Document:

ex109502deedoftrust.htm

 

Record and Return to:

Harrison C. Smith, Esq.

Krooth & Altman LLP

1850 M Street NW, Suite 400

Washington, DC 20036

DEED OF TRUST

With Assignment of Rents

THIS DEED OF TRUST, made as of the first day of November, 2012, by and between, EMERICHIP PHOENIX LLC, a limited liability company organized and existing under the laws of the State of Delaware, with offices at 3131 Elliott Ave., Suite 500, Seattle, WA 98121, herein called Trustor, and CHICAGO TITLE INSURANCE COMPANY, whose address is 2390 E. Camelback Rd., Suite 325, Phoenix, AZ 85016, herein called Trustee, and KEYCORP REAL ESTATE CAPITAL MARKETS, INC., an Ohio corporation, with offices at 8115 Preston Road, Suite 800, Dallas, Texas 75225, herein called Beneficiary.

WITNESSETH:  That Trustor grants, transfers, and assigns to Trustee in trust, upon the trusts, covenants, conditions and agreements and for the uses and purposes hereinafter contained, with power of sale, all that real property situate, lying and being in Maricopa County, State of Arizona, described as follows:

SEE EXHIBIT "A" ATTACHED HERETO

AND MADE A PART HEREOF.

Together with the rents, issues, and profits thereof, SUBJECT, HOWEVER, to the right, power, and authority hereinafter given to and conferred upon Beneficiary to collect and apply such rents, issues, and profits; and together with all buildings and improvements of every kind and description now or hereafter erected or placed thereon, and all fixtures, including but not limited to all gas and electric fixtures, engines and machinery, radiators, heaters, furnaces, heating equipment, laundry equipment, steam and hot-water boilers, stoves, ranges, elevators and motors, bath tubs, sinks, water closets, basins, pipes, faucets and other plumbing and heating fixtures, mantels, cabinets, refrigerating plant and refrigerators, whether mechanical or otherwise, cooking apparatus and appurtenances, and all shades, awnings, screens, blinds and other furnishings, it being hereby agreed that all such fixtures and furnishings shall to the extent permitted by law be deemed to be permanently affixed to and a part of the realty; and

Together with all building materials and equipment now or hereafter delivered to said premises and intended to be installed therein; and

Together with all articles of personal property now or hereafter attached to or used in and about the building or buildings now erected or hereafter to be erected on the lands described which are necessary to the complete and comfortable use and occupancy of such building or buildings for the purposes for which they were or are to be erected, including all other goods and chattels and personal property as are ever used or furnished in operating a building, or the activities conducted therein, similar to the one herein described and referred to, and all renewals or replacements thereof or articles in substitution therefor, whether or not the same are, or shall be attached to said building or buildings in any manner, and said Trustor agrees to execute a

  

  

  

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chattel mortgage covering the aforesaid fixtures and articles of personal property, at the time of placing such personal property or any part thereof in the building or buildings to be erected on the lands herein described in the manner and form required by law, at its expense and satisfactory to the Beneficiary.

To have and to hold the property hereinbefore described together with appurtenances to the Trustee, its or his successors and assigns forever.

FOR THE PURPOSE of securing performance of each agreement of Trustor herein and payment of a just indebtedness of the Trustor to the Beneficiary in the principal sum of FOUR MILLION EIGHTY THOUSAND AND NO/100THS DOLLARS ($4,080,000.00), evidenced by its note of even date herewith, bearing interest from date on outstanding balances at Two and Seventy Hundredths per centum (2.70%) per annum, said principal and interest being payable in monthly installments as provided in said note with a final maturity of December 1, 2042, which note is identified as being secured hereby by a certificate thereon.  Said note and all of its terms are incorporated herein by reference and this conveyance shall secure any and all extensions thereof, however evidenced.

AND TO PROTECT THE SECURITY OF THIS DEED OF TRUST, TRUSTOR COVENANTS AND AGREES:

	
1.  

	
That it will pay the Note at the times and in the manner provided therein;

     2.           That it will not permit or suffer the use of any of the property for any purpose other than the use for which the same was intended at the time this Deed of Trust was executed;

     3.           That the Regulatory Agreement, if any, executed by the Trustor and the Secretary of Housing and Urban Development, acting by and through the Federal Housing Commissioner, which is being recorded simultaneously herewith, is incorporated in and made a part of this Deed of Trust.  Upon default under the Regulatory Agreement and upon the request of the Secretary of Housing and Urban Development, acting by and through the Federal Housing Commissioner, the Beneficiary, at its option, may declare the whole of the indebtedness secured hereby to be due and payable;

     4.           That all rents, profits and income from the property covered by this Deed of Trust are hereby assigned to the Beneficiary for the purpose of discharging the debt hereby secured. Permission is hereby given to Trustor so long as no default exists hereunder, to collect such rents profits and income for use in accordance with the provisions of the Regulatory Agreement;

     5.           That upon default hereunder Beneficiary shall be entitled to the appointment of a receiver by any court having jurisdiction, without notice, to take possession and protect the property described herein and operate same and collect the rents, profits and income therefrom;

     6.           That at the option of the Trustor the principal balance secured hereby may be reamortized on terms acceptable to the Secretary of Housing and Urban Development, acting by and through the Federal Housing Commissioner if a partial prepayment results from an award in condemnation in accordance with provisions of Paragraph 8 herein, or from an insurance payment made in accordance with provisions of Paragraph 7 herein, where there is a resulting loss of project income;

     7.           That the Trustor will keep the improvements now existing or hereafter erected on the deeded property insured against loss by fire and such other hazards, casualties, and contingencies, as may be stipulated by the Secretary of Housing and Urban Development, acting by and through the Federal Housing Commissioner upon the insurance of the Deed of Trust and other hazards and liabilities as may be required from time to time by the Beneficiary, and such insurance shall be evidenced by standard fire and extended coverage insurance policy or policies, in amounts not less than necessary to comply with the applicable Coinsurance Clause percentage, but in no event shall the amounts of coverage be less than 80 percent of the Insurable Values or not less than the

  

  

  

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unpaid balance of the insured Deed of Trust, whichever is the lesser, and in default thereof the Beneficiary shall have the right to effect insurance.  Such policies shall be endorsed with standard Mortgagee clause with loss payable to the Beneficiary and shall be deposited with the Beneficiary.  The insurance company providing such coverage shall be selected by Mortgagor, subject to approval by Mortgagee, which approval shall not be unreasonably withheld.

