, directors,
employees and agents, in addition to any other remedy provided herein or in the
Transaction Documents, the Buyer shall have the right to request the Company to
make a public disclosure, in the form of a press release, public advertisement
or otherwise, of such material, nonpublic information without the prior approval
by the Company, its Subsidiaries, or any of its or their respective officers,
directors, employees or agents. The Buyer shall not have any liability to the
Company, its Subsidiaries, or any of its or their respective officers,
directors, employees, stockholders or agents for any such disclosure. Subject to
the foregoing, neither the Company nor the Buyer shall issue any press releases
or any other public statements with respect to the transactions contemplated
hereby; provided, however, that the Company shall be entitled, without the prior
approval of the Buyer, to make any press release or other public disclosure with
respect to such transactions (i) in substantial conformity with the 8-K Filing
and contemporaneously therewith and (ii) as is required by applicable law and
regulations (provided that in the case of clause (i) the Buyer shall be
consulted by the Company in connection with and given an opportunity to review
and comment on any such press release or other public disclosure prior to its
release). Notwithstanding the foregoing, the Company shall not publicly disclose
the name of the Buyer, or include the name of the Buyer in any filing with the
SEC or any regulatory agency or the Principal Market, without the prior written
consent of such Buyer, except (i) for disclosure thereof in the 8-K Filing or
Registration Statement or (ii) as required by law or Principal Market
regulations or any order of any court or other governmental agency, in which
case the Company shall provide such Buyer with prior notice of such disclosure.
 
(i) Integration. None of the Company, its Subsidiaries, their affiliates and any
Person acting on their behalf will take any action or steps referred to in
Section 3(g) that would require registration of any of the Securities under the
1933 Act or cause the offering of the Securities to be integrated with other
offerings.
 

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(j) Form S-3 Eligibility. The Company shall use its commercially reasonable
efforts to maintain the eligibility of its registration statement on Form S-3 so
that it is available for the registration of the resale of Registrable
Securities.
 
(k) Holding Period. For the purposes of Rule 144, the Company acknowledges that
the holding period of the Conversion Shares may be tacked onto the holding
period of the Notes and the holding period of the Warrant Shares may be tacked
onto the holding period of the Warrants (in the case of Cashless Exercise (as
defined in the Warrants)) and the Company agrees not to take a position contrary
to this Section 4(k).
 
(l) Restrictions on Future Indebtedness. For so long as the Notes remain
outstanding, the Company shall not, without the prior written consent of the
holders of at least a majority of the aggregate number of Registrable Securities
issued and issuable hereunder, assume or incur (by guaranty or otherwise)
Indebtedness, other than purchase money mortgages and installment purchases on
hog farm acquisitions, that (i) ranks senior or pari passu with the Notes, or
(ii) individually or in the aggregate, exceeds $250,000.
 
5. REGISTER; TRANSFER AGENT INSTRUCTIONS.
 
(a) Register. The Company shall maintain at its principal executive offices (or
such other office or agency of the Company as it may designate by notice to each
holder of Securities), a register for the Notes and the Warrants, in which the
Company shall record the name and address of the Person in whose name the Notes
and the Warrants have been issued (including the name and address of each
transferee), the principal amount of Notes held by such Person, the number of
Conversion Shares issuable upon conversion of the Notes and Warrant Shares
issuable upon exercise of the Warrants held by such Person. The Company shall
keep the register open and available at all times during business hours for
inspection of any Buyer or its legal representatives.
 
