Document:

Exhibit

10.16

 

STOCK

PURCHASE AGREEMENT

 

THIS STOCK PURCHASE AGREEMENT (the “Agreement”) is entered into this 10th

day of December, 2002 by and among SOUTH DAKOTA SOYBEAN PROCESSORS, LLC, a

South Dakota limited liability company (“SDSP”), URETHANE SOY SYSTEMS, CO., an

Illinois corporation (“USSC”), BRUCE KURTH, ED KURTH, JOHN KURTH, RICHARD

KURTH, JOHN WAWAK, and FORREST HICKMAN (collectively the “Sellers”).

 

RECITALS

 

A.            The Sellers desire to sell to SDSP, and SDSP

desires to purchase from the Sellers, 22,500 shares of USSC common stock (the

“Purchased Shares”), subject to the terms and conditions set forth in this

Stock Purchase Agreement (the “Agreement”).

 

B.            USSC desires to issue to SDSP, and SDSP

desires to purchase from USSC, an additional 28,125 shares of USSC common stock

(the “Issued Shares”) subject to the terms and conditions set forth in this

Agreement.

 

C.            Other understandings have been agreed upon by

the parties and are set forth in this Agreement.

 

NOW, THEREFORE, in consideration of the mutual promises set forth

herein, the parties agree as follows:

 

1.             SALE AND PURCHASE OF SHARES

 

1.1          Initial Transfers and Stock Dividends.  USSC

is authorized to issue 100,000 shares of common stock. On the Closing Date,

USSC shall declare a stock dividend of 1.5 shares of common stock for each one

share of common stock outstanding.

 

1.2          Shares and Shareholders. 

Schedule 1.2 sets forth common stock ownership for each record owner of

shares of the Company’s common stock, including the transfers and sales described

herein.

 

1.3          Sale of Shares.  On

the Closing Date and subsequent to the declaration of the stock dividend

provided for in Section 1.1, Sellers shall sell, transfer, convey, assign, and

deliver to SDSP, and SDSP shall purchase, acquire, and accept from Sellers, the

Purchased Shares, free and clear of all encumbrances, claims, liens, security

interests or restrictions on transfer. 

The number of shares sold by each Seller is identified in 

 

 

Schedule 1.2.  All right, title

and interest in and to the Purchased Shares shall be transferred to SDSP at

Closing, notwithstanding that SDSP shall pay the purchase price in

installments.  Sellers will pay any

transfer taxes and excise taxes incurred by any party in connection with the

sale of the Purchased Shares.

 

1.4          Issuance of Shares.  On

the Closing Date, USSC shall sell, transfer, convey, assign and deliver to

SDSP, and SDSP shall purchase, acquire and accept from USSC, the Issued Shares

free and clear of all encumbrances, claims, liens, security interests, or

restrictions on transfers.  All right

and title and interest in and to the Issued Shares shall be transferred to SDSP

at Closing, notwithstanding that SDSP shall pay the purchase price in

installments.  USSC will pay any

transfer or issuance taxes and excise taxes incurred by any party in connection

with the sale of the Issued Shares.

 

1.5          Vote for Plan of

Reorganization.  Following completion of the sale of the

Purchased Shares and Issued Shares on the Closing Date and any time thereafter,

USSC’s board of directors will review alternatives to USSC continuing its

business operations as an Illinois corporation taxed as a “C” corporation for

federal income tax purposes.  It will be

the objective of the board of directors to continue USSC’s business operations

in a new business structure that will allow for maximum distributions of cash

with minimum tax consequences.  Sellers

hereby grant SDSP the right to vote their shares of common stock in favor of

the board of directors’ recommended plan of reorganization.

 

1.6          Intellectual Property. 

Following completion of the sale of the Purchased Shares and Issued

Shares on the Closing Date and any time thereafter, Ultra Foam, Inc.  shall have a right of first refusal to

purchase from USSC any patent or patent applications for letters patent in the

event that USSC (i) is insolvent and in the process of liquidating its assets,

or (ii) is operating or in liquidation under a voluntary or involuntary

bankruptcy petition, or (iii) intends to sell, transfer or otherwise dispose of

any patent or patent applications for letters patent.  The right of first refusal shall only apply to offers for sale,

transfer or other disposition accepted by USSC.  USSC shall provide Ultra Foam, Inc. with notice of the pending

sale, transfer or other disposition of one or more patents and/or applications

for letters patent, including identification of the patents and/or applications

for letters patent, the purchase price, other terms  and the name and address of the purchaser.  Ultra Foam, Inc. shall have  60 days from the date of the notice within

which to match the third party purchaser’s offer by giving written notice to

USSC and the third party purchaser.  If

Ultra Foam, Inc. timely exercises its right of first refusal, Ultra Foam, Inc.

shall purchase, and USSC shall sell, the patents and/or applications for

letters patent, and closing shall occur within sixty (60) days following the

giving of notice of exercise of the right of first refusal.  If Ultra Foam, Inc. fails to timely exercise

its right of first refusal, then USSC shall be free to sell, transfer or

dispose of the patents and/or

 

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applications for letters patent to the third party purchaser in

accordance with the terms and conditions of the offer disclosed to Ultra Foam,

Inc.

 

1.7          Payment of Ultra Foam

Account. On the Closing

Date, USSC shall pay to Ultra Foam, Inc. the sum of $275,000.00.  Any remaining balance owed by USSC to Ultra

Foam, Inc. will be kept current. USSC shall release Ultra Foam and Sellers from

all personal guarantees of Ultra Foam and Sellers on the following debts and

obligations of USSC: (1) Master Lease No. 00-1006-01 dated October 6, 2000,

between USSC, as lessee, and G & G Financial Services, as lessor, which lease

was assigned to LaSalle National Bank; and (2) Business Loan Agreement in the

principal amount of $100,000.00 dated December 3, 2001, between USSC and

LaSalle National Bank.

 

2.             PURCHASE PRICE

 

2.1          The

purchase price for the Purchased Shares shall be $180.00 per common share for a

total of $4,050,000.00.

 

2.2          The

purchase price for the Issued Shares shall be $160.00 per common share for a

total of $4,500,000.00.  The proceeds

from the sale of the Issued Shares shall be used by USSC as working capital and

for the purchase of capital assets in accordance with a plan of operation to be

developed and approved by USSC’s board of directors.

 

3.             PAYMENT OF PURCHASE PRICE

 

3.1          All

payments of the purchase price for the Purchased Shares are identified in

Schedule 3.1.  All payments shall be

without interest.  All payments shall be

by wire transfer or cashier’s check. 

Payment of the purchase price shall be completed as follows:

 

3.1.1       34% of

the purchase price shall be paid to each Seller, his heirs or assigns, within

90 days following the approval of a registration statement by the United States

Securities and Exchange Commission (“SEC”) for sale of securities to be

conducted by SDSP to raise the funds necessary to pay the purchase prices for

the Purchased Shares and Issued Shares, or the 365th day following

the Closing if SDSP has filed with the SEC the registration statement within 60

days following the Closing, whichever is the earliest to occur (the “ First

Funding Date”).  If SDSP has not filed

with the SEC the registration statement within 60 days following the Closing,

the 365 day period referenced in this Section 3.1.1 shall be reduced to 300

days.

 

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3.1.2       22% of

the purchase price shall be paid to each Seller, his heirs or assigns, on the

first annual anniversary of the First Funding Date.

 

3.1.3       22% of

the purchase price shall be paid to each Seller, his heirs or assigns, on the

second anniversary of the First Funding Date.

 

3.1.4       22% of

the purchase price shall be paid to each Seller, his heirs or assigns, on the

third anniversary of the First Funding Date.

