o | REGISTRATION STATEMENT PURSUANT TO SECTION 12(B) OR 12(G) OF THE SECURITIES EXCHANGE ACT OF 1934 |
þ | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 |
o | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 |
o | SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 |
John Layburn, Chief Strategy and Compliance Officer | David Pasquale, Senior Vice President | |
Phone: +86 (10) 8438 1060 | Phone: +1 914 337 1117 | |
Email: john.layburn@agriacorp.com | Email: david.pasquale@agriacorp.com | |
|
||
21/F Tower B, PingAn International Finance Center, | Two Park Place | |
1-3 Xinyuan South Road, Chaoyang District | Bronxville, New York 10708 | |
Beijing 100027, Peoples Republic of China | United States of America |
Title of Each class | Name of Each Exchange on Which Registered | |
American Depositary Shares, each
representing
two ordinary shares, par value $0.0000001 per share |
New York Stock Exchange |
Large accelerated filer o | Accelerated filer þ | Non-accelerated filer o |
US GAAP þ |
International Financial Reporting Standards as issued
by the International Accounting Standards Board o |
Other o |
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25 | ||||||||
40 | ||||||||
40 | ||||||||
58 | ||||||||
66 | ||||||||
72 | ||||||||
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80 | ||||||||
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86 | ||||||||
87 | ||||||||
87 | ||||||||
87 | ||||||||
87 | ||||||||
Exhibit 4.22 | ||||||||
Exhibit 4.23 | ||||||||
Exhibit 4.24 | ||||||||
Exhibit 4.25 | ||||||||
Exhibit 4.26 | ||||||||
Exhibit 4.27 | ||||||||
Exhibit 4.28 | ||||||||
Exhibit 4.29 | ||||||||
Exhibit 4.30 | ||||||||
Exhibit 4.31 | ||||||||
Exhibit 4.32 | ||||||||
Exhibit 4.33 | ||||||||
Exhibit 4.34 | ||||||||
Exhibit 4.35 | ||||||||
Exhibit 4.36 | ||||||||
Exhibit 4.37 | ||||||||
Exhibit 4.38 | ||||||||
Exhibit 4.39 | ||||||||
Exhibit 4.40 | ||||||||
Exhibit 4.41 | ||||||||
Exhibit 4.42 | ||||||||
Exhibit 4.43 | ||||||||
Exhibit 4.44 | ||||||||
Exhibit 4.45 | ||||||||
Exhibit 4.46 | ||||||||
Exhibit 4.47 | ||||||||
Exhibit 4.48 | ||||||||
Exhibit 4.49 | ||||||||
Exhibit 4.50 | ||||||||
Exhibit 4.51 | ||||||||
Exhibit 4.52 | ||||||||
Exhibit 4.53 | ||||||||
Exhibit 4.54 | ||||||||
Exhibit 8.1 | ||||||||
Exhibit 12.1 | ||||||||
Exhibit 12.2 | ||||||||
Exhibit 13.1 | ||||||||
Exhibit 13.2 | ||||||||
Exhibit 15.1 | ||||||||
Exhibit 15.2 | ||||||||
Exhibit 15.3 | ||||||||
Exhibit 15.4 |
| we, us, our company, the Company, our and Agria refer to Agria Corporation, a Cayman Islands company, and its predecessor entities, subsidiaries and, unless the context indicates otherwise, P3A and Guanli, our consolidated affiliated entities; |
| P3A refers to our consolidated affiliated entity, Taiyuan Primalights III Agriculture Development Co., Ltd., which is a limited liability company established in China; |
| Guanli refers to our consolidated affiliated entity, Shenzhen Guanli Agricultural Technology Co., Ltd., which is a limited liability company established in China; |
| PGG Wrightson refers to PGG Wrightson Group, in which we hold 19% equity interest; |
| China or PRC refers to the Peoples Republic of China, excluding, for purposes of this annual report, Taiwan, Hong Kong and Macau; |
| shares or ordinary shares refers to our ordinary shares, and preferred shares refers to our series A redeemable convertible preferred shares, all of which were converted into our ordinary shares upon the completion of our initial public offering on November 13, 2007; |
| ADSs refers to our American depositary shares, each of which represents two ordinary shares; |
| all references to RMB or Renminbi are to the legal currency of China; all references to $, US$, dollars and US dollars are to the legal currency of the United States; |
| breeder sheep refers to pure breed sheep that are used primarily in rapid reproduction or artificial reproduction methods to spread desired genes widely in a flock and have received official variety recognition in China or another country; and |
| upstream refers to the production and sale of agricultural products (e.g., seeds, sheep semen and sheep embryos) to be used by other participants in the agricultural industry to produce other agricultural products, such as corn and sheep, which in turn are used to manufacture products such as animal feed, mutton and wool. |
| our future business development, results of operations and financial condition; |
| changes in our revenues, cost and expense items; |
1
| our anticipated development strategies, which may include potential acquisitions and divestitures, expanding into new sectors within the agricultural industry, expanding sales into new regions, and expanding our product offerings; |
| our strategy to expand our research and development capability; |
| the growth in demand in China for high-quality corn seeds, sheep and seedlings; |
| our ability to attract customers and end users and enhance our brand recognition; |
| future changes in government regulations affecting our business; |
| trends and competition in the seed, sheep and seedling industries; and |
| our ability to retain and motivate existing management and other key personnel and to recruit and integrate additional qualified personnel into our operations. |
2
For the Year Ended December 31, | ||||||||||||||||||||||||
2005 | 2006 | 2007 | 2008 | 2009 | 2009 | |||||||||||||||||||
RMB | RMB | RMB | RMB | RMB | $ | |||||||||||||||||||
(In thousands, except share, per share and per ADS data) | ||||||||||||||||||||||||
Consolidated Statements of
Operations Data:
|
||||||||||||||||||||||||
Revenue
|
||||||||||||||||||||||||
Corn seeds
|
245,601 | 245,634 | 343,743 | 257,144 | 107,529 | 15,752 | ||||||||||||||||||
Sheep products
|
119,468 | 193,054 | 255,508 | 148,457 | 38,426 | 5,630 | ||||||||||||||||||
Seedlings
(1)
|
19,020 | 51,015 | 71,505 | 62,463 | 31,013 | 4,543 | ||||||||||||||||||
|
||||||||||||||||||||||||
Total revenues
|
384,089 | 489,703 | 670,756 | 468,064 | 176,968 | 25,925 | ||||||||||||||||||
|
||||||||||||||||||||||||
Cost of revenue
|
||||||||||||||||||||||||
Corn seeds
|
(147,723 | ) | (144,730 | ) | (203,709 | ) | (153,029 | ) | (67,186 | ) | (9,843 | ) | ||||||||||||
Sheep products
|
(37,716 | ) | (52,287 | ) | (72,716 | ) | (74,701 | ) | (34,616 | ) | (5,071 | ) | ||||||||||||
Seedlings
(2)
|
(5,932 | ) | (10,357 | ) | (20,459 | ) | (33,436 | ) | (17,526 | ) | (2,568 | ) | ||||||||||||
Write down of inventories
|
| | | (16,686 | ) | (22,508 | ) | (3,297 | ) | |||||||||||||||
|
||||||||||||||||||||||||
Total cost of revenue
|
(191,371 | ) | (207,374 | ) | (296,884 | ) | (277,852 | ) | (141,836 | ) | (20,779 | ) | ||||||||||||
|
||||||||||||||||||||||||
Gross profit
|
192,718 | 282,329 | 373,872 | 190,212 | 35,132 | 5,146 | ||||||||||||||||||
|
||||||||||||||||||||||||
Operating income (expenses)
|
||||||||||||||||||||||||
Selling expenses
|
(11,349 | ) | (14,031 | ) | (36,443 | ) | (18,585 | ) | (5,744 | ) | (842 | ) | ||||||||||||
General and administrative
|
(4,199 | ) | (7,472 | ) | (25,723 | ) | (896,977 | ) | (133,203 | ) | (19,515 | ) | ||||||||||||
Research and development
|
(2,974 | ) | (3,746 | ) | (3,080 | ) | (20,247 | ) | (14,541 | ) | (2,130 | ) | ||||||||||||
Government grants
|
150 | 80 | | | | | ||||||||||||||||||
Total operating expenses
|
(18,372 | ) | (25,169 | ) | (65,246 | ) | (935,809 | ) | (153,488 | ) | (22,487 | ) | ||||||||||||
|
||||||||||||||||||||||||
Operating profit (loss)
|
174,346 | 257,160 | 308,626 | (745,597 | ) | (118,356 | ) | (17,341 | ) | |||||||||||||||
Interest income
|
218 | 280 | 8,700 | 34,531 | 8,778 | 1,286 | ||||||||||||||||||
Interest expense
(3)
|
(5,537 | ) | (4,923 | ) | (8,260 | ) | (1,147 | ) | (1,639 | ) | (240 | ) | ||||||||||||
Unrealized loss on investment
|
| | | | (548 | ) | (80 | ) | ||||||||||||||||
Exchange loss
|
| | (7,745 | ) | (11,812 | ) | (16,602 | ) | (2,432 | ) | ||||||||||||||
Other expense
|
(7 | ) | | (680 | ) | (2,657 | ) | (283 | ) | (42 | ) | |||||||||||||
Other income
|
60 | 1,386 | 578 | 1,256 | 4,290 | 630 | ||||||||||||||||||
|
||||||||||||||||||||||||
Income (loss) before income tax
|
169,080 | 253,903 | 301,219 | (725,426 | ) | (124,360 | ) | (18,219 | ) | |||||||||||||||
|
||||||||||||||||||||||||
Income tax
|
| | (159,001 | ) | (25,576 | ) | (10,915 | ) | (1,599 | ) | ||||||||||||||
Net income (loss)
|
169,080 | 253,903 | 142,218 | (751,002 | ) | (135,275 | ) | (19,818 | ) | |||||||||||||||
|
||||||||||||||||||||||||
Earnings (loss) per ordinary share
|
||||||||||||||||||||||||
Basic
|
1.69 | 2.54 | 1.37 | (5.95 | ) | (1.08 | ) | (0.16 | ) | |||||||||||||||
Diluted
|
1.69 | 2.54 | 1.34 | (5.95 | ) | (1.08 | ) | (0.16 | ) | |||||||||||||||
Earnings (loss) per ADS
(4)
|
||||||||||||||||||||||||
Basic
|
3.38 | 5.08 | 2.74 | (11.90 | ) | (2.16 | ) | (0.32 | ) | |||||||||||||||
Diluted
|
3.38 | 5.08 | 2.68 | (11.90 | ) | (2.16 | ) | (0.32 | ) | |||||||||||||||
Weighted average number of ordinary
shares outstanding:
|
||||||||||||||||||||||||
Basic
|
100,000,000 | 100,000,000 | 103,978,082 | 126,262,529 | 125,271,946 | 125,271,946 | ||||||||||||||||||
Diluted
|
100,000,000 | 100,000,000 | 106,091,889 | 126,262,529 | 125,271,946 | 125,271,946 | ||||||||||||||||||
Dividends declared per ordinary share
|
0.24 | 1.10 | 0.56 | | | |
(1) | Includes related party amounts of RMB2.2 million, RMB3.0 million, RMB14.5 million, RMB4.2 million and RMBnil ($nil) for 2005, 2006, 2007, 2008 and 2009, respectively. | |
(2) | Includes related party amounts of RMB0.8 million, RMB1.0 million, RMB4.8 million , RMB1.8 million and RMBnil million ($nil) for 2005, 2006, 2007, 2008 and 2009, respectively. | |
(3) | Includes related party amounts of RMB4.1 million, RMB2.5 million, RMB6.6 million , RMB0.6 million and RMB0.6 million ($0.1 million) for 2005, 2006, 2007, 2008 and 2009, respectively. | |
(4) | Each ADS represents two ordinary shares. |
3
As of December 31, | ||||||||||||||||||||||||
2005 | 2006 | 2007 | 2008 | 2009 | ||||||||||||||||||||
RMB | RMB | RMB | RMB | RMB | $ | |||||||||||||||||||
(In thousands) | ||||||||||||||||||||||||
Consolidated Balance Sheets
Data:
|
||||||||||||||||||||||||
Cash and cash equivalents
|
29,477 | 42,782 | 1,387,153 | 1,176,767 | 737,825 | 108,092 | ||||||||||||||||||
Accounts receivable
|
67,200 | 156,440 | 200,757 | 162,820 | 109,265 | 16,007 | ||||||||||||||||||
Total assets
|
351,866 | 490,476 | 2,071,536 | 2,077,762 | 2,006,153 | 293,902 | ||||||||||||||||||
Total current liabilities
|
141,532 | 127,344 | 56,976 | 53,056 | 94,129 | 13,788 | ||||||||||||||||||
Ordinary shares
|
| | | | | | ||||||||||||||||||
Additional paid-in capital
|
6,262 | 8,098 | 1,561,933 | 2,368,520 | 2,381,377 | 348,874 | ||||||||||||||||||
Total shareholders equity
|
208,834 | 354,136 | 1,848,207 | 1,835,560 | 1,712,486 | 250,882 |
Noon Buying Rate | ||||||||||||||||
Period | Period End | Average (1) | Low | High | ||||||||||||
(RMB per $1.00) | ||||||||||||||||
|
||||||||||||||||
2005
|
8.0702 | 8.1826 | 8.2765 | 8.0702 | ||||||||||||
2006
|
7.8041 | 7.9579 | 8.0702 | 7.8041 | ||||||||||||
2007
|
7.2946 | 7.5806 | 7.8127 | 7.2946 | ||||||||||||
2008
|
6.8225 | 6.9193 | 7.2946 | 6.7800 | ||||||||||||
2009
|
6.8259 | 6.8295 | 6.8470 | 6.8176 | ||||||||||||
December
|
6.8259 | 6.8275 | 6.8299 | 6.8244 | ||||||||||||
2010
|
||||||||||||||||
January
|
6.8268 | 6.8269 | 6.8295 | 6.8258 | ||||||||||||
February
|
6.8258 | 6.8285 | 6.8330 | 6.8258 | ||||||||||||
March
|
6.8258 | 6.8262 | 6.8270 | 6.8254 | ||||||||||||
April
|
6.8247 | 6.8256 | 6.8275 | 6.8229 | ||||||||||||
May
|
6.8305 | 6.8275 | 6.8310 | 6.8245 | ||||||||||||
June
(through June 25)
|
6.7911 | 6.8227 | 6.8323 | 6.7911 |
(1) | Annual averages are calculated from month-end rates. Monthly averages are calculated using the average of the daily rates during the relevant period. |
4
5
6
| maintain our competitive position in China and compete in each of our business segments with Chinese and international companies, many of which have longer operating histories and greater financial resources than we do; |
| offer commercially successful corn seeds, sheep products, seedling and other products to attract and retain direct customers and ultimate users; |
| retain access to the farmland we currently use and obtain access to additional farmland for expansion; |
| continue our existing arrangements with village collectives that grow our corn seed products and enter into new arrangements with additional village collectives; |
| maintain effective control of our costs and expenses; and |
| retain and motivate our management and skilled technical staff and recruit and integrate additional qualified personnel into our operations. |
7
8
9
10
11
12
13
14
15
16
| revoking P3A or Guanlis business and operating licenses; |
| confiscating relevant income and imposing fines and other penalties; |
| prohibiting or restricting P3A or Guanlis operations in China; |
| requiring us or P3A or Guanli to restructure P3A or Guanlis ownership structure or operations; |
| restricting or prohibiting our use of the proceeds from our initial public offering to finance our businesses and operations in China; or |
| imposing conditions or requirements with which we or our subsidiaries or P3A or Guanli may not be able to comply. |
17
18
19
20
21
| announcement of securities law class action lawsuits against us and our directors and officers; |
| delays in our periodic earnings announcements; |
| announcements of technological or competitive developments; |
| regulatory developments in our target markets affecting us, our customers or our competitors; |
| actual or anticipated fluctuations in our quarterly operating results; |
| changes in financial estimates by securities research analysts; |
| changes in the economic performance or market valuations of other corn seed, sheep products or seedling companies; |
| additions to or departures of our executive officers and key personnel; |
| fluctuations in the exchange rates between the US dollar and RMB; and |
| sales or anticipated sales of additional ADSs. |
22
23
| Our board of directors has the authority to establish from time to time one or more series of preferred shares without action by our shareholders and to determine, with respect to any series of preferred shares, the terms and rights of that series, including the designation of the series; number of shares of the series; dividend rights, dividend rates, conversion rights, voting rights; and rights and terms of redemption and liquidation preferences. |
24
| Our board of directors may issue a series of shares without action by our shareholders to the extent of available authorized but unissued preferred shares. Accordingly, the issuance of preferred shares may adversely affect the rights of the holders of the ordinary shares. Issuance of preference shares may dilute the voting power of holders of ordinary shares. |
| Subject to applicable regulatory requirements, our board of directors may issue additional ordinary shares or rights to acquire ordinary shares without action by our shareholders to the extent of available authorized but unissued shares. |
25
| Growing a focused seed business in China. We believe that the PRC government and the agricultural industry participants share the same goal of improving agricultural productivity, which is evidenced by strong foreign and domestic investment flowing into the agricultural industry in China. We consider that focusing on the seed sector will best position us to achieve sustainable growth in the future. |
| Developing strong expertise in operational management. The agricultural sector in China is highly fragmented with many small companies whose growth potential is hindered by a lack of experienced operational management. Our investment in and strategic partnership with PGG Wrightson, which owns the largest seed company in the southern hemisphere gives us an access to a management team experienced in running modern international seed businesses. In June 2010, we also recruited Mr. Chuanli Zhou as the head of our seeds division. Mr. Zhou has over 20 years of experience in the seed industry in China and was previously the general manager of Shandong Denghai-PIONEER Seed Company, a joint venture between Pioneer Hi-Bred International Inc., a leading international agricultural company, and Shandong Denghai Seeds Co., Ltd. |
| Acquiring proprietary technologies. The seed industry is a technology-centered business and companies with sufficient quantity and quality of proprietary technologies have a significant competitive edge. We will continue to leverage our recent investment in and partnership with CNAAS to develop proprietary technologies. We are also at various stages of discussions regarding potential investments in seed companies with proprietary seed producers. |
26
27
28
Division | Business unit | Overview | ||
|
||||
Customer Services
|
Rural Supplies | A leading provider of rural supplies throughout New Zealand through a retail chain operating under the PGG Wrightson brand | ||
|
||||
|
Fruitfed Supplies | A leading provider of agri-chemicals and technical expertise to the New Zealand horticulture sector | ||
|
||||
|
Livestock | A leading livestock broker in New Zealand | ||
|
||||
|
Irrigation and Pumping | A leading irrigation systems provider in New Zealand | ||
|
||||
|
Wool | Joint venture investments in The New Zealand Merino Company and Wool Partners International | ||
|
||||
|
Agriculture New Zealand | A leading New Zealand agricultural and horticultural training provider | ||
|
||||
Seed, Grain and Nutrition
|
Seeds | A leading southern hemisphere forage seed company with developing global operations | ||
|
||||
|
Grain | A significant share of the grain brokerage and marketing services in New Zealand and a leading proprietary cereal seed provider | ||
|
||||
|
Agri-feeds | A leading New Zealand molasses importer and wholesaler | ||
|
||||
Financial Services
|
PGG Wrightson Finance | A leading non-bank specialist rural lender in New Zealand | ||
|
||||
|
Real Estate | A leading full service rural real estate business in New Zealand with nationwide operations | ||
|
||||
|
Funds Management | Provider of fund management services to New Zealand Stock Exchange-listed NZ Farming Systems Uruguay Limited | ||
|
||||
|
Insurance | Broking arrangement with AON New Zealand servicing the New Zealand rural insurance market | ||
|
||||
South America
|
Leading forage seed supplier in Uruguay and provider of rural services and farm management services to South American customers, with potential for growth and expansion |
| joint development and international commercialization of seed cultivars to which we and PGG Wrightson and their development partners have access; |
| examination of additional funding lines through a third party source to enhance liquidity in, and development of, PGG Wrightson Finance; |
| development of livestock demand in China and the export of livestock from New Zealand, Australia, South America and other markets to China to meet market demand; |
29
| the establishment of livestock trading systems in China using PGG Wrightsons technical expertise, particularly through the establishment of an auction system; and |
| exploring the possibility of developing a rural services business in China, where there is currently no mature provider. |
| for the period from January 15, 2010 to December 31, 2011, 8.0% per annum on the principal amount of the notes; |
| for the period from January 1, 2012 to December 31, 2013, the two-year swap on December 31, 2011 plus a margin of 5.5%; |
| for subsequent two-year periods commencing on January 1, 2014, January 1, 2016 and so on, the two-year swap at the start of the relevant two-year period plus a margin of 6.5%. |
30
31
32
33
34
35
36
37
38
39
| exercise effective control over P3A, Guanli, Agria Agriculture and Zhongyuan; |
| receive substantially all of the earnings and other economic benefits from P3A, Guanli, Agria Agriculture and Zhongyuan to the extent permissible under PRC law in consideration for the services provided by Agria China and Agria Brother; and |
| have an exclusive option to purchase all or part of the equity interests in P3A, Guanli, Agria Agriculture and Zhongyuan in each case when and to the extent permitted by PRC law. |
40
For the Years Ended December 31, | ||||||||||||||||||||||||||||
2007 | 2008 | 2009 | ||||||||||||||||||||||||||
% of | % of | % of | ||||||||||||||||||||||||||
RMB | Revenues | RMB | Revenues | RMB | $ | Revenues | ||||||||||||||||||||||
(In thousands, except percentages) | ||||||||||||||||||||||||||||
Revenue:
|
||||||||||||||||||||||||||||
Corn seeds
|
343,743 | 51.2 | % | 257,144 | 54.9 | % | 107,529 | 15,752 | 60.8 | % | ||||||||||||||||||
Sheep products
|
255,508 | 38.1 | 148,457 | 31.7 | 38,426 | 5,630 | 21.7 | |||||||||||||||||||||
Seedlings
|
71,505 | 10.7 | 62,463 | 13.4 | 31,013 | 4,543 | 17.5 | |||||||||||||||||||||
|
||||||||||||||||||||||||||||
Total revenues
|
670,756 | 100 | % | 468,064 | 100 | % | 176,968 | 25,925 | 100 | % | ||||||||||||||||||
|
||||||||||||||||||||||||||||
Cost of revenue:
|
||||||||||||||||||||||||||||
Corn seeds
|
(203,709 | ) | (30.4 | )% | (153,029 | ) | (32.7 | )% | (67,186 | ) | (9,843 | ) | (38.0 | )% | ||||||||||||||
Sheep products
|
(72,716 | ) | (10.8 | ) | (74,701 | ) | (16.0 | ) | (34,616 | ) | (5,071 | ) | (19.6 | ) | ||||||||||||||
Seedlings
|
(20,459 | ) | (3.1 | ) | (33,436 | ) | (7.1 | ) | (17,526 | ) | (2,568 | ) | (9.9 | ) | ||||||||||||||
Write down of Inventories
|
| | (16,686 | ) | (3.6 | ) | (22,508 | ) | (3,297 | ) | (12.7 | ) | ||||||||||||||||
|
||||||||||||||||||||||||||||
Total cost of revenue
|
(296,884 | ) | (44.3 | )% | (277,852 | ) | (59.4 | )% | (141,836 | ) | (20,779 | ) | (80.2 | )% | ||||||||||||||
|
||||||||||||||||||||||||||||
Gross profit
|
373,872 | 55.7 | % | 190,212 | 40.6 | % | 35,132 | 5,146 | 19.8 | % | ||||||||||||||||||
|
||||||||||||||||||||||||||||
Operating income (expenses):
|
||||||||||||||||||||||||||||
Selling expenses
|
(36,443 | ) | (5.4 | )% | (18,585 | ) | (4.0 | )% | (5,744 | ) | (842 | ) | (3.2 | )% | ||||||||||||||
General and administrative expenses
|
(25,723 | ) | (3.8 | ) | (896,977 | ) | (191.6 | ) | (133,203 | ) | (19,515 | ) | (75.3 | ) | ||||||||||||||
Research and development expenses
|
(3,080 | ) | (0.5 | ) | (20,247 | ) | (4.3 | ) | (14,541 | ) | (2,130 | ) | (8.2 | ) | ||||||||||||||
|
||||||||||||||||||||||||||||
Total operating expenses
|
(65,246 | ) | (9.7 | )% | (935,809 | ) | (199.9 | )% | (153,488 | ) | (22,487 | ) | (86.7 | )% | ||||||||||||||
|
||||||||||||||||||||||||||||
Operating profit (loss)
|
308,626 | 46.0 | % | (745,597 | ) | (159.3 | )% | (118,356 | ) | (17,341 | ) | (66.9 | )% | |||||||||||||||
Interest income
|
8,700 | 1.3 | 34,531 | 7.4 | 8,778 | 1,286 | 5.0 | |||||||||||||||||||||
Interest expense
|
(8,260 | ) | (1.2 | ) | (1,147 | ) | (0.2 | ) | (1,639 | ) | (240 | ) | (0.9 | ) | ||||||||||||||
Unrealized loss on investment
|
| | | | (548 | ) | (80 | ) | (0.3 | ) | ||||||||||||||||||
Exchange loss
|
(7,745 | ) | (1.2 | ) | (11,812 | ) | (2.5 | ) | (16,602 | ) | (2,432 | ) | (9.4 | ) | ||||||||||||||
Other expense
|
(680 | ) | (0.1 | ) | (2,657 | ) | (0.6 | ) | (283 | ) | (42 | ) | (0.2 | ) | ||||||||||||||
Other income
|
578 | 0.1 | 1,256 | 0.3 | 4,290 | 630 | 2.4 | |||||||||||||||||||||
|
||||||||||||||||||||||||||||
Income (loss) before income tax
|
301,219 | 44.9 | % | (725,426 | ) | (154.9 | )% | (124,360 | ) | (18,219 | ) | (70.3 | )% | |||||||||||||||
Income tax
|
(159,001 | ) | (23.7 | )% | (25,576 | ) | (5.5 | )% | (10,915 | ) | (1,599 | ) | (6.2 | )% | ||||||||||||||
|
||||||||||||||||||||||||||||
Net income (loss)
|
142,218 | 21.2 | % | (751,002 | ) | (160.4 | )% | (135,275 | ) | (19,818 | ) | (76.4 | )% | |||||||||||||||
|
41
42
2007 | 2008 | 2009 | ||||||||||||||||||||||||||||||||||||||
% of | % of | % of | ||||||||||||||||||||||||||||||||||||||
Sheep | % of | Sheep | % of | Sheep | % of | |||||||||||||||||||||||||||||||||||
Product | Total | Product | Total | Product | Total | |||||||||||||||||||||||||||||||||||
RMB | Revenues | Revenues | RMB | Revenues | Revenues | RMB | $ | Revenues | Revenues | |||||||||||||||||||||||||||||||
(In thousands, except percentages) | ||||||||||||||||||||||||||||||||||||||||
Revenues:
|
||||||||||||||||||||||||||||||||||||||||
|
||||||||||||||||||||||||||||||||||||||||
Frozen semen
|
167,562 | 65.6 | % | 25.0 | % | 52,466 | 35.3 | % | 11.2 | % | | | | | ||||||||||||||||||||||||||
|
||||||||||||||||||||||||||||||||||||||||
Embryos
|
10,299 | 4.0 | % | 1.5 | % | 4,132 | 2.8 | % | 0.9 | % | | | | | ||||||||||||||||||||||||||
|
||||||||||||||||||||||||||||||||||||||||
Sheep sales
|
77,647 | 30.4 | % | 11.6 | % | 91,859 | 61.9 | % | 19.6 | % | 38,426 | 5,630 | 100.0 | % | 21.7 | % | ||||||||||||||||||||||||
|
||||||||||||||||||||||||||||||||||||||||
|
||||||||||||||||||||||||||||||||||||||||
Total
|
255,508 | 100.0 | % | 38.1 | % | 148,457 | 100.0 | % | 31.7 | % | 38,426 | 5,630 | 100.0 | % | 21.7 | % | ||||||||||||||||||||||||
|
43
44
45
46
47
Buildings and improvements
|
5-30 years | |||
Plant and machinery
|
5-10 years | |||
Furniture and office equipment
|
5 years | |||
Motor vehicles
|
5-6 years |
48
49
50
For the Year Ended December 31, | ||||||||||||||||
2007 | 2008 | 2009 | ||||||||||||||
RMB | RMB | RMB | $ | |||||||||||||
(In thousands) | ||||||||||||||||
Net cash provided by/(used in) operating activities
|
259,388 | 209,096 | (6,281 | ) | 920 | |||||||||||
Net cash used in investing activities
|
(196,356 | ) | (337,636 | ) | (429,981 | ) | (62,993 | ) | ||||||||
Net cash (used in)/provided by financing
activities
|
1,296,144 | (13,612 | ) | (2,026 | ) | (296 | ) | |||||||||
Effect of exchange rate changes on cash
|
(14,805 | ) | (68,234 | ) | (654 | ) | (96 | ) | ||||||||
Net increase (decrease) in cash and cash
equivalents
|
1,344,371 | (210,386 | ) | (438,942 | ) | (64,305 | ) | |||||||||
Cash and cash equivalents at the beginning of the
year
|
42,782 | 1,387,153 | 1,176,767 | 172,397 | ||||||||||||
Cash and cash equivalents at the end of the
year
|
1,387,153 | 1,176,767 | 737,825 | 108,092 |
51
52
53
54
55
56
Payment Due by December 31, | ||||||||||||||||||||||||
Total | 2010 | 2011 | 2012 | 2013 | Thereafter | |||||||||||||||||||
(in RMB thousands) | ||||||||||||||||||||||||
Short-term borrowings
(1)
|
||||||||||||||||||||||||
- principal
|
8,750 | 8,750 | | | | | ||||||||||||||||||
- interest
|
869 | 869 | | | | | ||||||||||||||||||
Building and premises lease obligations
(2)
|
53,722 | 5,485 | 3,590 | 2,911 | 1,711 | 40,025 | ||||||||||||||||||
Production land rental obligations
(3)
|
113,780 | 13,841 | 13,841 | 13,841 | 13,841 | 58,416 | ||||||||||||||||||
Purchase obligations
(4)
|
2,520 | 2,520 | | | | | ||||||||||||||||||
Other long-term liabilities reflected on the balance
sheet
(5)
|
||||||||||||||||||||||||
- principal
|
8,588 | 204 | 204 | 204 | 204 | 7,772 | ||||||||||||||||||
- interest
|
12,657 | 587 | 573 | 560 | 546 | 10,391 | ||||||||||||||||||
Convertible redeemable note commitment
(6)
|
170,648 | 170,648 | ||||||||||||||||||||||
Investment into
Zhongnong
(7)
|
28,000 | | 28,000 | | | | ||||||||||||||||||
Capital
expenditure commitment
|
51,330 | 51,330 | | | | | ||||||||||||||||||
Research and development commitment
|
12,000 | 12,000 | | | | | ||||||||||||||||||
|
||||||||||||||||||||||||
Total
|
462,864 | 266,234 | 46,208 | 17,516 | 16,302 | 116,604 | ||||||||||||||||||
|
(1) | Includes short-term borrowings and future interest obligations. | |
(2) | Includes lease obligations for our office premises and buildings under non-cancelable leases. | |
(3) | Represents commitments for the rental of land used for the production of corn seeds. | |
(4) | Represents commitments for the purchase of corn seeds, acquisitions of intangible assets and payments for research and development services. These commitments are not recorded on our balance sheet as of December 31, 2007, 2008 or 2009, as we have not received related goods or services or taken title to the properties. | |
(5) | Represents commitments for the purchase of forestry use rights from Taiyuan Relord. | |
(6) | Represents commitments for the subscription in a convertible redeemable note that was issued by PGG Wrightson in January 2010. | |
(7) | Represents commitments to make remaining investment into Zhongnong. |
57
| our future business development, results of operations and financial condition; |
| changes in our revenues, cost and expense items; |
| our anticipated development strategies, including expanding sales into new regions, increasing the farmland to which we have access, and expanding our product offerings; |
| our strategy to expand our research and development capability; |
| the growth in demand in China for high-quality corn seeds, sheep and seedlings; |
| our ability to attract customers and end users and enhance our brand recognition; |
| future changes in government regulations affecting our business, including regulation of genetically modified corn; |
| trends and competition in the corn seed, sheep and seedling industries; and |
| our ability to retain and motivate existing management and other key personnel and to recruit and integrate additional qualified personnel into our operations. |
Directors and Executive Officers | Age | Position/Title | ||||
Guanglin Lai
|
46 | Chairman of the Board of Directors | ||||
Xie Tao
|
46 | Chief Executive Officer and Director | ||||
Gary Kim Ting Yeung
|
44 | Director | ||||
Kenneth J. DeWoskin
|
67 | Independent Director | ||||
Shangzhong Xu
|
59 | Independent Director | ||||
Jiuran Zhao
|
47 | Independent Director | ||||
Joo Hai Lee
|
54 | Independent Director | ||||
Sean Shao
|
53 | Independent Director | ||||
Yue Zhao
|
46 | Chief Operating Officer | ||||
Christopher Boddington
|
44 | Chief Financial Officer | ||||
John Layburn
|
34 | Chief Strategy and Compliance Officer | ||||
Weizhong Wang
|
46 | Chief Strategy Officer, Corn Seed | ||||
Kean Seng U
|
43 | Head of Corporate and Legal Affairs | ||||
David Pasquale
|
39 | Senior Vice President | ||||
Zhixin Xue
|
48 | President of P3A |
58
59
60
61
62
| selecting the independent auditors and pre-approving all auditing and non-auditing services permitted to be performed by the independent auditors; |
| reviewing with the independent auditors any audit problems or difficulties and managements response; |
| reviewing and approving all proposed related party transactions, as defined in Item 404 of Regulation S-K under the Securities Act; |
| discussing the annual audited financial statements with management and the independent auditors; |
| reviewing major issues as to the adequacy of our internal controls and any special audit steps adopted in light of material control deficiencies; |
| annually reviewing and reassessing the adequacy of our audit committee charter; |
63
| meeting separately and periodically with management and the independent auditors; and |
| reporting regularly to the board of directors. |
| reviewing and recommending to the board total compensation packages for our senior executives; |
| approving and overseeing the total compensation packages for our chief executive officer; |
| reviewing and recommending director compensation to the board; and |
| periodically reviewing and approving any long-term incentive compensation or equity plans, programs or similar arrangements, annual bonuses, employee pension and welfare benefit plans. |
| selecting and recommending nominees for election or re-election to the board or appointments to fill any vacancy; |
| annually reviewing with the board the current composition of the board with regards to characteristics such as independence, age, skills, experience and availability of service to us; |
| periodically advising the board with regard to significant developments in the law and practice of corporate governance as well as our compliance with applicable laws and regulations, and making recommendations to the board on all matters of corporate governance and on any remedial action to be taken; and |
| monitoring compliance with our code of business conduct and ethics, including reviewing the adequacy and effectiveness of our procedures to ensure proper compliance. |
64
Number of full- | Percentage of | Number of part- | Percentage of | |||||||||||||
time Employees | Total Employees | time Employees | Total Employees | |||||||||||||
Seeds
|
80 | 20 | % | 59 | 14 | % | ||||||||||
Sheep products
|
107 | 26 | % | | | |||||||||||
Seedlings
|
55 | 14 | % | | | |||||||||||
Administration
|
106 | 26 | % | | | |||||||||||
|
||||||||||||||||
Total
|
348 | 86 | % | 59 | 14 | % | ||||||||||
|
| each of our directors and executive officers as of the date of this annual report; and |
| each person known to us to own beneficially more than 5% of our ordinary shares as of March 31, 2010. |
Ordinary Shares Beneficially Owned | ||||||||
Number (1) | % (2) | |||||||
Directors and Executive Officers:
|
||||||||
Guanglin Lai
(3)
|
48,522,000 | 38.8 | ||||||
Xie Tao
|
* | * | ||||||
Gary Kim Ting Yeung
|
* | * | ||||||
Kenneth J. DeWoskin
|
* | * | ||||||
Shangzhong Xu
|
* | * | ||||||
Jiuran Zhao
|
* | * | ||||||
Joo Hai Lee
|
| | ||||||
Sean Shao
|
* | * | ||||||
Frank Yue Zhao
|
* | * | ||||||
Christopher Boddington
|
* | * | ||||||
John Layburn
|
* | * | ||||||
Weizhong Wang
|
* | * | ||||||
Kean Seng U
|
* | * | ||||||
David Pasquale
|
* | * | ||||||
Zhixin Xue
(4)
|
21,943,040 | 17.5 | ||||||
All directors and executive officers as a group
(5)
|
73,037,040 | 57.2 | ||||||
Principal Shareholders:
|
||||||||
Morgan Finanz Capital Limited
(6)
|
31,076,750 | 24.8 | ||||||
Brothers Capital Limited
(7)
|
17,445,250 | 13.9 | ||||||
TPG Capital, L.P.
