LLC INTEREST REDEMPTION AGREEMENT
This Agreement is entered into this 4th day of March, 2002 by and
between Developed Technology Resource, Inc., a Minnesota corporation
(hereinafter "DTR"), API Dairy Partners LP (hereinafter "API I"), a Delaware
limited partnership, Agribusiness Partners International LP II (hereinafter "API
II") a Delaware limited partnership; and Foodmaster International, LLC, a
Delaware limited liability company (hereinafter the "Company").
RECITALS
A. DTR, API I and API II are the only members of the Company, and as such
are parties to a Limited Liability Company Agreement dated as of March 3, 1997,
first amended by an Amended and Restated Limited Liability Company Agreement
dated as of September 11, 1998, and next amended by a Second Amended and
Restated Limited Liability Company Agreement dated November 1999, which Second
Amended and Restated Limited Liability Company Agreement, attached hereto as
Exhibit A and is referred to herein as the "LLC Agreement."
B. Under Section 5.02(a) of the LLC Agreement, DTR has a 30% "Percentage
Interest" in the Company, subject to a potential increase in that Percentage
Interest on the Termination Date as provided in Section 5.02(b) and (c) of the
LLC Agreement, all of which is referred to herein as the "DTR Interest."
C. The Company is desirous of redeeming and DTR is desirous of selling the
DTR Interest.
AGREEMENT
NOW THEREFORE, in consideration of the premises and the mutual
covenants contained herein, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
1.1 Definitions. Initially capitalized terms used in this Agreement, if not
defined herein, shall have the meaning set forth in the LLC Agreement.
ARTICLE II
REDEMPTION OF INTEREST, PRICE, ETC.
2.1 Redemption of Interest. At the Closing, the Company will redeem from
DTR, and DTR will assign, transfer and convey to the Company, the DTR Interest,
pursuant to the terms and conditions hereof by delivery of an Assignment in the
form attached herein as Exhibit B, and such other documentation as the Company
may reasonably require.
2.2 Redemption Price. The Redemption Price shall be $1,500,000 (subject to
adjustment as described below), $500,000 of which will be paid in cash at the
Closing, and $1,000,000 (subject to adjustment as described below) of which will
be paid by the execution and delivery by the Company of (i) a promissory note in
the form of Exhibit C in the principal amount of $500,000 due on September 30,
2002, and (ii) a promissory note in the form of Exhibit D in the principal
amount of $500,000 due on March 31, 2003, subject to a discount for early
payment as provided in the terms of such note. The promissory notes are referred
to herein as the "Promissory Notes".
ARTICLE III
WARRANTIES AND REPRESENTATIONS
3.1 Warranties and Representations of DTR. DTR warrants and represents to
the Company, API I and API II as follows:
(a) Organization, Power and Authority. DTR is a corporation duly
organized, validly existing and in good standing under the laws of the
state of Minnesota, and has the full power and authority to enter into
this Agreement and to carry out the transactions provided for herein.
All action of the Board of Directors and shareholders of DTR required
to permit DTR to comply with the provisions of this Agreement have been
taken.
(b) No Encumbrances. The DTR Interest, when transferred by DTR to
the Company under the terms of this Agreement, will be free of all
liens, restrictions and encumbrances, except those imposed on DTR under
the terms of the LLC Agreement, and except for restrictions on transfer
imposed under applicable state and federal laws relating to the offer
and sale of securities.
(c) Binding Effect. Upon execution and delivery of this Agreement
by all parties hereto, this Agreement shall be binding upon DTR,
enforceable against DTR in accordance with its terms, except as such
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting the
enforcement of creditor's rights generally, and by general principals
of equity.
