STANDSTILL AGREEMENT

 

THIS STANDSTILL AGREEMENT ("Agreement") made and entered into as of this 2nd day
of March, 2012, by and between AGFEED INDUSTRIES, INC. (the "Company"), a Nevada
corporation, and AF SELLCO, LLC ("Sellco"), a Delaware limited liability
company.

 

BACKGROUND

 

A. The Company and Sellco entered into a certain Membership Purchase Agreement,
dated as of September 13, 2010 (the "Purchase Agreement"), pursuant to the terms
of which the Company acquired all of the outstanding equity interests of
M2 P2, LLC, a Delaware limited liability company ("M2P2"). Sellco is the holder
of the Amended and Restated Promissory Note, dated November 12, 2010
(the "Note"), issued by the Company to Sellco, which is secured pursuant to a
Pledge Agreement, dated as of September 13, 2010 (the "Pledge Agreement",
together with the Note, the "Loan Documents"), by and between the Company and
Sellco.

 

B. On February 6, 2012, Sellco, as holder of the Note, delivered written notice
(together with previous written notices by Sellco, as holder of the Note,
the "Holder Notices") to the Company alleging, that an event of default under
the Note had occurred and was continuing.

 

C. M2P2 is in the process of refinancing its existing indebtedness to Farm
Credit Services of America, PCA and Farm Credit Services of America, FLCA
(collectively, the "M2P2 Lenders") (the "Refinancing").

 

D. Without admitting or denying any of the allegations made by Sellco, whether
under the aforementioned Holder Notices or otherwise, and with each of the
Company and Sellco reserving all of their respective, existing rights and
remedies under the aforementioned Purchase Agreement and Loan Documents, and at
law and in equity, the Company and Sellco have each determined, that their
respective interests would be best served by allowing the Refinancing process to
proceed without the substantial expense and disruption, which would be expected
to result from contesting the underlying issues in the aforementioned Holder
Notices.

 

NOW, THEREFORE, in consideration of the mutual promises contained herein and
intending to be legally bound hereby, the parties hereto covenant and agree as
follows:

 

Section 1. General Provisions. Unless expressly provided otherwise in this
Agreement, or unless the context requires otherwise:

 

(a) all capitalized terms used herein, but not otherwise defined herein, shall
have the meanings given to such terms in the Note or the Purchase Agreement, as
applicable;

 

(b) the singular shall include the plural, the plural shall include the
singular, and the use of any gender shall include all genders;

 

(c) all references to any particular party defined herein shall be deemed to
refer to each and every person defined herein as such party individually, and to
all of them, collectively, jointly, and severally, as though each were named
wherever the applicable, defined term is used;

 

(d) all references to "Sections", shall refer to provisions of this Agreement;

 

(e) all references to time herein shall mean Eastern Standard Time or Eastern
Daylight Time, as then in effect; and

 

(f) all references to sections, subsections, paragraphs or other provisions of
statutes or regulations shall be deemed to include successor, amended,
renumbered and replacement provisions.

 

Section 2. Defined Terms. As used herein, the following terms shall have the
meanings indicated in this Section 2, unless the context otherwise requires:

 

"M2P2 Credit Facility" shall mean the Credit Agreement, dated as of June 7,
2006, as amended (together with any future amendments, restatements,
modifications or supplements thereof or thereto), by and among the M2P2 Lenders,
M2P2, TS Finishing, LLC, New York Finishing, LLC, Pork Technologies, LLC, New
Colony Farms, LLC, Heritage Farms, LLC, Heritage Land, LLC, Genetics
Operating, LLC, M2P2 Facilities, LLC, MGM, LLC, M2P2 General Operations, LLC,
and New Colony Land Company, LLC.

 

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"Standstill Documents" shall mean, collectively, this Agreement and all
agreements, documents and instruments executed by the Company and/or Sellco
pursuant to, or in connection with, this Agreement.

