agfeed - stock purchase agreement bidding procedures motion (2) · 2013. 11. 13. · proposed stock...

01:14090113.5

IN THE UNITED STATES BANKRUPTCY COURT FOR THE DISTRICT OF DELAWARE

In re: AgFeed USA, LLC, et al.,1 Debtors.

Chapter 11 Case No. 13-11761 (BLS) Jointly Administered Hearing Date: October 10, 2013, at 2:00 p.m. (ET) Objection Deadline: October 3, 2013, at 4:00 p.m. (ET)

AGFEED INDUSTRIES, INC.’S MOTION FOR ENTRY OF (A) AN ORDER (I)

SCHEDULING A HEARING ON THE APPROVAL OF THE PROPOSED STOCK PURCHASE AGREEMENT REGARDING THE SALE AND PURCHASE OF THE

STOCK OF AGFEED INDUSTRIES, INC. (BRITISH VIRGIN ISLANDS), (II) APPROVING CERTAIN BIDDING PROCEDURES WITH RESPECT TO THE

PROPOSED STOCK PURCHASE AGREEMENT, (III) APPROVING THE BREAK-UP FEE, EXPENSE REIMBURSEMENT AND THE FORM AND MANNER OF NOTICE

THEREOF, AND (IV) GRANTING RELATED RELIEF; AND (B) AN ORDER (I) AUTHORIZING AND APPROVING AGFEED INDUSTRIES, INC.’S SALE OF THE

STOCK OF AGFEED INDUSTRIES, INC. (BRITISH VIRGIN ISLANDS), (II) APPROVING A CERTAIN STOCK PURCHASE AGREEMENT, (III) AUTHORIZING

AND APPROVING AGFEED INDUSTRIES, INC.’S ENTRY INTO AND CONSUMMATION OF THE STOCK PURCHASE AGREEMENT, AND (IV)

GRANTING RELATED RELIEF

AgFeed Industries, Inc. (“AgFeed Industries” or “Seller”), by and through its undersigned

counsel, hereby submits this motion (this “Motion”)2 for the entry of: (a) an order, substantially

in the form attached hereto as Exhibit A (the “Bidding Procedures Order”), (i) scheduling a

hearing (the “Sale Hearing”) on the approval of the proposed stock purchase agreement (the

“SPA” or “Stock Purchase Agreement”) regarding the sale and purchase of the stock of AgFeed

1 The Debtors and the last four digits of their federal tax identification number are: AgFeed USA, LLC (8748), AgFeed Industries, Inc. (7168); TS Finishing, LLC (8748); New York Finishing, LLC (8748); Pork Technologies, LC (2076); New Colony Farms, LLC (9246); Heritage Farms, LLC (8141); Heritage Land, LLC (8129); Genetics Operating, LLC (1921); M2P2 Facilities, LLC (8748); MGM, LLC (8748); M2P2 General Operations, LLC (8748); New Colony Land Company, LLC(5834); M2P2 AF JV, LLC (8748); Midwest Finishing, LLC (8748); and Genetic Land, LLC (1921). The location of the corporate headquarters for AgFeed Industries, Inc. is 100 Bluegrass Commons Blvd., Suite 310, Hendersonville, Tennessee 37075. The location of the corporate headquarters for the remaining Debtors is 510 South 17th Street, Suite 104, Ames, Iowa 50010. 2 Capitalized terms used but not otherwise defined herein shall have the meanings ascribed to them in the SPA, or the Bidding Procedures, as applicable.

Case 13-11761-BLS Doc 331 Filed 09/18/13 of 30

2

01:14090113.5

Industries, Inc. (British Virgin Islands), (ii) approving certain bidding procedures (the “Bidding

Procedures”) with respect to the proposed Stock Purchase Agreement, (iii) approving the break-

up fee, expense reimbursement and the form and manner of notice thereof, and (iv) granting

related relief; and (b) an order, substantially in the form attached hereto as Exhibit B (the “Sale

Order”) (i) authorizing and approving AgFeed Industries, Inc.’s sale of the stock of AgFeed

Industries, Inc. (British Virgin Islands), (ii) approving the Stock Purchase Agreement by and

among Good Charm International Development, Ltd., as purchaser (the “Proposed Purchaser”),

Ningbo Tech-Bank Co., Ltd., as parent (“NTB” or “Parent”)3, and AgFeed Industries, Inc., as

seller, a copy of which is attached hereto as Exhibit C (or if the Proposed Purchaser is not the

Highest and Best Bidder, then a modified Stock Purchase Agreement), (iii) authorizing and

approving AgFeed Industries, Inc.’s entry into and consummation of the Stock Purchase

Agreement, and (iv) granting related relief. The facts and circumstances supporting this Motion

are set forth in the Declaration of Keith A. Maib in Support of First Day Motions [Docket No. 4]

(the “First Day Declaration”). In further support of this Motion, AgFeed Industries respectfully

states as follows:

JURISDICTION

1. The Court has jurisdiction over this matter pursuant to 28 U.S.C. §§ 157 and

1334, and the Amended Standing Order of Reference from the United States District Court for

the District of Delaware, dated as of February 29, 2012 (the “Amended Standing Order”). This

is a core proceeding pursuant to 28 U.S.C. § 157(b)(2), and the Court may enter a final order

consistent with Article III of the United States Constitution. Venue is proper in this Court

pursuant to 28 U.S.C. §§ 1408 and 1409. The statutory and legal predicates for the relief sought

3 NTB is a publicly traded company in the People’s Republic of China.


3

01:14090113.5

herein are sections 105(a), 363, 365, 503 and 507 of title 11 of the United States Code, 11 U.S.C.

§§ 101 et seq. (the “Bankruptcy Code”), Rules 2002, 6004, 6006, 9007 and 9014 of the Federal

Rules of Bankruptcy Procedure (the “Bankruptcy Rules”) and Rule 6004-1 of the Local Rules of

Bankruptcy Practice and Procedure of the United States Bankruptcy Court for the District of

Delaware (the “Local Rules”).

BACKGROUND

2. On July 15, 2013 (the “Petition Date”), AgFeed Industries and its above-

captioned debtors and debtors in possession (each, a “Debtor,” and collectively, the “Debtors”)

each filed voluntary petitions (collectively, the “Chapter 11 Cases”) for relief under chapter 11 of

the Bankruptcy Code. The Debtors have continued in possession of their properties and have

continued to operate and maintain their business as debtors in possession pursuant to sections

1107(a) and 1108 of the Bankruptcy Code.

3. On July 23, 2013, the United States Trustee for the District of Delaware (the

“U.S. Trustee”) appointed an official committee of unsecured creditors (the “Creditors’

Committee”). On August 23, 2013, the U.S. Trustee appointed an official committee of equity

security holders (the “Equity Holders’ Committee”) [Docket No. 195].

4. On August 1, 2013, the Court entered an order [Docket No. 103], approving,

among other things, certain bidding procedures for the sale of substantially all of the assets of

AgFeed USA and its Debtor subsidiaries (the “AgFeed USA Sale”). On August 26, 2013, in

accordance with the order, the Debtors held an auction at the conclusion of which the bid

submitted by High Plains Pork, LLC, Cohoma Pork, LLC, and Murphy-Brown, LLC (the

“Purchasers”) was identified as the Highest and Best Bid in connection with the AgFeed USA

Sale. On August 29, 2013, the Bankruptcy Court entered an order [Docket No. 257] approving

the AgFeed USA Sale to the Purchasers. The AgFeed USA Sale closed on September 12, 2013.


4

01:14090113.5

5. Additional information about the Debtors’ business and the events leading up to

the Petition Date can be found in the First Day Declaration and incorporated by reference herein.

AGFEED INDUSTRIES’ SALE EFFORTS

6. For the reasons set forth in the First Day Declaration, AgFeed Industries, in

consultation with its professional advisors has continued to actively market the assets of AgFeed

Industries, Inc. and its Chinese subsidiaries in an effort to maximize the value of AgFeed

Industries’ estate for the benefit of its stakeholders. On or about April 8, 2013, AgFeed

Industries and its professional advisors began a robust and aggressive marketing effort which

resulted in several expressions of interests. After consideration of the various expressions of

interest, AgFeed Industries and the Proposed Purchaser entered into the SPA, pursuant to which,

subject to Court approval and the auction process proposed herein, the Proposed Purchaser has

agreed to purchase and AgFeed Industries has agreed to sell 100% of the outstanding shares of

AgFeed Industries, Inc. (British Virgin Islands) (the “Target Shares”) for $50.5 million.4

AgFeed Industries has determined that the floor established by the proposed sale to the Proposed

Purchaser (the “Proposed Sale”), subject to higher and better bids with approval of the Court in

an open auction process pursuant to section 363 of the Bankruptcy Code, affords AgFeed

Industries the best opportunity to maximize value for their creditors.

7. To ensure that AgFeed Industries receive the highest and best offer for the sale of

the Target Shares in connection with these chapter 11 cases, AgFeed Industries, together with its

professional advisors, including BDA Advisors Inc. (“BDA”), will continue a marketing process

and contact other potential purchasers, including existing stakeholders, that might be interested

in purchasing the Target Shares. If AgFeed Industries receives competitive offers based on the

4 The purchase price represents the Base Purchase Price (as defined in Section 2.4 of the SPA) of $52.88 million minus certain adjustments as set forth in Section 2.5.2 of the SPA in the approximate amount of $2.38 million.


5

01:14090113.5

qualification criteria described below for Qualifying Bidders and Qualifying Bids, AgFeed

Industries intends to utilize section 363 of the Bankruptcy Code to conduct an auction and sale

process to determine the highest and best bid for the Target Shares. The primary purpose of the

auction and sale process is to provide for a sale of the Target Shares to the party that submits the

highest and best offer in accordance with the Bidding Procedures, as described more fully below.

THE SPA5

8. AgFeed Industries has engaged in extensive, good faith and arm’s-length

negotiations with the Proposed Purchaser regarding the terms of the SPA. These negotiations

culminated in the execution of the SPA on September 13, 2013. AgFeed Industries believes that,

subject to the receipt of higher and better proposals through the Bidding Procedures, the SPA

represents the highest and best offer currently available to AgFeed Industries and its estates for

the Target Shares.

9. The SPA contemplates the sale of the Target Shares, subject to higher and better

bids, on the following material terms:

(a) Proposed Purchaser: Good Charm International Development, Ltd. ( a newly formed acquisition entity formed by NTB, as parent).

(b) Seller: AgFeed Industries, Inc.

(c) Purchase Price: Pursuant to Sections 2.1 through 2.4 of the SPA, subject to certain adjustments in Section 2.5.3, the Proposed Purchase shall pay $50.5 million for the Target Shares on a fully-diluted, debt-free basis and the Seller agrees to (i) waive all rights of pre-emption over any of the Target Shares conferred on it by its articles of association or otherwise and (ii) waive and cause the Seller’s Group to waive all rights, claims, accounts receivable to Company’s Group. As set forth more fully in the SPA, pursuant to Section 2.5.3 of the SPA, the Purchase Prices is subject to an Estimated Adjustment based on the Estimated Net Working Capital Amount Adjustment, the Estimated Livestock Adjustment and the Estimated Cash Adjustment.

5 Any summary of the SPA contained herein is qualified in its entirety by the actual terms and conditions of the SPA. To the extent that there is any conflict between any summary contained herein and the actual terms and conditions of the SPA, the actual terms and conditions of the SPA shall control.


6

01:14090113.5

(d) Working Capital Adjustment: As set forth more fully in the SPA, pursuant to Section 2.5.5 of the SPA, the Sale is also subject to a post-Closing adjustment based on the Post-Closing Net Working Capital Amount Adjustment, the Post-Closing Livestock Adjustment and the Post-Closing Cash Adjustment.

(e) Sale Free and Clear: Pursuant to Section 2.1 of the SPA, the Target Shares shall be transferred to the Proposed Purchaser free and clear from all security interests, liens, claims, equities, mortgages, pledges, hypothecation, encumbrances, easements, charges, restrictions on transfer, including any conditional sales or other title retention contract or lease in the nature thereof, any filing or agreement to file a financing states as debtor under the applicable Uniform Commercial Code or any similar statute of law of any country or any subordination arrangement in favor of another person.

(f) Shareholder Approval and Financial Wherewithal: Pursuant to Section 3.3 of the SPA, NTB must obtain shareholder approval within twenty-one (21) days of executing the SPA. In addition, pursuant to Section 3.4 of the SPA, the Proposed Purchaser must also provide a firm financing commitment letter, specific to this transaction, within twenty-one (21) days of executing the SPA.

(g) Cash Deposit: Pursuant to Section 2.5.1 of the SPA, the Proposed Purchaser shall deliver a deposit in an amount equal to 20% of the Base Purchase Price within one (1) business day of receiving shareholder approval. Upon receipt of a financial commitment letter, specific to this transaction, however, half of the Cash Deposit will be returned to the Proposed Purchaser.

(h) Closing and Other Deadlines: Pursuant to Section 3.1, a condition precedent to the Closing, is approval of by this Bankruptcy Court of bid procedures in accordance with those proposed in the SPA (as described herein). Accordingly, pursuant to Sections 3.1 and 6 of the SPA, the SPA may be terminated by the Proposed Purchaser in the event, among other things, that a hearing to consider the Bidding Procedures (in a final form which is reasonably acceptable to the Proposed Purchaser) is not held within twenty-six (26) days of execution of the SPA pursuant to which an order (in a form acceptable to the Proposed Purchaser) approving the Bidding Procedures is entered by the Bankruptcy Court or that an order (in a form acceptable to the Proposed Purchaser) approving the Sale has not been entered within forty-five (45) days after the Bidding Procedures hearing.

(i) Break-Up Fee and Expense Reimbursement: Pursuant to Sections 2.6 and 6.2 of the SPA, if the Seller accepts a higher and better offer for the Target Shares (an “Alternative Transaction”) or confirms a plan of reorganization that involves the disposition or revesting of the Target Shares, then (i) Seller may terminate the SPA; and (ii) upon the closing on any Alternative Transaction, Seller shall pay to the Proposed Purchaser a break-up fee of $1,586,400 which represents 3% of the Base Purchase Price (the “Break-up Fee”) and the actual and documented out-of-pocket fees and expenses of Proposed Purchaser (the “Expense Reimbursement”) not to exceed $528,800 which represents 1% of the Base Purchase Price.


7

01:14090113.5

Pursuant to Section 6.2.3 of the SPA, the Break-up Fee and Expense Reimbursement shall be entitled to administrative priority under section 503(b)(1)(A) of the Bankruptcy Code and a first priority priming lien on the proceeds of an Alternative Transaction until paid. Additionally, pursuant to Section 2.5.1.3 of the SPA, the Proposed Purchaser shall be entitled to the Expense Reimbursement if the Seller fails to file the sale motion in accordance with the SPA and Bidding Procedures.

BIDDING PROCEDURES6

10. AgFeed Industries proposes to solicit bids for the Target Shares utilizing the

Bidding Procedures summarized below. The Bidding Procedures describe, among other things,

the Target Shares, the manner in which bidders and bids become “qualified,” the coordination of

diligence efforts among Qualifying Bidders and AgFeed Industries, the receipt and negotiation of

bids received, the conduct of any Auction, and the selection and approval of the Highest and Best

Bidder and the selection of the Next Highest Bid.

11. The Bidding Procedures were developed consistent with AgFeed Industries’

competing needs to conduct an expedited sale process, to promote participation and active

bidding, and to comply with the terms and conditions of the SPA. The Bidding Procedures

reflect AgFeed Industries’ objective of conducting the Auction in a controlled, but fair and open,

manner, while ensuring that the highest and best bid is generated for the Target Shares.

12. The following sets forth a summary of the key provisions of the Bidding

Procedures:

(a) Qualification as Bidder: Any person or entity that wishes to participate in the bidding process for the Target Shares (each, a “Potential Bidder”) must first become a “Qualifying Bidder.” As a prerequisite to becoming a Qualifying Bidder (and thus being able to conduct due diligence), a Potential Bidder must: (i) deliver an executed confidentiality agreement in form and substance acceptable

6 Any summary of the Bidding Procedures contained herein is qualified in its entirety by the actual terms and conditions of the Bidding Procedures as provided for in the Bidding Procedures Order. To the extent that there is any conflict between any summary contained herein and the actual terms and conditions of the Bidding Procedures as provided for in the Bidding Procedures Order, the actual terms and conditions of the Bidding Procedures as provided for in the Bidding Procedures Order shall control.


8

01:14090113.5

to the Debtors, and (ii) be able, as determined by the Seller, to demonstrate the financial wherewithal to close the Sale if selected as the Highest and Best Bidder. Notwithstanding anything to the contrary herein and for the avoidance of doubt, for all purposes under the Bidding Procedures, (i) the Proposed Purchaser shall be considered a Qualifying Bidder and (ii) the SPA shall be considered a Qualifying Bid.

(b) Due Diligence: The Seller may afford to any Qualifying Bidder reasonable due diligence access and the time and opportunity to conduct reasonable due diligence. The due diligence period shall extend through and including the Bid Deadline. Except as provided for in the SPA, the Seller may, but shall not be obligated to, in its sole discretion, furnish any due diligence information after the Bid Deadline. The Seller will designate a representative to coordinate all reasonable requests from Qualifying Bidders for due diligence access.

For any Qualifying Bidder which is a competitor of the Debtors, or is affiliated with any competitor of the Debtors, the Seller reserves the right, in its sole discretion, to withhold or limit access to any due diligence information that the Seller determines is business-sensitive or otherwise not appropriate for disclosure to such Qualifying Bidder. Notwithstanding any limitations provided for in such information, including, without limitation, any non-disclosure, confidentiality or similar provisions, the Seller and its estate shall be authorized to provide due diligence information to Qualifying Bidders provided that such Qualifying Bidders have delivered an executed confidentiality agreement in form and substance acceptable to the Seller. The Seller and its estate are not responsible for, and shall have no liability with respect to, any information obtained by, or provided to, any Qualifying Bidders in connection with the Bidding Procedures and the Sale.

Except as provided for in the SPA, each Qualifying Bidder shall be deemed to acknowledge and represent that it (i) has had an opportunity to conduct any and all due diligence regarding the Target Shares, (ii) has relied solely upon its own independent review, investigation and/or inspection of any documents and other information in making its Qualifying Bid, and (iii) did not rely upon any written or oral statements, representations, promises, warranties or guaranties whatsoever, whether express, implied, by operation of law or otherwise, regarding the Target Shares, or the completeness of any documents or other information provided in connection with the Bidding Procedures and the Sale.

(c) Bid Requirements:

i. Qualifying Bid. To be deemed a “Qualifying Bid,” a bid must be received from a Qualifying Bidder, other than the Proposed Purchaser, on or before the Bid Deadline and satisfy each of the following requirements (each, a “Bid Requirement”):

a. be in writing;


9

01:14090113.5

b. fully disclose the identity of the Qualifying Bidder;

c. set forth the Purchase Price to be paid by such Qualifying Bidder;

d. not propose payment in any form other than cash;

e. state that such Qualifying Bidder offers to purchase the Target Shares upon substantially the same terms as, or terms more favorable to the Seller and its estate than, the terms set forth in the SPA;

f. be accompanied by a clean and duly executed stock purchase agreement (a “Modified SPA”) and marked copy or blackline of the Modified SPA that reflects any variations from the SPA submitted by the Proposed Purchaser;

g. state that such Qualifying Bidder’s offer is irrevocable until two (2) business days after the closing of the Sale;

h. state that such Qualifying Bidder is financially capable of consummating the transactions contemplated by the Modified SPA and provide written evidence in support thereof;

i. contain such financial and other information to allow the Seller to make a reasonable determination as to the Qualifying Bidder’s financial and other capabilities to close the transactions contemplated by the Modified SPA;

j. a commitment to close the transactions contemplated by the Modified SPA before fifteen (15) days after entry of the Sale Order or order approving entry into a Modified SPA, provided that the conditions for the Closing as set forth in the SPA have been met;

k. not request or entitle such Qualifying Bidder to any break-up fee, termination fee, expense reimbursement or similar type of fee or payment, except as provided for in the SPA;

l. the aggregate consideration proposed by the Qualifying Bidder must equal or exceed the sum of the amount of at least (i) the Base Purchase Price, (ii) the Break-Up Fee, (iii) the Expense Reimbursement, and (iv) $250,000;

m. not contain any contingencies of any kind, including, without limitation, contingencies related to financing, internal approval or due diligence;

n. contain written evidence satisfactory to the Seller, in its sole discretion, that the Qualifying Bidder has a commitment for


10

01:14090113.5

financing or other evidence of the ability to close the transactions contemplated by the Modified SPA, with appropriate contact information for such financing sources;

o. sets forth any regulatory and third-party approval required for the Qualifying Bidder to close the transactions contemplated by the Modified SPA, and the time period within which the Qualifying Bidder expects to receive such regulatory and third-party approvals (and in the case that receipt of any such regulatory or third-party approval is expected to take more than ten (10) days following execution and delivery of such Qualifying Bidder’s Modified SPA, those actions the bidder will take to ensure receipt of such approval(s) as promptly as possible);

p. provides for the Qualifying Bidder to serve as a backup bidder (the “Next Highest Bidder”) if the Qualifying Bidder’s bid is the next highest and best bid after the Highest and Best Bid (the “Next Highest Bid”), in accordance with the terms of the Modified SPA;

q. includes written evidence of authorization and approval from the Qualifying Bidder’s board of directors (or comparable governing body) with respect to the submission, execution, and delivery of the Modified SPA;

r. provides a cash purchase deposit (the “Deposit”) in the amount of no less than 10% of the bidder’s proposed purchase price (which amount shall be paid to or deposited with an escrow agent or similar arrangement which is acceptable to the Seller, in its sole discretion, to be held pursuant to an escrow agreement to be entered into by such bidder, Seller and such escrow agent); and

s. provides for liquidated damages in the event of the Qualifying Bidder’s breach of, or failure to perform under, the Modified SPA equal to the amount of the Deposit.

A bid from a Qualifying Bidder satisfying all of the above requirements, as determined by the Seller, in its sole discretion and after consultation with counsel to the Creditors’ Committee and counsel to the Equity Holders’ Committee, shall constitute a Qualifying Bid.

Each Qualifying Bidder submitting a bid shall be deemed to: (i) acknowledge and represent that it is bound by all of the terms and conditions of the Bidding Procedures; and (ii) have waived the right to pursue a substantial contribution claim under section 503 of the Bankruptcy Code related in any way to the submission of its bid, the Bidding Procedures, and the Sale.


11

01:14090113.5

ii. Bid Deadline. A Qualifying Bidder, other than the Proposed Purchaser, that desires to make a bid shall deliver a written or electronic copy of its bid to (a) AgFeed Industries, Inc., 100 Bluegrass Commons Blvd., Suite 310, Hendersonville, TN 37075, Attn: Keith A. Maib and Matthew A. Beresh, (b) counsel for the Debtors, Young Conaway Stargatt & Taylor, LLP, 1000 North King Street, Wilmington, DE 19801, Attn: Robert S. Brady, Esq., Donald J. Bowman, Jr., Esq., and Robert F. Poppiti, Jr., Esq. (c) BDA Advisors Inc., 1270 Avenue of the Americas, Suite 2310, New York, New York 10020 Attn: Euan Rellie, (d) counsel to Creditors’ Committee, Lowenstein Sandler LLP, 65 Livingston Avenue, Roseland, New Jersey 07068, Attn: Jeff D. Prol, Esq. and Timothy R. Wheeler, Esq., and Lowenstein Sandler LLP, 1251 Avenue of the Americas, New York, New York 10020, Attn: Bruce S. Nathan, Esq. and (e) counsel to Equity Holders’ Committee, Elliott Greenleaf, 1105 Market Street, Suite 1700, Wilmington, Delaware 19801 Attn: Rafael X. Zahralddin, Esq. and Sugar Felsenthal Grais & Hammer LLP, 30 N. LaSalle St., Suite 3000, Chicago, IL 60602, Attn: Aaron L. Hammer, Esq. in each case so as to be received on or before November 13, 2013 at 4:00 p.m. (ET) (the “Bid Deadline”). On or before November 17, 2013, at 4:00 p.m. (ET), the Seller shall provide a copy of each marked Modified SPA submitted by a Qualified Bidder to all Qualified Bidders.

iii. Evaluation of Qualifying Bids. The Seller shall make a determination, in its sole discretion and after consultation with counsel to the Creditors’ Committee and counsel to the Equity Holders’ Committee, regarding whether a bid from a Qualifying Bidder is a Qualifying Bid, and shall notify all Qualifying Bidders whether their bids have been determined to be a Qualified Bid by no later than three (3) days prior to the Auction Date. In the event that a bid is determined not to be a Qualifying Bid, the Qualifying Bidder shall be notified by the Seller and shall have one (1) day from the date of such notification to modify its bid.

One (1) day prior to the Auction Date, the Seller shall determine, in its sole discretion and after consultation with counsel to the Creditors’ Committee and counsel to the Equity Holders’ Committee, which of the Qualifying Bids, at such time, is the highest and best bid for purposes of constituting the opening bid of the Auction (the “Baseline Auction Bid”), and shall promptly notify the Proposed Purchaser and all Qualifying Bidders with Qualifying Bids of the Baseline Auction Bid.

(d) No Qualifying Bids: If no timely Qualifying Bids other than the Proposed Purchaser’s Qualifying Bid are submitted on or before the Bid Deadline, the Seller, after consultation with counsel to the Creditors’ Committee and counsel to the Equity Holders’ Committee, shall not hold an Auction and shall request at the Sale Hearing that the Bankruptcy Court approve the SPA and the transactions contemplated thereunder.


12

01:14090113.5

(e) Auction: In the event that the Seller timely receives one or more Qualifying Bids other than the Proposed Purchaser’s Qualifying Bid, the Seller shall conduct an auction (the “Auction”). Following the Auction, the Seller will determine, in its sole discretion and after consultation with counsel to the Creditors’ Committee and counsel to the Equity Holders’ Committee, which Qualifying Bid is the highest and best bid for the Target Shares, which will be determined by considering, among other things: (i) the number, type and nature of any changes to the SPA requested by each bidder; (ii) the extent to which such modifications are likely to delay closing of the Sale and the cost to the Seller of such modifications or delay; (iii) the total consideration to be received by the Seller; (iv) the likelihood of the bidder’s ability to close a transaction and the timing thereof; and (v) the net benefit to AgFeed Industries’ estate, taking into account the Proposed Purchaser’s rights to the Break-Up Fee and the Expense Reimbursement.

The Auction shall be governed by the following procedures:

i. the Auction shall be held at the offices of Young Conaway Stargatt & Taylor, LLP, 1000 North King Street, Wilmington, DE 19801, on November 18, 2013, beginning at 10:00 a.m. (ET) (the “Auction Date”);

ii. only the Proposed Purchaser and the other Qualifying Bidders with Qualifying Bids (together, the “Auction Bidders”) shall be entitled to make any subsequent bids at the Auction;

iii. the Auction Bidders shall appear in person at the Auction, or through a duly authorized representative;

iv. only the Seller, the Auction Bidders, counsel to the Creditors’ Committee and counsel to the Equity Holders’ Committee, together with the professional advisors to each of the foregoing parties, may attend the Auction;

v. the Seller and its professional advisors shall direct and preside over the Auction, which shall be transcribed;

vi. the Auction Bidders shall confirm that they have not engaged in any collusion with respect to the Bidding Procedures, the Auction or the Sale;

vii. bidding shall commence at the amount of the Baseline Auction Bid, and the Auction Bidders may submit successive bids in increments of at least $250,000 higher than the Baseline Auction Bid and thereafter the then-highest and best bid, provided that: (a) each such successive bid must be a Qualifying Bid; (b) if the then-highest and best bid was made by the Proposed Purchaser, such bid shall be deemed to include the sum of the amount of (I) the Break-Up Fee and (II) the Expense Reimbursement; (c) any successive bid made by the Proposed Purchaser shall only be required to equal the sum of the amount of (I) the Baseline Auction Bid or the then-


13

01:14090113.5

highest and best bid, as applicable, and (II) $250,000, less the sum of the amount of (III) the Break-Up Fee and (IV) the Expense Reimbursement; and (d) the Seller shall retain the right to modify the bid increment requirements at the Auction;

viii. the Auction may include individual negotiations with any of the Auction Bidders, but all bids shall be made on the record and in the presence of all of the Auction Bidders;

ix. all material terms of the bid that is deemed to be the highest and best bid for each round of bidding shall be fully disclosed to the Auction Bidders, and the Seller shall use reasonable efforts to clarify any and all questions that the Auction Bidders may have regarding the Seller’s announcement of the then-current highest and best bid;

x. the Seller and its professional advisors may employ and announce at the Auction, and after consultation with counsel to the Creditors’ Committee and counsel to the Equity Holders’ Committee, additional procedural rules that are reasonable under the circumstances (e.g., the amount of time allotted to make subsequent bids) for conducting the Auction, provided that such rules are (a) not inconsistent with the Bankruptcy Code, the Federal Rules of Bankruptcy Procedure, the Local Rules of Bankruptcy Practice and Procedure of the United States Bankruptcy Court for the District of Delaware, or any applicable order of the Bankruptcy Court entered in connection with these chapter 11 cases, including, without limitation, the order of the Bankruptcy Court approving these Bidding Procedures, and (b) disclosed to the Auction Bidders;

xi. Each Auction Bidder shall (a) be deemed to have waived any right to a jury trial in connection, and consented and submitted to the exclusive jurisdiction of the Bankruptcy Court over, any actions or proceedings arising from or relating the Bidding Procedures, the Sale, the Auction and the construction and enforcement of the contemplated transaction documents of the Auction Bidders, (b) bring any such action or proceeding in the Bankruptcy Court, and (c) be deemed to have consented to the Bankruptcy Court entering a final judgment determining any such action or proceeding such matter and that such final judgment in any such action or proceeding, including all appeals, shall be conclusive and may be enforced in other jurisdictions (including any foreign jurisdictions) by suit on the judgment or in any other manner provided by applicable law;

xii. the Auction Bidders shall have the right to make additional modifications to the SPA or the Modified SPA, as applicable, in conjunction with each Qualifying Bid submitted in each round of bidding during the Auction, provided that (a) any such modifications to the SPA or Modified SPA on an aggregate basis and viewed in whole, shall not, in the Seller’ sole discretion, be less favorable to the Seller and its estate than the terms of


14

01:14090113.5

the SPA, and b) each Qualifying Bid shall constitute an irrevocable offer and shall be binding on the Auction Bidder submitting such bid until such party shall have submitted a subsequent Qualifying Bid at the Auction or the conclusion of the Sale Hearing, whichever occurs sooner, unless such bid is selected as the Highest and Best Bid or the Next Highest Bid, which shall remain binding as provided for herein;

xiii. the Seller shall have the right to request any additional financial information that will allow the Seller to make a reasonable determination as to an Auction Bidder’s financial and other capabilities to consummate the transactions contemplated by the SPA or the Modified SPA, as applicable, as may be amended during the Auction, and any further information that the Seller may believe is reasonably necessary to clarify and evaluate any bid made by an Auction Bidder during the Auction;

xiv. upon the conclusion of the Auction, the Seller shall determine, in its sole discretion and after consultation with counsel to the Creditors Committee and counsel to the Equity Holders’ Committee, and subject to Bankruptcy Court approval, the offer or offers for the Target Shares that is or are the highest and best from among the Qualifying Bids submitted at the Auction (the “Highest and Best Bid”). In making this decision, the Seller shall consider, in its sole discretion and without limitation, the amount of the proposed purchase price, the likelihood of the bidder’s ability to close a transaction and the timing thereof, the number, type and nature of any changes to the SPA requested by each bidder, and the net benefit to AgFeed Industries’ estate. The bidder submitting such Highest and Best Bid shall become the “Highest and Best Bidder,” and shall have such rights and responsibilities of the purchaser as set forth in the applicable SPA or Modified SPA. The Seller may, in its sole discretion and after consultation with counsel to the Creditors Committee and counsel to the Equity Holders’ Committee, designate the Next Highest Bid (and the corresponding Next Highest Bidder) to purchase the Target Shares in the event that the Highest and Best Bidder does not close the Sale; and

xv. prior to the Sale Hearing, the Highest and Best Bidder shall complete and execute all agreements, contracts, instruments and other documents evidencing and containing the terms and conditions upon which the Highest and Best Bid was made.

THE HIGHEST AND BEST BID AND ANY NEXT HIGHEST BID SHALL CONSTITUTE AN IRREVOCABLE OFFER AND BE BINDING ON THE HIGHEST AND BEST BIDDER AND THE NEXT HIGHEST BIDDER, RESPECTIVELY, FROM THE TIME THE BID IS SUBMITTED UNTIL THE EARLIEST OF (A) TWO (2) BUSINESS DAYS AFTER THE SALE HAS CLOSED, OR (B) TWENTY-ONE (21) DAYS AFTER ENTRY OF THE SALE ORDER. EACH QUALIFYING BID (INCLUDING THE BID OF THE PROPOSED PURCHASER) THAT IS NOT THE HIGHEST AND


15

01:14090113.5

BEST BID OR THE NEXT HIGHEST BID SHALL BE DEEMED WITHDRAWN AND TERMINATED AT THE CONCLUSION OF THE SALE HEARING.

(f) Sale Hearing: The Highest and Best Bid and any Next Highest Bid (or if no Qualifying Bid other than that of the Proposed Purchaser is received, then the SPA) will be subject to approval by the Bankruptcy Court. The Sale Hearing to approve the Highest and Best Bid and any Next Highest Bid (or the SPA if no Qualifying Bid other than that of the Proposed Purchaser is received) shall take place on November 21, 2013 at 11:30 p.m. (ET). The Sale Hearing may be adjourned by the Seller from time to time without further notice to creditors or other parties in interest other than by announcement of the adjournment in open court on the date scheduled for the Sale Hearing or by filing a notice on the docket of the Debtors’ chapter 11 cases.