 

3.1.5       In the event SDSP sells all or substantially

all of its shares of USSC stock prior to the last date of payment of the

purchase price as set forth in Section 3.1.5 of this Agreement (“the Subsequent

Sale”), SDSP shall pay in full the purchase price for the Purchased Shares on

or before the closing date of the Subsequent Sale, provided, however, that the

amount of the purchase price due on said closing date shall not exceed the net

sale proceeds realized by SDSP in the Subsequent Sale.  For purposes of this section, “substantially

all” shall mean a number of shares that would give the purchaser of such shares

a majority of the total outstanding shares of USSC stock.  This section shall not apply if the

purchaser in the Subsequent Sale is a person, association, partnership, limited

liability company, corporation or joint stock company or trust that directly or

indirectly, through one or more intermediaries, controls, is controlled by, or

is under common control with SDSP.  Control

shall be defined as (i) ownership of a majority of the voting power of all

classes of voting stock or (ii) ownership of a majority of the beneficial

interests in income and capital of an entity other than a corporation.

 

3.2          The

purchase price for the Issued Shares shall be paid by SDSP to USSC in twelve

(12) quarterly payments of Three Hundred Seventy-Five Thousand and No/Dollars

($375,000.00).  The first payment will

be due on the Closing Date and will be prorated based upon the number of days

remaining in the calendar quarter from the date of the purchase of the Issued

Shares.  The remaining eleven (11)

payments will be made on the first day of each calendar quarter commencing

January 1, 2003.  SDSP will make a final

payment on October 1, 2006, for the difference between $375,000.00 and the

amount of the first, prorated payment. 

All payments shall be without interest. 

All payments shall be by wire transfer or cashier’s check.

 

4.             CLOSING

 

4.1          Date, time, and Place of

Closing.  The closing of the transactions (the

“Closing”) described in this Agreement shall take place on a date and at a time

set by

 

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SDSP, but no later than January 1, 2003, unless otherwise agreed by the

parties. Subject to the terms and conditions set forth in this Agreement, the

Closing of the purchase and sale of the Purchased Shares and Issued Shares

shall take place at the offices of USSC, in Princeton, Illinois, or at such

other place as may be mutually agreed upon by the parties on the Closing

Date.  Notwithstanding any provision in

this Agreement to the contrary, if SDSP has not obtained the consents required

by this Agreement, or determined that the due diligence completed is

satisfactory to SDSP, prior to the Closing Date, SDSP shall have the right to

terminate this Agreement by giving written notice to the other parties.

 

4.2          Documents to be Delivered by

Sellers at Closing.  At Closing, Sellers shall deliver to SDSP the

following instruments and other documents, in each case, in such form as SDSP

may reasonably request:

 

4.2.1       Consents

from all persons from whom consent is required in order for Sellers to enter

into the transactions contemplated by this Agreement.

 

4.2.2       Stock

certificates and respective stock powers representing the Purchased Shares.

 

4.2.3       Releases

of any encumbrances, claims, liens, security interests, or restrictions upon

the Purchased Shares.

 

4.3          Documents to be Delivered by

SDSP at Closing.  At Closing, SDSP will execute and deliver

the following instruments and other documents:

 

4.3.1       To USSC, cashier’s check or wire transfer deposit confirmation in the

amount of the prorated $375,000.00 payment as provided in Section 3.2.

 

4.3.2       To USSC,

identification of the five directors elected by SDSP, and confirmation of the

identity of SDSP’s Chief Executive Officer who shall serve as President of the

USSC Board of Directors.

 

4.4          Documents to be Delivered by

USSC at Closing.  At Closing, USSC shall execute and deliver

to SDSP the following instruments and other documents, in each case in such

form as SDSP may reasonably request:

 

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4.4.1       A

Writing in Lieu of Meeting of Directors (currently serving) of USSC, in the

form of Schedule 4.4.1, authorizing USSC to enter into this Agreement,

authorizing the stock dividend, and authorizing the issuance of stock to SDSP.

 

4.4.2       Resignations

from USSC’s officers and directors.

 

4.4.3       A

Writing in Lieu of Meeting of Directors (newly elected) of USSC, in the form of

Schedule 4.4.3, electing officers, appointing a new registered agent and

registered office and approving Agreements and General Releases for James N.

Jackson and Richard W. Muckey.

 

4.4.4       Copies

of signed Agreements and General Releases for James N. Jackson and Richard W.

Muckey.

 

4.5          Documents to be Delivered by

Sellers and Thomas Kurth at Closing.  At Closing, Sellers and Thomas

Kurth shall execute and deliver the following instruments and other documents,

in each case in such form as SDSP may reasonably request:

 

4.5.1       Identification

of the two directors to be elected by Sellers and Thomas Kurth.

 

4.6          Documents to be Delivered by

the Shareholders of USSC.  At Closing, USSC’s shareholders shall

execute and deliver to SDSP the following instruments and other documents, in

each case in such form as SDSP may reasonably request:

 

4.6.1       A

Writing in Lieu of Meeting of Shareholders of USSC, in the form of Schedule

4.6.1, amending USSC’s By-Laws.

 

4.7          Documents to be Delivered by

Thomas Kurth and Richard Kurth at Closing.  At Closing, Thomas Kurth and

Richard Kurth shall execute and deliver to USSC the following instruments and

other documents, in each case in such form as SDSP may reasonably request:

 

4.7.1       In the

case of Thomas Kurth, a Transitional Employment Agreement in the form of

Schedule 4.7.1.a.  In the case of

Richard Kurth, an Employment Agreement in the form of Schedule 4.7.2.b.

 

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4.7.2       Employee

Non-Competition and Confidentiality Agreements in the forms of Schedule 4.7.2.

 

4.8          Due Diligence.  SDSP

has been conducting a due diligence review of USSC’s assets, books, and

operations.  USSC and Sellers hereby

agree to cooperate in good faith to assist SDSP in completing its due diligence

review.  SDSP will endeavor to complete

its due diligence prior to January 1, 2003. Notwithstanding the foregoing,

SDSP’s failure to complete its due diligence review within the time lines set

forth herein shall not give USSC and Sellers any right to terminate this

Agreement or the transactions set forth herein, or the right to damages arising

from any delay in completing the due diligence review.  SDSP’s due diligence review may include but

not be limited to (i) a review of USSC’s articles of incorporation and by-laws,

(ii) completion of an audit of USSC’s financial records by a certified public

accountant selected by SDSP, (iii) review of all of USSC’s contractual

obligations, employment obligations, liabilities, and guarantees, (iv) review

of USSC’s assets, including those not contained in the financial statements,

(v) completion of an environmental audit of USSC’s properties and business

activities, including compliance with Environmental Laws, as defined in Section

5.14.1 of this Agreement, and (vi) a review of any stock options, warrants,

conversion rights or privileges, and offers to sell or issue securities of any

kind. If requested by USSC, SDSP will execute and deliver to USSC a

Confidentiality Agreement as part of the due diligence review.

