EXHIBIT 10.1
TRANSACTION AGREEMENT
THIS TRANSACTION AGREEMENT (this "Agreement") is made and entered into
as of this ____ day of July, 1997, by and between XXXXXX XXXXXXX MIDLAND
COMPANY, a Delaware business corporation ("ADM"), and MINNESOTA CORN PROCESSORS,
a Minnesota cooperative corporation ("MCP").
W I T N E S S E T H
WHEREAS, on May 21, 1997, ADM and MCP entered into a letter of intent
(the "Letter of Intent") pursuant to which both parties agreed to use their best
efforts to reach mutual agreement as to the final terms and conditions of a
proposed investment by ADM in MCP; and
WHEREAS, the parties have reached agreement as to the final terms and
conditions of such investment; and
WHEREAS, the parties wish to enter into this Agreement and certain
other arrangements referred to herein in order to memorialize in writing such
terms and conditions.
NOW, THEREFORE, in consideration of the foregoing, and of the covenants
and agreements of the parties set forth herein, the parties hereby covenant and
agree as follows:
ARTICLE I
THE TRANSACTIONS
SECTION 1.1 OVERVIEW OF TRANSACTIONS.
On the Closing Date (as herein defined), ADM will purchase from MCP and
MCP will issue to ADM nonvoting units of equity participation of MCP (the "ADM
Units"), subject to, and upon the terms and conditions contained in, this
Agreement. The foregoing transactions are referred to collectively herein as the
"Transactions."
SECTION 1.2 PAYMENT AND CALCULATION OF PURCHASE PRICE.
On the Closing Date, ADM will deliver to MCP, by wire transfer to a
bank account or accounts designated by MCP, an amount equal to the purchase
price for the ADM Units, determined as follows:
(a) an amount equal to One Hundred and Twenty Million Dollars
and 00/100 ($120,000,000.00); LESS
(b) the sum of (i) Ten Million Dollars and 00/100
($10,000,000.00) previously paid to MCP as an "Initial Advance"
pursuant to Section 2 of the Letter of Intent; and (ii) an amount equal
to any shortfall in aggregate members equity as of March 31, 1997,
determined as described in Section 2.5 of this Agreement.
SECTION 1.3 ISSUANCE OF UNITS.
On the Closing Date, MCP will issue to ADM 58,622,340 ADM Units, which
the parties agree will constitute thirty percent (30%) of MCP's total
participating equity after such issuance. The ADM Units will have the
designations, voting powers, preferences, participation rights, qualifications,
rights, limitations and restrictions assigned and attributable to such units by
Article VI of the Second Amended and Restated Articles of Incorporation of MCP,
attached hereto as Exhibit A and by this reference made a part hereof (the
"Amended Articles"), and by the Stockholder Agreement.
ARTICLE II
COVENANTS AND AGREEMENTS OF THE PARTIES
SECTION 2.1 ADOPTION OF AMENDED ARTICLES AND AMENDMENTS TO BYLAWS.
MCP will use its best efforts (i) to authorize and take any and all
actions necessary to adopt the Amended Articles as its Articles of Incorporation
effective as of the Closing Date, and (ii) to adopt the amendments described on
Exhibit B, attached hereto and by this reference made a part hereof, to its
Bylaws, effective as of the Closing Date (the "Bylaw Amendments").
SECTION 2.2 STOCKHOLDER AGREEMENT.
ADM and MCP will enter into a Stockholder Agreement in substantially
the form of Exhibit C attached hereto and by this reference made a part hereof
(the "Stockholder Agreement"). The Stockholder Agreement will be effective as of
the Closing Date.
SECTION 2.3 MEMBER AND BOARD APPROVAL.
MCP will submit the Amended Articles, the Bylaw Amendments, the
Stockholder Agreement and the Transactions to its members for approval at a
meeting expected to be held on or about July 29, 1997, and will use its best
efforts to obtain the approval thereof by its members as required by applicable
law and its Articles of Incorporation and Bylaws (as in force prior to the
amendments described in Section 2.1 hereof). ADM will submit this Agreement, the
Stockholder Agreement and the Transactions to its Board of Directors for
approval at a meeting expected to be held on or about July 17, 1997, as required
by applicable law and its Articles of Incorporation and Bylaws.
