Unassociated Document


    Exhibit
10.7


    SECURITIES
PURCHASE AGREEMENT

     

    THIS SECURITIES PURCHASE
AGREEMENT (this “Agreement”) is made this 7th
day of July, 2010 by and between Nanchang Best Animal Husbandry Co., Ltd., a
corporation organized under the laws of the People’s Republic of China having
its principal place of business at 1095 Qinglan Avenue, Eco &
Technology Development Zone, Nanchang, Jiangxi Province (the “Seller”), and Shandong AgFeed
Agribusiness Co., Ltd., a corporation organized under the laws of the People’s
Republic of China having its principal place of business at No. 4 Chuangye
Street, East Development Zone, Tai’an City, Shandong Province (the “Purchaser”).  The
Purchaser and the Seller may collectively be referred to as the “Parties” and, individually,
as a “Party.”

     

    RECITALS:

     

    WHEREAS, the Seller is the
record holder of 100% of the issued and outstanding registered capital (the
“Purchased Securities”)
Hainan HopeJia Feed Co., Ltd., a corporation organized under the laws of the
People’s Republic of China (the “Company”); and

     

    WHEREAS, the Seller desires to
sell to the Purchaser, and the Purchaser desires to purchase from the Seller,
the Purchased Securities in accordance with the terms and conditions of this
Agreement.

     

    NOW, THEREFORE, in
consideration of the mutual promises and covenants stated below, the Parties
hereto agree as follows:

     

    Article
1.  Definitions.  Capitalized
terms used in this Agreement and not otherwise defined herein shall have the
meanings set forth below:

     

    “Affiliate” shall mean, with
respect to any Person, (i) any Person directly or indirectly controlling,
controlled by or under common control with, such Person; (ii) any Person
owning five percent (5%) or more of the outstanding stock of such Person; and
(iii) any Person who is a director, officer or key employee of such Person
or of any Person described in clause (i) above.  As used herein,
“control” means the possession, direct or indirect, of the power to direct or
cause the direction of the management and policies of a Person, whether through
the ownership of voting securities, by contract or otherwise.

     

    “Agreement” shall mean this
Securities Purchase Agreement, including all exhibits hereto, as the same may
hereafter be amended, modified or supplemented from time to time.

     

    “Approvals” shall mean any and
all permits, consents, acceptances of filings and reports, authorizations, and
other approvals from any relevant government authority or agency in China,
United States of America, or the British Virgin Islands.

     

    “Authority” shall mean any
governmental, legislative, executive, regulatory or administrative body, or any
court of judicial authority, whether international, national or local, or any
subdivision, agency, authority, board, bureau, commission, office or
instrumentality thereof.

     

    
      
         


      

      
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    “Business Day” shall mean any
day that is not a Saturday, Sunday or national holiday in China.

     

    “China” shall mean the
People’s Republic of China.

     

    “Closing” shall mean the
closing of the transactions under this Agreement.

     

    “Closing Date” shall mean the
date of the Closing to be mutually agreed by the Parties, which date shall be
July 7, 2010, or within three (3) Business Days after the satisfaction
or the waiver of the conditions precedent to the Parties’ obligations hereunder,
or at such other date, time and place as shall be mutually agreed by the
Parties.

     

    “Consideration” shall have the
meaning specified in Article 2.1
hereof.

     

    “Contract” shall mean a
contract or agreement to a Party is a party.

     

    “Final Purchase Price” shall
have the meaning specified in Article 2.1
hereof.

     

    “ICC” shall mean the
International Chamber of Commerce.

     

    “Indemnified Party” shall have
the meaning specified in Article 7.1
hereof.

     

    “Indemnifying Party” shall
have the meaning specified in Article 7.1
hereof.

     

    “Law” shall mean any law,
statute, regulation, ordinance, requirement, notification or other binding
action or requirement of any Authority, or any fiduciary duty or obligation
provided by the statutory laws.

