OZARK ETHANOL, LLC Limited Liability Company Agreement Effective Upon Adoption
Page | ||||||||
OPERATION, MANAGEMENT, AND INTERESTS IN THE COMPANY | ||||||||
ARTICLE 1. DEFINITIONS | 1 | |||||||
Section 1.1 | Reference to Certain Terms |
1 | ||||||
Section 1.2 | Definitions |
1 | ||||||
ARTICLE 2. FORMATION, PURPOSE, POWERS | 3 | |||||||
Section 2.1 | Formation |
3 | ||||||
Section 2.2 | Name |
3 | ||||||
Section 2.3 | Purpose; Powers |
4 | ||||||
Section 2.4 | Principal Place of Business |
4 | ||||||
Section 2.5 | Term |
4 | ||||||
Section 2.6 | Filings; Agent for Service of Process |
4 | ||||||
Section 2.7 | Title to Property |
5 | ||||||
Section 2.8 | No Payments of Individual Obligations |
5 | ||||||
Section 2.9 | Independent Non-Competitive Activities |
5 | ||||||
Section 2.10 | Limited Liability |
5 | ||||||
Section 2.11 | Members And Unitholders Bound Without Execution |
6 | ||||||
ARTICLE 3. UNITS, UNITHOLDERS, FINANCIAL RIGHTS | 6 | |||||||
Section 3.1 | Rights and Obligations of Unitholders |
6 | ||||||
Section 3.2 | Units |
6 | ||||||
Section 3.3 | Capital Contributions |
7 | ||||||
Section 3.4 | No Certificate For Units |
8 | ||||||
Section 3.5 | Unit Ledger |
8 | ||||||
Section 3.6 | Allocations and Distributions |
8 | ||||||
Section 3.7 | Unitholder Conditions And Limitations |
9 | ||||||
Section 3.8 | Restrictions On Transfers |
10 | ||||||
ARTICLE 4. MEMBERS AND MEMBER VOTING | 11 | |||||||
Section 4.1 | Rights and Obligations of Members |
11 | ||||||
Section 4.2 | Minimum Required Unit Holding by Members |
12 | ||||||
Section 4.3 | Admission of Members |
13 | ||||||
Section 4.4 | Member Voting |
13 | ||||||
Section 4.5 | Member Meetings |
14 | ||||||
Section 4.6 | Termination of Membership |
16 | ||||||
Section 4.7 | Resignation |
17 | ||||||
Section 4.8 | Continuation of the Company |
17 | ||||||
ARTICLE 5. MANAGEMENT OF COMPANY | 17 | |||||||
Section 5.1 | Governance By Board, CEO |
17 |
i
Page | ||||||||
Section 5.2 | Actions By Board; Committees; Reliance On Authority |
19 | ||||||
Section 5.3 | The Board |
19 | ||||||
Section 5.4 | Board Meetings |
21 | ||||||
Section 5.5 | Officers |
22 | ||||||
Section 5.6 | Liability And Indemnification Of Managers And Officers |
24 | ||||||
Section 5.7 | Contracts With Managers Or Their Affiliates |
24 | ||||||
ARTICLE 6. AMENDMENTS | 25 | |||||||
Section 6.1 | Amendments |
25 | ||||||
ARTICLE 7. DISSOLUTION AND WINDING UP | 26 | |||||||
Section 7.1 | Dissolution Commencement |
26 | ||||||
Section 7.2 | Winding Up |
26 | ||||||
Section 7.3 | Rights Of Unitholders |
26 | ||||||
Section 7.4 | Notice Of Dissolution |
27 | ||||||
Section 7.5 | Allocations During Period Of Liquidation |
27 | ||||||
Section 7.6 | The Liquidator |
27 | ||||||
Section 7.7 | Form Of Liquidating Distributions |
28 | ||||||
ARTICLE 8. MISCELLANEOUS | 28 | |||||||
Section 8.1 | Notices |
28 | ||||||
Section 8.2 | Binding Effect |
28 | ||||||
Section 8.3 | Construction |
28 | ||||||
Section 8.4 | Time |
28 | ||||||
Section 8.5 | Headings |
28 | ||||||
Section 8.6 | Severability |
29 | ||||||
Section 8.7 | Incorporation By Reference |
29 | ||||||
Section 8.8 | Variation Of Terms |
29 | ||||||
Section 8.9 | Governing Law |
29 | ||||||
Section 8.10 | Specific Performance |
29 | ||||||
Section 8.11 | Consent To Jurisdiction |
29 | ||||||
Section 8.12 | Waiver Of Jury Trial |
30 | ||||||
APPENDICES | ||||||||
Appendix A | Principal Place of Business of Ozark Ethanol, LLC |
X-0 | ||||||
Xxxxxxxx X | Agent for Service of Process of Ozark Ethanol, LLC |
B-1 | ||||||
Appendix C | Unit Transfer Policy of Ozark Ethanol, LLC |
C-1 | ||||||
Appendix D | Board of Managers of Ozark Ethanol, LLC |
D-1 | ||||||
Appendix E | Allocations, Distributions, Tax Matters, and Accounting |
E-1 |
ii
Ozark Ethanol, LLC
THIS LIMITED LIABILITY COMPANY AGREEMENT of Ozark Ethanol, LLC (the “Company”) is adopted
and made effective upon adoption by the initial Board of Managers.
OPERATION, MANAGEMENT, AND INTERESTS
IN THE COMPANY
ARTICLE 1.
DEFINITIONS
Section 1.1 Reference to Certain Terms.
For purposes of this Agreement: (1) references to “Articles” and “Sections” are to those
Articles and Sections appearing in this Agreement unless explicitly indicated otherwise; and (2)
references to statutes include all rules and regulations under those statutes, and all amendments
and successors to those statutes.
Section 1.2 Definitions.
The definitions in this Section 1.2 (and the definitions in Section 1.10 of Appendix E)
apply throughout this Agreement unless the context requires otherwise.
“Act” means the Delaware Limited Liability Company Act as set forth in the Delaware Code
(commencing with Section 18-101 of the Delaware Code), as amended from time to time (or any
corresponding provision or provisions of any succeeding law).
“Affiliate” means, with respect to any Person: (1) a Business Entity directly or indirectly
Controlling, Controlled by or under common Control with the Person; (2) an officer, director,
general partner, or trustee of a Person that is a Business Entity; or (3) a Person or a
representative who is an officer, director, general partner, or trustee of the Business Entity
described in clauses (1) or (2) of this sentence.
“Agreement” means this Limited Liability Company Agreement of the Company, as amended,
modified, or restated from time to time.
“Board” or “Board of Managers” means the individuals who are named, appointed or elected as
Managers of this Company under Section 5.3 acting collectively pursuant to this Agreement.
“Business Entity” means a partnership (whether general or limited), joint venture,
association, cooperative, corporation, trust, estate, limited liability company, limited liability
partnership, unincorporated association, governmental entity, or any other legal entity, including
an individual acting as a sole proprietorship or as a business.
1
Ozark Ethanol, LLC | Limited Liability Company Agreement |
“CEO” means the Chief Executive Officer of the Company appointed by the Board.
“Certificate of Formation” means the certificate of formation of the Company as amended or
restated and filed with the Delaware Secretary of State pursuant to the Act.
“Class” is the designated division in Interests as provided in Section 3.2(a).
“Class A Member” means a Person who holds Class A Units, meets the requirements of Section
4.2(a), is admitted as a Class A Member and has not ceased to be a Class A Member. “Class A
Members” mean all Persons who hold Class A Units, meet the requirements of Section 4.2(a), are
admitted as Class A Members and have not ceased to be Class A Members.
“Class A Units” mean Units that are designated as Class A Units pursuant to Section 3.2(a).
“Company” means Ozark Ethanol, LLC, the limited liability company formed by the filing of the
Certificate of Formation in accordance with the Act and the limited liability company continuing
the business of this Company in the event of dissolution of the Company as provided in this
Agreement and the Act.
“Confidential Information” is defined in Section 4.1(c).
“Control”, “Controlling”, “Controlled by” and “under common Control with” mean the possession,
direct or indirect, of the power to direct or cause the direction of the management and policies of
a Business Entity, whether through the ownership of voting securities, by contract, or otherwise,
or the power to elect at least fifty percent (50%) of the Board of Directors, or persons exercising
similar authority with respect to the Business Entity.
“Dissolution Event” has the meaning given in Section 7.1(a).
“Distribution” means a payment of cash or property to a Unitholder based on the Unitholder’s
Interest in the Company as provided in this Agreement.
“Effective Date” is the date this Agreement is adopted as provided in the introductory
paragraph.
“Event of Disassociation” has the meaning given in Section 4.6(a).
“Interest” means, collectively, the Unitholders’ financial rights to Profits, Losses and other
allocation items, and to receive Distributions and, with respect to Members, the right of the
Members to vote on matters and to receive information concerning the business and affairs of the
Company as provided for in this Agreement.
“Lien” means a security interest, lien or other encumbrance in Units pledged or granted for
the purpose of securing debt financing.
“Liquidator” has the meaning given in Section 7.6(a).
2
Ozark Ethanol, LLC | Limited Liability Company Agreement |
“Managers” is defined in Section 5.3.
“Member” means a Person who is admitted as a Member under Section 4.3, and who has not ceased
to be a Member. “Members” mean all Persons who are Members.
“Person” means any individual natural person, or a Business Entity.
“Property” means all real and personal property acquired by the Company, including cash and
any improvements to the Property, and includes both tangible and intangible property.
“Securities Act” means the Securities Act of 1933.
“Subsidiary” means, with respect to any Business Entity, any corporation, partnership, joint
venture, limited liability company, association or other entity Controlled by the Business Entity.
“Transfer” means, as a noun, any voluntary or involuntary transfer, sale, or other disposition
or other transfer, whether by operation of law (e.g., pursuant to a merger) or otherwise, and, as a
verb, voluntarily or involuntarily to convey, sell, or otherwise dispose of, but does not include a
pledge or grant of a Lien.
“Transfer Restrictions” means the restrictions on Transfer of Units in Section 3.8 and the
Unit Transfer Policy attached as Appendix C.
“Unit” means the unit of measurement within a Class into which Interests in the Company are
divided as provided in Section 3.2(a).
“Unit Ledger” has the meaning given in Section 3.5.
“Unit Transfer Policy” is the policy for Transferring Units attached as Appendix C.
“Unitholder” means a Person who holds Units, whether or not the Person is a Member.
“Unitholders” mean all Persons holding Units. Unitholders may be designated with respect to
specific types or classes of Units held.
ARTICLE 2.
FORMATION, PURPOSE, POWERS
Section 2.1 Formation.
The Company was formed as a Delaware limited liability company pursuant to the Act.
Section 2.2 Name.
The name of the Company is stated in the Certificate of Formation and all business of the
Company shall be conducted in that name or under other names as the Board, without Member
3
Ozark Ethanol, LLC | Limited Liability Company Agreement |
approval, may determine. The Board, without Member approval, may change the name of the
Company in accordance with the Act.
Section 2.3 Purpose; Powers.
(a) Purpose. The Company has been formed for the purpose of, and the nature of the
business to be conducted by the Company is, engaging in any lawful act or activity for which
limited liability companies may be formed under the Act and engaging in any activities necessary,
convenient or incidental to this purpose.
(b) Powers. The Company shall possess and may exercise all the powers and privileges granted
by the Act, by any other law, or by this Agreement, together with any lawful powers incidental to
those powers and privileges, including the powers and privileges as are necessary or convenient to
the conduct, promotion or attainment of the business, purposes or activities of the Company.
Section 2.4 Principal Place of Business.
The principal place of business of the Company shall be at the place or places stated in
the Principal Place of Business attached as Appendix A and incorporated as part of this Agreement.
The Principal Place of Business may be amended or changed by resolution of the Board without Member
approval. The records required by the Act shall be maintained at one of the Company’s principal
offices.
Section 2.5 Term.
The term of the Company shall continue until the winding up and liquidation of the
Company and its business is completed following a Dissolution Event as provided in this Agreement.