That if the premises covered hereby, or any part thereof, shall be damaged by fire or other hazard against which insurance is held as hereinabove provided, the amounts paid by any insurance company in pursuance of the contract of insurance to the extent of the indebtedness then remaining unpaid, shall be paid to the Beneficiary, and, at its option, may be applied to the debt or released for the repairing or rebuilding of the premises or, with the consent of the Secretary of Housing and Urban Development, applied to the debt or used for other purposes.  Any unexpired insurance shall inure to the benefit of, and pass to, the purchaser of the property covered thereby at any Trustee’s sale held hereunder;

     8.           That all awards of damages in connection with any condemnation for public use of, or injury to, any of said property are hereby assigned and shall be paid to Beneficiary, who may apply the same to payment of the installments last due under said Note, and Beneficiary is hereby authorized, in the name of Trustor, to execute and deliver valid acquittances thereof and to appeal from any such award.  No amount applied to the reduction of the principal amount due shall be considered an optional prepayment as the term is used in the Deed of Trust and the Note secured hereby, nor relieve the Trustor from making regular monthly payments commencing on the first month following the date of receipt of the award.

     9.           Together with and in addition to the monthly payments of interest or of principal and interest payable under the terms of said note, to pay to Beneficiary monthly until said note is fully paid, beginning on the first day of the first month after the date hereof, the following sums:

	
(29)  

	
An amount sufficient to provide the Beneficiary with funds to pay the next mortgage insurance premium if this instrument and the note secured hereby are insured, or a monthly service charge, if they are held by the Secretary of Housing and Urban Development, as follows:

	
(29)  

	
If and so long as said note of even date and this instrument are insured or are reinsured under the provisions of the National Housing Act, an amount sufficient to accumulate in the hands of the Beneficiary one month prior to its due date the annual mortgage insurance premium, in order to provide such Beneficiary with funds to pay such premium to the Secretary of Housing and Urban Development, pursuant to the National Housing Act, as amended, and applicable Regulations thereunder, or

 (II)           Beginning with the first day of the month following an assignment of this instrument and the note secured hereby to the Secretary of Housing and Urban Development, a monthly service charge which shall be an amount equal to one-twelfth of forty-five hundredths percent (1/12 of 0.45%) of the average outstanding principal balance due on the note computed for each successive year beginning with the first of the month following such assignment, without taking into account delinquencies or prepayments.

(b)           A sum equal to the ground rents, if any, next due, plus the premiums that will next become due and payable on policies of fire and other property insurance covering the premises covered hereby, plus water rates, taxes and assessments next due on the premises covered hereby (all as estimated by the Beneficiary) less all sums already paid therefor divided by the number of months to elapse before one month prior to the date when such ground rents, premiums, water rates, taxes and assessments will become delinquent, such sums to be held by Beneficiary in trust to pay said ground rents, premiums, water rates, taxes, and special assessments.

I           All payments mentioned in the two preceding subsections of this paragraph and all payments to be made under the note secured hereby shall be added together and the aggregate

  

  

  

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amount thereof shall be paid each month in a single payment to be applied by Beneficiary to the following items in the order set forth:

	
(29)  

	
premium charges under the Contract of Insurance with the Secretary of Housing and Urban Development, acting by and through the Federal Housing Commissioner or service charge;

(II)           ground rents, taxes, special assessments, water rates, fire and other  property insurance premiums;

(III)           interest on the note secured hereby;

(IV)           amortization of the principal of said note.

     10.                      Any excess funds accumulated under paragraph (b) above remaining after payment of the items therein mentioned, shall be credited to subsequent monthly payments of the same nature required thereunder; but if any such item shall exceed the estimate therefor, the Trustor shall without demand forthwith make good the deficiency.  Failure to do so before the due date of such item shall be a default hereunder.  In case of termination of the Contract of Mortgage Insurance by prepayment of the mortgage in full, or otherwise (except as hereinafter provided) accumulations under paragraph (a) above not required to meet payments due under the Contract of Mortgage Insurance, shall be credited to the Trustor.  If the property is sold under foreclosure or is otherwise acquired by the Beneficiary after default any remaining balance of the accumulations under paragraph (b) above shall be credited to the principal of the debt as of the date of commencement of foreclosure proceedings or as of the date the property is otherwise acquired; and accumulations under paragraph (a) above shall be similarly applied unless required to pay sums due to the Secretary of Housing and Urban Development, acting by and through the Federal Housing Commissioner under the Contract of Mortgage Insurance;

     11.                      To keep said property in good condition and repair, not to remove or demolish any buildings thereon; to complete or restore promptly and in good and workmanlike manner any building which may be constructed, damaged, or destroyed thereon and to pay when due all claims for labor performed and materials furnished therefor; to comply with all laws affecting said property or requiring any alterations or improvements to be made thereon; not to commit or permit waste thereof; not to commit, suffer or permit any act upon said property in violation of law and/or covenants, conditions and/or restrictions affecting said property; not to permit or suffer any alterations of or addition to the buildings or improvements hereafter constructed in or upon said property without the consent of the Beneficiary.