     

    “Lien or Other Encumbrance”
shall mean any lien, pledge, mortgage, security interest, lease, charge,
conditional sales contract, option, restriction, reversionary interest, right of
first refusal or other transfer restriction, voting trust arrangement,
preemptive right, claim, easement or any other encumbrance, adverse claim or
right or demands of any nature whatsoever.

     

    “Losses” shall mean all
losses, liabilities, damages, deficiencies, suits, debts, obligations, interest,
penalties, expenses, judgments or settlements of any nature or kind, including
all costs and expenses related thereto, including without limitation reasonable
attorneys’ fees and disbursements, court costs, amounts paid in settlement and
expenses of investigation, whether at law or in equity, whether known or
unknown, foreseen or unforeseen, of any kind or nature.

     

    “Person” shall mean any
natural person, entity, corporation, company, association, joint venture, joint
stock company, partnership, trust, organization, individual, nation, state,
government (including agencies, departments, bureaus, boards, divisions and
instrumentalities thereof), trustee, receiver or liquidator.

     

    “Preliminary Purchase Price”
shall have the meaning specified in Article 2.1
hereof.

     

    
      
         


      

      
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    “RMB” shall mean Renminbi, the
official currency of China.

     

    Article
2.  Sale and Purchase of the
Shares.

     

    2.1  Sale and
Purchase.  Subject to the terms and conditions of this
Agreement, the Seller shall sell to the Purchaser, and the Purchaser shall buy
from the Seller, the Purchased Securities, for a purchase price equal to the sum
of the registered capital, additional paid-in capital and the cumulative profits
of the Company through July 31, 2010 less the cumulative
losses of the Company through July 31, 2010 (such sum, the “Consideration”),  which
purchase price shall be paid by the Seller by wire transfer of immediately
available funds to a bank account designated by the Purchaser, in writing in
accordance with the following paragraph.

     

    Prior to
July 31, 2010, Purchaser shall pay an amount equal to Twelve Million
Renminbi (RMB 12,000,000) (the “Preliminary Purchase
Price”).  Prior to September 15, 2010, Purchaser and
Seller shall jointly calculate the Consideration as of July 31, 2010
(the “Final Purchase
Price”).  Prior to September 30, 2010, to the extent the
Final Purchase Price exceeds the Preliminary Purchase Price, the Purchaser shall
pay the Seller an amount equal to such difference.  Prior to
September 30, 2010, to the extent the Preliminary Purchase Price exceeds
the Final Purchase Price, the Seller shall pay the Purchaser an amount equal to
such difference by wire transfer of immediately available funds to a bank
account designated by the Purchaser in writing.

     

    2.2  Closing.  Subject
to the satisfaction or, if permissible, waiver of the conditions set forth in
Article 5
of this Agreement, the Closing shall take place at the offices in Nanchang,
Jiangxi Province of the Seller, or such other location agreed upon by the
Parties, beginning at 11:00 A.M. local time on the Closing
Date.

     

    Article
3.  Closing
Deliveries.

     

    3.1  Deliveries by the
Seller.  At the Closing, the Seller shall deliver, or cause to
be delivered:

     

    (i)  All
outstanding certificates representing the Purchased Securities, duly endorsed in
blank, or accompanied by stock powers duly executed in blank, by Seller, with
all required stock transfer stamps, if any, affixed, free and clear of any Liens
or Other Encumbrances; and

     

    (ii)  Such
other documents as the Purchaser shall reasonably request in
writing.

     

    3.2  Deliveries by the
Purchaserg.  The Purchaser shall deliver, or cause to be
delivered:

     

    (i)  The
Preliminary Purchase Price by wire transfer to an account of the Seller
designated by written notice to the Purchaser on the dater hereof, in
immediately available funds, in accordance with Article 2.1;
and

     

    
      
         


      

      
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    (ii)  At
the Closing, such other documents as the Seller shall reasonably request in
writing.

     

    Article
4.  Representations and
Warranties.