Section 2.6 Filings; Agent for Service of Process.
(a) Maintenance of Delaware Status. The Board shall take any actions reasonably
necessary to perfect and maintain the status of the Company as a limited liability company under
the laws of the State of Delaware. The Board shall cause amendments to the Certificate of
Formation to be filed whenever required by the Act.
(b) Maintenance of Status in Other Jurisdictions. The Board shall take any and all other
actions as may be reasonably necessary to perfect and maintain the status of the Company as a
limited liability company or similar type of entity under the laws of any other jurisdictions in
which the Company engages in business.
(c) Agent For Service of Process. The name and address of the agent for service of process on
the Company in the State of Delaware shall be stated in the Agent for Service of Process attached
as Appendix B and incorporated as part of this Agreement, which shall be amended by the Board,
without Member approval, to reflect the appointment of any successor.
4
Ozark Ethanol, LLC | Limited Liability Company Agreement |
(d) Filings Upon Dissolution. Upon the dissolution and completion of the winding up and
liquidation of the Company, the Board shall cause to be filed a Certificate of Cancellation in
accordance with the Act and cause similar filings as necessary to be made under the laws of any
other jurisdictions.
Section 2.7 Title to Property.
All Property owned by the Company is owned by the Company as an entity, and a Unitholder,
Member, or Manager does not have any ownership interest in the Property in their individual name.
The Company shall hold title to all of its Property in the name of the Company and not in the name
of any Unitholder, Member, or Manager.
Section 2.8 No Payments of Individual Obligations.
The Company’s credit and assets shall be used solely for the benefit of the Company, and
an asset of the Company shall not be Transferred or encumbered for, or in payment of, any
individual obligation of any Unitholder, Member, or Manager.
Section 2.9 Independent Non-Competitive Activities.
Neither this Agreement nor any activity under this Agreement shall prevent a Unitholder,
Member, or Manager or any of their Affiliates, acting on their own behalf, from engaging in
whatever activities they choose, unless the activities are competitive with the Company or the
Company’s Affiliates as determined by the Board. Activities, other than activities that are
competitive with the Company, or the Company’s Affiliates, may be undertaken by a Unitholder,
Member, or Manager without having or incurring any obligation to: (1) offer any interest in the
activities to the Company or any other Unitholder or Member; or (2) require the Unitholder, Member,
or Manager undertaking the activity to allow the Company, the Company’s Affiliates, or other
Unitholders, Members, Managers, or their Affiliates to participate in any of those activities. As
a material part of the consideration for becoming a Unitholder, Member, or Manager, each
Unitholder, Member, or Manager shall not have any right or claim of participation in another
Unitholder’s, Member’s or Manager’s activities.
Section 2.10 Limited Liability.
Except as otherwise expressly provided by the Act, this Agreement, or agreed to under
another written agreement, the debts, obligations, and liabilities of the Company, whether arising
in contract, tort or otherwise, are solely the debts, obligations, and liabilities of the Company,
and a Unitholder, Member, or Manager of the Company is not obligated personally for any debt,
obligation, or liability of the Company solely by reason of being a Unitholder or Member or by
acting as a Manager of the Company. The failure of the Company to observe any formalities or
requirements relating to the exercise of its powers or management of its business or affairs under
this Agreement or the Act shall not be grounds for imposing liability on the Unitholders, Members,
or Managers for any debt, obligation, or liability of the Company.
5
Ozark Ethanol, LLC | Limited Liability Company Agreement |
Section 2.11 Members And Unitholders Bound Without Execution.
A Member or Unitholder who has Interests in the Company shall be bound by this Agreement
without the necessity of executing a physical copy of this Agreement.
ARTICLE 3.
UNITS, UNITHOLDERS, FINANCIAL RIGHTS
Section 3.1 Rights and Obligations of Unitholders.
The respective rights and obligations of the Unitholders will be determined pursuant to
the Act and this Agreement. To the extent that any right or obligation of any Unitholder is
different by reason of any provision of this Agreement than it would be in the absence of that
provision, this Agreement, to the extent permitted by the Act, will control.
Section 3.2 Units.
(a) Unitholder Interests and Units. The Interests of the Unitholders will be divided
into one or more classes (“Classes”), with the initial Class designated as Class A, and with
subsequent Classes as may be established by the Board designated as Class B, Class C and
sequentially lettered. Interests within each Class will be divided into units (the “Units”)
designated as Class A Units (with respect to Class A), Class B Units (with respect to Class B),
Class C Units (with respect to Class C), and sequentially lettered. With respect to the Class B
and subsequent Classes of Units, the Board of Managers without Member approval is granted the
express authority, by resolution and conforming amendments to this Agreement, to fix and establish
the designations, powers, preferences, and governance and veto rights including Member voting
rights and rights to appoint or elect Managers to the Board, qualifications, limitations or
restrictions of each additional Class of Units (and the corresponding obligation to fix and
establish these designations, powers, preferences, governance and other rights, qualifications,
limitations and restrictions whenever any additional Class is established). The power of the Board
extends to and includes the express authority to create Classes and Units, without Member approval,
which have terms granting the additional Class and the Units (and the holders of the Units) rights,
powers, preferences and privileges greater than the rights, powers, preferences and privileges
associated with any previously established and designated Class or issued Units. The rights,
powers, preferences and privileges are the same for all Units within a Class except as expressly
provided otherwise in this Agreement, the Class designation approved by the Board, or the
subscription or other agreement regarding the Units approved by the Board.
(b) Additional Units. The Board may issue additional Units without Member approval, including
Class A Units, to existing or new Unitholders in exchange for Capital Contributions as provided in
Section 3.3(b) of this Agreement.
(c) Adjustment of Books and Records and Amendment of this Agreement. Upon acceptance of
Capital Contributions under Section 3.3 of this Agreement, the issuance of additional Units, or any
change in Unitholders or Members, the Board shall cause the books and records of the Company and
the Unit Ledger to be appropriately adjusted, and the Board shall
6
Ozark Ethanol, LLC | Limited Liability Company Agreement |
amend this Agreement, without Member approval, to reflect the terms and conditions of the
Capital Contributions and the issuance of Units, including any changes to the percentages of
allocations and Distributions to different Classes or Units.
(d) Units Issued in Connection with Services. The Board of Managers has broad power and
authority to cause the Company to issue Units in connection with the performance of services. The
Company and each Unitholder acknowledges that, that there is considerable uncertainty under current
law as to the tax consequences and Capital Account adjustments when partnership interests are
issued in connection with the performance of services, and that much of the uncertainty is expected
to be clarified when Proposed Regulations under Code Sections 83, 704, 706, 707, 721 and 761 and a
related Revenue Procedure are finalized. Accordingly, in addition to any other power and authority
vested in the Board of Managers, and notwithstanding any other provision of this Agreement, the
Board may:
(1) cause such adjustments to the Capital Accounts of Unitholders as the Board
determines to be necessary or appropriate to reflect the economic rights and obligations
that the Board agrees to embody in Units that are issued in connection with the performance
of services;
(2) make any special allocation under Section 3.3(h) of taxable income or items
thereof that is consistent with the provisions of current or future law relating to issuance
of partnership interests in connection with the performance of services;
(3) cause the Company to elect, maintain and comply with the safe harbor provisions
described in Proposed Regulations, Section 1.83-3(1), when finalized, and to take any action
on behalf of each Unitholder as may be necessary or appropriate to legally bind the Company
and all Unitholders, including transferees, to elect, maintain and comply with the
requirements of such safe harbor, and each Unitholder shall execute such documentation as
may be reasonably requested by the Company to assurance such election, compliance and
maintenance; and
(4) amend this Agreement without Member approval to the extent the Board considers
necessary or appropriate to implement the foregoing provisions of this Section 3.2(d).
Section 3.3 Capital Contributions.
(a) Initial Unitholders. Those persons satisfying the conditions of Section 4.3(a) of
this Agreement shall be the initial Unitholders of the Company.
(b) By Unitholders For Additional Units. Each Unitholder’s Capital Contribution, if any, may
be any consideration, whether in cash or a form other than cash (including past or future
services), upon execution of any documents and on any other terms and conditions (including, in the
case of Units issued to employees and consultants, any vesting and forfeiture provisions) as the
Board determines to be appropriate, without Member approval.
7
Ozark Ethanol, LLC | Limited Liability Company Agreement |
(c) Additional Contributions Not Required. A Unitholder is not obligated to make any
additional Capital Contributions to the Company or to pay any assessment to the Company, other than
the unpaid portion of a Unitholder’s written agreement to make Capital Contributions. Units and
their holders are not subject to any mandatory assessment, requests or demands for capital.
Section 3.4 No Certificate For Units.
The Units of the Company are not certificated Units unless otherwise determined by the
Board. If the Board determines that the Units shall be certificated, the Board shall have the
power and authority to make rules and regulations, not inconsistent with this Agreement or the Act,
as the Board deems appropriate relating to the issuance, Transfer, conversion, and registration of
certificates of the Company, including legend requirements or the appointment or designation of one
or more transfer agents and one or more registrars. The Company may act as its own transfer agent
and registrar.
Section 3.5 Unit Ledger.
The Board shall prepare, amend, and supplement a Unit Ledger without approval of the
Members that states the Unitholders and the Class and number of Units held by each Unitholder, the
Capital Contribution of the Unitholder, and those Unitholders who are Members of each Class.
Section 3.6 Allocations and Distributions.
(a) Generally. The provisions relating to allocations of Profits, Losses and other
allocation items of profit and loss, and Distributions are provided in this Section 3.6 and Article
7; Appendix C as to Transfers; and in Article III, Article IV, and Article XII of Appendix E. The
provisions of this Section 3.6 may be amended by the Board, without Member approval, to conform
with Class designations under Section 3.2(a). Appendix E is attached and incorporated as part of
this Agreement. Appendix E may be amended by the Board without Member approval.
(b) Distributions. Distributions other than Liquidating Distributions will be made on a Class
Percentage and then unitary basis in proportion to the Units held in any Class, subject to Section
3.6(a).
(c) Liquidating Distributions. Liquidating Distributions will be made to the Unitholders in
accordance with their positive Capital Account balances, subject to Section 3.6(a), after payment
of any obligations.
(d) Offset. The Company may offset any debts, liabilities, or amounts owed by a Unitholder to
the Company in amounts and at times determined by the Board in their discretion against
Distributions or other amounts owed or to be paid to a Xxxxxxxxxx.
0
Xxxxx Xxxxxxx, LLC | Limited Liability Company Agreement |
Section 3.7 Unitholder Conditions And Limitations.
(a) Interests Are Personal Property. The interests of a Unitholder (whether or not a
Member) in the Company are personal property for all purposes.
(b) No Compensation or Reimbursement. Except as otherwise provided in a written agreement or
policy approved by the Board and except for compensation employees receive as employees of the
Company, a Unitholder, whether or not a Member, in the status as Unitholder or Member shall not
receive any salary, fee, or draw for services rendered to or on behalf of the Company and shall not
be reimbursed for any expenses incurred by the Unitholder or Member on behalf of the Company.
(c) Advances to Company. A Unitholder or Affiliate of the Unitholder may, with the consent of
the Board, lend or advance money to the Company. If any Unitholder or Affiliate of the Unitholder
loans or advances money to the Company on its behalf, the amount of any loan or advance shall not
be treated as a contribution to the capital of the Company but shall be a debt due from the
Company. The amount of the loan or advance by a lending Unitholder or Affiliate shall be repayable
out of the Company’s cash and shall bear interest at a rate agreed upon by the Board and the
Unitholder. The Unitholders or their Affiliates are not obligated to make any loan or advance to
the Company.
