exv10w13






Exhibit 10.13




UNIT ISSUANCE AGREEMENT




     THIS UNIT ISSUANCE AGREEMENT (this “Agreement”), dated as of the 16th day of
February, 2006, is entered into by and among INTERNATIONAL FARMLAND HOLDINGS LLC (“IFH”), a
Delaware limited liability company, XANGO CORPORATION (“Xango”), a British Virgin Islands
corporation, ETIEL SOCIÉTÉ ANONYME (“Etiel”), a British Virgin Islands corporation, COBRA
CA HOLDINGS LTD. (“Cobra”), a British Virgin Islands corporation, and LIUEDE HOLDINGS LTD.
(“Liuede” and, together with Xango, Etiel and Cobra, the “UMA Members”), a British Virgin
Islands corporation,



WITNESSETH:




     WHEREAS, concurrently with the execution and delivery of this Agreement, IFH, Adeco
Brasil Participações Ltda (the “UMA Purchaser”), Usina Monte Alegre S.A. (“UMA”) and the
UMA Shareholders (as defined below) are entering into a Share Purchase and Sale Agreement
of even date herewith (the “Share Purchase Agreement”) pursuant to which the UMA
Shareholders are selling and tranferring to the UMA Purchaser approximately 40% of the
issued and outstanding capital stock of UMA;



     WHEREAS, the UMA Shareholders have transferred the remaining issued and outstanding
shares of capital stock of UMA (the “Remaining Shares”) to the UMA Members;



     WHEREAS, the parties are entering into this Agreement, among other things, to provide
for (i) the transfer by the UMA Members to IFH of the Remaining Shares in exchange for the
issuance by IFH of an aggregate of 12,079,991 Ordinary Units (as defined below), (ii) the
possible issuance of additional Ordinary Units by IFH to the UMA Shareholders as
contemplated in Section 4.5 of the Share Purchase Agreement and (iii) the possible
cancellation of certain of the Ordinary Units issued by IFH to the UMA Shareholders in
discharge of certain indemnification obligations of the related UMA Shareolders provided
for in Section 4.3 of the Share Purchase Agreement, all on the terms and conditions set
forth below;



     NOW, THEREFORE, in consideration of these premises and for other good and valid
consideration, the receipt and sufficiency of which are hereby acknowledged, the parties
agree as follows:



ARTICLE I




DEFINITIONS



     As used in this Agreement, the following terms have the meanings set forth below:



     “Additional IFH Units” shall mean, collectively, the Additional IFH SPA Units and the
Additional IFH UIA Units.



 









 





     “Additional IFH SPA Units” shall have the meaning set forth in Section 2.3.



     “Additional
IFH UIA Units” shall have the meaning set forth in Section 5.2.



     “Agreement” shall have the meaning provided in the preamble.



     “Announcement” shall have the meaning provided in Section 6.1.



     “Cobra” shall have the meaning provided in the preamble.



     “Code shall mean the Internal Revenue Code of 1986, as amended.



     “Dispute” shall have the meaning specified in Section 6.4(a).



     “Etiel” shall have the meaning provided in the preamble.



     “ICC” shall have the meaning specified in Section 6.4(a).



     “IFH” shall have the meaning provided in the preamble.



     “IFH LLC Agreement” shall mean the Second Amended and Restated Limited Liability Company
Agreement of International Farmland Holding LLC dated as of the date hereof, as same may be amended
from time to time.



     “IFH Unit Indemnification Payment Notice” shall have the meaning provided in Section 5.2.



     “IFH Unit Indemnification Payment Option” shall have the meaning provided in Section 5.2.



     “IFH Units” shall mean, collectively, the Initial IFH Units and any Additional IFH Units.



     “Incentive Option Plan” shall have the meaning provided in the IFH LLC Agreement.



     “Initial IFH Units” shall have the meaning provided in Section 2.2.



     “Liens” shall have the meaning provided in Section 2.1.



     “Liuede” shall have the meaning provided in the preamble.



     “Old IFH LLC Agreements” shall mean the “Old LLC Agreements” as defined in the IFH LLC
Agreement.



     “Ordinary Units” shall mean Ordinary Units of membership interests in IFH.



     “Other Members” shall mean the holders of Other Membership Units.



     “Other Membership Units” shall mean any units of membership interests in IFH other than the
IFH Units being issued to the UMA Members.



     “Outstanding Options” shall mean any options granted under the Incentive Option Plan that
are outstanding.



     “Person” shall mean any individual, corporation, partnership, joint venture, association,
joint-stock company, limited liability company, trust, unincorporated organization, government
or any agency or political subdivision thereof, or any other legal entity.



     “Private Placement Memorandum” shall have the meaning provided in Section 3.8.



     “Rebate Amount” shall have the meaning provided in Section 2.3.



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     “Related UMA Member” shall mean: (a) in respect of Mario Jorge de Lemos Vieira, Xango, (b) in
respect of Corina de Almeida Leite, Etiel, (c) in respect of Marcelo Weyland Barbosa Vieira, Liuede
and (d) in respect of Paulo Albert Weyland Vieira, Cobra.



     “Related UMA Shareholder” shall mean: (a) in respect of Xango, Mario Jorge de Lemos Vieira,
(b) in respect of Etiel, Corina de Almeida Leite, (c) in respect of Liuede, Marcelo Weyland Barbosa
Vieira and (d) in respect of Cobra, Paulo Albert Weyland Vieira.



     “Remaining Shares” shall have the meaning provided in the recitals.



     “Rules” shall have the meaning specified in Section 6.4(a).



     “Securities Act” shall mean the Securities Act of 1933, as amended.



     “Share Purchase Agreement” shall have the meaning provided in the recitals.



     “SPA Discharge Amount” shall have the meaning provided in Section 2.4.