(8)
|
8,650,000 | 6.9 | ||||||
Heartland Advisors, Inc.
(9)
|
8,928,200 | 7.1 | ||||||
Dubai Group Limited
(10)
|
6,600,000 | 5.3 |
65
* | Less than 1% or our total issued and outstanding shares | |
(1) | Beneficial ownership is determined in accordance with Rule 13d-3 of the General Rules and Regulations under the Exchange Act and includes voting or investment power with respect to the securities. | |
(2) | For each person and group included in this table, percentage ownership is calculated by dividing the number of shares beneficially owned by such person or group by the sum of 125,160,000, being the number of ordinary shares outstanding as of June 1, 2010, and the number of ordinary shares underlying share options held by such person or group that are exercisable within 60 days after the date of this annual report if any. | |
(3) | Includes (i) 17,445,250 ordinary shares owned by BCL, a British Virgin Islands company wholly owned by Mr. Lai, and (ii) 31,076,750 ordinary shares owned by Morgan Finanz Capital Limited, a British Virgin Islands company wholly owned by BCL. The business address of Mr. Lai is Room 21/F Tower B, PingAn International Finance Center, 1-3 Xinyuan South Road, Chaoyang District, Beijing 100027, Peoples Republic of China. | |
(4) | Based on the Schedule D filed with the SEC on July 23, 2008. The business address of Mr. Xue is Floor 25, Golden Port Hotel, No. 35 North Bing Zhou Road, Tai Yuan City, Shanxi Province 030012, Peoples Republic of China. | |
(5) | Certain directors and executive officers have been granted options pursuant to our 2007 Share Incentive Plan. See B. Compensation of Directors and Executive OfficersShare Incentives. | |
(6) | Morgan Finanz Capital Limited is a company incorporated in the British Virgin Islands. Morgan Finanz Capital Limited is wholly owned by BCL, which in turn is wholly owned by Mr. Guanglin Lai. Mr. Guanglin Lai is the sole director of Morgan Finanz Capital Limited. | |
(7) | Includes 17,445,250 ordinary shares held by BCL, a British Virgin Islands company wholly owned by Mr. Lai, The business address of BCL is 21/F Tower B, PingAn International Finance Center, 1-3 Xinyuan South Road, Chaoyang District, Beijing 100027, Peoples Republic of China. | |
(8) | In the form of ADSs, each representing two ordinary shares, based on Form 13-F filed with the SEC by TPG Capital, L.P. for the quarter ended March 31, 2010. TPG Capital, L.P. is ultimately owned by Tarrant Capital Advisors, Inc., a Delaware company, whose shareholders are David Bonderman and James Coulter. The registered address for both of these companies is c/o M&C Corporate Services Limited, PO Box 309GT, Ugland House, South Church Street, George Town, Grand Cayman, Cayman Islands. | |
(9) | In the form of ADSs, each representing two ordinary shares, based on Form 13-F filed with the SEC by Heartland Advisors, Inc. for the quarter ended March 31, 2010. The business address of Heartland Advisors, Inc. is 789 North Water Street. Suite 500, Milwaukee, WI 53202. | |
(10) | Based on the Schedule 13G/A filed with the SEC on February 17, 2009. Dubai Ventures Group Limited, a company incorporated in Cayman Islands, holds 3,300,000 ADS, representing 6,600,000 ordinary shares of the company. Dubai Ventures Group Limited is wholly owned by Dubai Ventures Group L.L.C., whose General Manager is Dubai Group Limited, which has the authority, among other things, to acquire, purchase, subscribe for, sell, assign and/or transfer any shares owned by Dubai Ventures Group L.L.C. The directors of Dubai Group Limited are Fadhel Abdulbaqi Abu Al Hassan Al Qaed Al Ali, Hashim Abdulla Ahmad Al Babal, Soud Ahmad Abdulrahman Baalawi and Mohammad Abdulla Ali Al Gergawi. The address for Dubai Group Limited is c/o Paget Brown Trust Company Ltd., West Wind Building, Harbour Drive, George Town, Grand Cayman, British West Indies. |
66
67
68
69
70
71
72
Sales Price ($) | ||||||||
High | Low | |||||||
Yearly Highs and Lows
|
||||||||
2007 (starting from November 7, 2007)
|
17.00 | 7.00 | ||||||
2008
|
11.75 | 1.21 | ||||||
2009
|
4.53 | 0.75 | ||||||
|
||||||||
Quarterly Highs and Lows
|
||||||||
First Quarter 2008
|
11.75 | 6.05 | ||||||
Second Quarter 2008
|
9.30 | 3.52 | ||||||
Third Quarter 2008
|
5.42 | 2.80 | ||||||
Fourth Quarter 2008
|
3.54 | 1.21 | ||||||
First Quarter 2009
|
1.85 | 0.75 | ||||||
Second Quarter 2009
|
3.77 | 1.05 | ||||||
Third Quarter 2009
|
2.62 | 1.69 | ||||||
Four Quarter 2009
|
4.53 | 1.90 | ||||||
First Quarter 2010
|
3.31 | 1.77 | ||||||
|
||||||||
Monthly Highs and Lows
|
||||||||
December 2009
|
3.67 | 2.66 | ||||||
January 2010
|
3.31 | 2.00 | ||||||
February 2010
|
2.44 | 1.87 | ||||||
March 2010
|
2.78 | 2.11 | ||||||
April 2010
|
2.44 | 1.77 | ||||||
May 2010
|
1.94 | 1.18 | ||||||
June 2010
(through June 28)
|
1.71 | 1.26 |
73
74
| certain financial institutions; | ||
| insurance companies; | ||
| broker dealers; | ||
| traders that elect to mark to market; | ||
| tax-exempt entities; | ||
| persons liable for alternative minimum tax; | ||
| persons holding an ADS or ordinary share as part of a straddle, hedging, conversion or integrated transaction; | ||
| persons that actually or constructively own 10% or more of our voting stock; | ||
| persons who acquired ADSs or ordinary shares pursuant to the exercise of any employee stock options or otherwise as compensation; or | ||
| persons holding ADSs or ordinary shares through partnerships or other pass-through entities. |
| an individual who is a citizen or resident of the United States; |
| a corporation (or other entity taxable as a corporation for U.S. federal income tax purposes) organized under the laws of the United States, any state or the District of Columbia; |
75
| an estate whose income is subject to U.S. federal income taxation regardless of its source; or |
| a trust that (1) is subject to the primary supervision of a court within the United States and the control of one or more U.S. persons or (2) has a valid election in effect under applicable U.S. Treasury regulations to be treated as a U.S. person. |
76
| at least 75% of its gross income is passive income, or |
| at least 50% of the value of its assets (based on an average of the quarterly values of the assets during a taxable year) is attributable to assets that produce or are held for the production of passive income (the asset test). |
| any excess distribution or gain from a sale or other disposition of ADSs or ordinary shares will be allocated ratably over your holding period for the ADSs or ordinary shares, |
| the amount allocated to the current taxable year, and any taxable year prior to the first taxable year in which we were a PFIC, will be treated as ordinary income, and |
| the amount allocated to each other year will be subject to the highest tax rate in effect for that year and the interest charge generally applicable to underpayments of tax will be imposed on the resulting tax attributable to each such year. |
77
78
79
80
Table of Contents
81
82
83
84
85
86
87
88
89
90
F-1
F-2
F-3
F-4
F-5
F-6
F-7
F-8
F-9
F-10
F-11
F-12
F-13
F-14
F-15
F-16
F-17
F-18
F-19
F-20
F-21
F-22
F-23
F-24
F-25
F-26
F-27
F-28
F-29
F-30
F-31
F-32
F-33
F-34
F-35
F-36
F-37
F-38
F-39
F-40
F-41
F-42
F-43
F-44
F-45
F-46
F-47
F-48
F-49
F-50
F-51
F-52
F-53
F-54
F-55
F-56
F-57
Persons depositing or withdrawing shares must pay:
For:
agents for servicing the deposited securities
Table of Contents
Table of Contents
Table of Contents
(i)
We have and will continue to review and make necessary changes to the overall design of
our internal control environment, as well as policies and procedures to improve the overall
effectiveness of internal control over financial reporting. In particular in 2010, we are
implementing a series of review and monitoring controls over the financial statement
closing process which will ensure complete and accurate reporting of transactions,
including ones involving unusual or non-recurring events, in compliance with U.S. GAAP.
(ii)
In 2010, we have also appointed external consultants with relevant expertise and
experience in U.S. GAAP and internal control over financial reporting to assist our
management in addressing the material weaknesses noted in our internal control evaluations
for both 2008 and 2009.
(iii)
Our audit committee is monitoring the remediation plan on an ongoing basis and
providing the necessary oversight to ensure that we are effectively addressing our material
weakness.
Shenzhen, Peoples Republic of China
Table of Contents
For the Year Ended December 31,
2008
2009
$
$
911,520
1,037,233
911,520
1,037,233
(1)
Audit fees means the aggregate fees billed for professional services rendered by our
principal auditors for the audit of our annual financial statements and the performance of agreed
upon procedures on our comparative unaudited interim financial statements.
Table of Contents
Total Number of
Approximate Dollar
ADSs Purchased as
Value of ADSs that
Total Number of
Average Price Paid
Part of Publicly
may Yet be Purchased
Period
ADSs Purchased
Per ADS
(1)
Announced Plan
(2)
Under the Plan
(1)
33,949
$
5.0644
$
171,931.32
$
9,828,068.68
32,289
$
5.0348
$
162,568.66
$
9,665,500.02
36,393
$
4.7657
$
173,438.12
$
9,492,061.90
22,450
$
4.4485
$
99,868.83
$
9,392,193.07
25,000
$
4.2728
$
106,820.00
$
9,285,373.07
19
$
4.2800
$
81.32
$
9,285,291.75
26,261
$
3.2976
$
86,598.27
$
9,198,693.48
500
$
3.3960
$
1,698.00
$
9,196,995.48
23,139
$
3.3367
$
77,207.90
$
9,119,787.58
17,744
$
1.9904
$
35,317.66
$
9,084,469.92
27,256
$
1.5475
$
42,178.66
$
9,042,291.26
24,669
$
1.6066
$
39,633.22
$
9,002,658.04
2,400
$
1.5900
$
3,816.00
$
8,998,842.04
10,535
$
1.6111
$
16,972.94
$
8,981,869.10
12,396
$
1.5155
$
18,786.14
$
8,963,082.96
5,000
$
1.4104
$
7,052.00
$
8,956,030.96
10,000
$
0.9982
$
9,982.00
$
8,946,048.96
15,381
$
0.9651
$
14,844.20
$
8,931,204.76
15,381
$
0.9998
$
15,377.92
$
8,915,826.84
15,381
$
0.9709
$
14,933.41
$
8,900,893.43
15,381
$
0.9624
$
14,802.67
$
8,886,090.76
15,381
$
0.9423
$
14,493.52
$
8,871,597.24
21,893
$
0.8815
$
19,298.68
$
8,852,298.56
21,893
$
0.8793
$
19,250.51
$
8,833,048.05
21,293
$
0.8927
$
19,008.26
$
8,814,039.79
21,893
$
0.8550
$
18,718.52
$
8,795,321.27
21,893
$
0.8237
$
18,033.26
$
8,777,288.01
24,552
$
0.8276
$
20,319.24
$
8,756,968.77
24,552
$
0.8324
$
20,437.08
$
8,736,531.69
24,552
$
0.8262
$
20,284.86
$
8,716,246.83
24,552
$
0.8137
$
19,977.96
$
8,696,268.87
24,552
$
0.8252
$
20,260.31
$
8,676,008.56
1,470
$
1.7482
$
2,569.85
$
8,673,438.71
620,000
$
2.1396
$
1,326,561.29
$
8,673,438.71
(1)
Each of our ADSs represents two ordinary shares.
(2)
On August 12, 2008, we announced that our board of directors had approved a share repurchase
program to repurchase from the open market up to $10 million worth of our outstanding ADSs
from time to time within the next 24 months. The timing and amount of any repurchase will be
determined by our management, based on market conditions, ADS price and other factors, and
will be subject to the restrictions relating to volume, price and timing under applicable law,
including Rule 10b-18 under the Exchange Act. We have canceled the ADSs
repurchased and their underlying ordinary shares.
Table of Contents
Exhibit Number
Description of Document
1.1
2.1
2.2
2.3
4.1
4.2
4.3
4.4
4.5
4.6
4.7
Table of Contents
Exhibit Number
Description of Document
4.8
4.9
4.10
4.11
4.12
4.13
4.14
4.15
4.16
4.17
4.18
4.19
4.20
4.21
Table of Contents
Exhibit Number
Description of Document
4.22*
4.23*
4.24*
4.25*
4.26*
4.27*
4.28*
4.29*
4.30*
4.31*
4.32*
4.33*
4.34*
4.35*
4.36*
4.37*
4.38*
4.39*
4.40*
4.41*
4.42*
4.43*
4.44*
4.45*
Table of Contents
Exhibit Number
Description of Document
4.46*
4.47*
4.48*
4.49*
4.50*
4.51*
4.52*
4.53*
4.54*
8.1*
11.1
12.1*
12.2*
13.1*
13.2*
15.1*
15.2*
15.3*
15.4*
*
Filed with this annual report on Form 20-F
Table of Contents
AGRIA CORPORATION
By:
/s/ Xie Tao
Name:
Xie Tao
Title:
Chief Executive Officer
Table of Contents
Agria Corporation
Audited Consolidated Financial Statements
December 31, 2009
Page
F-1
F-2
F-3
F-4F-5
F-6F-7
F-8F-57
Table of Contents
June 29, 2010
Table of Contents
(Amounts in thousands of Renminbi (RMB) and U.S. dollar (US$),except for number of shares)
Table of Contents
(Amounts in thousands of Renminbi (RMB) and U.S. dollar (US$),
except for number of shares and per share data)
Note
2007
2008
2009
2009
(RMB)
(RMB)
(RMB)
(US$)
343,743
257,144
107,529
15,752
255,508
148,457
38,426
5,630
71,505
62,463
31,013
4,543
670,756
468,064
176,968
25,925
(203,709
)
(153,029
)
(67,186
)
(9,843
)
(72,716
)
(74,701
)
(34,616
)
(5,071
)
(20,459
)
(33,436
)
(17,526
)
(2,568
)
6
(16,686
)
(22,508
)
(3,297
)
(296,884
)
(277,852
)
(141,836
)
(20,779
)
373,872
190,212
35,132
5,146
(36,443
)
(18,585
)
(5,744
)
(842
)
(25,723
)
(896,977
)
(133,203
)
(19,515
)
(3,080
)
(20,247
)
(14,541
)
(2,130
)
(65,246
)
(935,809
)
(153,488
)
(22,487
)
308,626
(745,597
)
(118,356
)
(17,341
)
8,700
34,531
8,778
1,286
(8,260
)
(1,147
)
(1,639
)
(240
)
(7,745
)
(11,812
)
(16,602
)
(2,432
)
3
(548
)
(80
)
(680
)
(2,657
)
(283
)
(42
)
578
1,256
4,290
630
301,219
(725,426
)
(124,360
)
(18,219
)
17
(159,001
)
(25,576
)
(10,915
)
(1,599
)
142,218
(751,002
)
(135,275
)
(19,818
)
18
RMB
1.37
RMB
(5.95
)
RMB
(1.08
)
US
(0.16
)
18
RMB
1.34
RMB
(5.95
)
RMB
(1.08
)
US
(0.16
)
18
103,978,082
126,262,529
125,271,946
125,271,946
18
106,091,889
126,262,529
125,271,946
125,271,946
Table of Contents
(Amounts in thousands of Renminbi (RMB) and U.S. dollar (US$))
2007
2008
2009
2009
(RMB)
(RMB)
(RMB)
(US$)
142,218
(751,002
)
(135,275
)
(19,818
)
768,540
157,032
23,088
10,915
1,599
548
80
13,311
45,299
14,833
2,173
917
7,496
20,325
2,978
11,226
13,766
16,479
2,414
5,350
12,636
24,292
3,559
(1,949
)
12,815
7,346
1,076
86
16,622
22,508
3,297
1,822
629
615
601
88
(40,887
)
25,122
47,404
6,945
(2,016
)
(5,173
)
(34,936
)
(5,118
)
(24,528
)
35,237
(8,697
)
(1,274
)
(398
)
(3,027
)
1,719
252
1,122
414
(1,536
)
(225
)
2,488
(2,507
)
(367
)
(18,175
)
(5,511
)
3,939
577
14,341
5,262
6,163
903
2,514
(1,025
)
(805
)
(118
)
(3,227
)
5,434
403
59
259,388
209,096
(6,281
)
(920
)
(414,595
)
(60,739
)
(7,000
)
(1,026
)
516
76
(67,557
)
(69,215
)
(3,400
)
(498
)
(10,900
)
(256,361
)
(119,068
)
(25,227
)
(5,502
)
(806
)
269
13,167
900
(196,356
)
(337,636
)
(429,981
)
(62,993
)
Table of Contents
CONSOLIDATED STATEMENTS OF CASH FLOWS (continued)
For the years ended December 31, 2007, 2008 and 2009
(Amounts in thousands of Renminbi (RMB) and U.S. dollar (US$))
2007
2008
2009
2009
(RMB)
(RMB)
(RMB)
(US$)
76,155
1,329,995
34,800
17,600
8,750
1,282
(56,540
)
(23,960
)
(8,800
)
(1,289
)
(1,500
)
(56,774
)
(29,992
)
(7,252
)
(1,976
)
(289
)
1,296,144
(13,612
)
(2,026
)
(296
)
(14,805
)
(68,234
)
(654
)
(96
)
1,344,371
(210,386
)
(438,942
)
(64,305
)
42,782
1,387,153
1,176,767
172,397
1,387,153
1,176,767
737,825
108,092
5,609
1,147
3,338
802
209,311
30,644
11,859
1,737
Table of Contents
(Amounts in thousands of Renminbi (RMB) except for number of shares)
Accumulated
Additional
Other
Retained
Total
Number of
Ordinary
Paid-in
Statutory
Comprehensive
Earnings
Shareholders
Ordinary Shares
Shares
Capital
Reserves
Loss
(deficit)
Equity
(RMB)
(RMB)
(RMB)
(RMB)
(RMB)
(RMB)
100,000,000
8,098
76,953
269,085
354,136
1,822
1,822
142,218
142,218
(9,421
)
(9,421
)
132,797
7,426
7,426
3,618
3,618
(6,250,000
)
(20,142
)
(135,787
)
(155,929
)
24,000,000
1,332,084
1,332,084
6,250,000
152,173
152,173
2,400,000
63,543
63,543
13,311
13,311
(56,774
)
(56,774
)
Table of Contents
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS EQUITY (continued)
For the years ended December 31, 2007, 2008 and 2009
(Amounts in thousands of Renminbi (RMB) and U.S. Dollars (US$) except for number of shares)
Accumulated
Additional
Other
Retained
Total
Number of
Ordinary
Paid-in
Statutory
Comprehensive
Earnings
Shareholders
Ordinary Shares
Shares
Capital
Reserves
Loss
(deficit)
Equity
(RMB)
(RMB)
(RMB)
(RMB)
(RMB)
(RMB)
126,400,000
1,561,933
76,953
(9,421
)
218,742
1,848,207
(751,002
)
(751,002
)
(68,232
)
(68,232
)
(819,234
)
768,540
768,540
(600,000
)
(7,252
)
(7,252
)
45,299
45,299
125,800,000
2,368,520
76,953
(77,653
)
(532,260
)
1,835,560
(135,275
)
(135,275
)
(656
)
(656
)
(135,931
)
(640,000
)
(1,976
)
(1,976
)
14,833
14,833
125,160,000
2,381,377
76,953
(78,309
)
(667,535
)
1,712,486
348,874
11,274
(11,472
)
(97,794
)
250,882
Table of Contents
1.
Table of Contents
1.
Table of Contents
1.
Date of
Place of
Percentage of
Principal
Name
incorporation
incorporation
shareholdings
Activities
March 29, 2007
PRC
100%
Research and development
July 6, 2005
BVI
100%
Investment holding
September 19, 2003
Hong Kong
100%
Investment holding
April 11, 2008
PRC
100%
Service of biotechnology and investment holding
November 5, 2009
Hong Kong
100%
Sale of upstream agricultural products and investment holding
September 29, 2009
BVI
100%
Investment holding
December 19, 2009
BVI
100%
Investment holding
Date of
Place of
Principal
Name
incorporation
incorporation
Activities
April 20, 2000
PRC
Research, development, production and sale of upstream agricultural products
November 6, 2008
PRC
Investment holding
August 31, 1998
PRC
Research, production and marketing of edible corn seeds
November 5, 2009
Hong Kong
Sale of upstream agricultural products
September 16, 2009
PRC
Research and development
September 16, 2009
PRC
Research and development, service, sales and investment
November 5, 2009
Hong Kong
Investment holding
*
**
Table of Contents
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the years ended December 31, 2007, 2008 and 2009
1.
2.
Table of Contents
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the years ended December 31, 2007, 2008 and 2009
2.
Table of Contents
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the years ended December 31, 2007, 2008 and 2009
2.
5-30 years
5-10 years
5 years
5-6 years
5 years
30-46 years
Table of Contents
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the years ended December 31, 2007, 2008 and 2009
2.
Table of Contents
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the years ended December 31, 2007, 2008 and 2009
Table of Contents
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the years ended December 31, 2007, 2008 and 2009
2.
Table of Contents
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the years ended December 31, 2007, 2008 and 2009
Table of Contents
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the years ended December 31, 2007, 2008 and 2009
2.
Table of Contents
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the years ended December 31, 2007, 2008 and 2009
2.
Table of Contents
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the years ended December 31, 2007, 2008 and 2009
2.
Table of Contents
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the years ended December 31, 2007, 2008 and 2009
Table of Contents
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the years ended December 31, 2007, 2008 and 2009
Table of Contents
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the years ended December 31, 2007, 2008 and 2009
2.
Table of Contents
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the years ended December 31, 2007, 2008 and 2009
3.
4.
Table of Contents
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the years ended December 31, 2007, 2008 and 2009
(RMB000)
(US$000)
5,516
808
596
87
12,456
1,825
6,446
944
1,355
199
508
74
(5,086
)
(745
)
(13,674
)
(2,003
)
(16,233
)
(2,378
)
3,362
494
(63
)
(9
)
9,817
1,437
5,000
733
Table of Contents
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the years ended December 31, 2007, 2008 and 2009
5.
2008
2009
2009
(RMB000)
(RMB000)
(US$000)
175,673
119,935
17,570
(12,853
)
(10,670
)
(1,563
)
162,820
109,265
16,007
2007
2008
2009
2009
(RMB000)
(RMB000)
(RMB000)
(US$000)
(3,467
)
(38
)
(12,853
)
(1,883
)
(12,848
)
(14,664
)
(2,148
)
3,429
33
7,916
1,160
8,931
1,308
(38
)
(12,853
)
(10,670
)
(1,563
)
6.
2008
2009
2009
(RMB000)
(RMB000)
(US$000)
6,805
7,447
1,091
4,674
6,339
929
37,009
59,586
8,729
48,488
73,372
10,749
Table of Contents
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the years ended December 31, 2007, 2008 and 2009
7.
2008
2009
2009
(RMB000)
(RMB000)
(US$000)
251,105
40,738
5,968
7,999
4,985
730
8,124
29,732
4,356
1,045
1,005
147
4,000
1,772
259
1,517
850
125
(1,125
)
(1,723
)
(252
)
21,560
36,621
5,365
(1)
(2)
(3)
2007
2008
2009
2009
(RMB000)
(RMB000)
(RMB000)
(US$000)
(1,480
)
(1,125
)
(165
)
(1,480
)
(598
)
(87
)
355
(1,480
)
(1,125
)
(1,723
)
(252
)
Table of Contents
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the years ended December 31, 2007, 2008 and 2009
8.
2008
2009
2009
(RMB000)
(RMB000)
(US$000)
80,446
72,499
10,621
7,797
7,240
1,061
2,950
4,265
625
7,652
9,509
1,393
12,520
12,937
1,895
111,365
106,450
15,595
(13,437
)
(18,228
)
(2,670
)
97,928
88,222
12,925
9.
Gross
Carrying
Accumulated
Net Carrying
Value
Amortization
Value
(RMB000)
(RMB000)
(RMB000)
192,658
(13,093
)
179,565
35,771
(13,429
)
22,342
256
(72
)
184
228,685
(26,594
)
202,091
Gross
Carrying
Accumulated
Net Carrying
Net Carrying
Value
Amortization
Value
Value
(RMB000)
(RMB000)
(RMB000)
(US$000)
397,457
(28,541
)
368,916
54,046
42,273
(22,217
)
20,056
2,938
256
(127
)
129
19
439,986
(50,885
)
389,101
57,004
Table of Contents
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the years ended December 31, 2007, 2008 and 2009
9.
Year ending December 31
(RMB000)
(US$000)
26,311
3,855
22,238
3,258
19,237
2,818
18,371
2,691
17,983
2,635
284,961
41,747
389,101
57,004
10.
2008
2009
2009
(RMB000)
(RMB000)
(US$000)
33,323
16,234
2,378
91,012
91,012
13,333
124,335
107,246
15,711
(11,552
)
(12,651
)
(1,853
)
112,783
94,595
13,858
Table of Contents
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the years ended December 31, 2007, 2008 and 2009
11.
2008
2009
2009
(RMB000)
(RMB000)
(US$000)
8,800
8,750
1,282
12.
2008
2009
2009
(RMB000)
(RMB000)
(US$000)
7,423
8,601
1,260
15,709
17,594
2,578
2,291
2,115
310
11,494
1,684
6,495
6,684
979
1,200
1,200
176
1,969
8,696
1,274
468
12,151
1,780
5,086
745
1,178
3,563
520
36,733
77,184
11,306
(i)
Table of Contents
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the years ended December 31, 2007, 2008 and 2009
13.
Shares
2008
2009
2009
(RMB000)
(RMB000)
(US$000)
Table of Contents
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the years ended December 31, 2007, 2008 and 2009
14.
Table of Contents
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the years ended December 31, 2007, 2008 and 2009
14.
15.
16.
(i)
(ii)
Table of Contents
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the years ended December 31, 2007, 2008 and 2009
17.
Table of Contents
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the years ended December 31, 2007, 2008 and 2009
17.
2007
2008
2009
2009
(RMB000)
(RMB000)
(RMB000)
(US$000)
315,001
90,572
(54,391
)
(7,969
)
(13,782
)
(815,998
)
(69,969
)
(10,250
)
301,219
(725,426
)
(124,360
)
(18,219
)
Table of Contents
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the years ended December 31, 2007, 2008 and 2009
2007
2008
2009
2009
(RMB000)
(RMB000)
(RMB000)
(US$000)
1,969
2,487
157,032
23,089
10,915
1,599
159,001
25,576
10,915
1,599
Table of Contents
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the years ended December 31, 2007, 2008 and 2009
17.