(g) Return of Deposits: Except as provided for in the SPA, all Deposits shall be returned to each bidder not selected by the Seller as the Highest and Best Bidder no later than five (5) business days following the closing of the Sale; the deposit of the Highest and Best Bidder or, if the Sale is closed with the Next Highest Bidder, the deposit of the Next Highest Bidder, shall be applied to the Purchase Price for the Sale. If the Highest and Best Bidder fails to consummate the Sale because of a breach or failure to perform on the part of such bidder, then, subject to the terms of the SPA or the Modified SPA, as applicable, the Seller and their estates shall be entitled to retain the Deposit of the Highest and Best Bidder as part of the damages resulting to the Seller and its estate for such breach or failure to perform.

(h) Reservation of Rights. Notwithstanding any of the foregoing, the Seller and its estate reserves the right to modify these Bidding Procedures at or prior to the Auction, including, without limitation, to extend the deadlines set forth herein, modify bidding increments, waive terms and conditions set forth herein with respect to any or all potential bidders (including, without limitation, the Bid Requirements), impose additional terms and conditions with respect to any or all potential bidders, adjourn or cancel the Auction at or prior to the Auction, and adjourn the Sale Hearing.

(i) Backup Bidder: Notwithstanding any of the foregoing, in the event that the Highest and Best Bidder (other than the Proposed Purchaser) fails to close the Sale within fifteen (15) days after entry of the Sale Order or order approving entry into a Modified SPA (or such date as may be extended by the Seller), provided that the conditions for the Closing as set forth in the SPA have been met, the Next Highest Bid will be deemed to be the Highest and Best Bid, the Next Highest Bidder will be deemed to be the Highest and Best Bidder, and the Seller will be authorized, but not directed, to close the Sale to the Next Highest Bidder subject to the terms of the Next Highest Bid without the need for further order of the Bankruptcy Court and without the need for further notice to any interested parties.


16

01:14090113.5

NOTICE PROCEDURES FOR THE SALE, BIDDING PROCEDURES, AUCTION, AND SALE HEARING

13. AgFeed Industries also requests approval of the sale notice (the “Sale Notice”),

substantially in the form attached hereto as Exhibit D. Within five (5) business days of entry of

the Bidding Procedures Order, the Seller will serve the Sale Notice by first class mail, postage

prepaid, upon: (a) the Office of the United States Trustee for the District of Delaware;

(b) counsel to the Debtors’ prepetition secured lenders; (c) counsel to the Creditors’ Committee,

(d) counsel to the Equity Holders’ Committee, (e) the Debtors’ known creditors; (f) all entities

with recorded claims, liens, interests or encumbrances against the AgFeed Industries’ right, title

and interest in its assets and any other entities reasonably known to have asserted any such claim,

liens, interests or encumbrances; (g) all entities reasonably known to have expressed an interest

in a transaction with respect to the Target Shares during the past year; (h) the Internal Revenue

Service; (i) the Office of the United States Attorney for the District of Delaware; (j) the United

States Securities and Exchange Commission; (k) all taxing authorities or recording offices with a

reasonably known interest in the relief requested in this Motion; and (l) all parties requesting

notice in these chapter 11 cases pursuant to Local Rule 2002-1(b) as of the date thereof.

14. AgFeed Industries shall also post the Sale Notice and the Bidding Procedures

Order on the website of the Debtors’ claims and noticing agent.

15. Not later than twenty-one (21) days prior to the date of the Sale Hearing, the

Seller shall cause the Sale Notice to be published once in: (i) The Wall Street Journal (US and

Asia editions) and (ii) a Chinese publication as agreed upon by the Seller and the Proposed

Purchaser.


17

01:14090113.5

RELIEF REQUESTED

16. AgFeed Industries respectfully request the entry of: (a) the Bidding Procedures

Order, (i) scheduling a date for the Sale Hearing, (ii) authorizing and approving the Bidding

Procedures, (iii) approving the Break-Up Fee, Expense Reimbursement and the form and manner

of notice thereof and (iv) granting related relief and (b) the Sale Order, (i) authorizing and

approving AgFeed Industries’ sale of the stock of AgFeed Industries, Inc. (British Virgin

Islands), (ii) authorizing and approving the SPA (or if the Proposed Purchaser is not the Highest

and Best Bidder, then a Modified SPA), (iii) authorizing and approving AgFeed Industries’ entry

into and consummation of the SPA, and (iv) granting related relief.

BASIS FOR RELIEF REQUESTED

I. The Bidding Procedures Are Appropriate and in the Best Interests of AgFeed Industries, Its Estate, and Creditors

A. The Bidding Procedures Are Reasonable, Appropriate and Will Maximize Value

17. The paramount goal in any proposed sale of property of the estate is to maximize

the proceeds received by the estate. See In re Mushroom Transp. Co., 382 F.3d 325, 339 (3d Cir.

2004) (debtor in possession “had a fiduciary duty to protect and maximize the estate’s assets”);

Official Comm. of Unsecured Creditors of Cybergenics, Corp v. Chinery, 330 F.3d 548, 573 (3d

Cir. 2003) (same); Four B. Corp. v. Food Barn Stores, Inc. (In re Barn Stores, Inc.), 107 F.3d

558, 564-65 (8th Cir. 1997) (in bankruptcy sales, “a primary objective of the Code [is] to

enhance the value of the estate at hand”).

18. To that end, courts uniformly recognize that procedures to enhance competitive

bidding are consistent with the goal of maximizing the value received by the estate and therefore

are appropriate in the context of bankruptcy transactions. See In re O’Brien Envtl. Energy, Inc.,

181 F.3d 527, 537 (3d Cir. 1999); see also Official Comm. of Subordinated Bondholders v.


18

01:14090113.5

Integrated Res. Inc. (In re Integrated Res. Inc.), 147 B.R. 650, 659 (S.D.N.Y. 1992) (bidding

procedures “encourage bidding and . . . maximize the value of the debtor’s assets”).

19. AgFeed Industries believes that the Bidding Procedures will increase the

likelihood that it will receive the greatest possible consideration for the Target Shares because

they will ensure a competitive and fair bidding process. AgFeed Industries also believes that the

Bidding Procedures will promote active bidding from seriously interested parties and will

confirm the best and highest offer reasonably available for such assets. The Bidding Procedures

will allow it to conduct the Auction, if a Qualifying Bid other than Proposed Purchaser’s is

received, in a controlled, fair and open manner that will encourage participation by financially

capable bidders which demonstrate the ability to close the Sale. AgFeed Industries believes that

the Bidding Procedures will encourage bidding, are consistent with other procedures previously

approved by courts in this and other districts, and are appropriate under the relevant standards

governing auction proceedings and bidding incentives in bankruptcy proceedings. See In re

O’Brien Envtl. Energy, Inc., 181 F.3d at 537; see also In re Dura Auto. Sys., Inc., No. 06-11202

(Bankr. D. Del. July 24, 2007); In re New Century TRS Holdings, Inc., No. 07-10416 (Bankr D.

Del. Apr. 20, 2007); In re Three A’s Holdings, L.L.C., No. 06-10886 (Bankr. D. Del. Sept. 7,

2006).

20. Similar bidding procedures have been previously approved by bankruptcy courts

in this District. See, e.g., In re Vertis Holdings, Inc., Case No. 12-12821 (CSS) (Bankr. D. Del.

Nov. 2, 2012 (D.I. 206); In re Northstar Aerospace (USA) Inc., Case No. 12-11817 (MFW)

(Bankr. D. Del. June 27, 2012) (D.I. 119); In re Traffic Control & Safety Corp., Case No. 12-

11287 (KJC) (Bankr. D. Del. May 14, 2012) (D.I. 128); In re Real Mex Rests. Inc., Case No. 11-

13122 (BLS) (Bankr. D. Del. Nov. 9, 2011) (D.I. 393); In re Nortel Networks, Inc., Case No. 09-


19

01:14090113.5

10138 (KG) (Bankr. D. Del. June 30, 2009) (D.I. 1012); In re Tweeter Home Etm’t Group, Inc.,

Case No. 07-10787 (PJW) (Bankr. D. Del. June 27, 2007) (D.I. 211).

21. Additionally, AgFeed Industries is required to complete the auction and sale

process on the timetable set forth in the Bidding Procedures and required under the SPA which

timetable was integral to the sale process.

22. Accordingly, the Bidding Procedures are reasonable, appropriate, and within

AgFeed Industries’ sound business judgment under the circumstances, because the procedures

are designed to maximize the value to be received by its estate for the Target Shares.

B. The Initial and Subsequent Overbids Are Reasonable and Appropriate

23. One important component of the Bidding Procedures is the “overbid” provisions.

To be deemed a Qualifying Bid, the aggregate consideration proposed by the Qualifying Bidder

must equal or exceed the sum of the amount of at least (i) the Base Purchase Price, (ii) the Break-

Up Fee, (iii) the Expense Reimbursement, and (iv) $250,000.

24. In the event that the Auction is held, bidding shall commence at the amount of the

Baseline Auction Bid, and the Auction Bidders may submit successive bids in increments of at

least $250,000 higher than the Baseline Auction Bid and thereafter the then-highest and best bid,

provided that, among other things, (i) if the then-highest and best bid was made by the Proposed

Purchaser, such bid shall be deemed to include the sum of the amount of (a) the Break-Up Fee

and (b) the Expense Reimbursement, (ii) any successive bid made by the Proposed Purchaser

shall only be required to equal the sum of the amount of (x) the Baseline Auction Bid or the

then-highest and best bid, as applicable, and (y) $250,000, less the sum of the amount of (y) the

Break-Up Fee and (z) the Expense Reimbursement, and (iii) AgFeed Industries shall retain the

right to modify the bid increment requirements at the Auction.


20

01:14090113.5

25. AgFeed Industries believes that such bid increments are reasonable under the

circumstances, and will enable it to maximize the value for the Target Shares while limiting any

chilling effect in the marketing process. The overbid increments are also consistent with such

increments previously approved by courts in this District in chapter 11 cases involving assets of

comparable value. In re Dura Auto. Sys., Inc., No. 06-11202 (Bankr. D. Del. July 24, 2007)

(approving $750,000 increment); In re New Century TRS Holdings, Inc., No. 07-10416 (Bankr

D. Del. Apr. 20, 2007) (approving $500,000 increment); In re Three A’s Holdings, L.L.C., No.

06-10886 (Bankr. D. Del. Sept. 7, 2006) (approving $300,000 increment).

C. The Break-Up Fee and the Expense Reimbursement are Reasonable and Appropriate

26. The Break-Up Fee and Expense Reimbursement were negotiated at arm’s-length

and in good faith and are necessary to secure the Proposed Purchaser’s participation in the sale

process. AgFeed Industries has determined that pursuing a sale of AgFeed Industries’ shares in

AgFeed Industries, Inc. (British Virgin Islands) is in the best interests of its estate and creditors,

and therefore submits that agreeing to the Break-Up Fee and the Expense Reimbursement were

actual, necessary costs of preserving their estates.

27. In the Third Circuit, bid protections, including traditional breakup fees and

expense reimbursement provisions, will be approved where they benefit the debtor’s estates or

are necessary for its preservation. See, e.g., In re Reliant Energy Channelview LP, 594 F.3d 200,

206 (3d Cir. 2010) (citing Calpine Corp. v. O’Brien Envtl. Energy, Inc. (In re O’Brien Envtl.

Energy, Inc.), 181 F.3d 527 (3d Cir. 1999). Accordingly, bid protections may be awarded where

they induce the stalking horse bidder to make an initial bid or adhere to its bid after the court

orders an auction and where they promote more competitive bidding. In re O’Brien, 181 F.3d at

537.


21

01:14090113.5

28. Here, the Break-Up Fee and Expense Reimbursement should be approved, and

accorded administrative expense status under sections 503(b)(1)(A) of the Bankruptcy Code, and

secured by a first-priority lien on the proceeds of an Alternative Transaction until such amounts

are paid in full because they provide a clear benefit to the Seller’ estates, and the Proposed

Purchaser has expressly conditioned its willingness to enter into the SPA upon AgFeed

Industries’ agreement to, and the Court’s approval of, the Break-Up Fee and the Expense

Reimbursement, as set forth in the SPA. The Break-Up Fee and the Expense Reimbursement

will enable AgFeed Industries to secure an adequate floor for the Target Shares and, thus, insist

that competing bids be materially higher and better than the SPA (or any modified agreement

that might be entered into with the Proposed Purchaser if other Qualifying Bid’s are received).

Accordingly, AgFeed Industries’ ability to offer the Break-Up Fee and the Expense

Reimbursement enables them to ensure the sale of the Target Shares to a contractually-

committed bidder at a price that AgFeed Industries believes to be fair, while providing them with

the potential of even greater benefit to their estates.

29. AgFeed Industries submits that the amount of the Break-Up Fee and the Expense

Reimbursement is reasonable and appropriate in light of the size and nature of the proposed

transaction and the efforts that have been and will be expended by the Proposed Purchaser,

including conducting the legal and financial diligence necessary to negotiate and enter into the

SPA, which will serve as the baseline for other bids for the Target Shares. AgFeed Industries

further submits that the Break-Up Fee and the Expense Reimbursement played a material role in

inducing the Proposed Purchaser to enter into the SPA.

30. In addition, payment of the Break-Up Fee and the Expense Reimbursement will

not diminish AgFeed Industries’ estate. AgFeed Industries does not intend to terminate the SPA


22

01:14090113.5

if to do so would incur an obligation to pay the Break-Up Fee, unless to accept an alternative bid,

which bid must exceed the consideration offered by the Proposed Purchaser by an amount

sufficient to pay the Break-Up Fee and the Expense Reimbursement and otherwise comply with

the Bidding Procedures. With respect to the Expense Reimbursement, only reasonably

documented actual out-of-pocket fees and expenses will be reimbursed by AgFeed Industries and

its estate.

31. The Break-Up Fee, which represents 3% of the Base Purchase Price, is reasonable

and consistent with the range of bid protections approved by bankruptcy courts in this District.

See, e.g., In re Vertis Holdings, Inc., Case No. 12-12821 (CSS) (Bankr. D. Del. Nov. 2, 2012)

(D.I. 206) (court approved break-up fee of 3.0% in connection with a $258 million sale of

assets); In re Solyndra LLC, Case No. 11-12799 (MFW) (D.I. 1113) (Bankr. D. Del. Sept. 28,

2012) (court approved break-up fee of 2.6% in connection with $90 million sale of assets); In re

Global Motorsport Group, Inc., Case No. 08-10192 (KJC) (Bankr. D. Del. Feb. 14, 2008) (D.I.

101) (court approved breakup fee of approximately 4% or $500,000 in connection with sale of

assets); In re Global Home Prods. LLC, Case No. 06-10340 (KG) (Bankr. D. Del. July 14, 2006

(court approved breakup fee of approximately 3.1% or $650,000 in connection with sale of

assets).

D. The Notice Procedures for the Sale, Bidding Procedures, Auction and Sale Hearing Are Reasonable and Appropriate

32. Pursuant to Bankruptcy Rules 2002(a) and (c), AgFeed Industries is required to

notify creditors of the Sale, including a disclosure of the time and place of any auction, the terms

and conditions of the sale, and the deadline for filing any objections.

33. AgFeed Industries submits that the notice procedures described above fully

comply with Bankruptcy Rule 2002 and are reasonably calculated to provide timely and


23

01:14090113.5

adequate notice of the Sale, Bidding Procedures, Auction, and Sale Hearing to its creditors and

all other parties in interest that are entitled to notice, as well as those parties that have expressed

a bona fide interest in acquiring the Target Shares.

34. Accordingly, AgFeed Industries respectfully requests the Court to approve the

notice procedures set forth in this Motion, including the form and manner of service of the Sale

Notice, and that no other or further notice of the Sale, Bidding Procedures, Auction or Sale

Hearing is necessary or required.

II. Approval of the Sale Is Appropriate and in the Best Interests of AgFeed Industries’ Estate

A. The Sale Is Authorized by Section 363 of the Bankruptcy Code as a Sound Exercise of AgFeed Industries’ Business Judgment.

35. Section 363 of the Bankruptcy Code provides that a debtor, “after notice and a

hearing, may use, sell, or lease, other than in the ordinary course of business, property of the

estate[.]” 11 U.S.C. § 363(b). Although section 363 does not specify a standard for determining

when it is appropriate for a court to authorize the use, sale, or lease of property of the estate,

courts routinely authorize sales of a debtor’s assets if such sale is based upon the sound business

judgment of the debtor. See Meyers v. Martin (In re Martin), 91 F.3d 389, 395 (3d Cir. 1996); In

re Montgomery Ward Holding Corp., 242 B.R. 147, 153 (D. Del. 1999); In re Delaware &

Hudson Ry. Co., 124 B.R. 169, 175-76 (D. Del. 1991); In re Trans World Airlines, Inc., No. 01-

00056 (PJW), 2001 WL 1820326, at *10 (Bankr. D. Del. Apr. 2. 2001).

36. Courts typically consider the following factors in determining whether a proposed

sale satisfies this standard: (a) whether a sound business justification exists for the sale;

(b) whether adequate and reasonable notice of the sale was given to interested parties;

(c) whether the sale will produce a fair and reasonable price for the property; and (d) whether the

parties have acted in good faith. See In re Decora Indus., Inc., 2002 WL 32332749, at *2 (D.


24

01:14090113.5

Del. May 20, 2002) (citing In re Delaware & Hudson Ry. Co., 124 B.R. at 176); In re United

Healthcare Sys. Inc., No. 97-1159, 1997 WL 176574, at *4 & n.2 (D.N.J. Mar. 26, 1997).

37. A sound business purpose for the sale of a debtor’s assets outside the ordinary

course of business may be found where such a sale is necessary to preserve the value of assets

for the estate, its creditors or interest holders. See, e.g., In re Abbotts Dairies of Pa., Inc., 788

F.2d 143 (3d Cir. 1986); In re Lionel Corp., 722 F.2d 1063 (2d Cir. 1983); see also In re Food

Barn Stores, Inc., 107 F.3d 558, 564-65 (8th Cir. 1997) (stating that the paramount goal in any

proposed sale of property of the estate is to maximize value).

38. Furthermore, “[w]here the debtor articulates a reasonable basis for its business

decisions (as distinct from a decision made arbitrarily or capriciously), courts will generally not

entertain objections to the debtor’s conduct.” Comm. of Asbestos-Related Litigants and/or

Creditors v. Johns-Manville Corp. (In re Johns-Manville Corp), 60 B.R. 612, 616 (Bankr.

S.D.N.Y. 1986). There is a presumption that “in making a business decision the directors of a

corporation acted on an informed basis, in good faith and in the honest belief that the action was

in the best interests of the company.” In re Integrated Res., 147 B.R. at 656 (quoting Smith v.

Van Gorkcom, 488 A.2d 858, 872 (Del. 1985)). Thus, if a debtor’s actions satisfy the business

judgment rule, then the transaction in question should be approved under section 363(b)(1) of the

Bankruptcy Code. Indeed, when applying the business judgment standard, courts show great

deference to a debtor’s business decisions. See Pitt v. First Wellington Canyon Assocs. (In re

First Wellington Canyon Assocs.), 1989 WL 106838, at *3 (N.D. Ill. Sept. 8, 1989) (“Under this

test, the debtor’s business judgment . . . must be accorded deference unless shown that the

bankrupt’s decision was taken in bad faith or in gross abuse of the bankrupt’s retained

discretion.”).


25

01:14090113.5

39. The value of the Target Shares will be tested through the auction and sale process

provided for in the Bidding Procedures. Consequently, the fairness and reasonableness of the

consideration for the Target Shares to be paid by the Proposed Purchaser (or if the Proposed

Purchaser is not the Highest and Best Bidder, then by the Highest and Best Bidder) ultimately

will be demonstrated by adequate “market exposure” and an open and fair auction and sale

process — the best means for establishing whether a fair and reasonable price is being paid.

40. Thus, AgFeed Industries submits that the SPA (or if the Proposed Purchaser is not

the Highest and Best Bidder, then a Modified SPA) will constitute the highest and best offer for

the Target Shares, and will provide a greater recovery for its estate than would be provided by

any other available alternative. As such, AgFeed Industries’ determination to sell the Target

Shares through an auction and sale process, as provided for in the Bidding Procedures, is a valid

and sound exercise of its business judgment.

41. Accordingly, the Seller respectfully requests that the Sale be approved.

B. The Sale of the Target Shares Free and Clear of All Encumbrances Is Authorized by Section 363(f) of the Bankruptcy Code.

42. In the interest of attracting the best bids for the Target Shares, AgFeed Industries

submits that the Sale should be free and clear of all liens, claims, interests, pledges or

encumbrances in accordance with section 363(f) of the Bankruptcy Code, with any such liens,

claims, interests, pledges or encumbrances attaching to the net proceeds of the Sale, as and to the

extent applicable.

43. Section 363(f) of the Bankruptcy Code authorizes a debtor to sell assets free and

clear of liens, claims, interests, and encumbrances if:

(a) applicable non-bankruptcy law permits sale of such property free and clear of such interests;

(b) such entity consents;


26

01:14090113.5

(c) such interest is a lien and the price at which such property is to be sold is greater than the value of all liens on such property;

(d) such interest is in bona fide dispute; or

(e) such entity could be compelled, in a legal or equitable proceeding, to accept a money satisfaction of such interest.

11 U.S.C. § 363(f).

44. Section 363(f) is supplemented by section 105(a) of the Bankruptcy Code, which

provides that “[t]he Court may issue any order, process or judgment that is necessary or

appropriate to carry out the provisions of [the Bankruptcy Code].” 11 U.S.C. § 105(a).

45. Because section 363(f) of the Bankruptcy Code is drafted in the disjunctive,

satisfaction of any one of its five requirements will suffice to permit the sale of the Target Shares

“free and clear” of all liens and encumbrances. See In re Kellstrom Indus., Inc., 282 B.R. 787,

793 (Bankr. D. Del. 2002) (“Section 363(f) is written in the disjunctive, not the conjunctive, and

if any of the five conditions are met, the debtor has the authority to conduct the sale free and

clear of all liens.”); see also Citicorp Homeowners Servs., Inc. v. Elliot (In re Elliot), 94 B.R.

343, 345 (E.D. Pa. 1988) (same); In re Dundee Equity Corp., No. 89-10233 (FGC), 1992 WL

53743, at *4 (Bankr. S.D.N.Y. Mar. 6, 1992) (same).

46. AgFeed Industries submits that one or more of the conditions set forth in section

363(f) of the Bankruptcy Code will be satisfied with respect to the Sale. In particular, AgFeed

Industries believes that at least section 363(f)(2) of the Bankruptcy Code will be satisfied

because each of the parties holding liens on the Target Shares, if any, will consent, or absent any

objection to Sale, will be deemed to have consented to, the sale and transfer of the Target Shares.

Any lienholder also will be adequately protected by having its liens, if any, attach to the proceeds

of the Sale, in the same order of priority, with the same validity, force and effect that such


27

01:14090113.5

creditor had prior to such sale, subject to any claims and defenses that AgFeed Industries and its

estate may possess with respect thereto.

47. Accordingly, AgFeed Industries respectfully requests that the Target Shares be

sold free and clear of any liens and encumbrances pursuant to section 363(f) of the Bankruptcy

Code.

C. The Proposed Purchaser (or if the Proposed Purchaser is not the Highest and Best Bidder, then the Highest and Best Bidder) Is Entitled to the Full Protection of Section 363(m) of the Bankruptcy Code, and the Sale Does Not Violate Section 363(n) of the Bankruptcy Code

48. Section 363(m) of the Bankruptcy Code protects the sale of a debtor’s property to

a good faith purchaser. Specifically, section 363(m) provides:

The reversal or modification on appeal of an authorization under subsection (b) or (c) of this section of a sale or lease of property does not affect the validity of a sale or lease under such authorization to an entity that purchased or leased such property in good faith, whether or not such entity knew of the pendency of the appeal, unless such authorization and such sale or lease were stayed pending appeal.

11 U.S.C. § 363(m).

49. While the Bankruptcy Code does not define “good faith,” the Third Circuit in In

re Abbotts Dairies of Pa., Inc. held that the misconduct that would destroy a purchaser’s good

faith status at a judicial sale typically involves “fraud, collusion between the purchaser and other

bidders or the trustee, or an attempt to take grossly unfair advantage of other bidders.” 788 F.2d

at 147 (citation omitted); see also Kabro Assocs. of West Islip, L.L.C. v. Colony Hill Assocs. (In

re Colony Hill Assocs.), 111 F.3d 269, 276 (2d Cir. 1997) (“[t]ypically, the misconduct that

would destroy a [buyer]’s good faith status at a judicial sale involves fraud, collusion between

the [buyer] and other bidders or the trustee or an attempt to take grossly unfair advantage of

other bidders”).


28

01:14090113.5

50. The terms and conditions of the SPA were negotiated by AgFeed Industries and

the Proposed Purchaser at arm’s-length and in good faith with the assistance of counsel and

AgFeed Industries’ other professional advisors. Moreover, neither AgFeed Industries nor the

Proposed Purchaser has engaged in any conduct that would cause or permit the SPA to be

avoided under section 363(n) of the Bankruptcy Code. If, following the Auction, the Proposed

Purchaser is not the Highest and Best Bidder, AgFeed Industries will have negotiated a Modified

SPA with the Highest and Best Bidder in good faith and at arm’s-length.

51. Accordingly, AgFeed Industries requests that the Court make a finding at the Sale

Hearing that the Proposed Purchaser (or if the Proposed Purchaser is not the Highest and Best

Bidder, then the Highest and Best Bidder) purchased the Target Shares in good faith and is

entitled to the full protections of section 363(m) of the Bankruptcy Code.

D. Appointment of a Consumer Privacy Ombudsman Is Not Required

52. Section 363(b)(1) of the Bankruptcy Code requires the appointment of a

consumer privacy ombudsman pursuant to section 332 of the Bankruptcy Code if a debtor, in

connection with offering a product or a service, discloses a consumer privacy policy prohibiting

the transfer of personally identifiable information to persons not affiliated with the debtor, and

the sale of an individual’s personally identifiable information is inconsistent with such privacy

policy. 11 U.S.C. § 363(b)(1).

53. AgFeed Industries believes that it has not disclosed to any individual any policy

prohibiting the transfer of personally identifiable information.

54. Accordingly, AgFeed Industries submits that the requirements of section 332(b)(l)

of the Bankruptcy Code are inapplicable, so section 363(b)(1) does not apply to the Sale, and a

consumer privacy ombudsman is not required in connection with the relief requested herein.


29

01:14090113.5

WAIVER OF BANKRUPTCY RULE 6004(h) and 6006(d)

55. Bankruptcy Rule 6004(h) provides that “[a]n order authorizing the use, sale, or

lease of property other than cash collateral is stayed until the expiration of 14 days after entry of

the order, unless the court orders otherwise.” Fed. R. Bankr. P. 6004(h). Similarly, Bankruptcy

Rule 6006(d) provides that “[a]n order authorizing the [debtor] to assign an executor contract or

unexpired . . . . is stayed until the expiration of 14 days after entry of the order, unless the court

orders otherwise.” Id. at 6006(d). AgFeed Industries submits that ample cause exists to justify a

waiver of the fourteen (14) day stay under Bankruptcy Rules 6004(h) and 6006(d) in connection

with the Sale. As an initial matter, the SPA requires that the Sale Order contain such a waiver.

AgFeed Industries therefore requests that the Sale Order be effective immediately by providing

that the fourteen (14) day stay under Bankruptcy Rules 6004(h) and 6006(d) be waived

NOTICE

56. Notice of this Motion has or will be provided to: (a) the Office of the United

States Trustee for the District of Delaware; (b) counsel to the Debtors’ prepetition secured

lenders; (c) counsel to Creditors’ Committee, (d) counsel to Equity Holders’ Committee, (e) the

Internal Revenue Service; (f) the Office of the United States Attorney for the District of

Delaware; (g) the United States Securities and Exchange Commission; and (h) all parties

requesting notice in these chapter 11 cases pursuant to Local Rule 2002-1(b) as of the date

thereof. In light of the nature of the relief requested herein, the Seller submits that no other or

further notice is necessary.

NO PRIOR REQUEST

57. No prior request for the relief sought in this Motion has been made by AgFeed

Industries to this or any other court.


30

01:14090113.5

CONCLUSION

WHEREFORE, AgFeed Industries respectfully requests the Court to enter the Bidding

Procedures Order and the Sale Order and grant such other and further relief as is just and proper.

Dated: September 18, 2013 Wilmington, Delaware

YOUNG CONAWAY STARGATT & TAYLOR, LLP /s/ Donald J. Bowman, Jr. Robert S. Brady (No. 2847) Donald J. Bowman, Jr. (No. 4383) Robert F. Poppiti, Jr. (No. 5052) Ian J. Bambrick (No. 5455) 1000 N. King Street Rodney Square Wilmington, Delaware 19801 Telephone: (302) 571-6600 Facsimile: (302) 571-1253 Counsel for the Debtors and Debtors in Possession


01:14128644.1



Chapter 11 Case No. 13-11761 (BLS) Jointly Administered Hearing Date: October 10, 2013, at 2:00 p.m. (ET) Objection Deadline: October 3, 2013, at 4:00 p.m. (ET)

NOTICE OF MOTION

TO: (I) OFFICE OF THE UNITED STATES TRUSTEE FOR THE DISTRICT OF

DELAWARE; (II) COUNSEL TO THE DEBTORS’ PREPETITION SECURED LENDERS; (III) COUNSEL TO THE OFFICIAL COMMITTEE OF UNSECURED CREDITORS; (IV) COUNSEL TO THE OFFICIAL COMMITTEE OF EQUITY SECURITY HOLDERS; (V) INTERNAL REVENUE SERVICE; (VI) OFFICE OF THE UNITED STATES ATTORNEY FOR THE DISTRICT OF DELAWARE; (VII) UNITED STATES SECURITIES AND EXCHANGE COMMISSION; AND (VIII) ALL PARTIES REQUESTING NOTICE PURSUANT TO BANKRUPTCY RULE 2002 AS OF THE DATE HEREOF.

PLEASE TAKE NOTICE that AgFeed Industries, Inc. (“AgFeed Industries”),

by and through its undersigned counsel, have filed the attached AgFeed Industries, Inc.’s Motion for Entry of (A) an Order (I) Scheduling a Hearing on the Approval of the Proposed Stock Purchase Agreement Regarding the Sale and Purchase of the Stock of AgFeed Industries, Inc. (British Virgin Islands), (II) Approving Certain Bidding Procedures with Respect to the Proposed Stock Purchase Agreement, (III) Approving the Break-Up Fee, Expense Reimbursement and the Form and Manner of Notice Thereof, and (IV) Granting Related Relief; and (B) an Order (I) Authorizing and Approving AgFeed Industries, Inc.’s Sale of the Stock of AgFeed Industries, Inc. (British Virgin Islands), (II) Approving a Certain Stock Purchase Agreement, (III) Authorizing and Approving AgFeed Industries, Inc.’s Entry Into and Consummation of the Stock Purchase Agreement, and (IV) Granting Related Relief (the “Motion”).

PLEASE TAKE FURTHER NOTICE that any objections to the relief

requested in the Motion must be filed on or before October 3, 2013, at 4:00 p.m. (ET) (the

1 The Debtors and the last four digits of their federal tax identification number are: AgFeed USA, LLC (8748), AgFeed Industries, Inc. (7168); TS Finishing, LLC (8748); New York Finishing, LLC (8748); Pork Technologies, LC (2076); New Colony Farms, LLC (9246); Heritage Farms, LLC (8141); Heritage Land, LLC (8129); Genetics Operating, LLC (1921); M2P2 Facilities, LLC (8748); MGM, LLC (8748); M2P2 General Operations, LLC (8748); New Colony Land Company, LLC(5834); M2P2 AF JV, LLC (8748); Midwest Finishing, LLC (8748); and Genetics Land, LLC (1921). The location of the corporate headquarters for AgFeed Industries, Inc. is 100 Bluegrass Commons Blvd., Suite 310, Hendersonville, Tennessee 37075. The location of the corporate headquarters for the remaining Debtors is 510 South 17th Street, Suite 104, Ames, Iowa 50010.

Case 13-11761-BLS Doc 331-1 Filed 09/18/13 Page 1 of 2

2 01:14128644.1

“Objection Deadline”) with the United States Bankruptcy Court for the District of Delaware, 824 N. Market Street, 3rd Floor, Wilmington, Delaware 19801. At the same time, you must serve a copy of your objection upon the undersigned counsel to the Debtors so as to be received on or before the Objection Deadline.

PLEASE TAKE FURTHER NOTICE THAT A HEARING TO CONSIDER

THE MOTION WILL BE HELD ON OCTOBER 10, 2013, AT 2:00 P.M. (ET) BEFORE THE HONORABLE BRENDAN L. SHANNON IN THE UNITED STATES BANKRUPTCY COURT FOR THE DISTRICT OF DELAWARE, 824 N. MARKET STREET, 6TH FLOOR, COURTROOM #1, WILMINGTON, DELAWARE 19801.