     “SPA Indemnification Payment Amount” shall have the meaning provided in Section 2.4.



     “SPA Unit Indemnification Payment Notice” shall have the meaning provided in Section
2.4.



     “SPA Unit Indemnification Payment Option” shall have the meaning provided in Section
2.4.



     “Subsidiary” shall mean any Person of which fifty percent (50%) or more is owned,
directly or indirectly, by IFH.



     “UIA Discharge Amount” shall have the meaning provided in Section 5.1.



     “UIA Indemnification Payment Amount” shall have the meaning provided in Section 5.1.



     “UIA Unit Indemnification Payment Notice” shall have the meaning provided in Section
5.1.



     “UIA Unit Indemnification Payment Option” shall have the meaning provided in Section
5.1.



     “UMA” shall have the meaning provided in the recitals.



     “UMA Members” shall have the meaning provided in the preamble.



     “UMA Purchaser” shall have the meaning provided in the recitals.



     “UMA Shareholders” shall mean Marcelo Weyland Barbosa Vieira, Paulo Albert Weyland
Vieira, Mário Jorge de Lemos Vieira, Gustavo Abel de Lemos Vieira, Corina de Almeida Leite,
Ana Barbosa Vieira and Espólio de Céu de Lemos Vieira.



     “Units” shall mean Units of membership interests in IFH.



     “Unit Rebate Payment Notice” shall have the meaning provided in Section 2.3.



     “Unit Rebate Payment Option” shall have the meaning provided in Section 2.3.



     “Xango” shall have the meaning provided in the preamble.



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ARTICLE II




TRANSFER OF REMAINING SHARES; ISSUANCE AND POTENTIAL

CANCELLATION OF IFH UNITS



     Section 2.1 Transfer of Remaining Shares. Concurrently with the execution and delivery of
this Agreement, the UMA Members are transferring to IFH the following shares of the capital stock
of UMA constituting all the Remaining Shares, in each case free and clear of any encumbrance,
burden, lien, charge, pledges, options, preemptive rights and other similar rights or claims of any
nature whatsoever related thereto (“Liens”) and the parties are causing UMA to record the transfer
of such shares in the appropriate shares registry book (livro de registro de ações nominativas) and
shares transfer book (livro de registro de transferências de ações nominativas), duly reflected by
the signature of the applicable representatives in such books:



	 	 	 	 	 
	UMA Member
	 	Number of UMA Shares
	Xango
	 	 	152,369	 
	Etiel
	 	 	172,511	 
	Liuede
	 	 	434,153	 
	Cobra
	 	 	231,644	 





The transfer of the Remaining Shares reflected above to IFH shall constitute the Capital
Contribution (as defined in the LLC Agreement) of each UMA Member under the LLC
Agreement.




     Section 2.2 Issuance of Initial IFH Units. Concurrently with the execution and delivery of
this Agreement, in consideration of the sale and transfer of the Remaining Shares to IFH, IFH is
issuing to each of the UMA Members the number of Ordinary Units set forth below (collectively, the
“Initial IFH Units”):



	 	 	 	 	 
	UMA Member
	 	Number of IFH Units
	Xango
	 	 	1,857,938	 
	Etiel
	 	 	2,103,543	 
	Liuede
	 	 	5,293,919	 
	Cobra
	 	 	2,824,591	 






     Section 2.3 Potential Issuance of Additional IFH SPA Units. In the event that any amount
becomes payable by the UMA Purchaser and/or IFH to the UMA Shareholders after the fifth anniversary
of the Closing Date under the Share Purchase Agreement as provided in Section 4.4 thereof (a
“Rebate Amount”), each UMA Shareholder related to an UMA Member shall have the option (the “Unit
Rebate Payment Option”) of requiring that such UMA Shareholder’s



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portion of such Rebate Amount be paid in whole or in part by causing IFH to issue to such UMA
Member additional Ordinary Units (“Additional IFH SPA Units”) with an aggregate value (rounded to
the nearest whole Unit) equal to the portion of such Rebate Amount to be paid in such manner,
subject to such UMA Shareholder and IFH agreeing on the per Unit value of such Additional IFH SPA
Units as contemplated by Section 4.4 of the Share Purchase Agreement. Such Unit Rebate Payment
Option shall be exercisable by the applicable UMA Member giving IFH written notice of such exercise
(a “Unit Rebate Payment Notice”) within ten (10) days after such Rebate Amount has been finally
determined pursuant to the applicable provisions of the Share Purchase Agreement, which Unit Rebate
Payment Notice shall specify the portion of such Rebate Amount to be paid through the issuance of
Additional IFH SPA Units to such UMA Member. Subject to IFH and such UMA Shareholder agreeing on
such per Unit value, such Additional IFH SPA Units shall be issued in accordance with Section 4.6
of the IFH LLC Agreement with effect as of the date of such Unit Rebate Payment Notice.




     Section 2.4 Potential Cancellation of IFH Units. In the event that any UMA Shareholder
related to an UMA Member becomes obligated to pay any amount in respect of a “Contigency” pursuant
to Section 4.2 of the Share Purchase Agreement (an “SPA Indemnification Payment Amount”), such UMA
Shareholder shall have the option (the “SPA Unit Indemnification Payment Option”) to discharge such
obligation in whole or in part by the cancellation of IFH Units held by such UMA Member (rounded to
the nearest whole Unit) with an aggregate value equal to the portion of such SPA Indemnification
Payment Amount to be so discharged (the “SPA Discharge Amount”). The value of each IFH Unit for
such purpose shall be deemed to be equal to US$1.2203832 (or the Brazilian Reais equivalent thereof
determined pursuant to the applicable provisions of the Share Purchase Agreement), which amount
shall be proportionately decreased or increased any time that the “Unit Price” applicable to such
IFH Units is adjusted pursuant to Section 5.9 of the IFH LLC Agreement. Such SPA Unit
Indemnification Payment Option shall be exercisable by the applicable UMA Member giving IFH written
notice of such exercise (a “SPA Unit Indemnification Payment Notice”) within ten (10) days after
such SPA Indemnification Payment Amount has been finally determined pursuant to the applicable
provisions of the Share Purchase Agreement, which SPA Unit Indemnification Payment Notice shall
specify the SPA Discharge Amount to be discharged through the cancellation of IFH Units held by
such UMA Member. Such cancellation shall take effect in accordance with Section 4.7 of the IFH LLC
Agreement as of the date of such SPA Unit Indemnification Payment Notice.



