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STOCK PURCHASE AGREEMENT
URETHANE SOY SYSTEMS CO., an Illinois corporation (the "company" ),
agrees with SOUTH DAKOTA SOYBEAN PROCESSORS (the "purchaser") as follows:
1. ISSUANCE AND SALES OF SHARES. The company will issue and sell to purchaser
and, subject to the terms and conditions and in reliance on the
representations and warranties in this agreement, purchaser will purchase
from the company an aggregate of ONE THOUSAND (1000) shares (the "shares")
of the company's common stock ("stock"), at the purchase price of $1000.00
per share, at ONE closing (the "closing") as set forth in paragraph 2.
Purchaser shall make three (3) equal installment payments to complete the
sale, one upon signing this agreement, one on October 15, 2000 and the
final payment on April 15, 2001 at said closing. All shares shall, upon
issuance and delivery to purchaser, be duly authorized, validly issued,
fully paid and nonassessable.
2. DELIVERY OF PAYMENT FOR SHARES. Purchaser acknowledges receipt of share
certificates into escrow representing 1000 shares of the company's common
stock, issued on purchaser's name, and the company acknowledges receipt of
a certified (or bank cashier's) check or federal funds, payable to the
company in the amount of $333,000 representing payment in full for 333
shares. At the second closing and the third closing, the company shall
deliver to escrow share certificates issued in the name designated by
purchaser representing the shares to be purchased at the respective
closings, against delivery of a certified (or bank cashier's) check or
federal funds, payable to the company, for the purchase price of the
shares. All of said shares shall remain in an escrow account maintained
until the completion of the third closing. An Escrow Agreement will be
negotiated and signed by the parties contemporaneous with the execution of
this Agreement.
3. CLOSING. The first closing of the sale and purchase of the shares (the
"closing,") shall take place at VOLGA, SD at 9:00 a.m., on May 30, 2000,
or such other time and place as may be mutually agreed upon. An request
for adjournment shall be specified in a written notice from the party
requesting adjournment to the other party delivered at least twenty five
days prior to the scheduled date of the closing. Upon signing this
agreement Purchaser shall be entitled to one "honorary" non-voting seat on
the Board of Directors of the company. Said "honorary" member shall be
either an officer of the Purchaser or an Officer of the Purchaser's Board
of Directors.
4. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The company represents and
warrants to the purchaser that:
(a) The company has delivered to purchaser copies of the consolidated
balance sheet of the company and its subsidiaries certified by EDWARD S.
WIACEK, certified public accountant, the "consolidated financial
statements" which present fairly the consolidated financial condition and
results of operations of the company to which they relate as at the
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dates and for the periods covered by the statements and have been prepared
in conformity with generally accepted accounting principles applied on a
basis which is, except as otherwise stated in this agreement, consistent
in all material respects during the periods involved. Since January 1,
2000, there has not been any material adverse change in the financial
condition or in the operations of the business of the company and its
subsidiaries from that shown in the statements. The Company shall provide
Purchaser audited financial statements on the six month anniversary of the
initial installment and for three (3) consecutive six month anniversaries
thereafter.
(b) The company and its subsidiaries are duly organized, validly existing
and in good standing under the laws of their respective jurisdictions of
organization, with full power and authority (corporate and other) to own
their properties and conduct their businesses.
(c) The authorized capital stock of the company intended by this agreement
to be purchased consists of 1,000 shares of common stock, per share, none
of which are issued or outstanding. The company has outstanding no
options, warrants, or other agreements or commitments for the issuance or
sale of additional shares of stock. All of the outstanding stock is
validly issued, fully paid, and nonassessable.
(d) Except as stated in a list furnished by the company on the date of
this agreement (the information on which is, to the company's knowledge,
true in all material respects), no action, suit, or proceeding has been
initiated or threatened against the company or any of its subsidiaries
which involves a claim for damages, or which seeks relief other than
damages and, if determined adversely to the company or such subsidiary,
would result in any material adverse change in the business, property,
operations, or condition, financial or otherwise, of the company and its
subsidiaries taken as a whole, or the ability of the company to perform
this agreement. To the company's knowledge, no governmental investigation
of the company or any of its subsidiaries or of their business or affairs
has been initiated or threatened.
The business or properties of the company and its subsidiaries have not
been and have not been threatened to be, materially affected in any way as
a result of fire, explosion, earthquake, disaster, or labor dispute, or as
a result of any action by the United States or any United States
governmental agency that would materially impair its ability to continue
operations.
