INTRA GROUP LOAN AGREEMENT
Exhibit
10.27
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1.
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Date of
Agreement as of December 11, 2009 (the "Agreement
Date")
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2.
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Parties:
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(a)
▇▇▇▇▇▇▇ GENETICS B.V., a limited liability company incorporated
under the laws of the Netherlands and having its registered office at
Villa “de Körver”, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇, ▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇, as
ultimate parent company via its 100% affiliate Hypor B.V. Boxmeer The
Netherlands in Shandong Hypor Liuhe Breeding Co. (“▇▇▇▇▇▇▇
Genetics”)
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(b)
HYPOR AGFEED BREEDING COMPANY INC. an equity joint venture
corporation existing under the laws of PRC and having its registered
office at [address,
address,] China (the
“Affiliate”)
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3.
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Definitions
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In this
Agreement the following words and phrases shall bear the following
meanings:-
Acceleration Event
means an event declared by a Party to be an Acceleration Event in accordance
with Clause 11.1 hereof;
Agreement means this
document, stating the terms and conditions agreed to by the
Parties, including and forming an integral part thereof, the
Schedules attached hereto;
Amount means the Loan
as the same may be reduced or increased from time to time in accordance with the
terms hereof;
Business Day means
any day other than a Saturday or Sunday on which banks are open for business in
the country of ▇▇▇▇▇▇▇ Genetics and in the country of the
Affiliate;
Currency means the
currency in which the Loan is made being the Euro (€).
Drawdown Date means
the date of the advance of the Loan.
Default Interest Rate
has the meaning set out in Part I of the Schedule;
Group means
the group of companies consisting of ▇▇▇▇▇▇▇ Genetics B.V. and all its direct
and indirect subsidiaries from time to time;
Loan means the amount
advanced to the Affiliate by ▇▇▇▇▇▇▇ Genetics as specified in Part II of the
Schedule.
Interest Margin means
the margin charged over and above the base rate (one month’s Euribor) by the
finance provider(s) to ▇▇▇▇▇▇▇ Genetics;
1
Interest Period means
each period by reference to which interest is credited or debited to the Account
as indicated in Clause 6.2;
Interest Rate has the
meaning set out in Part I of the Schedule;
Parties means the
parties to this Agreement (and "Party" shall be construed accordingly) as
mentioned in Clause 2 of this Agreement;
SAFE means the State
Administration of Foreign Exchange or its local counterpart;
Schedule means the
Schedule attached to this Agreement;
Termination Date
means the date on which this Agreement is terminated pursuant to Clause 11 or
Clause 14.1;
Withholding Tax means
fees, taxes, charges or deductions of whatever nature imposed by the fiscal
authorities in the country of tax residence of the paying Party on any sum
payable under this Agreement.
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4.
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Loan/Purpose
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4.1
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Subject
to the term of this Agreement, ▇▇▇▇▇▇▇ Genetics agrees to make the Loan as
set out in the Schedule to the Affiliate for the sole purpose to
settlement of accounts, purchase of capital equipment and running of the
business, and for other purposes as directed by its board of directors
shall at no time serve to finance financial assets, repayment of RMB loan,
domestic equity investment or other purposes restricted by SAFE. The Loan
will be governed by the terms of this
Agreement.
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4.2
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Subject
to the satisfaction of conditions precedent set out in Clause 13, the Loan
shall be advanced by ▇▇▇▇▇▇▇ Genetics to the Affiliate in one instalment
on such date as may be requested by the
Affiliate.
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5.
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(P)repayment
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5.1
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The
Affiliate will repay the Loan (together with all accrued unpaid interest)
on the Termination Date.
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5.2
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Notwithstanding
anything else to the contrary contained in this Agreement, the consent of
▇▇▇▇▇▇▇ Genetics shall be required for any prepayment of Loan hereunder
should the Affiliate decide to propose a (partial) prepayment on basis of
sufficient free cash flow derived from Affiliate’s
operations.
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5.3
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In
the situation of any prepayment the Affiliate shall pay the Net Present
Value of the interest liability calculated for the period of the date of
prepayment of any amount and the Termination Date of this Loan
agreement.
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2
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6.