PLEASE TAKE FURTHER NOTICE THAT IF YOU FAIL TO RESPOND

TO THE MOTION IN ACCORDANCE WITH THIS NOTICE, THE COURT MAY GRANT THE RELIEF REQUESTED THEREIN WITHOUT FURTHER NOTICE OR A HEARING. Dated: Wilmington, Delaware September 18, 2013

YOUNG CONAWAY STARGATT & TAYLOR, LLP /s/ Donald J. Bowman, Jr. Robert S. Brady (No. 2847) Donald J. Bowman, Jr. (No. 4383) Robert F. Poppiti, Jr. (No. 5052) Ian J. Bambrick (No. 5455) 1000 N. King Street Rodney Square Wilmington, Delaware 19801 Telephone: (302) 571-6600 Facsimile: (302) 571-1253 Counsel for the Debtors and Debtors in Possession


01:14090113.5

EXHIBIT A

Bidding Procedures Order


01:14091221.2



Chapter 11 Case No. 13-11761 (BLS) Jointly Administered Ref. Docket No.: _____

ORDER (I) SCHEDULING A HEARING ON THE APPROVAL OF THE

PROPOSED STOCK PURCHASE AGREEMENT REGARDING THE SALE AND PURCHASE OF THE STOCK OF AGFEED INDUSTRIES, INC., (BRITISH VIRGIN

ISLANDS) (II) APPROVING CERTAIN BIDDING PROCEDURES WITH RESPECT TO THE PROPOSED STOCK PURCHASE AGREEMENT, (III) APPROVING THE

BREAK-UP FEE, EXPENSE REIMBURSEMENT AND THE FORM AND MANNER OF NOTICE THEREOF, AND (IV) GRANTING RELATED RELIEF

Upon consideration of the motion (the “Motion”)2 of AgFeed Industries, Inc. (“AgFeed

Industries” or “Seller”) for the entry of: (a) an order (i) scheduling a hearing (the “Sale

Hearing”) on the approval of the proposed stock purchase agreement (the “SPA” or “Stock

Purchase Agreement”) regarding the sale and purchase of the stock of AgFeed Industries, Inc.

(British Virgin Islands), (ii) approving certain bidding procedures (the “Bidding Procedures”),

attached hereto has Exhibit 1, with respect to the proposed Stock Purchase Agreement, (iii)

approving the break-up fee, expense reimbursement and the form and manner of notice thereof,

and (iv) granting related relief; and (b) an order, substantially in the form attached to the Motion

as Exhibit B (the “Sale Order”) (i) authorizing and approving AgFeed Industries, Inc.’s sale of 1 The Debtors and the last four digits of their federal tax identification number are: AgFeed USA, LLC (8748), AgFeed Industries, Inc. (7168); TS Finishing, LLC (8748); New York Finishing, LLC (8748); Pork Technologies, LC (2076); New Colony Farms, LLC (9246); Heritage Farms, LLC (8141); Heritage Land, LLC (8129); Genetics Operating, LLC (1921); M2P2 Facilities, LLC (8748); MGM, LLC (8748); M2P2 General Operations, LLC (8748); New Colony Land Company, LLC(5834); M2P2 AF JV, LLC (8748); Midwest Finishing, LLC (8748); and Genetic Land, LLC (1921). The location of the corporate headquarters for AgFeed Industries, Inc. is 100 Bluegrass Commons Blvd., Suite 310, Hendersonville, Tennessee 37075. The location of the corporate headquarters for the remaining Debtors is 510 South 17th Street, Suite 104, Ames, Iowa 50010. 2 Capitalized terms not otherwise defined herein shall have the meanings ascribed to such terms in the Motion or the Bidding Procedures, as applicable.


2

01:14091221.2

the stock of AgFeed Industries, Inc. (British Virgin Islands), (ii) approving the Stock Purchase

Agreement by and among Good Charm International Development, Ltd., as purchaser (the

“Proposed Purchaser”), Ningbo Tech-Bank Co., Ltd., as parent (“NTB” or “Parent”) and AgFeed

Industries, Inc., as seller, a copy of which is attached to hereto as Exhibit A to the Bidding

Procedures (or if the Proposed Purchaser is not the Highest and Best Bidder, then a modified

Stock Purchase Agreement), (iii) authorizing and approving AgFeed Industries, Inc.’s entry into

and consummation of the Stock Purchase Agreement, and (iv) granting related relief; and upon

consideration of the Motion and all pleadings related thereto, including the First Day

Declaration; and after due deliberation and sufficient cause appearing therefor, it is hereby

FOUND AND DETERMINED THAT:3

A. This Court has jurisdiction to consider the Motion in accordance with 28 U.S.C.

§§ 157 and 1334 and the Amended Standing Order.

B. Venue of this proceeding and the Motion is proper pursuant to 28 U.S.C. §§ 1408

and 1409. This is a core proceeding pursuant to 28 U.S.C. § 157(b)(2).

C. The statutory and legal predicates for the relief requested in the Motion and

provided for herein are sections 105(a), 363, 365, 503 and 507 of the Bankruptcy Code,

Bankruptcy Rules 2002, 6004, 6006, 9007, and 9014 and Local Rule 6004-1.

D. In the Motion and at the hearing on the Motion, AgFeed Industries demonstrated

that good and sufficient notice of the relief granted by this Order has been given and no further

notice is required. A reasonable opportunity to object or be heard regarding the relief granted by

this Order has been afforded to those parties entitled to notice pursuant to Local Bankruptcy Rule

2002-1(b) and all other interested parties.

3 Findings of fact shall be construed as conclusions of law and conclusions of law shall be construed as findings of fact to the fullest extent of the law. See Fed. R. Bankr. P. 7052.


3

01:14091221.2

E. The Sale Notice is appropriate and reasonably calculated to provide all interested

parties with timely and proper notice of this Order, the Bidding Procedures, the Auction, the

Sale, and the Sale Hearing, and any and all objection deadlines related thereto, and no other or

further notice is required of the foregoing.

F. The Bidding Procedures are fair, reasonable, and appropriate and are designed to

maximize recovery with respect to the sale of the Target Shares by AgFeed Industries’ estate.

G. Under the circumstances, timing, and procedures set forth in this Order, in the

Bidding Procedures, in the Motion, and in the SPA, AgFeed Industries has demonstrated

compelling and sound business justifications for entry into the SPA and all of its terms,

including, without limitation, the Break-Up Fee and the Expense Reimbursement.

H. The Break-Up Fee and the Expense Reimbursement: (i) were negotiated by the

AgFeed Industries and the Proposed Purchaser in good faith and at arm’s-length; (ii) are

reasonable and appropriate given, among other things, the size and nature of the Sale and the

efforts that have been expended, and will continue to be expended, by the Proposed Purchaser;

and (iii) are a material inducement for, and a condition of, the Proposed Purchaser’s entry into

the SPA. The Break-Up Fee and the Expense Reimbursement are commensurate with the real

and substantial post-petition benefits conferred upon AgFeed Industries’ estates by the Proposed

Purchaser and constitute actual and necessary costs and expenses incurred by AgFeed Industries

in preserving the value of its estate within the meaning of section 503(b) of the Bankruptcy

Code.

I. Entry into the SPA as a “stalking-horse” is in the best interests of AgFeed

Industries, its estate and creditors and all other interested parties and, based on the information

set forth in the Motion and presented to this Court at the hearing on the Motion, is an appropriate


4

01:14091221.2

exercise of AgFeed Industries’ business judgment. The SPA will enable AgFeed Industries to

secure an adequate floor for the Auction and will provide a clear benefit to AgFeed Industries, its

estate and creditors and all other interested parties.

J. Entry of this Order is in the best interests of AgFeed Industries, its estate and

creditors and all other interested parties; and therefore:

IT IS HEREBY ORDERED THAT:

1. Those portions of the Motion seeking approval of (a) AgFeed Industries’ entry

into the SPA and all of its terms (including, without limitation, the Break-Up Fee, the Expense

Reimbursement, and the first-priority lien on the proceeds of an Alternative Transaction until

such amounts are paid in full), (b) the Bidding Procedures, (c) the Sale Notice, (d) the date, time

and place of the Sale Hearing, and (e) the noticing and objection procedures related to each of

the foregoing, are hereby GRANTED.

2. The Break-Up Fee and the Expense Reimbursement each shall be allowed claims

entitled to administrative expense claim priority under Section 503(b)(1)(A) of the Bankruptcy

Code, and AgFeed Industries’ shall and is hereby authorized without further order of the Court to

pay in full in cash when due any amount owed by AgFeed Industries to the Proposed Purchaser

under the SPA, including the Break-Up Fee and the Expense Reimbursement, all of which shall

not be discharged, modified or otherwise affected by any plan of reorganization or liquidation for

AgFeed Industries and its above-captioned affiliated debtors and debtors in possession (each, a

“Debtor,” and collectively, the “Debtors”), by the appointment of a chapter 7 or chapter 11

trustee, or by any other Order of the Bankruptcy Court. In addition to AgFeed Industries’

obligation to pay the Break-Up Fee and the Expense Reimbursement, the Proposed Purchaser

shall have, and is hereby granted, a security interest and lien upon the proceeds of an Alternative


5

01:14091221.2

Transaction until such Break-Up Fee and Expense Reimbursement are paid in full and such

which lien and security interest shall have a first priority and be senior to all other security

interests and liens in such proceeds.

3. Any objections to the Motion or the relief granted by this Order that have not

been withdrawn, waived or settled, and all reservations of rights included therein, are hereby

overruled and denied on the merits.

4. The SPA, which may be obtained by parties in interest free of charge on BMC

Group, Inc.’s dedicated webpage related to these chapter 11 cases (www.bmcgroup.com/agfeed)

or from counsel to the Debtors upon written request to Ian J. Bambrick, Esquire

([email protected]), is hereby approved and is appropriate and reasonably calculated to

enable AgFeed Industries and other parties in interest to easily compare and contrast the differing

terms of any bids presented at the Auction.

5. Except as expressly provided herein, nothing herein shall be construed as a

determination of the rights of any party in interest in these chapter 11 cases, including, without

limitation, the Debtors, and the Proposed Purchaser.

6. The Bidding Procedures are hereby approved. The failure to specifically include

or reference any particular provision of the Bidding Procedures in the Motion or this Order shall

not diminish or otherwise impair the effectiveness of such procedures, it being this Court’s intent

that the Bidding Procedures are approved in their entirety, as if fully set forth in this Order.

AgFeed Industries is hereby authorized to conduct a sale by auction of the Target Shares

pursuant to the terms of the Bidding Procedures and this Order.

7. Notwithstanding any limitations provided for in such information, including,

without limitation, any non-disclosure, confidentiality or similar provisions, AgFeed Industries


6

01:14091221.2

and its estate shall be authorized to provide due diligence information to Qualifying Bidders

provided that such Qualifying Bidders have delivered an executed confidentiality agreement in

form and substance acceptable to the Debtors. The Debtors and their estates are not responsible

for, and shall have no liability with respect to, any information obtained by, or provided to, any

Qualifying Bidders in connection with the Bidding Procedures and the Sale provided that the

information was provided in accordance with this Order.

8. Notwithstanding anything to the contrary herein and for the avoidance of doubt,

for all purposes under these Bidding Procedures, the Proposed Purchaser shall be considered a

Qualifying Bidder and (ii) the SPA shall be considered a Qualifying Bid.

9. The Bidding Procedures shall apply to the Potential Bidders, the Qualifying

Bidders, and the conduct of the Sale and the Auction.

10. The Sale Notice and notice of the Bidding Procedures, the Auction, and the Sale

Hearing and the objection periods associated with each of the foregoing are reasonably

calculated to provide notice to any affected party and afford the affected party the opportunity to

exercise any rights affected by the Motion as it relates to the Auction, the Sale, the Sale Hearing

pursuant to Bankruptcy Rules 2002(a)(2), 6004 and 6006, and such notice and objection periods

are hereby approved.

11. Within five (5) business days of entry of this Order, AgFeed Industries shall serve

the Sale Notice by first class mail, postage prepaid, upon: (a) the Office of the United States

Trustee for the District of Delaware; (b) counsel to the Debtors’ prepetition secured lenders; (c)

the Debtors’ known creditors; (d) all entities with recorded claims, liens, interests or

encumbrances against AgFeed Industries’ right, title and interest in its assets and any other

entities reasonably known to have asserted any such claim, liens, interests or encumbrances; (e)


7

01:14091221.2

all entities reasonably known to have expressed an interest in a transaction with respect to the

Target Shares during the past year; (g) the Internal Revenue Service; (h) the Office of the United

States Attorney for the District of Delaware; (i) the United States Securities and Exchange

Commission; (j) all taxing authorities or recording offices with a reasonably known interest in

the relief requested in this Motion; and (j) all parties requesting notice in these chapter 11 cases

pursuant to Local Rule 2002-1(b) as of the date thereof.

12. Not later than twenty-one (21) days prior to the date of the Sale Hearing, AgFeed

Industries shall cause the Sale Notice to be published once in: (i) The Wall Street Journal (U.S.

and Asia editions) and (ii) such other Chinese publication (as mutually agreed upon by the Seller

and the Proposed Purchaser). Such publication conforms to the requirements of Bankruptcy

Rules 2002(l) and 9008, and is reasonably calculated to provide notice to any affected party,

including any Potential Bidders, and afford the affected party the opportunity to exercise any

rights affected by the Motion and the relief granted by this Order.

13. Any objections to the Sale or the relief requested in connection with the Sale (a

“Sale Objection”) must: (a) be in writing; (b) comply with the Bankruptcy Rules and the Local

Rules; (c) set forth the specific basis for the Sale Objection; (d) be filed with the Clerk of this

Court, 824 N. Market Street, 3rd Floor, Wilmington, DE 19801, together with proof of service,

on or before 4:00 p.m. (ET) on November 13, 2013 (the “Sale Objection Deadline”); and

(e) be served, so as to be actually received on or before the Sale Objection Deadline, upon

(i) counsel for the Debtors, Young Conaway Stargatt & Taylor, LLP, 1000 North King Street,

Wilmington, DE 19801, Attn: Robert S. Brady, Donald J. Bowman, Jr. and Robert F. Poppiti, Jr.;

(ii) counsel to the Creditors’ Committee, Lowenstein Sandler LLP, 65 Livingston Avenue,

Roseland, New Jersey 07068, Attn: Jeff D. Prol, Esq. and Timothy R. Wheeler, Esq., and


8

01:14091221.2

Lowenstein Sandler LLP, 1251 Avenue of the Americas, New York, New York 10020, Attn:

Bruce S. Nathan, Esq., (iii) counsel to the Equity Holders’ Committee, Elliott Greenleaf, 1105

Market Street, Suite 1700, Wilmington, Delaware 19801 Attn: Rafael X. Zahralddin, Esq., and

Sugar Felsenthal Grais & Hammer LLP, 30 N. LaSalle St., Suite 3000, Chicago, IL 60602, Attn:

Aaron L. Hammer, Esq., and (iv) counsel to the Proposed Purchaser and Parent, Robbins,

Salomon & Patt, Ltd., 180 N. LaSalle Street, Suite 3300, Chicago, IL 60604, Attn: Steve

Jakubowski, Esq. and Mr. Hong Jianping, Rm. 1807 Yangguang International Building, No. 55,

Yuli Road, Yuyao City, Zhejiang 315400, PRC, fax: +86 21 50470264 and e-mail:

[email protected]. If a Sale Objection is not filed and served on or before the Sale

Objection Deadline in accordance with the foregoing requirements, the objecting party shall be

barred from objecting to the Sale and shall not be heard at the Sale Hearing, and this Court may

enter the Sale Order without further notice to such party. The Proposed Purchaser shall have

standing to contest the Highest and Best Bid selected by the Seller.

14. Failure to file a Sale Objection on or before the Sale Objection Deadline shall be

deemed to be “consent” for purposes of section 363(f) of the Bankruptcy Code.

15. If no timely Qualifying Bids other than the Proposed Purchaser’s Qualifying Bid

are submitted on or before the Bid Deadline, AgFeed Industries, after consultation with the

counsel to the Creditors’ Committee and counsel to the Equity Holders’ Committee, shall not

hold an Auction and shall request at the Sale Hearing that this Court approve the SPA and the

transactions contemplated thereunder. In the event that AgFeed Industries timely receives one or

more Qualifying Bids other than the Proposed Purchaser’s Qualifying Bid, AgFeed Industries

shall conduct the Auction, and following the Auction, in accordance with the Bidding

Procedures, AgFeed Industries will determine, in its sole discretion and after consultation with


9

01:14091221.2

counsel to the Creditors’ Committee and counsel to the Equity Holders’ Committee, which

Qualifying Bid is the Highest and Best Bid.

16. The Sale Hearing shall be held in this Court on November 21, 2013 at 11:30 a.m.

(ET), unless otherwise determined by this Court. The Sale Hearing may be adjourned by

AgFeed Industries from time to time without further notice to creditors or other parties in interest

other than by announcement of the adjournment in open court on the date scheduled for the Sale

Hearing or by filing a notice on the docket of the Debtors’ chapter 11 cases.

17. This Order shall be effective immediately upon entry, and any stay of orders

provided for in Bankruptcy Rules 6004(h) and 6006 or any other provision of the Bankruptcy

Code, the Bankruptcy Rules or the Local Rules is expressly waived. The Debtors are not subject

to any stay in the implementation, enforcement or realization of the relief granted in this Order,

and may, in their sole discretion and without further delay, take any action and perform any act

authorized or approved under this Order.

18. This Court shall retain jurisdiction with respect to all matters arising from or

related to the implementation or interpretation of the Order.

Dated: October ___, 2013 Wilmington, Delaware

____________________________________ BRENDAN L. SHANNON UNITED STATES BANKRUPTCY JUDGE


01:14091221.2

EXHIBIT 1

Bidding Procedures


01:14092487.5



Chapter 11 Case No. 13-11761 (BLS) Jointly Administered

BIDDING PROCEDURES

Set forth below are the procedures (collectively, the “Bidding Procedures”) to be employed by AgFeed Industries, Inc. (“AgFeed Industries” or “Seller”) in connection with the proposed sale of 100% of the outstanding shares of AgFeed Industries, Inc. (British Virgin Islands) (the “Sale”), free and clear of all liens, claims and encumbrances, pursuant to that certain stock purchase agreement (the “SPA” or “Stock Purchase Agreement”) by and among Good Charm International Development, Ltd., as purchaser (the “Proposed Purchaser”), Ningbo Tech-Bank Co., Ltd., as parent, and the AgFeed Industries, Inc., as the seller. A copy of the SPA is attached hereto as Exhibit A.

ANY PARTY INTERESTED IN BIDDING ON THE TARGET SHARES SHOULD CONTACT BDA ADVISORS INC., 1270 AVENUE OF THE AMERICAS, SUITE 2310, NEW YORK, NEW YORK 10020, ATTN: EUAN RELLIE

1. Target Shares to be Sold

AgFeed Industries, Inc. shall offer the 100% of the outstanding shares of AgFeed Industries, Inc. (British Virgin Islands) (the “Target Shares”) for sale.

2. Participation Requirements

Any person or entity that wishes to participate in the bidding process for the Target Shares (each, a “Potential Bidder”) must first become a “Qualifying Bidder.” As a prerequisite to becoming a Qualifying Bidder (and thus being able to conduct due diligence), a Potential Bidder must:

(a) deliver an executed confidentiality agreement in form and substance acceptable to 1 The Debtors and the last four digits of their federal tax identification number are: AgFeed USA, LLC (8748), AgFeed Industries, Inc. (7168); TS Finishing, LLC (8748); New York Finishing, LLC (8748); Pork Technologies, LC (2076); New Colony Farms, LLC (9246); Heritage Farms, LLC (8141); Heritage Land, LLC (8129); Genetics Operating, LLC (1921); M2P2 Facilities, LLC (8748); MGM, LLC (8748); M2P2 General Operations, LLC (8748); New Colony Land Company, LLC(5834); M2P2 AF JV, LLC (8748); Midwest Finishing, LLC (8748); and Genetic Land, LLC (1921). The location of the corporate headquarters for AgFeed Industries, Inc. is 100 Bluegrass Commons Blvd., Suite 310, Hendersonville, Tennessee 37075. The location of the corporate headquarters for the remaining Debtors is 510 South 17th Street, Suite 104, Ames, Iowa 50010.


2

01:14092487.5

the and the above-captioned debtors and debtors in possession (each, a “Debtor,” and collectively, the “Debtors”); and

(b) be able, as determined by the Seller, to demonstrate the financial wherewithal to close the Sale if selected as the Highest and Best Bidder (as defined below).

Notwithstanding anything to the contrary herein and for the avoidance of doubt, for all purposes under these Bidding Procedures, (i) the Proposed Purchaser shall be considered a Qualifying Bidder and (ii) the SPA shall be considered a Qualifying Bid.

3. Bankruptcy Court Jurisdiction

The Proposed Purchaser and any Potential Bidders and Qualifying Bidders shall (i) be deemed to have waived any right to a jury trial in connection, and consented and submitted to the exclusive jurisdiction of the Bankruptcy Court over, any actions or proceedings arising from or relating the Bidding Procedures, the Sale, the Auction and the construction and enforcement of the contemplated transaction documents of such parties, (ii) bring any such action or proceeding in the Bankruptcy Court, and (iii) be deemed to have consented to the Bankruptcy Court entering a final judgment determining any such action or proceeding such matter and that such final judgment in any such action or proceeding, including all appeals, shall be conclusive and may be enforced in other jurisdictions (including any foreign jurisdictions) by suit on the judgment or in any other manner provided by applicable law.

4. Form of Agreement

The SPA is an offer to purchase the Target Shares. Potential Bidders should reference the SPA in connection with their bids. As set forth below, Potential Bidders intending to submit bids must include with their bids:

(a) a clean copy of an SPA that contains substantially the same terms as, or terms more favorable to the Seller and its estate than, those in the SPA; and

(b) a marked copy or blackline of the foregoing SPA that reflects any variations from the SPA.

5. Due Diligence

The Seller may afford to any Qualifying Bidder reasonable due diligence access and the time and opportunity to conduct reasonable due diligence. The due diligence period shall extend through and including the Bid Deadline (as defined below). Except as provided for in the SPA, the Seller may, but shall not be obligated to, in their sole discretion, furnish any due diligence information after the Bid Deadline. The Seller will designate a representative to coordinate all reasonable requests from Qualifying Bidders for due diligence access.

For any Qualifying Bidder which is a competitor of the Debtors, or is affiliated with any competitor of the Debtors, the Seller reserves the right, in its sole discretion, to withhold or limit access to any due diligence information that the Seller determines is business-sensitive or otherwise not appropriate for disclosure to such Qualifying Bidder. Notwithstanding any


3

01:14092487.5

limitations provided for in such information, including, without limitation, any non-disclosure, confidentiality or similar provisions, the Seller and its estate shall be authorized to provide due diligence information to Qualifying Bidders provided that such Qualifying Bidders have delivered an executed confidentiality agreement in form and substance acceptable to the Seller. The Seller and its estate are not responsible for, and shall have no liability with respect to, any information obtained by, or provided to, any Qualifying Bidders in connection with the Bidding Procedures and the Sale.

Except as provided for in the SPA, each Qualifying Bidder shall be deemed to acknowledge and represent that it (a) has had an opportunity to conduct any and all due diligence regarding the Target Shares, (b) has relied solely upon its own independent review, investigation and/or inspection of any documents and other information in making its Qualifying Bid, and (c) did not rely upon any written or oral statements, representations, promises, warranties or guaranties whatsoever, whether express, implied, by operation of law or otherwise, regarding the Target Shares, or the completeness of any documents or other information provided in connection with the Bidding Procedures and the Sale.

6. Bid Requirements

To be deemed a “Qualifying Bid,” a bid must be received from a Qualifying Bidder, other than the Proposed Purchaser, on or before the Bid Deadline (as defined below) and satisfy each of the following requirements (each, a “Bid Requirement”):

(a) be in writing;

(b) fully disclose the identity of the Qualifying Bidder;

(c) set forth the Base Purchase Price to be paid by such Qualifying Bidder;

(d) not propose payment in any form other than cash;

(e) state that such Qualifying Bidder offers to purchase the Target Shares upon substantially the same terms as, or terms more favorable to the Seller and its estates than, the terms set forth in the SPA;

(f) be accompanied by a clean and duly executed stock purchase agreement (a “Modified SPA”) and marked copy or blackline of the Modified SPA that reflects any variations from the SPA submitted by the Proposed Purchaser;

(g) state that such Qualifying Bidder’s offer is irrevocable until two (2) business days after the closing of the Sale;

(h) state that such Qualifying Bidder is financially capable of consummating the transactions contemplated by the Modified SPA and provide written evidence in support thereof;

(i) contain such financial and other information to allow the Seller to make a reasonable determination as to the Qualifying Bidder’s financial and other


4

01:14092487.5

capabilities to close the transactions contemplated by the Modified SPA;

(j) a commitment to close the transactions contemplated by the Modified SPA before fifteen (15) days after entry of the Sale Order or order approving entry into a Modified SPA, provided that the conditions for the Closing as set forth in the SPA have been met;

(k) not request or entitle such Qualifying Bidder to any break-up fee, termination fee, expense reimbursement or similar type of fee or payment, except as provided for in the SPA;

(l) the aggregate consideration proposed by the Qualifying Bidder must equal or exceed the sum of the amount of at least (i) the Base Purchase Price, (ii) the Break-Up Fee, (iii) the Expense Reimbursement, and (iv) $250,000;

(m) not contain any contingencies of any kind, including, without limitation, contingencies related to financing, internal approval or due diligence;

(n) contain written evidence satisfactory to the Seller, in its sole discretion, that the Qualifying Bidder has a commitment for financing or other evidence of the ability to close the transactions contemplated by the Modified SPA, with appropriate contact information for such financing sources;

(o) sets forth any regulatory and third-party approval required for the Qualifying Bidder to close the transactions contemplated by the Modified SPA, and the time period within which the Qualifying Bidder expects to receive such regulatory and third-party approvals (and in the case that receipt of any such regulatory or third-party approval is expected to take more than ten (10) days following execution and delivery of such Qualifying Bidder’s Modified SPA, those actions the bidder will take to ensure receipt of such approval(s) as promptly as possible);

(p) provides for the Qualifying Bidder to serve as a backup bidder (the “Next Highest Bidder”) if the Qualifying Bidder’s bid is the next highest and best bid after the Highest and Best Bid (the “Next Highest Bid”), in accordance with the terms of the Modified SPA;

(q) includes written evidence of authorization and approval from the Qualifying Bidder’s board of directors (or comparable governing body) with respect to the submission, execution, and delivery of the Modified SPA;

(r) provides a cash purchase deposit (the “Deposit”) in the amount of no less than 10% of the Potential Bidders’ proposed purchase price or similar arrangement which is acceptable to the Seller, in its sole discretion; and

(s) provides for liquidated damages in the event of the Qualifying Bidder’s breach of, or failure to perform under, the Modified SPA equal to the amount of the Deposit.


5

01:14092487.5

A bid from a Qualifying Bidder satisfying all of the above requirements, as determined by the Seller, in its sole discretion and after consultation with counsel to the Official Committee of Unsecured Creditors (the “Creditors’ Committee”) and counsel to the Official Committee of Equity Holders (the “Equity Holders’ Committee”), shall constitute a Qualifying Bid.

Each Qualifying Bidder submitting a bid shall be deemed to: (i) acknowledge and represent that it is bound by all of the terms and conditions of the Bidding Procedures; and (ii) have waived the right to pursue a substantial contribution claim under section 503 of the Bankruptcy Code related in any way to the submission of its bid, the Bidding Procedures, and the Sale.

7. Bid Deadline

A Qualifying Bidder, other than the Proposed Purchaser, that desires to make a bid shall deliver a written or electronic copy of its bid to (a) AgFeed Industries, Inc., 100 Bluegrass Commons Blvd., Suite 310, Hendersonville, TN 37075, Attn: Keith A. Maib and Matthew A. Beresh, (b) counsel for the Debtors, Young Conaway Stargatt & Taylor, LLP, 1000 North King Street, Wilmington, DE 19801, Attn: Robert S. Brady, Esq., Donald J. Bowman, Jr., Esq., and Robert F. Poppiti, Jr., Esq. (c) BDA Advisors Inc., 1270 Avenue of the Americas, Suite 2310, New York, New York 10020 Attn: Euan Rellie, (d) counsel to Creditors’ Committee, Lowenstein Sandler LLP, 65 Livingston Avenue, Roseland, New Jersey 07068, Attn: Jeff D. Prol, Esq. and Timothy R. Wheeler, Esq., and Lowenstein Sandler LLP, 1251 Avenue of the Americas, New York, New York 10020, Attn: Bruce S. Nathan, Esq. and (e) counsel to Equity Holders’ Committee, Elliott Greenleaf, 1105 Market Street, Suite 1700, Wilmington, Delaware 19801 Attn: Rafael X. Zahralddin, Esq. and Sugar Felsenthal Grais & Hammer LLP, 30 N. LaSalle St., Suite 3000, Chicago, IL 60602, Attn: Aaron L. Hammer, Esq. in each case so as to be received on or before November 13, 2013 at 4:00 p.m. (ET) (the “Bid Deadline”). On or before November 17, 2013, at 4:00 p.m. (ET), the Seller shall provide a copy of each marked Modified SPA submitted by a Qualified Bidder to all Qualified Bidders.

8. Evaluation of Qualifying Bids

The Seller shall make a determination, in its sole discretion and after consultation with counsel to the Creditors’ Committee and counsel to the Equity Holders’ Committee, regarding whether a bid from a Qualifying Bidder is a Qualifying Bid, and shall notify all Qualifying Bidders whether their bids have been determined to be a Qualified Bid by no later than three (3) days prior to the Auction Date (as defined below). In the event that a bid is determined not to be a Qualifying Bid, the Qualifying Bidder shall be notified by the Seller and shall have one (1) day from the date of such notification to modify its bid.

One (1) day prior to the Auction Date (as defined below), the Seller shall determine, in its sole discretion and after consultation counsel to the Creditors’ Committee and counsel to the Equity Holders’ Committee, which of the Qualifying Bids, at such time, is the highest or best bid for purposes of constituting the opening bid of the Auction (the “Baseline Auction Bid”), and shall promptly notify the Proposed Purchaser and all Qualifying Bidders with Qualifying Bids of the Baseline Auction Bid.


6

01:14092487.5

9. No Qualifying Bids

If no timely Qualifying Bids other than the Proposed Purchaser’s Qualifying Bid are submitted on or before the Bid Deadline, the Seller, after consultation with counsel to the Creditors’ Committee and counsel to the Equity Holders’ Committee, shall not hold an Auction and shall request at the Sale Hearing (as defined below) that the Bankruptcy Court approve the SPA and the transactions contemplated thereunder.

10. Auction

In the event that the Debtors timely receive one or more Qualifying Bids other than the Proposed Purchaser’s Qualifying Bid, the Debtors shall conduct an auction (the “Auction”). Following the Auction, the Seller will determine, in its sole discretion and after consultation with counsel to the Creditors’ Committee and counsel to the Equity Holders’ Committee, which Qualifying Bid is the highest and best bid for the Target Shares, which will be determined by considering, among other things: (i) the number, type and nature of any changes to the SPA requested by each bidder; (ii) the extent to which such modifications are likely to delay closing of the Sale and the cost to the Seller of such modifications or delay; (iii) the total consideration to be received by the Seller; (iv) the likelihood of the bidder’s ability to close a transaction and the timing thereof; and (v) the net benefit to the Seller’s estate, taking into account the Proposed Purchaser’s rights to the Break-Up Fee and the Expense Reimbursement.