The company believes that all material income and other tax returns of
the company and its subsidiaries required by law to be filed have been
duly filed and all income and other taxes, assessments and other
governmental charges (other than any presently payable without penalty and
any currently being contested in good faith) upon the company and their
properties, income, and franchises, material to the company and its
subsidiaries taken as a whole, believed by the company to be due and
payable, have been paid.
To the best of the company's knowledge, the company is not in default in
the performance, observance, or fulfillment of any of the obligations,
covenants, or conditions contained in any material agreement, indenture,
or instrument to which it is a
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party that would have a material adverse effect on the company and its
subsidiaries taken as a whole.
The execution, delivery, and performance of this agreement have been duly
authorized by all necessary corporate action of the company. Neither the
execution and delivery of this agreement nor the consummation of any
transaction provided for in it will violate any material agreement,
indenture, or instrument to which the company is a party or any provision
of the company's certificate of incorporation or bylaws or any law,
regulation, license, judgment, court order or decree to which the company
is subject. The company has obtained all governmental approvals and
permits required for the issuance and sale of the shares to purchaser.
This agreement has been duly executed and delivered by the company and is
a valid and binding agreement of the company.
5. REPRESENTATIONS AND WARRANTIES OF THE PURCHASER. Purchaser represents and
warrants to the company:
(a) Purchaser has been duly incorporated and is validly existing and in
good standing as a cooperative under the laws of the State of South
Dakota.
(b) The execution, delivery, and performance of this agreement have been
duly authorized by all necessary corporate action of the purchaser.
Neither the execution and delivery of this agreement nor the consummation
of any transactions provided for in, it shall violate any material
agreement, indenture, or instrument to which the company is a party or any
provisions, of its certificate of incorporation or bylaws or any law,
regulation, license, judgment, court order or decree to which it is
subject. This agreement has been duly executed and delivered and is a
valid and binding agreement of the purchaser.
(c) All of the shares of the purchaser are, or will be, owned, except for
qualifying shares, directly or indirectly, by purchaser.
(d) The shares are being purchased by purchaser for investment and not
for sale or distribution of any part and will not be sold in violation of
the Securities Act of 1933 and purchaser is an "accredited investor" as
defined by Regulation D of the Securities Act of 1933, Reg. Sec.230.501-
230-508 as amended, and is qualified to purchase under the exemptions of
Rule 504 of said Act.
(e) Further, purchaser shall indemnify and hold harmless the company, its
officers and directors and any person who controls (within the meaning of
the Act) the company from all losses, liabilities, damages, and expenses
(including reasonable attorneys' fees) caused by, arising our of, or based
upon any untrue statement of a material fact contained in this Agreement
or any breach of this Agreement.
Purchaser acknowledges that it has been given every opportunity and all
necessary time it required to investigate and conduct due diligence
regarding this purchase.
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6. DELIVERY AND PAYMENT FOR SHARES
Upon the April 15, 2001 closing Purchaser shall acknowledge receipt of
Share certificates representing 1000 shares of the company's common stock,
issued in purchaser's name, and the company shall acknowledge receipt of
the third payment for said stock via a certified [or bank cashier's] check
in or payable to the company which will then total $1,000,000.00
representing payment in full for the 1000 shares.
7. OPINIONS OF COUNSEL
Purchaser acknowledges receipt of opinions on the date of this agreement
by Allan C. Alongi, counsel to the company, as to matters set forth in
subparagraph (b) of paragraph 4 as it related to the company, and certain
subsidiaries, subparagraph (c) of paragraph 4 and as to the due
authorization, valid issuance, full payment, and non-assessability of the
shares and subparagraph (d) regarding the execution, delivery and
performance of this agreement have been duly authorized by all necessary
corporate action of the company. The company acknowledges receipt of an
opinion on the date of this agreement by, James M. Wiederrich, counsel to
purchaser, as to the matters set forth in subparagraphs (a) and (b),
regarding the execution, delivery and performance of this agreement have
been duly authorized by all necessary corporate action of the Company of
paragraph 5.
8. COVENANTS OF THE COMPANY.
(a) If at anytime during which the purchaser holds at least 1000 shares
of the outstanding stock a person designated by purchaser is not serving
as director of the company:
(1) The company shall furnish to purchaser or purchaser's
representatives promptly and on a continuing basis the following:
(A) Copies of any financial report or data prepared for or
submitted to the board of directors of the company, or any
executive committee, examining committee, audit committee, or
other similar committee of the board.
