SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): March 3, 1997
Developed Technology Resource, Inc.
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(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
Minnesota 0-21394 41-1713474
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STATE OR OTHER (COMMISSION FILE NUMBER) (IRS EMPLOYER I.D. NO.)
JURISDICTION OF
INCORPORATION
12800 Whitewater Drive, Suite 170 55343
Minnetonka, MN
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(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
Registrant's telephone number, including area code: (612) 938-7080
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(FORMER NAME OR FORMER ADDRESS, IF CHANGED SINCE LAST REPORT)
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS.
On March 3, 1997, Developed Technology Resource, Inc. entered into a
joint venture with API Dairy Partners, L.P. and Agribusiness Partners
International L.P. for the purpose of investing in agribusiness in the
former Soviet Union and in furtherance of this purpose. The joint
venture arrangement is more fully described in the news release issued
by the Company on March 3, 1997.
As a capital contribution to the joint venture, the Company has
contributed to FoodMaster International Limited Liability Company all
of the Company's interest in a dairy operation in the Republic of
Kazakhstan, certain equipment and other assets owned by or being
purchased by the Company for use in the dairy operation in Kazakhstan,
and other interests, rights and opportunities that the Company has with
respect to food-related projects in the former Soviet Union.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
(c) Exhibit Description Sequentially Numbered Page
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2 Limited Liability Company Agreement
of FoodMaster International, L.L.C.
99 Press Release issued by the Company on March 3, 1997
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly authorized this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Date: March 3, 1997 Developed Technology Resource, Inc.
By: /s/ Lydia L. Bauer
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Lydia L. Bauer
Chief Financial Officer
LIMITED LIABILITY COMPANY AGREEMENT
OF
FOODMASTER INTERNATIONAL L.L.C.
THIS LIMITED LIABILITY COMPANY AGREEMENT ("Agreement") is made
and entered into as of this 3rd day of March, 1997 by and between (i) API DAIRY
PARTNERS L.P. ("API I") and AGRIBUSINESS PARTNERS INTERNATIONAL L.P. II ("API
II"), both of which are limited partnerships organized and existing under the
laws of the State of Delaware, with their principal offices at 1004 Farnam
Street, Omaha, Nebraska, 68102 (API I and API II hereinafter collectively
referred to as "API"), and (ii) DEVELOPED TECHNOLOGY RESOURCE, INC., a Minnesota
corporation organized and existing under the laws of the State of Minnesota with
its principal office at 12800 Whitewater Drive, Suite 170, Minnetonka,
Minnesota, 55343 (hereinafter referred to as "DTR"), for the purpose of forming
a limited liability company under the laws of the State of Delaware.
WITNESSETH
WHEREAS, API I is a holding company formed to hold dairy
investments made by Agribusiness Partners International, L.P., which is an
investment fund formed for the purpose of investing in agribusiness in the
former Soviet Union and which is guaranteed by the Overseas Private Investment
Corporation ("OPIC") and governed by an OPIC financing agreement;
WHEREAS, API II is an affiliate of API I and has also been
formed for the purpose of investing in agribusiness in the former Soviet Union,
but which is not guaranteed by OPIC;
WHEREAS, DTR owns certain interests in dairy and food related
businesses in the former Soviet Union; and
WHEREAS, API and DTR desire to jointly own, operate and
develop certain dairy and food related businesses in the former Soviet Union.
NOW, THEREFORE, for and in consideration of the premises and
mutual covenants set forth herein, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
1.1 Certain Defined Terms. In addition to the other terms defined in
this Agreement, the following terms shall have the respective meanings set forth
below:
(a) "Capital Contribution" means, with respect to any Member, the
amount of capital contributed by such Member to the Company in accordance with
Article 3 hereof.
(b) "Certificate of Formation" means the certificate of formation
of the Company as filed in the Office of the Secretary of State of the State of
Delaware on February 27, 1997, as amended from time to time.
(c) "Current Ratio" means current assets divided by current
liabilities.
(d) "Debt Ratio" means the sum of total current liabilities and
long term debt divided by total assets.
(e) "Dollars" means the lawful currency of the United States of
America.
(f) "GAAP" means generally accepted accounting principles as used
in the United States.
(g) "Interest" means the ownership interest of a Member in the
Company (which shall be considered personal property for all purposes),
consisting of (i) such Member's right to receive profits, losses, allocations,
and distributions, (ii) such Member's right to vote or grant or withhold
consents with respect to Company matters as provided herein or in the Delaware
Act, and (iii) such Member's other rights and privileges as herein provided.
(h) "Members" means API and DTR and all other persons who may
become Members of the Company as provided herein.
(i) "Percentage Interest" means (i) sixty percent (60%) with
respect to API (fifty-seven percent (57%) with respect to API I and three
percent (3%) with respect to API II), and (ii) forty percent (40%) with respect
to DTR, subject to adjustment in accordance with Section 5.2.
1.2 Other Definitional Provisions. Unless the context of this Agreement
clearly requires otherwise, references to the plural include the singular;
references to the singular include the plural; and references to the masculine
gender include the feminine and neuter genders. The words "hereof", "herein",
and similar terms refer to this Agreement as a whole. The term "including" is
not limiting and the term "or" has the inclusive meaning represented by the term
"and/or."
ARTICLE II
ORGANIZATION
2.1 Formation and Name. Subject to the terms and conditions of this
Agreement, the Members hereby agree to establish and operate a limited liability
company under the laws of the State of Delaware to be named FoodMaster
International L.L.C. (the "Company"). The Company shall be formed upon the
filing of the Certificate of Formation with the Secretary of State of Delaware.
The Members hereby adopt the Certificate of Formation filed with the Secretary
of State of Delaware on February 27, 1997 as the Certificate of Formation of the
Company.
2.2 Purposes and Activities. The business and purpose of the Company
shall be to produce, package and distribute dairy, juice and other food related
products in the former Soviet Union.
2.3 Principal Office. The principal place of business of the Company
shall be located at the offices of DTR at 12800 Whitewater Drive, Suite 170,
Minnetonka, Minnesota, 55343 or such other place as the Members may from time to
time determine. The registered office of the Company in the State of Delaware
shall be located at 1209 Orange Street, Wilmington, Delaware, 19801, and the
registered agent of the Company for service of process at such address shall be
The Corporation Trust Company (or such other registered office and registered
agent as the Members may from time to time select).
2.4 Term. The Company shall dissolve in accordance with the provisions
of Section 7.1.