The Auction shall be governed by the following procedures:

(a) the Auction shall be held at the offices of Young, Conaway, Stargatt & Taylor, LLP, 1000 North King Street, Wilmington, DE 19801, on November 18, 2013, beginning at 10:00 a.m. (ET) (the “Auction Date”);

(b) only the Proposed Purchaser and all Qualifying Bidders with Qualifying Bids (together, the “Auction Bidders”) shall be entitled to make any subsequent bids at the Auction;

(c) the Auction Bidders shall appear in person at the Auction, or through a duly authorized representative;

(d) only the Seller, the Auction Bidders, counsel to the Creditors’ Committee and counsel to the Equity Holders’ Committee, together with the professional advisors to each of the foregoing parties, may attend the Auction;

(e) the Seller and its professional advisors shall direct and preside over the Auction, which shall be transcribed;

(f) the Auction Bidders shall confirm that they have not engaged in any collusion with respect to the Bidding Procedures, the Auction or the Sale;

(g) bidding shall commence at the amount of the Baseline Auction Bid, and the Auction Bidders may submit successive bids in increments of at least $250,000 higher than the Baseline Auction Bid and thereafter the then-highest and best bid,


7

01:14092487.5

provided that: (i) each such successive bid must be a Qualifying Bid; (ii) if the then-highest and best bid was made by the Proposed Purchaser, such bid shall be deemed to include the sum of the amount of (A) the Break-Up Fee and (B) the Expense Reimbursement; (iii) any successive bid made by the Proposed Purchaser shall only be required to equal the sum of the amount of (W) the Baseline Auction Bid or the then-highest and best bid, as applicable, and (X) $250,000, less the sum of the amount of (Y) the Break-Up Fee and (Z) the Expense Reimbursement; and (iv) the Seller shall retain the right to modify the bid increment requirements at the Auction;

(h) the Auction may include individual negotiations with any of the Auction Bidders, but all bids shall be made on the record and in the presence of all of the Auction Bidders;

(i) all material terms of the bid that is deemed to be the highest and best bid for each round of bidding shall be fully disclosed to the Auction Bidders, and the Seller shall use reasonable efforts to clarify any and all questions that the Auction Bidders may have regarding the Seller’s announcement of the then-current highest and best bid;

(j) the Seller and its professional advisors may employ and announce at the Auction, after consultation with counsel to the Creditors’ Committee and counsel to the Equity Holders’ Committee, additional procedural rules that are reasonable under the circumstances (e.g., the amount of time allotted to make subsequent bids) for conducting the Auction, provided that such rules are (i) not inconsistent with the Bankruptcy Code, the Federal Rules of Bankruptcy Procedure, the Local Rules of Bankruptcy Practice and Procedure of the United States Bankruptcy Court for the District of Delaware, or any applicable order of the Bankruptcy Court entered in connection with these chapter 11 cases, including, without limitation, the order of the Bankruptcy Court approving these Bidding Procedures, and (ii) disclosed to the Auction Bidders;

(k) Each Auction Bidder shall (a) be deemed to have waived any right to a jury trial in connection, and consented and submitted to the exclusive jurisdiction of the Bankruptcy Court over, any actions or proceedings arising from or relating the Bidding Procedures, the Sale, the Auction and the construction and enforcement of the contemplated transaction documents of the Auction Bidders, (b) bring any such action or proceeding in the Bankruptcy Court, and (c) be deemed to have consented to the Bankruptcy Court entering a final judgment determining any such action or proceeding such matter and that such final judgment in any such action or proceeding, including all appeals, shall be conclusive and may be enforced in other jurisdictions (including any foreign jurisdictions) by suit on the judgment or in any other manner provided by applicable law;

(l) the Auction Bidders shall have the right to make additional modifications to the SPA or the Modified SPA, as applicable, in conjunction with each Qualifying Bid submitted in each round of bidding during the Auction, provided that (i) any such


8

01:14092487.5

modifications to the SPA or Modified SPA on an aggregate basis and viewed in whole, shall not, in the Seller’s sole discretion, be less favorable to the Seller and its estate than the terms of the SPA, and (ii) each Qualifying Bid shall constitute an irrevocable offer and shall be binding on the Auction Bidder submitting such bid until such party shall have submitted a subsequent Qualifying Bid at the Auction or the conclusion of the Sale Hearing, whichever occurs sooner, unless such bid is selected as the Highest and Best Bid or the Next Highest Bid, which shall remain binding as provided for herein;

(m) the Seller shall have the right to request any additional financial information that will allow the Seller to make a reasonable determination as to an Auction Bidder’s financial and other capabilities to consummate the transactions contemplated by the SPA or the Modified SPA, as applicable, as may be amended during the Auction, and any further information that the Seller may believe is reasonably necessary to clarify and evaluate any bid made by an Auction Bidder during the Auction;

(n) upon the conclusion of the Auction, the Seller shall determine, in their sole discretion and after consultation with counsel to the Creditors’ Committee and counsel to the Equity Holders’ Committee, and subject to Bankruptcy Court approval, the offer or offers for the Target Shares that is or are the highest or best from among the Qualifying Bids submitted at the Auction (the “Highest and Best Bid”). In making this decision, the Seller shall consider, in its sole discretion, after consultation with counsel to the Creditor’s Committee and counsel to the Equity Holders’ Committee, and without limitation, the amount of the proposed purchase price, the likelihood of the bidder’s ability to close a transaction and the timing thereof, the number, type and nature of any changes to the SPA requested by each bidder, and the net benefit to the Seller’s estate. The bidder submitting such Highest and Best Bid shall become the “Highest and Best Bidder,” and shall have such rights and responsibilities of the purchaser as set forth in the applicable SPA or Modified SPA. The Seller may, in its sole discretion and after consultation with counsel to the Creditors’ Committee and counsel to the Equity Holders’ Committee, designate the Next Highest Bid (and the corresponding Next Highest Bidder) to purchase the Target Shares in the event that the Highest and Best Bidder does not close the Sale; and

(o) prior to the Sale Hearing, the Highest and Best Bidder shall complete and execute all agreements, contracts, instruments and other documents evidencing and containing the terms and conditions upon which the Highest and Best Bid was made.

THE HIGHEST AND BEST BID AND ANY NEXT HIGHEST BID SHALL CONSTITUTE AN IRREVOCABLE OFFER AND BE BINDING ON THE HIGHEST AND BEST BIDDER AND THE NEXT HIGHEST BIDDER, RESPECTIVELY, FROM THE TIME THE BID IS SUBMITTED UNTIL THE EARLIEST OF (A) TWO (2) BUSINESS DAYS AFTER THE SALE HAS CLOSED, OR (B) TWENTY-ONE (21) DAYS AFTER THE ENTRY OF THE


9

01:14092487.5

SALE ORDER. EACH QUALIFYING BID (INCLUDING THE BID OF THE PROPOSED PURCHASER) THAT IS NOT THE HIGHEST AND BEST BID OR THE NEXT HIGHEST BID SHALL BE DEEMED WITHDRAWN AND TERMINATED AT THE CONCLUSION OF THE SALE HEARING.

11. Sale Hearing

The Highest and Best Bid (or if no Qualifying Bid other than that of the Proposed Purchaser is received, then the SPA) will be subject to approval by the Bankruptcy Court. The hearing (the “Sale Hearing”) to approve the Sale to the Highest and Best Bidder (or to the Proposed Purchaser if no Qualifying Bid other than that of the Proposed Purchaser is received) shall take place on November 21, 2013 at 11:30 a.m. (ET). The Sale Hearing may be adjourned by the Seller from time to time without further notice to creditors or other parties in interest other than by announcement of the adjournment in open court on the date scheduled for the Sale Hearing or by filing a notice on the docket of the Debtors’ chapter 11 cases.

12. Return of Deposits

Except as provided for in the SPA, all Deposits shall be returned to each bidder not selected by the Seller as the Highest and Best Bidder no later than five (5) business days following the closing of the Sale. The deposit of the Highest and Best Bidder or, if the Sale is closed with the Next Highest Bidder, the deposit of the Next Highest Bidder, shall be applied to the Base Purchase Price for the Sale. If the Highest and Best Bidder fails to consummate the Sale because of a breach or failure to perform on the part of such bidder, then, subject to the terms of the SPA or the Modified SPA, as applicable, the Seller and its estate shall be entitled to retain the Deposit of the Highest and Best Bidder as part of the damages resulting to the Seller and its estate for such breach or failure to perform.

13. Reservation of Rights

Notwithstanding any of the foregoing, the Seller and its estate reserves the right to modify these Bidding Procedures at or prior to the Auction, including, without limitation, to extend the deadlines set forth herein, modify bidding increments, waive terms and conditions set forth herein with respect to any or all potential bidders (including, without limitation, the Bid Requirements), impose additional terms and conditions with respect to any or all potential bidders, adjourn or cancel the Auction at or prior to the Auction, and adjourn the Sale Hearing.

The Seller shall consult with the counsel to the Creditors’ Committee and counsel to the Equity Holders’ Committee on all matters relating to (i) the selection and qualifications of Potential Bidders and Qualified Bidders, (ii) the selection of bids, including Qualifying Bids, (iii) the Auction procedures, including how and when the Auction is conducted and (iv) the Sale itself.

14. Backup Bidder

Notwithstanding any of the foregoing, in the event that the Highest and Best Bidder (other than the Proposed Purchaser) fails to close the Sale within fifteen (15) days after entry of the Sale Order or order approving entry into a Modified SPA (or such date as may be extended


10

01:14092487.5

by the Seller), provided that the conditions for the Closing as set forth in the SPA have been met, the Next Highest Bid will be deemed to be the Highest and Best Bid, the Next Highest Bidder will be deemed to be the Highest and Best Bidder, and the Seller will be authorized, but not directed, to close the Sale to the Next Highest Bidder subject to the terms of the Next Highest Bid without the need for further order of the Bankruptcy Court and without the need for further notice to any interested parties.


01:14090113.5

EXHIBIT B

Sale Order


01:14091521.3



Chapter 11 Case No. 13-11761 (BLS) Jointly Administered Ref Docket No: _______

ORDER (I) AUTHORIZING AND APPROVING AGFEED INDUSTRIES INC.’S SALE OF THE STOCK OF AGFEED INDUSTRIES, INC. (BRITISH VIRGIN ISLANDS), (II) APPROVING A CERTAIN STOCK PURCHASE AGREEMENT, (III) AUTHORIZING

AND APPROVING AGFEED INDUSTRIES, INC.’S ENTRY INTO AND CONSUMMATION OF THE STOCK PURCHASE AGREEMENT, AND (IV)

GRANTING RELATED RELIEF

Upon consideration of the motion, dated_________, 2013 [D.I.___] (the “Motion”), of

AgFeed Industries, Inc. (“AgFeed Industries” or “Seller”), pursuant to sections 105 and 363 of

chapter 11 of title 11 of the United States Code (the “Bankruptcy Code”), rules 2002, 6004, 6006

and 9014 of the Federal Rules of Bankruptcy Procedure (the “Bankruptcy Rules”), and rules

2002-1 and 6004-1 of the Local Rules of Bankruptcy Practice and Procedure of the United States

Bankruptcy Court for the District of Delaware (the “Local Rules”), seeking entry of an order,

among other things, (i) authorizing and approving AgFeed Industries’ sale of the stock of

AgFeed Industries, Inc. (British Virgin Islands), (ii) approving the Stock Purchase Agreement by

and among Good Charm International Development, Ltd., as purchaser (the “Proposed

1 The Debtors and the last four digits of their federal tax identification numbers are: AgFeed USA, LLC (8748), AgFeed Industries, Inc. (7168); TS Finishing, LLC (8748); New York Finishing, LLC (8748); Pork Technologies, LC (2076); New Colony Farms, LLC (9246); Heritage Farms, LLC (8141); Heritage Land, LLC (8129); Genetics Operating, LLC (1921); M2P2 Facilities, LLC (8748); MGM, LLC (8748); M2P2 General Operations, LLC (8748); New Colony Land Company, LLC(5834); M2P2 AF JV, LLC (8748); and Midwest Finishing, LLC; and Genetics Land, LLC (1921). The location of the corporate headquarters for AgFeed Industries, Inc. is 100 Bluegrass Commons Blvd., Suite 310, Hendersonville, Tennessee 37075. The location of the corporate headquarters for the remaining Debtors is 510 South 17th Street, Suite 104, Ames, Iowa 50010.


-2-

01:14091521.3

Purchaser”), Ningbo Tech-Bank Co., Ltd., as parent, and AgFeed Industries, Inc., as seller, a

copy of which is attached hereto as Exhibit [____] (or if the Proposed Purchaser is not the

Highest and Best Bidder, then a modified Stock Purchase Agreement) (the “SPA”),

(iii) authorizing and approving AgFeed Industries’ entry into and consummation of the Stock

Purchase Agreement, and (iv) granting related relief, all as more fully described in the Motion

and the Stock Purchase Agreement; and the Court having entered an order [Docket No. ____]

(the “Bidding Procedures Order”) on October [____], 2013: (i) approving procedures (the

“Bidding Procedures”) for (a) submitting bids for the purchase of Target Shares (b) conducting

an auction for the Target Shares (the “Auction”); and (ii) approving the break-up fee and expense

reimbursement for the Purchaser (the “Stalking Horse Bidder”); and a hearing having been held

to consider the relief requested in the Motion (the “Sale Hearing”); and AgFeed Industries

having conducted the Auction on November [____], 2013, and the Purchaser having been

selected as the Highest and Best Bidder (as defined in the Bidding Procedures Order); and

AgFeed Industries having filed the Notice of Highest and Best Bid and Next Highest Bid on

November [____], 2013; and AgFeed Industries having entered into the SPA; and upon the

record of the Sale Hearing and all of the proceedings had before the Court; and the Court having

found and determined that the relief requested in the Motion is in the best interests of AgFeed

Industries, its estate and creditors, and all other parties in interest and that the legal and factual

bases set forth in the Motion and at the Sale Hearing establish just cause for the relief granted in

this Order; and after due deliberation and sufficient cause appearing therefor:


-3-

01:14091521.3

THE COURT HEREBY FINDS THAT:

Jurisdiction and Venue

A. This Court has jurisdiction over the Motion pursuant to 28 U.S.C. §§ 157 and

1334, and this matter is a core proceeding pursuant to 28 U.S.C. § 157(b)(2). Venue is proper in

this District and this Court under 28 U.S.C. §§ 1408 and 1409.

Statutory Predicates

B. The statutory predicates for the relief requested in the Motion are sections 105,

363 and 365 of the Bankruptcy Code, Bankruptcy Rules 2002, 6004, 6006, and 9014 and Local

Rules 2002-1 and 6004-1.

Final Order

C. This Order constitutes a final and appealable order within the meaning of 28

U.S.C. § 158(a). Notwithstanding Bankruptcy Rule 6004(h), and to any extent necessary under

Bankruptcy Rule 9014 and rule 54(b) of the Federal Rules of Civil Procedure, as made

applicable by Bankruptcy Rule 7054, this Court expressly finds that there is no just reason for

delay in the implementation of this Order and that waiver of any applicable waiting period is

appropriate, and expressly directs entry of judgment as set forth in this Order.

D. The findings and conclusions set forth herein constitute the Court’s findings of

fact and conclusions of law pursuant to Fed. R. Bankr. P. 7052, made applicable to this

proceeding pursuant to Fed. R. Bankr. P. 9014. To the extent any of the following findings of

fact constitute conclusions of law, they are adopted as such. To the extent any of the following

conclusions of law constitute findings of fact, they are adopted as such.


-4-

01:14091521.3

Compliance with Bidding Procedures Order

E. On October __, 2013, this Court entered the Bidding Procedures Order approving

the Bidding Procedures for the Proposed Sale. The Bidding Procedures provided a full, fair, and

reasonable opportunity for any entity to make an offer to purchase the Target Shares.

F. As demonstrated by (i) the testimony and other evidence proffered or introduced

at the Sale Hearing and (ii) the representations of counsel made on the record at the Sale

Hearing, AgFeed Industries has thoroughly and fairly marketed the Target Shares and conducted

the related sale process in good faith and in compliance in all respects with the Bidding

Procedures and the Bidding Procedures Order. All interested persons and entities have been

afforded a full, fair and reasonable opportunity to (i) conduct due diligence investigations, (ii)

submit bids and to submit higher or otherwise better bids to purchase the Target Shares, and (iii)

object or be heard with respect to the Motion and the relief granted by this Order. The Bidding

Procedures were non-collusive, formulated and implemented in good faith, were substantively

and procedurally fair to all parties, and obtained the highest and best value for the Target Shares

for AgFeed Industries and its estate and creditors.

G. The Purchaser is the Highest and Best Bidder (as defined in the Bidding

Procedures) for the Target Shares in accordance with the Bidding Procedures Order and the

consideration provided by the Purchaser under the SPA constitutes the highest or otherwise best

offer and provides fair and reasonable consideration to AgFeed Industries for the sale of all of

the Target Shares. The Purchaser has complied in all respects with the Bidding Procedures

Order and any other applicable order of this Court in negotiating and entering into the SPA, and

the sale and the SPA likewise comply with the Bidding Procedures Order and any other

applicable order of this Court.


-5-

01:14091521.3

Notice

H. As evidenced by the affidavits of service and publication previously filed with the

Court, proper, timely, adequate, and sufficient notice of the Motion, the Auction, the Sale

Hearing, and the sale of the Target Shares (the “Sale”), has been provided in accordance with

sections 102(1), 363 and 365 of the Bankruptcy Code, Bankruptcy Rules 2002, 6004, 6006 and

9014, all applicable Local Rules, and in compliance with the Bidding Procedures Order. Such

notice was good, sufficient, and appropriate under the particular circumstances, and no other or

further notice of the Motion, the Auction, the Sale Hearing, the Sale, or entry of this Order is

required.

I. Actual written notice of the Motion, the Auction, the Sale Hearing and the Sale,

and a fair and reasonable opportunity to object or otherwise be heard with respect to the Motion,

the Sale and the relief granted by this Order has been afforded to all interested parties, including,

without limitation, (a) the Office of the United States Trustee for the District of Delaware;

(b) counsel to the Debtors’ prepetition secured lenders; (c) counsel to the Creditors’ Committee,

(d) counsel to the Equity Holders’ Committee, (e) the Debtors’ known creditors; (f) all entities

with recorded claims, liens, interests or encumbrances against AgFeed Industries and its

subsidiaries’ right, title and interest in their assets and any other entities reasonably known to

have asserted any such claim, liens, interests or encumbrances; (g) all entities reasonably known

to have expressed an interest in a transaction with respect to the Target Shares during the past

year; (h) the Internal Revenue Service; (i) the Office of the United States Attorney for the

District of Delaware; (j) the United States Securities and Exchange Commission; (k) all taxing

authorities or recording offices with a reasonably known interest in the relief requested in this


-6-

01:14091521.3

Motion; and (l) all parties requesting notice in these chapter 11 cases pursuant to Local Rule

2002-1(b) as of the date thereof.

J. The Debtors published notice of the Sale, the deadline to submit bids for the

Target Shares, the time and place of the Auction, the time and place of the Sale Hearing, and the

time for filing an objection to the Sale or the Motion, in ____________ on ____________. Such

publication notice was good, sufficient, and proper notice to any interested parties whose

identities are unknown to the Debtors.

K. On _________, 2013, AgFeed Industries served notice of the selection of the

Purchaser as the Highest and Best Bidder for the Target Shares on (i) the United States Trustee,

(ii) counsel to the Debtors’ prepetition secured lenders, (iii) counsel for the Creditors’

Committee, (iv) counsel to the Equity Holders’ Committee, (v) all parties that have requested

notice pursuant to Bankruptcy Rule 2002, and (vi) all Qualified Bidders (as defined in the

Bidding Procedures).

L. Notice of the Motion, the Bidding Procedures, the Auction, the Sale Hearing and

the Sale was good and sufficient, reasonable, and appropriate under the particular circumstances

of these chapter 11 cases, and reasonably calculated to reach and apprise all holders of liens,

claims, encumbrances, and other interests in the Target Shares, including rights or claims based

on any successor or transferee liability, about the Motion, the Bidding Procedures, the Auction,

the Sale Hearing, and the Sale and no other or further notice thereof or in respect of any matters

in connection therewith is or shall be required.

Highest and Best Offer

M. The offer of the Purchaser, upon the terms and conditions set forth in the SPA,

including the form and total consideration to be realized by AgFeed Industries pursuant to the


-7-

01:14091521.3

SPA; (i) is the highest and best offer received by AgFeed Industries; (ii) is fair and reasonable;

(iii) is in the best interests of AgFeed Industries’ creditors and estate; and (iv) constitutes fair

value, fair, full and adequate consideration, reasonably equivalent value and reasonable market

value for the Target Shares.

Corporate Authority

N. The Debtors have full corporate power and authority to execute and deliver the

SPA and all other documents contemplated thereby, and the Sale has been duly and validly

authorized by all necessary corporate and limited liability company, as applicable, action of each

of the Debtors, and upon entry of this Order the Debtors shall have full corporate and limited

liability company, as applicable, power and authority to consummate the transactions

contemplated by the SPA. Except as otherwise set forth in the SPA, no further consents or

approvals are required for the Debtors to consummate the transactions contemplated by the SPA.

Good Faith Purchaser

O. The Purchaser is purchasing the Target Shares in good faith, and each is a “good

faith purchaser” within the meaning of section 363(m) of the Bankruptcy Code, and is therefore

entitled to the full protection of that provision and any other applicable or similar bankruptcy and

non-bankruptcy law. The Purchaser has at all times acted in good faith and will continue to act

in good faith within the meaning of section 363(m) of the Bankruptcy Code in closing the Sale.

No Purchaser, nor any affiliates of any Purchaser, is an “insider” of any of the Debtors, as that

term is defined in section 101(31) of the Bankruptcy Code. Neither the Purchaser, nor any of its

agents, personnel, representatives, or advisors, is an “insider” (as that term is defined in section

101(31) of the Bankruptcy Code) of any of the Seller or any of the other Debtors.


-8-

01:14091521.3

Arm’s-Length Sale

P. The SPA was negotiated, proposed, and entered into by AgFeed Industries and the

Purchaser without collusion, in good faith, and from arm’s-length bargaining positions. Neither

the Debtors nor the Purchaser have engaged in any conduct that would cause or permit the

avoidance of the Sale or the SPA or the imposition of costs or damages under section 363(n) of

the Bankruptcy Code.

Business Justification

Q. AgFeed Industries has demonstrated good, sufficient and sound business reasons

and compelling circumstances to enter into the SPA and to sell the Target Shares, under section

363 of the Bankruptcy Code, and such actions are appropriate and reasonable exercises of

AgFeed Industries’ business judgment and in the best interests of AgFeed Industries, its estate

and creditors, and all other parties in interest. Such business reasons include, but are not limited

to, the facts that (i) there is substantial risk of deterioration of the value of the Target Shares if

the Sale is not consummated quickly, (ii) the SPA constitutes the highest and best offer for the

Target Shares, (iii) no other person or entity or group of persons or entities has offered to

purchase the Target Shares for greater economic value to AgFeed Industries’ estate than the

Purchaser, and (iv) the Sale pursuant to the terms of the SPA presents the best opportunity to

realize the value of AgFeed Industries and avoid decline and devaluation of AgFeed Industries’

business. AgFeed Industries’ determination that the SPA constitutes the highest and best offer

for the Target Shares constitutes a valid and sound exercise of AgFeed Industries’ business

judgment.

R. The terms and conditions of the SPA, including the consideration to be realized

by AgFeed Industries pursuant to the SPA, are fair and reasonable, and the transactions


-9-

01:14091521.3

contemplated by the SPA are in the best interests of AgFeed Industries, its estate and creditors,

and all other parties in interest. Approval of the Motion, the SPA and the Sale, and the

consummation of the transactions contemplated thereby is in the best interests of AgFeed

Industries, its estate and creditors, and all other parties in interest.

No Fraudulent Transfer

S. The consideration provided by the Purchaser for the Target Shares pursuant to the

SPA (i) is fair and reasonable, (ii) is the highest and best offer for the Target Shares, (iii) will

provide a greater recovery for AgFeed Industries’ estate and creditors than would be provided by

any other practical available alternative, and (iv) constitutes reasonably equivalent value and fair

consideration under the Bankruptcy Code, any other laws of the United States, and the laws of

any state, territory, possession, and the District of Columbia. The SPA was not entered into for

the purpose of hindering, delaying, or defrauding the Debtors’ present or future creditors. None

of the Debtors, the Purchaser, nor the Purchaser’s present or contemplated owners is entering

into the SPA or proposing to consummate the Sale fraudulently, within the meaning of any

statutory and common law fraudulent conveyance and fraudulent transfer claims (whether under

the Bankruptcy Code or under the laws of the United States, any state, territory, or possession

thereof, or the District of Columbia, or any other applicable jurisdiction with laws substantially

similar to any of the foregoing).

T. No law of any state or other jurisdiction relating to bulk sales or similar laws shall

apply in any way to the transactions contemplated by the Sale, the SPA, the Motion, and this

Order.


-10-

01:14091521.3

Free and Clear

U. As of the closing of the Sale, the Target Shares shall vest the Purchaser with all

right, title and interest in AgFeed Industries, Inc. (British Virgin Islands), and the Target Shares

shall be sold free and clear from all security interests, liens, claims, equities, mortgages, pledges,

hypothecation, encumbrances, easements, charges, restrictions on transfer of any kind or nature

whatsoever, including any conditional sales or other title retention contract or lease in the nature

thereof, any filing or agreement to file a financing states as debtor under the applicable Uniform

Commercial Code or any similar statute of law of any country or any subordination arrangement

in favor of another person with respect to the Target Assets which arose prior to the Closing Date

(collectively, “Interests”) (including, any “claim” as defined in section 101(5) of the Bankruptcy

Code),

V. The transfer of the Target Shares to the Purchaser free and clear of all Interests

will not result in any undue burden or prejudice to any holders of any Interests as such Interests

shall attach to the net proceeds of the Sale that are ultimately attributable to the Target Shares

when received by AgFeed Industries, in the order of their priority, with the same validity, force

and effect which they now have as against the Target Shares and subject to any claims and

defenses the Debtors, their estates, or other parties may possess with respect to such Interests.

W. AgFeed Industries may sell the Target Shares free and clear of all Interests

because, in each case, one or more of the standards set forth in section 363(f)(1)-(5) of the

Bankruptcy Code has been satisfied. All holders of Interests who did not object or who

withdrew their objections to the Sale or the Motion are deemed to have consented to the Sale and

the relief requested in the Motion pursuant to section 363(f)(2) of the Bankruptcy Code. All other

holders of Interests, including those who maintained and did not withdraw objections to the Sale


-11-

01:14091521.3

or the Motion, if any, fall within one or more of the other subsections of section 363(f) of the

Bankruptcy Code, including, without limitation, section 363(f)(5) of the Bankruptcy Code

because such holders could be compelled in a legal or equitable proceeding to accept a money

satisfaction on account of such Interests, and are adequately protected by having their Interests, if

any, attach to the net proceeds of the Sale that are ultimately attributable to the Target Shares

when received by AgFeed Industries, in which such holders allege Interests, in the same order of

priority, with the same validity, force and effect that such holders had prior to the Sale, subject to

any claims and defenses the Debtors, their estates, or other parties may possess with respect to

such Interests.

X. The Purchaser would not have entered into the SPA and will not consummate the

transactions contemplated thereby, thus adversely affecting AgFeed Industries, its estate,

creditors, and other parties in interest, if the Sale was not free and clear of all Interests.

Y. Not selling the Target Shares free and clear of all Interests would adversely

impact AgFeed Industries’ efforts to maximize the value of their estates, and the Sale of the

Target Shares other than one free and clear of all Interests would be of substantially less benefit

to AgFeed Industries’ estate.

Validity of Transfer

Z. The consummation of the SPA and the Sale is legal, valid, and properly

authorized under all applicable provisions of the Bankruptcy Code, including, without limitation,

sections 105(a), 363(b), 363(f), 363(m) and 365 and all of the applicable requirements of such

sections have been complied with in respect of the transactions contemplated under the SPA.

AA. The Target Shares constitute property of AgFeed Industries’ estate and no other

person has any ownership right, title or interest therein. Good and indefeasible title to the Target


-12-

01:14091521.3

Shares is vested in AgFeed Industries’ estate within the meaning of section 541(a) of the

Bankruptcy Code, and no other person has any ownership right or ownership interest therein or

title thereto.

BB. The transfer of the Target Shares to the Purchaser under the SPA will be a legal,

valid and effective transfer of all of the legal, equitable and beneficial right, title and interest in

and to the Target Shares free and clear of all Interests. AgFeed Industries may sell its interests in

the Target Shares free and clear of all Interests because, in each case, one or more of the

standards set forth in section 363(f) has been satisfied. The transfer of the Target Shares to the

Purchaser will vest the Purchaser with good and marketable title to the applicable Target Shares.

Compelling Circumstances for an Immediate Sale

CC. To maximize the value of the Target Shares, preserve the viability of the business

to which the Target Shares relate, and avoid deterioration, erosion of value, and uncertainty with

respect to the future operation of the Target Shares, it is essential that the Sale of the Target

Shares occur within the time constraints set forth in the Motion, the Bidding Procedures Order,

and the SPA. Time is of the essence in consummating the Sale. Accordingly, there is cause to

waive the stay contemplated by Bankruptcy Rules 6004 and 6006.

DD. AgFeed Industries has demonstrated compelling circumstances and a good,

sufficient, and sound business purpose and justification for the approval and consummation of

the Sale prior to, and outside of, a chapter 11 plan. The Sale pursuant to the SPA neither

impermissibly restructures the rights of the Debtors’ creditors nor impermissibly dictates the

terms of a liquidating chapter 11 plan for the Debtors, and therefore, does not constitute a sub

rosa plan.


-13-

01:14091521.3

EE. Given all of the circumstances of these cases and the adequacy and fair value of

the Purchase Price under the SPA, the Sale of the Target Shares to the Purchaser constitutes a

reasonable and sound exercise of AgFeed Industries’ business judgment.

IT IS THEREFORE ORDERED, ADJUDGED AND DECREED THAT:

General Provisions

1. The Motion is granted and approved as provided in this Order. The Motion

complies with all provisions of Local Rule 6004-1 other than those previously waived by the

Court.

2. All objections and responses, if any, to the Sale or the Motion that have not

been withdrawn, waived, or settled, and all reservations of rights included in such objections

and responses, are overruled on the merits and denied with prejudice. All persons and entities

given notice of the Motion that failed to timely object thereto, are deemed to have consented to

the relief sought therein.

3. This Court’s findings of fact and conclusions of law set forth in the Bidding

Procedures Order are incorporated in this Order by reference.

Approval of the Stock Purchase Agreement

4. The SPA, in substantially the form attached hereto, and all other ancillary

documents, and all of the terms and conditions of the SPA and such other ancillary documents,

are approved in all respects. This Order and the SPA shall be binding in all respects upon the

Debtors, their affiliates, all known and unknown creditors of, and holders of equity security

interests in, any Debtor (including any holders of liens, claims, encumbrances, or other

interests, including rights or claims based on any successor or transferee liability), all

successors and assigns of the Purchaser, the Debtors or any interested parties, and any trustees


-14-

01:14091521.3

appointed in the Debtors’ chapter 11 cases or upon a conversion of any of such cases to cases

under chapter 7 of the Bankruptcy Code, and shall not be subject to rejection. Nothing

contained in any chapter 11 plan confirmed in any of the Debtors’ chapter 11 cases or the order

confirming any such chapter 11 plan shall conflict with or derogate from the provisions of the

SPA or this Order.

5. Pursuant to sections 363(b) and 365 of the Bankruptcy Code, AgFeed Industries

is authorized and directed, without the need for further order of this Court, (a) to take any and

all actions necessary or appropriate to execute and deliver, perform under, consummate,

implement, and effectuate the SPA together with any and all instruments and documents, that

may be reasonably necessary or desirable to implement and effectuate the terms of the SPA,

this Order, and the Sale, and to take all further actions as may be reasonably requested by the

Purchaser for the purpose of assigning, transferring, granting, conveying and conferring to the

Purchaser, or reducing to possession, the Target Shares, free and clear of all Interests, and (b)

to take any and all actions as may be necessary or appropriate to the performance of AgFeed

Industries’ obligations as contemplated by the SPA, without any further corporate and limited

liability company, as applicable, action or order of this Court. Keith A. Maib, the Chief

Restructuring Officer for the Debtors, is hereby authorized to execute and deliver on behalf of

the Debtors, or any of them, any and all documents necessary, required or contemplated by the

SPA and such other ancillary documents, including without limitation any deeds.

6. The failure to specifically include any particular provisions of the SPA in this

Order shall not diminish or impair the effectiveness of such provision, it being the intent of the

Court that the SPA be authorized and approved in its entirety. The SPA and any related


-15-

01:14091521.3

agreements, documents, or other instruments may be modified, amended, or supplemented by

the parties thereto and in accordance with the terms thereof, without further order of the Court.

Transfer of the Target Shares

7. Pursuant to sections 105(a), 363(b), 363(f) and 365 of the Bankruptcy Code,

AgFeed Industries is authorized and directed to transfer the Target Shares to the Purchaser on

the Closing Date pursuant to the terms and conditions of the SPA and this Order free and clear

of all Interests, with all such Interests to attach to the net proceeds of the Sale that are

ultimately attributable to the Target Shares when received by AgFeed Industries, in the order of

their priority, with the same validity, force and effect which they now have as against the

Target Shares and subject to any claims and defenses the Debtors, their estates or other parties

may possess with respect to such Interests.

8. The transfer of the Target Shares to the Purchaser will be, as of the Closing

Date, a legal, valid, binding and effective transfer of the Target Shares, and shall vest the

Purchaser with all right, title, and interest of AgFeed Industries in and to the Target Shares

transferred to such Purchaser free and clear of all Interests accruing, arising, or relating to such

Target Shares any time prior to and through the Closing Date.

9. All persons and entities (including, but not limited to, all debt security holders,

equity security holders, affiliates, governmental, tax and regulatory authorities, lenders,

customers, vendors, employees, trade creditors, litigation claimants and other creditors) and

their respective successors and assigns holding Interests in all or any portion of the Target

Shares arising under or out of, in connection with, or in any way relating to the Debtors, the

Target Shares prior to and including the Closing Date or the transfer of the Target Shares to the

Purchaser, are hereby forever barred, estopped, and permanently enjoined from asserting such


-16-

01:14091521.3

Interests against the Purchaser, its successors and assigns, and their property, including,

without limitation, the Target Shares. Following the Closing, no holder of any Interest shall

interfere any Purchaser’s title to or use and enjoyment of the Target Shares based on or related

to any such Interest, or based on any action the Debtors may take in their Chapter 11 Cases.

10. All persons and entities are hereby forever prohibited and enjoined from taking

any action that would adversely affect or interfere with the ability of AgFeed Industries to sell

and transfer the Target Shares to the purchaser in accordance with the terms of the SPA and

this Order.

11. Upon consummation of the transactions contemplated in the SPA, the Purchaser

shall be authorized, but not required to file termination statements or lien terminations in any

required jurisdiction to remove any record, notice filing, or financing statement recorded to

attach, perfect, or otherwise notice any lien or encumbrance that is extinguished or otherwise

released pursuant to this Order under section 363 and the related provisions of the Bankruptcy

Code.

12. If any person or entity which has filed statements or other documents or

agreements evidencing Interests with respect to all or any portion of the Target Shares

(including any filed financing statements, mortgages, mechanic’s liens, lis pendens, or other

documents or agreements evidencing a lien, claim, encumbrance, or other interest in the

Debtors or the Target Shares) shall not have delivered to the Debtors prior to the Closing Date,

in proper form for filing and executed by the appropriate parties, termination statements,

instruments of satisfaction, releases of liens and easements, and any other documents necessary

or desirable to the Purchaser for the purpose of documenting the release of all Interests that the

person or entity has or may assert with respect to all or any portion of the Target Shares, the


-17-

01:14091521.3

Debtors or the Purchaser is hereby authorized to execute and file such statements, instruments,

releases, and other documents on behalf of such person or entity with respect to the Target

Shares.

