Exhibit 10.17
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SHARE EXCHANGE AGREEMENT
By and Among
GREEN PLAINS RENEWABLE ENERGY, INC.,
SUPERIOR ETHANOL, LLC,
and the
CONTROLLING MANAGER
As of February 22, 2006
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SHARE EXCHANGE AGREEMENT
This Share Exchange Agreement (hereinafter the "Agreement") is entered
into effective as of this 22nd day of February, 2006, by and among Green Plains
Renewable Energy, Inc., an Iowa corporation (hereinafter "GPRE"), Superior
Ethanol, LLC, an Iowa limited liability company (hereinafter "Superior"), Xxxxx
X. Xxxxxxxx, a manager and the sole member of Superior (hereinafter "Controlling
Manager").
RECITALS:
WHEREAS, Controlling Manager owns all of the membership interest of
Superior (the "Superior Stock"). GPRE desires to acquire the Superior Stock in
exchange for 100,000 shares of restricted voting common stock of GPRE (the "GPRE
Stock"), making Superior a wholly-owned subsidiary of GPRE.
NOW THEREFORE, for the mutual consideration set out herein and other
good and valuable consideration, the legal sufficiency of which is hereby
acknowledged, the parties agree as follows:
ARTICLE I
DEFINITIONS
1.01 Definitions. Accounting terms used in this Agreement and not
otherwise defined herein shall have the meanings provided by GAAP. Certain
capitalized terms are used in this Agreement as specifically defined in this
Section 1.1 as follows:
"Affiliate" means any Person directly or indirectly controlling,
controlled by or under direct or indirect common control with Superior (or other
specified Person) and shall include (a) any Person who is an officer, director
or beneficial holder of at least 10% of the outstanding capital stock of
Superior (or other specified Person), (b) any Person of which Superior (or other
specified Person) or any officer or director of Superior (or other specified
Person) shall, directly or indirectly, either beneficially own at least 10% of
the outstanding equity securities or constitute at least a 10% participant, and
(c) in the case of a specified Person who is an individual, Members of the
Immediate Family of such Person; provided, however, that Controlling Manager
shall not be Affiliates of Superior for purposes of this Agreement.
"Agreement" is defined in the Preamble.
"Balance Sheet Date" is defined in Section 4.06.
"Bylaws" means all written rules, regulations, procedures, bylaws,
operating agreements and all other similar documents, relating to the
management, governance or internal regulation of a Person other than an
individual, each as from time to time amended or modified.
"Charter" means the articles or certificate of incorporation, articles
of organization, statute, constitution, joint venture or partnership agreement
or articles or other charter of any Person other than an individual, each as
from time to time amended or modified.
"Closing" is defined in Section 2.02.
"Code" means the federal Internal Revenue Code of 1986 or any successor
statute, and the rules and regulations thereunder, as from time to time amended
and in effect.
"Commission" means the Securities and Exchange Commission or any other
federal agency at the time administering the Securities Act, the Exchange Act or
both.
"Contractual Obligation" means, with respect to any Person, any
contracts, agreements, deeds, mortgages, leases, licenses, other instruments,
commitments, undertakings, arrangements or understandings, written or oral, or
other documents, including any document or instrument evidencing indebtedness,
to which any such Person is a party or otherwise subject to or bound by or to
which any asset of any such Person is subject.
"Controlling Manager" is defined in the preamble.
"Debt Funding Documents" is defined in Section 2.03(i).
"Employee Benefit Plan" means each and all "employee benefit plans" as
defined in section 3(3) of ERISA, maintained or contributed to by Superior, any
of its Affiliates or any of their respective predecessors, or in which Superior,
any of its Affiliates or any of their respective predecessors participates or
participated and which provides benefits to employees of Superior or their
spouses or covered dependents or with respect to which Superior has or may have
a material liability, including, (i) any such plans that are "employee welfare
plans" as defined in section 3(1) of ERISA and (ii) any such plans that are
"employee pension benefit plans" as defined in section 3(2) of ERISA.
"ERISA" means the Employee Retirement Income Security Act of 1974 or
any successor statute and the rules and regulations thereunder, and in the case
of any referenced section of any such statute, rule or regulation, any successor
section thereof, collectively and as from time to time amended and in effect.
"ERISA Group", with respect to any entity, means any Person which is a
member of the same "controlled group" or under "common control", within the
meaning of section 414(b) or (c) of the Code or section 4001(b)(1) of ERISA,
with such entity.
"Exchange Act" means the Securities Exchange Act of 1934, or any
successor federal statute, and the rules and regulations of the Commission
thereunder, all as from time to time amended and in effect.
"Financial Statements" is defined in Section 4.06.
"GAAP" means United States generally accepted accounting principles, as
in effect from time to time, consistently applied.
"GPRE" is defined in the Preamble.
"GPRE Stock" is defined in the Recitals.
"Intellectual Property" is defined in Section 4.17(a).
"Intellectual Property Licenses" is defined in Section 4.17(d).
"Legal Requirement" means any federal, state or local law, statute,
standard, ordinance, code, order, rule, regulation, resolution, promulgation or
any final order, judgment or decree of any court, arbitrator, tribunal or
governmental authority, or any license, franchise, permit or similar right
granted under any of the foregoing.
"Material Adverse Effect" means a material adverse effect upon the
business, assets, financial condition, income or prospects of the party in
question.
"Members of the Immediate Family," as applied to any individual, means
each parent, spouse, child, brother, sister or the spouse of a child, brother or
sister of the individual, and each trust created for the benefit of one or more
of such persons and each custodian of a property of one or more such persons.
"Other Intellectual Property" is defined in Section 4.17(c).
