Exhibit 3.29
LIMITED LIABILITY COMPANY AGREEMENT
of
LAND O'LAKES FARMLAND FEED LLC
THIS LIMITED LIABILITY COMPANY AGREEMENT (this "Agreement") is made
and entered into as of this 1st day of September, 2000, by and between FARMLAND
INDUSTRIES, INC. ("FII"), a cooperative corporation organized under the laws of
Kansas, and LAND O' LAKES, INC. ("LOL"), a cooperative corporation organized
under the laws of Minnesota.
PREMISES
WHEREAS, FII and LOL have caused Land O'Lakes Farmland Feed LLC (the
"Company") to be formed as a limited liability company under the Delaware
Limited Liability Company Act and do hereby adopt this Operating Agreement as
the limited liability company agreement of the Company within the meaning of
Section 18-101(7) of the Act.
NOW, THEREFORE, in consideration of the premises and the mutual
agreements contained herein, the parties hereto agree as follows:
ARTICLE I
ORGANIZATION
1.1 Principal Office. The principal office of the Company shall be
located at such place as the Managers, as hereinafter defined, may determine
from time to time.
1.2 Registered Office and Registered Agent. The location of the
registered office and the name of the registered agent of the Company in the
State of Delaware shall be as stated in the Certificate of Formation for the
Company (the "Certificate of Formation") or as shall be determined from time to
time by the Managers and on file in the appropriate public offices of the State
of Delaware pursuant to applicable provisions of law.
ARTICLE II
DEFINITIONS
As used in this Agreement, capitalized terms shall have the meanings
set forth in the Articles, Sections or Subsections referred to in the
definitions appendix, attached hereto, and
"Agreement" means this Operating Agreement, as amended from time to
time.
"Feed Business" means the business of (i) manufacturing and selling
feed and feed ingredient products including specialty feed and pet foods to
Members, cooperative members and patrons of Members, and others for retail
resale or use in North American markets, and (ii) providing other goods and
services to Members, members and patrons of Members, and
others.
"Members" means LOL, FII and the persons who are hereafter admitted
as members of the Company in accordance with this Agreement until LOL, FII, or
any such persons shall cease to be members of the Company pursuant to this
Agreement.
"Interest" means the entire ownership interest of a Member in the
Company at any particular time, including, without limitation, the right of such
Member to any and all benefits to which a Member may be entitled as provided in
this Agreement and under law, together with the obligations of such Member to
comply with all of the terms and provisions set forth in this Agreement and
under law.
ARTICLE III
PURPOSE AND POWERS OF THE COMPANY
The Company shall engage in the business of owning, operating and
managing the assets and business of the Feed Business and in such other
businesses as the Members may from time to time determine in accordance with the
provisions of this Agreement. The Company shall have all powers and rights of a
Delaware limited liability company as provided in the Delaware Limited Liability
Company Act, as amended from time to time (the "Act").
ARTICLE IV
TERM OF THE COMPANY
The term of the Company shall be perpetual.
ARTICLE V
COMPANY ACCOUNTING
5.1 Fiscal Year. The fiscal and taxable year of the Company shall
end on the last day of December of each year unless otherwise designated by the
Members or otherwise required by the Code.
5.2 Accounting Method. The Company books of account shall be
maintained and its income, gains, losses, deductions and credits shall be
reported, for financial and tax accounting purposes, on the accrual method of
accounting, applied consistently and in accordance with generally accepted
accounting principles.
5.3 Books and Records.
Records. The Company shall keep at its principal office or, if
none has been established by the Managers, at its registered office, the
following:
A current list of the full name and last known business or mailing
address of each Member and Manager, both past and present;
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A copy of the Certificate of Formation, and all amendments thereto,
together with executed copies of any powers of attorney pursuant to which
any amendment has been executed;
Copies of the Company's federal, state, and local income tax returns
and reports, if any, for the three (3) most recent years;
Copies of this Agreement and copies of any financial statements of
the Company for the three (3) most recent years;
Minutes of all meetings of the Managers;
Minutes of every annual and special meeting of the Members; and
Any written consents obtained from the Members or Managers.
5.4 Access. Each Member (or such Member's designated representative)
shall have the right during ordinary business hours to inspect and copy (at such
Member's own expense) all books and records of the Company (including all
subsidiaries of the Company of which the Company owns a voting interest in
excess of 50%).
5.5 Reports. As soon as reasonably practicable after the end of each
month and fiscal year of the Company, the Company shall cause to be prepared and
delivered to each Member an income statement and balance sheet of the Company as
of the end of such month or fiscal year. The financial statements of the Company
for each fiscal year shall be compiled and audited by an independent public
accountant retained by the Company.
5.6 Tax Returns. The Company shall cause to be prepared and timely
filed all federal, state and local income tax returns or other returns or
statements required by applicable law. Copies of all tax returns shall be
furnished for review and approval by each Member at least fifteen (15) days
prior to the due date for filing and reasonable efforts shall be made to avoid
filing extensions.
5.7 Section 754 Election. In the event a distribution of Company
assets occurs which satisfies the provisions of Section 734 of the Code upon the
decision of the Managers, the Company may elect, pursuant to Section 754 of the
Code, to adjust the basis of the Company's property to the extent allowed by
such Section 734 and shall cause such adjustments to be made and maintained.
In the event a transfer of an interest occurs which satisfies the
provisions of Section 743 of the Code, upon the decision of the Managers, the
Company shall elect, pursuant to Section 754 of the Code, to adjust the basis of
the Company's property to the extent allowed by such Section 743 and shall cause
such adjustments to be made and maintained.
5.8 Tax Matters Member. The Managers shall designate from time to
time a Member to serve as the "Tax Matters Member" of the Company under the
Code. The initial Tax Matters Member shall be LOL.
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5.9 Bank Accounts. All funds of the Company shall be deposited in a
separate bank, money market or similar account(s) approved by the Managers and
in the Company's name. Withdrawals therefrom shall be made only by persons
authorized to do so by the Managers.
ARTICLE VI
MEMBERS MEETINGS
6.1 Meetings of Members, Place of Meetings. Meetings of the Members
may be held for any purpose or purposes, unless otherwise prohibited by statute
or by the Certificate of Formation. All meetings of the Members shall be held at
the headquarters facilities of the Company or at such other place as shall be
designated from time to time by the Managers and stated in the notice of the
meeting or in a duly executed waiver of the notice thereof.
6.2 Quorum. All Members shall constitute a quorum at all meetings of
Members for the transaction of any business, except as otherwise provided under
the Act, or in this Agreement.
6.3 Special Meetings. Special meetings of the Members may be held
for any purpose or purposes, unless otherwise prohibited by statute, and may be
called by any Manager or by any Member as provided in Section 6.5 below.
6.4 Action Without Meeting. Any action required or permitted to be
taken at any annual or special meeting of Members of the Company may be taken
without a meeting if the action is evidenced by one or more written consents
describing the action taken, signed by each Member entitled to vote.
6.5 Notice. Written notice stating the place, day and hour of the
meeting and, in the case of a special meeting, the purpose for which the meeting
is called, shall be delivered to each Member entitled to vote at such meeting
not less than ten (10) days nor more than fifty (50) days before the date of the
meeting, either personally or by mail, by or at the direction of any Manager or
person calling the meeting. Notice to Members, if mailed, shall be deemed
delivered as to any Member when deposited in the United States mail, addressed
to the Member at its usual place of business or last known address, with postage
prepaid.
6.6 Waiver of Notice. When any notice is required to be given to any
Member hereunder, a waiver thereof in writing signed by the person entitled to
such notice, whether before, at, or after the time stated therein, shall be
equivalent to the giving of such notice. By attending a meeting, a Member (a)
waives objection to lack of notice or defect of notice of such meeting unless
the Member, at the beginning of the meeting, objects to the holding of the
meeting or the transacting of business at the meeting, and (b) waives objection
to consideration at such meeting of a particular matter not within the purpose
or purposes described in the notice of the meeting unless the Member objects to
considering the matter when it is presented.
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ARTICLE VII
MANAGEMENT AND CONTROL
7.1 Election of Managers. Except as provided below, FII and LOL
shall each have the right to designate two (2) Managers for the Company (each a
"Manager" and collectively the "Managers"). Each Manager shall hold office until
such Manager's successor has been designated by the Members by whom such Manager
was designated or until such Manager's earlier death, resignation or removal.
The initial managers appointed by FII shall be Xxx Xxxxx and Xxxx Xxxxx. The
initial managers appointed by LOL shall be Xxxxx Xxxxxxxxx and Xxx Xxxxxxxxxxx.
7.2 Vacancies. Any vacancies in the Manager positions designated and
elected by a Member shall be filled by the election and designation by such
Member of a replacement Manager.
7.3 Removal of Managers; Resignations. The Manager designated and
elected by a Member may be removed from such position at any time with or
without cause, by the Member that elected and designated such Manager. A Manager
may resign at any time upon giving thirty (30) days prior notice to all the
other Managers.
