Unassociated Document


    Exhibit
      10.2

     

    COLLATERAL
      AGREEMENT

     

    AGREEMENT
      dated as of October 11, 2007 (this “Agreement”)
      among
      SYNUTRA INTERNATIONAL, INC., a Delaware corporation (the “Borrower”),
      SYNUTRA, INC., an Illinois corporation (the “Pledged
      Stock Issuer”)
      and
      ABN AMRO BANK N.V., as Collateral Agent (the “Collateral
      Agent”)
      and
      Administrative Agent (the “Administrative
      Agent”).

     

    WITNESSETH:

     

    WHEREAS,
      the Borrower, ABN AMRO Bank N.V. as Administrative Agent and Collateral Agent,
      ABN AMRO Bank N.V. as Arranger and the Lenders party thereto (the “Lenders”)
      are
      parties to a Loan Agreement of even date herewith (as the same may be amended
      from time to time, the “Loan
      Agreement”)
      providing for credit extensions to and on behalf of the Borrower;
      and

     

    WHEREAS,
      in order to induce the Collateral Agent, the Administrative Agent and the
      Lenders to enter into the Loan Agreement, the Borrower has agreed to grant
      a
      continuing security interest in and to the Collateral (as hereafter defined)
      to
      secure the Borrower’s obligations under the Loan Agreement;

     

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

     

    Section
      1.
      Definitions. 

     

    (a)
      Terms
      Defined in the Loan Agreement.
      Terms
      defined in the Loan Agreement and not otherwise defined herein shall have,
      as
      used herein, the respective meanings provided for therein. 

     

    (b)
      Additional
      Definitions.
      The
      following additional terms, as used herein, have the following
      meanings:

     

    “Acceleration
      Default”
means
      an Event of Default which either (i) results in acceleration of the maturity
      of
      some or all of the Obligations or (ii) arises from a failure to pay the
      principal amount of some or all of the Obligations at final
      maturity.

     

    “Collateral”
has
      the
      meaning assigned to such term in ‎Section
      3(a).

     

    “Default”
and
      “Event
      of Default”
have
      the meanings assigned such terms under the Loan Agreement and, for purposes
      of
      this Agreement only, Event of Default shall also include any payment defaults
      by
      the Pledged Stock Issuer or the Borrower arising under any other Loan
      Document.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    “Pledged
      Stock”
means
      (i) the 10,000 shares of common stock of the Pledged Stock Issuer owned by
      the
      Borrower as of the date hereof and (ii) any other capital stock required to
      be
      pledged to the Collateral Agent pursuant to ‎Section
      3(b).

     

    “Pledged
      Stock Issuer”
has
      the
      meaning specified in the introductory paragraph hereto.

     

    “Post-Petition
      Interest”
means
      any interest that accrues after the commencement of any case, proceeding or
      other action relating to the bankruptcy, insolvency or reorganization of the
      Borrower (or would accrue but for the operation of applicable bankruptcy or
      insolvency laws), whether or not such interest is allowed or allowable as a
      claim in any such proceeding.

     

    “Proceeds”
means
      all proceeds of, and all other profits, products, rents or receipts, in whatever
      form, arising from the collection, sale, lease, exchange, assignment, licensing
      or other disposition of, or other realization upon, any Collateral, including
      all claims of the Borrower against third parties for loss of, damage to or
      destruction of, or for proceeds payable under, or unearned premiums with respect
      to, policies of insurance in respect of, any Collateral.

     

    “Secured
      Obligations”
means
      the obligations secured under this Agreement including (i) the Obligations,
      (ii)
      any note issued pursuant to any of the Loan Documents and (iii) any renewals
      or
      extensions of any of the foregoing.

     

    “Security
      Interests”
means
      the security interests in the Collateral granted hereunder securing the Secured
      Obligations.

     

    “UCC”
means
      the Uniform Commercial Code as in effect from time to time in the State of
      New
      York; provided
      that, if
      perfection or the effect of perfection or non-perfection or the priority of
      the
      Security Interests on any Collateral is governed by the Uniform Commercial
      Code
      as in effect in a jurisdiction other than New York, “UCC”
means
      the Uniform Commercial Code as in effect from time to time in such other
      jurisdiction for purposes of the provisions hereof relating to such perfection,
      effect of perfection or non-perfection or priority.

     

    Unless
      otherwise defined herein or in the Loan Agreement, or unless the context
      otherwise requires, all terms used herein which are defined in the UCC as in
      effect on the date hereof shall have the meanings therein stated.

