Exhibit 3.2
APPENDIX D
AMENDED AND RESTATED
OPERATING AGREEMENT
OF
MINNESOTA CORN PROCESSORS, LLC
A Colorado Limited Liability Company
(CONTAINS RESTRICTIONS ON
TRANSFERABILITY OF MEMBERSHIP INTERESTS)
MINNESOTA CORN PROCESSORS, LLC
AMENDED AND RESTATED
OPERATING AGREEMENT
(CONTAINS RESTRICTIONS ON TRANSFERS
OF MEMBERSHIP INTERESTS)
TABLE OF CONTENTS
PAGE
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RECITALS .................................................................. D-1
ARTICLE I DEFINITIONS ............................................................... D-1
1.1 Terms Defined in the Act .................................................. D-1
1.2 Terms Defined Herein ...................................................... D-1
ARTICLE II THE LIMITED LIABILITY COMPANY ............................................. D-6
2.1 Formation; Effective Date of Agreement .................................... D-6
2.2 Name ...................................................................... D-6
2.3 Business Purpose .......................................................... D-6
2.4 Powers .................................................................... D-6
2.5 Duration .................................................................. D-6
2.6 Registered Office and Registered Agent .................................... D-6
2.7 Principal Office .......................................................... D-6
2.8 Title to Property; No Agency Power ........................................ D-6
2.9 Limited Liability of Members and Directors ................................ D-7
ARTICLE III MEMBERS ................................................................... D-7
3.1 Membership ................................................................ D-7
3.2 Ownership of Membership Interests ......................................... D-7
3.3 Classes of Membership ..................................................... D-8
3.4 Voting .................................................................... D-8
3.5 Place of Meetings ......................................................... D-8
3.6 Regular Meetings .......................................................... D-9
3.7 Special Meetings .......................................................... D-9
3.8 Notice of Meetings ........................................................ D-9
3.9 Waiver of Notice .......................................................... D-9
3.10 Quorum .................................................................... D-9
3.11 Proxies; Mail Ballots ..................................................... D-9
3.12 Action Without Meeting .................................................... D-9
3.13 Telephonic Meetings ....................................................... D-9
3.14 Termination of Membership ................................................. D-9
3.15 Continuation of the Company ............................................... D-10
3.16 No Obligation to Purchase Units ........................................... D-10
3.17 Advance Consent to Certain Substitute Members ............................. D-10
3.18 Compliance with Articles of Organization and Operating Agreement .......... D-10
3.19 No Dissenters' Rights ..................................................... D-10
3.20 Purchase of Class B Units ................................................. D-10
ARTICLE IV CAPITAL ................................................................... D-11
4.1 Units ..................................................................... D-11
4.2 Capital Accounts .......................................................... D-11
4.3 Initial Issuance of Units; Offering of Additional Units ................... D-12
4.4 No Capital Calls .......................................................... D-12
4.5 Tax Withholding Obligations ............................................... D-12
4.6 Transferee Succeeds to Transferor's Capital Account ....................... D-12
4.7 No Right to Return of Contributions ....................................... D-12
4.8 No Interest on Capital Contributions ...................................... D-12
4.9 Loans to the Company ...................................................... D-13
4.10 No Repayment Liability .................................................... D-13
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ARTICLE V ALLOCATIONS AND DISTRIBUTIONS ..................................... D-13
5.1 Allocation of Profits and Losses .................................. D-13
5.2 Special Allocations ............................................... D-13
5.3 Curative Allocations .............................................. D-14
5.4 Loss Limitation ................................................... D-14
5.5 Other Allocation Rules ............................................ D-15
5.6 Tax Allocations ................................................... D-15
5.7 Distributions ..................................................... D-15
5.8 Tax Withholding Obligations Constitute a Distribution ............. D-16
ARTICLE VI BOARD OF DIRECTORS ................................................ D-16
6.1 Board of Directors ................................................ D-16
6.2 Qualifications of Directors ....................................... D-16
6.3 Election of Directors ............................................. D-16
6.4 Removal of Directors .............................................. D-16
6.5 Vacancies ......................................................... D-16
6.6 Annual Meeting .................................................... D-16
6.7 Regular Meetings .................................................. D-16
6.8 Special Meetings .................................................. D-16
6.9 Quorum, Voting .................................................... D-17
6.10 Executive Committee ............................................... D-17
6.11 Compensation ...................................................... D-17
6.12 Number of Districts ............................................... D-17
6.13 Districting Committee ............................................. D-17
6.14 Counties and Districts ............................................ D-17
6.15 Directors and Districts ........................................... D-18
6.16 Board Actions Requiring Approval of Members ....................... D-18
6.17 Board Actions Requiring Approval of ADM ........................... D-19
6.18 Absent Directors .................................................. D-19
6.19 Action Without Meeting ............................................ D-19
6.20 Telephonic Meetings ............................................... D-19
ARTICLE VII DUTIES OF DIRECTORS ............................................... D-19
7.1 General Powers .................................................... D-19
7.2 Employment of President and Chief Executive Officer ............... D-19
7.3 Bonds and Insurance ............................................... D-19
7.4 Accounting System and Audit ....................................... D-20
7.5 Agreements with Members ........................................... D-20
7.6 Depository ........................................................ D-20
ARTICLE VIII BOARD OFFICERS; PRESIDENT AND CHIEF
EXECUTIVE OFFICER ................................................. D-20
8.1 Election of Board Officers ........................................ D-20
8.2 Duties of Chairman ................................................ D-20
8.3 Duties of Vice Chairman ........................................... D-20
8.4 Duties of Secretary ............................................... D-20
8.5 Duties of President and Chief Executive Officer ................... D-21
8.6 Compensation ...................................................... D-21
8.7 Special Powers .................................................... D-21
ARTICLE IX REQUIRED RECORDS; ACCOUNTING AND TAX MATTERS ...................... D-21
9.1 Required Records .................................................. D-21
9.2 Books of Account .................................................. D-22
9.3 Tax Characterization, Returns, Elections and Information .......... D-22
9.4 Tax Matters Partner; Tax Audit Costs .............................. D-22
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ARTICLE X TRANSFER OF MEMBER INTERESTS .............................................. D-23
10.1 Restrictions on Transfer. ................................................. D-23
10.2 Conditions Precedent to Transfers ......................................... D-23
10.3 Substitution of Member .................................................... D-23
10.4 Effective Date of Transfer ................................................ D-24
10.5 Distributions and Allocations in Respect to Transferred Interest .......... D-24
ARTICLE XI DISSOLUTION AND WINDING UP ................................................ D-24
11.1 Liquidating Events ........................................................ D-24
11.2 Winding Up ................................................................ D-24
11.3 Distributions Upon Dissolution ............................................ D-25
11.4 Compliance With Regulations; Deficit Capital Accounts ..................... D-25
11.5 Deemed Distribution and Recontribution .................................... D-26
11.6 Allocations During Period of Liquidation .................................. D-26
11.7 Character of Liquidating Distributions .................................... D-26
ARTICLE XII MEMBERS BOUND BY AGREEMENT ................................................ D-26
ARTICLE XIII INDEMNIFICATION OF DIRECTORS AND EMPLOYEES ................................ D-26
13.1 Indemnity of Directors, Employees and Other Agents ........................ D-26
ARTICLE XIV MISCELLANEOUS ............................................................. D-27
14.1 Entire Agreement .......................................................... D-27
14.2 Amendment ................................................................. D-27
14.3 Conflict with Articles .................................................... D-27
14.4 Certificates of Membership Interest ....................................... D-27
14.5 Severability .............................................................. D-27
14.6 Remedies .................................................................. D-27
14.7 Consent and Waiver ........................................................ D-27
14.8 No Third Party Beneficiary ................................................ D-27
14.9 Notices ................................................................... D-28
14.10 Binding Effect ............................................................ D-28
14.11 Necessary Instruments and Acts ............................................ D-28
14.12 Number and Gender ......................................................... D-28
14.13 Interpretation ............................................................ D-28
14.14 Counterparts .............................................................. D-28
14.15 Governing Law ............................................................. D-28
SCHEDULE A
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MINNESOTA CORN PROCESSORS, LLC
AMENDED AND RESTATED
OPERATING AGREEMENT
(CONTAINS RESTRICTIONS ON TRANSFERS
OF MEMBERSHIP INTERESTS)
THIS OPERATING AGREEMENT is entered into and made effective as of the
day of May, 1999 by and between Minnesota Corn Processors, LLC, a Colorado
limited liability company (the "Company"), and the members of the Company who
are identified as such on the Membership Register from time to time
(collectively, the "Members").
RECITALS
WHEREAS, the Cooperative, as the only initial Member, has caused the
Company to be formed under the laws of the State of Colorado for the following
purposes: (a) to acquire all of the businesses and assets of Minnesota Corn
Processors, Inc., a Minnesota cooperative corporation (the Cooperative"); and
(b) to operate the corn processing and marketing business currently operated by
the Cooperative; and (c) for any other lawful purpose;
WHEREAS, the Cooperative and the Company previously entered into an
Operating Agreement dated as of January 22, 1999 (the "Original Agreement") and
adopted the Original Agreement as the operating agreement of the Company as
contemplated by Section 7-80-108 of the Colorado Limited Liability Company Act;
WHEREAS, the Cooperative and the Company wish to amend and restate the
Original Agreement in its entirety effective as of the date hereof and hereby
adopt this Amended and Restated Operating Agreement as the operating agreement
of the Company for purposes of Section 7-80-108 of the Colorado Limited
Liability Company Act;
NOW THEREFORE, in consideration of the foregoing and the mutual agreements
of the Members contained herein, and the mutual benefits to be gained by the
performance hereof, each of the Members agrees as follows:
ARTICLE I
DEFINITIONS
1.1 Terms Defined in the Act. Unless defined specifically herein, terms
relating to a limited liability company shall have the meanings given in or
interpreted under the Colorado Limited Liability Company Act.
1.2 Terms Defined Herein. The following capitalized words and phrases
shall have the following respective meanings as used herein, except as may be
otherwise expressly provided in this Agreement or unless the context otherwise
specifies.
"ACT" means the Colorado Limited Liability Company Act, as amended, and
any successor thereto.
"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 allocation period, 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 penultimate sentences in
Sections 1.704-2(g)(1) and 1.704-2(i)(5) of the Regulations; and
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(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.
This 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.
"ADM" means Xxxxxx Xxxxxxx Midland Company, a Delaware corporation.
"AFFILIATE" means, with respect to a specified Person, any Person,
directly or indirectly, through one or more intermediaries, controlling or
controlled by, or under common control with a specified Person. The term
"control", as used in the preceding sentence, means with respect to a
corporation the right to exercise, directly or indirectly, more than 50% of the
voting rights attributable to the controlled corporation, and, with respect to
any partnership, trust or other entity or association, the possession, directly
or indirectly, of the power to direct or cause the direction of the management
or policies of the controlled entity.
"AGREEMENT" means this Amended and Restated Operating Agreement of
Minnesota Corn Processors, LLC, as amended, modified or supplemented from time
to time, including any schedules to this Agreement. Words such as "herein",
"hereinafter", "hereof", and "hereunder" refer to this Agreement.
"ARTICLES OF ORGANIZATION" means the Articles of Organization filed on
behalf of the Company with the Secretary of State of Colorado, as from time to
time amended.
