Document:

Unassociated Document

Exhibit 10.2

 

EXECUTION COPY

 

CONTRIBUTION AGREEMENT

 

This CONTRIBUTION AGREEMENT (this “Agreement”) is made and entered into as of March 3, 2013 by and among Platinum Infant Formula Holding Limited, an exempted company incorporated in the Cayman Islands with limited liability (“Parent”), Diamond Infant Formula Holding Limited, an exempted company incorporated in the Cayman Islands with limited liability (“Holdco”), Feihe International, Inc., a Utah corporation (the “Company”), and the shareholders of the Company listed on Schedule A (each, a “Rollover Holder” and collectively, the “Rollover Holders”).  Capitalized terms used but not defined herein shall have the meanings ascribed to such terms in the Merger Agreement (defined below).

 

RECITALS

 

WHEREAS, concurrently herewith, Holdco, Parent, Infant Formula Merger Sub Holding Inc., a Utah corporation and wholly-owned subsidiary of Parent (“Merger Sub”), and the Company are entering into an Agreement and Plan of Merger (as may be amended, supplemented or otherwise modified from time to time, the “Merger Agreement”), pursuant to which Merger Sub will merge with and into the Company, with the Company continuing as the surviving corporation (the “Merger”);

 

WHEREAS, each Rollover Holder is the “beneficial owner” (within the meaning of Rule 13d-3 under the Exchange Act) of such shares of common stock, par value $0.001 per share, of the Company (the “Shares”) as set forth opposite such Rollover Holder’s name on Schedule A (with respect to each Rollover Holder, the “Rollover Shares”);

 

WHEREAS, in connection with the consummation of the transactions contemplated by the Merger Agreement, the Rollover Holders each desire to contribute their respective Rollover Shares to Parent in exchange for newly issued ordinary shares of Holdco (the “Holdco Shares”);

 

WHEREAS, in order to induce Holdco, Parent, the Company and Merger Sub to enter into the Merger Agreement and consummate the transactions contemplated thereby, including the Merger, the Rollover Holders are entering into this Agreement; and

 

WHEREAS, the Rollover Holders acknowledge that Holdco, Parent, the Company and Merger Sub are entering into the Merger Agreement in reliance on the representations, warranties, covenants and other agreements of the Rollover Holders set forth in 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, Holdco, Parent, the Company and the Rollover Holders hereby agree as follows:

 

1.   Contribution of Rollover Shares. Subject to the terms and conditions set forth herein, immediately prior to the Closing and without further action by the Rollover Holders, all of each Rollover Holder’s right, title and interest in and to the Rollover Shares shall be contributed, assigned, transferred and delivered to Parent.

 

2.   Issuance of Holdco Shares. As consideration for the indirect benefit received by Holdco as a result of the contribution, assignment, transfer and delivery of the Rollover Shares to Parent, a wholly-owned Subsidiary of Holdco, pursuant to Section 1, Holdco shall issue Holdco Shares in the name of each Rollover Holder (or, if designated by such Rollover Holder in writing, in the name of an Affiliate of such Rollover Holder) in the amount set forth opposite such Rollover Holder’s name on Schedule A and the parties hereto acknowledge and agree that the value of such Holdco Shares issued to each Rollover Holder is equal to (x) the total number of the Rollover Shares contributed by such Rollover Holder multiplied by (y) the Merger Consideration under the Merger Agreement.  Each Rollover Holder hereby acknowledges and agrees that (i) delivery of such Holdco Shares shall constitute complete satisfaction of all obligations towards or sums due to such Rollover Holder by Parent and Holdco with respect to the applicable Rollover Shares, and (ii) on receipt of such Holdco Shares, such Rollover Holder shall have no right to any Merger Consideration with respect to the Rollover Shares contributed to Parent by such Rollover Holder. Notwithstanding the foregoing, the Rollover Shares set forth opposite each such Rollover Holder’s name on Schedule A shall be deemed to include Shares issuable up on the exercise of the Company Options only if such Rollover Holder pays or causes to be paid to the Company at or prior to the Contribution Closing the Exercise Price for each Company Option included in the Rollover Shares; provided, that if such Rollover Holder fails to pay such amount to the Company at or prior to the Contribution Closing, such Rollover Holder’s Rollover Shares shall include only those Shares that are validly issued, fully paid and non-assessable, and each such Company Option shall be cancelled in accordance with Section 2.02 of the Merger Agreement.

 

3.   Closing. Subject to the satisfaction in full (or waiver) of all of the conditions set forth in Article VII of the Merger Agreement (other than conditions that by their nature are to be satisfied at the Closing, but subject to the satisfaction of such conditions at the Closing), the closing of the contribution and exchange contemplated hereby (the “Contribution Closing”) shall take place immediately prior to the Closing.  No later than three (3) Business Days prior to the Contribution Closing, the Rollover Holders and any agent of the Rollover Holders holding certificates evidencing any Rollover Shares (including, without limitation, any broker holding securities in “street name”) shall deliver or cause to be delivered to Parent all certificates representing Rollover Shares in such persons’ possession, (i) duly endorsed for transfer or (ii) with

 

  

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duly executed stock powers, sufficient to transfer such Shares to Parent, for disposition in accordance with the terms of this Agreement (the “Share Documents”). The Share Documents shall be held in escrow by Parent or any agent authorized by Parent until the Contribution Closing.

 

4.   Irrevocable Election. 

 

(a)   The execution of this Agreement by the Rollover Holders evidences, subject to Section 8 and the proviso in Section 22, the irrevocable election and agreement by the Rollover Holders to contribute their respective Rollover Shares in exchange for Holdco Shares at the Contribution Closing on the terms and conditions set forth herein.  In furtherance of the foregoing, each Rollover Holder covenants and agrees, severally and not jointly, that from the date hereof until any termination of this Agreement pursuant to Section 8, such Rollover Holder shall not, directly or indirectly, (i) tender any Rollover Shares into any tender or exchange offer, (ii) sell (constructively or otherwise), transfer, pledge, hypothecate, grant, encumber, assign or otherwise dispose of (collectively, “Transfer”), or enter into any contract, option or other arrangement or understanding with respect to the Transfer of any Rollover Shares or any right, title or interest thereto or therein (including by operation of Law), except (x) pursuant to this Agreement or the Merger Agreement, or (y) any Transfer to an Affiliate of such Rollover Holder, 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, (iii) deposit any Rollover Shares into a voting trust or grant any proxy or power of attorney or enter into a voting agreement (other than that certain Voting Agreement of even date herewith by and among Parent, the Company and the Rollover Holders (the “Voting Agreement”)) with respect to any Rollover Shares, (iv) knowingly take any action that would make any representation or warranty of such Rollover Holder set forth in this Agreement untrue or incorrect or have the effect of preventing, disabling, or delaying such Rollover Holder from performing any of his, her, or its obligations under this Agreement, or (v) agree (whether or not in writing) to take any of the actions referred to in the foregoing clauses (i) through (iv).  Any purported Transfer in violation of this paragraph shall be void.

