LOAN AGREEMENT
CONFIDENTIAL
AMERICAN
DAIRY, INC.
(as
the “Lender”)
and
MOVEUP
LIMITED
(as
the “Borrower”)
Dated
as
of June
27, 2007
THIS
LOAN AGREEMENT
(this
“Agreement”)
is
made on June 27, 2007.
BETWEEN
|
(1)
|
American
Dairy, Inc.,
a
company incorporated under the laws of ___________________ (“Lender”);
and
|
|
(2)
|
Moveup
Limited,
a
company incorporated under the laws of Samoa (the “Borrower”).
|
Each
of
the parties named above shall be referred to as a “Party”,
and
collectively as the “Parties”.
WHEREAS
|
(A)
|
Borrower
is contemplating purchasing 100% of the equity interest (the “Acquisition”)
in Ausnutria Dairy (Hunan) Company, currently an equity joint venture
established under the laws of the People’s Republic of China
(“PRC”);
and
|
|
(B)
|
Lender
is willing to make the loan under the terms and conditions of this
Agreement for the purpose of the Acquisition.
|
NOW,
THEREFORE, in
consideration of the premises and the mutual covenants and agreements
hereinafter contained, the Parties hereby agree as follows:
|
1.
|
DEFINITION
|
Unless
otherwise defined in this Agreement, capitalized terms used in this Agreement
shall have the following meanings:
“Affiliate”
shall
mean, with respect to any Person, any other Person that, directly or indirectly
through one or more intermediaries, controls, or is controlled by, or is under
common control with, such Person, and the term “control” (including the terms
“controlled by” and “under common control with”) means the possession, directly
or indirectly, of the power to direct or cause the direction of the management
and policies of such Person, whether through ownership of voting securities,
by
contract or otherwise.
“Person”
shall
mean any individual, firm, corporation (including a business trust), limited
liability company, partnership, joint venture, association, joint stock company,
trust, unincorporated organization, governmental agency or other entity.
“Repayment
Date”
shall
mean the fifth anniversary of the date hereof.
“RMB”
shall
mean the lawful currency of PRC.
“US$”
shall
mean the lawful currency of the United States of America.
|
2.
|
THE
LOAN
|
Subject
to the terms of this Agreement, Lender will make an advance in US$ or other
convertible currency in an amount equivalent to US$ 10 million (the
“Loan”)
to
Borrower on the date that Borrower is obligated to make any deposit or advance
payment for the Acquisition (the “Effective
Date”).
1
|
3.
|
ADVANCE
OF THE LOAN
|
On
the
Effective Date, Lender will release the funds of the Loan by wire transfer
or
other means mutually agreed between the Parties to an account designated by
Borrower.
| 4. |
INTEREST
|
|
4.1
|
Subject
to Section 4.2 below, the Loan shall not bear any interest.
|
|
4.2
|
Notwithstanding
Section 4.1 above, effective immediately upon the occurrence of an
Event
of Default and for as long thereafter as such Event of Default shall
be
continuing, the principal balance of the Loan, and the amount of
all other
obligations then due and payable hereunder, shall bear interest at
a rate
that is twelve percent per
annum.
Such interest shall be payable on
demand.
|
|
5.
|
REPAYMENT
|
Borrower
promises to repay the Loan in full on the Repayment Date or earlier if required
by the terms hereof.
|
6.
|
PAYMENTS
|
|
6.1
|
Borrower
shall make all payments of principal and interest in respect of the
Loan
hereunder in the same currency of the Loan advanced by the Lender
free and
clear of, and without withholding or deduction for, any present or
future
taxes, duties, assessments or other governmental charges of whatever
nature imposed, levied, collected, withheld or assessed by any relevant
taxing jurisdiction unless such withholding or deduction is required
by
applicable law. In the event that any withholding or deduction is
required
by applicable law, Borrower shall pay such additional amounts as
will
result in the receipt by the Lender of such net amount as would have
been
received by it if no such withholding or deduction had been
required.
|
|
6.2
|
Unless
otherwise agreed by Lender, all such interest and principal shall
be paid
to the bank account of Lender or any other person or entity as the
Lender
may designate to Borrower for this
purpose.
|
|
7.
|
REPRESENTATIONS
AND WARRANTIES
|
To
induce
the Lender to enter into this Agreement, Borrower represents and warrants each
of the following to the Lender, on and as of the date hereof and after giving
effect to the making of the Loan on the Effective Date:
|
7.1
|
Borrower
has the authority and legal power to enter into this Agreement and
to
borrow the Loan pursuant to the terms
hereof.
|
|
7.2
|
The
execution, delivery and performance by Borrower of this
Agreement
do
not and will not (a) violate any laws applicable to Borrower, (b)
conflict
with or result in the breach of, or constitute a default under, any
material contractual obligation of Borrower or (c) require the consent
of,
authorization by, approval of, notice to, or filing or registration
with,
any governmental agency or any other
Person.
