EXHIBIT 2.2
SECOND AMENDED AND RESTATED
OPERATING AGREEMENT
OF
LITTLE SIOUX CORN PROCESSORS, L.L.C.
DATED DECEMBER 17, 2001
THE SECURITIES (MEMBERSHIP INTERESTS) EVIDENCED BY AND/OR ISSUED PURSUANT TO
THIS OPERATING AGREEMENT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED, OR REGISTERED OR QUALIFIED UNDER ANY SECURITIES OR BLUE SKY
LAWS OF ANY STATE OR JURISDICTION. THEREFORE, THE SECURITIES MAY NOT BE SOLD,
PLEDGED, HYPOTHECATED OR OTHERWISE TRANSFERRED UNTIL A REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OR THE APPLICABLE STATE SECURITIES OR BLUE SKY LAWS
SHALL HAVE BECOME EFFECTIVE WITH REGARD TO THE PROPOSED TRANSFER OR, IN THE
OPINION OF LEGAL COUNSEL ACCEPTABLE TO THE COMPANY, REGISTRATION OR
QUALIFICATION UNDER THE SECURITIES ACT OR BLUE SKY LAWS IS NOT REQUIRED IN
CONNECTION WITH THE PROPOSED TRANSFER. TRANSFER OF THE SECURITIES IS ALSO
SUBJECT TO ADDITIONAL RESTRICTIONS SET FORTH HEREIN.
LITTLE SIOUX CORN PROCESSORS, L.L.C. OPERATING AGREEMENT
(CONTAINS RESTRICTIONS ON TRANSFER OF MEMBERSHIP INTERESTS)
TABLE OF CONTENTS
Page
SECTION 1: THE COMPANY..........................................................................5
1.1 FORMATION...................................................................................5
1.2 NAME........................................................................................5
1.3 PURCHASE; POWERS............................................................................5
1.4 PRINCIPAL PLACE OF BUSINESS.................................................................6
1.5 TERM........................................................................................6
1.6 AGENT FOR SERVICE OF PROCESS................................................................6
1.7 TITLE TO PROPERTY...........................................................................6
1.8 PAYMENT OF INDIVIDUAL OBLIGATIONS...........................................................6
1.9 INDEPENDENT ACTIVITIES; TRANSACTIONS WITH AFFILIATES........................................6
1.10 DEFINITIONS................................................................................7
SECTION 2. CAPITAL CONTRIBUTIONS; CAPITAL ACCOUNTS.............................................13
2.1 ORIGINAL CAPITAL CONTRIBUTIONS.............................................................13
2.2 ADDITIONAL CAPITAL CONTRIBUTIONS; ADDITIONAL UNITS.........................................13
2.3 CAPITAL ACCOUNTS...........................................................................14
SECTION 3. ALLOCATIONS.........................................................................15
3.1 PROFITS....................................................................................15
3.2 LOSSES.....................................................................................15
3.3 SPECIAL ALLOCATIONS........................................................................15
3.4 CURATIVE ALLOCATIONS.......................................................................16
3.5 LOSS LIMITATION............................................................................17
3.6 OTHER ALLOCATION RULES.....................................................................17
3.7 TAX ALLOCATIONS: CODE SECTION 704(c).......................................................17
SECTION 4. DISTRIBUTIONS.......................................................................18
4.1 NET CASH FLOW..............................................................................18
4.2 AMOUNTS WITHHELD...........................................................................18
4.3 LIMITATIONS ON DISTRIBUTIONS...............................................................18
SECTION 5. MANAGEMENT..........................................................................18
5.1 DIRECTORS..................................................................................18
5.2 ELECTION AND APPOINTMENT OF DIRECTORS......................................................19
5.3 COMMITTEES.................................................................................20
5.4 AUTHORITY OF DIRECTORS.....................................................................20
5.5 DIRECTOR AS AGENT..........................................................................22
5.6 RESTRICTION ON AUTHORITY OF DIRECTORS......................................................22
5.7 DIRECTOR ACTIONS...........................................................................23
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5.8 DUTIES AND OBLIGATIONS OF DIRECTORS........................................................24
5.9 CHAIRMAN AND VICE CHAIRMAN.................................................................24
5.10 PRESIDENT AND CHIEF EXECUTIVE OFFICER.....................................................24
5.11 CHIEF FINANCIAL OFFICER...................................................................25
5.12 SECRETARY; ASSISTANT SECRETARY............................................................25
5.13 VICE PRESIDENT............................................................................25
5.14 DELEGATION................................................................................25
5.15 EXECUTION OF INSTRUMENTS..................................................................26
5.16 LIMITATION OF LIABILITY; INDEMNIFICATION OF DIRECTORS.....................................26
5.17 COMPENSATION; EXPENSES OF DIRECTORS.......................................................26
5.18 LOANS.....................................................................................27
SECTION 6. ROLE OF MEMBERS.....................................................................27
6.1 RIGHTS OF POWERS...........................................................................27
6.2 VOTING RIGHTS..............................................................................27
6.3 MEMBER MEETINGS; QUORUM AND PROXIES........................................................27
6.4 TERMINATION OF MEMBERSHIP..................................................................27
6.5 CONTINUATION OF THE COMPANY................................................................28
6.6 NO OBLIGATION TO PURCHASE MEMBERSHIP INTEREST..............................................28
6.7 WAIVER OF DISSENTERS RIGHTS................................................................28
SECTION 7. ACCOUNTING, BOOKS AND RECORDS.......................................................28
7.1 ACCOUNTING, BOOKS AND RECORDS..............................................................28
7.2 REPORTS....................................................................................28
7.3 TAX MATTERS................................................................................29
7.4 DELIVERY TO MEMBERS AND INSPECTION.........................................................29
SECTION 8. AMENDMENTS..........................................................................29
8.1 AMENDMENTS.................................................................................30
SECTION 9. TRANSFERS...........................................................................30
9.1 RESTRICTIONS ON TRANSFERS..................................................................30
9.2 PERMITTED TRANSFERS........................................................................30
9.3 CONDITIONS TO PERMITTED TRANSFERS..........................................................30
9.4 PROHIBITED TRANSFERS.......................................................................32
9.5 RIGHTS OF UNADMITTED ASSIGNEES.............................................................32
9.6 ADMISSION OF SUBSTITUTED MEMBERS...........................................................32
9.7 REPRESENTATIONS REGARDING TRANSFERS........................................................33
9.8 DISTRIBUTION AND ALLOCATION IN RESPECT OF TRANSFERRED UNITS................................34
SECTION 10. DISSOLUTION AND WINDING UP........................................................34
10.1 DISSOLUTION...............................................................................34
10.2 WINDING UP................................................................................34
10.3 COMPLIANCE WITH CERTAIN REQUIREMENTS OF REGULATIONS; DEFICIT CAPITAL ACCOUNTS.............35
10.4 DEEMED DISTRIBUTION AND RECONTRIBUTION....................................................35
10.5 RIGHTS OF UNIT HOLDERS....................................................................35
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10.6 ALLOCATIONS DURING PERIOD OF LIQUIDATION..................................................35
10.7 CHARACTER OF LIQUIDATING DISTRIBUTIONS....................................................36
10.8 THE LIQUIDATOR............................................................................36
10.9 FORMS OF LIQUIDATING DISTRIBUTIONS........................................................36
SECTION 11. MISCELLANEOUS......................................................................36
11.1 NOTICES...................................................................................36
11.2 BINDING EFFECT............................................................................36
11.3 CONSTRUCTION..............................................................................37
11.4 HEADINGS..................................................................................37
11.5 SEVERABILITY..............................................................................37
11.6 INCORPORATION BY REFERENCE................................................................37
11.7 VARIATION OF TERMS........................................................................37
11.8 GOVERNING LAW.............................................................................37
11.9 WAIVER OF JURY TRIAL......................................................................37
11.10 COUNTERPART EXECUTION....................................................................37
11.11 SPECIFIC PERFORMANCE.....................................................................37
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AMENDED AND RESTATED
OPERATING AGREEMENT
OF
LITTLE SIOUX CORN PROCESSORS, L.L.C.
THIS
OPERATING AGREEMENT (the "Agreement") is entered into and shall be
effective as of the 17th day of December, 2001 (the "Effective Date"), by and
among LITTLE SIOUX CORN PROCESSORS, L.L.C., an
Iowa limited liability company
(the "Company"), each of the Persons who are identified as Members on the
attached Exhibit A and who have executed a counterpart of this Agreement and a
Subscription Agreement, and any other Persons as may from time to time be
subsequently admitted as a Member of the Company in accordance with the terms of
this Agreement. Capitalized terms not otherwise defined herein shall have the
meaning set forth in Section 1.10.
WHEREAS, the Members of the Company have adopted an
Operating Agreement of
the Company dated January 22, 2001, pursuant to the
Iowa Limited Liability
Company Act (the "Act"); and
WHEREAS, the Members desire to amend and restate the
Operating Agreement to
revise and set forth the respective rights, duties, and responsibilities with
respect to the Company and its business and affairs.
NOW, THEREFORE, in consideration of the covenants and agreements contained
herein, and other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the parties hereto agree as follows:
SECTION 1. THE COMPANY
1.1 FORMATION. The initial Members formed the Company as an
Iowa limited
liability company by filing Articles of Organization with the
Iowa Secretary of
Sate on September 28, 2000 pursuant to the provisions of the Act. To the extent
that the rights or obligations of any Member are different by reason of any
provision of this Agreement than they would be in the absence of such
provisions, this Agreement shall, to the extent permitted by the Act, control.
1.2 NAME. The name of the Company shall be "Little Sioux Corn Processors,
L.L.C." and all business of the Company shall be conducted in such name.
1.3 PURCHASE; POWERS. The nature of the business and purposes of the Company
are (i) to own, construct, operate, lease, finance, contract with, and/or invest
in ethanol production and co product production facilities as permitted under
the applicable laws of the State of
Iowa; (ii) to engage in the processing of
corn, grains and other feedstocks into ethanol and any and all related co
products, and the marketing of all products and co products from such
processing; and (iii) to engage in any other business and investment activity in
which an
Iowa limited liability company may lawfully be engaged, as determined
by the Class A Directors. The Company has the power
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to do any and all acts necessary, appropriate, proper, advisable, incidental or
convenient to or in furtherance of the purpose of the Company as set forth in
this Section 1.3 and has, without limitation, any and all powers that may be
exercised on behalf of the Company by the Directors pursuant to Section 5
hereof.
1.4 PRINCIPAL PLACE OF BUSINESS. The Company shall continuously maintain an
office in
Iowa. The principal office of the Company shall be at 000 Xxxxx Xxxxxx
Xxxxx, Xxxxxxxx, Xxxx, 00000, or elsewhere as the Directors may determine. Any
documents required by the Act to be kept by the Company shall be maintained at
the Company's principal office.
1.5 TERM. The term of the Company commenced on the date the Articles of
Organization (the "Articles") of the Company were filed with the office of the
Iowa Secretary of State, and shall continue until the winding up and liquidation
of the Company and its business is completed following a Dissolution Event as
provided in Section 10 hereof.
1.6 AGENT FOR SERVICE OF PROCESS. The name and address of the agent for
service of process on the Company in the State of
Iowa shall be Xxxxxxx X.
Xxxxxxx, 000 Xxxxx Xxxxxx, Xxxxx 0000, Xxx Xxxxxx, Xxxx, 00000, or any successor
as appointed by the Class A Directors.
1.7 TITLE TO PROPERTY. All Property owned by the Company shall be owned by the
Company as an entity and no Member shall have any ownership interest in such
Property in its individual name. Each Member's interest in the Company shall be
personal property for all purposes. At all times after the Effective Date, the
Company shall hold title to all of its Property in the name of the Company and
not in the name of any Member.
1.8 PAYMENT OF INDIVIDUAL OBLIGATIONS. Company's credit and assets shall be
used solely for the benefit of the Company, and no asset of the Company shall be
Transferred or encumbered for, or in payment of, any individual obligation of
any Member.
1.9 INDEPENDENT ACTIVITIES; TRANSACTIONS WITH AFFILIATES. The Directors shall
be required to devote such time to the affairs of the Company as may be
necessary to manage and operate the Company, and shall be free to serve any
other Person or enterprise in any capacity that the Director may deem
appropriate in its discretion. Neither this Agreement nor any activity
undertaken pursuant hereto shall (i) prevent any Member or Director or their
Affiliates, acting on their own behalf, from engaging in whatever activities
they choose, whether the same are competitive with the Company or otherwise, and
any such activities may be undertaken without having or incurring any obligation
to offer any interest in such activities to the Company or any Member, or (ii)
require any Member or Director to permit the Company or Director or Member or
its Affiliates to participate in any such activities, and as a material part of
the consideration for the execution of this Agreement by each Member, each
Member hereby waives, relinquishes, and renounces any such right or claim of
participation. To the extent permitted by applicable law and subject to the
provisions of this Agreement, the Directors are hereby authorized to cause the
Company to purchase Property from, sell Property to or otherwise deal with any
Member (including any Member who is also a Director), acting on its own behalf,
or any Affiliate of any Member; provided that any such purchase, sale or other
transaction shall be made on terms and
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conditions which are no less favorable to the Company than if the sale, purchase
or other transaction had been made with an independent third party.
1.10 DEFINITIONS. Capitalized words and phrases used in this Agreement have the
following meanings:
(a) "Act" means the
Iowa Limited Liability Company Act, as amended from
time to time (or any corresponding provision or provisions of any succeeding
law).