SECTION 2.4 ACCESS; NONDISCLOSURE.
From the date hereof to and including the Closing Date, MCP will afford
ADM and its authorized representatives access (during normal business hours) to
its operating and office facilities, properties, books and records, financial
and operating data and other information
concerning its business and properties (other than information relating to
customers, product pricing or sales or marketing efforts), as ADM may from time
to time reasonably request. The obligations of each party with respect to
confidentiality or nondisclosure of confidential, proprietary and trade secret
information shall be governed by the terms of the Nondisclosure Agreement dated
as of May 21, 1997 between the parties (the "Nondisclosure Agreement") and by
Section 10 of the Letter of Intent.
SECTION 2.5 MCP FINANCIAL STATEMENTS
MCP will have prepared, or will have made arrangements for the
preparation of, financial statements that are complete, true and accurate as of
March 31, 1997. Such financial statements will have been prepared in accordance
with generally accepted accounting principles, will have been audited in
accordance with generally accepted auditing standards and will have been
furnished to ADM no less than ten (10) business days prior to the Closing Date.
MCP guarantees that the aggregate member equity reflected in such financial
statements will be no less than Two Hundred and Twelve Million, Six Hundred and
Twenty-Eight Thousand and 00/100 Dollars ($212,628,000.00), which amount
reflects a reduction of Twenty One Million, Five Hundred and Eighty Four
Thousand and 00/100 Dollars ($21,584,000.00) in respect of receivables due from
members for loss allocations. To the extent that aggregate member equity is less
than the amount hereinbefore required, the purchase price required to be paid by
ADM for the ADM Units shall be reduced, dollar-for-dollar, as provided in
Section 1.2 hereof.
SECTION 2.6 DEBT RESTRUCTURING.
MCP will obtain a commitment to restructure or refinance its debt
obligations, including such obligations to the St. Xxxx Bank for Cooperatives,
RaboBank and Liquid Sugars, Inc. Such restructuring or refinancing shall be
acceptable to both parties. The parties contemplate that such restructuring will
take the form of: (i) a reduction of MCP's term debt to approximately Two
Hundred Eighty Million and 00/100 Dollars ($280,000,000.00), with the remainder
of such term debt being refinanced with an institutional lender on a first
mortgage basis; and (ii) a refinancing or continuation of MCP's operating line
of credit at an appropriate level.
SECTION 2.7 BEST EFFORTS
Each party will use its best efforts (i) to take all action necessary
to render accurate, as of the Closing Date, its representations and warranties
contained herein, and it will refrain from taking any action which would render
any such representation or warranty inaccurate as of the Closing Date, (ii) to
perform or cause to be satisfied each covenant or condition to be performed or
satisfied by it pursuant to this Agreement, and to cause the Transactions to be
consummated, and (iii) to obtain all licenses or other approvals required to be
obtained by it from any appropriate governmental or regulatory body or other
person in connection with the carrying out of the Transactions and the
performance of its obligations under this Agreement.
SECTION 2.8 COOPERATION. As soon as practicable after the Closing Date,
appropriate representatives of MCP and ADM will meet for the purpose of
determining operational areas
where the parties might provide advice and assistance to each other, including,
without limitation, a review of opportunities to improve rail, truck, barge and
ship transportation efficiencies, opportunities for joint buying of enzymes and
yeasts and assistance in the areas of corn procurement, risk management and
hedging, borrowing costs and development of value-added products.
SECTION 2.9 CONDUCT OF BUSINESS PRIOR TO CLOSING.