     

    4.1  Representations and
Warranties of the Seller.  The Seller represents and warrants
to the Purchaser as of the date of this Agreement and as of the Closing Date
with the same force and effect as if made at and as of such time as set forth
below, and acknowledges that the Purchaser is relying upon the accuracy of each
of such representations and warranties in connection with the purchase of the
Shares and the completion of the other transactions contemplated
hereunder:

     

    (i)  Authority and
Enforceability.  The Seller has full power, authority and
capacity to execute and deliver this Agreement, to perform its obligations
hereunder and to consummate the purchase and sale of Shares contemplated
hereby.  The execution, delivery and performance of this Agreement by
the Seller and the consummation of the purchase and sale of Purchased Securities
contemplated hereby, have been duly authorized by all requisite corporate action
of the Seller.  The Seller has duly executed and delivered this
Agreement which constitutes the legal, valid and binding obligation of the
Seller enforceable against the Seller in accordance with its terms, subject, as
to enforceability, to bankruptcy, insolvency, reorganization and similar laws of
general applicability relating to or affecting creditors’ rights and to general
equity principles.  To ensure the legality, validity, enforceability
or admissibility into evidence in China of this Agreement, it is not necessary
that this Agreement be filed or recorded with any court or other authority in
China other than filing hereof as required under the Law of
China  (which filing does not affect the validity or enforceability of
this Agreement).

     

    (ii)  Ownership of
Shares.  The Seller owns all of the Purchased Securities, and
such Securities are fully paid and non-assessable, free and clear of any Lien or
Other Encumbrance.  Upon the delivery of and payment for the Purchased
Securities at the Closing as provided for in this Agreement, the Purchaser will
acquire good and valid title, free and clear of any Lien or Other Encumbrance,
to the Purchased Securities upon receipt of book transfer of the Purchased
Securities.  The Purchased Securities constitute all of the issued and
outstanding capital securities of the Company.

     

    (iii)  No
Violation.  The execution, delivery and performance of this
Agreement by the Seller, and the consummation of the purchase and sale of the
Purchased Securities contemplated hereby, do not and will not conflict with,
contravene, result in a violation or breach of or default under (with or without
the giving of notice or the lapse of time or both), create in any other Person a
right or claim of termination or amendment, or require modification,
acceleration or cancellation of, or result in the creation of any Lien or Other
Encumbrance (or any obligation to create any Lien or Other Encumbrance) upon any
of the properties or assets of the Seller under, (a) any Law of any
Authority having jurisdiction over the Seller or any of its properties or
assets, (b) any provision of any of the constituent documents of the
Seller, or (c) any Contract, or any other agreement or instrument to which
the Seller is a party or by which any of its properties or assets may be bound,
and with respect to each of (a), (b), and (c) above, there is no pending
action alleging any such violation.

     

    
      
         


      

      
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    (iv)  Due
Organization.  The Seller is an entity duly organized, validly
existing and, if applicable under the laws of its jurisdiction of organization,
in good standing under the laws of its jurisdiction of organization, and has
full power and authority to, conduct its business and to own or lease and to
operate its properties as and in the places where such business is conducted and
such properties are owned, leased or operated.

     

    (v)  Government
Approvals.  Except as set forth on Schedule 4.1(v)(1),
no Approval of any Chinese Authority is required for the sale of the Purchased
Shares or the consummation by the Seller of the transactions contemplated by
this Agreement.

     

    (vi)  Survival of Representations
and Warranties.  Each of the representations and warranties of
the Seller in this Agreement or in any schedule, instrument or other document
delivered pursuant to this Agreement shall survive the Closing Date and shall
continue in force thereafter.