ARTICLE III




REPRESENTATIONS AND WARRANTIES OF THE UMA MEMBERS



     Each UMA Member severally and not jointly represents and warrants to IFH as follows:



     Section 3.1 Organization. Such UMA Member is a corporation duly organized, validly existing
and in good standing under the laws of the British Virgin Islands and has the corporate power and
authority to own its property and carry on its business as owned and carried on at the date hereof
and as contemplated hereby. Such UMA Member is duly licensed or qualified to do business and in
good standing in each of the jurisdictions in which the failure to be so licensed or qualified
would have a material adverse effect on its ability to perform its



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obligations hereunder. The applicable Related UMA Shareholder owns of record and
beneficially all of the outstanding capital stock of such UMA Member.




     Section 3.2 Authority; Enforceability. Such UMA Member has the corporate power and
authority to execute and deliver this Agreement and to perform its obligations hereunder, and the
execution, delivery and performance of this Agreement have been duly authorized by all necessary
corporate action. This Agreement has been duly executed and delivered by such UMA Member and
constitutes the legal, valid and binding obligation of such UMA Member, enforceable against such
UMA Member in accordance with its terms.



     Section 3.3 No Conflict; No Default. Neither the execution, delivery or performance of this
Agreement by such UMA Member nor the consummation by such UMA Member of the transactions
contemplated hereby (i) does or will conflict with, violate or result in a breach of (or has
conflicted with, violated or resulted in a breach of) any of the terms, conditions or provisions of
any law, regulation, order, writ, injunction, decree, determination or award of any court, any
governmental department, board, agency or instrumentality, domestic or foreign, or any arbitrator,
applicable to such UMA Member, (ii) does or will conflict with, violate, result in a breach of or
constitute a default under (or has conflicted with, violated, resulted in a breach of or
constituted a default under) any of the terms, conditions or provisions of the articles of
incorporation or bylaws of such UMA Member or of any material agreement or instrument to which such
UMA Member is a party or by which such UMA Member is or may be bound or to which any of its
properties or assets is subject, (iii) does or will conflict with, violate, result in (or has
conflicted with, violated or resulted in) a breach of, constitute (or has constituted) a default
under (whether with notice or lapse of time or both), accelerate or permit the acceleration of (or
has accelerated) the performance required by, give (or has given) to others any material interests
or rights or require any consent, authorization or approval under any indenture, mortgage, lease,
agreement or instrument to which such UMA Member is a party or by which such UMA Member or any of
its properties or assets is or may be bound or (iv) does or will result (or has resulted) in the
creation or imposition of any lien upon any of the properties or assets of such UMA Members.



     Section 3.4 Governmental Authorizations. Any registration, declaration or filing with, or
consent, approval, license, permit or other authorization or order by, or exemption or other action
of, any governmental, administrative or regulatory authority, domestic or foreign, that was or is
required in connection with the valid execution, delivery and performance by such UMA Member of
this Agreement or consummation by such UMA Member of any transactions contemplated hereby has been
completed, made or obtained on or before the date hereof.



     Section 3.5 Investment Intent; Transfer Restrictions. The IFH Units to be issued to such
UMA Member hereunder will be acquired for the account of such UMA Member for investment only and
not with a view to, or with any intention of, any distribution thereof. Such UMA Member
acknowledges that such IFH Units have not been registered under the Securities Act, or the
securities laws of any state or other jurisdiction and cannot be disposed of unless subsequently
registered under the Securities Act and any applicable laws of states or other jurisdictions or an
exemption from such registration is available. Such UMA Member also understands that the transfer
of such IFH Units is subject to certain restrictions contained in the IFH LLC Agreement.



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     Section 3.6 Accredited Investor. Each of such UMA Member and the Related UMA Shareholder
who owns all the issued and outstanding capital stock of such UMA Member is an “accredited
investor” as defined in Rule 501(a) of Securities and Exchange Commission Regulation D.



     Section 3.7 Sophistication. Such UMA Member has such knowledge and experience in financial
and business matters that it is capable of evaluating the merits and risks of an investment in IFH
and making an informed investment decision with respect thereto. Such UMA Member has consulted its
own advisers with respect to its proposed investment in IFH and has reviewed and fully understands
the provisions of this Agreement and the IFH LLC Agreement.



     Section 3.8 Furnished Information. Such UMA Member acknowledges that it has been furnished
a copy of Supplement No. 2 to the Confidential Private Placement Memorandum dated September 28,
2004 (the “Private Placement Memorandum”). Such UMA Member further acknowledges that the
information related to tax and structural considerations set forth in the Private Placement
Memorandum has been superseded and that such UMA Member has completed its own due diligence
investigation with respect to such tax and structural matters and has not relied on any information
related to tax and structural considerations set forth in the Private Placement Memorandum. In the
event of any conflict between this Agreement or the IFH LLC Agreement on the one hand, and the
Private Placement Memorandum on the other hand, the terms of this Agreement or the IFH LLC
Agreement, as the case may be, shall prevail. Such UMA Member has had the opportunity to ask
questions and receive answers concerning the terms and conditions of investing in IFH, as well as
the opportunity to obtain any additional information necessary to verify the accuracy of the
information contained in the Private Placement Memorandum which IFH possesses or can acquire
without unreasonable effort or expense.



