China Green Agriculture Files 8K – Entry Into Definitive Agreement >CGA

China Green Agriculture Inc. (CGA) filed a Form 8K – Entry Into a Definitive Agreement – with the U.S Securities and Exchange Commission on June 30, 2016.

On June 30, 2016, China Green Agriculture, Inc., a Nevada corporation (the “Company” or “CGA”), through its wholly-owned subsidiary Shaanxi TechTeam Jinong Humic Acid Product Co., Ltd., a company organized under the laws of the People’s Republic of China (“Jinong”), as authorized by the board of directors of the Company and Jinong, entered into (i) Strategic Acquisition Agreements (the “SAA”), and (ii) Agreements for Convertible Notes (the “ACN”), with the shareholders of the companies as listed below (the “Targets”). The transaction represented by the SAA, ACN and the VIE Agreements as defined below are collectively referred to as the “Strategic Acquisitions.”

Company Name Business Scope

Cash Payment for Acquisition

(RMB [1])

Principal of Notes for Acquisition

(RMB)

Shaanxi Lishijie Agrochemical Co., Ltd.

Sales of pesticides, agricultural chemicals, chemical fertilizers, agricultural materials; Manufacture and sales of mulches. 10,000,000 3,000,000

Songyuan Jinyangguang Sannong Service Co., Ltd.

Promotion and consulting services regarding agricultural technologies; Retail sales of chemical fertilizers (including compound fertilizers and organic fertilizers); Wholesale and retail sales of pesticides, agricultural machineries and accessories; Collection of agricultural information; Development of saline-alkali soil; Promotion and development of high-efficiency agriculture and agriculture informatization, agricultural and biological engineering high technologies; E-commerce; Cultivation of freshwater fish, poultry, fruits, flowers, vegetables, and seeds; Recycle and complex utilization of straw and stalk; Technology transfer and training; Recycle of agricultural economic; Ecological industry planning. 8,000,000 12,000,000

Shenqiu County Zhenbai Agriculture Co., Ltd.

Cultivation of crops; Storage, sales, preliminary processing and logistics distribution of agricultural by-products; Promotion and application of agricultural technologies; Purchase and sales of agricultural materials; Electronic commerce. 3,000,000 12,000,000

Weinan City Linwei District Wangtian Agricultural Materials Co., Ltd.

Promotion and application of new agricultural technologies; Professional prevention of plant diseases and insect pests; Sales of plant protection products, plastic material, chemical fertilizers, pesticides, agricultural mulches, micronutrient fertilizers, hormones, agricultural machineries and medicines, and gardening tools. 6,000,000 12,000,000

Aksu Xindeguo Agricultural Materials Co., Ltd.

Wholesale and retail sales of pesticides; Sales of chemical fertilizers, packaged seeds, agricultural mulches, micronutrient fertilizers, compound fertilizers, plant growth regulators, agricultural machineries, and water economizers; Consulting services for agricultural technologies; Purchase and sales of agricultural by-products. 10,000,000 12,000,000

Xinjiang Xinyulei Eco-agriculture Science and Technology co., LTD

Sales of chemical fertilizers, packaged seeds, agricultural mulches, micronutrient fertilizers, organic fertilizers, plant growth regulators, agricultural machineries, and water economizers; Purchase and sales of agricultural by-products; Cultivation of fruits and vegetables; Consulting services and training for agricultural technologies; Storage services; Sales of articles of daily use, food and oil; On-line sales of the above mentioned products.

Total 37,000,000 51,000,000

[1] RMB: Abbreviation for renminbi, the official currency of the People’s Republic of China where Jinong and the Targets operate. The exchange rate between RMB and U.S. dollars on June 30, 2016 is RMB1=US$0.1508, according to the exchange rate published by Bank of China.

Pursuant to the SAA and the ACN, the shareholders of the Targets, while be in possession of the equity interests and will continue to be the legal owners of such interests, agreed to pledge and entrust all of their equity interests, including the proceeds thereof but excluding any claims or encumbrances, and the operations and management of its business to Jinong, in exchange of an aggregated amount of RMB37,000,000 (approximately $5,579,600) to be paid by Jinong within three days following the execution of the SAA, ACN and the VIE Agreements, and convertible notes with an aggregated face value of RMB51,000,000 (approximately $7,690,800) with an annual fixed compound interest rate of 3% and term of three years.