(B) Copies of minutes of all meetings of the board of
directors of the company or any committee referred to above.
(C) Copies of all reports or documents filed with or
submitted to the Securities and Exchange Commission.
(2) The persons or representatives shall be permitted, upon
reasonable request, to inspect any documents which the company files
with, submits to, or receives from any governmental or regulatory
authority, and at any time or from time to time to consult with
officials of the company on matters pertaining to the business and
prospects of the company, not including patents pending.
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(3) The company shall provide purchaser with at least 10 days'
advance of each meeting of its board of directors and of the
committees referred to in subparagraph (1)(A) and purchaser shall be
entitled to have the "honorary" representative attend each meeting
in person or by teleconference.
Purchaser and purchaser's representatives shall treat as confidential any
such information received under this agreement.
Nothing in this agreement shall be deemed to obligate the company or any
officer of the company to furnish information or to permit inspection of
any document in violation of any applicable law or any regulation of any
governmental agency having jurisdiction of the company, but the company
shall use its best efforts to provide or cause to be provided information
and document in conformity with procedures permissible under any law or
regulations.
Nothing in this agreement shall be deemed to limit purchaser to receive
the annual reports, interim reports, financial statements, and financial
data as shall, from time to time, be furnished by the company to its
shareholders.
(b) The company shall apply the proceeds of the issuance and sale of the
shares to capital.
(c) The company shall not, without purchaser's written approval, refer to
purchaser or to any of purchaser's shareholders, officers, directors, or
affiliates in any registration statement under the Securities Act of 1933
or in any publication or filing under the Securities Exchange Act of 1934
or in any other document filed with any governmental agency or prepared
for publication or for distribution to shareholders of the company or the
public, unless in the written opinion of counsel for the company such
reference is required by law.
9. REGISTRATION UNDER SECURITIES ACT OF 1933.
(a) If at any time commencing two years after the date of this agreement
purchaser, by written notice to the company, requests registration of not
less than 1,000 shares of stock held by purchaser, the company shall set
forth, prepare, and file a registration statement under the Securities Act
of 1933 ("Act"), including a prospectus appropriate for use in connection
with the sale as stated in purchaser's notice, and shall use its best
efforts to cause the registration statement to become effective, the
preparation, filing, and effectiveness to be accomplished as promptly as
reasonably practicable. In connection with the registration statement, the
company shall effect the filings under state "blue sky" laws as purchaser
requests and take other action as purchaser reasonably requests to
facilitate the sale of the shares.
The obligations of the company under this paragraph 8 shall be subject to
the following conditions:
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(1) The company shall not be required to file any registration
statement within 12 months after the effective date of any previous
registration statement requested by purchaser nor to keep any
registration statement in effect for a period exceeding six months.
(2) If at the time of request the company (A) has filed a
registration statement for an underwritten ,public offering of stock
exclusively for the account of the company or (B) has engaged in
serious discussions with underwriters for the offering and a
registration statement is to be filed within 60 days for the
offering ("pending registration"), the company may defer the filing
of any registration statement requested by purchaser for a period
not exceeding 180 days after the date of request or, if it does not
exercise the right, may delay the effectiveness of the registration
statement for a period not exceeding 90 days from the effective date
of the pending registration, provided the managing underwriter
determines and advises purchaser in writing that the filing or
effectiveness of the registration statement requested could be
materially prejudicial to the company's offering.
(b) It is not intended that there be any limit on the number of
registrations purchaser may request under paragraph 9(a); however, the
company shall pay only the expenses relating to the first two registration
statements requested. The expenses shall include, without limitation, all
legal and accounting fees and expenses, filing fees, printing costs and
all other expenses, except the fees of purchaser's own counsel and any
underwriting discounts or commissions in connection with the sale of
shares. Purchaser shall pay all expenses in connection with any additional
registration statement requested under paragraph 8(a), except expenses
(such as accounting expenses for the company's annual financial
statements) which the company would have incurred irrespective of the
request. Neither the company nor purchaser shall impose any charge for the
services of its own personnel in connection with any registration of stock
requested.
(c) Purchaser shall provide the company all information required to be
included in the registration statement concerning purchaser and the
offering of shares by purchaser. Further, purchaser shall indemnify and
hold harmless the company, its officers and directors and any person who
controls (within the meaning of the Act) the company from all losses,
liabilities, damages, and expenses (including reasonable attorneys' fees)
caused by, arising out of, or based upon any untrue statement of a
material fact contained in the registration statement, or any related
prospectus, or any omission of a material fact required or necessary to
make the statements not misleading, to the extent that the losses,
liabilities, damages, or expenses resulted from any untrue statement or
omission contained in information furnished in writing to the company by
purchaser expressly for inclusion in the registration statement.
