NOTES REPURCHASE AGREEMENT
Exhibit
99.2
This
NOTES REPURCHASE AGREEMENT (this “Agreement”)
dated
as of July 28,
2008 is
made by and between Origin Agritech Ltd., a company organized and existing
under
the laws of the British Virgin Islands (the “Company”)
and
Citadel Equity Fund Ltd. (the “Seller”).
RECITALS:
WHEREAS,
the
Company has issued to the Seller, and the Seller has purchased from the Company,
the Company’s 1% Guaranteed Senior Secured Convertible Notes due 2012 of
US$100,000 principal amount each in an aggregate principal amount of
US$40,000,000 (the “Notes”)
pursuant to that certain Notes Purchase Agreement dated July 25, 2007 by and
among, inter
alia,
the
Company and the Seller.
WHEREAS,
in
connection with such transaction, an Indenture dated July 25, 2007 (the
“Indenture”)
was
entered into by and among, inter
alia,
the
Company, The Bank of New York (the “Trustee”)
and
State Harvest Holdings Limited (the “Guarantor”). Capitalized terms that are not
otherwise defined in this Agreement shall have the meanings ascribed to them
in
the Indenture or other relevant Transaction Documents, as applicable.
WHEREAS,
the
Company now wishes to repurchase from the Seller, and the Seller wishes to
sell
to the Company, Notes, each of US$100,000 principal amount, in an aggregate
principal amount of US$18,700,000 (the “Repurchased
Notes”)
upon
the terms and conditions set forth in this Agreement.
NOW
THEREFORE,
in
consideration of the foregoing and the mutual promises, covenants and agreements
of the parties contained herein, the parties hereto agree as
follows:
| 1. |
NOTES
REPURCHASE; PAYMENT
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1.1 Repurchase
and Sale of the Repurchased Notes. The
parties agree that the Company shall repurchase the Repurchased Notes from
the
Seller in two (2) installments. At the first closing (the “First
Closing”),
the
Company shall repurchase from the Seller and the Seller shall sell to the
Company Repurchased Notes in an aggregate principal amount of US$14,000,000
for
an aggregate purchase price of US$15,000,000. At the second closing (the
“Second
Closing”),
the
Company shall repurchase from the Seller and the Seller shall sell to the
Company Repurchased Notes in an aggregate principal amount of US$4,700,000
for
an aggregate purchase price of US$5,000,000 (together with the purchase price
paid at the First Closing, the “Repurchase
Price”).
Notwithstanding any terms of this Agreement, the Seller shall be entitled to
all
rights and privileges in respect of the Repurchased Notes as a noteholder up
to
the First Closing Date or the Second Closing Date (each as defined below),
as
the case may be, including, without limitation, the right to receive any
Interest payable on the Repurchased Notes in respect of any Record Date prior
to
the First Closing Date or the Second Closing Date, as applicable. For the
avoidance of doubt, except as provided in the preceding sentence, the Seller
shall not be entitled to any accrued and unpaid Interest on the Repurchased
Notes.
1.2 Closing. The
First
Closing shall occur at the Beijing office of Milbank, Tweed, Xxxxxx & XxXxxx
LLP, or at such other place as the Company and the Seller shall mutually agree,
on the date that falls three (3) business days after the date hereof, or if
later, the third business day following the satisfaction of all of the
conditions set forth in Section 8 (the “First
Closing Date”).
At
the First Closing, the Company shall pay to the Seller US$15,000,000 for
Repurchased Notes in an aggregate principal amount of US$14,000,000 by wire
transfer of immediately available funds to an account of the Seller which shall
be designated by the Seller in writing at least two (2) days prior to the First
Closing. The
Second Closing shall occur at the Beijing office of Milbank, Tweed, Xxxxxx
&
XxXxxx LLP, or at such other place and at such other time as the parties shall
mutually agree but in no event later than December 31, 2008 (the “Second
Closing Date”).
At
the Second Closing, the Company shall pay to the Seller the remaining
US$5,000,000 of the Repurchase Price for Repurchased Notes in an aggregate
principal amount of US$4,700,000 by wire transfer of immediately available
funds
to an account of the Seller which shall be designated by the Seller in writing
at least two (2) days prior to the Second Closing.
(a) Cancellation
of Notes. On
the
First Closing Date and the Second Closing Date, as applicable, the Seller shall,
against the payment of the relevant portion of the Repurchase Price by the
Company, surrender to the Trustee the respective Repurchased Notes through
book-entry instruction for the prompt cancellation of such Repurchased Notes
by
the Trustee pursuant to Section 2.08 of the Indenture. The Company and the
Seller hereby agree to take all actions necessary and proper in order for the
Trustee to promptly cancel such Repurchased Notes pursuant to this Agreement
and
the terms of the Indenture.