(b) "Adjusted Capital Account Deficit" means, with respect to any Unit
Holder, the deficit balance, if any, in such Unit Holder's Capital Account as of
the end of the relevant Fiscal Year, after giving effect to the following
adjustments: (i) Credit to such Capital Account any amounts which such Unit
Holder is deemed to be obligated to restore pursuant to the next to the last
sentences in Sections 1.704 2(g)(1) and 1.704 2(i)(5) of the Regulations; and
(ii) Debit to such Capital Account the items described in Sections 1.704
1(b)(2)(ii)(d)(4), 1.704 1(b)(2)(ii)(d)(5) and 1.704 1(b)(2)(ii)(d)(6) of the
Regulations. The foregoing definition is intended to comply with the provisions
of Section 1.704 1(b)(2)(ii)(d) of the Regulations and shall be interpreted
consistently therewith.
(c) "Affiliate" means, with respect to any Person (i) any Person
directly or indirectly controlling, controlled by or under common control with
such Person (ii) any officer, Director, general partner, member or trustee of
such Person or (iii) any Person who is an officer, Director, general partner,
member or trustee of any Person described in clauses (i) or (ii) of this
sentence. For purposes of this definition, the terms "controlling," "controlled
by" or "under common control with" shall mean the possession, direct or
indirect, of the power to direct or cause the direction of the management and
policies of a Person or entity, whether through the ownership of voting
securities, by contract or otherwise, or the power to elect at least 50% of the
Directors, members, or persons exercising similar authority with respect to such
Person or entities.
(d) "Agreement" means this
Operating Agreement of Little Sioux Corn
Processors, L.L.C., as amended from time to time.
(e) "Articles" means the Articles of Organization of the Company filed
with the Iowa Secretary of State, as same may be amended from time to time.
(f) "Assignee" means a transferee of Units who is not admitted as a
substituted member pursuant to Section 9.6.
(g) "Capital Account" means the separate capital account maintained for
each Unit Holder in accordance with Section 2.3.
(h) "Capital Contributions" means, with respect to any Member, the
amount of money (US Dollars) and the initial Gross Asset Value of any assets or
property (other than money) contributed by the Member (or such Member's
predecessor in interest) to the Company (net of liabilities secured by such
contributed property that the Company is considered to assume
7
or take subject to under Code Section 752) with respect to the Units in the
Company held or purchased by such Member, including additional Capital
Contributions.
(i) "Class A Directors" means all Persons who (i) are referred to as
such in Section 5.1 of this Agreement or have become a Class A Directors
pursuant to the terms of this Agreement, and (ii) have not ceased to be Class A
Directors pursuant to the terms of this Agreement.
(j) "Class B Directors" means all Persons who (i) are referred to as
such in Section 5.1 of this Agreement, and (ii) have not ceased to be Class B
Directors pursuant to the terms of this Agreement. The authority of Class B
Directors is limited as set forth in this Agreement.
(k) "Code" means the United States Internal Revenue Code of 1986, as
amended from time to time.
(l) "Company" means Little Sioux Corn Processors, L.L.C., an Iowa
limited liability company.
(m) "Company Minimum Gain" has the meaning given the term "partnership
minimum gain" in Sections 1.704 2(b)(2) and 1.704 2(d) of the Regulations.
(n) "Debt" means (i) any indebtedness for borrowed money or the
deferred purchase price of property as evidenced by a note, bonds, or other
instruments, (ii) obligations as lessee under capital leases, (iii) obligations
secured by any mortgage, pledge, security interest, encumbrance, lien or charge
of any kind existing on any asset owned or held by the Company whether or not
the Company has assumed or become liable for the obligations secured thereby,
(iv) any obligation under any interest rate swap agreement, (v) accounts payable
and (vi) obligations under direct or indirect guarantees of (including
obligations (contingent or otherwise) to assure a creditor against loss in
respect of) indebtedness or obligations of the kinds referred to in clauses (i),
(ii), (iii), (iv) and (v), above provided that Debt shall not include
obligations in respect of any accounts payable that are incurred in the ordinary
course of the Company's business and are not delinquent or are being contested
in good faith by appropriate proceedings.
(o) "Depreciation" means, for each Fiscal Year, an amount equal to the
depreciation, amortization, or other cost recovery deduction allowable with
respect to an asset for such Fiscal Year, except that if the Gross Asset Value
of an asset differs from its adjusted basis for federal income tax purposes at
the beginning of such Fiscal Year, Depreciation shall be an amount which bears
the same ratio to such beginning Gross Asset Value as the federal income tax
depreciation, amortization, or other cost recovery deduction for such Fiscal
Year bears to such beginning adjusted tax basis; provided, however, that if the
adjusted basis for federal income tax purposes of an asset at the beginning of
such Fiscal Year is zero, Depreciation shall be determined with reference to
such beginning Gross Asset Value using any reasonable method selected by the
Class A Directors.
(p) "Directors" means all Class A Directors and Class B Directors,
collectively. Notwithstanding the foregoing, however, wherever this Agreement
requires or permits action to
8
be taken with the consent, approval or affirmative vote of the Class A
Directors, only Class A Directors shall be required or permitted to consent,
approve or vote with respect thereto, it being expressly understood and agreed
that the authority of Class B Directors shall be limited as otherwise provided
herein. For purposes of the Act, the Directors shall be deemed to be the
"managers" (as such term is defined and used in the Act) of the Company. Unless
otherwise stated in this Agreement, any action taken by the Directors shall
require the affirmative vote of a majority of the Directors present at a meeting
of the Directors (in person or by telephonic or other electronic means as more
specifically described in Section 5.7) and entitled to vote upon respective
resolutions regarding the matters presented thereat.
(q) "Dissolution Event" shall have the meaning set forth in
Section 10.1 hereof.
(r) "Effective Date" means December 17, 2001.
(s) "Facilities" shall mean the ethanol production and co product
production facilities near Marcus, Iowa or such other location as may be
determined by the Directors to be constructed and operated by the Company
pursuant to the Business Plan.
(t) "Financing Closing" means the actual closing (execution and
delivery of all required documents) by the Company with its project lender(s)
providing for all debt financing, including senior and subordinated debt and any
other project financing characterized by debt obligations and repayable as debt
which is required by the project lender(s) or which is deemed necessary or
prudent in the sole discretion of the Directors.
(u) "Fiscal Quarter" means (i) any three month period commencing on
each of January 1, April 1, July 1 and October 1 and ending on the last date
before the next such date and (ii) the period commencing on the immediately
preceding January 1, April 1, July 1, or October 1, as the case may be, and
ending on the date on which all Property is distributed to the Unit Holders
pursuant to Section 10 hereof.
(v) "Fiscal Year" means (i) any twelve month period commencing on
January 1 and ending on December 31 and (ii) the period commencing on the
immediately preceding January 1 and ending on the date on which all Property is
distributed to the Unit Holders pursuant to Section 10 hereof, or, if the
context requires, any portion of a Fiscal Year for which an allocation of
Profits or Losses or a distribution is to be made.
(w) "GAAP" means generally accepted accounting principles in effect in
the United States of America from time to time.
(x) "Gross Asset Value" means with respect to any asset, the asset's
adjusted basis for federal income tax purposes, except as follows: (i) 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 Class
9
A Directors provided that the initial Gross Asset Values of the assets
contributed to the Company pursuant to Section 2.1 hereof shall be as set forth
in such section; (ii) The Gross Asset Values of all Company assets shall be
adjusted to equal their respective gross fair market values (taking Code Section
7701(g) into account), as determined by the Class A Directors as of the
following times: (A) 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; (B) the distribution by the Company to a Member of more than a de
minimis amount of Company property as consideration for an interest in the
Company; and (C) the liquidation of the Company within the meaning of
Regulations Section 1.704 1(b)(2)(ii)(g), provided that an adjustment described
in clauses (A) and (B) of this paragraph shall be made only if the Class A
Directors reasonably determine that such adjustment is necessary to reflect the
relative economic interests of the Members in the Company; (iii) The Gross Asset
Value of any item of Company assets distributed to any Member shall be adjusted
to equal the gross fair market value (taking Code Section 7701(g) into account)
of such asset on the date of distribution as determined by the Class A
Directors; and (iv) The Gross Asset Values of Company assets shall be increased
(or decreased) to reflect any adjustments to the adjusted basis of such assets
pursuant to Code Section 734(b) or Code Section 743(b), but only to the extent
that such adjustments are taken into account in determining Capital Accounts
pursuant to Regulations Section 1.704 1(b)(2)(iv)(m) and subparagraph (vi) of
the definition of "Profits" and "Losses" or Section 3.3(c) hereof; provided,
however, that Gross Asset Values shall not be adjusted pursuant to this
subparagraph (iv) to the extent that an adjustment pursuant to subparagraph (ii)
is required in connection with a transaction that would otherwise result in an
adjustment pursuant to this subparagraph (iv). If the Gross Asset Value of an
asset has been determined or adjusted pursuant to subparagraph (ii) or (iv),
such Gross Asset Value shall thereafter be adjusted by the Depreciation taken
into account with respect to such asset, for purposes of computing Profits and
Losses.
(y) "Issuance Items" has the meaning set forth in Section 3.3(f)
hereof.
(z) "Liquidation Period" has the meaning set forth in Section 10.6
hereof.
(aa) "Liquidator" has the meaning set forth in Section 10.8 hereof.
(bb) "Losses" has the meaning set forth in the definition of "Profits"
and "Losses."
(cc) "Member" means any person (i) whose name is set forth as such on
Exhibit "A" initially attached hereto or has become a Member pursuant to the
terms of this Agreement, and (ii) whose is the owner of one or more Units.
(dd) "Members" means all such Members.
(ee) "Membership Economic Interest" means collectively, a Member's share
of "Profits" and "Losses," the right to receive distributions of the Company's
assets, and the right to information concerning the business and affairs of the
Company provided by the Act. The Membership Economic Interest of a Member is
quantified by the unit of measurement referred to herein as "Units."
(ff) "Membership Interest" means collectively, the Membership Economic
Interest and Membership Voting Interest.
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(gg) "Membership Register" means the membership register maintained by
the Company at its principal office or by a duly appointed agent of the Company
setting forth the name, address, the number of Units, and Capital Contributions
of each Member of the Company, which shall be modified from time to time as
additional Units are issued and as Units are transferred pursuant to this
Agreement.
(hh) "Membership Voting Interest" means collectively, a Member's right
to vote as set forth in this Agreement or required by the Act. The Membership
Voting Interest of a Member shall mean as to any matter to which the Member is
entitled to vote hereunder or as may be required under the Act, the right to one
(1) vote for each Unit registered in the name of such Member as shown in the
Membership Register; provided however that under no circumstances shall any
Member, and/or any Related Party or Affiliate of a Member, ever be entitled to
vote more than five percent (5%) of the outstanding Membership Interests (Units)
of the Company even if such Member is the registered owner of more than five
percent (5%) of the outstanding Membership Interests (Units) of the Company. In
determining whether a Member has over five percent (5%) of the outstanding
Membership Interests (Units) of the Company, Membership Interests (Units) held
by an Affiliate and/or Related Party of a Member shall be deemed to be owned and
held by such Member.
(ii) "Net Cash Flow" means the gross cash proceeds of the Company less
the portion thereof used to pay or establish reserves for all Company expenses,
debt payments, capital improvements, replacements, and contingencies, all as
reasonably determined by the Class A Directors. "Net Cash Flow" shall not be
reduced by depreciation, amortization, cost recovery deductions, or similar
allowances, but shall be increased by any reductions of reserves previously
established.
(jj) "Nonrecourse Deductions" has the meaning set forth in Section 1.704
2(b)(1) of the Regulations.
(kk) "Nonrecourse Liability" has the meaning set forth in Section 1.704
2(b)(3) of the Regulations.
(ll) "Officer" or "Officers" has the meaning set forth in Section 5.14
hereof.
(mm) "Permitted Transfer" has the meaning set forth in Section 9.2
hereof.
(nn) "Person" means any individual, partnership (whether general or
limited), joint venture, limited liability company, corporation, trust, estate,
association, nominee or other entity.
(oo) "Profits and Losses" mean, for each Fiscal Year, an amount equal to
the Company's taxable income or loss for such Fiscal Year, determined in
accordance with Code Section 703(a) (for this purpose, all items of income,
gain, loss, or deduction required to be stated separately pursuant to Code
Section 703(a)(1) shall be included in taxable income or loss), with the
following adjustments (without duplication): (i) Any income of the Company that
is exempt from federal income tax and not otherwise taken into account in
computing Profits or Losses pursuant to this definition of "Profits" and
"Losses" shall be added to such taxable income
11
or loss; (ii) Any expenditures of the Company described in Code Section
705(a)(2)(b) or treated as Code Section 705(a)(2)(b) expenditures pursuant to
Regulations Section 1.704 1(b)(2)(iv)(i), and not otherwise taken into account
in computing Profits or Losses pursuant to this definition of "Profits" and
"Losses" shall be subtracted from such taxable income or loss; (iii) In the
event the Gross Asset Value of any Company asset is adjusted pursuant to
subparagraphs (ii) or (iii) of the definition of Gross Asset Value, the amount
of such adjustment shall be treated as an item of gain (if the adjustment
increases the Gross Asset Value of the asset) or an item of loss (if the
adjustment decreases the Gross Asset Value of the asset) from the disposition of
such asset and shall be taken into account for purposes of computing Profits or
Losses; (iv) Gain or loss resulting from any disposition of Property with
respect to which gain or loss is recognized for federal income tax purposes
shall be computed by reference to the Gross Asset Value of the Property disposed
of, notwithstanding that the adjusted tax basis of such Property differs from
its Gross Asset Value; (v) In lieu of the depreciation, amortization, and other
cost recovery deductions taken into account in computing such taxable income or
loss, there shall be taken into account Depreciation for such Fiscal Year,
computed in accordance with the definition of Depreciation; (vi) To the extent
an adjustment to the adjusted tax basis of any Company asset pursuant to Code
Section 734(b) is required, pursuant to Regulations Section 1.704
(b)(2)(iv)(m)(4), to be taken into account in determining Capital Accounts as a
result of a distribution other than in liquidation of a Unit Holder's interest
in the Company, the amount of such adjustment shall be treated as an item of
gain (if the adjustment increases the basis of the asset) or loss (if the
adjustment decreases such basis) from the disposition of such asset and shall be
taken into account for purposes of computing Profits or Losses; and (vii)
Notwithstanding any other provision of this definition, any items which are
specially allocated pursuant to Section 3.3 and Section 3.4 hereof shall not be
taken into account in computing Profits or Losses. The amounts of the items of
Company income, gain, loss or deduction available to be specially allocated
pursuant to Sections 3.3 and Section 3.4 hereof shall be determined by applying
rules analogous to those set forth in subparagraphs (i) through (vi) above.