Prior to the closing date, MCP shall conduct its business only in the
ordinary course and consistent with its prior practice and shall maintain and
preserve its assets and properties in good condition and repair and maintain
insurance thereon in accordance with present practices. Without limiting the
foregoing, prior to the Closing Date, MCP will not without ADM's prior written
approval (which ADM agrees will not be unreasonably withheld):
(a) Change its articles of incorporation or bylaws except as
contemplated hereby, or merge or consolidate with any other entity (or
enter into any agreement to do so);
(b) Incur any indebtedness for borrowed money except as
contemplated in Section 2.6 and except for trade debt incurred in the
ordinary course of business;
(c) Issue any capital stock or other equity participation
interests, except that MCP may issue common stock to transferees of
Units of Participation and to members of any employee stock option plan
in force on the date hereof; or
(d) Sell or otherwise dispose of a substantial portion of its
assets.
ARTICLE III
CONDITIONS TO OBLIGATION OF EACH PARTY
The respective obligations of ADM and MCP to consummate the
Transactions are, at their respective options, subject to the satisfaction or
waiver of each or the following conditions on or before the Closing Date:
(a) MCP will have adopted the Amended Articles and amended its
Bylaws, all as more particularly described in Section 2.1 hereof.
(b) The parties will have entered into a Stockholder
Agreement, as more particularly described in Section 2.2 hereof.
(c) The members of MCP and the Board of Directors of ADM will
have approved this Agreement, the Stockholder Agreement and the
Transactions, all as more particularly described in Section 2.3 hereof.
(d) ADM shall have conducted a "due diligence" review to its
own satisfaction of the books and records of MCP, as contemplated by
Section 2.4 hereof.
(e) MCP shall have delivered to ADM, financial statements, as
more particularly described in Section 2.5 hereof.
(f) MCP shall have obtained a commitment for restructuring or
refinancing of its debt obligations acceptable to both parties, as more
particularly described in Section 2.6 hereof.
(g) The consummation of the Transactions shall not, in the
reasonable judgment of any party, cause any material adverse tax
consequences for any party hereto, and any rulings applied for by any
party with respect to the tax consequences of the Transactions shall
have been obtained in a form and content satisfactory to such party.
(h) No injunction, restraining order or order of any nature
issued by any court of competent jurisdiction, government or
governmental agency enjoining the Transactions or any part thereof
shall have been issued and remain in effect.
(i) All consents, approvals and waivers which are necessary in
connection with the Transactions or any part thereof shall have been
obtained.
(j) No action shall have been threatened or instituted by any
governmental agency or any other person challenging the legality of the
Transactions or any part thereof, seeking to prevent or delay
consummation of the Transactions or seeking to obtain divestiture or
other relief in the event of consummation of the Transactions. It is
understood in the event that such an action is threatened or
instituted, the parties will first attempt for a period of ninety (90)
days to obtain dismissal or other favorable resolution of such
threatened or actual action prior to exercise of their right to
terminate hereunder.
(k) All the representations and warranties of each party
contained in this Agreement shall be true and correct in all material
respects on the Closing Date as though such representations and
warranties were made on and as of the Closing Date, and each party
shall have each performed all of its obligations and complied with all
of its covenants contained in this Agreement to be performed or
complied with prior to the Closing Date.
(l) Each party shall have received a certificate dated as of
the Closing Date, executed by the President or Chief Executive Officer
of the other party certifying in such detail as such party may
reasonably request as to the accuracy of such representations and
warranties, the fulfillment of such obligations, compliance with such
covenants and satisfaction of the conditions to such party's
obligations as of the Closing Date.
(m) All actions, proceedings and documents necessary to carry
out the Transactions shall be reasonably satisfactory to each party.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF MCP
Except as otherwise set forth in Schedule I attached hereto and made a
part hereof (hereinafter, the "MCP Schedule"), MCP hereby represents and
warrants to ADM that:
SECTION 4.1 ORGANIZATION AND GOOD STANDING.