     12.                      To appear in and defend any action or proceeding purporting to affect the security hereof or the rights or powers of Beneficiary or Trustee, and to pay all costs and expenses, including cost of evidence of title and attorney’s fees in a reasonable sum, in any such action or proceeding in which Beneficiary or Trustee may appear;

     13.                      Should Trustor fail to make any payment or do any act as herein provided, then Beneficiary or Trustee, but without obligation so to do and without notice to or demand upon Trustor and without releasing Trustor from any obligation hereof, may make or do the same in such manner and to such extent as either may deem necessary to protect the security hereof, Beneficiary or Trustee being authorized to enter upon said property for such purposes; may commence, appear in and/or defend any action or proceeding purporting to affect the security hereof or the rights or powers of Beneficiary or Trustee; may pay, purchase, contest, or compromise any encumbrance, charge, or lien which in the judgment of either appears to be prior or superior hereto; and, in exercising any such powers, may pay necessary expenses, employ counsel and pay his reasonable fees;

     14.                      The Beneficiary shall have the right to pay mortgage insurance premiums or fire and other property insurance premiums when due to the extent that monthly payments made hereunder for

  

  

  

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the purpose of meeting same are insufficient.  All such payments made by the Beneficiary shall be added to the principal sum secured hereby;

     15.                      To pay immediately and without demand all sums so expended by Beneficiary or Trustee, under permission given under this Deed of Trust, with interest from date of expenditure at the rate specified in said note;

     16.                      That the funds to be advanced hereunder are to be used in the construction of certain improvements on the lands herein described in accordance with a certain building loan agreement made by and between the Trustor and the Beneficiary dated of even date herewith which said building loan agreement (except such part or parts thereof as may be inconsistent herewith) is incorporated herein by reference to the same extent and effect as if fully set forth herein, and made a part of this Deed of Trust; and on the failure of the Trustor to keep and perform all the covenants, conditions, and agreements of said building loan agreement, thereupon, the principal sum and all arrears of interest, and other charges provided for herein shall at the option of the Beneficiary of this Deed of Trust become due and payable, anything contained herein to the contrary notwithstanding.  This covenant shall be terminated upon the completion of the building or buildings to the satisfaction of the Beneficiary and the making of the final advance as provided in said building loan agreement;

     17.                      The Trustor further covenants that it will not voluntarily create, suffer, or permit to be created against the property subject to this Deed of Trust any lien or liens inferior or superior to the lien of this Deed of Trust and further that it will keep and maintain the same free from the claim of all persons supplying labor or materials which will enter into the construction of any and all buildings now being erected or to be erected on said premises;

     18.                      That the improvements about to be made upon the premises, covered by the Deed of Trust, and all plans and specifications comply with all municipal ordinances and regulations and all of other regulations made or promulgated, now or hereafter, by lawful authority, and that the same will upon completion comply with all such municipal ordinances and regulations and with the rules of the applicable fire rating or inspection organization, bureau, association or office;

     19.                      That so long as this Deed of Trust and the said note secured hereby are insured under the provisions of the National Housing Act, or held by the Secretary of Housing and Urban Development, it will not execute or file for record any instrument which imposes a restriction upon the sale or occupancy of the mortgaged property on the basis of race, color, or creed.

IT IS MUTUALLY AGREED THAT:

     20.                      That if the construction of the improvements herein referred to shall not be carried on with reasonable diligence, or shall be discontinued at any time for any reason other than strikes or lockouts, the Beneficiary, after due notice to the Trustor or any subsequent owner, is hereby invested with full and complete authority to enter upon the said premises, employ watchmen to protect such improvements from depredation or injury and to preserve and protect the personal property therein, and to continue any and all outstanding contracts for the erection and completion of said building or buildings, to make and enter into any contracts and obligations wherever necessary, either in its own name or in the name of the Trustor, and to pay and discharge all debts, obligations and liabilities incurred thereby.  All such sums so advanced by the Beneficiary (exclusive of advances of the principal of the indebtedness secured hereby) shall be added to the principal of the indebtedness secured hereby and shall be secured by this Deed of Trust and shall be due and payable on demand with interest at the rate specified in said note, but no such advances shall be insured unless same are specifically approved by the Secretary of Housing and Urban Development, acting by and through the Federal Housing Commissioner prior to the making thereof;

     21.                      Upon default by Trustor in making any monthly payment provided for herein or in the note secured hereby, and if such default is not made good prior to the due date of the next such installment, or if Trustor shall fail to perform any covenant or agreement in this Deed of Trust,

  

  

  

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the Beneficiary may declare all sums secured hereby immediately due and payable by delivery to Trustee of written declaration of default and demand for sale, and of written notice of default and of election to cause the property to be sold, which notice Trustee shall cause to be duly filed for record and the Beneficiary may foreclose this Deed of Trust.  Beneficiary shall also deposit with Trustee this Deed, the note and all documents evidencing expenditures secured hereby;

     22.                      After Trustee shall have published, posted, recorded and mailed Notice of Sale as then required by law, Trustee, without demand on Trustor, shall sell said property at the time and place fixed by it in said notice of sale, either as a whole or in separate parcels, and in such order as it may determine at public auction to the highest bidder for cash in lawful money of the United States, payable at time of sale.  Trustee may postpone sale of all or any portion of said property by public announcement at the time and place of sale, and from time to time thereafter may postpone the sale by public announcement at the time fixed by the preceding postponement.  Trustee shall deliver to the purchaser its Deed conveying the property so sold, but without any covenant or warranty, express or implied.  Any person, including Trustor, Trustee, or Beneficiary, may purchase at the sale.  The Trustee shall apply the proceeds of sale to payment of (1) the expenses of such sale, together with the reasonable expenses of this trust including therein reasonable Trustee’s fees or attorney’s fees for conducting the sale, and the actual cost of publishing, recording, mailing and posting notice of the sale; (2) the cost of any search and/or other evidence of title procured in connection with such sale and revenue stamps on Trustees’ Deed; (3) all sums expended under the terms hereof, not then repaid, with accrued interest at the rate specified in said note; (4) all other sums then secured hereby; and (5) the remainder, if any, to the person or persons legally entitled thereto;

     23.                      Beneficiary may from time to time substitute a successor or successors to any Trustee named herein or acting hereunder to execute this Trust.  Upon such appointment, and without conveyance to the successor trustee, the latter shall be vested with all title, powers, and duties conferred upon any Trustee herein named or acting hereunder.  Each said appointment and substitution shall be made by written notice thereof executed by Beneficiary, containing reference to this Deed, the original parties thereto, the pertinent recording information, and its place of record.  Such substitution shall become effective upon the mailing of copies of said notice by registered or certified mail, postage prepaid, to the Trustor, the Trustee and successor Trustee, and upon the recordation of said notice in the office of the county recorder of the county in which the trust property is situated.