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"Pension Plan" means each pension plan (as defined in section 3(2) of
ERISA) established or maintained, or to which contributions are or were made by
Superior or any of its Subsidiaries or former Subsidiaries, or any Person which
is a member of the same ERISA Group with any of the foregoing.
"Person" means an individual, partnership, corporation, company,
association, trust, joint venture, unincorporated organization and any
governmental department or agency or political subdivision.
"Property" is defined in Section 2.03(i).
"Rescission Period" is defined in Section 5.03.
"Shares" is defined in Section 2.01.
"Securities Act" means the Securities Act of 1933, as amended, or any
successor federal statute, and the rules and regulations of the Commission
thereunder, all as the same shall be from time to time amended and in effect.
"Superior" is defined in the Preamble.
"Superior Intellectual Property" is defined in Section 4.17(b).
"Superior Stock" is defined in the Recitals.
"Transaction Prerequisites" is defined in Section 2.03(h).
"Welfare Plan" means each welfare plan (as defined in section 3(l) of
ERISA) established or maintained, or to which any contributions are or were
made, by Superior or any of its Subsidiaries or any Person which is a member of
the same ERISA Group with any of the foregoing.
ARTICLE II
SHARE EXCHANGE
2.01 Plan of Share Exchange. It is hereby agreed that the Superior
Stock shall be acquired by GPRE at Closing in exchange for 100,000 shares of
restricted GPRE Stock (the "Shares"). It is the intention of the parties hereto
that this transaction will qualify as a corporate reorganization under Section
368(a)(1)(B) of the Code, and related or other applicable sections thereunder.
However, neither party is making any representations or warranties regarding the
tax treatment of this transaction.
2.02 Closing. The closing of the Agreement (the "Closing") shall take
place in Salt Lake City, Utah, at the offices of Xxxxxxxxx & Xxxxx, XX. The
Closing shall take place on a date no later than February __, 2006 or at such
other place and time as the parties may otherwise agree.
Notwithstanding the foregoing, the parties will endeavor in good faith
to effectuate the Closing simultaneously in different locations to avoid the
travel and additional expense of requiring all parties to be simultaneously
located in the same place. In connection therewith, the parties will deliver, in
escrow to opposing counsel and other appropriate parties, all assignments,
instructions, documents, certificates, wire transfer instructions, escrow
instructions and other matters and things necessary to effect Closing in such
manner.
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2.03 Conditions to Closing for GPRE. GPRE's several obligations to
purchase Superior Stock pursuant to this Agreement on the Closing date are
subject to the satisfaction, on or prior to the Closing date, of the following
conditions:
(a) Representations and Warranties Correct. The representations and
warranties made by Superior and Controlling Manager herein shall have been true
and correct when made and shall be true and correct on and as of the Closing
date, with the same force and effect as though made on and as of the Closing
date, except for representations and warranties that are made as of a specific
date which shall only be required to be true and correct as of such date.
(b) Performance. All covenants, agreements, and conditions contained in
this Agreement to be performed or complied with by Superior and Controlling
Manager on or prior to the Closing shall have been performed or complied with
and neither Superior nor the Controlling Manager shall be in default in the
performance of or compliance with any provisions of this Agreement.
(c) Compliance Certificates. Superior shall have delivered to GPRE a
certificate of the manager of Superior, dated the date of the Closing date,
certifying to the matters stated in Sections 2.03(a) and (b).
(d) Certified Documents. Superior shall have delivered to GPRE copies
of each of the following which shall be true and correct copies in full force
and effect as of the Closing date: (i) the Charter of Superior certified by
Superior's secretary as of the Closing date; (ii) the Bylaws of Superior,
certified by Superior's secretary as of the Closing date; and (iii) resolutions
of the manager of Superior, the form and substance of which are reasonably
satisfactory to GPRE, authorizing the execution, delivery and performance of
this Agreement and the transactions contemplated hereby.
(e) Consents. All consents and approvals to the transactions
contemplated by this Agreement required to be obtained by Superior and/or
Controlling Manager from any third party shall have been obtained.
(f) Legality. All authorizations, approvals or permits of any
governmental authority or regulatory body that are required in connection with
the lawful issuance and exchange of the GPRE Stock and the exchange of Superior
Stock pursuant to this Agreement shall have been duly obtained and shall be in
full force and effect.
(g) Due Diligence. After completing its due diligence investigation
prior to the Closing, GPRE shall have determined that, in GPRE's sole
discretion, the financial condition of Superior and the condition of Superior
otherwise is suitable to GPRE. In the event that GPRE determines, in its sole
discretion, that Superior is not suitable to GPRE for any reason whatsoever,
then GPRE may rescind this Agreement prior to Closing by giving written notice
to Superior prior to Closing. In the event of any such rescission, this
Agreement thereafter shall be null and void and neither party shall have any
obligation to the other.
(h) Transaction Prerequisites. At Closing, or at such later time as the
parties may agree, the following shall have occurred (the "Transaction
Prerequisites"):
(i) Superior will have had at least $210,000 in its bank
account(s).
(ii) The land that Superior has options on pertaining to the
proposed site shall have been awarded a complete property tax abatement
from Xxxxxxxxx County, Iowa, for a period of twelve years, with three
additional years of a tax abatement of 50% (fifty percent).
(iii) The land that Superior has options on pertaining to the
proposed site shall be zoned "heavy industrial" and shall also have any
other special zoning or zoning permits required to allow construction
of the proposed ethanol plant.