"BOARD" OR "BOARD OF DIRECTORS" means the Board of Directors of the
Company established by Article VI. For purposes of the Act, the "Board" or
"Board of Directors" shall mean the board of managers of the Company.
"CAPITAL ACCOUNT" means, with respect to any Unit Holder, the Capital
Account maintained for such Person in accordance with the provisions of Section
4.2 herein.
"CAPITAL CONTRIBUTIONS" means, with respect to any Unit Holder, the
amount of money and the Gross Asset Value of any property (other than money)
and the agreed value of services rendered or the obligation to perform services
which are contributed to the capital of the Company with respect to the Units
held by such Person pursuant to the terms of this Agreement.
"CERTIFICATE OF MEMBERSHIP INTEREST" means a certificate or other
evidence of ownership of the Units adopted by the Company pursuant to Section
14.4 of this Agreement.
"CLASS A MEMBER" means a Member that owns Class A Units.
"CLASS B MEMBER" means a Member that owns Class B Units.
"CLASS A UNITS" means the unit of measurement used to quantify the
Membership Interest of a Member eligible to purchase a voting Membership
Interest.
"CLASS B UNITS" means the unit of measurement used to quantify the
Membership Interest of a Member eligible to purchase a non-voting Membership
Interest.
"CODE" means the Internal Revenue Code of 1986, as amended from time to
time (or any corresponding provisions of succeeding law).
"COMPANY" shall have the meaning assigned to that term in the first
paragraph of this Agreement.
"COMPANY MINIMUM GAIN" shall have the same meaning as "partnership
minimum gain" in Regulations Sections 1.704-2(b)(2) and 1.704-2(d).
"COMPETITOR" means (i) each Person identified as a Competitor on
Schedule A attached hereto and the successors and assigns thereof; (ii) any
other Person identified by the Company as a Competitor; and (iii) any officer
or director of any Person identified in (i) and (ii) hereof.
"DEPRECIATION" means, for each allocation period, an amount equal to the
depreciation, amortization, or other cost recovery deduction allowable with
respect to an asset for such allocation
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period, 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
allocation period, 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 allocation period 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
allocation period is zero, Depreciation shall be determined with reference to
such beginning Gross Asset Value using any reasonable method selected by the
Board of Directors.
"DIRECTOR" OR "DIRECTORS" means the natural persons elected, appointed,
or otherwise designated as directors by the Members to direct the business and
affairs of the Company as provided in Article VI. For purposes of the Act, the
directors shall be deemed to be the "managers" of the Company.
"ESTABLISHED VALUE" means a per-Unit value established by the Board of
Directors from time to time, which shall be based on (i) seventy-five percent
(75%) of the fair market value for the Units, as determined by the Board of
Directors using reasonable valuation methods; or (ii) the book value of the
Units as shown on the Company's most recent audited financial statements,
whichever is less.
"EVENT OF DISASSOCIATION" shall have the meaning assigned to that term
in Section 3.15 of this Agreement.
"GROSS ASSET VALUE" means with respect to any asset, the asset's
adjusted basis for federal income tax purposes, except as follows:
(a) The initial Gross Asset Value of any asset contributed by a Member
to the Company shall be the gross fair market value of such asset, as
determined by the Board of Directors, provided that the initial Gross Asset
Values of the assets contributed to the Company pursuant to Section 4.3 hereof
shall be as set forth in such section;
(b) 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 Board of Directors as of the following
times: (i) the acquisition of an additional interest in the Company by any new
or existing Member in exchange for more than a de minimis Capital Contribution;
(ii) 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
(iii) 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 (i) and
(ii) of this paragraph shall be made only if the Board of Directors reasonably
determines that such adjustment is necessary to reflect the relative economic
interests of the Members in the Company;
(c) 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 Board of Directors; and
(d) 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 (f) of
the definition of "Profits and Losses" or Section 5.2(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 (b)
is required in connection with a transaction that would otherwise result in an
adjustment pursuant to this subparagraph (d).
If the Gross Asset Value of an asset has been determined or adjusted
pursuant to subparagraph (b) or (d), 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.
"INITIAL AGREED VALUE PER UNIT" shall mean the fair market value of each
Unit received by the Initial Members pursuant to the Transaction Agreement in
the merger of MCP Colorado into the Company as determined by a nationally
recognized appraisal firm selected by the Cooperative. The Board of Directors
shall be authorized to make reasonable modifications to such appraisal to
reflect
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intervening events between the date of the appraisal and the transfer of Units
to the Initial Members pursuant to the merger of MCP Colorado with and into the
Company pursuant to the Transaction Agreement.
"INITIAL MEMBERS" shall mean, (i) prior to the merger of MCP Colorado
into the Company pursuant to the Transaction Agreement, the Cooperative, and
(ii) from and after the effective time of the merger of MCP Colorado into the
Company pursuant to the Transaction Agreement, each Person who receives Class A
Units or Class B Units pursuant to such merger.
"LIQUIDATING EVENT" shall have the meaning assigned to that term in
Section 9.1 of this Agreement.
"LOSSES" shall have the meaning associated with that term in the
definition of Profits and Losses hereunder.
"MCP COLORADO" means Minnesota Corn Processors Colorado, the transitory
Colorado cooperative into which the Cooperative will be merged in anticipation
of the merger of such Colorado cooperative into the Company.
"THE COOPERATIVE" means Minnesota Corn Processors, Inc., a Minnesota
cooperative corporation.
"MEMBER" means any Person (i) who has become a Member pursuant to the
terms of this Agreement, and who is designated as a Member on the Membership
Register, (ii) who is the owner of 1,000 or more Units, and (iii) who has not
ceased to be a Member pursuant to the terms of this Agreement. "Members" means
all such Persons.
"MEMBERSHIP INTEREST" means a Unit Holder's share of the Profits and
Losses of the Company and a Unit Holder's right to receive distributions of
cash or other assets of the Company in accordance with the terms of this
Agreement.
"MEMBERSHIP REGISTER" shall have the meaning specified in Section 3.1 of
this Agreement.
"1996 LOSS PAYABLE" shall mean the unpaid portion of the Cooperative's
operating loss for fiscal year ended September 30, 1996 that was assessed
against a unit of equity participation by the Board of Directors of The
Cooperative and which pursuant to the Transaction Agreement continues as a lien
in favor of the Company against a Class A Unit into which such unit of equity
participation has been converted.
"NONRECOURSE DEDUCTIONS" has the meaning set forth in Section
1.704-2(b)(1) of the Regulations.
"NONRECOURSE LIABILITY" has the meaning set forth in Section
1.704-2(b)(3) of the Regulations.
"PERSON" means any individual, partnership, limited liability company,
association, corporation, cooperative, estate, trust or other entity, and also
includes a group as that term is used for purposes of Section 13(d)(3) of the
Securities Exchange Act of 1934, as amended.
"PROFITS" shall have the meaning associated with that term in the
definition of Profits and Losses hereunder.
"PRODUCER" means and includes Persons (including individuals, firms,
partnerships, corporations, or associations) who are (1) currently or formerly
engaged in the production of one or more agricultural products, including
tenants of land used for the production of any such product, and lessors of
such land who receive as rent part of the produce of such land, and
associations of such producers, (2) members of the immediate family (i.e., a
spouse, parent, brother or sister, child or grandchild) of any Member, and (3)
current or former employees or agents of the Company.
"PROFITS AND LOSSES" shall mean, for each allocation period, an amount
equal to the Company's taxable income or loss for such allocation period,
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):
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(a) 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
or loss;
(b) 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;
(c) In the event the Gross Asset Value of any Company asset is adjusted
pursuant to subparagraphs (b) or (c) 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;
(d) 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;
(e) 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 Allocation Year, computed in
accordance with the definition of Depreciation;
(f) 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 Member'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
(g) Notwithstanding any other provision of this definition, any items
which are specially allocated pursuant to Section 5.2 or Section 5.3 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 Section 5.2 or Section 5.3
hereof shall be determined by applying rules analogous to those set forth in
subparagraphs (a) through (f) above.
"PROPERTY" means all real and personal property, including cash,
acquired and operated by the Company and any improvements thereto, and shall
include both tangible and intangible property.
"REGULATIONS" means the Income Tax Regulations, including Temporary
Regulations, promulgated under the Code as such Regulations may be amended from
time to time (including corresponding provisions of succeeding Regulations).
"SPECIAL FINANCIAL INTERESTS" means the nonvoting financial interest in
the Company issued to the former holders of nonqualified written notices of
allocation issued by the Cooperative, the stated amounts of which shall
correspond to the stated amounts of such nonqualified written notices of
allocation.
"REGULATORY ALLOCATIONS" has the meaning set forth in Section 5.3
hereof.
"TAX WITHHOLDING OBLIGATION" means an amount equal to the portion of any
amount allocated, credited, or otherwise distributable to a Unit Holder which
the Company is required to withhold for income tax purposes pursuant to any
applicable federal, state, local, or other governmental agency law or
regulation.
"TRANSACTION AGREEMENT" means the Amended and Restated Transaction
Agreement dated as of the date hereof among the Cooperative, MCP Colorado and
the Company.
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"TRANSFER" means, as a noun, any voluntary or involuntary transfer, sale
or other disposition and, as a verb, to voluntarily or involuntarily transfer,
sell, or otherwise dispose of, but shall not include a pledge, grant of a
security interest or other encumbrance.
"UNIT" means the unit of measurement used herein to quantify the
Membership Interest of a Unit Holder, consisting of Class A Units or Class B
Units, as reflected on the Membership Register. A Unit Holder's Membership
Interest as quantified by the number of Units owned by such Person may be
evidenced by a certificate of Units issued by the Company, which certificate
shall contain appropriate restrictive legends.
"UNIT HOLDER NONRECOURSE DEBT" has the same meaning as the term "partner
nonrecourse debt" in Section 1.704-2(b)(4) of the Regulations.
"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.
"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.
"UNIT HOLDERS" means all Persons who hold Units. "Unit Holder" means any
one of the Unit Holders.
ARTICLE II
THE LIMITED LIABILITY COMPANY
2.1 Formation; Effective Date of Agreement. The Company is formed as a
Colorado limited liability company pursuant to and in accordance with the
provisions of the Act and upon the terms and conditions set forth in this
Agreement. This Agreement is made effective as of the formation of the Company.
2.2 Name. The name of the Company shall be Minnesota Corn Processors, LLC.
All business of the Company shall be conducted in such name or in trade names
approved by the Board of Directors. The name of the Company may be changed from
time to time in accordance with the Act.
2.3 Business Purpose. The purpose of the Company is to conduct any
business activity in which a limited liability company organized under the Act
may be lawfully engaged in and to conduct any and all activities related or
incidental thereto, including the acquisition, improvement, leasing, operation,
mortgage and disposition of personal property and real property.
2.4 Powers. The Company may carry on any lawful business, purpose or
activity permitted by the Act and shall possess and may exercise all the powers
and privileges granted by the Act or by any other law or by this Agreement,
together with any powers incidental, necessary or convenient to the conduct,
promotion or attainment of the business, purposes or activities of the Company.
2.5 Duration. The duration of the Company shall be perpetual, unless
dissolved earlier as provided herein.