(d) No Return of Distributions. Except as required by law, a Unitholder (whether or not a
Member) is not obligated by this Agreement to return any Distribution to the Company or pay the
amount of any Distribution for the account of the Company or to any creditor of the Company;
provided, however, that if any court of competent jurisdiction holds that, notwithstanding this
Agreement, any Unitholder is obligated to return or pay any part of any Distribution, the
obligation will bind the Unitholder alone and not any other Unitholder. The provisions of the
immediately preceding sentence are solely for the benefit of the Unitholders and will not be
construed as benefiting any third party. The amount of any Distribution returned to the Company by
a Unitholder or upon approval of the Board paid by a Unitholder for the account of the Company or
to a creditor of the Company will be added to the account or accounts from which it was subtracted
when it was distributed to the Unitholder.
(e) Redemption. The Company, by resolution of the Board, may redeem the Units of a Class of a
Unitholder that are not held by a Member of that Class. Unless otherwise provided by resolution of
the Board, a Unitholder (whether or not a Member), or any transferee of a Unitholder, does not have
a right to: demand, withdraw or receive a return of the Unitholder’s (or transferee’s) Capital
Contributions or Capital Account; to require the purchase or redemption of the Unitholder’s (or
transferee’s) Units or Interest; or to receive a Distribution in partial or complete redemption of
the fair value of the Unitholder’s Units or Interest in the Company, (except in all cases a
redemption authorized by the resolution of the Board under this Section 3.7(e) or as provided in
Appendix E, Article XII, or Article 7 of this Agreement following a Dissolution Event),
notwithstanding any provisions of the Act or any other provision of law. The other Unitholders and
the Company do not have any obligation to purchase or redeem the Units or Interest of any
Unitholder or transferee. Each Unitholder (whether or not a Member), as a condition of becoming a
Unitholder, has no right to receive a Distribution in partial or
9
Ozark Ethanol, LLC | Limited Liability Company Agreement |
complete redemption of the fair value of the Units or Interest of any Unitholder upon an Event
of Disassociation or otherwise which, in the absence of the provisions in this Agreement, it would
otherwise be afforded by Section 18-604 of the Act or any other provision of the Act.
(f) Rights of Unitholders Who Are Not Members. Unless admitted as a Member pursuant to
Section 4.3, a Person who acquires Units, or a Person who holds Units and ceases to be a Member,
has only the rights of an “unadmitted assignee” and is only entitled to allocations and
Distributions with respect to the Units in accordance with this Agreement, and does not have any
right to any information or accounting of the affairs of the Company, and is not entitled to
inspect the books or records of the Company, and does not have any of the rights of a Member under
the Act or this Agreement. Units held by a Person who is not a Member are subject to the Transfer
Restrictions.
(g) Specific Limitations. A Unitholder (whether or not a Member) does not have the right,
power or authority to: (1) reduce the Unitholder’s Capital Account, except as a result of the
dissolution of the Company or as otherwise provided by law or in this Agreement; (2) make voluntary
Capital Contributions to the Company except when authorized by the Board; (3) bring an action for
partition against the Company or any Company assets; (4) cause the termination and dissolution of
the Company, except as set forth in this Agreement; (5) require that any Distribution to the
Unitholder be made in the form of property other than cash; (6) (in the Unitholder’s capacity as a
Unitholder or Member) take part in or interfere in any manner with the management of the business
and affairs of the Company; (7) (in the Unitholder’s capacity as a Unitholder or Member) act for or
bind the Company notwithstanding Section 18-402 of the Act; and (8) have any contractual appraisal
rights under Section 18-210 of the Act. Each Unitholder (whether or not a Member) by becoming a
Unitholder shall have irrevocably waived each of the rights contained in clauses (1) through (8) of
this Section 3.7(g).
Section 3.8 Restrictions On Transfers.
(a) General Restrictions. The Board shall not approve, and the Company shall not
recognize for any purpose, any purported Transfer of Units unless and until the Transfer
Restrictions, consisting of the provisions of this Section and the Unit Transfer Policy, have been
satisfied or the Board has by resolution specifically waived any unsatisfied provision, condition
or restriction. A Transfer of Units approved by the Board that satisfies the provisions and
conditions of the Transfer Restrictions (or if any unsatisfied condition is waived), shall be
referred to in this Agreement as a “Permitted Transfer”.
(b) Not Binding Until Entered in Company Books. A Transfer of Units is not binding on the
Company without the approval of the Board and not until the Transfer is entered in the books and
records of the Company.
(c) Pledge of Units Allowed. Notwithstanding the Transfer Restrictions, a Unitholder may
pledge, xxxxx x Xxxx on all or any portion of its Units as security for the payment of debt,
provided that a subsequent foreclosure or transfer to the secured party in lieu of foreclosure or
otherwise shall be considered a Transfer.
10
Ozark Ethanol, LLC | Limited Liability Company Agreement |
(d) Unless Permitted, Transfers Void. A purported Transfer of Units that is not a Permitted
Transfer is null and void and of no force or effect whatsoever; provided that, if the Company is
required to recognize a Transfer that is not a Permitted Transfer (or if the Board, in its sole
discretion, elects to recognize a Transfer that is not a Permitted Transfer), the Units Transferred
shall be strictly limited to the transferor’s rights to allocations and Distributions as provided
by this Agreement with respect to the transferred Units, which allocations and Distributions may be
applied or set off against (without limiting any other legal or equitable rights of the Company) to
satisfy any debts, obligations, or liabilities for damages that the transferor or transferee of the
Units may have to the Company.
(e) Indemnification of Company. If a Transfer or attempted Transfer of Units is not a
Permitted Transfer, the Unitholder and the prospective transferee engaging or attempting to engage
in the Transfer is liable to and shall indemnify and hold harmless the Company and the other
Unitholders from all cost, liability, and damage that the Company and any of the other Unitholders
may incur (including incremental tax liabilities, lawyers’ fees and expenses) as a result of the
Transfer or attempted Transfer and efforts to prohibit the transfer or enforce the indemnity.
(f) Transferee Subject to Transfer Restrictions. Units held by a transferee are subject to
the Transfer Restrictions.
(g) Unit Transfer Policy. The Unit Transfer Policy shall be consistent with this Agreement
and impose conditions and restrictions on Transfers to: (1) preserve the tax status of the Company;
(2) comply with state or federal securities laws; (3) require appropriate information from the
transferor and transferee regarding the transfer; (4) require representations from the transferor
and/or transferee regarding the Transfer; and (5) allow the Board to determine whether or not the
transferee is a competitor of the Company or the Company’s Affiliates. The Unit Transfer Policy
also shall state the permitted method and conventions that shall be used in allocating Profits,
Losses, and each item of Profits, and Losses and all other items attributable between the
transferor and the transferee. The Unit Transfer Policy is attached as Appendix C, and
incorporated as part of this Agreement. The Unit Transfer Policy may be amended by the Board
without Member approval.
ARTICLE 4.
MEMBERS AND MEMBER VOTING
Section 4.1 Rights and Obligations of Members.
(a) Authority. The respective rights and obligations of Members will be determined
pursuant to the Act and this Agreement. To the extent that the rights or obligations of any Member
are different by reason of any provision of this Agreement than they would be in the absence of any
provision of this Agreement, to the extent permitted by the Act, this Agreement shall control. A
Member, other than a Member acting in his or her capacity as an officer of the Board or an officer
of the Company pursuant to delegated authority, does not have the power or authority to act for or
on behalf of the Company, to bind the Company by any act, or to incur any expenditures on behalf of
the Company, except with the prior consent of the Board.
11
Ozark Ethanol, LLC | Limited Liability Company Agreement |
(b) Access to Records. The Company shall provide to a Member upon written request of the
Member: (1) the Class and Number of Units held by the Member; (2) the percentage or share of
annual Distributions to which the Member is entitled based upon the Units held by the Member; (3)
the voting rights of the Member for each Class of Units held; (4) the most recent audited financial
statements of the Company; and (5) copies or internet access to any annual, quarterly, and special
reports filed by the Company with the Securities and Exchange Commission. The Board shall
prescribe the form and format in which the information in clauses (1) to (5) is transmitted to the
Member. For all other information, upon the request of a Member for a proper purpose related to
the Member’s Interest as determined by the Board, the Board will allow the Member and its
designated representatives or agents, upon at least ten (10) business days prior written notice to
the Board and during reasonable business hours, to examine the Company’s books and records to the
extent required by the Act for the proper purpose at the Member’s sole cost and expense. Each
Member and Unitholder has an expectation of privacy that information about them or their Interests
in the Company will not be shared with other Members for an improper purpose. The Member’s request
for information and right to inspect information is subject to any reasonable standards as may be
established by the Board on a case by case basis or from time to time and the inspection rights
will be restricted by the Board to protect the rights of other Members and the Company from damage
by the requesting Member. The Board has the authority and shall restrict access to and protect
Confidential Information of the Company in a manner consistent with this Section 4.1(b) and Section
4.1(c) as deemed appropriate by the Board.
(c) Nondisclosure. Except as otherwise consented to by the Board, all non-public information
furnished to the Member pursuant to this Agreement or otherwise regarding the Company or its
business that is not generally available to the public (“Confidential Information”) will be kept
confidential and will not be disclosed by the Member, or by any of the Member’s agents,
representatives or employees, in any manner, in whole or in part, except that: (1) a Member will be
permitted to disclose Confidential Information to those of the Member’s agents, representatives and
employees who need to be familiar with the information in connection with the Member’s investment
in the Company and who are charged with an obligation of confidentiality and nondisclosure to other
Persons; (2) a Member will be permitted to disclose Confidential Information to the Member’s
partners and equity holders so long as they agree to keep the information confidential on the terms
set forth in this Agreement; (3) a Member will be permitted to disclose Confidential Information to
the extent required by law, so long as the Member will have first provided the Company a reasonable
opportunity to contest the necessity of disclosing the information; and (4) a Member will be
permitted to disclose Confidential Information with prior written notice to the Company regarding
the Persons and the nature of and restrictions on the Confidential Information to be disclosed,
only to the Persons and to the extent necessary for the enforcement of any right of the Member
arising under this Agreement.
Section 4.2 Minimum Required Unit Holding by Members.
(a) Class A Members. Class A Members must hold at least 5,000 Class A Units.
(b) Other Classes. A Unitholder must hold the minimum number and Class of Units required for
membership as stipulated in the designation of another Class.
12
Ozark Ethanol, LLC | Limited Liability Company Agreement |
Section 4.3 Admission of Members.
(a) Initial Members. Each Person who submits a properly executed subscription agreement
to purchase Units, pays for such Units in full, and who satisfies the requirements of Section 4.2
is admitted as a Class A Member upon approval of the Board.
(b) Additional Members. Additional Persons may, upon the approval of the Board, be admitted
as Members of the Company with respect to any Class of Units: (1) by meeting the requirements for
membership with respect to any Class under Section 4.2 and otherwise under this Agreement including
any subscription and payment for Units as determined by the Board; (2) by submitting documents
required by the Board to evaluate membership approval; and (3) by submitting an executed document
approved by the Board agreeing to be bound by this Agreement. A Person is not admitted as a Member
of any Class by the Board unless and until an officer of the Company, acting under authority from
the Board, has countersigned the Person’s application, subscription agreement, or other document
required by the Board for admission as a Member of any Class. The Board in its sole discretion may
refuse to admit any Person as a Member of any Class.
(c) Admission of Transferees as Members. A transferee of Units will be admitted as a Member
with respect to a Class of Units (if not already a Member) if: (1) the Transfer Restrictions are
satisfied with respect to the applicable Transfer; (2) the requirements of Section 4.2 are
satisfied with respect to the transferee and the Class of Units, (3) the Board approves the
membership of the transferee (which approval may be granted, delayed, considered or withheld in the
sole discretion of the Board); and (4) the transferee executes any instruments and satisfies any
other requirements that the Board deems reasonably necessary or desirable for admission of the
transferee as a Member. In the absence of satisfying the foregoing requirements, the transferee
will be a non-member Unitholder with only the rights of an unadmitted assignee as provided in
Section 3.7(f).
Section 4.4 Member Voting.