2007
2008
2009
2009
(RMB000)
(RMB000)
(RMB000)
(US$000)
301,219
(725,426
)
(124,360
)
(18,219
)
99,402
(181,356
)
(31,090
)
(4,555
)
205,365
5,597
820
(101,981
)
(24,539
)
6,344
930
3,788
157,032
22,997
10,596
1,552
760
2,787
19,523
2,860
322
(55
)
(8
)
159,001
25,576
10,915
1,599
2007
2008
2009
2009
(RMB)
(RMB)
(RMB)
(US$)
1.00
0.19
(0.05
)
(0.01
)
0.98
0.19
(0.05
)
(0.01
)
2008
2009
2009
(RMB000)
(RMB000)
(US$000)
58
131
19
1,255
5,144
754
1,513
222
193
137
20
2,478
19,406
2,843
219
32
3,984
26,550
3,890
(3,547
)
(23,070
)
(3,380
)
437
3,480
510
(63
)
(9
)
(63
)
(9
)
(180,558
)
(191,154
)
(28,004
)
(180,558
)
(191,154
)
(28,004
)
Table of Contents
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the years ended December 31, 2007, 2008 and 2009
17.
2008
2009
2009
(RMB)
(RMB)
(US$)
7,751
1,134
7,751
983
144
1,271
187
2,487
365
7,751
12,492
1,830
*
Table of Contents
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the years ended December 31, 2007, 2008 and 2009
18.
2007
2008
2009
2009
(RMB)
(RMB)
(RMB)
(US$)
(Amounts in thousands except for number of shares and per share data)
142,218
(751,002
)
(135,275
)
(19,818
)
103,978,082
126,262,529
125,271,946
125,271,946
900,645
1,213,162
106,091,889
126,262,529
125,271,946
125,271,946
1.37
(5.95
)
(1.08
)
(0.16
)
1.34
(5.95
)
(1.08
)
(0.16
)
Table of Contents
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the years ended December 31, 2007, 2008 and 2009
19.
Name of Related Parties
Relationship with the Group
A company owned by a director of P3A
A subsidiary of Taiyuan Relord
A director of P3A
A director of P3A
A director of P3A
*
(1)
Table of Contents
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the years ended December 31, 2007, 2008 and 2009
19.
(2)
2008
2009
2009
(RMB000)
(RMB000)
(US$000)
3,517
1,865
273
39
(6
)
28
3,578
1,865
273
6
1
6
1
8,588
8,384
1,228
(i)
(ii)
(3)
Table of Contents
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the years ended December 31, 2007, 2008 and 2009
20.
Table of Contents
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the years ended December 31, 2007, 2008 and 2009
20.
Weighted-
Average
Aggregate
Weighted-
Weighted
Remaining
Intrinsic
Number of
average
average grant-
Contractual
Value
Share Option
Shares
Exercise Price
date fair value
Term
(US$000)
9,194,500
US$
1.67
(74,000
)
9,120,500
19,239
2,434,000
US$
0.87
(510,000
)
(2,200,000
)
8,844,500
US$
2.97
2,340,000
0.92
0.44
(784,600
)
2.81
1.59
(450,000
)
2.40
1.65
9,949,900
2.53
3.30
6.72
1,735
9,949,900
2.53
3.30
6.72
1,735
5,494,500
2.71
0.56
6.05
581
Table of Contents
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the years ended December 31, 2007, 2008 and 2009
20.
2007
2008
2009
4.12%-5.04
%
2.67%-4.23
%
3.17
%
32.22%-33.17
%
34.91%-49.94
%
48.62
%
32.52
%
40.19
%
48.62
%
2.4 to 7.38
3.31-5.58
2.77
Table of Contents
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the years ended December 31, 2007, 2008 and 2009
20.
For the years ended December 31,
2007
2008
2009
2009
RMB000
RMB000
RMB000
US$000
152
520
206
30
13,147
44,732
14,596
2,139
12
47
31
4
13,311
45,299
14,833
2,173
21.
22.
Year ending December 31
(RMB000)
(US$000)
5,485
804
3,590
526
2,911
426
1,711
251
1,662
243
38,363
5,620
53,722
7,870
Table of Contents
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the years ended December 31, 2007, 2008 and 2009
22.
Year ending December 31
(RMB000)
(US$000)
16,361
2,396
13,841
2,028
13,841
2,028
13,841
2,028
13,841
2,028
45,074
6,603
116,799
17,111
Table of Contents
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the years ended December 31, 2007, 2008 and 2009
Table of Contents
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the years ended December 31, 2007, 2008 and 2009
22.
Table of Contents
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the years ended December 31, 2007, 2008 and 2009
22.
23.
Table of Contents
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the years ended December 31, 2007, 2008 and 2009
23.
Sheep
Corn Seeds
Products
Seedlings
Consolidated
(RMB000)
(RMB000)
(RMB000)
(RMB000)
343,743
255,508
71,505
670,756
(203,709
)
(72,716
)
(20,459
)
(296,884
)
140,034
182,792
51,046
373,872
(65,246
)
(7,407
)
301,219
Sheep
Corn Seeds
Products
Seedlings
Consolidated
(RMB000)
(RMB000)
(RMB000)
(RMB000)
257,144
148,457
62,463
468,064
(153,029
)
(74,765
)
(33,436
)
(261,230
)
(13,856
)
(2,766
)
(16,622
)
104,115
59,836
26,261
190,212
(935,809
)
20,171
(725,426
)
Sheep
Corn Seeds
Products
Seedlings
Consolidated
(RMB000)
(RMB000)
(RMB000)
(RMB000)
107,529
38,426
31,013
176,968
(67,186
)
(34,616
)
(17,527
)
(119,329
)
(22,508
)
(22,508
)
40,343
(18,698
)
13,486
35,131
(153,488
)
(6,005
)
(124,360
)
Table of Contents
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the years ended December 31, 2007, 2008 and 2009
23.
Sheep
Corn Seeds
Products
Seedlings
Consolidated
(US$000)
(US$000)
(US$000)
(US$000)
15,752
5,630
4,543
25,925
(9,843
)
(5,072
)
(2,567
)
(17,482
)
(3,297
)
(3,297
)
5,909
(2,739
)
1,976
5,146
(22,487
)
(878
)
(18,219
)
24.
Table of Contents
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the years ended December 31, 2007, 2008 and 2009
Fair Value Measurement at December 31, 2009
Quoted Prices
in
Active
Significant
Markets for
Other
Identical
Observable
Unobservable
Fair Value at
Fair Value at
Assets
Inputs
Inputs
December 31,
December 31,
(Level 1)
(Level 2)
(Level 3)
2009
2009
(RMB000)
(RMB000)
(RMB000)
(RMB000)
(US000)
414,047
414,047
60,658
25.
26.
Table of Contents
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the years ended December 31, 2007, 2008 and 2009
Table of Contents
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the years ended December 31, 2007, 2008 and 2009
27.
2007
2008
2009
2009
(RMB000)
(RMB000)
(RMB000)
(US$000)
(619
)
(19,744
)
(26,700
)
(3,912
)
(619
)
(19,744
)
(26,700
)
(3,912
)
(619
)
(19,744
)
(26,700
)
(3,912
)
6,900
23,735
3,379
495
(62
)
(14
)
(22
)
(3
)
132
(433
)
24
4
135,867
(752,842
)
(111,956
)
(16,402
)
142,218
(749,298
)
(135,275
)
(19,818
)
(1,704
)
142,218
(751,002
)
(135,275
)
(19,818
)
142,218
(751,002
)
(135,275
)
(19,818
)
Table of Contents
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the years ended December 31, 2007, 2008 and 2009
27.
Table of Contents
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the years ended December 31, 2007, 2008 and 2009
27.
2007
2008
2009
2009
(RMB)
(RMB)
(RMB)
(US$)
142,218
(751,002
)
(135,275
)
(19,818
)
(135,867
)
752,842
111,956
16,402
(4,018
)
1,422
(616
)
(89
)
1,704
(1,704
)
(250
)
(833
)
9,651
1,413
2,333
4,133
(15,988
)
(2,342
)
(243,519
)
(230,918
)
(737,525
)
(108,048
)
(243,519
)
(230,918
)
(737,525
)
(108,048
)
76,155
1,332,917
(7,252
)
(1,976
)
(289
)
1,409,072
(7,252
)
(1,976
)
(289
)
(25,869
)
(63,764
)
(87
)
(13
)
1,142,017
(297,801
)
(755,576
)
(110,692
)
1,142,017
844,216
123,678
1,142,017
844,216
88,640
12,986
Table of Contents
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the years ended December 31, 2007, 2008 and 2009
27.
(a)
Party A:
|
Agria Brother Biotech (Shenzhen) Co., Ltd. | |
Address:
|
Unit 201, 2/F, Longyuan Building, Clear Water River Road, Luohu District, Shenzhen | |
|
||
Party B:
|
Shenzhen Guanli Agricultural Technology Co., Ltd. | |
Address:
|
Room 1501, Tower 1, Huarong Building, Mintian Road, Futian Center District, Shenzhen |
(1) | Party A is a wholly foreign-owned enterprise incorporated in Shenzhen under the laws of the Peoples Republic of China (hereinafter referred to as the PRC , and for the purpose of this Contract, excluding the Hong Kong Special Administrative Region, Macao Special Administrative Region and Taiwan); |
(2) | Party B is a limited liability company established in Shenzhen under the laws of the PRC; |
(3) | Party A agrees to provide exclusive technology development and related services to Party B and Party B agrees to accept such services from Party A. |
1. | Exclusive Consultancy and Services; Monopolized and Exclusive Interests |
1.1 | During the term hereof, Party A agrees to act as the provider of Party B with respect to the exclusive technology development, consulting and services on the conditions and terms hereunder, and, to the extent permitted by the PRC laws, to provide Party B with the technology development, technology support and any technology services in relation thereto, including without limitation: |
(1) | conducting the research and development of technologies in biological breeding as commissioned by Party B; |
(2) | provision of technology support services required by Party B; |
(3) | provision of technology consulting services to Party B on a regular or ad hoc basis, including without limitation, provision of feasibility studies, technology forecasts, specific technology investigations, analysis evaluation reports; |
(4) | conducting technical training for Party Bs personnel; |
(5) | provision of on-site technology guidance to Party B when it needs to hire relevant technology personnel; |
(6) | assisting Party B in the promotion of technologies. |
1.2 | Party B agrees to accept the technology development, technology support and any technology services in relation thereto provided by Party A, and further agrees that, unless with the prior written consent of Party A, it will not accept any or part of the technology development, support and services provided by any third parties in connection with the above business during the term hereof. |
1.3 | Party B shall promptly provide Party A with any plans and arrangements relating to the technology development, technology support or technology services required by Party B. |
2. | Calculation and Payment of, and Security for Technology Development and Service Fees (hereinafter referred to as the Technology Service Fees) |
2.1 | The parties agree that the Technology Service Fees hereunder shall be calculated and paid according to the calculation and payment method of the Technology Service Fees listed in Annex 1 hereto. |
2.2 | The parties shall bear their respective taxes payable in connection with the execution or performance of this Contract according to laws. Party B shall, at the request from Party A, make its best effort to assist Party A in obtaining the treatment of business tax exemption for all or part of its income derived from the Technology Service Fees hereunder, including without limitation, the provision of the relevant documents and the execution of written agreements with Party A from time to time in respect of any specific services within the scope of this Contract and in a format that meets the reporting requirements of competent departments in charge of science and technology. However, the execution of such documents shall be subject to the following conditions: (1) the provisions of such written agreements shall, in principle, be consistent with this Contract and shall not contradict with the provisions of this Contract, and (2) the execution of such documents shall not violate any laws and regulations. |
2.3 | The Technology Service Fees payable by Party B hereunder shall be secured by a pledge created in favor of Party A by other holders of equity interest of Party B over their respective equity interests in Party B. |
3. | Intellectual Property |
3.1 | Unless otherwise required by the PRC laws and regulations, any technology developed and information prepared by Party A in the course of the provision of its technology development and technology services to Party B, as well as any intellectual property rights associated with all research and development products of Party A obtained from research and development due to the performance of this Contract and/or other contracts jointly signed by the parties and any other rights arising out thereof shall be exclusively owned by Party A. The above rights shall include but not limit to the right of patent application, ownership of proprietary technology, copyright or other intellectual property rights of technical documents and information, rights to grant a license to others for the use of the above intellectual property rights or to transfer such intellectual property rights. |
3.2 | If, during the performance hereof, Party B needs to use any proprietary technology of Party A, the parties hereto shall sign a separate contract to stipulate the scope of license in relation to the propriety technology, its manner and license fees. |
4. | Representations and Warranties |
4.1 | Party A hereby represents and warrants as follows: |
4.1.1 | Party A is a wholly foreign-owned enterprise duly incorporated and validly existing under the laws of the PRC; |
4.1.2 | Party A executes and performs this Contract within its authority and business scope. It has taken the necessary corporate actions and been granted appropriate authorization, and has obtained the necessary consents and approvals from third parties and governmental departments. In addition, it does not violate the restrictions of any laws and contracts that are binding upon or having an effect on it; |
4.1.3 | This Contract, when executed, constitutes the legal, valid and binding obligation of Party A, and is enforceable against it pursuant to the provisions hereof. |
2
4.2 | Party B hereby represents and warrants as follows: |
4.2.1 | Party B is a limited liability company duly incorporated and validly existing under the laws of the PRC; |
4.2.2 | Party B executes and performs this Contract within its authority and business scope. It has taken the necessary corporate actions and been granted appropriate authorization, and has obtained the necessary consents and approvals from third parties and governmental departments. In addition, it does not violate the restrictions of any laws and contracts that are binding upon or having an effect on it; |
4.2.3 | This Contract, when executed, constitutes the legal, valid and binding obligation of Party B, and is enforceable against it pursuant to the provisions hereof. |
5. | Confidentiality |
5.1 | Party B agrees that it will make its best effort to take all reasonable measures to keep in confidence any confidential materials and information of Party A (hereinafter referred to as the Confidential Information ) that are known to or accessible by Party B in connection with the provision of the exclusive technology development, technology support and technology services by Party A to Party B. Unless with the prior written consent of Party A, Party B shall not divulge, provide or transfer such Confidential Information to any third parties. Once this Contract is terminated, Party B shall return to Party A any documents, materials or software containing the Confidential Information according to the requirements of Party A, or destroy them on its own. It shall also delete any Confidential Information from all relevant memory devices and shall not continue to use such Confidential Information. |
5.2 | The parties hereto acknowledge and confirm that any oral or written information exchanged between them in connection with this Contract shall be confidential information. The parties shall keep all such information confidential and shall not disclose any of the information to any third parties without the written consent of the other party, except for the following: (a) the information that are or will be known to the public (provided that they are not disclosed to the public without authorization by the information receiving party); (b) the information required to be disclosed by applicable laws, or the rules or regulations of securities exchanges; or (c) the information required to be disclosed by a party to its legal or financial advisors with respect to the transaction mentioned herein, for which such legal or financial advisors shall also comply with the confidentiality obligation as similar as that described in this Article. Any divulgence of Confidential Information by the employees of either party or any organization engaged by it shall be deemed as the divulgence of Confidential Information by such party, and such party shall be liable for the breach pursuant to this Contract. |
5.3 | The parties agree that this Article 5 shall survive regardless of whether this Contract is invalid, modified, discharged, terminated or cannot be operated. |
6. | Indemnification |
7. | Effectiveness and Term |
7.1 | This Contract shall become effective as of the date first written above. |
7.2 | This Contract shall remain valid during the operating period of Party B, except for the early termination by this Contract or pursuant to the provisions of the relevant contracts separately signed by the parties hereto. |
3
8. | Termination |
8.1 | Early Termination: During the term hereof, Party B shall not terminate this Contract in advance unless Party A commits gross negligence, fraud, other unlawful act or is bankrupt. Notwithstanding the above requirements, Party A shall have the right to terminate this Contract at all times by giving a thirty (30) days prior written notice to Party B. If, during the term hereof, Party B violates this Contract and fails to make any remedy in respect thereof within fourteen (14) days after receiving a written notice of such breach from Party A, Party A may terminate this Contract by serving written notice to Party B. |
8.2 | Provisions After Termination: After the termination hereof, the rights and obligations of the parties under Articles 5 and 10 hereof shall remain in effect. |
9. | Governing Law |
10. | Dispute Resolution |
11. | Force Majeure |
11.1 | Force Majeure means any event that is beyond the reasonable control of a party and that is unavoidable even though the party so affected gives reasonable attention to it, including but not limited to act of government, act of nature, fire, explosion, typhoon, flood, earthquake, tidal, lightning or war. However, the shortage of credit, capital or financing shall not be deemed as events beyond the reasonable control of a party. Any party who seeks for an exemption from its obligations hereunder because of being affected by Force Majeure shall notify the other party as soon as possible of the event, in respect of which the exemption from such obligations is sought, and of any steps required to be taken for the completion of the performance of its obligations. |
11.2 | When the performance of this Contract is delayed or prevented due to the Force Majeure defined above, the party so affected shall not be required to assume any liabilities hereunder to the extent that it is within the scope of the delay or prevention. The party so affected shall take appropriate measures to minimize or eliminate the impact of Force Majeure and shall make effort to resume the performance of any obligations that are delayed or prevented by the Force Majeure. Once the Force Majeure is removed, the parties agree to resume the performance of their respective obligations hereunder with their greatest efforts. |
4
12. | Assignment of this Contract |
12.1 | Party B shall not transfer its rights and obligations hereunder to any third parties, unless with the prior written consent of Party A. |
12.2 | Party B hereby agrees that, to the extent permitted by the PRC laws, Party A may transfer its rights and obligations hereunder to any third parties when necessary. Party A shall only be required to serve written notice to Party B when such transfer is made, and no consent shall be further required from Party B in respect of such transfer. |
13. | Integrity of this Contract |
14. | Severability of this Contract |
15. | Amendment and Supplement to this Contract |
16. | Counterpart |
5
6
1. |
Loan Amount: Party A shall lend to Party B a loan of Renminbi Five Million And One Hundred
Thousand (¥ 5,100,000).
|
2. |
Time for Loan Payment: Party A will pay the above loan to Party B within five working days
after this Contract becomes effective.
|
3. |
Term: The loan shall be for a term of three years from the date on which Party A makes the
loan payment, and may be extended upon its expiry after mutual consultation.
|
4. |
Use of the Loan: Party B undertakes that the loan will be used for investment only, and shall
be in compliance with the relevant laws and regulations. Otherwise, Party A shall have the
right to discharge this Loan Contract unilaterally and request Party B to assume the
liabilities for breach of contract.
|
5. |
Equity Pledge: All equity interests owned or proposed to be owned by Party B in Shenzhen
Guanli Agricultural Technology Co., Ltd. shall be pledged as security. Please see the Equity
Pledge Contract for details.
|
6. |
Liabilities for Breach of Contract: If a party violates this Contract, the other party shall
have the right to discharge it and request the defaulting party to make compensation for any
loss arising therefrom.
|
7. |
Termination of this Contract: After the termination or discharge of this Contract, Party B
shall return the loan to Party A within five working days. In the event of any late return,
Party B shall pay to Party A any interest accrued thereon at a loan interest rate stipulated
by banks for the corresponding period.
|
8. |
Dispute Resolution: Any disputes arisen during the performance of this Contract shall be
resolved by the parties through consultation. In the event that no agreement can be reached
through consultation, such dispute shall be referred to China International Economic and Trade
Arbitration Commission for arbitration. The seat of arbitration shall be Shenzhen. The
arbitral award shall be final and binding upon the parties.
|
9. |
If any provision of this Contract becomes invalid, it shall not affect the validity of the
other provisions hereof.
|
10. |
This Contract is executed in two originals and each of the parties shall keep one original.
All of them shall have the same legal effect.
|
11. |
This Contract shall become effective after it is signed and sealed by Party A and signed by
Party B.
|
Party A:
|
Agria Brother Biotech (Shenzhen) Co., Ltd. (hereinafter also referred to as the Pledgee ) | |
Address:
|
Unit 201, 2/F, Longyuan Building, Clear Water River Road, Luohu District, Shenzhen | |
|
||
Party B:
|
Li Juan, a citizen of the PRC with ID card number: 420983197609010023 (hereinafter also referred to as the Pledgor ) | |
|
||
Party C:
|
Shenzhen Guanli Agricultural Technology Co., Ltd.
|
|
Address:
|
Room 1501, Tower 1, Huarong Building, Mintian Road, Futian Center District, Shenzhen |
(1) | The Pledgor is the legal and valid shareholder of Shenzhen Guanli Agricultural Technology Co., Ltd. ( Guanli ), who holds 51% equity interest of Guanli according to laws; |
(2) | The Pledgee is a wholly foreign-owned enterprise incorporated in Shenzhen under the laws of the Peoples Republic of China (hereinafter referred to as the PRC , and for the purpose of this Contract, excluding the Hong Kong Special Administrative Region, Macao Special Administrative Region and Taiwan); |
(3) | Guanli is a limited liability company established in Shenzhen under the laws of the PRC; |
(4) | The Pledgee and Guanli entered into the Exclusive Technology Development, Technology Support and Technology Services Contract on November 7, 2008. The Pledgor agrees to pledge all of her equity interest in Guanli as security for the performance by Guanli of all of its obligations under the above contract; |
(5) | The Pledgee, the Pledgor and Guanli entered into the Exclusive Call Option Contract on November 7, 2008, and the Pledgee and the Pledgor entered into the Loan Contract on October 6, 2008. The Pledgor agrees to pledge all of her equity interest in Guanli as security for the performance by the Pledgor and Guanli of all of their respective obligations under the above two contracts. |
1. | Definitions |
1.1 | Pledge Right refers to the full content of Article 2 hereof. |
1.2 | Equity Interest means the equity interest legally held by the Pledgor in Guanli. |
1.3 | Master Contract means the Exclusive Technology Development, Technology Support and Technology Services Contract , the Exclusive Call Option Contract , the Loan Contract and any amendment and supplement thereto. |
1.4 | Secured Party means any contractual party of each Master Contract other than the Pledgee. |
1.5 | Secured Debt means all contractual obligations of a Secured Party under each Master Contract, including (but not limited to) interest, default penalty, compensation, expenses incurred by the Pledgee in realizing debt. |
1.6 | Event of Default means any circumstances stated in Article 7.1 hereof. |
1.7 | Notice of Default means the notice of default issued by the Pledgee pursuant to this Contract, declaring the occurrence of an Event of Default. |
2. | Pledge Right |
3. | Registration of Pledge |
3.1 | Within one (1) week from the date hereof, Guanli shall, and the Pledgor shall procure Guanli to record the Pledge Right specified in Article 2 above on the register of members of Guanli, and deliver a copy of the register of members of Guanli with its common chop affixed thereon and the original of the equity contribution certificate to the Pledgee for custody. |
3.2 | After the execution hereof, the Pledgor shall, at the written request of the Pledgee at any time, complete the notarization jointly with the Pledgee in respect of this Contract, as well as the Pledge Right of the Pledgee recorded on the register of members and the equity contribution certificate as set forth in Article 3.1 at a notary public office of the place where Guanli is located. |
2
3.3 | The parties agree that they will make their best effort to register, and cause the pledge hereunder to be registered with an industrial and commercial administrative department of the place where Guanli is registered. The parties also confirm that, unless the registration of the pledge hereunder with the industrial and commercial administrative department is mandatory in law, the validity of this Contract and the Pledge Right specified in Article 2 above shall not be affected even if the parties fail to register the pledge hereunder with the industrial and commercial administrative department of the place where Guanli is registered after the execution of this Contract. |
4. | Rights of the Pledgee |
4.1 | When a Secured Party does not perform any of its obligations under the Master Contract, the Pledgee shall have the right of priority to claim for any money converted from Guanlis Equity Interest pledged by the Pledgor, or any proceeds from the auction or sale of such Equity Interest. |
4.2 | The Pledgee shall be entitled to receive any dividends (including bonuses) and other property distributions arising from the Equity Interest that is pledged. |
5. | Representations and Warranties of the Pledgor |
5.1 | The Pledgor is the legitimate owner of the Equity Interest; |
5.2 | The Pledgor fully understands the contents of the Master Contract. She signs and performs this Contract on a voluntary basis and all her actual meaning is truly expressed herein. The Pledgor is legally authorized to execute this Contract; |
5.3 | All documents, information, statements and evidence provided by the Pledgor to the Pledgee are accurate, true, complete and valid; |
5.4 | The Pledgor acknowledges that the Pledgee shall have the right to dispose of and transfer the Pledge Right in a manner stipulated herein and within the scope restricted by the PRC laws; |
5.5 | Except for the interest of the Pledgee, the Pledgor has not created other pledges, any other kinds of rights or any third party rights over the Equity Interest; |
5.6 | The Pledgor has obtained the consent of other shareholders of Guanli to pledge the Equity Interest, and the other shareholders have unanimously agreed that they will not interfere by any means and will give up the exercise of their pre-emptive right when the Pledgee actually exercises the Pledge Right. |
3
6. | Undertakings of the Pledgor |
6.1 | During the term hereof, the Pledgor undertakes to the Pledgee for its benefit that: |
6.1.1 | save for the transfer of the Equity Interest to the Pledgee, the Pledgor shall not, without the prior written consent of the Pledgee, transfer the Equity Interest, nor create or permit the existence of any pledge which might affect the rights and interests of the Pledgee, nor procure any resolution in relation to the sale/transfer/pledge or disposal by other means of the legal and beneficial interest in any Equity Interest of Guanli or permitting the creation of any other security interests over it to be passed at a shareholders meeting of the company; unless with the prior written consent of the Pledgee, the Pledgor shall vote at a shareholders meeting of Guanli/procure any director of Guanli nominated by her to vote at a board meeting of Guanli and/or by other means to object Guanli to sell/transfer/pledge or otherwise dispose of any of its major assets, including (but not limited to) any intellectual property rights. |
6.1.2 | if the Equity Interest pledged hereunder is subject to any compulsory measures imposed by courts or other departments for any reasons, the Pledgor shall use all her efforts, including (without limitation) the provision of other security to courts or adoption of other measures, to remove the compulsory measures taken by courts or other departments in respect of the Equity Interest pledged. |
6.1.3 | the Pledgor shall comply with and implement all laws and regulations relevant to the pledge of rights. The Pledgor shall, within five (5) days of the receipt of any notices, orders or recommendations given or made by the competent authority with respect to the Pledge Right, present the above notices, orders or recommendations to the Pledgee, and shall comply with the same or raise objections and make representations in respect of the above matters as reasonably required by or with the consent of the Pledgee. |
6.1.4 | the Pledgor shall promptly notify the Pledgee of any event which might have effects on the Equity Interest of the Pledgor or any part of her right or any notice received in connection therewith, as well as any event which might change any warranty and obligation of the Pledgor as created by this Contract or might have effects on it or any notice received in connection therewith. |
6.2 | The Pledgor agrees that the Pledgee shall not be interrupted nor impeded by any legal proceedings instituted by the Pledgor or any successors of the Pledgor or any person authorized by the Pledgor or any other persons when it exercises its rights on the pledge pursuant to the provisions hereof and within the scope permitted by the PRC laws. |
6.3 | The Pledgor undertakes to the Pledgee that, in order to protect or improve the security for the repayment of the Secured Debt herein, she will honestly execute and procure other parties who have an interest in the Pledge Right to execute all title certificates and contracts required by the Pledgee, and/or perform and procure other interested parties to perform all acts required by the Pledgee, and facilitate the exercise of any right and authorization conferred to the Pledgee by this Contract. |
6.4 | The Pledgor undertakes to the Pledgee that she will execute all documents in relation to the change of share certificates (if applicable and necessary) with the Pledgee or any person designated by it (natural person/legal person), and shall provide the Pledgee with all notices, orders and decisions in relation to the Pledge Right which it thinks necessary within a reasonable time. |
4
6.5 | The Pledgor undertakes to the Pledgee that she will, for the interest of the Pledgee, observe and perform all warranties, undertakings, contracts, representations and conditions. If the Pledgor does not perform or fully perform her warranties, undertakings, contracts, representations and conditions, she will indemnify the Pledgee all losses suffered by it arising therefrom. |
7. | Event of Default |
7.1 | The following events shall be deemed as Events of Default: |
7.1.1 | the Secured Party fails to fully perform any of its Secured Debts under the Master Contract as scheduled; |
7.1.2 | any representation or warranty made by the Pledgor in Article 5 hereof contains misleading or false information that is material, and/or the Pledgor violates the warranties set forth in Article 5 hereof; |
7.1.3 | the Pledgor violates the undertakings set forth in Article 6 hereof; |
7.1.4 | the Pledgor violates any other provisions of this Contract; |
7.1.5 | the Pledgor gives up the pledged Equity Interest or transfers the pledged Equity Interest without the written consent of the Pledgee; |
7.1.6 | any external loan, guarantee, compensation, undertaking or other debt liability of the Pledgor (1) is required to be repaid or performed prior to the scheduled date due to any breach of this Contract; (2) has been due but cannot be repaid or performed as scheduled, which in the opinion of the Pledgee, would have affected the ability of the Pledgor in performing her obligations hereunder; |
7.1.7 | Guanli is incapable to repay the general debts or other debts; |
7.1.8 | this Contract becomes illegal or the Pledgor fails to continue to perform her obligations hereunder due to any reasons other than force majeure; |
7.1.9 | there has been any adverse change in the properties of the Pledgor, which, in the opinion of the Pledgee, would have affected the ability of the Pledgor in performing her obligations hereunder; |
7.1.10 | there occurs any material adverse change in the assets, operating result or financial situation of Guanli; |
5
7.1.11 | the successors or heirs of Guanli can only perform part of, or refuse to perform, the Master Contract; |
7.1.12 | the Pledgor violates any other provisions of this Contract through any act or omission to act. |
7.2 | If the Pledgor is aware or discovers that any event described in this Article 7 or any event which may possibly result in the aforesaid events has happened, she shall immediately notify the Pledgee in writing. |
7.3 | Unless the events of default listed in this Article 7.1 has been resolved to the satisfactory of the Pledgee, the Pledgee may serve a written Notice of Default to the Pledgor at any time when the Pledgor is in default or thereafter and require the Pledgor to pay any debts and other payables under the Master Contract or to dispose of the Pledge Right pursuant to Article 8 hereof. |
8. | Exercise of the Pledge Right |
8.1 | Subject to the requirement in Article 6.1.1 hereof, the Pledgor shall not transfer the pledged Equity Interest before the obligations of the Secured Party under the Master Contract have not been fully performed and without the written consent of the Pledgee. |
8.2 | The Pledgee shall serve Notice of Default to the Pledgor when exercising its Pledge Right. |
8.3 | Subject to the requirement in Article 7.3 hereof, the Pledgee may exercise the right to dispose of the Pledge Right at the time when the Notice of Default is given pursuant to Article 7.3 or at any time after such notice is given. |
8.4 | The Pledgee shall have the right of priority to claim for any money converted from all or part of the Equity Interest hereunder, or any proceeds from the auction or sale of such Equity Interest according to statutory procedures until the outstanding debts and all other payables of the Secured Party under the Master Contract are repaid. |
8.5 | When the Pledgee disposes of the Pledge Right in accordance with this Contract, the Pledgor shall not pose any obstacles, and shall offer necessary assistance in this regard so that the Pledgee can realize its Pledge Right. |
9. | Assignment of this Contract |
9.1 | Unless with the prior consent of the Pledgee, the Pledgor or Guanli shall have no right to transfer any of her/its rights or obligations hereunder. |
9.2 | This Contract shall be binding upon the Pledgor and her successors or heirs, and shall be valid and binding upon the Pledgee and each of its successors, heirs or permitted assignees. |
6
9.3 | The Pledgee may, at any time and to the extent permitted by laws, transfer all or any of its rights and obligations under the Master Contract to any person designated by it (natural person/legal person), in which case, the assignee shall be entitled to and undertake all rights and obligations of the Pledgee hereunder as if it should have been entitled to and undertaken such rights and obligations as a party to this Contract. When the Pledgee transfers its rights and obligations under the Master Contract, a written notice shall be only given by the Pledgee to the Pledgor, and the Pledgor shall, at the request of the Pledgee, execute and transfer the relevant contracts and/or documents in this regard. |
9.4 | A new pledge contract shall be signed between the new parties to the pledge after the change of the pledgee as a result of the transfer. |
10. | Effectiveness |
11. | Termination |
12. | Handling Fees and Other Costs |
12.1 | All costs and actual expenses in connection with this Contract, including without limitation, legal fee, cost of production, stamp duty and any other taxes and charges, shall be borne by the Pledgee. If the relevant taxes are required by law to be paid by the Pledgor, the Pledgee shall fully indemnify the Pledgor such taxes paid by her. |
12.2 | If the Pledgee fails to pay any taxes or charges payable in accordance with this Contract or the Pledgor recovers such taxes or charges by any means or ways due to any other reasons, the Pledgee shall bear all costs arising therefrom (including without limitation, all taxes, handling fees, management fees, litigation cost, attorneys fees and various insurance premiums in connection with the handling of the Pledge Right). |
13. | Force Majeure |
13.1 | Force Majeure means any event that is beyond the reasonable control of a party and that is unavoidable even though the party so affected gives reasonable attention to it, including but not limited to act of government, act of nature, fire, explosion, typhoon, flood, earthquake, tidal, lightning or war. However, the shortage of credit, capital or financing shall not be deemed as events beyond the reasonable control of a party. Any party who is affected by Force Majeure shall notify the other party as soon as possible of the event, in respect of which the exemption from such obligations is sought. |
7
13.2 | When the performance of this Contract is delayed or prevented due to the Force Majeure defined above, the party so affected shall not be required to assume any liabilities hereunder to the extent that it is within the scope of the delay or prevention. It shall take appropriate measures to minimize or eliminate the impact of Force Majeure and shall make effort to resume the performance of any obligations that are delayed or prevented by the Force Majeure. Once the Force Majeure is removed, the parties agree to resume the performance of their respective obligations hereunder with their greatest efforts. |
14. | Confidentiality Obligation |
15. | Dispute Resolution |
15.1 | This Contract shall be governed by and construed in accordance with the laws of the PRC; |
15.2 | Any disputes between the parties arising from the interpretation and performance of any provisions hereof shall be resolved in good faith by them through consultation. If no agreement can be reached in respect of a dispute, either party may submit such dispute to China International Economic and Trade Arbitration Commission for arbitration in accordance with its arbitration rules then in force. The seat of arbitration shall be Shenzhen. The arbitration shall be conducted in Chinese. The arbitral award shall be final and binding upon the parties. |
16. | Integrity of this Contract |
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17. | Severability of this Contract |
18. | Amendment and Supplement to this Contract |
18.1 | All amendments and supplements to this Contract shall be made by the parties in writing. Any amendment contracts and supplemental contracts hereto duly signed by the parties shall be an integral part of this Contract, and shall have the same legal effect as this Contract. |
18.2 | This Contract and any of its amendments, supplements or modification shall be made in writing and shall become effective once they are signed and sealed by the parties. |
19. | Counterpart |
9
10
Party A:
|
Agria Brother Biotech (Shenzhen) Co., Ltd. | |
Address:
|
Unit 201, 2/F, Longyuan Building, Clear Water River Road, Luohu District, Shenzhen | |
|
||
Party B:
|
Li Juan, a citizen of the PRC with ID card number: 420983197609010023 | |
|
||
Party C:
|
Shenzhen Guanli Agricultural Technology Co., Ltd. | |
Address:
|
Room 1501, Tower 1, Huarong Building, Mintian Road, Futian Center District, Shenzhen |
1. |
Party A is a wholly foreign-owned enterprise incorporated in Shenzhen under the laws of the
Peoples Republic of China (hereinafter referred to as the
PRC
, and for the purpose of this
Contract, excluding the Hong Kong Special Administrative Region, Macao Special Administrative
Region and Taiwan);
|
2. |
Party B is a citizen of the PRC, who holds 51% equity interest of Shenzhen Guanli
Agricultural Technology Co., Ltd. (
Guanli
);
|
3. |
Guanli is a limited liability company established in Shenzhen under the laws of the PRC;
|
4. |
Party B intends to grant to Party A an exclusive call option so that Party A may request
Party B to sell her equity interest to it upon certain conditions are satisfied.