2.5 Closing. The closing (the "Closing") shall occur on March 3, 1997.
ARTICLE III
CAPITAL STRUCTURE
3.1 Capital Contributions.
(a) DTR shall make a Capital Contribution to the Company of up to
Four Million Dollars ($4,000,000) by transferring certain rights and properties
to the Company. The rights and properties to be transferred to the Company and
the fair market value thereof as agreed to by the Members for the purposes of
determining the amount of DTR's Capital Contribution are as follows:
(i) DTR's fifty percent (50%) interest in the Kazakstan
limited liability partnership FoodMaster TOO and certain other property
identified in the Share Transfer attached as Exhibit A-1 hereto and the Bill of
Sale attached as Exhibit A- 2 hereto (collectively, the "FoodMaster Interest")
valued at One Million Nine Hundred and Seventy Five Thousand Dollars
($1,975,000) to be contributed by signing appropriate acts of transfer and
acceptance at Closing;
(ii) DTR's right to purchase eighty percent (80%) of the
shareholding in the Ak Bulak Dairy in Kazakstan ("Ak Bulak Dairy Interest")
valued at One Million Five Hundred and Seventy Five Thousand Dollars
($1,575,000) to be contributed by assignment to the Company immediately upon the
shares being properly registered with the Ministry of Justice and National
Securities Commission and made available for purchase from the State Committee
for Privatization of State Property of the Republic of Kazakstan; and
(iii) The opportunity to purchase all of the newly issued
shares of the Hincesti Dairy in Moldova (constituting fifty percent (50%) of the
total shares of the Hincesti Dairy) (the "Hincesti Dairy Interest") and the
benefit of certain equipment, materials and services acquired by DTR pursuant to
a grant from the United States Agency for International Development (the "USAID
Property"), valued collectively at Four Hundred and Fifty Thousand Dollars
($450,000). DTR further agrees that the USAID Property shall be used exclusively
for the benefit of the Company and DTR shall assign the USAID Property to the
Company upon DTR acquiring legal title thereto;
(b) API shall make a Capital Contribution to the Company of up to
Six Million Dollars ($6,000,000) (the percentage of each Capital Contribution to
be made by API pursuant to this Agreement shall be contributed by API I and API
II based on their respective Percentage Interests) which shall be contributed in
installments by bank transfer to the Company's Dollar-denominated bank account
maintained at First Bank, International Moscow Bank or another bank acceptable
to API, in amounts and subject to conditions as follows:
(i) API shall contribute to the Company One Million Three
Hundred Thousand Dollars ($1,300,000) upon transfer of the FoodMaster Interest;
(ii) API shall contribute to the Company Seven Hundred
Thousand Dollars ($700,000) upon satisfaction of all conditions to the transfer
to the Company of the AK Bulak Dairy Interest;
(iii) API shall contribute to the Company Nine Hundred
Forty-Five Thousand Dollars ($945,000) upon the Company obtaining the right to
acquire the Hincesti Dairy Interest; and
(iv) API shall contribute the balance of its Capital
Contribution to finance additional projects as approved by the Members.
(c) If DTR is unable to contribute to the Company the properties
identified in Section 3.1(a)(iii), DTR may, subject to the approval of the
Members, contribute other property in lieu thereof.
3.2 Additional Capital Contributions.
(a) Except as provided in this Section 3.2 or otherwise
unanimously agreed to by the Members, no Member shall be required or permitted
to make any additional capital contributions to the Company except as specified
in Section 3.1.
(b) If, as of the second anniversary of the Closing or the
liquidation of the Company, whichever occurs first, the amount of capital
contributed to the Company by API is less than sixty percent (60%) of the total
amount of capital contributed by both API and DTR as of such date ("Total
Capital"), API shall make an additional Capital Contribution ("Additional
Contribution") to the Company which the Company shall distribute to DTR as a
reduction of its Capital Contribution. The amount of the Additional Contribution
shall be equal to the difference between (i) sixty percent (60%) of the Total
Capital, and (ii) the amount of the Total Capital contributed by API.
3.3 Failure to Contribute.
(a) In the event that the Company does not obtain full legal title
to (i) the properties identified in Section 3.2(a)(i) prior to the date that is
ninety (90) days after the Closing, or (ii) the property identified in Section
3.2(a)(ii) within one year after the Closing (in either case, a "Non-Transferred
Property"), API may terminate this Agreement and liquidate the Company. In the
event that API elects to liquidate the Company pursuant to this Section 3.3, the
Company shall take any steps reasonably necessary to return parties to their
original position.
(b) In the event that API is required to make a Capital
Contribution pursuant to Sections 3.1 or 3.2(b) and fails to make such
Contribution, the number of Directors that API and DTR shall each be entitled to
appoint pursuant to Article IV shall be adjusted to reflect actual Capital
Contributions as of such date, provided that the rights contained in Article IV
shall be restored upon the making of such contribution by API.
3.4 Return of Capital. No Member has a right to withdraw its Capital
Contribution except upon liquidation of the Company or as otherwise provided for
in this Agreement. No interest shall accrue or be paid by the Company with
respect to any Capital Contribution.
ARTICLE IV
MANAGEMENT
4.1 Management. The management of the Company shall be vested in a
Board of Directors (the "Board") consisting of five (5) members, three (3) of
whom shall be appointed by API and two (2) of whom shall be appointed by DTR.
The Board may appoint, employ, or otherwise contract with any persons or
entities for the transaction of the business of the Company or the performance
of services for or on behalf of the Company, and the Board may delegate to any
such person (who may be designated an officer of the Company) or entity such
authority to act on behalf of the Company as the Board may from time to time
deem appropriate. The Company shall enter into a management agreement with DTR,
in the form of Exhibit B hereto (the "Management Agreement"), pursuant to which
DTR shall manage the business of the Company.
4.2 Appointment of Directors. The initial members of the Board of
Directors shall be appointed by Members prior to the first meeting. Any Director
may be removed by the Member appointing such Director. Upon the death,
retirement or removal of any Director, the Member appointing such Director may
appoint a replacement.
4.3 Actions by the Board. Except as otherwise specified in this
Agreement, any action to be taken or approved by the Board requires the approval
of a majority of the Directors.
4.4 Committees of the Board. The Directors may appoint from among their
number one or more committees and may delegate to such committee any of the
powers of the Directors.
4.5 Meetings of Board. Meetings of the Board may be called by any
Director provided that the Board shall meet at least once during each calendar
quarter. Three (3) Directors shall constitute a quorum for the transaction of
business and notwithstanding any vacancy on the Board, a quorum may exercise all
powers of the Board. Meetings of the Board shall be held at such time and place
as determined by the Board. Notice of such meetings shall be provided to each
Director at least ten (10) days prior to the meeting. The Board may act without
a meeting provided that such action is consented to in writing by each Director
then in office. Directors may participate in any meeting of the Board by
conference call or similar communications equipment by means of which all
persons can hear each other, and participation by such means shall constitute
attendance at such meeting.
4.6 Distribution. Distributions to Members shall be made in such
amounts and at such times as determined by the Board based on the budget and
business plan in effect and on the current and expected cash flow needs of the
Company.
4.7 Financial Statements. The Company shall cause annual financial
statements for the Company to be prepared in accordance with GAAP and provided
to Members within ninety (90) days of the end of the Company's fiscal year. The
Company shall also cause an audit to be performed on an annual basis of each
entity controlled by the Company which audit shall be performed in accordance
with GAAP and in accordance with any applicable local accounting principles and
practices.
4.8 Extraordinary Actions. In addition to other actions identified
herein requiring unanimous approval of the Members, the Company shall not (i)
sell or otherwise dispose of all or substantially all of its assets unless such
sale or disposition is unanimously approved by the Members provided that such
approval shall not be unreasonably withheld, (ii) undertake any new investment
projects unless such projects are unanimously approved by the Members, or (iii)
terminate the Management Agreement unless such termination is unanimously
approved by the Members.
ARTICLE V
ALLOCATIONS
5.1 Allocations. All items of Company income, gain, loss, deduction,
credit, or the like shall be allocated among the Members in accordance with
their respective Percentage Interests (as adjusted pursuant to Section 5.2) as
of the end of the fiscal year with respect to which such items were incurred.