 

(b)   Each Rollover Holder covenants and agrees, severally and not jointly, that such Rollover Holder shall promptly (and in any event within 24 hours) notify Parent and the Company of any new Shares with respect to which beneficial ownership (within the meaning of Rule 13d-3 of the Exchange Act) is acquired by such Rollover Holder, including, without limitation, by purchase, as a result of a stock dividend, stock split, recapitalization, combination, reclassification, exchange or change of such shares, or upon exercise or conversion of any securities of the Company, if any, after the date hereof.  Any such Shares shall automatically become subject to the terms of this Agreement, and Schedule A shall be deemed amended accordingly.

 

5.   Representations and Warranties of the Rollover Holders. To induce Parent to accept the Rollover Shares, and Holdco to issue the Holdco Shares, and the Company to enter into the Merger Agreement, each Rollover Holder makes the following representations and warranties, severally and not jointly, to Parent , Holdco and the 

 

  

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Company, each and all of which shall be true and correct as of the date of this Agreement and as of the Contribution Closing, and shall survive the execution and delivery of this Agreement:

 

(a)   Ownership of Shares.  Such Rollover Holder is the beneficial owner of, and has good and valid title to, the Rollover Shares, free and clear of Liens other than as created by this Agreement, the Voting Agreement and the Consortium Agreement dated as of October 3, 2012 by and between Mr. You-Bin Leng and MSPEA IMF Holding Limited (the “Consortium Agreement”).  Such Rollover Holder has sole voting power, sole power of disposition, sole power to demand dissenter’s rights (if applicable) and sole power to agree to all of the matters set forth in this Agreement, in each case with respect to all of the Rollover Shares, with no limitations, qualifications, or restrictions on such rights, subject to applicable United States federal securities Laws, Laws of the State of Utah, Laws of the People’s Republic of China and the terms of this Agreement and the Voting Agreement.  As of the date hereof, other than the Rollover Shares, such Rollover Holder does not own, beneficially or of record, any Shares, securities of the Company, or any direct or indirect interest in any such securities (including by way of derivative securities).  The Rollover Shares are not subject to any voting trust agreement or other Contract to which such Rollover Holder is a party restricting or otherwise relating to the voting or Transfer of the Rollover Shares other than this Agreement, the Voting Agreement and the Consortium Agreement.  Such Rollover Holder has not appointed or granted any proxy or power of attorney that is still in effect with respect to any Rollover Shares, except as contemplated by this Agreement or the Voting Agreement.

 

(b)   Organization, Standing and Authority.  Each such Rollover Holder has full legal power and capacity to execute and deliver this Agreement and to perform such Rollover Holder’s obligations hereunder.  This Agreement has been duly and validly executed and delivered by such Rollover Holder and, assuming due authorization, execution and delivery by Parent,  Holdco and the Company, constitutes a legal, valid and binding obligation of such Rollover Holder, enforceable against such Rollover Holder in accordance with its terms, except as enforcement may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar Laws affecting creditors’ rights generally and by general principles of equity (regardless of whether considered in a proceeding in equity or at Law).  If such Rollover Holder is married, and any of the Rollover Shares of such Rollover Holder constitute community property or otherwise need spousal or other approval for this Agreement to be legal, valid and binding, this Agreement has been duly and validly executed and delivered by such Rollover Holder’s spouse and, assuming due authorization, execution and delivery by Parent, Holdco and the Company, constitutes a legal, valid and binding obligation of such Rollover Holder’s spouse, enforceable against such Rollover Holder’s spouse in accordance with its terms, except as enforcement may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar Laws affecting creditors’ rights generally and by general principles of equity (regardless of whether considered in a proceeding in equity or at Law).

 

  

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(c)   Consents and Approvals; No Violations.  Except for the applicable requirements of the Exchange Act, (i) no filing with, and no permit, authorization, consent or approval of, any Governmental Authority is necessary on the part of such Rollover Holder for the execution, delivery and performance of this Agreement by such Rollover Holder or the consummation by such Rollover Holder of the transactions contemplated hereby and (ii) neither the execution, delivery or performance of this Agreement by such Rollover Holder nor the consummation by such Rollover Holder of the transactions contemplated hereby, nor compliance by such Rollover Holder with any of the provisions hereof shall (A) require the consent or approval of any other person pursuant to any agreement, obligation or instrument binding on such Rollover Holder or its properties or assets, (B) conflict with or violate any provision of the organizational documents of any such Rollover Holder which is an entity, (C) result in any breach or violation of, or constitute a default (or an event which, with notice or lapse of time or both, would become a default) under, or give to others any rights of termination, amendment, acceleration or cancellation of, or result in the creation of a Lien on property or assets of such Rollover Holder pursuant to any Contract to which such Rollover Holder is a party or by which such Rollover Holder or any property or asset of such Rollover Holder is bound or affected, or (D) violate any order, writ, injunction, decree, statute, rule or regulation applicable to such Rollover Holder or any of such Rollover Holder’s properties or assets.

 

(d)   Litigation.  Except for any shareholder litigation in connection with the Merger, there is no action, suit, investigation, complaint or other proceeding pending against any such Rollover Holder or, to the knowledge of such Rollover Holder, any other person or, to the knowledge of such Rollover Holder, threatened against any Rollover Holder or any other person that restricts or prohibits (or, if successful, would restrict or prohibit) the performance by such Rollover Holder of his obligations under this Agreement.

 

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

 

6.   Representations and Warranties of Parent. To induce the Rollover Holders to contribute the Rollover Shares and to accept the Holdco Shares, Parent makes the following representations and warranties to each Rollover Holder that, each and all of which shall be true and correct as of the date of this Agreement and as of the Contribution Closing, and shall survive the execution and delivery of this Agreement:

 

(a)   Organization, Standing and Authority.  Parent is duly organized, validly existing and in good standing under the Laws of the Cayman Islands and has all requisite power and authority to execute and deliver this Agreement and to perform its obligations hereunder.  This Agreement has been duly and validly executed and delivered by Parent and, assuming due authorization, execution and delivery by Holdco, the Company and the Rollover Holders (subject to the proviso in Section 22), constitutes a

 

  

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legal, valid and binding obligation of Parent, enforceable against Parent in accordance with its terms, except as enforcement may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar Laws affecting creditors’ rights generally and by general principles of equity (regardless of whether considered in a proceeding in equity or at Law).