13. A certified copy of this Order may be filed by the Debtors or the Purchaser with

any appropriate clerk and/or recorded with any appropriate recorder to act to cancel any of the

Interests of record in the Target Shares and to resolve any title issues with respect to the Target

Shares.

14. This Order is and shall be binding upon and govern the acts of all persons and

entities, including, without limitation, all filing agents, filing officers, title agents, title

companies, recorders of mortgages, recorders of deeds, registrars of deeds, registrars of

patents, trademarks or other intellectual property, administrative agencies, governmental

departments, secretaries of state, federal and local officials, and all other persons and entities

who may be required by operation of law, the duties of their office, or contract, to accept, file,

register or otherwise record or release any documents or instruments, or who may be required

to report or insure any title or state of title in or to any lease, and each of the foregoing persons

and entities is hereby directed to accept for filing any and all of the documents and instruments

necessary and appropriate to consummate the transactions contemplated by the SPA.

No Successor or Transferee Liability

15. From and after the Closing Date , the Purchaser shall not be deemed, as a result

of any action taken in connection with the SPA, to: (a) be a legal successor, or otherwise be

deemed a successor to AgFeed Industries, Inc. or any of its Debtor-affiliates; (b) have, de facto

or otherwise, merged with or into AgFeed Industries, Inc. or any of its Debtor-affiliates or (c) be

a mere continuation or substantial continuation of AgFeed Industries, Inc. or any of its Debtor-


-18-

01:14091521.3

affiliates or the enterprise of AgFeed Industries, Inc. or its Debtor-affiliates. Without limiting

the generality of the foregoing, the Purchaser shall not be liable for any Interests, claims or

liabilities against the Debtors or any of its predecessors or affiliates, and the Purchaser shall not

have any successor or vicarious liabilities of any kind or character, including, but not limited to,

successor or transferee liability, labor law, de facto merger or substantial continuity, whether

known or unknown as of and including the Closing Date, now existing or hereafter arising,

whether asserted or unasserted, fixed or contingent, liquidated or unliquidated with respect to the

Debtors or any obligations of the Debtors arising prior to and including the Closing Date, in any

way relating to the Target Shares prior to and including the Closing Date. The Purchaser has

given substantial consideration under the SPA for the benefit of the holders of any Interest. The

consideration given by the Purchaser shall constitute valid and valuable consideration for the

releases of any potential claims of successor liability of the Purchaser, which releases shall be

deemed to have been given in favor of the Purchaser by all holders of Interests.

16. Upon the Closing, all persons and entities are hereby forever prohibited and

permanently enjoined from commencing or continuing in any manner any action or other

proceeding, whether in law or equity, in any judicial, administrative, arbitral, or other proceeding

against any Purchaser, its successors and assigns, or the Target Shares, with respect to any (a)

Interest arising under, out of, in connection with or in any way relating to the Debtors, the

Purchaser or the Target Shares, prior to and including the Closing Date or (b) successor or

transferee liability, including, without limitation, the following actions: (i) commencing or

continuing in any manner any action or other proceeding against the Purchaser, its successors or

assigns, assets, or properties, (ii) enforcing, attaching, collecting or recovering in any manner any

judgment, award, decree, or order against the Purchaser, its successors or assigns, assets or


-19-

01:14091521.3

properties, (iii) creating, perfecting, or enforcing any Interest against the Purchaser, its

successors or assigns, assets, or properties, (iv) asserting any setoff, right of subrogation, or

recoupment of any kind against any obligation due the Purchaser or its successors or assigns, or

(v) commencing or continuing any action, in any manner or place, that does not comply or is

inconsistent with the provisions of this Order or other orders of this Court, or the agreements or

actions contemplated or taken in respect of this Order and such other orders.

Good Faith of Purchaser

17. The transactions contemplated by the SPA are undertaken by the Purchaser and

the Debtors without collusion and in good faith, as that term is defined in section 363(m) of the

Bankruptcy Code, and accordingly, the reversal or modification on appeal of the authorization

provided in this Order to consummate the Sale shall not affect the validity of the Sale, unless

such authorization and consummation of such Sale are duly stayed pending such appeal.

18. Neither the Debtors nor the Purchaser has engaged in any action or inaction that

would cause or permit the Sale to be avoided or costs or damages to be imposed under section

363(n) of the Bankruptcy Code. The consideration provided by the Purchaser for the Target

Shares under the SPA is fair and reasonable and the sale may not be avoided under section

363(n) of the Bankruptcy Code.

Related Relief

19. Any and all claims of the Purchaser against AgFeed Industries or its estate

estates arising under section 2.5.5 of the SPA, concerning the Post Closing Adjustment, shall be

entitled to administrative priority under section 503(b)(1)(A) of the Bankruptcy Code, shall be

secured by a first-priority priming lien on the assets of the AgFeed Industries’ estate and shall

not be discharged, modified or otherwise affected by any plan of reorganization or liquidation for


-20-

01:14091521.3

the Debtors, by the appointment of a chapter 7 trustee or chapter 11 trustee, or by any other order

of this Court. The Purchaser shall not be obligated to file any claim or application with, or

obtain any further order from, this Court in connection with any claims described in this

paragraph; provided, however, that the Debtors’ rights to dispute any such claims are reserved,

and the Court shall retain jurisdiction to adjudicate any disputes relating to such claims. The

Seller is authorized without further order of the Court to pay in full in cash when due any amount

owed by the Seller on account of such claims of the Purchaser under the SPA.

20. Nothing contained in any plan of reorganization or liquidation, or order of any

type or kind entered in (a) these Chapter 11 Cases, (b) any subsequent chapter 7 case into which

any such Chapter 11 Case may be converted, or (c) any related proceeding subsequent to entry of

this Order, shall alter or affect (i) the terms, provisions and conditions of the SPA; or (ii) the

terms or the implementation of this Order.

21. Notwithstanding the possible applicability of Bankruptcy Rules 6004, 6006,

7062, 9014, or otherwise, the terms and conditions of this Order shall be immediately effective

and enforceable upon its entry. The Debtors are not subject to any stay in the implementation,

enforcement, or realization of the relief granted in this Order, and may, subject to the terms and

conditions of the SPA, and in their discretion and without further delay, close the transactions

contemplated under the SPA and take any action and perform any act authorized under this

Order.

22. The Purchaser shall not be required to seek or obtain relief from the automatic

stay under section 362 of the Bankruptcy Code to enforce any of its remedies under the SPA or

any other sale-related document. The automatic stay imposed by section 362 of the Bankruptcy

Code is modified solely to the extent necessary to implement the preceding sentence, provided,


-21-

01:14091521.3

however, that this Court shall retain exclusive jurisdiction over any and all disputes with respect

thereto.

23. Upon closing and pursuant to this Court’s Order, Pursuant to Sections 327(a)

and 328(a) of the Bankruptcy Code, Authorizing the Retention and Employment of BDA Advisors

Inc. as Investment Banker and Financial Advisor, Nunc Pro Tunc to the Petition Date [Docket

No. 183] (the “BDA Retention Order”), the Debtors are authorized and directed to place all

amounts owed to BDA Advisors, Inc. and Business Development Asia (HK) Ltd (together

“BDA”) in accordance with the AgFeed Industries Fee Structure2, including, but not limited to

the Success Fee, into an escrow or a segregated account for the benefit of BDA. The Success

Fee shall calculated based upon the proceeds received at the time of closing and shall paid to

BDA in accordance with this Court’s interim compensation procedures as set forth in [Docket

No. 176].

24. Upon closing, the Debtors shall be authorized to make any and all payments to

Edward Pazdro and Gerard R. Daignault, in accordance with that certain Key Executive

Employment and Incentive Agreement, dated July 11, 2013, by and between the Debtors and

Gerard R. Daignault (the “Daignault KEIP Agreement”) due Mr. Daignault on account of a Non-

USA Sale Event (as defined in the Daignault KEIP Agreement) and in accordance with that

certain Key Executive Employment and Incentive Agreement dated, July 11, 2013, by and

between the Debtors and Edward Pazdro (the “Pazdro KEIP Agreement) due Mr. Pazdro on

account of a Company Sale Event (as defined in the Pazdro KEIP Agreement) and which have

been approved by order of this Court, free and clear of any interest that any creditor or claimant

may possess in the relevant assets sold or proceeds received in connection with the Sale.

2 Capitalized terms used, but not otherwise defined in this paragraph, have the meaning given to them in the BDA Retention Order.


-22-

01:14091521.3

25. There are no brokers involved in consummating the Sale and no brokers’

commissions are due. The Purchaser is not and will not become obligated to pay any fee or

commission or like payment to any broker, finder or financial advisor as a result of the

consummation of the transaction contemplated by the SPA based upon any arrangement made by

or on behalf of the Debtors.

26. The Purchaser shall have no obligation to proceed with Closing unless and until

all conditions precedent to their obligations to do so, as set forth in the SPA, have been met,

satisfied or waived in accordance with the terms of the SPA.

27. The failure specifically to include any particular provision of the SPA in this

Order shall not diminish or impair the effectiveness of such provision, it being the intent of this

Court that the SPA be authorized and approved in its entirety.

28. The terms and provisions of the SPA and this Order shall be binding in all

respects upon the Debtors, their respective affiliates, estates and creditors, all holders of equity

interests in any of the Debtors, all holders of any Interest, all interested parties in the Chapter 11

Cases and their respective successors and assigns, the Purchaser and its successors and assigns,

and any trustees, if any, subsequently appointed in any of the Debtors’ Chapter 11 Cases or upon

a conversion to chapter 7 under the Bankruptcy Code of any of the Debtors’ cases. This Order

and the SPA shall inure to the benefit of the Debtors, their estates and creditors, the Purchaser,

and its respective successors and assigns.

29. Nothing in this Order or the SPA releases, nullifies, precludes, or enjoins the

enforcement of any police or regulatory liability to a governmental unit that any entity would be

subject to as the owner or operator of property after the date of entry of this Order. Nothing in

this Order or the SPA shall be construed to limit, impede, affect, or impair the police and


-23-

01:14091521.3

regulatory powers of the United States Department of Agriculture (USDA) under any statute or

regulation administered by it, including the Packers and Stockyards Act, 1921, as amended and

supplemented, and regulations issued thereunder. Nothing in this Order or the SPA authorizes

the transfer or assignment to Purchaser of any license, permit, registration, authorization, or

approval of or with respect to a governmental unit without Purchaser’s complying with all

applicable legal requirements under non-bankruptcy law governing such transfers or

assignments.

30. Subject to the Bidding Procedures Order, if the Purchaser fails to consummate

the sale of the Target Shares because of a breach or failure to perform on the part of the

Purchaser, AgFeed Industries is hereby authorized, but not required, to consummate the sale of

the Target Shares to the Next Highest Bidder, in accordance with the Bidding Procedures and the

terms of the final bid submitted by the Next Highest Bidder at the Auction, without further order

of the Court. If AgFeed Industries elects to consummate the sale of the Target Shares to the

Next Highest Bidder, the Next Highest Bidder is hereby compelled to consummate such sale. In

such event, all references to “Purchaser” herein shall be deemed to apply to the Next Highest

Bidder.

31. This Court shall retain jurisdiction to, among other things, interpret, implement,

and enforce the terms and provisions of this Order and the SPA, all amendments to this Order

and the SPA, any waivers and consents under this Order and the SPA, and each of the

agreements executed in connection with this Order and the SPA to which the Debtors are a party

or which has been assigned by the Debtors to the Purchaser, and to adjudicate, if necessary, any

and all disputes concerning or relating in any way to the SPA, the Sale, or this Order. This Court

retains jurisdiction to compel delivery of the Target Shares, to protect the Purchaser and its assets


-24-

01:14091521.3

against any Interests and successor and transferee liability and to enter orders, as appropriate,

pursuant to sections 105 or 363 (or other applicable provisions) of the Bankruptcy Code

necessary to transfer the Target Shares and the Assigned Contracts to the Purchaser.

32. Each and every federal, state, and local governmental agency or department is

directed to accept any and all documents and instruments necessary and appropriate to

consummate the transactions contemplated by the SPA and this Order.

33. All time periods set forth in this Order shall be calculated in accordance with

Bankruptcy Rule 9006(a).

34. To the extent that this Order is inconsistent with any prior order or pleading

with respect to the Motion in these Chapter 11 Cases, the terms of this Order shall govern.

35. To the extent there are any inconsistencies between the terms of this Order and

the SPA (including all ancillary documents executed in connection this Order and the SPA) the

terms of this Order shall govern.

36. The provisions of this Order are nonseverable and mutually dependent upon

each other

37. This Court retains exclusive jurisdiction to enforce and implement the terms and

provisions of this Order, the SPA, all amendments thereto, any waivers and consents thereunder,

and each of the agreements executed in connection therewith, in all respects, including, but not

limited to, retaining jurisdiction to (a) compel delivery of the Target Shares to the Purchaser, (b)

compel delivery of the purchase price or performance of other obligations owed by or to the

Debtors, (c) resolve any disputes arising under or related to the SPA, except as otherwise

provided therein, (d) interpret, implement, and enforce the provisions of this Order, and (e)

protect the Purchaser against the assertion of any lien, claim, encumbrance, or other interest, of


-25-

01:14091521.3

any kind or nature whatsoever, against the Target Shares. The Court does not retain jurisdiction

to hear disputes arising in connection with the application of stockholder agreements or other

documents concerning the corporate governance of the Purchaser, and documents governed by

foreign law, which disputes shall be adjudicated as necessary under applicable law in any other

court or administrative agency of competent jurisdiction.

Dated: November ____, 2013 Wilmington, Delaware

_______________________________________ Brendan L. Shannon United States Bankruptcy Court Judge


01:14090113.5

EXHIBIT C

SPA

1 4848-8662-0949.25

AGREEMENT FOR THE SALE AND PURCHASE OF SHARES Of AgFeed Industries, Inc. (British Virgin Islands)

AMONG

AgFeed Industries, Inc., a Nevada corporation, as Seller

AND

Good Charm International Development Ltd., as Purchaser

AND

Ningbo Tech-Bank Co., Ltd, as Parent

Dated September 13, 2013

2 4848-8662-0949.25

TABLE OF CONTENTS

1 INTERPRETATION ..........................................................................................................4

2 SALE AND PURCHASE....................................................................................................8

3 CONDITIONS PRECEDENT TO THE CLOSING......................................................15

4 CLOSING ..........................................................................................................................16

5 WARRANTIES .................................................................................................................18

7 CONFIDENTIALITY AND NON-DISCLOSURE........................................................21

8 COSTS, EXPENSES, DUTIES AND TAX .....................................................................22

9 GOVERNING LAW, JURISDICTION, AND DISPUTES ...........................................22

10 MISCELLANEOUS..........................................................................................................22

11 NOTICES...........................................................................................................................23

SCHEDULE 1................................................................................................................................29

SCHEDULE 2................................................................................................................................30

SCHEDULE 3................................................................................................................................32

SCHEDULE 4................................................................................................................................38

SCHEDULE 5................................................................................................................................39

SCHEDULE 6................................................................................................................................46

SCHEDULE 7................................................................................................................................53

SCHEDULE 8................................................................................................................................59

SCHEDULE 9................................................................................................................................61

3 4848-8662-0949.25

AGREEMENT FOR THE SALE AND PURCHASE OF SHARES Of AgFeed Industries, Inc. (British Virgin Islands)

THIS AGREEMENT is made on September 13, 2013 AMONG: (1) AgFeed Industries, Inc , a corporation incorporated under the laws of the State of

Nevada, and having its registered office at 711 Carson Street, Suite 4, Carson City, Nevada 89701, USA, further particulars of which are set out in the Schedule 1 (the “Seller”);

(2) Good Charm International Development Ltd. (the “Purchaser”), a company

incorporated under the laws of Hong Kong, wholly owned by the Parent (as defined below), and having its registered office at 7/F Allied Kajima Building, 128 Gloucester Road, Wanchai, Hong Kong, further particulars of which are set out in the Schedule 2A; and

(3) Ningbo Tech-Bank Co., Ltd. (宁波天邦股份有限公司) (the “Parent”), a publicly

traded company incorporated under the laws of the People’s Republic of China and having its office at Rm.1807 Yangguang International Building, No.55 Yuli Rd., Yuyao City, Zhejiang, the People’s Republic of China, further particulars of which are set out in the Schedule 2B.

The Seller, the Purchaser and the Parent shall be collectively referred to as the “Parties” and each individually as the “Party”. WHEREAS: AgFeed Industries, Inc. (the “Company”), a company duly organized and validly existing under the laws of the British Virgin Islands with its legal address at 24 De Castro Street, Wickhams Cay 1, Road Town, Tortola, British Virgin Islands. A. As of the date of this Agreement, the Company has an authorized share capital

comprising of 50,000 authorised ordinary shares with no par value (the “Ordinary Shares”), of which 1 Ordinary Share has been issued and is outstanding. As of the date of this Agreement, the Seller holds 1 Ordinary Share in the Company, representing 100% of the shareholding in the Company.

B. Subject to the receipt of any higher or better offer to purchase the Target Shares (as defined below), the Seller has agreed to sell the Target Shares of the Company to the Purchaser for the consideration and upon the terms and conditions set out in this Agreement.

4 4848-8662-0949.25

C. On July 15, 2013 (the “Petition Date”), the Seller and certain of Seller’s subsidiaries filed voluntary petitions for relief (the “Bankruptcy Cases”) under Chapter 11 of Title 11, U.S.C. §§ 101, et seq., as amended (the “Bankruptcy Code”), in the United States Bankruptcy Court for the District of Delaware (together with any court having proper jurisdiction with respect to the Bankruptcy Cases, the “Bankruptcy Court”).

D. Purchaser will purchase the Target Shares from the Seller in order for Purchaser

to acquire (and for Parent to acquire beneficially) right of control of the Company’s Group.

NOW, THEREFORE, THE PARTIES AGREE as follows: 1 INTERPRETATION 1.1 In this Agreement:

“Affiliate” means, (a) with respect to a Person, any other Person that,

directly or indirectly, Controls, is Controlled by or is under common Control with such Person, and (b) with respect to an individual, shall include, without limitation, his spouse, child, brother, sister, parent, trustee of any trust in which such individual or any of his immediate family members is a beneficiary or a discretionary object, or any entity or company Controlled by any of the aforesaid Persons.

“Agreement” means this Agreement for Sale and Purchase of Shares.

“Base Cash Amount ” means the amount of the Cash as set forth in Part A of Schedule 9.

“Base Livestock” means the predictive quantity of Livestock of the Company’s Group as set forth in Part A of Schedule 9.

“Base Net Working Capital Amount”

means the predictive aggregate amount of Net Working Capital of the Company’s Group as set forth in Part A of Schedule 9.

“Business Day” any day that is not a Saturday, a Sunday, a day on which banks in Wilmington, Delaware, the United States of America are permitted to be closed or the statutory public holidays in the People’s Republic of China and Hong Kong SAR, PRC.

“Cash” means the cash and cash equivalents of the Company’s Group.

5 4848-8662-0949.25

“Claim” means a claim, as such term is defined in Section 101(5) of the Bankruptcy Code, against Seller or property of the Seller.

“Closing” means completion of the sale and purchase of the Target Shares in accordance with this Agreement, as described in Section 4.

“Company’s Group” means the Company and any subsidiary of the Company set forth on Schedule 4.

“Control” (including the correlative terms “controlled by” and “under common control with”)

means the possession, directly or indirectly, of more than fifty percent (50%) of the outstanding voting power of such Person or the power to direct or cause the direction of the management and policies of such Person, whether through ownership of voting securities, by contract or otherwise.

“Cut-off Date” means the last Business Day of the month before Closing, or another day as agreed by the Parties (if applicable).

“Financial Statements”

means the financial statements (the balance sheet and profit & loss statement) of the Company’s Group as set forth in Schedule 8 as prepared in accordance with the Company’s Group’s accounting methods applied on a consistent basis.

“Key Operations Team Employees”

means those employees identified as key employees of the Company’s Group on Schedule 3B.

“Knowledge of Seller” means the actual or constructive knowledge of Gerard Daignault, Keith Maib, Gerry Cheung and Ming Wei; after such individuals have consulted with (as of the date of this Agreement and as of the Closing Date) Mr. Ruguang Niu, Mr. Shuangbin Li, Mr. Youzhan Hu and Hongxi Zhang.

“Laws”

means: (a) any constitutional provision, statute or other law, rule, or regulation, whether administrative, regulatory, local, or otherwise, and (b) any official policy or interpretation of any governmental or regulatory authority of the United States of America.

“Liens” means any (i) security interest, lien, mortgage, pledge, hypothecation, encumbrance, easement, charge, restriction on transfer, including any conditional sale or other title retention contract or lease in the nature thereof; (ii) any filing or agreement to file a financing statement as debtor under the applicable Uniform Commercial Code or any similar statute of law of any country; and (iii) any subordination arrangement in favor of another Person.

6 4848-8662-0949.25

“Livestock” means sows, suckling pigs, weaners, grower pigs, finisher pigs, and other biological assets of Company’s Group, which are set forth in Part C of Schedule 9.

“Material Adverse Event”

means any event that may have material adverse effect on the value of the Target Shares but not including any event arising out or attributable to changes in: general economic conditions (domestic or abroad) or securities or financial markets in general; the industry in which Seller operates; any change resulting from an action required or permitted by this Agreement; any matter of which Purchaser or Parent is aware on the date hereof; changes in any applicable law or regulations, or interpretations of applicable law or regulations; announcement of this Agreement; change in market price or trading volumes of Seller; actions by Seller agreed to or requested by Purchaser or Parent; or any action by the Bankruptcy Court or arising out of the filing of the Bankruptcy Cases. Any facts underlying any such changes that are not covered by the immediately preceding sentence may be taken into account in determining whether or not there has been a Material Adverse Effect.

“Net Working Capital Amount”

means the aggregate net working capital (excluding Livestock, Cash and unborn pigs) of the Company’s Group calculated in accordance with Part B of Schedule 9.

“Person” means and includes natural persons, corporations, limited partnerships, general partnerships, limited liability companies, limited liability partnerships, joint stock companies, joint ventures, associations, companies, trusts, banks, trust companies, land trusts, business trusts or other organizations and Governmental Authorities, whether or not legal entities.

“Restatement” means Seller’s restatement of prior period financial results as publicly disclosed in accordance with United States regulatory requirements.

“Sale Motion” has the meaning set forth on Schedule 3A.

“Sale Order” means an order entered by the Bankruptcy Court in such form as is reasonably acceptable to Purchaser and Seller and consistent in all material respects with the terms of this Agreement approving Seller’s sale of the Target Shares to Purchaser.

“Seller’s Group” means the Seller and any Affiliate of the Seller immediately

7 4848-8662-0949.25

after the Closing.

“Target Shares” means the fully paid single Ordinary Share held by the Seller which represents 100% of the outstanding shareholding of the Company on a fully diluted basis.

“USD” or “$” means United States Dollars, the lawful currency of the United States of America.

“Warranty” means the representations and warranties contained in Schedule 5 and any other representation and warranty made herein by the Parties to this Agreement.

8 4848-8662-0949.25

1.2 In this Agreement, unless the context otherwise requires, a reference to:

1.2.1 a Person includes a reference to any individual, firm, company, body corporate, association or partnership, government, state or agency of a state, local or municipal authority (whether or not having separate legal authority);

1.2.2 a Person includes a reference to that Person's successors and permitted

assigns;

1.2.3 a clause, paragraph or schedule, unless the context otherwise requires, is a reference to a clause or paragraph of or schedule to this Agreement;

1.2.4 references to any statute or statutory provision are to be construed as

references to the same as it may have been, or may from time to time be, amended, modified or re-enacted, and include references to all statutory instruments, orders and regulations for the time being made thereunder or deriving validity therefrom; and

1.2.5 as appropriate in the context, the singular includes the plural and plural

includes the singular. 1.3 The headings in this Agreement do not affect its interpretation. 2 SALE AND PURCHASE 2.1 Seller shall sell and Purchaser shall buy (and Parent shall cause Purchaser to buy)

the Target Shares, together with all rights attaching to them on the date of Closing, free from all Liens, encumbrances, equities and Claims whatsoever.

2.2 The Seller waives all rights of pre-emption over any of the Target Shares

conferred on it by its articles of association or otherwise.

2.3 The Seller shall waive and cause the Seller’s Group to waive all rights, claims, accounts receivable to Company’s Group. After the date of Closing, the Company’s Group will not be liable for and shall not be obligated to pay or satisfy any obligation, debt or liability whatsoever, whether fixed, contingent or otherwise of the Seller’s Group.

2.4 Subject to the adjustment in accordance with Section 2.5.3, the total price for the

Target Shares shall be USD52,880,000 (the “Base Purchase Price”) on a fully-diluted, debt-free basis.

9 4848-8662-0949.25

2.5 The Purchase Price shall be payable as follows: 2.5.1 Within one (1) Business Day after the shareholders of Parent approve the

transaction contemplated by this Agreement, Purchaser and Parent will execute and deliver to Seller and an escrow agent mutually acceptable to Seller and Purchaser (the “Deposit Escrow Agent”) an escrow agreement among Purchaser, Parent, Seller and the Deposit Escrow Agent substantially in the form attached hereto as Exhibit A (the “Deposit Escrow Agreement”, which form will be subject to good faith negotiation of the parties until the date that is five days after the date of this Agreement) that designates a United States bank as the holder of the escrow. Upon execution and delivery of the Deposit Escrow Agreement by each of the other parties thereto, Purchaser will deliver (and Parent will cause Purchaser to deliver) to the Deposit Escrow Agent, pursuant to the terms of the Deposit Escrow Agreement, an amount (the “Cash Deposit”) equal to (i) twenty percent (20%) of the Base Purchase Price in immediately available funds if the conditions set forth in Section 4 Part B of Schedule 5 have not been met and (ii) ten percent (10%) of the Base Purchase Price in immediately available funds if the conditions set forth in Section 4 Part B of Schedule 5 have been met. Any fees or costs payable to the Deposit Escrow Agent or in connection with the Deposit Escrow Agreement shall be divided evenly and payable one-half by Purchaser and one-half by Seller. The Cash Deposit shall be held by the Deposit Escrow Agent in an interest-bearing account reasonably acceptable to Purchaser and Seller. The Cash Deposit shall be held by the Deposit Escrow Agent and be released as follows: 2.5.1.1 If the Closing shall occur, the Deposit Escrow Agent shall deliver

the Cash Deposit together with all accrued interest thereon to the Seller in accordance with the terms of the Deposit Escrow Agreement and Section 2.5.2 hereof.

2.5.1.2 If this Agreement is terminated by Seller pursuant to Section 6.1.6 resulting from the failure of Purchaser to satisfy the conditions set forth in Section 4 Part B of Schedule 5 (and Seller is not then in breach of Seller’s obligations pursuant to this Agreement), the Deposit Escrow Agent shall deliver the Cash Deposit as then constituted, together with all accrued interest thereon, in accordance with the terms of the Deposit Escrow Agreement and the notice provisions thereof to the Seller. If this Agreement is terminated by Seller pursuant to Section 6.1.6 other than resulting from the failure of Purchaser to satisfy the conditions set forth in Section 4 Part B of Schedule 5 (and Seller is not then in breach of Seller’s obligations pursuant to this

10 4848-8662-0949.25

Agreement): (i) if the Cash Deposit is then twenty percent (20%) of the Base Purchase Price, the Deposit Escrow Agent shall deliver half of the Cash Deposit, namely ten percent (10%) of the Base Purchase Price, as then constituted, together with half of the accrued interest thereon, in accordance with the terms of the Deposit Escrow Agreement and the notice provisions thereof to the Seller and shall deliver the rest of the Cash Deposit and the interest thereon, in accordance with the terms of the Deposit Escrow Agreement and the notice provisions thereof to the Purchaser; and (ii) if the Cash Deposit is then ten percent (10%) of the Base Purchase Price, the Deposit Escrow Agent shall deliver the Cash Deposit as then constituted, together with all accrued interest thereon, in accordance with the terms of the Deposit Escrow Agreement and the notice provisions thereof to the Seller. If such deposit is delivered to, or becomes deliverable to, anyone other than Purchaser or Parent such deposit will constitute liquidated damages to the exclusion of all other damages and remedies. Because it would be impractical and extremely difficult to determine the extent of any damages that might result from a breach of, or default under, this Agreement by Purchaser or Parent prior to the Closing, it is understood and agreed that such liquidated damages (in an amount equal to the Cash Deposit or half of the Cash Deposit, as the case may be) represent Purchaser’s, Parent’s and Seller’s reasonable estimate of actual damages, such liquidated damages do not constitute a penalty and such deposit will constitute Seller’s sole and exclusive remedy for any breach of, or default under, this Agreement by Purchaser or Parent prior to the Closing.

2.5.1.3 If Seller fails to serve and file a motion to the Bankruptcy Court

for approving Seller’s sale of the Target Shares to Purchaser after the execution of this Agreement as required herein and neither Parent nor Purchaser is then in breach of Purchaser’s or Parent’s obligations pursuant to this Agreement, Seller shall compensate the Purchaser the amount equal to the Expense Reimbursement. Such amount will constitute liquidated damages to the Purchaser and the Parent for such failure. Because it would be impractical and extremely difficult to determine the extent of any damages that might result from such failure, it is understood and agreed that such liquidated damages represent Purchaser’s, Parent’s and Seller’s reasonable estimate of actual damages for such failure and do not constitute a penalty and payment will constitute the Purchaser’s and the Parent’s sole and exclusive remedy for such

11 4848-8662-0949.25

failure.

2.5.1.4 If this Agreement is terminated for any reason other than as set forth in Section 2.5.1.2, the Deposit Escrow Agent shall deliver the Cash Deposit, together with all accrued interest thereon, to Purchaser.

2.5.1.5 If the Seller satisfies the conditions set forth in Section 4 Part B

of Schedule 5 after having deposited a Cash Deposit equal to twenty percent (20%) of the Base Purchase Price, the Deposit Escrow Agent shall deliver half of the Cash Deposit, namely ten percent (10%) of the Base Purchase Price, as then constituted, together with half of the accrued interest thereon, in accordance with the terms of the Deposit Escrow Agreement and the notice provisions thereof to the Purchaser.

2.5.2 At the Closing, the following shall occur: (a) Purchaser shall make (and

Parent shall cause Purchaser to make) a cash payment by wire transfer of immediately available funds (the “Closing Payment”) to Seller in the amount equal to the Base Purchase Price (i) minus an amount equal to the Cash Deposit and any accrued interest thereon, (ii) plus the Estimated Adjustment, as set forth in Section 2.5.3.2, and (iii) minus USD2,300,000, the amount equal to the value reduced attributing to the shutdown of a hog farm of Company’s Group in Hainan Province and other contingent liabilities, which is agreed by both Parties, (iv) minus the amount of the outstanding principal due to Hendrix of USD180,000 and the interest thereon at Closing (as set forth in Schedule 6-5(5)); (v) minus the amount of the sale bonuses to be paid to certain key employees of Company’s Group in US Dollar equal to RMB3,172,105 after the Closing in accordance with the sale bonus letter agreements dated on August 5, 2013 (the “Sale Bonus Agreements”); (vi) unless paid by the Seller or forgiven by the payee, minus the amount of the payment to be paid to Edward Pazdro and Gerard R. Daignault in an aggregate amount equal to USD375,000 in accordance with their respective Key Executive Employment and Incentive Agreements dated on July 11, 2013; and (vii) unless paid by the Seller or forgiven by the payee, minus the amount of the third-party costs and expenses to be paid to Dacheng Law Offices and Business Development Asia (consultants of Seller’s Group) after the Closing by Company’s Group; (b) the Deposit Escrow Agent shall deliver the Cash Deposit together with all accrued interest thereon to the Seller in accordance with the terms of the Deposit Escrow Agreement and this Section 2.5.2. At the Closing, after receiving the confirmation letters (“Confirmation Letters”) on renouncing claims and rights against Company’s Group signed by

12 4848-8662-0949.25

Edward Pazdro, Gerard R. Daignault and the key employees and Dacheng Law Offices and Business Development Asia, Purchaser shall make (and Parent shall cause Purchaser to make) a cash payment by wire transfer of immediately available funds to AgFeed Industries Holdings, Inc. in the sum of the amount in sub-sections (v), (vi), and (vii) (to the extent not already paid by the Seller or forgiven by the payee), which amount shall reflect only those parties that have sent Confirmation Letters.

2.5.3 Cut-off Date Statement and the Estimated Adjustment

Within ten (10) Business Days prior to the date of Closing, but in no event less than five (5) Business days prior to the date of Closing, Seller shall deliver to Purchaser a statement (the “Cut-off Date Statement”) that sets forth Seller’s reasonable, good faith calculation as of the Cut-off Date of the following: (i) an estimate of the Net Working Capital Amount (the “Estimated Net Working Capital Amount”); (ii) an estimate of the Livestock (the “Estimated Livestock”); and (iii) an estimate of the Cash Amount (the “Estimated Cash Amount”). The Cut-off Date Statement shall be approved by Purchaser and it shall be based on the books and records of Seller and prepared in accordance and in a manner consistent with the accounting principles applied in the preparation of the Financial Statements. The Estimated Livestock shall be calculated based on the same methodology of the calculation of the Livestock in the Financial Statements (and for the avoidance of doubt, the number of animals may vary but the value per category per location will not be adjusted from Schedule 9).

