Stock Purchase Agreement

 


EXHIBIT 10.11


STOCK PURCHASE AGREEMENT

This STOCK PURCHASE AGREEMENT (the “Agreement”) is made and entered into as of 2nd day of March, 2006 by and among China Agritech, Inc., a corporation organized and existing under the laws of the State of Delaware (“CAGC”), China Tailong Group Ltd., a corporation organized and existing under the laws of the laws of the British Virgin Islands, (the “Seller”), and Chang Yu (the “Purchaser”).


PRELIMINARY STATEMENT
:

WHEREAS, the parties intend to memorialize the transfer ofcertain stocks in CAGC to the Purchaser;

WHEREAS, the Seller desires to sell to Purchaser certainstocks in CAGC held by it and the Purchaser desires to purchase such stocks inCAGC held by the Seller, upon the terms and subject to the conditions set forthherein

NOW, THEREFORE, in consideration of the mutual covenants andpremises contained herein, and for other good and valuable consideration, thereceipt and adequacy of which are hereby conclusively acknowledged, the partieshereto, intending to be legally bound, agree as follows:

ARTICLE I         SALE AND PURCHASEOF CAGC ‘S COMMON STOCK AND PURCHASE PRICE

SECTION 1.1

Sale of CAGC Stock. Upon the terms and subject to theconditions set forth in this Agreement, and in accordance with applicable law,at the Closing on the Closing Date (as those terms are defined in Section 2.1hereof), the Seller agrees to sell, assign, transfer, convey and deliver toPurchaser, and Purchaser agrees to purchase and acquire 483,881 shares of commonstock of CAGC held by the Seller (the ” CAGC Stock” or “Company Stock”).Purchaser acknowledges that the Seller has deposited CAGC Stock with theCompany’s corporate secretary.

SECTION 1.2

Purchase Price. The purchase price to be paid by the Purchaser to the Sellerfor CAGC Stock is USD1,000 (the “Purchase Price”).

ARTICLE II        CLOSING DATE ANDDELIVERIES AT CLOSING

SECTION 2.1

Closing Date. The closing of the transactions contemplated bythis Agreement (the “Closing”), unless expressly determined herein, shall beheld by the Company’s corporate secretary on the date and place

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as may be mutually agreed by the parties, including closing by facsimile withoriginals to follow. The date of the Closing is sometimes referred to herein asthe “Closing Date.”

SECTION 2.2

Deliveries by the Seller. In addition to and without limiting any otherprovision of this Agreement, the Seller agrees to deliver, or cause to bedelivered, to Purchaser, at or prior to Closing, the following:

(a)   Certificates representing CAGC Stock, which certificates shall be dulyendorsed to the Purchaser;

(b)   Such other documents or certificates as shall be reasonably requested bythe Purchaser or his counsel.

SECTION 2.3

Deliveries by Purchaser. In addition to and without limitingany other provision of this Agreement, the Purchaser agrees to deliver, or causeto be delivered, to the Seller, at or prior to Closing, the following:

(a)   The Purchase Price required to be delivered on or before Closing pursuantto Section 1.2 hereof;

(b)   Such other documents or certificates as shall be reasonably requested bythe Seller or his counsel.

SECTION 2.4

Further Assurances. The Seller and the Purchaser shall, uponrequest, on or after the Closing Date, cooperate with each other by furnishingany additional information, executing and delivering any additional documentsand/or other instruments and doing any and all such things as may be reasonablyrequired by the parties or their counsel to consummate or otherwise implementthe transactions contemplated by this Agreement.

ARTICLE III       REPRESENTATIONS ANDWARRANTIES OF CAGC

CAGC and the Seller jointly and severally represent andwarrant to Purchaser (which warranties and representations shall survive theClosing regardless of what examination, inspections, audits and otherinvestigations the Purchaser has heretofore made or may hereinafter make withrespect to such warranties and representations) as follows:

SECTION 3.1

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Organization and Qualification. CAGC is a corporation dulyorganized, validly existing and in good standing under the laws of the State ofDelaware, and has the requisite corporate power and authority to own, lease andoperate its properties and to carry on its business as it is now being conductedand is duly qualified to do business in any other jurisdiction by virtue of thenature of the businesses conducted by it or the ownership or leasing of itsproperties, except where the failure to be so qualified will not, when takentogether with all other such failures, have a material adverse effect on thebusiness, operations, properties, assets, financial condition or results ofoperation of CAGC and its subsidiaries taken as a whole. (Any such materialadverse effect being hereinafter referred to as “Company Material AdverseEffect”).