(b) Transfer Agent Instructions. The Company shall issue irrevocable
instructions to its transfer agent, and any subsequent transfer agent, to issue
certificates or credit shares to the applicable balance accounts at The
Depository Trust Company (“DTC”), registered in the name of each Buyer or its
respective nominee(s), for the Conversion Shares and the Warrant Shares issued
at the Closing or upon conversion of the Notes or exercise of the Warrants in
such amounts as specified from time to time by each Buyer to the Company upon
conversion of the Notes or exercise of the Warrants in the form of Exhibit D
attached hereto (the “Irrevocable Transfer Agent Instructions”). The Company
warrants that no instruction other than the Irrevocable Transfer Agent
Instructions referred to in this Section 5(b), and stop transfer instructions to
give effect to Section 2(g) hereof, will be given by the Company to its transfer
agent, and that the Securities shall otherwise be freely transferable on the
books and records of the Company as and to the extent provided in this Agreement
and the other Transaction Documents. If a Buyer effects a sale, assignment or
transfer of the Securities in accordance with Section 2(f), the Company shall
permit the transfer and shall promptly instruct its transfer agent to issue one
or more certificates or credit shares to the applicable balance accounts at DTC
in such name and in such denominations as specified by such Buyer to effect such
sale, transfer or assignment. In the event that such sale, assignment or
transfer involves Conversion Shares or Warrant Shares sold, assigned or
transferred pursuant to an effective registration statement or pursuant to Rule
144, the transfer agent shall issue such Securities to the Buyer, assignee or
transferee, as the case may be, without any restrictive legend. The Company
acknowledges that a breach by it of its obligations hereunder will cause
irreparable harm to a Buyer. Accordingly, the Company acknowledges that the
remedy at law for a breach of its obligations under this Section 5(b) will be
inadequate and agrees, in the event of a breach or threatened breach by the
Company of the provisions of this Section 5(b), that a Buyer shall be entitled,
in addition to all other available remedies, to an order and/or injunction
restraining any breach and requiring immediate issuance and transfer, without
the necessity of showing economic loss and without any bond or other security
being required.
 

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6. CONDITIONS TO THE COMPANY’S OBLIGATION TO SELL. The obligation of the Company
hereunder to issue and sell the Notes and the related Warrants to each Buyer at
the Closing is subject to the satisfaction, at or before the Closing Date, of
each of the following conditions, provided that these conditions are for the
Company’s sole benefit and may be waived by the Company at any time in its sole
discretion by providing each Buyer with prior written notice thereof:
 
(a) Such Buyer shall have executed each of the Transaction Documents to which it
is a party and delivered the same to the Company.
 
(b) Such Buyer and each other Buyer shall have delivered to the Company the
Purchase Price (less any amounts withheld pursuant to Section 4(f)) for the
Notes and the related Warrants and being purchased by such Buyer at the Closing
by wire transfer of immediately available funds pursuant to the wire
instructions provided by the Company.
 
(c) The representations and warranties of such Buyer shall be true and correct
in all material respects (except for those representations and warranties that
are qualified by materiality or Material Adverse Effect, which shall be true and
correct in all respects) as of the date of this Agreement and (except to the
extent such representations and warranties speak as of an earlier date) as of
the Closing Date as though made on and as of the Closing Date, and such Buyer
shall have performed, satisfied and complied in all material respects with the
covenants, agreements and conditions required by this Agreement to be performed,
satisfied or complied with by such Buyer at or prior to the Closing Date.
 
7. CONDITIONS TO EACH BUYER’S OBLIGATION TO PURCHASE. The obligation of each
Buyer hereunder to purchase the Notes and the related Warrants at the Closing is
subject to the satisfaction, at or before the Closing Date, of each of the
following conditions, provided that these conditions are for each Buyer’s sole
benefit and may be waived by such Buyer at any time in its sole discretion by
providing the Company with prior written notice thereof:
 
(a) The Company shall have executed and delivered to such Buyer (i) each of the
Transaction Documents, (ii) the Notes (in such principal amounts as such Buyer
shall request) being purchased by such Buyer at the Closing pursuant to this
Agreement and (iii) the Warrants (in such amounts as such Buyer shall request)
being purchased by such Buyer at the Closing pursuant to this Agreement.
 

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(b) Such Buyer shall have received the opinions of (i) Pryor Cashman, LLP, the
Company’s outside counsel and (ii) Hale Lane Peek Dennison and Howard, the
Company’s Nevada counsel, each dated as of the Closing Date, which, when taken
together, shall be in substantially the form of Exhibit E attached hereto.
 
(c) The Company shall have delivered to such Buyer a copy of the Irrevocable
Transfer Agent Instructions, in the form of Exhibit D attached hereto, which
instructions shall have been delivered to and acknowledged in writing by the
Company’s transfer agent.
 
(d) The Company shall have delivered to such Buyer (x) a certificate evidencing
the formation and good standing of the Company in such entity’s jurisdiction of
formation issued by the Secretary of State (or comparable office) of such
jurisdiction, as of a date within ten (10) days of the Closing Date and (y) a
facsimile or other acceptable method of confirmation from such Secretary of
State (or comparable office) as of the Closing Date as to the continued good
standing of such entity.
 
