Attached files
| file | filename |
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| EX-99.1 - AgFeed Industries, Inc. | v169279_ex99-1.htm |
| EX-10.27 - AgFeed Industries, Inc. | v169279_ex10-27.htm |
| EX-10.23 - AgFeed Industries, Inc. | v169279_ex10-23.htm |
| EX-10.24 - AgFeed Industries, Inc. | v169279_ex10-24.htm |
| EX-10.26 - AgFeed Industries, Inc. | v169279_ex10-26.htm |
| EX-10.25 - AgFeed Industries, Inc. | v169279_ex10-25.htm |
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
WASHINGTON,
D.C. 20549
FORM 8-K
CURRENT
REPORT
PURSUANT
TO SECTION 13 OR 15(d) OF THE
SECURITIES
EXCHANGE ACT OF 1934
Date of
Report (Date of earliest event reported): December 11,
2009
AgFeed Industries,
Inc.
(Exact
Name of Registrant as Specified in Charter)
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Nevada
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001-33674
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20-2597168
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(State
or Other Jurisdiction
of
Incorporation)
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(Commission
File
Number)
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(IRS
Employer
Identification
No.)
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Suite
A1001-1002, Tower 16, Hengmao Int'l Center
Nanchang City, Jiangxi
Province, China 330003
(Address
of principal executive offices; zip code)
Registrant’s
telephone number, including area
code: 86-791-6669093
Check the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions (see General Instruction A.2. below):
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¨
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Written
communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
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¨
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Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
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¨
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Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act
(17 CFR 240.14d-2(b))
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¨
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Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act
(17 CFR 240.13e 4(c))
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Item
1.01. Entry
into a Material Definitive Agreement.
On
December 11, 2009, AgFeed Industries, Inc. ("AgFeed BVI"), a company formed
under the laws of the British Virgin Islands and subsidiary of AgFeed
Industries, Inc., a Nevada corporation ("AgFeed NV"), and Hypor B.V., a company
incorporated under the laws of The Netherlands ("Hypor"), formed a joint
venture, Hypor AgFeed Breeding Company Inc. ("Hypor AgFeed Breeding" or the
"Company" and, together with AgFeed BVI and Hypor, the "Parties"), which is
incorporated under the laws of the Peoples' Republic of China as a Wholly Owned
Foreign Entity ("WOFE"). the purpose of the joint venture is to
develop, operate and market a new genetic nucleus farm in Wuning, China to
produce cross bred stock to supply farms owned by AgFeed NV and to sell to
customers of AgFeed NV and third parties within a specified geographic territory
in China.
In
connection with the formation of Hypor AgFeed Breeding, the parties entered into
a Shareholders Agreement (the “Shareholders Agreement”) that sets forth the
business agreement between the Parties, as well as several ancillary
agreements. Pursuant to the Shareholders Agreement, the parties have
agreed to make aggregate capital contributions of RMB18,500,000 (approximately
$2.7 million based on a conversion rate of RMB1 = $0.146464 on December 11,
2009). AgFeed BVI will contribute RMB15,725,000 (approximately $2.3
million) and Hypor will contribute RMB2,775,000 (approximately $0.6 million) to
the Company. Each party will also make a loan in an amount equal to
its capital contribution to the Company. Following
the contributions of capital and the making of the loans to Hypor AgFeed
Breeding, AgFeed BVI will own an 85% interest (15,725 shares of capital stock)
and Hypor will own a 15% interest (2,775 shares of capital stock) in the Company
.
Shareholders
Agreement
The
Shareholders Agreement will serve as Hypor AgFeed Breeding’s primary operating
document and provide for the management and governance of the
Company. Pursuant to the Shareholder Agreement, Hypor AgFeed Breeding
will be managed by a board of directors initially consisting of three
directors. AgFeed BVI shall be entitled to appoint two persons to be
directors for as long as it holds an equity interest in the Company greater than
50%. In the event that AgFeed BVI's equity interest in the Company is
equal to or less than 50%, its representation right will be reduced to one
director. Hypor shall be entitled to appoint one person to be a
director for as long as it holds an equity interest in the Company equal to or
less than 50%. In the event that Hypor's equity interest in the
Company is greater than 50%, its representation right will be increased to two
directors.