 

(b)   Consents and Approvals; No Violations.  Except for the applicable requirements of the Exchange Act and Laws of the Cayman Islands, (i) no filing with, and no permit, authorization, consent or approval of, any Governmental Authority is necessary on the part of Parent for the execution, delivery and performance of this Agreement by Parent or the consummation by Parent of the transactions contemplated hereby and (ii) neither the execution, delivery or performance of this Agreement by Parent nor the consummation by Parent of the transactions contemplated hereby nor compliance by Parent with any of the provisions hereof shall (A) require the consent or approval of any other person pursuant to any agreement, obligation or instrument binding on Parent or its properties or assets, (B) conflict with or violate any provision of the organizational documents of Parent, (C) result in any breach or violation of, or constitute a default (or an event which, with notice or lapse of time or both, would become a default) under, or give to others any rights of termination, amendment, acceleration or cancellation of, or result in the creation of a Lien on such property or asset of Parent pursuant to, any Contract to which Parent is a party or by which such Parent or any property or asset of Parent is bound or affected, or (D) violate any order, writ, injunction, decree, statute, rule or regulation applicable to Parent or any of Parent’s properties or assets.

 

7.   Representations and Warranties of Holdco. To induce the Rollover Holders to contribute the Rollover Shares and to accept the Holdco Shares, Holdco makes the following representations and warranties to each Rollover Holder that, each and all of which shall be true and correct as of the date of this Agreement and as of the Contribution Closing, and shall survive the execution and delivery of this Agreement:

 

(a)   Organization, Standing and Authority.  Holdco is duly organized, validly existing and in good standing under the Laws of the Cayman Islands and has all requisite power and authority to execute and deliver this Agreement and to perform its obligations hereunder.  This Agreement has been duly and validly executed and delivered by Holdco and, assuming due authorization, execution and delivery by Parent, the Company and the Rollover Holders (subject to the proviso in Section 22), constitutes a legal, valid and binding obligation of Holdco, enforceable against Holdco in accordance with its terms, except as enforcement may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar Laws affecting creditors’ rights generally and by general principles of equity (regardless of whether considered in a proceeding in equity or at Law).

 

(b)   Consents and Approvals; No Violations.  Except for the applicable requirements of the Exchange Act and Laws of the Cayman Islands, (i) no filing with, and no permit, authorization, consent or approval of, any Governmental Authority is 

 

  

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necessary on the part of Holdco for the execution, delivery and performance of this Agreement by Holdco or the consummation by Holdco of the transactions contemplated hereby and (ii) neither the execution, delivery or performance of this Agreement by Holdco nor the consummation by Holdco of the transactions contemplated hereby nor compliance by Holdco with any of the provisions hereof shall (A) require the consent or approval of any other person pursuant to any agreement, obligation or instrument binding on Holdco or its properties or assets, (B) conflict with or violate any provision of the organizational documents of Holdco, (C) result in any breach or violation of, or constitute a default (or an event which, with notice or lapse of time or both, would become a default) under, or give to others any rights of termination, amendment, acceleration or cancellation of, or result in the creation of a Lien on such property or asset of Holdco pursuant to, any Contract to which Holdco is a party or by which such Holdco or any property or asset of Holdco is bound or affected, or (D) violate any order, writ, injunction, decree, statute, rule or regulation applicable to Holdco or any of Holdco’s properties or assets.

 

(c)   Issuance of Holdco Shares.  The Holdco Shares will be duly authorized, validly issued, fully paid and nonassessable, and free and clear of all Liens, preemptive rights, rights of first refusal, subscription and similar rights (other than those arising under any agreements entered into at the Contribution Closing by all of the Rollover Holders) when issued.

 

8.   Termination. This Agreement, and the obligation of the Rollover Holders to contribute, transfer, assign and deliver the Rollover Shares, will terminate on the earlier to occur of (a) the valid termination of the Merger Agreement in accordance with its terms and (b) the Closing.  If for any reason the Merger contemplated by the Merger Agreement fails to occur but the Contribution Closing has already taken place, then Parent shall promptly return the Share Documents to the Rollover Holders at their respective addresses set forth on Schedule A and take all such actions as are necessary to restore each such Rollover Holder to the position he, she, or it was in with respect to ownership of the Company’s Shares prior to the Contribution Closing.

 

9.   Further Assurances. Each Rollover Holder hereby covenants that, from time to time, such Rollover Holder will do, execute, acknowledge and deliver, or will cause to be done, executed, acknowledged and delivered, such further acts, conveyances, transfers, assignments, powers of attorney and assurances necessary to convey, transfer to and vest in Parent, and to put Parent in possession of, all of the applicable Rollover Shares.

 

10.   Amendments and Modification. 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.

 

11.   Waiver. No failure or delay of any party in exercising any right or remedy hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any such right or power, or any abandonment or discontinuance of steps to enforce such right

 

  

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or power, or any course of conduct, preclude any other or further exercise thereof or the exercise of any other right or power.  The rights and remedies of the parties hereunder are cumulative and are not exclusive of any rights or remedies which they would otherwise have hereunder.  Any agreement on the part of a party to any such waiver shall be valid only if set forth in a written instrument executed and delivered by such party.

 

12.   Survival of Representations and Warranties. All representations and warranties of the Rollover Holders or by or on behalf of Parent or Holdco in connection with the transactions contemplated by this Agreement contained herein shall survive the execution and delivery of this Agreement, any investigation at any time made by or on behalf of Parent, Holdco, the Company or the Rollover Holders, and the issuance of the Holdco Shares , until the earlier to occur of (x) the termination of this Agreement and (y) the Closing.

 

13.   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 Rollover Holder, in accordance with the contact information set forth next to such Rollover Holder’s name on Schedule A.
	 	 	 
	 	 (ii)	If to Parent or Holdco:

 

	 	
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	 
	 	 	 	 
	 	
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	 

 

	 	 (iii)	If to the Company:

 

  

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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 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	 

 

14.   Entire Agreement. This Agreement (together with the Merger Agreement and the Voting Agreement to the extent referred to in this 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.