 

5.             REPRESENTATIONS AND

WARRANTIES OF USSC AND SELLERS

 

Bruce Kurth, Ed Kurth, John Kurth, Richard Kurth, John Wawak and

Forrest Hickman, each for himself represents and warrants to SDSP that the

following information is true and accurate to the best of his information,

knowledge and belief and USSC represents and warrant to SDSP that the following

information is true and accurate:

 

5.1          Authorization.  USSC

has the authority to execute and deliver this Agreement and to perform USSC’s

obligations hereunder.  This Agreement

is a valid and legally binding obligation of USSC and Sellers, enforceable

against USSC and Sellers in accordance with its terms, except as the

enforceability thereof may be limited by bankruptcy, insolvency,

reorganization, moratorium, or other similar laws relating to the enforcement

of creditors’ rights generally and by general principles of equity (regardless

of whether such enforceability is considered in a proceeding in equity or at

law).  Sellers will have at Closing (i)

good, absolute, and marketable title to the Purchased Shares, free and clear of

any liens, claims, encumbrances, security interests or restrictions of any

kind,

 

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and (ii) the complete and unrestricted right, power, and authority to

sell, transfer, and assign to SDSP the Purchased Shares in accordance with this

Agreement.  USSC will have at Closing

(i) good, absolute, and marketable title to the Issued Shares, free and clear

of any liens, claims, encumbrances, security interests or restrictions of any

kind, and (ii) the complete and unrestricted right, power, and authority to

sell, transfer, and assign to SDSP the Issued Shares in accordance with this

Agreement.

 

5.2          Incorporation and Good

Standing.  USSC is duly organized, validly existing and

in good standing under the applicable laws of the state of its incorporation

and has all necessary power and authority to own, lease, and operate its

properties and assets and to conduct its business as its business is now being

conducted.  USSC has delivered to SDSP

complete and accurate copies of USSC’s articles of incorporation and bylaws,

including all amendments thereto.  USSC

is qualified to do business and is in good standing in each state in which it

transacts business.  USSC does not have

any subsidiaries nor any direct or indirect equity interest in any corporation,

partnership, or other entity.

 

5.3          Capitalization.  The

authorized capital stock of USSC consists of 100,000 shares of common stock, no

par value, 25,000 shares of which are outstanding.  The Purchased Shares and Issued Shares are collectively referred

to herein as the “Shares”.  The Shares

have been validly authorized and issued, are fully paid and non-assessable, and

have not been issued in violation of any preemptive rights, or of any federal

or state securities law.  On the date

hereof, the Shares are owned beneficially and of record by the Sellers as set

forth on Schedule 1.2.  There are

and will be on the Closing Date no outstanding subscriptions, options, rights,

warrants, convertible securities, or other agreements or commitments obligating

USSC or Sellers to issue any additional shares of its capital stock of any

class or any other securities of any kind except for the agreement contained in

James N. Jackson’s Employment Agreement, and except for the outstanding

convertible securities represented by a Subordinated Convertible Note dated

February 13, 2002, held by Richard P. Kiphart. 

There are no agreements that relate to the voting or control of the

Shares.

 

5.4          No Conflicts. 

Neither the execution and delivery of this Agreement nor the fulfillment

of or compliance with the terms and provisions hereof will violate, conflict

with, or result in a breach of the terms, conditions or provisions of, or

constitute a default or an event which, with notice or lapse of time or both,

would constitute a default under, the articles of incorporation or bylaws of

USSC, any contract, agreement, mortgage, deed of trust, or other instrument or

obligation to which USSC and Sellers are parties or by

 

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which any of them is bound, or violate any provision of any applicable

law or regulation or of any order, decree, writ or injunction of any court or

governmental body, or result in the creation or imposition of any lien, claim,

restriction, security interest or encumbrance of any nature whatsoever on any

property or asset of USSC and Sellers or on the Shares.

 

5.5          Financial Statements.  USSC

has delivered to SDSP copies of a balance sheet for USSC dated October 31, 2002

(the “Balance Sheet Date”), and the related statement of income (hereinafter

collectively referred to as the “Financial Statements”).  The Financial Statements  fairly present the financial condition of

USSC at the dates mentioned and the results of its operations for the periods

specified.  The Financial Statements

disclose all of the debts, liabilities, and obligations of any nature (whether absolute,

accrued, contingent, or otherwise, and whether due or to become due) of USSC as

of the Balance Sheet Date, reflect adequate reserves for all reasonably

anticipated losses, claims, and costs, and include appropriate reserves for all

taxes and other liabilities accrued or due at such dates but not yet paid.

 

5.6          Indebtedness For Borrowed

Money; Contingent Obligations; Guaranties.  USSC has delivered to SDSP

complete and accurate copies of all instruments evidencing or relating to

USSC’s indebtedness for borrowed money. 

USSC is not in default or violation of any provision of any agreement

evidencing or relating to its indebtedness for borrowed money.  These copies set forth a complete and

accurate description of all contingent liabilities and guarantees by USSC of

any obligation or liability of any person or entity, including without

limitation any guaranties of installment sales contracts, leases or customer

purchase or lease paper sold to third parties, insurance or service contracts

or reimbursement commitments.

 

5.7          Tax Matters.  USSC

has failed to file its 2000 and 2001 federal, state, and local tax returns

required to be filed by it. 

Notwithstanding a failure to file tax returns, all federal, state,

local, and foreign income, ad valorem, excise, b&o, sales, use, payroll,

unemployment, and other taxes and assessments that are due and payable by USSC

have been properly computed, fully paid, and discharged.  The only unpaid taxes that require payment

by USSC or on behalf of USSC, are current taxes not yet due and payable.

 

5.8          Transactions Since Balance

Sheet Date.  Since the Balance Sheet Date or as

anticipated by this Agreement, (i) USSC has not incurred any debts,

liabilities, or obligations except current liabilities in the ordinary course

of business and except for those debts, liabilities and obligations identified

in Schedule 5.8 attached to this Agreement; discharged or satisfied any liens

or encumbrances, or paid any debts,

 

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liabilities, or obligations, except in the ordinary course of business;

mortgaged, pledged, or otherwise subjected to any lien or other encumbrance any

of its properties or assets; canceled any debt or claim; sold or transferred

any properties or assets except sales from inventory in the ordinary course of

business; nor entered into any transaction other than in the ordinary course of

business; (ii) there has not been any change in the financial condition, net

income, assets, liabilities, operations, or business of USSC other than changes

in the ordinary course of business, none of which, individually or in the

aggregate, has been material; (iii) there has not been any declaration, setting

aside or payment of any dividend or other distribution in respect of, or any

repurchase or acquisition of, the capital stock of USSC; (iv) USSC has not

issued any securities or options to purchase any securities of any nature

whatsoever; (v) USSC has not increased the compensation, commissions, bonuses,

or other remuneration payable to any officer, director, employee, or to any other

person or entity, whether now or hereafter payable; (vi) there has not been any

damage, destruction or loss (whether or not covered by insurance) materially

and adversely affecting the assets, properties or business of USSC; (vii) USSC

has not made any capital expenditure or commitment in excess of $20,000.00 for

additions to property, plant, or equipment; (viii) USSC has not made any loan

or advance to any person or entity, guaranteed any obligation or liability of

any person or entity, including (without limitation) any guaranties of any

installment sales contracts or leases, or given any indemnification to any

person or entity; (ix) USSC has not granted any waiver or release of any claim

or right, or canceled any debt or claim held by it; (x) USSC has not amended or

terminated any material contract, agreement, or license to which it is a party;

and (xi) USSC has not agreed, in writing or otherwise, to do or permit any of

the foregoing.

 

5.9          Litigation.  USSC

and Sellers have provided complete and accurate descriptions of all orders,

decrees, writs or injunctions of any court or governmental body applicable to

USSC and Sellers and all legal actions, suits, arbitrations, condemnation

actions, or other proceedings pending or threatened against USSC and Sellers

with respect to the Shares, or against USSC or any of its properties, assets,

or business.  USSC and Sellers are not

aware of any facts that might result in any other action, suit, arbitration, or

proceeding.

 

5.10        Compliance With Laws. 

There are no existing violations of federal, state, or local laws,

ordinances, rules, codes, regulations, or orders by USSC which might materially

affect the properties, assets, or business of USSC.  USSC is not subject to any restriction, judgment, order, writ,

injunction, decree, or award, which materially or

 

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adversely affects or is likely to materially

or adversely affect the business, operations, properties, assets, or

condition (financial or otherwise) of USSC.