     Section 3.9 No General Solicitation or General Advertising. Such UMA Member acknowledges
that at no time was such UMA Member or the Related UMA Shareholder presented with, or solicited by,
any leaflet, public promotional meeting, internet communication, newspaper or magazine article,
radio or television advertisement or any other form of general advertising or general solicitation
with respect to an investment in IFH.



     Section 3.10 Ownership of Remaining Shares. The Remaining Shares being sold by such UMA
Member to the UMA Purchaser hereunder are owned by such UMA Member free and clear of any and all
claims, security interests, Liens or encumbrances whatsoever. The transfer of such Remaining Shares
to the UMA Purchaser hereunder will convey to such UMA Purchaser good and marketable title to such
Remaining Shares free and clear of any claims, security interests, Liens or encumbrances
whatsoever, and such Remaining Shares may be freely assigned and transferred by such UMA Member in
compliance with the laws and regulations applicable in Federative Republic of Brazil.



     Section 3.11 No Broker or Finder. Other than Rabobank International do Brasil, S.A., whose
fees and expenses will be paid as provided in Section 5.1 of the Share Purchase Agreement, there
are no contracts, agreements or understandings between such UMA Member or the Related UMA
Shareholder and any Person that would give rise to a claim for any brokerage



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commission, finder’s fee or other like payment with respect to the sale by such UMA Member of
Remaining Shares to the UMA Purchaser hereunder or the issuance of IFH Units by IFH to such UMA
Member hereunder.




     Section 3.12 Certain Tax Matters. The Related UMA Shareholder who owns all the issued and
outstanding capital stock of such UMA Member is not investing in IFH through such UMA Member for
the principal purpose of permitting IFH to satisfy the 100-partner limitation set forth in Treasury
Regulations Section 1.7704-1(h) (regarding the private placement safe harbor from treatment as a
publicly traded partnership). Such UMA Member is not a “U.S. person” as defined in Section
7701(a)(3) of the Code. Such UMA Member shall promptly notify IFH of any change in circumstances
that would cause the foregoing representations to no longer be true. The UMA Member shall provide
to IFH all documentation as requested by IFH necessary to determine whether withholding is required
with respect to the UMA Member interest in IFH under the Internal Revenue Code of 1986, as amended.



     Section 3.13 Foreign Corrupt Practices Act. Such UMA Member has not violated, is not in
violation of, and will not violate any provision of the U.S. Foreign Corrupt Practices Act of
1977, as amended, to the extent applicable to such UMA Member.



ARTICLE IV




REPRESENTATIONS AND WARRANTIES OF IFH



     IFH hereby represents and warrants to the UMA Members as follows:



     Section 4.1 Organization.



               (a) IFH is a limited liability company duly formed, validly existing and in good standing
under the laws of the Delaware and has the limited liability company power and authority to own its
property and carry on its business as owned and carried on at the date hereof and as contemplated
hereby. IFH is duly licensed or qualified to do business and in good standing in each of the
jurisdictions in which the failure to be so licensed or qualified would have a material adverse
effect on its financial condition or the ability to perform its obligations hereunder.



               (b) Each Subsidiary of IFH is a corporation duly organized, or a partnership or limited
liability company duly formed, and is validly existing and in good standing under the laws of the
jurisdiction of its incorporation or formation and has the corporate, partnership or limited
liability company power and authority to own its property and carry on its business as owned and
carried on at the date hereof and as contemplated hereby. Each such Subsidiary is duly licensed or
qualified to do business and in good standing in each of the jurisdictions in which the failure to
be so licensed or qualified would have a material adverse effect on its financial condition.



     Section 4.2 Authority; Enforceability. IFH has the limited liability power and authority to
execute and deliver this Agreement and the IFH LLC Agreement and to perform its obligations
hereunder and thereunder, and the execution, delivery and performance of this



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Agreement and the IFH LLC Agreement have been duly authorized by all necessary corporate action.
Each of this Agreement and the IFH LLC Agreement has been duly executed and delivered by IFH and
constitutes the legal, valid and binding obligation of IFH, enforceable against it in accordance
with its terms.




     Section 4.3 No Conflict; No Default. Neither the execution, delivery or performance of this
Agreement or the IFH LLC Agreement by IFH, nor the consummation by IFH of the transactions
contemplated hereby or thereby (i) does or will conflict with, violate or result in a breach of (or
has conflicted with, violated or resulted in a breach of) any of the terms, conditions or
provisions of any law, regulation, order, writ, injunction, decree, determination or award of any
court, any governmental department, board, agency or instrumentality, domestic or foreign, or any
arbitrator, applicable to IFH or any Subsidiary, (ii) does or will conflict with, violate, result
in a breach of or constitute a default under (or has conflicted with, violated, resulted in a
breach of or constituted a default under) any of the terms, conditions or provisions of the IFH LLC
Agreement or the constitutive documents of any Subsidiary or of any material agreement or
instrument to which IFH or any Subsidiary is a party or by which IFH or any Subsidiary is or may be
bound or to which any of its properties or assets is subject, (iii) does or will conflict with,
violate, result in (or has conflicted with, violated or resulted in) a breach of, constitute (or
has constituted) a default under (whether with notice or lapse of time or both), accelerate or
permit the acceleration of (or has accelerated) the performance required by, give (or has given) to
others any material interests or rights or require any consent, authorization or approval under any
indenture, mortgage, lease, agreement or instrument to which IFH or any Subsidiary is a party or by
which IFH or any Subsidiary or any of their respective properties or assets is or may be bound or
(iv) does or will result (or has resulted) in the creation or imposition of any lien upon any of
the properties or assets of IFH or any Subsidiary.