2.6 Registered Office and Registered Agent. The location of the registered
office and the name of the registered agent of the Company in the State of
Colorado shall be as stated in the Articles of Organization. The registered
office and registered agent of the Company in the State of Colorado may be
changed from time to time by the Board of Directors.
2.7 Principal Office. The principal office of the Company shall be located
at 000 Xxxxx Xxxxxxx 00, Xxxxxxxx, XX 00000, or at such other place(s) within
or without the State of Minnesota as the Board of Directors may determine from
time to time.
2.8 Title to Property; No Agency Power. All Property originally
transferred to or subsequently acquired by or on account of the Company shall
be owned by the Company as an entity. No Member,
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Director or Unit Holder shall have any ownership interest in such Property in
such Person's individual name or right. The Company shall hold all of its
Property in the name of the Company and not in the name of any Member, Director
or Unit Holder. Subject to the approval by the Board or the Members when
required by this Agreement, title to Property may be transferred by an
instrument of transfer executed by the appropriate officer of the Company as
designated by the Board. No Member, Director or Unit Holder has the authority,
in said Person's capacity as Member, Director or Unit Holder, to transfer title
to Property or bind the Company or the other Members or any one of them. Only
duly authorized officers, directors and agents of the Company shall have the
authority to bind the Company.
2.9 Limited Liability of Members and Directors. Except as otherwise
expressly provided by the Act, the debts, obligations and liabilities of the
Company, whether arising in contract, tort or otherwise, shall be solely the
debts, obligations and liabilities of the Company. No Member, Director or other
agent of the Company, solely by reason of such status, shall be personally
liable, under a judgment, decree or order of a court, or in any other manner,
for the acts, debts, obligations or liabilities of the Company, whether arising
in contract, tort or otherwise.
ARTICLE III
MEMBERS
3.1 Membership. There shall be no Members admitted to the Company except
as provided in this Agreement. The name, address, Capital Contribution, and
class of membership of each Member shall be set forth in a membership register
maintained by the Company at its principal office or by a duly appointed agent
of the Company (the "Membership Register"), which shall be modified from time
to time as additional Units are issued and as Units are transferred pursuant to
Article X. Prior to the merger of MCP Colorado into the Company pursuant to the
Transaction Agreement, the Cooperative (or its successors) shall be the only
Member of the Company. From and after the effective time of the merger of MCP
Colorado into the Company pursuant to the Transaction Agreement, the membership
interest of the Cooperative (or its successor) in the Company shall be
canceled, and (A) the Class A Members of this Company shall include, (i)
initially, the members of the Cooperative who receive Class A Units from the
Cooperative pursuant to the Transaction Agreement; and (ii) individuals,
corporations or other entities who acquire a minimum of 1,000 Class A Units in
a permitted transfer or in an offering by the Company of additional Class A
Units. The Class B Members of this Company shall include, (i) initially, Xxxxxx
Xxxxxxx Midland Company, as the transferee of Class B Units from the
Cooperative pursuant to the Transaction Agreement, and (ii) individuals,
corporations or other entities who acquire a minimum of 1,000 Class B Units in
a permitted transfer.
The holders of Special Financial Interests shall not be Members of the
Company and shall have no rights other than the rights to distributions
specified in Sections 5.7(a) and 11.3(d) and the corresponding right to income
allocations provided in Section 5.2(i).
3.2 Ownership of Membership Interests.
(a) Minimum Ownership of Units Required. Each Class A Member shall own
not less than 1,000 Class A Units. Each Class B Member shall own not less than
1,000 Class B Units.
(b) Limitation on Ownership of Membership Interests.
(i) Number of Units. No Class A Member shall own more than two
percent (2%) of the total issued and outstanding Class A Units of the Company.
For purposes of this Section 3.2(b), the number of Units owned by any Member
shall include Units owned by the member's spouse, children, parents, or
brothers and sisters, and by any Affiliate of the Member or the Member's
spouse, children, parents or brothers and sisters.
(ii) Nonproducers. Only Producers shall be eligible to own Class A
Units of the Company.
(iii) Competitors. Any Competitor of the Company shall not be
eligible to own Class A Units of the Company.
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(c) Company Right to Purchase Units. If (A) any Member holds at any time
less than the minimum number of Units required by Section 3.2(a) or more than
the maximum number of Units permitted under Section 3.2(b), or if any Class A
Units are held by any Person who is not a Producer, and such violation of this
Agreement is not cured within one (1) year after notice thereof by the Company,
or (B) any Member is or becomes a Competitor, that Member's voting rights, if
any, shall be suspended as provided in Section 3.14 below and, in addition, the
Company shall have the right (but not the obligation) to purchase, and the
Member shall be required to sell (i) in the case of a violation of Section
3.2(a), 3.2(b)(ii) or 3.2(b)(iii), all of the Units owned by such Member, and
(ii) in the case of a violation of Section 3.2(b)(i), that Member's Units in
excess of the two percent (2%) maximum provided for in Section 3.2(b)(i). The
purchase price for Units purchased by the Company under this Section shall be
an amount equal to the Established Value of the Units determined at the time
the Company notifies the Member of the violation and shall be payable, at the
Company's option, in one lump sum or equal installments over a period of five
(5) years, with interest at a rate equal to the interest rate for 91 day U.S.
Treasury bills, adjusted quarterly.
3.3 Classes of Membership. This Company has two (2) classes of Membership.
(a) Class A Membership. Class A Membership (as quantified by the Class A
Units) shall be the voting Membership Interests of the Company.
(b) Class B Membership. Class B Membership (as quantified by the Class B
Units) shall be non-voting Membership Interests.
3.4 Voting.
(a) Units Required. Each Class A Member owning a minimum of 5,000 Class
A Units shall be entitled to one (1) vote with respect to any matter to be
determined by the Members under this Agreement or the Act, regardless of the
number of Units owned by such Class A Member. Any Class A Member who is in
default of any of its obligations under this Agreement shall not be entitled to
vote on any matter during the period of such default. When determining the
aggregate number of Units held by a Member for purposes of this Agreement, the
Units held by any Member who is in default of any obligations under this
Agreement shall be excluded. Each Member other than individual Members shall
designate in writing to the Chairman of the Board of the Company the name of
one (1) individual authorized to act as such Member's representative with
respect to all matters covered by this Agreement, including the right to
exercise such Member's voting rights hereunder. The Company and the other
Members shall be entitled to rely on the authority of the individual so
designated. Each Member may change such Member's representative by written
notice to the Chairman of the Board at such Member's sole discretion.
A member absent from any meeting may submit an absentee vote on any
motion, resolution, or amendment to be acted upon at such meeting. An absentee
vote must be cast on a ballot containing the exact text of the proposed motion,
resolution, or amendment by delivering such ballot to the Secretary at the
principal office of the Company by hand, by United States mail (with postage
prepaid thereon), by facsimile, by overnight courier or by any other reasonable
means, to arrive not later than five (5) days prior to the day of the meeting
at which the vote is taken.
(b) Non-Voting Members. Any Class A Member owning at least 1,000 Class A
Units but less than 5,000 Class A Units as of the date upon which notice of
action to be taken by the Members is mailed to the Members shall be considered
a non-voting member of the Company and shall not be entitled to vote on any
matters reserved to the Members. The Units held by such non-voting members
shall be excluded in determining the aggregate number of Units held by Members.
Notwithstanding that such member is not entitled to vote, the Units in the
hands of the non-voting member shall continue to be subject to all the
applicable provisions of this Agreement, including but not limited to the
transfer restrictions set forth in Article X hereof. In the event a non-voting
member purchases the minimum number of Class A Units required to receive voting
rights under Section 3.4(a) hereof, such member shall be entitled to the voting
rights set forth in Section 3.4(a) without any further action by the Members or
the Board.
3.5 Place of Meetings. Each meeting of the Members shall be held at such
place as the Board of Directors may from time to time designate in writing to
the Members.
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3.6 Regular Meetings. Regular meetings of the Members shall be held not
less than once per year, at such time and place as determined by the Board of
Directors; provided however, that if a regular meeting has not been held within
six (6) months after the end of each fiscal year of the Company any Member may
demand a meeting of the members by written demand to the Board of Directors.
3.7 Special Meetings. Special meetings of the Members may be called by the
Board of Directors or twenty percent (20%) of the Class A Members. The business
transacted at a special meeting of the Members is limited to the purposes
stated in the notice of the meeting.
3.8 Notice of Meetings. Written notice of each meeting of the Members,
stating the date, time and place, and in the case of a special meeting, the
purpose of the meeting, shall be given in writing at least fourteen (14) days
and not more than sixty (60) days prior to the meeting to every Member entitled
to vote at such meeting.
3.9 Waiver of Notice. A Member may waive the notice of meeting required
under this Article. A written notice of waiver signed by the Member entitled to
notice is effective 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.
3.10 Quorum. The presence (in person or by proxy or mail ballot) of at
least ten percent (10%) of the Class A Members is required for the transaction
of business at a meeting of the Members; provided, however, that a quorum shall
never be more than fifty (50) Class A Members.
3.11 Proxies; Mail Ballots. Voting by proxy or by mail ballot shall be
permitted on any matter if authorized by the Board of Directors.
3.12 Action Without Meeting. Any action required or permitted to be taken
at a meeting of the Members of the Company may be taken without a meeting by
written action signed by all of the Class A Members. The written action is
effective when signed by all the Class A Members, unless a different effective
time is provided in the written action.
3.13 Telephonic Meetings. Any regular or special meeting of the Members
may be taken by telephonic or electronic conference or any other means of
communication through which the Members can simultaneously hear each other
during the conference, if the same notice is given of the conference to each
Member, and if the Members participating in the conference would be sufficient
to constitute a quorum at a meeting. Participation in a telephonic, electronic,
or other conference of such means constitutes presence at the meeting in person
or by proxy if all the other requirements are met.
3.14 Termination of Membership. A Member's Membership Interest terminates
and such Person ceases to be a Member on and following the occurrence of any of
the following events (each an "Event of Disassociation"):
(a) Complete Transfer. The Member transfers all of the Member's Units,
regardless of whether the transferee(s) is admitted as a substitute Member
pursuant to Section 10.5 of this Agreement;
(b) Dissolution of Member. Any event terminating the existence of any
non-individual Member;
(c) Death of Individual Member. The death of any individual Member;
(d) Withdrawal. The Member resigns by written notice to the Chairman of
the Board; or
(e) Disqualification. The Member holds less than the minimum number of
Units required by Section 3.2(a) or more than the maximum number of Units
permitted by Section 3.2(b) and fails to cure the applicable violation within
one (1) year after notice thereof by the Company.
A Person who has ceased to be a Member shall be considered a non-member
Unit Holder only, and 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, shall not be entitled to vote on any matters reserved
to the Members, and shall not have any of the other rights of a Member under
the Act or this Agreement.
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The Units held by such Unit Holder shall be excluded in determining the
aggregate number of Units held by Members. Notwithstanding that such Unit
Holder is no longer a Member, the Units in the hands of such Unit Holder shall
continue to be subject to all the applicable provisions of this Agreement,
including but not limited to the transfer restrictions set forth in Article X
hereof.