7.4 Powers of the Managers. The business and affairs of the Company
shall be managed by or under the direction of the Managers. In addition to the
powers and authority conferred upon them by this Agreement, the Certificate of
Formation and the Act, the Managers collectively may exercise all of the powers
of the Company and do all such lawful acts and things that are not by statute or
by the Certificate of Formation or by this Agreement directed or required to be
exercised or done by the Members. Notwithstanding the foregoing, the Managers,
by reason of their being managers, are not agents of the Company and do not have
any authority to take any actions or execute any instruments on behalf of the
Company or otherwise act for or bind the Company.
7.5 Voting Requirement. Each Manager shall have one vote on all
matters to come before the Managers. A majority vote of the Managers is
necessary in order for there to be a valid act or decision of the Managers,
provided however, that in the event of a deadlock, excepting with respect to the
matters set forth in Section __ hereof which shall require the unanimous vote of
all Managers, the unanimous vote of the Managers appointed by LOL shall
constitute a valid act and decision of all the Managers.
7.6 Election of Chairman and President. The Managers at their first
meeting shall select a Chairman to preside at that meeting.. The term of the
Chairman shall be from the time he or she is elected until the election of his
or her successor. The Chairman shall preside at meetings of the Managers and the
Members. Subject to the direction of the Managers as herein provided, the
management and operation of the Company shall be conducted in accordance with
the Management Contract entered into as of the 31st day of August, 2000, between
the Company and LOL as it may be amended from time to time. The initial
President of the Company (the "President") shall be Xxxxxx XxXxxxxxxx. The
initial Chief Financial Officer shall be Xxxxxx Xxxxxxx and the initial
Secretary shall be Xxxx Xxxxxx. The Managers may elect their respective
successors as they choose, who shall serve pursuant to the terms of the
Management Contract.
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7.7 Powers of President. The President shall be responsible, subject
to the Management Contract and to the direction and control of the Managers to
the extent therein provided, for running the day-to-day business operations of
the Company. Except as otherwise provided herein, the President, shall have
authority to take any and all actions on behalf of the Company and, except to
the extent otherwise required by the Act, if authorized by the Managers, may
execute all bonds, notes, debentures, mortgages and other instruments and
agreements for and in the name of the Company. Notwithstanding the foregoing,
the actions taken by the Chairman or the President may be limited by action
adopted unanimously by all Managers attending a duly called meeting at which at
least one Manager is in attendance from each of LOL and FII .
7.8 Notice of Meetings; Waiver of Notice.
Regular Meeting. Regular meetings of the Managers may be held
without notice on a rotating basis from meeting to meeting at the headquarters
offices of the Members, at such times as fixed by resolution adopted by all of
the Managers or at such times and places either within or without the States of
Missouri or Minnesota as shall from time to time be fixed by resolution adopted
by all of the Managers. Any business may be transacted at a regular meeting.
Special Meetings.
Special meetings of the Managers may be called at any time by any of
the Managers. The place shall be at one of the Company's headquarters
facilities as set forth in the notice, unless all of the Managers consent
to another place.
Written or printed notice of each special meeting of the Managers,
stating the place, day and hour of the meeting and purpose or purposes
thereof, shall be mailed to each Manager addressed to him at his residence
or usual place of business at least ten (10) days before the day on which
the meeting is to be held or shall be sent to him by telegram, facsimile
or delivered to him personally, at least eight (8) days before the day on
which the meeting is to be held. If mailed, such notice shall be deemed to
be delivered when it is deposited in the United States mail with postage
thereon addressed to the Manager at his residence or usual place of
business. If given by telegraph, such notice shall be deemed to be
delivered when it is delivered by the telegraph company. If given by
facsimile, such notice shall be deemed to have been delivered when
confirmation of receipt of the facsimile is printed by the sender's
facsimile machine. The notice may be given by any person having authority
to call the meeting.
Waiver of Notice. Whenever any notice is required to be given
hereunder, a written waiver thereof, signed by the person entitled to such
notice, whether before or after the time stated therein, shall be deemed
equivalent to notice. Attendance of a person at a meeting shall constitute a
waiver of notice of such meeting, except when the person attends a meeting for
the express purpose of objecting, at the beginning of the meeting, to the
transaction of any business because the meeting is not lawfully called or
convened. Neither the business to be transacted at, nor the purpose of, any
regular meeting of the Managers need be specified in any written waiver of
notice, but the business to be transacted at, or the purpose of, any special
meeting of the Managers shall be specified in any written waiver of notice.
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7.9 Meetings by Conference Telephone or Similar Communications
Equipment. The Managers may participate in a meeting by means of conference
telephone or similar communications equipment by means of which all persons
participating in the meeting can hear each other, and participation in a meeting
pursuant hereto shall constitute presence in person at such meeting.
7.10 Action Without Meeting. Any action required or permitted to be
taken at any meeting of the Managers may be taken without a meeting if written
consent thereto is signed by all of the Managers and such written consent is
filed with the books and records of the Company.
7.11 Compensation. The Managers may, by resolution, fix the
compensation to be paid the Managers for serving as Managers of the Company and
may, by resolution, provide for reimbursement of expenses incurred by Managers
in attending such meetings. The Managers shall also fix the compensation to be
paid to the President of the Company for acting in such capacity.
7.12 Conflicts of Interest. As to any matter before the Managers in
which a Member has a direct or indirect interest which is or may be material,
the nature of that interest shall be disclosed to the other Managers and
recorded in the minutes of the Managers' meeting or in a recital in an action by
unanimous written consent. The Company shall not engage in any transaction or
arrangement with a party affiliated with the Company or with any Member which is
not on arms' length terms which are at least as favorable to the Company as
similar terms obtainable from an unrelated party.
7.13 Liability of Managers. Except in the case where the Managers
are guilty of fraud, gross negligence, misconduct, reckless disregard of duty or
a criminal act which is a felony, the Managers shall not be liable to the
Company or any other Member for any loss, damage, liability or expense suffered
by the Company or any other Member on account of any action taken or omitted to
be taken by him as a Manager.
7.14 Indemnification. Except as provided in Section 7.12 above, each
Member and Manager shall indemnify and hold the Company and its Members harmless
from and against any loss or damage incurred by it or them as a result of any
agreement, contract, instrument, obligation or act legally binding the Company
that was incurred or performed by such Member or Manager outside the scope of
the authority granted to such Member or Manager pursuant to this Agreement.
To the fullest extent permitted by law, each Manager, officer and
employee of the Company (individually, an "Indemnitee") shall be indemnified,
held harmless and defended by the Company from and against any and all losses,
claims, damages, liabilities, whether joint or several, expenses (including
legal fees and expenses), judgments, fines and other amounts paid in settlement,
incurred or suffered by such Indemnitee, as a party or otherwise, in connection
with any threatened, pending or completed claim, demand, action, suit or
proceeding, whether civil, criminal, administrative or investigative, and
whether formal or informal, arising out of or in connection with the business or
the operation of the Company and by reason of the Indemnitee's status as a
Manager, officer or employee of the Company regardless of whether the Indemnitee
continues to be a Manager, officer or employee of the Company at the time any
such loss, claim,
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damage, liability or other expense is paid or incurred if (i) the Indemnitee
acted in good faith and in a manner he or she reasonably believed to be in the
best interests of the Company and, with respect to any criminal proceeding, had
no reasonable cause to believe that his or her conduct was unlawful, (ii) the
Indemnitee's conduct did not constitute intentional misconduct or a material
breach of the terms of this Agreement and (iii) the Indemnitee's conduct did not
involve a transaction from which the Manager, , officer or employee of the
Company derived an improper personal benefit. The termination of any action,
suit or proceeding by judgment, order, settlement or upon a plea of nolo
contendere, or its equivalent, shall not, of itself, create a presumption that
the Indemnitee acted in a manner contrary to the standards specified in clauses
(i), (ii) or (iii) of this Section 7.13(b).
To the fullest extent permitted by law, expenses incurred by an
Indemnitee in defending any claim, demand, action, suit or proceeding subject to
this Section 8.1 shall, from time to time, be advanced by the Company prior to
the final disposition of such claim, demand, action, suit or proceeding upon
receipt by the Company of an undertaking by or on behalf of the Indemnitee to
repay such amount unless it is determined that such Indemnitee is entitled to be
indemnified therefor pursuant to this Section 7.13.
The indemnification provided by this Section 7.13 shall be in
addition to any other rights to which any Indemnitee may be entitled under any
other agreement, pursuant to any vote of the Managers, as a matter of law or
otherwise, and shall inure to the benefit of the heirs, legal representatives,
successors, assigns and administrators of the Indemnities.
Any indemnification under this Section 7.13 shall be satisfied
solely out of the assets of the Company and no Indemnitee shall have any
recourse against any Member with respect to such indemnification.
An Indemnitee shall not be denied indemnification in whole or in
part under this Section 7.13 merely because the Indemnitee had an interest in
the transaction with respect to which the indemnification applies, if the
transaction was not otherwise prohibited by the terms of this Agreement and the
conduct of the Indemnitee satisfied the conditions set forth in Section 7.13(b).
The Company may, but shall have no obligation to, purchase and
maintain insurance covering any potential liability of the Indemnitees for any
actions or omissions for which indemnification is permitted hereunder, including
such types of insurance (including extended coverage liability and casualty and
workers' compensation) as would be customary for any person engaged in a similar
business, and may name the Indemnitees as additional insured parties thereunder.
