EXHIBIT 10.1
MEMBERSHIP PURCHASE AGREEMENT
THIS MEMBERSHIP PURCHASE AGREEMENT ("Agreement") is made and entered into as of
the _____ day of May, by and between XXXX AGRICULTURE COMPANY, a Nebraska
corporation formerly known as Xxxx Agriculture, Inc. ("Seller"), XXXXXX XXXXX
INC., a Washington corporation ("Xxxxxx Xxxxx") and Xxxxxx Companies Inc., a
Washington corporation ("Xxxxxx Companies") (collectively, "Buyer").
RECITALS
A. Seller and Xxxxxx Xxxxx are the sole members of Xxxx Xxxxxx Xxxxx
L.L.C., a Washington limited liability company (the "Company") pursuant to the
terms of that certain Limited Liability Company Operating Agreement of Xxxx
Xxxxxx Xxxxx L.L.C. dated July 17, 1996 (the "LLC Agreement"). The purpose of
the Company is to own, operate and sell the products produced by the flour mill
located in Blackfoot, Idaho, on the real property more particularly described on
Exhibit A attached to this Agreement (the "LLC Property").
B. Seller owns fifty percent (50%) of the Company Interest, and Xxxxxx
Xxxxx owns fifty percent (50%) of the Company Interest. Seller and Buyer desire
to provide for and set forth the terms of Buyer's purchase of all of the Company
Interest held by Seller (the "Sale").
C. All capitalized terms used in this Agreement but not defined shall
have the meanings attributed to them in the LLC Agreement.
AGREEMENT
1. Purchase and Sale.
1.1 Sale. Subject to the terms set forth herein, Seller shall sell, and
Xxxxxx Xxxxx as to forty-nine percent (49%) of the Company Interest,
and Xxxxxx Companies as to one percent (1%) of the Company Interest,
shall purchase, for the consideration described herein, all of the
Company Interest owned by Seller (the "LLC Interest").
1.2 Purchase Price. The purchase price payable for the LLC Interest (the
"Purchase Price") is Eighteen Million Two Hundred Thousand Dollars
($18,200,000.00), plus Eight Hundred Thousand Dollars ($800,000.00) as
Seller's share of the working capital account of the Company, which
shall be deemed to be one-half of the balance of the working capital
account as of May 31, 1999, and as of the Closing Date (defined
below).
2. Closing.
2.1 Time and Place of Closing. The closing ("Closing") shall be deemed to
have occurred when Seller has transferred the LLC Interest to Buyer as
evidenced by a duly executed Closing Certificate representing Seller's
fifty percent (50%) interest
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in the Company (the "Closing Certificate") in the form attached hereto
as Exhibit B, and Buyer has paid the Purchase Price to Seller. The
Closing shall occur on or before July 1, 1999, on a date mutually
agreeable to Buyer and Seller (the "Closing Date"). On or before the
Closing Date, Buyer shall have satisfied itself that all conditions
precedent to its obligation to purchase the LLC Interest have been
satisfied, or shall have provided to Seller written notice that Buyer
has waived any such conditions that remain unsatisfied. The Closing
shall occur in the offices of Xxxxxx & Xxxx, 0000 Xxxxx Xxxxxx, 00xx
Xxxxx, Xxxxxxx, Xxxxxxxxxx.
2.2 Joint Obligations to Be Performed Prior to Closing. Prior to Closing,
Seller and the Company shall have executed the following agreements:
(a) Grain Storage Tank Usage Agreement, in substantially the form
attached to this Agreement as Exhibit C (the "Tank Usage
Agreement");
(b) Wheat Handling Agreement, in substantially the form attached to
this Agreement as Exhibit D (the "Wheat Handling Agreement");
(c) Easement, License and Utility Agreement, in substantially the
form attached to this Agreement as Exhibit E;
2.3 Buyer's Closing Obligations. In consideration for the LLC Interest,
Buyer shall deliver the Purchase Price to Seller by wire transfer of
immediately available funds as directed by Seller.
2.4 Seller's Closing Obligations. In consideration for the purchase of
the LLC Interest, Seller:
(a) shall deliver to Buyer the Closing Certificate evidencing the
transfer of the LLC Interest; and
(b) shall deliver to Buyer any and all books and records concerning
the Company or the business and operations of the Company
currently in Seller's possession; and
(c) Seller's Member Representative shall resign.