(a) Voting Rights Restricted. A Member does not have any voting rights except with
respect to those matters requiring a Member vote or approval for: (1) the election and removal of
Managers; (2) approval of certain mergers or consolidations as provided in Section 5.1(c); (3)
approval of certain dispositions of all or substantially all of the assets of the Company under
Section 5.1(c); (4) approval of the dissolution of the Company under Article 7; and (5) approval of
certain amendments to this Agreement under Article 6, or as specifically provided for in this
Agreement.
(b) Class A Member Voting Rights. A Class A Member is entitled to one (1) vote for each Class
A Unit held by the Member; provided, however, that a Class A Member’s number of votes is at all
times capped at five percent (5%) of the outstanding Class A Units. Cumulative voting of the votes
for Class A Units is not permitted. A Member of any other Class will be entitled to any additional
voting rights as may be stipulated in the designations governing other Classes of Units held.
13
Ozark Ethanol, LLC | Limited Liability Company Agreement |
(c) Voting Method for Classes. Subject to the governance rights of the designation of any
other Class of Units, Members shall vote by Class, and the Members shall take action by the
affirmative vote of the majority of voting power of each Class authorized to vote as provided in
this Agreement for: (1) approval of certain mergers or consolidations as provided in Section
5.1(c); (2) approval of certain dispositions of all or substantially all of the assets of the
Company under Sections 5.1(c); (3) approval of dissolution of the Company under Article 7; and (4)
approval of certain amendments of this Agreement under Article 6. In the election (or removal) of
Managers by the Members under Section 5.3(b), Members shall take action by the affirmative vote of
a majority of the voting power of the Class or Classes electing (or removing) the Manager, present
either in person, by proxy, or by mail ballot, at a duly held meeting of the Members at which a
quorum is present for the transaction of business.
(d) Voting on Procedural and Other Matters. Except for Class voting matters in Section
4.4(c), the Members shall take action at a Members meeting on procedural and other matters as
determined by the Chair by the affirmative vote of the Members (each Member with one vote), without
regard to the Class or the Units held, unless objected to by the majority of the voting power of
any Class present at the meeting.
Section 4.5 Member Meetings.
(a) Place and Manner of Meeting. All meetings of Members shall be held at a time and
place, within or without the State of Delaware, as stated in the notice of the meeting or in a duly
executed waiver of notice. Presence in person, or by proxy or mail ballot, constitutes
participation in a meeting, except where a person participates in the meeting for the express
purpose of objecting to the transaction of business on the ground that the meeting is not lawfully
convened.
(b) Conduct of Meetings. The meetings of the Members shall be presided over by the Chair and
shall be conducted in general accordance with the most recent edition of Xxxxxxx’ Rules of Order,
or other rules and procedures as may be determined by the Board in its discretion. Resolutions to
be voted on by the Members shall be limited to those that have been approved by the Board for
presentation to the Members and contained in the notice of the meeting.
(c) Annual Meeting. The annual meeting of the Members shall be held on a date determined by
the Board. Failure to hold the annual meeting at the designated time is not grounds for
dissolution of the Company.
(d) Special Meetings. Special meetings of the Members may be called at any time by the Chair
or the Board, or by the Secretary upon the request of thirty-three percent (33%) of all Members
(total Members without respect to Class) regardless of the number of Units held by the requesting
Members. The special meeting request shall state a proper purpose or purposes of the special
meeting and the matters if any proposed to be acted on at the special meeting. Except as may be
required by applicable law, the Board in its discretion may determine whether a special meeting
request contains a proper purpose. If the Board determines the purpose is not proper, the Board
shall notify the Person requesting the special meeting in writing of the reasons that the
14
Ozark Ethanol, LLC | Limited Liability Company Agreement |
requestor’s purpose was not proper, and may either revise the purpose and proceed with the
procedures to call a special meeting or decline to call a special meeting until a proper purpose is
requested.
(e) Notice. The Secretary shall cause a written or printed notice, reviewed by the Company’s
legal counsel, stating the place, day and time of the meeting and, in the case of a special
meeting, the proper purpose or purposes for which the meeting is called. The notice shall be
delivered not less than ten (10) nor more than sixty (60) days before the date of the meeting
either personally or by mail, to each Member entitled to vote at the meeting. If mailed, the notice
shall be deemed to be delivered when deposited in the United States mail addressed to the Member at
the Member’s address as it appears on the records of the Company, with postage prepaid. If the
purpose of the meeting is to consider any item requiring Class voting of Members under Section
4.4(c), the notice shall be in a form that is approved by the Board and shall state the purpose,
identify the Manager if the purpose is removal, and a summary of the transaction to be considered
or a verbatim statement of the amendment to be considered must accompany the notice.
(f) Quorum. At any annual or special meeting of the Members, a quorum necessary for the
transaction of business is present if: (1) when the Board has authorized the use of mail ballot or
proxies, Members with twenty percent (20%) or more of the voting power are present; and (2) in any
other case, Members with ten percent (10%) or more of the voting power are present. If a vote of
more than one Class is required, the quorum requirement will be applied to the Members of each
Class. The Members present at a duly organized meeting at which a quorum is present may transact
business until adjournment, notwithstanding the departure or withdrawal of Members leaving less
than a quorum, provided however, if the question of a quorum is called and the Chair determines a
quorum is not present, the meeting shall be adjourned. The registration of Members eligible to
vote shall be verified by the Secretary and shall be reported in the minutes of the meeting.
(g) Record Date. For the purpose of determining Members entitled to notice of or to vote at
any meeting of Members or to make a determination of Members for any other proper purpose, the
Board may designate a record date or provide that the record books shall be closed for a stated
period not exceeding sixty (60) days. If the record books shall be closed for the purpose of
determining Members entitled to notice of or to vote at a meeting of Members, the books shall be
closed for a period not exceeding the period immediately preceding the meeting starting on the date
when the notice is mailed or transmitted from the Company and the date of the meeting. In lieu of
closing the record books, the Board may fix in advance a date as the record date for determination
of Members. Unless otherwise determined by the Board, if the record books are not closed and a
record date is not fixed for the determination of Members entitled to notice of or to vote at a
meeting of Members, the date on which notice of the meeting is first mailed or transmitted from the
Company, as the case may be, shall be the record date for the determination of Members. When a
determination of Members entitled to vote at any meeting of Members has been made as provided in
this Section, the determination applies to the reconvening of an adjournment, except where the
determination has been made through the closing of record books and the stated period of closing
has expired.
15
Ozark Ethanol, LLC | Limited Liability Company Agreement |
(h) Ballots; Proxies. If and to the extent authorized by the Board, a Member may vote at a
meeting of Members by alternative ballot (mail or otherwise) or by proxy granted by the Member or
by the Member’s duly authorized attorney-in-fact. If authorized by the Board, a proxy may be
granted in writing, by means of electronic transmission, or as otherwise permitted by applicable
law. A proxy shall be filed with the Secretary of the Company before the meeting is convened, as
determined by the Board. A proxy shall be considered filed with the Company when received by the
Company at its executive offices or other place designated by the Board, unless later revoked. A
proxy is not valid after eleven months from the date of its execution, unless otherwise provided in
the proxy. A proxy is revocable at the discretion of the Member executing the proxy. While the
right to vote can be exercised by proxy, only a Member has the right to be recognized in a meeting
of the Members unless otherwise determined by the Chair in the Chair’s sole discretion.
Section 4.6 Termination of Membership.
(a) Termination Events. Membership as to any Class may be terminated by the Board upon a
determination by the Board that the requirements to be a Member of that Class are not met.
Membership in the Company (membership in all Classes) is terminated if any of the following events
occur (any of the events are referred to as an “Event of Disassociation”):
(1) a Member does not meet the requirements to be a Member with regard to at least one
of the Classes of Units held by the Member as determined by the Board;
(2) a Member that is an individual dies, or a member that is not an individual ceases
to exist as a Business Entity, and leaves no successor qualified as determined by the Board
to be a Member;
(3) a Member Transfers all of the Member’s Units;
(4) the Member resigns as a Member with respect to all Classes of Units held under
Section 4.7; or
(5) the Board by resolution finds that a Member:
(i) has intentionally or repeatedly violated any provision of this
Agreement;
(ii) has breached any agreement with or obligation to the Company;
(iii) has intentionally or repeatedly taken actions that will impede the
Company from accomplishing its purposes;
(iv) is a Person who is a competitor of the Company or a competitor of an
Affiliate of the Company;
(v) is a Person who is detrimental to the interests of the Company or an
Affiliate of the Company; or
16
Ozark Ethanol, LLC | Limited Liability Company Agreement |
(vi) has willfully obstructed any lawful purpose or activity of the Company.
(b) Company’s Right of Redemption. Upon membership termination under clauses (1), (4) or (5)
in Section 4.6(a), the Company may, at its option purchase the terminated Member’s Units at eighty
percent (80%) of the average sale price of the Units (as reasonably determined by the Board),
measured over the six (6) month period immediately preceding the date the Board determines by
resolution to purchase the terminated Member’s Units. The Company may exercise the right to
purchase the terminated Member’s Units at any time after the membership termination. The Board by
resolution may waive the Company’s right to purchase the terminated Member’s Units.
Section 4.7 Resignation.
A Member may resign as a Member of any Class or all Classes at any time. A resignation
must be made in writing delivered to the Secretary of the Company, and will take effect at the time
specified in the resignation or, if no time is specified, upon receipt. The acceptance of a
resignation will not be necessary to make it effective, unless expressly so provided in the
resignation. The resignation as a Member does not terminate or cancel any contractual or other
obligations of the resigning Member to the Company or obligate the Company to make any
distributions to the resigning Member under Section 18-604 of the Act or otherwise, except as
approved by resolution of the Board.
Section 4.8 Continuation of the Company.
The occurrence of an Event of Disassociation or any other event which is deemed to
terminate the continued membership of a Member in one or all Classes, will not dissolve the
Company, the Company’s affairs shall not be required to be wound up, and the Company will continue
without dissolution.
ARTICLE 5.
MANAGEMENT OF COMPANY
Section 5.1 Governance By Board, CEO.
(a) General Authority. As provided in this Agreement, the powers and privileges of the
Company shall be exercised by or under the authority of the Board, and the business and affairs of
the Company shall be governed by the Board, and management of the Company shall be delegated to the
CEO. The Company shall not be governed or managed by the Members, except those matters for which
consent or approval of the Members is required by this Agreement or any nonwaivable provisions of
the Act. The Board by resolution and employment agreement shall allocate and delegate governance
and management of the Company between the Board and the CEO. Any delegation or allocation by the
Board shall not cause the individuals constituting the Board to cease to be “managers” of the
Company for purposes of the Act.
17
Ozark Ethanol, LLC | Limited Liability Company Agreement |
(b) Policies, Rules, Regulations. The Board may adopt policies, rules, and regulations and
may take actions as it deems advisable in furtherance of the purposes of the Company, provided that
the Board shall not act in a manner contrary to this Agreement.
(c) Board Actions Requiring Member Consent. Notwithstanding any other provision of this
Agreement, the following actions will not be taken by the Company without a resolution describing
and authorizing the action that is approved by the Board and is also approved by the Members:
(1) mergers or consolidations with or into any other Business Entity which is not an
Affiliate of the Company, whether or not the Company is the surviving entity;
(2) dispositions (whether effected by merger, sale of assets, lease, equity exchange or
otherwise) of all or substantially all of the assets of the Company, other than through a
pledge, security, transfer to a subsidiary under the control of the Company or transfer to
effect a securitization of the Company’s assets for purposes of debt financing;
(3) amendments of this Agreement requiring approval by the Members to the extent
provided in Article 6; and
(4) dissolution of the Company under Section 7.1.