|
2
|
7.3
|
This
Agreement has been duly executed and delivered by Borrower. This
Agreement
constitutes the legal, valid and binding obligation of Borrower,
enforceable against Borrower in accordance with the terms
hereof.
|
|
8.
|
COVENANTS
OF BORROWER
|
So
long
as any amount of the Loan under this Agreement remains outstanding, Borrower
shall:
|
8.1
|
use
the proceeds of the Loan for the payment of any deposit or advance
payment
or the purchase price of the Acquisition;
and
|
|
8.2
|
use
its best effort to consummate the Acquisition, including entering
into all
the definitive agreements as necessary, filing for all the registrations
or approvals for the Acquisition required under the applicable law,
and
complying with the covenants set forth in the definitive agreements;
and
|
|
9.
|
EVENTS
OF DEFAULT
|
|
9.1
|
An
“Event
of Default”
shall mean any of the following
events:
|
|
9.1.1
|
Borrower
fails to pay any amount of the Loan, interest or fees when they become
due
and payable under this Agreement;
|
|
9.1.2
|
Borrower
fails to perform, observe or comply with any of the covenants contained
in
Section 8 hereof; or
|
|
9.1.3
|
Any
representation or warranty made by Borrower herein is not true and
correct
when made.
|
|
9.2
|
Upon
the occurrence of an Event of Default, the Lender may, by notice
to
Borrower, declare the Loan, all interest thereon and all other amounts
and
obligations payable under this Agreement to be forthwith due and
payable,
whereupon the Loan, all such interest and all such amounts and obligations
shall become and be forthwith due and payable, without presentment,
demand, protest or further notice of any kind, all of which are hereby
expressly waived by Borrower. In addition to the remedies set forth
above,
the Lender may commence such legal action or proceedings or exercise
any
other remedies provided by applicable law.
|
|
10.
|
AMENDMENT
AND MODIFICATION
|
Except
as
otherwise permitted herein, this Agreement and its provisions may be amended,
supplemented, changed, modified or terminated by a writing signed by both
Parties.
3
|
11.
|
LOAN
ASSIGNMENT
|
Subject
to the prior notification to Borrower but without the necessity of obtaining
Borrower’ consent, Lender may, at the Lender’s sole discretion, assign its
rights and liabilities under this Agreement to an Affiliate of Lender.
|
12.
|
GOVERNING
LAW
|
This
Agreement shall be governed by, and construed in accordance with, the laws
of
the
State of New York.
|
13.
|
ARBITRATION
|
The
Parties agree to negotiate in good faith to resolve any disputes among them
regarding this Agreement. If any dispute cannot be resolved through negotiation,
it shall be resolved through arbitration at HKIAC in accordance with the
UNCITRAL
Arbitration Rules as at present in force. There shall be three (3) arbitrators
on the arbitration panel. Borrower and Lender shall each appoint one arbitrator,
and the third arbitrator shall be selected by the chairman of HKIAC. The
language used throughout the arbitral proceedings shall be English. The
arbitration award shall be final and binding on the Parties. The costs of
arbitration and enforcing the arbitral award (including witness expenses,
attorneys' fees) shall be borne by the losing Party, unless otherwise determined
by the arbitration panel.
|
14.
|
MISCELLANEOUS
|
| 14.1 |
Counterparts.
This Agreement may be executed in any number of counterparts and
by the
Parties in separate counterparts, each of which when so executed
shall be
deemed to be an original and all of which taken together shall constitute
one and the same agreement.
|
| 14.2 |
Successors.
This Agreement shall be binding upon and inure to the benefit of
the
Parties and their respective successors and
assigns.
|
| 14.3 |
Severability.
If
any one or more of the provisions contained in this Agreement, or
the
application thereof in any circumstance, is held invalid, illegal
or
unenforceable in any respect for any reason, the validity, legality
and
enforceability of any such provision in every other
respect and of the remaining provisions hereof shall not be in any
way
impaired, unless the provisions held invalid, illegal or unenforceable
shall substantially impair the benefits of the remaining provisions
of
this Agreement. The Parties further agree to replace such invalid,
illegal
or unenforceable provision of this Agreement with a valid, legal
and
enforceable provision that will achieve, to the extent possible,
the
economic, business and other purposes of such invalid, illegal or
unenforceable provision.
|
4
IN
WITNESS WHEREOF,
the
parties hereto have executed this Loan Agreement the day and year first above
written.
| Lender:
AMERICAN
DAIRY, INC.
|
Borrower:
MOVEUP
LIMITED
|
||
| By: /s/ Leng You Bin | By: /s/ Xxxxxxx Xxxx | ||
|
|
Name:
Xxxxxxx Xxxx
|
||
|
Title:
Chief
Executive Officer
|
Title:
Director
|