     24.                      The pleading of any statute of limitations as a defense to any and all obligations secured by this Deed is hereby waived to the full extent permissible by law;

     25.                      Upon written request of Beneficiary stating that all sums secured hereby have been paid, and upon surrender of this Deed of Trust and said note to Trustee for cancellation and retention and upon payment of its fees, Trustee shall reconvey, without warranty, the property then held hereunder.  The recitals in such reconveyance of any matters or fact shall be conclusive proof of the truthfulness thereof.  The grantee in such reconveyance may be described as “the person or persons legally entitled thereto;”

     26.                      The trust created hereby is irrevocable by Trustor;

     27.                      This Deed of Trust applies to, inures to the benefit of, and binds all parties hereto, their heirs, legatees, devisees, administrators, executors, successors, and assigns.  The term “Beneficiary” shall include not only the original Beneficiary hereunder but also any future owner and holder including pledges, of the note secured hereby in this Deed, whenever the context so requires, the masculine gender includes the feminine and/or neuter, and the singular number includes the plural.  All obligations of each Trustor hereunder are joint and several;

     28.                      Trustee accepts this Trust when this Deed of Trust, duly executed and acknowledged, is made public record as provided by law.  Except as otherwise provided by law the Trustee is not obligated to notify any party hereto of pending sale under this Deed of Trust or of any action of proceeding in which Trustor, Beneficiary, or Trustee shall be a party unless brought by Trustee;

  

  

  

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     29.                      The Undersigned TRUSTOR REQUESTS that a copy of any notice of sale hereunder be mailed to him at the mailing address opposite his name hereto.

Mailing Address for Notices

Emerichip Phoenix LLC

3131 Elliott Ave., Suite 500

Seattle, WA 98121

Attention: Eric Mendelsohn

      30.                      Notwithstanding any other provision contained herein or in the Note, it is agreed that the execution of the Note shall impose no personal liability upon the Mortgagor nor any of its present or future members or managers for payment of the indebtedness evidenced thereby and in the event of a default, the holder of the Note shall look solely to the "Collateral" (defined below) in satisfaction of the indebtedness evidenced by the Note and will not seek or obtain any deficiency or personal judgment against the Mortgagor except such judgment or decree as may be necessary to foreclose and/or bar its interest in the Collateral, provided, that nothing in this condition and no action so taken shall operate to impair any obligation of the Mortgagor under the Regulatory Agreement herein referred to and made a part hereof.  As used herein, "Collateral" shall mean and include (i) the property subject to this Deed of Trust and to the rents, issues and profits thereof; (ii) the tangible and intangible property described in any and all security agreements (whether executed by the Mortgagor, any lessee or operator of the property or any portion thereof, or any other party) which now or hereafter secure the Note and the proceeds and products thereof; (iii) any and all escrows and reserves now or hereafter required by the Mortgagee and/or the Secretary of Housing and Urban Development in connection with the property subject to this Deed of Trust (including, to the extent applicable, replacement reserves accounts, residual receipts accounts, escrows for insurance premiums, mortgage insurance premiums, ground rents, taxes, assessments, utility charges and other impositions, and escrows for working capital, operating deficits, repairs, latent defects, and offsite improvements); and (iv) any and all property now or hereafter mortgaged, pledged, conveyed or assigned to secure payment of the Note and the rents, issues, profits, proceeds and products thereof.

[Signatures appear on following page]

  

  

  

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IN WITNESS WHEREOF the Trustor has caused its name to be hereunto subscribed by its duly authorized its Senior Vice President as of the day and year herein first above written.

EMERICHIP PHOENIX LLC

a Delaware limited liability company

By:  /s/ Eric Mendelsohn____________

                                                                   Eric Mendelsohn

                                                                   Senior VP Corporate Development

ACKNOWLEDGMENT

STATE OF _Washington______________                                                                                     ]

] ss:

COUNTY OF __King____________                                                                           ]

The foregoing instrument was acknowledged before me this October 18th, 2012, by Eric Mendelsohn, as Senior VP Corporate Development of Emerichip Phoenix LLC, on behalf of said corporation.

IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official the day and year in this Certificate first above written.

_/s/ Melanie Pennington_______________

                                                                                                                Melanie Pennington

Notary Public

My Commission Expires: __7.9.15_______________________Unassociated Document

Exhibit 10.1

 

EXECUTION COPY

 

VOTING AGREEMENT

 

VOTING AGREEMENT, dated as of March 3, 2013 (this “Agreement”), by and between Platinum Infant Formula Holding Limited, an exempted company incorporated in the Cayman Islands with limited liability (“Parent”), Feihe International, Inc., a Utah corporation (the “Company”), and the shareholders of the Company listed on Schedule A hereto (each, a “Shareholder” and collectively, the “Shareholders”).  Capitalized terms used herein but not defined shall have the meanings given to them in the Merger Agreement (as defined below).

 

RECITALS

 

WHEREAS, concurrently herewith, Diamond Infant Formula Holding Limited, an exempted company with limited liability incorporated under the laws of the Cayman Islands (“Holdco”), Parent, Infant Formula Merger Sub Holding Inc., a Utah corporation and a wholly-owned subsidiary of Parent (“Merger Sub”), and the Company are entering into an Agreement and Plan of Merger (as amended, supplemented or otherwise modified from time to time in accordance with its terms, the “Merger Agreement”), pursuant to which at the effective time under the Merger Agreement (the “Effective Time”), Merger Sub will merge with and into the Company, with the Company continuing as the surviving corporation (the “Merger”);

 

WHEREAS, as of the date hereof, each Shareholder Beneficially Owns the Existing Shares (as defined below);

 

WHEREAS, the Shareholders intend and are obligated to contribute their Securities (as defined below) to Parent immediately prior to the consummation of the Merger pursuant to a contribution agreement entered into in connection with the Merger Agreement dated as of the date hereof (the “Contribution Agreement”); and

 

WHEREAS, as a condition to the willingness of and material inducement to Holdco, Parent, Merger Sub and the Company to enter into the Merger Agreement and to consummate the transactions contemplated thereby, including the Merger, each Shareholder has agreed to enter into this Agreement, pursuant to which such Shareholder is agreeing, among other things, to vote all of the Securities (as hereinafter defined) it Beneficially Owns in accordance with the terms of this Agreement.