7.15 Indemnification Procedures: Survival. Promptly after receipt by
an Indemnitee of notice of the commencement of any action that may result in a
claim for indemnification pursuant to Section 7.13, the Indemnitee shall notify
the Company in writing within thirty (30) days thereafter; provided, however,
that any omission so to notify the Company will not relieve it of any liability
for indemnification hereunder as to the particular item for which
indemnification may then be sought (except to the extent that the failure to
give notice shall have been materially prejudicial to the Company) nor from any
other liability that it may have to any Indemnitee. The Company shall have the
right to assume sole and exclusive
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control of the defense of any claim for indemnification pursuant to Section 8.1,
including the choice and direction of any legal counsel.
An Indemnitee shall have the right to employ separate counsel in any
action as to which indemnification may be sought under any provision of this
Agreement and to participate in the defense thereof, but the fees and expenses
of such counsel shall be at the expense of such Indemnitee unless (i) the
Company has agreed in writing to pay such fees and expenses, (ii) the Company
has failed to assume the defense thereof and employ counsel within a reasonable
period of time after being given the notice required above or (iii) the
Indemnitee shall have been advised by its counsel that representation of such
Indemnitee and other parties by the same counsel would be inappropriate under
applicable standards of professional conduct (whether or not such representation
by the same counsel has been proposed) due to actual or potential differing
interests between them. It is understood, however, that to the extent more than
one Indemnitee is entitled to employ separate counsel at the Company's expense
pursuant to clause (iii) above, the Company shall, in connection with any one
such action or separate but substantially similar or related actions in the same
jurisdiction arising out of the same general allegations or circumstances, be
liable for the reasonable fees and expenses of only one separate firm of
attorneys at any time for all such Indemnitees having actual or potential
differing interests with the Company, unless but only to the extent the
Indemnitees have actual or potential differing interests with each other.
The Company shall not be liable for any settlement of any such
action effected without its written consent, but if settled with such written
consent, or if there is a final. judgment against the Indemnitee in any such
action, the Company agrees to indemnify and hold harmless the Indemnitee to the
extent provided above from and against any loss, claim, damage, liability or
expense by reason of such settlement or judgment.
The indemnification obligations set forth in Section 7.13 and this
Section 7.14 shall survive the termination of this Agreement.
7.16 Other Business Ventures. LOL and Farmland each agree not to
directly or indirectly engage in the wholesale marketing of feed except through
the Company in the United States of America or Canada (provided however that
such restriction shall not apply to the sale of feed incidental to the egg
production and marketing businesses of MoArk LLC or its affiliated companies)
during the time it, or an entity of which it is a material owner, remains a
member of the Company and for a period of four years thereafter.
The Parties believe that the restrictive covenant contained in this
Section 7.15 is reasonable. However, if any court having jurisdiction shall at
any time hereafter hold this restriction to be unenforceable or unreasonable,
whether as to scope, territory or period of time specified herein, and if such
court shall declare or determine the scope, territory or period of time which it
deems to be reasonable, such scope, territory or period of time shall be deemed
to be reduced to that declared or determined by said court to be reasonable.
Each Party recognizes that in the event of violation of the terms of
the above covenant, the other Parties will suffer irreparable damages and that
it will be difficult if not impossible to compute actual damages sustained by
such Parties as the result of such unauthorized competition. Therefore, the
Parties agree that each Party shall be entitled to apply
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to a court of competent jurisdiction to enjoin any breach, threatened or actual,
of the covenants contained herein.
ARTICLE VIII
SPECIFIC VOTING REQUIREMENTS
8.1 Business Plan. Except as provided below, the following matters
will require the approval of the Managers of both Members of the Company: (i) a
material change the scope of the business of the Company (ii) election to
dissolve the Company; (iii) approval of the sale of all or substantially all of
its assets or significant assets; (iv) requiring any additional capital
contributions; (v) authorizing cash distributions of earnings of the Company to
the Members including, but not limited to, distributions which are not in
proportion to their respective economic interests; (vi) making any change in
income tax elections or changing accounting practices from those in effect
within LOL as of the Closing but only to the extent they have a material impact
on Farmland; (vii) reducing the number of meetings of the members committee to
less than four per calendar year, (viii) amending the Management Contract with
LOL, and (ix) adoption of the annual budgets and business plans for the Company
and any material amendments thereto (provided that such approvals shall be
considered by all parties on a basis of being a fiduciary of the Company and
shall not be unreasonably withheld, and provided further that expenditures of
capital amounts in any year which do not exceed the amount of depreciation of
existing assets in such year shall, by definition, be deemed to be reasonable
and shall not require the approval of both Members). In the event that LOL
elects to exercise the Option granted it in Section 1.1(c) of the Joint Venture
Agreement between LOL and FII dated July 18, 2000 (`Joint Venture Agreement")
and FII elects not to permit LOL the right to exercise the Option, the voting
rights of the Managers shall immediately be revised so that, in aggregate, the
voting power of the Managers appointed by a Member shall reflect the actual
financial interest of such Member in the Company, and anything to the contrary
in this Agreement notwithstanding, all decisions of the members committee shall
thereafter be made upon a majority vote of the voting power of the Managers,
provided, however, that actions listed above as items (ii), (iv), (v), (vi), and
(viii) shall require the unanimous approval of the Managers appointed by each of
LOL and FII as will other actions affecting one Member or the other (as an
investor in the Company) in a manner which is material, adverse, and not in
proportion to the economic interests of such Member; provided, however,
unanimous approval of both LOL and FII shall be required in the event any
monetary distributions are to be made that are not proportional to the economic
interests of each Member.
ARTICLE IX
PERCENTAGE INTERESTS
In exchange for the capital contribution provided for in Article X,
the Members shall have the following percentage interests ("Percentage
Interest"):
FII 30.8%
LOL 69.2%
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ARTICLE X
CAPITAL CONTRIBUTIONS AND LOANS
10.1 Capital Contributions. Each Member shall make an initial
aggregate contribution to the capital of the Company (together "Capital
Contributions") of assets as described in the Joint Venture Agreement.
10.2 Additional Capital Contributions.
10.3 Time. Additional amounts may be required from the Members
("Additional Capital Contributions"), in only in accordance with the provisions
of this Agreement or as approved by the Members.
10.4 Capital Withdrawal Rights, Interest and Priority. Prior to the
dissolution and termination of the Company, no Member shall be entitled to
withdraw or reduce such Member's Capital Account or to receive any distributions
from the Company, other than distributions as provided in Article XIV hereof.
Except as provided in Article XIV, no Member shall be entitled to receive or be
credited with any interest on the balance in such Member's Capital Account at
any time. No Member shall have any priority over any other Member as to the
return of the balance in such Member's Capital Account.
10.5 Loans. Any Member may make a loan to the Company in such
amounts, at such times and on such terms and conditions as may be approved by
the Managers, subject to the conflict of interest provisions set forth in this
Agreement. Loans by any Member to the Company shall not be considered as
contributions to the capital of the Company.
10.6 Limited Liability. Except as otherwise provided above, no
Member shall be liable for the debts, liabilities, contracts, or any other
obligations of the Company. Except as otherwise provided by applicable state law
or this Agreement, a Member shall be liable only to make its Capital
Contributions and shall not be required to lend any funds to the Company or,
after its Capital Contributions have been paid, to make any additional Capital
Contributions to the Company. No Member shall have any personal liability for
the repayment of any Capital Contributions of any other Member.
10.7 Debit Balance in Capital Account. A debit balance in a Member's
Capital Account, whether occasioned by distributions and withdrawals in excess
of such Member's share of Company profits or by charging such Member for such
Member's share of Company losses or by any other circumstance, shall not
constitute a liability of such Member to the Company or to the other Members,
except upon termination of the Company or liquidation of such Member's interest
in the Company, as hereinafter provided.
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ARTICLE XI
TRANSFERS OF INTERESTS
11.1 General.
Voluntary Sale or Transfer. No Member may sell, transfer,
assign, give, mortgage, alienate, pledge, hypothecate or otherwise encumber or
dispose of all or any part of such Member's Interest, voluntarily, involuntarily
or by operation of law, without the unanimous written consent of all Members.
Any purported encumbrance or disposition of any Interests in violation of the
terms of this Agreement shall be null and void and of no effect. Notwithstanding
the foregoing, FII may grant a security interest to any creditor of Farmland and
may execute such documents requested by such creditor, which documents may
provide for the transfer of FII's interest in the Company (whether through
foreclosure or deed in lieu of foreclosure or otherwise).
Transfer by Legal Process. Upon any involuntary Transfer of
all or any portion of the Units of a Member pursuant to a levy of execution,
foreclosure of pledge, garnishment, attachment, divorce decree, bankruptcy or
other legal process (or by operation of law resulting from the death,
disability, liquidation, dissolution or winding up of a Member), such Member
shall cease to be a Member, but any successor in title to the transferred Units
shall have no right to become a Member or vote in any Company matters unless
admitted as a Member by written unanimous consent of the other Members. If such
successor does not become a Member, such successor shall be merely an assignee
within the meaning of Section 18-702(b) of the Act.