 

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

 

16.   Governing Law. This Agreement and all disputes or controversies arising out of or relating to this Agreement or the transaction contemplated hereby 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.

 

17.   Submission to Jurisdiction. Each of the parties irrevocably agrees that any legal action or proceeding arising out of or relating to this Agreement brought by any party or its Affiliates against any other 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 exclusive 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 

 

  

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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, (a) any claim that it is not personally subject to the jurisdiction of the courts in New York as described herein for any reason, (b) 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 (c) that (i) the suit, action or proceeding in any such court is brought in an inconvenient forum, (ii) the venue of such suit, action or proceeding is improper, or (iii) this Agreement, or the subject matter hereof, may not be enforced in or by such courts.

 

18.   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.

 

19.   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.

 

20.   Severability. Whenever possible, each provision or portion of any provision of this Agreement shall be interpreted in such manner as to be effective and 

 

  

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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.

 

21.   Waiver of Jury Trial. EACH OF THE PARTIES TO THIS AGREEMENT HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.

 

22.   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; provided, however, that if any of the Rollover Holders fails for any reason to execute, or perform their obligations under, this Agreement, this Agreement shall remain effective as to all parties executing this Agreement.

 

23.   Headings. The section headings in this Agreement are for convenience of reference only and shall not affect in any way the meaning or interpretation of this Agreement.

 

24.   No Presumption Against Drafting Party. Each of the parties to this Agreement acknowledges that it has been represented by independent counsel in connection with this Agreement and the transactions contemplated by this Agreement.  Accordingly, any rule of Law or any legal decision that would require interpretation of any claimed ambiguities in this Agreement against the drafting party has no application and is expressly waived.

 

[Remainder of page intentionally left blank]

 

  

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IN WITNESS WHEREOF, Parent, Holdco, the Company and the Rollover Holders have caused to be executed or executed this Agreement as of the date first written above.

 

	 	Parent:	 
	 	 	 
	 	Platinum Infant Formula Holding Limited	 
	 	 	 	 
	
 

	
By: 

	/s/ You-Bin Leng	 
	 	Name: You-Bin Leng	 
	 	Title: Director	 

 

	 	Holdco:	 
	 	 	 
	 	Diamond Infant Formula Holding Limited	 
	 	 	 	 
	
 

	
By: 

	
/s/ You-Bin Leng

	 
	 	Name: You-Bin Leng	 
	 	Title: Director	 

 

[SIGNATURE PAGE TO CONTRIBUTION AGREEMENT]

 

  

  

  

 

	 	The Company:	 
	 	 	 
	 	Feihe International, Inc.	 
	 	 	 	 
	
 

	
By: 

	/s/ David Dong	 
	 	Name: David Dong	 
	 	Title: Director	 

 

[SIGNATURE PAGE TO CONTRIBUTION AGREEMENT]

 

  

  

  

 

	 	
Rollover Holders:

	 
	 	 	 	 
	
 

	
   

	/s/ You-Bin Leng	 
	 	 	You-Bin Leng	 
	 	 	 	 
	 	 	 	 
	 	 	/s/ Sheng-Hui Liu	 
	 	 	 
Sheng-Hui Liu

	 
	 	 	 	 
	 	 	 	 
	 	 	/s/ Hua Liu	 
	 	 	 
Hua Liu

	 

 

[SIGNATURE PAGE TO CONTRIBUTION AGREEMENT]

 

  

  

  

 

Schedule A

	
  Rollover Holder Name

	 	
Address

Facsimile

	
  Rollover Shares

	
  Holdco

  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

	
  7,878,135(1)

	
  7,878,135

	
  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

	
  273,207(2)

	
  273,207

	
  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

	
  63,783(3)

	
  63,783

       _____________________________

(1)           Includes 7,866,135 Shares and options to purchase 12,000 Shares.

(2)           Includes 261,207 Shares and options to purchase 12,000 Shares.

(3)           Includes 51,783 Shares and options purchase 12,000 Shares.

 

[SCHEDULE A TO CONTRIBUTION AGREEMENT]Unassociated Document

Exhibit 10.3

 

EXECUTION COPY

 

LIMITED GUARANTEE

 

LIMITED GUARANTEE, dated as of March 3, 2013 (this “Limited Guarantee”), by Mr. You-Bin Leng (the “Chairman”) and Morgan Stanley Private Equity Asia III Holdings (Cayman) Ltd, an exempted company incorporated in the Cayman Islands (the “Sponsor” and, together with the Chairman, the “Guarantors” and each, a “Guarantor”) in favor of Feihe International, Inc., a Utah corporation (the “Guaranteed Party”).  Capitalized terms used but not defined in this Limited Guarantee shall have the meanings assigned to such terms in the Merger Agreement (as defined below).

 

1.             GUARANTEE.  (a) To induce the Guaranteed Party to enter into that certain Agreement and Plan of Merger, dated as of the date hereof (as amended, supplemented or otherwise modified from time to time in accordance with its terms, the “Merger Agreement”), by and among the Guaranteed Party, Diamond Infant Formula Holding Limited, a Cayman Islands exempted company with limited liability (“Holdco”), Platinum Infant Formula Holding Limited, a Cayman Islands exempted company with limited liability (“Parent”), and Infant Formula Merger Sub Holding Inc., a Utah corporation and a wholly-owned subsidiary of Parent (“Merger Sub”), pursuant to which Merger Sub will merge with and into the Guaranteed Party, each Guarantor, intending to be legally bound, hereby absolutely, unconditionally and irrevocably, as a primary obligor and not merely a surety, guarantees to the Guaranteed Party, severally but not jointly nor jointly and severally, the due and punctual performance and discharge of (A) all of the payment obligations of Parent with respect to the payment of the Parent Termination Fee pursuant to Section 8.06(b) of the Merger Agreement , (B) the reimbursement obligations of Parent pursuant to Section 8.06(c) of the Merger Agreement, and (C) the indemnification, reimbursement and expense obligations of Holdco and Parent under Section 6.07(c) of the Merger Agreement, if, as and when those obligations become payable and due under the Merger Agreement (the “Obligations”); provided that, notwithstanding anything to the contrary contained in this Limited Guarantee, in no event shall a Guarantor’s aggregate liability under this Limited Guarantee exceed such Guarantor’s respective percentage, as set forth opposite its name on Annex A hereto, of an amount equal to (y) the Obligations minus (z) any portion of the Obligations actually paid by Holdco, Parent or Merger Sub to the Guaranteed Party (such limitation on the liability each Guarantor may have for the Obligations being herein referred to as such Guarantor’s “Maximum Amount”), it being understood that this Limited Guarantee may not be enforced against any Guarantor without giving effect to such Guarantor’s Maximum Amount (and to the provisions of Sections 8 (Continuing Guaranty) and 9 (No Recourse) hereof).  No Guarantor shall have any obligations or liability to any person relating to, arising out of or in connection with this Limited Guarantee other than as expressly set forth herein.  All payments hereunder shall be made in lawful money of the United States, in immediately available funds.  Each Guarantor acknowledges that the Guaranteed Party entered into the transactions contemplated by the Merger Agreement in material reliance upon the execution of this Limited Guarantee.