In the event such Unit Holder ceased to be a Member pursuant to Section
3.14(f), such Unit Holder shall be reinstated as a Member without any further
action by the Members or the Board upon a showing to the Board that such Unit
Holder meets the minimum and maximum requirements set forth in Section 3.2.
3.15 Continuation of the Company. The Company shall not be dissolved upon
the occurrence of an Event of Disassociation or any other 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.
3.16 No Obligation to Purchase Units. No Member whose membership in the
Company terminates shall have any right to demand or receive a return of such
terminated Member's Capital Contributions. Neither the remaining Members nor
the Company shall have any obligation to purchase or redeem the Units of any
such terminated Member.
3.17 Advance Consent to Certain Substitute Members.
(a) Substitute Member -- Dissolution. In the event of dissolution of a
non-individual Member, any person who continues the business of a dissolved
Member, or who holds some or all of the Membership Interest of the dissolved
Member, shall be admitted as a substitute Member; provided, however, that such
Person shall not be admitted as a substitute Member unless and until each of
the conditions set forth in Section 10.3 of this Agreement have been satisfied.
(b) Substitute Member -- Death. In the event of the death of an
individual Member, each of the following Persons who holds some or all of the
Membership interest of the deceased Member shall be admitted as a substitute
Member; provided, however, that such Person shall not be admitted as a
substitute Member unless and until each of the conditions set forth in Section
10.3 of this Agreement are satisfied at the time such Person becomes the holder
of all or some of such Membership Interest:
(i) the estate of the deceased Member;
(ii) the surviving joint tenant of the Membership Interest; and
(iii) any distributee of the estate of the deceased Member, including
any trustee(s) of a trust which holds some or all of the Membership Interest of
the deceased Member.
The rights of the estate of a deceased Member shall be exercised by the
personal representative(s) appointed by the court as the personal
representative of the estate of a deceased Member.
(c) Substitute Member. The purpose of this Section 3.17 is that the
voting rights of any Member whose membership is terminated by the dissolution
or death of such Member shall follow the Membership Interest of such Member
notwithstanding such termination, through the automatic substitution of the
holder of all or some of such Membership Interest as a substitute Member. Any
Person who is admitted as a substitute Member under this Section 3.17 shall be
entitled to all of the rights and bound by the obligations of, the Member for
which it is substituted.
3.18 Compliance with Articles of Organization and Operating Agreement.
Each Member of the Company is subject to the terms of the Company's Articles of
Organization, this Agreement, and such other reasonable policies and procedures
as the Board from time to time adopts to implement the terms of this Agreement.
3.19 No Dissenters' Rights. No Member or Unit Holder shall have any
dissenters' rights or appraisal rights or other similar rights as a result of
any merger or consolidation or other action involving the Company approved by
the Class A Members as provided in Section 6.16 hereof.
3.20 Purchase of Class B Units. The Company agrees with ADM (as the holder
of the Class B Units) that, on or before August 1, 2001, it will present for
approval of the Class A Members pursuant
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to Section 6.16 amendments to this Agreement having the effect of (a)
eliminating the requirement of Section 3.2(b)(ii) that Class A Units may be
owned only by Producers, and (b) modifying the requirement of Section
3.2(b)(iii) that Competitors cannot own Class A Units to permit ADM to own
Class A Units, and (c) eliminating the maximum number of Class A Units that may
be owned by any Class A Member as set forth in Section 3.2(b)(i). The Company
will coordinate with ADM regarding the timing and manner of presenting these
proposed amendments to the Class A Members.
If the amendments to this Agreement described in the preceding paragraph
are not for any reason presented to the Class A Members for approval on or
before August 1, 2001, or if such amendments are presented to the Class A
Members but not approved pursuant to Section 6.16 and made effective on or
before August 1, 2001, then the Company shall, upon written demand by ADM made
on or before December 31, 2001, purchase all of the Class B Units from ADM (and
ADM shall sell all of the Class B Units to the Company), for cash in an amount
equal to the "Buy-Out Price". The closing of the purchase of the Class B Units
shall occur on a date mutually acceptable to the Company and ADM within one
hundred eighty (180) days after the receipt by the Company of the demand by ADM,
and at the closing the Company shall pay ADM the Buy-Out Price in cash and ADM
and the Company shall execute appropriate transfer and release instruments. The
"Buy-Out Price" shall mean the sum of (1) Ten Million Dollars ($10,000,000),
together with interest on that amount calculated at a rate equal to seven
percent (7%) per annum (the "Accrual Rate"), compounded annually, from May 27,
1997 to the closing date, plus (2) One Hundred Nine Million Seven Hundred Ninety
Thousand Dollars ($109,790,000), together with interest on that amount
calculated at the Accrual Rate, compounded annually, from August 27, 1997 to
the closing date, minus (3) the amount of all cash distributions made by the
Company to ADM relative to its ownership of the Class B Units, together with
interest on such amounts calculated at the Accrual Rate from the date(s) of
receipt by ADM to the closing date, minus (4) the interest on the value of tax
benefits realized by ADM as a result of its ownership of Class B Units
calculated at the Accrual Rate from the date(s) the benefits were realized to
the closing date.
The Company and ADM acknowledge that their intent underlying the
above-stated formula for determining the "Buy-Out Price" was to provide ADM
with a seven percent (7%) annual return on its investment in the Company.
In the event that after the closing date any of the tax-related components
of the above-stated formula for determining the "Buy-Out Price" is changed as a
result of any audit or other review by the Internal Revenue Service, the
Company and ADM shall promptly, upon such revised tax-related components being
known, recompute the "Buy-Out Price" and make the corresponding payment plus
interest at the Accrual Rate from the closing date to the date of payment.
ARTICLE IV
CAPITAL
4.1 Units. The Company shall be authorized to issue 500,000,000 Units. Of
the total number of Units authorized in this Section 4.1, 350,000,000 Units are
hereby designated as Class A Units, and 150,000,000 Units are hereby designated
as Class B Units.
4.2 Capital Accounts. A Capital Account maintained for such 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 (determined in the case of the initial
Unit Holders as provided in Section 4.3(a)), (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 5.2 or Section 5.3 hereof,
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
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expenses or losses which are specially allocated pursuant to Section 5.2 or
Section 5.3 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 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 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 Board of Directors shall determine that it is prudent, it may modify
the manner in which the Capital Accounts are maintained, provided that it is
not likely to have a material effect on the amounts distributed to any Person
pursuant to Article XI hereof upon the dissolution of the Company. The Board of
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 appropriate modifications in the event unanticipated events might
otherwise cause this Agreement not to comply with Regulations Section
1.704-1(b).
4.3 Initial Issuance of Units; Offering of Additional Units.
(a) MCP Colorado will fund the Company on the Closing Date specified in
the Transaction Agreement by contributing all of its assets to the Company in
consideration of the Company's assumption of all of MCP Colorado's liabilities
and other obligations. On the effective date of the merger of MCP Colorado into
the Company, each member of MCP Colorado shall be issued the number and class
of Units that corresponds to the number and class of units such member held in
MCP Colorado. As the result of the foregoing transactions, the Unit Holder
shall be deemed to have made a Capital Contribution in the amount the product
of (i) the number of Units distributed to such Unit Holder, times (ii) the
Initial Agreed Value Per Unit.
(b) From time to time, the Board of Directors may authorize the issuance
and sale by the Company of additional Units (within the limits set forth in
Section 4.1). In the event the Company offers such additional Units, the
Company shall offer the existing Class A and Class B Members the opportunity to
purchase additional Units so as to permit them to maintain at a constant level
their then existing percentage of the total Class A or Class B Units. Class A
and Class B Members may purchase all or any portion of the additional Units
offered pursuant to this Section 4.3(b).
4.4 No Capital Calls. The Company may not require Members to make
additional contributions of capital to the Company for any reason, except as
provided in Section 4.5.
4.5 Tax Withholding Obligations. The Board of Directors may, in its
discretion, by resolution require that any Member to whom a Tax Withholding
Obligation is attributable make an additional contribution to the capital of
the Company in an amount equal to such Tax Withholding Obligation less the
amount of any loans for such purpose made to the Company pursuant to Section
4.9.
4.6 Transferee Succeeds to Transferor's Capital Account. Any transfers
permitted by Article X of this Agreement by a Member to a transferee of all or
a part of such Member's Membership Interest in the Company shall vest in such
transferee (and such transferee shall become a successor in interest) the
interest of the transferor Member's Capital Account to the extent of the
Membership Interest transferred.
4.7 No Right to Return of Contributions. The Members (including terminated
members) shall have no right to the withdrawal or the return of their
respective Capital Contributions except to the extent set forth in Article XI
upon liquidation of the Company.
4.8 No Interest on Capital Contributions. Other than Distributions
authorized pursuant to Article V or Article XI, no Member shall be entitled to
receive any interest or other property on account of the Member's Capital
Contributions to the Company.
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4.9 Loans to the Company. A Member may lend money to the Company if
authorized by the Board of Directors. Any such loan shall not be treated as a
Capital Contribution for any purpose and shall not entitle the Member to any
increase in such Member's Membership Interest. The Company shall be obligated
to such Member for the amount of any such loan, with interest thereon at such
rate as may have been agreed upon by the Board of Directors.
4.10 No Repayment Liability. No Member, Director or other Unit Holder
shall be personally liable for the repayment of any Capital Contributions of
any other Unit Holder.
ARTICLE V
ALLOCATIONS AND DISTRIBUTIONS
5.1 Allocation of Profits and Losses. After giving effect to the special
allocations set forth in Section 5.2 or Section 5.3, Profits and Losses for any
accounting period shall be allocated to the Unit Holders and shall be divided
among them in proportion to the number of Units held by each as set forth on
the Membership Register.
5.2 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
Article V, if there is a net decrease in Company Minimum Gain during any
allocation period, each Unit Holder shall be specially allocated items of
Company income and gain for such allocation period (and, if necessary,
subsequent allocation periods) 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 Article V, if there is a net decrease in Unit Holder Nonrecourse Debt
Minimum Gain attributable to a Unit Holder Nonrecourse Debt during any
allocation period, 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
allocation period (and, if necessary, subsequent allocation periods) in an
amount equal to such Unit Holder's share of the net decrease in Unit Holder
Nonrecourse Debt, 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
5.2(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 Unit Holder 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 gain shall be specially allocated
to such Unit Holder in an amount and manner sufficient to eliminate, to the
extent required by the Regulations, the Adjusted Capital Account Deficit of the
Unit Holder as quickly as possible, provided that an allocation pursuant to
this Section 5.2(c) shall be made only if and to the extent that the Unit
Holder would have an Adjusted Capital Account Deficit after all other
allocations provided for in this Article V have been tentatively made as if
this Section 5.2(c) were not in the Agreement.
(d) Gross Income Allocation. In the event any Unit Holder has a deficit
Capital Account at the end of any allocation period which is in excess of the
sum of (i) the amount such Unit Holder is
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obligated to restore pursuant to the penultimate sentences of Regulations
Sections 1.704-2(g)(1) and 1.704-2(i)(5), each such Unit Holder 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 5.2(d) shall be made only if and to the extent that such Unit Holder
would have a deficit Capital Account in excess of such sum after all other
allocations provided for in this Article V have been made as if Section 5.2(c)
and this Section 5.2(d) were not in the Agreement.