Assignment of Right to Distributions. Each Member shall have
the right to sell, transfer or assign, for cash, or cash and notes, by a written
instrument its right to receive distributions of cash or other property from the
Company; provided that any such assignment is not secured by the Interests and
further provided that such an assignee shall not be substituted as a Substitute
Member in place of any Member.
11.2 Resignation and Withdrawal of Member. No Member may resign or
withdraw from the Company without the unanimous written consent of the other
Members.
ARTICLE XII
ALLOCATIONS OF PROFITS AND LOSSES
AND OTHER TAX AND ACCOUNTING PROVISIONS
12.1 Accounting Tax Definitions.
"Adjusted Capital Account Deficit" shall mean, with respect to any
Member, the deficit balance, if any, in such Member's Capital Account as of the
end of the relevant fiscal year, after giving effect to the following
adjustments: (a) increased for any amounts such Member is unconditionally
obligated to restore and the amount of such Member's share of Company Minimum
Gain and Member Minimum Gain after taking into account any changes during such
year; and (b) reduced by the items described in Treas. Reg. Section
1.704-1(b)(2)(ii)(d)(4), (5) and (6).
12
"Capital Accounts." A separate Capital Account shall be maintained
for each Member. Each Member's Capital Account shall be (a) increased by (i) the
amount of money contributed by such Member, (ii) the fair market value of
property contributed by such Member (net of liabilities secured by such
contributed property that the Company is considered to assume or take subject to
under Code Section 752), (iii) allocations to such Member, pursuant to Article
XII, of Company income and gain (or items thereof), and (iv) to the extent not
already netted out under clause (b)(ii) below, the amount of any Company
liabilities assumed by the Member or which are secured by any property
distributed to such Member; and (b) decreased by (i) the amount of money
distributed to such Member, (ii) the fair market value of property distributed
to such Member (net of liabilities secured by such distributed property that
such Member is considered to assume or take subject to under Code Section 752),
(iii) allocations to such Member, pursuant to Article XII, of Company loss and
deduction (or items thereof), and (iv) to the extent not already netted out
under clause (a)(ii) above, the amount of any liabilities of the Member assumed
by the Company or which are secured by any property contributed by such Member
to the Company.
In the event any interest in the Company is transferred in
accordance with the terms of this Agreement, the transferee shall succeed to the
Capital Account of the transferor to the extent it relates to the transferred
interest.
The foregoing provisions and the other provisions of this Agreement
relating to the maintenance of Capital Accounts are intended to comply with
Treas. Reg. Section 1.704-1(b) and Treas. Reg. Section 1.704-2, and shall be
interpreted and applied in a manner consistent with such Regulations. In the
event the Chairman determines that it is prudent to modify the manner in which
the Capital Accounts, or any increases or decreases thereto, are computed in
order to comply with such Regulations, the Chairman may cause such modification
to be made without the consent of the Members, provided that it is not likely to
have a material effect on the amounts distributable to any Member upon the
dissolution of the Company. The Chairman may make any appropriate modifications
to this Agreement's provisions without the consent of the Members in the event
unanticipated events might otherwise cause this Agreement not to comply with
Treas. Reg. Section 1.704-1(b) and Treas. Reg. Section 1.704-2.
"Capital Asset" shall have the meaning given such term in the Code,
as hereinafter defined.
"Capital Reserve" shall mean such amount as is determined in the
Business Plan to be established and maintained by the Company for use for
working capital, debt service, future investments and for such other purposes as
the Managers deem necessary or advisable.
"Capital Transaction Proceeds" means any and all proceeds from (a)
the sale or other disposition of a Capital Asset of the Company, or (b) the
refinancing of the Company, reduced by any expenses incurred by the Company in
connection with such transaction and Company liabilities paid in connection with
such transaction.
"Code" means the Internal Revenue Code of 1986, as amended from time
to time.
13
"Company Minimum Gain" shall have the same meaning as partnership
minimum gain set forth in Treas. Reg. Section 1.704-2(d)(1).
"Credits" means all investment tax credits or other business tax
credits allowed by the Code with respect to activities of the Company or its
assets.
"Gross Asset Value" means, with respect to any asset, the asset's
adjusted basis for federal income tax purposes, except as follows:
(a) The initial Gross Asset Value of any asset contributed by a
Member to the Company shall be the gross fair market value of such asset,
as determined by the contributing Member and the Company;
(b) The Gross Asset Values of all Company assets shall be adjusted
to equal their respective gross fair market values, as determined by the
Managers, as of the following times: (i) the acquisition of an additional
interest in the Company by any new or existing Member in exchange for more
than a de minimis Capital Contribution; and (ii) the termination of the
Company for federal income tax purposes pursuant to Code Section
708(b)(1)(B); and
(c) If the Gross Asset Value of an asset has been determined or
adjusted pursuant to paragraph (b) above, such Gross Asset Value shall
thereafter be adjusted by the depreciation taken into account with respect
to such asset for purposes of computing Income and Losses.
"Income" and "Loss" means, respectively, for each fiscal year or
other period, an amount equal to the Company's taxable income or loss for such
year or period, determined in accordance with Code Section 703(a), except that
for this purpose (a) all items of income, gain, deduction or loss required to be
separately stated by Code Section 703(a)(1) shall be included in taxable income
or loss; (b) tax exempt income shall be added to taxable income or loss; (c) any
expenditures described in Code Section 705(a)(2)(B) (or treated as Code Section
705(a)(2)(B) expenditures pursuant to Treas. Reg. Section 1.704-1(b)(2)(iv)(i))
and not otherwise taken into account in computing taxable income or loss shall
be subtracted; (d) taxable income or loss shall be adjusted to reflect any item
of income or loss specifically allocated to a Member, and (e) income shall
include any patronage dividends received by the Company.
"Member Minimum Gain" shall have the same meaning as the term
"partner nonrecourse debt minimum gain" as set forth in Treas. Reg. Section
1.704-2(i)(3).
"Member Nonrecourse Debt" shall have the same meaning as partner
nonrecourse debt set forth in Treas. Reg. Section 1.704-2(b)(4).
"Member Nonrecourse Deductions" shall have the same meaning as
partner nonrecourse deductions set forth in Treas. Reg. Section 1.704-2(i)(2).
Generally, the amount of Member Nonrecourse Deductions with respect to a
Member Nonrecourse Debt for a fiscal year equals the net increase during the
year in the amount of the Member Minimum Gain (determined
14
in accordance with Treas. Reg. Section 1.704-2(i)) reduced (but not below zero)
by the aggregate amount of any distributions made during the fiscal year
proceeds of Member Nonrecourse Debt and are allocable to an increase in Member
Minimum Gain determined in accordance with Treas. Reg. Section 1.704-2(i).
"Net Cash Flow" of the Company shall be determined for each Company
fiscal year in accordance with sound, cash basis accounting principles, and
shall consist of (a) all cash receipts of the Company during such year, from
whatever source, whether or not taxable (excluding Capital Transaction Proceeds
and Capital Contributions by Members), plus (b) any cash that becomes available
during such year by reason of a reduction in the working Capital Reserve of the
Company referred to below, less (c) all cash expenditures as provided for in the
Business Plan for such fiscal year and cash losses of the Company during such
year, whether capital or current, tax deductible or nondeductible (excluding
only distributions to Members), and less (d) any additions during such year to
the Company's working Capital Reserve as approved by all Members.
"Nonrecourse Deduction" shall have the same meaning as nonrecourse
deductions set forth in Treas. Reg. Section 1.704-2(c). Generally, the amount of
Nonrecourse Deductions for a fiscal year equals the net increase, if any, in the
amount of Company Minimum Gain, determined according to the provisions of Treas.
Reg. Section 1.704-2(d), during such year reduced (but not below zero) by the
aggregate distributions made during the year of proceeds of a Nonrecourse
Liability that are allocable to the increased in Company Minimum Gain,
determined in accordance with Treas. Reg. Section 1.704-2(c) and (h).
"Nonrecourse Liability" means a Company liability with respect to
which no Member bears the economic risk of loss as determined under Treas. Reg.
Section 1.752-1(a)(2) and 1.752-2.
"Regulations" mean Treasury Regulations issued pursuant to the
Internal Revenue Code of 1986, as amended.
12.2 Allocation of Income and Losses. Except as provided in Sections
12.3 through 12.13 hereof, all income and loss for any fiscal year of the
Company shall be allocated to the Members in proportion to their Percentage
Interests:
12.3 Other Allocation Rules.
For purposes of determining the Income, Losses, or any other
items allocable to any period, Income, Losses, and any such other items shall be
determined on a daily, monthly, or other basis, as determined by the Managers
using any permissible method under Code Section 706 and the Regulations
thereunder.
Except as otherwise provided in this Agreement, all items of
Company income, gain, loss, deduction, and any other allocations not otherwise
provided for shall be divided among the Members in the same proportions as they
share Income or, Losses, as the case may be, for the year.
15
The Members are aware of the income tax consequences of the
allocations made by this Article XII and hereby agree to be bound by the
provisions of this Article XII in reporting their shares of Company income and
loss for income tax purposes.