(i) Transaction Documents. At Closing, or at such later time as the
parties may agree, Superior shall deliver to GPRE the following (the "Debt
Funding Documents"):
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(i) Ten year pro forma financial statements prepared by
Xxxxxxxxxxxx & Associates, PLLP, in a form that is reasonably
acceptable to the lender(s) that GPRE solicits to obtain funds for the
construction of an ethanol plant in or near Superior, Iowa. The parties
agree that such financial statements shall be prepared post-Closing at
GPRE's expense.
(ii) A feasibility study completed by PRX Pro Experts relating
to the Property.
(iii) Superior shall have options to acquire at least 135 (one
hundred thirty five) acres of continuous real property in Xxxxxxxxx
County, Iowa (the "Property").
(j) General. All instruments and legal and corporate proceedings in
connection with the transactions contemplated by this Agreement shall be
reasonably satisfactory in form and substance to GPRE, and GPRE shall have
received copies of all documents, including records of corporate proceedings and
officers' certificates, which they may have reasonably requested in connection
therewith.
2.04 Conditions to Closing for Superior. Superior's several obligations
to enter into the transactions described in this Agreement on the Closing date
are subject to the satisfaction, on or prior to the Closing date, of the
following conditions:
(a) Representations and Warranties Correct. The representations and
warranties made by GPRE herein shall have been true and correct when made and
shall be true and correct on and as of the Closing date with the same force and
effect as though made on and as of the Closing date.
(b) Performance. All covenants, agreements and conditions contained in
this Agreement to be performed or complied with by GPRE on or prior to the
Closing shall have been performed or complied with and GPRE shall not be in
default in the performance of or compliance with any provisions of this
Agreement.
(c) Compliance Certificates. GPRE shall have delivered to GPRE a
certificate of the chief executive officer or chief financial officer of GPRE,
dated the date of the Closing date, certifying to the matters stated in Sections
2.04(a) and (b).
(d) Certified Documents. GPRE shall have delivered to Superior copies
of each of the following which shall be true and correct copies in full force
and effect as of the Closing date: (i) the Charter of GPRE certified by GPRE's
secretary as of the Closing date; (ii) the Bylaws of GPRE, certified by GPRE's
secretary as of the Closing date; and (iii) resolutions of the Board of
Directors of GPRE, certified by GPRE's secretary as of the Closing date, the
form and substance of which are reasonably satisfactory to GPRE, authorizing the
execution, delivery and performance of this Agreement and the transactions
contemplated hereby.
(e) Consents. All consents and approvals to the transactions
contemplated by this Agreement required to be obtained by any Seller from any
third party shall have been obtained by such Seller.
(f) Legality. All authorizations, approvals or permits of any
governmental authority or regulatory body that are required in connection with
the lawful issuance and exchange of the GPRE Stock and the exchange of Superior
Stock pursuant to this Agreement shall have been duly obtained and shall be in
full force and effect.
(g) Due Diligence. After completing its due diligence investigation
prior to the Closing, Superior shall have determined that, in Superior's sole
discretion, the financial condition of GPRE and the condition of GPRE otherwise
is suitable to Superior and its Controlling Manager. In the event that Superior
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determines, in its sole discretion, that GPRE is not suitable to Superior or its
Controlling Manager for any reason whatsoever, then Superior may rescind this
Agreement by giving written notice to GPRE. In the event of any such rescission,
this Agreement thereafter shall be null and void and neither party shall have
any obligation to the other.
(h) General. All instruments and legal and corporate proceedings in
connection with the transactions contemplated by this Agreement shall be
reasonably satisfactory in form and substance to Superior, and Superior shall
have received copies of all documents, including records of corporate
proceedings and officers' certificates, which they may have reasonably requested
in connection therewith.
2.05 Other Events Occurring at Closing. At Closing, the following shall
be accomplished:
(a) All of the manager and officers, if any, of Superior shall resign
and the nominees identified by GPRE shall have been appointed.
(b) This Agreement shall have been duly authorized, executed, and
delivered by the parties hereto and a copy of such executed agreement shall have
been delivered to GPRE and Controlling Manager.
(c) Such other instruments, documents and certificates, if any, as are
required to be delivered pursuant to the provisions of this Agreement shall have
been duly authorized, executed and delivered by the parties thereto and a copy
of such executed instruments, documents and certificates shall have been
delivered to GPRE.
(d) All of the certificates representing the Superior Stock shall be
delivered to GPRE, duly and validly endorsed for transfer to GPRE.
(e) The GPRE Stock certificates representing the shares to be issued
and delivered to the Controlling Manager as described herein shall be issued and
held by GPRE for delivery pursuant to the provisions of Section 5.05.
(f) GPRE shall deliver to Superior a certificate of good standing of
GPRE issued by the Secretary of State of Iowa and such certificate dated no
earlier than thirty (30) days prior to the Closing.
(g) Superior shall deliver to GPRE a certificate of good standing of
Superior issued by the Secretary of State of Iowa and such certificate dated no
earlier than thirty (30) business days prior to the Closing.
ARTICLE III
REPRESENTATIONS OF GPRE
GPRE hereby represents and warrants to Controlling Manager as follows:
3.01 Authorization. All shareholder approval and corporate action on
the part of GPRE necessary for the due authorization, execution and delivery of
this Agreement and the consummation of the transactions contemplated herein has
been or will be taken prior to the Closing date. This Agreement is a legal,
valid and binding agreement of GPRE, enforceable in accordance with its terms.
The execution, delivery and performance by GPRE of this Agreement and the
issuance and exchange of the GPRE Stock will not result in any violation of or
be in conflict with, or result in a breach of or constitute a default under, any
term or provision of any Legal Requirement to which GPRE is subject, or any
Charter or Bylaws, or any Contractual Obligation to which GPRE is a party or by
which GPRE is bound.