2.5.3.1 The result of the Estimated Net Working Capital Amount minus

the Base Net Working Capital Amount shall be the “Estimated Net Working Capital Amount Adjustment”; the result of the value of the Estimated Livestock (calculated in accordance with Part C of Schedule 9) minus the value of the Base Livestock (calculated in accordance with Part C of Schedule 9) shall be the “Estimated Livestock Adjustment”; and the result of the Estimated Cash Amount minus the Base Cash Amount shall be the “Estimated Cash Adjustment”.

2.5.3.2 The sum of the Estimated Net Working Capital Amount

Adjustment, the Estimated Livestock Adjustment and the Estimated Cash Adjustment shall be the “Estimated Adjustment”. If the Estimated Adjustment is a positive number, then the Base Purchase Price shall be adjusted upward in an amount equal to such result pursuant to Section 2.5.2. If the

13 4848-8662-0949.25

Estimated Adjustment is a negative number, then the Base Purchase Price shall be adjusted downward in an amount equal to the absolute value of such result pursuant to Section 2.5.2.

2.5.3.3 Notwithstanding the adjustment above-mentioned, the Parties agree that the Estimated Adjustment shall not be applied to the extent its absolute value is less than USD 250,000 in aggregate.

2.5.4 Closing Statement

2.5.4.1 As soon as practicable but within fifteen (15) Business Days after

the date of Closing, Purchaser shall deliver to Seller a report (the “Closing Statement”) showing Purchaser’s determination as of the Cut-off Date of the following: (i) Net Working Capital Amount (the “Closing Net Working Capital Amount”); (ii) the Livestock (the “Closing Livestock”); and (iii) the Cash Amount (the “Closing Cash Amount”), which shall be in reasonable detail and prepared in a manner consistent with the accounting principles applied in the preparation of the Financial Statements and the Cut-off Date Statement. Seller shall have ten (10) Business Days after its receipt of the Closing Statement to give written notice (an “Objection Notice”) to Purchaser of any objection to the Closing Statement. During such ten (10) Business Days period, Purchaser shall provide Seller and its representatives with access to the relevant books, records and personnel of Purchaser reasonably requested by Seller to assist Seller in its review of the Closing Statement.

2.5.4.2 If, within the ten (10) Business Days period, an Objection Notice

is sent by Seller to Purchaser, respectively representatives of Seller and Purchaser shall confer in good faith for up to ten (10) Business Days after the date of Purchaser’s receipt of the Objection Notice to resolve the objections raised by Seller. If such representatives are unable to resolve all such objections within such ten (10) Business Days period, then at any time thereafter, Seller or Purchaser may require that the objection raised by Seller be immediately submitted to the Bankruptcy Court for resolution, whereupon the parties shall cooperate reasonably and in good faith to establish fast-track procedures for presenting their respective positions to the Bankruptcy Court. Any determination of the Bankruptcy Court with respect to the matters that are the subject of Seller’s objection shall be final, binding and conclusive on the parties hereto.

14 4848-8662-0949.25

2.5.4.3 Upon the first to occur of, (i) the written agreement between Seller and Purchaser as to the Closing Statement, including any amendment to be made thereto, (ii) the passing of the ten (10) Business Days (or more, if mutually agreed upon in writing by Seller and Purchaser) period after Seller has received the Closing Statement without Seller’s delivery of an Objection Notice (in which case Seller shall be irrevocably deemed to have accepted and agreed to the Closing Statement), or (iii) the final determination of the Bankruptcy Court of all matters that are the subject of an Objection Notice, the Closing Statement and the adjustment arising out of such shall be final, binding and conclusive on the parties hereto.

2.5.5 Post-Closing Adjustment

2.5.5.1 The result of the Closing Net Working Capital Amount minus the Estimated Net Working Capital Amount shall be the “Post-Closing Net Working Capital Amount Adjustment”; the result of the value of the Closing Livestock (calculated in accordance with Part C of Schedule 9) minus the value of the Estimated Livestock shall be the “Post-Closing Livestock Adjustment”; and the result of the Closing Cash Amount minus the Estimated Cash Amount shall be the “Post-Closing Cash Adjustment”.

2.5.5.2 The sum of the Post-Closing Net Working Capital Amount

Adjustment, the Post-Closing Livestock Adjustment and the Post-Closing Cash Adjustment shall be the “Post-Closing Adjustment”. If the Post-Closing Adjustment is a positive number, then the Base Purchase Price shall be adjusted upward in an amount equal to of such result, and such amount shall be paid in cash by Purchaser (and Parent shall cause Purchaser have such amount paid in cash) to Seller by wire transfer of immediately available funds to a bank account designated by Seller within three (3) Business Days after the Closing Statement becomes final, binding and conclusive on the parties. If the Post-Closing Adjustment is a negative number, then the Base Purchase Price shall be adjusted downward in an amount equal to the absolute value of such result, and such amount shall be paid to Purchaser by Seller in cash by wire transfer of immediately available funds to a bank account designated by Purchaser within three (3) Business Days after the Closing Statement becomes final, binding and conclusive on the parties.

15 4848-8662-0949.25

2.5.5.3 Notwithstanding the adjustment above-mentioned, the Parties agree that the Post-Closing Adjustment shall not be applied to the extent its absolute value is less than USD 250,000 in aggregate.

2.6 If Seller accepts a higher and better offer for the Target Shares (an “Alternative

Transaction”) or confirms a plan of reorganization that involves the disposition or revesting of the Target Shares, then (i) Seller may terminate this Agreement; and (ii) upon the closing on any Alternative Transaction, Seller shall pay to Purchaser a break-up fee of USD1,586,400 (the “Break-up Fee”) and the actual and documented out-of-pocket fees and expenses of Purchaser (the “Expense Reimbursement”) not to exceed USD528,800.

3 CONDITIONS PRECEDENT TO THE CLOSING

Unless otherwise waived in writing, the Parties’ obligations to close on the transactions contemplated by this Agreement shall be subject to the following conditions:

3.1 Bid procedures for the sale of the Target Shares shall have been approved by the Bankruptcy Court and the Bidding Procedures Order shall have been entered by the Bankruptcy Court in accordance with Schedule 3A;

3.2 The transactions contemplated by this Agreement have been duly approved by the Bankruptcy Court and the Sale Order shall have been entered by the Bankruptcy Court in accordance with Schedule 3A;

3.3 The transaction contemplated by this Agreement shall have been approved by a shareholders’ resolution of the Parent within twenty-one (21) days after the date of this Agreement, which shareholders’ resolution shall not have been withdrawn;

3.4 Purchaser shall have delivered to Seller, no later than 21 days after the date hereof, evidence of available liquid assets or a commitment letter in customary form from a bank specifically committing to provide financing to pay the Purchase Price which availability of liquid assets or committed financing shall not have been withdrawn (in whole or in part);

3.5 No Material Adverse Event shall have occurred after the date of this Agreement;

3.6 The Parties shall not have terminated this Agreement pursuant to Section 2.5.1.2, Section 4.2 or Section 6;

3.7 After the date of this Agreement, Seller shall not have terminated any Key Operations Team Employees without the prior written consent of Purchaser; and

16 4848-8662-0949.25

3.8 The Warranties of the Parties contained in Schedule 5 shall be true and correct on the date of this Agreement and true and correct in all material respects (except for those Warranties already qualified by materiality, which shall be true and correct in all respects) as of the date of Closing.

4 CLOSING 4.1 After the execution of this Agreement, Seller shall provide Purchaser and

Purchaser’s counsel and other professionals with reasonable access to all documents, records, personnel, and information of Company’s Group to conduct onsite due diligence, to prepare the Closing Statement, and to review the calculations made and information relied upon by the Seller in preparing the Cut-off Date Statement.

4.2 Upon the fulfillment or waiver agreed by Purchaser of the conditions as set out in Section 3 above, but in no event later than nine (9) Business Days after the date of the Sale Order, the Closing shall take place on the next Business Day, at the specified office of the Company or on such other date and at such other time and place that the Parties hereto may mutually agree upon; provided, however, that (a) if the conditions set forth in Section 3.3 or Section 3.4 shall not have been satisfied, such failure to satisfy the condition shall be considered a material breach by Purchaser and Seller shall have the right to terminate this Agreement immediately pursuant to Section 6.1.6 (notwithstanding any cure period listed in Section 6.1.6); (b) if the shareholder approval set forth in Section 3.3 shall have been withdrawn after the date of the shareholder approval or the availability of liquid assets or committed financing set forth in Section 3.4 shall have been withdrawn after delivery of the evidence, such withdrawal shall be considered a material breach by Purchaser and Seller shall have the right to terminate this Agreement immediately pursuant to Section 6.1.6 (notwithstanding any cure period listed in Section 6.1.6); (c) if the Closing shall not have taken place within the date that is ten (10) Business Days after the date of the Sale Order because Purchaser does not make itself available to consummate the Closing, such failure shall be considered a material breach by Purchaser and Seller shall have the right to terminate this Agreement immediately pursuant to Section 6.1.6 (notwithstanding any cure period listed in Section 6.1.6); or (d) if the Closing shall not have taken place within the date that is ten (10) Business Days after the date of the Sale Order because Seller does not make itself available to consummate the Closing, such failure shall be considered a material breach by Seller and Purchaser shall have the right to terminate this Agreement immediately pursuant to Section 6.1.6 (notwithstanding any cure period listed in Section 6.1.6).

4.3 As of the date of Closing, Seller shall sell, transfer or cause such transfer and assign (or cause the assignment) all right, obligation, title and interest in the

17 4848-8662-0949.25

Target Shares and into the Purchaser, on the terms and conditions set forth in this Agreement, so that upon Closing, Purchaser shall have full and exclusive legal and beneficial right, title and interest under applicable laws in the Target Shares, at same time, undertake the obligations arising from the Target Shares.

4.4 At Closing, the Seller shall deliver (or cause to be delivered) to the Purchaser:

a) duly executed transfers into the name of the Purchaser or its nominee in

respect of the Target Shares, together with the related share certificates evidencing the title and ownership of the Target Shares;

b) all such other documents (including any necessary waivers of pre-emption

rights or other consents) as may be required to enable the Purchaser and/or its nominee to be registered as the holder(s) of the Target Shares;

c) a copy of a resolution of the Board of Directors (certified by a duly appointed

officer as true and correct) of the Seller, authorizing the execution of and the performance by the Seller of its obligations under this Agreement and each of the other documents to be executed by the Seller;

d) the Business Licenses, Certificates of Approval and Official Seals of the

Company’s Group. 4.5 At Closing, subject to compliance by the Seller of its obligations under this

Agreement (including, without limitation, Sections 4.3 and 4.4), the Purchaser shall pay (and the Parent shall cause the Purchaser to pay) the Closing Payment to Seller in accordance with Section 2.5.2. If the Purchaser fails to pay the Purchase Price in full as of the date of Closing and Seller has satisfied all its obligations under this Agreement, except as otherwise agreed by the Parties, the Seller shall be entitled to (a) withdraw the Closing and the Closing deliverables contemplated under this Agreement, (b) terminate this Agreement, and (c) retain the Cash Deposit as liquidated damages to the exclusion of all other damages or remedies.

4.6 EACH OF PARENT AND PURCHASER HEREBY ACKNOWLEDGES AND AGREES THAT, EXCEPT AS OTHERWISE EXPRESSLY PROVIDED HEREIN, SELLER MAKES NO (AND SELLER EXPRESSLY DISCLAIMS AND NEGATES ANY) REPRESENTATIONS OR WARRANTIES OF ANY KIND, WRITTEN OR ORAL, STATUTORY, EXPRESS OR IMPLIED, WITH RESPECT TO THE TARGET SHARES OR ANY OTHER MATTER WHATSOEVER. WITHOUT IN ANY WAY LIMITING THE FOREGOING, EXCEPT AS EXPRESSLY PROVIDED HEREIN, SELLER HEREBY DISCLAIMS ANY WARRANTY, EXPRESS OR IMPLIED, OF MERCHANTABILITY OR FITNESS FOR ANY PARTICULAR PURPOSE AS TO ANY PORTION OF THE COMPANY’S GROUP ASSETS. EACH OF

18 4848-8662-0949.25

PARENT AND PURCHASER FURTHER ACKNOWLEDGES THAT IT HAS CONDUCTED AN INDEPENDENT INSPECTION AND INVESTIGATION OF THE PHYSICAL CONDITION OF THE COMPANY’S GROUP’S ASSETS AND ALL SUCH OTHER MATTERS RELATING TO OR AFFECTING THE TARGET SHARES AND COMPANY’S GROUP ASSETS AS PARENT OR PURCHASER DEEMED NECESSARY OR APPROPRIATE AND THAT IN PROCEEDING WITH PURCHASER’S ACQUISITION OF THE TARGET SHARES, EXCEPT FOR ANY REPRESENTATIONS AND WARRANTIES EXPRESSLY SET FORTH HEREIN, EACH OF PARENT AND PURCHASER IS DOING SO BASED SOLELY UPON SUCH INDEPENDENT INSPECTIONS AND INVESTIGATIONS. ACCORDINGLY, SUBJECT TO THE TERMS AND CONDITIONS OF THIS AGREEMENT, EACH OF PARENT AND PURCHASER WILL ACCEPT THE TARGET SHARES AT THE CLOSING “AS IS” “WHERE IS.” Subject to the Warranties of Seller hereunder and the adjustment of Base Purchase Price as provided herein, each of Parent and Purchaser expressly acknowledges and agrees that any credit, debt, or liabilities of the Company and the Company’s Group will be the full and exclusive right, obligation, and responsibility of Purchaser upon Closing.

5 WARRANTIES 5.1 Seller warrants to Purchaser that the Warranties set forth in Part A of Schedule 5

are true and correct on the date of this Agreement.

5.2 Each of Parent and Purchaser warrants to Seller that the Warranties set forth in Part B of Schedule 5 are true and correct on the date of this Agreement.

5.3 Each of the Parties acknowledges that the other Party is entering into this Agreement in reliance on each Warranty which has also been given as a representation and with the intention of inducing the other Party to enter into this Agreement.

5.4 All Warranties shall be true and correct in all material respects (except for those

Warranties already qualified by materiality, which shall be true and correct in all respects) as of the date of Closing.

5.5 The Parties agree that, the Warranties of the Parties contained in this Agreement and in any certificate delivered pursuant hereto by any Party shall not survive the Closing.

6 TERMINATION OF AGREEMENT

6.1 Termination Events.

19 4848-8662-0949.25

Except otherwise provided for in this Agreement, subject to Section 6.2 of this Agreement, by notice given prior to or at the Closing, this Agreement may be terminated as follows: 6.1.1 by mutual consent of Parent, Purchaser and Seller; 6.1.2 by Purchaser or Seller, upon Seller entering into an Agreement providing

for an Alternative Transaction, provided that any termination pursuant to this Section 6.1.2 shall not become effective until Seller fulfills its obligation to pay any Break-up Fee and Expense Reimbursement payable pursuant to Section 6.2;

6.1.3 by Seller if, incident to the Bidding Procedures Order, Seller accepts and

closes on an Alternative Transaction in respect of the Target Shares, provided that any termination pursuant to this Section 6.1.3 shall not become effective until Seller fulfills its obligation to pay any Break-up Fee and Expense Reimbursement payable pursuant to Section 6.2;

6.1.4 by Purchaser if the Bankruptcy Case is dismissed or converted to one under Chapter 7 of the Bankruptcy Code, if a trustee or an examiner with expanded powers is appointed in the Bankruptcy Case; provided, however, that the Break-up Fee and Expense Reimbursement shall be payable in the event any trustee under Chapter 7 or Chapter 11 closes on an Alternative Transaction;

6.1.5 by Purchaser upon a material breach of any provision of the Agreement by Seller, provided that such breach has not been waived by Purchaser and has continued after notice to Seller by Purchaser without cure for a period of ten (10) Business Days; or

6.1.6 by Seller upon a material breach of any provision of the Agreement by

Purchaser or Parent, provided that such breach has not been waived by Seller and has continued after notice to Purchaser or Parent by Seller without cure for a period of ten (10) Business Days; provided, however, that Purchaser’s failure to satisfy the conditions set forth in Section 3.3 or Section 3.4 shall not be subject to such ten (10) Business Day cure period.

6.2 Break-up Fee; Expense Reimbursement

6.2.1 Break-up Fee.

If this Agreement is terminated pursuant to Section 6.1, other than by mutual consent of the parties under Section 6.1.1 or by Seller pursuant to

20 4848-8662-0949.25

6.1.6 as a result of Purchaser’s or Parent’s breach of this Agreement, and provided that Purchaser is not in breach of this Agreement at the time of termination, then Purchaser shall be entitled to receive the Break-up Fee as provided in Section 2.6.

6.2.2 Expense Reimbursement

If this Agreement is terminated pursuant to Section 6.1, other than by (i) mutual consent of the parties under Section 6.1.1 or (ii) by Seller pursuant to 6.1.6 as a result of Purchaser’s or Parent’s breach of this Agreement, then the Purchaser shall be entitled to receive the Expense Reimbursement, with such amount being payable within ten (10) Business Days after Seller receives, from Purchaser, the documentation related to the Expense Reimbursement.

6.2.3 Priority and Effect of Payment

The Break-up Fee and Expense Reimbursement shall be entitled to administrative priority under Section 503(b)(1)(A) of the Bankruptcy Code. The obligation to pay in full in cash when due any amount owed by Seller to Purchaser under this Agreement, including the Break-up Fee and the Expense Reimbursement, shall not be discharged, modified or otherwise affected by any plan of reorganization or liquidation for Seller or by any other Order of the Bankruptcy Court. In addition, the Bidding Procedures Order shall provide that the Break-up Fee and Expense Reimbursement shall be entitled to a first priority priming lien on the proceeds of the Alternative Transaction until such Break-up Fee and Expense are paid in full.

6.2.4 Exception.

Notwithstanding the prior provisions of this Section 6.2, if (i) Purchaser submits a bid at the Auction in an amount in excess of the Base Purchase Price set forth in this Agreement and is designated as the “Next Highest Bidder” in accordance with the Bidding Procedures Order; and (ii) Purchaser closes on the terms of bid submitted by Purchaser at the Auction as a result of a failure to close on the Alternative Transaction designated as the winning bid at the Auction, then Seller shall have no obligation to pay, and Purchaser shall not be entitled to receive, the Expense Reimbursement or Break-up Fee.

6.3 Effect of Termination

21 4848-8662-0949.25

Each Party’s right of termination according to Section 6.1 of this Agreement is in addition to any other right it may have under this Agreement or otherwise, and the exercise of a party’s right of termination will not constitute an election of remedies. If this Agreement is terminated according to Section 6.1, this Agreement will be of no further force or effect; provided, however, that (i) this Section 6.3 will survive the termination of this Agreement of this Agreement and will remain in full force and effect, (ii) the obligation of Seller to pay the Break-up Fee and Expense Reimbursement pursuant to Section 6.2 will survive the termination of this Agreement and remain in full force and effect, and (iii) the termination of this Agreement will not relieve any party from any liability for any breach of this Agreement occurring prior to termination.

6.4 Termination Procedures Any party desiring to exercise its right to terminate this Agreement shall deliver to the other party notice of termination in accordance with Section 11, stating with a reasonable degree of specificity the reason relied upon for such termination.

7 CONFIDENTIALITY AND NON-DISCLOSURE

7.1 Any press release issued by the Seller or the Purchaser and their respective

Affiliates shall be mutually agreed upon by Purchaser and Seller. No announcement regarding any of the terms and the existence of this Agreement in a press release, conference, advertisement, announcement, professional or trade publication, mass marketing materials or otherwise to the general public may be made without the prior written consent of the Seller and the Purchaser, which consent shall not be unreasonably withheld.

7.2 Notwithstanding any provisions of this Agreement to the contrary, the Parties shall be permitted to disclose the terms of this Agreement (a) in any filing with the Bankruptcy Court in order to seek approval of this Agreement or the Sale Order, (b) in any filings the Parties are required to make with any governmental agency or authority, including, without limitation, the United States Securities and Exchange Commission, the Shenzhen Stock Exchange and China Securities Regulatory Commission, or (c) as otherwise required by applicable law as provided in Section 7.4 hereof.

7.3 Notwithstanding the foregoing, any party may disclose any of the terms of this

Agreement to its current or bona fide prospective investors, employees, investment bankers, lenders, partners, accountants and attorneys, in each case only where such Persons are under appropriate nondisclosure obligations. In addition to and without limiting the generality of the foregoing, Seller shall be entitled to disclose the terms of this Agreement in connection with any filings

22 4848-8662-0949.25

with the Bankruptcy Court, to any prospective bidder for the Target Shares (but only in accordance with the terms of this Agreement and the Bidding Procedures Order), and Seller’s auditors, counsel, directors, officers, employees, shareholders or investors.

7.4 In the event that any party is requested or becomes legally compelled (including without limitation, pursuant to securities Laws) to disclose the existence of any of the terms of this Agreement in contravention of the provisions of this Section 7, such party shall notify the other Party.

7.5 The provisions of this Section 7 shall be in addition to, and not in substitution for, the provisions of the non-disclosure agreement executed by the Seller and the Purchaser with respect to the transactions contemplated hereby (the “NDA”). To the extent there is any conflict between the NDA and this Agreement, the terms of this Agreement shall govern.

7.6 All notices required under this Agreement shall be made pursuant to Section 11 of this Agreement.

8 COSTS, EXPENSES, DUTIES AND TAX

Except where this Agreement provides otherwise, each Party shall pay its own costs, expenses, duties, and taxes relating to the negotiation, preparation, execution and performance by it of this Agreement and of each document referred to in it.

9 GOVERNING LAW, JURISDICTION, AND DISPUTES 9.1 This Agreement and the relationship between the parties shall be governed by,

and interpreted in accordance with, the laws of the State of Delaware, in the United States of America, without regard to the principles of conflict of laws thereunder.

9.2 Any dispute arising out of or in connection with this Agreement shall be

resolved by the Bankruptcy Court. 10 MISCELLANEOUS 10.1 This Agreement shall be made and executed in the English language.

10.2 Any amendment or modification of this Agreement is valid only if it is in

writing and signed by or on behalf of each Party.

23 4848-8662-0949.25

10.3 The failure to exercise or delay in exercising a right or remedy provided by this Agreement or by laws does not constitute a waiver of the right or remedy or a waiver of other rights or remedies. No single or partial exercise of a right or remedy provided by this Agreement or by law prevents further exercise of the right or remedy or the exercise of another right or remedy.

10.4 The Parties' rights and remedies contained in this Agreement are cumulative and

not exclusive of rights or remedies provided by law.

10.5 Except to the extent that they have been performed and except where this Agreement provides otherwise, the obligations contained in this Agreement remain in force after Closing.

10.6 All obligations, agreements, covenants, undertakings or conditions in this

Agreement, together with any other documents referred to herein which have not been done, observed or performed at or prior to or Closing shall remain in full force and effect notwithstanding Closing.

10.7 If at any time any provision of this Agreement is or becomes invalid or illegal in

any respect such provision shall be deemed to be severed from this Agreement but the validity, legality and enforceability of the remaining provisions of this Agreement shall not be affected or impaired thereby.

10.8 This Agreement, together with all the Schedules attached hereto and the NDA,

constitute the entire understanding between the Parties with respect to the subject matter of this Agreement and supersedes all prior agreements, negotiations and discussions between the Parties, their respective employees, agents and consultants.

10.9 This Agreement may be executed in separate counterparts and by facsimile or other means of electronically imaging a signature, each of which is deemed to be an original and all of which taken together constitute one and the same agreement.

10.10 At least ten (10) Business Days prior to Closing, Purchaser will send Seller a list

of employees of Company and its subsidiaries that it does not intend to retain after Closing. Seller will terminate (or cause to have terminated) those employees prior to Closing and will assume any related severance or social payment obligations.

11 NOTICES 11.1 Any notice required or permitted pursuant to this Agreement shall be given in

writing and shall be given either personally or by sending it by express courier

24 4848-8662-0949.25

service, fax, electronic mail or similar means to the address as shown below (or at such other address as such party may designate by fifteen (15) days’ advance written notice to the other parties to this Agreement given in accordance with this Clause). Where a notice is sent by express courier service, service of the notice shall be deemed to be effected by properly addressing, pre-paying and sending by express service through an internationally-recognized courier a letter containing the notice, with a confirmation of delivery, and to have been effected at the expiration of three (3) days after the letter containing the same is sent as aforesaid. Where a notice is sent by fax or electronic mail, service of the notice shall be deemed to be effected by properly addressing, and sending such notice through a transmitting organization, with a written confirmation of delivery, and to have been effected on the day the same is sent as aforesaid.

To the Seller: c/o AgFeed Industries, Inc. Address: 100 Bluegrass Commons Blvd., Suite 310 Hendersonville, TN 37075 USA Fax: (866) 226-7617 and (248) 258-6913 Attention: Chief Restructuring Officer and Mackinac Partners Address: 180 High Oak Suite 100 Bloomfield Hills, MI 48304 USA Fax: (248) 258-6913 Attention: Keith Maib, Chief Restructuring Officer E-mail: [email protected] with a copy (which shall not constitute notice) to counsel: Foley & Lardner LLP Address: 90 Park Avenue New York, New York 10016-1314 USA Attention: Selig Sacks Facsimile: (212) 687-2329

and:

Young Conaway Stargatt & Taylor, LLP Address: Rodney Square 1000 North King Street Wilmington, Delaware 19801 USA

25 4848-8662-0949.25

Attention: Robert Brady Facsimile: (302) 576-3283 To the Purchaser: Good Charm International Development Ltd. Address: Rm.1807 Yangguang International Building, No.55

Yuli Rd., Yuyao City, Zhejiang 315400, PRC Fax: +86 21 50470264 Attention: Mr. Hong Jianping E-mail: [email protected]

with a copy (which shall not constitute notice) to counsel: Robbins, Salomon & Patt, Ltd. Address: 180 N. LaSalle Street, Suite 3300,

Chicago, Illinois 60604 USA Attention: Steve Jakubowski Facsimile: (312) 782-6690

and

HHP Attorneys at Law Address: 12F, 21st Century Tower, 210 Century Avenue,

Pudong New Area, Shanghai, 200120, PRC Fax: 8621-50470264 Attention: Mr. Jason Jiamao Cheng E-mail: [email protected]

To the Parent: Ningbo Tech-Bank Company, Ltd. Address: Rm.1807 Yangguang International Building, No.55

Yuli Rd., Yuyao City, Zhejiang 315400, PRC Fax: +86 21 50470264 Attention: Mr. Hong Jianping E-mail: [email protected]

with a copy (which shall not constitute notice) to counsel:

Address: 12F, 21st Century Tower, 210 Century Avenue,

Pudong New Area, Shanghai, 200120, PRC Fax: 8621-50470264 Attention: Mr. Jason Jiamao Cheng E-mail: [email protected]

26 4848-8662-0949.25

[Signature Page Follows]

4848-8662-0949.25

SCHEDULE 1

DETAILS OF THE SELLER

1 NAME: AgFeed Industries, Inc.

2 DATE OF INCORPORATION: March 30, 2005

3 PLACE OF INCORPORATION: State of Nevada, United States of America

4 CLASS OF COMPANY: Corporation

5 REGISTERED NUMBER: Entity Number E0163272005-6, Nevada Business ID: NV20051051405

6 REGISTERED OFFICE:

Registered Agent: Resident Agents of Nevada, Inc. 711 S. Carson St. Suite 4 Carson City, Nevada 89701

7 DIRECTORS:

K. Ivan F. Gothner, Chairman Todd Zelek, Independent Director H. David Sherman, Independent Director Bruce Ginn, Independent Director Lixiang Zhang, Ph.D., Independent Director

8 REGISTERED SHAREHOLDER:

Publically traded 9 AUTHORIZED CAPITAL:

$150,000 10 ISSUED CAPITAL:

$69,118 as of 12/31/2012 11 PRINCIPAL OPERATING SUBSIDIARIES: AgFeed Industries, Inc. (BVI); AgFeed USA,

LLC

4848-8662-0949.25

SCHEDULE 2

SCHEDULE 2A

DETAILS OF THE PURCHASER

1 NAME: Good Charm International Development Limited

2 DATE OF INCORPORATION: 1 August 2013

3 PLACE OF INCORPORATION: Hong Kong

4 CLASS OF COMPANY: Private Company Limited by Shares

5 REGISTERED NUMBER: 1946536


7/F Allied Kajima Building, 128 Gloucester Road, Wanchai, Hong Kong 7 DIRECTORS:

Mr. Hong Jianping, Director Ms. Zhang Lei, Director

8 REGISTERED SHAREHOLDER:

Ningbo Tech-Bank Co., Ltd. 9 AUTHORIZED CAPITAL:

HKD 10,000 10 ISSUED CAPITAL:

HKD 10,000 11 PRINCIPAL OPERATING SUBSIDIARY:

N/A

12 MORTGAGES AND CHARGES: N/A

4848-8662-0949.25

SCHEDULE 2B

DETAILS OF THE PARENT

1 NAME OF INCORPORATION: Ningbo Tech-Bank Co., Ltd.（宁波天邦股份有限公司）

2 DATE OF INCORPORATION: 25 September 1996 3 PLACE OF INCORPORATION:

Zhejiang Province, the People’s Republic of China

4 CLASS OF COMPANY: Company Limited by Shares

5 REGISTERED NUMBER: 330200000039600


ROOM 1805-1807, Block A, Yangguang International Building, Yuli Rd, YuYao City, Zhejiang Province, 315400, PRC

7 DIRECTORS:

Mr. Wu Tianxing Chairman Mr. Zhang Banghui, Director Mr. Hong Jianping, Director Mr. Shen Yuhua, Director Dr. Wang Baoping, Independent Director Dr. Wei Anning, Independent Director Dr. Shi Wei, Independent Director

8 REGISTERED CAPITAL:

RMB 205,500,000

4848-8662-0949.25

SCHEDULE 3

DETAILS OF THE COMPANY

1 NAME: AgFeed Industries, Inc. 2 DATE OF INCORPORATION: March 22, 2006 3 PLACE OF INCORPORATION:

British Virgin Islands

4 CLASS OF COMPANY: Corporation 5 REGISTERED NUMBER: 1017131 6 REGISTERED OFFICE:

Akara Bldg 24 De Castro Street Wickhams Cay 1 Road Town Tortola, British Virgin Islands

7 DIRECTORS:

Keith Alan Maib 8 REGISTERED SHAREHOLDER:

AgFeed Industries, Inc. (Nevada) 9 AUTHORISED CAPITAL:

50,000 shares at no par value 10 ISSUED CAPITAL:

One (1) share at no par value 11 PRINCIPAL OPERATING SUBSIDIARY (ownership % in parentheses):

AgFeed Animal Nutrition Holdings, Inc. (100%) Nanchang Best Animal Husbandry Co., Ltd. (100%) Jiangxi Best Swine Development Co. (100%) Shanghai Best Animal Feed Co., Ltd. (100%) Guangxi Huijie Science and Technology Feed Co., Ltd. (100%) Hypor-AgFeed Breeding Company, Inc. (85%) Xinyu AgFeed Animal Husbandry Co., Ltd. (100%) Da Hua AgFeed Animal Husbandry Co., Ltd. (100%) Nanning AgFeed Enterprise Management Consulting Co., Ltd. (100%) AgFeed Industries Limited (Hong Kong) (100%)

4848-8662-0949.25

SCHEDULE 3A

BANKRUPTCY PROCEDURES

1. Within three (3) Business Days following execution of the Agreement, Parent shall transfer accounts to the account of Purchaser (in a Hong Kong bank) by wire transfer of immediately available funds in the amount equal to ten percent (10%) of the Base Purchase Price, and upon receipt of the evidence delivered by Parent to evidence such fund transfer, Seller shall serve and file a motion (the “Sale Motion”) on the same day of receipt of such evidence, in the Bankruptcy Cases requesting that the Bankruptcy Court schedule a hearing (the “Initial Hearing”), to be held no later than the latest to occur of (x) twenty-five (25) days after the date of the Agreement and (y) such later date on which the Bankruptcy Court is available to hear and schedules such hearing or on which Seller in its discretion requests an Initial Hearing, for entry of an order (the “Interim Order”) approving, among other things, (a) the auction procedures proposed by the Seller and reasonably approved by the Purchaser, (b) the Seller’s obligations regarding the protections described herein for the Purchaser, including the granting of administrative expense priority for and payment of the Break Up Fee and the Expense Reimbursement, and (c) the adequacy of the extent and method of notice to creditors, possible competing bidders, and parties in interest of a final hearing, to be held no later than forty-five (45) days following the Initial Hearing (the “Sale Hearing”), to approve this Agreement and the transactions contemplated hereby. The order approving this Agreement and the sale of the Target Shares to Purchaser as contemplated herein (the “Sale Order”) shall be entered no later than forty-five (45) days following the Initial Hearing. Purchaser and Seller acknowledge and agree that the Bankruptcy Court’s entry of the Sale Order shall be required in order to consummate the sale of the Target Shares, and that the requirement that the Sale Order be entered is a condition that cannot be waived by any party. Unless otherwise agreed by Purchaser in its sole discretion, the Purchaser shall not be required to consummate the Closing unless and until the Sale Order shall have become a final and nonappealable order.

2. Seller will provide Purchaser with a reasonable opportunity to review and comment upon the Sale Motion, any orders to be submitted for consideration at the Initial Hearing, and the Sale Order contemplated by this Agreement, each as prepared by Seller prior to the filing thereof with the Bankruptcy Court, each of which shall be in a final form reasonably acceptable to Purchaser.