SECTION 3.2

Articles of Incorporation and By-Laws. The complete andcorrect copies of CAGC’s Articles of Incorporation and By-Laws, as amended orrestated to date which have been filed with the Securities and ExchangeCommission are a complete and correct copy of such document as in effect on thedate hereof and as of the Closing Date.

SECTION 3.3

Capitalization. The authorized and outstanding capital stockof CAGC is set forth in CAGC ‘s Annual Report on Form 10-KSB, filed with theSecurities and Exchange Commission, or its amendment. All shares of capitalstock have been duly authorized and are validly issued, and are fully paid andno assessable, and free of preemptive rights.

(a)

   Except pursuant to this Agreementand the Agreement signed between the CAGC and Heritage, and as set forth in CAGC’s Annual Report on Form 10-KSB, filed with the Securities and ExchangeCommission, as of the date hereof and as of the Closing Date, there are not nowoutstanding options, warrants, rights to subscribe for, calls or commitments ofany character whatsoever relating to, or securities or rights convertible intoor exchangeable for, shares of any class of capital stock of CAGC , oragreements, understandings or arrangements to which CAGC is a party, or by whichCAGC is or may be bound, to issue additional shares of its capital stock oroptions, warrants, scrip or rights to subscribe for, calls or commitment of anycharacter whatsoever relating to, or securities or rights convertible into orexchangeable for, any shares of any class of its capital stock.

(b)

  The Seller beneficially ownsof record CAGC Stock. The Purchaser (i) on the Closing Date will have fullright, power, and authority to sell, assign, transfer, and deliver, by reason ofrecord and beneficial ownership, to Purchaser, CAGC Stock hereunder, free andclear of all liens, charges, claims, options, pledges, restrictions, andencumbrances whatsoever; and (ii) upon delivery of and payment by Purchaser tothe Seller of the Purchase Price, Purchaser will acquire good and marketabletitle to such Company Stock, free and clear of all liens, charges, claims,options, pledges, restrictions, and encumbrances whatsoever.

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SECTION 3.4

Authority.     CAGC hasall requisite corporate power and authority, and the Seller has full power, toexecute and deliver this Agreement, to perform his obligations hereunder and toconsummate the transactions contemplated hereby. The execution and delivery ofthis Agreement by CAGC and the Seller and the consummation of the transactionscontemplated hereby have been duly authorized by all necessary corporate actionand no other corporate proceedings on the part of CAGC is necessary to authorizethis Agreement or to consummate the transactions contemplated hereby except asdisclosed in this Agreement. This Agreement has been duly executed and deliveredby CAGC and the Seller and constitutes the legal, valid and binding obligationof CAGC and the Seller enforceable against CAGC and the Seller in accordancewith its terms, except as may be limited by bankruptcy, insolvency,reorganization, moratorium, or other similar laws affecting the enforcement ofcreditors’ rights generally and general principles of equity.

SECTION 3.5

No Conflict; Required Filings and Consents.The execution and delivery of this Agreement by CAGC and the Seller does not,and the performance by CAGC and the Seller of their respective obligationshereunder will not: (i) conflict with or violate the Articles of Incorporationor By-Laws of CAGC ; (ii) conflict with or violate any federal, state, foreignor local law, statute, ordinance, rule, regulations, order, judgment or decree(collectively, “Laws”) in effect as of the date of this Agreement and applicableto CAGC and the Seller; or (iii) result in any breach of, constitute a default(or an event that with notice or lapse of time or both would become a default)under, give to any other entity any right of termination, amendment,acceleration or cancellation of, require payment under, or result in thecreation of a lien or encumbrance on any of the properties or assets of CAGCpursuant to, any note, bond, mortgage, indenture, contract, agreement, lease,license, permit, franchise or other instrument or obligation to which CAGC is aparty or by CAGC or any of its properties or assets is bound. Excluding from theforegoing are such violations, conflicts, breaches, defaults, terminations,accelerations, creations of liens, or incumbency that would not, in theaggregate, have a Company Material Adverse Effect.