|
1.1 |
Grant of Option
|
1.2 |
Steps for Exercise of the Call Option
|
1.3 |
Purchase Price
|
1.3.1 |
When Party A exercises its Call Option, unless an appraisal is required to be
made in respect of the equity interest by applicable PRC laws and regulations then in
effect or there are other restrictions imposed by such PRC laws and regulations on the
price of equity interest, the purchase price payable by Party A to Party B in respect
of all of the equity interest (hereinafter referred to as the
Purchase Price
) shall
be RMB One (1). Party A shall also release the obligation of Party B to make repayment
under the
Loan Contract
dated October 6, 2008 between Party A and Party B,
respectively.
|
1.3.2 |
If an appraisal is required to be made in respect of the equity interest by
the PRC laws and regulations that are applicable at the time when Party A exercises its
Call Option or there are other restrictions imposed by such PRC laws and regulations on
the price of equity interest, the parties agree that the Purchase Price shall the
minimum price permitted by applicable laws.
|
1.3.3 |
If Party A chooses to purchase part of the equity interest, the exercise price
of the Call Option shall be adjusted according the ratio of the Purchased Equity to the
whole equity interests of Guanli.
|
1.4 |
Transfer of the Purchased Equity
|
1.4.1 |
Party B shall cause Guanli to hold a shareholders meeting in a timely manner,
during which a resolution approving the transfer of equity interest by Party B to Party
A and/or the Designated Person shall be passed and she shall procure other shareholders
to give up their right of first refusal in respect of the Purchased Equity in writing;
|
1.4.2 |
Party B shall sign an equity transfer contract in relation to each transfer
with Party A and/or the Designated Person (as applicable) in accordance with the
requirements of this Contract and the Equity Purchase Notice in connection with the
Purchased Equity;
|
1.4.3 |
The relevant parties shall execute all other necessary contracts, agreements
or documents, obtain all necessary government approvals and consents, and take all
necessary actions to grant the valid ownership of the Purchased Equity to Party A
and/or the Designated Person without any security interest being attached thereto and
procure Party A and/or the Designated Person to become the legal owner of the Purchased
Equity. For the purpose of this Article and this Contract, security interest shall
include guarantees, mortgages, pledges, third parties rights or interests, any share
options, acquisition rights, right of first refusal, right to offset, ownership
retention or other security arrangements but exclude any security interest arising from
the
Equity Pledge Contract
dated November 7, 2008 by and among Party A, Party B and
Guanli (hereinafter referred to as the
Equity Pledge Contract
).
|
2
1.5 |
Payment
|
2.1 |
Joint undertakings relating to Guanli
|
2.1.1 |
Without the prior written consent of Party A, they shall not in any manner
supplement, change or amend the articles of association of Guanli, increase or decrease
its registered capital, or otherwise change the structure of its registered capital;
|
2.1.2 |
Guanli shall maintain its corporate existence in accordance with good
financial and business standards and practices by operating its business and handling
its affairs in a prudent and efficient manner; it shall make its best endeavour to
ensure that Guanli continues to own all permits, licenses and approvals that are
necessary for its operation and that such permits, licenses and approvals will not be
cancelled; it shall make its best endeavour to keep the current organizational
structure and the senior management of the company unchanged, and to maintain the
relationship with its customers so as to guarantee that there will not be any material
adverse effect on the goodwill and operation of Guanli after the delivery of equity
interest as agreed;
|
2.1.3 |
Without the prior written consent of Party A, Guanli shall not, at any time
after the date hereof, sell, transfer, mortgage or otherwise dispose of the legal or
beneficial interest in any assets, businesses or revenues of Guanli, nor allow any
other security interest to be created thereon;
|
2.1.4 |
Without the prior written consent of Party A, Guanli shall not incur, inherit,
guarantee or allow the existence of any debt, except for (i) debts incurred in the
normal or ordinary course of business other than through loans; and (ii) debts
disclosed to Party A for which Party As written consent has been obtained;
|
2.1.5 |
Guanli shall always operate all of its businesses during the ordinary course
of business to maintain its asset value, and shall refrain from any action/omission
that may affect its business operation and asset value;
|
2.1.6 |
Without the prior written consent of Party A, Guanli shall not enter into any
material contract, except for those contracts that are entered into in the ordinary
course of business (for the purpose of this paragraph, a contract with a value
exceeding RMB One Million (1,000,000) shall be deemed as a material contract);
|
2.1.7 |
Without the prior written consent of Party A, Guanli shall not provide any
loan or credit to any person;
|
2.1.8 |
Guanli shall, at the request of Party A, provide it with information relating
to the business operation and financial condition of Guanli;
|
2.1.9 |
Guanli shall take out and maintain insurance from an insurance company
recognized by Party A. The coverage and type of insurance shall be the same as those
of the insurance typically taken out by other companies that operate businesses similar
to Guanli in the same region and possess property or assets similar to Guanli;
|
2.10 |
Without the prior written consent of Party A, Guanli shall not merge or
consolidate with, or acquire or invest in any person;
|
3
2.1.11 |
Guanli shall immediately notify Party A of the occurrence or possible occurrence of
any litigation, arbitration or administrative proceedings relating to Guanlis assets,
businesses and revenues;
|
2.1.12 |
To maintain the ownership by Guanli of all of its assets, it shall execute all
necessary or appropriate documents, take all necessary or appropriate actions and make
all necessary or appropriate claims or raise necessary and appropriate defenses against
all claims;
|
2.1.13 |
Without the prior written consent of Party A, Guanli shall not in any manner
distribute dividends to its shareholders, provided that upon Party As written request,
it shall immediately distribute all or part of its distributable profits to its
shareholders;
|
2.1.14 |
Within the term hereof, Guanli shall operate its business in compliance with all
applicable laws, regulations, administrative rules and regulations of the PRC, and
there will not be any material adverse effect on the business operation or assets of
Guanli due to any breach of the above requirements;
|
2.1.15 |
If Party A exercises the Call Option according to the conditions of this Contract,
Guanli shall make its best endeavour to obtain all government approvals and other
consents (if applicable) that are necessary for the completion of the equity transfer
as soon as possible;
|
2.1.16 |
At the request of Party A, they shall appoint any persons designated by Party A as
directors of Guanli.
|
2.2 |
Undertakings relating to Party B
|
2.2.1 |
Without the prior written consent of Party A, she will not, at any time after
the date hereof, sell, transfer, mortgage or otherwise dispose of any legal or
beneficial interest in the equity interest, nor allow any other security interest to be
created thereon, except for the pledge right under the
Equity Pledge Contract
;
|
2.2.2 |
Without the prior written consent of Party A, she will not vote in favor of
or support or execute any shareholders resolution at a shareholders meeting of Guanli
to approve the sale, transfer, mortgage or disposal in any other manner of any legal or
beneficial interest in the equity interest, nor allow any security interest to be
created thereon, except for the same is made to Party A or any person designated by it;
|
2.2.3 |
Without the prior written consent of Party A, she will not vote in favor of
or support or execute any shareholders resolution at a shareholders meeting of Guanli
to approve the merger or consolidation of Guanli with any person, or the acquisition of
or investment in any person;
|
2.2.4 |
She will immediately notify Party A of the occurrence or possible occurrence
of any litigation, arbitration or administrative proceedings relating to the equity
interest held by her;
|
2.2.5 |
She will procure the shareholders meeting of the company to vote in favor of
the transfer of the Purchased Equity as set forth in this Contract;
|
2.2.6 |
To maintain her ownership in the equity interest, she will execute all
necessary or appropriate documents, take all necessary or appropriate actions and make
all necessary or appropriate claims or raise necessary and appropriate defenses against
all claims;
|
4
2.2.7 |
At the request of Party A, she will appoint any persons designated by Party A
as directors of Guanli;
|
2.2.8 |
At the request of Party A at any time, she will unconditionally and promptly
transfer her equity interest to Party A and/or the Designated Person at any time, and
give up her right of first refusal in respect of other equity interests to be
transferred;
|
2.2.9 |
She will strictly observe the provisions of this Contract and other contracts
jointly or separately executed by and among Party B, Guanli and Party A, perform her
obligations hereunder and thereunder, and refrain from action/omission that may affect
the effectiveness and enforceability thereof.
|
3.1 |
They have the right to execute and deliver this Contract and any equity transfer contracts to
which they are a party and which are entered into in respect of each transfer of the Purchased
Equity hereunder (each, a
Transfer Contract
), and to perform their respective obligations
under this Contract and any Transfer Contracts. This Contract and the Transfer Contracts to
which they are a party, once executed, will constitute their legal, valid and binding
obligations and shall be enforceable against them in accordance with the provisions thereof;
|
3.2 |
The execution and delivery of this Contract or any Transfer Contracts and the performance of
their respective obligations under this Contract or any Transfer Contracts shall not: (i)
result in any violation of any applicable PRC laws and regulations; (ii) be in conflict with
their articles of association or other constituent documents; (iii) result in the violation of
any contracts or documents to which they are a party or which are binding upon them, or
constitute any breach under any contracts or documents to which they are a party or which are
binding upon them; (iv) result in the violation of any conditions for the grant and/or
continued effectiveness of any licenses or permits issued to either of them; or (v) result in
the suspension or revocation of or imposition of additional conditions to any licenses or
permits issued to either of them;
|
3.3 |
Guanli has a good and merchantable title to all of its assets. Guanli has not created any
security interest on its assets;
|
3.4 |
Guanli does not have any outstanding debts, except for (i) debts incurred in the ordinary
course of its business, and (ii) debts disclosed to Party A for which Party As written
consent has been obtained;
|
3.5 |
Guanli has complied with all PRC laws and regulations applicable to the acquisition of
assets;
|
3.6 |
There are no ongoing, pending or threatened litigation, arbitration or administrative
proceedings relating to Guanli or the equity interest in or assets of Guanli; and
|
3.7 |
Party B has a good and merchantable title and a complete and valid disposal right to all of
her equity interests (except for the restrictions under the PRC laws and regulations). Save
for the security interests under the
Equity Pledge Contract
, she has not created any security
interest on her equity interest and is free from any third party claims.
|
5
4.1 |
Unless with the prior written consent of Party A, Party B and Guanli shall not transfer their
respective rights and obligations hereunder to any third parties.
|
4.2 |
Party B and Guanli hereby agree that Party A shall have the right to transfer its rights and
obligations hereunder to any third parties when necessary. Party A shall only be required to
serve written notice to Party B and Guanli when such transfer is made, and no consent shall be
further required from Party B or Guanli in respect of such transfer.
|
5.1 |
This Contract shall become effective as of the date first written above.
|
5.2 |
This Contract shall be automatically terminated only after Party A exercises its option to
purchase all of the equity interests in Guanli pursuant to the requirements of this Contract,
except for the early termination by this Contract or pursuant to the provisions of the
relevant agreements separately signed by the parties hereto.
|
5.3 |
If, during the period stipulated in Article 5.2, the operation term of Party A or Guanli
(including any extended term) expires or either party terminates due to other reasons, this
Contract shall be terminated at the time of the termination of such party, except for the
circumstances where Party A has transferred its rights and obligations pursuant to Article 4.2
hereof.
|
6.1 |
Applicable Laws
|
6.2 |
Dispute Resolution
|
6.3 |
Liabilities for Breach
|
6
a. |
the information that are or will be known to the public (provided that they are
not disclosed to the public without authorization by the information receiving party);
|
b. |
the information required to be disclosed by applicable laws, or the rules or
regulations of securities exchanges; or
|
c. |
the information required to be disclosed by a party to its legal or financial
advisors with respect to the transaction mentioned herein, for which such legal or
financial advisors shall also comply with the confidentiality obligation as similar as
that described in this Article. Any divulgence of confidential information by the
employees of either party or any organization engaged by it shall be deemed as the
divulgence of confidential information by such party, and such party shall be liable
for the breach pursuant to this Contract. This article shall survive regardless of
whether this Contract is invalid, discharged, terminated or cannot be operated due to
any reason.
|
10.1 |
Modification, Amendment and Supplement
|
10.2 |
Integrity of this Contract
|
7
10.3 |
Severability of this Contract
|
10.4 |
Headings
|
10.5 |
Language and Counterpart
|
10.6 |
Successors
|
10.7 |
Survival
|
10.8 |
Waivers
|
8
9
/s/ Li Juan
|
||
November 7, 2008
|
/s/ Li Juan | ||||
November 7, 2008 | ||||
1. |
Loan Amount: Party A shall lend to Party B a loan of Renminbi Ten Million And Two Hundred
Thousand (¥10,200,000).
|
2. |
Time for Loan Payment: Party A will pay the above loan to Party B within five working days
after this Contract becomes effective.
|
3. |
Term: The loan shall be for a term of three years from the date on which Party A makes the
loan payment, and may be extended upon its expiry after mutual consultation.
|
4. |
Use of the Loan: Party B undertakes that the loan will be used for investment only, and shall
be in compliance with the relevant laws and regulations. Otherwise, Party A shall have the
right to discharge this Loan Contract unilaterally and request Party B to assume the
liabilities for breach of contract.
|
5. |
Equity Pledge: All equity interests owned by Party B in Shenzhen Guanli Agricultural
Technology Co., Ltd. shall be pledged as security. In the Equity Pledge Contract dated
November 7, 2008, all obligations hereunder shall be covered in a pledge created by Party B
over its equity interests in Shenzhen Guanli Agricultural Technology Co., Ltd..
|
6. |
Liabilities for Breach of Contract: If a party violates this Contract, the other party shall
have the right to discharge it and request the defaulting party to make compensation for any
loss arising therefrom.
|
7. |
Termination of this Contract: After the termination or discharge of this Contract, Party B
shall return the loan to Party A within five working days. In the event of any late return,
Party B shall pay to Party A any interest accrued thereon at a loan interest rate stipulated
by banks for the corresponding period.
|
8. |
Dispute Resolution: Any disputes arisen during the performance of this Contract shall be
resolved by the parties through consultation. In the event that no agreement can be reached
through consultation, such dispute shall be referred to China International Economic and Trade
Arbitration Commission for arbitration. The seat of arbitration shall be Shenzhen. The
arbitral award shall be final and binding upon the parties.
|
9. |
If any provision of this Contract becomes invalid, it shall not affect the validity of the
other provisions hereof.
|
10. |
This Contract is executed in two originals and each of the parties shall keep one original.
All of them shall have the same legal effect.
|
11. |
This Contract shall become effective after it is signed and sealed by Party A and signed by
Party B.
|
Party A:
|
Agria Brother Biotech (Shenzhen) Co., Ltd. | |
Address:
|
Unit 201, 2/F, Longyuan Building, Clear Water River Road, Luohu District, Shenzhen | |
|
||
Party B:
|
Li Juan, a citizen of the PRC with ID card number: 420983197609010023 | |
|
||
Party C:
|
Shenzhen Guanli Agricultural Technology Co., Ltd. | |
Address:
|
Room 1501, Tower 1, Huarong Building, Mintian Road, Futian Center District, Shenzhen |
1. | Article 1.3.1 of the Exclusive Call Option Contract shall be revised as follows: |
2. | The other provisions of the Exclusive Call Option Contract shall remain unchanged. |
3. | This Contract shall become effective after it is signed and sealed by Party A and Party C and signed by Party B. This Contract is executed in three originals and each of the parties shall keep one original. |
By:
|
/s/ Li Juan |
1. |
Loan Amount: Party A shall lend to Party B a loan of Renminbi Thirty-two Million And Two
Hundred Thousand (¥32,200,000).
|
2. |
Term: The loan shall be for a term of three years from the date hereof, and may be extended
upon its expiry after mutual consultation.
|
3. |
Use of the Loan: Party B undertakes that the loan will be used for investment in Shenzhen
Guanli Agricultural Technology Co., Ltd., and shall be in compliance with the relevant laws
and regulations. Otherwise, Party A shall have the right to discharge this Loan Contract
unilaterally and request Party B to assume the liabilities for breach of contract.
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4. |
Equity Pledge: All equity interests owned by Party B in Shenzhen Guanli Agricultural
Technology Co., Ltd. shall be pledged as security.
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5. |
Liabilities for Breach of Contract: If a party violates this Contract, the other party shall
have the right to discharge it and request the defaulting party to make compensation for any
loss arising therefrom.
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6. |
Termination of this Contract: After the termination or discharge of this Contract, Party B
shall return the loan to Party A within five working days. In the event of any late return,
Party B shall pay to Party A any interest accrued thereon at a loan interest rate stipulated
by banks for the corresponding period.
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7. |
Dispute Resolution: Any disputes arisen during the performance of this Contract shall be
resolved by the parties through consultation. In the event that no agreement can be reached
through consultation, such dispute shall be referred to China International Economic and Trade
Arbitration Commission for arbitration. The seat of arbitration shall be Shenzhen. The
arbitral award shall be final and binding upon the parties.
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8. |
If any provision of this Contract becomes invalid, it shall not affect the validity of the
other provisions hereof.
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9. |
This Contract is executed in two originals and each of the parties shall keep one original.
All of them shall have the same legal effect.
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10. |
This Contract shall become effective after it is signed and sealed by Party A and signed by
Party B.
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(1) | The Pledgor is the legal and valid shareholder of Shenzhen Guanli Agricultural Technology Co., Ltd. ( Guanli ), who holds 95% equity interest of Guanli according to laws; |
(2) | The Pledgee is a wholly foreign-owned enterprise incorporated in Shenzhen under the laws of the Peoples Republic of China (hereinafter referred to as the PRC , and for the purpose of this Contract, excluding the Hong Kong Special Administrative Region, Macao Special Administrative Region and Taiwan); |
(3) | Guanli is a limited liability company established in Shenzhen under the laws of the PRC; |
(4) | The Pledgee and Guanli entered into the Exclusive Technology Development, Technology Support and Technology Services Contract on November 7, 2008. The Pledgor agrees to pledge all of her equity interest in Guanli as security for the performance by Guanli of all of its obligations under the above contract; |
(5) | The Pledgee, the Pledgor and Guanli entered into the Exclusive Call Option Contract on August 4, 2009, and the Pledgee and the Pledgor entered into three Loan Contracts on October 6, 2008, July 22, 2009 and August 4, 2009, respectively. The Pledgor agrees to pledge all of her equity interest in Guanli as security for the performance by the Pledgor and Guanli of all of their respective obligations under the above four contracts. |
1. | Definitions |
1.1 | Pledge Right refers to the full content of Article 2 hereof. |
1.2 | Equity Interest means the equity interest legally held by the Pledgor in Guanli. |
1.3 | Master Contract means the Exclusive Technology Development, Technology Support and Technology Services Contract , the Exclusive Call Option Contract , three Loan Contracts dated October 6, 2008, July 22, 2009 and August 4, 2009 and any amendment and supplement thereto. |
1.4 | Secured Party means any contractual party of each Master Contract other than the Pledgee. |
1.5 | Secured Debt means all contractual obligations of a Secured Party under each Master Contract, including (but not limited to) interest, default penalty, compensation, expenses incurred by the Pledgee in realizing debt. |
1.6 | Event of Default means any circumstances stated in Article 7.1 hereof. |
1.7 | Notice of Default means the notice of default issued by the Pledgee pursuant to this Contract, declaring the occurrence of an Event of Default. |
2. | Pledge Right |
3. | Registration of Pledge |
3.1 | Within one (1) week from the date hereof, Guanli shall, and the Pledgor shall procure Guanli to record the Pledge Right specified in Article 2 above on the register of members of Guanli, and deliver a copy of the register of members of Guanli with its common chop affixed thereon and the original of the equity contribution certificate to the Pledgee for custody. |
3.2 | After the execution hereof, the Pledgor shall, at the written request of the Pledgee at any time, complete the notarization jointly with the Pledgee in respect of this Contract, as well as the Pledge Right of the Pledgee recorded on the register of members and the equity contribution certificate as set forth in Article 3.1 at a notary public office of the place where Guanli is located. |
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3.3 | The parties agree that they will make their best effort to register, and cause the pledge hereunder to be registered with an industrial and commercial administrative department of the place where Guanli is registered. The parties also confirm that, unless the registration of the pledge hereunder with the industrial and commercial administrative department is mandatory in law, the validity of this Contract and the Pledge Right specified in Article 2 above shall not be affected even if the parties fail to register the pledge hereunder with the industrial and commercial administrative department of the place where Guanli is registered after the execution of this Contract. |
4. | Rights of the Pledgee |
4.1 | When a Secured Party does not perform any of its obligations under the Master Contract, the Pledgee shall have the right of priority to claim for any money converted from Guanlis Equity Interest pledged by the Pledgor, or any proceeds from the auction or sale of such Equity Interest. |
4.2 | The Pledgee shall be entitled to receive any dividends (including bonuses) and other property distributions arising from the Equity Interest that is pledged. |
5. | Representations and Warranties of the Pledgor |
5.1 | The Pledgor is the legitimate owner of the Equity Interest; |
5.2 | The Pledgor fully understands the contents of the Master Contract. She signs and performs this Contract on a voluntary basis and all her actual meaning is truly expressed herein. The Pledgor is legally authorized to execute this Contract; |
5.3 | All documents, information, statements and evidence provided by the Pledgor to the Pledgee are accurate, true, complete and valid; |
5.4 | The Pledgor acknowledges that the Pledgee shall have the right to dispose of and transfer the Pledge Right in a manner stipulated herein and within the scope restricted by the PRC laws; |
5.5 | Except for the interest of the Pledgee, the Pledgor has not created other pledges, any other kinds of rights or any third party rights over the Equity Interest; |
5.6 | The Pledgor has obtained the consent of other shareholders of Guanli to pledge the Equity Interest, and the other shareholders have unanimously agreed that they will not interfere by any means and will give up the exercise of their pre-emptive right when the Pledgee actually exercises the Pledge Right. |
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6. | Undertakings of the Pledgor |
6.1 | During the term hereof, the Pledgor undertakes to the Pledgee for its benefit that: |
6.1.1 | save for the transfer of the Equity Interest to the Pledgee, the Pledgor shall not, without the prior written consent of the Pledgee, transfer the Equity Interest, nor create or permit the existence of any pledge which might affect the rights and interests of the Pledgee, nor procure any resolution in relation to the sale/transfer/pledge or disposal by other means of the legal and beneficial interest in any Equity Interest of Guanli or permitting the creation of any other security interests over it to be passed at a shareholders meeting of the company; unless with the prior written consent of the Pledgee, the Pledgor shall vote at a shareholders meeting of Guanli/procure any director of Guanli nominated by her to vote at a board meeting of Guanli and/or by other means to object Guanli to sell/transfer/pledge or otherwise dispose of any of its major assets, including (but not limited to) any intellectual property rights. |
6.1.2 | if the Equity Interest pledged hereunder is subject to any compulsory measures imposed by courts or other departments for any reasons, the Pledgor shall use all her efforts, including (without limitation) the provision of other security to courts or adoption of other measures, to remove the compulsory measures taken by courts or other departments in respect of the Equity Interest pledged. |
6.1.3 | the Pledgor shall comply with and implement all laws and regulations relevant to the pledge of rights. The Pledgor shall, within five (5) days of the receipt of any notices, orders or recommendations given or made by the competent authority with respect to the Pledge Right, present the above notices, orders or recommendations to the Pledgee, and shall comply with the same or raise objections and make representations in respect of the above matters as reasonably required by or with the consent of the Pledgee. |
6.1.4 | the Pledgor shall promptly notify the Pledgee of any event which might have effects on the Equity Interest of the Pledgor or any part of her right or any notice received in connection therewith, as well as any event which might change any warranty and obligation of the Pledgor as created by this Contract or might have effects on it or any notice received in connection therewith. |
6.2 | The Pledgor agrees that the Pledgee shall not be interrupted nor impeded by any legal proceedings instituted by the Pledgor or any successors of the Pledgor or any person authorized by the Pledgor or any other persons when it exercises its rights on the pledge pursuant to the provisions hereof and within the scope permitted by the PRC laws. |
6.3 | The Pledgor undertakes to the Pledgee that, in order to protect or improve the security for the repayment of the Secured Debt herein, she will honestly execute and procure other parties who have an interest in the Pledge Right to execute all title certificates and contracts required by the Pledgee, and/or perform and procure other interested parties to perform all acts required by the Pledgee, and facilitate the exercise of any right and authorization conferred to the Pledgee by this Contract. |
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6.4 | The Pledgor undertakes to the Pledgee that she will execute all documents in relation to the change of share certificates (if applicable and necessary) with the Pledgee or any person designated by it (natural person/legal person), and shall provide the Pledgee with all notices, orders and decisions in relation to the Pledge Right which it thinks necessary within a reasonable time. |
6.5 | The Pledgor undertakes to the Pledgee that she will, for the interest of the Pledgee, observe and perform all warranties, undertakings, contracts, representations and conditions. If the Pledgor does not perform or fully perform her warranties, undertakings, contracts, representations and conditions, she will indemnify the Pledgee all losses suffered by it arising therefrom. |
7. | Event of Default |
7.1 | The following events shall be deemed as Events of Default: |
7.1.1 | the Secured Party fails to fully perform any of its Secured Debts under the Master Contract as scheduled; |
7.1.2 | any representation or warranty made by the Pledgor in Article 5 hereof contains misleading or false information that is material, and/or the Pledgor violates the warranties set forth in Article 5 hereof; |
7.1.3 | the Pledgor violates the undertakings set forth in Article 6 hereof; |
7.1.4 | the Pledgor violates any other provisions of this Contract; |
7.1.5 | the Pledgor gives up the pledged Equity Interest or transfers the pledged Equity Interest without the written consent of the Pledgee; |
7.1.6 | any external loan, guarantee, compensation, undertaking or other debt liability of the Pledgor (1) is required to be repaid or performed prior to the scheduled date due to any breach of this Contract; (2) has been due but cannot be repaid or performed as scheduled, which in the opinion of the Pledgee, would have affected the ability of the Pledgor in performing her obligations hereunder; |
7.1.7 | Guanli is incapable to repay the general debts or other debts; |
7.1.8 | this Contract becomes illegal or the Pledgor fails to continue to perform her obligations hereunder due to any reasons other than force majeure; |
7.1.9 | there has been any adverse change in the properties of the Pledgor, which, in the opinion of the Pledgee, would have affected the ability of the Pledgor in performing her obligations hereunder; |
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7.1.10 | there occurs any material adverse change in the assets, operating result or financial situation of Guanli; |
7.1.11 | the successors or heirs of Guanli can only perform part of, or refuse to perform, the Master Contract; |
7.1.12 | the Pledgor violates any other provisions of this Contract through any act or omission to act. |
7.2 | If the Pledgor is aware or discovers that any event described in this Article 7 or any event which may possibly result in the aforesaid events has happened, she shall immediately notify the Pledgee in writing. |
7.3 | Unless the events of default listed in this Article 7.1 has been resolved to the satisfactory of the Pledgee, the Pledgee may serve a written Notice of Default to the Pledgor at any time when the Pledgor is in default or thereafter and require the Pledgor to pay any debts and other payables under the Master Contract or to dispose of the Pledge Right pursuant to Article 8 hereof. |
8. | Exercise of the Pledge Right |
8.1 | Subject to the requirement in Article 6.1.1 hereof, the Pledgor shall not transfer the pledged Equity Interest before the obligations of the Secured Party under the Master Contract have not been fully performed and without the written consent of the Pledgee. |
8.2 | The Pledgee shall serve Notice of Default to the Pledgor when exercising its Pledge Right. |
8.3 | Subject to the requirement in Article 7.3 hereof, the Pledgee may exercise the right to dispose of the Pledge Right at the time when the Notice of Default is given pursuant to Article 7.3 or at any time after such notice is given. |
8.4 | The Pledgee shall have the right of priority to claim for any money converted from all or part of the Equity Interest hereunder, or any proceeds from the auction or sale of such Equity Interest according to statutory procedures until the outstanding debts and all other payables of the Secured Party under the Master Contract are repaid. |
8.5 | When the Pledgee disposes of the Pledge Right in accordance with this Contract, the Pledgor shall not pose any obstacles, and shall offer necessary assistance in this regard so that the Pledgee can realize its Pledge Right. |
9. | Assignment of this Contract |
9.1 | Unless with the prior consent of the Pledgee, the Pledgor or Guanli shall have no right to transfer any of her/its rights or obligations hereunder. |
9.2 | This Contract shall be binding upon the Pledgor and her successors or heirs, and shall be valid and binding upon the Pledgee and each of its successors, heirs or permitted assignees. |
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9.3 | The Pledgee may, at any time and to the extent permitted by laws, transfer all or any of its rights and obligations under the Master Contract to any person designated by it (natural person/legal person), in which case, the assignee shall be entitled to and undertake all rights and obligations of the Pledgee hereunder as if it should have been entitled to and undertaken such rights and obligations as a party to this Contract. When the Pledgee transfers its rights and obligations under the Master Contract, a written notice shall be only given by the Pledgee to the Pledgor, and the Pledgor shall, at the request of the Pledgee, execute and transfer the relevant contracts and/or documents in this regard. |
9.4 | A new pledge contract shall be signed between the new parties to the pledge after the change of the pledgee as a result of the transfer. |
10. | Effectiveness |
10.1 | This Contract is signed and shall become effective on the date first written above. |
10.2 | After this Contract becomes effective, the Equity Pledge Contract dated November 7, 2008 signed by Party A, Party B and Party C will be terminated. |
11. | Termination |
12. | Handling Fees and Other Costs |
12.1 | All costs and actual expenses in connection with this Contract, including without limitation, legal fee, cost of production, stamp duty and any other taxes and charges, shall be borne by the Pledgee. If the relevant taxes are required by law to be paid by the Pledgor, the Pledgee shall fully indemnify the Pledgor such taxes paid by her. |
12.2 | If the Pledgee fails to pay any taxes or charges payable in accordance with this Contract or the Pledgor recovers such taxes or charges by any means or ways due to any other reasons, the Pledgee shall bear all costs arising therefrom (including without limitation, all taxes, handling fees, management fees, litigation cost, attorneys fees and various insurance premiums in connection with the handling of the Pledge Right). |
13. | Force Majeure |
13.1 | Force Majeure means any event that is beyond the reasonable control of a party and that is unavoidable even though the party so affected gives reasonable attention to it, including but not limited to act of government, act of nature, fire, explosion, typhoon, flood, earthquake, tidal, lightning or war. However, the shortage of credit, capital or financing shall not be deemed as events beyond the reasonable control of a party. Any party who is affected by Force Majeure shall notify the other party as soon as possible of the event, in respect of which the exemption from such obligations is sought. |
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13.2 | When the performance of this Contract is delayed or prevented due to the Force Majeure defined above, the party so affected shall not be required to assume any liabilities hereunder to the extent that it is within the scope of the delay or prevention. It shall take appropriate measures to minimize or eliminate the impact of Force Majeure and shall make effort to resume the performance of any obligations that are delayed or prevented by the Force Majeure. Once the Force Majeure is removed, the parties agree to resume the performance of their respective obligations hereunder with their greatest efforts. |
14. | Confidentiality Obligation |
15. | Dispute Resolution |
15.1 | This Contract shall be governed by and construed in accordance with the laws of the PRC; |
15.2 | Any disputes between the parties arising from the interpretation and performance of any provisions hereof shall be resolved in good faith by them through consultation. If no agreement can be reached in respect of a dispute, either party may submit such dispute to China International Economic and Trade Arbitration Commission for arbitration in accordance with its arbitration rules then in force. The seat of arbitration shall be Shenzhen. The arbitration shall be conducted in Chinese. The arbitral award shall be final and binding upon the parties. |
16. | Integrity of this Contract |
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17. | Severability of this Contract |
18. | Amendment and Supplement to this Contract |
18.1 | All amendments and supplements to this Contract shall be made by the parties in writing. Any amendment contracts and supplemental contracts hereto duly signed by the parties shall be an integral part of this Contract, and shall have the same legal effect as this Contract. |
18.2 | This Contract and any of its amendments, supplements or modification shall be made in writing and shall become effective once they are signed and sealed by the parties. |
19. | Counterpart |
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10
1. |
Party A is a wholly foreign-owned enterprise incorporated in Shenzhen under the laws of the
Peoples Republic of China (hereinafter referred to as the
PRC
, and for the purpose of this
Contract, excluding the Hong Kong Special Administrative Region, Macao Special Administrative
Region and Taiwan);
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2. |
Party B is a citizen of the PRC, who holds 95% equity interest of Shenzhen Guanli
Agricultural Technology Co., Ltd. (
Guanli
);
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3. |
Guanli is a limited liability company established in Shenzhen under the laws of the PRC;
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4. |
Party B intends to grant to Party A an exclusive call option so that Party A may request
Party B to sell her equity interest to it upon certain conditions are satisfied.