(d) Duty to the Company. The Board shall cause the Company to conduct its business and
operations separate and apart from that of any Member, Manager, or any of their Affiliates. The
Board shall take all actions which may be necessary or appropriate: (1) for the continuation of the
Company’s valid existence as a limited liability company under the laws of the State of Delaware
and each other jurisdiction in which the existence is necessary to protect the limited liability of
Members and Unitholders or to enable the Company to conduct the business in which it is engaged;
and (2) for the accomplishment of the Company’s purposes, including the acquisition, development,
maintenance, preservation, and operation of Company property in accordance with the provisions of
this Agreement and applicable laws and regulations. Each Manager shall have the duty to discharge
the foregoing duties in good faith, in a manner the Manager reasonably believes to be in the best
interests of the Company, and with the care an ordinarily prudent person in a like position would
exercise under similar circumstances. A Manager is not under any other duty to the Company or the
Members to conduct the affairs of the Company in a particular manner.
(e) Duty of Care and Loyalty. Without limiting the applicability of Section 5.1(d) or any
other provision of this Agreement, the following provisions will be applicable to the Board and to
the Managers in their capacity as Managers:
(1) the Board and the Managers and the decisions of the Board will have the benefit of
the business judgment rule to the same extent as the Board, the Managers and the decisions
would have the benefit of the rule if the Board were a board of directors of a Delaware
corporation and the Managers were directors; and
18
Ozark Ethanol, LLC | Limited Liability Company Agreement |
(2) the Board and the Managers will have the same duties of care and loyalty as they
would have if they were a board of directors and directors of a Delaware corporation, but in
no event will any member of the Board be liable for any action or inaction for which this
Agreement expressly waives liability for the Manager.
Section 5.2 Actions By Board; Committees; Reliance On Authority.
(a) Board Action. In taking any action under this Agreement, the Managers shall act:
(1) collectively through meetings of the Board held and conducted pursuant to the provisions of
this Agreement or by written action taken pursuant to the provisions of this Agreement; (2) through
committees established pursuant to Section 5.2(b); and (3) through officers of the Board, and
through the CEO by resolutions of delegated and reserved authorities and employment agreement. The
Board shall take action by the affirmative vote of the Managers present at a duly held meeting of
the Board at which a quorum is present.
(b) Committees. The Board, by resolution approved by the affirmative vote of a majority of
the Managers then holding office, may from time to time establish one or more committees, each of
which shall be comprised of one or more natural persons who may but need not be Managers or
Members, provided that a majority of committee members on each committee must be a Manager or
Member. Any committee shall have and may only exercise the authority and duties to the extent
provided by the Board in the resolution establishing the committee, subject at all times to the
limitations set forth in the Act, this Agreement and to the direction and control of the Board.
Unless otherwise provided by the Board, the presence of a majority of the members of the committee
constitutes a quorum for the transaction of business at a meeting of the committee, and the
committee shall act by the affirmative vote of a majority of committee members present at a duly
held meeting. In other matters of procedure the provisions of this Agreement shall apply to
committees and their members to the same extent they apply to the Board and Managers, including the
provisions with respect to meetings and notice, absent members, written actions, and valid acts.
Each committee shall keep regular minutes of its proceedings and report the same to the Board. The
Board may dissolve any committee at any time.
(c) Reliance on Authority. A Person dealing with the Company, may rely on the authority of an
officer of the Board or an officer of the Company in taking an action in the name of the Company
without inquiry into the provisions of this Agreement or compliance with this Agreement, regardless
of whether the action is actually taken in accordance with the provisions of this Agreement, unless
the Person dealing with the Company has actual knowledge that the officer lacks authority to act or
the Act establishes that the officer lacks authority to act.
Section 5.3 The Board.
(a) Manager Election and Appointment. The Board shall consist of individuals appointed
or elected under this Section (“Managers”) who are the “managers” of the Company for all purposes
under the Act. Managers shall be appointed by the Board and elected by the Members at the times,
in the manner, and for the terms as prescribed by this Agreement. A Manager is not required to be
a Member. The initial Managers comprising the initial Board who
19
Ozark Ethanol, LLC | Limited Liability Company Agreement |
shall serve until the first Annual Meeting of the Members (which is expected to occur before
August 2007) in the manner and as prescribed by this Agreement consists of the individuals, terms,
and classification as provided in the Board attached as Appendix D and incorporated as part of this
Agreement. The Board may appoint Advisory Managers as provided in Section 5.3(d). Other than the
initial appointment (which may only be for a term that ends with the next election of Managers by
the Members), Managers and Advisory Managers appointed by the Board shall have one year terms
beginning and ending at the Annual Members meeting, Managers and Advisory Managers appointed by
Members shall be appointed by Members at the Annual Meeting of Members, and Managers and Advisory
Managers appointed by the Board, shall be appointed by the Board within 30 days after the Annual
Meeting of Members. The Board may adopt written procedures for determining the qualification and
nomination of Managers. The Board, without Member approval, shall amend Appendix D to comply with
any change in Managers. For purposes of this Agreement, the initial Managers in Appendix D shall
be deemed to have been elected by the Class A Members.
(b) Term. The elected Managers shall serve three-year terms and until their successors are
duly elected and qualified, or until their earlier death, resignation or removal. In order to
preserve continuity of governance and the harmonious transition of the initial Board to the elected
or appointed Board, the terms of the initial Managers may be staggered, with all subsequent terms
for elected Managers to be for a period of three years. The Board shall adopt nomination,
reporting, and other election procedures and policies for the Company in its sole discretion and
which may be amended or modified by the Board in its sole discretion.
(c) Number. The initial Board shall consist of eleven (11) Managers. After the first Annual
Meeting of the Members, the Board shall consist of not less than nine (9) Managers. The Board by
resolution may establish additional Managers to be elected by the Members. The designations for
any Class under Section 3.2(a) may establish additional Managers on the Board elected by the
Members or appointed by the Board or by one or more Members. At each Annual Meeting of the
Members, elections will be held to fill all vacancies on the Board for elected Managers.
(d) Advisory Managers. The Board may also appoint “Advisory Managers” (who may be invited by
the Board to serve the Board in an advisory capacity and attend meetings of the Board, but who will
not be members of the Board or “Managers” as used in this Agreement or the Act and who may have
voting rights on the Board).
(e) Independent Non-Competitive Activities. A Manager is only required to devote the time to
the affairs of the Company as are necessary to govern the business and affairs of the Company in
accordance with this Agreement, and shall be free to serve any other Business Entity or enterprise
in any capacity that the Manager deems appropriate in his or her discretion, provided that the
other Business Entity or enterprise or one of their Affiliates is not a competitor of the Company
or one of the Company’s Affiliates as determined by the Board.
(f) Resignation. A Manager may resign at any time. The resignation must be made in writing
and shall take effect at the time specified in the written resignation or, if a time is not
specified then at the time of its receipt by the Chair or the Secretary of the Company. The
20
Ozark Ethanol, LLC | Limited Liability Company Agreement |
acceptance of a resignation is not necessary to make it effective, unless expressly provided
in the written resignation.
(g) Removal. A Manager elected by the Members may be removed for any reason at any special
meeting of Members by the affirmative vote of the majority of the voting power of the class of
Members who elected the Manager. A Manager appointed by one or more Members pursuant to a Class
designation may be removed at any time by the appointing Member or Members or as otherwise provided
in the Class designation. A Manager appointed by the Board may be removed by the affirmative
majority vote of the Managers excluding the Manager to be removed. A Manager elected or appointed
by the Members may be removed at any special meeting of the Board by the affirmative vote of
two-thirds (2/3) of the Managers who are not subject to removal for an act or failure to act in a
manner that constitutes any of the following: (1) a willful failure to deal fairly with the Company
or its Members in connection with a matter in which the Manager or officer has a material conflict
of interest; (2) a violation of criminal law, unless the Board determines the Manager had
reasonable cause to believe that the Manager’s or officer’s conduct was lawful or no reasonable
cause to believe that the conduct was unlawful; (3) a transaction from which the Manager derived an
improper personal profit; or (4) willful misconduct. The notice of the meeting shall state that
the removal will be discussed and acted upon at the meeting, and must also be provided to the
Manager in question at least 10 days in advance of the meeting. The Manager in question has a
right to be heard at the meeting.
(h) Vacancies. A vacancy occurring on the Board (whether by reason of an increase in the
number of Managers or by reason of a vacancy in an existing Manager seat) may be filled by
appointment through an affirmative vote of a majority of the remaining Managers, though less than a
quorum. A Manager appointed by the Board to fill a vacancy for an elected Manager shall serve
until a successor is elected and qualified at the next annual or special meeting of the Members
held for the purpose of electing Managers. At the next annual meeting or special meeting of the
Members called for the purpose of electing a Manager, the Members shall elect a Manager to fill the
unexpired term of the vacant Manager’s position.
Section 5.4 Board Meetings.
(a) Meetings. Regular meetings of the Board shall be held from time to time as
determined by the Board. Special meetings of the Board shall be held upon the call of the Chair or
two (2) or more Managers. Board meetings shall be held at the principal office of the Company or
at another place, either within or without the State of Delaware, as designated by the person
calling the meeting and stated in the notice of the meeting or a duly executed waiver of notice of
the meeting. Managers may participate in a Board meeting by means of video or audio conferencing
or similar communications equipment whereby all Managers participating in the meeting can hear each
other.
(b) Notice. Notice of each meeting of the Board, stating the place, day and hour of the
meeting, shall be given to each Manager at least three (3) days before the day on which the meeting
is to be held. The notice may be given orally, in writing, by facsimile transmission, by
21
Ozark Ethanol, LLC | Limited Liability Company Agreement |
electronic mail or by any other form or means of communication that provides reasonable
assurances of effective communication. Except as expressly required in this Agreement, the notice
or waiver of notice of any special or regular meeting of the Board does not need to specify the
business to be transacted or the purpose of the meeting.
(c) Waiver. Whenever a notice is required to be given to a Manager under the provisions of
this Agreement, a waiver of the notice in writing signed by the Manager, whether before or after
the meeting time stated in the notice, shall be deemed equivalent to the giving of the notice.
Attendance of a Manager at a meeting of the Board constitutes a waiver of notice of the meeting by
the Manager, except where the Manager attends a meeting for the express purpose of stating his or
her objection to the transaction of any business because the meeting is not lawfully called or
convened.
(d) Quorum. One-half of the Managers in office constitute a quorum necessary for the
transaction of business at any regular or special meeting of the Board. If less than a quorum is
present, those Managers present may adjourn the meeting from time to time until a quorum shall be
present.
(e) Voting and Act of the Board. Each Manager has one (1) vote, without regard to the Class
or Classes of Members that elected or appointed the Manager, unless otherwise provided in a Class
designation. The Board shall take action by the affirmative vote of a majority of the Managers
present at a duly held meeting at which a quorum is present. Provided that a quorum is present,
there is no requirement that any action of the Board be approved by Managers elected or appointed
by a certain Class of Members, unless otherwise provided in a Class designation.
(f) Action Without a Meeting. An action required or permitted to be taken at a meeting of the
Board may be taken by written action signed by the Managers with a majority of the voting power of
the Managers comprising the Board, unless this Agreement prescribes a greater Manager approval for
the action to be taken.
(g) Compensation. The Board may fix the compensation, if any, of Managers. Managers shall
also be entitled to reimbursement for actual expenses incurred in attending meetings of the Board
or conducting other business of the Company.
Section 5.5 Officers.
(a) Qualification; Election. Officers of the Board, and the CEO must be natural persons,
and shall be elected or appointed by the Board. The officers of the Company shall consist of the
following persons:
(1) officers of the Board, elected on an annual basis, who shall consist of a Chair and
a Vice Chair, who must be Managers, and a Secretary and a Treasurer who need not be a
Manager and may be appointed by the Board;
(2) the CEO who may be appointed by the Board when determined necessary; and
22
Ozark Ethanol, LLC | Limited Liability Company Agreement |
(3) a chief financial officer and other officers and assistant officers of the Company,
who shall be appointed by the CEO.
(b) Bonds and Insurance. The Board may require all officers, agents and employees charged by
this Company with responsibility for the custody of its funds or property to give bonds. Bonds
shall be furnished by a responsible bonding company and approved by the Board, and the cost shall
be paid by the Company. The Board shall cause the Company to provide for insurance of the property
of the Company, or property which may be in the possession of the Company and not otherwise
adequately insured by the owner of the property. In addition, the Board shall cause the Company to
provide for insurance covering liability of the Company to all employees and the public, in a
commercially reasonable amount as is customary for businesses similar to the Company.