     

    (c)
      Terms
      Generally.
      The
      definitions of terms herein (including those incorporated by reference to the
      UCC or to another document) apply equally to the singular and plural forms
      of
      the terms defined. Whenever the context may require, any pronoun includes the
      corresponding masculine, feminine and neuter forms. The words “include”,
      “includes”
and
      “including”
shall
      be deemed to be followed by the phrase “without
      limitation”.
      The
      word “will”
shall
      be construed to have the same meaning and effect as the word “shall”.
      Unless
      the context requires otherwise, (i) any definition of or reference to any
      agreement, instrument or other document herein shall be construed as referring
      to such agreement, instrument or other document as from time to time amended,
      supplemented or otherwise modified (subject to any restrictions on such
      amendments, supplements or modifications set forth herein), (ii) any reference
      herein to any Person shall be construed to include such Person’s successors and
      permitted assigns, (iii) the words “herein”,
      “hereof”
and
      “hereunder”,
      and
      words of similar import, shall be construed to refer to this Agreement in its
      entirety and not to any particular provision hereof, (iv) all references herein
      to Sections, Exhibits and Schedules shall be construed to refer to Sections
      of,
      and Exhibits and Schedules to, this Agreement, and (v) the word “property”
shall
      be construed to refer to any and all tangible and intangible assets and
      properties, including cash, securities, accounts and contract
      rights.

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

     

    Section
      2.
      Representations
      and Warranties.
      The
      Borrower represents and warrants as follows:

     

    (a)
      Title
      to Pledged Stock.
      The
      Borrower owns all of the Pledged Stock, free and clear of any Liens other than
      the Security Interests. All of the Pledged Stock has been duly authorized and
      validly issued, and is fully paid and non-assessable, and is not subject to
      options to purchase, claims or similar rights of any Person. The Borrower is
      not
      and will not become a party to or otherwise bound by any agreement, other than
      this Agreement, which restricts in any manner the rights of the Lenders, the
      Collateral Agent, the Administrative Agent or any present or future holder
      of
      any of the Pledged Stock with respect thereto.

     

    (b)
      Pledged
      Stock. As
      of the
      date hereof, the Pledged Stock represents 100.0% of the issued and outstanding
      common stock of the Pledged Stock Issuer. 

     

    (c)
      Validity,
      Perfection and Priority of Security Interests.
      Upon
      delivery of the certificates representing the Pledged Stock to the Collateral
      Agent or its designee in accordance with ‎Section
      4
      hereof,
      the Collateral Agent will have a valid and perfected security interest in the
      Collateral subject to no prior Lien. Except as set forth in ‎Section
      5,
      no
      registration, recordation or filing with any governmental body, agency or
      official is required in connection with the execution or delivery of this
      Agreement or necessary for the validity or enforceability hereof or for the
      perfection or enforcement of the Security Interests. Neither the Borrower nor
      any of its Subsidiaries has performed or will perform any acts which could
      prevent the Collateral Agent from enforcing any of the terms and conditions
      of
      this Agreement or which would limit the Collateral Agent in any such
      enforcement.

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

     

    (d)
      UCC
      Filing Locations.
      The
      Borrower is duly organized, validly existing and in good standing under the
      laws
      of the State of Delaware.

     

    (e)
      Authorization;
      No Contravention.
      The
      execution, delivery and performance by the Borrower of this Agreement has been
      duly authorized by all necessary corporate action on its part, and does not
      and
      will not contravene the terms of its Organization Documents. The execution,
      delivery and performance by the Borrower of this Agreement does not and will
      not
      (a) conflict with or result in any breach or contravention of, or the creation
      of any Lien (other than those contemplated hereby) under (i) any Contractual
      Obligation to which the Borrower is a party or (ii) any order, injunction,
      writ
      or decree of any Governmental Authority or any arbitral award to which the
      Borrower or its property is subject or (b) violate any Law applicable to the
      Borrower, this Agreement or any of the transactions contemplated
      hereby.

     

    (f)
      Governmental
      Authorization; Other Consents. Except
      as
      set forth in ‎Section
      5,
      no
      approval, consent, exemption, authorization, or other action by, or notice
      to,
      or filing with, any Governmental Authority or any other Person is necessary
      or
      required in connection with the execution, delivery or performance by, or
      enforcement against, the Borrower or the Collateral of this Agreement or any
      other Loan Document.

     

    (g)
      Binding
      Effect.
      This
      Agreement has been duly executed and delivered by the Borrower. The Agreement
      constitutes a legal, valid and binding obligation of the Borrower, enforceable
      against it in accordance with its terms.

     

    Section
      3.
      The
      Security Interests. In
      order
      to secure the full and punctual payment of the Secured Obligations in accordance
      with the terms thereof, and to secure the performance of all the obligations
      of
      the Borrower and the Pledged Stock Issuer hereunder:

     

    (a)
      The
      Borrower hereby assigns and pledges to and with the Collateral Agent for the
      benefit of the Administrative Agent and the Lenders and grants to the Collateral
      Agent for the benefit of the Administrative Agent and the Lenders a security
      interest in the Pledged Stock, and all of its rights and privileges with respect
      to the Pledged Stock, and all income and profits thereon, and all interest,
      dividends and other payments and distributions with respect thereto, and all
      Proceeds of the foregoing (the “Collateral”).
      On or
      prior to the first Credit Extension, the Borrower shall have delivered the
      certificate representing the Pledged Stock in pledge hereunder.