 

AGREEMENT

 

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

 

Section 1.   Certain Definitions.  For purposes of this Agreement:

 

  

  

  

 

 

(a)         “Beneficially Own” or “Beneficial Ownership” with respect to any securities means having “beneficial ownership” of such securities as determined pursuant to Rule 13d-3 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”).

 

(b)         “Company Shares” means the shares of common stock, par value $0.001 per share, of the Company.

 

(c)         “Existing Shares” means the Company Shares as set forth opposite such Shareholder’s name on Schedule A hereto.  In the event of a stock dividend or distribution, or any change in the Company Shares by reason of any stock dividend, split-up, recapitalization, combination, exchange of shares or the like other than pursuant to the Merger, the term “Existing Shares” will be deemed to refer to and include all such stock dividends and distributions and any shares into which or for which any or all of the Existing Shares may be changed or exchanged as well as the Existing Shares that remain.

 

(d)         “Securities” means the Existing Shares together with any Company Shares and other voting securities of the Company which the Shareholder acquires Beneficial Ownership of after the date hereof and prior to the termination of this Agreement whether upon the exercise of options, warrants or rights, the conversion or exchange of convertible or exchangeable securities, or by means of purchase, dividend, distribution, split-up, recapitalization, combination, exchange of shares or the like, gift, bequest, inheritance or as a successor in interest in any capacity or otherwise.

 

Section 2.   Representations and Warranties of Shareholders.  Each Shareholder, severally and not jointly, hereby represents and warrants to Parent and the Company as follows:

 

(a)         Ownership of Company Shares.  As of the date hereof and at all times prior to the termination of this Agreement, such Shareholder Beneficially Owns and has good and valid title to (and will Beneficially Own unless any Existing Shares are Transferred pursuant to Section 7(a) hereof, and have good and valid title to) a number of Company Shares no less than the Existing Shares set forth opposite such Shareholder’s name on Schedule A.  Such Shareholder has and will have at all times through the termination of this Agreement sole voting power, sole power of disposition, sole power to issue instructions with respect to the matters set forth in Section 7 hereof, and sole power to agree to all of the matters set forth in this Agreement, in each case with respect to the Existing Shares set forth opposite such Shareholder’s name on Schedule A and any other Securities, with no limitations, qualifications or restrictions on such power, subject to applicable securities Laws and the terms of this Agreement.  As of the date hereof, neither such Shareholder nor any of his Affiliates Beneficially Owns any Securities other than the Existing Shares set forth opposite such Shareholder’s name on Schedule A.  None of the Existing Shares of such Shareholder is the subject of any commitment, undertaking or agreement, contingent or otherwise, the terms of which relate to or could give rise to the Transfer of any Existing Shares or would affect in any way the ability of such Shareholder to perform its, his or her obligations as set out in this Agreement.  Such Shareholder has not appointed or granted any proxy inconsistent with this Agreement with respect to the Securities.

 

(b)         Authority.  Such Shareholder has the requisite power to agree to all of the matters set forth in this Agreement with respect to the Securities he Beneficially Owns and the 

 

  

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full authority to vote, Transfer and hold all the Securities he Beneficially Owns, with no limitations, qualifications or restrictions on such power, subject to applicable securities Laws and the terms of this Agreement.

 

(c)         Power; Binding Agreement.  Such Shareholder has the legal capacity and authority to enter into this Agreement and to perform all of his obligations under this Agreement.  This Agreement has been duly and validly executed and delivered by such Shareholder and, assuming the due authorization, execution and delivery by Parent and the Company, constitutes a valid and binding obligation of such Shareholder, enforceable against such Shareholder in accordance with its terms, subject to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and similar Laws of general applicability relating to or affecting creditors’ rights and to general principles of equity.

 

(d)         No Conflicts.  None of the execution and delivery of this Agreement by such Shareholder, the consummation by such Shareholder of any of the transactions contemplated hereby or compliance by such Shareholder with any of the provisions hereof (i) violates any Law applicable to such Shareholder or any of such Shareholder’s properties or assets, (ii) results in or constitutes (with or without notice or lapse of time or both) any breach of or default under, or result in the creation of any lien or encumbrance or restriction on, such Shareholder or any of the Securities of such Shareholder, including pursuant to, any note, bond, mortgage, indenture, contract, agreement, lease, license, permit, franchise or other instrument or obligation to which such Shareholder is a party or by which the Securities of such Shareholder is bound or (iii) except for the requirements of the Exchange Act, requires any filing with, or permit, authorization, consent or approval of, any Governmental Authority.  There is no beneficiary, trustee or holder of a voting trust certificate or other interest in such Shareholder whose consent is required for the execution and delivery of this Agreement of the performance by such Shareholder of the obligations hereunder.

 

(e)         No Encumbrance.  The Existing Shares are free and clear of Liens other than as created by this Agreement, the Contribution Agreement and the Consortium Agreement dated as of October 3, 2012 by and between Mr. You-Bin Leng and MSPEA IMF Holding Limited .

 

(f)         No Litigation.  Except for any shareholder litigation in connection with the Merger, there is no action, suit, investigation, complaint or other proceeding pending or, to the knowledge of such Shareholder, threatened against such Shareholder or the Securities of such Shareholder at Law or in equity before or by any Governmental Authority or any other person that could reasonably be expected to impair the ability of such Shareholder to perform his obligations under this Agreement on a timely basis.

 

(g)         Reliance.  Such Shareholder understands and acknowledges that Parent and the Company are entering into the Merger Agreement in reliance upon such Shareholder’s execution and delivery of this Agreement and the representations and warranties of such Shareholder contained herein.

 

Section 3.            Representations and Warranties of the Parent. Parent hereby represents and warrants to each Shareholder and the Company that:

 

  

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(a)         Power; Binding Agreement.  Parent has the corporate power and authority to enter into and perform all of its obligations under this Agreement.  This Agreement has been duly and validly executed and delivered by Parent and, assuming the due authorization, execution and delivery by the Shareholders and the Company, constitutes a valid and binding obligation of Parent, enforceable against Parent in accordance with its terms, subject to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and similar Laws of general applicability relating to or affecting creditors’ rights and to general principles of equity.