 

"Standstill Period" shall mean the period commencing on the date hereof and
ending upon the earlier of (i) the Standstill Termination Date, (ii)  the
occurrence of an Event of Default (as defined in the Note) (other than the
events of default described in the Holder Notices and the subject of any other
forbearance expressly set forth in this Agreement), or (iii) such date upon
which M2P2 is in noncompliance with any of Sections 6.11.1 (Working Capital),
6.11.2 (Current Ratio), 6.11.3 (Net Worth), 6.11.4 (Minimum Fixed Charge
Coverage Ratio), 6.11.5 (Minimum EBITDA) of the M2P2 Credit Facility on the date
of any Compliance Certificate (as defined in the M2P2 Credit Facility), copies
of which Compliance Certificates shall be sent to Sellco at the same time, that
they are sent to the M2P2 Lenders.

 

"Standstill Termination Date" shall mean June 1, 2012, for so long as M2P2 is,
in good faith, seeking to refinance the M2P2 Credit Facility; provided, that if
by such date a binding term sheet, subject to customary conditions to closing,
has been adopted by M2P2 and its new lender, but not yet closed, then the
Standstill Termination shall automatically be extended for an additional period
ending on the date M2P2 and such lender implement the provisions of, and enter
into, the definitive documentation to close such refinancing. Notwithstanding
the foregoing, such additional period shall end on June 30, 2012, or such later
date mutually agreed-to, in writing, by the Company and Sellco.

 

"Obligations" shall mean, collectively, all duties, obligations, liabilities and
indebtedness, due or to become due, liquidated or unliquidated, direct or
contingent, joint, or several, of the Company to Sellco of any type, kind or
nature whatsoever and out of whatever transaction arising, including, without
limitation, the duties, obligations, liabilities and indebtedness evidenced by
the Loan Documents.

 

Section 3. Acknowledgments of the Company and Sellco. The Company and Sellco
jointly acknowledge and agree as follows:

 

(a) Principal Balance of the Note. The aggregate unpaid principal balance of the
Note as of the date hereof, and prior to the prepayment described in
Section 5(b) of this Agreement, is Nine Million Six Hundred Twenty-One Thousand
Four Hundred Thirty-Three and 69/100 Dollars ($9,621,433.69).

 

(b) Loan Documents. The Obligations are validly evidenced by the Loan Documents,
and all of the Loan Documents are, and remain, in full force and effect. Except
as specifically set forth herein, none of the agreements, covenants, provisions,
or terms contained in the Purchase Agreement and the Loan Documents have been
modified.

 

Section 4. Agreement to Standstill.

 

(a) Standstill. At the request of the Company, Sellco hereby agrees to forbear
from exercising any of the rights or remedies which Sellco may have, including
those pursuant to Section 2(e) of the Pledge Agreement, as a result of the
Holder Notices, if successfully alleged and pursued, which forbearance shall be
effective only during the Standstill Period and shall immediately and
automatically cease and terminate upon the expiration of the Standstill Period.
The Company and Sellco expressly acknowledge and agree that such forbearance
shall not, nor shall it be deemed to, constitute a continuing or future waiver
of, a bar to, or an agreement to forbear from exercising, any right or remedy of
Sellco with respect to any Event of Default under the Note, which is not
described in the Holder Notices, and which Event of Default occurs subsequent to
the date hereof.

 

(b) Post-Standstill Period. The Company expressly acknowledges and agrees that
from and after the expiration or termination of the Standstill Period, Sellco
shall be entitled, without notice, to proceed to exercise any and all rights or
remedies available to Sellco under the Loan Documents, as well as all other
rights and remedies available to Sellco at law or in equity.

 

(c) Ratification of Rights and Remedies Following Event of Default. Upon the
occurrence of an Event of Default (other than described in the Holder Notices)
or upon the expiration or termination of the Standstill Period, Sellco shall
have all rights and remedies available to it under the Loan Documents, the
Purchase Agreement, and at law or in equity.

 

Section 5. Conditions Precedent. Sellco's agreement to grant the standstill
herein shall be subject to the Company's satisfaction of each of the following
conditions on, or before, the date hereof.

 

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(a) Standstill Documents. The Company shall have executed and delivered any and
all other agreements, documents, and instruments required by Sellco in
connection herewith, including, without limitation, amendments or modifications
to, and reaffirmations of, existing Loan Documents and certified resolutions
approving this Agreement.