MCP is a cooperative corporation duly organized and existing under
Chapter 308A of the Minnesota Statutes, as amended, is in good standing under
the laws of the State of Minnesota, and has all requisite corporate power and
authority to own its properties and conduct its business as it is presently
being conducted. MCP is duly qualified to do business and is in good standing in
each jurisdiction in which it conducts business or owns or leases properties of
a nature which would require such qualification.
SECTION 4.2 SUBSIDIARIES.
MCP has no Subsidiaries (as defined in Section 7.1), other than those,
if any, identified in the MCP Schedule; and MCP is not a member of and owns no
capital stock, other equity securities or similar equity investments, directly
or indirectly, in any corporation, association, joint venture, trust or other
entity, except as otherwise identified in the MCP Schedule.
SECTION 4.3 FINANCIAL STATEMENTS.
MCP has heretofore delivered to ADM its audited financial statements as
of September 30, 1996 and March 31, 1997, accompanied by the opinion of Xxxxxxx,
Xxxxxxxxx LLC. Except as stated in said opinion, such financial statements
fairly present the financial position of MCP at the dates indicated therein and
the results of its operation for the period indicated therein, in conformity
with generally accepted accounting principles consistently applied. Except as
otherwise disclosed in the MCP Schedule, there has been no material adverse
change in the financial condition or results of operations of MCP and its
Subsidiary since the date of such financial statements.
SECTION 4.4 ABSENCE OF LIABILITIES.
Neither MCP nor its Subsidiary has any liabilities or obligations,
absolute or contingent, except for liabilities and obligations which are (i)
reflected in the financial statements referred to in Section 4.3, (ii) fully
covered by insurance, except for reasonable deductibles, (iii) incurred in the
ordinary course of business since March 31, 1997, and not materially different
in type or amount from those reflected in the financial statements referred to
in Section 4.3, or (iv) individually and in the aggregate not material to the
business or financial condition of MCP and its Subsidiary, taken as a whole.
SECTION 4.5 PROPERTIES.
MCP has good and marketable title to all real and personal properties
owned by it, as reflected in the financial statements referred to in Section
4.3, free and clear of all liens, restrictions or encumbrances of any nature,
except (i) Permitted Liens (as defined in Section 7.1) , and (ii) any other
liens disclosed in the MCP Schedule. Each lease under which MCP leases any real
or personal property, as reflected in the financial statements referred to in
Section 4.3, is a valid and enforceable lease under which there is no existing
default, or event which with notice or lapse of time or both could become a
default, of such materiality as to enable the lessor to terminate such lease.
SECTION 4.6 LITIGATION.
There are no actions, investigations or proceedings pending (or, to the
best knowledge of MCP, threatened) against or affecting MCP or its Subsidiary or
any of their properties in or before any court, governmental agency, or
governmental, arbitral or other body which, if determined adversely to MCP or
its Subsidiary, could materially and adversely affect the financial condition,
business, properties or operations of MCP and its Subsidiary taken as a whole,
or the ability of MCP to consummate the Transactions.
SECTION 4.7 ABSENCE OF DEFAULTS.
Neither MCP nor its Subsidiary is in any material respect in default
under any provision of its Articles of Incorporation or Bylaws or any indenture,
mortgage, loan agreement or other material agreement to which it is a party or
by which it is bound, and neither MCP nor its Subsidiary is in violation of any
statute, order, rule or regulation of any court or governmental agency having
jurisdiction over it or its properties which if enforced could have a material
adverse effect on its business, and neither the execution and delivery of this
Agreement nor the consummation of the Transactions in accordance with this
Agreement will conflict with or result in a breach of or constitute a material
default under any of the foregoing.
SECTION 4.8 AUTHORIZATION.
MCP has the corporate power and authority to enter into and to perform
its obligations under this Agreement (subject to the approval of its members as
required by Section 2.3). This Agreement and the Transactions have been duly and
validly authorized by the Board of Directors of MCP, and (except for the
approval of its members as required by Section 2.3) no other corporate action is
required by MCP in connection with this Agreement or the Transactions. This
Agreement constitutes the valid and binding agreement of MCP, enforceable
against MCP in accordance with its terms, except to the extent such enforcement
may be limited by the application of equitable principles where equitable relief
is sought or bankruptcy and other laws relating to the enforcement of creditors'
rights generally.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF ADM
ADM hereby represents and warrants to MCP that:
SECTION 5.1 ORGANIZATION AND GOOD STANDING.