5.2 Adjustment of Percentage Interests. It is the intent of the Members
that DTR's Percentage Interest shall be increased to the extent that API earns
an actual Internal Rate of Return over the term of its investment in the Company
("IRR") in excess of thirty-five percent (35%), provided that the adjustment of
Percentage Interests shall not alter the voting/management provisions contained
in this Agreement. To effect the foregoing, API's estimated IRR on its
investment in the Company shall be calculated as of the end of each fiscal year.
The calculation of API's estimated IRR shall be based on all actual cash flows
received to date and an estimated terminal value of API's Interest based on the
book value of the Company determined in accordance with GAAP. If API's estimated
IRR as calculated at the end of any fiscal year is greater than thirty-five
percent (35%), DTR's Percentage Interest shall be set at the percentage set
forth in Appendix A corresponding to such IRR, and API's Percentage Interest
shall be correspondingly adjusted. If API's IRR as calculated at the end of any
fiscal year is thirty-five percent (35%) or less, DTR's Percentage Interest
shall be set at forty percent (40%). Notwithstanding the provisions of Section
5.1 or the adjustments of the respective Percentage Interests pursuant to this
Section 5.2, the amount of income allocated to DTR for any fiscal year shall be
reduced to the extent that the allocation of such income would result in DTR
being allocated a percentage of the Company's income over the term of API's
investment in the Company that is greater than the percentage identified in
Appendix A which corresponds to API's IRR as of such date. For the purposes of
this Section 5.2, "terminal value" means the proceeds from the sale of API's
Interest. A final non-estimated calculation of API's IRR shall be calculated,
and Percentage Interest calculated thereon, upon the sale, transfer or
liquidation by API of its Interest, based on cash flows to date and the actual
terminal value of API's Interest.
ARTICLE VI
TRANSFERS
6.1 New Members. Additional Members shall not be admitted in the
absence of unanimous consent of the existing Members except as provided herein.
6.2 Transfers to Third Parties. No Member may sell, assign, pledge, or
otherwise transfer or encumber (collectively "transfer") all or any part of its
Interest and no transferee of all or any part of any Member's Interest shall be
admitted as a substituted Member, without the unanimous consent of all Members,
provided that if DTR refuses to consent to a transfer proposed by API, the
put-right provided pursuant to Section 6.4 shall become immediately exercisable.
6.3 Transfer by API After Five Years by Sale or IPO. If after five
years from the Closing, API has not sold its Interest in the Company, then at
API's election, DTR will, at the request of API, either assist API in the sale
of its Interest to a third party, subject to the consent provisions set forth in
Section 6.2, or assist in an initial public offering ("IPO") of Interests in the
Company.
6.4 Put Right. If any time after five years from the Closing, API has
not sold or otherwise liquidated its Interest in the Company, then API may elect
to require the Company to purchase API's Interest at its fair market value at
the time of election determined as:
(a) The Members shall select a qualified independent third party
who shall provide the Members with an appraisal of the fair market value of
API's Interest.
(b) Based upon the appraisal provided pursuant to Section 6.4(a),
the Members shall agree on a fair market value of API's Interest.
(c) If the Members fail to reach an agreement on the fair market
value of API's Interest, then the fair market value shall be determined by
arbitration pursuant to Article X, except that each Member shall select an
arbitrator qualified to provide an appraisal of the fair market value of API's
Interest. If the highest valuation does not exceed the lowest valuation by ten
percent (10%) of each other, then the fair market value will be the average of
the values provided by both of the arbitrators. If the highest valuation exceeds
the lowest valuation by 10% or greater, then an additional qualified arbitrator
shall be selected by the original arbitrators. The additional arbitrator shall
set the fair market value of API's Interest at a value between the appraised
values provided by the first two arbitrators.
(d) The Company shall pay API cash in full payment within
forty-five (45) days of the Company's purchase of API's Interest unless the
Current Ratio of the Company is less than 2 to 1 and the Debt Ratio of the
Company is greater than 30%. The Company may then elect to pay for the purchase
of API's Interest with a senior note (or combination of cash and senior note).
The senior note will be superior in right of payment to all debt obligations of
the Company except for debt obligations of the Company existing at the time of
issuance of the note which cannot by their terms be subordinated to such note.
Interest will accrue on the unpaid principal amount of the senior note at a rate
of twenty-five percent (25%) per annum. Principal and interest shall be
amortized and payable in equal monthly installments over a term of twenty-four
(24) months. The Company shall have the right to prepay any principal due under
the senior note without penalty.
ARTICLE VII
TERMINATION OF AGREEMENT/LIQUIDATION
7.1 Termination of Agreement. This Agreement shall terminate and the
Company shall be liquidated (i) in accordance with Section 3.3(a) of this
Agreement, (ii) upon the unanimous agreement of the Members, (iii) on the date
that is thirty (30) years after the filing of the Certificate of Formation with
the Delaware Secretary of State, or (iv) upon the withdrawal, bankruptcy, or
dissolution of any Member or the occurrence of any other event that terminates
the continued membership of any Member in the Company under Delaware law unless
the remaining Members unanimously agree to continue the business of the Company
within ninety (90) days of such event. Upon termination, this Agreement shall be
of no further force and effect provided that the indemnification provisions of
Section 12.1 and the confidentiality provision contained in Section 8.2 shall
continue in full force and effect.
7.2 API Priority Distribution. If the Company is liquidated for any
reason, sold or refinanced prior to API's receipt of distributions in an amount
equivalent to its Capital Contributions to the Company (after giving effect to
Section 3.2(b)), then API shall have priority over DTR's right to receive any
distribution of the assets of the Company in an amount equal to the amount of
API's Capital Contribution less distributions to API after the payment of all
amounts owed by the Company to creditors. Proceeds in excess of such amount
shall be distributed in accordance with the following priority: (i) to DTR to
the extent of its Capital Contribution (after giving effect to Section 3.2(b))
less distributions received, and (ii) to the Members in proportion to their
Percentage Interests. The priority payment set forth in this Section 7.2 is not
intended to prohibit the making of distributions to Members.
ARTICLE VIII
NON-COMPETITION/CONFIDENTIALITY
8.1 Non-competition.
(a) Neither DTR, nor any affiliate thereof, shall directly or
indirectly own, manage, invest or participate in any corporation, partnership,
joint venture or other enterprise involved in the production or distribution of
dairy, juice or food-related projects in the former Soviet Union except through
the Company unless (i) the proposed project has a projected five year IRR,
calculated based on reasonable assumptions mutually agreed to by API and DTR, of
not less than thirty-five percent (35%), (ii) DTR has provided notice of the
proposed project to the Company, which notice shall contain reasonable details
regarding such project, and (iii) the Company has not, within thirty (30) days
of the receipt of notice pursuant to clause (ii) of this sentence, elected to
undertake such project or, revoked such election within sixty (60) days thereof
because of unsatisfactory results from the Company's due diligence of the
project.
(b) Neither API, nor any affiliate thereof, shall directly or
indirectly own, manage, invest or participate in any corporation, partnership,
joint venture or other enterprise involved in the production or distribution of
dairy products in the former Soviet Union except through the Company unless (i)
the proposed project has a projected five year IRR, calculated based on
reasonable assumptions mutually agreed to by API and DTR, of not less than
thirty-five percent (35%), and (ii) API has provided notice of the proposed
project to the Company, which notice shall contain reasonable details regarding
such project, and (iii) the Company has not, within thirty (30) days of the
receipt of notice pursuant to clause (ii) of this sentence, elected to undertake
such project or, revoked such election within sixty (60) days of such election
because of unsatisfactory results from the Company's due diligence of the
project. The provisions of this Section 8.1(b) shall not apply to API's
investment in the Borisoglebsk project.