 

(b) Principal Prepayment. The Company shall have paid to Sellco a prepayment of
principal in the amount of One Million Dollars ($1,000,000.00). Unlike the
prepayment of principal described in the preceding sentence, future prepayment
of principal shall be made pursuant to Section 3 of the Note, which Note shall
be amended and restated in the form attached hereto as Exhibit A and shall be
delivered to Sellco upon receipt by the Company of the earlier Note.

 

Section 6. Representations and Warranties.

 

(a) Representations of the Company. The Company represents and warrants, as of
the date hereof, to Sellco (i) that it has the corporate power and authority to
execute, deliver and carry out the terms and provisions of this Agreement,
(ii) to consummate the transactions contemplated hereby, (iii) that this
Agreement has been duly and validly authorized, executed and delivered by the
Company and constitutes a valid and binding agreement of the Company,
enforceable against it in accordance with its terms; and (iv) that the Company
intends, as part of the Refinancing, to refinance the aggregate indebtedness
outstanding under the M2P2 Credit Facility and Note, whereby the Note will be
paid-off in-full to Sellco.

 

(b) Representations of Sellco. Sellco represents and warrants, as of the date
hereof, to the Company (i) that it has the corporate power and authority to
execute, deliver and carry-out the terms and provisions of this Agreement,
(ii) to consummate the transactions contemplated hereby, (iii) that this
Agreement has been duly and validly authorized, executed and delivered by Sellco
and constitutes a valid and binding agreement of Sellco, enforceable against it
in accordance with its terms; and (iv) that on, or prior to, the date hereof,
Sellco has not exercised any of the remedies afforded to it under and pursuant
to the Pledge Agreement, except as otherwise set forth in Sellco's letter, dated
February 6, 2012, addressed to the Company.

 

Section 7. Confirmation of Collateral. Nothing herein contained shall be deemed
to be a compromise, satisfaction, accord and satisfaction, novation or release
of the Loan Documents or the Purchase Agreement, or any rights or obligations
thereunder. All liens, security interests, rights and remedies granted to, and
in favor of, Sellco in the Loan Documents and the Purchase Agreement are hereby
confirmed, continued, and reaffirmed.

 

Section 8. Binding Effect. This Agreement shall be binding upon, and shall inure
to the benefit of, the parties hereto and their respective successors and
permitted assigns under the Loan Documents and the Purchase Agreement.

 

Section 9. Effective Date. This Agreement shall be operative and effective, when
both parties have executed this Agreement, and all conditions precedent
described in Section 5 hereof have been satisfied, all of which shall occur no
later than March 2, 2012, or such later date as shall be mutually agreed-to, in
writing.

 

Section 10. Severability; Counterparts; Governing Law; Consent to Jurisdiction
and Service of Process; Waiver of Jury Trial. The provisions of Sections 12.06,
12.10, 12.11, 12.12 (except that the reference to Section 12.04 therein is
inapplicable), and 12.13 of the Purchase Agreement are incorporated herein by
reference, mutatis mutandis.

 

Section 11. No Novation. Nothing contained herein, and no actions taken pursuant
to the terms hereof, are intended to constitute a novation of any of the Loan
Documents or the Purchase Agreement and shall not constitute a release,
termination or waiver of any of the liens, security interest, rights or remedies
granted to Sellco under the Loan Documents and/or the Purchase Agreement.

 

Section 12. Modification. No modification hereof, or of any agreement referred
to herein, shall be binding or enforceable unless in writing and signed on
behalf of the party against whom enforcement is sought.

 

Section 13. Notices. All notices, demands, and requests required or permitted to
be given under the provisions of this Agreement shall be in writing and sent to
the intended recipient's address set forth in this Agreement (which may be
changed by notice given hereunder) and shall be deemed given (i) when personally
delivered to the party to be given such notice or other communication; (ii) on
the business day that such notice or other communication is sent by facsimile,
email or similar electronic means, fully prepaid, provided that facsimile or
similar electronic communication shall promptly be confirmed by written notice
in accordance with subsections (i), (iii) or (iv) of this Section 13; (iii) on
the third business day following the date of deposit in the mail, if such notice
or other communication is sent by certified or registered mail with return
receipt requested and postage thereon fully prepaid; or (iv) on the business day
following the day such notice or other communication is sent by reputable
overnight courier. All notices required by this Agreement shall be addressed as
follows:

 

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  If to Sellco:   If to the Company:   AF Sellco, LLC   AgFeed Industries, Inc.
  775 Ridge Lake Boulevard, Suite 450   744 Horizon Court, Suite 350   Memphis,
Tennessee 38120   Grand Junction, Colorado 81506   Attention: Mr. David M.
Johnson   Attention: Chairman of the Board   Title: Chairman of the Board of
Managers    Phone: (970) 245-9410   Phone: (901) 766-4562   Facsimile:
(866) 226-7617   Facsimile: (901) 766-8157   E-mail:     Email:           With a
Copy to:   With a Copy to:   Sunjeet S. Gill, Esq.   John E. Kruger, Esq.  
Stevens & Lee   Baker, Donelson, Bearman,   111 North Sixth Street   Caldwell &
Berkowitz, P.C.   Reading, Pennsylvania 19603-0679   165 Madison Avenue, Suite
2000   Phone: (610) 478-2254   Memphis, Tennessee 38103   Facsimile:
(610) 371-1228   Phone: (901) 577-2306   Email: ssg@stevenslee.com   Facsimile:
(901) 577-2303       E-mail:  jkruger@bakerdonelson.com    

 

Addresses and contact information may be changed, as provided in this Section.

 

[Signature page follows]

 

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IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement as of the date first above written.

 

AF SELLCO, LLC   AGFEED INDUSTRIES, INC.       By:   /s/ David M. Johnson    
By:   /s/ Clayton T. Marshall     DAVID M. JOHNSON       CLAYTON T. MARSHALL    
Chairman of the Board of Managers       Chief Financial Officer  

 

[Signature Page to Standstill Agreement]

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Exhibit A

 

FORM OF SECOND AMENDED AND RESTATED PROMISSORY NOTE

 

 

 

 

 

SECOND AMENDED AND RESTATED
PROMISSORY NOTE

 

$8,621,433.69 September 13, 2010   as amended and restated November 12, 2010  
and as amended and restated March 2, 2012

 

FOR VALUE RECEIVED, and intending to be legally bound, AGFEED INDUSTRIES, INC.,
a Nevada corporation (“Buyer”), promises to pay to the order of AF SELLCO, LLC,
a Delaware limited liability company (“Seller”), the principal sum of Eight
Million Six Hundred Twenty-One Thousand Four Hundred Thirty-Three and 69/100
Dollars ($8,621,433.69), with interest thereon, as provided herein.

 

1. Principal and Interest.

 

(a) Unless sooner accelerated pursuant to Section 8 hereof, and subject to any
restrictions and limitations stated herein, the principal balance of this
Promissory Note (this “Note”) shall be due and payable in forty (40) successive
quarterly payments commencing on December 31, 2010 in accordance with Schedule A
attached hereto.

 

(b) Simple interest shall accrue on the unpaid principal balance of this Note at
the fixed annual rate of eight percent (8.0%). Accrued interest shall be payable
quarterly, simultaneously with the payment of the installments of principal
required to be made pursuant to Section 1(a).

 

2. Maximum Legal Rate. Buyer shall not be obligated to pay, and Seller shall not
collect, interest at a rate in excess of the maximum permitted by law or the
maximum that will not subject Seller to any civil or criminal penalties. If,
because of the acceleration of maturity, the payment of interest in advance or
any other reason, Buyer is required, under the provisions of this Note or
otherwise, to pay interest at a rate in excess of such maximum rate, the rate of
interest under such provisions shall immediately and automatically be reduced to
such maximum rate, and any payment made in excess of such maximum rate, together
with interest thereon at the rate provided herein from the date of such payment,
shall be immediately and automatically applied to the reduction of the unpaid
principal balance of this Note as of the date on which such excess payment was
made. If the amount to be so applied to the reduction of the unpaid principal
balance exceeds the amount of the unpaid principal balance, the amount of such
excess shall be refunded by Seller to Buyer.