(d) The company shall indemnify and hold harmless the purchaser, its
officers, directors, and underwriters and any person who controls (within
the meaning of the Act) the purchaser or any underwriter from all losses,
liabilities, damages, and expenses (including reasonable attorneys' fees)
caused by, arising out of, or based upon any untrue statement of a
material fact contained in the registration statement, or any related
prospectus, or any omission of a material fact required or necessary to
make the
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statements not misleading except to the extent that the losses,
liabilities, damages, or expenses resulted from any untrue statement or
omission contained in information furnished in writing to the company by
purchaser expressly for inclusion in the registration statement.
(e) The company shall furnish to purchaser and purchaser's underwriters,
if any, the number of copies of any prospectus which is a part of any
registration statement filed under this agreement as purchaser or
underwriters reasonably request.
(f) The company shall not, except with purchaser's written approval,
include in any registration statement filed at purchaser's request under
this paragraph or in any registration statement that will become effective
within 90 days after the effective date of the registration statement, any
other offering or sale of shares by shareholders of the company, if in
purchaser's judgment or the judgment of any managing underwriter of
purchaser's offering, the inclusion could be materially prejudicial to
purchaser's offering.
10. LEGEND ON SHARE CERTIFICATES. Purchaser understands that to insure
compliance with the securities laws of the United States the share
certificates representing the shares will contain a legend restricting
transfer to the effect that the shares have not been registered under the
Securities Act of 1933 and may be offered, sold, or transferred only if
registered pursuant to the provision of that Act or if an exemption from
registration is available.
11. PROTECTION AGAINST DILUTION AND CERTAIN OTHER EVENTS. Prior to the
April 15, 2001 closing, the company shall not, without prior written
consent of the purchaser, declare or pay any dividend payable in stock
or in securities convertible into stock, or take any action to change
the number of outstanding shares of the stock by slit-up, reverse
split, combination, or recapitalization, or declare or pay any dividend
or distribution on its stock other than the usual cash dividends
payable to shareholders of record on the usual record dates, or take
any action to merge into or consolidate with, or sell all or
substantially all its assets to, any other corporation, or enter into
any other transaction as a result of which the company's separate
corporate existence terminates.
12. The company will not offer unsold or new issues of stock at a price less
than the Minimum Incremental Stock Price ("MISP") without written consent
from Purchaser. The MISP will be defined and managed as follows:
1. MISP will be the same as the price paid by Purchaser
($1000.00) at the time the stock is issued.
2. MISP will be recalculated to reflect the appropriate value
in the event of stock splits. Example: Old MISP=$1000.00; 2 for 1
split; New MISP=$500.00.
3. MISP will be reduced to zero ($0.00) in the event that the
company is no longer a closed corporation and shares can be
purchased on the open market.
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13. INVESTIGATION. The rights of either party arising out of a
misrepresentation or breach of any warranty contained in this agreement
or any misstatement contained in any certificate to be delivered under
the agreement shall not be limited or affected by any investigation
made by that party, except to the extent that the party that asserts a
claim based on any misrepresentation, breach of warranty, or
misstatement had actual knowledge, at the time of the
misrepresentation, breach, or misstatement of the facts or
circumstances which it claims were misrepresented or misstated or as to
which it claims breach of warranty.
14. ASSIGNMENT. This agreement and any or all of purchaser's rights and
obligations under this agreement, shall not be assignable.
15. NOTICES. Any notice required or permitted to be given under this agreement
shall be in writing and shall be deemed to have been duly given when sent
by cable, telegraph, or telex (and confirmed by first class airmail,
postage prepaid) to the addresses set forth below or to other address or
addresses as either of the parties may designate by similar notice to the
other
If to the company: JOHN WAWAK
VP & GM
Urethane Soy Systems Company, Inc.
19 N. Grant Street
Hinsdale, IL 60521
If to purchaser: RODNEY G. CHRISTIANSON
SDSP
P.O. Box 500
Volga, SD 57071
This agreement shall take effect upon purchaser's executing a copy and
delivering it to company.
Dated: May 30, 2000
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/s/ Rodney G. Christianson
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Purchaser
/s/ Connie Kelly
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Attest
/s/ John Wawak
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Company
/s/ Thomas
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Attest