(e) Nonrecourse Deductions. Nonrecourse Deductions for any allocation
period shall be specially allocated to the Unit Holders in proportion to their
respective Units held.
(f) Unit Holder Nonrecourse Deductions. Any Unit Holder Nonrecourse
Deductions for any allocation period 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 Units. Any income, gain,
loss or deduction realized as a direct or indirect result of the issuance of
Units by the Company shall be allocated among the Unit Holders so that, to the
extent possible, the net amount of such 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 items had
not been realized.
(i) Allocations Relating to Special Financial Interests. If a
distribution is made to a holder of a Special Financial Interests under Section
5.7(a) or 11(d), a corresponding amount of income, gain, gross receipts or
gross sales proceeds, as determined by the Board of Directors, shall be
allocated to such holder.
5.3 Curative Allocations. The allocations set forth in Sections 5.2(a)
through 5.2(g) and 5.4 (the "Regulatory Allocations") are intended to comply
with certain requirements of the Regulations. It is the intent of the Unit
Holders 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
5.3. Therefore, notwithstanding any other provision of this Section 3 (other
than the Regulatory Allocations), the Board of 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 Unit Holder's Capital Account balance is, to the
extent possible, equal to the Capital Account balance such Unit Holder would
have had if the Regulatory Allocations were not part of the Agreement and all
Company items were allocated pursuant to Sections 5.1 and 5.2(h).
5.4 Loss Limitation. Losses allocated pursuant to Section 5.1 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
allocation period. 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 5.1 hereof, the limitation set forth in this Section 5.4
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.
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5.5 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 Board of
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 Article 5 and hereby agree to be bound by the
provisions of this Article 5 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' interests in Company
profits are in proportion to their Units held.
To the extent permitted by Section 1.704-2(h) (3) of the Regulations, the
Company shall endeavor to treat distributions 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.
5.6 Tax Allocations. 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 using such
allocation method as may be provided by Regulations and selected by the Board
of Directors.
In the event the Gross Asset Value of any Company asset is adjusted
pursuant to subparagraph (b) 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 Board of Directors in any manner that reasonably reflects the
purpose and intention of this Agreement. Allocations pursuant to this Section
5.6 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.
5.7 Distributions. Cash shall be distributed in the amounts and at such
times as the Board may determine in its discretion; provided, however, that the
declaration and making of any distribution shall in all instances be limited by
applicable provisions of the Act. Subject to such limitation, the Board shall
endeavor to cause the Company to make cash distributions in amounts reasonably
matching the income taxes payable with respect to ownership of Units.
Distributions shall be in such amounts as the Board determines is not required
to be retained by the Company to meet the reasonably foreseeable cash
requirements and needs of the business and activities of the Company and to
establish an adequate reserve for the payment of Company liabilities and
contingencies. Distributions of cash or other property hereunder shall be made
as follows:
(a) In the sole discretion of the Board of Directors, distributions may
be made prorata to the holders of Special Financial Interests in any amount up
to the stated amount thereof provided that the aggregate amount of such
distributions shall not exceed the aggregate stated amount of all Special
Financial Interests.
(b) Except as otherwise provided in Section 5.7(a), to the Unit Holders
to be divided among them in proportion to the number of Units held by each Unit
Holder.
(c) Any distribution may be made subject to offset for any debt or other
amount owed by the Unit Holder or the holder of a Special Financial Interest to
the Company.
For purposes of determining those Unit Holders entitled to receive
distributions pursuant to this Section 5.7, the Board of Directors may fix in
advance a record date which shall be the first day of any
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calendar month following the calendar month in which the Board of Directors
declares the distribution. If no such record date is fixed by the Board, the
record date shall be the first day of the calendar month in which the
distribution is to paid. Notwithstanding the foregoing, distributions made with
respect to Units that are the subject of a Transfer shall be made in accordance
with Section 10.6 hereof and distributions made with respect to additional
Units issued by the Company shall be made in accordance with Section 10.6 as if
such additional Units had been the subject of a Transfer.
5.8 Tax Withholding Obligations Constitute a Distribution. Any Tax
Withholding Obligation which is withheld by the Company shall constitute a
distribution of such amount by the Company to the Unit Holder to whom such Tax
Withholding Obligation is attributable.
ARTICLE VI
BOARD OF DIRECTORS
6.1 Board of Directors. Except as otherwise provided in this Agreement,
the business and affairs of the Company shall be managed under the direction of
the Board of Directors as provided herein. Prior to the merger of MCP Colorado
into the Company pursuant to the Transaction Agreement, the Board of Directors
shall consist of the individuals identified as such in the Articles of
Organization. At the effective time of the merger of MCP Colorado into the
Company pursuant to the Transaction Agreement, the Board of Directors shall
consist of the Directors specified in the Transaction Agreement. Thereafter,
the Board of Directors shall consist of twenty-four (24) Directors, who shall
be elected by the Class A Members in accordance with this Article.
6.2 Qualifications of Directors. All Directors elected by the Class A
Members shall be natural persons and must be Class A Members or an elected or
appointed representative of a Class A Member which is other than a natural
person.
6.3 Election of Directors. At each Annual Meeting of the Members,
elections shall be held to fill all vacancies on the Board of Directors. Class
A Members may vote by mail ballot for directors. Directors shall be elected for
staggered terms of three (3) years and until a successor is elected and
qualified.
6.4 Removal of Directors. The Board of Directors or any individual
director may be removed from office, with cause, by a vote of a majority of the
Class A Members from the district that elected the director that are present in
person or by mail ballot, and that are entitled to vote at the meeting of the
Class A Members at which said removal of directors is considered. In case any
one (1) or more directors be so removed, successor directors shall be elected
at the same meeting. Such successor directors shall be from the same district
or districts as the director or directors so removed. Notice of a meeting at
which any Class A Members will be voting to remove a director must state
removal of directors as an item to be voted upon at the meeting.
6.5 Vacancies. Whenever a vacancy occurs on the Board of Directors, other
than from expiration of a term of office or removal from office, a majority of
the remaining Directors shall appoint a Member from the same district to fill
the vacancy until the next Annual Meeting of the Class A Members, at which time
the Members may elect a new Director to fill the vacancy for the remainder of
the term of the vacant Directors.
6.6 Annual Meeting. An annual organizational meeting of the Board of
Directors shall be held within thirty (30) days following each Annual Meeting
of the Class A Members for the purpose of the election of the board officers
for the ensuing year, and to transact such other business as may properly come
before the meeting.
6.7 Regular Meetings. A regular meeting of the Board of Directors shall be
held at such frequency and at such time and place as the Board of Directors may
determine.
6.8 Special Meetings. A special meeting of the Board of Directors shall be
held whenever called by the Chairman or, during his or her absence, by the Vice
Chairman, on forty-eight (48) hours' notice to each Director personally, or by
mail. Special meetings shall be called by the Chairman or Secretary in
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like manner and on like notice on the written request of any Director. The
purpose of a special meeting need not be specified in the notice of the
meeting. Notice of any special meeting may be waived by attendance at a
meeting, except when a Director attends a meeting and objects to the
transaction of business, or by a waiver of notice signed before, during, or
after the meeting.
6.9 Quorum, Voting. A majority of the Directors in office shall constitute
a quorum necessary to the transaction of business at any annual organizational
meeting, regular meeting, or special meeting of the Board of Directors, but if
less than a quorum is present, those Directors present may adjourn the meeting
from time to time until a quorum shall be present. All questions shall be
decided by a vote of a majority of the Directors present at a meeting.
6.10 Executive Committee. The Board of Directors may designate three (3)
or more Directors, one of whom shall be the Chairman of the Board, to
constitute an Executive Committee. The Board of Directors may elect other
Directors as alternative members of the Executive Committee. To the extent
determined by the Board of Directors, the Executive Committee shall have and
exercise the authority of the Board of Directors in the direction of the
Company; provided, however, that the Executive Committee shall not have the
powers of the Board of Directors in regard to apportionment or distribution of
cash, election of officers, filling vacancies on the Board of Directors, and
recommending amendments to this Agreement. The Executive Committee shall act
only in the interval between meetings of the Board of Directors, and shall be
subject at all times to the control and direction of the Board of Directors.
Copies of the minutes of each Executive Committee meeting shall be mailed to
all directors within seven (7) days following such meeting.
6.11 Compensation. The compensation of the Board of Directors shall be
determined by resolution of the Board of Directors, which shall be presented
for approval to the Class A Members at any Annual Meeting or special meeting,
and when so determined shall be continuing until altered or amended. Board
officers shall be entitled to reimbursement for actual expenses incurred in
attending Board of Directors meetings or in conducting other business of the
Company. Such expense accounts shall be approved by officers of the Board of
Directors.
6.12 Number of Districts. The territory in which the Class A Members are
located shall be divided into eight districts. The boundaries of such districts
shall be defined without dividing counties, and the number of Directors
representing each district shall be approximately proportionate to the number
of Class A Members located in that district. Each district shall be represented
by two or more Directors, who shall be elected at the Annual Meeting, as
provided in Section 6.3.
6.13 Districting Committee. Periodically, the Board of Directors may
appoint a Districting Committee. The Districting Committee shall review the
boundaries of the districts, the number of Class A Members located in each
district, and the number of Directors representing each district. The
Districting Committee shall then recommend any changes to said boundaries that
are necessary to maintain equality of representation among such districts.
The boundaries of the districts, the number of Class A Members located in
each district, and the number of Directors representing each district shall be
subject to review by the Districting Committee at least every three years. The
recommendations of the Districting Committee may be accepted, rejected, or
modified by the Board of Directors. Rather than appointing a Districting
Committee, the Board of Directors may delegate the duties, powers, rights, and
responsibilities described in this Section 6.13 to any existing committee of
the Board of Directors.
6.14 Counties and Districts. Initially, the counties in each of the eight
districts shall be as follows:
(a) District One. District One shall include the following counties in
Minnesota: Anoka, Big Stone, Chisago, Clay, Crow Wing, Dakota, Douglas, Grant,
Hennepin, Kanabec, Kandiyohi, Mahnomen, Xxxxxx, Mille Lacs, Xxxxxxxx, Xxxxxx,
Otter Tail, Pennington, Polk, Pope, Ramsey, Red Lake, Sherburne, Stearns,
Stevens, Swift, Todd, Traverse, Wadena, Washington, Wilkin, and Xxxxxx.
(b) District Two. District Two shall include the following counties in
Minnesota: Blue Earth, Carver, Dodge, Faribault, Fillmore, Freeborn, Goodhue,
Le Sueur, McLeod, Mower, Nicollet, Olmsted, Renville, Rice, Scott, Sibley,
Steele, Wabasha, and Waseca.
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(c) District Three. District Three shall include Xxxxx County, Redwood
County, and Watonwan County in Minnesota.
(d) District Four. District Four shall include Chippewa County and Lac
Qui Parle County in Minnesota.
(e) District Five. District Five shall include Lincoln County and Yellow
Medicine County in Minnesota, and shall also include the following counties in
South Dakota: Xxxxxx, Bon Homme, Brookings, Xxxxx, Xxxxxxx Mix, Clark, Clay,
Codington, Deuel, Grant, Hamlin, Kingsbury, Lake, Lincoln, McCook, Miner,
Minnehaha, Xxxxx, Spink, Turner, and Yankton.