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1.1 |
Grant of Option
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1.2 |
Steps for Exercise of the Call Option
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1.3 |
Purchase Price
|
1.3.1 |
When Party A exercises its Call Option, unless an appraisal is required to be
made in respect of the equity interest by applicable PRC laws and regulations then in
effect or there are other restrictions imposed by such PRC laws and regulations on the
price of equity interest, the purchase price payable by Party A to Party B in respect
of all of the equity interest (hereinafter referred to as the
Purchase Price
) shall
be RMB One (1). Party A shall also release the obligation of Party B to make repayment
under three
Loan Contracts
dated October 6, 2008, July 22, 2009 and August 4, 2009
between Party A and Party B, respectively.
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1.3.2 |
If an appraisal is required to be made in respect of the equity interest by
the PRC laws and regulations that are applicable at the time when Party A exercises its
Call Option or there are other restrictions imposed by such PRC laws and regulations on
the price of equity interest, the parties agree that the Purchase Price shall the
minimum price permitted by applicable laws.
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1.3.3 |
If Party A chooses to purchase part of the equity interest, the exercise price
of the Call Option shall be adjusted according the ratio of the Purchased Equity to the
whole equity interests of Guanli.
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1.4 |
Transfer of the Purchased Equity
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1.4.1 |
Party B shall cause Guanli to hold a shareholders meeting in a timely manner,
during which a resolution approving the transfer of equity interest by Party B to Party
A and/or the Designated Person shall be passed and she shall procure other shareholders
to give up their right of first refusal in respect of the Purchased Equity in writing;
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1.4.2 |
Party B shall sign an equity transfer contract in relation to each transfer
with Party A and/or the Designated Person (as applicable) in accordance with the
requirements of this Contract and the Equity Purchase Notice in connection with the
Purchased Equity;
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1.4.3 |
The relevant parties shall execute all other necessary contracts, agreements
or documents, obtain all necessary government approvals and consents, and take all
necessary actions to grant the valid ownership of the Purchased Equity to Party A
and/or the Designated Person without any security interest being attached thereto and
procure Party A and/or the Designated Person to become the legal owner of the Purchased
Equity. For the purpose of this Article and this Contract, security interest shall
include guarantees, mortgages, pledges, third parties rights or interests, any share
options, acquisition rights, right of first refusal, right to offset, ownership
retention or other security arrangements but exclude any security interest arising from
the
Equity Pledge Contract
dated August 4, 2009 by and among Party A, Party B and
Guanli (hereinafter referred to as the
Equity Pledge Contract
).
|
1.5 |
Payment
|
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2.1 |
Joint undertakings relating to Guanli
|
2.1.1 |
Without the prior written consent of Party A, they shall not in any manner
supplement, change or amend the articles of association of Guanli, increase or decrease
its registered capital, or otherwise change the structure of its registered capital;
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2.1.2 |
Guanli shall maintain its corporate existence in accordance with good
financial and business standards and practices by operating its business and handling
its affairs in a prudent and efficient manner; it shall make its best endeavour to
ensure that Guanli continues to own all permits, licenses and approvals that are
necessary for its operation and that such permits, licenses and approvals will not be
cancelled; it shall make its best endeavour to keep the current organizational
structure and the senior management of the company unchanged, and to maintain the
relationship with its customers so as to guarantee that there will not be any material
adverse effect on the goodwill and operation of Guanli after the delivery of equity
interest as agreed;
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2.1.3 |
Without the prior written consent of Party A, Guanli shall not, at any time
after the date hereof, sell, transfer, mortgage or otherwise dispose of the legal or
beneficial interest in any assets, businesses or revenues of Guanli, nor allow any
other security interest to be created thereon;
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2.1.4 |
Without the prior written consent of Party A, Guanli shall not incur, inherit,
guarantee or allow the existence of any debt, except for (i) debts incurred in the
normal or ordinary course of business other than through loans; and (ii) debts
disclosed to Party A for which Party As written consent has been obtained;
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2.1.5 |
Guanli shall always operate all of its businesses during the ordinary course
of business to maintain its asset value, and shall refrain from any action/omission
that may affect its business operation and asset value;
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2.1.6 |
Without the prior written consent of Party A, Guanli shall not enter into any
material contract, except for those contracts that are entered into in the ordinary
course of business (for the purpose of this paragraph, a contract with a value
exceeding RMB One Million (1,000,000) shall be deemed as a material contract);
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2.1.7 |
Without the prior written consent of Party A, Guanli shall not provide any
loan or credit to any person;
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2.1.8 |
Guanli shall, at the request of Party A, provide it with information relating
to the business operation and financial condition of Guanli;
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2.1.9 |
Guanli shall take out and maintain insurance from an insurance company
recognized by Party A. The coverage and type of insurance shall be the same as those
of the insurance typically taken out by other companies that operate businesses similar
to Guanli in the same region and possess property or assets similar to Guanli;
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2.10 |
Without the prior written consent of Party A, Guanli shall not merge or
consolidate with, or acquire or invest in any person;
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2.1.11 |
Guanli shall immediately notify Party A of the occurrence or possible occurrence of
any litigation, arbitration or administrative proceedings relating to Guanlis assets,
businesses and revenues;
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2.1.12 |
To maintain the ownership by Guanli of all of its assets, it shall execute all
necessary or appropriate documents, take all necessary or appropriate actions and make
all necessary or appropriate claims or raise necessary and appropriate defenses against
all claims;
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2.1.13 |
Without the prior written consent of Party A, Guanli shall not in any manner
distribute dividends to its shareholders, provided that upon Party As written request,
it shall immediately distribute all or part of its distributable profits to its
shareholders;
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2.1.14 |
Within the term hereof, Guanli shall operate its business in compliance with all
applicable laws, regulations, administrative rules and regulations of the PRC, and
there will not be any material adverse effect on the business operation or assets of
Guanli due to any breach of the above requirements;
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2.1.15 |
If Party A exercises the Call Option according to the conditions of this Contract,
Guanli shall make its best endeavour to obtain all government approvals and other
consents (if applicable) that are necessary for the completion of the equity transfer
as soon as possible;
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2.1.16 |
At the request of Party A, they shall appoint any persons designated by Party A as
directors of Guanli.
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2.2 |
Undertakings relating to Party B
|
2.2.1 |
Without the prior written consent of Party A, she will not, at any time after
the date hereof, sell, transfer, mortgage or otherwise dispose of any legal or
beneficial interest in the equity interest, nor allow any other security interest to be
created thereon, except for the pledge right under the
Equity Pledge Contract
;
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2.2.2 |
Without the prior written consent of Party A, she will not vote in favor of
or support or execute any shareholders resolution at a shareholders meeting of Guanli
to approve the sale, transfer, mortgage or disposal in any other manner of any legal or
beneficial interest in the equity interest, nor allow any security interest to be
created thereon, except for the same is made to Party A or any person designated by it;
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2.2.3 |
Without the prior written consent of Party A, she will not vote in favor of
or support or execute any shareholders resolution at a shareholders meeting of Guanli
to approve the merger or consolidation of Guanli with any person, or the acquisition of
or investment in any person;
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2.2.4 |
She will immediately notify Party A of the occurrence or possible occurrence
of any litigation, arbitration or administrative proceedings relating to the equity
interest held by her;
|
2.2.5 |
She will procure the shareholders meeting of the company to vote in favor of
the transfer of the Purchased Equity as set forth in this Contract;
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2.2.6 |
To maintain her ownership in the equity interest, she will execute all
necessary or appropriate documents, take all necessary or appropriate actions and make
all necessary or appropriate claims or raise necessary and appropriate defenses against
all claims;
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2.2.7 |
At the request of Party A, she will appoint any persons designated by Party A
as directors of Guanli;
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2.2.8 |
At the request of Party A at any time, she will unconditionally and promptly
transfer her equity interest to Party A and/or the Designated Person at any time, and
give up her right of first refusal in respect of other equity interests to be
transferred;
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2.2.9 |
She will strictly observe the provisions of this Contract and other contracts
jointly or separately executed by and among Party B, Guanli and Party A, perform her
obligations hereunder and thereunder, and refrain from action/omission that may affect
the effectiveness and enforceability thereof.
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3.1 |
They have the right to execute and deliver this Contract and any equity transfer contracts to
which they are a party and which are entered into in respect of each transfer of the Purchased
Equity hereunder (each, a
Transfer Contract
), and to perform their respective obligations
under this Contract and any Transfer Contracts. This Contract and the Transfer Contracts to
which they are a party, once executed, will constitute their legal, valid and binding
obligations and shall be enforceable against them in accordance with the provisions thereof;
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3.2 |
The execution and delivery of this Contract or any Transfer Contracts and the performance of
their respective obligations under this Contract or any Transfer Contracts shall not: (i)
result in any violation of any applicable PRC laws and regulations; (ii) be in conflict with
their articles of association or other constituent documents; (iii) result in the violation of
any contracts or documents to which they are a party or which are binding upon them, or
constitute any breach under any contracts or documents to which they are a party or which are
binding upon them; (iv) result in the violation of any conditions for the grant and/or
continued effectiveness of any licenses or permits issued to either of them; or (v) result in
the suspension or revocation of or imposition of additional conditions to any licenses or
permits issued to either of them;
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3.3 |
Guanli has a good and merchantable title to all of its assets. Guanli has not created any
security interest on its assets;
|
3.4 |
Guanli does not have any outstanding debts, except for (i) debts incurred in the ordinary
course of its business, and (ii) debts disclosed to Party A for which Party As written
consent has been obtained;
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3.5 |
Guanli has complied with all PRC laws and regulations applicable to the acquisition of
assets;
|
3.6 |
There are no ongoing, pending or threatened litigation, arbitration or administrative
proceedings relating to Guanli or the equity interest in or assets of Guanli; and
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3.7 |
Party B has a good and merchantable title and a complete and valid disposal right to all of
her equity interests (except for the restrictions under the PRC laws and regulations). Save
for the security interests under the
Equity Pledge Contract
, she has not created any security
interest on her equity interest and is free from any third party claims.
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4.1 |
Unless with the prior written consent of Party A, Party B and Guanli shall not transfer their
respective rights and obligations hereunder to any third parties.
|
4.2 |
Party B and Guanli hereby agree that Party A shall have the right to transfer its rights and
obligations hereunder to any third parties when necessary. Party A shall only be required to
serve written notice to Party B and Guanli when such transfer is made, and no consent shall be
further required from Party B or Guanli in respect of such transfer.
|
5.1 |
This Contract shall become effective as of the date first written above.
|
5.2 |
This Contract shall be automatically terminated only after Party A exercises its option to
purchase all of the equity interests in Guanli pursuant to the requirements of this Contract,
except for the early termination by this Contract or pursuant to the provisions of the
relevant agreements separately signed by the parties hereto.
|
5.3 |
If, during the period stipulated in Article 5.2, the operation term of Party A or Guanli
(including any extended term) expires or either party terminates due to other reasons, this
Contract shall be terminated at the time of the termination of such party, except for the
circumstances where Party A has transferred its rights and obligations pursuant to Article 4.2
hereof.
|
5.4 |
After this Contract becomes effective, the
Exclusive Call Option Contract
dated November 7,
2008 by and among Party A, Party B and Party C, and the
Supplemental Agreement to the
Exclusive Call Option Contract
dated July 22, 2009 will be terminated.
|
6.1 |
Applicable Laws
|
6.2 |
Dispute Resolution
|
6
6.3 |
Liabilities for Breach
|
a. |
the information that are or will be known to the public (provided that they are
not disclosed to the public without authorization by the information receiving party);
|
b. |
the information required to be disclosed by applicable laws, or the rules or
regulations of securities exchanges; or
|
c. |
the information required to be disclosed by a party to its legal or financial
advisors with respect to the transaction mentioned herein, for which such legal or
financial advisors shall also comply with the confidentiality obligation as similar as
that described in this Article. Any divulgence of confidential information by the
employees of either party or any organization engaged by it shall be deemed as the
divulgence of confidential information by such party, and such party shall be liable
for the breach pursuant to this Contract. This article shall survive regardless of
whether this Contract is invalid, discharged, terminated or cannot be operated due to
any reason.
|
10.1 |
Modification, Amendment and Supplement
|
7
10.2 |
Integrity of this Contract
|
10.3 |
Severability of this Contract
|
10.4 |
Headings
|
10.5 |
Language and Counterpart
|
10.6 |
Successors
|
10.7 |
Survival
|
8
10.8 |
Waivers
|
9
/s/ Li Juan |
/s/ Li Juan | ||||
August 4, 2009 |
1. |
Loan Amount: Party A shall lend to Party B a loan of Renminbi Two Million And Five Hundred
Thousand (¥ 2,500,000).
|
2. |
Term: The loan shall be for a term of three years from the date hereof, and may be extended
upon its expiry after mutual consultation.
|
3. |
Use of the Loan: Party B undertakes that the loan will be used for investment in Shenzhen
Guanli Agricultural Technology Co., Ltd., and shall be in compliance with the relevant laws
and regulations. Otherwise, Party A shall have the right to discharge this Loan Contract
unilaterally and request Party B to assume the liabilities for breach of contract.
|
4. |
Equity Pledge: All equity interests owned by Party B in Shenzhen Guanli Agricultural
Technology Co., Ltd. shall be pledged as security.
|
5. |
Liabilities for Breach of Contract: If a party violates this Contract, the other party shall
have the right to discharge it and request the defaulting party to make compensation for any
loss arising therefrom.
|
6. |
Termination of this Contract: After the termination or discharge of this Contract, Party B
shall return the loan to Party A within five working days. In the event of any late return,
Party B shall pay to Party A any interest accrued thereon at a loan interest rate stipulated
by banks for the corresponding period.
|
7. |
Dispute Resolution: Any disputes arisen during the performance of this Contract shall be
resolved by the parties through consultation. In the event that no agreement can be reached
through consultation, such dispute shall be referred to China International Economic and Trade
Arbitration Commission for arbitration. The seat of arbitration shall be Shenzhen. The
arbitral award shall be final and binding upon the parties.
|
8. |
If any provision of this Contract becomes invalid, it shall not affect the validity of the
other provisions hereof.
|
9. |
This Contract is executed in two originals and each of the parties shall keep one original.
All of them shall have the same legal effect.
|
10. |
This Contract shall become effective after it is signed and sealed by Party A and signed by
Party B.
|
Party B: Cui Yachao
|
/s/ Cui Yachao |
(1) | The Pledgor is the legal and valid shareholder of Shenzhen Guanli Agricultural Technology Co., Ltd. ( Guanli ), who holds 5% equity interest of Guanli according to laws; |
(2) | The Pledgee is a wholly foreign-owned enterprise incorporated in Shenzhen under the laws of the Peoples Republic of China (hereinafter referred to as the PRC , and for the purpose of this Contract, excluding the Hong Kong Special Administrative Region, Macao Special Administrative Region and Taiwan); | |
(3) | Guanli is a limited liability company established in Shenzhen under the laws of the PRC; |
(4) | The Pledgee and Guanli entered into the Exclusive Technology Development, Technology Support and Technology Services Contract on November 7, 2008. The Pledgor agrees to pledge all of his equity interest in Guanli as security for the performance by Guanli of all of its obligations under the above contract; |
(5) | The Pledgee, the Pledgor and Guanli entered into the Exclusive Call Option Contract on August 4, 2009, and the Pledgee and the Pledgor entered into the Loan Contract on August 4, 2009. The Pledgor agrees to pledge all of his equity interest in Guanli as security for the performance by the Pledgor and Guanli of all of their respective obligations under the above four contracts. |
1. | Definitions | |
Unless otherwise required herein, the following terms shall have the meaning as follows: |
1.1 | Pledge Right refers to the full content of Article 2 hereof. | ||
1.2 | Equity Interest means the equity interest legally held by the Pledgor in Guanli. | ||
1.3 | Master Contract means the Exclusive Technology Development, Technology Support and Technology Services Contract , the Exclusive Call Option Contract , the Loan Contract and any amendment and supplement thereto. | ||
1.4 | Secured Party means any contractual party of each Master Contract other than the Pledgee. | ||
1.5 | Secured Debt means all contractual obligations of a Secured Party under each Master Contract, including (but not limited to) interest, default penalty, compensation, expenses incurred by the Pledgee in realizing debt. | ||
1.6 | Event of Default means any circumstances stated in Article 7.1 hereof. | ||
1.7 | Notice of Default means the notice of default issued by the Pledgee pursuant to this Contract, declaring the occurrence of an Event of Default. |
2. | Pledge Right | |
The Pledgor hereby pledges all of his Equity Interest in Guanli to the Pledgee as security for the performance by the Pledgor and Guanli of all of their respective obligations under the Master Contract. Therefore, the Pledgee is entitled to the Pledge Right in respect of all the Equity Interest of the Pledgor in Guanli. The Pledge Right means the right of priority to claim for any money converted from the Equity Interest pledged by the Pledgor to the Pledgee, or any proceeds from the auction or sale of such Equity Interest that is enjoyed by the Pledgee. | ||
3. | Registration of Pledge |
3.1 | Within one (1) week from the date hereof, Guanli shall, and the Pledgor shall procure Guanli to record the Pledge Right specified in Article 2 above on the register of members of Guanli, and deliver a copy of the register of members of Guanli with its common chop affixed thereon and the original of the equity contribution certificate to the Pledgee for custody. |
3.2 | After the execution hereof, the Pledgor shall, at the written request of the Pledgee at any time, complete the notarization jointly with the Pledgee in respect of this Contract, as well as the Pledge Right of the Pledgee recorded on the register of members and the equity contribution certificate as set forth in Article 3.1 at a notary public office of the place where Guanli is located. |
2
3.3 | The parties agree that they will make their best effort to register, and cause the pledge hereunder to be registered with an industrial and commercial administrative department of the place where Guanli is registered. The parties also confirm that, unless the registration of the pledge hereunder with the industrial and commercial administrative department is mandatory in law, the validity of this Contract and the Pledge Right specified in Article 2 above shall not be affected even if the parties fail to register the pledge hereunder with the industrial and commercial administrative department of the place where Guanli is registered after the execution of this Contract. |
4. | Rights of the Pledgee |
4.1 | When a Secured Party does not perform any of its obligations under the Master Contract, the Pledgee shall have the right of priority to claim for any money converted from Guanlis Equity Interest pledged by the Pledgor, or any proceeds from the auction or sale of such Equity Interest. |
4.2 | The Pledgee shall be entitled to receive any dividends (including bonuses) and other property distributions arising from the Equity Interest that is pledged. |
5. | Representations and Warranties of the Pledgor |
5.1 | The Pledgor is the legitimate owner of the Equity Interest; |
5.2 | The Pledgor fully understands the contents of the Master Contract. She signs and performs this Contract on a voluntary basis and all his actual meaning is truly expressed herein. The Pledgor is legally authorized to execute this Contract; |
5.3 | All documents, information, statements and evidence provided by the Pledgor to the Pledgee are accurate, true, complete and valid; |
5.4 | The Pledgor acknowledges that the Pledgee shall have the right to dispose of and transfer the Pledge Right in a manner stipulated herein and within the scope restricted by the PRC laws; |
5.5 | Except for the interest of the Pledgee, the Pledgor has not created other pledges, any other kinds of rights or any third party rights over the Equity Interest; |
5.6 | The Pledgor has obtained the consent of other shareholders of Guanli to pledge the Equity Interest, and the other shareholders have unanimously agreed that they will not interfere by any means and will give up the exercise of their pre-emptive right when the Pledgee actually exercises the Pledge Right. |
6. | Undertakings of the Pledgor | |
In addition to the obligations specified in the other provisions hereof, the Pledgor undertakes as follows: |
6.1 | During the term hereof, the Pledgor undertakes to the Pledgee for its benefit that: |
3
6.1.1 | save for the transfer of the Equity Interest to the Pledgee, the Pledgor shall not, without the prior written consent of the Pledgee, transfer the Equity Interest, nor create or permit the existence of any pledge which might affect the rights and interests of the Pledgee, nor procure any resolution in relation to the sale/transfer/pledge or disposal by other means of the legal and beneficial interest in any Equity Interest of Guanli or permitting the creation of any other security interests over it to be passed at a shareholders meeting of the company; unless with the prior written consent of the Pledgee, the Pledgor shall vote at a shareholders meeting of Guanli/procure any director of Guanli nominated by him to vote at a board meeting of Guanli and/or by other means to object Guanli to sell/transfer/pledge or otherwise dispose of any of its major assets, including (but not limited to) any intellectual property rights. |
6.1.2 | if the Equity Interest pledged hereunder is subject to any compulsory measures imposed by courts or other departments for any reasons, the Pledgor shall use all his efforts, including (without limitation) the provision of other security to courts or adoption of other measures, to remove the compulsory measures taken by courts or other departments in respect of the Equity Interest pledged. |
6.1.3 | the Pledgor shall comply with and implement all laws and regulations relevant to the pledge of rights. The Pledgor shall, within five (5) days of the receipt of any notices, orders or recommendations given or made by the competent authority with respect to the Pledge Right, present the above notices, orders or recommendations to the Pledgee, and shall comply with the same or raise objections and make representations in respect of the above matters as reasonably required by or with the consent of the Pledgee. |
6.1.4 | the Pledgor shall promptly notify the Pledgee of any event which might have effects on the Equity Interest of the Pledgor or any part of his right or any notice received in connection therewith, as well as any event which might change any warranty and obligation of the Pledgor as created by this Contract or might have effects on it or any notice received in connection therewith. |
6.2 | The Pledgor agrees that the Pledgee shall not be interrupted nor impeded by any legal proceedings instituted by the Pledgor or any successors of the Pledgor or any person authorized by the Pledgor or any other persons when it exercises its rights on the pledge pursuant to the provisions hereof and within the scope permitted by the PRC laws. |
6.3 | The Pledgor undertakes to the Pledgee that, in order to protect or improve the security for the repayment of the Secured Debt herein, she will honestly execute and procure other parties who have an interest in the Pledge Right to execute all title certificates and contracts required by the Pledgee, and/or perform and procure other interested parties to perform all acts required by the Pledgee, and facilitate the exercise of any right and authorization conferred to the Pledgee by this Contract. |
4
6.4 | The Pledgor undertakes to the Pledgee that she will execute all documents in relation to the change of share certificates (if applicable and necessary) with the Pledgee or any person designated by it (natural person/legal person), and shall provide the Pledgee with all notices, orders and decisions in relation to the Pledge Right which it thinks necessary within a reasonable time. |
6.5 | The Pledgor undertakes to the Pledgee that she will, for the interest of the Pledgee, observe and perform all warranties, undertakings, contracts, representations and conditions. If the Pledgor does not perform or fully perform his warranties, undertakings, contracts, representations and conditions, she will indemnify the Pledgee all losses suffered by it arising therefrom. |
7. | Event of Default |
7.1 | The following events shall be deemed as Events of Default: |
7.1.1 | the Secured Party fails to fully perform any of its Secured Debts under the Master Contract as scheduled; |
7.1.2 | any representation or warranty made by the Pledgor in Article 5 hereof contains misleading or false information that is material, and/or the Pledgor violates the warranties set forth in Article 5 hereof; |
7.1.3 | the Pledgor violates the undertakings set forth in Article 6 hereof; | ||
7.1.4 | the Pledgor violates any other provisions of this Contract; |
7.1.5 | the Pledgor gives up the pledged Equity Interest or transfers the pledged Equity Interest without the written consent of the Pledgee; |
7.1.6 | any external loan, guarantee, compensation, undertaking or other debt liability of the Pledgor (1) is required to be repaid or performed prior to the scheduled date due to any breach of this Contract; (2) has been due but cannot be repaid or performed as scheduled, which in the opinion of the Pledgee, would have affected the ability of the Pledgor in performing his obligations hereunder; | ||
7.1.7 | Guanli is incapable to repay the general debts or other debts; |
7.1.8 | this Contract becomes illegal or the Pledgor fails to continue to perform his obligations hereunder due to any reasons other than force majeure; |
7.1.9 | there has been any adverse change in the properties of the Pledgor, which, in the opinion of the Pledgee, would have affected the ability of the Pledgor in performing his obligations hereunder; |
7.1.10 | there occurs any material adverse change in the assets, operating result or financial situation of Guanli; |
5
7.1.11 | the successors or heirs of Guanli can only perform part of, or refuse to perform, the Master Contract; |
7.1.12 | the Pledgor violates any other provisions of this Contract through any act or omission to act. |
7.2 | If the Pledgor is aware or discovers that any event described in this Article 7 or any event which may possibly result in the aforesaid events has happened, she shall immediately notify the Pledgee in writing. |
7.3 | Unless the events of default listed in this Article 7.1 has been resolved to the satisfactory of the Pledgee, the Pledgee may serve a written Notice of Default to the Pledgor at any time when the Pledgor is in default or thereafter and require the Pledgor to pay any debts and other payables under the Master Contract or to dispose of the Pledge Right pursuant to Article 8 hereof. |
8. | Exercise of the Pledge Right |
8.1 | Subject to the requirement in Article 6.1.1 hereof, the Pledgor shall not transfer the pledged Equity Interest before the obligations of the Secured Party under the Master Contract have not been fully performed and without the written consent of the Pledgee. |
8.2 | The Pledgee shall serve Notice of Default to the Pledgor when exercising its Pledge Right. |
8.3 | Subject to the requirement in Article 7.3 hereof, the Pledgee may exercise the right to dispose of the Pledge Right at the time when the Notice of Default is given pursuant to Article 7.3 or at any time after such notice is given. |
8.4 | The Pledgee shall have the right of priority to claim for any money converted from all or part of the Equity Interest hereunder, or any proceeds from the auction or sale of such Equity Interest according to statutory procedures until the outstanding debts and all other payables of the Secured Party under the Master Contract are repaid. |
8.5 | When the Pledgee disposes of the Pledge Right in accordance with this Contract, the Pledgor shall not pose any obstacles, and shall offer necessary assistance in this regard so that the Pledgee can realize its Pledge Right. |
9. | Assignment of this Contract |
9.1 | Unless with the prior consent of the Pledgee, the Pledgor or Guanli shall have no right to transfer any of her/its rights or obligations hereunder. |
9.2 | This Contract shall be binding upon the Pledgor and his successors or heirs, and shall be valid and binding upon the Pledgee and each of its successors, heirs or permitted assignees. |
6
9.3 | The Pledgee may, at any time and to the extent permitted by laws, transfer all or any of its rights and obligations under the Master Contract to any person designated by it (natural person/legal person), in which case, the assignee shall be entitled to and undertake all rights and obligations of the Pledgee hereunder as if it should have been entitled to and undertaken such rights and obligations as a party to this Contract. When the Pledgee transfers its rights and obligations under the Master Contract, a written notice shall be only given by the Pledgee to the Pledgor, and the Pledgor shall, at the request of the Pledgee, execute and transfer the relevant contracts and/or documents in this regard. |
9.4 | A new pledge contract shall be signed between the new parties to the pledge after the change of the pledgee as a result of the transfer. |
10. | Effectiveness | |
This Contract is signed and shall become effective on the date first written above. |
11. | Termination | |
This Contract shall be terminated after the Secured Debt under the Master Contract has been fully repaid and the Pledgor has no longer undertaken any obligation under the Master Contract, and the Pledgee shall, within the earliest reasonable and practicable time, offer assistance to complete necessary formalities so as to release the pledge of the Equity Interest. |
12. | Handling Fees and Other Costs |
12.1 | All costs and actual expenses in connection with this Contract, including without limitation, legal fee, cost of production, stamp duty and any other taxes and charges, shall be borne by the Pledgee. If the relevant taxes are required by law to be paid by the Pledgor, the Pledgee shall fully indemnify the Pledgor such taxes paid by her. |
12.2 | If the Pledgee fails to pay any taxes or charges payable in accordance with this Contract or the Pledgor recovers such taxes or charges by any means or ways due to any other reasons, the Pledgee shall bear all costs arising therefrom (including without limitation, all taxes, handling fees, management fees, litigation cost, attorneys fees and various insurance premiums in connection with the handling of the Pledge Right). |
13. | Force Majeure |
13.1 | Force Majeure means any event that is beyond the reasonable control of a party and that is unavoidable even though the party so affected gives reasonable attention to it, including but not limited to act of government, act of nature, fire, explosion, typhoon, flood, earthquake, tidal, lightning or war. However, the shortage of credit, capital or financing shall not be deemed as events beyond the reasonable control of a party. Any party who is affected by Force Majeure shall notify the other party as soon as possible of the event, in respect of which the exemption from such obligations is sought. |
7
13.2 | When the performance of this Contract is delayed or prevented due to the Force Majeure defined above, the party so affected shall not be required to assume any liabilities hereunder to the extent that it is within the scope of the delay or prevention. It shall take appropriate measures to minimize or eliminate the impact of Force Majeure and shall make effort to resume the performance of any obligations that are delayed or prevented by the Force Majeure. Once the Force Majeure is removed, the parties agree to resume the performance of their respective obligations hereunder with their greatest efforts. |
14. | Confidentiality Obligation | |
The parties hereto acknowledge and confirm that any oral or written information exchanged between them in connection with this Contract shall be confidential information. The parties shall keep all such information confidential and shall not disclose any of the information to any third parties without the written consent of the other parties, except for the following: (a) the information that are or will be known to the public (provided that they are not disclosed to the public without authorization by the information receiving party); (b) the information required to be disclosed by applicable laws, or the rules or regulations of securities exchanges; or (c) the information required to be disclosed by a party to its legal or financial advisors with respect to the transaction mentioned herein, for which such legal or financial advisors shall also comply with the confidentiality obligation as similar as that described in this Article. Any divulgence of Confidential Information by the employees of either party or any organization engaged by it shall be deemed as the divulgence of Confidential Information by such party, and such party shall be liable for the breach pursuant to this Contract. |
15. | Dispute Resolution |
15.1 | This Contract shall be governed by and construed in accordance with the laws of the PRC; |
15.2 | Any disputes between the parties arising from the interpretation and performance of any provisions hereof shall be resolved in good faith by them through consultation. If no agreement can be reached in respect of a dispute, either party may submit such dispute to China International Economic and Trade Arbitration Commission for arbitration in accordance with its arbitration rules then in force. The seat of arbitration shall be Shenzhen. The arbitration shall be conducted in Chinese. The arbitral award shall be final and binding upon the parties. |
16. | Integrity of this Contract | |
Notwithstanding the requirement in Article 10 hereof, the parties confirm that, once this Contract becomes effective, it shall constitute the entire agreement and understanding between the parties hereto with respect to the contents of this Contract, and shall completely supersede all previous oral or/and written discussions, communications, understanding, agreements and arrangements between the parties hereto in connection with the contents of this Contract. |
17. | Severability of this Contract | |
If any provision of this Contract is invalid or unenforceable due to its inconsistency with the relevant laws, such provision shall be deemed to be invalid only to the extent within the scope of the related jurisdiction, and shall not affect the legal effect of the other provisions hereof. |
8
18. | Amendment and Supplement to this Contract |
18.1 | All amendments and supplements to this Contract shall be made by the parties in writing. Any amendment contracts and supplemental contracts hereto duly signed by the parties shall be an integral part of this Contract, and shall have the same legal effect as this Contract. |
18.2 | This Contract and any of its amendments, supplements or modification shall be made in writing and shall become effective once they are signed and sealed by the parties. |
19. | Counterpart | |
This Contract is executed in Chinese in six originals and each of them shall have the same legal effect. The Pledgee, the Pledgor and Guanli shall each keep one original and the remaining three originals shall be provided to the relevant government departments. |
9
10
1. |
Party A is a wholly foreign-owned enterprise incorporated in Shenzhen under the laws of the
Peoples Republic of China (hereinafter referred to as the
PRC
, and for the purpose of this
Contract, excluding the Hong Kong Special Administrative Region, Macao Special Administrative
Region and Taiwan);
|
2. |
Party B is a citizen of the PRC, who holds 5% equity interest of Shenzhen Guanli Agricultural
Technology Co., Ltd. (
Guanli
);
|
|
3. |
Guanli is a limited liability company established in Shenzhen under the laws of the PRC;
|
4. |
Party B intends to grant to Party A an exclusive call option so that Party A may request
Party B to sell his equity interest to it upon certain conditions are satisfied.