The
Shareholders Agreement contains an enumerated list of approval rights requiring
the prior written consent or casting of an affirmative vote of at least one
director appointed by AgFeed BVI and at least one director appointed by
Hypor. These "major actions" include:
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appointment
of the Chief Executive Officer of the Company and establishment of the
CEO's duties;
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requesting
additional capital contributions;
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exercise
of the option to convert a loan by a contributing shareholder or third
party pursuant to Section 2.3.2 of the Shareholders
Agreement;
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admission
of any additional shareholder by the allotment or transfer of shares, or
issuance of options, warrants or other securities, of the
Company;
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approval
of any employee benefit plans, including, without limitation, any stock
option plans or other employee incentive
plans;
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approval
of the annual budget and business plan and any amendments
thereto;
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approval
of expenditures not included in an approved annual budget and business
plan or in excess of 105% of any line item in an approved annual budget
and business plan;
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entering
into, amending or enforcing any contracts (i) in excess of $100,000, (ii)
not in the approved annual budget and business plan, (iii) that are not
cancellable with 30 days prior notice, or (iv) that are otherwise material
to the business of the Company;
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engaging
in or settling any litigation in which the Company is a
party;
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approval
of the compensation on an annual basis for any employee or consultant
receiving compensation on an annual basis in excess of $150,000, which
compensation shall be included in the approved annual budget and business
plan;
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changing
the tax status or accounting methods of the
Company;
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extending
the statute of limitations for assessing or computing any tax liability
against the Company or the amount of any Company tax
item;
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commencing
the dissolution, winding-up or liquidation of the Company except pursuant
to the terms of the Shareholders
Agreement;
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a
sale of all or substantially all of the Company's property or any sale of
the Company in a single transaction or a series of related transactions to
a third party or a group of third parties, other than to an affiliate of a
shareholder, acting in concert (a) pursuant to which such third party or
group desires to acquire all of the shares (whether by merger,
consolidation, recapitalization, reorganization or otherwise), in each
case for cash or marketable securities (b) which has been approved by the
Board and (c) pursuant to which all holders of shares in the Company
receive (whether in such transaction or, with respect to an asset sale,
upon a subsequent liquidation) the same form and amount of consideration
pro rata for its shares or, if any shareholders are given an option as to
the form and amount of consideration to be received, all shareholders are
given the same option.
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a
merger, consolidation or other acquisition of the Company with or into any
other person or any public offering of the
Company;
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any
amendment to the formation documents, provided that the formation
documents may be amended by a resolution of shareholders in respect of
which both AgFeed BVI and Hypor vote in favor without the approval of any
of the directors;
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any
material property sale, exchange, or other disposition of the Company not
in the ordinary course of business and not in the approved annual budget
and business plan;
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the
borrowing of money, incurring Indebtedness or otherwise committing the
credit of the Company, the granting of any collateral or security interest
in any Company's property, or the granting of any guaranty;
and
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the
approval of any distributions of "distributable cash" to the Shareholders
not in accordance with the terms of the Shareholders
Agreement.
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Additionally,
the board of directors shall not have the authority to:
(i) without
the prior written consent of AgFeed BVI (a) enter into, amend, terminate,
rescind, enforce or waive any rights under the Production and Distribution
Agreement or any other agreements between the Company and Hypor or one of its
affiliates or (b) determine whether a default has occurred thereunder;
or
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(ii) without
the prior written consent of Hypor (a) enter into, amend, terminate, rescind,
enforce or waive any rights under the Facilities Lease Agreement or any other
agreements between the Company and AgFeed BVI or one of its affiliates or (b)
determine whether a default has occurred thereunder.
Except as
set forth above, Board decisions will be made by majority vote.
The
Shareholders Agreement generally prohibit the transfer by either AgFeed BVI or
Hypor of any of their respective ownership interest in the Company except to
affiliates. Upon the occurrence pf certain enumerated trigger events,
the unaffected shareholder shall be granted am option to purchase any or all of
the shares held by the affected shareholder for the fair market value of such
shares (or, in the case of an affected shareholder's receipt of a bona fide
offer, the bona fide offer price). The trigger events
include:
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any
attempt by an affected shareholder to sell, assign, transfer or in any way
dispose of any or all of such shareholder’s chares, or the beneficial
interests therein; or
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any
pledge or the creation of any encumbrance on any or all of the shares held
by such shareholder, except to secure an obligation owed to another
shareholder; or
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any
other transfer of any or all of the shares held by such shareholder, or
the beneficial interests therein, whether voluntary or involuntary, by
operation of law or otherwise, including all executions or legal processes
attaching such shares and all processes affecting the interest of any
shareholder with respect to such shares;
or
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such
shareholder becoming bankrupt; or
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the
receipt by such shareholder of a bona fide offer from a third party to
purchase all, but not less than all, of such shareholder’s shares, which
offer such shareholder desires to accept;
or
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A
material breach by a shareholder of any of the terms or covenants
contained herein or of the confidentiality or intellectual property
provisions of any agreement between the Company and such shareholder; or
any wrongful and intentional act or omission by such shareholder which has
had or would reasonably be expected to have a material adverse impact on
the business, properties, results of operations, condition (financial or
otherwise) or prospects of the
Company.