 

5.11        Contracts And Agreements.  USSC

has provided a complete and accurate description of all material contracts and

agreements to which USSC is a party or by which it or any of its property is

bound.  All such contracts and

agreements are in full force and effect and neither USSC nor the other party

are in breach of any of the provisions thereof.  USSC is not a party to any contract or agreement which materially

or adversely affects or is likely to materially or adversely affect the

business, operations, properties, assets, or condition (financial or otherwise)

of USSC.

 

5.12        Personnel.  USSC

has provided SDSP with copies of employment agreements with James N. Jackson

and Richard W. Muckey.  Bruce Kurth, Ed

Kurth and John Kurth dispute that these employment agreements are legally

binding upon USSC and warrant and represent that they as members of USSC’s

board of directors never authorized or approved the same.  Except as otherwise disclosed herein, there

does not exist between USSC and any person or entity any employment agreements

or contracts, oral or written, and all employees are employed at will.  USSC is not a party to or bound by any

collective bargaining agreement, nor has USSC experienced any strikes, grievances,

claims of unfair labor practices, or other collective bargaining dispute.  USSC has not committed any unfair labor

practice.  There are no unions

representing any employees of USSC. 

USSC has no knowledge of any organizational effort presently being made

or threatened by or on behalf of any labor union with respect to employees of

USSC.  USSC has paid or has made

provision for the payment of all compensation due any person or entity and has

complied in all material respects with all applicable laws, rules, and

regulations relating to the employment of labor, including those related to

wages, hours, collective bargaining and the payment and withholding of taxes,

and has withheld and paid to the appropriate governmental authority, or is

holding for payment not yet due to such authority, all amounts required by law

or agreement to be withheld from the compensation of its employees.

 

5.13        Full Disclosure.  No

representation or warranty by USSC and Sellers, in this Agreement or in any of

the Schedules attached hereto, or other statement in writing or certificate

furnished or to be furnished to SDSP by or on behalf of USSC and, Sellers in

connection with the transactions contemplated by this Agreement, contains or

will contain any untrue statement of a material fact, or omits or will omit to

state a material fact necessary to make the statements contained herein not

misleading.

 

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5.14        Environmental.

 

5.14.1     USSC and

Sellers represent and warrant that:

 

(a)           Any Hazardous Substances  generated, used, treated or stored on, or

transported to or from, any of USSC’s owned or leased real property or any

property adjoining any of USSC’s owned or leased real property have been in

compliance with Environmental Laws.

 

(b)           Hazardous Substances have not been stored,

released or disposed of on, under, or migrating from, or in groundwater under,

any of USSC’s owned or leased real property or any property adjoining any of

USSC’s owned or leased real property;

 

(c)           Environmental permits have been obtained and

are in effect for the operations conducted at USSC’s owned or leased real

property;

 

(d)           There are no pending applications for

issuance or renewal of any Environmental Permits for the operations conducted

at any of USSC’s owned or leased real property;

 

(e)           USSC is in compliance with all applicable

Environmental Laws and the requirements of all Environmental Permits pertaining

to its owned or leased real property;

 

(f)            USSC has disposed of all wastes, including

those containing any Hazardous Substances, in compliance with all applicable

Environmental Laws;

 

(g)           There are no past, pending or threatened

administrative, regulatory or judicial claims, actions, suits, investigations,

demands, proceeding or notices of violation relating in any way to any

Environmental Law or Environmental Permit (“Environmental Claims”) against USSC

or Sellers;

 

(h)           There are no circumstances with respect to

any parcel of USSC’s owned or leased real property that could (i) form the

basis of an Environmental Claim against any USSC or any parcel of USSC’s owned

or leased real property or (ii) cause any parcel of USSC’s real property to be

subject to any restrictions on

 

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ownership, occupancy, use or transferability under any applicable

Environmental Law.

 

For purposes of this Section, the following definitions shall apply:

 

“Environmental Laws” means any federal, state or local or

foreign statue, law, rule or regulation relating to: (a) releases, discharges,

spills, leaks or emissions (or threatened releases, discharges, spills, leaks

or emissions) of Hazardous Substances; (b) the manufacture, handling,

transport, use, treatment, storage or disposal of hazardous Substances or

materials containing hazardous Substances; or (c) otherwise relating to

pollution of the environment by Hazardous Substances or the protection of human

health form injury form hazardous Substances.

 

“Environmental Permits” means all permits, licenses, approvals

and other authorizations required under applicable Environmental Laws.

 

“Hazardous Substances” means (a) substances, chemicals or

materials in concentrations regulated under any applicable federal, state or

local or foreign statute, law, rule or regulation, including, without

limitation, the following federal statues and their state counterparts, as well

as such statues’ implementing regulations as amended from time to time and as

interpreted by administering agencies: the Hazardous Materials Transportation

Act, the Resource Conservation and Recovery Act, the Comprehensive

Environmental Response, Compensation and Liability Act, the Clean Water Act,

the Safe Drinking Water Act, the Atomic Energy Act, the Toxic Substances

Control Act, the Federal Insecticide, Fungicide, and Rodenticide Act, and the

Clean Air Act; (b) regulated concentrations of petroleum and petroleum

products, radioactive materials, asbestos in any form that is or could become

friable, urea formaldehyde, polychlorinated biphenyls and radon gas; and (c)

any other substances, chemical or materials in concentrations with respect to

which a federal, state or local or foreign agency requires environmental

investigation, monitoring, reporting or remediation.

 

5.15        Intellectual Property. 

Schedule 5.15 sets forth a complete and accurate description of all

intellectual property presently in use by USSC, which intellectual property

includes (without limitation) patents, patent applications for letters patent,

trademarks, trade names, service marks, copyrights, trade secrets, inventions,

formulas, methods, processes. and any other proprietary information or

property.  There are no outstanding

licenses or consents to third parties granting the right to use any

intellectual property owned by USSC. 

USSC owns and has the exclusive right to use its intellectual property

free and clear of any claims and without any conflict with the rights of

others.  No royalties or fees are

payable by USSC to any third party by reason of the use of any

 

13

 

intellectual property by USSC. 

No additional intellectual property is required by USSC for the

operation of its business.  The Sellers

and all employees of USSC have transferred and assigned to USSC all patents,

trademarks, trade names, service marks, copyrights, trade secrets, inventions,

formulas, methods, processes, and any other proprietary information or property

developed by them that is related to USSC’s business activities.

 

5.16        Employee Benefit Plans.  USSC

has disclosed in writing to SDSP a complete and accurate description of all

pension, profit sharing, bonus, deferred compensation, percentage compensation,

severance pay, retirement, health, stock option, insurance, or other employee

benefit plans and arrangements binding upon USSC.  USSC has complied with the provisions of and has performed the

obligations required of it under such plans and arrangements, and USSC is not

in default under any provision thereof in any manner.  There have been no material defaults, breaches, or omissions by

USSC or any fiduciary under any of the plans or arrangements.  USSC has not incurred any liability of any

nature whatsoever not reflected in the Financial Statements under any employee

benefit plan or arrangement.

 

6.             REPRESENTATIONS AND

WARRANTIES OF SDSP

 

SDSP represents and warrants to USSC and Sellers as follows:

 

6.1          Incorporation.  SDSP has been duly organized and is a valid existing limited liability

company under the laws of the State of South Dakota.

 

6.2          Authorization.  SDSP

has the authority to execute and deliver this Agreement and to perform its

obligations hereunder.  This Agreement

is a valid and legally binding obligation of SDSP, enforceable against SDSP in

accordance with its terms, except as the enforceability thereof may be limited

by bankruptcy, insolvency, reorganization, moratorium, or other similar laws

relating to the enforcement of creditors’ rights generally and by general

principles of equity (regardless of whether such enforceability is considered

in a proceeding at law or in equity).