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

     

    (b)
      In
      the
      event that the Pledged Stock Issuer at any time issues any additional or
      substitute shares of capital stock of any class to the Borrower, the Borrower
      will immediately (i) pledge and deposit with the Collateral Agent certificates,
      if any, representing such shares as additional security for the Secured
      Obligations and (ii) take all other steps required to grant or maintain, as
      applicable, a first priority security interest in such shares to the Collateral
      Agent for the benefit of the Administrative Agent and the Lenders. All such
      shares constitute Pledged Stock and are subject to all provisions of this
      Agreement.

     

    (c)
      The
      Security Interests are granted as security only and shall not subject the
      Administrative Agent, the Collateral Agent or the Lenders to, or transfer or
      in
      any way affect or modify, any obligation or liability of the Borrower with
      respect to any of the Collateral or any transaction in connection
      therewith.

     

    Section
      4.
      Delivery
      of Pledged Stock.
      All
      certificates representing Pledged Stock delivered to the Collateral Agent or
      its
      designee by the Borrower pursuant hereto shall be in suitable form for transfer
      by delivery, or shall be accompanied by duly executed instruments of transfer
      or
      assignment in blank, with signatures appropriately guaranteed, and accompanied
      by any required transfer tax stamps, all in form and substance satisfactory
      to
      the Collateral Agent. 

     

    Section
      5.
      Further
      Assurances. (a)
      The
      Borrower agrees that it will, at its expense and in such manner and form as
      the
      Collateral Agent may reasonably require, execute, deliver, file and record
      any
      financing statement, specific assignment or other paper and take any other
      action that may be necessary or desirable, or that the Collateral Agent may
      reasonably request, in order to create, preserve, perfect or validate any
      Security Interest or to enable the Collateral Agent to exercise and enforce
      its
      rights hereunder with respect to any of the Collateral. To the extent permitted
      by applicable law, the Borrower hereby authorizes the Collateral Agent to
      execute and file, in the name of the Borrower or otherwise, financing statements
      (which may be carbon, photographic, photostatic or other reproductions of this
      Agreement or of a financing statement relating to this Agreement) which the
      Collateral Agent in its reasonable discretion may deem necessary or appropriate
      to further perfect the Security Interests.

     

    (b)
      The
      Borrower agrees that it will not change (i)
      its
      name, identity or corporate structure in any manner or (ii)
      the
      location of its chief executive office unless it shall have given the Collateral
      Agent not less than 30 days’ prior notice thereof (or such shorter period
      consented to by the Collateral Agent in its sole discretion).

     

    
      
        
        

      

      
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    Section
      6.
      Record Ownership of Pledged Stock. The
      Collateral Agent may at any time or from time to time, in its sole discretion,
      cause any or all of the Pledged Stock to be transferred of record into the
      name
      of the Collateral Agent or its nominee. The Borrower will promptly give to
      the
      Collateral Agent copies of any notices or other communications received by
      it
      with respect to Pledged Stock registered in the name of the Borrower and the
      Collateral Agent will promptly give to the Borrower copies of any notices and
      communications received by the Collateral Agent with respect to Pledged Stock
      registered in the name of the Collateral Agent or its nominee.

     

    Section
      7.
      Right to Receive Distributions on Collateral. The
      Collateral Agent shall have the right to receive and, during the continuance
      of
      any Default, to retain as Collateral hereunder all dividends and other payments
      and distributions made upon or with respect to the Collateral and the Borrower
      shall take all such action as the Collateral Agent may deem necessary or
      appropriate to give effect to such right. All such dividends and other payments
      and distributions which are received by the Borrower shall be received in trust
      for the benefit of the Collateral Agent, the Administrative Agent and the
      Lenders and, if the Collateral Agent so directs during the continuance of a
      Default, shall be segregated from other funds of the Borrower and shall,
      forthwith upon demand by the Collateral Agent during the continuance of a
      Default, be paid over to the Collateral Agent as Collateral in the same form
      as
      received (with any necessary endorsement). After all Defaults have been cured,
      the Collateral Agent’s right to retain dividends, interest and other payments
      and distributions under this ‎Section
      7
      shall
      cease and the Collateral Agent shall pay over to the Borrower any such
      Collateral retained by it during the continuance of a Default.

     

    Section
      8.
      Right
      to Vote Pledged Stock.
      Unless
      an Acceleration Default shall have occurred and be continuing, the Borrower
      shall have the right, from time to time, to vote and to give consents,
      ratifications and waivers with respect to the Pledged Stock, and the Collateral
      Agent shall, upon receiving a written request from the Borrower accompanied
      by a
      certificate signed by its principal financial officer stating that no Default
      has occurred and is continuing, deliver to the Borrower or as specified in
      such
      request such proxies, powers of attorney, consents, ratifications and waivers
      in
      respect of any of the Pledged Stock which is registered in the name of the
      Collateral Agent or its nominee as shall be specified in such request and be
      in
      form and substance satisfactory to the Collateral Agent.