(c) As used in this Section 8.1, the term "affiliate" with respect
to either DTR or API shall mean any person or entity directly or indirectly
controlling, controlled by, or under common control with DTR or API, as the case
may be.
8.2 Confidentiality.
(a) Unless otherwise specifically agreed by API and DTR, during
the term of this Agreement and for a period of five (5) years thereafter, the
Company and each Member shall maintain in confidence, and shall refrain from
using or disclosing, all Confidential Information. For the purposes of this
Section 8.2, "Confidential Information" means all know-how, financial data,
technical data (including the terms of the transactions contemplated in this
Agreement), trade secrets or other confidential information that the Company has
disclosed to any Member, or that a Member has disclosed to any other Member or
the Company, under or in connection with this Agreement. The Company and each
Member shall cause its directors, current and past employees, agents and
contractors to refrain from using or disclosing any Confidential Information in
any manner, except as expressly permitted by this Section 8.2.
(b) Notwithstanding the foregoing, this Section 8.2 shall not
restrict the use or disclosure of Confidential Information to the extent that:
(i) the information becomes generally available to the public
without breach of this Section 8.2;
(ii) the recipient lawfully obtains the information from a
third party who is not subject to the terms of this Agreement;
(iii) the recipient has independently developed the
information prior to disclosure; or
(iv) applicable law requires disclosure of the information to
governmental, legislative or judicial authorities, provided that the recipient
shall give prior notice to the disclosing party and use its best efforts to
require such authorities to continue to accord confidential treatment to the
information.
(c) Notwithstanding the foregoing, this Section 8.2 shall not
restrict the use or disclosure of Confidential Information to the extent
necessary to permit either API or DTR to undertake a project pursuant to Section
8.1.
ARTICLE IX
FORCE MAJEURE
9.1 Force Majeure Defined. "Force Majeure" means the occurrence of
circumstances beyond the reasonable control of the Member affected, and which
such Member could not have prevented by the exercise of reasonable diligence.
Events of Force Majeure include:
(a) earthquakes, floods, fires or other natural physical
disasters; wars or hostilities; riots or civil disturbances; acts of terrorism
or sabotage; governmental regulations, decrees or actions; and legislative or
judicial actions; or
(b) actions of any persons or groups of persons (i) with the
purpose of obtaining money or property from the Company or from employees or
representatives of the Company by coercion or intimidation; (ii) threatening the
life and/or health of employees or representatives of the Company or (iii)
causing or threatening to cause material loss to the Company, provided that
adequate evidence of such circumstances is presented to the satisfaction of the
other Members; or
(c) actions of any governmental authority to seize, confiscate,
expropriate or nationalize the Interest of any Member or its share in the
Company or any property of the Company, or otherwise to prevent any Member from
exercising its rights with respect to the Company as set forth in this Agreement
or applicable law in force on the date hereof.
9.2 Effect of Force Majeure. If an event of Force Majeure causes a
Member's failure or delay in its performance of any obligations under this
Agreement, then such failure or delay shall be excused (and thus shall not
constitute a breach of this Agreement for as long as the Force Majeure remains
in effect).
9.3 Notice of Force Majeure. A Member that fails or delays to perform
any obligations under this Agreement due to Force Majeure shall so notify the
other Members in writing, as promptly as possible after such occurrence. The
notice shall describe the nature of the Force Majeure, furnish adequate evidence
of the existence and circumstances of the event of Force Majeure and, to the
extent possible, estimate its duration and its likely effects on the Member's
performance of its obligations under this Agreement.
9.4 Cessation of Force Majeure. A Member whose performance is affected
by a Force Majeure shall use its best efforts to terminate the effects of such
Force Majeure. Upon the cessation of the Force Majeure, the affected Member
shall resume performance of its obligations as soon as possible. The affected
Member shall notify the other Members as soon as it learns that the Force
Majeure has ceased or appears likely to cease.
ARTICLE X
RESOLUTION OF DISPUTES
10.1 Arbitration. Any dispute, claim or grievance arising out of or
relating to the interpretation or application of this Agreement, or to the
breach, termination of validity thereof, shall be settled by arbitration in
accordance with the then-current Center for Public Resources Rules of
Non-Administered Arbitration of Business Disputes, by a sole arbitrator. The
arbitration shall be governed by the United States Arbitration Act, 9 U.S.C.
ss.ss. et seq. Judgment upon the award rendered by the arbitrator may be entered
in any court having jurisdiction thereof. The place of the arbitration shall be
a neutral city in the midwestern United States.
ARTICLE XI
REPRESENTATIONS AND WARRANTIES
11.1 API. API I and API II each represent and warrant to DTR:
(a) It is a limited partnership duly organized, validly existing
and in good standing under the laws of the State of Delaware. It has the power
and authority to own, lease, and operate its assets, properties, and businesses
and to enter into this Agreement and to carry out its obligations hereunder. The
execution, delivery, and performance of this Agreement by it have been duly
authorized by all necessary action on its part, and this Agreement is legally
binding upon it in accordance with its terms.
(b) The execution, delivery, and performance by it of this
Agreement and the transactions contemplated hereby will not (i) violate the
provisions of any order, judgment, or decree of any court or other governmental
agency or any arbitrator applicable to it, (ii) result in a material breach of
or constitute (with due notice or lapse of time or both) a material default
under any contract or agreement to which it is a party or by which it is bound;
or (iii) violate any provision of law applicable to it, the violation of which
is likely to have a material adverse effect on the business, operations or
condition (financial or otherwise) of it or the Company.
11.2 DTR. DTR represents and warrants:
(a) DTR is a corporation duly organized, validly existing and in
good standing under the laws of the State of Minnesota. DTR has the corporate
power and authority to own, lease and operate its assets, properties, and
business and to enter into this Agreement and to carry out its obligations
hereunder. The execution, delivery, and performance of this Agreement by DTR
have been duly authorized by all necessary corporate actions on the part of DTR,
and this Agreement is legally binding upon DTR in accordance with its terms.
(b) The execution, delivery, and performance by DTR of this
Agreement and the transactions contemplated hereby will not (i) violate the
provisions of any order, judgment, or decree of any court or other governmental
agency or any arbitrator applicable to DTR or the Articles of Incorporation or
Bylaws of DTR; (ii) result in a material breach of or constitute (with due
notice or lapse of time or both) a material default under any contract or
agreement to which DTR is a party or by which DTR is bound; or (iii) violate any
provision of law applicable to DTR, the violation of which is likely to have a
material adverse effect on the business, operations or condition (financial or
otherwise) of DTR or the Company.
(c) DTR has or will have at the time of contribution, full legal
right to transfer and assign all rights and properties to be contributed to the
Company as Capital Contributions pursuant to the terms of this Agreement, free
and clear mortgage, pledge, claim, lien charge, obligation, liability (including
liability for taxes) or other encumbrances, and the Company will receive full
legal and beneficial title to all such rights and properties.
ARTICLE XII
INDEMNIFICATION
12.1 Extent of Responsibility for Damages. Each Member shall indemnify
and hold harmless the other Member for losses, claims, damages, liabilities,
including without limitation reasonable legal and other expenses incurred in
connection with investigating any loss, claim, damage or liability, that such
Member may incur or suffer by reason of (i) any inaccuracy in any representation
or the breach of any warranty made by the Member hereunder, or (ii) the failure
of such Member to fully perform or observe any term, provision, covenant,
agreement to be performed under this Agreement.