 

3. Prepayment. This Note may be prepaid in whole or in part, at any time, and
from time to time, without premium or penalty; provided, however, that each
partial prepayment hereon shall be in an amount of no less than One-Hundred
Thousand Dollars ($100,000.00). Each prepayment hereon shall be applied first to
interest and then to principal in the inverse order of maturity and shall not
postpone or reduce any regularly scheduled payment of principal or interest.

 

1

 

 

4. Acquisition. This Note is the amended and restated Note identified in
Section 1.06(f) of the Membership Purchase Agreement dated as of September 13,
2010 (the “Purchase Agreement”) between Buyer and Seller, following a prepayment
of principal in the amount of One Million Dollars ($1,000,000.00) pursuant to
Section 5(b) of the Standstill Agreement dated as of March 1, 2012 between Buyer
and Seller, and evidences a portion of the purchase price payable by Buyer to
Seller in consideration for the sale and transfer by Seller to Buyer of all of
the issued and outstanding equity interests of M2 P2, LLC, a Delaware limited
liability company (“M2P2”), owned by Seller. Capitalized terms used herein but
not otherwise defined herein, shall have the meanings given to such terms in the
Purchase Agreement.

 

5. Pledge Agreement. This Note is secured by a Pledge Agreement dated as of
September 13, 2010 (the “Pledge Agreement”) executed by Buyer in favor of Seller
pursuant to which Buyer has pledged to Seller, and granted to Seller a
first-priority lien on, and security interest in, all of the issued and
outstanding equity interest of M2P2 (the “Collateral”).

 

6. Additional Covenants of Buyer. Until such time as the entire principal
amount, subject to any restrictions and limitations stated herein, of, and all
accrued, unpaid interest on, this Note shall have been irrevocably paid in full,
Buyer will, and will cause M2P2 to, observe the following covenants unless
Seller shall otherwise consent in advance and in writing:

 

(a) None of the Companies or the Company Subsidiaries will, nor will Buyer cause
or permit any of the Companies or the Company Subsidiaries to, create, incur,
assume, or suffer or permit to exist any additional Indebtedness (as defined
below), except:

 

(i) Indebtedness to suppliers and other trade creditors of the Companies and the
Company Subsidiaries incurred in the ordinary course of business;

 

(ii) Indebtedness to Farm Credit Services of America, PCA and Farm Credit
Services of America, FLCA (the “Lenders”) or any bank or other commercial or
institutional lender who may provide financing to the Companies or the Company
Subsidiaries from time-to-time, provided, however, that the maximum amount of
such Indebtedness may not exceed 120% of the Indebtedness of M2P2 Operations
existing or available as of the Execution Date under the Credit Agreement dated
as of June 7, 2006 by and between the Lenders and M2 P2, TS Finishing, LLC, New
York Finishing, LLC, Pork Technologies, LLC, New Colony Farms, LLC, Heritage
Farms, LLC, Heritage Land, LLC, Genetics Operating, LLC, M2P2 Facilities, LLC,
MGM, LLC, M2P2 General Operations, LLC, New Colony Land Company, LLC and M2P2 AF
JV, LLC, as amended, supplemented, restated or modified from time to time (the
“Credit Agreement”); and

 

(iii) Indebtedness of the Companies and the Company Subsidiaries in existence as
of the date hereof.

 

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(iv) For purposes of this Note, “Indebtedness” means, with respect to any
Person, any and all obligations of such Person (1) for borrowed money, (2)
evidenced by notes, bonds, debentures or similar instruments, (3) under or
relating to letters of credit (including any obligation to reimburse the letter
of credit issuer with respect to amounts drawn on such instruments), (4) for the
deferred purchase price of goods or services (other than trade payables or
accruals incurred and paid in the ordinary course of business), (5) under
capital leases, (6) with respect to bank overdrafts or otherwise reflected as
negative cash in financial statements of such Person, (7) for deferred
compensation, (8) to pay any accrued dividends or dividends that have otherwise
been declared and not yet paid, and (ix) in the nature of guarantees of the
obligations described in clauses (i) through (viii) above of any other Person.

 

(b) Buyer shall use commercially reasonable efforts to maintain all of the
assets of M2P2 Operations that are material or necessary to the operation of its
business in their condition as of the Execution Date, ordinary wear and tear
excepted.