     

    4.2  Representations and
Warranties of the Purchaser.  The Purchaser hereby represents
and warrants to the Seller as of the date of this Agreement and as of the
Closing Date with the same force and effect as if made at and as of such time as
follows, and confirms that the Seller is relying upon the accuracy of each of
such representations and warranties in connection with the sale of the Purchased
Securities and the completion of the other transactions contemplated
hereunder:

     

    (i)  Authority and
Enforceability.  The Purchaser has full power, authority and
capacity to execute and deliver this Agreement, to perform its obligations
hereunder and to consummate the purchase and sale of the Purchased Securities
contemplated hereby.  The execution, delivery and performance of this
Agreement by the Purchaser and the consummation of the purchase and sale of the
Purchased Securities contemplated hereby, have been duly authorized or will be
duly authorized prior to the Closing by all requisite corporate action of the
Purchaser.  The Purchaser has duly executed and delivered this
Agreement.  This Agreement constitutes the legal, valid and binding
obligation of the Purchaser enforceable against the Purchaser in accordance with
its terms in China, subject, as to enforceability, to bankruptcy, insolvency,
reorganization and similar laws of general applicability relating to or
affecting creditors’ rights and to general equity principles.

     

    (ii)  No
Violation.  The execution, delivery and performance of this
Agreement by the Purchaser, and the consummation of the purchase and sale of the
Purchased Securities contemplated hereby, do not and will not conflict with,
contravene, result in a violation or breach of or default under (with or without
the giving of notice or the lapse of time or both), create in any other Person a
right or claim of termination or amendment, or require modification,
acceleration or cancellation of, or result in the creation of any Lien or Other
Encumbrance (or any obligation to create any Lien or Other Encumbrance) upon any
of the properties or assets of the Purchaser under, (a) any Law of any
Authority having jurisdiction over the Purchaser or any of its properties or
assets, (b) any provision of any of the constituent documents of the
Purchaser, or (c) any Contract, or any other agreement or instrument to
which the Purchaser is a party or by which any of its properties or assets may
be bound, and with respect to each of (a), (b), and (c) above, there is no
pending action alleging any such violation.

     

    
      
         


      

      
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    (iii)  Due
Organization.  The Purchaser is an entity duly organized,
validly existing and, if applicable under the laws of its jurisdiction of
organization, in good standing under the laws of its jurisdiction of
organization, and has full power and authority to, conduct its business and to
own or lease and to operate its properties as and in the places where such
business is conducted and such properties are owned, leased or
operated.

     

    (iv)  Survival of Representations
and Warranties.  Each of the representations and warranties of
the Purchaser in this Agreement or in any schedule, instrument or other document
delivered pursuant to this Agreement shall survive the Closing Date and shall
continue in force thereafter.

     

    Article
5.  Conditions Precedent to
Closing.

     

    5.1  Conditions Precedent to
Obligations of the Seller.  The obligations of the Seller to
sell and deliver the Purchased Securities pursuant to Articles 2 and
3 hereof and to
consummate the transactions contemplated hereby shall be subject to the
fulfillment, or waiver by the Seller, on or prior to the Closing Date, of all of
the conditions set forth below:

     

    (i)  Representations and
Warranties.  All representations and warranties of the
Purchaser contained in Article 4.2
hereto were true when made and shall be true on and as of the Closing Date as if
made on such date.

     

    (ii)  Performance.  The
Purchaser shall have performed and complied with all agreements and covenants
required by this Agreement to be performed or complied with by the Purchaser on
or prior to the Closing Date.

     

    (iii)  Government
Approvals.  All necessary Approvals from the Authorities
applicable to the Purchaser, which are required to be obtained prior to the
Closing Date in connection with the transactions contemplated hereby shall have
been obtained within the period prescribed by the relevant statute.

     

    5.2  Conditions Precedent to
Obligations of the Purchaser.  The obligations of the Purchaser
to purchase the Purchased Securities pursuant to Articles 2 and
3 hereof and to
consummate the transactions contemplated hereby shall be subject to the
fulfillment, or waiver by the Purchaser, on or prior to the Closing Date, of all
of the conditions set forth below:

     

    (i)  Representations and
Warranties.  All representations and warranties of the Seller
contained in Article 4.1
hereto were true when made and shall be true on and as of the Closing Date as if
made on such date.

     

    (ii)  Performance.  The
Seller shall have performed and complied with all agreements and covenants
required by this Agreement to be performed or complied with by the Purchaser on
or prior to the Closing Date.