12.2 Indemnification of Members and Directors. The Company shall
indemnify and hold harmless each Member and its Affiliates and each Director
(each an "Indemnified Person") against any and all losses, claims, damages,
expenses and liabilities of any kind whatsoever that such Indemnified Person may
at any time become subject to or liable for by reason of the formation,
operation, or termination of the Company, or the Indemnified Person acting as a
Member or Director of the Company, or the authorized actions of such Indemnified
Person in connection with the conduct of the affairs of the Company, provided
that no Indemnified Person shall be entitled to indemnification to the extent
that liability otherwise indemnified for results from (i) any act or omission of
such Indemnified Person that involves actual fraud or willful misconduct, or
(ii) any transaction from which such Indemnified Person derived improper
personal benefit.
12.3 Limitation of Liability. No Member shall have any personal
liability whatsoever to the Company or any other Member on account of such
Member's status as a Member or by reason of such Member's acts or omissions in
connection with the conduct of the business of the Company; provided, however,
that nothing contained herein shall protect any Member against any liability to
the Company or the Members to which such Member would otherwise be subject by
reason of (i) any act or omission of such Manager that involves actual fraud or
willful misconduct or (ii) any transaction from which such Member derived
improper personal benefit.
ARTICLE XIII
GENERAL PROVISIONS
13.1 Limitation on Liability. The debts, obligations, and liabilities
of the Company, whether arising in contract, tort, or otherwise, shall be solely
the debts, obligations, and liabilities of the Company, and no Member of the
Company shall be obligated personally for any such debt, obligation, or
liability of the Company solely by reason of being a Member.
13.2 Tax Treatment. It is the intention of the Members that the Company
shall be taxed as a "partnership" for federal, state, local, and foreign income
tax purposes. The Members agree to take all reasonable actions, including the
amendment of this Agreement and the execution of other documents, as may
reasonably be required in order for the Company to qualify for and receive
"partnership" treatment for federal, state, local, and foreign income tax
purposes.
13.3 Cooperation. The parties hereto shall in good faith undertake to
perform their obligations under this Agreement. Upon execution of this Agreement
and thereafter, each party shall do such things as may be reasonably requested
by the other party hereto in order to more effectively carry out the intent of
this Agreement.
13.4 Notices. Except as otherwise provided in this Agreement, any and
all notices, consents, waivers, directions, requests, votes or other instruments
or communications among the Members, Member representatives and the Company
under this Agreement shall be communicated and be effective only if the original
is sent in writing by hand or by registered mail, and a copy is sent by telex or
facsimile. Any notice so given shall be deemed to have been received as of the
date the original is received, or as of the date on which a copy was sent by
telex or facsimile and a confirmation of receipt indicated on the sending telex
or facsimile machine, whichever is earlier.
13.5 Applicable Law. This Agreement shall be governed by and
interpreted in accordance with the substantive law of the State of Delaware. The
Company shall be governed by and operate in accordance with the applicable
legislation of Delaware.
13.6 Severability. In case one or more of the provisions contained in
this Agreement, or any application thereof, shall be invalid, illegal or
unenforceable in any respect under applicable law, the validity, legality and
enforceability of the remaining provisions contained therein and any other
application thereof shall not be affected or impaired in any way.
13.7 Entire Agreement. This Agreement sets forth the entire agreement
among the Members relating to the subject matter contained herein and shall
create binding rights and obligations of the Members, and between the Members
and the Company. All other prior agreements or understandings, both written and
oral, are of no further force or effect. This Agreement shall not be amended or
replaced except by unanimous written agreement of the Members.
13.8 Headings. The headings contained in this Agreement are for
convenience only and shall not be used to construe or interpret the substantive
meaning or intent of any provision thereof.
13.9 Counterparts. This Agreement may be executed in one or
more counterparts, each of which is an original but all of which
shall constitute one instrument.
IN WITNESS WHEREOF, the undersigned have caused this Agreement to be
signed in four (4) originals on the date first written above.
FOR AND ON BEHALF OF:
DEVELOPED TECHNOLOGY RESOURCE, INC.
[SEAL]
By: /s/ John P. Hupp DEVELOPED TECHNOLOGY RESOURCE, INC.
---------------------------- CORPORATE
Name: John P. Hupp SEAL
Title: President MINNESOTA
FOR AND ON BEHALF OF:
API DAIRY PARTNERS L.P.
By Agribusiness Holding Company L.L.C.
its general partner
By: /s/ Gary N. Thompson
----------------------------
Name: Gary N. Thompson
Title: Chief Financial Officer
FOR AND ON BEHALF OF:
AGRIBUSINESS PARTNERS INTERNATIONAL L.P. II
By C.I.S. Management Company L.L.C.
its general partner
By: /s/ Gary N. Thompson
----------------------------
Name: Gary N. Thompson
Title: Chief Financial Officer
APPENDIX A
DTR Ownership Table**
IRR DTR DTR
to API Economic Control
Ownership Ownership
35% 40% 40%
37 41 40
39 42 40
41 43 40
43 44 40
45 45 40
47 46 40
49 47 40
51 48 40
53 49 40
55 50 40
57 51 40
59 52 40
61 53 40
63 54 40
65 55 40
-----
66 56 40
67 57 40
68 58 40
69 59 40
70 60 40
71 61 40
72 62 40
73 63 40
74 64 40
75 65 40
76 66 40
77 67 40
78 68 40
79 69 40
80 70 40
** The DTR Ownership Table is set up using a ratio of 2 units of IRR
increase for 1 unit of economic ownership increase until API's IRR reaches 65%
thereafter, the ratio will be 1 unit of IRR increase for 1 unit of economic
ownership increase.
Exhibit A-1
SHARE TRANSFER
City of Minnetonka, MN, USA Date: March 3, 1997
THIS SHARE TRANSFER (the "Transfer") is made by and between
FoodMaster International L.L.C., a company created under the laws of the State
of Delaware, U.S.A. (hereinafter referred to as "FI"), and Developed Technology
Resource, Inc., a company created under the laws of the State of Minnesota,
U.S.A., (hereinafter referred to as "DTR").
WHEREAS, the Certificate On State Registration No. 17-
1900-TOO(UY) dated July 14, 1995, issued by the Ministry Of Justice of the
Republic of Kazakstan on the name of the Company with Limited Liability
FoodMaster Corporation TOO ("FoodMaster L.L.C.") evidences that FoodMaster
L.L.C. is a legal entity;
WHEREAS, the Foundation Agreement of FoodMaster L.L.C. of February
1, 1995 (as amended) and the Charter of FoodMaster L.L.C. of February 1, 1995
(as amended) state that DTR possesses an equity share in the amount of 50% of
FoodMaster L.L.C. ("Equity Share").
NOW THEREFORE, the parties have concluded this Transfer as
follows:
I. SUBJECT MATTER OF THE AGREEMENT
DTR hereby transfers and assigns all of its rights and interest in
the Equity Share to FI as of the date of this Agreement and as part of the
capital contribution of DTR to FI under the terms and conditions contained in
the Limited Liability Company Agreement of FI dated as of the date hereof.
II. TERMS AND CONDITIONS OF THE AGREEMENT
2.1 FI's rights in and to the Equity Share shall arise from the
moment of the conclusion of this Transfer.