(pp) "Property" means all real and personal property acquired by the
Company, including cash, and any improvements thereto, and shall include both
tangible and intangible property.
(qq) "Regulations" means the Income Tax Regulations, including Temporary
Regulations, promulgated under the Code, as such regulations are amended from
time to time.
(rr) "Regulatory Allocations" has the meaning set forth in Section 3.4
hereof.
(ss) "Related Party" means the adopted or birth relatives of any Person
and such Person's spouse (whether by marriage or common law), if any, including
without limitation great grandparents, grandparents, children (including
stepchildren and adopted children), grandchildren, and great grandchildren
thereof, and such Person's (and such Person's spouse's) brothers, sisters, and
cousins and their respective lineal ancestors and descendants, and any other
ancestors and/or descendants, and any spouse of any of the foregoing, each trust
created for the exclusive benefit of one or more of the foregoing, and the
successors, assigns, heirs, executors, personal representatives and estates of
any of the foregoing.
12
(tt) "Securities Act" means the Securities Act of 1933, as amended.
(uu) "Subsidiary" means any corporation, partnership, joint venture,
limited liability company, association or other entity in which such Person
owns, directly or indirectly, fifty percent (50%) or more of the outstanding
equity securities or interests, the holders of which are generally entitled to
vote for the election of the board of Directors or other governing body of such
entity.
(vv) "Tax Matters Member" has the meaning set forth in Section 7.3
hereof.
(ww) "Transfer" means, as a noun, any voluntary or involuntary transfer,
sale, pledge or hypothecation or other disposition and, as a verb, voluntarily
or involuntarily to transfer, give, sell, exchange, assign, pledge, bequest or
hypothecate or otherwise dispose of.
(xx) "Units or Unit" means an ownership interest in the Company
representing a Capital Contribution made as provided in Section 2 in
consideration of the Units, including any and all benefits to which the holder
of such Units may be entitled as provided in this Agreement, together with all
obligations of such Person to comply with the terms and provisions of this
Agreement.
(yy) "Unit Holders" means all Unit Holders.
(zz) "Unit Holder" means the owner of one or more Units.
(aaa) "Unit Holder Nonrecourse Debt" has the same meaning as the term
"partner nonrecourse debt" in Section 1.704 2(b)(4) of the Regulations.
(bbb) "Unit Holder Nonrecourse Debt Minimum Gain" means an amount, with
respect to each Unit Holder Nonrecourse Debt, equal to the Company Minimum Gain
that would result if such Unit Holder Nonrecourse Debt were treated as a
Nonrecourse Liability, determined in accordance with Section 1.704 2(i)(3) of
the Regulations.
(ccc) "Unit Holder Nonrecourse Deductions " has the same meaning as the
term "partner nonrecourse deductions" in Sections 1.704 2(i)(1) and 1.704
2(i)(2) of the Regulations.
SECTION 2. CAPITAL CONTRIBUTIONS; CAPITAL ACCOUNTS
2.1 ORIGINAL CAPITAL CONTRIBUTIONS. The name, address, original Capital
Contribution, and initial Units quantifying the Membership Interest of each
Member are set out in Exhibit A attached hereto, and shall also be set out in
the Membership Register.
2.2 ADDITIONAL CAPITAL CONTRIBUTIONS; ADDITIONAL UNITS. No Unit Holder shall
be obligated to make any additional Capital Contributions to the Company or to
pay any assessment to the Company, other than any unpaid amounts on such Unit
Holder's original Capital Contributions, and no Units shall be subject to any
calls, requests or demands for capital. Subject to Section 5.6, additional
Membership Economic Interests quantified by additional Units may be issued in
13
consideration of Capital Contributions as agreed to between the Class A
Directors and the Person acquiring the Membership Economic Interest quantified
by the additional Units. Each Person to whom additional Units are issued shall
be admitted as a Member in accordance with this Agreement. Upon such Capital
Contributions, the Class A Directors shall cause Exhibit A and the Membership
Register to be appropriately amended.
2.3 CAPITAL ACCOUNTS. A Capital Account shall be maintained for each Unit
Holder in accordance with the following provisions:
(a) To each Unit Holder's Capital Account there shall be credited (i)
such Unit Holder's Capital Contributions, (ii) such Unit Holder's
distributive share of Profits and any items in the nature of income
or gain which are specially allocated pursuant to Section 3.3 and
Section 3.4, and (iii) the amount of any Company liabilities assumed
by such Unit Holder or which are secured by any Property distributed
to such Unit Holder;
(b) To each Unit Holder's Capital Account there shall be debited (i)
the amount of money and the Gross Asset Value of any Property
distributed to such Unit Holder pursuant to any provision of this
Agreement, (ii) such Unit Holder's distributive share of Losses and
any items in the nature of expenses or losses which are specially
allocated pursuant to Section 3.3 and 3.4 hereof, and (iii) the
amount of any liabilities of such Unit Holder assumed by the Company
or which are secured by any Property contributed by such Unit Holder
to the Company;
(c) In the event Units are 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 Units;
and
(d) In determining the amount of any liability for purposes of
subparagraphs (a) and (b) above there shall be taken into account
Code Section 752(c) and any other applicable provisions of the Code
and Regulations.
The foregoing provisions and the other provisions of this Agreement relating to
the maintenance of Capital Accounts are intended to comply with Regulations
Section 1.704 1(b), and shall be interpreted and applied in a manner consistent
with such Regulations. In the event the Class A Directors shall determine that
it is prudent to modify the manner in which the Capital Accounts, or any debits
or credits thereto (including, without limitation, debits or credits relating to
liabilities which are secured by contributed or distributed property or which
are assumed by the Company or any Unit Holders), are computed in order to comply
with such Regulations, the Class A Directors may make such modification,
provided that it is not likely to have a material effect on the amounts
distributed to any Person pursuant to Section 10 hereof upon the dissolution of
the Company. The Class A Directors also shall (i) make any adjustments that are
necessary or appropriate to maintain equality between the Capital Accounts of
the Unit Holders and the amount of capital reflected on the Company's balance
sheet, as computed for book purposes, in accordance with Regulations Section
1.704 1(b)(2)(iv)(q), and (ii) make any
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appropriate modifications in the event unanticipated events might otherwise
cause this Agreement not to comply with Regulations Section 1.704 1(b).
SECTION 3. ALLOCATIONS
3.1 PROFITS. After giving effect to the special allocations in Section 3.3 and
Section 3.4 hereof, Profits for any Fiscal Year shall be allocated among the
Unit Holders in proportion to Units held.
3.2 LOSSES. After giving effect to the special allocations in Section 3.3 and
3.4 hereof, Losses for any Fiscal Year shall be allocated among the Unit Holders
in proportion to Units held.
3.3 SPECIAL ALLOCATIONS. The following special allocations shall be made in
the following order:
(a) Minimum Gain Chargeback. Except as otherwise provided in Section
1.704 2(f) of the Regulations, notwithstanding any other provision of this
Section 3, if there is a net decrease in Company Minimum Gain during any Fiscal
Year, each Unit Holder shall be specially allocated items of Company income and
gain for such Fiscal Year (and, if necessary, subsequent Fiscal Years) in an
amount equal to such Unit Holder's share of the net decrease in Company Minimum
Gain, determined in accordance with Regulations Section 1.704 2(g). Allocations
pursuant to the previous sentence shall be made in proportion to the respective
amounts required to be allocated to each Unit Holder pursuant thereto. The items
to be so allocated shall be determined in accordance with sections 1.704 2(f)(6)
and 1.704 2(j)(2) of the Regulations. This Section 3.3(a) is intended to comply
with the minimum gain chargeback requirement in Section 1.704 2(f) of the
Regulations and shall be interpreted consistently therewith.
(b) Unit Holder Minimum Gain Chargeback. Except as otherwise provided
in Section 1.704 2(i)(4) of the Regulations, notwithstanding any other provision
of this Section 3, if there is a net decrease in Unit Holder Nonrecourse Debt
Minimum Gain attributable to a Unit Holder Nonrecourse Debt during any Fiscal
Year, each Unit Holder who has a share of the Unit Holder Nonrecourse Debt
Minimum Gain attributable to such Unit Holder Nonrecourse Debt, determined in
accordance with Section 1.704 2(i)(5) of the Regulations, shall be specially
allocated items of Company income and gain for such Fiscal Year (and, if
necessary, subsequent Fiscal Years) in an amount equal to such Unit Holder's
share of the net decrease in Unit Holder Nonrecourse Debt Minimum Gain,
determined in accordance with Regulations Section 1.704 2(i)(4). Allocations
pursuant to the previous sentence shall be made in proportion to the respective
amounts required to be allocated to each Unit Holder pursuant thereto. The items
to be so allocated shall be determined in accordance with Sections 1.704 2(i)(4)
and 1.704 2(j)(2) of the Regulations. This Section 3.3(b) is intended to comply
with the minimum gain chargeback requirement in Section 1.704 2(i)(4) of the
Regulations and shall be interpreted consistently therewith.
(c) Qualified Income Offset. In the event any Member unexpectedly
receives any adjustments, allocations, or distributions described in Sections
1.704 1(b)(2)(ii)(d)(4), 1.704 1(b)(2)(ii)(d)(5), or 1.704 1(b)(2)(ii)(d)(6) of
the Regulations, items of Company income and
15
gain shall be specially allocated to such Member in an amount and manner
sufficient to eliminate, to the extent required by the Regulations, the Adjusted
Capital Account Deficit as soon as practicable, provided that an allocation
pursuant to this Section 3.3(c) shall be made only if and to the extent that the
Member would have an Adjusted Capital Account Deficit after all other
allocations provided for in this Section 3 have been tentatively made as if this
Section 3.3(c) were not in the Agreement.
(d) Gross Income Allocation. In the event any Member has a deficit
Capital Account at the end of any Fiscal Year which is in excess of the sum of
(i) the amount such Member is obligated to restore pursuant to any provision of
this Agreement, and (ii) the amount such Member is deemed to be obligated to
restore pursuant to the penultimate sentences of Sections 1.704 2(g)(1) and
1.704 2(i)(5) of the Regulations, each such Member shall be specially allocated
items of Company income and gain in the amount of such excess as quickly as
possible, provided that an allocation pursuant to this Section 3.3(d) shall be
made only if and to the extent that such Member would have a deficit Capital
Account in excess of such sum after all other allocations provided for in this
Section 3 have been made as if Section 3.3(c) and this Section 3.3(d) were not
in this Agreement. (e) Nonrecourse Deductions. Nonrecourse Deductions for any
Fiscal Year or other period shall be specially allocated among the Members in
proportion to Units held
(f) Unit Holder Nonrecourse Deductions. Any Unit Holder Nonrecourse
Deductions for any Fiscal Year shall be specially allocated to the Unit Holder
who bears the economic risk of loss with respect to the Unit Holder Nonrecourse
Debt to which such Unit Holder Nonrecourse Deductions are attributable in
accordance with Regulations Section 1.704 2(i)(1).
(g) Section 754 Adjustments. To the extent an adjustment to the
adjusted tax basis of any Company asset, pursuant to Code Section 734(b) or Code
Section 743(b) is required, pursuant to Regulations Section 1.704
1(b)(2)(iv)(m)(2) or 1.704 1(b)(2)(iv)(m)(4), to be taken into account in
determining Capital Accounts as the result of a distribution to a Unit Holder in
complete liquidation of such Unit Holder's interest in the Company, the amount
of such adjustment to Capital Accounts shall be treated as an item of gain (if
the adjustment increases the basis of the asset) or loss (if the adjustment
decreases such basis) and such gain or loss shall be specially allocated to the
Unit Holders in accordance with their interests in the Company in the event
Regulations Section 1.704 1(b)(2)(iv)(m)(2) applies, or to the Unit Holder to
whom such distribution was made in the event Regulations Section 1.704
1(b)(2)(iv)(m)(4) applies.
(h) Allocations Relating to Taxable Issuance of Company Units. Any
income, gain, loss or deduction realized as a direct or indirect result of the
issuance of Units by the Company to a Unit Holder (the "Issuance Items") shall
be allocated among the Unit Holders so that, to the extent possible, the net
amount of such Issuance Items, together with all other allocations under this
Agreement to each Unit Holder shall be equal to the net amount that would have
been allocated to each such Unit Holder if the Issuance Items had not been
realized.
3.4 CURATIVE ALLOCATIONS. The allocations set forth in Sections 3.3(a),
3.3(b), 3.3(c), 3.3(d), 3.3(e), 3.3(f), 3.3(g) and 3.5 (the "Regulatory
Allocations") are intended to comply with certain
16
requirements of the Regulations. It is the intent of the Members that, to the
extent possible, all Regulatory Allocations shall be offset either with other
Regulatory Allocations or with special allocations of other items of Company
income, gain, loss or deduction pursuant to this Section 3.4. Therefore,
notwithstanding any other provision of this Section 3 (other than the Regulatory
Allocations), the Class A Directors shall make such offsetting special
allocations of Company income, gain, loss or deduction in whatever manner it
determines appropriate so that, after such offsetting allocations are made, each
Member's Capital Account balance is, to the extent possible, equal to the
Capital Account balance such Member would have had if the Regulatory Allocations
were not part of the Agreement and all Company items were allocated pursuant to
Sections 3.1, 3.2, and 3.3(h). In exercising their discretion under this Section
3.4, the Class A Directors shall take into account future Regulatory Allocations
under Sections 3.3(a) and 3.3(b) that, although not yet made, are likely to
offset other Regulatory Allocations previously made under Section 3.3(e) and
3.3(f).