(c) Term of Office. An officer appointed by the Board, other than the CEO, shall hold office
for a term of one year and until a successor is duly elected or appointed, unless prior to the end
of the term the officer has resigned, deceased or has been removed from office.
(d) Removal and Vacancies. Any officer elected or appointed by the Board may be removed, with
or without cause, at any time by a resolution of the Board; provided that the removal is subject to
the termination procedures of any written employment agreement with the Company. A vacancy in an
office of the Board or the CEO shall be filled by a resolution of the Board. The CEO may remove
any officer appointed by the CEO. An officer may resign at any time by giving written notice to
the Company. The resignation is effective without acceptance when the notice is given to the
Company, unless a later effective date is specified in the notice.
(e) Chief Executive Officer. The CEO shall have direct and general charge and supervision of
all business and administrative operations of the Company and all other duties, responsibilities,
authorities and privileges as are set forth in the CEO’s employment agreement, if any, as amended
from time to time, in addition to those duties, responsibilities, authorities and privileges as are
delegated to the CEO by the Board by resolution, or that a CEO of a Delaware corporation would have
in respect of a Delaware corporation in the absence of a specific delegation of the duties,
responsibilities, authorities and privileges. The CEO may be an officer of any Business Entity in
which the Company owns an interest. The CEO shall also perform other duties that may be assigned
by the Board to the extent consistent with this Agreement and the CEO’s employment agreement, if
any, as amended from time to time.
(f) Duties of Other Officers. Unless provided otherwise by a resolution adopted by the Board,
the officers of the Company, other than the CEO, shall have the duties as are customarily
associated with their respective offices and shall perform other duties as may from time to time be
prescribed by any officer to whom the officer reports.
(g) Delegation. Unless prohibited by a resolution of the Board, an officer elected or
appointed by the Board may delegate in writing some or all of the duties and powers of the person’s
management position to other persons. An officer who delegates the duties or powers of an office
remains subject to the standard of conduct for an officer with respect to the discharge of all
duties and powers so delegated.
23
Ozark Ethanol, LLC | Limited Liability Company Agreement |
Section 5.6 Liability And Indemnification Of Managers And Officers.
(a) Liability Limitation. A Manager or officer of the Company is not personally liable
to the Company or its Members for monetary damages for a breach of fiduciary duty by the Manager or
officer; provided that this provision does not eliminate or limit the liability of a Manager or
officer for an act or failure to act in a manner that constitutes any of the following: (1) a
willful failure to deal fairly with the Company or its Members in connection with a matter in which
the Manager or officer has a material conflict of interest; (2) a violation of criminal law, unless
the Manager had reasonable cause to believe that the Manager’s or officer’s conduct was lawful and
had no reasonable cause to believe that the conduct was unlawful; (3) a transaction from which the
Manager derived an improper personal benefit or profit; or (4) willful misconduct.
(b) Indemnification. To the fullest extent permitted or required by law, the Company, its
receiver, or its trustee (in the case of its receiver or trustee, to the extent of Company
Property) shall indemnify, defend, save harmless, and pay all judgments and claims against, and
reasonable expenses of, each present and former Manager or officer relating to any liability or
damage or reasonable expenses incurred with respect to a proceeding if the Manager or officer (or
former Manager or officer) was a party to the proceeding as a result of or in connection with (1)
his or her capacity as a Manager or officer of the Company (which reasonable expenses including
reasonable attorneys’ fees may be paid as incurred); or (2) his or her service of any other Person
at the request of the Company. Notwithstanding the foregoing provisions, the Company shall not
indemnify, defend, save harmless, or pay any portion of any judgments or claims against, or any
expenses of, a Manager or officer (or former Manager or officer) under the foregoing provisions
where the judgments and claims or proceedings arise out of or are related to an act or failure to
act of the Manager or officer in a manner that constitutes any of the following: (1) a willful
failure to deal fairly with the Company or its Members in connection with a matter in which the
Manager or officer has a material conflict of interest; (2) a violation of criminal law, unless the
Manager or officer had reasonable cause to believe that the Manager’s conduct was lawful or no
reasonable cause to believe that the conduct was unlawful; (3) a transaction from which the Manager
or officer derived an improper personal profit; or (4) willful misconduct.
(c) Insurance. The Company may purchase and maintain insurance on behalf of a person in the
person’s official capacity against any liability or expense asserted against or incurred by the
person in or arising from that capacity, whether or not the Company would be required to indemnify
the person against the liability.
Section 5.7. Contracts With Managers Or Their Affiliates.
A contract or transaction between the Company or an Affiliate of the Company and a
Manager or the Manager’s Affiliate or between the Company and the Company’s Affiliate and any other
entity in which a Manager or the Manager’s Affiliate has a material financial interest, is not void
or voidable and does not require the Manager to account to the Company and hold as trustee for the
Company any profit or benefit derived from the contract or transaction solely for this reason, or
solely because the Manager is present at or participates in the Board meeting at
24
Ozark Ethanol, LLC | Limited Liability Company Agreement |
which the contract or transaction is authorized, if: (1) the material facts of the Manager’s
material financial interest are disclosed to the Board; and (2) the contract or transaction is
authorized or approved by two-thirds of all of the disinterested Managers. The presence of the
interested Manager may be counted in determining the presence of a quorum at the meeting at which
the contract or transaction is authorized but the interested Manager’s presence or vote may not be
counted in determining the authorization or approval of the contract or transaction by the
necessary two-thirds quantum of consent.
ARTICLE 6.
AMENDMENTS
Section 6.1 Amendments.
(a) Procedure For Amendments. Other than amendments by the Board under Section 6.1(b),
amendments to this Agreement shall be proposed solely by the Board and approved by the Members.
Following the Board’s approval of any proposed amendment, the Board shall submit to the Members a
verbatim statement of the proposed amendment, providing that counsel for the Company has approved
of the amendment in writing as to form. The Board shall include in any submission to the Members a
recommendation as to the proposed amendment. The Board shall seek the approval of the Members on
the proposed amendment by consent (written or electronic affirmation as determined by the Board) of
the required number of Members or shall call a meeting of the Members to vote on the proposed
amendment and to transact any other business deemed appropriate. A proposed amendment is adopted
and is effective as an amendment of this Agreement if the amendment is approved by Members of each
Class entitled to vote on the amendment. The Board shall incorporate any amendment as a restated
Agreement effective as of the effective date of the amendment.
(b) Amendments By Board. This Agreement may be amended by the Board, without Member approval,
to the extent provided in: Section 2.4 for the Principal Place of Business; Section 2.6(c) for the
Agent for Service of Process; Section 3.2(a), 3.2(b) and Section 3.2(c) for designations of Classes
and issuance of Units; Section 3.6 as to Class designations under Section 3.2(a). Section 3.8(g)
for the Unit Transfer Policy; and Section 5.3(a) as to the change in Managers; which includes the
authority of the Board to amend Appendices A, B, C, D, and E without Member approval.
(c) Amendments Of Sections By Specified Percentage. A provision of this Agreement that
requires the approval or consent of a specified percentage or number in interest of the Members or
any Class of Members may not be amended without the affirmative vote of Members holding at least
the specified percentage or number of voting rights of all of the Members or of the specified
Class.
(d) Amendment Of This Section. This Section shall not be amended without the approval or
consent of at least two-thirds (2/3) of the voting power of Members holding each Class of Xxxxx.
00
Xxxxx Xxxxxxx, LLC | Limited Liability Company Agreement |
ARTICLE 7.
DISSOLUTION AND WINDING UP
Section 7.1 Dissolution Commencement.
(a) Dissolution Event. The Company shall dissolve and shall commence winding up and
liquidating upon the first to occur of either of the following (each a “Dissolution Event”): (1)
the affirmative vote of the Board and a majority of the voting power of each class of Members to
dissolve, wind up, and liquidate the Company; or (2) the entry of a decree of judicial dissolution
pursuant to the Act.
(b) No Dissolution Prior To Dissolution Event. The Members agree that, notwithstanding any
provision of the Act, the Company shall not dissolve prior to the occurrence of a Dissolution
Event.
Section 7.2 Winding Up.
Upon the occurrence of a Dissolution Event, the Company shall continue solely for the
purposes of winding up its affairs in an orderly manner, liquidating its assets, and satisfying the
claims of its creditors, Unitholders and Members, and no Unitholder or Member shall take any action
that is inconsistent with, or not necessary to or appropriate for, the winding up of the Company’s
business and affairs, provided that all covenants contained in this Agreement and obligations
provided for in this Agreement shall continue to be fully binding upon the Unitholders and Members
until the time as the Property has been distributed pursuant to this Section and the Certificate of
Formation has been canceled pursuant to the Act. The Liquidator shall be responsible for overseeing
the prompt and orderly winding up and dissolution of the Company. The Liquidator appointed under
Section 7.6 shall take full account of the Company’s liabilities and Property and shall cause the
Property or the proceeds from the sale of the Property, to be applied and distributed, to the
maximum extent permitted by law, in the following order (subject to any priority Distributions
applicable to Units of any specific Class or Classes):
(1) first, to creditors (including Managers, Unitholders, Members and Affiliates of
Unitholders and Members who are creditors, to the extent otherwise permitted by law) in
satisfaction of all of the Company’s debts, obligations and liabilities (whether by payment or
making of reasonable provision for payment of the liabilities); and
(2) second, the excess of the amount paid in Section 7.2(1) above, subject to any priorities
in the designation of Unit Classes, to the Unitholders in accordance with the positive balance in
their Capital Accounts, as provided in Appendix E, Article XII.
Section 7.3 Rights Of Unitholders.
Except as otherwise provided in this Agreement, in winding up under Section 7.2 each
Unitholder shall look solely to the Property of the Company for any Distribution and has no right
or power to demand or receive Property other than cash from the Company. If the assets of the
Company remaining after payment or discharge of the debts, obligations and liabilities of the
26
Ozark Ethanol, LLC | Limited Liability Company Agreement |
Company are insufficient to return the Capital Contributions, the Unitholders shall have no
recourse against the Company or any other Unitholder or Unitholders.
Section 7.4 Notice Of Dissolution.
(a) Notice to Unitholders and Claimants. Within thirty (30) days after the occurrence of
a Dissolution Event, the Board shall provide written notice of the Dissolution Event to each of the
Members and any Unitholders who are not Members, and the Board may notify its known claimants
and/or publish notice as further provided in the Act.
(b) Certificate of Cancellation. Upon completion of the distribution of the Company’s
Property as provided in this Article 7, the Company shall be terminated, and the Liquidator shall
cause the filing of a Certificate of Cancellation in accordance with the Act and shall take all
other actions as may be necessary to terminate the Company.
Section 7.5 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 Unitholders pursuant to Section 7.2 (the “Liquidation Period”), the Unitholders
shall continue to share Profits, Losses, gain, loss and other items of Company income, gain, loss
or deduction in the manner provided in Article 3 and Appendix E.
Section 7.6 The Liquidator.
(a) Definition. The “Liquidator” shall mean a Person appointed by the Board to oversee
the liquidation of the Company. The Liquidator may be the Board or a committee of three or more
Managers appointed by the Board.
(b) Fees. The Company is authorized to pay a reasonable fee to the Liquidator for its
services performed pursuant to this Article 7 and to reimburse the Liquidator for its reasonable
costs and expenses incurred in performing those services.
(c) Indemnification. The Company shall indemnify, save harmless, and pay all judgments and
claims against the Liquidator or any officers, directors, agents or employees of the Liquidator
relating to any liability or damage incurred by reason of any act performed or omitted to be
performed by the Liquidator, or any officers, directors, agents or employees of the Liquidator in
connection with the liquidation of the Company, including reasonable attorneys’ fees incurred by
the Liquidator, officer, director, agent or employee in connection with the defense of any action
based on any act or omission, which attorneys’ fees may be paid as incurred, except to the extent
the liability or damage is caused by the fraud, intentional misconduct of, or a knowing violation
of the laws by the Liquidator which was material to the cause of action.