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Interest
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6.1
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The
interest rate applicable to the Loan for each Interest Period shall be the
rate as set out in Schedule I, or other rates agreed upon between the
Affiliate and ▇▇▇▇▇▇▇ Genetics in writing from time to time, subject to
approval by SAFE, and is payable by the Affiliate to the ▇▇▇▇▇▇▇ Genetics
in arrear on the last day of each Interest Period. Interest
accrues from day to day commencing on the date of the advance of the Loan
and is calculated on the basis of the actual number of days elapsed and a
360 day year.
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6.2
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Each
Interest Period for the Loan shall be a period of 3 months. The
first Interest Period in relation to the Loan shall commence on the
Drawdown Date of the Loan.
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6.2
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Interest
not paid on the Loan at the end of an Interest Period (with the prior
agreement of ▇▇▇▇▇▇▇ Genetics) will be added to the Loan and itself bear
interest.
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7.
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Payments
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7.1
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All
payments under this Agreement shall be made to ▇▇▇▇▇▇▇ Genetics' bank
account.
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7.2
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If
any payment whether of principal, interest or otherwise falls due on, or
the last day of any Interest Period is, a day which is not a Business Day,
the date for payment, or such last day of an Interest Period, shall be the
next following Business Day or, if such next following Business Day falls
in the next following calendar month or after the Termination Date, the
immediately preceding Business Day.
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7.3
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In
the event that the Affiliate fails to make a payment under this Agreement
on its due date interest shall be payable on such overdue sum at the
Default Interest Rate set out in Part I of the Schedule as from the due
date and without notification in writing from ▇▇▇▇▇▇▇ Genetics that such
interest has become due.
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8.
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Withholding
Tax
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8.1
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If
and to the extent any applicable double taxation treaty or any provision
of law provides for a reduced (or as the case may be zero) rate of
Withholding Tax, ▇▇▇▇▇▇▇ Genetics will use all reasonable endeavours to
assist the receiving Party to obtain permission at the earliest
opportunity to make payment hereunder at such reduced (or as the case may
be zero) rate.
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8.2
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Either
Party required to make a deduction or withholding will deliver tax
receipts to the other Party within thirty (30) Business Days after
Withholding Tax has been paid and will further provide all other available
documents and information reasonably necessary or appropriate to permit
the other Party to substantiate its claim for credit for foreign tax
purposes with respect to the withheld amount. The Parties agree
to submit any such claims to the appropriate revenue authorities
expeditiously.
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3
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9.
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Costs and
Expenses
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9.1
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▇▇▇▇▇▇▇
Genetics may charge the Affiliate for the provision of the Loan and
related services in such a way as to reimburse all of ▇▇▇▇▇▇▇ Genetics’
costs and expenses actually incurred, including a profit of 0,7% interest
margin.
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10.
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Representation and
Warranties
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A.
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Each
Party represents and warrants
that:-
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10.1
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It
is a duly incorporated validly existing corporation under the laws of the
place of its incorporation;
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10.2
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It
has the power to enter into this Agreement and to exercise its rights and
fulfil its obligations granted hereunder and has taken all necessary
actions to authorise the execution, delivery and performance of this
Agreement which constitutes its valid and legally binding obligation
enforceable in accordance with its
terms;
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10.3
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The
execution, delivery and performance of this Agreement does not violate any
provision of any applicable existing law or regulation by which it is
bound or its statutes or any mortgage, contract or other undertaking to
which it is a party or which is binding upon it;
and
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10.4
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All
relevant consents, approvals or authorisations of any governmental
authority or agency required in connection with the execution, validity or
enforceability of this Agreement have been obtained and are valid and
subsisting.
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B.
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Affiliate
represents and warrants that:-
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10.5
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In
the event Hendix Genetics’ interest in the Affiliate is changed due to any
sale of shares in the Affiliate or capital change of the Affiliate, any
Amount (to be) made available under this Agreement by ▇▇▇▇▇▇▇ Genetics
shall be adjusted to reflect the interest held by ▇▇▇▇▇▇▇ Genetics in the
Affiliate and the shareholders indebtedness of the Affiliate. Additionally
in such circumstances the Loan shall be subject to a contribution held by
the other co-owner(s) of the Affiliate, on a pro rata basis reflecting
the(ir) respective interest of such
co-owner(s).