 

(c) Buyer shall not make, nor shall it allow, any sale, assignment, lease,
transfer or other disposition of any part of the business or assets of the
Companies and the Company Subsidiaries (each, a “Disposition”), except (i) in
the ordinary course of business of the Company and its subsidiaries, as
applicable, (ii) conveyance of obsolete assets or assets with a de minimis
value, or (iii) the Companies or the Company Subsidiaries may make a Disposition
so long as the then greater of the current fair market or book value (as
determined by GAAP) of the remaining assets of the M2P2 Operations is in excess
of two hundred percent (200%) of the outstanding amount due on this Note at the
time of such Disposition.

 

(d) Buyer shall maintain the Collateral free and clear of any Lien except (i)
the Lien contemplated by the Pledge Agreement, and (ii) any restrictions
contained in the Credit Agreement (the "Credit Agreement Restrictions") or any
restrictions identical to the Credit Agreement Restrictions under any
Indebtedness permitted by Section 6(a)(ii)). .

 

(e) Buyer shall maintain, or cause to be maintained, in full force and effect at
all times adequate insurance coverage as is customary in the business of M2P2
Operations.

 

(f) Buyer shall (i) maintain, or cause to be maintained, its existence and the
existence of M2P2 and all of M2P2's respective right and privileges necessary in
the normal course of business, (ii) conduct M2P2's business in an orderly,
efficient and regular manner and (iii) maintain, or cause to be maintained, in
good standing at all times all of the authorizations, licenses, permits and
certifications necessary to carry on the business of the Companies and the
Company Subsidiaries as it is now being conducted as of the Execution Date,
except where the failure to have such authorizations, licenses, permits and
certifications would not, individually or in the aggregate, have or would be
reasonably likely to have, a Material Adverse Effect on M2P2 Operations.

 

(g) Buyer cause to be kept, complete and accurate books and records with respect
to the business and financial condition of the Companies and the Company
Subsidiaries, in accordance with GAAP. Buyer will permit any employee, attorney,
accountant or other agent of Seller, at Seller's sole cost and expense, to
audit, review, make extracts from and copy any of such books and records at any
time during ordinary business hours, and to discuss the affairs of the Companies
and the Company Subsidiaries with any of Seller's managers.

 

3

 

 

(h) Buyer shall cause M2P2 Operations to comply with the requirements of all
applicable Laws, the noncompliance with which would materially and adversely
affect the business or financial condition of the Companies or the Company
Subsidiaries or the ability of Buyer to fullfill its obligations under this
Note, the Pledge Agreement, or any other documents securing this Note, or to
consummate the transactions contemplated by the Purchase Agreement or any
Ancillary Agreements.

 

(i) None of the Companies and the Company Subsidiaries will, nor will Buyer
cause or permit any Company or Company Subsidiary to, consolidate with or merge
into any other entity whereby such Company or Company Subsidiary is not the
surviving entity, or permit any other entity to merge into it that would result
in a violation of any other provision of this Section when looking at the merged
or consolidated entity; provided, however, any Company or Company Subsidiary can
merge with another Company or Company Subsidiary.

 

(j) In order to permit Seller to file a financing statement covering such
Collateral or perfect the security interest granted by the Pledge Agreement,
Buyer shall notify Seller at least five (5) business days prior to (i) any move
of its chief executive office or principal place of business or (ii) any change
in its name or jurisdiction of organization.

 

(k) Buyer shall not allow the M2P2 Operating Agreement to be amended to opt out
of Article 8 of the Uniform Commercial Code.

 

(l) Buyer shall not allow the addition of any new members in M2P2.

 

7. Events of Default. Each of the following shall constitute an “Event of
Default” hereunder:

 

(a) except as permitted by Section 12 hereof, any failure by Buyer to pay any
amount as and when due under this Note or the Purchase Agreement;

 

(b) any failure by Buyer to perform or observe any of its obligations under this
Note, in each case within fifteen (15) days after written notice from Seller;

 

(c) any material breach by Buyer of any of its material covenants or agreements
contained in the Purchase Agreement or the Pledge Agreement, in each case within
fifteen (15) days after written notice from Seller;

 