     

    If
      an
      Acceleration Default shall have occurred and be continuing, the Collateral
      Agent
      shall have the right to the extent permitted by law and the Borrower shall
      take
      all such action as may be necessary or appropriate to give effect to such right,
      to vote and to give consents, ratifications and waivers, and take any other
      action with respect to any or all of the Pledged Stock with the same force
      and
      effect as if the Collateral Agent were the absolute and sole owner
      thereof.

     

    
      
        
        

      

      
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    Section
      9.
      General
      Authority.
      The
      Borrower hereby irrevocably appoints the Collateral Agent its true and lawful
      attorney, with full power of substitution, in the name of the Borrower, the
      Collateral Agent, the Administrative Agent, the Lenders or otherwise, for the
      sole use and benefit of the Collateral Agent, the Administrative Agent and
      the
      Lenders, but at the expense of the Borrower, to the extent permitted by law
      to
      exercise, at any time and from time to time while an Event of Default has
      occurred and is continuing, all or any of the following powers with respect
      to
      all or any of the Collateral:

     

    (a)
      to
      demand, sue for, collect, receive and give acquittance for any and all monies
      due or to become due upon or by virtue thereof,

     

    (b)
      to
      settle, compromise, compound, prosecute or defend any action or proceeding
      with
      respect thereto,

     

    (c)
      to
      sell,
      transfer, assign or otherwise deal in or with the same or the proceeds or avails
      thereof, as fully and effectually as if the Collateral Agent were the absolute
      owner thereof, and

     

    (d)
      to
      extend
      the time of payment of any or all thereof and to make any allowance and other
      adjustments with reference thereto;

     

    provided
      that the
      Collateral Agent (x) shall not sell or otherwise dispose of the Pledged Stock
      unless an Acceleration Default has occurred and is continuing and (y) shall
      give
      the Borrower at least ten days’ prior written notice of the time and place of
      any public sale thereof or the time after which any private sale or other
      intended disposition thereof will be made. Any such notice shall (i) contain
      the
      information specified in UCC Section 9-613, (ii) be authenticated and (iii)
      be
      sent to the parties required to be notified pursuant to UCC Section 9-611(c);
      provided
      that, if
      the Collateral Agent fails to comply with this sentence in any respect, its
      liability for such failure shall be limited to the liability (if any) imposed
      on
      it as a matter of law under the UCC.

     

    
      
        
        

      

      
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    Section
      10.
      Remedies
      upon Event of Default. If
      any
      Event of Default shall have occurred and be continuing, the Collateral Agent
      may
      exercise on behalf of the Administrative Agent and the Lenders all the rights
      of
      a secured party under the UCC (whether or not in effect in the jurisdiction
      where such rights are exercised) and, in addition, the Collateral Agent may,
      without being required to give any notice, except as herein provided or as
      may
      be required by mandatory provisions of law, (i) apply the cash, if any, then
      held by it as Collateral as specified in ‎Section
      13
      and (ii)
      if there shall be no such cash or if such cash shall be insufficient to pay
      all
      the Secured Obligations in full, but only if an Acceleration Default has
      occurred and is continuing, sell the Collateral or any part thereof at public
      or
      private sale or at any broker’s board or on any securities exchange, for cash,
      upon credit or for future delivery, and at such price or prices as the
      Collateral Agent may deem satisfactory. The Administrative Agent or any of
      the
      Lenders may be the purchaser of any or all of the Collateral so sold at any
      public sale (or, if the Collateral is of a type customarily sold in a recognized
      market or is of a type which is the subject of widely distributed standard
      price
      quotations, at any private sale). The Collateral Agent is authorized, in
      connection with any such sale, if it deems it advisable so to do, (A) to
      restrict the prospective bidders on or purchasers of any of the Pledged Stock
      to
      a limited number of sophisticated investors who will represent and agree that
      they are purchasing for their own account for investment and not with a view
      to
      the distribution or sale of any of such Pledged Stock, (B) to cause to be placed
      on certificates for any or all of the Pledged Stock or on any other securities
      pledged hereunder a legend to the effect that such security has not been
      registered under the United States Securities Act of 1933, as amended, and
      may
      not be disposed of in violation of the provision of said Act, and (C) to impose
      such other limitations or conditions in connection with any such sale as the
      Collateral Agent deems necessary or advisable in order to comply with said
      Act
      or any other law. The Borrower will execute and deliver such documents and
      take
      such other action as the Collateral Agent deems necessary or advisable in order
      that any such sale may be made in compliance with law. Upon any such sale the
      Collateral Agent shall have the right to deliver, assign and transfer to the
      purchaser thereof the Collateral so sold. Each purchaser at any such sale shall
      hold the Collateral so sold absolutely and free from any claim or right of
      whatsoever kind, including any equity or right of redemption of the Borrower
      which may be waived, and the Borrower, to the extent permitted by law, hereby
      specifically waives all rights of redemption, stay or appraisal which it has
      or
      may have under any law now existing or hereafter adopted. The notice (if any)
      of
      such sale required by ‎Section
      9
      shall
      (1) in the case of a public sale, state the time and place fixed for such sale,
      (2) in the case of a sale at a broker’s board or on a securities exchange, state
      the board or exchange at which such sale is to be made and the day on which
      the
      Collateral, or the portion thereof so being sold, will first be offered for
      sale
      at such board or exchange, and (3) in the case of a private sale, state the
      day
      after which such sale may be consummated. Any such public sale shall be held
      at
      such time or times within ordinary business hours and at such place or places
      as
      the Collateral Agent may fix in the notice of such sale. At any such sale the
      Collateral may be sold in one lot as an entirety or in separate parcels, as
      the
      Collateral Agent may determine. The Collateral Agent shall not be obligated
      to
      make any such sale pursuant to any such notice. The Collateral Agent may,
      without notice or publication, adjourn any public or private sale or cause
      the
      same to be adjourned from time to time by announcement at the time and place
      fixed for the sale, and such sale may be made at any time or place to which
      the
      same may be so adjourned. In the case of any sale of all or any part of the
      Collateral on credit or for future delivery, the Collateral so sold may be
      retained by the Collateral Agent until the selling price is paid by the
      purchaser thereof, but the Collateral Agent shall not incur any liability in
      the
      case of the failure of such purchaser to take up and pay for the Collateral
      so
      sold and, in the case of any such failure, such Collateral may again be sold
      upon like notice. The Collateral Agent, instead of exercising the power of
      sale
      herein conferred upon it, may proceed by a suit or suits at law or in equity
      to
      foreclose the Security Interests and sell the Collateral, or any portion
      thereof, under a judgment or decree of a court or courts of competent
      jurisdiction.