(b) Termination;
Delayed Closing. If
the
Company fails for any reason, other than due to the non-fulfillment of the
conditions set forth in Section 8, to pay to the Seller the amount of the
Repurchase Price due pursuant to this Clause 1.2
on or
prior to the First Closing Date or the Second Closing Date, as the case may
be,
the Seller shall be entitled to terminate this Agreement in respect of the
Repurchased Notes not yet repurchased (“Outstanding
Notes”)
under
Clause 2
of this
Agreement with immediate effect by (1) giving written notice thereof to the
Company or (2) selling the Outstanding Notes in good faith and on an
arm’s-length basis to an unrelated third party (without the need for any notice
of such to the Company) at a price not less than fair market value. Until this
Agreement is terminated in accordance with either method set forth in the
preceding sentence, upon any repurchase of Outstanding Notes on a subsequent
date, the Company shall pay to the Seller an amount equal to the sum of (i)
the
Repurchase Price in respect of Outstanding Notes pursuant to this
Clause 1.2
and (ii)
interest thereon at the rate of LIBOR plus three percent (3%) per annum to
be
calculated on the basis of a 360-day year and the days elapsed from the First
Closing Date or the Second Closing Date, as the case may be, to such date when
payment of such sum is actually received in full by the Seller.
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| 2. |
TERMINATION
|
2.1 Effect
of
Termination. If
this
Agreement is terminated pursuant to the preceding Clause 1.2(b),
this
Agreement shall forthwith become null and void, and there shall be no liability
or obligation on the part of the parties (or any of their respective officers,
directors, employees, agents or other representatives or affiliates) under
this
Agreement or in connection with the transactions contemplated hereby, except
that termination shall not relieve any breaching party from liability hereunder
from willful breach of any covenant or agreement contained herein, and except
that the provisions of this Agreement other than Clause 1,
including, without limitation, Clauses 2,
3,
4 and
5, shall continue to apply following any such termination.
2.2 Sale
to
Third Party. If
this
Agreement is terminated pursuant to the preceding Clause 1.2(b),
the
Company shall pay to the Seller on the Third Party Sale Date (as defined below)
an amount equal to the sum of (i) interest on the Repurchase Price in respect
of
the Outstanding Notes at the rate of LIBOR plus three percent (3%) per annum
to
be calculated on the basis of a 360-day year and the days elapsed from the
First
Closing Date or the Second Closing Date, as the case may be, to such date on
which the Seller sells in good faith and on an arm’s-length basis the
Outstanding Notes to an unrelated third party at a price not less than fair
market value (the “Third
Party Sale Date”)
and
(ii) the balance between the Repurchase Price in respect of the Outstanding
Notes and the sales price of the Outstanding Notes to such third party (the
“Third Party Sales Price”) in the event that the Third Party Sales Price is
lower than the Repurchase Price in respect of the Outstanding
Notes.
| 3. |
WAIVER
AND FORBEARANCE
|
3.1 Waiver.
The
Seller hereby waives, pursuant to Section 6.07 of the Indenture, all Defaults,
Events of Defaults and their consequences, if any, on the part of the Company
and the Guarantor for failure to duly observe and perform covenants set forth
in
Sections 4.09(b) and 4.16 of the Indenture on the original issue date of the
Notes and in respect of the determination dates on September 30, 2007, December
31, 2007, March 31, 2008 and June 30, 2008 only and any failure to duly observe
and perform covenants set forth in Section 4.29 of the Indenture in respect
of
such matters for the fiscal year ended September 30, 2007 (collectively, the
“Waived
Matters”),
provided,
that
this waiver shall terminate, and be deemed to have never taken effect, if the
Company defaults in its obligations to complete the repurchase of the
Repurchased Notes at the First Closing or the Second Closing.
3.2 Forbearance.
Pursuant to Section 6.07 of the Indenture, the Seller hereby agrees to forbear,
and directs the Trustee to forbear, from taking or exercising any Enforcement
Action (as defined below) in connection with the Waived Matters (the
“Forbearance”),
provided
that
this Section 3.2 shall terminate if the waiver is terminated as provided in
3.1
above. “Enforcement Action” means any Default-related right, remedy or other
action available to the Seller or the Trustee or aiding and abetting, assisting,
cooperating with or otherwise supporting any other Person in taking or
exercising any Default-related right, remedy or other action available to such
Person.