3.02 Organization. GPRE is a duly organized and validly existing
corporation in good standing under the laws of Iowa. GPRE is duly qualified to
do business as a foreign corporation and is in good standing in each
jurisdiction in which it does business, except where the failure to be so
qualified would not have a Material Adverse Effect.
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3.03 Corporate Power. GPRE has all necessary corporate power and
authority to enter into and perform this Agreement, to issue and sell the GPRE
Stock, to own all the properties owned by it and to carry on the businesses now
conducted or presently proposed to be conducted by it. GPRE has taken all
corporate action necessary to authorize this Agreement and the issuance of the
GPRE Stock to be issued and exchanged hereunder.
3.04 Capitalization. As of the date hereof, the authorized capital
stock of GPRE consists of 25,000,000 shares of common stock, $.001 par value per
share, of which 4,220,990 shares are outstanding. All of the outstanding shares
of capital stock of GPRE, including the GPRE Stock to be issued pursuant to this
Agreement, will be, upon consummation of the transactions contemplated by this
Agreement, validly issued, fully paid, nonassessable and subject to no lien or
restriction on transfer, except restrictions on transfer imposed by applicable
securities laws. All of the outstanding shares of capital stock have been
offered and exchanged in compliance with applicable federal and state securities
laws. GPRE has no outstanding (i) rights (either preemptive or otherwise) or
options to subscribe for or purchase, or any warrants or other agreements
providing for or requiring the issuance of, any capital stock or any securities
convertible into or exchangeable for its capital stock, (ii) obligation to
repurchase or otherwise acquire or retire any of its capital stock, any
securities convertible into or exchangeable for its capital stock or any rights,
options or warrants with respect thereto, (iii) rights that require it to
register the offering of any of its securities under the Securities Act or (iv)
any restrictions on voting any of its securities.
3.05 Accredited Investor Status. GPRE is a sophisticated and an
"accredited investor" as defined under Rule 501 of Regulation D as promulgated
under the Securities Act.
3.06 Litigation. No litigation or proceeding before, or investigation
by, any foreign, federal, state or municipal board or other governmental or
administrative agency or any arbitrator is pending or, to GPRE's knowledge,
threatened (nor to GPRE's knowledge, does any basis exist therefor) against GPRE
or, to GPRE's knowledge, any officer of GPRE, which individually or in the
aggregate could result in any material liability or which may otherwise result
in a Material Adverse Effect, or which seeks rescission of, seeks to enjoin the
consummation of, or which questions the validity of, this Agreement or any of
the transactions contemplated hereby.
3.07 Disclosure. GPRE's Registration Statement on Form S-1, filed with
the Commission on March 7, 2005, and GPRE's subsequent filings with the
Commission did not contain any untrue statement of a material fact, nor omit to
state any material fact necessary in order to make the statements contained
therein, in light of the circumstances under which they were made, not
misleading as of the filing date. Neither this Agreement, nor any agreement,
certificate, statement or document furnished in writing by or on behalf of the
GPRE in connection herewith contains any untrue statement of a material fact or
omits to state a material fact necessary in order to make the statements
contained herein, in light of the circumstances under which they were made, not
misleading.
ARTICLE IV
REPRESENTATIONS OF SUPERIOR AND CONTROLLING MANAGER
Superior and Controlling Manager, jointly and severally, represent and
warrant to GPRE as follows:
4.01 Authorization. All approvals and company action on the part of
Superior necessary for the due authorization, execution and delivery of this
Agreement and the consummation of the transactions contemplated herein has been
or will be taken prior to the Closing date. This Agreement is a legal, valid,
and binding agreement of Superior and the Controlling Manager, enforceable in
accordance with its terms. The execution, delivery and performance by
Controlling Manager and Superior of this Agreement and the transfer of Superior
Stock will not result in any violation of or be in conflict with, or result in a
breach of or constitute a default under, any term or provision of any Legal
Requirement to which any Controlling Manager or Superior is subject, or
Superior's Charter or Bylaws, or any Contractual Obligation to which any
Controlling Manager or Superior is a party or by which any such party is bound.
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4.02 Organization. Superior is a duly organized and validly existing
limited liability company in good standing under the laws of Iowa. Superior is
duly qualified to do business as a foreign company and is in good standing in
each jurisdiction in which it does business, except where the failure to be so
qualified would not have a Material Adverse Effect.
4.03 Company Power. Superior and Controlling Manager have all necessary
power and authority to enter into and perform this Agreement and Controlling
Manager has the power and authority to sell the Superior Stock he owns
hereunder. To the best of its knowledge with investigation, Superior has all
necessary power and authority to own all the properties owned by it and to carry
on the businesses now conducted or presently proposed to be conducted by it.
Superior and Controlling Manager have taken all action necessary to authorize
this Agreement and the sale of the Superior Stock to be exchanged hereunder.
4.04 Subsidiaries. Superior has no Subsidiaries.
4.05 Capitalization. The authorized capital stock of Superior as of the
date of the Agreement is one million (1,000,000). The number of shares of
Superior Stock outstanding as of the date of this Agreement is one thousand
(1,000). All of the outstanding shares of capital stock of Superior are validly
issued, fully paid, nonassessable and the shares of capital stock owned by the
Controlling Manager are subject to no lien or restriction on transfer, except
restrictions on transfer imposed by applicable securities laws or as otherwise
set forth in Schedule 4.05. All of the outstanding shares of capital stock have
been offered and issued, and will be exchanged at Closing in compliance with
applicable federal and state securities laws. Other than as set forth in
Schedule 4.05, Superior has no outstanding (i) rights (either preemptive or
otherwise) or options to subscribe for or purchase, or any warrants or other
agreements providing for or requiring the issuance of, any capital stock or any
securities convertible into or exchangeable for its capital stock, (ii)
obligation to repurchase or otherwise acquire or retire any of its capital
stock, any securities convertible into or exchangeable for its capital stock or
any rights, options or warrants with respect thereto, (iii) rights that require
it to register the offering of any of its securities under the Securities Act or
(iv) any restrictions on voting any of its securities.