ADM is a business corporation duly organized and existing under the
General Corporation Law of Delaware of, as amended, is in good standing under
the laws of the State of Delaware, and has all requisite corporate power and
authority to own its properties and conduct its business as it is presently
being conducted. ADM is duly qualified to do business and is in good standing in
each jurisdiction in which it conducts business or owns or leases properties of
a nature which would require such qualification.
SECTION 5.2 AUTHORIZATION.
ADM has the corporate power and authority to enter into and perform its
obligations under this Agreement. This Agreement and the Transactions will have
been duly and validly authorized by the Board of Directors of ADM no later than
the Closing Date, and no other corporate action is required by ADM in connection
with this Agreement or the Transactions. This Agreement constitutes the valid
and binding agreement of ADM, enforceable against ADM in accordance with its
terms, except to the extent such enforcement may be limited by the application
of equitable principles where equitable relief is sought or bankruptcy and other
laws relating to the enforcement of creditors' rights generally.
ARTICLE VI
THE CLOSING
SECTION 6.1 CLOSING DATE.
Unless this Agreement is terminated as provided in Section 7.7, and
subject to the satisfaction or waiver of all conditions set forth herein, the
closing of the Transactions shall take place at a location mutually acceptable
to the parties on July 31, 1997, or such other date as may be mutually agreed
upon by the parties. The closing of the Transactions shall be deemed to occur at
11:59 p.m. on the Closing Date, and shall not be deemed to have occurred until
all of the steps required by this Agreement or to occur on or before the Closing
Date shall have occurred.
SECTION 6.2 ACTIONS TO BE TAKEN AT CLOSING.
On the Closing Date, subject to the satisfaction or waiver of the
conditions to the obligations of the parties, each party hereto shall deliver to
the other party any and all documents or showings as may be required of it by
the terms of this Agreement, or as may be reasonably requested by the other
party to evidence that all of the conditions to consummation of the
Transactions have been satisfied or waived.
ARTICLE VII
MISCELLANEOUS PROVISIONS
SECTION 7.1 DEFINITIONS OF CERTAIN TERMS.
For purposes of this Agreement, the following terms shall have the
meanings set forth below:
"Permitted Liens" means: (a) liens for current real property or ad
valorem taxes on special assessments which are not yet due and payable, (ii)
easements, covenants, restrictions or other encumbrances which do not secure
indebtedness for borrowed money and which do not have a material adverse effect
on the value, usefulness or condition of the property affected thereby, (iii)
mineral rights which do not have a material adverse effect on value, usefulness
or condition of the property affected thereby, and (iv) mechanics',
materialmens' and similar liens in securing amounts which are not yet due and
payable or which are being properly contested by appropriate legal proceedings;
and (b) any liens in favor of the holders of MCP's debt refinancing or
restructuring obligations contemplated by Section 2.6 hereof.
"Subsidiaries" means with respect to any party, any corporation or
other organization of which more than 50% of the outstanding voting rights is
owned directly or indirectly by such party, by such party and one or more of its
Subsidiaries, or by one or more of such party's Subsidiaries.
SECTION 7.2 WAIVER OF CONDITIONS.
Any party may, at its option, waive in writing any and all of the
conditions herein contained to which its obligations hereunder are subject other
than the conditions set forth in Article III, Sections (h) and (j) hereof. A
party, by consummating the Transactions contemplated herein, shall be deemed to
have waived any breach of a warranty, representation, covenant or condition of
which such party received written notice prior to the Closing Date if the notice
specifically referred to this Section 7.2 and described the breach in reasonable
detail.
SECTION 7.3 AMENDMENT.