12.4 Minimum Gain Chargeback. Notwithstanding any other provision of
this Article XII, if there is a net decrease in Company Minimum Gain during a
Company taxable year, each Member shall be allocated items of income and gain
for such year (and, if necessary, for subsequent years) in that Member's share
of the net decrease in Company Minimum Gain during such year (hereinafter
referred to as the "Minimum Gain Chargeback Requirement"). A Member's share of
the net decrease in Company Minimum Gain is the amount of the total decrease
multiplied by the Member's percentage share of the Company Minimum Gain at the
end of the immediately preceding taxable year. A Member is not subject to the
Minimum Gain Chargeback Requirement to the extent: (1) the Member's share of the
net decrease in Company Minimum Gain is caused by a guarantee, refinancing or
other change in the debt instrument causing it to become partially or wholly
recourse debt or a Member Nonrecourse Debt, and the Member bears the economic
risk of loss for the newly guaranteed, refinanced or otherwise changed
liability; (2) the Member contributes capital to the Company that is used to
repay the Nonrecourse Debt and the Member's share of the net decrease in Company
Minimum Gain results from the repayment; or (3) the Minimum Gain Chargeback
Requirement would cause a distortion and the Commissioner of the Internal
Revenue Service waives such requirement.
A Member's share of Company Minimum Gain shall be computed in
accordance with Treasury Regulation Section 1.704-2(g) and as of the end of any
Company taxable year shall equal: (1) the sum of the Nonrecourse Deductions
allocated to that Member up to that time and the distributions made to that
Member up to that time of proceeds of a Nonrecourse Debt allocable to an
increase of Company Minimum Gain, minus (2) the sum of that Member's aggregate
share of net decrease in Company Minimum Gain plus that Member's aggregate share
of decreases resulting from revaluations of Property subject to Nonrecourse
Debts. In addition, a Member's share of Company Minimum Gain shall be adjusted
for the conversion of recourse and Member Nonrecourse Debts into Nonrecourse
Debts in accordance with Treasury Regulation Section 1.704-2(g)(3). In computing
the above, amounts allocated or distributed to the Member's predecessor in
interest shall be taken into account.
12.5 Member Minimum Gain Chargeback. Notwithstanding any other
provision of this Article XII other than Section 12.5, if there is a net
decrease in Member Minimum Gain during a Company taxable year, each Member who
has a share of the Member Minimum Gain (determined under Treasury Regulation
Section 1.704-2(i)(5) as of the beginning of the year) shall be allocated items
of income and gain for such year (and, if necessary, for subsequent years) equal
to that Member's share of the net decrease in Member Minimum Gain. In accordance
with Treasury Regulation Section 1.704-2(i)(4), a Member is not subject to this
Member Minimum Gain Chargeback requirement to the extent the net decrease in
Member Minimum Gain arises because the liability ceases to be Member Nonrecourse
Debt due to a conversion, refinancing or other change in the debt instrument
that causes it to be partially or wholly a Nonrecourse Debt. The amount that
would otherwise be subject to the Member Minimum Gain Chargeback requirement is
added to the Member's share of Company Minimum Gain.
16
12.6 Qualified Income Offset. In the event any Member unexpectedly
receives an adjustment, allocation or distribution described in Treas. Reg.
Section 1.704-1(b)(2)(ii)(d)(4), (5) or (6), which causes or increases such
Member's Adjusted Capital Account Deficit, items of Company income and gain
shall be specially allocated to such Member in an amount and manner sufficient
to eliminate such Adjusted Capital Account Deficit as quickly as possible,
provided that an allocation under this Section 12.6 shall be made if and only to
the extent such Member would have an Adjusted Capital Account Deficit after all
other allocations under this Article XII have been made.
12.7 Nonrecourse Deductions. Nonrecourse Deductions for any fiscal
year or other period shall be allocated to the Members in proportion to their
respective Percentage Interest.
12.8 Member Nonrecourse Deductions. Any Member Nonrecourse Deduction
shall be allocated to the Member who bears the risk of loss with respect to the
loan to which such Member Nonrecourse Deductions are attributable in accordance
with Treas. Reg. Section 1.704-2(i).
12.9 Curative Allocations. Any special allocations of items of
income, gain, deduction or loss pursuant to Sections 12.4, 12.5, 12.6, 12.7,
12.8 and 12.10 shall be taken into account in computing subsequent allocations
of income and gain pursuant to this Article XII, so that the net amount of any
items so allocated and all other items allocated to each Member pursuant to this
Article XII shall, to the extent possible, be equal to the net amount that would
have been allocated to each such Member pursuant to the provisions of this
Article XII if such adjustments, allocations or distributions had not occurred.
No allocations pursuant to Sections 12.4 and 12.5 shall be made prior to the
Company taxable year during which there is a net decrease in Company Minimum
Gain or Member Minimum Gain, respectively. In addition, allocations pursuant to
this Section 12.9 with respect to Nonrecourse Deductions in Section 12.7 and
Member Nonrecourse Deductions in Section 12.8 shall be deferred to the extent
the Members reasonably determine that such allocations are likely to be offset
by subsequent allocations of Company Minimum Gain or Member Minimum Gain,
respectively.
12.10 Loss Allocation Limitation. Notwithstanding the other
provisions of this Article XII, unless otherwise agreed to by the Managers, no
Member shall be allocated Loss in any taxable year which would cause or increase
an Adjusted Capital Account Deficit as of the end of such taxable year.
12.11 Share of Nonrecourse Liabilities. Solely for purposes of
determining a Member's proportionate share of the "excess nonrecourse
liabilities" of the Company within the meaning of Treas. Reg. Section
1.752-3(a)(3), each Member's interest in Company Income is equal to its
respective Applicable Percentage Interests.
12.12 Compliance with Regulation. The foregoing provisions are
intended to comply with Treas. Regs. Sections 1.704-1(b), 1.704-2 and
1.752-l through 1.752-5, and shall be interpreted and applied in a manner
consistent with such Regulations. In the event it is determined by the Managers
that it is prudent or advisable to amend this Agreement in order to comply with
such regulations, the Managers are empowered to amend or modify Sections 12.4
through 12.11 of this Agreement notwithstanding any other provision of this
Agreement.
17
12.13 Tax Allocations: Code Section 704(c). In accordance with Code
Section 704(c) and the Regulations thereunder, income, gain, loss, and deduction
with respect to any property contributed to the capital of the Company shall,
solely for tax purposes, be allocated among the Members so as to take account of
any variation between the adjusted basis of such property to the Company for
federal income tax purposes and its initial Gross Asset Value.
In the event the Gross Asset Value of any Company asset is adjusted,
subsequent allocations of income, gain, loss, and deduction with respect to such
asset shall take account of any variation between the adjusted basis of such
asset for federal income tax purposes and its Gross Asset Value in the same
manner as under Code Section 704(c) and the Regulations thereunder.
The Members hereby agree that elections and other decisions relating
to such allocations shall be made by the Managers in a manner that reasonably
reflects the intent and purpose of this Agreement. Allocations pursuant to this
Section 12.13 are solely for purposes of federal, state and local taxes and
shall not affect, or in any way be taken into account in computing, any Member's
Capital Account or share of Income, Losses, other items or distributions
pursuant to any provisions of this Agreement.
ARTICLE XIII
DISTRIBUTIONS
13.1 Net Cash Flow. Net Cash Flow, if any, shall be distributed, at
such times as the Managers may determine to the Members in proportion to the
Interests owned by such Member.
13.2 Capital Transactions Proceeds. Capital transactions proceeds
shall be distributed, at such times as the Managers may determine to the Members
in proportion to the Percentage Interests of each Member.
13.3 Amounts Withheld. All amounts withheld pursuant to the Code or
any provision of any state or local tax law with respect to any payment or
distribution to the Members shall be treated as amounts distributed to the
Members for all purposes under this Agreement.
ARTICLE XIV
DISSOLUTION AND TERMINATION
14.1 Events Causing Dissolution. The Company shall be dissolved upon
the unanimous written agreement of the Members to dissolve.
14.2 Effect of Dissolution. Except as otherwise provided in this
Agreement, upon the dissolution of the Company, the Managers shall take such
actions as may be required pursuant to the Act and shall proceed to wind up,
liquidate and terminate the business and affairs of the Company. In connection
with such winding up, the Managers shall have the authority to liquidate and
reduce to cash (to the extent necessary or appropriate) the assets of the
Company as
18
promptly as is consistent with obtaining a fair market value therefor, to apply
and distribute the proceeds of such liquidation and any remaining assets in
accordance with the provisions of Section 15.3 below, and to do any and all acts
and things authorized by, and in accordance with, the Act and other applicable
laws for the purpose of winding up and liquidation.
14.3 Application of Proceeds. Upon dissolution and liquidation of
the Company, the assets of the Company, after providing for the payment of all
liabilities, shall be applied and distributed in the order of priority set forth
in Article XIII.
ARTICLE XV
MISCELLANEOUS
15.1 Amendments. Except as otherwise provided herein, this Agreement
shall not be modified or amended in any manner other than by the unanimous
written agreement of the Members.
15.2 Title to Assets. Title to all other assets acquired by the
Company shall be held in the name of the Company. No Member shall individually
have any ownership interest or rights in any other assets of the Company, except
indirectly by virtue of such Member's ownership of an Interest. No Member shall
have any right to seek or obtain a partition of the real property or other
assets of the Company, nor shall any Member have the right to any specific
assets of the Company upon the liquidation of or any distribution from the
Company.