The SAA contains representations and warranties by both Jinong and the shareholders of the Targets including:

Should the shareholders of the Targets fail to satisfy the conditions listed in the exhibit to the SAA, i.e., the entry into the VIE Agreements, as defined below or are in breach of any representations or warranties in the SAA, other than the direct and consequential damages that may cause to Jinong, they shall pay RMB100,000 (approximately $15,080) as a breach make up.

The shareholders of the Targets agree and ensure its main management members and technology persons to agree and enter into Non-Compete Agreements which shall prohibit any direct or indirect operation, holding of equity interests of the same or similar business of the Targets, its customers or suppliers, unless the operation of such an entity is through the Targets.

The equity interests of the Targets do not have any form of Claims or Encumbrances, as such terms are defined in the SAA. The shareholders of the Targets represented that there is no action, suit, arbitration, or legal proceeding pending or, currently threatened against the Targets that would have a material adverse effect on the Target’s capacity to fulfill their contractual obligations. The Targets shall have a minimum of 10% of annual compound growth rate (the “Growth Rate”) within the three (3) years after the closing of the Strategic Acquisitions (the “Closing”).

According to the SAA, all the existing employees will continue to be the employees of the Targets after the Closing based on the current employment terms, subject to the decisions from the new board of the Targets to be formed after the Closing.

Under the ACN, each convertible note (or note, as referred to below) has a face value of RMB100 with a term of three years and an annual fixed compound interest rate of 3%. The convertible notes take priority over the preferred stock and common stock of Jinong, and any other class or series of capital stocks Jinong issues in the future in terms of interests and payments in the event of any liquidation, dissolution or winding up of Jinong. On or after the third anniversary of the issuance date of the note (the “Mature Date”), noteholders may request Jinong to process the note conversion through mechanics of conversion chosen by Jinong. The noteholder shall not have Jinong convert the note prior to the Mature Date and Jinong may decline the conversion if the noteholder requests so. If the note is converted into the common stock of CGA, the noteholder will become the holders of the common stock of CGA.

The per share conversion price of the note is the higher of the following: (i) $5.00 per share or (ii) 75% of the closing price of CGA’s on the date the noteholder delivers the conversion notice.

If the profits of the Targets hit certain level of sales target set by the parties, i.e., the Growth Rate, Jinong may at its discretion, convert the notes to (i) cash , (ii) equity of CGA, or (iii) to a combination of cash and equity of CGA, in the amount of the face value of the notes with compound interest for three years.

Upon the arrival of the Mature Date of the note, the noteholder can (i) requests Jinong to convert all or a part of the note; (ii) continue to hold the note until such a holder delivers a conversion request at his/her will; however, if the holder chooses to hold the note after the Mature Date, no interests shall accrue on the note after the three year term.

In the event that the behavior of the Targets or noteholders materially impair Jinong or, if the annual compounded rate for sales within the three years following the acquisition of any of the Targets by Jinong fail to achieve the sales target listed in the SAA, or the Growth Rate, Jinong may request noteholders to redeem the shares they hold of the Targets with (i) amount represented by the convertible notes including the accrued interests and the cash payment Jinong made on the Closing of the Strategic Acquisition and (ii) 15% of the amount under (i) mentioned immediately prior to this item. However, the noteholder can elect to offset the payment of the interests of the note by the annual increase rate the Targets realizes, despite a lower rate.

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The full text of this SEC filing can be retrieved at: http://www.sec.gov/Archives/edgar/data/857949/000114420416111996/v443872_8k.htm

Any exhibits and associated documents for this SEC filing can be retrieved at: http://www.sec.gov/Archives/edgar/data/857949/000114420416111996/0001144204-16-111996-index.htm

Public companies must file a Form 8-K, or current report, with the SEC generally within four days of any event that could materially affect a company’s financial position or the value of its shares.

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