|
1.1 |
Grant of Option
|
|
Party B hereby irrevocably grants to Party A an option to purchase or designate any person
or persons (hereinafter referred to as the
Designated Person
) to purchase from Party B all
or part of his equity interest in Guanli at any time according to the steps for exercise of
the option as determined by Party A at its sole discretion to the extent permitted by the
PRC laws and at the price specified in Article 1.3 hereof (hereinafter referred to as the
Call Option
). Except for Party A and/or the Designated Person, Party B shall not sell,
offer to sell, transfer, offer as gift nor pledge any equity interest of Guanli to any other
third parties. Guanli hereby agrees to the grant of the Call Option by Party B to Party A
and/or the Designated Person. The term person specified in this Article and this Contract
shall include individuals, corporations, joint ventures, partnerships, enterprises, trusts
or non-corporate bodies.
|
1.2 |
Steps for Exercise of the Call Option
|
|
Subject to the provisions of the PRC laws and regulations, Party A and/or the Designated
Person may exercise the Call Option by giving written notice to Party B (hereinafter
referred to as the
Equity Purchase Notice
) and specifying the portion of equity interest
to be purchased from Party B (hereinafter referred to as the
Purchased Equity
) and the
manner in which the purchase is made.
|
||
1.3 |
Purchase Price
|
1.3.1 |
When Party A exercises its Call Option, unless an appraisal is required to be
made in respect of the equity interest by applicable PRC laws and regulations then in
effect or there are other restrictions imposed by such PRC laws and regulations on the
price of equity interest, the purchase price payable by Party A to Party B in respect
of all of the equity interest (hereinafter referred to as the
Purchase Price
) shall
be RMB One (1). Party A shall also release the obligation of Party B to make repayment
under the
Loan Contract
dated August 4, 2009 between Party A and Party B.
|
1.3.2 |
If an appraisal is required to be made in respect of the equity interest by
the PRC laws and regulations that are applicable at the time when Party A exercises its
Call Option or there are other restrictions imposed by such PRC laws and regulations on
the price of equity interest, the parties agree that the Purchase Price shall the
minimum price permitted by applicable laws.
|
1.3.3 |
If Party A chooses to purchase part of the equity interest, the exercise price
of the Call Option shall be adjusted according the ratio of the Purchased Equity to the
whole equity interests of Guanli.
|
1.4 |
Transfer of the Purchased Equity
|
|
For each exercise of the Call Option:
|
1.4.1 |
Party B shall cause Guanli to hold a shareholders meeting in a timely manner,
during which a resolution approving the transfer of equity interest by Party B to Party
A and/or the Designated Person shall be passed and he shall procure other shareholders
to give up their right of first refusal in respect of the Purchased Equity in writing;
|
1.4.2 |
Party B shall sign an equity transfer contract in relation to each transfer
with Party A and/or the Designated Person (as applicable) in accordance with the
requirements of this Contract and the Equity Purchase Notice in connection with the
Purchased Equity;
|
1.4.3 |
The relevant parties shall execute all other necessary contracts, agreements
or documents, obtain all necessary government approvals and consents, and take all
necessary actions to grant the valid ownership of the Purchased Equity to Party A
and/or the Designated Person without any security interest being attached thereto and
procure Party A and/or the Designated Person to become the legal owner of the Purchased
Equity. For the purpose of this Article and this Contract, security interest shall
include guarantees, mortgages, pledges, third parties rights or interests, any share
options, acquisition rights, right of first refusal, right to offset, ownership
retention or other security arrangements but exclude any security interest arising from
the
Equity Pledge Contract
dated August 4, 2009 by and among Party A, Party B and
Guanli (hereinafter referred to as the
Equity Pledge Contract
).
|
2
1.5 |
Payment
|
|
The payment method of the Purchase Price or the exercise price of the Call Option shall be
determined by Party A and/or the Designated Person and Party B through negotiation in
accordance with the laws applicable at the time when the Call Option is exercised.
|
2.1 |
Joint undertakings relating to Guanli
|
|
Party B and Party C hereby jointly undertake as follows:
|
2.1.1 |
Without the prior written consent of Party A, they shall not in any manner
supplement, change or amend the articles of association of Guanli, increase or decrease
its registered capital, or otherwise change the structure of its registered capital;
|
2.1.2 |
Guanli shall maintain its corporate existence in accordance with good
financial and business standards and practices by operating its business and handling
its affairs in a prudent and efficient manner; it shall make its best endeavour to
ensure that Guanli continues to own all permits, licenses and approvals that are
necessary for its operation and that such permits, licenses and approvals will not be
cancelled; it shall make its best endeavour to keep the current organizational
structure and the senior management of the company unchanged, and to maintain the
relationship with its customers so as to guarantee that there will not be any material
adverse effect on the goodwill and operation of Guanli after the delivery of equity
interest as agreed;
|
2.1.3 |
Without the prior written consent of Party A, Guanli shall not, at any time
after the date hereof, sell, transfer, mortgage or otherwise dispose of the legal or
beneficial interest in any assets, businesses or revenues of Guanli, nor allow any
other security interest to be created thereon;
|
2.1.4 |
Without the prior written consent of Party A, Guanli shall not incur, inherit,
guarantee or allow the existence of any debt, except for (i) debts incurred in the
normal or ordinary course of business other than through loans; and (ii) debts
disclosed to Party A for which Party As written consent has been obtained;
|
2.1.5 |
Guanli shall always operate all of its businesses during the ordinary course
of business to maintain its asset value, and shall refrain from any action/omission
that may affect its business operation and asset value;
|
2.1.6 |
Without the prior written consent of Party A, Guanli shall not enter into any
material contract, except for those contracts that are entered into in the ordinary
course of business (for the purpose of this paragraph, a contract with a value
exceeding RMB One Million (1,000,000) shall be deemed as a material contract);
|
2.1.7 |
Without the prior written consent of Party A, Guanli shall not provide any
loan or credit to any person;
|
2.1.8 |
Guanli shall, at the request of Party A, provide it with information relating
to the business operation and financial condition of Guanli;
|
2.1.9 |
Guanli shall take out and maintain insurance from an insurance company
recognized by Party A. The coverage and type of insurance shall be the same as those
of the insurance typically taken out by other companies that operate businesses similar
to Guanli in the same region and possess property or assets similar to Guanli;
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2.10 |
Without the prior written consent of Party A, Guanli shall not merge or
consolidate with, or acquire or invest in any person;
|
2.1.11 |
Guanli shall immediately notify Party A of the occurrence or possible occurrence of
any litigation, arbitration or administrative proceedings relating to Guanlis assets,
businesses and revenues;
|
2.1.12 |
To maintain the ownership by Guanli of all of its assets, it shall execute all
necessary or appropriate documents, take all necessary or appropriate actions and make
all necessary or appropriate claims or raise necessary and appropriate defenses against
all claims;
|
2.1.13 |
Without the prior written consent of Party A, Guanli shall not in any manner
distribute dividends to its shareholders, provided that upon Party As written request,
it shall immediately distribute all or part of its distributable profits to its
shareholders;
|
2.1.14 |
Within the term hereof, Guanli shall operate its business in compliance with all
applicable laws, regulations, administrative rules and regulations of the PRC, and
there will not be any material adverse effect on the business operation or assets of
Guanli due to any breach of the above requirements;
|
2.1.15 |
If Party A exercises the Call Option according to the conditions of this Contract,
Guanli shall make its best endeavour to obtain all government approvals and other
consents (if applicable) that are necessary for the completion of the equity transfer
as soon as possible;
|
2.1.16 |
At the request of Party A, they shall appoint any persons designated by Party A as
directors of Guanli.
|
2.2 |
Undertakings relating to Party B
|
|
Party B hereby undertakes that:
|
2.2.1 |
Without the prior written consent of Party A, he will not, at any time after
the date hereof, sell, transfer, mortgage or otherwise dispose of any legal or
beneficial interest in the equity interest, nor allow any other security interest to be
created thereon, except for the pledge right under the
Equity Pledge Contract
;
|
2.2.2 |
Without the prior written consent of Party A, he will not vote in favor of or
support or execute any shareholders resolution at a shareholders meeting of Guanli to
approve the sale, transfer, mortgage or disposal in any other manner of any legal or
beneficial interest in the equity interest, nor allow any security interest to be
created thereon, except for the same is made to Party A or any person designated by it;
|
2.2.3 |
Without the prior written consent of Party A, he will not vote in favor of or
support or execute any shareholders resolution at a shareholders meeting of Guanli to
approve the merger or consolidation of Guanli with any person, or the acquisition of or
investment in any person;
|
2.2.4 |
He will immediately notify Party A of the occurrence or possible occurrence of
any litigation, arbitration or administrative proceedings relating to the equity
interest held by him;
|
2.2.5 |
He will procure the shareholders meeting of the company to vote in favor of
the transfer of the Purchased Equity as set forth in this Contract;
|
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2.2.6 |
To maintain his ownership in the equity interest, he will execute all
necessary or appropriate documents, take all necessary or appropriate actions and make
all necessary or appropriate claims or raise necessary and appropriate defenses against
all claims;
|
2.2.7 |
At the request of Party A, he will appoint any persons designated by Party A
as directors of Guanli;
|
2.2.8 |
At the request of Party A at any time, he will unconditionally and promptly
transfer his equity interest to Party A and/or the Designated Person at any time, and
give up his right of first refusal in respect of other equity interests to be
transferred;
|
2.2.9 |
He will strictly observe the provisions of this Contract and other contracts
jointly or separately executed by and among Party B, Guanli and Party A, perform his
obligations hereunder and thereunder, and refrain from action/omission that may affect
the effectiveness and enforceability thereof.
|
3.1 |
They have the right to execute and deliver this Contract and any equity transfer contracts to
which they are a party and which are entered into in respect of each transfer of the Purchased
Equity hereunder (each, a
Transfer Contract
), and to perform their respective obligations
under this Contract and any Transfer Contracts. This Contract and the Transfer Contracts to
which they are a party, once executed, will constitute their legal, valid and binding
obligations and shall be enforceable against them in accordance with the provisions thereof;
|
3.2 |
The execution and delivery of this Contract or any Transfer Contracts and the performance of
their respective obligations under this Contract or any Transfer Contracts shall not: (i)
result in any violation of any applicable PRC laws and regulations; (ii) be in conflict with
their articles of association or other constituent documents; (iii) result in the violation of
any contracts or documents to which they are a party or which are binding upon them, or
constitute any breach under any contracts or documents to which they are a party or which are
binding upon them; (iv) result in the violation of any conditions for the grant and/or
continued effectiveness of any licenses or permits issued to either of them; or (v) result in
the suspension or revocation of or imposition of additional conditions to any licenses or
permits issued to either of them;
|
3.3 |
Guanli has a good and merchantable title to all of its assets. Guanli has not created any
security interest on its assets;
|
3.4 |
Guanli does not have any outstanding debts, except for (i) debts incurred in the ordinary
course of its business, and (ii) debts disclosed to Party A for which Party As written
consent has been obtained;
|
3.5 |
Guanli has complied with all PRC laws and regulations applicable to the acquisition of
assets;
|
5
3.6 |
There are no ongoing, pending or threatened litigation, arbitration or administrative
proceedings relating to Guanli or the equity interest in or assets of Guanli; and
|
3.7 |
Party B has a good and merchantable title and a complete and valid disposal right to all of
his equity interests (except for the restrictions under the PRC laws and regulations). Save
for the security interests under the
Equity Pledge Contract
, he has not created any security
interest on his equity interest and is free from any third party claims.
|
4.1 |
Unless with the prior written consent of Party A, Party B and Guanli shall not transfer their
respective rights and obligations hereunder to any third parties.
|
4.2 |
Party B and Guanli hereby agree that Party A shall have the right to transfer its rights and
obligations hereunder to any third parties when necessary. Party A shall only be required to
serve written notice to Party B and Guanli when such transfer is made, and no consent shall be
further required from Party B or Guanli in respect of such transfer.
|
5.1 |
This Contract shall become effective as of the date first written above.
|
5.2 |
This Contract shall be automatically terminated only after Party A exercises its option to
purchase all of the equity interests in Guanli pursuant to the requirements of this Contract,
except for the early termination by this Contract or pursuant to the provisions of the
relevant agreements separately signed by the parties hereto.
|
5.3 |
If, during the period stipulated in Article 5.2, the operation term of Party A or Guanli
(including any extended term) expires or either party terminates due to other reasons, this
Contract shall be terminated at the time of the termination of such party, except for the
circumstances where Party A has transferred its rights and obligations pursuant to Article 4.2
hereof.
|
6.1 |
Applicable Laws
|
|
The formation of this Contract, its effectiveness, interpretation and performance, as well
as the dispute resolution hereunder shall be protected and governed by the laws of the PRC.
|
6.2 |
Dispute Resolution
|
|
Any disputes between the parties arising from the interpretation and performance of any
provisions hereof shall be resolved in good faith by them through consultation. If no
agreement can be reached within thirty (30) days after a Party proposes to resolve a dispute
through consultation, either party may submit such dispute to China International Economic
and Trade Arbitration Commission for arbitration in accordance with its arbitration rules
then in force. The seat of arbitration shall be Shenzhen. The arbitration shall be
conducted in Chinese. The arbitral award shall be final and binding upon the parties.
|
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6.3 |
Liabilities for Breach
|
|
A breach of this Contract shall be constituted if any party hereto violates the requirements
of this Contract by failing to fully perform this Contract, or making any false information,
or withholding or omitting significant facts in any undertaking, representation and warranty
made by him/it in this Contract, or refusing to perform any of his/its undertakings,
representations and warranties. The defaulting party shall bear the corresponding
liabilities for the breach according to laws.
|
a. |
the information that are or will be known to the public (provided that they are
not disclosed to the public without authorization by the information receiving party);
|
b. |
the information required to be disclosed by applicable laws, or the rules or
regulations of securities exchanges; or
|
c. |
the information required to be disclosed by a party to its legal or financial
advisors with respect to the transaction mentioned herein, for which such legal or
financial advisors shall also comply with the confidentiality obligation as similar as
that described in this Article. Any divulgence of confidential information by the
employees of either party or any organization engaged by it shall be deemed as the
divulgence of confidential information by such party, and such party shall be liable
for the breach pursuant to this Contract. This article shall survive regardless of
whether this Contract is invalid, discharged, terminated or cannot be operated due to
any reason.
|
10.1 |
Modification, Amendment and Supplement
|
|
All amendments and supplements to this Contract shall be made by the parties in writing.
Any amendment contracts and supplemental contracts hereto duly signed by the parties shall
be an integral part of this Contract, and shall have the same legal effect as this Contract.
|
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10.2 |
Integrity of this Contract
|
|
The parties confirm that, once this Contract becomes effective, it shall constitute the
entire agreement and understanding between the parties hereto with respect to the contents
of this Contract, and shall completely supersede all previous oral or/and written agreement
and understanding between the parties hereto in connection with the contents of this
Contract.
|
||
10.3 |
Severability of this Contract
|
|
If any provision or provisions of this Contract is/are held to be invalid, illegal or
unenforceable in any respect in accordance with any laws or regulations, the validity,
legality or enforceability of the remaining provisions of this Contract shall not be
affected or impaired in any respect. The parties shall, through amicable negotiations,
strive to replace those invalid, illegal or unenforceable provision or provisions with valid
provision or provisions, and the economic effect of such valid provision or provisions shall
be as close as possible to the economic effect of those invalid, illegal or unenforceable
provision or provisions.
|
||
10.4 |
Headings
|
|
The headings of this Contract are for convenience only, and shall not be used to interpret,
explain or otherwise affect the meanings of the provisions of this Contract.
|
||
10.5 |
Language and Counterpart
|
|
This Contract is executed in Chinese in six originals and each of them shall have the same
legal effect. Each party shall keep one original and the remaining three originals shall be
provided to the relevant government departments.
|
||
10.6 |
Successors
|
|
This Contract shall be binding on and shall inure to the interest of the respective
successors or heirs of the parties and the permitted assignees of such parties.
|
||
10.7 |
Survival
|
|
Any obligations that occur or are due as a result of this Contract prior to the expiration
or early termination of this Contract shall survive the expiration or early termination
hereof. The provisions of Chapters 6 and 8 and this Article 10.7 hereof shall survive the
termination of this Contract.
|
||
10.8 |
Waivers
|
|
Any party may waive the terms and conditions of this Contract, provided that such a waiver
must be provided in writing and shall require the signatures of the parties. No waiver by
any party in certain circumstances with respect to a breach by other parties shall operate
as a waiver by such a party with respect to any similar breach by other parties in other
circumstances.
|
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9
/s/ Cui Yachao
|
||
|
/s/ Cui Yachao | ||||
August 4, 2009 | ||||
Legal Representative: LAI GUANGLIN
|
Position: Executive Director | |
|
||
Authorized Agent: Zhang Hui
|
Position: Administrator |
ID Card No.: 420983197609010023
|
Telephone No.: 13603071085 |
ID Card No.: 220104195612155017
|
Telephone No.: 13603076606 |
ID Card No.: 220104198401120344
|
Telephone No.: 13603076606 |
Transferor (Party A):
|
/s/ Zhang Hui | |
|
[Chop of Agria Brother Biotech (Shenzhen) Co., Ltd. is affixed] | |
|
||
Transferee (Party B):
|
/s/ Li Juan | |
|
||
Transferee (Party C):
|
/s/ Cui Yang, the agent of Cui Yachao |
|
Shenzhen Notary Public Office, Guangdong Province, | |
|
the Peoples Republic of China | |
|
||
|
Notary: /s/ Liu Suimei | |
|
||
|
[Chop of Shenzhen Notary Public Office is affixed] |
|
Beijing Qiushi Notary Public Office, the Peoples Republic of China | |
|
||
|
Notary: /s/ Liu Zheng | |
|
||
|
August 5, 2009 | |
|
||
|
[Chop of Beijing Qiushi Notary Public Office is affixed] |
1. |
Loan Amount: Party A shall lend to Party B a loan of Renminbi Two Million And Five Hundred
Thousand (¥2,500,000).
|
2. |
Term: The loan shall be for a term of three years from the date hereof, and may be extended
upon its expiry after mutual consultation.
|
3. |
Use of the Loan: Party B undertakes that the loan will be used for investment in Shenzhen
Guanli Agricultural Technology Co., Ltd., and shall be in compliance with the relevant laws
and regulations. Otherwise, Party A shall have the right to discharge this Loan Contract
unilaterally and request Party B to assume the liabilities for breach of contract.
|
4. |
Equity Pledge: All equity interests owned by Party B in Shenzhen Guanli Agricultural
Technology Co., Ltd. shall be pledged as security.
|
5. |
Liabilities for Breach of Contract: If a party violates this Contract, the other party shall
have the right to discharge it and request the defaulting party to make compensation for any
loss arising therefrom.
|
6. |
Termination of this Contract: After the termination or discharge of this Contract, Party B
shall return the loan to Party A within five working days. In the event of any late return,
Party B shall pay to Party A any interest accrued thereon at a loan interest rate stipulated
by banks for the corresponding period.
|
7. |
Dispute Resolution: Any disputes arisen during the performance of this Contract shall be
resolved by the parties through consultation. In the event that no agreement can be reached
through consultation, such dispute shall be referred to China International Economic and Trade
Arbitration Commission for arbitration. The seat of arbitration shall be Shenzhen. The
arbitral award shall be final and binding upon the parties.
|
8. |
If any provision of this Contract becomes invalid, it shall not affect the validity of the
other provisions hereof.
|
9. |
This Contract is executed in two originals and each of the parties shall keep one original.
All of them shall have the same legal effect.
|
10. |
This Contract shall become effective after it is signed and sealed by Party A and signed by
Party B.