3. Buyer's Obligation to Fund Working Capital Account. Commencing June 1,
1999, Buyer shall be responsible for funding one hundred percent (100%) of
the working capital account of the Company.
4. Seller's Continuing Obligations for Mill Construction Costs. In connection
with the construction of the conventional mill located on the LLC Property
(the "Mill"), Seller and Buyer, in accordance with the terms of that
certain Unanimous Written Consent Resolution of Members in Lieu of Special
Meeting dated as of November 4, 1997, agreed to make equal capital
contributions as necessary to pay the costs incurred by the Company
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in the completion of the Mill. The Mill is substantially complete, and the
contractor retained by the Company to design, construct and equip the Mill
(the "Contractor") has prepared a punchlist dated ________________, which
has been accepted by Buyer and Seller as all that is required for the Mill
to meet remaining requirements of the contract for the design, construction
and equipping of the Mill. The Company has funded a retainage for the
payment of the remaining funds due to the Contractor upon final completion
of all punchlist items. Seller hereby agrees that the funds held as
retainage shall remain on deposit with the Company until Buyer and Seller
are satisfied that the punchlist items have been completed, at which time
Buyer is authorized to transfer such funds to the Contractor. If, for any
reason, the cost of completing items on the punchlist, for which the
Company is obligated to pay the contractor, exceeds the amount held as
retainage, then Seller shall, within five (5) days following written demand
therefor from Buyer (including evidence of the full additional amount
payable by the Company), remit to Buyer for payment to Buyer or the
Contractor its one-half share of such additional amount. The obligation of
Seller to pay its one-half share of all costs incurred for the construction
of the Mill shall survive the Closing of the transaction contemplated by
this Agreement for a period of three (3) months after which time all
obligations of Seller regarding the Mill shall cease.
5. Representations.
5.1 Seller's Representations. Seller represents and warrants to Buyer
that:
(a) Organization, Good Standing, and Power of Seller. Seller is a
corporation duly organized, validly existing, and in good
standing under the laws of its state of incorporation, with all
requisite corporate power and authority to carry on its business.
Seller is duly qualified or licensed and in good standing to do
business in the respective jurisdictions in which such
qualification or licensing is necessary. Seller has all requisite
corporate power and authority to enter into this Agreement and to
consummate the transactions contemplated hereby.
(b) Authority Relative to this Agreement. The execution and delivery
of this Agreement and the consummation of the transactions
contemplated hereby have been duly and validly authorized by the
Board of Directors of Seller and no other corporate proceedings
are necessary to authorize this Agreement or to complete the
transactions so contemplated. This Agreement has been duly and
validly executed and delivered by Seller and constitutes a valid
and binding agreement of Seller, enforceable against Seller in
accordance with its terms.
(c) Consents and Approvals: No Violations. No filing with, and no
permit, consent, authorization, or approval of any public body or
authority is necessary for the completion by Seller of the
transactions contemplated by this Agreement. Neither the
execution and delivery of this Agreement nor the completion by
Seller of the transactions contemplated hereby nor
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compliance by Seller with any of the provisions hereof will (i)
conflict with or result in any breach of any provision of the
Articles of Incorporation or Bylaws of Seller; (ii) result in a
violation or breach of, or constitute a default under, any
agreement or other instrument or obligation to which Seller is a
party; or (iii) violate any order, writ, injunction, decree,
statute, rule, or regulation applicable to Seller.
(d) Title to LLC Interest. Seller owns the LLC Interest free and
clear of any liens or claims of any kind whatsoever and after
transfer of the LLC Interest pursuant to the terms of this
Agreement, Buyer will hold good and valid title to the LLC
Interest, free of any restrictions, liens, claims and
encumbrances of any nature.
5.2 Buyer Representations. Buyer represents and warrants to Seller that:
(a) Organization, Good Standing, and Power of Buyer. Buyer is a
corporation duly organized, validly existing, and in good
standing under the laws of its state of incorporation, with all
requisite corporate power and authority to carry on its business.
Buyer is duly qualified or licensed and in good standing to do
business in the respective jurisdictions in which such
qualification or licensing is necessary. Buyer has all requisite
corporate power and authority to enter into this Agreement and to
consummate the transactions contemplated hereby.