     

    
      
        
        

      

      
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    Section
      11.
      Expenses. Each
      of
      the Borrower and the Pledged Stock Issuer jointly and severally agrees that
      it
      will forthwith upon demand pay to the Collateral Agent:

     

    (a)
      the
      amount of any taxes which the Collateral Agent may have been required to pay
      by
      reason of the Security Interests or to free any of the Collateral from any
      Lien
      thereon, and

     

    (b)
      the
      amount of any and all out-of-pocket expenses, including the fees and
      disbursements of counsel and of any other experts, which the Collateral Agent
      may incur in connection with (i)
      the
      administration or enforcement of this Agreement, including such expenses as
      are
      incurred to preserve the value of the Collateral and the validity, perfection,
      rank and value of any Security Interest, (ii)
      the
      collection, sale or other disposition of any of the Collateral, (iii)
      the
      exercise by the Collateral Agent of any of the rights conferred upon it
      hereunder or (iv)
      any
      Default or Event of Default.

     

    Any
      such
      amount not paid on demand shall bear interest at the rate equal to the Default
      Rate and shall be treated as additional Secured Obligations
      hereunder.

     

    Section
      12.
      Limitation on Duty of Collateral Agent in Respect of Collateral; Indemnity.
      (a)
      Beyond
      the exercise of reasonable care in the custody thereof, the Collateral Agent
      shall have no duty as to any Collateral in its possession or control or in
      the
      possession or control of any agent or bailee or any income thereon or as to
      the
      preservation of rights against prior parties or any other rights pertaining
      thereto. The Collateral Agent shall be deemed to have exercised reasonable
      care
      in the custody and preservation of the Collateral in its possession if the
      Collateral is accorded treatment substantially equal to that which it accords
      its own property, and shall not be liable or responsible for any loss or damage
      to any of the Collateral, or for any diminution in the value thereof, by reason
      of the act or omission of any agent or bailee selected by the Collateral Agent
      in good faith.
      In no
      event shall the Collateral Agent be liable to the Borrower or the Pledged Stock
      Issuer or any other party to this Agreement for any consequential (being loss
      of
      business, goodwill, opportunity or profit) or punitive loss or damages, even
      if
      advised of the possibility of such loss or damage.

     

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

     

    (b)
      Each
      of
      the Borrower and the Pledged Stock Issuer agrees to be jointly and severally
      responsible for and will indemnify each of the Collateral Agent, any predecessor
      Collateral Agent and their agents, employees, officers and directors for, and
      hold it harmless against, any loss or liability or expense incurred by it
      without negligence or willful misconduct on its part arising out of or in
      connection with the acceptance or administration of this Agreement and its
      duties under this Agreement, including the costs and expenses of defending
      itself against any claim or liability and of complying with any process served
      upon it or any of its officers in connection with the exercise or performance
      of
      any of its powers or duties under this Agreement.

     

    (c)
      This
      ‎Section
      12
      shall
      survive the termination of the Security Interests and the release of the
      Collateral.