     

    (iii)  Government
Approvals.  All necessary Approvals from the Authorities
applicable to the Purchaser, which are required to be obtained prior to the
Closing Date in connection with the transactions contemplated hereby shall have
been obtained within the period prescribed by the relevant statute.

     

    
      
         


      

      
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    Article
6.  Termination.

     

    6.1  Termination by Either
Party.  Either Party may terminate this Agreement (i) to
the extent that performance thereof is prohibited, enjoined or otherwise
materially restrained by any final, non-appealable judgment, ruling, order or
decree of any Authority, provided that the Party seeking to terminate its
obligations hereunder pursuant to this clause 6.1(i) shall have used its
best efforts to remove such prohibition, injunction, or restraint; or
(ii) by mutual written consent of the Parties.

     

    6.2  Effect of
Termination.  In the event of termination of this Agreement
under any provision of this Article 6, this
Agreement shall forthwith become null and void and neither Party shall have any
liability to the other Party.

     

    Article
7.  Indemnification.

     

    7.1  Indemnification.  Subject
to the following, each Party (the “Indemnifying Party”) shall
indemnify and hold the other Party (the “Indemnified Party” ) harmless
from and against any and all Losses that may be sustained, suffered or incurred
by the Indemnified Party arising out of or relating to any inaccuracy in or
breach or nonperformance of any of the representations, warranties, covenants or
agreements made by or any certificate given by the Indemnifying Party in or
pursuant to this Agreement.  The obligations under this Article 7 shall
survive any termination of this Agreement.

     

    7.2  No
Waiver.  No right of the Purchaser for indemnification under
this Article 7 shall
be affected by any examination made for or on behalf of the Purchaser, the
knowledge of any member of the Purchaser or the acceptance by the Purchaser of
any certificate or opinion.  No right of the Seller for
indemnification under this Article 7 shall
be affected by any examination made for or on behalf of the Seller, the
knowledge of any of the Seller or the acceptance by the Seller of any
certificate or opinion.

     

    Article
8.  Dispute
Resolution.

     

    8.1  Choice of
Forum.  The Parties agree that all disputes, differences,
controversies, claims or questions arising in connection with, occurring under,
or related to, the present Agreement shall be finally settled under the
Arbitration Rules of the ICC by an arbitral tribunal appointed in accordance
with said Rules.  The place of arbitration shall be Nanchang, Jiangxi
Province, China. The language of the arbitration shall be
English.  The Parties hereby exclude any right of appeal to any court
on the merits of the dispute.  Nothing contained in this Agreement
shall prevent either party from seeking interim measures of protection in the
form of pre-award attachment of assets, or from seeking injunctive relief to
enforce in courts of competent jurisdiction rights covered by this
Agreement.  In the event that any dispute arises under both this
Agreement, such disputes shall be resolved in a consolidated proceeding by a
single arbitral tribunal appointed by the ICC.

     

    8.2  Governing
Law.  The terms and conditions of this Agreement shall be
governed by and construed in accordance with the Laws of China that have been
promulgated and are available to the public, but if the promulgated and
available Laws of China have no application for the relevant matters of this
Agreement, the Parties shall consult the general international commercial
practice.

     

    
      
         


      

      
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    Article
9.  Miscellaneous.

     

    9.1  Notices.  All
notices, consents, waivers, and other communications under this Agreement shall
be (i) in writing, (ii) delivered by hand-delivery, registered first
class mail (return receipt requested), facsimile, or air courier guaranteeing
overnight delivery, (iii) deemed to have been given on the date on which it
is received, and (iv) shall be addressed as follows:

     

    
      
        	
                If
      to the Purchaser:

              
	 
      
	
                Shandong
      AgFeed Agribusiness Co., Ltd.

                No. 4
      Chuangye Street

                East
      Development Zone

                Tai’an
      City, Shandong Province  330013, China

                 

              
	
                Phone:  +(86) 791-666903

                Facsimile:  +(86) 791-6669090

                Attention:  Mr.
      Junhong Xiong

              
	 
      
	
                If
      to the Seller:

              
	 
      
	
                Nanchang
      Best Animal Husbandry Co., Ltd.