2.2 Subsequent to the date of this Transfer, DTR shall take all
necessary steps to reregister the Equity Share in the name of FI, including but
not limited to:
(a) signing and providing the letter of withdrawal from
FoodMaster L.L.C.
(b) preparing and signing the Protocol Of The General Meeting
of FoodMaster L.L.C. approving the necessary changes to the
foundation documents of FoodMaster L.L.C. and other related
issues, and registering new foundation documents with the
Ministry of Justice.
All of the foregoing steps shall be taken to the sole satisfaction of FI.
III. REPRESENTATIONS
DTR represents and warrants that (i) DTR has full and record and
beneficial title to Equity Share and the Equity Share is not encumbered with any
liens, pledges or other encumbrances or rights of third parties, (ii) DTR has
authority and has taken all steps necessary to enter into this Transfer and
transfer the Equity Share and neither executing this Transfer or transferring
the Equity Share violates or will violate any law applicable to DTR, (iii)
FoodMaster L.L.C. is validly existing and properly registered in accordance with
all laws applicable to it, (iv) DTR has obtained the letter of consent for this
Transfer from the Ak Bulak Joint Stock Company, which is another participant in
FoodMaster L.L.C., and (v) FI will obtain full legal title to the Equity Share
subject to the satisfaction of the conditions set forth in Section 2.2 of this
transfer.
The parties hereby agree to the foregoing by the signatures of their
undersigned representatives as of the date first above written:
FOR AND ON BEHALF OF:
DEVELOPED TECHNOLOGY RESOURCE, INC.
[SEAL]
By: /s/ John P. Hupp DEVELOPED TECHNOLOGY RESOURCE, INC.
-------------------- CORPORATE
Name: John P. Hupp SEAL
Title: President MINNESOTA
FOR AND ON BEHALF OF:
FOODMASTER INTERNATIONAL L.L.C.
By API Dairy Partners L.P., member
By Agribusiness Holding
Company L.L.C., its general
partner
By: /s/ Gary N. Thompson
---------------------------------
Name: Gary N. Thompson
Title: Chief Financial Officer
EXHIBIT A-2
BILL OF SALE, ASSIGNMENT AND ASSUMPTION AGREEMENT
Developed Technology Resource, Inc. ("DTR"). a Minnesota Corporation,
hereby sells, assigns and transfers to FoodMaster International L.L.C., a
Delaware Limited Liability Company ("FoodMaster"), the following personal
property:
1. The following items located at the Ak Bulak Dairy in the city of
Issyk, Kazakhstan ("Ak Bulak"), which are a capital contribution by DTR to
FoodMaster and for which no additional consideration is to be paid by
FoodMaster:
1 Mercedes Tractor Trailer truck 2435L,
Serial #WDB65846315549468, 16 cyl
1 Rebuilt Hamba yogurt/sour cream packaging machine. Model 2400
Loan Agreement dated February 21, 1995, for $60,000
Loan Agreement dated May 7, 1996, for $40,000
2. The following items, for which FoodMaster shall pay to DTR the
consideration set forth below:
1 NiMCO 350 QL form, fill, seal machine $19,078.94 (located in Ak
Bulak)
1 NiMCO 550 QL form, fill, seal machine 29,613.69 (at NiMCO factory)
1 Used Hamba Yogurt filling machine 11,470.00 (at Phoenix
factory)
shipping 473.21
repair parts 297.40
1 Vitaline ice cream machine and wrapper 120,000.00 (in transit to Ak
Bulak)
----------
180,193.24
FoodMaster agrees to assume liability for the balance owed by DTR to the vendors
of the above machines with respect to any of the items listed in this section 2
and agrees to indemnify DTR and to hold DTR harmless for any further liability
or obligation to any vendor with respect to such items.
3. The Following accounts receivable owed by the FoodMaster Corporation
TOO to DTR for payments made on behalf of FoodMaster Corporation TOO by DTR,
which are sold, transferred and assigned without recourse in exchange for
payment to DTR of the amounts set forth below.
Cargill $4,451.36
Aliance Food Equipment 2,373.60
Germantown USA 834.00
Germantown USA 4,004.00
International Dairy Equipment 880.00
MO Air 10,000.00
Label Makers, Inc. 7,075.00
NiMCO Corporation 2,698.38
Landis Plastics 39,331.70
Phoenix Engineering 99.72
Rhone-Poulen, Inc. 2,805.11
Advance to FoodMaster for
Powdered Milk 35,000.00
----------
Total 109,552.87
DTR represents that these expenses were necessary for the implementation of the
Diary Proposal, dated December 1996 which was provided by DTR to certain members
of FoodMaster.
4. DTR agrees to sign any and all documents that may be required to
perfect the sale, transfer and assignment of all its right, title and interest
(including leasehold) to the property which is the subject of this agreement and
agrees to indemnify FoodMaster and hold FoodMaster harmless in the event that
FoodMaster does not obtain full legal title to such property. Effective upon the
signing of this agreement, all of DTR's rights to use, control and dispose of
the property which is the subject of this agreement is transferred to
FoodMaster.
FOR AND ON BEHALF OF:
Dated: 3-3-97 DEVELOPED TECHNOLOGY RESOURCE, INC.
[SEAL] By: /s/ John P. Hupp
DEVELOPED TECHNOLOGY RESOURCE, INC. -----------------------------
CORPORATE John P. Hupp, President and
SEAL Chief Executive Officer
MINNESOTA
Dated: 3-3-97 FOR AND BEHALF OF:
FOODMASTER INTERNATIONAL L.L.C.
By: API Dairy Partners L.P., member
By: Agribusiness Holding Company
L.L.C., its general partner
By: /s/ Gary N. Thompson
---------------------------
Gary N. Thompson, Chief
Financial Officer
ACKNOWLEDGED AND CONSENTED TO:
- ------------------------------
FoodMaster Corporation, TOO
By: Erlan Sagadiev
Dated:
-------------
EXHIBIT B
MANAGEMENT AGREEMENT
THIS AGREEMENT ("Agreement") is made and entered into as of
the 3rd day of March, 1997, by and between DEVELOPED TECHNOLOGY RESOURCE, INC.,
a corporation organized under the laws of the State of Minnesota (hereinafter
the "Manager"), and FOODMASTER INTERNATIONAL L.L.C., a limited liability company
organized under the laws of the State of Delaware (hereinafter the "Company").
WITNESSETH:
WHEREAS, the Company has been formed by the Manager and
certain other parties (collectively the "Members") for the purpose of producing,
packaging and distributing high-quality, branded dairy, juice and other food
related products in the former Soviet Union; and
WHEREAS, as an inducement to the Members to form the Company,
the Manager has agreed to manage the business of the Company.
NOW, THEREFORE, for and in consideration of the foregoing and
the premises and mutual covenants hereinafter contained, the parties hereto
hereby agree as follows:
1. Engagement of Manager. The Company hereby engages the
Manager to develop, manage and operate all business activities of the Company
and to do and perform any and all things in the management of those business
activities customarily performed by managers of similar businesses, subject to
the terms and conditions imposed by this Agreement.
2. Acceptance by Manager/Priority of Resources. Manager hereby
agrees to manage the business of the Company on the terms and conditions
provided herein. It is understood and agreed that the Manager will devote all
resources necessary to the performance of its obligations under this Agreement
and shall not undertake any other projects or commitments which may adversely
affect its ability to perform its obligations under this Agreement.