 

(b)         No Conflicts.  None of the execution and delivery of this Agreement by Parent, the consummation by Parent of any of the transactions contemplated hereby or compliance by Parent with any of the provisions hereof (i) conflicts with, or results in any breach of, any provision of the articles of association of Parent, (ii) violates any order, writ, injunction, decree, judgment, law, statute, rule or regulation applicable to Parent, any of its subsidiaries or any of their respective properties or assets or (iii) except for the requirements of the Exchange Act, requires any filing with, or permit, authorization, consent or approval of, any Governmental Authority.

 

Section 4.   Representations and Warranties of the Company. The Company hereby represents and warrants to each Shareholder and Parent that:

 

(a)         Power; Binding Agreement.  The Company has the corporate power and authority to enter into and perform all of its obligations under this Agreement.  This Agreement has been duly and validly executed and delivered by the Company and, assuming the due authorization, execution and delivery by the Shareholders and Parent, constitutes a valid and binding obligation of the Company, enforceable against the Company in accordance with its terms, subject to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and similar Laws of general applicability relating to or affecting creditors’ rights and to general principles of equity.

 

(b)         No Conflicts.  None of the execution and delivery of this Agreement by the Company, the consummation by the Company of any of the transactions contemplated hereby or compliance by the Company with any of the provisions hereof (i) conflicts with, or results in any breach of, any provision of the articles of association of the Company, (ii) violates any order, writ, injunction, decree, judgment, law, statute, rule or regulation applicable to the Company, any of its subsidiaries or any of their respective properties or assets or (iii) except for the requirements of the Exchange Act, requires any filing with, or permit, authorization, consent or approval of, any Governmental Authority.

 

Section 5.   Disclosure.  Unless required by Law or legal process, each Shareholder shall not, and shall cause his Affiliates and Representatives not to, make any press release, public announcement or other public communication that criticizes or disparages this Agreement or the Merger Agreement or the transactions contemplated hereby or thereby, without the prior written consent of Parent and the Company.  Each Shareholder (a) consents to and authorizes the publication and disclosure by Parent and the Company of such Shareholder’s identity and ownership of the Securities and the existence and terms of this Agreement (including, for the avoidance of doubt, the disclosure of this Agreement) and any other information, in each case, that Parent or the Company reasonably determines in its good faith judgment is required to be 

 

  

4

  

 

disclosed by Law (including the rules and regulations of the SEC) in any press release, any Current Report on Form 8-K, the Proxy Statement, the Schedule 13E-3 and any other disclosure document in connection with the Merger Agreement and any filings with or notices to any Governmental Authority in connection with the Merger Agreement (or the transactions contemplated thereby) and (b) agrees promptly to provide to Parent and the Company any information it may reasonable request for the preparation of any such documents.

 

Section 6.   Additional Securities.  Each Shareholder hereby agrees that, during the period commencing on the date hereof and continuing until this Agreement is terminated in accordance with its terms, such Shareholder shall promptly (and in any event within twenty-four (24) hours) notify Parent and the Company of the number of any additional Securities acquired by such Shareholder after the date hereof.

 

Section 7.   Transfer and Other Restrictions.  Prior to the termination of this Agreement, each Shareholder hereby irrevocably and unconditionally agrees not to, and to cause each of his Affiliates not to, directly or indirectly:

 

(a)         offer for sale, sell, transfer, tender, pledge, encumber, assign or otherwise dispose of, or enter into any contract, option or other arrangement or understanding with respect to, or consent to the offer for sale, sale, transfer, tender, pledge, encumbrance, assignment or other disposition of, or enter into a loan of (collectively, “Transfer”), any or all of the Securities such Shareholder Beneficially Owns or any interest therein, except (i) pursuant to the Contribution Agreement or the Merger Agreement, or (ii) any Transfer to an Affiliate of such Shareholder, provided that such Affiliate shall have agreed in writing in a form reasonably acceptable to Parent and the Company to be bound by this Agreement;

 

(b)         grant any proxy or power of attorney with respect to any of the Securities he Beneficially Owns, or deposit any of the Securities he Beneficially Owns into a voting trust or enter into a voting agreement or arrangement with respect to any such Securities except as provided in this Agreement; or

 

(c)         take any other action that would prevent or materially impair the Shareholder from performing any of his obligations under this Agreement or that would make any representation or warranty of such Shareholder hereunder untrue or incorrect or have the effect of preventing or materially impairing the performance by the Shareholder of any of his obligations under this Agreement or that is intended, or would reasonably be expected, to impede, frustrate, interfere with, delay, postpone, adversely affect or prevent the consummation of the Merger or the other transactions contemplated by the Merger Agreement or this Agreement or the performance by the Company of its obligations under the Merger Agreement or by any Shareholder of his obligations under this Agreement.

 

Any purported Transfer in violation of this Section 7 shall be null and void.

 

Section 8.             Voting of the Securities.  Except during such time (if any) as a Change of Recommendation has occurred and is continuing, each Shareholder (severally and not jointly) covenants and agrees solely with respect to itself that, during the period commencing on the date hereof and continuing until termination of this Agreement in accordance with its terms:

 

  

5

  

 

(a)         at the Shareholders’ Meeting and any other meeting (whether annual or special and whether or not an adjourned or postponed meeting) of the shareholders of the Company, however called, or in any other circumstances upon which any vote, consent or other approval with respect to the Merger Agreement, the Merger or any other transaction contemplated by the Merger Agreement is sought, each Shareholder shall (solely in its capacity as a beneficial owner of the Securities owned by it) (i) if a meeting is held, appear at such meeting or otherwise cause the Securities it Beneficially Owns to be counted as present thereat for purposes of establishing a quorum and (ii) vote (or cause to be voted) such Securities in favor of the approval and adoption of the Merger Agreement and the approval of other actions contemplated by the Merger Agreement and any actions required in furtherance thereof,

 

(b)         at any meeting (whether annual or special and whether or not an adjourned or postponed meeting) of the shareholders of the Company, however called, or in any other circumstances upon which the Shareholder’s vote, consent or other approval is sought, each Shareholder shall (solely in its capacity as a beneficial owner of the Securities owned by it), to the extent the Securities may vote on the matter in question, vote against the approval of any Alternative Transaction or the approval of any other action contemplated by an Alternative Transaction.