 

  

 

  

 

(b)          Subject to the terms and conditions of this Limited Guarantee, if Holdco or Parent fails to pay the Obligations when due, then all of the Guarantor’s liabilities to the Guaranteed Party hereunder in respect of such Obligations shall become immediately due and payable and the Guaranteed Party may at any time and from time to time, at the Guaranteed Party’s option, take any and all actions available hereunder or under applicable Law to collect such Obligations from the Guarantors (subject to each Guarantor’s Maximum Amount).

 

(c)           In furtherance of the foregoing, each Guarantor acknowledges that the Guaranteed Party may, in its sole discretion, bring and prosecute a separate action or actions against such Guarantor for the full amount of the Obligations (subject to each Guarantor’s Maximum Amount), regardless of whether any such action is brought against Holdco, Parent, Merger Sub or any other Guarantor or whether Holdco, Parent, Merger Sub or any other Guarantor is joined in any such action or actions.

 

(d)          Each Guarantor hereby agrees, severally but not jointly nor jointly and severally, to pay on demand its pro rata portion (based on the percentages set forth on Annex A hereto) of all reasonable and documented out-of-pocket expenses (including reasonable fees and expenses of counsel) incurred by the Guaranteed Party in connection with the enforcement of its rights hereunder if (i) any of the Guarantors assert in any litigation or other proceeding that this Guarantee is illegal, invalid or unenforceable in accordance with its terms or (ii) any of the Guarantors fail or refuse to make any payment to the Guaranteed Party hereunder when due and payable and it is judicially determined that the Guarantors are required to make such payment hereunder, which amounts will be in addition to the Obligations and not included within a determination of the Maximum Amount.

 

2.             NATURE OF GUARANTEE.  The Guaranteed Party shall not be obligated to file any claim relating to the Obligations in the event that Holdco, Parent or Merger Sub becomes subject to a bankruptcy, reorganization or similar proceeding, and the failure of the Guaranteed Party to so file shall not affect the Guarantors’ obligations hereunder.  In the event that any payment to the Guaranteed Party in respect of the Obligations is rescinded or must otherwise be returned for any reason whatsoever, the Guarantor shall remain liable hereunder with respect to its portion of the Obligations up to its Maximum Amount as if such payment had not been made. This is an unconditional guarantee of payment and not of collectability.  Each Guarantor reserves the right to assert defenses which Holdco, Parent or Merger Sub may have to payment of any Obligations, other than defenses arising from the bankruptcy, insolvency or similar proceeding of Holdco, Parent or Merger Sub and other defenses expressly waived herein.

 

3.             CERTAIN WAIVERS.  Each Guarantor agrees that the Guaranteed Party may, in its sole discretion, at any time and from time to time, without notice to or further consent of such Guarantor, extend the time of payment of any of the Obligations, and may also make any agreement with Holdco, Parent or Merger Sub, for the extension, renewal, payment, compromise, discharge or release thereof, in whole or in part, without in any way impairing or affecting such Guarantor’s obligations under this Limited Guarantee or affecting the validity or enforceability of this Limited Guarantee. Each Guarantor agrees that the obligations of such Guarantor hereunder shall not be released or discharged, in whole or in part, or otherwise affected by (a) the failure or delay of the Guaranteed Party to assert any claim or demand or to enforce any right or remedy against Holdco, Parent, Merger Sub, or any other person interested in the transactions 

 

  

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contemplated by the Merger Agreement; (b) any change in the time, place or manner of payment of any of the Obligations, or any waiver, compromise, consolidation or other amendment or modification of any of the terms or provisions of the Merger Agreement made in accordance with the terms thereof or any other agreement evidencing, securing or otherwise executed by Holdco, Parent, Merger Sub and/or the Guaranteed Party in connection with any of the Obligations; (c) any change in the corporate existence, structure or ownership of Holdco, Parent, Merger Sub, or any other person interested in the transactions contemplated by the Merger Agreement; (d) any insolvency, bankruptcy, reorganization or other similar proceeding affecting Holdco, Parent, Merger Sub or any other person interested in the transactions contemplated by the Merger Agreement; (e) the existence of any claim, set-off or other right which such Guarantor may have at any time against Holdco, Parent, Merger Sub or the Guaranteed Party, whether in connection with the Obligations or otherwise;  (f) the adequacy of any other means the Guaranteed Party may have of obtaining repayment of any of the Obligations; (g) the addition, substitution or release of any entity or other Person interested in the transactions contemplated by the Merger Agreement; or (h) any discharge of any Guarantor as a matter of applicable Law (other than as a result of, and to the extent of, payment of the Obligations in accordance with the terms of the Merger Agreement or this Limited Guarantee).  To the fullest extent permitted by law, each Guarantor hereby expressly waives any and all rights or defenses arising by reason of any Law which would otherwise require any election of remedies by the Guaranteed Party. Each Guarantor waives promptness, diligence, notice of the acceptance of this Limited Guarantee and of the Obligations, presentment, demand for payment, notice of non-performance, default, dishonor and protest, notice of the incurrence of any Obligations and all other notices of any kind, all defenses which may be available by virtue of any valuation, stay, moratorium law or other similar Law now or hereafter in effect, any right to require the marshaling of assets of any person interested in the transactions contemplated by the Merger Agreement, and all suretyship defenses generally (other than defenses to the payment of the Obligations (x) that are available to Holdco, Parent or Merger Sub under the Merger Agreement, (y) in respect of a material breach by the Guaranteed Party of this Limited Guarantee or (z) in respect of fraud or willful misconduct of the Guaranteed Party or any of its Affiliates (other than in connection with the Merger Agreement), including, without limitation, any event, condition or circumstance that might be construed to constitute, an equitable or legal discharge of such Guarantor’s obligations hereunder.  Each Guarantor acknowledges that it will receive substantial direct and indirect benefits from the transactions contemplated by the Merger Agreement and that the waivers set forth in this Limited Guarantee are knowingly made in contemplation of such benefits.