     

    Section
      13.
      Application of Proceeds. Upon
      the
      occurrence and during the continuance of an Event of Default, the proceeds
      of
      any sale of, or other realization upon, all or any part of the Collateral and
      any cash held shall be applied by the Collateral Agent in the following order
      of
      priorities:

     

    first,
      to pay
      the expenses of such sale or other realization, including reasonable
      compensation to agents and counsel for the Collateral Agent, and all expenses,
      liabilities and advances incurred or made by the Collateral Agent in connection
      therewith, and any other unreimbursed expenses for which the Collateral Agent,
      the Administrative Agent or the Lenders are to be reimbursed pursuant to Section
      10.04 of the Loan Agreement or ‎Section
      11
      hereof
      and unpaid fees owing to the Collateral Agent, the Administrative Agent or
      the
      Lenders under any Loan Document;

     

    second,
      to pay
      ratably all interest (including Post-Petition Interest, to the fullest extent
      permitted by applicable Law) on the Secured Obligations, until payment in full
      of all such interest shall have been made;

     

    third,
      to pay
      the unpaid principal of the Secured Obligations, until payment in full of the
      principal of the Secured Obligations shall have been made;

     

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

     

    fourth,
      to pay
      all other Secured Obligations, until payment in full of all such other Secured
      Obligations shall have been made; and

     

    finally,
      to
      payment to the Borrower or its successors or assigns, or as a court of competent
      jurisdiction may direct, of any surplus then remaining from such
      proceeds.

     

    The
      Collateral Agent may make distributions hereunder in cash or in kind or, on
      a
      ratable basis, in any combination thereof.

     

    Section
      14.
      Concerning the Collateral Agent. The
      provisions of Article 7 of the Loan Agreement shall inure to the benefit of
      the
      Collateral Agent in respect of this Agreement and shall be binding upon the
      parties to the Loan Agreement in such respect. In furtherance and not in
      derogation of the rights, privileges and immunities of the Collateral Agent
      therein set forth:

     

    (a)
      The
      Collateral Agent is authorized to take all such action as is provided to be
      taken by it as Collateral Agent hereunder and all other action reasonably
      incidental thereto. As to any matters not expressly provided for herein
      (including, without limitation, the timing and methods of realization upon
      the
      Collateral) the Collateral Agent shall act or refrain from acting in accordance
      with written instructions from the Administrative Agent or, in the absence
      of
      such instructions, in accordance with its discretion.

     

    (b)
      The
      Collateral Agent shall not be responsible for the existence, genuineness or
      value of any of the Collateral or for the validity, perfection, priority or
      enforceability of the Security Interests in any of the Collateral, whether
      impaired by operation of law or by reason of any action or omission to act
      on
      its part hereunder. The Collateral Agent shall have no duty to ascertain or
      inquire as to the performance or observance of any of the terms of this
      Agreement by the Borrower.

     

    Section
      15.
      Appointment of Co-Collateral Agents. At
      any
      time or times, in order to comply with any legal requirement in any
      jurisdiction, the Collateral Agent may appoint another bank or trust company
      or
      one or more other persons, either to act as co-collateral agent or co-collateral
      agents, jointly with the Collateral Agent, or to act as separate collateral
      agent or collateral agents on behalf of the Administrative Agent and the Lenders
      with such power and authority as may be necessary for the effectual operation
      of
      the provisions hereof and may be specified in the instrument of appointment
      (which may, in the discretion of the Collateral Agent, include provisions for
      the protection of such co-collateral agent or separate collateral agent similar
      to the provisions of ‎Section
      14
      hereof).

     

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

     

    Section
      16.
      Termination of Security Interests; Release of Collateral. Upon
      the
      repayment in full of all Secured Obligations and the termination of all lending
      commitments under the Loan Agreement, the Security Interests shall terminate
      and
      all rights to the Collateral shall revert to the Borrower. At any time and
      from
      time to time prior to such termination of the Security Interests, the Collateral
      Agent may release any of the Collateral with the prior written consent of the
      Administrative Agent. Upon any such termination of the Security Interests or
      release of Collateral, the Collateral Agent will, at the expense of the
      Borrower, execute and deliver to the Borrower such documents as the Borrower
      shall reasonably request to evidence the termination of the Security Interests
      or the release of such Collateral, as the case may be.

     

    Section
      17.
      Acknowledgment by the Pledged Stock Issuer, Stop Transfer Instructions.
The
      Pledged Stock Issuer hereby acknowledges the Security Interests in the Pledged
      Stock. The Pledged Stock Issuer agrees to effect or recognize any transfer
      of
      the Pledged Stock only if and to the extent such transfer is made in accordance
      with the provisions of this Agreement. The Pledged Stock Issuer and the Borrower
      shall refrain from effecting any proposed transfer of Pledged Stock without
      the
      prior written consent of the Collateral Agent. 

     

    Section
      18.
      Notices. All
      notices hereunder shall be (a) in the case of the Borrower; in writing
      (including by facsimile transmission) and mailed, faxed or delivered to the
      address, facsimile number or electronic mail address specified for notices
      to
      the Borrower on Schedule A hereto, (b) in the case of the Pledged Stock Issuer;
      in writing (including by facsimile transmission) and mailed, faxed or delivered
      to the address, facsimile number or electronic mail address specified for
      notices to the Pledged Stock Issuer on Schedule A hereto, (c) in the case of
      the
      Collateral Agent; in writing (including by facsimile transmission) and mailed,
      faxed or delivered to the address, facsimile number or electronic mail address
      specified for notices to Collateral Agent on Schedule A hereto and (d) in the
      case of any other party, given in accordance with Section 10.02 of the Loan
      Agreement. 