15.3 Nature of Interest in the Company. A Member's Interest shall be
personal property for all purposes.
15.4 Organizational Expenses. The Company shall pay all
organizational expenses incurred in connection with the creation and formation
of the Company. Such expenses may be paid directly by the Company or may be
reimbursed by the Company to the Members.
15.5 Office. Except for the Notices required by Articles VI and VII
which shall be governed by those Sections, all notices or other communications
required or permitted under this Agreement shall be in writing and shall be
delivered personally, telegraphed, telecopied. (facsimile) or telexed or sent by
registered, certified or express mail, postage prepaid as hereinafter provided.
Any such notice or other communication, if mailed by prepaid first class mail at
any time other than during a general discontinuance of postal service due to
strike, lockout or otherwise, shall be deemed to have been received on the
fourth Business Day, as hereinafter defined, after the postmarked date thereof,
or if sent by facsimile or other means of electronic communication, shall be
deemed to have been received on the Business Day following the sending, or if
delivered by hand, shall be deemed to have been received at the time it is
delivered to the applicable address noted below either to the individual
designated below or to an individual at such address having apparent authority
to accept deliveries on behalf of the addressee. Notice of change of address
shall also be governed by this Section. In the event of a general discontinuance
of postal service due to strike, lockout or otherwise, notices or other
communications shall be delivered by hand or sent by facsimile or other means of
electronic communication and shall be deemed to have been received in accordance
with this Section. Notice and other communications shall be addressed as
follows:
19
IF TO FII:
Xx. Xxxxxx Xxxxx
Farmland Industries, Inc.
0000 Xxxxx Xxx Xxxxxxxxxx
P.O. Box 7305, Dept. 65
Xxxxxx Xxxx, Xxxxxxxx 00000-0000
With a copy to:
Xxxxxx Xxxxx, Esq.
Farmland Industries, Inc.
0000 Xxxxx Xxx Xxxxxxxxxx
P.O. Box 7305, Dept. 62
Xxxxxx Xxxx, Xxxxxxxx 00000-0000
IF TO LAND O' LAKES
Xx. Xxxxx Xxxxxxxxx
Land O' Lakes, Inc.
X.X. Xxx 00000
Xx. Xxxx, Xxxxxxxxx 00000-0000
With a copy to:
Xxxx Xxxxxx, Esq.
Land O'Lakes, Inc.
X.X. Xxx 00000
Xx. Xxxx, Xxxxxxxxx 00000-0000
For the purposes hereof, "Business Day" means any day, other than Saturday,
Sunday or any statutory holiday.
15.6 Waiver of Default. No consent or waiver, express or implied, by
the Company or a Member with respect to any breach or default by another Member
hereunder shall be deemed or construed to be a consent or waiver with respect to
any other breach or default by such Member of the same provision or any other
provision of this Agreement. Failure on the part of the Company or a Member to
complain of any act or failure to act of another Member or to declare such
15.7 No Third Party Rights. None of the provisions contained in this
Agreement shall be for the benefit of or enforceable by any third parties,
including creditors of the Company. other Member in default shall not be deemed
or constitute a waiver by the Company or the Member of any rights hereunder;
provided, however, that WECO is an intended third party
20
beneficiary of this Agreement and shall have the right to enforce this Agreement
directly against the Company.
15.8 Entire Agreement. This Agreement (together with the Certificate
of Formation) contains the entire agreement between the Members relative to the
formation, operation and continuation of the Company, and this Agreement shall
not be altered, modified or changed except by a written document duly executed
by all parties hereto at the time of such alteration, modification or change.
15.9 Severability. In the event any provision of this Agreement is
held to be illegal, invalid or unenforceable to any extent, the legality,
validity and enforceability of the remainder of this Agreement shall not be
affected thereby and shall remain in full force and effect and shall be enforced
to the greatest extent permitted by law.
15.10 Assignment. This Agreement and the rights and obligations
hereunder shall not be assignable by any of the parties.
15.11 Governing. This Agreement and the rights and obligations of
the parties hereto shall be governed by and construed in accordance with the
laws of the state of Delaware, without regard to conflict of law.
15.12 Jurisdiction. Each Member hereby irrevocably submits itself to
the jurisdiction of the States of Missouri or Minnesota, and to the jurisdiction
of the Federal District Courts for the District of Xxxxxxx County, Missouri or
Xxxxxx County, Minnesota, for the purpose of any suit, action, or other
proceeding arising out of or relating to this Agreement. Each Member hereby
agrees that it will not bring or file any suit, action, or other proceeding
arising out of or relating to this Agreement in a venue other than the two
listed above.
15.13 Binding Agreement. Subject to the restrictions on the
disposition of Interests herein contained, the provisions of this Agreement
shall be binding upon, and inure to the benefit of, the parties hereto and their
respective heirs, personal representatives, successors and permitted assigns.
15.14 Headings. The headings of the Articles, Sections and
Subsections of this Agreement are for convenience only and shall not be
considered in construing or interpreting any of the terms or provisions hereof.
15.15 Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original and all of which
shall constitute one agreement that is binding upon all of the parties hereto,
notwithstanding that all parties are not signatories to the same counterpart.
15.16 Interpretation. Words of the masculine gender shall be deemed
to include the feminine and neuter genders, and vice versa, where applicable.
Words of the singular number shall be deemed to include the plural number, and
vice versa, where applicable.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed as of the date first above written.
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REMAINDER OF PAGE INTENTIONALLY LEFT BLANK
22
LAND O'LAKES, INC.
By: /s/ Xxxx X. Xxxxxx
--------------------------------------
Print Name Xxxx X. Xxxxxx
--------------------------------
Title President & Chief Executive Officer
-------------------------------------
FARMLAND INDUSTRIES, INC.
By: /s/ Xxxxxx X. Xxxxx
--------------------------------------
Print Name Xxxxxx X. Xxxxx
--------------------------------
Title President & Chief Executive Officer
-------------------------------------
23
FIRST AMENDMENT TO
LIMITED LIABILITY COMPANY AGREEMENT
OF
LAND O'LAKES FARMLAND FEED LLC
This FIRST AMENDMENT to LIMITED LIABILITY COMPANY AGREEMENT is made and
entered into as of September __, 2000 (this "Amendment"), by and between
Farmland Industries, Inc., a Kansas cooperative corporation ("FII"), and Land
O'Lakes, Inc., a Minnesota cooperative corporation ("LOL").
WHEREAS, FII and LOL were parties to a certain Limited Liability Company
Agreement, dated September 1, 2000 (the "Agreement") and are all the Members of
the company thereby created; and
WHEREAS, the parties desire to amend the Agreement as set forth herein.
NOW, THEREFORE, in consideration of the promises set forth herein, and in
the Agreement, the parties agree as set forth below:
SECTION I
EFFECT ON AMENDMENT
This Amendment amends the Agreement. The parties agree that the terms set
forth below shall be deemed effective as of the date hereof. The terms of this
agreement shall govern in the event of any conflict with the terms of the
Agreement. Except as amended herein, the Agreement shall remain in full force
and effect and shall be incorporated herein and made a part hereof by reference.
By its execution of this Amendment, the parties affirm all of the
representations, warranties, covenants and terms of the Agreement, and confirm
the accuracy or compliance of such provisions as if entered into as of the date
of this Amendment.
SECTION II
AMENDED TRANSFER PROVISIONS
The first two paragraphs of Section 11.1 of the Agreement are hereby amended in
their entirety to be as follows:
Voluntary Sale or Transfer. No Member may sell, transfer, assign, give,
mortgage, alienate, pledge, hypothecate or otherwise encumber or dispose
of all or any portion of such Member's Interest, voluntarily,
involuntarily or by operation of law, without the unanimous written
consent of all Members. Any purported encumbrance or dispositions of any
Interest in violation of the terms of this Agreement shall be null and
void and of no
24
effect. Notwithstanding the foregoing, any Member may (a) pledge and grant
a security interest in it's Interest to any of its creditors, and (b) may
execute such documents requested by such creditor, which documents may
provide for the transfer of such Member's Interest in the Company to such
creditor, or a third party designated by such creditor, through (i)
foreclosure, (ii) a transfer in lieu of foreclosure, or (iii) any sale by
such creditor to a third party following creditor's foreclosure or a
transfer in lieu of foreclosure.