 

Each Guarantor hereby unconditionally waives any rights that it may now have or hereafter acquire against Holdco, Parent or Merger Sub that arise from the existence, payment, performance, or enforcement of such Guarantor’s obligations under or in respect of this Limited Guarantee (subject to such Guarantor’s Maximum Amount), including, without limitation, any right of subrogation, reimbursement, exoneration, contribution or indemnification and any right to participate in any claim or remedy of the Guaranteed Party against Holdco, Parent or Merger Sub, whether or not such claim, remedy or right arises in equity or under contract, statute or common Law, including, without limitation, the right to take or receive from Holdco, Parent or Merger Sub, directly or indirectly, in cash or other property or by set-off or in any other manner, payment or security on account of such claim, remedy or right, unless and until all amounts payable by such Guarantor under this Limited Guarantee (which shall be subject to such 

 

  

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Guarantor’s Maximum Amount) shall have been indefeasibly paid in full in immediately available funds.  If any amount shall be paid to any Guarantor in violation of the immediately preceding sentence at any time prior to the payment in full in immediately available funds of all amounts payable under this Limited Guarantee (which shall be subject to the Maximum Amount), such amount shall be received and held in trust for the benefit of the Guaranteed Party, shall be segregated from other property and funds of such Guarantor and shall forthwith be promptly paid or delivered to the Guaranteed Party in the same form as so received (with any necessary endorsement or assignment) to be credited and applied to all amounts payable by such Guarantor under this Limited Guarantee.

 

The Guaranteed Party hereby covenants and agrees that it shall not institute, directly or indirectly, and shall cause all of its Related Persons (as defined below) not to institute, any proceeding or bring any other claim (whether in tort, contract or otherwise) arising under, or in connection with, the Merger Agreement, the Equity Financing or the transactions contemplated thereby against the Guarantors or any Non-Recourse Party (as defined below), except for (i) claims against the Guarantors under this Limited Guarantee (subject to the limitations contained herein.), (ii) claims against Holdco, Parent and Merger Sub under the Merger Agreement, (iii) claims against the Sponsor and its successors and permitted assigns under the Equity Commitment Letter pursuant to the terms thereof and the terms of the Merger Agreement; (iv) claims to seek the enforcement of the Parent’s, Holdco’s and Rollover Holders’ obligations under the Contribution Agreement; and (v) claims to seek the enforcement of Parent’s and the Rollover Holders’ obligations under the Voting Agreement ((i), (ii), (iii) and (iv) collectively, the “Retained Claims”).  The Guaranteed Party hereby agrees that to the extent Holdco, Parent or Merger Sub is relieved of all or any portion of its payment obligations under the Merger Agreement (other than by bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium or other similar Laws affecting creditors’ rights generally, or general equitable principles (whether considered in a proceeding in equity or at Law)), each Guarantor shall be similarly relieved of its corresponding obligations under this Limited Guarantee.

 

4.             NO WAIVER; CUMULATIVE RIGHTS.  No failure on the part of the Guaranteed Party to exercise, and no delay in exercising, any right, remedy or power hereunder shall operate as a waiver thereof, nor shall any single or partial exercise by the Guaranteed Party of any right, remedy or power hereunder preclude any other or future exercise of any right, remedy or power hereunder.  Each and every right, remedy and power hereby granted to the Guaranteed Party or allowed it by Law or other agreement shall be cumulative and not exclusive of any other, and may be exercised by the Guaranteed Party at any time or from time to time.

 

5.             REPRESENTATIONS AND WARRANTIES.  Each Guarantor (other than, in the case of the representation and warranties contained in Sections 5(a) and 5(b)(i), the Chairman) hereby represents and warrants to the Guaranteed Party that:

 

(a)         such Guarantor is a legal entity duly organized and validly existing under the Laws of its jurisdiction of organization;

 

(b)         the execution, delivery and performance of this Limited Guarantee have been duly authorized by all necessary action and do not contravene (i) any provision of such Guarantor’s charter documents, partnership agreement, operating agreement or similar 

 

  

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organizational documents or (ii) any Law, regulation, rule, decree, order, judgment or contractual restriction binding on the Guarantor or its assets;

 

(c)         all consents, approvals, authorizations and permits of, filings with and notifications to, any Governmental Entity necessary for the due execution, delivery and performance of this Limited Guarantee by such Guarantor have been obtained or made and all conditions thereof have been duly complied with, and no other action by, and no notice to or filing with, any Governmental Entity or regulatory body is required from such Guarantor in connection with the execution, delivery or performance of this Limited Guarantee;

 

(d)         this Limited Guarantee constitutes a legal, valid and binding obligations of such Guarantor enforceable against such Guarantor in accordance with its terms, subject to (i) the effects of bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium or other similar Laws affecting creditors’ rights generally and (ii) general equitable principles (whether considered in a proceeding in equity or at Law); and

 

(e)         (i) each Guarantor is solvent and shall not be rendered insolvent as a result of its execution and delivery of this Limited Guarantee or the performance of its obligations hereunder, (ii) each Guarantor has the financial capacity to pay and perform its obligations under this Limited Guarantee, and (iii) all funds necessary for each Guarantor to fulfill its obligations under this Limited Guarantee shall be available to such Guarantor for so long as this Limited Guarantee shall remain in effect in accordance with Section 8 hereof.

 

6.             NO ASSIGNMENT.  Neither the Guarantors nor the Guaranteed Party may assign its rights, interests or obligations hereunder to any other person (except by operation of Law) without the prior written consent of the other party hereto; provided, however, that each Guarantor may assign all or a portion of its obligations hereunder, with prior written notice to the Guaranteed Party accompanied by a guarantee in the form identical to this Limited Guarantee duly executed and delivered by the assignee, to an Affiliate or to an entity managed or advised by an Affiliate of such Guarantor; provided, further, that no such assignment shall relieve such Guarantor of any liability or obligations hereunder except to the extent actually performed or satisfied by the assignee.

 

7.             NOTICES.  All notices, requests and other communications to any party hereunder shall be given in the manner specified in the Merger Agreement (and shall be deemed given as specified therein) as follows:

 

	 	 
if to the Chairman, to:

	 	 	 
	 	 
c/o Feihe International, Inc.