SECTION 3.6

Report and Financial Statements. CAGC ‘sQuarterly Report on Form 10-QSB, was filed with the Securities and ExchangeCommission contains the financial statements of CAGC as of September 30, 2005(the “Financial Statements”). Each of the balance sheets contained in orincorporated by reference into any such Financial Statements (including therelated notes and schedules thereto) fairly presented the financial position ofCAGC as of its date, and each of the statements of income and changes instockholders’ equity and cash flows or equivalent statements in such FinancialStatements (including any related notes and schedules thereto) fairly presentsand will fairly present the results of operations, changes in stockholders’equity and changes in cash flows, as the case may be, of CAGC for the periods towhich they relate, in each case in accordance with United States generallyaccepted accounting principles (“U.S. GAAP”) consistently applied during theperiods involved, except in each

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case as may be noted therein, subject to normal year-endaudit adjustments in the case of unaudited statements. The books and records ofCAGC have been, and are being, maintained in all material respects in accordancewith U.S. GAAP and any other applicable legal and accounting requirements andreflect only actual transaction. Without limiting the foregoing, the Purchasershall not assume, undertake or accept, and shall have no responsibility withrespect to, liabilities and obligations related to CAGC or operation of CAGCprior to the Closing Date, except as disclosed herein (up to the maximum agreedto herein).

SECTION 3.7

Compliance with Applicable Laws. CAGC is not in violation of,or, to the knowledge of CAGC or the Seller, is not under investigation withrespect to or has not been given notice or has not been charged with theviolation of any Law of a governmental agency, except for violations whichindividually or in the aggregate do not have a Company Material Adverse Effect.

SECTION 3.8

Brokers. No broker, finder or investment banker is entitledto any brokerage, finder’s or other fee or commission in connection with thetransactions contemplated by this Agreement based upon arrangements made by oron behalf of CAGC or the Seller.

SECTION 3.9

SEC Requirements. The Purchaser acknowledges that CAGC is apublicly held company and that the Purchaser has received from the Companyreports with the Securities and Exchange Commission and with the NASD.

SECTION 3.10

Litigation. To the knowledge of CAGC and the Seller, no litigation, claim, orother proceeding before any court or governmental agency is pending orthreatened against CAGC.

SECTION 3.11

Full Disclosure. No representation or warranty made by CAGCor the Seller in this Agreement and no certificate or document furnished or tobe furnished to the Purchaser pursuant to this Agreement contains or willcontain any untrue statement of a material fact, or omits or will omit to statea material fact necessary to make the statements contained herein or therein notmisleading.

ARTICLE IV REPRESENTATIONS AND WARRANTIES OF THE PURCHASER

 

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The Purchaser represents and warrants to the Seller (whichwarranties and representations shall survive the Closing regardless of whatexaminations, inspections, audits and other investigations The Seller hasheretofore made or may hereinafter make with respect to such warranties andrepresentations) as follows:

SECTION 4.1

No Conflict; Required Filings and Consents. The execution anddelivery of this Agreement by the Purchaser does not, and the performance by thePurchaser of its obligations hereunder will not conflict with, breach or violateany Laws in effect as of the date of this Agreement and applicable to thePurchaser.

SECTION 4.2

Brokers. No broker, finder or investment banker is entitledto any brokerage, finder’s or other fee or commission in connection with thetransactions contemplated by this Agreement based upon arrangements made by oron behalf of the Purchaser.

SECTION 4.3

Full Disclosure. No representation or warranty made by thePurchaser in this Agreement and no certificate or document furnished or to befurnished to CAGC or the Seller pursuant to this Agreement contains or willcontain any untrue statement of a material fact, or omits or will omit to statea material fact necessary to make the statements contained herein or therein notmisleading.

ARTICLE V CONDITIONS PRECEDENT TO SELLER’S OBLIGATIONS

The obligation of the Seller to consummate the transactions contemplatedhereby shall be subject to the fulfillment, on or prior to Closing Date, of thefollowing conditions:

SECTION 5.1

No Termination. This Agreement shall not have been terminated pursuant toArticle 7 hereof.

SECTION 5.2

Representations True and Correct. The representations andwarranties of the Purchaser contained in this Agreement shall be true andcorrect in all material respects on and as of the Closing Date with the sameforce and effect as if made on as of the Closing Date.

SECTION 5.3

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Compliance with Covenants. The Purchaser shall have performedand complied in all material respects with all covenants, agreements, andconditions required by this Agreement to be performed or complied by it prior toor at the Closing Date.

SECTION 5.4

No Adverse Proceedings. On the Closing Date, no action orproceeding shall be pending by any public authority or individual or entitybefore any court or administrative body to restrain, enjoin, or otherwiseprevent the consummation of this Agreement or the transactions contemplatedhereby or to recover any damages or obtain other relief as a result of thetransactions proposed hereby.

ARTICLE VI CONDITIONS PRECEDENT TO PURCHASER’S OBLIGATIONS

The obligation of the Purchaser to consummate the transactions contemplatedhereby shall be subject to the fulfillment, on or prior to Closing Date unlessspecified otherwise, of the following conditions:

SECTION 6.1

No Termination. This Agreement shall not have been terminated pursuant toArticle 7 hereof.

