September 30, 2010
Exhibit
10.9
September 30,
2010
Xxxxx X0000-0000,
Tower 16
Hengmao
International Center
Nanchang
City, Jiangxi Province 330003
The
People’s Republic of China
Attn: Xxxxxx
Xxxxxxxxx, President and Chief Executive Officer
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Re:
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Supply
Commitment by AgFeed
Industries, Inc.
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Gentlemen:
This
letter (the “Agreement”) evidences
the agreement of AgFeed Industries, Inc., a Nevada corporation (the “Purchaser”), to
procure from AgFeed Animal Nutrition Holdings, Inc., a British Virgin
Islands corporation (the “Supplier”), feed on
the terms and subject to the conditions described below.
1. Supply
Commitment. Subject to the terms and conditions set forth
herein, the Purchaser and its currently existing wholly-owned, directly or
indirectly, operating subsidiaries in the People’s Republic of China (“China”) agree, for a
period of three years commencing on August 1, 2010 (the “Term”), to use
commercially reasonable efforts to procure from the Supplier and its
wholly-owned, directly or indirectly, operating subsidiaries in China
(collectively, the “Suppliers”) and their
respective distributors (together with the Suppliers, the “Supplier Group”), on
an exclusive basis premix feed, concentrates, and complete feed manufactured by
the Suppliers (collectively, the “Feed Products”) for
the existing hog farms located in China in which the Purchaser and its currently
existing wholly-owned, directly or indirectly, subsidiaries own at least a
majority equity interest (collectively, the “AgFeed Hog
Farms”). In the event the Purchaser or its currently existing
wholly-owned, directly or indirectly, subsidiaries cease to own a majority
equity interest in an individual hog farm located in China, such farm shall no
longer be considered a member of the AgFeed Hog Farms and shall be released from
the commitment contained in this Section 1.
2. Conditions for First Choice
Provider. The AgFeed Hog Farms shall continue to purchase the
Feed Products offered by the Supplier from the Supplier Group on an exclusive
basis during the term to the extent (i) the Feed Products offered are of
equal or superior quality to that of a product produced by a third-party as
determined in the sole discretion of the Purchaser, (ii) the pricing for
the Feed Products offered is competitively priced and continues to be
market-based, and (iii) the members of the Supplier Group, as applicable,
are able to meet the specifications as far as quality, composition, quantities
and delivery requested by the AgFeed Hog Farms. Such purchases by the
AgFeed Hog Farms shall be pursuant to a purchase order issued to the Supplier
Group or in accordance with practices existing between the parties as of the
date of this Agreement.
September 30,
2010
Page
2
3. “Most Favored Nation”
Pricing. The Supplier agrees, and will cause members of the
Supplier Group to agree, that the Feed Products offered by the Supplier Group to
the AgFeed Hog Farms shall have “most favored nation” pricing for customers
purchasing quantities of the Feed Products similar to those being purchased by a
member of the AgFeed Hog Farms.
4. Ability to Reject
Order. Any member of the Supplier Group retains the absolute
right to accept or reject any individual order placed by any member of the
AgFeed Hog Farms. Such rejection shall not constitute a termination
of the commitment by such member of the AgFeed Hog Farms.
5. Members of the Supplier
Group.
(a) The
commitment of the AgFeed Hog Farms shall be null and void with respect to a
member of the Supplier Group on the date such member does not offer for sale the
Feed Products.
(b) Any
distributor engaged by any of the Suppliers following the date of this Agreement
shall become a member of the Supplier Group as of the date upon which it became
a distributor. Any feed mill or operations constructed or acquired by
the Suppliers shall become a member of the Supplier Group as of the date upon
which construction or acquisition is completed.
6. Costs;
Expenses. Each party shall be responsible for its own
professional expenses or other third party costs associated with the
transactions contemplated in this Agreement.
This
Agreement constitutes the entire agreement, and supersedes all other prior
agreements, understandings, representations and warranties, both written and
oral, among the parties, with respect to the subject matter hereof.
This
Agreement will be governed by and construed in accordance with the laws of the
People’s Republic of China that have been promulgated and are available to the
public, but if the laws of the People’s Republic of China that have been
promulgated and are available have no application for the relevant matters of
this Agreement, the parties shall consult general international commercial
practice.
September 30,
2010
Page
3
No
amendment or waiver of any provision of this Agreement will be effective with
respect to any party to this Agreement unless made in writing and signed by an
officer of such party. This Agreement may be executed in any number
of separate counterparts, each such counterpart being deemed to be an original
instrument, and all such counterparts will together constitute the same
agreement. Executed signature pages to this Agreement may be
delivered by facsimile or other electronic means and will be deemed as
sufficient as if original signature pages had been delivered.
[Signature
page follows]
September 30,
2010
Page
4
If this
letter accurately sets forth your understanding of our mutual intent, please
sign this letter where indicated below and return it to us.
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AGFEED
INDUSTRIES, INC.
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By
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/s/ Xxxxxx Xxxxxxxxx
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Chief
Operating Officer
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Accepted
this 30th
day of
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September,
2010 as to all
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terms
and conditions:
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By
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/s/ Xxxxxx Xxxxxx
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Chief
Financial Officer
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