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10.6
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Any
amount made available by the co-owner(s) to the Affiliate under a
shareholders loan agreement shall solely be accepted by Affiliate if such
amount is made available under same/similar conditions and such conditions
are not more favourable to the co-owner than the conditions as stated in
this Agreement.
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11.
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Acceleration and
Termination
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11.1
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If
any of the following events shall occur in respect of one Party (the
"Affected Party"), the other Party may at its discretion by notice to the
Affected Party declare such event to be an Acceleration
Event:-
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(i)
failure by the Affected Party to pay principal, interest or any
other sum due for payment by the Affected Party under this Agreement
within ten (10) Business Days of the due date;
or
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4
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(ii)
the Affected Party committing any other material
breach or omitting to observe in any material respect any other of the
obligations accepted or undertakings given by it under this Agreement and
such breach or omission continuing for more than ten (10) Business Days
after the date of receipt by the Affected Party of written notice
requiring such breach or omission to be remedied;
or
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(iii)
any material debt of the Affected
Party
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(A)
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being
validly declared to be due and repayable prior to the stated date of
maturity thereof as a result of any material default on the part of the
Affected Party (other than a default arising out of liability being
contested in good faith) under the terms of the agreement or other
documents evidencing or constituting such debt and such debt not being
repaid or such default not being remedied or such declaration not being
otherwise rescinded within ten (10) Business Days after the Affected Party
has received notice of such declaration;
or
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(B)
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being
not repaid within ten (10) Business Days after the date of the maturity
thereof plus any applicable period of
grace
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PROVIDED
THAT for the purposes of this sub-paragraph 11.1(iii), material debt means a
borrowing which represents more than ten per cent (10%) of the aggregate amount
of the net interest bearing debts of the Affected Party and no failure to pay or
repay or other default resulting from circumstances outside the control of the
Affected Party shall be taken into account; or
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(iv)
a final judgement being made by a
court of competent jurisdiction, or an effective resolution being passed
for the winding-up of the Affected Party (save for a voluntary winding-up
for the purpose of an amalgamation or reconstruction) or the occurrence of
any similar event in any appropriate jurisdiction;
or
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(v)
a receiver being appointed or an
encumbrancer taking possession of all or a major part of the undertaking,
property or assets of the Affected Party and not being paid out or
discharged within forty (40) Business Days (excluding any period during
which such appointment or taking possession is being contested in good
faith) after such appointment or taking possession or the occurrence of
any similar event in any appropriate jurisdiction;
or
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(vi)
the Affected Party ceasing
to be controlled by the Group meaning that the Group will directly or
indirectly cease to own more than fifty per cent of the shares carrying
rights to vote at a general meeting of shareholders of the Affected Party
or ordinary shares carrying a majority of votes at a general meeting of
shareholders of the Affected
Party.
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11.2
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The
Loan amount shall be fully reimbursed at the third anniversary of the
Drawdown Date, without prejudice to the application of Clause 11.1. On
that date, the Amount together with any interest accrued thereon less any
interest to be deducted from the Amount shall become immediately due and
repayable by or to the other
Party.
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11.3
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If
an Acceleration Event shall occur the other Party shall have the right,
subject to notification within eight (8) Business Days, to terminate this
Agreement with the same result and under the same conditions as a
termination pursuant to clause
11.2.
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5
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11.4
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If
the Amount shall become immediately due and payable pursuant to Clause
11.3, the Affected Party will promptly reimburse to the other Party any
losses, costs and expenses whatsoever incurred or suffered by the other
Party as a consequence of the early termination of this Agreement in
application of the said Clause
11.3.
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12.
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Undertakings
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The
undertakings in this clause remain in force from the date of this Agreement for
so long as the Amount is outstanding under this Loan Agreement.
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12.1.
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The
Affiliate’s payment obligations under this Loan Agreement shall rank pari
passu with all business and/or financial creditors of the
Affiliate.
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12.2.
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The
Affiliate is in compliance with all applicable laws and regulations and no
litigation, arbitration or administrative proceedings, which are likely to
have a Material Adverse Effect have been started or threatened against the
Affiliate.