 

6.3          No Conflicts.  The

execution and delivery of this Agreement and the consummation of the

transactions contemplated by this Agreement will not result in any breach or

violation of or default under any agreement or other instrument to which SDSP

is a party or by which it is bound.

 

6.4          Purchase Offer.  SDSP

offered to purchase shares from all shareholders of USSC, including Thomas

Kurth and Richard Kurth, under the terms and conditions set forth in this

Agreement.  Thomas Kurth and Richard

Kurth were given full and fair

 

14

 

opportunity to participate in the sale of Purchased Shares contemplated

by this Agreement.

 

7.             PRE-CLOSING COVENANTS

 

7.1          Conduct of Business by USSC

Prior to the Closing Date.  USSC and Sellers shall cause USSC to conduct

its operations according to the ordinary and usual course of business

reasonably consistent with past and current practices, to maintain and preserve

its assets, properties, insurance policies, business organization, and

advantageous business relationships, and to retain the services of its

officers, employees, agents, and independent contractors, and shall not allow

USSC to engage in any practice, take any action, or enter into any transaction

outside of the ordinary course of business or in violation of this

Agreement.  From the date of the

execution of this Agreement to the date of Closing of the transaction

contemplated hereby, USSC and Sellers will not without SDSP’s consent: (i)

commit to or make any obligation which binds USSC to an expense in excess of

$10,000.00, (ii) sell any of USSC’s assets except in the ordinary course of

business, (iii) issue securities, options, warrants or conversion rights,

except as provided in this Agreement, (iv) distribute any dividends, except and

as provided in this Agreement, (v) subdivide or combine any class of USSC’s

stock, (vi) merge or enter into an agreement to merge or sell substantially all

of USSC’s assets, or (viii) enter into any transaction wherein USSC’s common

stock is converted into that of another security.

 

7.2          SDSP’s Examination.  USSC

and Sellers shall cause USSC to permit representatives of SDSP to have full

access to and to examine, at all reasonable times, and in a manner so as not to

interfere with the normal business operations of USSC, the books, records,

properties, and assets of USSC.

 

7.3          Notice of Changes.  USSC

shall give to SDSP prompt written notice of any material adverse change in the

financial condition, net income, assets, liabilities, operations, or business

of USSC.

 

8.             CONDITIONS PRECEDENT TO

OBLIGATION OF SDSP

 

The obligation of SDSP to effect the transactions contemplated by this

Agreement is subject to the satisfaction on or prior to the Closing Date of the

following conditions, each of which may be waived by SDSP:

 

15

 

8.1          Representations, Warranties

and Agreements of Sellers.  All representations and warranties of USSC

and Sellers contained in this Agreement shall be true and correct in all

material respects as of the Closing Date with the same effect as though such

representations and warranties were made on the Closing Date, except to the

extent that such representations and warranties expressly relate to any earlier

date, and USSC and Sellers shall have performed and complied with all the

covenants and agreements and satisfied all the conditions required by this

Agreement to be performed, complied with or satisfied by USSC and Sellers on or

prior to the Closing Date.

 

8.2          No Adverse Change.  SDSP

shall have determined to its satisfaction that as of the Closing Date there has

been no material adverse change in the financial condition, net income, assets,

liabilities, operations, or business of USSC.

 

8.3          Transfer of Shares.  The

certificates representing the Purchased Shares shall have been transferred and

conveyed by Sellers to SDSP in a manner and by instruments acceptable to SDSP

and its counsel, free and clear of all liens, claims, encumbrances, or

restrictions of any kind.  The certificates

representing the Issued Shares shall have been transferred and conveyed by USSC

to SDSP in a manner and by instruments acceptable to SDSP and its counsel, free

and clear of all liens, claims, encumbrances, or restrictions of any kind.

 

8.4          Delivery of

Instruments.  USSC and Sellers shall have delivered to SDSP

the instruments identified in Section 4 to be delivered by them.

 

8.5          Completion of Due Diligence

to SDSP’s Satisfaction.  SDSP shall have completed its due diligence

review of the business, assets, and liabilities of USSC, and shall have found

that the same are acceptable to SDSP in its sole discretion.

 

9.             CONDITIONS PRECEDENT TO OBLIGATION OF USSC AND SELLERS

 

The obligation of USSC and Sellers to effect the transactions

contemplated by this Agreement subject to the satisfaction on or prior to the

Closing Date of the following conditions, each of which may be waived by USSC

and Sellers:

 

9.1          Representations, Warranties

and Agreements of SDSP.  All representations and warranties of SDSP

contained in this Agreement shall be true and correct in all material respects

as of the Closing Date with the same effect as though such 

 

16

 

representations and warranties were made on the Closing Date, except to

the extent that such representations and warranties expressly relate to an

earlier date, and SDSP shall have performed and complied with all of the

covenants and agreements and satisfied all the conditions required by this

Agreement to be performed, complied with, or satisfied by SDSP on or prior to

the Closing Date.

 

9.2          Delivery of Purchase Price.  SDSP

shall have delivered the purchase price as provided in Section 3.

 

10.          INDEMNIFICATION

 

10.1        General Indemnity.  USSC and Sellers, on a joint

and several basis, agree to indemnify, defend, and hold harmless SDSP and its

respective successors and assigns (the “SDSP Indemnified Parties”) from and

against any Claims.  Claims, as used in

this subsection include any claims, damages, liabilities, penalties, actions,

suits, proceedings, demands, assessments, costs and expenses, including

reasonable attorneys fees, expenses of investigation, and interest on any

payment or expense, at the rate of eight percent (8%) per annum, incurred by

SDSP Indemnified Parties arising from or related to (i) any breach of any

representation, warranty, covenant or agreement made by USSC and Sellers in

this Agreement, (ii) any debts, liabilities, or obligations of any nature

(whether absolute, accrued, contingent, or otherwise and whether due or to

become due) of USSC occurring or existing before Closing that are not reflected

in and adequately provided for in the Financial Statements, (iii) any

condition, activity or event, caused in whole or in part, or engaged in, by

USSC and that existed or occurred prior to the Closing Date, (iv) the

infringement or claimed infringement by USSC on the rights or claimed rights of

any person or entity under or in respect to any intellectual property,

(v) any tax liability of USSC by any federal, state, or local taxing

authority for any time period prior to the Closing Date, (vi) SDSP’s ownership

of common stock of USSC, (vii) SDSP’s ownership, exercise, refusal to exercise

or release of its right of first refusal provided for in the Vegetable Oil

Supply Agreement dated August 2, 1999, (viii) any breach or alleged breach of

the Vegetable Oil Supply Agreement dated August 2, 2002, (ix) SDSP’s tender

offers to purchase the Purchased Shares and Issued Shares and all negotiations

and agreements reached herein, (x) any existing or potential liability arising

out of any condition, activity, or event existing or occurring prior to the

Closing Date with respect to any property comprising part of the properties or

assets of USSC for which there is any material risk of liability to any

governmental entity or agency or any other person or entity for the violation

of any Environmental Laws or for which there may be liability in tort, or

otherwise, and which is related to or arises out of an environmental condition

including, if

 

17

 

necessary, the costs and expenses of any remediation, transportation,

incineration, treatment, or other necessary and appropriate disposition or

mitigation of such environmental condition, (xi) each and every other Claim

arising from the acts or omissions of USSC arising or occurring through the

Closing, whether known or unknown, and (xii) any liability arising under the

alleged employment agreements of James N. Jackson and Richard W. Muckey

described in Section 5.12 of this Agreement. 