4.06 Financial Statements. GPRE has been furnished with complete and
correct copies of the following financial statements of Superior (the "Financial
Statements"): (a) the unaudited balance sheet of Superior as of January 31, 2006
(the "Balance Sheet Date") and (b) the unaudited transaction report of Superior
as of January 31, 2006, and (c) any tax return prepared for Superior or for
Controlling Manager that relates to Superior for the tax period ending December
31, 2005 together with the unaudited balance sheet of Superior as of December
31, 2005. The Financial Statements have been prepared in accordance with GAAP
consistently applied, except that the Financial Statements do not contain the
notes required by generally accepted accounting principles, and fairly and
accurately present the financial condition of Superior at the date thereof and
the results of its operations for the period covered thereby. All the books,
records and accounts of Superior are accurate and complete, are in accordance
with good business practice and all laws, regulations and rules applicable to
Superior the conduct of its business and accurately present and reflect all of
the transactions described therein.
4.07 Outstanding Debt: Absence of Liabilities. Superior (i) does not
have any outstanding indebtedness for borrowed money except as reflected in the
Financial Statements or Schedule 4.07 and (ii) except as reflected, is not a
guarantor or otherwise contingently liable on such indebtedness of any other
Person. Except as set forth in Schedule 4.07, Superior, to the best of its
knowledge with investigation, does not have any material liabilities or
obligations, contingent or otherwise, which are not reflected or provided for in
the Financial Statements.
4.08 Changes in Condition. Since the Balance Sheet Date, there have
occurred no event or events that, individually or in the aggregate, have caused
or will cause a Material Adverse Effect. Except as set forth in Schedule 4.08,
since the Balance Sheet Date, Superior has not (a) declared any dividend or
other distribution on any shares of its capital stock, (b) made any payment
(other than compensation to its directors, officers and employees at rates in
effect prior to the Balance Sheet Date or for bonuses accrued in accordance with
normal practice prior to the Balance Sheet Date) to any of its Affiliates, (c)
increased the compensation, including bonuses, payable or to be payable to any
of its directors, officers, employees or Affiliates, or (d) entered into any
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Contractual Obligation, or entered into or performed any other transaction, not
in the ordinary and usual course of business and consistent with past practice,
other than as specifically contemplated by this Agreement.
4.09 Contractual Obligations. Schedule 4.09 contains, together with a
reference to the paragraph pursuant to which each item is being disclosed, a
correct and complete list of all Contractual Obligations of a material nature of
Superior of the types described below:
(a) All collective bargaining agreements, all employment, bonus or
consulting agreements, all pension, profit sharing, deferred compensation, stock
option, stock purchase, retirement, welfare or incentive plans or agreements,
and all plans, agreements or practices that constitute "fringe benefits" to any
of the employees of Superior.
(b) All Contractual Obligations under which Superior is restricted from
carrying on any business, venture or other activities anywhere in the world.
(c) All Contractual Obligations to sell or lease (as lessor) any of the
properties or assets of Superior, except in the ordinary course of business, or
to purchase or lease (as lessee) any real property.
(d) All Contractual Obligations pursuant to which Superior guarantees
any liability of any Person, or pursuant to which any Person guarantees any
liability of Superior.
(e) All Contractual Obligations pursuant to which Superior provides
goods or services involving payments to Superior of more than $1,000 annually,
which Contractual Obligation is not terminable by Superior without penalty upon
notice of thirty (30) days or less.
(f) All Contractual Obligations with any Affiliate of Superior.
(g) All Contractual Obligations providing for the disposition of the
business, assets, or shares of Superior or the merger or consolidation or sale
or purchase of all or substantially all of the assets or business of any Person,
and any letters of intent relating to the foregoing.
(h) All Contractual Obligations of Superior relating to the borrowing
of money or to the mortgaging or pledging of, or otherwise placing a lien on,
any asset of Superior (except liens imposed by operation of law in favor of
landlords, suppliers, mechanics or others who provide services to Superior).
(i) All of the Contractual Obligations of Superior that are enforceable
against Superior and, to Superior's knowledge, the other parties thereto in
accordance with their terms, except that enforceability may be limited by
applicable bankruptcy, insolvency, moratorium, reorganization or similar laws,
from time to time in effect, which affect enforcement of creditors' rights
generally. Superior is not in default under nor, to Superior's knowledge, are
there any liabilities arising from any breach or default by any Person prior to
the date of this Agreement of, any provision of any such Contractual Obligation.
Upon request by counsel for GPRE, Superior will, prior to Closing, furnish to
counsel for the GPRE true and correct copies of all Contractual Obligations
listed in Schedule 4.09.
4.10 Insurance. To Superior's knowledge its insurance policies in full
force and effect, written by reputable insurers licensed to write insurance in
the states in which Superior conducts business, which insurance contracts
provide for coverages which are usual and customary in its business as to amount
and scope. Schedule 4.10 contains a correct and complete list and description of
all insurance policies owned by Superior, correct and complete copies of which
have previously been made available to GPRE. Superior is not in default under
any of its insurance policies, nor has Superior received any notice of
cancellation or intent to cancel or increase premiums with respect to present
insurance policies. Schedule 4.10 also contains a list of all pending claims
with any insurance company and any instances of a denial of coverage of Superior
by any insurance company.