Star City International Building

10 Jiuxianqiao Road, C-16th Floor

Chaoyang District, Beijing 100016

People’s Republic of China

	 	 
Fax No.:

	 
+(86) 10 6431-9357

	 	 
Attention:

	 
Mr. You-Bin Leng

 

  

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

	 	 	 
	 	 
Wilson Sonsini Goodrich & Rosati, P.C.

 
38 F, Unit 03

 
88 Century Boulevard

 
Pudong, Shanghai 200121

 
People’s Republic of China

	 	 
Fax No.:

	+86 21 6165 1799:
	 	 
Attention:

	 
Ms. Zhan Chen

	 	 	 
	 	 
if to the Sponsor, to:

	 	 	 
	 	 
c/o Intertrust Corporate Services (Cayman) Limited

 
190 Elgin Avenue

 
Georgetown, Grand Cayman, KY1-9005

 
Cayman Islands

	 	 
Fax No:

	 
+1 345 945 4757

	 	 
Attention:

	 
Mr. Boris Brady

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

	 	 	 
	 	 
c/o Morgan Stanley Asia Limited

40th Floor, International Commerce Centre

1 Austin Road West

Kowloon, Hong Kong

	 	 
Fax No:

	 
+852 3407 9855

	 	 
Attention:

	 
Mr. Kingsley Chan

	 	 	 
	 	 
and

	 	 	 
	 	 
Skadden, Arps, Slate, Meagher & Flom LLP

30th Floor, China World Office

1 Jianguomenwai Avenue

Beijing 100004, PRC

	 	 
Fax No.:

	 
+86 10 6535 5577

	 	 
Attention:

	 
Michael V. Gisser

 
Peter X. Huang

 

or to such other address or facsimile number as the Guarantor shall have notified the Guaranteed Party in a written notice delivered to the Guaranteed Party in accordance with the Merger Agreement.  All notices to the Guaranteed Party hereunder shall be given as set forth in the Merger Agreement.

 

8.             CONTINUING GUARANTEE.  This Limited Guarantee may not be revoked or terminated and shall remain in full force and effect until the Obligations have been indefeasibly paid in full.  Notwithstanding the foregoing, this Limited Guarantee will terminate, and be of no further force or effect, upon the earliest of (a) the Effective Time, (b) in the case of 

 

  

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the termination of the Merger Agreement in accordance with its terms by mutual consent of the parties thereto or in circumstances where Holdco and Parent would not have any Obligations, immediately upon such termination, and (c) in the case of a termination of the Merger Agreement under circumstances in which Holdco or Parent would have any Obligations, the date that is six (6) months following the date of the termination of the Merger Agreement in accordance with its terms (provided, that if the Guaranteed Party has made a claim under this Limited Guarantee prior to such date of termination, this Limited Guarantee shall terminate upon the earlier of (i) a final, non-appealable resolution of such claim and payment of the Guarantors’ obligations hereunder (subject to each Guarantor’s Maximum Amount), if applicable and (ii) a written agreement signed by each of the parties hereto terminating this Limited Guarantee.).  Notwithstanding the foregoing, in the event that the Guaranteed Party or any of its controlled Affiliates asserts in any litigation or other proceeding that any provision of this Limited Guarantee limiting each Guarantor’s liability to the Maximum Amount are illegal, invalid or unenforceable in whole or in part or that the Guarantors are liable in excess of or to a greater extent than the Maximum Amount, or asserts any theory of liability against any Non-Recourse Party or, other than its rights to recover from the Guarantors with respect to the Obligations, the Guarantors, Holdco, Parent or Merger Sub with respect to the transactions contemplated by the Merger Agreement, then (x) the obligations of the Guarantors under this Limited Guarantee shall terminate ab initio and be null and void, (y) if a Guarantor has previously made any payments under this Limited Guarantee, such Guarantor shall be entitled to recover such payments and (z) neither the Guarantors nor any Non-Recourse Party shall have any liability to the Guaranteed Party with respect to the Merger Agreement and the transactions contemplated thereby, the Equity Financing or under this Limited Guarantee.

 

9.             NO RECOURSE.

 

(a)         The Guaranteed Party acknowledges and agrees that none of Holdco, Parent and Merger Sub has any assets, other than their respective rights under the Merger Agreement and the agreements contemplated thereby and that no funds are expected to be contributed to Holdco, Parent or Merger Sub unless and until the Effective Time.  Notwithstanding anything that may be expressed or implied in this Limited Guarantee or any document or instrument delivered in connection herewith, by its acceptance of the benefits of this Limited Guarantee, the Guaranteed Party covenants, agrees and acknowledges that no person (other than the Guarantors and any successors and permitted assignees thereof) have any obligations under this Limited Guarantee and that, notwithstanding that the Guarantors may be partnerships or limited liability companies, the Guaranteed Party has no right of recovery under this Limited Guarantee, or any claim based on such obligations against, and no personal liability shall attach to, the former, current or future equity holders, controlling persons, directors, officers, employees, agents, general or limited partners, managers, members, or Affiliates of the Guarantors, Holdco, Parent or Merger Sub, or any former, current or future equity holders, controlling persons, directors, officers, employees, agents, general or limited partners, managers, members, or Affiliates of any of the foregoing, excluding however any such persons that constitute a Guarantor hereunder or a successor or permitted assignee thereof (collectively, each of the foregoing but not including the Guarantors or their respective successors or permitted assignees themselves, the “Non-Recourse Parties”, and each a “Non-Recourse Party”), through Holdco, Parent or Merger Sub or otherwise, whether by or through attempted piercing of the corporate (or limited partnership or limited liability company) veil, by or through a claim by or 

 

  

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on behalf of Holdco, Parent or Merger Sub against any Non-Recourse Party, by the enforcement of any assessment or by any legal or equitable proceeding, by virtue of any statute, regulation or applicable Law, or otherwise, except for any Retained Claims.

 

(b)         Recourse against the Guarantors and their permitted assignees under and pursuant to the terms of this Limited Guarantee and the Retained Claims shall be the sole and exclusive remedy of the Guaranteed Party and all of its Related Persons against the Guarantors and the Non-Recourse Parties in respect of any liabilities or obligations arising under, or in connection with, the Merger Agreement, the Equity Financing or the transactions contemplated thereby.  Nothing set forth in this Limited Guarantee shall affect or be construed to affect any liability of Holdco, Parent or Merger Sub to the Guaranteed Party under the Merger Agreement or otherwise or give or shall be construed to confer or give to any person other than the Guaranteed Party any rights or remedies against any person, except as expressly set forth in this Limited Guarantee.