Notwithstanding the foregoing, the obligation of Sellers to indemnify,

defend and hold harmless SDSP and its respective successors and assigns from

any and all Claims shall be limited to one-fourth of the amount paid to Sellers

as the purchase price for the Purchased Shares, with each of the individual

Seller’s obligation to indemnify limited to one-fourth of the amount paid to

such individual Seller.  Notwithstanding

the foregoing, the obligation of Sellers to indemnify, defend and hold harmless

SDSP and its respective successors and assigns shall not apply to subsection

(xii) above relating to any liability arising under the employment agreements

of James N. Jackson and Richard W. Muckey described in Section 5.12 of this

Agreement or any other employment contracts, oral or written.

 

10.2        SDSP Indemnity.  SDSP agrees to indemnify,

defend and hold harmless USSC and Sellers and their respective successors and

assigns (the “Seller Indemnified Parties”) from and against any Claims. Claims,

as used in this subsection, include any claims, damages, liabilities,

penalties, actions, suits, proceedings, demands, assessments, costs and

expenses, including reasonable attorneys fees, and expenses of investigation,

incurred by Seller Indemnified Parties arising from or related to any breach of

any representation, warranty, covenant or agreement made by SDSP in this

Agreement.  If any Claim is filed or

brought against a Seller Indemnified Party which is or may be subject to SDSP’s

obligation to indemnify a Seller Indemnified Party as set forth in this

subparagraph, then a Seller Indemnified Party shall promptly give SDSP written

notice of that Claim and SDSP thereafter shall have the option to defend that

Claim at SDSP’s expense using attorneys selected by SDSP.

 

10.3        Other Indemnification

Provisions.  The foregoing indemnification provisions are

in addition to, and not in derogation of, any other indemnification provisions

in this Agreement, or any contractual, statutory, equitable, or common law

remedy any party may have for the breach of any representation, warranty, or

covenant.

 

18

 

11.          TERMINATION

 

11.1        Mutual Consent.  This

Agreement may be terminated by the written consent of all the parties.

 

11.2        By SDSP.  SDSP

may terminate this Agreement prior to Closing by giving written notice of

termination to Sellers if: (i) Sellers have made a material misrepresentation

or are in material breach of the representations and warranties contained in

this Agreement; (ii) Sellers are in material default in observance of or in the

due and timely performance of any of the agreements and covenants contained in

the Agreement; or (iii) Sellers are in material breach of a condition of

Closing that has not been previously waived by SDSP.

 

11.3        By USSC and Sellers.  USSC and, Sellers may terminate this Agreement prior to Closing by

giving written notice of termination to SDSP if: (i) SDSP has made a material

misrepresentation or is in material breach of the representations and

warranties contained in this Agreement; (ii) SDSP is in material breach of a

condition of Closing that has not been previously waived by USSC and Sellers.

 

11.4        Disclosure of Breach.  A

breach may not be declared if the action or inaction of a party is capable of

cure and the party intending to declare the breach has not given the other

party at least 30 days’ prior written notice within which such impending breach

may be cured.

 

12.          DISPUTE RESOLUTION

 

12.1        Mediation.  The

parties hope there will be no disputes arising out of this transaction.  To that end, each commits to cooperate in

good faith and to deal fairly in performing its duties under this Agreement in

order to accomplish their mutual objectives and avoid disputes.  But if a dispute arises, the parties agree

to resolve all disputes by the following alternate dispute resolution process.

The parties will seek a fair and prompt negotiated resolution, but if this is

not successful, all disputes shall be resolved by binding arbitration;

provided, however, that during this process, at the request of either party

made not later than twenty-five (25) days after the initial arbitration demand,

the parties will attempt to resolve any dispute by nonbinding mediation (but

without delaying the arbitration hearing date).  The parties recognize that negotiation or mediation may not be

appropriate to resolve some disputes and agree that either party may proceed

with

 

19

 

arbitration without negotiating or mediating.  The parties confirm that by agreeing to this alternate dispute

resolution process, they intend to give up their right to have any dispute

decided in court by a judge or jury, except to the extent that there is a right

to appeal provided under Section 12.4.

 

12.2        Binding Arbitration.  Any

claim between the parties, including but not limited to those arising out of or

relating to this Agreement and any claim based on or arising from an alleged

tort, shall be determined by arbitration in Des Moines, Iowa (or some other

place as the parties may agree).  If a

party demands a total award greater than $250,000, including interest,

attorneys’ fees, and costs, then any party may require that there be three (3)

neutral arbitrators.  If the parties

cannot agree on the identity of the arbitrator(s) within ten (10) days of the

arbitration demand, the arbitrator(s) shall be selected by the administrator of

the American Arbitration Association (AAA) office having jurisdiction over Des

Moines, Iowa, from its Large, Complex Case Panel (or have similar professional

credentials).  Each arbitrator shall be

an attorney with at least fifteen (15) years’ experience in commercial law and

shall reside in Iowa.  Whether a claim

is covered by this Agreement shall be determined by the arbitrator(s).  All statutes of limitations which would

otherwise be applicable shall apply to any arbitration proceeding hereunder.

 

12.3        Procedures.  The

arbitration shall be conducted in accordance with the AAA Commercial

Arbitration Rules with Expedited Procedures, as modified by this

Agreement.  There shall be no

dispositive motion practice.  As may be

shown to be necessary to ensure a fair hearing, the arbitrator(s) may authorize

limited discovery, and may enter pre-hearing orders regarding (without

limitation) scheduling, document exchange, witness disclosure and issues to be

heard.  The arbitrator(s) shall not be

bound by the rules of evidence or of civil procedure, but may consider such

writings and oral presentations as reasonable business people would use in the conduct

of their day-to-day affairs, and may require the parties to submit some or all

of their case by written declaration or such other manner of presentation as

the arbitrator(s) may determine to be appropriate.  The parties intend to limit live testimony and cross-examination

to the extent necessary to ensure a fair hearing on material issues.

 

12.4        Hearing and Award.  The

arbitrator(s) shall take such steps as may be necessary to hold a private  hearing within 90 days of the initial demand

for arbitration and to conclude the hearing within three days; and the

arbitrator(s)’s written decision shall be made not later than 14 calendar days

after the hearing.  The parties have

included these time limits in order to expedite the proceeding, but they are

not jurisdictional, and the

 

20

 

arbitrator(s) may, for good cause afford or permit reasonable

extensions or delays, which shall not affect the validity of the award.  The written decision shall contain a brief statement

of the claim(s) determined and the award made on each claim.  In making the decision and award, the

arbitrator(s) shall apply applicable substantive law.  Absent fraud, collusion or willful misconduct by an arbitrator,

the award shall be final, and judgment may be entered in any court having

jurisdiction thereof.  The arbitrator(s)

may award injunctive relief or any other remedy available from a judge,

including the joinder of parties or consolidation of this arbitration with any

other involving common issues of law or fact or which may promote judicial

economy, and may award attorneys’ fees and costs to the prevailing party but

shall not have the power to award punitive or exemplary damages.  The decision and award of the arbitrators

need not be unanimous; rather, the decision and award of two arbitrators shall

be final.

 

13.          GENERAL PROVISIONS

 

13.1        Entire Agreement.  This

Agreement contains and constitutes the entire agreement between the parties

regarding the subject matter hereof and supersedes all prior agreements and

understandings between the parties relating to the subject matter of this

Agreement.  There are no agreements,

understandings, restrictions, warranties, or representations between the parties

relating to the subject matter hereof other than those set forth in this

Agreement.  This Agreement is not

intended to have any legal effect whatsoever, or to be a legally binding

agreement, or any evidence thereof, until it has been signed by the USSC,

Sellers, and SDSP.