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| 4. |
SUPPLEMENTAL
INDENTURE
|
4.1 Supplemental
Indenture. Pursuant
to Section 6.07 and Section 8.02 of the Indenture, the Company and the Seller
hereby direct the Trustee to execute and deliver, and the Seller consents to
the
execution and delivery of, a supplement to the Indenture (the “Supplemental
Indenture”)
to
amend Section 4.16 of the Indenture to read as follows: “The Company shall not,
on the Issue Date (after giving effect to the issuance of the Notes) or at
the
end of any Fiscal Quarter thereafter, permit its Consolidated Tangible Net
Worth
to be less than the Consolidated Tangible Net Worth Threshold. The “Consolidated
Tangible Net Worth Threshold” shall be equal to US$45,000,000 (or its equivalent
in RMB, calculated at the exchange rate for conversion of US dollars into RMB
quoted by the People’s Bank of China on the Issue Date or the last Business Day
of such Fiscal Quarter, as the case may be) from the Issue Date until redemption
or conversion or purchase and cancellation in full of the Notes in accordance
with the Indenture.”
| 5. |
FURTHER
ACTIONS
|
5.1 As
soon
as practicable after the date hereof, the Seller shall execute and deliver
to
the Trustee the consent letter attached hereto as Exhibit A (the “Consent
Letter”).
The
Seller further agrees to execute and deliver such documents as may be necessary
or appropriate, and to take all such further action, to facilitate or consummate
the transactions as contemplated by this Agreement (including the execution
and
delivery of the Supplemental Indenture).
5.2
As
soon as practicable after the date hereof, the Company shall execute and deliver
all such documents to be provided by the Company as required by Section 8.05
of
the Indenture for the Trustee to enter into the Supplemental Indenture. The
Company further agrees to execute and deliver such documents as may be necessary
or appropriate, and to take all such further action, to facilitate or consummate
the transactions as contemplated by this Agreement, including the execution
and
delivery of the Supplemental Indenture.
| 6. |
SELLER’S
REPRESENTATIONS AND
WARRANTIES
|
6.1 Seller’s
Authority. The Seller is the beneficial owner of all the Notes, and has all
requisite right, power and authority to enter into this Agreement and to
consummate the transactions contemplated hereby. This Agreement has been duly
executed and delivered by the Seller and constitutes the legal, valid and
binding obligation of the Seller, enforceable against the Seller in accordance
with its terms.
6.2 Title
to
the Repurchased Notes. The Seller represents and warrants to, and agrees with,
the Company that it is and as of the First Closing Date and the Second Closing
Date will be the beneficial owner of the Repurchased Notes, free and clear
of
any encumbrances, including, without limitation, any charge, claim, condition,
equitable interest, lien, option, pledge, security interest, right of first
refusal, or restriction of any kind, including any restriction on use, voting,
transfer, receipt of income, or exercise of any other attribute of ownership.
| 7. |
COMPANY’S
REPRESENTATIONS AND
WARRANTIES
|
7.1 Company’s
Authority. The Company has all requisite corporate right, power and authority
to
enter into this Agreement and to consummate the transactions contemplated
hereby. This Agreement has been duly executed and delivered by the Company
and
constitutes the legal, valid and binding obligation of the Company, enforceable
against the Company in accordance with its terms.
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7.2 No
insolvency. The Company has taken no action, and no steps have been taken or
legal proceedings started or threatened against it for an administration,
winding-up, examinership, interim or bankruptcy order to be made against it
or
for its dissolution or reorganization or for the appointment of a receiver,
administrative receiver, examiner, supervisor, trustee or similar officer over,
or for the taking into possession or enforcement of security by an encumbrancer,
mortgagee or chargee in respect of, all or any part of its assets, undertaking
or revenues. The Company is not insolvent and is able to pay its debts as and
when they become due.
| 8. |
CONDITIONS
PRECEDENT TO THE COMPANY’S OBLIGATION TO
CLOSE
|
The
Company’s obligation to repurchase the Repurchased Notes and to take the other
actions required to be taken by the Company is subject to the satisfaction,
or
waiver, of the following conditions:
8.1 Accuracy
of Representations and Warranties. The Seller’s representations and warranties
in Section 6 shall be accurate as of the date of this Agreement, and shall
be
accurate as of the First Closing Date and the Second Closing Date, in each
case
as if made on the date thereof.
8.2 Performance.
The Seller shall have duly performed and complied with all of the obligations
that the Seller is required to perform or to comply with pursuant to this
Agreement on or prior to the First Closing Date or the Second Closing Date,
as
applicable.
| 9. |
CONDITIONS
PRECEDENT TO THE SELLER’S OBLIGATION TO
CLOSE
|
The
Seller’s obligation to sell the Repurchased Notes and to take the other actions
required to be taken by the Seller is subject to the satisfaction, or waiver,
of
the following conditions:
9.1 Accuracy
of Representations and Warranties. The Company’s representations and warranties
in Section 7 shall be accurate as of the date of this Agreement, and shall
be
accurate as of the First Closing Date and the Second Closing Date, in each
case
as if made on the date thereof.