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12.3.
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The
Affiliate is in compliance in all material respects with all environmental
laws and environmental permits and no environmental claims have been
commenced or are threatened against the
Affiliate.
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12.4.
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The
Affiliate shall not create or permit to subsist any security over any of
its assets other than:
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12.4.1
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Any
security which has been permitted by ▇▇▇▇▇▇▇
Genetics;
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12.4.2
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Any
security arising pursuant to any netting, set-off, cash pooling, cash
management or other arrangement entered into in the ordinary course of the
Affiliate’s banking arrangements;
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12.4.3
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Any
lien arising by operation of law (including Tax laws) or resulting from
judicial proceedings, in the ordinary course of
business;
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12.4.4
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Any
security over or affecting any asset acquired by the Affiliate after the
date of this Agreement, provided such security is discharged within three
months of the acquisition of such
assets;
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12.4.5
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Pledges
of goods, the related documents of title or other related documents
arising in the ordinary course of
trading
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12.5
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The
Affiliate shall not dispose of any asset other
than:
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12.5.1
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Any
disposal which has been authorised by ▇▇▇▇▇▇▇
Genetics;
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12.5.2
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Sales,
transfers or other disposals made in the ordinary course of trading at
arms length and on normal commercial terms,
or
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12.5.3
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The
payment of dividends.
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12.6
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The
Affiliate shall not merge or acquire any other legal entity, whether an
entity being part of the Group, or a third party, without the prior
written consent of ▇▇▇▇▇▇▇
Genetics.
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12.7
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The
Affiliate shall maintain insurances in relation to its business and assets
in accordance with the insurance policy set out by, or on behalf of
▇▇▇▇▇▇▇ Genetics.
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12.8
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Other
than in the ordinary course of business, the Affiliate shall not grant any
loan or credit or give any guarantee or indemnity to a third
party.
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6
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13.
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Conditions
Precedent
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The Loan
amount shall become available to the Affiliate on receipt by ▇▇▇▇▇▇▇ Genetics
of:
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13.1
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a
duly executed copy of this
Agreement;
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13.2
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the
foreign debt registration document in respect of the Loan issued by SAFE
in accordance with relevant PRC laws, regulations and rules;
and
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13.3
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where
the Affiliate is required to obtain any statutory, regulatory or other
consents or authorisations for the making or performance of this
Agreement, a certificate signed on behalf of the Affiliate confirming that
such consents or authorisations have been
obtained.
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14.
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New
Circumstances
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14.1
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Save
as otherwise provided in Clause 8 hereof,
if:
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(A)
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there
is any change in applicable law, regulation or regulatory requirement or
in the interpretation or application thereof;
or
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(B)
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compliance
by either Party (the "Relevant Party") with any applicable direction or
requirement of any competent authority shall impose, modify or deem
applicable any reserve requirements or require the making of any special
deposits against or in respect of any assets or liability of, deposit with
or for the account of, or loans by, the Relevant
Party;
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and
the result thereof is either to increase the costs to the Relevant Party
of making available or maintaining the Amount or any part thereof or to
reduce the amount of any payment received or receivable by the Relevant
Party under this Agreement then:-
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(a)
the
Relevant Party shall notify the other Party as soon as possible of the happening
of such event;
(b) the
other Party shall pay to the Relevant Party on demand such amount as may be
necessary to compensate the Relevant Party (as set out in any explanatory
certificate provided by the Relevant Party) for such additional costs or such
reduction; and
(c) so
long as such additional costs continue or as the case may be so long as the
circumstances giving rise to such reduction continue the other Party shall have
the right:
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(A)
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on
giving not less that (10) Business Days' notice to the Relevant Party to
terminate this Agreement with the result that the Amount together with any
interest accrued thereon or less any interest to be deducted therefrom
shall become immediately due and repayable;
or
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(B)
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at
any time without premium penalty or other charge to reduce the maximum
amounts available for deposits and/or borrowings hereunder to any amounts
being not more than (whilst any sums are outstanding under the Agreement
and not repaid) the Amount.