3.5 LOSS LIMITATION. Losses allocated pursuant to Section 3.2 hereof shall not
exceed the maximum amount of Losses that can be allocated without causing any
Unit Holder to have an Adjusted Capital Account Deficit at the end of any Fiscal
Year. In the event some but not all of the Unit Holders would have Adjusted
Capital Account Deficits as a consequence of an allocation of Losses pursuant to
Section 3.2 hereof, the limitation set forth in this Section 3.5 shall be
applied on a Unit Holder by Unit Holder basis and Losses not allocable to any
Unit Holder as a result of such limitation shall be allocated to the other Unit
Holders in accordance with the positive balances in such Unit Holder's Capital
Accounts so as to allocate the maximum permissible Losses to each Unit Holder
under Section 1.704 1(b)(2)(ii)(d) of the Regulations.
3.6 OTHER ALLOCATION RULES. (a) For purposes of determining the Profits,
Losses, or any other items allocable to any period, Profits, Losses, and any
such other items shall be determined on a daily, monthly, or other basis, as
determined by the Class A Directors using any permissible method under Code
Section 706 and the Regulations thereunder. (b) The Unit Holders are aware of
the income tax consequences of the allocations made by this Section 3 and hereby
agree to be bound by the provisions of this Section 3 in reporting their shares
of Company income and loss for income tax purposes. (c) Solely for purposes of
determining a Unit Holder's proportionate share of the "excess nonrecourse
liabilities" of the Company within the meaning of Regulations Section 1.752
3(a)(3), the Unit Holders' aggregate interests in Company profits shall be
deemed to be as provided in the capital accounts. To the extent permitted by
Section 1.704 2(h)(3) of the Regulations, the Class A Directors shall endeavor
to treat distributions of Net Cash Flow as having been made from the proceeds of
a Nonrecourse Liability or a Unit Holder Nonrecourse Debt only to the extent
that such distributions would cause or increase an Adjusted Capital Account
Deficit for any Unit Holder. (d) Allocations of Profits and Losses to the Unit
Holders shall be allocated among them in the ratio which each Unit Holder's
Units bears to the total number of Units issued and outstanding.
3.7 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 Unit Holders 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 (computed in
17
accordance with the definition of Gross Asset Value). In the event the Gross
Asset Value of any Company asset is adjusted pursuant to subparagraph (ii) of
the definition of Gross Asset Value, 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. Any elections or other decisions relating
to such allocations shall be made by the Class A Directors in any manner that
reasonably reflects the purpose and intention of this Agreement. Allocations
pursuant to this Section 3.7 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 Unit Holder's Capital Account or share of Profits, Losses, other
items, or distributions pursuant to any provision of this Agreement.
SECTION 4. DISTRIBUTIONS
4.1 NET CASH FLOW. Except as otherwise provided in Section 10 hereof, Net Cash
Flow, if any, shall be distributed to the Unit Holders in proportion to Units
held subject to, and to the extent permitted by, any loan covenants or
restrictions on such distributions agreed to by the Company in any loan
agreements with the Company's lenders from time to time in effect. In
determining Net Cash Flow, the Class A Directors shall endeavor to provide for
cash distributions at such times and in such amounts as will permit the Unit
Holders to make timely payment of income taxes.
4.2 AMOUNTS WITHHELD. All amounts withheld pursuant to the Code or any
provision of any state, local or foreign tax law with respect to any payment,
distribution or allocation to the Company or the Unit Holders shall be treated
as amounts paid or distributed, as the case may be, to the Unit Holders with
respect to which such amount was withheld pursuant to this Section 4.2 for all
purposes under this Agreement. The Company is authorized to withhold from
payments and distributions, or with respect to allocations to the Unit Holders,
and to pay over to any federal, state and local government or any foreign
government, any amounts required to be so withheld pursuant to the Code or any
provisions of any other federal, state or local law or any foreign law, and
shall allocate any such amounts to the Unit Holders with respect to which such
amount was withheld.
4.3 LIMITATIONS ON DISTRIBUTIONS. The Company shall make no distributions to
the Unit Holders except as provided in this Section 4 and Section 10 hereof.
Notwithstanding any other provision, no distribution shall be made if it is not
permitted to be made under the Act.
SECTION 5. MANAGEMENT
5.1 DIRECTORS. Except as otherwise provided in this Agreement, the Directors
shall direct the business and affairs of the Company, and shall exercise all of
the powers of the Company except such powers as are by this Agreement conferred
upon or reserved to the Members Notwithstanding the foregoing, however, wherever
this Agreement requires or permits action to be taken with the consent, approval
or affirmative vote of the Class A Directors, only Class A Directors shall be
required or permitted to consent, approve or vote with respect thereto, it being
18
expressly understood and agreed that the authority of Class B Directors shall be
limited as otherwise provided herein. It is further expressly understood and
agreed that Class B Directors shall have no power or authority other than the
power or authority of Directors as it directly relates to the Company's
activities as the general partner of LSCP, L.P. an Iowa limited partnership. In
the event the Class A Directors determine that it is necessary or appropriate
for the Company to undertake activities other than those directly related to the
Company's activities as the general partner of LSCP, L.P., the Class B Directors
shall have no power or authority with respect thereto. The Directors shall adopt
such policies, rules, regulations, and actions not inconsistent with law or this
Agreement as it may deem advisable. The management of the business and affairs
of the Company shall be directed by the Directors, as the authority of Class A
Directors and Class B Directors is limited herein, and not by its Members. The
number of Directors of the Company shall be a minimum of seven (7) and a maximum
of thirteen (13); and the number of Directors may be fixed or changed from time
to time, within that variable range, by the Directors, in accordance with the
provisions of this Section 5.1. The Members may increase or decrease the number
of Directors last approved and may change from a variable range to a fixed
number or visa versa by majority vote at any annual or special meeting. However,
the relative ratio of the number of Class A Directors to Class B Directors shall
always result in a majority of Class A Directors. Subject to Section 5.4 hereof
or any other express provisions hereof, the business and affairs of the Company
shall be managed by or under the direction of the Directors. The amendment or
repeal of this section or the adoption of any provision inconsistent therewith
shall require the approval of a majority of the Membership Voting Interests.
5.2 ELECTION AND APPOINTMENT OF DIRECTORS.
(a) Election of Class A Directors. The initial Class A Directors,
appointed by the initial Members, shall be the individuals set forth on Exhibit
"B" attached hereto. The initial Class A Directors shall serve for an initial
term ending one (1) year after substantial completion of the construction of the
Facilities, and in all cases until a successor is elected and qualified, or
until the earlier death, resignation, removal or disqualification of any such
Class A Director. After the expiration of the initial terms of the Class A
Directors, at each annual meeting of the Members, Class A Directors shall be
elected by the Members for staggered terms of three (3) years and until a
successor is elected and qualified. One or more nominees for Class A Director
positions up for election shall be named by the then current Class A Directors
or by a nominating committee established by the Class A Directors. Nominations
for the election of Class A Directors may also be made by any Unit Holder
entitled to vote generally in the election of Class A Directors. However, any
Unit Holder that intends to nominate one or more persons for election as Class A
Directors at a meeting may do so only if written notice of such Unit Holder's
intent to make such nomination or nominations has been given, either by personal
delivery or by United States mail, postage prepaid, to the Secretary of the
Company not less than thirty (30) days nor more than ninety (90) days prior to
the annual meeting of the Company. Each such notice to the Secretary shall set
forth: (i) the name and address of record of the Unit Holder who intends to make
the nomination; (ii) a representation that the Unit Holder is a holder of record
of Units of the Company entitled to vote at such meeting and intends to appear
in person or by proxy at the meeting to nominate the person or persons specified
in the notice; (iii) the name, age, business and residence addresses, and
principal occupation or employment of each nominee; (iv) a
19
description of all arrangements or understandings between the Unit Holder and
each nominee and any other person or persons (naming such person or persons)
pursuant to which the nomination or nominations are to be made by the Unit
Holder; (v) such other information regarding each nominee proposed by such Unit
Holder as would be required to be included in a proxy statement filed pursuant
to the proxy rules of the Securities and Exchange Commission; (vi) the consent
of each nominee to serve as a Class A Director of the Company if so elected, and
(vi) a nominating petition signed and dated by the holders of at least five
percent (5%) of the then outstanding Units and clearly setting forth the
proposed nominee as a candidate of the Class A Director's seat to be filled at
the next election of Class A Directors. The Company may require any proposed
nominee to furnish such other information as may reasonably be required by the
Company to determine the eligibility of such proposed nominee to serve as a
Class A Director of the Company. The presiding Officer of the meeting may, if
the facts warrant, determine that a nomination was not made in accordance with
the foregoing procedures, and if he should so determine, he shall so declare to
the meeting and the defective nomination shall be disregarded. The amendment or
repeal of this Section or the adoption of any provision inconsistent therewith
shall require the approval of a majority of the Membership Voting Interests.
Whenever a vacancy occurs other than from expiration of a term of office or
removal from office, a majority of the remaining Class A Directors shall appoint
a new Class A Director to fill the vacancy for the remainder of such term.
(b) Appointment of Class B Directors. So long as the Company remains
the general partner of LSCP, L.P., an Iowa limited partnership, each class of
limited partner of LSCP, L.P. may appoint one person as a Class B Director to
serve as such at the discretion of such class of limited partners until the next
annual meeting of the partners of LSCP, L.P. or until his or her successor is
appointed and qualified.
5.3 COMMITTEES. A resolution approved by the affirmative vote of a majority of
the Directors may establish committees having the authority of the Directors in
the management of the business of the Company to the extent consistent with this
Agreement and provided in the resolution. A committee shall consist of one or
more persons, who need not be Directors, appointed by affirmative vote of a
majority of the Directors present. Committees may include a compensation
committee and/or an audit committee, in each case consisting of one or more
independent Directors or other independent persons. Committees are subject to
the direction and control of, and vacancies in the membership thereof shall be
filled by, the Directors. A majority of the members of the committee present at
a meeting is a quorum for the transaction of business, unless a larger or
smaller proportion or number is provided in a resolution approved by the
affirmative vote of a majority of the Directors present.
5.4 AUTHORITY OF DIRECTORS. Subject to the limitations and restrictions set
forth in this Agreement, the Directors shall direct the management of the
business and affairs of the Company and shall have all of the rights and powers
which may be possessed by a "manager" under the Act including, without
limitation, the right and power to do or perform the following and, to the
extent permitted by the Act or this Agreement, the further right and power by
resolution of the Directors to delegate to the Officers or such other Person or
Persons to do or perform the following:
20
(a) Conduct its business, carry on its operations and have and exercise
the powers granted by the Act in any state, territory, district or
possession of the United States, or in any foreign country which may
be necessary or convenient to effect any or all of the purposes for
which it is organized;
(b) Acquire by purchase, lease, or otherwise any real or personal
property which may be necessary, convenient, or incidental to the
accomplishment of the purposes of the Company;
(c) Operate, maintain, finance, improve, construct, own, grant
operations with respect to, sell, convey, assign, mortgage, and
lease any real estate and any personal property necessary,
convenient, or incidental to the accomplishment of the purposes of
the Company;
(d) Execute any and all agreements, contracts, documents,
certifications, and instruments necessary or convenient in
connection with the management, maintenance, and operation of the
business, or in connection with managing the affairs of the Company,
including, executing amendments to this Agreement and the Articles
in accordance with the terms of this Agreement, both as Directors
and, if required, as attorney in fact for the Members pursuant to
any power of attorney granted by the Members to the Directors;
(e) Borrow money and issue evidences of indebtedness necessary,
convenient, or incidental to the accomplishment of the purposes of
the Company, and secure the same by mortgage, pledge, or other lien
on any Company assets;
(f) Execute, in furtherance of any or all of the purposes of the
Company, any deed, lease, mortgage, deed of trust, mortgage note,
promissory note, xxxx of sale, contract, or other instrument
purporting to convey or encumber any or all of the Company assets;
(g) Prepay in whole or in part, refinance, recast, increase, modify, or
extend any liabilities affecting the assets of the Company and in
connection therewith execute any extensions or renewals of
encumbrances on any or all of such assets;
(h) Care for and distribute funds to the Members by way of cash income,
return of capital, or otherwise, all in accordance with the
provisions of this Agreement, and perform all matters in furtherance
of the objectives of the Company or this Agreement;
(i) Contract on behalf of the Company for the employment and services or
employees and/or independent contractors, such as lawyers and
accountants, and delegate to such Persons the duty to manage or
supervise any of the assets or operations of the Company;
(j) Engage in any kind of activity and perform and carry out contracts
of any kind (including contracts of insurance covering risks to
Company assets and Directors' and
21
Officers' liability) necessary or incidental to, or in connection
with, the accomplishment of the purposes of the Company, as may be
lawfully carried on or performed by a limited liability company
under the laws of each state in which the Company is then formed or
qualified;
(k) Take, or refrain from taking, all actions, not expressly proscribed
or limited by this Agreement, as may be necessary or appropriate to
accomplish the purposes of the Company;
(l) Institute, prosecute, defend, settle, compromise, and dismiss
lawsuits or other judicial or administrative proceedings brought on
or in behalf of, or against, the Company, the Members or the
Directors or Officers in connection with activities arising out of,
connected with, or incidental to this Agreement, and to engage
counsel or others in connection therewith;
(m) Purchase, take, receive, subscribe for or otherwise acquire, own,
hold, vote, use, employ, sell, mortgage, lend, pledge, or otherwise
dispose of, and otherwise use and deal in and with, shares or other
interests in or obligations of domestic or foreign corporations,
associations, general or limited partnerships, other limited
liability companies, or individuals or direct or indirect
obligations of the United States or of any government, state,
territory, government district or municipality or of any
instrumentality of any of them;
(n) Agree with any Person as to the form and other terms and conditions
of such Person's Capital Contribution to the Company and cause the
Company to issue Membership Economic Interests and Units in
consideration of such Capital Contribution; and
(o) Indemnify a Member, Director or Officer, or former Members,
Directors or Officers, and to make any other indemnification that is
authorized by this Agreement in accordance with, and to the fullest
extent permitted by, the Act.