(f) District Six. District Six shall include Lyon County in Minnesota.
(g) District Seven. District Seven shall include the following counties
in Minnesota: Cottonwood, Jackson, Martin, Murray, Nobles, Pipestone, and Rock.
District Seven shall also include the following counties in Iowa: Cerro Gordo,
Clay, Chickasaw, Xxxxxxxxx, Xxxxx, Lyon, Mitchell, Osceola, Sioux, and
Winnebago.
(h) District Eight. District Eight shall include all of the counties in
Nebraska, and shall also include the following counties in Iowa: Xxxxxxx,
Crawford, Davis, Delaware, Dubuque, Fremont, Xxxxxxxx, Xxx, Xxxx, Xxxxxx, Page,
Pottawattamie, Shelby, Story, and Xxxxxxx.
If a situation arises where a Class A Member is located in a county or
state which is not designated as part of the any of the eight districts, then
the Board of Directors may add that county or state to whichever of the
districts the Board of Directors determines is most logical, in its sole
discretion, and may notify the affected Member of its decision. The Board of
Directors may take this action without the need for any additional amendments
to this Agreement. The designation of new counties to existing districts by the
Board of Directors under these circumstances shall be reviewed by the
Districting Committee when it is next appointed.
6.15 Directors and Districts. Initially, the number of directors
representing each district shall be as follows:
(a) District One shall be represented by three directors.
(b) District Two shall be represented by three directors.
(c) District Three shall be represented by three directors.
(d) District Four shall be represented by two directors.
(e) District Five shall be represented by three directors.
(f) District Six shall be represented by two directors.
(g) District Seven shall be represented by three directors.
(h) District Eight shall be represented by five directors.
6.16 Board Actions Requiring Approval of Members. The Board may not
authorize or approve the following actions without the affirmative vote or
prior consent of sixty-six and two-thirds percent (66.67%) of the Class A
Members voting in person, by proxy or by mail ballot at a duly called Members
meeting:
(a) Any amendment of this Agreement or the Articles of Organization of
the Company (except that the Board may amend Sections 3.20 or 6.17
without the consent or approval of any Class A Members);
(b) Approve any merger, consolidation, share or interest exchange, or
sale of all or substantially all of the assets of the Company
(other than the merger contemplated in the Transaction Agreement
and a merger of a wholly-owned subsidiary with and into the Company
in which the Company is the surviving entity);
(c) Voluntarily cause the dissolution of the Company; and
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(d) Authorize any transaction, agreement or action on behalf of the
Company that is not related or complimentary to the Company's
existing business or would make it impossible for the Company to
carry on the primary business of the Company.
6.17 Board Actions Requiring Approval of ADM. So long as ADM holds at
least one-third of the outstanding Class B Units, neither the Board nor the
Class A Members may authorize or approve the following actions without the
prior written consent of ADM:
(a) Make any material change in the principal business of the Company;
(b) Sell, lease, liquidate, exchange, dispose of or otherwise transfer
substantially all of the assets of the Company; or
(c) Embark upon any capital expenditure project that would involve the
expenditure by the Company of any amount in excess of Two Hundred
and Fifty Thousand Dollars ($250,000.00).
ADM shall not unreasonably withhold any consent required of it pursuant to
this Section 6.17. For purposes of assessing the reasonableness of the
withholding by ADM of consent hereunder, reference shall be made to the
viewpoint of a lender or passive investor that occupies the position of sole
holder of the Class B Units.
6.18 Absent Directors. A Director of the Company may give advance written
consent or opposition to a proposal to be acted upon at a Board meeting. If the
Director is not present at the meeting, consent or opposition to a proposal
does not constitute presence at the meeting for purposes of determining
existence of a quorum, but consent or opposition shall be counted as a vote in
favor of or against the proposal and shall be entered in the minutes or other
record of action at the meeting, if the proposal acted on at the meeting is
substantially the same or has substantially the same effect as the proposal to
which the Director has consented or objected.
6.19 Action Without Meeting. Any action required or permitted to be taken
at a meeting of the Directors may be taken without a meeting by written action
signed by all of the Directors. The written action is effective when signed by
all the Directors, unless a different effective time is provided in the written
action.
6.20 Telephonic Meetings. Any regular or special meeting of the Directors
may be taken by telephonic or electronic conference or any other means of
communication through which the Directors can simultaneously hear each other
during the conference, if the same notice is given of the conference to each
Director, and if the Directors participating in the conference would be
sufficient to constitute a quorum at a meeting. Participation in a telephonic,
electronic, or other conference of such means constitutes presence at the
meeting in person if all the other requirements are met.
ARTICLE VII
DUTIES OF DIRECTORS
7.1 General Powers. The Board of Directors shall direct the business and
affairs of the Company, and shall exercise all of the powers of the Company
except such as are by this Agreement conferred upon or reserved to the Members.
The Board of Directors shall adopt such policies, rules, regulations, and
actions not inconsistent with law or this Agreement as it may deem advisable.
7.2 Employment of President and Chief Executive Officer. The Board of
Directors shall select and employ a President and Chief Executive Officer and
fix the compensation of such President and Chief Executive Officer. The Board
of Directors may terminate the employment of the President and Chief Executive
Officer with or without cause at any time, unless an enforceable written
contract between the Company and the President and Chief Executive Officer
provides otherwise.
7.3 Bonds and Insurance. The Board of Directors shall require the
President and Chief Executive Officer and all officers, agents, and employees
charged by the Company with responsibility for the
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custody of any of its funds or property to give adequate bonds. Such bonds,
unless cash security is given, shall be furnished by a responsible bonding
company and approved by the Board of Directors, and the cost thereof shall be
paid by the Company. The Company shall provide for the adequate insurance of
the property of the Company, or property which may be in the possession of the
Company, or stored by it, and not otherwise adequately insured, and in addition
adequate insurance covering liability for accidents to all employees and the
public.
7.4 Accounting System and Audit. The Board of Directors shall cause to be
installed and maintained an adequate system of accounts and records. At least
once in each year the books and accounts of the Company shall be audited by an
independent auditing firm, and the report of such audit shall be made at the
next Annual Meeting of the Class A Members.
7.5 Agreements with Members. The Board of Directors and such duly
authorized officers shall have the power to carry out all agreements of the
Company with its Members in every way advantageous to the Company representing
the Members collectively.
7.6 Depository. The Board of Directors may direct management to approve
one or more banks or other financial institutions to act as depositories of the
funds of the Company, and to determine the manner of receiving, depositing, and
disbursing the funds of the Company, the form of checks, and the person or
persons by whom they shall be signed, with the power to change such banks and
the person or persons signing such checks and the form thereof at will.
ARTICLE VIII
BOARD OFFICERS; PRESIDENT AND CHIEF EXECUTIVE OFFICER
8.1 Election of Board Officers. At each Annual Meeting of the Board of
Directors, the Board of Directors shall elect the principal officers of the
Board, which principal officers shall be a Chairman, a Vice Chairman, a
Secretary and such other Board officers as may be established by the Board. The
Chairman, Vice Chairman and Secretary must be Directors of the Company. A board
officer may be removed by the Board of Directors whenever in its judgment the
best interests of the Company will be served thereby. If any vacancy shall
occur among the principal officers of the Board, it shall be filled by the
Board of Directors at its next regular meeting following the vacancy.
8.2 Duties of Chairman. The Chairman shall:
(a) preside over all meetings of the Members of the Company, the
Executive Committee, and the Board of Directors;
(b) call special meetings of the Board of Directors;
(c) perform all acts and duties usually performed by an executive and
presiding officer; and
(d) sign all membership certificates and such other papers of the
Company as the Chairman may be authorized or directed to sign by the Board of
Directors; provided, however, that the Board of Directors may authorize any
person to sign any or all checks, contracts, and other documents in writing on
behalf of the Company. The Chairman shall perform such other duties as may be
prescribed by this Agreement or by the Board of Directors.
8.3 Duties of Vice Chairman. In the absence or disability of the Chairman,
the Vice Chairman shall perform the duties of the Chairman.
8.4 Duties of Secretary. The Secretary shall attend all meetings of the
Company and the Board of Directors, all meetings of the Executive Committee,
and all meetings of the Members, and shall record all votes and keep minutes of
all proceedings. The Secretary shall keep a complete record of all meetings of
the Company and of the Board of Directors. The Secretary shall sign such papers
pertaining to the Company as he or she may be authorized or directed to sign by
the Board of Directors. The Secretary shall serve all notices required by law
and by this Agreement, including notices of meetings, and shall make a full
report of all matters and business pertaining to his or her office to the
Members at the Annual Meeting. The Secretary shall cause to be kept and
maintained complete membership records,
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shall make all reports required by law, and shall perform such other duties as
may be required of him or her by the Company or the Board of Directors. An
Assistant Secretary, if any, shall perform the duties of the Secretary during
the absence or disability of the Secretary.
8.5 Duties of President and Chief Executive Officer. The President and
Chief Executive Officer shall be employed by the Board of Directors as an
officer of the Company and shall perform such duties as the Board of Directors
may prescribe, and shall exercise such authority as the Board of Directors may
from time to time vest in him or her. Under the direction of the Board of
Directors, the President and Chief Executive Officer shall have general charge
of the ordinary and usual business operations of the Company, including the
purchasing, marketing and handling of all products and supplies handled by the
Company.
The President and Chief Executive Officer shall cause all money belonging
to the Company that comes into his or her possession in the name of the Company
to be deposited in a bank or other financial institution selected by the Board
of Directors, and if authorized to do so by the Board of Directors, shall make
all disbursements by check or electronic transfer of funds therefrom for the
ordinary and necessary expenses of the business in the manner and form
prescribed by the Board of Directors. On the appointment of his or her
successor, the President and Chief Executive Officer shall deliver to said
successor all money and property belonging to the Company which he or she has
in his or her possession or over which he or she has control.
The President and Chief Executive Officer shall be required to maintain
the Company's records and accounts in such a manner that the true and correct
condition of the Company's business may be ascertained therefrom at any time.
The President and Chief Executive Officer shall render annual and periodic
statements in the form and in the manner prescribed by the Board of Directors,
and shall carefully preserve all books, documents, correspondence, and records
of whatever kind pertaining to the business of the Company that may come into
his or her possession.
The President and Chief Executive Officer shall employ, supervise, and
dismiss any or all officers or employees of the Company, except agents or
counsel specifically employed by the Board of Directors. The President and
Chief Executive Officer may designate employees of the Company as various vice
presidents or assistant secretaries of the Company and define their duties and
responsibilities as such officers of the Company.
8.6 Compensation. The salary, compensation, and other benefits of the
President and Chief Executive Officer and all Board officers shall be fixed by
the Board of Directors; provided, however, that no officer who is a director
may take part in the vote on his or her own compensation.
8.7 Special Powers. The President and Chief Executive Officer or any
officer may be vested by the Board of Directors with any power and charged with
any duty not contrary to law or inconsistent with this Agreement.