27
Ozark Ethanol, LLC | Limited Liability Company Agreement |
Section 7.7. Form Of Liquidating Distributions.
For purposes of making Distributions required by Section 7.2, the Liquidator may
determine whether to distribute all or any portion of the Property in kind or to sell all or any
portion of the Property and distribute the proceeds from the sale.
ARTICLE 8.
MISCELLANEOUS
Section 8.1 Notices.
A notice, payment, demand, or communication required or permitted to be given by any
provision of this Agreement shall be in writing, facsimile or electronic communication, as
determined by the Board, and shall be deemed to have been delivered, given, and received for all
purposes: (1) if delivered personally to the Person or to an officer of the Business Entity to whom
the same is directed; or (2) when the same is actually delivered to the recipient’s address on
record with the Company. Notices, payments and demands shall be transmitted or sent: (1) if to the
Company, to the address determined pursuant to Section 2.4; and (2) if to the Unitholders or
Members, to the address of the Unitholder or Member on record with the Company.
Section 8.2 Binding Effect.
Except as otherwise provided in this Agreement, every covenant, term, and provision of
this Agreement shall be binding upon and inure to the benefit of the Members and Unitholders and
their respective successors, transferees, and assigns, without the necessity of physical execution
of this Agreement.
Section 8.3 Construction.
Every covenant, term, and provision of this Agreement shall be construed simply according
to its fair meaning and not strictly for or against any Member or Unitholder.
Section 8.4 Time.
In computing any period of time pursuant to this Agreement, the day of the act, event or
default from which the designated period of time begins to run shall not be included, but the time
shall begin to run on the next succeeding day. The last day of the period so computed shall be
included, unless it is a Saturday, Sunday or legal holiday, in which event the period shall run
until the end of the next day which is not a Saturday, Sunday or legal holiday.
Section 8.5 Headings.
Section and other headings contained in this Agreement are for reference purposes only
and are not intended to describe, interpret, define, or limit the scope, extent, or intent of this
Agreement or any provision of this Agreement.
28
Ozark Ethanol, LLC | Limited Liability Company Agreement |
Section 8.6 Severability.
Every provision of this Agreement is intended to be severable, and, if any term or
provision of this Agreement is illegal or invalid for any reason whatsoever, the illegality or
invalidity shall not affect the validity or legality of the remainder of this Agreement.
Notwithstanding the foregoing, if the illegality or invalidity would be to cause the Members to
lose the material benefit of their economic bargain, then the Members agree to negotiate in good
faith to amend this Agreement in order to restore the lost material benefit.
Section 8.7 Incorporation By Reference.
Every exhibit, schedule, and other appendix attached to this Agreement and referred to in
this Agreement is not incorporated in this Agreement by reference unless this Agreement expressly
provides that the exhibit, schedule or appendix is to be incorporated as part of this Agreement.
Section 8.8 Variation Of Terms.
All terms and any variations of the terms shall be deemed to refer to masculine,
feminine, or neuter, singular or plural, as the identity of the term may require.
Section 8.9 Governing Law.
The laws of the State of Delaware shall govern the validity of this Agreement, the
construction of its terms, and the interpretation of the rights and duties arising under this
Agreement.
Section 8.10 Specific Performance.
Each Member and Unitholder agrees that the other Members and Unitholders would be
irreparably damaged if any of the provisions of this Agreement are not performed in accordance with
their specific terms and that monetary damages would not provide an adequate remedy. Accordingly,
it is agreed that, in addition to any other remedy to which the Company on behalf of the
nonbreaching Members may be entitled, at law or in equity, the Company on behalf of the
nonbreaching Members shall be entitled to injunctive relief to prevent breaches of the provisions
of this Agreement and specifically to enforce the terms and provisions of this Agreement in any
action instituted in any court of the United States or any state having subject matter
jurisdiction.
Section 8.11 Consent To Jurisdiction.
All actions, suits or proceedings arising out of or based upon this Agreement or the
subject matter of this Agreement if brought by a person other than the Company shall be brought and
maintained exclusively in the federal courts located in the State of Delaware, provided that upon
determination by the Board of Managers, the Company has the right to bring, maintain, or remove any
action, suit, or proceeding arising out of or based on this Agreement or the subject matter of this
Agreement to any state or federal court located in the State of Delaware. Each of the Unitholders
and Members: (1) shall irrevocably be subject to the jurisdiction of the federal
29
Ozark Ethanol, LLC | Limited Liability Company Agreement |
courts located in the State of Delaware for the purpose of any action, suit or proceeding
arising out of or based upon this Agreement or the subject matter of this Agreement; and (2) waives
to the extent not prohibited by applicable law, and shall not be entitled to assert, by way of
motion, as a defense or otherwise, in any action, suit or proceeding, any claim that he, she, or it
is not subject personally to the jurisdiction of one of the above-named courts, that he, she, or it
is immune from extraterritorial injunctive relief or other injunctive relief, that he, she, or its
property is exempt or immune from attachment or execution, that any action, suit or proceeding may
not be brought or maintained in one of the above-named courts should be dismissed on the grounds of
forum non conveniens, should be transferred to any court other than one of the above-named courts,
should be stayed by virtue of the pendency of any other action, suit or proceeding in any court
other than one of the above-named courts, or that this Agreement or the subject matter of this
Agreement may not be enforced in or by any one of the above-named courts. Each Unitholder, Member,
or other party to this Agreement shall be subject to service of process in any suit, action or
proceeding in any manner permitted by the laws of the State of Delaware, shall be subject to
service of process by registered or certified mail, return receipt requested, at the address
specified in or pursuant to this Agreement on the records of the Company (on grounds that it is
reasonably calculated to give actual notice) and waives and shall not be entitled to assert by way
of motion, as a defense or otherwise, in any action, suit or proceeding any claim that service of
process made in accordance with this Agreement does not constitute good and sufficient service of
process. The provisions of this Section shall not restrict the ability of any party to enforce in
any court any judgment obtained in the federal courts located in the State of Delaware.
Section 8.12 Waiver Of Jury Trial.
To the extent not prohibited by applicable law which cannot be waived, the Company and
each of the Unitholders and Members waive and shall not be entitled to assert (whether as
plaintiff, defendant or otherwise) any right to trial by jury in any forum in respect of any issue,
claim, demand, action or cause of action arising out of or based upon this Agreement or the subject
matter of this Agreement, whether now existing or arising later and whether sounding in tort or
contract or otherwise.
30
Ozark Ethanol, LLC | Limited Liability Company Agreement | |
Appendix A |
Appendix A
PRINCIPAL PLACE OF BUSINESS
OF
OZARK ETHANOL, LLC
OF
OZARK ETHANOL, LLC
The principal place of business of Ozark Ethanol, LLC is 000 Xxxx Xxxxxxxx Xxxxxx, Xxxxxxx,
Xxxxxxxx, 00000 and other places as determined by the Board of Managers of Ozark Ethanol, LLC.
A-1
Ozark Ethanol, LLC | Limited Liability Company Agreement | |
Appendix B |
Appendix B
AGENT FOR SERVICE
OF PROCESS
OF
OZARK ETHANOL, LLC
OF PROCESS
OF
OZARK ETHANOL, LLC
The name and address of the agent for service of process on Ozark Ethanol, LLC in the State of
Delaware is Corporation Trust Center, 0000 Xxxxxx Xxxxxx, Xxxxxxxxxx, Xxxxxxxx 00000 and its
initial registered agent at that address is The Corporation Trust Company.
B-1
Ozark Ethanol, LLC | Limited Liability Company Agreement | |
Appendix C |
Appendix C
UNIT TRANSFER POLICY
OF
OZARK ETHANOL, LLC
OF
OZARK ETHANOL, LLC
Section 1.1. Definitions, Applicability.
(a) Definitions. The definitions of the Limited Liability Company Agreement (the
“Agreement”) of Ozark Ethanol, LLC (the “Company”) and Appendix E of the Agreement apply to this
Unit Transfer Policy (the “Policy”).
(b) Applicability. This Policy and Section 3.8 of the Agreement and the other applicable
provisions of the Agreement apply to all Transfers of Units of the Company.
(c) Intent of Policy. It is the intent of this Policy as it relates to any Transfers that:
(1) the tax status of the Company is the same as for a partnership; (2) this Company preserve its
partnership tax status by complying with Regulations, Section 1.7704-1, et seq., and any
amendments; and (3) to the extent possible, this Policy shall be read and interpreted to prohibit
the free transferability of Units.
Section 2.1. Complete Prohibition On Certain Transfers Of Units.
Notwithstanding any other provisions of this Policy, the following Transfers will be
prohibited and the Board of Managers will have no authority to approve any of the following
Transfers:
(1) a Transfer in violation of the Securities Act or any state securities or blue sky laws
applicable to the Company or the Interest to be transferred;
(2) a Transfer that would cause the Company to be considered a publicly traded partnership
under Section 7704(b) of the Code;
(3) a Transfer that would cause the Company to lose its status as a partnership for federal
income tax purposes; or
(4) a Transfer that would cause a termination of the Company for federal income tax purposes.
Section 3.1. Conditions To Permitted Transfers.
(a) Requirement. A Transfer shall not be treated as a Permitted Transfer unless and
until the conditions in this Section are satisfied.
C-1
Ozark Ethanol, LLC | Limited Liability Company Agreement | |
Appendix C |
(b) Conveyance Documents. Except in the case of a Transfer involuntarily by operation of law,
the transferor and transferee shall execute and deliver to the Company documents and instruments of
conveyance as may be necessary or appropriate in the opinion of legal counsel to the Company to
effect such Transfer. In the case of a Transfer of Units involuntarily by operation of law, the
Transfer shall be confirmed by presentation to the Company of legal evidence of the Transfer, in
form and substance satisfactory to legal counsel to the Company. In all cases, the Company shall be
reimbursed by the transferor and/or transferee for all costs and expenses that it reasonably incurs
in connection with the Transfer.
(c) Tax Information. The transferor and transferee shall furnish the Company with the
transferee’s taxpayer identification number, sufficient information to determine the transferee’s
initial tax basis in the Units transferred, and any other information reasonably necessary to
permit the Company to file all required federal and state tax returns and other legally required
information statements or returns. In addition, the transferee must consent to the use of the
method and convention of allocating Profits and Losses and each item of profit and loss for the
year of the transfer that is specified in the Unit Transfer Policy. Without limiting the
generality of the foregoing, the Company shall not be required to make any Distribution otherwise
provided for in the Agreement with respect to any Transferred Units until it has received this
information.
(d) Securities Compliance. Except in the case of a Transfer of Units involuntarily by
operation of law, either (1) the Units are registered under the Securities Act, and any applicable
state securities laws, or (2) if requested by the Board of Managers in its discretion, the
transferor provides an opinion of legal counsel, which opinion and legal counsel shall be
reasonably satisfactory to the Board of Managers, to the effect that the Transfer is exempt from
all applicable registration requirements and that the Transfer will not violate any applicable laws
regulating the Transfer of securities.
(e) Does Not Cause Company To Be Investment Company. Except in the case of a Transfer of
Units involuntarily by operation of law, if requested by the Board of Managers in its sole
discretion, the transferor shall provide an opinion of legal counsel, which opinion and legal
counsel shall be reasonably satisfactory to the Board of Managers, to the effect that the Transfer
will not cause the Company to be deemed to be an “investment company” under the Investment Company
Act of 1940.
(f) Does Not Cause Company To Be Publicly Traded Partnership. Except in the case of a
Transfer of Units involuntarily by operation of law, if requested by the Board of Managers in its
discretion, the transferor shall provide an opinion of legal counsel, which opinion and legal
counsel shall be reasonably satisfactory to the Board of Managers, to the effect that such Transfer
will not cause the Company to be deemed to be a “publicly-traded limited partnership” under
applicable provisions of the Code.