     

    Section
      19.
      Waivers, Non-exclusive Remedies. No
      failure on the part of the Collateral Agent to exercise, and no delay in
      exercising and no course of dealing with respect to, any right under this
      Agreement shall operate as a waiver thereof; nor shall any single or partial
      exercise by the Collateral Agent of any right under any Loan Document preclude
      any other or further exercise thereof or the exercise of any other right. The
      rights in this Agreement and the other Loan Documents are cumulative and are
      not
      exclusive of any other remedies provided by law.

     

    Section
      20.
      Successors and Assigns. This
      Agreement is for the benefit of the Collateral Agent, the Administrative Agent
      and the Lenders and their successors and assigns (if any), and in the event
      of
      an assignment of all or any of the Secured Obligations, the rights hereunder,
      to
      the extent applicable to the indebtedness so assigned, may be transferred with
      such indebtedness. This Agreement shall be binding on the Borrower and its
      successors and assigns.

     

    
      
        
        

      

      
        12

        
          

        

      

      
        
        

      

    

     

    Section
      21.
      Amendments and Waivers. Neither
      this Agreement nor any provision hereof may be changed, waived, discharged
      or
      terminated orally, but only in writing signed by the Borrower and the Collateral
      Agent with the consent of the Administrative Agent.

     

    Section
      22.
      New
      York Law. THIS
      AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF
      THE
      STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED ENTIRELY
      WITHIN SUCH STATE; PROVIDED
      THAT THE
ADMINISTRATIVE
      AGENT AND
      COLLATERAL AGENT SHALL RETAIN ALL RIGHTS ARISING UNDER FEDERAL LAW.


     

    SECTION
      23.
      Submission to Jurisdiction. ANY
      LEGAL ACTION
      OR
      PROCEEDING WITH RESPECT TO THIS AGREEMENT MAY BE BROUGHT IN THE COURTS OF THE
      STATE OF NEW YORK SITTING IN THE BOROUGH OF MANHATTAN, NEW YORK CITY OR OF
      THE
      UNITED STATES FOR THE SOUTHERN DISTRICT OF SUCH STATE, AND BY EXECUTION AND
      DELIVERY OF THIS AGREEMENT, EACH PARTY HERETO CONSENTS, FOR ITSELF AND IN
      RESPECT OF ITS PROPERTY, TO THE NON-EXCLUSIVE JURISDICTION OF THOSE COURTS.
      EACH
      PARTY HERETO IRREVOCABLY WAIVES, TO THE EXTENT PERMITTED BY APPLICABLE LAW,
      ANY
      OBJECTION, INCLUDING ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON THE
      GROUNDS OF FORUM
      NON CONVENIENS,
      WHICH
      IT MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF ANY ACTION OR PROCEEDING IN
      SUCH
      JURISDICTION IN RESPECT OF ANY LOAN DOCUMENT OR OTHER DOCUMENT RELATED THERETO.
      EACH PARTY HERETO WAIVES PERSONAL SERVICE OF ANY SUMMONS, COMPLAINT OR OTHER
      PROCESS, WHICH MAY BE MADE BY ANY OTHER MEANS PERMITTED BY THE LAW OF SUCH
      STATE. THE
      BORROWER AGREES THAT A FINAL JUDGMENT IN ANY SUCH SUIT, ACTION OR PROCEEDING
      BROUGHT IN SUCH A COURT SHALL BE CONCLUSIVE AND BINDING UPON IT AND WILL BE
      GIVEN EFFECT IN ANY OTHER JURISDICTION TO THE FULLEST EXTENT PERMITTED BY
      APPLICABLE LAW AND MAY BE ENFORCED IN ANY COURT TO THE JURISDICTION OF WHICH
      SUCH PARTY IS OR MAY BE SUBJECT BY A SUIT UPON SUCH JUDGMENT, PROVIDED
      THAT
      SERVICE OF PROCESS IS EFFECTED UPON IT IN ONE OF THE MANNERS SPECIFIED HEREIN
      OR
      AS OTHERWISE PERMITTED BY LAW.