(d) No Conflicts. The execution, delivery and performance of this
Agreement by DTR will not (i) violate any order, judgment, decision or
decree of any court, governmental agency or person authorized to
resolve disputes having jurisdiction or proper authority over or
respect to DTR or its properties, or the Articles of Incorporation or
By-Laws of DTR; (ii) result in a material breach of or constitute (with
due notice or lapse of time) a material default under any agreement to
which DTR is a party or by which DTR is bound; or (iii) violate any
provision of any law applicable to DTR; in all cases where such
violation, breach or default is likely to have a material adverse
effect on the DTR Interest or the consummation of the transactions
provided for herein.
3.2 Representations and Warranties of API I, API II and the
Company. API I, API II and the Company warrant and represent with respect to
themselves only, and, jointly and severally to their knowledge with respect to
parties other than themselves, as follows:
(a) Organization. API I and API II are each limited partnerships,
and the Company is a limited liability company, each duly organized,
validly existing and in good standing under the laws of the state of
Delaware, and each has the full power and authority to enter into this
Agreement and to carry out the transactions provided for herein. All
actions of the general partners of API I and API II and of the Board of
Managers and members of said general partners, and of the manager and
members of the Company, required to permit API I , API II and the
Company to comply with the provisions of this Agreement have been
taken.
(b) Binding Effect. Upon the execution and delivery of this
Agreement by all parties hereto, this Agreement shall be binding upon
each of API I, API II and the Company, enforceable against each,
jointly and severally, in accordance with its terms, except as such
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting the
enforcement of creditor's rights generally, and by general principals
of equity.
(c) No Conflicts. The execution, delivery and performance of this
Agreement by API I, API II and the Company will not (i) violate any
order, judgment, decision or decree of any court, governmental agency
or person authorized to resolve disputes having jurisdiction or proper
authority over or respect to API I, API II and the Company, or their
respective properties; the Certificate of Limited Partnership, Limited
Partnership Agreement or other governing document of API I or API II;
or the Certificate of Formation, the LLC Agreement or any other
governing document of the Company; (ii) result in a material breach of
or constitute (with due notice or lapse of time) a material default
under any agreement to which API I, API II or the Company is a party or
by which API I, API II or the
Company are bound; or (iii) violate any provision of any law applicable
to API I, API II or the Company, in all cases where such is likely to
have a material adverse effect on the DTR Interest or the consummation
of the transactions provided for herein.
(d) Financial Statements. Attached hereto as Exhibit E, are the
consolidated balance sheet of the Company as of December 31, 2001, and
the consolidated income statement of the Company for the year then
ended (the "Financial Statements"). The Financial Statements fairly and
accurately present the financial condition and results of operations of
the Company as of the date and for the period indicated in accordance
with generally accepted accounting principals consistently applied, and
were compiled from the books and records of the Company as regularly
maintained by the Company.
3.3 Other Agreements. While there is any amount due under the Promissory
Notes, neither the Company, API I nor API II will take any action which would
cause or permit (i) the sale of any assets of the Company, except in the
ordinary course of business, (ii) the distribution of any assets of the Company
to its members, other than in reimbursement of expenses incurred on be half of
the Company or in the payment of services provided consistent with past
practice, (iii) a merger or combination of the Company with any other entity,
(iv) the issuance or transfer of any equity interest in the Company, other than
where such issuance or transfer does not prevent API I or API II together to
control the business of the Company and where such issuance is for fair value as
reasonably determined API I and API II.
ARTICLE IV
CLOSING AND CLOSING TRANSACTIONS
4.1 Closing. The event at which the DTR Interest is assigned and
transferred to the Company, and the Redemption Price is paid by the Company to
DTR, is referred to herein as the "Closing," and the time said Closing occurs is
referred to herein as the "Time of Closing." The Closing shall take place at 225
South 6th Street, Suite 4300, Minneapolis, Minnesota, at 10:00 a.m. Central
Standard Time, on March 6, 2002, or at such other place and time as DTR and the
Company may mutually agree.