SECTION 6.2

Representations True and Correct. The representations andwarranties of CAGC and the Seller contained in this Agreement shall be true andcorrect in all material respects on and as of the Closing Date with the sameforce and effect as if made on as of the Closing Date.

SECTION 6.3

Compliance with Covenants. CAGC and the Seller shall haveperformed and complied in all material respects with all covenants, agreements,and conditions required by this Agreement herein attached to theAgreement to be performed or complied by it prior to or at the Closing Date.

SECTION 6.4

No Adverse Proceedings. On the Closing Date, no action orproceeding shall be pending by any public authority or individual or entitybefore any court or administrative body to restrain, enjoin, or otherwiseprevent the consummation of this Agreement or the transactions contemplatedhereby or to recover any damages or obtain other relief as a result of thetransactions proposed hereby.

ARTICLE VII     TERMINATION, AMENDMENT AND WAIVER

SECTION 7.1
 

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Termination. This Agreement may be terminated at any time prior to theClosing Date:

(a)

    by mutual writtenconsent of the Purchaser and the Seller;

(b)

  by the Seller upon amaterial breach of any representation, warranty, covenant or agreement on thepart of the Purchaser set forth in this Agreement, or by the Purchaser upon amaterial breach of any representation, warranty, covenant or agreement on thepart of CAGC or the Seller set forth in this Agreement, or if any representationor warranty of CAGC or The Seller or the Purchaser, respectively, shall havebecome untrue, in either case such that any of the conditions set forth inArticle V or Article VI hereof would not be satisfied (a “Terminating Breach”),and such breach shall, if capable of cure, not have been cured within ten (10)days after receipt by the party in breach of a notice from the non-breachingparty setting forth in detail the nature of such breach;

(c)

  by either the Seller or thePurchaser, if there shall be any court order which has become final and nonapplicable, except if the party seeking to terminate this Agreement pursuant tothis Section 8.1

(d)   

 has notcomplied with its obligations under Section 6 or 7 respectively; or

SECTION 7.2

Effect of Termination. In the event of the termination ofthis Agreement pursuant to Section 7.1 hereof, there shall be no liability onthe party of CAGC , the Seller or the Purchaser or any of their respectiveofficers, directors, agents or other representatives and all rights andobligations of any party hereto shall cease, except as expressed herein.

SECTION 7.3

Amendment. This Agreement may be amended by the parties hereto any time priorto the Closing Date by an instrument in writing signed by the parties hereto.

SECTION 7.4

Waiver. At any time prior to the Closing Date, the Seller or the Purchaser,as appropriate, may:

(a)

   extend the time forthe performance of any of the obligations or other acts of other party or;

(b)   waive any inaccuracies in therepresentations and warranties contained herein or in any document deliveredpursuant hereto which have been made to it or them; or

(c)    waive compliance with any ofthe agreements or conditions contained herein for its or their benefit. Any suchextension or waiver shall be valid only if set forth in an instrument in writingsigned by the party or parties to be bound hereby.

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ARTICLE VIII GENERAL PROVISIONS

SECTION 8.1

Transaction Costs. Except as otherwise provided herein, eachof the parties shall pay all of his or its costs and expenses (includingattorney fees and other legal costs and expenses and accountants’ fees and otheraccounting costs and expenses) incurred by that party in connection with thisAgreement.

SECTION 8.2

Indemnification. The Seller agrees to defend and hold thePurchaser and CAGC (following the Closing Date) and its officers and directorsharmless against and in respect of any and all claims, demands, losses, costs,expenses, obligations, liabilities or damages, including interest, penalties andreasonable attorney’s fees, that it shall incur or suffer, which arise out of,result from or relate to any breach of this Agreement or failure by the Sellerto perform with respect to any of its representations, warranties or covenantscontained in this Agreement or in any exhibit or other instrument furnished orto be furnished under this Agreement.

SECTION 8.3

Indemnification. The Purchaser agrees to defend and hold theSeller harmless against and in respect of any and all claims, demands, losses,costs, expenses, obligations, liabilities or damages, including interest,penalties and reasonable attorney’s fees, that it shall incur or suffer, whicharise out of, result from or relate to any breach of this Agreement or failureby the Purchaser to perform with respect to any of its representations,warranties or covenants contained in this Agreement or in any exhibit or otherinstrument furnished or to be furnished under this Agreement.