5.5 DIRECTOR AS AGENT. Notwithstanding the power and authority of the
Directors to manage the business and affairs of the Company, no Director shall
have authority to act as agent for the Company for the purposes of its business
(including the execution of any instrument on behalf of the Company) unless the
Directors have authorized the Director to take such action. The Directors may
also delegate authority to manage the business and affairs of the Company
(including the execution of instruments on behalf of the Company) to such Person
or Persons (including to any Officers) designated by the Directors, and such
Person or Persons (or Officers) shall have such titles and authority as
determined by the Directors.
5.6 RESTRICTIONS ON AUTHORITY OF DIRECTORS. (a) The Directors shall not have
authority to, and they covenant and agree that they shall not, do any of the
following acts without the unanimous consent of the Members:
(i) Cause or permit the Company to engage in any activity that is not
consistent with the purposes of the Company as set forth in Section
1.3 hereof;
22
(ii) Knowingly do any act in contravention of this Agreement or which
would make it impossible to carry on the ordinary business of the
Company, except as otherwise provided in this Agreement;
(iii) Possess Company Property, or assign rights in specific Company
Property, for other than a Company purpose; or
(iv) Cause the Company to voluntarily take any action that would cause a
bankruptcy of the Company.
(b) The Directors shall not have authority to, and they covenant and agree that
they shall not cause the Company to, without the consent of a majority of the
Membership Voting Interests:
(i) Merge, consolidate, exchange or otherwise dispose of at one time all
or substantially all of the Property, except for a liquidating sale
of the Property in connection with the dissolution of the Company;
(ii) Confess a judgment against the Company in an amount in excess of
$500,000;
(iii) Issue Units at a purchase price of less than $500.00 per Unit;
(iv) Issue more than an aggregate of 15,000 Units;
(v) Elect to dissolve the Company;
(vi) Cause the Company to acquire any equity or debt securities of any
Director or any of its Affiliates, or otherwise make loans to any
Director or any of its Affiliates.
The actions specified herein as requiring the consent of the Members shall be in
addition to any actions by the Directors which are specified in the Act as
requiring the consent or approval of the Members. Any such required consent or
approval may be given by a vote of a majority of the Membership Voting
Interests.
5.7 DIRECTOR ACTIONS. Meetings of the Directors shall be held at such times
and places as shall from time to time be determined by the Directors. Meetings
of the Directors may also be called by the Chairman of the Company or by any
three or more Class A Directors or by any two or more Class B Directors. If the
date, time, and place of a meeting of the Directors has been announced at a
previous meeting, no notice shall be required. In all other cases, five (5)
days' written notice of meetings, stating the date, time, and place thereof and
any other information required by law or desired by the Person(s) calling such
meeting, shall be given to each Director. Any Director may waive notice of any
meeting. A waiver of notice by a Director is effective whether given before, at,
or after the meeting, and whether given orally, in writing, or by attendance.
The attendance of a Director at any meeting shall constitute a waiver of notice
of such meeting, unless such Director objects at the beginning of the meeting to
the transaction of business on the grounds that the meeting is now lawfully
called or convened and does not
23
participate thereafter in the meeting. Any action required or permitted to be
taken by the Directors may also be taken by a written action signed by all of
the Directors authorized to vote on the specific matters being considered. The
Directors may participate in any meeting of the Directors by means of telephone
conference or similar means of communication by which all persons participating
in the meeting can simultaneously hear each other. Not less than fifty percent
(50%) of the Directors of each class of Directors authorized to vote on the
specific matters being considered at such meeting shall constitute a quorum for
the transaction of the related business at any Director's meeting. Subject to
the voting restrictions applicable to Class B Directors as set forth elsewhere
in this Agreement, each Director shall have one (1) vote at meetings of the
Directors. The affirmative vote of a majority of the Directors authorized to
vote on the specific matters being considered at a meeting at which a quorum is
present shall be the act of the Directors. No Director shall be disqualified
from voting on any matter to be determined or decided by the Directors solely by
reason of such Director's (or his/her Affiliate's) potential financial interest
in the outcome of such vote, provided that the nature of such Director's (or
his/her Affiliate's) potential financial interest was reasonably disclosed at
the time of such vote.
5.8 DUTIES AND OBLIGATIONS OF DIRECTORS. The Directors shall cause the Company
to conduct its business and operations separate and apart from that of any
Director or any of its Affiliates. The Directors shall take all actions which
may be necessary or appropriate (i) for the continuation of the Company's valid
existence as a limited liability company under the laws of the State of Iowa and
each other jurisdiction in which such existence is necessary to protect the
limited liability of Members or to enable the Company to conduct the business in
which it is engaged, and (ii) for the accomplishment of the Company's purposes,
including the acquisition, development, maintenance, preservation, and operation
of Company Property in accordance with the provisions of this Agreement and
applicable laws and regulations. Each Director shall have the duty to discharge
the foregoing duties in good faith, in a manner the Director believes to be in
the best interests of the Company, and with the care an ordinarily prudent
person in a like position would exercise under similar circumstances. The
Directors shall be under no other fiduciary duty to the Company or the Members
to conduct the affairs of the Company in a particular manner.
5.9 CHAIRMAN AND VICE CHAIRMAN. The Class A Directors shall appoint a Chairman
and may appoint one or more Vice Chairmen for the Company. Unless provided
otherwise by a resolution adopted by the Class A Directors, the Chairman shall
preside at meetings of the Members and the Directors; shall see that all orders
and resolutions of the Directors are carried into effect; may maintain records
of and certify proceedings of the Directors and Members; and shall perform such
other duties as may from time to time be prescribed by the Directors. The Vice
Chairman shall, in the absence or disability of the Chairman, perform the duties
and exercise the powers of the Chairman and shall perform such other duties as
the Directors or the Chairman may from time to time prescribe. The Class A
Directors may designate more than one Vice Chairmen, in which case the Vice
Chairmen shall be designated by the Class A Directors so as to denote which is
most senior in office.
5.10 PRESIDENT AND CHIEF EXECUTIVE OFFICER. The Class A Directors shall appoint
a President and Chief Executive Officer for the Company. Until provided
otherwise by a resolution of the
24
Class A Directors, the Chairman shall also act as the interim President and CEO
of the Company (herein referred to as the "President"; the titles of President
and CEO shall constitute a reference to one and the same office and Officer of
the Company), and the Chairman may exercise the duties of the office of Chairman
using any such designations. The Class A Directors shall appoint someone other
than the Chairman as the President of the Company not later than the
commencement of operations of the Facilities, and such President shall perform
such duties as the Directors may from time to time prescribe, including without
limitation, the management of the day to day operations of the Facilities.
5.11 CHIEF FINANCIAL OFFICER. The Class A Directors shall appoint a Chief
Financial Officer for the Company. Unless provided otherwise by a resolution
adopted by the Class A Directors, the Chief Financial Officer of the Company
shall be the Treasurer of the Company and shall keep accurate financial records
for the Company; shall deposit all monies, drafts, and checks in the name of and
to the credit of the Company in such banks and depositories as the Directors
shall designate from time to time; shall endorse for deposit all notes, checks,
and drafts received by the Company as ordered by the Directors, making proper
vouchers therefor; shall disburse Company funds and issue checks and drafts in
the name of the Company as ordered by the Directors, shall render to the
President and the Directors, whenever requested, an account of all such
transactions as Chief Financial Officer and of the financial condition of the
Company, and shall perform such other duties as may be prescribed by the
Directors or the President from time to time.
5.12 SECRETARY; ASSISTANT SECRETARY. The Class A Directors shall appoint a
Secretary and may appoint one or more Assistant Secretaries for the Company. The
Secretary shall attend all meetings of the Directors and of the Members and
shall maintain records of, and whenever necessary, certify all proceedings of
the Directors and of the Members. The Secretary shall keep the required records
of the Company, when so directed by the Directors or other person or persons
authorized to call such meetings, shall give or cause to be given notice of
meetings of the Members and of meetings of the Directors, and shall also perform
such other duties and have such other powers as the Chairman or the Directors
may prescribe from time to time. An Assistant Secretary, if any, shall perform
the duties of the Secretary during the absence or disability of the Secretary.
5.13 VICE PRESIDENT. The Class A Directors may appoint one or more Vice
Presidents for the Company. The Company may have one or more Vice Presidents. If
more than one, the Class A Directors shall designate which is most senior. The
most senior Vice President shall perform the duties of the President in the
absence of the President.
5.14 DELEGATION. Unless prohibited by a resolution of the Directors, the
President, Chief Financial Officer, Vice President and Secretary (individually,
an "Officer" and collectively, "Officers") may delegate in writing some or all
of the duties and powers of such Officer's management position to other Persons.
An Officer who delegates the duties or powers of an office remains subject to
the standard of conduct for such Officer with respect to the discharge of all
duties and powers so delegated.
25
5.15 EXECUTION OF INSTRUMENTS. All deeds, mortgages, bonds, checks, contracts
and other instruments pertaining to the business and affairs of the Company
shall be signed on behalf of the Company by (i) the Chairman; or (ii) when
authorized by resolution(s) of the Directors, the President; or (iii) by such
other person or persons as may be designated from time to time by the Directors.
5.16 LIMITATION OF LIABILITY; INDEMNIFICATION OF DIRECTORS. To the maximum
extent permitted under the Act and other applicable law, no Member or Director
of this Company shall be personally liable for any debt, obligation or liability
of this Company merely by reason of being a Member or Director or both. No
Director of this Company shall be personally liable to this Company or its
Members for monetary damages for a breach of fiduciary duty by such Director;
provided that this provision shall not eliminate or limit the liability of a
Director for any of the following: (i) receipt of an improper financial benefit
to which the Director is not entitled; (ii) liability under Section 808 of the
Act; (iii) a knowing violation of law; or (iv) acts or omissions involving
fraud, bad faith or willful misconduct. To the maximum extent permitted under
the Act and other applicable law, the Company, its receiver, or its trustee (in
the case of its receiver or trustee, to the extent of Company Property) shall
indemnify, save and hold harmless, and pay all judgments and claims against each
Director or officer or Director of such Director relating to any liability or
damage incurred by reason of any act performed or omitted to be performed by
such Director, officer, or Director in connection with the business of the
Company, including reasonable attorneys' fees incurred by such Director,
officer, or Director in connection with the defense of any action based on any
such act or omission, which attorneys' fees may be paid as incurred, including
all such liabilities under federal and state securities laws as permitted by
law. To the maximum extent permitted under the Act and other applicable law, in
the event of any action by a Unit Holder against any Director, including a
derivative suit, the Company shall indemnify, save harmless, and pay all costs,
liabilities, damages and expenses of such Director, including reasonable
attorneys' fees incurred in the defense of such action. Notwithstanding the
foregoing provisions, no Director shall be indemnified by the Company to the
extent prohibited or limited (but only to the extent limited) by the Act. The
Company may purchase and maintain insurance on behalf of any Person in such
Person's official capacity against any liability asserted against and incurred
by such Person in or arising from that capacity, whether or not the Company
would otherwise be required to indemnify the Person against the liability.
5.17 COMPENSATION; EXPENSES OF DIRECTORS. No Member or Director shall receive
any salary, fee, or draw for services rendered to or on behalf of the Company
merely by virtue of their status as a Member or Director, it being the intention
that, irrespective of any personal interest of any of the Directors, the
Directors shall have authority to establish reasonable compensation of all
Directors for services to the Company as Directors, Officers, or otherwise.
Except as otherwise approved by or pursuant to a policy approved by the
Directors, no Member or Director shall be reimbursed for any expenses incurred
by such Member or Director on behalf of the Company. Notwithstanding the
foregoing, by resolution by the Directors, the Directors may be paid as
reimbursement therefor, their expenses, if any, of attendance at each meeting of
the Directors. In addition, the Directors, by resolution, may approve from time
to time, the salaries and other compensation packages of the Officers of the
Company.
26
5.18 LOANS. Any Member or Affiliate may, with the consent of the Directors,
lend or advance money to the Company. If any Member or Affiliate shall make any
loan or loans to the Company or advance money on its behalf, the amount of any
such loan or advance shall not be treated as a contribution to the capital of
the Company but shall be a debt due from the Company. The amount of any such
loan or advance by a lending Member or Affiliate shall be repayable out of the
Company's cash and shall bear interest at a rate not in excess of the prime rate
established, from time to time, by any major bank selected by the Directors for
loans to its most creditworthy commercial borrowers, plus four percent (4%) per
annum. If the Directors, or any Affiliate of the Directors, is the lending
Member, the rate of interest and the terms and conditions of such loan shall be
no less favorable to the Company than if the lender had been an independent
third party. None of the Members or their Affiliates shall be obligated to make
any loan or advance to the Company.
SECTION 6. ROLE OF MEMBERS
6.1 RIGHTS OF POWERS. Except as otherwise expressly provided for in this
Agreement, the Members shall not have any right or power to take part in the
management or control of the Company or its business and affairs or to act for
or bind the Company in any way.