|
Party A: | Agria Brother Biotech (Shenzhen) Co., Ltd. (hereinafter also referred to as the Pledgee ) |
Party B: | Chen Jiezhen, a citizen of the PRC with ID card number: 440106197702170360 (hereinafter also referred to as the Pledgor ) |
Party C: | Shenzhen Guanli Agricultural Technology Co., Ltd. |
(1) | The Pledgor is the legal and valid shareholder of Shenzhen Guanli Agricultural Technology Co., Ltd. ( Guanli ), who holds 5% equity interest of Guanli according to laws; |
(2) | The Pledgee is a wholly foreign-owned enterprise incorporated in Shenzhen under the laws of the Peoples Republic of China (hereinafter referred to as the PRC , and for the purpose of this Contract, excluding the Hong Kong Special Administrative Region, Macao Special Administrative Region and Taiwan); |
(3) | Guanli is a limited liability company established in Shenzhen under the laws of the PRC; |
(4) | The Pledgee and Guanli entered into the Exclusive Technology Development, Technology Support and Technology Services Contract on November 7, 2008. The Pledgor agrees to pledge all of her equity interest in Guanli as security for the performance by Guanli of all of its obligations under the above contract; |
(5) | The Pledgee, the Pledgor and Guanli entered into the Exclusive Call Option Contract on November 3, 2009, and the Pledgee and the Pledgor entered into the Loan Contract on November 3, 2009. The Pledgor agrees to pledge all of her equity interest in Guanli as security for the performance by the Pledgor and Guanli of all of their respective obligations under the above four contracts. |
1. | Definitions | |
Unless otherwise required herein, the following terms shall have the meaning as follows: |
1.1 | Pledge Right refers to the full content of Article 2 hereof. |
1.2 | Equity Interest means the equity interest legally held by the Pledgor in Guanli. |
1.3 | Master Contract means the Exclusive Technology Development, Technology Support and Technology Services Contract , the Exclusive Call Option Contract , the Loan Contract and any amendment and supplement thereto. |
1.4 | Secured Party means any contractual party of each Master Contract other than the Pledgee. |
1.5 | Secured Debt means all contractual obligations of a Secured Party under each Master Contract, including (but not limited to) interest, default penalty, compensation, expenses incurred by the Pledgee in realizing debt. |
1.6 | Event of Default means any circumstances stated in Article 7.1 hereof. |
1.7 | Notice of Default means the notice of default issued by the Pledgee pursuant to this Contract, declaring the occurrence of an Event of Default. |
2. | Pledge Right | |
The Pledgor hereby pledges all of her Equity Interest in Guanli to the Pledgee as security for the performance by the Pledgor and Guanli of all of their respective obligations under the Master Contract. Therefore, the Pledgee is entitled to the Pledge Right in respect of all the Equity Interest of the Pledgor in Guanli. The Pledge Right means the right of priority to claim for any money converted from the Equity Interest pledged by the Pledgor to the Pledgee, or any proceeds from the auction or sale of such Equity Interest that is enjoyed by the Pledgee. |
3. | Registration of Pledge |
3.1 | Within one (1) week from the date hereof, Guanli shall, and the Pledgor shall procure Guanli to record the Pledge Right specified in Article 2 above on the register of members of Guanli, and deliver a copy of the register of members of Guanli with its common chop affixed thereon and the original of the equity contribution certificate to the Pledgee for custody. |
3.2 | After the execution hereof, the Pledgor shall, at the written request of the Pledgee at any time, complete the notarization jointly with the Pledgee in respect of this Contract, as well as the Pledge Right of the Pledgee recorded on the register of members and the equity contribution certificate as set forth in Article 3.1 at a notary public office of the place where Guanli is located. |
2
3.3 | The parties agree that they will make their best effort to register, and cause the pledge hereunder to be registered with an industrial and commercial administrative department of the place where Guanli is registered. The parties also confirm that, unless the registration of the pledge hereunder with the industrial and commercial administrative department is mandatory in law, the validity of this Contract and the Pledge Right specified in Article 2 above shall not be affected even if the parties fail to register the pledge hereunder with the industrial and commercial administrative department of the place where Guanli is registered after the execution of this Contract. |
4. | Rights of the Pledgee |
4.1 | When a Secured Party does not perform any of its obligations under the Master Contract, the Pledgee shall have the right of priority to claim for any money converted from Guanlis Equity Interest pledged by the Pledgor, or any proceeds from the auction or sale of such Equity Interest. |
4.2 | The Pledgee shall be entitled to receive any dividends (including bonuses) and other property distributions arising from the Equity Interest that is pledged. |
5. | Representations and Warranties of the Pledgor |
5.1 | The Pledgor is the legitimate owner of the Equity Interest; |
5.2 | The Pledgor fully understands the contents of the Master Contract. She signs and performs this Contract on a voluntary basis and all her actual meaning is truly expressed herein. The Pledgor is legally authorized to execute this Contract; |
5.3 | All documents, information, statements and evidence provided by the Pledgor to the Pledgee are accurate, true, complete and valid; |
5.4 | The Pledgor acknowledges that the Pledgee shall have the right to dispose of and transfer the Pledge Right in a manner stipulated herein and within the scope restricted by the PRC laws; |
5.5 | Except for the interest of the Pledgee, the Pledgor has not created other pledges, any other kinds of rights or any third party rights over the Equity Interest; |
5.6 | The Pledgor has obtained the consent of other shareholders of Guanli to pledge the Equity Interest, and the other shareholders have unanimously agreed that they will not interfere by any means and will give up the exercise of their pre-emptive right when the Pledgee actually exercises the Pledge Right. |
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6. | Undertakings of the Pledgor | |
In addition to the obligations specified in the other provisions hereof, the Pledgor undertakes as follows: |
6.1 | During the term hereof, the Pledgor undertakes to the Pledgee for its benefit that: |
6.1.1 | save for the transfer of the Equity Interest to the Pledgee, the Pledgor shall not, without the prior written consent of the Pledgee, transfer the Equity Interest, nor create or permit the existence of any pledge which might affect the rights and interests of the Pledgee, nor procure any resolution in relation to the sale/transfer/pledge or disposal by other means of the legal and beneficial interest in any Equity Interest of Guanli or permitting the creation of any other security interests over it to be passed at a shareholders meeting of the company; unless with the prior written consent of the Pledgee, the Pledgor shall vote at a shareholders meeting of Guanli/procure any director of Guanli nominated by her to vote at a board meeting of Guanli and/or by other means to object Guanli to sell/transfer/pledge or otherwise dispose of any of its major assets, including (but not limited to) any intellectual property rights. |
6.1.2 | if the Equity Interest pledged hereunder is subject to any compulsory measures imposed by courts or other departments for any reasons, the Pledgor shall use all her efforts, including (without limitation) the provision of other security to courts or adoption of other measures, to remove the compulsory measures taken by courts or other departments in respect of the Equity Interest pledged. |
6.1.3 | the Pledgor shall comply with and implement all laws and regulations relevant to the pledge of rights. The Pledgor shall, within five (5) days of the receipt of any notices, orders or recommendations given or made by the competent authority with respect to the Pledge Right, present the above notices, orders or recommendations to the Pledgee, and shall comply with the same or raise objections and make representations in respect of the above matters as reasonably required by or with the consent of the Pledgee. |
6.1.4 | the Pledgor shall promptly notify the Pledgee of any event which might have effects on the Equity Interest of the Pledgor or any part of her right or any notice received in connection therewith, as well as any event which might change any warranty and obligation of the Pledgor as created by this Contract or might have effects on it or any notice received in connection therewith. |
6.2 | The Pledgor agrees that the Pledgee shall not be interrupted nor impeded by any legal proceedings instituted by the Pledgor or any successors of the Pledgor or any person authorized by the Pledgor or any other persons when it exercises its rights on the pledge pursuant to the provisions hereof and within the scope permitted by the PRC laws. |
6.3 | The Pledgor undertakes to the Pledgee that, in order to protect or improve the security for the repayment of the Secured Debt herein, she will honestly execute and procure other parties who have an interest in the Pledge Right to execute all title certificates and contracts required by the Pledgee, and/or perform and procure other interested parties to perform all acts required by the Pledgee, and facilitate the exercise of any right and authorization conferred to the Pledgee by this Contract. |
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6.4 | The Pledgor undertakes to the Pledgee that she will execute all documents in relation to the change of share certificates (if applicable and necessary) with the Pledgee or any person designated by it (natural person/legal person), and shall provide the Pledgee with all notices, orders and decisions in relation to the Pledge Right which it thinks necessary within a reasonable time. |
6.5 | The Pledgor undertakes to the Pledgee that she will, for the interest of the Pledgee, observe and perform all warranties, undertakings, contracts, representations and conditions. If the Pledgor does not perform or fully perform her warranties, undertakings, contracts, representations and conditions, she will indemnify the Pledgee all losses suffered by it arising therefrom. |
7. | Event of Default |
7.1 | The following events shall be deemed as Events of Default: |
7.1.1 | the Secured Party fails to fully perform any of its Secured Debts under the Master Contract as scheduled; |
7.1.2 | any representation or warranty made by the Pledgor in Article 5 hereof contains misleading or false information that is material, and/or the Pledgor violates the warranties set forth in Article 5 hereof; |
7.1.3 | the Pledgor violates the undertakings set forth in Article 6 hereof; |
7.1.4 | the Pledgor violates any other provisions of this Contract; |
7.1.5 | the Pledgor gives up the pledged Equity Interest or transfers the pledged Equity Interest without the written consent of the Pledgee; |
7.1.6 | any external loan, guarantee, compensation, undertaking or other debt liability of the Pledgor (1) is required to be repaid or performed prior to the scheduled date due to any breach of this Contract; (2) has been due but cannot be repaid or performed as scheduled, which in the opinion of the Pledgee, would have affected the ability of the Pledgor in performing her obligations hereunder; |
7.1.7 | Guanli is incapable to repay the general debts or other debts; |
7.1.8 | this Contract becomes illegal or the Pledgor fails to continue to perform her obligations hereunder due to any reasons other than force majeure; |
7.1.9 | there has been any adverse change in the properties of the Pledgor, which, in the opinion of the Pledgee, would have affected the ability of the Pledgor in performing her obligations hereunder; |
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7.1.10 | there occurs any material adverse change in the assets, operating result or financial situation of Guanli; |
7.1.11 | the successors or heirs of Guanli can only perform part of, or refuse to perform, the Master Contract; |
7.1.12 | the Pledgor violates any other provisions of this Contract through any act or omission to act. |
7.2 | If the Pledgor is aware or discovers that any event described in this Article 7 or any event which may possibly result in the aforesaid events has happened, she shall immediately notify the Pledgee in writing. |
7.3 | Unless the events of default listed in this Article 7.1 has been resolved to the satisfactory of the Pledgee, the Pledgee may serve a written Notice of Default to the Pledgor at any time when the Pledgor is in default or thereafter and require the Pledgor to pay any debts and other payables under the Master Contract or to dispose of the Pledge Right pursuant to Article 8 hereof. |
8. | Exercise of the Pledge Right |
8.1 | Subject to the requirement in Article 6.1.1 hereof, the Pledgor shall not transfer the pledged Equity Interest before the obligations of the Secured Party under the Master Contract have not been fully performed and without the written consent of the Pledgee. |
8.2 | The Pledgee shall serve Notice of Default to the Pledgor when exercising its Pledge Right. |
8.3 | Subject to the requirement in Article 7.3 hereof, the Pledgee may exercise the right to dispose of the Pledge Right at the time when the Notice of Default is given pursuant to Article 7.3 or at any time after such notice is given. |
8.4 | The Pledgee shall have the right of priority to claim for any money converted from all or part of the Equity Interest hereunder, or any proceeds from the auction or sale of such Equity Interest according to statutory procedures until the outstanding debts and all other payables of the Secured Party under the Master Contract are repaid. |
8.5 | When the Pledgee disposes of the Pledge Right in accordance with this Contract, the Pledgor shall not pose any obstacles, and shall offer necessary assistance in this regard so that the Pledgee can realize its Pledge Right. |
9. | Assignment of this Contract |
9.1 | Unless with the prior consent of the Pledgee, the Pledgor or Guanli shall have no right to transfer any of her/its rights or obligations hereunder. |
9.2 | This Contract shall be binding upon the Pledgor and her successors or heirs, and shall be valid and binding upon the Pledgee and each of its successors, heirs or permitted assignees. |
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9.3 | The Pledgee may, at any time and to the extent permitted by laws, transfer all or any of its rights and obligations under the Master Contract to any person designated by it (natural person/legal person), in which case, the assignee shall be entitled to and undertake all rights and obligations of the Pledgee hereunder as if it should have been entitled to and undertaken such rights and obligations as a party to this Contract. When the Pledgee transfers its rights and obligations under the Master Contract, a written notice shall be only given by the Pledgee to the Pledgor, and the Pledgor shall, at the request of the Pledgee, execute and transfer the relevant contracts and/or documents in this regard. |
9.4 | A new pledge contract shall be signed between the new parties to the pledge after the change of the pledgee as a result of the transfer. |
10. | Effectiveness | |
This Contract is signed and shall become effective on the date first written above. |
11. | Termination | |
This Contract shall be terminated after the Secured Debt under the Master Contract has been fully repaid and the Pledgor has no longer undertaken any obligation under the Master Contract, and the Pledgee shall, within the earliest reasonable and practicable time, offer assistance to complete necessary formalities so as to release the pledge of the Equity Interest. |
12. | Handling Fees and Other Costs |
12.1 | All costs and actual expenses in connection with this Contract, including without limitation, legal fee, cost of production, stamp duty and any other taxes and charges, shall be borne by the Pledgee. If the relevant taxes are required by law to be paid by the Pledgor, the Pledgee shall fully indemnify the Pledgor such taxes paid by her. |
12.2 | If the Pledgee fails to pay any taxes or charges payable in accordance with this Contract or the Pledgor recovers such taxes or charges by any means or ways due to any other reasons, the Pledgee shall bear all costs arising therefrom (including without limitation, all taxes, handling fees, management fees, litigation cost, attorneys fees and various insurance premiums in connection with the handling of the Pledge Right). |
13. | Force Majeure |
13.1 | Force Majeure means any event that is beyond the reasonable control of a party and that is unavoidable even though the party so affected gives reasonable attention to it, including but not limited to act of government, act of nature, fire, explosion, typhoon, flood, earthquake, tidal, lightning or war. However, the shortage of credit, capital or financing shall not be deemed as events beyond the reasonable control of a party. Any party who is affected by Force Majeure shall notify the other party as soon as possible of the event, in respect of which the exemption from such obligations is sought. |
7
13.2 | When the performance of this Contract is delayed or prevented due to the Force Majeure defined above, the party so affected shall not be required to assume any liabilities hereunder to the extent that it is within the scope of the delay or prevention. It shall take appropriate measures to minimize or eliminate the impact of Force Majeure and shall make effort to resume the performance of any obligations that are delayed or prevented by the Force Majeure. Once the Force Majeure is removed, the parties agree to resume the performance of their respective obligations hereunder with their greatest efforts. |
14. | Confidentiality Obligation | |
The parties hereto acknowledge and confirm that any oral or written information exchanged between them in connection with this Contract shall be confidential information. The parties shall keep all such information confidential and shall not disclose any of the information to any third parties without the written consent of the other parties, except for the following: (a) the information that are or will be known to the public (provided that they are not disclosed to the public without authorization by the information receiving party); (b) the information required to be disclosed by applicable laws, or the rules or regulations of securities exchanges; or (c) the information required to be disclosed by a party to its legal or financial advisors with respect to the transaction mentioned herein, for which such legal or financial advisors shall also comply with the confidentiality obligation as similar as that described in this Article. Any divulgence of Confidential Information by the employees of either party or any organization engaged by it shall be deemed as the divulgence of Confidential Information by such party, and such party shall be liable for the breach pursuant to this Contract. |
15. | Dispute Resolution |
15.1 | This Contract shall be governed by and construed in accordance with the laws of the PRC; |
15.2 | Any disputes between the parties arising from the interpretation and performance of any provisions hereof shall be resolved in good faith by them through consultation. If no agreement can be reached in respect of a dispute, either party may submit such dispute to China International Economic and Trade Arbitration Commission for arbitration in accordance with its arbitration rules then in force. The seat of arbitration shall be Shenzhen. The arbitration shall be conducted in Chinese. The arbitral award shall be final and binding upon the parties. |
16. | Integrity of this Contract | |
Notwithstanding the requirement in Article 10 hereof, the parties confirm that, once this Contract becomes effective, it shall constitute the entire agreement and understanding between the parties hereto with respect to the contents of this Contract, and shall completely supersede all previous oral or/and written discussions, communications, understanding, agreements and arrangements between the parties hereto in connection with the contents of this Contract. |
17. | Severability of this Contract | |
If any provision of this Contract is invalid or unenforceable due to its inconsistency with the relevant laws, such provision shall be deemed to be invalid only to the extent within the scope of the related jurisdiction, and shall not affect the legal effect of the other provisions hereof. |
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18. | Amendment and Supplement to this Contract |
18.1 | All amendments and supplements to this Contract shall be made by the parties in writing. Any amendment contracts and supplemental contracts hereto duly signed by the parties shall be an integral part of this Contract, and shall have the same legal effect as this Contract. |
18.2 | This Contract and any of its amendments, supplements or modification shall be made in writing and shall become effective once they are signed and sealed by the parties. |
19. | Counterpart | |
This Contract is executed in Chinese in six originals and each of them shall have the same legal effect. The Pledgee, the Pledgor and Guanli shall each keep one original and the remaining three originals shall be provided to the relevant government departments. |
9
10
1. |
Party A is a wholly foreign-owned enterprise incorporated in Shenzhen under the laws of the
Peoples Republic of China (hereinafter referred to as the
PRC
, and for the purpose of this
Contract, excluding the Hong Kong Special Administrative Region, Macao Special Administrative
Region and Taiwan);
|
2. |
Party B is a citizen of the PRC, who holds 5% equity interest of Shenzhen Guanli Agricultural
Technology Co., Ltd. (
Guanli
);
|
3. |
Guanli is a limited liability company established in Shenzhen under the laws of the PRC;
|
4. |
Party B intends to grant to Party A an exclusive call option so that Party A may request
Party B to sell her equity interest to it upon certain conditions are satisfied.
|
1.1 |
Grant of Option
|
|
Party B hereby irrevocably grants to Party A an option to purchase or designate any person
or persons (hereinafter referred to as the
Designated Person
) to purchase from Party B all
or part of her equity interest in Guanli at any time according to the steps for exercise of
the option as determined by Party A at its sole discretion to the extent permitted by the
PRC laws and at the price specified in Article 1.3 hereof (hereinafter referred to as the
Call Option
). Except for Party A and/or the Designated Person, Party B shall not sell,
offer to sell, transfer, offer as gift nor pledge any equity interest of Guanli to any other
third parties. Guanli hereby agrees to the grant of the Call Option by Party B to Party A
and/or the Designated Person. The term person specified in this Article and this Contract
shall include individuals, corporations, joint ventures, partnerships, enterprises, trusts
or non-corporate bodies.
|
1.2 |
Steps for Exercise of the Call Option
|
|
Subject to the provisions of the PRC laws and regulations, Party A and/or the Designated
Person may exercise the Call Option by giving written notice to Party B (hereinafter
referred to as the
Equity Purchase Notice
) and specifying the portion of equity interest
to be purchased from Party B (hereinafter referred to as the
Purchased Equity
) and the
manner in which the purchase is made.
|
1.3 |
Purchase Price
|
1.3.1 |
When Party A exercises its Call Option, unless an appraisal is required to be
made in respect of the equity interest by applicable PRC laws and regulations then in
effect or there are other restrictions imposed by such PRC laws and regulations on the
price of equity interest, the purchase price payable by Party A to Party B in respect
of all of the equity interest (hereinafter referred to as the
Purchase Price
) shall
be RMB One (1). Party A shall also release the obligation of Party B to make repayment
under the
Loan Contract
dated November 3, 2009 between Party A and Party B.
|
1.3.2 |
If an appraisal is required to be made in respect of the equity interest by
the PRC laws and regulations that are applicable at the time when Party A exercises its
Call Option or there are other restrictions imposed by such PRC laws and regulations on
the price of equity interest, the parties agree that the Purchase Price shall the
minimum price permitted by applicable laws.
|
1.3.3 |
If Party A chooses to purchase part of the equity interest, the exercise price
of the Call Option shall be adjusted according the ratio of the Purchased Equity to the
whole equity interests of Guanli.
|
1.4 |
Transfer of the Purchased Equity
|
|
For each exercise of the Call Option:
|
1.4.1 |
Party B shall cause Guanli to hold a shareholders meeting in a timely manner,
during which a resolution approving the transfer of equity interest by Party B to Party
A and/or the Designated Person shall be passed and she shall procure other shareholders
to give up their right of first refusal in respect of the Purchased Equity in writing;
|
1.4.2 |
Party B shall sign an equity transfer contract in relation to each transfer
with Party A and/or the Designated Person (as applicable) in accordance with the
requirements of this Contract and the Equity Purchase Notice in connection with the
Purchased Equity;
|
1.4.3 |
The relevant parties shall execute all other necessary contracts, agreements
or documents, obtain all necessary government approvals and consents, and take all
necessary actions to grant the valid ownership of the Purchased Equity to Party A
and/or the Designated Person without any security interest being attached thereto and
procure Party A and/or the Designated Person to become the legal owner of the Purchased
Equity. For the purpose of this Article and this Contract, security interest shall
include guarantees, mortgages, pledges, third parties rights or interests, any share
options, acquisition rights, right of first refusal, right to offset, ownership
retention or other security arrangements but exclude any security interest arising from
the
Equity Pledge Contract
dated November 3, 2009 by and among Party A, Party B and
Guanli (hereinafter referred to as the
Equity Pledge Contract
).
|
2
1.5 |
Payment
|
|
The payment method of the Purchase Price or the exercise price of the Call Option shall be
determined by Party A and/or the Designated Person and Party B through negotiation in
accordance with the laws applicable at the time when the Call Option is exercised.
|
2.1 |
Joint undertakings relating to Guanli
|
|
Party B and Party C hereby jointly undertake as follows:
|
2.1.1 |
Without the prior written consent of Party A, they shall not in any manner
supplement, change or amend the articles of association of Guanli, increase or decrease
its registered capital, or otherwise change the structure of its registered capital;
|
2.1.2 |
Guanli shall maintain its corporate existence in accordance with good
financial and business standards and practices by operating its business and handling
its affairs in a prudent and efficient manner; it shall make its best endeavour to
ensure that Guanli continues to own all permits, licenses and approvals that are
necessary for its operation and that such permits, licenses and approvals will not be
cancelled; it shall make its best endeavour to keep the current organizational
structure and the senior management of the company unchanged, and to maintain the
relationship with its customers so as to guarantee that there will not be any material
adverse effect on the goodwill and operation of Guanli after the delivery of equity
interest as agreed;
|
2.1.3 |
Without the prior written consent of Party A, Guanli shall not, at any time
after the date hereof, sell, transfer, mortgage or otherwise dispose of the legal or
beneficial interest in any assets, businesses or revenues of Guanli, nor allow any
other security interest to be created thereon;
|
2.1.4 |
Without the prior written consent of Party A, Guanli shall not incur, inherit,
guarantee or allow the existence of any debt, except for (i) debts incurred in the
normal or ordinary course of business other than through loans; and (ii) debts
disclosed to Party A for which Party As written consent has been obtained;
|
2.1.5 |
Guanli shall always operate all of its businesses during the ordinary course
of business to maintain its asset value, and shall refrain from any action/omission
that may affect its business operation and asset value;
|
2.1.6 |
Without the prior written consent of Party A, Guanli shall not enter into any
material contract, except for those contracts that are entered into in the ordinary
course of business (for the purpose of this paragraph, a contract with a value
exceeding RMB One Million (1,000,000) shall be deemed as a material contract);
|
2.1.7 |
Without the prior written consent of Party A, Guanli shall not provide any
loan or credit to any person;
|
2.1.8 |
Guanli shall, at the request of Party A, provide it with information relating
to the business operation and financial condition of Guanli;
|
2.1.9 |
Guanli shall take out and maintain insurance from an insurance company
recognized by Party A. The coverage and type of insurance shall be the same as those
of the insurance typically taken out by other companies that operate businesses similar
to Guanli in the same region and possess property or assets similar to Guanli;
|
3
2.10 |
Without the prior written consent of Party A, Guanli shall not merge or
consolidate with, or acquire or invest in any person;
|
2.1.11 |
Guanli shall immediately notify Party A of the occurrence or possible occurrence of
any litigation, arbitration or administrative proceedings relating to Guanlis assets,
businesses and revenues;
|
2.1.12 |
To maintain the ownership by Guanli of all of its assets, it shall execute all
necessary or appropriate documents, take all necessary or appropriate actions and make
all necessary or appropriate claims or raise necessary and appropriate defenses against
all claims;
|
2.1.13 |
Without the prior written consent of Party A, Guanli shall not in any manner
distribute dividends to its shareholders, provided that upon Party As written request,
it shall immediately distribute all or part of its distributable profits to its
shareholders;
|
2.1.14 |
Within the term hereof, Guanli shall operate its business in compliance with all
applicable laws, regulations, administrative rules and regulations of the PRC, and
there will not be any material adverse effect on the business operation or assets of
Guanli due to any breach of the above requirements;
|
2.1.15 |
If Party A exercises the Call Option according to the conditions of this Contract,
Guanli shall make its best endeavour to obtain all government approvals and other
consents (if applicable) that are necessary for the completion of the equity transfer
as soon as possible;
|
2.1.16 |
At the request of Party A, they shall appoint any persons designated by Party A as
directors of Guanli.
|
2.2 |
Undertakings relating to Party B
|
|
Party B hereby undertakes that:
|
2.2.1 |
Without the prior written consent of Party A, she will not, at any time after
the date hereof, sell, transfer, mortgage or otherwise dispose of any legal or
beneficial interest in the equity interest, nor allow any other security interest to be
created thereon, except for the pledge right under the
Equity Pledge Contract
;
|
2.2.2 |
Without the prior written consent of Party A, she will not vote in favor of
or support or execute any shareholders resolution at a shareholders meeting of Guanli
to approve the sale, transfer, mortgage or disposal in any other manner of any legal or
beneficial interest in the equity interest, nor allow any security interest to be
created thereon, except for the same is made to Party A or any person designated by it;
|
2.2.3 |
Without the prior written consent of Party A, she will not vote in favor of
or support or execute any shareholders resolution at a shareholders meeting of Guanli
to approve the merger or consolidation of Guanli with any person, or the acquisition of
or investment in any person;
|
2.2.4 |
She will immediately notify Party A of the occurrence or possible occurrence
of any litigation, arbitration or administrative proceedings relating to the equity
interest held by her;
|
2.2.5 |
She will procure the shareholders meeting of the company to vote in favor of
the transfer of the Purchased Equity as set forth in this Contract;
|
4
2.2.6 |
To maintain her ownership in the equity interest, she will execute all
necessary or appropriate documents, take all necessary or appropriate actions and make
all necessary or appropriate claims or raise necessary and appropriate defenses against
all claims;
|
2.2.7 |
At the request of Party A, she will appoint any persons designated by Party A
as directors of Guanli;
|
2.2.8 |
At the request of Party A at any time, she will unconditionally and promptly
transfer her equity interest to Party A and/or the Designated Person at any time, and
give up her right of first refusal in respect of other equity interests to be
transferred;
|
2.2.9 |
She will strictly observe the provisions of this Contract and other contracts
jointly or separately executed by and among Party B, Guanli and Party A, perform her
obligations hereunder and thereunder, and refrain from action/omission that may affect
the effectiveness and enforceability thereof.
|
3.1 |
They have the right to execute and deliver this Contract and any equity transfer contracts to
which they are a party and which are entered into in respect of each transfer of the Purchased
Equity hereunder (each, a
Transfer Contract
), and to perform their respective obligations
under this Contract and any Transfer Contracts. This Contract and the Transfer Contracts to
which they are a party, once executed, will constitute their legal, valid and binding
obligations and shall be enforceable against them in accordance with the provisions thereof;
|
3.2 |
The execution and delivery of this Contract or any Transfer Contracts and the performance of
their respective obligations under this Contract or any Transfer Contracts shall not: (i)
result in any violation of any applicable PRC laws and regulations; (ii) be in conflict with
their articles of association or other constituent documents; (iii) result in the violation of
any contracts or documents to which they are a party or which are binding upon them, or
constitute any breach under any contracts or documents to which they are a party or which are
binding upon them; (iv) result in the violation of any conditions for the grant and/or
continued effectiveness of any licenses or permits issued to either of them; or (v) result in
the suspension or revocation of or imposition of additional conditions to any licenses or
permits issued to either of them;
|
3.3 |
Guanli has a good and merchantable title to all of its assets. Guanli has not created any
security interest on its assets;
|
3.4 |
Guanli does not have any outstanding debts, except for (i) debts incurred in the ordinary
course of its business, and (ii) debts disclosed to Party A for which Party As written
consent has been obtained;
|
3.5 |
Guanli has complied with all PRC laws and regulations applicable to the acquisition of
assets;
|
3.6 |
There are no ongoing, pending or threatened litigation, arbitration or administrative
proceedings relating to Guanli or the equity interest in or assets of Guanli; and
|
5
3.7 |
Party B has a good and merchantable title and a complete and valid disposal right to all of
her equity interests (except for the restrictions under the PRC laws and regulations). Save
for the security interests under the
Equity Pledge Contract
, she has not created any security
interest on her equity interest and is free from any third party claims.
|
4.1 |
Unless with the prior written consent of Party A, Party B and Guanli shall not transfer their
respective rights and obligations hereunder to any third parties.
|
4.2 |
Party B and Guanli hereby agree that Party A shall have the right to transfer its rights and
obligations hereunder to any third parties when necessary. Party A shall only be required to
serve written notice to Party B and Guanli when such transfer is made, and no consent shall be
further required from Party B or Guanli in respect of such transfer.
|
5.1 |
This Contract shall become effective as of the date first written above.
|
5.2 |
This Contract shall be automatically terminated only after Party A exercises its option to
purchase all of the equity interests in Guanli pursuant to the requirements of this Contract,
except for the early termination by this Contract or pursuant to the provisions of the
relevant agreements separately signed by the parties hereto.
|
5.3 |
If, during the period stipulated in Article 5.2, the operation term of Party A or Guanli
(including any extended term) expires or either party terminates due to other reasons, this
Contract shall be terminated at the time of the termination of such party, except for the
circumstances where Party A has transferred its rights and obligations pursuant to Article 4.2
hereof.
|
6.1 |
Applicable Laws
|
|
The formation of this Contract, its effectiveness, interpretation and performance, as well
as the dispute resolution hereunder shall be protected and governed by the laws of the PRC.
|
6.2 |
Dispute Resolution
|
|
Any disputes between the parties arising from the interpretation and performance of any
provisions hereof shall be resolved in good faith by them through consultation. If no
agreement can be reached within thirty (30) days after a Party proposes to resolve a dispute
through consultation, either party may submit such dispute to China International Economic
and Trade Arbitration Commission for arbitration in accordance with its arbitration rules
then in force. The seat of arbitration shall be Shenzhen. The arbitration shall be
conducted in Chinese. The arbitral award shall be final and binding upon the parties.
|
6
6.3 |
Liabilities for Breach
|
|
A breach of this Contract shall be constituted if any party hereto violates the requirements
of this Contract by failing to fully perform this Contract, or making any false information,
or withholding or omitting significant facts in any undertaking, representation and warranty
made by her/it in this Contract, or refusing to perform any of her/its undertakings,
representations and warranties. The defaulting party shall bear the corresponding
liabilities for the breach according to laws.
|
a. |
the information that are or will be known to the public (provided that they are
not disclosed to the public without authorization by the information receiving party);
|
b. |
the information required to be disclosed by applicable laws, or the rules or
regulations of securities exchanges; or
|
c. |
the information required to be disclosed by a party to its legal or financial
advisors with respect to the transaction mentioned herein, for which such legal or
financial advisors shall also comply with the confidentiality obligation as similar as
that described in this Article. Any divulgence of confidential information by the
employees of either party or any organization engaged by it shall be deemed as the
divulgence of confidential information by such party, and such party shall be liable
for the breach pursuant to this Contract. This article shall survive regardless of
whether this Contract is invalid, discharged, terminated or cannot be operated due to
any reason.
|
10.1 |
Modification, Amendment and Supplement
|
|
All amendments and supplements to this Contract shall be made by the parties in writing.
Any amendment contracts and supplemental contracts hereto duly signed by the parties shall
be an integral part of this Contract, and shall have the same legal effect as this Contract.
|
7
10.2 |
Integrity of this Contract
|
|
The parties confirm that, once this Contract becomes effective, it shall constitute the
entire agreement and understanding between the parties hereto with respect to the contents
of this Contract, and shall completely supersede all previous oral or/and written agreement
and understanding between the parties hereto in connection with the contents of this
Contract.
|
10.3 |
Severability of this Contract
|
|
If any provision or provisions of this Contract is/are held to be invalid, illegal or
unenforceable in any respect in accordance with any laws or regulations, the validity,
legality or enforceability of the remaining provisions of this Contract shall not be
affected or impaired in any respect. The parties shall, through amicable negotiations,
strive to replace those invalid, illegal or unenforceable provision or provisions with valid
provision or provisions, and the economic effect of such valid provision or provisions shall
be as close as possible to the economic effect of those invalid, illegal or unenforceable
provision or provisions.
|
10.4 |
Headings
|
|
The headings of this Contract are for convenience only, and shall not be used to interpret,
explain or otherwise affect the meanings of the provisions of this Contract.
|
10.5 |
Language and Counterpart
|
|
This Contract is executed in Chinese in six originals and each of them shall have the same
legal effect. Each party shall keep one original and the remaining three originals shall be
provided to the relevant government departments.
|
10.6 |
Successors
|
|
This Contract shall be binding on and shall inure to the interest of the respective
successors or heirs of the parties and the permitted assignees of such parties.
|
10.7 |
Survival
|
|
Any obligations that occur or are due as a result of this Contract prior to the expiration
or early termination of this Contract shall survive the expiration or early termination
hereof. The provisions of Chapters 6 and 8 and this Article 10.7 hereof shall survive the
termination of this Contract.
|
10.8 |
Waivers
|
|
Any party may waive the terms and conditions of this Contract, provided that such a waiver
must be provided in writing and shall require the signatures of the parties. No waiver by
any party in certain circumstances with respect to a breach by other parties shall operate
as a waiver by such a party with respect to any similar breach by other parties in other
circumstances.