(d) the entry of a decree or order for relief with respect to Buyer in an
involuntary case under the federal bankruptcy law, as now or hereafter
constituted, or any other applicable federal or state bankruptcy, insolvency or
other similar law, or appointing a receiver, liquidator, trustee, custodian (or
similar official) of or for Buyer or ordering the winding up or liquidation of
its affairs which is not promptly contested and released or discharged within
ninety (90) days;

 

(e) the commencement by Buyer of a voluntary case under the federal bankruptcy
law, as now constituted or hereafter amended, or any other applicable federal or
state bankruptcy, insolvency or other similar law, or the consent by Buyer to
the appointment of or taking possession by a receiver, liquidator, trustee,
custodian (or other similar official) of or for Buyer or for any substantial
part of its property, or the making by Buyer of any assignment for the benefit
of creditors, or the insolvency or the failure of Buyer generally to pay its
debts as such debt become due, or the taking of action by Buyer in furtherance
of any of the foregoing;

 

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(f) the acceleration of M2P2’s obligations under the Credit Agreement or any
other document or instrument evidencing or governing indebtedness in excess of
$2,000,000 in original principal amount;

 

(g) if any attachment, trustee process, lien, execution, levy, injunction or
receivership issued or made against all or substantially all of the assets of
M2P2 is not removed within ninety (90) days;

 

(h) any material provision of this Note (including, without limitation,
Section 7 hereof) or the Pledge Agreement shall at any time for any reason cease
to be a valid and binding obligation of Buyer or shall be declared to be null
and void, or the validity or enforceability thereof shall be contested by Buyer;
or

 

(i) the occurrence of any “Event of Default” under and as defined in the Pledge
Agreement.

 

8. Remedies. Upon the occurrence of any Event of Default, all obligations
evidenced by this Note shall be immediately and automatically due and payable
and Seller may exercise all of Seller’s rights, privileges and remedies under
applicable law, this Note, or the Pledge Agreement, all of which remedies shall
be cumulative and not alternative.

 

9. Benefit. This Note shall bind Buyer and its successors and permitted assigns,
and shall inure to the benefit of Seller and its successors, and assigns. Buyer
will, upon receipt of written notice from Seller, pay all future principal or
interest payments or other sums due under this Note to any person to whom Seller
directs Buyer to make such payments pursuant to such written notice. Buyer shall
not assign, delegate or otherwise transfer any of its duties, liabilities or
obligations hereunder without the prior written consent of Seller.

 

10. Validity. The invalidity or unenforceability of any provision of this Note
shall not affect the validity or enforceability of any other provision of this
Note, which shall remain in full force and effect.

 

11. Governing Law. This Note is made pursuant to, and shall be governed by and
construed in accordance with, the laws of the State of Delaware, without regard
its rules or laws relating to the conflict of laws.

 

12. Set-Off. Buyer is expressly authorized to set-off against, reduce and
appropriate any payment payable pursuant to this Note only as provided in
Section 10.05 of the Purchase Agreement. Any future holder of this Note shall be
subject to each and every provision hereof including, without limitation, this
Section 12.

 

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13. Amended and Restated Promissory Note. This Second Amended and Restated
Promissory Note amends and restates that certain Amended and Restated Promissory
Note of the Buyer dated November 12, 2010, in the original principal amount of
$9,621,433.69 and payable to Seller.

 

14. Captions; Gender; Certain Terms. All section headings contained herein are
for convenience of reference only and are not intended to be used in any respect
in the construction or interpretation of this Note. The terms “hereof”,
“herein”, “hereunder”, and similar terms shall refer to this Note as a whole.
The term “person,” as used in this Note, means an individual, a corporation, a
partnership, a joint venture, a trust or unincorporated organization, a joint
stock company or other similar organization, any Governmental Body (as such term
is defined in the Purchase Agreement), or any association or other legal entity.
All references in this Note to “Sections” shall be deemed to refer to the
provisions of this Note.

 

6

 

 

IN WITNESS WHEREOF, and intending to be legally bound, Buyer has duly executed
and delivered this Note as of the date first shown above.

 

  AGFEED INDUSTRIES, INC.       By     Name: Clayton T. Marshall   Title:  
Chief Financial Officer

 

AF Sellco, LLC, as the Payee, hereby agrees to and accepts this Second Amended
and Restated Promissory Note as of March __, 2012.