6.2 VOTING RIGHTS. The Members shall have voting rights as defined by the
Membership Voting Interest of
such Member and in accordance with the provisions of this Agreement.
6.3 MEMBER MEETINGS; QUORUM AND PROXIES. Meetings of the Members shall be
called by the Class A Directors, and shall be held at the principal office of
the Company or at such other place as shall be designated by the person calling
the meeting. Notice of the meeting, stating the place, day and hour of the
meeting, shall be given to each Member in accordance with Section 14.1 hereof at
least 10 days and no more than 60 days before the day on which the meeting is to
be held. Unit Holders representing an aggregate of not less than twenty five
percent (25%) of the Units may also in writing demand that a meeting of the
Members be called by the Class A Directors. Regular meetings of the Members
shall be held not less than once per Fiscal Year, at such time and place as
determined by the Class A Directors upon written notice thereof stating the
date, time and place, given not less than ten (10) days nor more than sixty (60)
days prior to the meeting to every Member entitled to vote at such meeting. A
Member may waive the notice of meeting required hereunder by written notice of
waiver signed by the Member whether given before, during or after the meeting.
Attendance by a Member at a meeting is waiver of notice of that meeting, unless
the Member objects at the beginning of the meeting to the transaction of
business because the meeting is not lawfully called or convened and thereafter
does not participate in the meeting. The presence (in person or by proxy or mail
ballot) of at least twenty five percent (25%) of the Membership Voting Interests
is required for the transaction of business at a meeting of the Members. Voting
by proxy or by mail ballot shall be permitted on any matter if authorized by the
Class A Directors.
6.4 TERMINATION OF MEMBERSHIP. The membership of a Member in the Company shall
terminate upon the occurrence of events described in the Act, including
registration and withdrawal. If for any reason the membership of a Member is
terminated, the Member whose membership has terminated loses all Membership
Voting Interests and shall be considered
27
merely as assignee of the Membership Economic Interest owned before the
termination of membership, having only the rights of an unadmitted Assignee
provided for in Section 10.6 hereof.
6.5 CONTINUATION OF THE COMPANY. The Company shall not be dissolved upon the
occurrence of any event which is deemed to terminate the continued membership of
a Member. The Company's affairs shall not be required to be wound up. The
Company shall continue without dissolution.
6.6 NO OBLIGATION TO PURCHASE MEMBERSHIP INTEREST. No Member whose membership
in the Company terminates, nor any transferee of such Member, shall have any
right to demand or receive a return of such terminated Member's Capital
Contributions or to require the purchase or redemption of the Member's
Membership Interest. The other Members and the Company shall not have any
obligation to purchase or redeem the Membership Interest of any such terminated
Member or transferee of any such terminated Member.
6.7 WAIVER OF DISSENTERS RIGHTS. Each Member hereby disclaims, waives and
agrees, to the fullest extent permitted by law or the Act, not to assert
dissenters' or similar rights under the Act.
SECTION 7. ACCOUNTING, BOOKS AND RECORDS
7.1 ACCOUNTING, BOOKS AND RECORDS. The books and records of the Company shall
be kept, and the financial position and the results of its operations recorded,
in accordance with GAAP. The books and records shall reflect all the Company
transactions and shall be appropriate and adequate for the Company's business.
The Company shall maintain at its principal office all of the following: (i) A
current list of the full name and last known business or residence address of
each Member and Assignee set forth in alphabetical order, together with the
Capital Contributions, Capital Account and Units of each Member and Assignee;
(ii) The full name and business address of each Director; (iii) A copy of the
Articles and any and all amendments thereto together with executed copies of any
powers of attorney pursuant to which the Articles or any amendments thereto have
been executed; (iv) Copies of the Company's federal, state, and local income tax
or information returns and reports, if any, for the six most recent taxable
years; (v) A copy of this Agreement and any an all amendments thereto together
with executed copies of any powers of attorney pursuant to which this Agreement
or any amendments thereto have been executed; and (vi) Copies of the financial
statements of the Company, if any, for the six most recent Fiscal Years. The
Company shall use the accrual method of accounting in preparation of its
financial reports and for tax purposes and shall keep its books and records
accordingly. Any Member or its designated representative shall have reasonable
access during normal business hours to such information and documents. The
rights granted to a Member pursuant to this Section 8.1 are expressly subject to
compliance by such Member with the safety, security and confidentiality
procedures and guidelines of the Company, as such procedures and guidelines may
be established from time to time.
7.2 REPORTS. The chief financial officer of the Company shall be responsible
for causing the preparation of financial reports of the Company and the
coordination of financial matters of the
28
Company with the Company's accountants. The Company shall cause to be delivered
to each Member the financial statements listed below, prepared, in each case
(other than with respect to Member's Capital Accounts, which shall be prepared
in accordance with this Agreement) in accordance with GAAP consistently applied.
As soon as practicable following the end of each Fiscal Year (and in any event
not later than ninety (90) days after the end of such Fiscal Year) and at such
time as distributions are made to the Unit Holders pursuant to Section 12 hereof
following the occurrence of a Dissolution Event, a balance sheet of the Company
as of the end of such Fiscal Year and the related statements of operations, Unit
Holders' Capital Accounts and changes therein, and cash flows for such Fiscal
Year, together with appropriate notes to such financial statements and
supporting schedules, all of which shall be audited and certified by the
Company's accountants, and in each case, to the extent the Company was in
existence, setting forth in comparative form the corresponding figures for the
immediately preceding Fiscal Year end (in the case of the balance sheet) and the
two (2) immediately preceding Fiscal Years (in the case of the statements).
7.3 TAX MATTERS. The Class A Directors shall, without any further consent of
the Unit Holders being required (except as specifically required herein), make
any and all elections for federal, state, local, and foreign tax purposes as the
Class A Directors shall determine appropriate and represent the Company and the
Unit Holders before taxing authorities or courts of competent jurisdiction in
tax matters affecting the Company or the Unit Holders in their capacities as
Unit Holders, and to file any tax returns and execute any agreements or other
documents relating to or affecting such tax matters, including agreements or
other documents that bind the Unit Holders with respect to such tax matters or
otherwise affect the rights of the Company and the Unit Holders. The Class A
Directors shall designate a Person to be specifically authorized to act as the
"Tax Matters Member" under the Code and in any similar capacity under state or
local law; provided, however, that the Class A Directors shall have the
authority to designate, remove and replace the Tax Matters Member who shall act
as the tax matters partner within the meaning of and pursuant to Regulations
Sections 301.6231(a)(7) 1 and 2 or any similar provision under state or local
law. Necessary tax information shall be delivered to each Unit Holder as soon as
practicable after the end of each Fiscal Year of the Company but not later than
three (3) months after the end of each Fiscal Year.
7.4 DELIVERY TO MEMBERS AND INSPECTION. Upon the request of any Member for
purposes reasonably related to the interest of that Person as a Member, the
Class A Directors shall promptly deliver to the requesting Member, at the
expense of the requesting Member, a copy of the information required to be
maintained under Sections 7.1 and a copy of this Agreement and all amendments
hereto. Each Member has the right, upon reasonable request for purposes
reasonably related to the interest of the Person as a Member and for proper
purposes, to: (i) inspect and copy during normal business hours any of the
Company records described in Sections 7.1; and (ii) obtain from the Class A
Directors, promptly after their becoming available, a copy of the Company's
federal, state, and local income tax or information returns for each Fiscal
Year. Each Assignee shall have the right to information regarding the Company
only to the extent required by the Act.
SECTION 8. AMENDMENTS
29
8.1 AMENDMENTS. Amendments to this Agreement may be proposed by the Class A
Directors or any Member. Following any such proposal, the Class A Directors
shall submit to the Members a verbatim statement of any proposed amendment,
providing that counsel for the Company shall have approved of the same in
writing as to form, and the Class A Directors shall include in any such
submission a recommendation as to the proposed amendment. The Class A Directors
shall seek the written vote of the Members on the proposed amendment or shall
call a meeting to vote thereon and to transact any other business that it may
deem appropriate. A proposed amendment shall be adopted and be effective as an
amendment hereto only if approved by the affirmative vote of a majority of the
Membership Voting Interests of the Members. Notwithstanding any provision of
this Section 8.1 to the contrary, this Agreement shall not be amended without
the consent of each Member adversely affected if such amendment would modify the
limited liability of a Member, or alter the Membership Economic Interest of a
Member.
SECTION 9. TRANSFERS
9.1 RESTRICTIONS ON TRANSFERS. Except as otherwise permitted by this
Agreement, no Member shall Transfer all or any portion of its Units. In the
event that any Member pledges or otherwise encumbers all or any part of its
Units as security for the payment of a Debt, any such pledge or hypothecation
shall be made pursuant to a pledge or hypothecation agreement that requires the
pledgee or secured party to be bound by all of the terms and conditions of this
Section 9. In the event such pledgee or secured party becomes the Unit Holder
hereunder pursuant to the exercise of such party's rights under such pledge or
hypothecation agreement, such pledgee or secured party shall be bound by all
terms and conditions of this
Operating Agreement and all other agreements
governing the rights and obligations of Unit Holders. In such case, such pledgee
or secured party, and any transferee or purchaser of the Units held by such
pledgee or secured party, shall not have any Membership Voting Interest attached
to such Units unless and until the Class A Directors have approved in writing
and admitted as a Member hereunder, such pledgee, secured party, transferee or
purchaser of such Units.
9.2 PERMITTED TRANSFERS. Subject to the conditions and restrictions set forth
in this Section 9, a Member may (a) at any time Transfer all or any portion of
its Units (i) to the transferor's administrator or trustee to whom such Units
are transferred involuntarily by operation of law, or (ii) without consideration
to or in trust for descendants of a Member; and (b) at any time following the
date on which substantial operations of the Facilities commences, Transfer all
or any portion of its Units (i) to any Person approved by a majority of the
Class A Directors in writing, or (ii) to any other Member or to any Affiliate or
Related Party of another Member, or (iii) to any Affiliate or Related Party of
the transferor. Any such Transfer set forth in this Section 9.2 and meeting the
conditions set forth in Section 9.3 below is referred to in this Agreement as a
"Permitted Transfer".
9.3 CONDITIONS TO PERMITTED TRANSFERS. A Transfer shall not be treated as a
Permitted Transfer under Section 9.2 hereof unless and until the Class A
Directors have approved such Transfer as set forth in Section 9.2 and the
following conditions are satisfied:
30
(a) Except in the case of a Transfer involuntarily by operation of law,
the transferor and transferee shall execute and deliver to the Company
such documents and instruments of conveyance as may be necessary or
appropriate in the opinion of counsel to the Company to effect such
Transfer. In the case of a Transfer of Units involuntarily by operation of
law, the Transfer shall be confirmed by presentation to the Company of
legal evidence of such Transfer, in form and substance satisfactory to
counsel to the Company. In all cases, the Company shall be reimbursed by
the transferor and/or transferee for all costs and expenses that it
reasonably incurs in connection with such Transfer.
(b) The transferor and transferee shall furnish the Company with the
transferee's taxpayer identification number, sufficient information to
determine the transferee's initial tax basis in the Units transferred, and
any other information reasonably necessary to permit the Company to file
all required federal and state tax returns and other legally required
information statements or returns. Without limiting the generality of the
foregoing, the Company shall not be required to make any distribution
otherwise provided for in this Agreement with respect to any transferred
Units until it has received such information.
(c) Except in the case of a Transfer of any Units involuntarily by
operation of law, either (i) such Units shall be registered under the
Securities Act, and any applicable state securities laws, or (ii) the
transferor shall provide an opinion of counsel, which opinion and counsel
shall be reasonably satisfactory to the Class A Directors, to the effect
that such Transfer is exempt from all applicable registration requirements
and that such Transfer will not violate any applicable laws regulating the
Transfer of securities.
(d) Except in the case of a Transfer of Units involuntarily by
operation of law, the transferor shall provide an opinion of counsel,
which opinion and counsel shall be reasonably satisfactory to the Class A
Directors, to the effect that such Transfer will not cause the Company to
be deemed to be an "investment company" under the Investment Company Act
of 1940.
(e) Unless otherwise approved by the Class A Directors and a 75%
majority in interest of the Members, no Transfer of Units shall be made
except upon terms which would not, in the opinion of counsel chosen by and
mutually acceptable to the Class A Directors and the transferor Member,
result in the termination of the Company within the meaning of Section 708
of the Code or cause the application of the rules of Sections 168(g)(1)(B)
and 168(h) of the Code or similar rules to apply to the Company. If the
immediate Transfer of such Unit would, in the opinion of such counsel,
cause a termination within the meaning of Section 708 of the Code, then
if, in the opinion of such counsel, the following action would not
precipitate such termination, the transferor Member shall be entitled to
(or required, as the case may be) (i) immediately Transfer only that
portion of its Units as may, in the opinion of such counsel, be
transferred without causing such a termination and (ii) enter into an
agreement to Transfer the remainder of its Units, in one or more
Transfers, at the earliest date or dates on which such Transfer or
Transfers may be effected without causing such termination. The purchase
price for the Units shall be allocated between the immediate Transfer and
the deferred Transfer or Transfers pro rata
31
on the basis of the percentage of the aggregate Units being transferred,
each portion to be payable when the respective Transfer is consummated,
unless otherwise agreed by the parties to the Transfer. In the case of a
Transfer by one Member to another Member, the deferred purchase price
shall be deposited in an interest bearing escrow account unless another
method of securing the payment thereof is agreed upon by the transferor
Member and the transferee Member(s).
(f) No notice or request initiating the procedures contemplated by
Section 9.3 may be given by any Member after a Dissolution Event has
occurred. No Member may sell all or any portion of its Units after a
Dissolution Event has occurred.
(g) No Person shall Transfer any Unit if, in the determination of the
Class A Directors, such Transfer would cause the Company to be treated as
a "publicly traded partnership" within the meaning of Section 7704(b) of
the Code.