 

(c)         For the purposes of this Limited Guarantee, pursuit of a claim against a person by the Guaranteed Party or any Related Person of the Guaranteed Party shall be deemed to be pursuit of a claim by the Guaranteed Party.  A person shall be deemed to have pursued a claim against another person if such first person brings a legal action against such second person, adds such second person to an existing legal proceeding or otherwise asserts a legal claim of any nature against such second person.

 

(d)         For the purposes of this Limited Guarantee, the term “Related Person” shall mean any former, current or future director, officer, agent, employee, general or limited partner, manager, member, stockholder or Affiliate of a person or any former, current or future director, officer, agent, employee, general or limited partner, manager, member, stockholder or Affiliate of any of the foregoing, but shall not include Holdco, Parent, Merger Sub or any of their controlled Affiliates.

 

10.           AMENDMENTS AND WAIVERS. No amendment or waiver of any provision of this Limited Guarantee will be valid and binding unless it is in writing and signed, in the case of an amendment, by each Guarantor and the Guaranteed Party, or in the case of waiver, by the party against whom the waiver is to be effective.  No waiver by any party of any breach or violation of, or default under, this Limited Guarantee, whether intentional or not, will be deemed to extend to any prior or subsequent breach, violation or default hereunder or affect in any way any rights arising by virtue of any prior or subsequent such occurrence.

 

11.           ENTIRE AGREEMENT. This Limited Guarantee, together with the Merger Agreement and any other agreement or instrument delivered in connection with the transactions contemplated by the Merger Agreement, constitutes the entire agreement with respect to the subject matter hereof and supersedes any and all prior discussions, negotiations, proposals, undertakings, understandings and agreements, whether written or oral, among Holdco, Parent, Merger Sub and the Guarantors or any of their respective Affiliates on the one hand, and the Guaranteed Party or any of its Affiliates on the other hand.

 

12.           GOVERNING LAW; SUBMISSION TO JURISDICTION.  This Limited Guarantee shall be interpreted, construed and governed by and in accordance with the Laws of

 

  

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the State of New York without regard to the conflicts of law principles thereof.  All Actions arising out of or relating to this Limited Guarantee shall be heard and determined exclusively in any New York federal court sitting 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.  Consistent with the preceding sentence, the parties hereto hereby (a) submit to the exclusive jurisdiction of any federal or state court sitting in the Borough of Manhattan of The City of New York for the purpose of any Action arising under the Laws of the State of New York out of or relating to this Limited Guarantee brought by any party hereto and (b) irrevocably waive, and agree not to assert by way of motion, defense, or otherwise, in any such Action, any claim that it is not subject personally to the jurisdiction of the above named courts, that its property is exempt or immune from attachment or execution, that the Action is brought in an inconvenient forum, that the venue of the Action is improper, or that this Limited Guarantee or the transactions contemplated by this Limited Guarantee may not be enforced in or by any of the above named courts.

 

13.           WAIVER OF JURY TRIAL.  EACH OF THE PARTIES HERETO IRREVOCABLY AND UNCONDITIONALLY WAIVES TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW ANY AND ALL RIGHT SUCH PARTY MAY HAVE TO TRIAL BY JURY IN ANY LEGAL ACTION, SUIT OR PROCEEDING BETWEEN THE PARTIES HERETO ARISING OUT OF, BASED UPON OR RELATING TO THIS LIMITED GUARANTEE OR THE NEGOTIATION, EXECUTION OR PERFORMANCE HEREOF.

 

14.           NO THIRD PARTY BENEFICIARIES.   Except for the rights of Non-Recourse Parties provided hereunder, the parties hereto hereby agree that their respective representations, warranties and covenants set forth herein are solely for the benefit of the other parties hereto, in accordance with and subject to the terms of this Limited Guarantee and the Merger Agreement, and this Limited Guarantee is not intended to, and does not, confer upon any person other than the parties hereto any rights or remedies hereunder, including the right to rely upon the representations and warranties set forth herein.

 

15.           COUNTERPARTS.  This Limited Guarantee may be signed in any number of counterparts and may be executed and delivered by facsimile or in .pdf form, and each counterpart shall be an original, with the same effect as if the signatures thereto and hereto were upon the same instrument.

 

16.           SEVERABILITY.  If any term or other provision of this Limited Guarantee is invalid, illegal or incapable of being enforced by any rule of Law, or public policy, all other conditions and provisions of this Limited Guarantee shall nevertheless remain in full force and effect so long as the economic or legal substance of the transactions contemplated hereby is not affected in any manner materially adverse to any party; provided, however, that this Limited Guarantee may not be enforced against any Guarantor without giving effect to the Maximum Amount of such Guarantor or the provisions set forth in Sections 3, 9 and 10. No party hereto shall assert, and each party shall cause its respective Related Persons not to assert, that this Limited Guarantee or any part hereof is invalid, illegal or unenforceable.  Upon a determination that any term or provision is invalid, illegal or incapable of being enforced, the parties hereto shall negotiate in good faith to modify this Limited Guarantee so as to effect the 

 

  

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original intent of the parties as closely as possible in a mutually acceptable manner in order that the transactions contemplated hereby be consummated as originally contemplated to the fullest extent possible.

 

17.           HEADINGS.  Headings are used for reference purposes only and do not affect the meaning or interpretation of this Limited Guarantee.

 

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IN WITNESS WHEREOF, the Guarantors and the Guaranteed Party have caused this Limited Guarantee to be executed and delivered as of the date first written above by its officer thereunto duly authorized.

 

	 	MR. YOU-BIN LENG
	 	 
	 	By:	/s/ You-Bin Leng
	 	Name:	You-Bin Leng
	 	 	 
	 	MORGAN STANLEY PRIVATE EQUITY ASIA III HOLDINGS (CAYMAN) LTD
	 	 
	 	By:	/s/ Samantha Jennifer Cooper 
	 	Name:	Samantha Jennifer Cooper
	 	Title:	Sole Director

 

 

Accepted and Agreed to:

 

 

	FEIHE INTERNATIONAL, INC.	 
	 	 
	By:	/s/ David Dong	 
	Name:	David Dong	 
	Title:	Director	 

 

  

  

  

Annex A

	
  Guarantor

	
  Percentage of Obligations

	
  The Chairman

	
  71.05%

	
  Sponsor

	
  28.95%

	
  Total

	
  100%

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