(e) The representations and warranties of the Company shall be true and correct
in all material respects (except for those representations and warranties that
are qualified by materiality or Material Adverse Effect, which shall be true and
correct in all respects) as of the date of this Agreement and (except to the
extent such representations and warranties speak as of an earlier date) as of
the Closing Date as though made on and as of the Closing Date, and the Company
shall have performed, satisfied and complied in all material respects with the
covenants, agreements and conditions required by this Agreement to be performed,
satisfied or complied with by the Company at or prior to the Closing Date and
such Buyer shall have received a certificate dated as of the Closing Date
executed by an authorized officer of the Company to such effect.
 
(f) The Company shall have delivered to such Buyer a certified copy of the
Articles of Incorporation as certified by the Secretary of State of the State of
Nevada within five (5) days of the Closing Date.
 
(g) The Common Stock (I) shall be designated for quotation or listed on the
Principal Market and (II) shall not have been suspended, as of the Closing Date,
by the Commission or the Principal Market from trading on the Principal Market
nor shall suspension by the Commission or the Principal Market have been
threatened, as of the Closing Date, either (A) in writing by the Commission or
the Principal Market or (B) by falling below the minimum listing maintenance
requirements of the Principal Market.
 
(h) The Company shall have obtained all governmental, regulatory or third party
consents and approvals, if any, necessary for the sale of the Securities.
 

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(i) The Company shall have delivered to such Buyer a notice stating that (a) the
Company has received an aggregate of $22 million from the issuance of its common
stock under its shelf registration statement on Form S-3 (Registration Number
333-148386) (the “Registration Funds”) and (b) that the Registration Funds
(except approximately US$3,000,000, which shall be funded in RMB) are being held
in a limited access account (to which the Company has no access) until such
funds are released to the Company simultaneously upon the closing of the
transactions contemplated hereby.
 
8. TERMINATION. In the event that the Closing shall not have occurred with
respect to a buyer on or before Monday, March 3, 2008 due to the Company’s or
such Buyer’s failure to satisfy the conditions set forth in Sections 6 and 7
above (and the nonbreaching party’s failure to waive such unsatisfied
condition(s)), the nonbreaching party shall have the option to terminate this
Agreement with respect to such breaching party at the close of business on such
date without liability of any party to any other party.
 
9. MISCELLANEOUS.
 
(a) Governing Law; Jurisdiction; Jury Trial. All questions concerning the
construction, validity, enforcement and interpretation of this Agreement shall
be governed by the internal laws of the State of New York, without giving effect
to any choice of law or conflict of law provision or rule (whether of the State
of New York or any other jurisdictions) that would cause the application of the
laws of any jurisdictions other than the State of New York. Each party hereby
irrevocably submits to the exclusive jurisdiction of the state and federal
courts sitting in The City of New York, Borough of Manhattan, for the
adjudication of any dispute hereunder or in connection herewith or with any
transaction contemplated hereby or discussed herein, and hereby irrevocably
waives, and agrees not to assert in any suit, action or proceeding, any claim
that it is not personally subject to the jurisdiction of any such court, that
such suit, action or proceeding is brought in an inconvenient forum or that the
venue of such suit, action or proceeding is improper. Each party hereby
irrevocably waives personal service of process and consents to process being
served in any such suit, action or proceeding by mailing a copy thereof to such
party at the address for such notices to it under this Agreement and agrees that
such service shall constitute good and sufficient service of process and notice
thereof. Nothing contained herein shall be deemed to limit in any way any right
to serve process in any manner permitted by law. EACH PARTY HEREBY IRREVOCABLY
WAIVES ANY RIGHT IT MAY HAVE, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE
ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION WITH OR ARISING OUT OF
THIS AGREEMENT OR ANY TRANSACTION CONTEMPLATED HEREBY. 
 
(b) Counterparts. This Agreement may be executed in two or more identical
counterparts, all of which shall be considered one and the same agreement and
shall become effective when counterparts have been signed by each party and
delivered to the other party; provided that a facsimile signature shall be
considered due execution and shall be binding upon the signatory thereto with
the same force and effect as if the signature were an original, not a facsimile
signature.
 
(c) Headings. The headings of this Agreement are for convenience of reference
and shall not form part of, or affect the interpretation of, this Agreement.
 