3. Control by the Company. Notwithstanding any other provision
of this Agreement, the Manager shall be subject to the direction and control of
the Company with respect to all aspects of the performance of its obligations
under this Agreement
4. Duties of Manager. Subject to the provisions of Section 3,
Manager agrees to perform all actions reasonably necessary to develop, manage
and operate the business activities of the Company, including without limitation
the following:
a. Manage all business activities of the Company.
b. Conduct all business activities of the Company's
FoodMaster operations in Kazakstan and its prospective
operations in Moldova.
c. Investigate other dairy and food operations in the
former Soviet Union for possible investment by the
Company.
d. Establish and maintain bank accounts for the Company,
provided that such accounts shall be approved by the
Company prior to being established, and keep the books
and records of all business activities of the Company,
to pay all debts and obligations, to execute contracts
as authorized by the Company.
e. Engage accountants for the Company and for the
businesses owned and controlled by the Company, provided
that such accountants shall be approved by the Company
prior to engagement. Select, employ, supervise, direct,
pay and discharge all employees or independent
contractors necessary, in Manager's opinion, for the
development, management, and operation of the Company's
businesses in the former Soviet Union, and all such
persons shall be employees or agents of Manager and not
of the Company. Manager shall carry workers'
compensation insurance, written in such manner as also
to protect the Company in an appropriate amount,
covering all such employees, and shall withhold for tax
purposes and make all deductions and file all reports
required under all applicable laws and regulations.
f. Such other duties and responsibilities reasonably
requested from time to time by the Company.
5. Employee Non-Competes. The Manager shall cause each of its
key employees to enter into non-competition agreements pursuant to which each of
its employees shall agree that during their employment with the Manager and for
a period of one year after termination thereof (whether voluntary or
involuntary), such employee shall not (i) directly or indirectly maintain an
ownership interest in, operate, or work for any entity which produces, packages
or distributes dairy, juice or other food related products in any of the
Republics of the former Soviet Union in which the Company engages, or proposes
to engage, in such activities, (ii) solicit, do business with, or deliver
products or services to any person or entity who was a client or customer of the
Company, or (iii) employ or offer to employ any individual who was employed by
the Manager or the Company or in any way associated with the Manager or the
Company. For purposes of this Agreement, the term "key employees" shall refer to
John P. Hupp, Erlan Sagadiev, Denis Gablenko, and Lydia L. Bauer, and any other
individuals employed by the Manager during the term of this Agreement to perform
duties for the Manager similar to those performed by the four foregoing
individuals.
6. Independent Contractor. The Manager shall operate as an
independent contractor and neither Manager nor its employees shall be considered
employees of the Company.
7. Property of the Company. It is understood and agreed that
all books, records, files, reports, business products, discoveries,
improvements, know-how or techniques made, developed or created by the Manager
(or its agents or employees) in connection with the performance of the Manager's
obligations under this Agreement, shall be the property of the Company and shall
be assigned to the Company upon request. Nothing in this Agreement is intended
to preclude the Manager from using (i) any products, discoveries, improvements,
know-how or techniques in connection with projects which the Company has
declined to pursue under the Company's Limited Liability Company Agreement, or
(ii) products, discoveries, improvements, know-how or techniques unrelated to
the production, packaging or distribution of dairy, juice or other food related
products in the former Soviet Union.
8. Insurance. The Company shall provide liability insurance in
an amount satisfactory to the Manager. The Manager shall be named insured on
such liability insurance policies and certificates of insurance shall be
provided to the Manager.
9. Reports. The Manager will submit to the Company monthly
financial statements for all businesses in which the Company has an investment
and will provide such other information and reports as may be requested from
time to time by the Company.
10. Preparation of Annual Budget. Manager shall prepare a
preliminary annual budget forty-five (45) days prior to the end of each fiscal
year. The Company shall provide the Manager with an approved budget for each
fiscal year prior to the beginning of that fiscal year. The Company must approve
any expenses incurred by the Manager in excess of amounts specified in the
approved budget.
11. Indemnification.
(a) The Company shall indemnify and hold harmless the Manager
from and against any and all claims or liabilities for damage or injury to
property or persons or death of persons occurring on or about the premises of
any businesses owned or controlled by the Company and managed by the Manager,
except for such claims as arise due to the negligent act or omission of Manager,
its agents or employees.
(b) The Manager shall indemnify and hold harmless the Company
against any and all claims or liabilities for damage or injury to property or
persons or death of persons resulting or arising from the negligent acts or
omissions of the Manager, its agents or employees, except for such claims as
arise due to the negligent acts of omissions of the Company which do not involve
any negligent acts or omissions of the Manager, its agents or employees.
12. Compensation and Expense Reimbursement.
(a) As consideration for performing the services identified in
this Agreement, the Company shall reimburse the Manager for all expenses
reasonably incurred by the Manager in connection with the performance of
services under this Agreement provided that such expenses are specified in the
budget approved pursuant to Section 10 or have been pre-approved by the Company.
The Manager shall provide the Company with monthly invoices (in form and detail
as reasonably acceptable to the Company) of expenses to be reimbursed under this
Agreement. The Company shall pay the Manager for expenses identified in such
invoice within thirty (30) days of the receipt of an invoice.
(b) Upon execution of this Agreement, the Company shall
reimburse the Manager for the expenses identified on Exhibit A hereto which were
for equipment purchases, consulting fees, and travel and other expenses incurred
from November 15, 1996 through the date of this Agreement, which the Manager
represents were necessary to implement the Dairy Proposal, dated December 1996,
provided by the Manager to the Members (the "Dairy Proposal"). Subsequent to the
date of this Agreement, the Company shall reimburse the Manager for other
expenses incurred prior to the date of this Agreement that are not identified on
Exhibit A which the Manager represents were necessary to implement the Dairy
Proposal.
13. Contracts. Contracts and agreements entered into in
accordance with Section 4 of this Agreement in connection with the development,
management or operation of the businesses owned or controlled by the Company and
managed by the Manager shall be executed by the Manager as agent of the Company,
and the Company agrees to indemnify and hold harmless the Manager from and
against all existing and future liabilities under such contracts and agreements,
provided that the Manager shall have no authority to incur any obligation on
behalf of the Company that exceeds [U.S.]$25,000 unless (i) the amount of such
obligation, the identity of the party to whom the obligation is to be incurred,
and the purpose for which the obligation is to be incurred is specified in a
budget approved by the Company, or (ii) such obligation is otherwise
specifically approved by the Company.
14. Term. This Agreement shall be effective as of the date
hereof and shall remain in effect until terminated in accordance with the
following sentence. This Agreement shall not terminate except (i) by mutual
consent of the parties hereto, (ii) by either party for cause, (iii) by the
Company upon sixty (60) day prior written notice, or (iv) upon the liquidation
of the Company. For purposes of this Agreement, "cause" shall mean the breach of
any term hereof which breach is not cured within thirty (30) days of the
delivery of notice of such breach by the party seeking termination.
15. Cooperation Between Parties. The parties agree to give
each other full cooperation and assistance to the end that both parties may
discharge their responsibilities hereunder.