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7
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14.2
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In
the event that it becomes unlawful in any relevant jurisdiction for either
Party (the "Relevant Party") to comply with its obligations or maintain
the Loan Amount under this Agreement, this Agreement shall immediately
terminate and the Amount (if any), together with all accrued interest
thereon and all other such sums then outstanding under this Agreement less
any interest to be deducted from the Amount shall become immediately due
and repayable upon receipt by the other Party of a notice from the
Relevant Party.
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15.
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Notices
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15.1
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All
notices and other communications in connection with this Agreement shall
be given or confirmed in writing or by e-mail, telex or fax by one Party
to the other at the address specified in Clause 2 or such other addresses
as may from time to time be substituted therefor by written notice by one
Party to the other.
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15.2
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Notices
sent by e-mail, telex or fax shall be deemed to be received on the
Business Day following the day they are transmitted and if sent by post
shall be deemed to be received three (3) Business Days after they are put
in the post by airmail, postage prepaid and properly addressed to the
addressee.
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16.
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Assignment
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Neither
Party may assign its rights or transfer its obligations under this Agreement
without the prior written consent of the other party.
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17.
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Currency
Indemnity
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The
obligation of either Party to make payments in the Currency shall not be
discharged or satisfied by tender or recovery pursuant to any judgement
expressed in or converted into any other currency except to the extent to which
such tender or recovery shall result in the effective receipt by the receiving
Party of the full amount of the Currency payable under this Agreement and
accordingly the primary obligation of both Parties shall be enforceable as an
alternative or additional cause of action for the purpose of recovery in the
Currency of the amount (if any) by which such effective receipt shall fall short
of the full amount of the Currency payable hereunder and shall not be affected
by judgement being obtained for any other sum due under this
Agreement.
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18.
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Governing Law and
Jurisdiction
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18.1
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This
Agreement shall be governed by and construed in accordance with the laws
of the PRC.
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18.2
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Any
dispute, controversy or claim arising out of or in connection with this
Agreement, or the breach, termination or invalidity thereof, shall be
settled by arbitration. The appointing authority shall be the
China International Economic and Trade Arbitration Commission (the
“Commission”). The place of arbitration shall be in Beijing at
Commission. There shall be only one arbitrator, and the arbitration shall
be conducted in English and Chinese. The arbitration shall be
administered by the Commission in accordance with the procedural rules of
the Commission in force at the date of this
Agreement.
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8
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19.
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Government
Registration
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The
Affiliate shall:
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(a)
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within
fifteen (15) days after the Agreement Date, effect foreign debt
registration formalities with SAFE in accordance with relevant PRC laws,
regulations and rules;
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(b)
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effect
formalities in respect of foreign debt principal and interest repayment in
accordance with relevant PRC laws, regulations and rules;
and
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(c)
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use
its best endeavour to obtain such additional government or other approvals
as may be necessary from time to time in connection with the execution,
delivery and performance of this
Agreement.
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IN
WITNESS WHEREOF each of the Parties has caused this Agreement to be signed on
its behalf
SIGNED by
/s/ M. H. M.
▇▇▇▇▇▇▇; Title: President
for and
on behalf of ▇▇▇▇▇▇▇ Genetics B.V.
SIGNED by
/s/ Li Songyan;
Title: Authorized
Signatory
for and
on behalf of Hypor Agfeed Breeding Company INC.
9
THE
SCHEDULE
PART I
Interest
Interest
Calculation: on the basis of 360 days per year and the actual number of
days.
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Interest
Rate
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:
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One
month’s Euribor at the date prior to the date interest shall be due plus
the Interest Margin charged by Company’s finance provider and a margin of
0.7% for administrative and treasury services
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Default
Interest Rate
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:
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3%
over the Interest Rate
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Basis
of debiting of Interest
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:
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at
the end of each calendar month
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Early
repayment
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:
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NPV
on interest
liability
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PART II
Loan
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Loan
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:
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Euro
amount of € 271,950 (in words: Two Hundred seventy one thousand nine
hundred fifty Euro) [Said amount is based on an
exchange rate of 1 RMB: 0.0980594€ on November 24. 2009. Final amount to
be calculated on the date of signing this Loan
agreement]
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Term
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:
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NB
(__) year
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Maturity
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:
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the
third anniversary of the Drawdown Date
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Special
condition
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:
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none
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10