     Section 4.4 IFH Membership Interests.



               (a) The Initial IFH Units have been duly authorized, validly issued and fully paid, and upon
the issuance thereof as contemplated herein, any Additional IFH Units will have been duly
authorized, validly issued and fully paid, in each case free and clear of any Liens (other than
any Liens created by action of the applicable UMA Members) and without violating the preemptive
rights of any Person (with the preemptive rights of the existing members of IFH provided for in
Section 5.8 of the Old IFH LLC Agreements having been duly waived).



               (b) All of outstanding Other Membership Units have been duly authorized and validly issued
without violating the preemptive rights of any Person and have been offered and issued without
violating the Securities Act or any securities laws of any applicable state or other jurisdiction.
To the best knowledge of IFH, neither IFH nor any Other Member has breached any obligation of such
party under the IFH LLC Agreement, including (without limitation), any obligation on the party of
any Other Member to contribute capital to IFH.



               (c) Except for the Outstanding Options (a true and correct list of which has heretofore been
provided by IFH to the UMA Shareholders), there are no issued or outstanding subscriptions,
options, warrants or other rights to purchase or acquire any Other Membership Units, and no options
granted under the Incentive Option Plan have been exercised.



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               (d) Neither IFH or any Subsidiary is a party to any agreement or understanding pursuant to
which it is obligated to purchase or redeem any Other Membership Units or Outstanding Options or is
otherwise under any obligation to repurchase, redeem or otherwise acquire any Other Membership
Units or Outstanding Options.



               (e) Other than the IFH LLC Agreement: (i) IFH is not a party to any agreement or understanding
pursuant to which it is obligated to register any Other Membership Units or other securities under
the Securities Act or the securities laws of any state or other jurisdiction and (ii) to the best
knowledge of IFH, no Other Member or holder of an Outstanding Option is a party to any voting
agreement, voting trust, irrevocable proxy or other agreement affecting the voting rights of any
Other Membership Units or any agreement providing for any call or put option, right of first
refusal or offer or other right to acquire or dispose of any Other Membership Units or Outstanding
Options.



               (f) The issuance of the Initial IFH Units has not caused any adjustment in the “Unit Price”
pursuant to Section 5.9 of the Old IFH LLC Agreements.



     Section 4.5 Exempt Issuances. Assuming the accuracy and completeness of the representations
made by the UMA Members herein, the issuance and sale of the Initial IFH Units and the Additional
IFH Units are not required to be registered under the registration provisions of the Securities Act
or the securities laws or any other applicable state or other jurisdiction.



     Section 4.6 No Litigation. Neither IFH or any Subsidiary is presently a defendant in any
material litigation or arbitration, including suits, claims, proceedings or notified
investigations, before any federal, state, municipal or other government department in the United
States or abroad, and is not presently aware of any such threatened material litigation.



     Section 4.7 Financial Statements. IFH has heretofore delivered to the UMA Shareholders true
and correct copies of the following financial statements (collectively, the “Financial
Statements”): (i) the following unaudited financial statements for IFH — statements of assets and
liabilities and partners’ capital of IFH as of December 31, 2003, December 31, 2004 and September
30, 2005, statements of operations of IFH for the twelve months ended December 31, 2003 and
December 31, 2004 and the nine months ended September 30, 2005 and statements of cash flows for
each of such periods; (ii) the following audited financial statements for Adeco Agropecuaria S.R.L.
— a balance sheet as of June 30, 2005 and a statement of operations and a statement of cash flows
for the fiscal year ended June 30, 2005; (iii) the following audited financial statements for Adeco
Agropecuaria Brasil Ltda — a balance sheet as of June 30, 2005 and a statement of operations and a
statement of cash flows for the fiscal year ended June 30, 2005; (iv) the following audited
financial statements for Kelizer S.A. — a balance sheet as of June 30, 2005 and a statement of
operations and a statement of cash flows for the fiscal year ended June 30, 2005; and (v) the
following audited financial statements for La Agraria S.A.A.C y F. — a balance sheet as of June 30,
2005 and a statement of operations and a statement of cash flows for the fiscal year ended June 30,
2005. The Financial Statements have been prepared in accordance with U.S. generally accepted
accounting principles and fairly present the financial condition of the applicable entities as of
the dates indicated and the results of operations of IFH for the periods indicated.



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     Section 4.8 Operation of Businesses. Since September 30, 2005, IFH and its Subsidiaries
have each operated only in the ordinary course of business in a manner consistent with past
practices and there has been no material adverse change in the sales, profits, business,
operations, properties, assets, condition (financial or otherwise) of IFH or any Subsidiary.



     Section 4.9 Compliance with Laws. To the knowledge of IFH, the assets, properties and
business of the IFH and each of its Subsidiaries comply in all material respects with all
applicable requirements of law (including, without limitation, environmental laws) and court orders
and no notice, claim, demand or action has been received by or filed against IFH or any such
Subsidiary alleging any failure to so comply.



     Section 4.10 Taxes. IFH and each Subsidiary has filed all material income tax returns, as
well as material fiscal reports, forms and lists required by any applicable tax authority, and has
timely paid all material federal, state and local taxes and other governmental charges which are
due and payable by it.



     Section 4.11 No Labor Disruption. There are no material labor suits, actions or proceedings
pending against IFH or any Subsidiary relating to employees, commercial representatives or
independent contractors, and IFH does not presently know of any threats of significant strikes,
work stoppages or grievances pending by any such such employees.



     Section 4.12 No Material Defaults or Infringements. Neither IFH or any Subsidiary is in
material default under any material contract or agreement to which it is a party or to IFH’s
knowledge has materially infringed the intellectual property rights of any Person.