ARTICLE IX
REQUIRED RECORDS; ACCOUNTING AND TAX MATTERS
9.1 Required Records. The Board shall cause to be maintained the required
records of the Company in a complete and accurate manner. The Board shall cause
to be maintained the required records on a current basis, including, without
limitation, the recording of any transfer of all or part of a Member's
Membership Interest pursuant to Article X hereof in the required records as
soon as the Board receives notice of such transfer. The Board shall
conspicuously note in the required records that the Members' Membership
Interests are governed by this Agreement and that this Agreement contains a
restriction on the assignment of Membership Interests. The required records at
all times shall be kept at the principal executive office of the Company or
such other place or places within the United States as the Board may determine.
Each Member shall have access to and may inspect and (at its expense) copy the
required records to the extent allowable and in accordance with the Act,
subject to such reasonable standards as may be established by the Company in
accordance with the Act as to certain of the required records. The costs of
such inspection shall be borne by the inspecting Member.
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9.2 Books of Account. The Board shall cause to be kept complete and
accurate accounts of all transactions of the Company in proper books of account
and shall enter or cause to be entered therein a full and accurate account of
each and every Company transaction in accordance with accounting principles and
methods as determined by the Board with the advice of the Company's
accountants. The books of account of the Company shall be closed and balanced
as of the end of each fiscal year. The books of account and other records of
the Company shall at all times be kept at the principal executive office of the
Company or such other place or places within the United States as the Board may
determine. Each Member shall have access to and may inspect and copy any of
such books and records at all reasonable times and in accordance with the Act.
The costs of such inspection and copying shall be borne by the inspecting
Member.
9.3 Tax Characterization, Returns, Elections and Information. The Members
acknowledge that the Company will be characterized as a partnership for federal
income tax purposes. Management shall prepare or cause to be prepared and shall
file on or before the due date (or any extension thereof) any federal, state or
local tax returns required to be filed by the Company and, except as otherwise
provided in any Board resolution, shall have complete discretion and authority
concerning any tax election required or permitted to be made by the Company.
Notwithstanding the preceding sentence, the Company shall not make an election
under Section 754 of the Code unless the Board shall determine by resolution
that the tax benefits made available to affected transferee Members as a result
of such an election are likely to be of sufficient magnitude to justify the
increased cost and administrative burden of accounting for the resulting basis
adjustments under Sections 734(b) and 743(b) of the Code.
Management shall deliver or cause to be delivered to each Member within a
reasonable time after the end of each fiscal year or, if applicable, after the
extended due date of the Company's tax return, such information concerning the
Company as is necessary or appropriate to permit each Member to properly
complete any federal, state or local income tax return in which Members must
include items attributable to the Company. Management shall endeavor to provide
sufficient information from time to time during the year as may be appropriate
to permit the Members to pay federal, state and local estimated taxes.
9.4 Tax Matters Partner; Tax Audit Costs. The Tax Matters Partner shall be
the person so designated in accordance with Sections 6221-33 of the Code and
related Treasury Regulations and such person shall assume the responsibilities
assigned to tax matters partners therein. The Board may designate the Tax
Matters Partner in accordance with said sections and regulations or, if no such
designation is made, the Tax Matters Partner shall be the Chairman of the Board
or, if such Chairman is not a Member, the Director who is a Member and who,
among the other Directors who are members, individually owns the largest number
of Units.
If on advice of counsel the Tax Matters Partner determines that it is in
the best interest of the Members that the final results of any administrative
proceeding be appealed by the institution of legal proceedings, the Tax Matters
Partner is hereby authorized to commence such legal proceedings in such forum
as the Tax Matters Partner, on advice of counsel, determines to be appropriate.
In the event the Tax Matters Partner selects a forum for appeal in which the
Unit Holders are required to deposit a proportionate share of any disputed tax
before making such appeal, the Tax Matters Partner must obtain the approval of
the Board and the consent of Members owning a majority of the Voting Interests.
If such approval and consent is obtained, each of the Unit Holders will be
required to deposit and pay such Unit Holder's proportionate share of such
disputed tax before participating in such appeal. The Unit Holders acknowledge
that such deposit under current law does not earn interest and that the failure
to so deposit may preclude a Unit Holder from pursuing any other sort of appeal
by court action.
The Tax Matters Partner shall not be liable to any other Unit Holder for
any action taken with respect to any such administrative proceedings or appeal
so long as the Tax Matters Partner is not grossly negligent or guilty of
willful misconduct. Any costs paid or incurred by the Tax Matters Partner in
connection with its activities in such capacity shall be reimbursed by the
Company.
Each Unit Holder acknowledges that any cost a Unit Holder may incur in
connection with an audit of such Unit Holder's income tax return, including an
audit of such Unit Holder's investment in this
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Company, is such Unit Holder's sole responsibility and obligation. The Company,
the Board, the officers and the Tax Matters Partner shall not be liable to any
Unit Holder for reimbursement or sharing of any such costs.
ARTICLE X
TRANSFER OF MEMBER INTERESTS
10.1 Restrictions on Transfer.
(a) No Person shall Transfer any Unit if, in the determination of the
Board, such Transfer would cause the Company to be treated as a "publicly
traded partnership" within the meaning of Section 7704(b) of the Code.
(b) No Person shall Transfer any Unit except with the prior consent of
the Board of Directors.
(c) Any Transfer of a Unit that would result in a violation of the
restrictions in Section 10.1(a) or (b) shall be null and void, and the intended
transferee shall acquire no rights in such Unit.
10.2 Conditions Precedent to Transfers. The Board of Directors may not
recognize any Transfer of Units unless and until the Company has received:
(a) an opinion of counsel (whose fees and expenses shall be borne by the
transferor) satisfactory in form and substance to the Board that such Transfer
may be lawfully made without registration or qualification under applicable
state and federal securities laws, or such Transfer is properly registered or
qualified under applicable state and federal securities laws;
(b) such documents and instruments of conveyance executed by the
transferor and transferee as may be necessary or appropriate in the opinion of
counsel to the Company to effect such Transfer, except that in the case of a
Transfer of Units involuntarily by operation of law, the Transfer shall be
confirmed by presentation of legal evidence of such Transfer, in form and
substance satisfactory to the Company;
(c) the transferor's Certificate of Membership Interest;
(d) the transferee's taxpayer identification number and sufficient
information to determine the transferee's initial tax basis in the interest
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;
(e) evidence satisfactory in form and substance to the Board that the
transferee meets the minimum and maximum Unit ownership requirements and any
other applicable eligibility requirements set forth in Section 3.2 of this
Agreement;
(f) in the case of a Transfer of Class A Units subject to a 1996 Loss
Payable (other than a gift Transfer to a Member's relatives, made without
consideration), full payment in cash to offset such Member's 1996 Loss Payable;
and
(g) in the case of a Transfer of Class B Units, a written agreement
executed by the transferee to the effect that transferee is not entitled to the
benefits of the Stockholder Agreement between the Cooperative and Xxxxxx
Xxxxxxx Midland Corporation dated August 27, 1997;
provided, however, the Board may waive any or all of the conditions stated
above. In addition, the Board may (i) institute or suspend a procedure
applicable to Class A Units similar to the procedure adopted pursuant to the
Bylaws of the Cooperative as in effect just prior to closing of the
transactions described in the Transaction Agreement, except that utilization of
any such procedure must be discretionary at the option of the Class A Unit
Holder, and (ii) adopt such other conditions on the Transfer of Units as it
deems appropriate, provided that such additional restrictions are reasonably
required to satisfy the requirements of applicable tax or securities laws.
10.3 Substitution of Member. A transferee of Units shall be admitted as a
substitute Member only if (i) the provisions of this Article have been met,
(ii) the transferee executes an instrument satisfactory
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to the Company accepting and adopting the terms and provisions of this
Agreement and (iii) the transferor pays all reasonable expenses incurred by the
Company in connection with the Transfer and, if applicable, the transferee's
admission as a new Member. The admission of a transferee as a substitute Member
shall not result in the release of the Member who transferred the Unit from any
liability that such Member may have to the Company.
10.4 Effective Date of Transfer. Any Transfer of a Unit shall be deemed
effective as of the day of the month and year (i) which the Transfer occurs (as
reflected by the form of Assignment) and (ii) the transferee's name and address
and the nature and extent of the Transfer are reflected in the records of the
Company. The name, address, Capital Contributions, class and number of Units
held by each Member shall be set forth on the Membership Register, which shall
be modified from time to time as Transfers occur or as additional Units are
issued pursuant to the provisions of this Agreement. The appropriate Company
records shall be conspicuously noted to prevent the Transfer of Units otherwise
than in accordance with this Article X. Notwithstanding the foregoing, the
effective date of a Transfer for purposes of allocation of Profits and Losses
and for distributions shall be determined pursuant to Section 10.5. Any
transferee of a Unit shall take subject to the restrictions on transfer imposed
by this Agreement.
10.5 Distributions and Allocations in Respect to Transferred Interest. If
any Unit is transferred during any accounting period in compliance with the
provisions of this Article X, then Profits and Losses, each item thereof, and
all other items attributable to such Units for such accounting period shall be
divided and allocated between the transferor and the transferee by taking into
account their varying interests during such accounting period in accordance
with Code Section 706(d). Solely for purposes of making such allocations and
distributions, the Company shall use the interim closing of the books method
and the convention that recognizes such Transfer as of the beginning of the
calendar month following the calendar month in which the notice, documentation
and information requirements of this Article X have been substantially complied
with. All distributions on or before the end of the calendar month in which
such requirements have been substantially complied with shall be made to the
transferor and all distributions thereafter shall be made to the transferee.
The Board shall have the power and authority to adopt another reasonable method
and/or convention with respect to such allocations and distributions; provided,
that reasonable notice of any change is given to the Members in advance of the
change. Neither the Company, the Board, any Director nor any Member shall incur
any liability for making allocations and distributions in accordance with the
provisions of this Section 10.5, whether or not the Board or any Director or
the Company or any Member has knowledge of any Transfer of ownership of any
interest in the Company.
ARTICLE XI
DISSOLUTION AND WINDING UP
11.1 Liquidating Events. The Company shall be dissolved and commence
winding up and liquidating upon the affirmative vote of at least sixty-six and
two-thirds percent (66.67%) of the Class A Members voting at a duly called
meeting.
As further provided in Article III herein, the dissociation and
termination of the continued membership of a Member shall not cause the
dissolution of the Company and shall not require the Company's business to be
wound-up, so long as the Company has the minimum number of Members required
under applicable state law within ninety(90) days following the Event of
Dissociation.
11.2 Winding Up.
(a) Notice of Dissolution. As soon as possible following the occurrence
of a Liquidating Event, the appropriate representative of the Company shall
execute a notice of dissolution in such form as shall be prescribed by the
Colorado Secretary of State, setting forth the information required under the
Act, and shall file same with the Colorado Secretary of State's office.
(b) Winding Up of Business. Upon filing a notice of dissolution with the
Colorado Secretary of State, the Company shall cease to carry on its business,
except insofar as may be necessary for the
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winding up of its business, but its separate existence shall continue until a
certificate of termination has been issued by the Secretary of State or until a
decree dissolving the Company has been entered by a court of competent
jurisdiction.