4848-8662-0949.25

3. Seller shall in connection with the sale of the Target Shares advertise to the public in a commercially reasonable manner as required by the Bankruptcy Code or as shall be directed by the Bankruptcy Court following a preliminary hearing on the Sale Motion (the “Bidding Procedures Hearing”) and the entry of an order in the Bankruptcy Case approving procedures for solicitation and consideration by the Bankruptcy Court of bids from third parties for the Target Shares (the “Bidding Procedures Order”) considered at such Bidding Procedures Hearing. The Bidding Procedures Order shall be in a final form reasonably acceptable to Seller and Purchaser, and in any event shall:

（1） schedule the Sale Hearing;

（2） schedule an auction (the “Auction”)

（3） require, as a precondition to participation in the Auction, the submission of a competing bid for Target Shares no later than 5:00 p.m. Central Time at least five (5) days prior to the Auction (the “Bid Deadline”);

（4） require any Qualifying Bid (as defined below) to be accompanied by the following: (i) an earnest money deposit by wire transfer, certified or cashier’s check, in the amount of no less than ten percent (10%) of the Base Purchase Price (which amount shall be paid to or deposited with an escrow agent to be held pursuant to an escrow agreement to be entered into by such bidder, Seller and such escrow agent); (ii) an executed confidentiality agreement, (iii) an executed share purchase agreement substantially in the form of this Agreement along with a red-line marked against this Agreement to reflect changes, and (iv) written evidence of a commitment for financing or other evidence of the party’s ability to consummate the transaction and payment of the purchase price in cash at the Closing;

（5） provide that Seller is authorized without further Bankruptcy Court action to pay any amounts that become due and payable to Purchaser pursuant to this Agreement (including the Break-up Fee and Expense Reimbursement), and that such amounts shall have the priority specified in Section 2.6;

（6） provide that no party submitting any other offer to purchase the Target Shares or a Qualifying Bid shall be entitled to any expense reimbursement, Break-up, or termination or similar fee or payment;

（7） require that a bid will not be considered by Seller as qualified for the Auction unless such bid is for an amount equal to or more than the aggregate sum of (i) the Base Purchase Price in cash; (ii) the dollar value of the Break-up Fee in cash; (iii) the dollar value of the Expense

4848-8662-0949.25

Reimbursement in cash, and (iv) USD 250,000 in cash (each bid which meets the foregoing criteria constitutes, as applicable, a “Qualifying Bid”);

（8） require that any subsequent bid at the Auction be at least USD 250,000 greater than the preceding bid, which if such preceding bid shall have been made by Purchaser, shall be deemed to include the amounts in clauses (ii) and (iii) of Section 3(7) of Schedule 3A; provided, however, any overbid submitted by Purchaser at the Auction shall only be required to be equal to the sum of (A) the then existing leading bid, plus (B) USD 250,000 less (C) the dollar value of the Break-up Fee less (D) the dollar value of the Expense Reimbursement;

（9） provide for the service of notice of the Sale Hearing, at Seller’s expense, on all holders of Claims or Liens against or interests in the Seller or any member of the Company’s Group;

（10） provide for publication notice of the Sale Hearing, at Seller’s expense, in major regional and international newspapers in the United States and China reasonably acceptable to Purchaser;

（11） provide that if one (1) or more Qualifying Bids are submitted in accordance with the Bidding Procedures Order, Seller will conduct the Auction no later than three days prior to the Sale Hearing in accordance with the Bidding Procedures Order; and at such Auction, Seller shall have the right to select the highest and best bid from Purchaser and any Person who submitted a Qualifying Bid pursuant to Section 3 (7) or (8) of Schedule 3A (the “Highest and Best Bid”), and the next most favorable bid (the “Next Highest Bid”), each of which will be determined by considering, among other things: (i) the number, type and nature of any changes to this Agreement requested by each bidder; (ii) the extent to which such modifications are likely to delay closing of the sale of the Target Shares and the cost to Seller of such modifications or delay; (iii) the total consideration to be received by Seller; (iv) the likelihood of the bidder’s ability to close a transaction and the timing thereof: and (v) the net benefit to the Bankruptcy Estates, taking into account Purchaser’s rights to the Break-up Fee and Expense Reimbursement (for the avoidance of doubt, Seller hereby agrees that the value attributed by the Seller to any bid made by Purchaser at the Auction shall at least be equal to the sum of the following (w) the dollar value of the cash consideration contained in such bid, (x) the dollar value of any additional consideration contained in such bid, (y) the dollar value of the Break-up Fee, and (z) the dollar value of the Expense Reimbursement);

4848-8662-0949.25

a) require that the Next Highest Bid be held open until 21 days following the entry of the Sales Order and that the Person submitting the Next Highest Bid be required to perform its obligations thereunder in the event that the Person submitting the Highest and Best Bid fails to consummate the transaction;

b) require at the Auction that Purchaser has the right to submit further bids along with a markup of this Agreement, and at any time, request that Seller announce, subject to any potential new bids, the then current Highest and Best Bid, and to the extent Purchaser requests, use reasonable efforts to clarify any and all questions Purchaser may have regarding Seller’s announcement of the then current Highest and Best Bid;

c) unless otherwise agreed to by Purchaser in its sole and reasonable discretion, require that only the Persons who submitted Qualifying Bids and Purchaser may participate in the Auction; and

d) provide that Purchaser shall have standing to contest the Highest and Best selected by Seller.

4. Defense of Orders. If the Bidding Procedures Order, the Sale Order or any other order of the Bankruptcy Court relating to this Agreement (collectively, the “Bankruptcy orders”) shall be appealed (or a petition for certiorari or motion for rehearing or reargument shall be filed with respect thereto), Seller shall take all steps, at its own expense, as may be appropriate to defend against such appeal, petition or motion, and Purchaser agrees to cooperate in such efforts, and each of Seller and Purchaser hereto shall endeavor to obtain an expedited resolution of such appeal. Seller shall consult with Purchaser as reasonably requested by Purchaser regarding such efforts by Seller.

4848-8662-0949.25

Schedule 3B

Key Operations Team Employees Key Operations Team Employees consist of the following individuals. For the avoidance of doubt, Key Operations Team Employees exclude all individuals not set forth in this Schedule 3B.

No. English Name & Title

Chinese Name & Title

1 Cheung Ying Wah, Gerry (China CFO) 张英华 (中国财务总监)

2

Xiaokai Sun (Dahua Xinyu Production

Manager) 孙晓锴（大化新余生产经理）

3

Ming Wei (Hog Farm Operation Department

General Manager) 尉明（养猪事业部总经理）

4

Jianxin Xu (Nanning Feed Co. General

Manager) 许建新（南宁饲料公司总经理）

5

Jiajun Zhao (Shandong Feed Co. General

Manager) 赵家军（山东饲料公司总经理）

6

Lizhong Tang (Nanchang Feed Co. General

Manager) 唐礼中（南昌饲料公司总经理）

7

Zhengying Zhao (Shanghai Feed Co. General

Manager) 赵正英（上海饲料公司总经理）

8

Zhengke Liang (Hainan Feed Co. General

Manager) 梁正科（海南饲料公司总经理）

9 Yufeng Ye (Finance Center Director) 叶宇峰（财务中心总监）

10 Shifeng Wu (IT Director) 吴世峰（IT 总监）

11 Conglin Jiang (Legal) 蒋丛林（法务）

12

Shuangbin Li (Guangxi Region General

Manager) 李双斌（广西大区总经理）

13 Youzhan Hu (Fujian Region General Manager) 胡友战（福建大区总经理）

14 Hongxi Zhang (Jianxi General Manager) 张洪喜（江西区总经理）

15

Hong Mo (Vice Director of Financial Report

and Analysis) 莫洪（财务报表与分析副总监）

16

Bei Ye (Vice Director of Financial Report and

Analysis) 叶蓓（财务报表与分析副总监）

17

Xinde Yu (Sales Director of Hog Farm

Operation Department) 余新德（养猪事业部营销总监）

18

Ruguang Niu (Technology Director of Hog

Farm Operation Department ) 牛如广（养猪事业部技术总监）

4848-8662-0949.25

SCHEDULE 4 CORPORATE STRUCTURE OF THE COMPANY’S GROUP BEFORE EXECUTING THIS AGREEMENT

92% 8%

AgFeed Animal Nutrition Holdings,

Inc. (100%)

Shandong AgFeed Agribusiness Co., Ltd.

(100%)

AgFeed Animal Nutrition Inc. (100%)

Hainan Hopejia Animal Feed Co., Ltd.

(100%)

Nanning AgFeed Animal Feed Co., Ltd.

(100%)

Shanghai AgFeed Animal Feed Co., Ltd.

(100%)

Lushan AgFeed Breeding Co., Ltd.

(100%)

Shanghai Senrong Agricultural and

Animal Husbandry Sci & Tech Development

Co., Ltd. (100%)

Nanchang Best Animal Husbandry Co., Ltd.

(100%)

Shanghai Weicheng Animal Husbandry Co., Ltd. (100%)

Guangxi Huijie Sci & Tech Feed Co., Ltd.

(100%)

Jiangxi Best Swine Development Co., Ltd.

(100%)

Nanping Kangda Animal Husbandry Co., Ltd.

(100%)

FuZhou City Mawei District Fengxiang Agri Tech Development Co.,

Ltd. (100%)

Hainan Wohao Animal Husbandry Co., Ltd. (100%)

Jianou AgFeed Swine Development Co., Ltd.

(100%)

Nanping Minkang Animal Husbandry Co., Ltd. (100%)

Jianou Best Swine Development Co., Ltd.

(100%)

Nanning Wanghua Animal Husbandry Co., Ltd. (100%)

Xingye Guihong Animal Husbandry Co., Ltd. (100%)

Nanning Linxing Animal Husbandry Co., Ltd. (100%)

Jianou Shuanglin Animal Husbandry Co., Ltd. (100%)

Dahua AgFeed Animal Husbandry Co., Ltd.

(100%)

AgFeed Industries,

Inc.(BVI)

Xinyu AgFeed Animal Husbandry Co., Ltd.

(100%)

Hypor-AgFeed Breeding Company,

Inc. (85%)

Guigang Gangda Sci & Tech Animal Husbandry

Co., Ltd. (100%)

Guigang Gangnan Gangxuan Hog Farm

(100%)

Nanchang AgFeed Animal Feed Co., Ltd.

(100%)

Shanghai Best Animal Feed Co., Ltd (100%)

Nanning AgFeed Enterprise

Management Consulting Co., Ltd.

(100%)

AgFeed Industries Limited (Hong Kong)

(100%)

Quanzhou Quangang Xiqing Animal

Husbandry Co., Ltd.

Ganzhou Green Animal Husbandry

Development Co., Ltd.(100%)

Yulin Guixing Farming and Husbandry Co.,

Ltd. (70%)

Haikou Penglong Animal Husbandry Co., Ltd. (100%)

4848-8662-0949.25

SCHEDULE 5

THE WARRANTIES

PART A

WARRANTIES AND REPRESENTATION OF THE SELLER

The term “Operating Entities” means the entities within the Company’s Group that are not “Non-Operating Entities.” The term “Non-Operating Entities” means the following entities that are not currently conducting business but may own certain assets: Nanchang Best Animal Husbandry Co., Ltd., Guangxi Huijie Sci & Tech Feed Co., Ltd., Shanghai Best Animal Feed Co., Ltd., Quanzhou Quangang Xiqing Animal Husbandry Co., Ltd., Jiangxi Best Swine Development Co., Ltd., Ganzhou Green Animal Husbandry Development Co., Ltd, Yulin Guixing Farming and Husbandry Co., and Haikou Penglong Animal Husbandry Co., Ltd.

1. Organization, Good Standing and Qualification

（1） Except as set forth on Schedule 6, the Seller and the Company’s Group are duly organized, validly existing and in good standing under the Laws of the jurisdiction of its formation. The Seller has all requisite corporate power and authority to hold the Target Shares.

（2） There has been no resolution, petition or order for the winding-up, liquidation, dissolution or receivership of the Company in any jurisdiction and no receiver has been appointed in respect thereof or any part of the assets thereof, nor are any such resolutions, orders and appointments imminent or likely.

（3） No significant events or omissions have occurred whereby the corporate status of the Company has been or is likely to be adversely affected.

2. Shares

（1） The Seller is the legal owner of the Target Shares. No person other than Purchaser has any agreement, option, right or privilege capable of becoming a contractual party to an agreement for the purchase from the Seller of the Target Shares in the Company or issuance of new shares.

（2） The Target Shares are free from all Liens, encumbrances, equities and Claims whatsoever and together with all rights attaching to them.

3. Authorization

4848-8662-0949.25

Subject to entry of the Sale Order, the Seller has all requisite power and authority to execute and deliver this Agreement and any other documents referred to herein which it is a party and to carry out and perform its obligations thereunder. All actions on the part of the Seller that are necessary for the authorization, execution and delivery of this Agreement and any other documents referred to herein to which it is a party and the performance of all obligations of the Purchaser thereunder has been taken or will be taken prior to Closing. Subject to entry of the Sale Order, this Agreement and any other documents referred to herein have been duly executed and delivered by the Seller, and constitute valid and legally binding obligations of the Seller, enforceable against the Seller in accordance with the terms hereof, except (i) as limited by applicable bankruptcy, insolvency, reorganization, moratorium, and other Laws of general application affecting enforcement of creditors’ rights generally, and (ii) as limited by Laws relating to the availability of specific performance, injunctive relief, or other equitable remedies, and (iii) as otherwise set forth in this Agreement.

4. Capitalization

The issued and outstanding shares of the Company have been duly authorized and validly issued and are fully paid and non-assessable, free and clear of pre-emptive rights or any other similar rights.

5. Finances

（1） The Target Shares and, except as set forth on Schedule 6, the shares of Company’s Group are not pledged, attached, or in the control or possession of any party other than Seller or a subsidiary of Seller.

（2） To the Knowledge of Seller, except as already disclosed to Purchaser or set forth on Schedule 6, (1) the Company’s Group owns or leases all of the material properties and assets (as described on Schedule 7 with respect to fixed assets and intangible properties and as already disclosed to Purchaser with respect to real property) that the Company’s Group uses to conduct the business and operations of the Company’s Group as presently conducted, (2) such material properties and assets owned by the Company’s Group are not collateralized, pledged, attached, or seized, and (3) the Company Group’s leasehold interest is not collateralized, pledged, attached or seized.

（3） To the Knowledge of Seller, except as already disclosed to Purchaser or set forth on Schedule 6, there are no material debts, liabilities, Claims, Liens, or anticipated contingent liabilities arising out of pending legal proceedings or threatened legal or administrative proceedings owed by or against the Company’s Group.

4848-8662-0949.25

（4） Except as set forth on Schedule 6, to the Knowledge of Seller, since January 1, 2012, all the books and financial records of the Company’s Group, combined with the Restatement journal entries, whether or not such entries have been recorded in the Company’s Group’s books and financial records: are complete and properly maintained in all material aspects; do not contain or reflect any material errors or discrepancies; and disclose in all material aspects a true and fair view of the financial position of the Company’s Group, when taken as a whole. To the Knowledge of Seller, since January 1, 2012, the Financial Statements: are not affected by any abnormal, extraordinary or non-recurring material item; make full provision for all liabilities of the Company’s Group in all material aspects; and except as set forth on Schedule 6, recognize known material contingent liabilities and commitments and any other material liabilities which are not otherwise disclosed or reflected in the Financial Statements.

（5） The Financial Statements of the Company’s Group have been prepared on a basis consistent with the basis on which all Financial Statements of the Company’s Group have been prepared in respect of previous financial periods since January 1, 2012, and give, in all material respects, a true and fair view of the financial position and results from operations of the Company’s Group for the financial period, when taken as a whole.

（6） Except as set forth on Schedule 6, there are no loans granted from the Company’s Group to the Seller or the Seller’s Group or to third parties that will not have been discharged on or before the Closing. All borrowings of the Company’s Group from third parties or the Seller’s Group have been discharged on or before the Closing.

（7） Except as already disclosed to Purchaser or set forth on Schedule 6, to the Knowledge of Seller, (1) the Company’s Group possesses all material licenses and permits that will enable each Operating Entity to lawfully carry on its respective business and operations, and (2) except as set forth on Schedule 6, the assets of the Company’s Group are free from all Liens and claims.

6. Absence of Change or Event

Since June 30, 2013 (the “Accounts Date”), except as set forth in Schedule 6, the Operating Entities conducted business only in the ordinary course (other than in connection with the sale of the Target Shares) and have not:

（1） made or agreed to make any non-capital expenditure in an amount that exceeds US $50,000 individually or US $250,000 in the aggregate other than (i) in the ordinary course (other than in connection

4848-8662-0949.25

with the sale of the Target Shares) and (ii) the Company’s Group’s obligations and potential obligations to make certain payments to certain employees in connection with the sale of the Company or the Company’s Group pursuant to the agreements and notice listed on Schedule 6.

（2） distributed any profits or dividends;

（3） mortgaged, pledged or subjected to lien any of the material property, businesses or assets, tangible or intangible, of the Company’s Group;

（4） suffered any damage, destruction or loss of a single asset (whether or not covered by insurance) in an amount greater than US $100,000;

（5） made, or agreed to make, capital expenditures in an amount that exceeds US $50,000 individually or US $250,000 in the aggregate;

（6） engaged in any transaction with a transaction value in excess of US $250,000 other than in the ordinary course of business (other than in connection with the sale of the Target Shares); and

（7） dismissed any Key Operations Team Employees without the prior written consent of Purchaser.

7. Changes since the Accounts Date

Since the Accounts Date:

（1） no Material Adverse Event has occurred; and

（2） except in the ordinary course of business, no single asset with a fair market value of over US $50,000 has been sold, acquired, or transferred by any Company’s Group.

8. Taxation

Except as set forth on Schedule 6 or otherwise disclosed to Purchaser, to the Knowledge of Seller, all returns, notices and information which are or have been required to be made or given by the Company’s Group for any taxation purpose have been made or given within the requisite periods and all taxes reported due on such returns, notices and information have been paid or accrued in the Financial Statements. Except as set forth on Schedule 6, to the Knowledge of Seller, the Company’s Group has not received any written notice from, or encountered any audit by, the local tax authorities relating to underpayment of tax liabilities.

4848-8662-0949.25

9. Environment

Except for those matters disclosed by Seller to Purchaser on Schedule 6 or otherwise, to the Knowledge of Seller, the Operating Entities have (a) obtained all requisite material environmental licenses (all of which are valid and subsisting) and (b) have in all material aspects complied with all applicable environmental laws and with the terms and conditions of such environmental licenses. The environmental licenses cover the activities of the Operating Entities in the places and in the manner in which such activities are now carried out. Except for those matters disclosed by Seller to Purchaser on Schedule 6 or otherwise, to the Knowledge of Seller, there is not any circumstance that may give rise to any material modification, suspension, revocation, or prejudice to the renewal of an environmental license for an Operating Entity.

10. Litigation

To the Knowledge of Seller, except as disclosed to the Purchaser (as described on Schedule 6 or otherwise disclosed on the document provided to Purchaser entitled “Legal and Administrative Proceedings Involving AgFeed’s Chinese Entities”), there is no material action or legal proceeding, or legal, administrative, arbitral or other method of settling disputes against the Company’s Group.

11. Employees

Except as described or disclosed on Schedule 6 or otherwise disclosed to Purchaser, the Company’s Group are, in all material respects, in compliance with applicable state or local labor laws and regulations applicable to the Company’s Group. To the Knowledge of Seller, none of the employees of the Company’s Group has any material conflict of interest with the Company’s Group.

4848-8662-0949.25

PART B

WARRANTIES AND REPRESENTATION OF THE PARENT AND THE PURCHASER

1. Organization, Good Standing and Qualification

Each of the Parent and the Purchaser is duly organized, validly existing and in good standing under the Laws of the jurisdiction of its formation.

2. Corporate Power and Authorization

Except the approval of the Shareholders resolution of the Parent, which will be obtained within 21 days after the date of this Agreement, each of the Parent and the Purchaser has all requisite power and authority to execute and deliver this Agreement and any other document to which it is a party and to carry out and perform its obligations thereunder. All actions on the part of the each of the Parent and the Purchaser necessary for the authorization, execution and delivery of this Agreement and any other document referred to herein to which the Parent or the Purchaser is a party and the performance of all obligations of the Parent or the Purchaser thereunder has been taken or will be taken prior to each of the Closing. This Agreement and any other document to which the Parent or the Purchaser is a party have been duly executed and delivered by the Parent and/or the Purchaser, and constitute valid and legally binding obligations of the Parent and/or the Purchaser, enforceable against the Parent or the Purchaser in accordance with its terms, except (i) as limited by applicable bankruptcy, insolvency, reorganization, moratorium, and other Laws of general application affecting enforcement of creditors’ rights generally, and (ii) as limited by Laws relating to the availability of specific performance, injunctive relief, or other equitable remedies.

3. Governmental Approval

Purchaser represents and warrants that it is not required to give any notice to or obtain any governmental approvals or permits from any authorities or any persons (other than approval of Parent’s shareholders) in order for Purchaser to consummate the transaction.

Parent represents and warrants that before Closing it is not required to give any notice to or obtain any governmental approvals or permits from any authorities or any persons (other than approval from the State Administration of Foreign Exchange) in order for Parent to perform its obligations under this Agreement.

4848-8662-0949.25

4. Ability to Close

Purchaser represents and warrants to Seller that Purchaser will have procured available liquid assets or a commitment letter in customary form from a bank specifically committing to provide financing to pay the Purchase Price within twenty-one (21) days after the execution of the Agreement and that Purchaser’s obligations under this Agreement are not subject to any other financing contingency.

4848-8662-0949.25

SCHEDULE 6

DISCLOSING LETTER TO PURCHASER

The Disclosure Schedules (“Disclosure Schedules”) are furnished by Seller as of this 13th day of September, 2013, pursuant to and as part of the Agreement. Capitalized terms used but not defined in these Disclosure Schedules shall have the meanings ascribed to them in the Agreement. The Disclosure Schedules relate to certain matters concerning the disclosures required and transactions contemplated by the Agreement. Any fact or item disclosed in any Schedule of the Disclosure Schedules shall be deemed disclosed on each other Schedule of the Disclosure Schedules to which such fact or item may apply so long as it is reasonably apparent that such disclosure is applicable thereto. The Disclosure Schedules are qualified in their entirety by reference to specific provisions of the Agreement and are not intended to constitute, and shall not be construed as, any representation or warranty or covenant of Seller or the Company. These Disclosure Schedules are not intended to constitute, and shall not be construed as, an admission or indication that any such fact or item is required to be disclosed, and any fact or item disclosed in these Disclosure Schedules shall not by reason only of such disclosure be deemed to be material, to establish any standard of materiality or to define further the meaning of such terms for purposes of the Agreement. No disclosure in these Disclosure Schedules relating to any possible breach or violation of any contract, applicable Law or order shall be construed as an admission or indication that any such breach or violation exists or has actually occurred. References in these Disclosure Schedules to any contract, order, instrument, document or legal proceeding are qualified in their entirety by reference to more detailed information in documents attached thereto or previously delivered or made available to Purchaser and its representatives. Prior to Closing, Seller shall have the right to supplement, modify or update these Disclosure Schedules. These Disclosure Schedules are numbered in a manner that corresponds with the relevant section of Schedule 5 of the Agreement with respect to which an item of disclosure is made.

47 4848-8662-0949.25

Schedule 6-5(1)

Organization, Good Standing and Qualification

1. Yulin Guixing’s (a non-operational entity) annual Industrial and Commercial inspection is in

progress. 2. Gangquan Xiqing and Ganzhou Green Animal (non-operational entities) have not undergone

its annual Industrial and Commercial inspection.

3. Nanchang Best has not yet obtained a liquidation report recognized by the relevant tax bureau relative due to the incomplete provision of certain materials. Such liquidation report and related tax bureau approval relates to the cancellation of hog farms owned by Nanchang Best.

Company Group’s Shares

4. On April 27, 2008, Jiangxi Best Hog Husbandry Development Co. Ltd. (“Jiangxi Best”)

purchased 100% of shares of Fuzhou City Mawei Fengxiang Agricultural Technology Development Co. Ltd. (“Mawei Fengxiang”) from Mr. Zhu, Zuzhong. The record at the applicable Administration of Industry and Commerce (“AIC”) has not been amended to reflect the sale. Mr. Zhu has been conducting his own business using Mawei Fengxiang’s name. Jiangxi Best is in negotiations with Mr. Zhu about changing the AIC record to reflect Jiangxi Best as the owner of 100% of Mawei Fengxiang.

5. On September 10, 2008, Gangda Science and Technology Husbandry Limited (“Gangda”)

purchased Guigang City Gangnan District Gangxuan Hog Farm (“Guangxuan Hog Farm”) from Mr. Su, Xuezheng. Prior to the purchase, Mr. Su conducted the business of Guanxun Hog Farm as a sole-proprietor. Currently Gangxuan Hog Farm continues to operate as a sole-proprietor.

6. In June, 2008, Nanchang Best Animal Husbandry Co., Ltd. and Jiangxi Best Swine

Development Co., Ltd. (the two entities are collectively referred to as the “Quangang Buyers”) purchased Quanzhou City Quangang Xiqing Animal Husbandry Co., Ltd. (“Quangang Xiqing”) from Mr. Zhang, Heliang, Mr. Liu Huajin and Mr. Run, Guorong (collectively, “Original Owners”). In December, 2009, Xiqingchang, a subsidiary Quangang Xiqing, suspended its operation. As a result, Xiqingchang did not pass the annual examination relating to its Animal Epidemic Prevention Certificate and did not pass the annual inspection by the applicable AIC. The Quangang Buyers are currently in negotiations with two of the three Original Owners about transferring Quanggang Xiqing back to the two Original Owners for zero yuan.

7. In May, 2009, Mr. Qu, Yufang signed an agreement to transfer his 40% interest in Guanzhou

Green to Nanchang Best. However, the AIC record has not been amended to reflect the sale, and Mr. Qu is still listed as the legal representative of Guanzhou Green and has been

48 4848-8662-0949.25

conducting his own business using Guanzhou Green’s name. Nanchang Best is currently in negotiations with Mr. Qu about changing the AIC record to reflect Nanchang Best as owning 100% of Guanzhou Green.

8. Pursuant to the Shareholder Agreement of Hypor Breeding Company Inc. (the “JV”), Hypor

B.V., owner of 15% of the JV, has certain rights over the JV, which rights include the ability of Hypor (or a third party designated by Hypor) to purchase the shares of the JV held by the Company in connection with the transactions contemplated by this Agreement. Hypor is aware of a potential transaction involving the Company, and the Company and Hypor are discussing the parties’ continued partnership.

9. Guangxi Huijie Science & Tech Feed Co., Ltd. (“Guangxi Huijie”) and Mr. Fulai Li

respectively hold 70% and 30% of the shares of Yulin Guixing as of the date of this Schedule. Since Fulai Li’s death, the relevant person at the Company’s Group has been discussing with Fulai Li’s wife regarding transferring Mr. Li’s 30% shares of Yulin Guixing to Guangxi Huijie without any charge.

4848-8662-0949.25

Schedule 6-5(5)

Indebtedness

1. The Company is party to a loan agreement (“Loan Agreement”) with Hendrix Genetics B.V. (“Hendrix”), pursuant to which the Company has an outstanding principal balance due to Hendrix of USD $180,000, plus interest on the outstanding balance for the three-month period starting July 1, 2013 at an interest rate of 3.7% (which interest rate is calculated on the actual number of days elapsed and a 360 day year). The outstanding principal balance was due to Hendrix in two tranches – in April and May 2013.

50 4848-8662-0949.25

Schedule 6-6(1)

Retention Agreements and Notice

Sale Bonus Letter Agreements, dated as of August 5, 2013, between AgFeed Industries, Inc., a British Virgin Islands company, and each of the following executives: Ming Wei 尉明, Jianxin Xu 许建新, Jiajun Zhao 赵家军, Lizhong Tang唐礼中, Zhengying Zhao 赵正英, Zhengke Liang 梁正科, Yufeng Ye 叶宇峰, Shifeng Wu 吴世峰, Conglin Jiang 蒋丛林, Shuangbin Li 李双斌, Youzhan Hu 胡友

战, Hongxi Zhang 张洪喜, Hong Mo 莫洪, Bei Ye 叶蓓, Xinde Yu 余新德, Guangru Niu 牛如广, Xiaokai Sun 孙晓锴, and Cheung Ying Wah, Gerry 张英华

AgFeed Industries, Inc. and its subsidiaries and affiliates (“AgFeed”) Notice to All Employees of AgFeed (“Notice”), dated July 31, 2013.

51 4848-8662-0949.25

Schedule 6-6(5)

Capital Expenditure

Capital Expenditures that the Company’s Group Paid or Agreed to Pay on or Before the Date of this Agreement: Item Entity Amount (RMB) Second Stage Water Supply System


600,000

Digester Phase II Xinyu AgFeed Animal Husbandry Co., Ltd.

350,000

Remote control boar cart


68,000

Feed Vehicle Dahua AgFeed Animal Husbandry Co., Ltd

440,000

(other) 42,463 1,500,463

Capital Expenditures that the Company’s Group May Pay or Agree to Pay Before the Closing: 1. Guigang Gangda Hog Farm may pay/agree to pay approximately RMB300,000 to

change the sewage disposal facilities in order to obtain the discharge permit certificate.

2. Guangxuan Hog Farm may pay/agree to pay approximately RMB300,000 to

change the sewage disposal facilities in order to obtain the discharge permit certificate.

3. The Company’s Group may pay/agree to pay additional expenditures to comply

with notices, requests or orders issued by governmental agencies.

52 4848-8662-0949.25

Schedule 6-8

Taxation 1. On April 9, 2013, as part of its routine tax audit, Nanchang Economic

Development Zone Tax Bureau issued a notice to Nanchang Best Co., Ltd requesting the company to conduct a self-audit for the period January, 2009 through December, 2011. In April and May of 2013, pursuant to the notice, Nanchang Best Co., Ltd. conducted an internal audit with respect to the relevant period and prepared a self-audit report. The Tax Bureau accepted the company’s self-audit report and the company’s payment of RMB 43,178.88 of additional tax.

2. On April 9, 2013, as part of its routine tax audit, Nanchang Economic

Development Zone Tax Bureau issued a notice to Nanchang Agfeed Animal Feed Co., Ltd requesting the company to conduct a self-audit with respect to the period January, 2009 through December, 2011. In April and May of 2013, pursuant to the notice, Nanchang Agfeed Animal Feed Co., Ltd conducted an internal audit with respect to the relevant period and prepared a self-audit report. The Tax Bureau accepted the company’s self-audit report and the company’s payment of RMB 39,488.09 of additional tax.

3. On June 21, 2013, as part of its routine tax audit, Chengmai County Tax Bureau

issued a notice to Hainan Hopejia Animal Feed Co., Ltd informing the company that it was selected for audit and requesting the company to conduct a self-audit for the period January, 2010 through December, 2012. The company conducted a self-audit for the relevant period pursuant to the notice and prepared a self-audit report. The Tax Bureau accepted the company’s self-audit report and the company’s payment of RMB 104,685.05 of additional tax plus penalty of RMB 12,122.10.

4. Nanchang Best has not yet obtained a liquidation report recognized by the relevant tax bureau relative due to the incomplete provision of certain materials. Such liquidation report and related tax bureau approval relates to the cancellation of hog farms owned by Nanchang Best.