9.2 Performance.
The Company shall have duly performed and complied with all of the obligations
that the Company is required to perform or to comply with pursuant to this
Agreement on or prior to the First Closing Date or the Second Closing Date,
as
applicable.
| 10. |
MISCELLANEOUS
|
10.1 Governing
Law. This
Agreement shall be governed by and construed exclusively in according with
the
laws of the State of New York without giving effect to any choice of law rule
that would cause the application of the laws of any jurisdiction other than
the
laws of the State of New York to the rights and duties of the parties
hereunder.
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10.2 Entire
Agreement.
This
Agreement constitutes the entire agreement between the parties hereto relating
to the subject matter hereof and supersedes all prior agreements or
understandings, both oral and written, between the parties hereto relating
to
the subject matter hereof.
10.3 Binding
Effect; Benefit.
This
Agreement shall inure to the benefit of and be binding upon the parties and
their respective heirs, successors, legal representatives and permitted assigns.
Nothing in this Agreement, expressed or implied, is intended to confer on any
person other than the parties, and their respective heirs, successors, legal
representatives and permitted assigns, any rights, remedies, obligations or
liabilities under or by reason of this Agreement.
10.4 Assignment. No
party
may assign, delegate or otherwise transfer any of its rights or obligations
under this Agreement without the written consent of the other
party.
10.5 Amendment;
Waiver.
(a) This
Agreement may not be amended, modified or supplemented except by a written
instrument executed by each of the parties.
(b) No
waiver
of any provision of this Agreement shall be effective unless set forth in a
written instrument signed by the party waiving such provision. No failure or
delay by a party in exercising any right, power or privilege hereunder shall
operate as a waiver thereof, nor shall any single or partial exercise of the
same preclude any other or further exercise thereof or the exercise of any
other
right, power or privilege. Without limiting the foregoing, no waiver by a party
of any breach by any other party of any provision hereof shall be deemed to
be a
waiver of any subsequent breach of that or any other provision hereof. The
rights and remedies herein provided shall be cumulative and not exclusive of
any
rights or remedies provided by law.
10.6 Notices.
Each
notice, demand or other communication under this Agreement shall be in writing
and delivered or sent to the relevant party at its address or fax number set
out
below (or such other address or fax number as the addressee has by five (5)
days’ prior written notice specified to the other party). Any notice, demand or
other communication so addressed to the relevant party shall be deemed to have
been delivered (a) if delivered in person or by messenger, when proof of
delivery is obtained by the delivering party; (b) if sent by post within the
same country, on the third (3rd)
day
following posting, and if sent by post to another country, on the fifth
(5th)
day
following posting, and (c) if given or made by fax, upon dispatch and the
receipt of a transmission report confirming dispatch. The initial address and
facsimile for the parties for the purposes of this Agreement are:
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(a)
|
if
to the Company, to:
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Xx.
00
Xxxxx Xxxx Xxxx Xxxx
Xxxxxxxxx
Xxxxxxxx
Xxxxxxx
000000
PRC
Fax:
x00
00 0000 0000
Attention:
Chief Financial Officer
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(b)
|
if
to the Seller, to:
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Citadel
Equity Fund Ltd.
00/X
Xxxxxx Xxxxx
0
Xxxxxxxxx Xxxx,
Xxxxxxx,
Xxxx Xxxx
Fax:
x000
0000-0000
Attention:
Xxxxxx Xxxx and Xxx Xxx
10.7 Counterparts.
This
Agreement may be signed in any number of counterparts including counterparts
transmitted by facsimile, each of which shall be deemed an original, with the
same effect as if the signatures thereto and hereto were upon the same
instrument.
10.8 Severability.
If
any
provision contained in this Agreement shall for any reason be determined to
be
partially or wholly invalid, illegal or unenforceable by any court of competent
jurisdiction, such provision shall be of no force and effect to the extent
so
determined, but the invalidity, illegality or unenforceability of such provision
shall have no effect upon and shall not impair the validity, legality or
enforceability of any other provision of this Agreement.
10.9 Further
Assurances.
Each
party shall give such further assurance, provide such further information,
take
such further actions and execute and deliver such further documents and
instruments as are, in each case, within its power to give, provide and take
so
as to give full effect to the provisions of this Agreement.
[Signature page follows on the next page]
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IN
WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed by their respective authorized officers as of the day and year first
above written.
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By:
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Name:
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Title:
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CITADEL
EQUITY FUND LTD.
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By:
Citadel
Limited Partnership, its Portfolio Manager
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By:
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Name:
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Title:
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Signature
Page to Notes Repurchase Agreement