4.11 Transactions with Affiliates. Other than as set forth in Schedule
4.11, no Affiliate of Superior is a customer or supplier of, or is party to any
Contractual Obligation with Superior.
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4.12 Conformity With Legal Requirements. To the best of Superior's and
the Controlling Manager' knowledge with investigation, (a) the operations of
Superior as now conducted are not in violation of, nor is Superior in default
under, any Legal Requirements presently in effect or Superior's Charter or
Bylaws, and (b) Superior has all franchises, licenses, permits or other
authority presently necessary for the conduct of its business as now conducted.
4.13 Benefit Plans. Superior does not, and has not previously had, any
Employee Benefit Plans or Welfare Plans.
4.14 Employees. None of the employees of Superior are presently
represented by a labor union, and no petition has been filed or proceedings
instituted by any employee or group of employees with any labor relations board
seeking recognition of a bargaining representative. Except as set forth in
Schedule 4.14, to Superior's knowledge no controversies or disputes are pending
between Superior and any of its employees. To Superior's knowledge, no employee
of Superior is in violation of any term of any Contractual Obligation with a
former employer relating to the right of any such employee to be employed by
Superior because of the nature of Superior's business or the use of any trade
secrets or proprietary information. Except as set forth in Schedule 4.14, each
employee of Superior is an "employee at will" and may be terminated by Superior
without payment of any amounts other than accrued wages.
4.15 Taxes. Superior has filed all federal, state and local tax and
information returns which are required to be filed by it and such returns are
true and correct. Superior has paid all taxes, interest and penalties, if any,
reflected in such tax returns or otherwise due and payable by it. Superior has
no knowledge of any material additional assessments or any basis therefor. The
charges, accruals and reserves on the balance sheet of Superior as of the
Balance Sheet Date in respect of taxes or other governmental charges are
adequate in amount for the payment of all liabilities for such taxes or other
governmental charges. Superior has withheld or collected from each payment made
to its employees the amount of all taxes required to be withheld or collected
therefrom and has paid over such amounts to the appropriate taxing authorities.
Any deficiencies proposed as a result of any governmental audits of such tax
returns have been paid or settled or are being contested in good faith, and
there are no present disputes as to taxes payable by Superior.
4.16 Litigation. Except as set forth in Schedule 4.16, no litigation or
proceeding before, or investigation by, any foreign, federal, state or municipal
board or other governmental or administrative agency or any arbitrator is
pending or, to Superior's knowledge, threatened (nor to Superior's knowledge,
does any basis exist therefor) against Superior or, to Superior's knowledge, any
officer of Superior, which individually or in the aggregate could result in any
material liability or which may otherwise result in a Material Adverse Effect,
or which seeks rescission of, seeks to enjoin the consummation of, or which
questions the validity of, this Agreement or any of the transactions
contemplated hereby.
4.17 Patents and Trademarks.
(a) "Intellectual Property" shall mean any or all of the
following and all rights in, arising out of, or associated therewith
anywhere in the world held by such Person and not otherwise in the
public domain: (1) all United States, international and foreign patents
and applications therefor (including provisional applications) and all
reissues, divisions, renewals, extensions, provisionals, continuations
and continuations-in-part thereof; (2) all inventions (whether
patentable or not), patterns, drawings, blueprints, specifications,
products in development, processes, applications, circuits, invention
disclosures, improvements, trade secrets, proprietary information, know
how, mask works (and all information contained in a mask but not yet
fixed in a chip), technology, technical data and customer lists, and
all documentation relating to any of the foregoing; (3) all copyrights,
copyright registrations and applications therefor; (4) all industrial
designs and any registrations and applications therefor throughout the
world; (5) all trade names, logos, common law trademarks and service
marks, trademark and service xxxx registrations and applications
therefor and all goodwill associated therewith throughout the world;
(6) all databases and data collections and all rights therein
throughout the world; (7) all software including, but not limited to,
(i) Superior's web-enabled customer relation management applications
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that actively assists customers service representatives as well as
customers directly in preventing and resolving benefit communications
and administration problems in a highly personalized and customized
manner (ii) as well as call source code, object code, firmware,
development tools, files, records and data, all media on which any of
the foregoing is recorded; (8) all permits, privileges or royalties;
(9) all domain names and website addresses; (10) any similar,
corresponding or equivalent rights to any of the foregoing and (11) all
documentation related to any of the foregoing.
(b) Schedule 4.17 sets forth each item of Intellectual
Property that is owned by Superior and that is used in or material to
the conduct of Superior's business as it is currently conducted (the
"Superior Intellectual Property"), including, without limitation, all
software programs and databases, including any registration and/or
application numbers therefor. Except as set forth on Schedule 4.17,
Superior owns and will own on the Closing date each item of Superior
Intellectual Property set forth on Schedule 4.17. Superior's patents,
trademarks and copyrights that have been duly registered with, filed in
or issued by, as the case may be, the U.S. Patent and Trademark Office
and U.S. Copyright Office or other filing offices, domestic or foreign
are listed on Schedule 4.17, and the same remain in full force and
effect.
(c) Schedule 4.17 lists each item of Intellectual Property
other than Superior Intellectual Property that is necessary for the
conduct of, or otherwise material to, Superior's business as currently
conducted and as planned to be conducted ("Other Intellectual
Property"), including without limitation, all software programs.
Superior has the right, by license or other agreement, to use each item
of Other Intellectual Property.