 

Notwithstanding anything to the contrary herein, this Section 8 shall not limit or restrict any Shareholder who serves as a member of the board of directors of the Company in action in his or her capacity as a director of the Company and exercising his or her fiduciary duties and responsibilities.

 

Section 9.             Grant of Proxy.  In the event and only in the event of a breach or threatened breach by a Shareholder of its obligations under Section 8, such breaching Shareholder or such Shareholder threatening to breach hereby irrevocably grants to Parent (and any designee of Parent) a proxy (and appoints Parent or any such designee of Parent as its attorney-in-fact, with full power of substitution) to vote or grant a consent or approval with respect to all of the Securities Beneficially Owned by it, for and in the name, place and stead of such Shareholder, for each of the matters set forth in Section 8.  Each Shareholder hereby affirms that the irrevocable proxy set forth in this Section 9 is given in connection with the execution of the Merger Agreement, and that such irrevocable proxy is given to secure the performance of the duties of such Shareholder under this Agreement. Each Shareholder hereby further affirms that the irrevocable proxy is coupled with an interest, may under no circumstances be revoked and shall survive the death, dissolution, bankruptcy or other incapacity of such Shareholder. The irrevocable proxy granted hereunder shall automatically terminate upon the termination of this Agreement.

 

Section 10.           Termination.  This Agreement shall terminate on the earlier to occur of: (a) termination of the Merger Agreement in accordance with its terms and (b) the Effective Time; provided, that the provisions set forth in Section 5 and Section 10 shall survive the termination of this Agreement; provided, further, that any liability incurred by any party hereto as a result of a breach of a term or condition of this Agreement prior to such termination shall survive the termination of this Agreement.

 

Section 11.           Miscellaneous.

 

  

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(a)         Entire Agreement.  This Agreement (together with the Merger Agreement and the Contribution Agreement) constitutes the entire agreement among the parties hereto with respect to the subject matter hereof, and supersedes all other prior agreements and understandings, both written and oral, among the parties, with respect to the subject matter hereof.

 

(b)         Assignment; Successors.  Neither this Agreement nor any of the rights, interests or obligations under this Agreement may be assigned or delegated, in whole or in part, by operation of Law or otherwise, by any party without the prior written consent of the other parties, and any such assignment without such prior written consent shall be null and void.  Subject to the preceding sentence, this Agreement will be binding upon, inure to the benefit of, and be enforceable by, the parties and their respective successors and permitted assigns.

 

(c)         Amendment; Modification and Waiver.  This Agreement may not be amended, altered, supplemented or otherwise modified except upon the execution and delivery of a written agreement executed by each party hereto.

 

(d)         Interpretation.  When a reference is made in this Agreement to sections or subsections, such reference shall be to a section or subsection of this Agreement unless otherwise indicated.  The headings contained in this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement.  Whenever the words “include,” “includes” or “including” are used in this Agreement, they shall be deemed to be followed by the words “without limitation.”  The words “herein,” “hereof,” “hereunder” and words of similar import shall be deemed to refer to this Agreement as a whole, including any schedules and exhibits hereto, and not to any particular provision of this Agreement.  Any pronoun shall include the corresponding masculine, feminine and neuter forms.  References to “party” or “parties” in this Agreement mean each Shareholder, Parent and the Company.

 

(e)         Notices.  All notices and other communications hereunder shall be in writing (in the English language) and shall be deemed duly given (a) on the date of delivery if delivered personally, or if by facsimile, upon written confirmation of receipt by facsimile, (b) on the first Business Day following the date of dispatch if delivered utilizing a next-day service by a recognized next-day courier, or (c) on the earlier of confirmed receipt or the fifth Business Day following the date of mailing if delivered by registered or certified mail, return receipt requested, postage prepaid.  All notices hereunder shall be delivered to the addresses set forth below or pursuant to such other instructions as may be designated in writing by the party to receive such notice:

 

	 	(i)	if to a Shareholder to such Shareholder in accordance with the contact information set forth next to such Shareholder’s name on Schedule A;
	 	 	 
	 	(ii)	if to Parent, to:

 

c/o Intertrust Corporate Services (Company) Limited

87 Mary Street

Georgetown, Grand Cayman KY1-9005

Cayman Islands

Attention:        Mr. Boris Brady

Facsimile:        +1 345 945 4757

 

  

7

  

 

	 	with a copy (which shall not constitute notice) to:
	 	 	 
	 	
Skadden, Arps, Slate, Meagher & Flom LLP

30th Floor, China World Office 2

1 Jianguomenwai Avenue

Beijing 100004, PRC

	 	Attention: 	Michael Gisser / Peter X. Huang
	 	Facsimile:	+86 10 6535 5577
	 	E-mail:	Michael.Gisser@skadden.com
	 	 	Peter.Huang@skadden.com

       

	 	(iii)	if to Company, to:

 

Star City International Building,

10 Jiuxianqiao Road, C-16th Floor

Chaoyang District

Beijing, PRC 100016

 

Attention:        Judy Tu

Facsimile:        + 86 10 6431 1050

 

with a copy (which shall not constitute notice) to:

O’Melveny & Myers LLP

Yin Tai Centre, Office Tower, 37th Floor

No. 2 Jianguomenwai Ave.

Chao Yang District

Beijing 100022

Attention:        David J. Roberts/Paul Scrivano

Facsimile:        +86 10 6563 4201

 

(f)          Severability.  Whenever possible, each provision or portion of any provision of this Agreement shall be interpreted in such manner as to be effective and valid under applicable Law, but if any provision or portion of any provision of this Agreement is held to be invalid, illegal or unenforceable in any respect under any applicable Law or rule in any jurisdiction, such invalidity, illegality or unenforceability shall not affect any other provision or portion of any provision in such jurisdiction, and this Agreement shall be reformed, construed and enforced in such jurisdiction as if such invalid, illegal or unenforceable provision or portion of any provision had never been contained herein.