|
8
9
/s/ Chen Jiezhen
|
|
/s/ Chen Jiezhen | |
|
||
|
||
|
November 3, 2009 |
ID Card No.: 220104195612155017
|
Telephone No.: 13603076066 |
ID Card No.: 440106197702170360
|
Telephone No.: 13602653557 |
Transferor: /s/ Cui Yachao
|
Transferee: /s/ Chen Jiezhen |
|
Shenzhen Notary Public Office, Guangdong Province, | |
|
the Peoples Republic of China | |
|
||
|
Notary: /s/ | |
|
||
|
[Chop of Shenzhen Notary Public Office, | |
|
Guangdong Province, is affixed] |
Party A: | Aero Biotech Science & Technology Co., Ltd. (hereinafter also referred to as the Pledgee ) |
Address: | Block 16, No. 26 Court, Xihuan South Road, Economic and Technological Development Zone, Beijing; |
Party B: | Huang Hua, a citizen of the PRC with ID card number: 110108196204292252; (hereinafter also referred to as the Pledgor ) |
Party C: | Taiyuan Primalights III Agriculture Development Co., Ltd. (hereinafter also referred to as P3A ) |
Address: | Middle Area of Highway 73, Zhuang Er Shang Village, Huang Ling Rural Area, Xiaodian District, Taiyuan |
(1) | P3A (i.e. Party C) is a limited liability company incorporated and validly existing in Taiyuan, Shanxi Province, the Peoples Republic of China (hereinafter referred to as the PRC , and for the purpose of this Contract, excluding the Hong Kong Special Administrative Region, Macao Special Administrative Region and Taiwan) under the laws of the PRC; | |
(2) | The Pledgor is the legal and valid shareholder of P3A, who holds 40% equity interest of P3A according to laws; | |
(3) | The Pledgee is a wholly foreign-owned enterprise legally established and validly existing in the PRC, which provides technology support, technology consulting and related services to P3A. It has now become a major cooperative partner of P3A; | |
(4) | The Pledgee and P3A entered into the Exclusive Technology Development, Technology Support and Technology Services Contract , the Proprietary Technology License Contract and the Exclusive Consultancy Service Contract on June 8, 2007. The Pledgor agrees to pledge all of his equity interest in P3A as security for the performance by P3A of all of its obligations under the above contracts; | |
(5) | The Pledgee, the Pledgor and P3A entered into the Exclusive Call Option Contract on June 30, 2008. The Pledgor agrees to pledge all of his equity interest in P3A as security for the performance by the Pledgor and P3A of all of their respective obligations under the above Exclusive Call Option Contract . |
1
1. | Definitions | |
Unless otherwise required herein, the following terms shall have the meaning as follows: |
1.1 | Pledge Right refers to the full content of Article 2 hereof. | ||
1.2 | Equity Interest means all the equity interest legally held by the Pledgor in P3A. | ||
1.3 | Master Contract means the Proprietary Technology License Contract , the Exclusive Technology Development, Technology Support and Technology Services Contract , the Exclusive Consultancy Service Contract , the Exclusive Call Option Contract and any amendment and supplement thereto. | ||
1.4 | Secured Party means any contractual party of each Master Contract other than the Pledgee. | ||
1.5 | Secured Debt means all contractual obligations of a Secured Party under each Master Contract, including (but not limited to) interest, default penalty, compensation, expenses incurred by the Pledgee in realizing debt. | ||
1.6 | Event of Default means any circumstances stated in Article 7.1 hereof. | ||
1.7 | Notice of Default means the notice of default issued by the Pledgee pursuant to this Contract, declaring the occurrence of an Event of Default. |
2. | Pledge Right | |
The Pledgor hereby pledges all of his Equity Interest in P3A to the Pledgee as security for the performance by each Secured Party of all of its obligations for Secured Debt under the Master Contract. Therefore, the Pledgee is entitled to the Pledge Right in respect of all the Equity Interest of the Pledgor in P3A. The Pledge Right means the right of priority to claim for any money converted from the Equity Interest pledged by the Pledgor to the Pledgee, or any proceeds from the auction or sale of such Equity Interest that is enjoyed by the Pledgee. |
3. | Registration of Pledge |
3.1 | Within one (1) week from the date hereof, P3A shall, and the Pledgor shall procure P3A to record the Pledge Right specified in Article 2 above on the register of members of P3A, and deliver a copy of the register of members of P3A with its common chop affixed thereon and the original of the equity contribution certificate of P3A to the Pledgee for custody. | ||
3.2 | After the execution hereof, the Pledgor shall, at the written request of the Pledgee at any time, complete the notarization jointly with the Pledgee in respect of this Contract, as well as the Pledge Right of the Pledgee recorded on the register of members and the equity contribution certificate as set forth in Article 3.1 at a notary public office of the place where P3A is located. |
2
3.3 | The parties agree that they will make their best effort to register, and cause the pledge hereunder to be registered with an industrial and commercial administrative department of the place where P3A is registered. The parties also confirm that, unless the registration of the pledge hereunder with the industrial and commercial administrative department is mandatory in law, the validity of this Contract and the Pledge Right specified in Article 2 above shall not be affected even if the parties fail to register the pledge hereunder with the industrial and commercial administrative department of the place where P3A is registered after the execution of this Contract. |
4. | Rights of the Pledgee |
4.1 | When a Secured Party does not perform any of its obligations under the Master Contract, the Pledgee shall have the right of priority to claim for any money converted from P3As Equity Interest pledged by the Pledgor, or any proceeds from the auction or sale of such Equity Interest. | ||
4.2 | The Pledgee shall be entitled to receive any dividends (including bonuses) and other property distributions arising from the Equity Interest that is pledged. |
5. | Representations and Warranties of the Pledgor |
5.1 | The Pledgor is the legitimate owner of the Equity Interest; | ||
5.2 | The Pledgor fully understands the contents of the Master Contract. He signs and performs this Contract on a voluntary basis and all his actual meaning is truly expressed herein. The Pledgor is legally authorized to execute this Contract; | ||
5.3 | All documents, information, statements and evidence provided by the Pledgor to the Pledgee are accurate, true, complete and valid; | ||
5.4 | The Pledgor acknowledges that the Pledgee shall have the right to dispose of and transfer the Pledge Right in a manner stipulated herein and within the scope restricted by the PRC laws; | ||
5.5 | Except for the interest of the Pledgee, the Pledgor has not created other pledges, any other kinds of rights or any third party rights over the Equity Interest; | ||
5.6 | Each of the Pledgors has obtained the consent of other shareholders of P3A to pledge the Equity Interest, and the other shareholders have unanimously agreed that they will not interfere by any means and will give up the exercise of their pre-emptive right when the Pledgee actually exercises the Pledge Right. |
6. | Undertakings of the Pledgor | |
In addition to the obligations specified in the other provisions hereof, the Pledgor undertakes as follows: |
6.1 | During the term hereof, the Pledgor undertakes to the Pledgee for its benefit that: |
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6.1.1 | save for the transfer of the Equity Interest to the Pledgee, the Pledgor shall not, without the prior written consent of the Pledgee, transfer the Equity Interest, nor create or permit the existence of any pledge which might affect the rights and interests of the Pledgee, nor procure any resolution in relation to the sale/transfer/pledge or disposal by other means of the legal and beneficial interest in any Equity Interest of P3A or permitting the creation of any other security interests over it to be passed at a shareholders meeting of the company; unless with the prior written consent of the Pledgee, the Pledgor shall vote at a shareholders meeting of P3A/procure any director of P3A nominated by him to vote at a board meeting of P3A and/or by other means to object P3A to sell/transfer/pledge or otherwise dispose of any of its major assets, including (but not limited to) any intellectual property rights. | ||
6.1.2 | if the Equity Interest pledged hereunder is subject to any compulsory measures imposed by courts or other departments for any reasons, the Pledgor shall use all his efforts, including (without limitation) the provision of other security to courts or adoption of other measures, to remove the compulsory measures taken by courts or other departments in respect of the Equity Interest pledged. | ||
6.1.3 | the Pledgor shall comply with and implement all laws and regulations relevant to the pledge of rights. The Pledgor shall, within five (5) days of the receipt of any notices, orders or recommendations given or made by the competent authority with respect to the Pledge Right, present the above notices, orders or recommendations to the Pledgee, and shall comply with the same or raise objections and make representations in respect of the above matters as reasonably required by or with the consent of the Pledgee. | ||
6.1.4 | the Pledgor shall promptly notify the Pledgee of any event which might have effects on the Equity Interest of the Pledgor or any part of his right or any notice received in connection therewith, as well as any event which might change any warranty and obligation of the Pledgor as created by this Contract or might have effects on it or any notice received in connection therewith. |
6.2 | The Pledgor agrees that the Pledgee shall not be interrupted nor impeded by any legal proceedings instituted by the Pledgor or any successors of the Pledgor or any person authorized by the Pledgor or any other persons when it exercises its rights on the pledge pursuant to the provisions hereof and within the scope permitted by the PRC laws. | ||
6.3 | The Pledgor undertakes to the Pledgee that, in order to protect or improve the security for the repayment of the Secured Debt herein, he will honestly execute and procure other parties who have an interest in the Pledge Right to execute all title certificates and contracts required by the Pledgee, and/or perform and procure other interested parties to perform all acts required by the Pledgee, and facilitate the exercise of any right and authorization conferred to the Pledgee by this Contract. | ||
6.4 | The Pledgor undertakes to the Pledgee that he will execute all documents in relation to the change of share certificates (if applicable and necessary) with the Pledgee or any person designated by it (natural person/legal person), and shall provide the Pledgee with all notices, orders and decisions in relation to the Pledge Right which it thinks necessary within a reasonable time. |
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6.5 | The Pledgor undertakes to the Pledgee that he will, for the interest of the Pledgee, observe and perform all warranties, undertakings, contracts, representations and conditions. If the Pledgor does not perform or fully perform his warranties, undertakings, contracts, representations and conditions, he will indemnify the Pledgee all losses suffered by it arising therefrom. |
7. | Event of Default |
7.1 | The following events shall be deemed as Events of Default: |
7.1.1 | the Secured Party fails to fully perform any of its Secured Debts under the Master Contract as scheduled; | ||
7.1.2 | any representation or warranty made by the Pledgor in Article 5 hereof contains misleading or false information that is material, and/or the Pledgor violates the warranties set forth in Article 5 hereof; | ||
7.1.3 | the Pledgor violates the undertakings set forth in Article 6 hereof; | ||
7.1.4 | the Pledgor violates any other provisions of this Contract; | ||
7.1.5 | the Pledgor gives up the pledged Equity Interest or transfers the pledged Equity Interest without the written consent of the Pledgee; | ||
7.1.6 | any external loan, guarantee, compensation, undertaking or other debt liability of the Pledgor (1) is required to be repaid or performed prior to the scheduled date due to any breach of this Contract; (2) has been due but cannot be repaid or performed as scheduled, which in the opinion of the Pledgee, would have affected the ability of the Pledgor in performing his obligations hereunder; | ||
7.1.7 | P3A is incapable to repay the general debts or other debts; | ||
7.1.8 | this Contract becomes illegal or the Pledgor fails to continue to perform his obligations hereunder due to any reasons other than force majeure; | ||
7.1.9 | there has been any adverse change in the properties of the Pledgor, which, in the opinion of the Pledgee, would have affected the ability of the Pledgor in performing his obligations hereunder; | ||
7.1.10 | there occurs any material adverse change in the assets, operating result or financial situation of P3A; |
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7.1.11 | the successors or heirs of P3A can only perform part of, or refuse to perform, the Master Contract; | ||
7.1.12 | the Pledgor violates any other provisions of this Contract through any act or omission to act. |
7.2 | If the Pledgor is aware or discovers that any event described in this Article 7.1 or any event which may possibly result in the aforesaid events has happened, he shall immediately notify the Pledgee in writing. | ||
7.3 | Unless the events of default listed in this Article 7.1 has been resolved to the satisfactory of the Pledgee, the Pledgee may serve a written Notice of Default to the Pledgee at any time when the Pledgor is in default or thereafter and require the Pledgor to pay any debts and other payables under the Master Contract or to dispose of the Pledge Right pursuant to Article 8 hereof. |
8. | Exercise of the Pledge Right |
8.1 | Subject to the requirement in Article 6.1.1 hereof, the Pledgor shall not transfer the pledged Equity Interest before the obligations of the Secured Party under the Master Contract have not been fully performed and without the written consent of the Pledgee. | ||
8.2 | The Pledgee shall serve Notice of Default to the Pledgor when exercising its Pledge Right. | ||
8.3 | Subject to the requirement in Article 7.3 hereof, the Pledgee may exercise the right to dispose of the Pledge Right at the time when the Notice of Default is given pursuant to Article 7.3 or at any time after such notice is given. | ||
8.4 | The Pledgee shall have the right of priority to claim for any money converted from all or part of the Equity Interest hereunder, or any proceeds from the auction or sale of such Equity Interest according to statutory procedures until the outstanding debts and all other payables of the Secured Party under the Master Contract are repaid. | ||
8.5 | When the Pledgee disposes of the Pledge Right in accordance with this Contract, the Pledgor shall not pose any obstacles, and shall offer necessary assistance in this regard so that the Pledgee can realize its Pledge Right. |
9. | Assignment of this Contract |
9.1 | Unless with the prior consent of the Pledgee, the Pledgor or P3A shall have no right to transfer any of his/its rights or obligations hereunder. | ||
9.2 | This Contract shall be binding upon the Pledgor and his successors or heirs, and shall be valid and binding upon the Pledgee and each of its successors, heirs or permitted assignees. | ||
9.3 | The Pledgee may, at any time and to the extent permitted by laws, transfer all or any of its rights and obligations under the Master Contract to any person designated by it (natural person/legal person), in which case, the assignee shall be entitled to and undertake all rights and obligations of the Pledgee hereunder as if it should have been entitled to and undertaken such rights and obligations as a party to this Contract. When the Pledgee transfers its rights and obligations under the Master Contract, a written notice shall be only given by the Pledgee to the Pledgor, and the Pledgor shall, at the request of the Pledgee, execute and transfer the relevant contracts and/or documents in this regard. |
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9.4 | A new pledge contract shall be signed between the new parties to the pledge after the change of the pledgee as a result of the transfer. |
10. | Effectiveness | |
This Contract is signed and shall become effective on the date first written above. |
11. | Termination | |
This Contract shall be terminated after the Secured Debt under the Master Contract has been fully repaid and the Pledgor has no longer undertaken any obligation under the Master Contract, and the Pledgee shall, within the earliest reasonable and practicable time, offer assistance to complete necessary formalities so as to release the pledge of the Equity Interest. |
12. | Handling Fees and Other Costs |
12.1 | All costs and actual expenses in connection with this Contract, including without limitation, legal fee, cost of production, stamp duty and any other taxes and charges, shall be borne by the Pledgor. If the relevant taxes are required by law to be paid by the Pledgee, the Pledgor shall fully indemnify the Pledgee such taxes paid by it. | ||
12.2 | If the Pledgor fails to pay any taxes or charges payable in accordance with this Contract or the Pledgee recovers such taxes or charges by any means or ways due to any other reasons, the Pledgor shall bear all costs arising therefrom (including without limitation, all taxes, handling fees, management fees, litigation cost, attorneys fees and various insurance premiums in connection with the handling of the Pledge Right). |
13. | Force Majeure |
13.1 | Force Majeure means any event that is beyond the reasonable control of a party and that is unavoidable even though the party so affected gives reasonable attention to it, including but not limited to act of government, act of nature, fire, explosion, typhoon, flood, earthquake, tidal, lightning or war. However, the shortage of credit, capital or financing shall not be deemed as events beyond the reasonable control of a party. Any party who is affected by Force Majeure shall notify the other party as soon as possible of the event, in respect of which the exemption from such obligations is sought. |
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13.2 | When the performance of this Contract is delayed or prevented due to the Force Majeure defined above, the party so affected shall not be required to assume any liabilities hereunder to the extent that it is within the scope of the delay or prevention. It shall take appropriate measures to minimize or eliminate the impact of Force Majeure and shall make effort to resume the performance of any obligations that are delayed or prevented by the Force Majeure. Once the Force Majeure is removed, the parties agree to resume the performance of their respective obligations hereunder with their greatest efforts. |
14. | Confidentiality Obligation | |
The parties hereto acknowledge and confirm that any oral or written information exchanged between them in connection with this Contract shall be confidential information. The parties shall keep all such information confidential and shall not disclose any of the information to any third parties without the written consent of the other parties, except for the following: (a) the information that are or will be known to the public (provided that they are not disclosed to the public without authorization by the information receiving party); (b) the information required to be disclosed by applicable laws, or the rules or regulations of securities exchanges; or (c) the information required to be disclosed by a party to its legal or financial advisors with respect to the transaction mentioned herein, for which such legal or financial advisors shall also comply with the confidentiality obligation as similar as that described in this Article. Any divulgence of Confidential Information by the employees of either party or any organization engaged by it shall be deemed as the divulgence of Confidential Information by such party, and such party shall be liable for the breach pursuant to this Contract. |
15. | Dispute Resolution |
15.1 | This Contract shall be governed by and construed in accordance with the laws of the PRC; | ||
15.2 | Any disputes between the parties arising from the interpretation and performance of any provisions hereof shall be resolved in good faith by them through consultation. If no agreement can be reached in respect of a dispute, either party may submit such dispute to China International Economic and Trade Arbitration Commission for arbitration in accordance with its arbitration rules then in force. The seat of arbitration shall be Beijing. The arbitration shall be conducted in Chinese. The arbitral award shall be final and binding upon the parties. |
16. | Integrity of this Contract | |
Notwithstanding the requirement in Article 10 hereof, the parties confirm that, once this Contract becomes effective, it shall constitute the entire agreement and understanding between the parties hereto with respect to the contents of this Contract, and shall completely supersede all previous oral or/and written discussions, communications, understanding, agreements and arrangements between the parties hereto in connection with the contents of this Contract. |
17. | Severability of this Contract | |
If any provision of this Contract is invalid or unenforceable due to its inconsistency with the relevant laws, such provision shall be deemed to be invalid only to the extent within the scope of the related jurisdiction, and shall not affect the legal effect of the other provisions hereof. |
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1. |
Party A is a wholly foreign-owned enterprise incorporated in the Peoples Republic of China
(hereinafter referred to as the
PRC
, and for the purpose of this Contract, excluding the
Hong Kong Special Administrative Region, Macao Special Administrative Region and Taiwan) under
the laws of the PRC;
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2. |
Party C is a limited liability company incorporated and validly existing in Taiyuan, Shanxi
Province, the PRC;
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3. |
Party B is a citizen of the PRC, who holds 40% equity interest of P3A;
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4. |
Party B intends to grant to Party A an exclusive call option so that Party A may request
Party B to sell his equity interest to it upon certain conditions are satisfied.
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1.1 |
Grant of Option
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Party B hereby irrevocably grants to Party A an option to purchase or designate any person
or persons (hereinafter referred to as the
Designated Person
) to purchase from Party B all
or part of his equity interest in P3A at any time according to the steps for exercise of the
option as determined by Party A at its sole discretion to the extent permitted by the PRC
laws and at the price specified in Article 1.3 hereof (hereinafter referred to as the
Call
Option
). Except for Party A and/or the Designated Person, Party B shall not sell, offer to
sell, transfer, offer as gift nor pledge any equity interest of P3A to any other third
parties. P3A hereby agrees to the grant of the Call Option by Party B to Party A and/or the
Designated Person. The term person specified in this Article and this Contract shall
include individuals, corporations, joint ventures, partnerships, enterprises, trusts or
non-corporate bodies.
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1.2 |
Steps for Exercise of the Call Option
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Subject to the provisions of the PRC laws and regulations, Party A and/or the Designated
Person may exercise the Call Option by giving written notice to Party B (hereinafter
referred to as the
Equity Purchase Notice
) and specifying the portion of equity interest
to be purchased from Party B (hereinafter referred to as the
Purchased Equity
) and the
manner in which the purchase is made.
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1.3 |
Purchase Price
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1.3.1 |
When Party A exercises its Call Option, unless an appraisal is required to be
made in respect of the equity interest by applicable PRC laws and regulations then in
effect or there are other restrictions imposed by such PRC laws and regulations on the
price of equity interest, the purchase price payable by Party A to Party B in respect
of all of the equity interest of P3A (hereinafter referred to as the
Purchase Price
)
shall be RMB One (1).
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1.3.2 |
If an appraisal is required to be made in respect of the equity interest by
the PRC laws and regulations that are applicable at the time when Party A exercises its
Call Option or there are other restrictions imposed by such PRC laws and regulations on
the price of equity interest, the parties agree that the Purchase Price shall the
minimum price permitted by applicable laws.
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1.3.3 |
If Party A chooses to purchase part of the equity interest, the exercise price
of the Call Option shall be adjusted according the ratio of the Purchased Equity to the
whole equity interests of P3A.
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1.4 |
Transfer of the Purchased Equity
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For each exercise of the Call Option:
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1.4.1 |
Party B shall cause P3A to hold a Party Bs meeting in a timely manner, during
which a resolution approving the transfer of equity interest by Party B to Party A
and/or the Designated Person shall be passed and he shall procure other Party Bs to
give up their right of first refusal in respect of the Purchased Equity in writing;
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1.4.2 |
Party B shall sign an equity transfer contract in relation to each transfer
with Party A and/or the Designated Person (as applicable) in accordance with the
requirements of this Contract and the Equity Purchase Notice in connection with the
Purchased Equity;
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1.4.3 |
The relevant parties shall execute all other necessary contracts, agreements
or documents, obtain all necessary government approvals and consents, and take all
necessary actions to grant the valid ownership of the Purchased Equity to Party A
and/or the Designated Person without any security interest being attached thereto and
procure Party A and/or the Designated Person to become the legal owner of the Purchased
Equity. For the purpose of this Article and this Contract, security interest shall
include guarantees, mortgages, pledges, third parties rights or interests, any share
options, acquisition rights, right of first refusal, right to offset, ownership
retention or other security arrangements.
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1.5 |
Payment
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The payment method of the Purchase Price or the exercise price of the Call Option shall be
determined by Party A and/or the Designated Person and Party B through negotiation in
accordance with the laws applicable at the time when the Call Option is exercised.
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2.1 |
Undertakings relating to P3A
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Party B and Party C hereby jointly undertake as follows:
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2.1.1 |
Without the prior written consent of Party A, they shall not in any manner
supplement, change or amend the articles of association of P3A, increase or decrease
its registered capital, or otherwise change the structure of its registered capital;
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2.1.2 |
P3A shall maintain its corporate existence in accordance with good financial
and business standards and practices by operating its business and handling its affairs
in a prudent and efficient manner; it shall make its best endeavour to ensure that P3A
continues to own all permits, licenses and approvals that are necessary for its
operation and that such permits, licenses and approvals will not be cancelled; it shall
make its best endeavour to keep the current organizational structure and the senior
management of the company unchanged, and to maintain the relationship with its
customers so as to guarantee that there will not be any material adverse effect on the
goodwill and operation of P3A after the delivery of equity interest as agreed;
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2.1.3 |
Without the prior written consent of Party A, P3A shall not, at any time after
the date hereof, sell, transfer, mortgage or otherwise dispose of the legal or
beneficial interest in any assets, businesses or revenues of P3A, nor allow any other
security interest to be created thereon;
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2.1.4 |
Without the prior written consent of Party A, P3A shall not incur, inherit,
guarantee or allow the existence of any debt, except for (i) debts incurred in the
normal or ordinary course of business other than through loans; and (ii) debts
disclosed to Party A for which Party As written consent has been obtained;
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2.1.5 |
P3A shall always operate all of its businesses during the ordinary course of
business to maintain its asset value, and shall refrain from any action/omission that
may affect its business operation and asset value;
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2.1.6 |
Without the prior written consent of Party A, P3A shall not enter into any
material contract, except for those contracts that are entered into in the ordinary
course of business (for the purpose of this paragraph, a contract with a value
exceeding RMB One Million (1,000,000) shall be deemed as a material contract);
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2.1.7 |
Without the prior written consent of Party A, P3A shall not provide any loan
or credit to any person;
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2.1.8 |
P3A shall, at the request of Party A, provide it with information relating to
the business operation and financial condition of P3A;
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2.1.9 |
P3A shall take out and maintain insurance from an insurance company recognized
by Party A. The coverage and type of insurance shall be the same as those of the
insurance typically taken out by other companies that operate businesses similar to P3A
in the same region and possess property or assets similar to P3A;
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2.10 |
Without the prior written consent of Party A, P3A shall not merge or
consolidate with, or acquire or invest in any person;
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2.1.11 |
P3A shall immediately notify Party A of the occurrence or possible occurrence of any
litigation, arbitration or administrative proceedings relating to P3As assets,
businesses and revenues;
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2.1.12 |
To maintain the ownership by P3A of all of its assets, it shall execute all necessary
or appropriate documents, take all necessary or appropriate actions and make all
necessary or appropriate claims or raise necessary and appropriate defenses against all
claims;
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2.1.13 |
Without the prior written consent of Party A, P3A shall not in any manner distribute
dividends to its Party Bs, provided that upon Party As written request, it shall
immediately distribute all or part of its distributable profits to its Party Bs;
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2.1.14 |
Within the term hereof, P3A shall operate its business in compliance with all
applicable laws, regulations, administrative rules and regulations of the PRC, and
there will not be any material adverse effect on the business operation or assets of
P3A due to any breach of the above requirements;
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2.1.15 |
If Party A exercises the Call Option according to the conditions of this Contract,
P3A shall make its best endeavour to obtain all government approvals and other consents
(if applicable) that are necessary for the completion of the equity transfer as soon as
possible;
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2.1.16 |
At the request of Party A, they shall appoint any persons designated by Party A as
directors of P3A.
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2.2 |
Undertakings relating to Party B
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Party B hereby undertakes that:
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2.2.1 |
Without the prior written consent of Party A, he will not, at any time after
the date hereof, sell, transfer, mortgage or otherwise dispose of any legal or
beneficial interest in the equity interest, nor allow any other security interest to be
created thereon, except for the pledge right under the
Equity Pledge Contract
;
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2.2.2 |
Without the prior written consent of Party A, he will not vote in favor of or
support or execute any Party Bs resolution at a Party Bs meeting of P3A to approve
the sale, transfer, mortgage or disposal in any other manner of any legal or beneficial
interest in the equity interest, nor allow any security interest to be created thereon,
except for the same is made to Party A or any person designated by it;
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2.2.3 |
Without the prior written consent of Party A, he will not vote in favor of or
support or execute any Party Bs resolution at a Party Bs meeting of P3A to approve
the merger or consolidation of P3A with any person, or the acquisition of or investment
in any person;
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2.2.4 |
He will immediately notify Party A of the occurrence or possible occurrence of
any litigation, arbitration or administrative proceedings relating to the equity
interest held by him;
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2.2.5 |
He will procure the Party Bs meeting of the company to vote in favor of the
transfer of the Purchased Equity as set forth in this Contract;
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2.2.6 |
To maintain his ownership in the equity interest, he will execute all
necessary or appropriate documents, take all necessary or appropriate actions and make
all necessary or appropriate claims or raise necessary and appropriate defenses against
all claims;
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2.2.7 |
At the request of Party A, he will appoint any persons designated by Party A
as directors of P3A;
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2.2.8 |
At the request of Party A at any time, he will unconditionally and promptly
transfer his equity interest to Party A and/or the Designated Person at any time, and
give up his right of first refusal in respect of other equity interests to be
transferred;
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2.2.9 |
He will strictly observe the provisions of this Contract and other contracts
jointly or separately executed by and among Party B, P3A and Party A, perform his
obligations hereunder and thereunder, and refrain from action/omission that may affect
the effectiveness and enforceability thereof.
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3.1 |
They have the right to execute and deliver this Contract and any equity transfer contracts to
which they are a party and which are entered into in respect of each transfer of the Purchased
Equity hereunder (each, a
Transfer Contract
), and to perform their respective obligations
under this Contract and any Transfer Contracts. This Contract and the Transfer Contracts to
which they are a party, once executed, will constitute their legal, valid and binding
obligations and shall be enforceable against them in accordance with the provisions thereof;
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3.2 |
The execution and delivery of this Contract or any Transfer Contracts and the performance of
their respective obligations under this Contract or any Transfer Contracts shall not: (i)
result in any violation of any applicable PRC laws and regulations; (ii) be in conflict with
their articles of association or other constituent documents; (iii) result in the violation of
any contracts or documents to which they are a party or which are binding upon them, or
constitute any breach under any contracts or documents to which they are a party or which are
binding upon them; (iv) result in the violation of any conditions for the grant and/or
continued effectiveness of any licenses or permits issued to either of them; or (v) result in
the suspension or revocation of or imposition of additional conditions to any licenses or
permits issued to either of them;
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3.3 |
P3A has a good and merchantable title to all of its assets. P3A has not created any security
interest on its assets;
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3.4 |
P3A does not have any outstanding debts, except for (i) debts incurred in the ordinary course
of its business, and (ii) debts disclosed to Party A for which Party As written consent has
been obtained;
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3.5 |
P3A has complied with all PRC laws and regulations applicable to the acquisition of assets;
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3.6 |
There are no ongoing, pending or threatened litigation, arbitration or administrative
proceedings relating to P3A or the equity interest in or assets of P3A; and
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3.7 |
Party B has a good and merchantable title and a complete and valid disposal right to all of
his equity interests (except for the restrictions under the PRC laws and regulations). Save
for the security interests under the
Equity Pledge Contract
, he has not created any security
interest on his equity interest and is free from any third party claims.
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4.1 |
Unless with the prior written consent of Party A, Party B and P3A shall not transfer their
respective rights and obligations hereunder to any third parties.
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4.2 |
Party B and P3A hereby agree that Party A shall have the right to transfer its rights and
obligations hereunder to any third parties when necessary. Party A shall only be required to
serve written notice to Party B and P3A when such transfer is made, and no consent shall be
further required from Party B or P3A in respect of such transfer.
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5.1 |
This Contract shall become effective as of the date first written above.
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5.2 |
This Contract shall be automatically terminated only after Party A exercises its option to
purchase all of the equity interests in P3A pursuant to the requirements of this Contract,
except for the early termination by this Contract or pursuant to the provisions of the
relevant agreements separately signed by the parties hereto.
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5.3 |
If, during the period stipulated in Article 5.2, the operation term of Party A or P3A
(including any extended term) expires or either party terminates due to other reasons, this
Contract shall be terminated at the time of the termination of such party, except for the
circumstances where Party A has transferred its rights and obligations pursuant to Article 4.2
hereof.
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6.1 |
Applicable Laws
|
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The formation of this Contract, its effectiveness, interpretation and performance, as well
as the dispute resolution hereunder shall be protected and governed by the laws of the PRC.
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6.2 |
Dispute Resolution
|
|
Any disputes between the parties arising from the interpretation and performance of any
provisions hereof shall be resolved in good faith by them through consultation. If no
agreement can be reached within thirty (30) days after a Party proposes to resolve a dispute
through consultation, either party may submit such dispute to China International Economic
and Trade Arbitration Commission for arbitration in accordance with its arbitration rules
then in force. The seat of arbitration shall be Beijing. The arbitration shall be
conducted in Chinese. The arbitral award shall be final and binding upon the parties.
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6.3 |
Liabilities for Breach
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A breach of this Contract shall be constituted if any party hereto violates the requirements
of this Contract by failing to fully perform this Contract, or making any false information,
or withholding or omitting significant facts in any undertaking, representation and warranty
made by him/it in this Contract, or refusing to perform any of his/its undertakings,
representations and warranties. The defaulting party shall bear the corresponding
liabilities for the breach according to laws.
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6
a. |
the information that are or will be known to the public (provided that they are
not disclosed to the public without authorization by the information receiving party);
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b. |
the information required to be disclosed by applicable laws, or the rules or
regulations of securities exchanges; or
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c. |
the information required to be disclosed by a party to its legal or financial
advisors with respect to the transaction mentioned herein, for which such legal or
financial advisors shall also comply with the confidentiality obligation as similar as
that described in this Article. Any divulgence of confidential information by the
employees of either party or any organization engaged by it shall be deemed as the
divulgence of confidential information by such party, and such party shall be liable
for the breach pursuant to this Contract. This article shall survive regardless of
whether this Contract is invalid, discharged, terminated or cannot be operated due to
any reason.
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10.1 |
Modification, Amendment and Supplement
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All amendments and supplements to this Contract shall be made by the parties in writing.
Any amendment contracts and supplemental contracts hereto duly signed by the parties shall
be an integral part of this Contract, and shall have the same legal effect as this Contract.
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10.2 |
Integrity of this Contract
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The parties confirm that, once this Contract becomes effective, it shall constitute the
entire agreement and understanding between the parties hereto with respect to the contents
of this Contract, and shall completely supersede all previous oral or/and written agreement
and understanding between the parties hereto in connection with the contents of this
Contract.
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10.3 |
Severability of this Contract
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If any provision or provisions of this Contract is/are held to be invalid, illegal or
unenforceable in any respect in accordance with any laws or regulations, the validity,
legality or enforceability of the remaining provisions of this Contract shall not be
affected or impaired in any respect. The parties shall, through amicable negotiations,
strive to replace those invalid, illegal or unenforceable provision or provisions with valid
provision or provisions, and the economic effect of such valid provision or provisions shall
be as close as possible to the economic effect of those invalid, illegal or unenforceable
provision or provisions.
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10.4 |
Headings
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The headings of this Contract are for convenience only, and shall not be used to interpret,
explain or otherwise affect the meanings of the provisions of this Contract.
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10.5 |
Language and Counterpart
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This Contract is executed in Chinese in nine originals and each of them shall have the same
legal effect. Each party shall keep one original and the remaining three originals shall be
provided to the relevant government departments.
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10.6 |
Successors
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This Contract shall be binding on and shall inure to the interest of the respective
successors or heirs of the parties and the permitted assignees of such parties.
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10.7 |
Survival
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Any obligations that occur or are due as a result of this Contract prior to the expiration
or early termination of this Contract shall survive the expiration or early termination
hereof. The provisions of Chapters 6, 8 and 9 and this Article 10.7 hereof shall survive
the termination of this Contract.
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10.8 |
Waivers
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Any party may waive the terms and conditions of this Contract, provided that such a waiver
must be provided in writing and shall require the signatures of the parties. No waiver by
any party in certain circumstances with respect to a breach by other parties shall operate
as a waiver by such a party with respect to any similar breach by other parties in other
circumstances.
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8
9
/s/ Huang Hua | ||||
/s/ Huang Hua | ||||
June 30, 2008 | ||||
Name | Place of Incorporation | |
Agria Group Limited
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British Virgin Islands | |
China Victory International Holdings Limited
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Hong Kong | |
Agria Asia Investments Limited
|
British Virgin Islands | |
Agria (Singapore) Pte. Ltd.
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Singapore | |
Aero Biotech Science & Technology Co., Ltd.
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PRC | |
Agria Brother Biotech (Shenzhen) Co., Ltd.
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PRC | |
Agria Biotech Overseas Limited
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Hong Kong |
Name | Place of Incorporation | |
Taiyuan Primalights III Agriculture Development Co., Ltd.
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PRC | |
Shenzhen Guanli Agricultural Technology Co., Ltd.
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PRC | |
Shenzhen Agria Agricultural Co., Ltd.
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PRC | |
Shenzhen Zhongyuan Agriculture Co., Ltd.
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PRC | |
Beijing Nong Ke Yu Seeds International Co., Ltd.
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PRC | |
Agria Asia International Limited
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Hong Kong | |
Agria HongKong Limited
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Hong Kong |
By: | /s/ Xie Tao | |||
Name: | Xie Tao | |||
Title: | Chief Executive Officer | |||
By: | /s/ Christopher Boddington | |||
Name: | Christopher Boddington | |||
Title: | Chief Financial Officer | |||
By: | /s/ Xie Tao | |||
Name: | Xie Tao | |||
Title: | Chief Executive Officer | |||
By: | /s/ Christopher Boddington | |||
Name: | Christopher Boddington | |||
Title: | Chief Financial Officer | |||
Sincerely yours,
/s/ Commerce & Finance Law Offices Commerce & Finance Law Offices |
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Our ref |
GDK/JLL/630408/3932871v1
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Direct tel |
+852
2971 3090
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jo.lit@maplesandcalder.com
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