Transfer by Legal Process. Upon involuntary transfer of all or any portion
of a Member's Interest in the Company pursuant to a levy of execution,
foreclosure of pledge, transfer in lieu of foreclosure, garnishment,
attachment, divorce decree, bankruptcy or other legal process (or by
operation of law resulting from the death, disability, liquidation,
dissolution or winding up of a Member), such Member shall cease to be a
member, but any successor in title to the transferred Interest shall have
no right to become a Substitute Member or vote in any Company matters
unless admitted as a Substitute Member by unanimous written consent of the
other Members. Notwithstanding the foregoing, upon transfer of a Member's
Interest through foreclosure, a transfer in lieu of foreclosure, or sale
to a third party after a lender's foreclosure or transfer to a lender in
lieu of foreclosure, such successor in title to the transferred Interest
shall, upon written request, become a Substitute Member in place of such
Member and shall have the right to vote in all Company matters if the
other Member (or in the event that there is more than one other Member,
then the Company) was provided either:
(a) notice of a foreclosure sale to be conducted on an open-bid auction
basis, but the other Member (or Company) did not submit the winning bid, or
(b) a prior written right of first refusal, which right of first refusal
must be accepted by the other Member (or Company) in writing within 30
days of receipt and which, if accepted, must close within 45 days of
receipt, to acquire the transferring Member's Interest (i) in the case of
a lender submitting a written request to become a Substitute Member, upon
substantially the same economic terms as such lender who acquired the
Interest in foreclosure or through a transfer in lieu of foreclosure or
(ii) in the case of a request by or on behalf of a third party purchaser
to become a Substitute Member, upon substantially the same economic terms
as such third party purchaser who either purchased the Interest in
foreclosure or acquired the Interest through a transfer from a lender who
owned the Interest as the result of a transfer in lieu of foreclosure;
but, the other Member (or Company) did not properly exercise such right of
first refusal and acquire the Interest on such terms.
If such successor does not become a Substitute Member, such successor shall be
merely an assignee within the meaning of Section 18-702(b) of the Act.
25
SECTION III
COUNTERPARTS
This Amendment may be executed in several counterparts, each of which will be
considered an original and all of which will constitute and one and the same
document. This Amendment will become binding only when each party hereto has
executed and delivered to the others one or more such counterparts. Proving the
execution and contents of this document against a party may be done by producing
any copy of this Amendment signed by that party.
IN WITNESS WHEREOF, the undersigned have caused this Amendment to be
executed as of the date first above written.
FARMLAND INDUSTRIES, INC. LAND O'LAKES, INC.
By: /s/ Xxxxxx Xxxxx By: /s/ Xxxx Xxxxxx
-------------------------------- ----------------------------------
26
SECOND AGREEMENT TO MODIFY PERCENTAGE INTEREST
This AGREEMENT to Modify Percentage Interest ("Agreement") is made and
entered into the 15th day of June, 2001, by and between Land O'Lakes, Inc.
("LOL") and Farmland Industries, Inc. ("Farmland").
WHEREAS, pursuant to a Joint Venture Agreement dated July 18, 2000,
("Joint Venture Agreement") and corresponding Limited Liability Company
Agreement of Land O'Lakes Farmland Feed LLC dated September 1, 2000 ("Operating
Agreement"), the parties formed Land O'Lakes Farmland Feed LLC (the "Company")
and subsequently have been operating the Company.
WHEREAS, as set forth in Article I of the Joint Venture Agreement and
Article IX of the Operating Agreement as amended by that Agreement to Modify
Percentage Interest dated Xxxxx 00, 0000, XXX currently owns a 70.38% financial
interest (or Percentage Interest) and Farmland currently owns a 29.17% financial
interest in the Company.
WHEREAS, the parties have determined that an error in the calculation of
the earnings attributable to the Farmland Contributed Assets resulted in an
overvaluation of the Farmland Contributed Assets and a higher allocation of
Percentage Interest to Farmland than the parties believe to have been warranted.
WHEREAS, in order to remedy the over-allocation of Percentage Interest to
Farmland and the under-allocation of Percentage to LOL, Farmland and LOL desire
to increase LOL's financial interest (Percentage Interest) in the Company.
In consideration of the foregoing recitals which are incorporated herein and
made a contractual part of this Agreement, and in consideration of the mutual
agreements, provisions and conveyance herein contained, the parties hereby
agree as follows:
1. Definitions. Terms not defined herein shall have the meaning ascribed
to them in the Joint Venture Agreement and/or the Operating Agreement.
2. Increase in LOL's Financial (Percentage) Interest. In recognition of
the mutual mistake in calculations and in consideration of each others
respective desires to correct the financial interest ownership to
reflect the percentages resulting from the corrected calculations, LOL
and Farmland hereby agree that LOL's financial interest or Percentage
Interest in the Company shall increase by 2.87 percentage points.
Therefore, as of the Effective Date, LOL's financial interest or
Percentage Interest in the Company shall be 73.7% and Farmland's
financial interest or Percentage Interest shall be 26.3%.
3. Effective Date. The parties agreed that the effective date of this
change in their respective financial interest or Percentage Interest in
the Company shall be October 1, 2000("Effective Date"). This change
shall be effected in June by decreasing
27
Farmland's allocation of the Company's June earnings by $159,821 (2.87%
of the Company's earnings from inception through May 31, 2001) and
increasing LOL's allocation of the Company's June earnings by $159,821.
4. Waiver of Appraisal. The parties recognize that Section 1.7 of the
Joint Venture Agreement gives Farmland the right to participate on a
pro rata basis in the funding of the purchases referenced above. The
parties agree that Farmland has elected not to so participate. Further,
said Section calls for an appraisal process to accurately reflect the
value of such contributions. The parties hereby agree to waive such
appraisal process in this instance and agree to be bound by the terms
hereof, which each party acknowledges to be fair and accurate.
5. Authorization; No Conflicts. Each of the parties hereby represent and
warrant to the other party that it is fully authorized to enter into
this Agreement and that no consent from any other party is necessary.
The execution and performance of this Agreement shall not cause either
party to be in default under any other agreement it may have with any
other party.
6. Further Assurances. The parties agree to execute any and all documents
necessary to implement the full terms and conditions of this Agreement
and shall take all action necessary to cause the change in their
respective financial interest or Percentage Interest to be reflected in
the books and records of the Company. Should any party fail or refuse
to sign such documents or take such action, the non-defaulting party
may, at its option, seek a decree of specific performance to compel
such action.
7. Complete Agreement. This instrument sets forth the entire agreement
between the parties relative to the subject matter herein and
supercedes all previous understandings and agreements of the parties
relative to the subject matter herein. Modification or amendment of any
of the provision of this agreement shall not be valid unless signed by
the party against which enforcement is sought.
IN WITNESS WHEREOF, the authorized representatives of the parties hereto
have executed this agreement as of the day and year first above written.
LAND O'LAKES, INC. FARMLAND INDUSTRIES, INC.
By: /s/ Xxxx X. Xxxxxx By: /s/ Xxxxxx X. Xxxxx
-------------------------------- --------------------------------
Print Name: Xxxx X. Xxxxxx Print Name: Xxxxxx X. Xxxxx
----------------------- ------------------------
Its: President & Chief Executive Officer Its: President & Chief Executive Officer
------------------------------------ -----------------------------------
28
THIRD AMENDMENT MODIFYING ECONOMIC INTEREST
This Amendment Modifying Economic Interest ("Agreement") is made and
entered into the 15th day of June, 2001, by and between Land O'Lakes, Inc.
("LOL") and Farmland Industries, Inc. ("Farmland").
WHEREAS, pursuant to a Joint Venture Agreement dated July 18, 2000,
("Joint Venture Agreement") and corresponding Limited Liability Company
Agreement of Land O'Lakes Farmland Feed LLC dated September 1, 2000 ("Operating
Agreement"), the parties formed Land O'Lakes Farmland Feed LLC (the "Company")
and subsequently have been operating the Company.
WHEREAS, as set forth in Article I of the Joint Venture Agreement and
Article IX of the Operating Agreement, LOL initially owned a 69.2% financial
interest (or Percentage Interest) and Farmland initially owned a 30.8% financial
interest in the Company and those interests have respectively been amended to
73.7% and 26.3% by the agreements entered into by LOL and Farmland.
WHEREAS, LOL intends to acquire property at a cost of several hundred
million dollars and to contribute the same to the Company as additional
contributed capital for purposes of permitting the desired expansion of the
Company ("Expansion Assets").
WHEREAS, Farmland, though it agrees with the desired expansion of the
Company, does not wish to provide additional capital.
WHEREAS, the parties desire to modify the nature of the respective
Percentage Interests of LOL and Farmland in the Company to accommodate the
significantly changing capital contributions of the parties.
In consideration of the foregoing recitals which are incorporated herein and
made a contractual part of this Agreement, and in consideration of the mutual
agreements, provisions and conveyance herein contained, the parties hereby
agree as follows:
1. Definitions. Terms not defined herein shall have the meaning ascribed
to them in the Joint Venture Agreement and/or the Operating Agreement.
2. Modification of Percentage Interests. In consideration of LOL's
contribution of the Expansion Assets, LOL and Farmland hereby agree
that LOL's financial interest or Percentage Interest in the Company
shall increase by 18.3 percentage points. Therefore, as of the
Effective Date, LOL's financial interest or Percentage Interest in the
Company shall be 92% and Farmland's financial interest or Percentage
Interest shall be 8%.