 

  

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(g)         Other Remedies; Specific Performance.  Except as otherwise provided herein, any and all remedies herein expressly conferred upon a party will be deemed cumulative with and not exclusive of any other remedy conferred hereby, or by Law or equity upon such party, and the exercise by a party of any one remedy will not preclude the exercise of any other remedy.  No failure or delay on the part of any party hereto in the exercise of any right hereunder will impair such right or be construed to be a waiver of, or acquiescence in, any breach of any representation, warranty or agreement herein, nor will any single or partial exercise of any such right preclude other or further exercise thereof or of any other right.  The parties hereto agree that irreparable damage would occur in the event that any of the provisions of this Agreement were not performed in accordance with their specific terms or were otherwise breached or threatened to be breached.  It is accordingly agreed that each party shall be entitled to seek an injunction or injunctions to prevent breaches or threatened breaches of this Agreement and to enforce specifically the terms and provisions hereof in the federal courts of the United States of America located in New York, this being in addition to any other remedy to which they are entitled at Law or in equity, without the requirement to post bond or other security.

 

(h)         No Survival.  None of the representations, warranties, covenants and agreements made in this Agreement shall survive the termination of the Agreement in accordance with its terms, except for the agreements in Section 5 and this Section 10.

 

(i)         No Third Party Beneficiaries.  Nothing in this Agreement, express or implied, is  intended or shall confer upon any person other than the parties hereto and their respective successors and assigns any legal or equitable right, benefit or remedy of any nature under or by reason of this Agreement.

 

(j)         Governing Law.  This Agreement shall be interpreted, construed and governed by and in in accordance with, the Laws of the State of New York, without regard to the conflicts of laws principles thereof.

 

(k)         Jurisdiction.  Each of the parties irrevocably agrees that any legal action or proceeding arising out of or relating to this Agreement brought by any such party or its Affiliates against any other such party or its Affiliates shall be brought and determined in any federal court located in the Borough of Manhattan of the City of New York, provided, however, that if such federal court does not have jurisdiction over such Action, such Action shall be heard and determined exclusively in any New York state court sitting in the Borough of Manhattan of The City of New York.  Each of the parties hereby irrevocably submits to the jurisdiction of the aforesaid courts for itself and with respect to its property, generally and unconditionally, with regard to any such action or proceeding arising out of or relating to this Agreement and the transactions contemplated hereby.  Each of the parties agrees not to commence or maintain any action, suit or proceeding relating thereto except in the courts described above, other than actions in any court of competent jurisdiction to enforce any judgment, decree or award rendered by any such court in New York as described herein.  Each of the parties further agrees that notice as provided herein shall constitute sufficient service of process and the parties further waive any argument that such service is insufficient.  Each of the parties hereby irrevocably and unconditionally waives, and agrees not to assert, by way of motion or as a defense, counterclaim or otherwise, in any action or proceeding arising out of or relating to this Agreement or the transactions contemplated hereby, (i) any claim that it is not personally subject to the jurisdiction 

 

  

9

  

 

of the courts in New York as described herein for any reason, (ii) that it or its property is exempt or immune from jurisdiction of any such court or from any legal process commenced in such courts (whether through service of notice, attachment prior to judgment, attachment in aid of execution of judgment, execution of judgment or otherwise), and (iii) that (A) the suit, action or proceeding in any such court is brought in an inconvenient forum, (B) the venue of such suit, action or proceeding is improper, or (C) this Agreement, or the subject matter hereof, may not be enforced in or by such courts.

 

(l)          Waiver of Jury Trial.  EACH PARTY TO THIS AGREEMENT HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES ALL RIGHTS TO TRIAL BY JURY IN ANY JUDICIAL PROCEEDING IN ANY WAY ARISING OUT OF, RELATED TO, OR CONNECTED WITH THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.

 

(m)         Counterparts.  This Agreement may be executed in two or more counterparts, and by facsimile or .pdf format, all of which shall be considered one and the same agreement and shall become effective when one or more counterparts have been signed by each of the parties and delivered to the other party, it being understood that all parties need not sign the same counterpart; provided, however, that if any Shareholder fails for any reason to execute, or perform its obligations under, this Agreement, this Agreement shall remain effective as to all parties executing this Agreement.

 

 

 

[Remainder of page intentionally left blank]

 

  

10

  

 

IN WITNESS WHEREOF, the parties hereto have signed or have caused this Agreement to be signed by their respective officers or other authorized persons thereunto duly authorized as of the date first written above.

 

	 	

Platinum Infant Formula Holding Limited

	 	 	 
	 	

By:

	/s/ You-Bin Leng
	 	

Name: You-Bin Leng

	 	

Title: Director

	 	 
	 	

Feihe International, Inc.

	 	 
	 	

By:

	/s/ David Dong
	 	

Name:David Dong

	 	

Title: Director

  

  

  

	  	  	  
	  	/s/ You-Bin Leng
	  	

You-Bin Leng

	 	 
	 	 
	 	

/s/ Sheng-Hui Liu

	 	

Sheng-Hui Liu

	 	 
	 	 
	 	/s/ Hua Liu
	 	

Hua Liu

 

  

  

  

 

Schedule A

	
  Shareholder Name

	 	
Address

Facsimile

	
  Existing Shares

	
  You-Bin Leng

	 	
Star City International Building

10 Jiuxianqiao Road, C-16th Floor

Chaoyang District, Beijing 100016

People’s Republic of China

Facsimile: +(86) 10 6431-9357

	
  7,866,135

	
  Sheng-Hui Liu

	 	
Star City International Building

10 Jiuxianqiao Road, C-16th Floor

Chaoyang District, Beijing 100016

People’s Republic of China

Facsimile: +(86) 10 6431-9357

	
  261,207

	
  Hua Liu

	 	
Star City International Building

10 Jiuxianqiao Road, C-16th Floor

Chaoyang District, Beijing 100016

People’s Republic of China

Facsimile: +(86) 10 6431-9357

	
  51,783

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