SECTION 8.4

Notices. All notices and other communications hereunder shall be in writingand shall be deemed to have been given

(i)

on the date they are delivered if delivered in person;
(ii) on the date initially received if delivered by facsimile transmission followed by registered or certified mail confirmation;
(iii) on the date delivered by an overnight courier service; or
(iv) on the third business day after it is mailed by registered or certified mail, return receipt requested with postage and other fees prepaid, to the addresses provided by each party to the other parties.


SECTION 8.5

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Headings. The table of contents and headings contained in this Agreement arefor reference purposes only and shall not affect in any way the meaning orinterpretation of this Agreement.

SECTION 8.6

Severability. If any term or other provision of thisAgreement is invalid, illegal or incapable of being enforced by any rule of awor public policy, all other conditions and provisions of this Agreement hallnevertheless remain in full force and effect so long as the economic or legalsubstance of the transactions contemplated hereby is not affected in any mannermaterially adverse to any party. Upon such determination that any such term orother provision is invalid, illegal or incapable of being enforced, the partieshereto shall negotiate in good faith to modify this Agreement so as to effectthe original intent of the parties as closely as possible in an acceptablemanner to the end that the transactions contemplated hereby are fulfilled to theextent possible.

SECTION 8.7

Entire Agreement. This Agreement (together with theSchedules, Exhibit, certificates and documents referred to herein) constitutethe entire agreement of the parties and supersede all prior agreements andundertakings, both written and oral, between the parties, or any of them, withrespect to the subject matter hereof.

SECTION 8.8

Binding Effect. All the terms and provisions of thisAgreement, whether so expressed or not, shall be binding upon, inure to thebenefit of, and be enforceable by the parties and their respectiveadministrators, executors, legal representatives, heirs, successors andassignees.

SECTION 8.9

Preparation of Agreement. This Agreement shall not beconstrued more strongly against any party regardless of who is responsible forits preparation. The parties acknowledge each contributed and is equallyresponsible for its preparation.

SECTION 8.10

Governing Law. This Agreement shall be governed by, and construed inaccordance with, the laws of the State of Delaware, without giving effect toapplicable principles of conflicts of law.

SECTION 8.11

Preparation and Filing of Tax Returns and Securities andExchange Commission filings. CAGC shall reasonably assist and cooperate with thePurchaser in the preparation of all the federal, state and local tax returns ofCAGC and all filings with the Securities and Exchange Commission after the

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Closing Date due after the Closing Date relating to periodsprior to the Closing Date. After the Closing Date, the decision on whether tofile short period returns up to the Closing Date or for a period other than CAGC’s current consolidated tax years, shall be made at the sole discretion of thePurchaser.

SECTION 8.12

Further Assurances, Cooperation. Each party shall, uponreasonable request by the other party, execute and deliver any additionaldocuments necessary or desirable to complete the merger pursuant to and in themanner contemplated by this agreement. The parties hereto agree to cooperate anduse their respective best efforts to consummate the transactions contemplated bythis agreement.

SECTION 8.13

Survival. The representations, warranties, covenants and agreements madeherein shall survive the Closing of the transaction contemplated hereby.

SECTION 8.14

Third Parties Nothing in this Agreement, whether express orimplied, is intended to confer any rights or remedies under or by reason of thisAgreement on any persons other than the parties hereto and their respectiveadministrators, executors, legal representatives, heirs, successors andassignees. Nothing in this Agreement is intended to relieve or discharge theobligation or liability of any third persons to any party to this Agreement, norshall any provision give any third persons any right of subrogation or actionover or against any party to this Agreement.

SECTION 8.15

Failure or Indulgence Not Waiver; Remedies Cumulative. Nofailure or delay on the part of any party hereto in the exercise of any righthereunder shall impair such right or be construed to be a waiver of, oracquiescence in, any breach of any representation, warranty, covenant oragreement herein, nor shall nay single or partial exercise of any such rightpreclude other or further exercise thereof or of any other right. All rights andremedies existing under this Agreement are cumulative to, and not exclusive of,any rights or remedies otherwise available.

SECTION 8.16

Counterparts. This Agreement may be executed in one or morecounterparts, and by the different parties hereto in separate counterparts, eachof which when executed shall be deemed to be an original, but all of which takentogether shall constitute one and the same agreement.

IN WITNESS WHEREOF,

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The Purchaser, The Seller, and CAGC have as of the date first written above executed this Agreement.
     
PURCHASER CHINA AGRITECH, INC.
     
     
     
     
     
By: Yu Chang By: Yu Chang
         Title: President
     
     
SELLER  
       
       
       
       
       
By: China Tailong Group Ltd.  
Name: Yu Chang  
Title:   CEO    

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