(d) Schedule 4.17 sets forth all written or oral licenses,
permissions and arrangements pursuant to which (a) Superior permits any
Person to use any item of Superior Intellectual Property (b) Superior
uses any Intellectual Property owned by any Person ((a) and (b)
collectively, the "Intellectual Property Licenses"). Except as set
forth on Schedule 4.17, all Intellectual Property Licenses are in full
force and effect in accordance with their terms, and are free and clear
of any Liens.
(e) Superior has delivered to GPRE correct and complete copies
of (1) all registrations and applications for any Superior Intellectual
Property; (2) all Intellectual Property Licenses listed on Schedule
4.17; and (3) copies of any assignments pursuant to which Superior owns
any Superior Intellectual Property.
(f) Except as set forth on Schedule 4.17: To Superior's
knowledge (1) Superior is not in material default under any
Intellectual Property License, and to Superior's knowledge, no such
material default is currently threatened; (2) the operation of
Superior's business as currently conducted does not infringe the
proprietary rights of any Person or constitute unfair competition or
trade practices under the laws of any jurisdiction and Superior has not
received any notice, oral or written, that alleges the contrary; (3) to
Superior's knowledge, no Superior Intellectual Property and no Other
Intellectual Property used by Superior under any Intellectual Property
License is being infringed by any third party or group thereof; and (4)
there is no claim or demand of any Person pertaining to, or any
proceeding which is pending or, to Superior's knowledge, threatened,
that challenges Superior's rights with respect to any item of Superior
Intellectual Property or any Other Intellectual Property used by
Superior, or the validity or enforceability of any item of Superior
Intellectual Property, nor are there any claims that any default exists
under any Intellectual Property License.
(g) Except as set forth on Schedule 4.17, no item of Superior
Intellectual Property or Other Intellectual Property, or any
Intellectual Property License, is subject to any outstanding order,
ruling, decree, judgment or stipulation by or with any court, tribunal
arbitrator, or other Governmental Authority that could affect the
Seller's ability to use, license, or transfer such Superior
Intellectual Property or its validity or enforceability.
(h) Superior has taken all steps that are reasonably required
to protect Superior's rights in confidential information and trade
secrets of Superior or Superior's business or provided by any third
party to Superior. Without limiting the foregoing, Superior has, and
enforces, a policy requiring each employee and contractor to execute
proprietary information and confidentiality agreements in connection
with Superior Intellectual Property.
4.18 Consents. No consent, approval, qualification, order or
authorization of, or filing with any governmental authority is required in
connection with the offer and transfer of the Superior Stock by Controlling
Manager or the consummation of any other transaction pursuant to this Agreement.
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4.19 Filings, Broker's Fees. Superior is not obligated to pay any
broker's fee, finder's fee, investment banker's fee or other similar transaction
fee in connection with the transactions contemplated hereby.
4.20 Minute Books. The minute books of Superior, which shall have been
provided to counsel for GPRE prior to the Closing if requested, contain a
complete record of actions taken at all meetings of directors and Controlling
Manager since formation and reflect all such actions accurately in all material
respects.
4.21 Real Property Holding Corporation. Superior is not a "United
States real property holding corporation" as defined in section 897(c)(2) of the
Code and Treasury Regulation section 1.897-2(b).
4.22 Disclosure. Neither this Agreement, nor any agreement,
certificate, statement or document furnished in writing by or on behalf of
Superior to GPRE by Superior or the Controlling Manager in connection herewith
or therewith contains any untrue statement of a material fact or omits to state
a material fact necessary in order to make the statements contained herein or
therein, in light of the circumstances under which they were made, not
misleading.
ARTICLE V
INDEMNIFICATION AND RESCISSION RIGHT
5.01 Indemnification. For a period of one year from the Closing, GPRE
agrees to indemnify and hold harmless Controlling Manager, and for the same
period Controlling Manager agree to indemnify and hold harmless GPRE, against
and in respect of any liability, damage or deficiency, all actions, suits,
proceedings, demands, assessments, judgments, costs and expenses including
attorney's fees incident to any of the foregoing, resulting from any material
misrepresentations made by an indemnifying party to an indemnified party, an
indemnifying party's breach of covenant or warranty or an indemnifying party's
nonfulfillment of any agreement hereunder, or from any material
misrepresentation in or omission from any certificate furnished or to be
furnished hereunder. The party claiming indemnity shall notify the indemnifying
party and the indemnifying party shall have thirty (30) days in which to object.
In the event of an objection, the dispute shall be settled by arbitration in
Nevada pursuant to the rules of the American Arbitration Association.
5.02 Nature and Survival of Representations. All representations,
warranties and covenants made by any party in this Agreement shall survive the
Closing and the consummation of the transactions contemplated hereby for one
year from the Closing date. All of the parties hereto are executing and carrying
out the provisions of this Agreement in reliance solely on the representations,
warranties and covenants and agreements contained in this Agreement and not upon
any investigation upon which it might have made or any representation, warranty,
agreement, promise or information, written or oral, made by the other party or
any other person other than as specifically set forth herein.
5.03 Rescission Right. If, during the period beginning on the Closing
date and ending on the 6 (six) month anniversary of the Closing (the "Rescission
Period"), GPRE determines, in its sole discretion, that it is unable to build
the proposed ethanol plant on the Property (i) primarily because of the form of
any Debt Funding Document and/or the failure of any Transaction Prerequisite, or
(ii) because GPRE is not allowed to build the proposed plant at the Superior
site due to any action of a local government that would definitively stop GPRE
from building an ethanol plant at the proposed site in Superior, then GPRE may
rescind this Agreement by giving written notice of rescission to Controlling
Manager during the Rescission Period and, effective immediately upon such notice
and through no further action of the parties, this Agreement shall be rescinded.