11.3 Distributions Upon Dissolution. Upon dissolution, the business of the
Company shall be wound up, the Directors shall take full account of the Company
assets and liabilities, and all assets shall be liquidated as promptly as is
consistent with obtaining the fair value thereof. If any assets are not sold,
gain or loss shall be allocated to the Unit Holders in accordance with Article
V as if such assets had been sold at their fair market value at the time of the
liquidation. If any assets are distributed to a Unit Holder, rather than sold,
the distribution shall be treated as a distribution equal to the fair market
value of the assets at the time of the liquidation. The assets of the Company
shall be applied and distributed in the following order of priority:
(a) First, to the payment of all debts and liabilities of the Company,
including all fees due the Directors, and including any loans or advances that
may have been made by the Members to the Company, in the order of priority as
provided by law;
(b) Second, to the establishment of any reserves deemed necessary by the
Directors or the Person winding up the affairs of the Company for any
contingent liabilities or obligations of the Company; and
(c) Third, to the Unit Holders, ratably in proportion to the credit
balances in their respective Capital Accounts after and including all
allocations to the Unit Holders and holders of Special Financial Interests
under Article V herein, including the allocation of any income, gain or loss
from the sale, exchange or other disposition (including a deemed sale pursuant
to this Section 11.3) of the Company's assets, in an amount equal to value of
their units as established by the Board of Directors;
(d) Fourth, to the holders of Special Financial Interests in proportion
to their stated amounts in amounts equal to the stated amount of such interests
less any previous distributions made with respect to such Interests; and
(e) Fifth, the balance, if any, to the Unit Holders, ratably in
proportion to the credit balances in their respective Capital Accounts, in an
amount equal to the aggregate credit balances in the Capital Accounts after and
including all allocations to the Unit Holders and holders of Special Financial
Interests under Article V herein, including the allocation of any income, gain
or loss from the sale, exchange or other disposition (including a deemed sale
pursuant to this Section 11.3) of the Company's assets.
11.4 Compliance With Regulations; Deficit Capital Accounts. In the event
the Company is "liquidated" within the meaning of Regulations Section
1.704-1(b)(2)(ii)(g), distributions shall be made pursuant to this Article XI
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 allocation periods, including the
allocation period 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 Company, a pro rata portion of the distributions that would
otherwise be made to the Unit Holders pursuant to this Article XI 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
trustee, 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 11.3 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.
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11.5 Deemed Distribution and Recontribution. Notwithstanding any other
provision of this Article XI, 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. Instead, solely for federal income tax purposes, the
Company shall be deemed to have distributed the property in-kind to the Unit
Holders, who shall be deemed to have taken subject to all debts of the Company
and other liabilities all in accordance with their respective Capital Accounts.
Immediately thereafter, the Unit Holders shall be deemed to have recontributed
the property in-kind to the Company, which shall be deemed to have taken
subject to all such liabilities.
11.6 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 11.3 hereof (the
"Liquidation Period"), the Unit Holders shall continue to share Profits,
Losses, gain, loss and other items of Company income, gain, loss or deduction
in the manner provided in Article V hereof.
11.7 Character of Liquidating Distributions. All payments made in
liquidation of the interest of a Unit Holder 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.
ARTICLE XII
MEMBERS BOUND BY AGREEMENT
By their purchase or acceptance of Units, the Initial Members and any
Person who is admitted as an additional Member or a substitute Member shall be
subject to and bound by all the provisions of this Agreement, whether or not
such Member executes this Agreement or any other document referring to this
Agreement. However, such Person shall execute and acknowledge any documents and
instruments, in form and substance satisfactory to the Board, as the Board
shall deem necessary or advisable to effect such admission and to confirm the
agreement of the Person being admitted to be bound by all the terms and
provisions of this Agreement. Upon demand by the Board, such Person shall pay
all reasonable expenses in connection with such admission as a Member,
including, without limitation, legal fees and costs of preparation of any
amendment to or restatement of this Agreement, if necessary or desirable in
connection therewith.
ARTICLE XIII
INDEMNIFICATION OF DIRECTORS AND EMPLOYEES
13.1 Indemnity of Directors, Employees and Other Agents.
(a) To the fullest extent permitted by law, the Company shall indemnify
each Director from and make advances for expenses incurred by the Director in
connection with any claim made against the Director arising from an action or
omission made in good faith or which he or she reasonably believed to be in the
best interests of the Company, or any other such claim to the maximum extent
permitted under the Act, except to the extent the claim for which
indemnification is sought results from an act or omission of the Director
constituting fraud or willful misconduct.
(b) Except as may otherwise be provided in an agreement with an agent or
employee, the Company shall indemnify its employees and other agents who are
not Directors to the fullest extent permitted by law.
(c) Expenses (including legal fees and expenses) incurred by a Director
in defending any claim, demand, action, suit or proceeding subject to
subsection (a) above shall be paid by the Company in advance of the final
disposition of such claim, demand, action, suit or proceeding upon receipt of
an undertaking (which need not be secured) by or on behalf of the Director to
repay such amount if it shall
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ultimately be finally determined by a court of competent jurisdiction and not
subject to appeal, that the Director is not entitled to be indemnified by the
Company as authorized hereunder.
ARTICLE XIV
MISCELLANEOUS
14.1 Entire Agreement. This Agreement constitutes the entire agreement
among the parties and supersedes any prior agreement or understanding among
them with respect to the subject matter hereof.
14.2 Amendment. This Agreement may not be modified, amended, or
supplemented, without (a) the affirmative vote or prior consent of sixty-six
and two-thirds percent (66.67%) of the Class A Members voting in person, by
proxy, or by mail ballot at a duly called Members meeting (except that the
Board may amend Section 3.20 or Section 6.17 without the consent or approval of
any Class A Members), and (b) in the case of any modification, amendment or
supplement which otherwise modifies or amends Section 3.20 hereof, Section 6.17
hereof, the last sentence of Section 4.3(b) hereof, or this Section 14.2(b), or
which otherwise modifies the rights and benefits afforded to the holders of
Class B Units, the prior written consent of the holders of sixty-six and
two-thirds percent (66.67%) of the Class B Units.
14.3 Conflict with Articles. In the event of any conflict between the
Articles of Organization and this Agreement, the provisions of this Agreement
shall govern to the extent not contrary to law.
14.4 Certificates of Membership Interest. Units shall be evidenced by
certificates of membership interest. At the effective time of the merger of MCP
Colorado into the Company pursuant to the Transaction Agreement, the Company
adopts the certificates of the Cooperative as the Certificates of Membership
Interest of the Company. Upon any Transfer of Units in accordance with Article
X, the Board of Directors will issue a new form of certificate under the
Company's own name (a "LLC Certificate") representing the Units so transferred;
provided, however, that the issuance of LLC Certificates shall not invalidate
or otherwise affect the validity of certificates of the Cooperative
representing outstanding Units owned by the Initial Members. Each LLC
Certificate shall bear a legend referring to the restrictions set forth in
Article X.
14.5 Severability. If any provision of this Agreement is held to be
illegal, invalid, or unenforceable under the present or future laws effective
during the term of this Agreement, such provision will be fully severable. This
Agreement will be construed and enforced as if such illegal, invalid, or
unenforceable provision had never comprised a part of this Agreement. The
remaining provisions of this Agreement will remain in full force and effect and
will not be affected by the illegal, invalid, or unenforceable provision or by
its severance from this Agreement. In lieu of such illegal, invalid, or
unenforceable provision, there will be added automatically as a part of this
Agreement a provision as similar in terms to such illegal, invalid, or
unenforceable provision as may be possible and be legal, valid, and
enforceable.
14.6 Remedies. The parties agree that in the event of a breach of this
Agreement, the non-breaching party or parties shall be entitled to the remedies
of specific performance and injunctive relief, except to the extent prohibited
by the Act. Such remedies shall be in addition to any other remedies available
at law or in equity with the pursuit of any one or more remedies not being a
bar to the pursuit of other remedies which may be available. The parties
further agree that the breaching party or parties shall pay all reasonable
costs, expenses, and attorneys' fees incurred by the non-breaching party or
parties in pursuing their remedies for a breach of this Agreement.
14.7 Consent and Waiver. No consent under and no waiver of any provision
of this Agreement on any one occasion shall constitute a consent under or
waiver of any other provision on said occasion or on any other occasion, nor
shall it constitute a consent under or waiver of the consented to or waived
provision on any other occasion. No consent or waiver shall be enforceable
unless it is in writing and signed by the party against whom such consent or
waiver is sought to be enforced.
14.8 No Third Party Beneficiary. This Agreement is made solely and
specifically among and for the benefit of the Company, the Members and the Unit
Holders, and their respective successors and assigns.
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No other Person will have any rights, interest, or claims hereunder or be
entitled to any benefits under or on account of this Agreement as a third party
beneficiary or otherwise; provided, however, that the Company shall have
standing to bring an action to recover damages provided for by the Act or to
seek remedies otherwise provided by law in the event of a breach or threatened
breach of this Agreement.
14.9 Notices. All notices, offers, demands, or other communications
required or permitted under this Agreement shall be in writing, signed by the
Person giving the same. Notice shall be treated as given when personally
received or (except in the event of a mail strike) when sent by United States
Mail to a Member or Unit Holder at the address as shown from time to time on
the records of the Company. Any Member or Unit Holder may specify a different
address by written notice to the Company.
14.10 Binding Effect. Except as herein otherwise specifically provided,
this Agreement shall be binding upon and inure to the benefit of the Company,
the Members and Unit Holders, parties and their legal representatives, heirs,
administrators, executors, successors and assigns. Members and Unit Holders
shall be bound by and shall be entitled to the benefits of this Agreement by
their purchase or acceptance of Units whether or not they sign this Agreement
or any document referring to this Agreement.
14.11 Necessary Instruments and Acts. The parties covenant and agree that
they shall execute any further instruments and shall perform any acts which are
or may become necessary to effectuate and to carry out the terms and conditions
of this Agreement.
14.12 Number and Gender. Wherever from the context it appears appropriate,
each term stated in either the singular or the plural shall include the
singular and the plural and pronouns stated in either the masculine, the
feminine or the neuter gender shall include the masculine, feminine and neuter.
14.13 Interpretation. All references herein to Articles, Sections and
subsections refer to Articles, Sections and subsections of this Agreement. All
Article, Section and subsection headings are for reference purposes only and
shall not affect the interpretation of this Agreement.
14.14 Counterparts. This Agreement may be executed in any number of
counterparts, all of which taken together shall constitute one agreement
binding on all parties. Each party shall become bound by this Agreement
immediately upon signing any counterpart, independently of the signature of any
other party.
14.15 Governing Law. This Agreement and the rights of the parties
hereunder shall be governed by and interpreted in accordance with the internal
laws of the State of Colorado, without regard to its conflicts or choice-of-law
rules.
* * * * * * *
IN WITNESS WHEREOF, this Agreement has been executed by the duly
authorized representatives of the Company and the Cooperative as of the date
set forth in the first paragraph.
MINNESOTA CORN PROCESSORS, INC.
By ------------------------------------
Its -------------------------------------
MINNESOTA CORN PROCESSORS, LLC
By ------------------------------------
Its -------------------------------------
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SCHEDULE A
COMPETITORS
Xxxxxx Xxxxxxx Midland Company
Xxxxxxx, Xxxxxxxxxxxx
Corn Products Company (Corn Products International, Inc.)
X.X. Xxxxxx Manufacturing Company (Xxxx & Xxxx, PLC)
Cerestar USA, Inc.
National Starch and Chemical Company
Penford Products Company (Penford Corporation)
Roquette America, Inc.
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