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(d) Severability. If any provision of this Agreement shall be invalid or
unenforceable in any jurisdiction, such invalidity or unenforceability shall not
affect the validity or enforceability of the remainder of this Agreement in that
jurisdiction or the validity or enforceability of any provision of this
Agreement in any other jurisdiction.
 
(e) Entire Agreement; Amendments. This Agreement supersedes all other prior oral
or written agreements between the Buyer, the Company, their affiliates and
Persons acting on their behalf with respect to the matters discussed herein, and
this Agreement and the instruments referenced herein contain the entire
understanding of the parties with respect to the matters covered herein and
therein and, except as specifically set forth herein or therein, neither the
Company nor the Buyer makes any representation, warranty, covenant or
undertaking with respect to such matters. No provision of this Agreement may be
amended other than by an instrument in writing signed by the Company and the
holders of at least a majority of the aggregate number of Registrable Securities
issued and issuable hereunder, and any amendment to this Agreement made in
conformity with the provisions of this Section 9(e) shall be binding on the
Buyer and holders of Securities, as applicable. No provision hereof may be
waived other than by an instrument in writing signed by the party against whom
enforcement is sought. No such amendment shall be effective to the extent that
it applies to less than all of the holders of the applicable Securities then
outstanding. No consideration shall be offered or paid to any Person to amend or
consent to a waiver or modification of any provision of any of the Transaction
Documents unless the same consideration also is offered to all of the parties to
the Transaction Documents, holders of Notes, or holders of the Warrants, as the
case may be. The Company has not, directly or indirectly, made any agreements
with the Buyer relating to the terms or conditions of the transactions
contemplated by the Transaction Documents except as set forth in the Transaction
Documents.
 
(f) Notices. Any notices, consents, waivers or other communications required or
permitted to be given under the terms of this Agreement must be in writing and
will be deemed to have been delivered: (i) upon receipt, when delivered
personally; (ii) upon receipt, when sent by facsimile (provided confirmation of
transmission is mechanically or electronically generated and kept on file by the
sending party); or (iii) one Business Day after deposit with an overnight
courier service, in each case properly addressed to the party to receive the
same. The addresses and facsimile numbers for such communications shall be:
 
If to the Company:
 
Agfeed Industries, Inc.
1095 Qinglan Avenue
Economic and Technology Development Zone
Nanchang City
Jiangxi Province

Telephone:
86-791-2189636

Facsimile:
86-791-2189636

Attention:
Dr. Songyan Li

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Copy to:
 
Pryor Cashman, LLP
410 Park Avenue
New York, NY 10022

Telephone:
(212) 326-0879

Facsimile:
(212)798-6391

Attention:
Selig D. Sacks, Esq.

If to the Transfer Agent:
 
Interwest Transfer Company, Inc.
1981 East Murray Holladay Road, Suite 100
P.O. Box 17136
Salt Lake City, Ut 84117

Telephone:
(801)272-9294

Facsimile:
(801)277-3147

Attention:
Melinda Orth

 
If to a Buyer, to its address and facsimile number set forth on the Schedule of
Buyers, with copies to such Buyer’s representatives as set forth on the Schedule
of Buyers, or to such other address and/or facsimile number and/or to the
attention of such other Person as the recipient party has specified by written
notice given to each other party five (5) days prior to the effectiveness of
such change. Written confirmation of receipt (A) given by the recipient of such
notice, consent, waiver or other communication, (B) mechanically or
electronically generated by the sender’s facsimile machine containing the time,
date, recipient facsimile number and an image of the first page of such
transmission or (C) provided by an overnight courier service shall be rebuttable
evidence of personal service, receipt by facsimile or receipt from an overnight
courier service in accordance with clause (i), (ii) or (iii) above,
respectively; provided however that the foregoing clause (B) shall only be valid
if such communication contained in the facsimile is delivered by an overnight
courier service within 24 hours of the transmission of facsimile.
 
(g) Successors and Assigns. This Agreement shall be binding upon and inure to
the benefit of the parties and their respective successors and assigns,
including any purchasers of the Notes or the Warrants. The Company shall not
assign this Agreement or any rights or obligations hereunder without the prior
written consent of the holders of at least a majority of the aggregate number of
Registrable Securities issued and issuable hereunder, including by way of a
Fundamental Transaction (unless the Company is in compliance with the applicable
provisions governing Fundamental Transactions set forth in the Notes and the
Warrants). A Buyer may assign some or all of its rights hereunder without the
consent of the Company, in which event such assignee shall be deemed to be a
Buyer hereunder with respect to such assigned rights.
 