In such event, GPRE shall cancel the Shares and shall return all Superior
securities to Controlling Manager. Notwithstanding the foregoing, GPRE may
shorten but not lengthen the Rescission Period, in its sole discretion, by
giving written notice of the same to Controlling Manager.
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5.04 Negative Covenants. During the Rescission Period, Superior shall
not, without the advanced written approval of Controlling Manager, which consent
may be withheld in his sole discretion:
(a) Change any location of any of the places of business or of the
establishment of any new, or the discontinuance of any existing, place of
business of Superior;
(b) Spend any funds that are held by Superior;
(c) Declare or pay any distribution on any Superior securities;
(d) Liquidate or dissolve, or enter into any consolidation, merger,
pool, joint venture, syndicate, or other combination, or sell, lease, or dispose
of its business or assets as a whole or in part;
(e) Create, incur, assume, or be liable for, contingently or otherwise,
any indebtedness for borrowed money that did not exist at the Closing, or become
liable as a surety, guarantor, accommodation endorser, or otherwise, for or on
the obligation of any other person, firm, or corporation; or
(f) Incur any contractual obligation(s) after the Closing date that
involves, in the aggregate, more than $1,000.
5.05 Holdback. During the Rescission Period, GPRE shall hold the Shares
for the benefit of Controlling Manager. Upon expiration of the Rescission Period
the Shares shall immediately be delivered to Controlling Manager. In the event
that GPRE exercises its rescission right, then the Shares will immediately be
cancelled and no Shares shall be deliverable to Controlling Manager.
Notwithstanding GPRE's possession of the Shares during the Rescission Period,
Controlling Manager shall have and enjoy all rights and privileges of ownership
thereof (other than possession) during such period, unless and until GPRE shall
have exercised its rescission right pursuant to Section 5.03 above.
ARTICLE VI
MISCELLANEOUS
6.01 Further Assurances. At any time, and from time to time, after the
Closing date, each party will execute such additional instruments and take such
action as may be reasonably requested by the other party to confirm or perfect
title to any property transferred hereunder or otherwise to carry out the intent
and purposes of this Agreement.
6.02 Binding Effect; Assignment. This Agreement shall be binding upon
and inure to the benefit of the personal representatives, successors and assigns
of the respective parties hereto. The parties shall not have the right to assign
their rights or obligations hereunder or any interest herein without obtaining
the prior written consent of GPRE, Superior, and Controlling Manager.
6.03 Amendments and Waivers. Any term of this Agreement may be amended
and the observance of any term of this Agreement may be waived (either generally
or in a particular instance and either retroactively or prospectively) only with
the written consent of (i) GPRE, (ii) Superior, and (iii) the Controlling
Manager. Any amendment or waiver affected in accordance with this Section 6.03
shall be binding upon each party hereto.
6.04 Counterparts. This Agreement may be executed in one or more
counterparts, 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 parties, it being understood that all
parties need not sign the same counterpart. One or more counterparts of this
Agreement or any Exhibit or Schedule hereto may be delivered via facsimile and
such facsimile counterpart shall have the same effect as an original counterpart
hereof.
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6.05 Notices. Any notice or other communication in connection with this
Agreement shall be deemed to be delivered if in writing addressed as provided
below and if either (a) actually delivered at said address, (b) in the case of a
letter, seven business days shall have elapsed after the same shall have been
deposited in the United States mails, postage prepaid and registered or
certified, return receipt requested or (c) transmitted to any address outside of
the United States, by telecopy and confirmed by overnight or two-day courier:
If to the GPRE, to it at Green Plains Renewable Energy, Inc., 0000 Xxxx
Xxxxxx Xxxxxx, Xxxxx 000, Xxx Xxxxx, XX, 00000, fax (000) 000.0000, attention:
President, or at such other address as GPRE shall have specified by notice to
the parties.
If to Superior, to it at 0000 Xxxxxxx Xxxxxx, Xxxxxx, Xxxx 00000, fax
(000) 000-0000, attention: Xxxxx Xxxxxxxx, or at such other address as Superior
shall have specified by notice to the parties.
If to Controlling Manager, to Xxxxx Xxxxxxxx at 0000 Xxxxxxx Xxxxxx,
Xxxxxx, Xxxx00000, fax (000) 000.0000, or at such other address as Controlling
Manager shall have specified by notice to the parties.
6.06 Governing Law. This Agreement shall be construed and enforced in
accordance with the laws of the State of Iowa.
6.07 Responsibility and Costs. All fees, expenses and out-of-pocket
costs and expenses, including, without limitation, fees and disbursements of
counsel, advisors and accountants, incurred by the parties hereto shall be borne
solely and entirely by the party that has incurred such costs and expenses.
6.08 General. The invalidity or unenforceability of any term or
provision hereof shall not affect the validity or enforceability of any other
term or provision hereof. The headings in this Agreement are for convenience of
reference only and shall not alter or otherwise affect the meaning hereof. This
Agreement and the other items referred to herein or therein constitute the
entire understanding of the parties hereto with respect to the subject matter
hereof and thereof and supersede all present and prior agreements, whether
written or oral.
The undersigned have executed this Agreement as of the date first above
written.
GREEN PLAINS RENEWABLE ENERGY, INC.
By: /s/ Xxxxx Xxxxxxxxx
----------------------------------
Name: Xxxxx Xxxxxxxxx
Title: President
SUPERIOR ETHANOL, LLC
By: /s/ Xxxxx Xxxxxxxx
----------------------------------
Name: Xxxxx Xxxxxxxx
Title: Manager
By: /s/ Xxxxx Xxxxxxxx
----------------------------------
Name: Xxxxx Xxxxxxxx, individually
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