 

  AF SELLCO, LLC         By       Name: David M. Johnson     Title: Chairman of
the Board of Managers

 

7

 

 

Schedule A

 

Amortization Schedule Date  PMT   Payment   Interest   Principal   Balance    
                    $9,621,433.69  Dec-10   1   $230,387.20   $230,387.20   $-  
$9,621,433.69  Mar-11   2   $192,428.67   $192,428.67   $-   $9,621,433.69 
Jun-11   3   $192,428.67   $192,428.67   $-   $9,621,433.69  Sep-11   4  
$192,428.67   $192,428.67   $-   $9,621,433.69  Dec-11   5   $192,428.67  
$192,428.67   $-   $9,621,433.69  Mar-12   6   $185,835.27   $185,835.27  
$1,000,000.00   $8,621,433.69  Jun-12   7   $172,428.67   $172,428.67   $-  
$8,621,433.69  Sep-12   8   $359,397.66   $172,428.67   $186,968.99  
$8,434,464.70  Dec-12   9   $359,397.66   $168,689.29   $190,708.37  
$8,243,756.33  Mar-13   10   $359,397.66   $164,875.13   $194,522.54  
$8,049,233.79  Jun-13   11   $359,397.66   $160,984.68   $198,412.99  
$7,850,820.80  Sep-13   12   $359,397.66   $157,016.42   $202,381.25  
$7,648,439.56  Dec-13   13   $359,397.66   $152,968.79   $206,428.87  
$7,442,010.68  Mar-14   14   $359,397.66   $148,840.21   $210,557.45  
$7,231,453.23  Jun-14   15   $359,397.66   $144,629.06   $214,768.60  
$7,016,684.64  Sep-14   16   $359,397.66   $140,333.69   $219,063.97  
$6,797,620.67  Dec-14   17   $359,397.66   $135,952.41   $223,445.25  
$6,574,175.42  Mar-15   18   $359,397.66   $131,483.51   $227,914.15  
$6,346,261.26  Jun-15   19   $359,397.66   $126,925.23   $232,472.44  
$6,113,788.82  Sep-15   20   $359,397.66   $122,275.78   $237,121.89  
$5,876,666.94  Dec-15   21   $359,397.66   $117,533.34   $241,864.32  
$5,634,802.61  Mar-16   22   $359,397.66   $112,696.05   $246,701.61  
$5,388,101.00  Jun-16   23   $359,397.66   $107,762.02   $251,635.64  
$5,136,465.36  Sep-16   24   $359,397.66   $102,729.31   $256,668.36  
$4,879,797.00  Dec-16   25   $359,397.66   $97,595.94   $261,801.72  
$4,617,995.28  Mar-17   26   $359,397.66   $92,359.91   $267,037.76  
$4,350,957.52  Jun-17   27   $359,397.66   $87,019.15   $272,378.51  
$4,078,579.01  Sep-17   28   $359,397.66   $81,571.58   $277,826.08  
$3,800,752.92  Dec-17   29   $359,397.66   $76,015.06   $283,382.60  
$3,517,370.32  Mar-18   30   $359,397.66   $70,347.41   $289,050.26  
$3,228,320.06  Jun-18   31   $359,397.66   $64,566.40   $294,831.26  
$2,933,488.80  Sep-18   32   $359,397.66   $58,669.78   $300,727.89  
$2,632,760.91  Dec-18   33   $359,397.66   $52,655.22   $306,742.45  
$2,326,018.47  Mar-19   34   $359,397.66   $46,520.37   $312,877.29  
$2,013,141.17  Jun-19   35   $359,397.66   $40,262.82   $319,134.84  
$1,694,006.33  Sep-19   36   $359,397.66   $33,880.13   $325,517.54  
$1,368,488.80  Dec-19   37   $359,397.66   $27,369.78   $332,027.89  
$1,036,460.91  Mar-20   38   $359,397.66   $20,729.22   $338,668.45  
$697,792.46  Jun-20   39   $359,397.66   $13,955.85   $345,441.81   $352,350.65 
Sep-20   40   $359,397.66   $7,047.01   $352,350.65   $-