     Section 4.13 Registration and Permits. IFH and each Subsidiary has all material federal, state
or municipal government licenses, approvals, certificates, permits and franchises required by it to
carry on its business as presently conducted in each jurisdiction in which it operates, and is not
presently aware of any challenges or material threatened challenges by any relevant authority in
respect thereof.



     Section 4.14 Title to Assets. IFH and each Subsidiary has good and marketable title to all
material assets purported to be owned by it, all material tangible assets used by IFH and each
Subsidiary in its business is in reasonable working condition and IFH and its Subsidiaries own, or
have valid leases or licenses to use, all material assets required for the conduct of their
businesses as currently conducted.



     Section 4.15 Absence of Undisclosed Liabilities. Neither IFH or any Subsidiary is subject to
any material liability (whether pending or threatened, accrued, absolute, contingent or otherwise)
other than (i) liabilities reflected in the Financial Statements, (ii) liabilities incurred by IFH
or a Subsidiary subsequent to the date of the most recent applicable Financial Statements in the
ordinary course of business consistent with past practice that are similar to the liabilities
reflected in such Financial Statements and (iii) liabilities disclosed in the Private Placement
Memorandum or otherwise disclosed by IFH to the UMA Shareholders in writing prior to the date
hereof.



     Section 4.16 Full Disclosure. The Private Placement Memorandum, as modified and supplemented
by the additional documents heretofore delivered by IFH to the UMA



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Shareholders, taken as a whole, (i) does not contain any untrue statements of a material fact, and
(ii) does not omit to state any material facts required to be stated therein or necessary, with
respect to clauses (i) and (ii) in order to make the statements contained therein, taken as a whole
and in light of the circumstances under which they were made, not misleading.




     Section 4.17 No Broker or Finder. There are no contracts, agreements or understandings between
IFH or any Subsidiary and any Person that would give rise to a claim for any brokerage commission,
finder’s fee or other like payment with respect to the sale by such the UMA Member of the Remaining
Shares to the UMA Purchaser hereunder or the issuance of IFH Units by IFH to the UMA Members
hereunder.



ARTICLE V




INDEMNIFICATION



     Section 5.1 Indemnification by the UMA Members. Each UMA Member shall indemnify and hold
IFH harmless from and against any and all losses, costs, damages or liabilities due to or arising
out of any breach of any representation, warranty or covenants of such UMA Member set forth in this
Agreement. In the event that any UMA Member becomes obligated to pay any indemnification amount to
IFH pursuant to this Section 5.1 (an “UIA Indemnification Payment Amount”), such UMA Shareholder
shall have the option (the “UIA Unit Indemnification Payment Option”) to discharge such obligation
in whole or in part by the cancellation of IFH Units held by such UMA Member (rounded to the
nearest whole Unit) with an aggregate value equal to the portion of such UIA Indemnification
Payment Amount to be so discharged (the “UIA Discharge Amount”). The value of each IFH
Unit for such purpose shall be deemed to be equal to US$1.2203832 (or the Brazilian Reais
equivalent thereof determined pursuant to the applicable provisions of the Share Purchase
Agreement), which amount shall be proportionately decreased or increased any time that the “Unit
Price” applicable to such IFH Units is adjusted pursuant to Section 5.9 of the IFH LLC Agreement.
Such UIA Unit Indemnification Payment Option shall be exercisable by the applicable UMA Member
giving IFH written notice of such exercise (a “UIA Unit Indemnification Payment Notice”) within ten
(10) days after such UIA Indemnification Payment Amount has been finally determined pursuant to the
applicable provisions of the Share Purchase Agreement, which UIA Unit Indemnification Payment
Notice shall specify the UIA Discharge Amount to be discharged through the cancellation of IFH
Units held by such UMA Member. Such cancellation shall take effect in accordance with Section 4.7
of the IFH LLC Agreement as of the date of such UIA Unit Indemnification Payment Notice.



     Section 5.2 Indemnification by IFH. IFH shall indemnify and hold the UMA Members harmless
from and against any and all losses, costs, damages or liabilities due to or arising out of any
breach of any representation, warranty or covenants of either of IFH set forth in this Agreement.
Each UMA Member shall have the option (the “IFH Unit Indemnification Payment Option”) of requiring
that the amount of any indemnification payment required to be paid buy IFH pursuant to this Section
5.2 be paid in whole or in part by IFH issuing to such UMA Member additional Ordinary Units
(“Additional IFH UIA Units”) with an aggregate value (rounded to the nearest whole Unit) equal to
the portion of such indemnification payment,



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subject to such UMA Shareholder and IFH agreeing on the per Unit value of such Additional IFH UIA
Units for such purpose. Such IFH Unit Indemnification Payment Option shall be exercisable by the
applicable UMA Member giving IFH written notice of such exercise (a “IFH Unit Indemnification
Payment Notice”) within ten (10) days after the amount of such indemnification payment has been
finally determined hereunder, which IFH Unit Indemnification Payment Notice shall specify the
portion of such indemnification amount to be paid through the issuance of Additional IFH UIA Units
to such UMA Member. Subject to IFH and such UMA Shareholder agreeing on such per Unit value, such
Additional IFH UIA Units shall be issued in accordance with Section 4.6 of the IFH LLC Agreement
with effect as of the date of such Unit UIA Payment Notice.




ARTICLE VI




MISCELLANEOUS



     Section 6.1 Announcements. The parties to this Agreement agree that any announcement
addressed to the general public, relating to the transactions contemplated herein may only be
issued from and after the date of this Agreement (“Announcement”). Any party making any such
Announcement shall notify the other parties thereof within a reasonable time prior to making such
Announcement, stating the time and the content of such Announcement; provided that all
parties shall have a reasonable opportunity to review such an Announcement prior to its release.
Notwithstanding the foregoing, any party may issue any Announcement to the extent required by
applicable laws and regulations.