                1095 Qinglan
      Avenue

                Eco &
      Tech. Development Zone

                Nanchang,
      Jiangxi Province  271000, China

              
	 
      
	
                Phone:  +(86) 791-666903

                Facsimile:  +(86) 791-6669090

                Attention:  Dr.
      Songyan Li

              


      

    

    


    9.2  Assignment.  Neither
this Agreement nor any right or obligation arising under this Agreement may be
assigned by the Seller, without the prior written consent of the Purchaser, or
by the Purchaser, without the prior written consent of the Seller, provided that
the Purchaser may assign this Agreement and/or its rights and obligations under
this Agreement to any of its Affiliates, provided, however, that in case
of any such assignment by the Purchaser, the Purchaser shall remain jointly
responsible for any and all obligations set out in this Agreement, including the
obligations to make any deposit or payments.

     

    9.3  No Third-Party
Beneficiaries.  This Agreement shall be binding upon, and inure
solely to the benefit of, the Purchaser and the Seller, and their respective
heirs, successors and assigns, and no other Person shall acquire or have any
right under or by virtue of this Agreement.

     

    
      
         


      

      
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    9.4  Amendments.  This
Agreement may be amended only by written agreement between the Purchaser and the
Seller.

     

    9.5  Severability.  If
one of more provisions of this Agreement are held to be invalid or unenforceable
to any extent under applicable Law, such provision shall be interpreted as if it
were written so as to be enforceable to the maximum extent permitted by
applicable Law, so as to effectuate the Parties’ intent to the maximum extent,
and the remainder of this Agreement shall be interpreted as if such provision
were excluded and shall be valid and enforceable in accordance with its terms to
the maximum extent permitted by applicable Law.

     

    9.6  Survival.  The
representations, warranties, covenants and agreements made herein shall survive
any investigation made by any party hereto and the closing of the transactions
contemplated hereby.  In addition, Articles 7,
8 and 9.6 hereof shall
survive the termination of this Agreement.

     

    9.7  Costs and
Expenses.  Each Party shall bear its own costs and expenses
incurred in connection with this Agreement, including, without limitation, the
fees and expenses of their respective accountants and legal
counsel.

     

    9.8  Governing
Language.  In the event of any conflict between the English
language version of this Agreement and any translation hereof, the English
language version shall prevail.

     

    9.9  Entire
Agreement.  This Agreement (including all exhibits and
schedules hereto) constitutes the entire agreement and understanding of the
Parties hereto with respect to the subject matter of such documents, and
supersedes all prior agreements and understandings, both written and oral, of
the Parties relating to the subject matter of such documents.

     

    9.10  Counterparts.  This
Agreement may be executed in any number of counterparts, each of which shall be
deemed to be an original, and all of which together shall constitute one and the
same document.

     

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REMAINDER OF THIS PAGE LEFT BLANK INTENTIONALLY]

     

    
      
         


      

      
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    IN
WITNESS WHEREOF, the Parties hereto have caused this Agreement to be executed by
their duly authorized representatives as of the date first above
written.

     

    
      	
              SHANDONG AGFEED

              AGRIBUSINESS CO., LTD.

            	 
      	
              NANCHANG BEST ANIMAL

              HUSBANDRY CO., LTD.

            
	 
      	 
      	 
      
	
              By:

            	
              Li Songyan

            	 
      	
              By:

            	
              Xiao Qiu Sheng

            
	 
      	
              Name:  Li
      Songyan

            	 
      	 
      	
              Name:  Xiao
      Qiu Sheng

            
	 
      	
              Title:  Chairman

            	 
      	 
      	
              Title:  General
      Manager

            


    

    


    [SIGNATURE
PAGE TO SECURITIES PURCHASE AGREEMENT]

     

    
      
         


      

      
        
        

        
          

        

      

      
         


      

    

    
 

    Schedule 4.1(v)(1)
– Governmental Approvals

     

    Approval
by the original Chinese Authority approving the establishment of the Company as
a wholly foreign owned enterprise is required.