(b) Authority Relative to this Agreement. The execution and delivery
of this Agreement and the consummation of the transactions
contemplated hereby have been duly and validly authorized by the
Board of Directors of Buyer and no other corporate proceedings
are necessary to authorize this Agreement or to complete the
transactions so contemplated. This Agreement has been duly and
validly executed and delivered by Buyer and constitutes a valid
and binding agreement of Buyer, enforceable against Buyer in
accordance with its terms.
(c) Consents and Approvals: No Violations. No filing with, and no
permit, consent, authorization, or approval of any public body or
authority is necessary for the completion by Buyer of the
transactions contemplated by this Agreement. Neither the
execution and delivery of this Agreement nor the completion by
Buyer of the transactions contemplated hereby nor compliance by
Buyer with any of the provisions hereof will (i) conflict with or
result in any breach of any provision of the Articles of
Incorporation or Bylaws of Buyer; (ii) result in a violation or
breach of, or constitute a default under, any agreement or other
instrument or obligation to which Buyer is a party; or (iii)
violate any order, writ, injunction, decree, statute, rule, or
regulation applicable to Buyer.
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6. Indemnification.
6.1 By Seller.
(a) Seller hereby agrees to defend and indemnify Buyer and to hold
Buyer harmless against and in respect of any and all losses,
damages, costs and expenses, including attorneys' fees incurred
by Buyer by reason of a breach of any of the representations,
warranties, covenants or agreements made by Seller in this
Agreement, in any other instrument or agreement related hereto or
executed in connection herewith, or in any written statement or
certificate delivered to Buyer or any agent of Buyer in
connection with this Agreement or the transactions contemplated
hereby; or as a result of Seller's noncompliance, before or after
Closing, with any tax or other law that creates any liability for
the Company or Buyer; and
(b) Seller further agrees to defend and indemnify Buyer and to hold
Buyer harmless against and in respect of any and all claims,
losses, damages, costs and expenses, including attorneys' fees,
arising out of the operation of Company prior to the Closing
Date, but only to the extent of fifty percent (50%) of such
claims, losses, damages, costs and expenses.
6.2 By Buyer. Buyer hereby agrees to defend and indemnity Seller and to
hold Seller harmless against and in respect of any and all losses,
damages, costs and expenses, including attorneys' fees incurred by
Seller by reason of a breach of any of the representations,
warranties, covenants or agreements made by Buyer in this Agreement,
in any other instrument or agreement related hereto or executed in
connection herewith, or in any written statement or certificate
delivered to Seller or any agent of Seller in connection with this
Agreement or the transactions contemplated hereby.
6.3 Not Exclusive Remedy. The rights and remedies conferred in this
Section 6 are not intended to be the exclusive remedy available for
breach of this Agreement, now or hereafter, at law or in equity or
otherwise.
6.4 Dispute Resolution. In the event of a dispute between the parties,
either party may demand arbitration in accordance with the following
procedure: The party demanding arbitration shall give written notice
indicating its demand to the other party. Within fifteen (15) days
after the other party's receipt of such notice, the parties shall
select one neutral arbitrator in accordance with the Commercial Rules
of the American Arbitration Association. If the parties are unable to
agree on an arbitrator within such 15-day period, then either party
may request that the presiding judge of the King County, Washington
Superior Court appoint an arbitrator. The arbitration shall be
conducted in accordance with Title 9 of the U.S. Code (United States
Arbitration Act) and the Commercial Rules of the American Arbitration
Association. Except as provided in the following sentence, the
arbitrator shall have the authority to award any remedy or relief that
a court of
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the State of Washington could order or grant. The arbitrator shall,
however, have no authority to award punitive damages or any other
damages not measured by the prevailing party's actual damages, and may
not, in any event, make any ruling, finding or award that does not
conform to the terms and conditions of this Agreement. The award of
the arbitrator shall be accompanied by a reasoned written opinion and,
upon the request of either party, shall include findings of fact and
conclusions of law. The award of the arbitrator shall be final and
binding on the parties, and may be entered in any court having
jurisdiction thereof. The arbitration shall be held in Seattle,
Washington, or at such other place as may be selected by the parties
by mutual agreement. All fees and expenses of the arbitration shall be
borne by the parties equally, and each party shall each bear the
expenses of its own counsel, experts, witnesses and preparation and
presentation of proofs to the arbitrator.
7. Conditions to Closing. The obligations of Buyer and Seller to close the
transaction contemplated by this Agreement are subject to the fulfillment,
at or before Closing, of each of the following conditions (all or any of
which may be waived in whole or in part by Buyer, in its sole discretion):
7.1 Exhibits. The satisfaction of the joint obligations of the parties to
complete the exhibits to this Agreement, as set forth in Section 2.2
above.