     Section 6.2 Notices.



               (a) Any notice, request, demand, approval or other communication required or permitted to be
given to a party pursuant to the provisions of this Agreement will be in writing and will be
effective and deemed given under this Agreement on the earliest of: (i) the date of personal
delivery, (ii) the date of transmission by facsimile, with confirmed transmission and receipt,
(iii) two (2) days after deposit with a nationally recognized courier or overnight service such as
Federal Express, or (iv) five (5) days after mailing via certified mail, return receipt requested.
All notices not delivered personally or by facsimile will be sent with postage and other charges
prepaid and properly addressed to the party to be notified at the address set forth for such party:




If to IFH:


International Farmland Holdings LLC

c/o Soros Fund Management LLC

888 Seventh Avenue

New York, New York 10106

USA

Facsimile:      (212) 541-7751

Attention:       Bo Kwon




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     With a copy (which shall not constitute notice) to each of:


Goodwin Procter LLP

599 Lexington Avenue

New York, New York 10022

USA

Facsimile:      212-355-3333

Attention:      Kevin Sheridan, Esq.




     and


Pampas Humedas LLC

c/o Soros Fund Management LLC

888 Seventh Avenue

New York, New York 10106

USA

Facsimile:      (212) 541-7751

Attention:      Bo Kwon




     The UMA Members:



     If to Xango Corporation:


Caixa Postal 062

Alfenas, MG

37130-000

Brazil

Facsimile:      (55 23) 3573-2007

Attention:      Mario Jorge de Lemos Vieira




     If to Etiel Societé Anonyme:


Av. Brigadeiro Faria Lima 1461, 10th floor, Torre Sul

São Paulo, SP

01451-904

Brazil

Facsimile:      (55 11) 3814-1508

Attention:      Corina de Almeida Leite




     If to Cobra CA Holdings Ltd.:


Av. Delfim Moreira 106, apt. 101

Rio de Janeiro, RJ

22441-000

Brazil

Facsimile:      (55 21) 2217-2894

Attention:      Paulo Albert Weyland Vieira




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     If to Liuede Holdings Ltd.:


Av. Delfim Moreira 210, apt. 202

Rio de Janeiro, RJ

22441-000

Brazil

Facsimile:      (55 21) 3573-2010

Attention:      Marcelo Weyland Barbosa Vieira




     With, in the case of each of each of the four UMA Members, a copy (which shall not
constitute notice) to:


Sidley Austin LLP

787 Seventh Ave.

New York, NY 10019

Facsimile:      (212) 839-7395

Attention:       Michael H. Yanowitch, Esq.



and



Vieira, Rezende, Barbosa e Guerreiro Advogados

Av. Presidente Wilson 231, 18 andar

Rio de Janeiro, RJ 20030-021

Facsimile:      (55 21 2217 2887)

Attention:      Fabio Rezende




               (b) Any party hereto (and such party’s permitted assigns) may change such party’s address for
receipt of future notices hereunder by giving written notice to the other parties hereto.



     Section 6.3 Governing Law. This Agreement and the rights of the parties hereunder shall be
governed by, and interpreted in accordance with, the laws of the State of Delaware, without regard
to any conflicts of law jurisprudence.



     Section 6.4 Arbitration.



               (a) In General. Any dispute, controversy or claim (a “Dispute”) arising out of or in
connection with this Agreement, including any question regarding its existence, validity,
enforcement, performance, legal interpretation or termination, shall be referred to and finally
resolved by arbitration. The arbitration shall be instituted and held in accordance with the rules
of the International Chamber of Commerce (the “ICC”) (the “Rules”), which Rules are deemed to be
incorporated by reference into this Section 6.4. The administration and correct conduct of the
arbitration proceedings shall be incumbent upon the ICC. The number of arbitrators shall be three
(3), with one (1) arbitrator appointed by the claimant(s), one (1) arbitrator appointed by
defendant(s) and the third arbitrator appointed by the first two.



               (b) Procedural Matters. The legal place of arbitration shall be in the City of São
Paulo, State of São Paulo, Brazil, where the arbitration award shall be rendered. The language to
be used in the arbitral proceedings shall be Portuguese. Notwithstanding the



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foregoing, each party shall (i) provide to the other parties, reasonably in advance of any hearing,
copies of all documents which such party intends to present in such hearing, (ii) be allowed to
conduct reasonable discovery through written document requests and depositions of any employees,
senior officers or service providers of the other parties, the nature and extent of which discovery
shall be determined by the arbitration tribunal taking into account the needs of the parties hereto
and the purposes of arbitration to make discovery expeditious and cost effective, and (iii) be
entitled to make an oral presentation to the arbitration tribunal.




               (c) Consolidation. In order to facilitate the comprehensive resolution of related
disputes, and upon request of any party to the arbitration proceeding, the arbitration tribunal
may, within ninety (90) days of its appointment, consolidate the arbitration proceeding with any
other arbitration proceeding involving any of the parties hereto relating to this Agreement or the
Share Purchase Agreement. The arbitrators shall not consolidate such arbitrations unless they
determine that (i) there are issues of fact or Law common to the proceedings, so that a
consolidated proceeding would be more efficient than separate proceedings, and (ii) no party to
such arbitration would be prejudiced as a result of such consolidation through undue delay,
conflict of interest or otherwise. In the event of conflicting awards on the issue of consolidation
by the arbitration tribunal constituted hereunder, the ruling of the tribunal constituted under
this Agreement shall govern, and that tribunal shall decide all Disputes in the consolidated
proceeding.