     

    
      
        
        

      

      
        13

        
          

        

      

      
        
        

      

    

     

    Section
      24.
      Waiver of Right to Jury Trial.
      EACH
      PARTY TO THIS AGREEMENT HEREBY EXPRESSLY WAIVES, TO
      THE
      EXTENT PERMITTED BY APPLICABLE LAW, ANY
      RIGHT
      TO TRIAL BY JURY OF ANY CLAIM, DEMAND, ACTION OR CAUSE OF ACTION ARISING UNDER
      ANY LOAN DOCUMENT OR IN ANY WAY CONNECTED WITH OR RELATED OR INCIDENTAL TO
      THE
      DEALINGS OF THE PARTIES HERETO OR ANY OF THEM WITH RESPECT TO ANY LOAN DOCUMENT,
      OR THE TRANSACTIONS RELATED THERETO, IN EACH CASE WHETHER NOW EXISTING OR
      HEREAFTER ARISING, AND WHETHER FOUNDED IN CONTRACT OR TORT OR OTHERWISE; AND
      EACH PARTY HEREBY AGREES AND CONSENTS THAT ANY SUCH CLAIM, DEMAND, ACTION OR
      CAUSE OF ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT A JURY, AND THAT ANY
      PARTY TO THIS AGREEMENT MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS
      SECTION WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE SIGNATORIES
      HERETO TO THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY.

     

    Section
      25.
      Process Agent. 

     

    Without
      prejudice to any other mode of service allowed under any relevant Law, each
      of
      the Borrower and the Pledged Stock Issuer:

     

    (a) irrevocably
      shall have appointed, on or prior to the first Credit Extension, CT Corporation
      System, located at 111 Eighth Avenue, New York, NY 10011 as its agent for
      service of process in relation to any proceedings before the courts of the
      State
      of New York sitting in the Borough of Manhattan, New York City or of the United
      States for the Southern District of such State in connection with this
      Agreement; and

     

    (b) agrees
      that failure by a process agent to notify it of the process will not invalidate
      the proceedings concerned. 

     

    Section
      26.
      Severability. If
      any
      provision hereof is invalid or unenforceable in any jurisdiction, then, to
      the
      fullest extent permitted by law, (i) the other provisions hereof shall remain
      in
      full force and effect in such jurisdiction and shall be liberally construed
      in
      favor of the Collateral Agent, the Administrative Agent and the Lenders in
      order
      to carry out the intentions of the parties hereto as nearly as may be possible;
      and (ii) the invalidity or unenforceability of any provision hereof in any
      jurisdiction shall not affect the validity or enforceability of such provision
      in any other jurisdiction.

     

    
      
        
        

      

      
        14

        
          

        

      

      
        
        

      

    

     

    Section
      27.
      Counterparts.
      This
      Agreement may be executed in any number of counterparts, each of which shall
      be
      an original but all of which together shall constitute one
      instrument.

     

    
      
        
        

      

      
        15

        
          

        

      

      
        
        

      

    

     

    IN
      WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
      executed by their respective authorized officers as of the day and year first
      above written.

    
      	 	 	 
	 	
              SYNUTRA
                INTERNATIONAL, INC.

            
	 
 	 
 	 
 
	
            	By:  	
              /s/
                Liang Zhang

            
	 	
              

              Name: Liang
                Zhang

            
	 	
              Title: Chief
                Executive Officer

            


    

     

    
      
        	 	 	 
	 	
                SYNUTRA,
                  INC.

              
	 
 	 
 	 
 
	
              	By:  	
                /s/
                  Liang Zhang

              
	 	
                

                Name: Liang
                  Zhang

              
	 	
                Title: Chairman

              


      

       

      
        
          	 	 	 
	 	
                  ABN
                    AMRO BANK N.V., as Collateral Agent and Administrative
                    Agent

                
	 
 	 
 	 
 
	
                	By:  	
                  /s/
                    Yong Peck Yuen

                
	 	 	
                  

                  Name: Yong
                    Peck Yuen

                
	 	 	
                  Title: Senior
                    Vice President

                
	 	 	 
	 	By:  	
                  /s/
                    Irene Ng

                
	 	
                  

                  Name: Irene
                    Ng

                
	 	
                  Title: Assistant
                    Manager

                


        

         

        

          −
            Collateral Agreement Signature Page −

        

         

        
          
            
            

          

          
            
            

            
              

            

          

          
            
            

          

        

      

    

     

    Schedule
      A

    


    NOTICE
      ADDRESSES

    


    BORROWER:

    


    Synutra
      International, Inc.

    2275
      Research Blvd., Suite 500

    Rockville,
      Maryland 20850

    United
      States

    Attn:
      Weiguo Zhang

    Facsimile:
      +1-301-987-2346

    E-mail:
      wzhang@synutra.com

    


    PLEDGED
      STOCK ISSUER:

    


    Synutra,
      Inc.

    9784
      Athletic Way

    Gaithersburg,
      MD 20878

    United
      States

    Attn:
      Weiguo Zhang

    Facsimile:
      +1-301-987-2346

    E-mail:
      wzhang@synutra.com

    


    COLLATERAL
      AGENT:

    


    ABN
      AMRO
      Bank N.V.

    One
      Raffles Quay

    Level
      26,
      South Tower

    Singapore
      048583 

    Attention:
      Yong Peck Yuen / Irene Ng

    Telephone:
      +65-6518-8225 / 7342

    Facsimile:
      +65-6518-6012 / 6035

    E-Mail:
      peck.yuen.yong@sg.abnamro.com; irene.ng@sg.abnamro.com