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(h) No Third Party Beneficiaries. This Agreement is intended for the benefit of
the parties hereto and their respective permitted successors and assigns, and is
not for the benefit of, nor may any provision hereof be enforced by, any other
Person.
 
(i) Survival. Unless this Agreement is terminated under Section 8, the
representations and warranties of the Company and the Buyers contained in
Sections 2 and 3 and the agreements and covenants set forth in Sections 4, 5 and
9 shall survive the Closing. Each Buyer shall be responsible only for its own
representations, warranties, agreements and covenants hereunder.
 
(j) Further Assurances. Each party shall do and perform, or cause to be done and
performed, all such further acts and things, and shall execute and deliver all
such other agreements, certificates, instruments and documents, as any other
party may reasonably request to carry out the intent and accomplish the purposes
of this Agreement and the consummation of the transactions contemplated hereby.
 
(k) No Strict Construction. The language used in this Agreement will be deemed
to be the language chosen by the parties to express their mutual intent, and no
rules of strict construction will be applied against any party.
 
(l) Independent Nature of Buyers’ Obligations and Rights. The obligations of
each Buyer under any Transaction Document are several and not joint with the
obligations of any other Buyer, and no Buyer shall be responsible in any way for
the performance of the obligations of any other Buyer under any Transaction
Document. Nothing contained herein or in any other Transaction Document, and no
action taken by any Buyer pursuant hereto or thereto, shall be deemed to
constitute the Buyers as a partnership, an association, a joint venture or any
other kind of entity, or create a presumption that the Buyers are in any way
acting in concert or as a group with respect to such obligations or the
transactions contemplated by the Transaction Documents. Each Buyer confirms that
it has independently participated in the negotiation of the transaction
contemplated hereby with the advice of its own counsel and advisors. Each Buyer
shall be entitled to independently protect and enforce its rights, including,
without limitation, the rights arising out of this Agreement or out of any other
Transaction Documents, and it shall not be necessary for any other Buyer to be
joined as an additional party in any proceeding for such purpose.
 
(m) Remedies. Each Buyer and each holder of the Securities shall have all rights
and remedies set forth in the Transaction Documents and all rights and remedies
which such holders have been granted at any time under any other agreement or
contract and all of the rights which such holders have under any law. Any Person
having any rights under any provision of this Agreement shall be entitled to
enforce such rights specifically (without posting a bond or other security), to
recover damages by reason of any breach of any provision of this Agreement and
to exercise all other rights granted by law. Furthermore, the Company recognizes
that in the event that it fails to perform, observe, or discharge any or all of
its obligations under the Transaction Documents, any remedy at law may prove to
be inadequate relief to such Buyer. The Company therefore agrees that each Buyer
shall be entitled to seek temporary and permanent injunctive relief in any such
case without the necessity of proving actual damages and without posting a bond
or other security.
 

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[Signature Page Follows]

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IN WITNESS WHEREOF, each Buyer and the Company have caused their respective
signature page to this Securities Purchase Agreement to be duly executed as of
the date first written above.
 

 
COMPANY:
     
AGFEED INDUSTRIES, INC.
     
By:
/s/ Xiong Jun Hong
   
Name: Xiong Jun Hong
   
Title: CEO

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IN WITNESS WHEREOF, each Buyer and the Company have caused their respective
signature page to this Securities Purchase Agreement to be duly executed as of
the date first written above.
 

 
BUYERS:
     
APOLLO ASIA OPPORTUNITY
MASTER FUND, L.P.
 
By: Apollo Asia Management GP, LLC
     
By:
/s/ Patricia M. Navis
   
Name: Patricia M. Navis
   
Title: Vice President

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JABCAP MULTI-STRATEGY MASTER
FUND LIMITED
 
J-Invest Ltd
     
By:
/s/ Tse-Ern, Chia
   
Name: Tse-Ern, Chia
   
Title: Director

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J- INVEST LTD.
     
By:
/s/ Tse-Ern, Chia
   
Name: Tse-Ern, Chia
   
Title: Director

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DEUTSCHE BANK AG LONDON
     
By:
/s/ Simon Rani    
Name: Simon Rani
   
Title: Director

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