 

13.2        Schedule.  Schedules

attached are made a part of this Agreement by this reference.

 

13.3        Third Party Consents. 

USSC, Sellers, and SDSP mutually agree to cooperate and use reasonable,

good faith efforts to prepare all documentation, to effect all filings, and to

obtain all permits, consents, approvals, and authorizations of all third

parties and governmental bodies as may be necessary to consummate the

transactions contemplated by this Agreement.

 

13.4        Further Actions.  From

time to time, as and when requested by any party hereto, the other party shall

execute and deliver, or cause to be executed and delivered, all such documents

and instruments and shall take, or cause to be taken, all such further or other

actions as such other party may reasonably deem necessary or desirable to

consummate the transactions contemplated by this Agreement.

 

21

 

13.5        Publicity.  The

parties hereto agree that no public release or announcement concerning the

terms of the transactions contemplated by this Agreement shall be issued by any

party without the prior written consent of the other party (which consent shall

not be unreasonably withheld), except as such release or announcement may be

required by law.

 

13.6        Amendment.  This

Agreement may not be amended, modified, or terminated except by an instrument

in writing signed by all parties to this Agreement.

 

13.7        Construction.  All

pronouns and any variations thereof shall be deemed to refer to the masculine,

feminine, or neuter gender thereof or to the plurals of each, as the identity

of the person or persons or the context may require.  The descriptive headings contained in this Agreement are for

reference purposes only and are not intended to describe, interpret, define or

limit the scope, extent or intent of this Agreement or any provision contained

in this Agreement.

 

13.8        Invalidity.  If

any provision contained in this Agreement shall for any reason be held to be

invalid, illegal, void, or unenforceable in any respect, such provision shall

be deemed modified so as to constitute a provision conforming as nearly as

possible to such invalid, illegal, void, or unenforceable provision while still

remaining valid and enforceable; and the remaining terms or provisions

contained herein shall not be affected thereby.

 

13.9        Payment of Expenses. 

Whether or not the transactions contemplated by this Agreement are

consummated, each of the parties to this Agreement shall be responsible for its

own costs and expenses incurred in connection with the preparation and

negotiation of this Agreement and the transactions-contemplated hereby.

 

13.10      Binding Effect and

Assignment.  This Agreement shall be binding upon and

shall inure to the benefit of the parties hereto and their respective legal

representatives, successors and permitted assigns.  SDSP may assign its rights under this Agreement to a related

entity, and SDSP and its assignee shall be fully obligated, responsible and

liable for the performance of SDSP’s obligations hereunder regardless of any

such assignment.  USSC and Sellers may

not assign any of their rights or delegate any of their obligations

hereunder.  Any assignment in violation

hereof shall be void.

 

22

 

13.11      Attorneys’ Fees.  In

the event any party instigates litigation or any proceeding to enforce or

protect its rights under this Agreement, the party substantially prevailing in

any such litigation or proceeding shall be entitled, in addition to all other

relief, to reasonable attorneys fees, out-of-pocket costs and disbursements

relating to such litigation or proceeding.

 

13.12      Notices.  All

notices and other communications hereunder shall be (i) in writing, dated with

the current date of such notice, and signed by the party giving such notice,

and (ii) mailed, postpaid, registered or certified, return receipt requested,

addressed to the party to be notified, or delivered by personal delivery, by

overnight courier, or facsimile.  Notice

shall be deemed given when received by the party to be notified or when the

party to be notified refuses to accept delivery of the notice.  The initial addresses of the parties shall

be as follows:

 

If to SDSP:

South Dakota Soybean Processors, LLC

Post Office Box 500

100 Caspian Avenue

Volga, SD 57071

Attn: Rodney Christianson

 

With a copy to:

Woods, Fuller, Shultz & Smith P.C.

Post Office Box 5027

300 South Phillips Avenue, Suite 300

Sioux Falls, South Dakota 57104

Attn: James M. Wiederrich

 

If to USSC:

Urethane Soy Systems, Co.

535 Elm Place

P.O. Box 569

Princeton, Illinois 61356

 

If to Sellers:

Bruce Kurth

637 East Peru Street

Princeton, IL 61356

 

23

 

Ed Kurth

2105 Willow Way

Princeton, IL 61356

 

John Kurth

25 South Sixth Street

Princeton, IL 63156

 

Richard Kurth

11040 Highway 92

Walnut, IL 61376

 

John Wawak

902 South Bruner

Hinsdale, IL 60521

 

Forrest Hickman

Post Office Box 75

Dover, IL 61323

 

The parties hereto shall have the right from time to time to change

their respective addresses by written notice to the other parties.

 

13.13      Definition of Knowledge.  As

used in this Agreement, USSC’s and Sellers’ “knowledge” shall include the

knowledge of USSC and Sellers and the employees and agents thereof.

 

13.14      Time Is of the Essence.  Time

shall be of the essence with respect to this Agreement and the consummation of

the transactions contemplated hereby.

 

13.15      Remedies. 

Except as specifically set forth in this Agreement, none of the remedies

provided for in this Agreement shall be the exclusive remedy of either party

for a breach of this Agreement.  The

parties hereto shall have the right to seek any other remedy at law or in

equity in lieu of or in addition to any remedies provided for in this

Agreement.

 

24

 

13.16      Survival of Obligations.  To

the extent necessary to carry out the terms and provisions of this Agreement,

the obligations and rights arising from or related to this Agreement shall

survive the Closing and shall not be merged into the various documents executed

and delivered at the time of the Closing.

 

13.17      Waiver.  No

waiver of any breach or default hereunder shall be considered valid unless in

writing and signed by the party giving such waiver, and no such waiver shall be

deemed a waiver of any subsequent breach or default of the same or similar

nature.

 

13.18      No Strict Construction.  The

parties and their counsel have participated jointly in the negotiation and

drafting of this Agreement.  In the

event an ambiguity or question of intent or interpretation arises, this

Agreement shall be construed as if drafted jointly by the parties hereto and no

presumption or burden of proof shall arise favoring or disfavoring any party by

virtue of the authorship of any provisions of this Agreement

 

13.19      Governing Law.  This

Agreement shall be construed, enforced, and governed in accordance with the

laws of the State of Iowa.

 

13.20.     Venue. 

Venue for any legal action arising out of this Agreement shall lie in

Polk County, Iowa.

 

13.21      Counterparts.  This

Agreement may be executed in one or more counterparts, all of which taken

together shall constitute one and the same instrument.

 

IN WITNESS WHEREOF, the parties have executed this Agreement as of the

date first written above.

 

 

	

   

  	

   

  	

  SOUTH

  DAKOTA SOYBEAN

  PROCESSORS, LLC

  
	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

   

  
	

   

  	

  By

  	

    /s/

  Rodney Christianson

  	

   

  
	

   

  	

   

  	

  Its

  Chief Executive Officer

  	

   

  

 

25

 

	

   

  	

   

  	

  URETHANE SOY SYSTEMS, CO.