53 4848-8662-0949.25

SCHEDULE 7 MATERIAL ASSETS

SCHEDULE 7-1 FIXED ASSETS ADJUSTMENTS*

June 30, 2013 - RMB

Original valueRestatement adjustment

Adjusted value

AANIProperty & Equipment 37,614,896 (2,948,000) 34,666,896 Buildings 21,806,675 - 21,806,675 Machinery & equipment 13,055,373 (2,948,000) 10,107,373 Office equipment 694,450 - 694,450 Transportation 1,989,598 - 1,989,598 Other 68,800 - 68,800 Accumulated depreciation (18,378,973) 1,883,953 (16,495,020) Accumulated depreciation - buildings (7,589,355) - (7,589,355) Accumulated depreciation - machinery & equipment (9,434,276) 1,883,953 (7,550,323) Accumulated depreciation - office equipment (313,676) - (313,676) Accumulated depreciation - vehicles (999,051) - (999,051) Accumulated depreciation - other (42,615) - (42,615) Construction-in-process - - -

LegacyProperty & Equipment (-) 204,991,121 (94,975,472) 110,015,649 Buildings 93,275,514 (59,673,327) 33,602,187 Machinery & equipment 16,632,310 (7,180,454) 9,451,856 Office equipment 543,997 - 543,997 Transportation 2,629,565 - 2,629,565 Other 10,440 - 10,440 Leasehold improvements 39,826,370 (27,993,268) 11,833,102 Biological assets (+) 52,072,926 (128,423) 51,944,503 Accumulated depreciation (-) (52,243,333) 33,451,577 (18,791,756) Accumulated depreciation - buildings (19,969,378) 13,901,196 (6,068,182) Accumulated depreciation - machinery & equipment (9,089,931) 2,807,502 (6,282,429) Accumulated depreciation - office equipment (436,879) - (436,879) Accumulated depreciation - vehicles (1,535,630) - (1,535,630) Leasehold improvements (12,296,969) 8,514,538 (3,782,431) Accumulated depreciation - other (5,220) - (5,220) Accum Depr. - mature sow (8,741,317) 8,228,341 (512,976) Accum Depr. mature boar (168,008) - (168,008) Construction-in-process (+) 1,567,597 - 1,567,597

WesternProperty & Equipment (-) 198,232,211 - 198,232,211 Buildings 108,175,832 - 108,175,832 Machinery & equipment 45,746,088 - 45,746,088 Office equipment 4,681,129 - 4,681,129 Vehicles 5,017,031 - 5,017,031 Leasehold improvements 154,834 - 154,834 Biological assets (+) 34,457,297 - 34,457,297 Accumulated depreciation (-) (32,894,060) - (32,894,060) Accumulated depreciation - buildings (6,508,028) - (6,508,028) Accumulated depreciation - machinery & equipment (6,834,126) - (6,834,126) Accumulated depreciation - office equipment (2,340,263) - (2,340,263) Accumulated depreciation - vehicles (1,890,249) - (1,890,249) Accumulated depreciation on impaired assets (15,220,441) - (15,220,441) Accumulated depreciation - other (100,953) - (100,953) Construction-in-process (+) 10,879,458 - 10,879,458

Total unadjusted value 348,201,320 Restatement adjustments (62,587,942) Net Pickard and Green top-side adjustments 19,414,952 Purchasing price adjustments (10,699,916) Goodwill adjustments (31,572,747) Other adjustments 799,695 +Total adjustments (84,645,957) Total adjusted value 263,555,363

54 4848-8662-0949.25

SCHEDULE 7-2

TRADEMARK LIST

No. Trademark Registration

No. Category

Period of

validity Owner

1

NO.8835706

Category 31: Animal food; pig feed; feeding

preparation; animal fattening agent; livestock feed;

feed; animal food grains; animal feed; animal food

protein; animal grain processing by-products (end)

2011.11.28-

2021.11.27

Shandong

AgFeed

2

NO.8835687





2011.11.28-

2021.11.27

Shandong

AgFeed

3

NO.8835602





2011.11.28-

2021.11.27

Shandong

AgFeed

4

NO.8835583





2011.11.28-

2021.11.27

Shandong

AgFeed

5

NO.6067518

Category 31: Feed; livestock feed; rearing

preparation; animal fattening agent; aqua feed

(live); pet food; oil cake; livestock strengthening

feed; bran; non-medical feed additives

2010.7.21-2

020.7.20

Nanchang

AgFeed

6

NO.6991454

Category 40: feed processing; flour processing;

food and feed preservative treatment; animal

slaughter; stripping finishes; frozen foods

2010.6.21-2

020.6.20

Nanchang

AgFeed

7

NO.8647800





2011.11.7-2

021.11.6

Nanchang

AgFeed

8

NO.8647806

Category 44: artificial insemination (for animals);

pets; animal breeding; animal breeding; veterinary

assistance; vitro fertilization (for animals)

2011.11.21-

2021.11.20

Nanchang

AgFeed

9

NO.8647807 Category 40: animal slaughtering, processing 2012.1.14

-2022.1.13

Nanchang

AgFeed

10

NO.8647808





2011.11.7

-2021.11.6

Nanchang

AgFeed

11

NO.8705959 Category 31: Feed; livestock feed; rearing


2012.10.28

-2022.10.27

Nanchang

AgFeed

55 4848-8662-0949.25



12 百乐高 NO.4287956




feed; bran; non-medical feed additives (end)

2007.3.7-20

17.3.6

Nanchang

Best

13 百默乐 NO.5356508





2009.4.21-2

019.4.20

Nanchang

Best

14 百年优势 NO.4287955





2007.3.7-20

17.3.6

Nanchang

Best

15 百世腾飞

NO.5803911





2009.7.7-20

19.7.6

Nanchang

Best

16 百世腾金霸

王 NO.5803913





2009.7.7-20

19.7.6

Nanchang

Best

17 百世腾银霸

王 NO.5803912





2009.7.7-20

19.7.6

Nanchang

Best

18 保姆 NO.5459148





2009.5.14-2

019.5.13

Nanchang

Best

19 金威腾 NO.4287954





2007.3.7-20

17.3.6

Nanchang

Best

20 百世腾 NO.3520694

Category 5: cattle detergent; veterinary wash;

veterinary preparations; medical feed additives;

veterinary drugs; veterinary biologics; veterinary

enzyme acid; cleaning agent; pesticide (end)

2005.2.14-2

015.2.13

Nanchang

Best

21 百世腾 NO.3520714





2004.8.7-20

14.8.6

Nanchang

Best

56 4848-8662-0949.25

22 百世腾 NO.3520715

Class 29: Meat; ham; sausage; cured meats; dried

intestine; salted fish; canned meat; fried potato

chips; cheese; cocoa butter (end)

2004.11.7-2

014.11.6

Nanchang

Best

23 NO.5459146

Category 29: Meat; fish; canned meat; dried fruit;

eggs; milk products; edible fats; refined nuts; dried

mushroom; tofu products (end)

2009.5.14-2

019.5.13

Nanchang

Best

24 NO.5459147

Category 30: Coffee; tea; sugar; non-medical

nutrition; pastry; cereal products; flour products;

seasoning; salt; soy sauce (end)

2009.5.28-2

019.5.27

Nanchang

Best

25 康仕美 NO.6488731





2009.11.28-

2019.11.27

Nanchang

Best

26 维格 NO.5459144





2009.8.14-2

019.8.13

Nanchang

Best

27 NO.5459145

Category 5: cattle detergent; veterinary wash;

veterinary preparations; medical feed additives;

veterinary drugs; veterinary biologics; veterinary

enzyme acid; cleaning agent; pesticide (end)

2009.12.28-

2019.12.27

Nanchang

Best

28 NO.7239333





2010.10.7-2

020.10.6

Nanchang

Best

29

NO.6067517





2009.8.14-2

019.8.13

Nanchang

Best

30

NO.6991455

Category 40: feed processing; flour processing;

food and feed preservative treatment; animal

slaughtering; processing; frozen foods

2010.6.21-2

020.6.20

Nanchang

Best

31

NO.7494372

Category 31: Non-medical feed additives; livestock

strengthening feed; livestock feed; Animals drinks;

pets drinks; fish powder; animal food grains; oats;

beet; brewing malt

2010.11.7-2

020.11.6

Nanchang

Best

32 百乐宝飞翔 NO.7700871



pets drinks; fish powder; animal food grains;

brewing (end)

2012.3.28-2

022.3.27

Shanghai

Best

33 倍倍佳 NO.7494390




brewing (end)

2010.11.7-2

020.11.6

Shanghai

Best

57 4848-8662-0949.25

34 WJL NO.7494371




brewing (end)

2010.11.7-2

020.11.6

Shanghai

Best

35 百乐宝 NO.4790823




brewing (end)

2008.4.7-20

18.4.6

Shanghai

Best

36 飞壮 NO.4790824




brewing (end)

2008.4.7-20

18.4.6

Shanghai

Best

37 爱母利 NO.4282082




brewing (end)

2007.2.28-2

017.2.27

Shanghai

Best

38

NO.4282075




brewing (end)

2007.4.7-20

17.4.6

Shanghai

Best

39 小骏马奔腾 NO.4790822 Category 31: oats; beets; brewing malts (end) 2008.6.14-2

018.6.13

Shanghai

Best

40

NO.3671495

Category 31:Livestock feed,aquatic feed,

non-medical feed additives, premix feed,

concentrate feed (end)

2005.2.21-2

015.2.20

Shanghai

Best

41

NO.1996808 Category 31: Animal feed (end) 2003.10.7-2

013.10.6

Guangxi

Huijie

42

NO.1650558 Category 31: Feed 2011.10.14-

2021.10.13

Guangxi

Huijie

58 4848-8662-0949.25

SCHEDULE 7-3

MATERIAL ASSETS AT BVI

As of June 30, 2013

Entity owned

% Ownership

Represented

AgFeed Industries Limited (Hong Kong) 100%

Dahua AgFeed Animal Husbandry Co., Ltd. 100%

Guangxi Huijie Sci & Tech Feed Co., Ltd. 100%

Hypor-AgFeed Breeding Company, Inc.* 85%

Jiangxi Best Swine Development Co., Ltd. 100%

Nanchang Best Animal Husbandry Co., Ltd. 100%

AgFeed Animal Nutrition Holdings, Inc. 100%

Shandong AgFeed Agribusiness Co., Ltd. 100%

Shanghai Best Animal Feed Co., Ltd. 100%

Xinyu AgFeed Animal Husbandry Co., Ltd. 100%

Note:

* Minority 15% owned by Hypor B.V.

59 4848-8662-0949.25

SCHEDULE 8

FINANCIAL STATEMENTS (Unaudited)

As of June 30, 2013 In RMB In USD

FX rate used:

1 RMB = .1616 USD

BVI

consolidated

Discontinued

operations

Continued

operations

BVI

consolidated

Discontinued

operations

Continued

operations

Balance Sheet

Cash and cash equivalents 52,614,521 2,001,236 50,613,284 8,502,507 323,400 8,179,107

Account receivable 25,298,943 108,716 25,190,227 4,088,309 17,569 4,070,741

Allowance for bad debts (3,923,975) - (3,923,975) (634,114) - (634,114)

Other receivables 14,272,566 9,285,570 4,986,997 2,306,447 1,500,548 805,899

Notes receivable - - - - - -

Inventory 151,300,185 6,516,523 144,783,662 24,450,110 1,053,070 23,397,040

Advance to suppliers 1,287,326 16,504 1,270,822 208,032 2,667 205,365

Prepaid expense 215,943 - 215,943 34,896 - 34,896

Other assets (847,376) - (847,376) (136,936) - (136,936)

Total current assets 240,218,132 17,928,549 222,289,583 38,819,250 2,897,254 35,921,997

Property & equipment 313,765,331 (33,697,274) 347,462,605 50,704,477 (5,445,480) 56,149,957

Accumulated depreciation (63,469,431) 12,922,683 (76,392,114) (10,256,660) 2,088,306 (12,344,966)

Construction-in-process 13,259,463 - 13,259,463 2,142,729 - 2,142,729

Intangible assets 5,142,626 - 5,142,626 831,048 - 831,048

Goodwill 6,089,085 - 6,089,085 983,996 - 983,996

Other non-current assets 15,051,351 (197,120) 15,248,471 2,432,298 (31,855) 2,464,153

Total assets 530,056,558 (3,043,162) 533,099,720 85,657,140 (491,775) 86,148,915

Accounts payable 38,634,157 375,785 38,258,373 6,243,280 60,727 6,182,553

Other payables 13,056,255 5,355,055 7,701,201 2,109,891 865,377 1,244,514

Unearned revenue 1,860,033 - 1,860,033 300,581 - 300,581

Accrued expenses 17,710,859 8,068,362 9,642,497 2,862,075 1,303,847 1,558,228

Accrued payroll 7,071,683 6,497 7,065,186 1,142,784 1,050 1,141,734

Tax and welfare payable 4,434,114 765,531 3,668,584 716,553 123,710 592,843

Total current liabilities 82,767,102 14,571,229 68,195,873 13,375,164 2,354,711 11,020,453

Total liabilities 82,767,102 14,571,229 68,195,873 13,375,164 2,354,711 11,020,453

Minority interest 441,520 - 441,520 71,350 - 71,350

Common stock 116,349,880 (1,800,000) 118,149,880 18,802,141 (290,880) 19,093,021

Additional paid-in capital 598,179,423 (10,023,689) 608,203,112 96,665,795 (1,619,828) 98,285,623

60 4848-8662-0949.25

Statutory reserve 35,469,526 5,035,217 30,434,309 5,731,875 813,691 4,918,184

Current year statutory reserve 87,658 - 87,658 14,166 - 14,166

Foreign currency 89,435,938 - 89,435,938 14,452,848 - 14,452,848

Beginning retained earnings (344,489,553) 3,189,232 (347,678,785) (55,669,512) 515,380 (56,184,892)

Current year income (48,184,936) (14,015,151) (34,169,785) (7,786,686) (2,264,848) (5,521,837)

Total stockholders equity 446,847,936 (17,614,391) 464,462,327 72,281,976 (2,846,486) 75,128,462

Total L&SH 530,056,558 (3,043,162) 533,099,720 85,657,140 (491,775) 86,148,915

As of June 30, 2013 In RMB In USD

FX rate used:

1 RMB = .1616 USD

BVI

consolidated

Discontinued

operations

Continued

operations

BVI

consolidated

Discontinued

operations

Continued

operations

Income Statement

Revenue 362,931,972 - 362,931,972 58,649,807 - 58,649,807

Cost of revenue 366,460,460 22,589,272 343,871,188 59,220,010 3,650,426 55,569,584

Gross profit (3,528,487) (3,922,718) 394,230 (570,204) (633,911) 63,708

Operating expenses - - - -

Selling expenses 11,912,008 3,480 11,908,528 1,924,980 562 1,924,418

General and administrative 27,458,163 1,945,231 25,512,933 4,437,239 314,349 4,122,890

(Gain) / loss on sale of assets 7,693,393 7,791,191 (97,797) 1,243,252 1,259,056 (15,804)

Total operating expenses 47,063,565 9,739,902 37,323,663 7,605,472 1,573,968 6,031,504

Income from operations (50,592,052) (13,662,619) (36,929,433) (8,175,676) (2,207,879) (5,967,796)

Other income (expense)

Interest income 193,816 2,510 191,307 31,321 406 30,915

Other expense 2,353,890 (355,042) 2,708,932 380,389 (57,375) 437,763

Interest expense (34,736) - (34,736) (5,613) - (5,613)

Foreign currency transaction

gain (loss)

72,985 - 72,985 11,794 - 11,794

Total other income (expense) 2,585,955 (352,532) 2,938,487 417,890 (56,969) 474,860

Income before taxes (48,006,097) (14,015,151) (33,990,946) (7,757,785) (2,264,848) (5,492,937)

Provision for taxes 321,845 - 321,845 52,010 - 52,010

Net income (48,327,942) (14,015,151) (34,312,791) (7,809,795) (2,264,848) (5,544,947)

61 4848-8662-0949.25

SCHEDULE 9

WORKING CAPITAL MATTERS

PART A

Predictive AMOUNTS Base Net Working Capital: -$1,872,098 Base Livestock: Refer to Part C (Livestock Calculation) Base Amount of Cash: $8,500,000

PART B

NET WORKING CAPITAL CALCULATION

Net Working Capital equals to the total current assets of the Company’s Group (except for Cash, Livestock and unborn pigs) minus the total current liabilities of the Company’s Group (except for Cash), all as determined in accordance and in a manner consistent with the accounting principles applied in the preparation of the Financial Statements and detailed on Schedule 8 .

Working capital

Forecast for September 30th, 2013

FX rate used: 1 RMB = .1616 USD

In RMB In USD

Working Capital Due

Buyer

Working Capital Due

Buyer

Account receivable 25,487,061 4,118,709

Allowance for bad debts (3,016,374) (487,446)

Other receivables 10,608,018 1,714,256

Allowance for other receivables (581) (94)

Notes receivable 328,755 53,127

Inventory - feed and others 32,068,874 5,182,330

Advance to suppliers 1,012,976 163,697

Prepaid expense 215,943 34,896

Total current assets 66,704,671 10,779,475

62 4848-8662-0949.25

Accounts payable 31,273,372 5,053,777

Other payables 16,578,453 2,679,078

Unearned revenue 205,503 33,209

Accrued expenses 18,197,371 2,940,695

Accrued payroll 9,468,881 1,530,171

Tax and welfare payable 2,565,854 414,642

Total current liabilities 78,289,434 12,651,573

Net working capital (11,584,763) (1,872,098)

63 4848-8662-0949.25

64 4848-8662-0949.25

PART C LIVESTOCK CALCULAT

Forecast for September 30, 2013

(FX rate used: 1 RMB = .1616 USD)

Farms

Total Subtotal - Western Subtotal -Legacy

Baby pig head count 37,928 15,311 22,617 Ave cost RMB/head 202 267 157 Baby pig RMB value 7,651,608 4,089,788 3,561,820 Inventory reserve 294,225 294,225 - Piglet head count 66,567 21,372 45,195 Ave cost RMB/head 329 413 290 Piglet RMB Value 21,919,148 8,825,490 13,093,658 Inventory reserve 894,028 894,028 - Finishing pig head count 56,073 - 56,073 Ave cost RMB/head 1,123 - 1,123 Finishing pig RMB value 62,964,872 - 62,964,872 Inventory reserve - - - Immature sow head count 9,619 4,503 5,116 Ave cost RMB/head 1,819 1,867 1,776 Immature sow RMB value 17,493,767 8,408,100 9,085,667 Boar head count 498 197 301 Ave cost RMB/head 2,780 2,189 3,167 Boar RMB value 1,384,531 431,240 953,290 Sow head count 24,083 10,117 13,966 Ave cost RMB/head 2,100 1,864 2,272 Sow RMB value 50,586,152 18,855,750 31,730,402 Inventory head count 170,187 41,186 129,001 Inventory RMB value 108,841,142 20,135,125 88,706,017 Production bio assets head count 24,581 10,314 14,267 Production bio assets RMB value 51,970,683 19,286,990 32,683,692 Total head count 194,768 51,500 143,268 Total RMB value 160,811,825 39,422,115 121,389,709 Total US value 25,987,191 6,370,614 19,616,577 Summary In RMB In USD Estimated livestock 160,811,825 25,987,191 Unborn pigs * 9,468,757 1,530,151 Total livestock value 170,280,581 27,517,342 Note * Assume of constant value

65 4848-8662-0949.25

Continued

Farms

Dahua 大化

Xinyu 新余

Lushan 庐山

Haiboer 海波尔

Senrong 森茸

Weisheng 卫晟

Jianxi 建溪

Jianhua - Qingzhou Farm健华-青州场

Baby pig_head count 8,236 7,075 2,251 1,535 2,991 1,513 1,271 2,373 Ave cost RMB/head 252 285 143 210 167 155 132 138 Baby pig RMB value 2,073,413 2,016,375 320,790 322,968 499,555 234,552 168,176 328,137 Inventory reserve - - - - - - Piglet head count 9,687 11,685 3,927 4,076 6,228 1,792 2,391 5,218 Ave cost RMB/head 320 490 299 362 306 282 263 238 Piglet RMB Value 3,099,840 5,725,650 1,174,369 1,474,894 1,907,963 504,703 628,313 1,240,705 Inventory reserve 26,460 867,568 - - - - - Finishing pig head count - - 3,631 5,393 6,509 4,471 2,588 5,726 Ave cost RMB/head - - 1,200 1,410 1,015 1,082 992 990 Finishing pig RMB value - - 4,358,730 7,602,375 6,603,770 4,839,486 2,566,748 5,667,966 Inventory reserve - - - - - - - Immature sow head count 2,184 2,319 268 229 736 234 209 789 Ave cost RMB/head 1,705 2,020 2,546 2,577 2,187 1,978 1,763 1,067 Immature sow RMB vaiue 3,723,720 4,684,380 682,417 590,027 1,609,348 462,883 368,414 841,833 Boar head count 176 21 17 31 26 18 28 24 Ave cost RMB/head 2,182 2,250 5,079 4,127 2,208 2,221 1,397 2,617 Boar RMB vaiue 383,990 47,250 86,335 127,944.47 57,395.08 39,984.86 39,117.25 62,817.19 Sow head count 5,210 4,907 994 1,169 1,700 753 701 1,477 Ave cost RMB/head 1,500 2,299 3,128 2,065 2,352 1,696 1,911 Sow RMB vaiue 7,815,000 11,040,750 2,285,206 3,656,632 3,509,817 1,771,071 1,188,631 2,823,101 Inventory head count 20,107 21,079 10,077 11,233 16,464 8,010 6,459 14,106 Inventory RMB value 8,870,513 11,264,612 6,536,306 9,990,264 10,620,636 6,041,624 3,731,651 8,078,642 Production bio assets head count 5,386 4,928 1,011 1,200 1,726 771 729 1,501 Production bio assets RMB value 8,198,990 11,088,000 2,371,541 3,784,576 3,567,212 1,811,056 1,227,748 2,885,918 Total head count 25,493 26,007 11,088 12,433 18,190 8,781 7,188 15,607 Total RMB value 17,069,504 22,352,612 8,907,847 13,774,840 14,187,848 7,852,679 4,959,399 10,964,560 Total US value 2,758,432 3,612,182 1,439,508 2,226,014 2,292,756 1,268,993 801,439 1,771,873

66 4848-8662-0949.25

Continued

Farms

Kangda 康大

Mingkang 闽康

Fengxiang 凤翔

Shuanglin 双林

Wanghua 旺华

Gangda 港达

Lingxin 林兴

Gangxuan 港旋

Guihong 桂宏

Baby pig head count 775 1,192 1,342 783 823 856 804 766 2,344 Ave cost RMB/head 143 152 158 150 190 165 196 163 125 Baby pig RMB value 110,584 181,438 211,366 117,818 156,146 141,646 157,657 124,542 292,808 Inventory reserve - - - - - - - - - Piglet head count 1,490 2,226 1,288 1,659 1,930 2,239 1,714 1,033 5,282 Ave cost RMB/head 273 318 250 300 306 310 291 256 249 Piglet RMB Value 406,191 707,887 321,444 497,915 590,611 693,252 499,450 264,790 1,315,221 Inventory reserve - - - - - - - - - Finishing pig head count 2,679 2,421 4,053 2,027 4,443 2,574 1,889 1,057 4,781 Ave cost RMB/head 988 1,035 828 1,289 1,181 1,080 1,283 967 1,200 Finishing pig RMB value 2,645,966 2,506,777 3,354,537 2,612,852 5,245,118 2,778,951 2,424,005 1,021,597 5,736,513 Inventory reserve - - - - - - - - - Immature sow head count 193 191 191 252 157 101 245 93 958 Ave cost RMB/head 2,284 2,544 2,985 1,159 2,263 1,015 1,230 1,306 1,351 Immature sow RMB vaiue 440,850 485,907 570,215 292,043 355,363 102,490 301,419 121,423 1,294,128 Boar head count 7 15 15 14 19 15 11 9 40 Ave cost RMB/head 2,991 6,251 3,167 4,171 4,170 3,166 2,829 2,931 2,517 Boar RMB vaiue 20,934.33 93,764.00 47,500.00 58,391.01 79,238.49 47,483.45 31,113.76 26,382 100,678.85 Sow head count 427 628 592 459 812 724 626 447 1,691 Ave cost RMB/head 2,318 2,426 2,250 2,172 3,075 1,971 2,423 2,537 2,107 Sow RMB vaiue 989,614 1,523,439 1,331,767 997,069 2,496,770 1,426,648 1,516,900 1,133,990 3,562,301 Inventory head count 5,137 6,030 6,874 4,721 7,353 5,770 4,652 2,949 13,365 Inventory RMB value 3,603,590 3,882,009 4,457,563 3,520,629 6,347,238 3,716,339 3,382,531 1,532,352 8,638,670 Production bio assets head count 434 643 607 473 831 739 637 456 1,731 Production bio assets RMB value 1,010,548 1,617,203 1,379,267 1,055,460 2,576,009 1,474,131 1,548,014 1,160,372 3,662,980 Total head count 5,571 6,673 7,481 5,194 8,184 6,509 5,289 3,405 15,096 Total RMB value 4,614,138 5,499,212 5,836,830 4,576,089 8,923,246 5,190,470 4,930,546 2,692,724 12,301,650 Total US value 745,645 888,673 943,232 739,496 1,441,997 838,780 796,776 435,144 1,987,947

67 4848-8662-0949.25

Continued

Farms

Wohao - Meicheng 沃豪-美城场

Baby pig head count 998 Ave cost RMB/head 194 Baby pig RMB value 193,636 Inventory reserve - Piglet head count 2,702 Ave cost RMB/head 320 Piglet RMB Value 865,950 Inventory reserve - Finishing pig head count 1,831 Ave cost RMB/head 1,638 Finishing pig RMB value 2,999,481 Inventory reserve - Immature sow head count 270 Ave cost RMB/head 2,100 Immature sow RMB vaiue 566,906 Boar head count 12 Ave cost RMB/head 2,851 Boar RMB vaiue 34,210.58 Sow head count 766 Ave cost RMB/head 1,981 Sow RMB vaiue 1,517,446 Inventory head count 5,801 Inventory RMB value 4,625,974 Production bio assets head count 778 Production bio assets RMB value 1,551,657 Total head count 6,579 Total RMB value 6,177,630 Total US value 998,305

01:14090113.5

EXHIBIT D

Sale Notice


01:14094099.3



Chapter 11 Case No. 13-11761 (BLS) Jointly Administered Sale Objection Deadline: November 13, 2013 at 4:00 p.m. (ET) Ref. Docket No:

NOTICE OF SALE, BIDDING PROCEDURES, AUCTION AND SALE HEARING

PLEASE TAKE NOTICE OF THE FOLLOWING:

1. On _______, 2013, AgFeed Industries, Inc. (“AgFeed Industries” or “Seller”) filed with the United States Bankruptcy Court for the District of Delaware (the “Bankruptcy Court”) their motion (the “Motion”)2 for the entry of: (a) an order, substantially in the form attached to the Motion as Exhibit A (the “Bidding Procedures Order”), (i) scheduling a hearing (the “Sale Hearing”) on the approval of the proposed stock purchase agreement (the “SPA” or “Stock Purchase Agreement”) regarding the sale and purchase of the stock of AgFeed Industries, Inc. (British Virgin Islands), (ii) approving certain bidding procedures (the “Bidding Procedures”) with respect to the proposed Stock Purchase Agreement, (iii) approving the break-up fee, expense reimbursement and the form and manner of notice thereof, and (iv) granting related relief; and (b) an order, substantially in the form attached to the Motion as Exhibit B (the “Sale Order”) (i) authorizing and approving AgFeed Industries, Inc.’s sale of the stock of AgFeed Industries, Inc. (British Virgin Islands), (ii) approving the Stock Purchase Agreement by and among Good Charm International Development, Ltd., as purchaser (the “Proposed Purchaser”), Ningbo Tech-Bank Co., Ltd., and AgFeed Industries, Inc., as seller, a copy of which is attached to the Motion as Exhibit C (or if the Proposed Purchaser is not the Highest and Best Bidder, then a modified Stock Purchase Agreement), (iii) authorizing and approving AgFeed Industries, Inc.’s entry into and consummation of the Stock Purchase Agreement, and (iv) granting related relief.

2. On _______, 2013, the Bankruptcy Court entered the Bidding Procedures Order [Docket No. _____]. Pursuant to the Bidding Procedures Order, in the event that the Sellers timely receive one or more Qualifying Bids for the Target Shares (as defined in the Bidding Procedures Order) other than the Proposed Purchaser’s Qualifying Bid, the Auction shall be held at the offices of proposed counsel to the Debtors, Young Conaway Stargatt & Taylor, LLP, 1000

1 The Debtors and the last four digits of their federal tax identification number are: AgFeed USA, LLC (8748), AgFeed Industries, Inc. (7168); TS Finishing, LLC (8748); New York Finishing, LLC (8748); Pork Technologies, LC (2076); New Colony Farms, LLC (9246); Heritage Farms, LLC (8141); Heritage Land, LLC (8129); Genetics Operating, LLC (1921); M2P2 Facilities, LLC (8748); MGM, LLC (8748); M2P2 General Operations, LLC (8748); New Colony Land Company, LLC(5834); M2P2 AF JV, LLC (8748); Midwest Finishing, LLC (8748); and Genetic Land, LLC (1921). The location of the corporate headquarters for AgFeed Industries, Inc. is 100 Bluegrass Commons Blvd., Suite 310, Hendersonville, Tennessee 37075. The location of the corporate headquarters for the remaining Debtors is 510 South 17th Street, Suite 104, Ames, Iowa 50010. 2 Capitalized terms used but not otherwise defined herein shall have the meanings ascribed to them in the Motion. Any summary of the Bidding Procedures and the Bidding Procedures Order contained herein is qualified in its entirety by the actual terms and conditions thereof. To the extent that there is any conflict between any such summary and such actual terms and conditions, the actual terms and conditions shall control.


2 01:14094099.3

North King Street, Wilmington, DE 19801, on November 18, 2013, beginning at 10:00 a.m. (ET). Only the Proposed Purchaser and all Qualifying Bidders with Qualifying Bids, as determined in accordance with the Bidding Procedures, shall be entitled to make any subsequent bids at the Auction. A Qualifying Bidder, other than the Proposed Purchaser, that desires to make a bid shall deliver a written or electronic copy of its bid to the parties identified in the Bidding Procedures so as to be received on or before November 13, 2013 at 4:00 p.m. (ET) (the “Bid Deadline”) and otherwise comply with the Bidding Procedures. FAILURE TO ABIDE BY THE BIDDING PROCEDURES MAY RESULT IN A BID FOR THE TARGET SHARES TO NOT BE CONSIDERED. Any party interested in bidding on the Target Shares should contact BDA Advisors Inc., 1270 Avenue of the Americas, Suite 2310, New York, New York 10020, Attn: Euan Rellie.

3. If no timely Qualifying Bids other than the Proposed Purchaser’s Qualifying Bid are submitted on or before the Bid Deadline, the Seller, after consultation with counsel to the Official Committee of Unsecured Creditors (the “Creditors’ Committee”) and counsel to the Official Committee of Equity Holders (the “Equity Holders’ Committee”), shall not hold an Auction and shall request at the Sale Hearing that the Bankruptcy Court approve the SPA, and the transactions contemplated thereunder, and/or the sale of the Target Shares.

4. The Highest and Best Bid (or if no Qualifying Bid other than that of the Proposed Purchaser is received, then the SPA) will be subject to Bankruptcy Court approval. The hearing (the “Sale Hearing”) to approve the Sale to the Highest and Best Bidder (or if no Qualifying Bid other than that of the Proposed Purchaser is received, then to the Proposed Purchaser), free and clear of all liens, claims, interests, pledges or encumbrances, shall take place on November 21, 2013 at 11:30 a.m. (ET), before the Honorable Brendan L. Shannon, United States Bankruptcy Judge, 824 North Market Street, 6th Floor, Courtroom No. 1, Wilmington, DE 19801. The Seller may, in its sole discretion and after consultation with counsel to the Creditors’ Committee and counsel to the Equity Holders’ Committee, designate the Next Highest Bid (and the corresponding Next Highest Bidder) to purchase the Target Shares without the need for further order of the Bankruptcy Court and without the need for further notice to any interested parties, in the event that the Highest and Best Bidder does not close the Sale. The Sale Hearing may be adjourned by the Seller from time to time without further notice to creditors or other parties in interest other than by announcement of the adjournment in open court on the date scheduled for the Sale Hearing or by filing a notice on the docket of the Debtors’ chapter 11 cases.

5. Any objections to the Sale or the relief requested in connection with the Sale (a “Sale Objection”) must: (a) be in writing; (b) comply with the Bankruptcy Rules and the Local Rules; (c) set forth the specific basis for the Sale Objection; (d) be filed with the Clerk of the Bankruptcy Court, 824 N. Market Street, 3rd Floor, Wilmington, DE 19801, together with proof of service, on or before 4:00 p.m. (ET) on November 13, 2013 (the “Sale Objection Deadline”); and (e) be served, so as to be actually received on or before the Sale Objection Deadline, upon (i) counsel for the Debtors, Young Conaway Stargatt & Taylor, LLP, 1000 North King Street, Wilmington, DE 19801, Attn: Robert S. Brady, Esq., Donald J. Bowman, Jr., Esq., and Robert F. Poppiti, Jr. Esq.; (ii) counsel to the Creditors’ Committee Lowenstein Sandler LLP, 65 Livingston Avenue, Roseland, New Jersey 07068, Attn. Jeff D. Prol, Esq. and Timothy R. Wheeler, Esq., and Lowenstein Sandler LLP, 1251 Avenue of the Americas, New York, New York 10020, Attn. Bruce S. Nathan, Esq., (iii) counsel to the Equity Holders’ Committee Elliott Greenleaf, 1105 Market Street, Suite 1700, Wilmington, Delaware 19801 Attn: Rafael X. Zahralddin, Esq., and Sugar Felsenthal Grais & Hammer


3 01:14094099.3

LLP, 30 N. LaSalle St., Suite 3000, Chicago, IL 60602, Attn.: Aaron L. Hammer, Esq., and (iv) counsel to the Proposed Purchaser, Robbins, Salomon & Patt, Ltd., 180 N. LaSalle Street, Suite 3300, Chicago, IL 60604, Attn.: Steve Jakubowski, Esq. and Mr. Hong Jianping, Rm. 1807 Yangguang International Building, No. 55, Yuli Road, Yuyao City, Zhejiang 315400, PRC, fax: +86 21 50470264 and e-mail: [email protected]. If a Sale Objection is not filed and served in accordance with the foregoing requirements, the objecting party shall be barred from objecting to the Sale and shall not be heard at the Sale Hearing, and the Bankruptcy Court may enter the Sale Order without further notice to such party.

6. Copies of the Motion, the Bidding Procedures, the Bidding Procedures Order, and the SPA may be obtained by parties in interest free of charge on BMC Group, Inc.’s dedicated webpage related to these chapter 11 cases (www.bmcgroup.com/agfeed). Copies of such documents are also available for inspection during regular business hours at the Clerk of the Bankruptcy Court, 824 N. Market Street, 3rd Floor, Wilmington, DE 19801, and may be viewed for a fee on the internet at the Bankruptcy Court’s website (http://www.deb.uscourts.gov/) by following the directions for accessing the ECF system on such website.

Dated: October ____, 2013 Wilmington, Delaware

YOUNG CONAWAY STARGATT & TAYLOR, LLP

/s/ Donald J. Bowman, Jr. Robert S. Brady (No. 2847) Donald J. Bowman, Jr. (No. 4383) Robert F. Poppiti, Jr. (No. 5052) Ian J. Bambrick (No. 5455) 1000 N. King Street Rodney Square Wilmington, Delaware 19801 Telephone: (302) 571-6600 Facsimile: (302) 571-1253 Counsel for the Debtors and Debtors in Possession


agfeed - stock purchase agreement bidding procedures motion (2) · 2013. 11. 13. · proposed stock...

Documents