4.2 Deliveries by DTR. DTR shall deliver, or cause to be delivered, to the
Company at or prior to the Closing, the following:
(i) An Assignment, duly executed by DTR, in the form attached
hereto as Exhibit B; and
(ii) Such other documents or instruments as may be reasonably
necessary to carry out the transactions contemplated hereby.
4.3 Deliveries by the Company. The Company shall deliver, or cause to be
delivered, to DTR, at or prior to the Closing, the following:
(i) $500,000 in cash;
(ii) a promissory note in the form attached hereto as Exhibit C;
(iii) a promissory note in the form attached hereto as Exhibit D;
(iv) such other documents or instruments as may be reasonably
necessary to carry out the transactions contemplated hereby.
ARTICLE V
OTHER AGREEMENTS OF THE PARTIES
5.1 Consent/Waiver of Rights. API I, API II and DTR hereby consent to the
transfer of the DTR Interest to the Company pursuant to Section 6.02 of the LLC
Agreement, and API I and API II hereby waive their rights of first refusal under
Section 6.03 of the LLC Agreement with respect thereto.
5.2 Relief from LLC Agreement. Upon the transfer of the DTR Interest to the
Company, DTR shall no longer be a member of the Company and will no longer be a
party to, or be bound under the terms of, the LLC Agreement; provided that for
five years following such transfer, DTR will be bound by the terms of Section
8.02 of the LLC Agreement.
5.3 Financial Information. Following the Closing, the Company will, at its
cost, promptly provide DTR with such financial statements and financial
information as DTR may reasonably request in order to comply with informational
disclosure requirements under applicable federal securities laws, including the
Securities Exchange Act of 1934.
ARTICLE VI
SURVIVAL, INDEMNIFICATION, INJUNCTIVE RELIEF, ETC.
6.1 Survival. All representations, warranties, covenants and agreements
contained in this Agreement, and all representations and warranties contained in
any document delivered pursuant hereto, shall be deemed to be material and to
have been relied upon by the parties hereto (unless otherwise stated in such
document), and shall survive the Closing until all principal and interest on the
Promissory Notes has been paid.
6.2 Indemnification by API I, API II and the Company. API I, API II and the
Company shall each, with respect only to their own warranties, representations,
covenants
and agreements, indemnify, defend and hold harmless DTR from and against any and
all loss, damage (except incidental and consequential damages), expense
(including court costs, reasonable attorneys' fees, interest expenses and
amounts paid in compromise or settlement), suits, actions, claims, penalties,
liabilities or obligations (collectively, "Losses") related to, caused by,
arising from or on account of any misrepresentation, or breach of any
representation, warranty, covenant or agreement of API I, API II or the Company,
made or contained in this Agreement.
6.3 Indemnification by DTR. DTR shall indemnify, defend and hold harmless
API I, API II and the Company from and against any and all Losses related to,
caused by, arising from or on account of any misrepresentation, or breach of any
misrepresentation warranty, covenant or agreement of DTR, made or contained in
this Agreement.
6.4 Indemnification - General. Promptly after discovery by an indemnified
party under Section 6.2 or 6.3 of any facts or circumstances which form the
basis for a claim of indemnification, such indemnified party will, if a claim in
respect thereof is to be made against any indemnifying party under Section 6.2
or 6.3, notify in writing the indemnifying party of such facts or circumstances.
The omission of the indemnified party to promptly notify the indemnifying party
will not relieve the indemnifying party from any liability or obligation under
Section 6.2 or 6.3 as to the particular item for which indemnification is then
being sought, unless such omission materially impairs the indemnifying party's
ability to adequately remedy such facts or circumstances, or to defend any third
party action based in whole or part thereon. In case any third party action is
brought against any indemnified party and it seeks indemnification hereunder,
the indemnifying party will be entitled to participate therein, and, to the
extent that it may wish, to assume the defense thereof with counsel who shall be
to the reasonable satisfaction of such indemnified party. After notice from the
indemnifying party to such indemnified party of its election so to assume the
defense thereof, the indemnifying party will not be liable to such indemnified
party under Section 6.2 or 6.3 for any legal or other expenses subsequently
incurred by such indemnified party, in connection with the defense thereof other
than reasonable costs of investigation. Any such indemnifying party shall not be
liable to any such indemnified party on account of any settlement with a third
party of any claim or action effected without the consent of such indemnifying
party. An indemnified party shall have the right to employ its own counsel in
any matter with respect to which indemnity may be sought by the indemnified
party against an indemnifying party in which event the fees and expenses of
separate counsel shall be borne by the indemnified party.