The Class A Directors shall have the authority to waive any legal opinion or
other condition required in this Section 9.3 other than the member approval
requirement set forth in Section 9.3(e).
9.4 PROHIBITED TRANSFERS. Any purported Transfer of Units that is not a
Permitted Transfer shall be null and void and of no force or effect whatsoever;
provided that, if the Company is required to recognize a Transfer that is not a
Permitted Transfer (or if the Class A Directors, in their sole discretion, elect
to recognize a Transfer that is not a Permitted Transfer), the Units Transferred
shall be strictly limited to the transferor's Membership Economic Interests as
provided by this Agreement with respect to the transferred Units, which
Membership Economic Interests may be applied (without limiting any other legal
or equitable rights of the Company) to satisfy any debts, obligations, or
liabilities for damages that the transferor or transferee of such Interest may
have to the Company. In the case of a Transfer or attempted Transfer of Units
that is not a Permitted Transfer, the parties engaging or attempting to engage
in such Transfer shall be liable to indemnify and hold harmless the Company and
the other Members from all cost, liability, and damage that any of such
indemnified Members may incur (including, without limitation, incremental tax
liabilities, lawyers' fees and expenses) as a result of such Transfer or
attempted Transfer and efforts to enforce the indemnity granted hereby.
9.5 RIGHTS OF UNADMITTED ASSIGNESS. A Person who acquires Units but who is not
admitted as a substituted Member pursuant to Section 9.6 hereof shall be
entitled only to the Membership Economic Interests with respect to such Units in
accordance with this Agreement, and shall not be entitled to the Membership
Voting Interest with respect to such Units. In addition, such Person shall have
no right to any information or accounting of the affairs of the Company, shall
not be entitled to inspect the books or records of the Company, and shall not
have any of the rights of a Member under the Act or this Agreement.
9.6 ADMISSION OF SUBSTITUTED MEMBERS. As to Permitted Transfers, a transferee
of Units shall be admitted as a substitute Member provided that such transferee
has complied with the following provisions: (a) The transferee of Units shall,
by written instrument in form and substance reasonably satisfactory to the Class
A Directors; (i) accept and adopt the terms and
32
provisions of this Agreement, including this Section 9, and (ii) assume the
obligations of the transferor Member under this Agreement with respect to the
transferred Units. The transferor Member shall be released from all such assumed
obligations except (x) those obligations or liabilities of the transferor Member
arising out of a breach of this Agreement, (y) in the case of a Transfer to any
Person other than a Member or any of its Affiliates, those obligations or
liabilities of the transferor Member based on events occurring, arising or
maturing prior to the date of Transfer, and (z) in the case of a Transfer to any
of its Affiliates, any Capital Contribution or other financing obligation of the
transferor Member under this Agreement; (b) The transferee pays or reimburses
the Company for all reasonable legal, filing, and publication costs that the
Company incurs in connection with the admission of the transferee as a Member
with respect to the Transferred Units; and (c) Except in the case of a Transfer
involuntarily by operation of law, if required by the Class A Directors, the
transferee (other than a transferee that was a Member prior to the Transfer)
shall deliver to the Company evidence of the authority of such Person to become
a Member and to be bound by all of the terms and conditions of this Agreement,
and the transferee and transferor shall each execute and deliver such other
instruments as the Class A Directors reasonably deem necessary or appropriate to
effect, and as a condition to, such Transfer.
9.7 REPRESENTATIONS REGARDING TRANSFERS. Each Member hereby covenants and
agrees with the Company for the benefit of the Company and all Members, that (i)
it is not currently making a market in Units and will not in the future make a
market in Units, (ii) it will not Transfer its Units on an established
securities market, a secondary market (or the substantial equivalent thereof)
within the meaning of Code Section 7704(b) (and any Regulations, proposed
Regulations, revenue rulings, or other official pronouncements of the Internal
Revenue Service or Treasury Department that may be promulgated or published
thereunder), and (iii) in the event such Regulations, revenue rulings, or other
pronouncements treat any or all arrangements which facilitate the selling of
Company interests and which are commonly referred to as "matching services" as
being a secondary market or substantial equivalent thereof, it will not Transfer
any Units through a matching service that is not approved in advance by the
Company. Each Member further agrees that it will not Transfer any Units to any
Person unless such Person agrees to be bound by this Section 9.7 and to Transfer
such Units only to Persons who agree to be similarly bound. (b) Each Member
hereby represents and warrants to the Company and the Members that such Member's
acquisition of Units hereunder is made as principal for such Member's own
account and not for resale or distribution of such Units. Each Member further
hereby agrees that the following legend, as the same may be amended by the Class
A Directors in their sole discretion, may be placed upon any counterpart of this
Agreement, the Articles, or any other document or instrument evidencing
ownership of Units:
THE TRANSFERABILITY OF THE COMPANY UNITS REPRESENTED BY THIS DOCUMENT IS
RESTRICTED. SUCH UNITS MAY NOT BE SOLD, ASSIGNED, OR TRANSFERRED, NOR WILL ANY
ASSIGNEE, VENDEE, TRANSFEREE, OR ENDORSEE THEREOF BE RECOGNIZED AS HAVING
ACQUIRED ANY SUCH UNITS FOR ANY PURPOSES, UNLESS AND TO THE EXTENT SUCH SALE,
TRANSFER, HYPOTHECATION, OR ASSIGNMENT IS PERMITTED BY, AND IS COMPLETED IN
STRICT ACCORDANCE WITH, THE TERMS AND CONDITIONS SET FORTH IN THE
OPERATING
AGREEMENT AND AGREED TO BY EACH MEMBER.
33
9.8 DISTRIBUTION AND ALLOCATIONS IN RESPECT OF TRANSFERRED UNITS. If any Units
are Transferred during any Fiscal Year in compliance with the provisions of this
Section 9, Profits, Losses, each item thereof, and all other items attributable
to the Transferred Units for such Fiscal Year shall be divided and allocated
between the transferor and the transferee by taking into account their varying
interests during the Fiscal Year in accordance with Code Section 706(d), using
any conventions permitted by law and selected by the Class A Directors. All
distributions on or before the date of such Transfer shall be made to the
transferor, and all distributions thereafter shall be made to the transferee.
Solely for purposes of making such allocations and distributions, the Company
shall recognize such Transfer not later than the end of the calendar month
during which it is given notice of such Transfer, provided that, if the Company
is given notice of a Transfer at least ten (10) Business Days prior to the
Transfer, the Company shall recognize such Transfer as of the date of such
Transfer, and provided further that if the Company does not receive a notice
stating the date such Units were transferred and such other information as the
Class A Directors may reasonably require within thirty (30) days after the end
of the Fiscal Year during which the Transfer occurs, then all such items shall
be allocated, and all distributions shall be made, to the Person who, according
to the books and records of the Company, was the owner of the Units on the last
day of such Fiscal Year. Neither the Company nor any Member shall incur any
liability for making allocations and distributions in accordance with the
provisions of this Section 9.8, whether or not the Class A Directors or the
Company has knowledge of any Transfer of ownership of any Units.
SECTION 10. DISSOLUTION AND WINDING UP
10.1 DISSOLUTION. The Company shall dissolve and shall commence winding up and
liquidating upon the first to occur of any of the following (each a "DISSOLUTION
EVENT"): (i) The affirmative vote of a 75% majority in interest of the Members
to dissolve, wind up, and liquidate the Company; or (ii) The entry of a decree
of judicial dissolution pursuant to the Act. The Members hereby agree that,
notwithstanding any provision of the Act, the Company shall not dissolve prior
to the occurrence of a Dissolution Event.
10.2 WINDING UP. Upon the occurrence of a Dissolution Event, the Company shall
continue solely for the purposes of winding up its affairs in an orderly manner,
liquidating its assets, and satisfying the claims of its creditors and Members,
and no Member shall take any action that is inconsistent with, or not necessary
to or appropriate for, the winding up of the Company's business and affairs,
PROVIDED that all covenants contained in this Agreement and obligations provided
for in this Agreement shall continue to be fully binding upon the Members until
such time as the Property has been distributed pursuant to this Section 10.2 and
the Articles have been canceled pursuant to the Act. The Liquidator shall be
responsible for overseeing the prompt and orderly winding up and dissolution of
the Company. The Liquidator shall take full account of the Company's liabilities
and Property and shall cause the Property or the proceeds from the sale thereof
(as determined pursuant to Section 10.8 hereof), to the extent sufficient
therefor, to be applied and distributed, to the maximum extent permitted by law,
in the following order: (a) First, to creditors (including Members and Class A
Directors who are creditors, to the extent otherwise permitted by law) in
satisfaction of all of the Company's Debts and other liabilities
34
(whether by payment or the making of reasonable provision for payment thereof),
other than liabilities for which reasonable provision for payment has been made;
and (b) Second, except as provided in this Agreement, to Members in satisfaction
of liabilities for distributions pursuant to the Act; (c) Third, the balance, if
any, to the Unit Holders in accordance with the positive balance in their
Capital Accounts calculated after making the required adjustment set forth in
clause (ii)(C) of the definition of Gross Asset Value in Section 1.11 of this
Agreement, after giving effect to all contributions, distributions and
allocations for all periods.
10.3 COMPLIANCE WITH CERTAIN REQUIREMENTS OF REGULATIONS; DEFICIT CAPITAL
ACCOUNTS. In the event the Company is "liquidated" within the meaning of
Regulations Section 1.704 1(b)(2)(ii)(g), (a) distributions shall be made
pursuant to this Section 10 to the Unit Holders who have positive Capital
Accounts in compliance with Regulations Section 1.704 1(b)(2)(ii)(b)(2). If any
Unit Holder has a deficit balance in his Capital Account (after giving effect to
all contributions, distributions and allocations for all Fiscal Years, including
the Fiscal Year during which such liquidation occurs), such Unit Holder shall
have no obligation to make any contribution to the capital of the Company with
respect to such deficit, and such deficit shall not be considered a debt owed to
the Company or to any other Person for any purpose whatsoever. In the discretion
of the Liquidator, a pro rata portion of the distributions that would otherwise
be made to the Unit Holders pursuant to this Section 10 may be: (a) Distributed
to a trust established for the benefit of the Unit Holders for the purposes of
liquidating Company assets, collecting amounts owed to the Company, and paying
any contingent or unforeseen liabilities or obligations of the Company. The
assets of any such trust shall be distributed to the Unit Holders from time to
time, in the reasonable discretion of the Liquidator, in the same proportions as
the amount distributed to such trust by the Company would otherwise have been
distributed to the Unit Holders pursuant to Section 10.2 hereof; or (b) Withheld
to provide a reasonable reserve for Company liabilities (contingent or
otherwise) and to reflect the unrealized portion of any installment obligations
owed to the Company, provided that such withheld amounts shall be distributed to
the Unit Holders as soon as practicable.
10.4 DEEMED DISTRIBUTION AND RECONTRIBUTION. Notwithstanding any other
provision of this Section 10, in the event the Company is liquidated within the
meaning of Regulations Section 1.704 1(b)(2)(ii)(g) but no Dissolution Event has
occurred, the Property shall not be liquidated, the Company's Debts and other
liabilities shall not be paid or discharged, and the Company's affairs shall not
be wound up.
10.5 RIGHTS OF UNIT HOLDERS. Except as otherwise provided in this Agreement,
each Unit Holder shall look solely to the Property of the Company for the return
of its Capital Contribution and has no right or power to demand or receive
Property other than cash from the Company. If the assets of the Company
remaining after payment or discharge of the debts or liabilities of the Company
are insufficient to return such Capital Contribution, the Unit Holders shall
have no recourse against the Company or any other Unit Holder or Directors.
10.6 ALLOCATIONS DURING PERIOD OF LIQUIDATION. During the period commencing on
the first day of the Fiscal Year during which a Dissolution Event occurs and
ending on the date on which all of the assets of the Company have been
distributed to the Unit Holders pursuant to Section 10.2 hereof (the
"Liquidation Period"), the Unit Holders shall continue to share Profits, Losses,
35
gain, loss and other items of Company income, gain, loss or deduction in the
manner provided in Section 3 hereof.
10.7 CHARACTER OF LIQUIDATING DISTRIBUTIONS. All payments made in liquidation
of the interest of a Unit Holder in the Company shall be made in exchange for
the interest of such Unit Holder in Property pursuant to Section 736(b)(1) of
the Code, including the interest of such Unit Holder in Company goodwill.
10.8 THE LIQUIDATOR. The "Liquidator" shall mean a Person appointed by the
Class A Directors(s) to oversee the liquidation of the Company. Upon the consent
of a majority in interest of the Members, the Liquidator may be the Class A
Directors. The Company is authorized to pay a reasonable fee to the Liquidator
for its services performed pursuant to this Section 10 and to reimburse the
Liquidator for its reasonable costs and expenses incurred in performing those
services. The Company shall indemnify, save harmless, and pay all judgments and
claims against such Liquidator or any officers, Directors, agents or employees
of the Liquidator relating to any liability or damage incurred by reason of any
act performed or omitted to be performed by the Liquidator, or any officers,
Directors, agents or employees of the Liquidator in connection with the
liquidation of the Company, including reasonable attorneys' fees incurred by the
Liquidator, officer, Director, agent or employee in connection with the defense
of any action based on any such act or omission, which attorneys' fees may be
paid as incurred, except to the extent such liability or damage is caused by the
fraud, intentional misconduct of, or a knowing violation of the laws by the
Liquidator which was material to the cause of action.
10.9 FORMS OF LIQUIDATING DISTRIBUTIONS. For purposes of making distributions
required by Section 10.2 hereof, the Liquidator may determine whether to
distribute all or any portion of the Property in kind or to sell all or any
portion of the Property and distribute the proceeds therefrom.
