FIRST AMENDMENT TO ORGANIZATION AGREEMENT AND OPERATING AGREEMENT
Exhibit
10.32
FIRST
AMENDMENT TO ORGANIZATION AGREEMENT
AND
OPERATING AGREEMENT
THIS
First Amendment to Organizational Agreement and Operating Agreement (the
“Amendment”
or
“Agreement”)
is
entered into as of August 22, 2006, by and between CoastalXethanol, LLC
(“CX”),
Xethanol Corporation (“Xethanol”)
and
Coastal Energy Development, Inc. (“CED”).
WHEREAS,
Xethanol and CED entered into that Organizational Agreement dated May 30, 2006
(the “Organizational
Agreement”)
concerning the organization, management and financing of CX and entered into
that operating Agreement of CX dated May 30, 2006 (the “Operating
Agreement”);
and
WHEREAS,
contemporaneously herewith, CX has executed and delivered to Xethanol that
promissory note (the “Note”)
dated
August 22, 2006, in the principal amount of $8,500,000 by CX, as maker, in
favor
of Xethanol, as holder, a copy of which note is attached hereto as
Exhibit “A”;
and
WHEREAS,
the Note provides for five (5) annual payments of principal and interest with
the first annual payment due on the first anniversary of the date upon which
Augusta Biofuels, LLC (“AB”),
a
wholly owned subsidiary of Maker, begins producing saleable ethanol at AB’s
facility in Augusta, Georgia (such date hereinafter referred to as the
“Production
Date”);
and
WHEREAS,
on the terms set forth below, the parties to this Amendment desire to amend
such
Organization Agreement Operating Agreement to reflect certain agreements of
the
parties made in connection with the Note.
NOW
THEREFORE, for good and valuable consideration, the receipt and sufficiency
of
which is hereby acknowledged, the parties agree that the Organizational
Agreement Operating Agreement each is hereby amended as of August 22, 2007,
as
necessary to provide for the following:
1. During
each one-year period beginning on the Production Date and each anniversary
of
such date thereafter, CX agrees to use any distributions CX may receive from
AB
with respect to CX’s membership interest in AB to pay (or prepay) the payment
which will be due under the Note at the end of such one-year period. From the
distributions CS may receive from AB with respect to CX’s membership interests
in AB, CX shall not make any distributions to its members with respect to their
membership interests in CX during any such one-year period unless and until
the
payment which will be due under the Note at the end of such one-year period
has
been fully paid by CX. Once the payment which will be due under the Note at
the
end of such one-year period has been fully paid by CX, CX shall distribute
to
its members any remaining distributions CX may receive in such one-year period
from AB with respect to CX’s membership interest in AB.
2. In
the
event that any distributions with respect to CX’s membership interests in AB
remain available for distribution during any one-year period after the payment
which is due under the Note at the end of such one-year period has been fully
paid by CX, such distributions from AB shall be made to Xethanol and CED with
respect to their membership interests in CX, as follows, notwithstanding the
fact that Xethanol owns an 80% membership interest in CX and CED owns a 20%
membership interest in CX:
(A) So
long
as any amounts remain outstanding under the Note, distributions of amounts
received by CX from AB which are made by CX with respect to membership interests
in CX shall be governed by the following rules:
(i) Initially,
Xethanol shall receive an extra ten percent (10%) of any distributions which
are
made by CX with respect to membership interests in CX, so that Xethanol will
receive ninety percent (90%) of any such distributions, and CED shall receive
ten percent (10%) of any such distributions.
(ii) However,
as the amount of principal outstanding under the Note decreases, the extra
ten
percent which Xethanol is entitled to receive above its ownership share of
80%
shall be reduced proportionately based on the current (at the time of
distribution) amount of principal outstanding under the Note as compared to
the
original principal amount of the Note. For example, if CX is prepared to make
a
distribution to its members at a time when the principal balance of the loan
is
one-half of the original balance, then Xethanol would receive 85% and CED would
receive 15%.
3. Notwithstanding
anything to the contrary, CX shall distribute amounts received from sources
other than AB to CX’s members on a pro rata basis according to CX’s members’
respective ownership percentage which currently is as follows: (i) Xethanol
owns
an 80% membership interest in CX; and (ii) CED owns a 20% membership interest
in
CX. The distribution scheme described in Item 2 above only applies with respect
to amounts distributed to CX by AB with respect to CX’s membership interests in
AB.
4. Except
as
modified hereby, the Organizational Agreement and the Operating Agreement shall
otherwise remain in full force and effect in accordance with its terms, the
parties hereto hereby ratifying and confirming same in all
respects.
5. Without
limitation, all terms and conditions of the Organizational Agreement and the
Operating Agreement are incorporated herein by this express reference for all
purposes, and where a conflict exists between this instrument either of the
Organizational Agreement and the Operating Agreement, the terms and conditions
of the Organizational Agreement or the Operating Agreement, as the context
so
provides, shall control. This agreement constitutes the entire and complete
agreement between the parties hereto and supersedes any prior oral or written
agreement between the parties hereto and supersedes any prior oral or written
agreement between the parties with respect to the subject matter hereof. There
are no verbal understandings or agreements which in any way change the terms,
covenants, and conditions herein set forth, and that no modification of this
Agreement and no waiver or release of any obligation or right of any party
hereto shall be valid and enforceable unless made in writing and duly
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remainder of this page is blank. The next page is the execution
page.]
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IN
WITNESS WHEREOF, the parties hereto have executed this Amendment as of the
day
and year first set out above.
Xethanol
Corporation
By: /s/
Xxxxxxxx X. Xxxxxxx
Title: CFO
|
Coastal
Energy Development
Corporation,
Inc.
By: /s/
Xxxxxxxx Xxxxxxx
Title:
President
and CEO
|
Coastal
Xethanol, LLC
By:: /s/
Xxxxxxxx X. Xxxxxxx
Title: Manager
|
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