ARTICLE VII
VENUE AND JURISDICTION
7.1 With respect to any action brought by or against any party with respect
to this Agreement, or any controversy arising out of this Agreement, each party
hereto submits and consents to the jurisdiction of the Minnesota District Court,
Fourth Judicial District.
ARTICLE VIII
GENERAL PROVISIONS
8.1 Amendment and Waiver. No amendment or waiver of any provision of this
Agreement shall in any event be effective, unless the same shall be in writing
and signed by the parties hereto, and then such waiver or consent shall be
effective only in the specific instance and for the specific purpose for which
given.
8.2 Notices. To be effective, all notices or other communications required
or permitted hereunder shall be in writing. A written notice or other
communication shall be deemed to have been given hereunder (i) if delivered by
hand, when the notifying party delivers telecopier or overnight delivery
service, on the first business day following the date such notice or other
communication is transmitted by telecopier or timely delivered to the overnight
courier, or (iii) if delivered by mail, on the fourth business day following the
date such notice or other communication is deposited in the U.S. mail by
certified or registered mail addressed to the other party, whichever occurs
earlier. Mailed or telecopied communications shall be directed as follows unless
written notice of a change of address or telecopier number has been given in
writing in accordance with this paragraph:
To API I, API II and the Company Agribusiness Management Company, L.L.C.
1004 Farnam Street, Suite 400
Omaha, NE 68102
Facsimile No.: (402) 930-3007
Copy to: Steven P. Amen
Kutak Rock LLP
1650 Farnam Street
Omaha, NE 68102
Facsimile No.: (402) 346-1148
To DTR: To: John Hupp
Developed Technology Resource, Inc.
5223 Edina Industrial Boulevard
Edina, MN 55439
Copy to: Roger H. Frommelt
Felhaber, Larson, Fenlon & Vogt, P.A.
225 South Sixth Street, Suite 4200
Minneapolis, MN 55402
Facsimile No.: (612) 338-0535
Parties in Interest. This Agreement shall inure to the benefit of and be binding
upon the parties named herein and their respective successors and assigns. Any
assignment of this Agreement or the rights hereunder by a party hereto without
the prior written consent of the other parties shall be void.
Entire Transaction. This Agreement and the other documents referred to herein
shall contain the entire understanding among the parties with respect to the
transactions contemplated hereby and shall supersede all other agreements and
understandings among the parties.
Applicable Law. This Agreement shall be governed by and construed in accordance
with the laws of the state of Minnesota.
Cooperation. Subsequent to the Closing, the parties hereto will execute such
documents and take such actions as are reasonably requested by any other party
to carry out the intent of this Agreement.
Headings. The Article, Section and other headings contained in this Agreement
are for reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
Counterparts. This Agreement may be executed simultaneously in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute on and the same Agreement.
The parties hereof have executed this Agreement as of the date set forth above.
Developed Technology Resource, Inc. API Dairy Partners LP
By Agribusiness Holding Company LLC
Its general partner
By By
-------------------------------- --------------------------------
FoodMaster International LLC Agribusiness Partners International LP II
By CIS Management Company LLC
Its general partner
By By
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INDEX OF EXHIBITS
Second Amended and Restated Limited Liability Company Agreement
Assignment
Promissory Note due September 30, 2002
Promissory Note due March 31, 2003
Consolidated Balance Sheet of the Company