SECTION 11. MISCELLANEOUS
11.1 NOTICES. Any notice, payment, demand, or communication required or
permitted to be given by any provision of this Agreement shall be in writing and
shall be deemed to have been delivered, given, and received for all purposes (i)
if delivered personally to the Person or to an officer of the Person to whom the
same is directed, or (ii) when the same is actually received, if sent either by
registered or certified mail, postage and charges prepaid, or by facsimile, if
such facsimile is followed by a hard copy of the facsimile communication sent
promptly thereafter by registered or certified mail, postage and charges
prepaid, addressed as follows, or to such other address as such Person may from
time to time specify by notice to the Members and the Directors: (a) If to the
Company, to the address determined pursuant to Section 1.4 hereof; (b) If to the
Directors, to the address set forth on record with the company; (c) If to a
Member, either to the address set forth in Section 2.1 hereof.
11.2 BINDING EFFECT. Except as otherwise provided in this Agreement, every
covenant, term, and provision of this Agreement shall be binding upon and inure
to the benefit of the Members and their respective successors, transferees, and
assigns.
36
11.3 CONSTRUCTION. Every covenant, term, and provision of this Agreement shall
be construed simply according to its fair meaning and not strictly for or
against any Member.
11.4 HEADINGS. Section and other headings contained in this Agreement are for
reference purposes only and are not intended to describe, interpret, define, or
limit the scope, extent, or intent of this Agreement or any provision hereof.
11.5 SEVERABILITY. Except as otherwise provided in the succeeding sentence,
every provision of this Agreement is intended to be severable, and, if any term
or provision of this Agreement is illegal or invalid for any reason whatsoever,
such illegality or invalidity shall not affect the validity or legality of the
remainder of this Agreement. The preceding sentence of this Section 14.6 shall
be of no force or effect if the consequence of enforcing the remainder of this
Agreement without such illegal or invalid term or provision would be to cause
any Member to lose the material benefit of its economic bargain.
11.6 INCORPORATION BY REFERENCE. Every exhibit, schedule, and other appendix
attached to this Agreement and referred to herein is not incorporated in this
Agreement by reference unless this Agreement expressly otherwise provides.
11.7 VARIATION OF TERMS. All terms and any variations thereof shall be deemed to
refer to masculine, feminine, or neuter, singular or plural, as the identity of
the Person or Persons may require.
11.8 GOVERNING LAW. The laws of the State of Iowa shall govern the validity of
this Agreement, the construction of its terms, and the interpretation of the
rights and duties arising hereunder.
11.9 WAIVER OF JURY TRIAL. Each of the Members irrevocably waives to the extent
permitted by law, all rights to trial by jury in any action, proceeding or
counterclaim arising out of or relating to this Agreement.
11.10 COUNTERPART EXECUTION. This Agreement may be executed in any number of
counterparts with the same effect as if all of the Members had signed the same
document. All counterparts shall be construed together and shall constitute one
agreement.
11.11 SPECIFIC PERFORMANCE. Each Member agrees with the other Members that the
other Members would be irreparably damaged if any of the provisions of this
Agreement are not performed in accordance with their specific terms and that
monetary damages would not provide an adequate remedy in such event.
Accordingly, it is agreed that, in addition to any other remedy to which the
nonbreaching Members may be entitled, at law or in equity, the nonbreaching
Members shall be entitled to injunctive relief to prevent breaches of the
provisions of this Agreement and specifically to enforce the terms and
provisions hereof in any action instituted in any court of the United States or
any state thereof having subject matter jurisdiction thereof.
37
IN WITNESS WHEREOF, the parties have executed and entered into this Operating
Agreement of the Company as of the day first above set forth.
COMPANY:
LITTLE SIOUX CORN PROCESSORS, L.L.C.
By: /s/ Xxxxx Xxxxx
---------------
Its: Chairman
--------
38
MEMBERS:
/s/ Xxxxx X. Xxxxxxxx /s/ Xxxxxxx X. Xxxxx
--------------------------------------- ---------------------------------------
/s/ Xxxx X. Xxxxxxxx /s/ Xxxxx X. Xxxxx
--------------------------------------- ---------------------------------------
Xxxxx X. & Xxxx X. Xxxxxxxx Partnership Xxxxxxx X. and Xxxxx X. Xxxxx, JTWROS
/s/ Xxxxxxx X. Xxxxx /s/ Xxxxxx X. Xxxxx
--------------------------------------- ---------------------------------------
Xxxxx X. Xxxxx, Trustee of the Xxxxx X.
/s/ Xxxxx X. Xxxxx Xxxxx Revocable Trust
---------------------------------------
Xxxxxxx X. & Xxxxx X. Xxxxx, JTWROS
/s/ Xxxxxx X. Xxxxxxx /s/ Xxxxxxx X. Xxxxxxx
--------------------------------------- ---------------------------------------
Xxxxxx X. Xxxxxxx. Xxxxxxx X. Xxxxxxx
/s/ Xxxxx X. Xxxxxx /s/ Xxxxx X. Xxxxxxx
--------------------------------------- ---------------------------------------
Xxxxx X. Xxxxxx Xxxxx X. Xxxxxxx
/s/ Xxxx X. Xxxxxxx /s/ Xxxxxxx X. Xxxxxx
--------------------------------------- ---------------------------------------
/s/ Xxxxxx X. Xxxxxxx /s/ Xxxxx X. Xxxxxx
--------------------------------------- ---------------------------------------
Xxxx X. and Xxxxxx X. Xxxxxxx, JTWROS Xxxxxxx X. & Xxxxx X. Xxxxxx, JTWROS
/s/ Xxxxxx X. Xxxxxxx /s/ Xxxxx X. Xxxx
--------------------------------------- ---------------------------------------
Xxxxx X. Xxxx
/s/ Xxxxxx X. Xxxxxxx
---------------------------------------
Xxxxxx X. & Xxxxxx X. Xxxxxxx, JTWROS
/s/ Xxxxxx X. Xxxxxxxxx /s/ Xxxxxx X. Xxxxxxxxxx
--------------------------------------- ---------------------------------------
Xxxxxx X. Xxxxxxxxx Xxxxxx X. Xxxxxxxxxx
39
/s/ Xxxxx X. Xxxxxx /s/ Xxxxx X. Xxxxxx
--------------------------------------- ---------------------------------------
/s/ Xxxxx X. French /s/ Xxxxxx X. Xxxxxx
--------------------------------------- ---------------------------------------
Xxxxx X. & Xxxxx X. French, JTWROS Xxxxx X. & Xxxxxx X. Xxxxxx, JTWROS
/s/ Xxxxxxxxx X. Xxxxxxx /s/ Xxxxxx X. Xxxxxx
--------------------------------------- ---------------------------------------
Xxxxxxxxx X. Xxxxxxx Xxxxxx X. Xxxxxx
/s/ Xxxxx X. Xxxxxxx /s/ Xxxxxx X. Xxxxxxxxx
--------------------------------------- ---------------------------------------
/s/ Xxxxxx X. Xxxxxxx /s/ Xxxxx X. Xxxxxxxxx
--------------------------------------- ---------------------------------------
Xxxxx X. & Xxxxxx X. Xxxxxxx, JTWROS Xxxxxx X. & Xxxxx X. Xxxxxxxxx, JTWROS
/s/ Xxxx X. Xxxxxxxxx /s/ Xxxxxx Xxxxxx
--------------------------------------- ---------------------------------------
/s/ Xxxx X. Xxxxxxxxx /s/ Xxxxxx Xxxxxx
--------------------------------------- ---------------------------------------
Xxxx X. & Xxxx X. Xxxxxxxxx, JTWROS Xxxxxx & Xxxxxx Xxxxxx, JTWROS
/s/ Xxxxxxx X. Xxxxxx /s/ Xxxxxx X. Xxxxxxxx
--------------------------------------- ---------------------------------------
Xxxxxxx X. Xxxxxx Xxxxxx X. Xxxxxxxx, Trustee of the
Xxxxxx Xxxxx Xxxxxxxx Revocable Trust
/s/ Xxxx X. Xxxxxx /s/ Xxxxx X. Xxxxxx
--------------------------------------- ---------------------------------------
Xxxx X. Xxxxxx Xxxxx X. Xxxxxx
/s/ Xxxx X. Xxxx /s/ Xxxxxx Xxxx
--------------------------------------- ---------------------------------------
/s/ Xxxxx X. Xxxx /s/ Xxxx Xxxx
--------------------------------------- ---------------------------------------
Xxxx J & Xxxxx X. Xxxx, XXXXXX Xxxxxx & Xxxx Xxxx, XXXXXX
00
/s/ Xxxx Sand /s/ Xxx X. Xxxxx
--------------------------------------- ---------------------------------------
/s/ Xxxxxxxx Sand /s/ Xxxxx X. Xxxxx
--------------------------------------- ---------------------------------------
Xxxx & Xxxxxxxx Sand, JTWROS Xxx X. & XxXxx X. Xxxxx, JTWROS
/s/ Xxxx Xxxxxx /s/ Ag Land Custom Co.
--------------------------------------- ---------------------------------------
Xxxx Xxxxxx AG Land Custom Co.
/s/ Xxxx Xxxx /s/ Xxxxxxx Xxxx
--------------------------------------- ---------------------------------------
/s/ Xxxxx Xxxx /s/ Xxxxxxx (Xxxxx) Xxxx
--------------------------------------- ---------------------------------------
Xxxx & Xxxxx Xxxx, JTWROS Xxxxxxx & Xxxxxxx (Xxxxx) Xxxx, JTWROS
/s/ Xxxx Xxxxxxxxx
---------------------------------------
/s/ Xxx Xxxxxxxxx.
---------------------------------------
Xxxx & Xxx Xxxxxxxxx, JTWROS
41
EXHIBIT "A"
MEMBERS AND MEMBER'S MEMBERSHIP UNITS
NO. NAME UNITS
--- ---- -----
1 Xxxxx X. & Xxxx X. Xxxxxxxx Partnership 20
2 Xxxxxxx X. and Xxxxx X. Xxxxx, JTWROS 20
3 Xxxxxxx X. and Xxxxx X. Xxxxx, JTWROS 20
4 Xxxxx X. Xxxxx, Trustee of the
Xxxxx X. Xxxxx Revocable Trust 20
5 Xxxxxx X. Xxxxxxx 20
6 Xxxxxxx X. Xxxxxxx 20
7 Xxxx X. and Xxxxxx X. Xxxxxxx, JTWROS 20
8 Xxxxx X. Xxxxxx 24
9 Xxxxxxx X. and Xxxxx X. Xxxxxx, JTWROS 32
10 Xxxxx X. Xxxxxxx 21
11 Xxxxxx X. and Xxxxxx X. Xxxxxxx, JTWROS 20
12 Xxxxxx X. Xxxxxxxxx 60
13 Xxxxx X. Xxxx 82
14 Xxxxx X. and Xxxxx X. French, JTWROS 20
15 Xxxxxx X. Xxxxxxxxxx 20
16 Xxxxxxxxx X. Xxxxxxx 20
17 Xxxxx X. and Xxxxxx X. Xxxxxx, XXXXXX 00
00 Xxxxx X. and Xxxxxx X. Xxxxxxx, XXXXXX 00
00 Xxxxxx X. and Xxxxx X. Xxxxxxxxx, JTWROS 40
20 Xxxx X. and Xxxx X. Xxxxxxxxx, JTWROS 20
21 Xxxxxx X. Xxxxxx 20
22 Xxxxxxx X. Xxxxxx 20
23 Xxxxxx X. Xxxxxxxx, Trustee of the 20
Xxxxxx Xxxxx Xxxxxxxx Revocable Trust
24 Xxxx X. Xxxxxx 50
25 Xxxxxx and Xxxxxx Xxxxxx, XXXXXX 00
00 Xxxxx X. Xxxxxx 50
27 Xxxx X. and Xxxxx X. Xxxx, JTWROS 20
28 Xxxxxx and Xxxx Xxxx, XXXXXX 00
00 Xxxx xxx Xxxxxxxx Xxxx, XXXXXX 00
00 Xxxx Xxxxxx 20
31 Xxx X. and XxXxx X. Xxxxx, JTWROS 20
32 AG Land Custom Co. 40
33 Xxxx and Xxxxx Xxxx, JTWROS 20
34 Xxxxxxx and Xxxxxxx (Xxxxx) Xxxx, JTWROS 20
35 Xxxx and Xxx Xxxxxxxxx, JTWROS 20
---
TOTAL: 939
42
EXHIBIT "B"
INITIAL BOARD OF DIRECTORS
NAME OF INITIAL ADDRESS OF INITIAL
BOARD MEMBERS BOARD MEMBERS
--------------- ------------------
Xxxxx Xxxxx, Chairman 0000 000xx Xx., Xxxxxxxx, XX 00000
Xxxxxxx Xxxxxxx. 000 000xx Xx, Xxxxxxxx, XX 00000
Xxxx Xxxxxxx, Treasurer 0000 Xxxxxxx Xxx, Xxxxxx, XX 00000
Xxxx Xxxxxxxx 0000 000xx Xx, Xxxxxx, XX 00000
Xxxxx Xxxxx X.X. Xxx 00, Xxxxxx, XX 00000
Xxxxxxx Xxxxx 000 Xxxxxxxx Xxxxx, Xxxxxx, XX 00000
Xxxxx Xxxxxx 0000 000xx Xx, Xxxxxxx, XX 00000
Xxx Xxxxxx 0000 X Xxx, Xxxxxxx, XX 00000
Xxxxx Xxxxxxx, Secretary 0000 Xxxxxxx Xxx, Xxxxxxxx, XX 00000
Xxxxxx Xxxxxxx 0000 Xxxxx Xxx, Xxxxxx, XX 00000
Xxx Xxxxxxxxx, Vice Chairman 000 X. Xxx Xx, Xxxxxxxx, XX 00000
43