               (d) Exceptional Court Jurisdiction. The parties are fully aware of all terms and
effects of the arbitration clause set forth herein, and irrevocably agree that any Disputes shall
be solely referred to arbitration. Without prejudice to validity of the arbitration clause,
however, the parties hereby elect the courts in the Judicial District of São Paulo, State of São
Paulo, Brazil, as the exclusive forum for pursuing any enjoining or other conservatory measures of
a preventive nature to secure the arbitration to be initiated or already in progress between the
parties and/or to ensure the existence and enforceability of the arbitration proceedings.



               (e) Award. The arbitral award shall be final and binding upon the parties, and not
subject to any appeal, to the fullest extent permitted by applicable law, and shall deal with — but
not be limited to the question of liability for administrative costs of arbitration, arbitrators’
fees and all matters related thereto. The arbitrators may at their discretion award costs,
including legal fees, to the prevailing and/or defeated party or parties. Decisions of the
arbitrators shall be in writing and shall set forth the reasons therefore, and, to the extent
applicable, the manner in which the amount of the award was calculated. Any monetary award arising
from the arbitration proceedings may include interest from the date of any damages incurred for
breach or other violation of this Agreement and from the date of the award, until paid in full, at
a rate to be fixed by the arbitrators. The arbitral award may be enforced in any court of competent
jurisdiction. For such purpose, each of the parties hereto irrevocably submits to the jurisdiction
of the New York State courts and the federal courts sitting in the County of New York, State of New
York and the courts in the Judicial District of São Paulo, State of São Paulo, Brazil. Each of the
parties hereto waives irrevocably the defense of inconvenient forum to the maintenance of such
enforcement proceeding.



     Section 6.5 Successors. This Agreement shall be binding upon, and inure to the benefit
of, the parties and their successors and permitted assigns.



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     Section 6.6 Pronouns. Whenever from the context it appears appropriate, each term stated in
either the singular or the plural shall include the singular and the plural, and pronouns stated
in either the masculine, the feminine or the neuter gender shall include the masculine, feminine
and neuter.



     Section 6.7
Table of Contents and Captions Not Part of
Agreement. The table of contents and
captions contained in this Agreement are inserted only as a matter of convenience and in no way
define, limit or extend the scope or intent of this Agreement or any provisions hereof.



     Section 6.8 Waiver, Amendment. No waiver, termination or discharge of this Agreement, or any
of the terms or provisions hereof, shall be binding upon any party hereto unless confirmed in
writing. No waiver by any party hereto of any term or provision of this Agreement or of any
default hereunder shall affect such party’s rights thereafter to enforce such term or provision or
to exercise any right or remedy in the event of any other default, whether or not similar. This
Agreement may not be modified or amended except in writing and executed by all parties hereto.



     Section 6.9 Survival and Severability. All of the agreements, covenants, representations and
warranties made by the UMA Members in this Agreement shall survive the execution and delivery
hereof. The UMA Members shall immediately notify IFH upon discovering that any of the
representations or warranties made herein were false when made or has, as a result of changes in
circumstances, become false. All of the agreements, covenants, representations and warranties made
by IFH in this Agreement shall survive the execution and delivery hereof. IFH shall immediately
notify the UMA Members upon discovering that any of the representations or warranties made herein
were false when made. If any provision of this Agreement shall be held invalid, illegal or
unenforceable in any jurisdiction or in any respect, then the validity, legality and enforceability
of the remaining provisions contained herein shall not in any way be affected or impaired, and the
parties hereto shall use their best efforts to amend or substitute such invalid, illegal or
unenforceable provision with enforceable and valid provisions which would produce as nearly as
possible the rights and obligations previously intended by the parties hereto without renegotiation
of any material terms and conditions stipulated herein.



     Section 6.10 Counterparts. This Agreement may be executed in several counterparts, each of
which shall be deemed an original but all of which shall constitute one and the same instrument.



     Section 6.11 Entire Agreement. This Agreement and the other written agreements described
herein between the parties hereto entered into as of the date hereof, constitute the entire
agreement among them relating to the subject matter hereof. In the event of any conflict between
this Agreement or such other written agreements, the terms and provisions of this Agreement shall
govern and control. No party hereto may assign this Agreement, in whole or in part, without the
prior written consent of all of the other parties.



17









 





     Section 6.12 Further Assurances. Each party agrees to execute and deliver any and all
additional instruments and documents and do any and all acts and things as may be necessary or
expedient to effectuate more fully this Agreement.



18









 





     IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the date first set
forth above.



	 	 	 	 	 
	 	INTERNATIONAL FARMLAND HOLDINGS

LLC

 	 
	 	By:  	 
 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 
	 	XANGO CORPORATION

 	 
	 	By:  	/s/ Mário Jorge De Lemos Vieira
 	 
	 	 	Name:  	MÁRIO JORGE DE LEMOS VIEIRA 	 
	 	 	Title:  	DIRECTOR 	 
	 
	 	ETIEL SOCIETE ANONYME

 	 
	 	By:  	/s/ Corina De Almeida Leite
 	 
	 	 	Name:  	CORINA DE ALMEIDA LEITE 	 
	 	 	Title:  	DIRECTOR 	 
	 
	 	COBRA CA HOLDINGS LTD.

 	 
	 	By:  	/s/ Paulo Albert Weyland Vieira
 	 
	 	 	Name:  	PAULO ALBERT WEYLAND VIEIRA 	 
	 	 	Title:  	DIRECTOR 	 
	 
	 	LIUEDE HOLDINGS LTD.

 	 
	 	By:  	/s/
Marcelo Weyland Barbosa Vieira	 
	 	 	Name:  	MARCELO WEYLAND BARBOSA VIEIRA	 
	 	 	Title:  	DIRECTOR 	 
	 




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