  	

   

  
	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

   

  
	

   

  	

  By

  	

    /s/

  Thomas Kurth

  	

   

  
	

   

  	

   

  	

  Its

  President

  	

   

  
	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

  /s/

  Bruce Kurth

  	

   

  
	

   

  	

   

  	

  Bruce

  Kurth

  	

   

  
	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

  /s/

  Ed Kurth

  	

   

  
	

   

  	

   

  	

  Ed

  Kurth

  	

   

  
	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

  /s/

  John Kurth

  	

   

  
	

   

  	

   

  	

  John

  Kurth

  	

   

  
	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

  /s/

  Richard Kurth

  	

   

  
	

   

  	

   

  	

  Richard

  Kurth

  	

   

  
	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

  /s/

  John Wawak

  	

   

  
	

   

  	

   

  	

  John

  Wawak

  	

   

  
	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

  /s/

  Forrest Hickman

  	

   

  
	

   

  	

   

  	

  Forrest

  Hickman

  	

   

  

 

26Exhibit 4.1

              AMENDED GENERAL BUSINESS AFFAIRS CONSULTING AGREEMENT

     THIS AMENDED GENERAL BUSINESS AFFAIRS CONSULTANT AGREEMENT (this
"Agreement") is made between David Mouery, J.D. (the "Consultant") and Raven
Moon Entertainment, Inc. (the "Company"), and amends and restates the terms and
conditions of that certain General Business Affair Consulting Agreement entered
into by the Parties. Each of the Consultant and the Company are also referred to
in this agreement as the "Parties."

     WHEREAS, the Company intends to develop a market for the Company's products
and services offered from time to time by the Company (the "Products and
Services") for potential customers of the Products and Services; and

     WHEREAS, the Consultant is an attorney at law and has expertise which will
assist the company with its day to day operations and drafting of contracts,
agreements and other correspondence; and

     WHEREAS, the Company desires to utilize the services of the Consultant to
promote and develop a market for the Company's Products and Services; and

     NOW THEREFORE, in consideration of the premises and mutual covenants set
forth in this Agreement, the Parties hereby agree as follows:

     1.   Scope of Services. The Company hereby retains the Consultant to assist
          the company as an operations and legal services consultant to the CEO
          of the company on an as needed basis for the drafting of contracts for
          mergers, acquisitions, purchase orders, distribution agreements,
          licensing agreements, and all other related correspondence and
          assignments given to him by the company's Chief Executive Officer.

     1(a).The company and Consultant acknowledge that the Consultant may not
          provide legal advice to the company until such time as the Consultant
          has been admitted to the Florida Bar or other state bar, at which
          time, this Agreement will be amended to reflect the Consultant's
          ability to provide legal advice to the Company. Until such time,
          Consultant's legal services are limited to legal research, drafting
          and writing subject to approval and supervision of a Company attorney.

     2.   Term. This Agreement shall become effective as of the date set forth
          on the signature page of this Agreement, and shall continue for a
          period of (4) years (the "Term"). Notwithstanding the foregoing, the
          Company or the Consultant shall be entitled to terminate this
          Agreement for "cause" upon 90 days' written notice, which written
          notice shall be effective upon mailing by first class mail accompanied
          by facsimile transmission to the Consultant at the address and
          telecopier number last provided by the Consultant to the Company.
          "Cause" shall be determined solely as to the violation of any rule or
          regulation of any regulatory agency, and other neglect, act or
          omission detrimental to the conduct of Company or the Consultant's
          business, material breach of this Agreement or any unauthorized
          disclosure of any of the secrets or confidential information of
          Company, and dishonesty related to independent contractor status.

     3.   Compensation; Grant of Stock Option. In consideration for the services
          to be provided by the Consultant to the Company under the terms of
          this Agreement, the Company agrees to grant to the Consultant upon the
          execution of this Agreement

          A)   $225,000.00 or 15 million free trading shares of stock to be
               registered in an S8 and a non-qualified stock option (the
               "Option") to purchase up to the number of shares (the "Shares")

<PAGE>

               of the Company's common stock (the "Common Stock") as set forth
               below, which shall vest and be exercisable at the prices and on
               the terms set forth below:

               1)   $600,000 option for shares of common stock @ a 50% discount
                    from the closing "bid" price for the ten (10) trading days
                    immediately preceding the date of exercise.

     Expiration of Options: Any options that remain unexercised as of the
termination of this Agreement or the expiration of the Term shall automatically
and immediately expire and no longer be of any force or effect.

Detailed terms of the Option shall be set forth in the form of Non-Qualified
Stock Option Agreement between the Company and the Consultant, substantially in
the form attached as Exhibit A to this Agreement. The Company agrees to register
the Shares promptly after signing of this agreement for resale under the
Securities Act of 1933, as amended, pursuant to a registration statement filed
with the Securities and Exchange Commission on Form S-8 (or, if Form S-8 is not
then available, such other form of registration statement available), pursuant
to the terms of such registration set forth in the Non-Qualified Stock Option
Agreement.

     5. Confidentiality. The Consultant covenants that all information
concerning the Company, including proprietary information, which it obtains as a
result of the services rendered pursuant to this Agreement shall be kept
confidential and shall not be used by the Consultant except for the direct
benefit of the Company nor shall the confidential information be disclosed by
the Consultant to any third party without the prior written approval of the
Company, provided, however, that the Consultant shall not be obligated to treat
as confidential, or return to the Company copies of any confidential information
that (i) was publicly known at the time of disclosure to Consultant, (ii)
becomes publicly known or available thereafter other than by any means in
violation of this Agreement or any other duty owed to the Company by the
Consultant, or (iii) is lawfully disclosed to the Consultant by a third party.

     6. Independent Contractor. The Consultant and the Company hereby
acknowledge that the Consultant is an independent contractor. The Consultant
agrees not to hold himself out as, nor shall he take any action from which
others might reasonably infer that the Consultant is a partner or agent of, or a
joint venturer with the Company. In addition, the Consultant shall take no
action, which, to the knowledge of the Consultant, binds, or purports to bind,
the Company to any contract or agreement.

     7. Miscellaneous.

          (a) Entire Agreement. This Agreement contains the entire agreement
     between the Parties, and may not be waived, amended, modified or
     supplemented except by agreement in writing signed by the Party against
     whom enforcement of any waiver, amendment, modification or supplement is
     sought. Waiver of or failure to exercise any rights provided by this
     Agreement in any respect shall not be deemed a waiver of any further or
     future rights.

          (b) Governing Law. This Agreement shall be construed under the
     internal laws of Orange County, FL., and the Parties agree that the
     exclusive jurisdiction for any arbitration arising from this Agreement
     shall be in Orange County, FL.

          (c) Successors and Assigns. This Agreement shall be binding upon the
     Parties, their successors and assigns, provided, however, that the
     Consultant shall not permit any other person or entity to assume these
     obligations hereunder without the prior written approval of the Company,
     which approval shall not be unreasonably withheld and written notice of the
     Company's position shall be given within ten (10) days after approval has
     been requested.

                                        2

<PAGE>

          (d) Counterparts. This Agreement may be executed in two or more
     counterparts, each of which shall be deemed an original, but which when
     taken together shall constitute one agreement.

          (e) Severability. If one or more provisions of this Agreement are held
     to be unenforceable under applicable law, such provision(s) shall be
     excluded from this Agreement and the balance of this Agreement shall be
     interpreted as if such provision were excluded and shall be enforceable in
     accordance with its terms.

          (f) Voluntary Disclosure Statement. By signing this Agreement, the
     Consultant hereby discloses that he is a family member (son-in-law) of Joey
     DiFrancesco, CEO and Bernadette DiFrancesco. In addition, Consultant is the
     husband of Gina M. Mouery also known as "Gina D" who is principle talent of
     the Company.

     IN WITNESS WHEREOF, the Parties hereto have executed or caused this
Agreement to be executed as of the date set forth below.

Date:  December 1, 2002                     CONSULTANT:

                                            /s/  David D. Mouery, J.D.
                                            -----------------------------------
                                                 David D. Mouery, J.D.

                                            Address for Notices:

                                            635 Samantha Lane
                                            Lake Mary, Fl 32746

                                            COMPANY:

                                            Raven Moon Entertainment, Inc.

                                            By:  /s/  Joey DiFrancesco, CEO
                                               --------------------------------
                                                      Joey DiFrancesco, CEO

                                        3

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