The parties by mutual consent may amend, modify or supplement this
Agreement in such manner as may be agreed upon in writing.
SECTION 7.4 BINDING NATURE.
This Agreement shall be binding upon and inure only to the benefit of
the parties hereto and their respective successors and assigns, provided that
neither this Agreement nor any of the rights, interests or obligations hereunder
shall be assigned or delegated by any of the parties
hereto without the prior written consent of the other parties hereto.
SECTION 7.5 COUNTERPARTS.
This Agreement may be executed in two or more counterparts, each of
which shall be deemed an original, but all of which together shall constitute
one and the same instrument.
SECTION 7.6 ENTIRE AGREEMENT.
Except for Sections 2, 8, 9, 10 and 11 of the Letter of Intent and all
of the terms of the Confidentiality Agreement, and except in the event of
termination of this Agreement as described in Section 7.7(c) hereof, this
Agreement, the Stockholder Agreement and the documents referred to herein and
therein set forth the entire understanding of the parties hereto with respect to
the matters provided for herein and therein and supersede all prior agreements,
covenants, arrangements, communications, representations or warranties, whether
oral or written, by any officer, employee or representative of either party.
SECTION 7.7 TERMINATION.
The Agreement shall be terminated and the Transactions abandoned if at
any time prior to the closing of the Transactions:
(a) The members of MCP fail to approve the Transactions as
required by Section 2.3, or the Board of Directors of ADM fails to
approve the Transactions as also required by Section 2.3; or
(b) The parties mutually agree in writing to terminate this
Agreement; or
(c) Either party delivers a written notice to the other party
hereto to the effect that (i) one or more of the conditions to its
obligations as set forth herein cannot be met, or (ii) such other party
has defaulted in a material respect under one or more of its covenants
or agreements contained herein, and in either case such conditions or
conditions have not been satisfied or such default or defaults have not
been remedied within thirty (30) days after such notice is mailed; or
(d) The closing of the Transactions has not occurred on or
before August 31, 1997, or such later date as the parties may mutually
agree upon.
Any termination of this Agreement shall relieve all of the parties
hereto from any further obligation hereunder, but any termination pursuant to
clause (c) above shall be without prejudice as to any claim for breach of the
Letter of Intent.
SECTION 7.8 NOTICES.
All notices, requests, demands and other communications hereunder shall
be deemed to
have been duly given if delivered or mailed, certified or registered mail, with
postage prepaid, to the recipient at the following addresses, or to such other
address as may be designated in writing to the other party from time to time:
If to ADM :
Xxxxxx Xxxxxxx Midland Company
X.X. Xxx 0000
Xxxxxxx, XX 00000
Attention: M.L. Andreas
With a copy to:
Xxxxxx Xxxxxxx Midland Company
X.X. Xxx 0000
Xxxxxxx, XX 00000
Attention: X.X. Xxxxxxx
If to MCP:
Minnesota Corn Processors
000 Xxxxx Xxxxxxx 00
Xxxxxxxx, XX 00000
Attention: Xxxxxxx Xxxxxxxxx
With a copy to:
Xxxxxxx, Rumble & Xxxxxx Professional Association
2800 Minnesota World Trade Center
00 Xxxx 0xx Xxxxxx
Xx. Xxxx, XX 00000
Attention: Xxxxx X. Xxxxxx
SECTION 7.9 CHOICE OF LAW. This Agreement shall be governed in all
respects by the laws of the State of Minnesota, excluding its conflicts of laws
rules.
SECTION 7.10 SURVIVAL.
The representations and warranties of the parties contained in Articles
IV and V shall form the basis for closing conditions and shall survive the
Closing Date.
SECTION 7.11 CAPTIONS.
The article and section headings in this Agreement are for convenience
only and shall not affect the meaning or construction of this Agreement.
IN WITNESS WHEREOF, the parties have entered into this Agreement as of
the date first written above.
XXXXXX XXXXXXX MIDLAND COMPANY MINNESOTA CORN PROCESSORS
By: By:
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Its: Its:
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