7.2 Regulatory Consents and Approvals. All consents, approvals and
actions of, filings with and notices to any governmental or regulatory
authority necessary to permit Buyer and Seller to perform their
respective obligations under this Agreement and to consummate the
transaction contemplated hereby, including, without limitation,
approval under the Xxxx Xxxxx Xxxxxx Act (the "HSR Act"), shall have
been duly obtained, made or given without conditions materially
adverse to Buyer and shall be in full force and effect, and all
terminations or expirations of waiting periods imposed by any
governmental or regulatory authority necessary for the consummation of
the transactions contemplated by this Agreement, including under the
HSR Act, shall have occurred.
7.3 Public Announcements. Buyer and Seller will cooperate and seek the
prior approval of the other party of any press release relating to the
existence of this Agreement or to the transactions contemplated
hereby.
8. Miscellaneous.
8.1 Notice. Any notice required or permitted hereunder shall be given in
writing either by personal delivery, facsimile, overnight courier or
mail at the addresses indicated below, or to such other party or
address a party hereto may direct in writing to the other party. The
date upon which any such notice is so personally delivered, the date
that confirmation of facsimile transmission is received, one business
day following deposit with a recognized overnight courier service, or
if
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mailed, the date upon which it is received by the addressee, shall be
deemed to be the effective date of such notice.
To Seller: Xxxx Agriculture Company
0000 Xxxx 00xx Xxxxxx Xxxxx
Xxxxxxx, Xxxxxx 00000
Attention: Xxxxxx X. Xxxxx
Facsimile No.: (000) 000-0000
with a copy to: Xxxx Agriculture Company
0000 Xxxx 00xx Xxxxxx Xxxxx
Xxxxxxx, Xxxxxx 00000
Attention: Xxxxx Xxxxxxxx
Facsimile No.: (000) 000-0000
To Buyer: Xxxxxx Xxxxx Inc.
0000 - 00xx Xxx XX
Xxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxx Xxxxx
Facsimile No.: (000) 000-0000
Xxxxxx Companies Inc.
000 Xxxxxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxxxxxx, Xx.
Facsimile No.: (000) 000-0000
with a copy to: Xxxxxx & Xxxx, P.C.
0000 Xxxxx Xxxxxx, 00xx Xxxxx
Xxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxx X. Xxxxxxxx
Facsimile No.: (000) 000-0000
8.2 Specific Performance. The parties hereto will be irreparably damaged
in the event that this Agreement is not specifically enforced. If any
party hereto so required under this Agreement fails to comply with the
provisions, then, in such event, the other party hereto may institute
and maintain a proceeding to compel the specific performance of this
Agreement. Such remedy shall, however, be cumulative and not
exclusive, and shall be in addition to any other remedy at law or in
equity which any party may have.
8.3 Binding Effect. This Agreement shall be binding upon and inure to the
benefit of the successors and assigns of the parties hereto.
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8.4 Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument.
8.5 Modifications. This Agreement contains the entire agreement between
the parties hereto relating to the subject matter hereof and may be
modified or amended only by written agreement of the parties hereto.
8.6 Severability. Invalidation of any one of the provisions of this
Agreement for any reason shall in no way affect any other provision
hereof, and all such other provisions shall remain in full force and
effect.
8.7 Further Acts. Each party agrees to perform any further acts and to
execute and deliver any documents which may be reasonably necessary to
carry out the provisions hereof.
8.8 Applicable Law. This Agreement and its validity, construction, and
performance shall be governed by the laws of the State of Washington.
8.9 Headings. The headings used in this Agreement are intended solely
for the convenience of the parties and shall have no effect on the
interpretation of its terms.
EXECUTED as of the day and year first above written.
SELLER:
XXXX AGRICULTURE COMPANY,
a Nebraska corporation
By: /s/ Xxxxxx X. Xxxxx
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Its: Vice President
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BUYER:
XXXXXX XXXXX INC.,
a Washington corporation
By: /s/ R. Xxxxx Xxxxx
-----------------------
Its: President and CEO
-----------------
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XXXXXX COMPANIES INC.,
a Washington corporation
By: /s/ Xxxxxxx X. Xxxxxxxxxx, Xx.
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Its: President and CEO
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EXHIBITS NOT INCLUDED
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