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The
Shareholders Agreement contains standard confidentiality and non-disclosure
provisions, representations and warranties and provisions relating to
dissolution and termination.
Additional
Agreements
Production
and Distribution Agreement
The
Production and Distribution Agreement, dated as of December 11, 2009, by and
among Hypor, AgFeed BVI, and Hypor AgFeed Breeding, sets forth terms and
conditions pursuant to which (i) Hypor AgFeed Breeding shall purchase from Hypor
and Hypor shall sell to Hypor AgFeed Breeding, stock and genetic material for
production, (ii) Hypor shall provide Hypor AgFeed Breeding with expertise,
know-how and other information relating to the production and selection of
stock, (iii) Hypor shall grant Hypor AgFeed Breeding the right to use its
trademark "Hypor" in connection with the sale of stock in a prescribed territory
within China and (iv) AgFeed will purchase stock from Hypor AgFeed
Breeding. The initial term of the Production and Distribution
Agreement is five years, and it is renewable for successive two year
periods.
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Facilities
Lease Agreement
The
Facilities Lease Agreement, made and effective December 11, 2009, by and between
AgFeed NV and Hypor AgFeed Breeding provides for the leasing of certain premises
in Futian Village, Futian Township, China upon which the Wuning Farm will be
developed by AgFeed NV to Hypor AgFeed Breeding. The initial term of
the lease is ten years, subject to renewal on terms that are acceptable at the
time of such renewal.
Intra
Group Loan Agreements
Each of
Hendrix Genetics B.V., parent of Hypor, and AgFeed BVI has entered into a loan
agreement with Hypor AgFeed Breeding pursuant to which the lender has agreed to
make a loan to Hypor AgFeed Breeding for the sole purpose of settlement of
accounts, purchase of capital equipment and running of the business of Hypor
AgFeed Breeding. The principal amount of the loan is equal to the
capital contribution made by respective party in the formation of the joint
venture - for AgFeed BVI, RMB15,725,000 (approximately $2.3 million) and for
Hypor, RMB2,775,000 (approximately $0.6 million). The loan shall be
advanced to the Company upon request by it. Repayment of the
principal amount of the loan shall be due on the termination of the loan and
interest is payable quarterly in arrears at a floating annual interest rate
equal to one month's Euribor at the date prior to the date interest is due plus the interest
margin charged by the Company's finance provider and a margin of 0.7% for
administrative and treasury services.
Each of
the Shareholders Agreement, Production and Distribution Agreement, Facilities
Lease Agreement and Intra Group Loan Agreements contain standard and customary
terms and provisions. The foregoing descriptions of the formation of
Hypor AgFeed Breeding, the Shareholders Agreement, Production and Distribution
Agreement, Facilities Lease Agreement and Intra Group Loan Agreements do not
purport to be complete. The summaries set forth above are qualified
in their entirety by reference to the Shareholders Agreement, Production and
Distribution Agreement, Facilities Lease Agreement and Intra Group Loan
Agreements, copies of which are filed as Exhibits to this Current Report and
which are incorporated herein by reference. Readers should review those
agreements for a complete understanding of the terms and conditions associated
with this transaction.
Item
7.01. Regulation
FD Disclosure.
On
December 17, 2009, AgFeed Industries, Inc. (Nevada) announced the formation of a
joint venture - Hypor AgFeed Breeding Company Inc. - with Hypor, B.V., a Hendrix
Genetics company, a leading provider of superior swine genetics and technology.
The press release announcing the formation of Hypor AgFeed Breeding Company Inc.
is filed as an exhibit to this Current Report and is incorporated by reference
herein.
Item
9.01 Financial
Statements and Exhibits.
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Exhibits
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10.23
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Shareholders
Agreement of Hypor AgFeed Breeding Company Inc., dated as of December 11,
2009
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10.24
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Production
and Distribution Agreement, dated as of December 11,
2009
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10.25
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Facilities
Lease Agreement, made and effective December 11, 2009
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10.26
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Intra
Group Loan Agreement, dated as of December 11, 2009 (AgFeed
BVI)
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10.27
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Intra
Group Loan Agreement, dated as of December 11, 2009 (Hendrix Genetics
B.V.)
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99.1
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AgFeed
December 17, 2009 press
release
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4
SIGNATURE
Pursuant to the requirements of the
Securities Exchange Act of 1934, the registrant has duly caused this report to
be signed on its behalf by the undersigned hereunto duly
authorized.
Dated: December
17, 2009
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AGFEED
INDUSTRIES, INC.
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By:
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/s/ Junhong Xiong
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Junhong
Xiong
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Chief
Executive Officer
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