3. Special Provisions for Farmland Allocation. Although Farmland following
the Effective Date would otherwise receive an allocation of 8% of the
profits and losses of the Company, for the period commencing on the
Effective Date and ending on the
29
last day of the third full or partial calendar month thereafter
("Protected Period'), Farmland shall, with respect to such month, be
allocated with respect to each such month the greater of 8% of the
actual profit attributable to such month or $833,333.33. For the months
of such year, Farmland shall be allocated 8% of such monthly earnings
if the Effective Date occurs prior to such month and 26.3% of such
monthly earnings if the Effective Date occurs during or after such
month. It is intended that Farmland shall be guaranteed a minimum level
of return for the Protected Period. It is further intended that
Farmland shall not experience any diminished distribution or share of
profits as an eight percent (8%) owner for any period outside the
Protected Period as a result of the guaranteed return provided to
Farmland during the Protected Period. For other months of such year,
Farmland shall be allocated 8% of such annual earnings divided by
twelve if the Effective Date occurs prior to such month and 26.3% of
such annual earnings divided by twelve if the Effective Date occurs
during or after such month. As of the both the commencement and ending
dates of the Protected Period, such amount of the allocated profits and
losses of the Company as have been allocated to LOL and Farmland as is
in excess of their respective 92% or 8% Percentage Interests shall be
reflected not as Percentage interest in the Company or as part of the
Capital Account but rather as a non-interest bearing debt which shall
be retired prior to the payment of any amounts of other allocations.
4. Amendment of Operating Agreement and Joint Venture Agreement. The
following sentence is hereby added to the end of Section 8.1 of the
Operating Agreement and the end of Section 1.6 of the Joint Venture
Agreement: "Notwithstanding anything in this Section to the contrary,
each of the parties hereto approves of, and no further approval of any
Manager of any Member shall be necessary to authorize, the sale of any
of the feed xxxxx or other assets comprising any of the Expansion
Assets or of any existing assets of the Company made redundant or
unnecessary by the Company's direct or indirect ownership of the
Expansion Assets.
5. Effective Date. The parties agree that the effective date of this
change in their respective financial interest or Percentage Interest in
the Company shall be the day and year the Expansion Assets are
contributed to the Company by LOL ("Effective Date").
6. Waiver of Appraisal. The parties recognize that Section 1.7 of the
Joint Venture Agreement gives Farmland the right to participate on a
pro rata basis in the funding of the purchases referenced above. The
parties agree that Farmland has elected not to so participate. Further,
said Section calls for an appraisal process to accurately reflect the
value of such contributions. The parties hereby agree to waive such
appraisal process in this instance and agree to be bound by the terms
hereof, which each party acknowledges to be fair and accurate.
7. Authorization; No Conflicts. Each of the parties hereby represent and
warrant to the other party that it is fully authorized to enter into
this Agreement and that no consent from any other party is necessary.
The execution and performance of this Agreement
30
shall not cause either party to be in default under any other agreement
it may have with any other party.
8. Further Assurances. The parties agree to execute any and all documents,
including but not limited to amendments of the Operating Agreement and
the Joint Venture Agreement, necessary to implement the full terms and
conditions of this Agreement and shall take all action necessary to
cause the change in their respective financial interest or Percentage
Interest to be reflected in the governing agreements, books and records
of the Company. Should any party fail or refuse to sign such documents
or take such action, the non-defaulting party may, at its option, seek
a decree of specific performance to compel such action.
IN WITNESS WHEREOF, the authorized representatives of the parties hereto
have executed this agreement as of the day and year first above written.
LAND O'LAKES, INC. FARMLAND INDUSTRIES, INC.
By: /s/ Xxxx X. Xxxxxx By: /s/ Xxxxxx X. Xxxxx
------------------------------------- -------------------------------------
Its: President & Chief Executive Officer Its: President & Chief Executive Officer
------------------------------------ ------------------------------------
31
FOURTH AMENDMENT MODIFYING ECONOMIC INTEREST
This Amendment Modifying Economic Interest ("Fourth Amendment") is made
and entered into the 12th day of October, 2001, by and between Land O'Lakes,
Inc. ("LOL"), LOL Holdings II, Inc., a Delaware corporation and a wholly owned
subsidiary of LOL, and Farmland Industries, Inc. ("Farmland").
WHEREAS, pursuant to a Joint Venture Agreement dated July 18, 2000,
("Joint Venture Agreement") and corresponding Limited Liability Company
Agreement of Land O'Lakes Farmland Feed LLC dated September 1, 2000 ("Operating
Agreement"), the parties formed Land O'Lakes Farmland Feed LLC (the "Company")
and subsequently have been operating the Company.
WHEREAS, as set forth in Article I of the Joint Venture Agreement and
Article IX of the Operating Agreement, LOL initially owned a 69.2% financial
interest (or Percentage Interest) and Farmland initially owned a 30.8% financial
interest in the Company and those interests have respectively been amended to
73.7% and 26.3% by the agreements entered into by LOL and Farmland.
WHEREAS, LOL had intended to directly acquire property consisting of all
the shares of stock of Purina Xxxxx, Inc. at a cost of several hundred million
dollars and to contribute the same to the Company as additional contributed
capital for purposes of permitting the desired expansion of the Company and, as
reflected in the Third Amendment Modifying Economic Interest dated June 15, 2001
("Third Amendment"), in consideration for the contribution of the such stock was
to receive an additional economic interest in the Company increasing its
Percentage Interest in the Company by 18.3 percentage points.
WHEREAS, the acquisition of the such stock is to be by LOL Holdings II,
Inc. and not by LOL directly.
WHEREAS, LOL Holdings II, Inc. intends, following the acquisition of such
stock, to convert Purina Xxxxx, Inc. from a Delaware corporation to a Delaware
limited liability company and to contribute its entire limited liability company
interest in such limited liability company (the "Expansion Assets") to the
Company following such conversion.
WHEREAS, the parties desire to modify the nature of the respective
Percentage Interests of LOL, Farmland, and LOL Holdings II, Inc. to reflect the
revised capital contributions of the parties and to alter the Management
Committee of the Company by reducing by one the number of directors to be
appointed directly by LOL from time to time while increasing by one the number
of directors to be appointed directly by LOL Holdings II, Inc. from time to
time.
In consideration of the foregoing recitals which are incorporated herein and
made a contractual part of this Agreement, and in consideration of the mutual
agreements, provisions and conveyance herein contained, the parties hereby
agree as follows:
32
1. Definitions. Terms not defined herein shall have the meaning ascribed
to them in the Joint Venture Agreement and/or the Operating Agreement.
2. Amendment of Operating Agreement. The Operating Agreement is hereby
amended in the following particulars:
a) LOL Holdings II, Inc. is added as a Member of the Company and as a
party to the Operating Agreement and shall sometimes be referred to
therein as "Holdings".
b) Section 7.1 is amended to read as follows:
7.1 Election of Managers. Except as provided below, FII shall have
the right to designate two (2) Managers for the Company and LOL and Holdings
shall each have the right to designate one (1) Manager for the Company (each a
"Manager" and collectively the "Managers"). Each Manager shall hold office until
such Manager's successor has been designated by the Member by whom such Manager
was designated or until such Manager's earlier death, resignation or removal. As
of the Effective Date of the Fourth Amendment Modifying Economic Interest, the
managers appointed by FII shall be Xxx Xxxxx and Xxxx Xxxxx; the manager
appointed by LOL shall be Xxxxx Xxxxxxxxx; and the manager appointed by Holdings
shall be Xxx Xxxxxxxxxxx.
c) Article IX is amended to read as follows:
As of the Effective Date of the Fourth Amendment Modifying Economic
Interest, the Capital Accounts and percentage interests ("Percentage Interest")
of each of the Members shall be adjusted respectively to reflect the following:
FII 8.0%
LOL 39.8%
Holdings 52.2%
3. Special Provisions for Farmland Allocation Unaffected. The special
provisions for Farmland adopted in Paragraph 3 of the Third Amendment
shall remain in force and are not affected by this Fourth Amendment.
4. Effective Date. The parties agree that the effective date of this
Fourth Amendment shall be the day and year the Expansion Assets are
contributed to the Company by Holdings ("Effective Date").
5. Waiver of Appraisal. The parties recognize that to the extent Section
1.7 of the Joint Venture Agreement gives Farmland the right to
participate on a pro rata basis in the funding of the purchases
referenced above, Farmland has elected not to so participate. Further,
said Section calls for an appraisal process to accurately reflect the
value of such contributions. The parties hereby agree to waive such
appraisal process in this instance and agree to be bound by the terms
hereof, which each party acknowledges to be fair and accurate.
33
6. Authorization; No Conflicts. Each of the parties hereby represent and
warrant to the other party that it is fully authorized to enter into
this Agreement and that no consent from any other party is necessary.
The execution and performance of this Agreement shall not cause either
party to be in default under any other agreement it may have with any
other party.
7. Further Assurances. The parties agree to execute any and all documents,
including but not limited to amendments of the Operating Agreement and
the Joint Venture Agreement, necessary to implement the full terms and
conditions of this Agreement and shall take all action necessary to
cause the change in their respective financial interest or Percentage
Interest to be reflected in the governing agreements, books and records
of the Company. Should any party fail or refuse to sign such documents
or take such action, the non-defaulting party may, at its option, seek
a decree of specific performance to compel such action.
IN WITNESS WHEREOF, the authorized representatives of the parties hereto
have executed this agreement as of the day and year first above written.
LAND O'LAKES, INC. FARMLAND INDUSTRIES, INC.
By: Xxxxxx X. Xxxxxxx By: Xxxx Xxxxxxx
-------------------------- --------------------------------
Its: Chief Financial Officer Its: Executive Vice President
------------------------- -------------------------------
LOL HOLDINGS II, INC.
By: /s/ Xxxxx Xxxxxxxxx
--------------------------
Its: President
-------------------------
34