16. Notices. Wherever in this Agreement it shall be required
or permitted that notice or demand be given or served by either party to this
Agreement to or on the other, such notice or demand shall be given or served
either personally or forwarded by registered or certified mail, postage prepaid,
and a copy sent by telex or facsimile. Any notice so given shall be deemed to
have been received as of the date the original is received, or as of the date on
which a copy was sent by telex or facsimile and a confirmation of receipt
indicated on the sending telex or facsimile machine, whichever is earlier. The
addresses for the parties are as follows:
To the Manager: Development Technology, Inc.
12800 Whitewater Drive, Suite 170
Minnetonka, MN 55343
Telecopy: 612-938-2319
To the Company: c/o Agribusiness Management Co.
1004 Farnham Street, Suite 400
Omaha, NE 68102
Telecopy: 412-345-8966
Such addresses may be changed from time to time by either party by serving
notice as above provided.
17. Assignment. This Agreement shall be binding upon the
successors and assigns of the parties hereto and may not be assigned by Manager,
except to an entity controlled by Manager, without the prior written consent of
the Company.
18. Amendment or Modification. This Agreement constitutes the
entire agreement between the parties hereto, and no variance or modification
hereof shall be valid or enforceable, except by an amendment or supplemental
agreement in writing executed by the parties hereto.
19. Choice of Law. This Agreement shall be construed in
accordance with and governed by the laws of the State of Delaware, without
giving effect to principles of conflicts of laws.
20. Counterparts. This Agreement may be executed in one or
more counterparts, each of which is an original but all of which shall
constitute one instrument.
IN WITNESS WHEREOF, the parties hereof have caused this
instrument to be duly executed as of the day and year first above written.
FOODMASTER INTERNATIONAL L.L.C.
By API Dairy Partners L.P.,
Member
By Agribusiness Holding
Company L.L.C., its
general partner
By /S/ Gary N. Thompson
------------------------------
Gary N. Thompson, Chief
Financial Officer
DEVELOPED TECHNOLOGY RESOURCE, INC.
[SEAL]
DEVELOPED TECHNOLOGY RESOURCE, INC. By /S/ John P. Hupp
CORPORATE -----------------------------------
SEAL John P. Hupp, President
MINNESOTA
<TABLE>
<CAPTION>
EXPENSES FOR REIMBURSEMENT
Date Vendor Description Amount
- --------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
2/15/97 Payroll $ 8,542.08
2/3/97 Kinko's Investment proposal copy 12.27
2/3/97 Ceridian Payroll processing 36.00
2/3/97 American Medical Security Dental premium 102.15
2/4/97 Cargill, Inc. Rent-Feb97 2,967.64
2/4/97 Medica Medical insurance-Feb97 833.75
2/10/97 Fed of Trade Union Chisinau Office Rent-Feb97 600.00
2/13/97 Office Max Office supplies 110.43
2/28/97 Payroll-2/28/97 8,542.08 $ 21,746.40
12/10/96 Peter Sandfort Hinchesti & St. Petersburg projects 5,392.21
1/20/97 Peter Sandfort Hinchesti project 3,691.00
2/13/97 Peter Sandfort Kazakhstan 3,091.00 12,174.21
--------------
12/18/96 Mr. Alexandrov Airline ticket 1,931.22
1/6/97 John Hupp Mr. Alexandrov's visit expenses 2,161.33
1/7/97 Denis Gablenko Mr. Alexandrov's visit expenses 113.03
2/18/97 John Hupp Mr. Alexandrov's visit expenses 478.92
2/18/97 John Hupp NY/DC Trip for AID, Sandfort, Sagad 2,083.13 6,767.63
--------------
2/26/97 Robert Half Lydia Bauer placement fees 15,000.00 15,000.00
10/96-12/96 Denis Gablenko Moldova travel expenses 7,366.17
1/97 Denis Gablenko Flight from Moscow to Moldova 1,139.95 8,506.12
--------------
Ak-Bulak Debt payments 157,729.58 157,729.58
Subtotal: $ 221,923.94
ACCOUNTS RECEIVABLE TO FOODMASTER LLC
Cargill 4,451.36
Alliance Food Equipment 2,373.60
Germantown USA 834.00
Germantown USA 4,004.00
International Dairy Equipment 880.00
MO Air 10,000.00
Label Makers, Inc. 7,075.00
NiMCO Corporation 2,698.38
Landis Plastics 39,331.70
Phoenix Engineering 99.72
Rhone-Poulen, Inc. 2,805.11
Advance to FoodMaster for Powdered Milk 35,000.00
Subtotal: $ 109,552.87
EQUIPMENT PURCHASED
1 NiMCO 350 QL, form fill and seal machine 19,078.94
1 NiMCO 550 QL, form fill and seal machine 29,613.69
1 Used rebuilt Hamba Yogurt filling 11,470.00
-shipping 443.21
-repair parts 297.00
1 Vitaline ice cream machine and wrapper 120,000.00
Subtotal: $ 180,903.24
Grand Total: $ 512,380.05
</TABLE>
NEWS RELEASE
DEVELOPED TECHNOLOGY RESOURCE, INC.
12800 Whitewater Drive, Suite 170
Minnetonka, Minnesota 55343
CONTACT: John P. Hupp
(612) 938-7080
FOR IMMEDIATE RELEASE
DEVELOPED TECHNOLOGY RESOURCE, INC. AND AGRIBUSINESS PARTNERS
INTERNATIONAL FORM PARTNERSHIP TO PURSUE DAIRY OPPORTUNTIES IN
THE FORMER SOVIET UNION
MINNEAPOLIS, MINN. -- (03/03/97) Developed Technology Resource, Inc.
(DTR) and Agribusiness Partners International, L.P. (API) announced today the
formation of FoodMaster International LLC (FoodMaster) for the purpose of
pursuing dairy opportunities in the former Soviet Union. Under the founding
agreement signed today, DTR will contribute its dairy operations in Kazakhstan
and its opportunities in Moldova and API has agreed to fund up to $6 million
over the next two years to expand the business. DTR will manage the day-to-day
affairs of FoodMaster and its subsidiaries under a separate management
agreement. API will own 60% of FoodMaster and DTR 40%, with DTR having the
ability to earn a greater economic interest by reaching defined performance
targets.
In June, 1995, DTR started its first dairy operation in Kazakhstan with
a plan to expand into other markets in the former Soviet Union (fSU). In July of
1996, DTR obtained the right to purchase its dairy partner in Kazakhstan, and
just this year received a grant from the USAID to expand to Moldova. John Hupp,
the president of DTR, stated, "We are excited about the opportunity that this
partnership affords to our shareholders and our new partners. Having proven the
concept in Kazakhstan, and having learned a great deal in the process, we now
have the capital to carry out our expansion. It is FoodMaster's goal to move
prudently and deliberately to build solid regional dairies in the fSU."
- more -
Robert Peyton, president of API, stated, "We believe that this is an
excellent time to get into the dairy business in the fSU. Currently, there are
no companies offering domestic, high-quality, brand name dairy products in the
regions where FoodMaster will operate. The industry is in need of capital,
technology which API can provide and management experience which DTR brings to
the project. We are excited to be in partnership with DTR which has proved its
abilities both in the United States and in its dairy operations in Kazakhstan."
API is a $100 million fund sponsored by America First Companies,
headquartered in Omaha, Nebraska. It was formed with the purpose of investing in
the food and agribusiness industries of the former Soviet Union.
DTR is a publicly held company focused on building business
opportunities in the former Soviet Union, and maintains offices in Minnesota,
and Almaty, Kazakhstan. Its common shares are traded on NASDAQ OTC Bulletin
Board under the symbol "DEVT."
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