(g) Transferee Is Not A Competitor Of The Company. Except in the case of a Transfer of Units
involuntarily by operation of law, the Board must determine (in its sole discretion) that the
transferee is not a competitor of the Company or the Company’s Affiliates, or an Affiliate of a
competitor of the Company or a Person who as a Unitholder or Member would
C-2
Ozark Ethanol, LLC | Limited Liability Company Agreement | |
Appendix C |
or may be detrimental to the interests of the Company. The Unitholder and proposed transferee
shall submit information requested by the Board to make the determination.
(h) Tax Status Compliance. Unless otherwise approved by the Board of Managers, a Transfer of
Units shall not be made except upon terms which would not, in the opinion of legal counsel chosen
by and mutually acceptable to the Board and the transferor, result in the termination of the
Company within the meaning of Section 708 of the Code or cause the application of the rules of
Sections 168(g)(1)(B) and 168(h) of the Code or similar rules to apply to the Company. In
determining whether a particular proposed Transfer will result in a termination of the Company,
legal counsel to the Company shall take into account the existence of prior written commitments to
Transfer and the commitments shall always be given precedence over subsequent proposed Transfers.
(i) Suspension Of Transfers After Dissolution Event. No notice or request initiating the
procedures contemplated by this Section may be given by a Unitholder after a Dissolution Event has
occurred.
(j) Board May Waive Conditions. Subject to Section 2.1 of this Policy, the Board of Managers
shall have the authority to waive any legal opinion or other condition required in this Section.
Section 3.2. Distributions And Allocations In Respect To Transferred Units.
If any Unit is transferred in compliance with the Transfer Restrictions, then Profits and
Losses, each item of profit and loss, and all other items attributable to the Units for the fiscal
year of the Transfer shall be divided and allocated between the transferor and the transferee by
taking into account their varying interests during the fiscal year in accordance with Code Section
706(d). Solely for purposes of making the allocations, the Company shall use a monthly proration
method and convention that divides and allocates the Profits, Losses and items between the
transferor and transferee based on the portion of the year that has elapsed prior to the Transfer
determined by recognizing the Transfer as of the beginning of the calendar month following the
calendar month in which the notice, documentation and information and approval requirements of the
Transfer have been substantially complied with. All Distributions on or before the end of the
calendar month in which the 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 the
allocations and Distributions by resolution or by amending this Section; provided, that reasonable
notice of any change is given to the Unitholders in advance of the change. Neither the Company,
the Board, any Manager nor any Unitholder shall incur any liability for making allocations and
Distributions in accordance with the provisions of this Section, whether or not the Board or any
Manager or the Company or any Unitholder has knowledge of any Transfer of ownership of any interest
in the Company. The Unitholders acknowledge that the method and convention designated herein
constitutes an “agreement among the partners” within the meaning of Regulations, Section 1.706-1.
C-3
Ozark Ethanol, LLC | Limited Liability Company Agreement | |
Appendix C |
Section 3.3. Other Rules Regarding Transfers.
(a) Market Of Units Not Made. A Unitholder may not: (1) make a market in Units; (2)
Transfer its Units on an established securities market, a secondary market (or the substantial
equivalent of those markets) within the meaning of Code Section 7704(b) (and any Regulations,
proposed Regulations, revenue rulings, or other official pronouncements of the Internal Revenue
Service or Treasury Department that may be promulgated or published); and (3) in the event the
Regulations, revenue rulings, or other pronouncements treat any or all arrangements which
facilitate the selling of Company interests and which are commonly referred to as “matching
services” as being a secondary market or substantial equivalent of a secondary market, Transfer any
Units through a matching service that is not approved in advance by the Company. A Unitholder may
not Transfer any Units to any Person unless the Person agrees to be bound by the Transfer
Restrictions and to Transfer the Units only to Persons who agree to be similarly bound.
(b) Units Acquired For Unitholder’s Account. The acquisition of Units by a Unitholder shall
be deemed to be a representation and warranty to the Company and the other Unitholders, that the
Unitholder’s acquisition of Units is made as principal for the Unitholder’s own account and not for
resale or distribution of the Units to others in violation of securities laws as determined by the
Company and its legal counsel.
C-4
Ozark Ethanol, LLC | Limited Liability Company Agreement | |
Appendix D |
Appendix D
BOARD OF MANAGERS
OF
OZARK ETHANOL, LLC
OF
OZARK ETHANOL, LLC
Term | ||||||||
Manager and Address | Position | Classification | Expires | |||||
Xxxxxx Xxxxxx 0000 Xxxx Xxxxxxxx Xxx, X XX Xxx 000 Xxxxxxx, XX 00000 |
Manager | Class A Elected | 2007 | |||||
Xxxx Xxxxxx 000 XX 00xx Xxxx Xxxxx, XX 00000 |
Manager | Class A Elected | 2007 | |||||
Xxxx Xxxxxx 000 XX 0xx Xxxx Xxxxx XX 00000 |
Manager | Class A Elected | 2007 | |||||
Xxxx Xxxxx 0000 X X.X. 00xx Xx. Xxxxxxx, XX 00000 |
Manager | Class A Elected | 0000 | |||||
Xxx XxXxxxxxx X.X. Xxx 00 Xxxxxxx, XX 00000 |
Manager | Class A Elected | 2007 | |||||
Xxxx Xxxx 000 Xxxx 00xx Xxxxxx Xxxxxx Xxxx, XX 00000 |
Manager | Class A Elected | 2007 | |||||
Xxx Xxxx 00 XX Xxxxx Xx Xxxxx, XX 00000-0000 |
Manager | Class A Elected | 2007 | |||||
Xxxxx Xxxxxx 00000 Xxxxxx Xxxxxxx, XX 00000 |
Manager | Class A Elected | 0000 | |||||
Xxxxx Xxxx 000 Xxxx Xxxxxxx Xxxx Xxxxxxx, XX 00000 |
Manager | Class A Elected | 2007 | |||||
Xxxx Xxxxxxxx 0000 XX 00xx Xxxx Xxxxxxx, XX 00000 |
Manager | Class A Elected | 2007 | |||||
Xxxxxx Xxxxxxxx 000 Xxxxxxxx Xx. Xxxxxxxxx Xxxx, XX 00000 |
Manager | Class A Elected | 2007 |
D-1
Ozark Ethanol, LLC | Limited Liability Company Agreement | |
Appendix E |
APPENDIX E
ALLOCATIONS, DISTRIBUTIONS, TAX MATTERS,
AND ACCOUNTING
CONTENTS
ARTICLE I. THE COMPANY | E-2 | |||||||
Section 1.10. | Definitions |
E-2 | ||||||
ARTICLE II. CAPITAL AND INTERESTS | E-6 | |||||||
Section 2.4. | Capital Accounts |
E-6 | ||||||
ARTICLE III. ALLOCATIONS | E-7 | |||||||
Section 3.1. | Profits |
E-7 | ||||||
Section 3.2. | Losses |
E-7 | ||||||
Section 3.3. | Special Allocations |
E-7 | ||||||
Section 3.4. | Curative Allocations |
E-10 | ||||||
Section 3.5. | Loss Limitation |
E-10 | ||||||
Section 3.6. | Other Allocation Rules |
E-10 | ||||||
Section 3.7. | Tax Allocations: Code Section 704(c) |
E-11 | ||||||
ARTICLE IV. DISTRIBUTIONS | E-11 | |||||||
Section 4.1. | Net Cash Flow |
E-11 | ||||||
Section 4.2. | Amounts Withheld |
E-12 | ||||||
Section 4.3. | Limitations Of Distributions |
E-12 | ||||||
ARTICLE V. [RESERVED] | E-12 | |||||||
ARTICLE VI. [RESERVED] | E-12 | |||||||
ARTICLE VII. [RESERVED] | E-12 | |||||||
ARTICLE VIII. ACCOUNTING, BOOKS AND RECORDS | E-12 | |||||||
Section 8.1. | Accounting, Books And Records |
E-12 | ||||||
Section 8.2. | Reports |
E-13 | ||||||
Section 8.3. | Tax Matters |
E-14 | ||||||
ARTICLE IX. [RESERVED] | E-14 | |||||||
ARTICLE X. [RESERVED] | E-14 | |||||||
ARTICLE XI. [RESERVED] | E-14 | |||||||
ARTICLE XII. DISSOLUTION AND WINDING UP | E-15 | |||||||
Section 12.1. | Compliance With Certain Requirements Of Regulations;
Deficit Capital Accounts |
E-15 | ||||||
Section 12.2. | Deemed Distribution And Recontribution |
E-15 | ||||||
Section 12.3. | Character Of Liquidating Distributions |
E-15 |
E-1
Ozark Ethanol, LLC | Limited Liability Company Agreement | |
Appendix E |
ALLOCATIONS, DISTRIBUTIONS, TAX MATTERS,
AND ACCOUNTING
The Sections in this Appendix E relate to allocations, distributions, tax matters,
accounting, dissolution and other related matters. The numbering of the Sections is not sequential
but the Sections are numbered to reflect the numbering conventions of certain forms.
ARTICLE I.
THE COMPANY
Section 1.10. Definitions.
The definitions in this section (and the definitions in Section 1.2 of the Agreement)
apply to this Appendix E. References to Articles and Sections refer to Articles and Sections in
this Appendix E unless the context implies or it is stated otherwise.
“Adjusted Capital Account Deficit” means, with respect to any Unitholder, the deficit balance,
if any, in the Unitholder’s Capital Account as of the end of the relevant Fiscal Year, after giving
effect to the following adjustments:
(a) Credit to the Capital Account any amounts which the Unitholder is deemed to be obligated
to restore pursuant to the next to the last sentences in Regulations, Sections 1.704-2(g)(1) and
1.704-2(i)(5); and
(b) Debit to the Capital Account the items described in Regulations, 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).
The foregoing definition is intended to comply and shall be interpreted consistently with the
provisions of Regulations, Section 1.704-1(b)(2)(ii)(d).
“Capital Account” means the capital account maintained for each Unitholder in accordance with
Section 2.4.
“Capital Contribution” means a contribution made to the Company with respect to any Unit in a
form allowed as valid consideration for Units under the Act. The amount of any Capital
Contribution shall be the sum of the money and the initial Gross Asset Value of any Property (other
than money) contributed to the Company with respect to the Units held or purchased by a Unitholder,
plus in the case of a contribution made in a form other than Property as consideration for Units,
the amount, if any, determined or agreed to by the Board of Managers or otherwise specified in this
Agreement.
“Class Percentage” is 100%.
“Code” means the United States Internal Revenue Code of 1986, as amended from time to time.
E-2
Ozark Ethanol, LLC | Limited Liability Company Agreement | |
Appendix E |
“Company Minimum Gain” has the meaning given the term “partnership minimum gain” in
Regulations, Sections 1.704-2(b)(2) and 1.704-2(d).
“Depreciation” means, for each Fiscal Year, an amount equal to the depreciation, amortization,
or other cost recovery deduction allowable with respect to an asset for the Fiscal Year, except
that if the Gross Asset Value of an asset differs from its adjusted basis for federal income tax
purposes at the beginning of the Fiscal Year, Depreciation shall be an amount which bears the same
ratio to the beginning Gross Asset Value as the federal income tax depreciation, amortization, or
other cost recovery deduction for the Fiscal Year bears to the beginning adjusted tax basis;
provided, however, that if the adjusted basis for federal income tax purposes of an asset at the
beginning of the Fiscal Year is zero, Depreciation shall be determined with reference to the
beginning Gross Asset Value using any reasonable method selected by the Board.
“Fiscal Year” means, subject to a change in Fiscal Year pursuant to Section 8.1(b), the fiscal
year of the Company, which shall be the Company’s taxable year as determined under Regulations,
Section 1.441-1 or Section 1.441-2 and the Regulations under Section 706 of the Code or, if the
context requires, any portion of a fiscal year for which an allocation of Profits, Losses or other
allocation items or a Distribution is to be made; provided that the Board may designate a different
fiscal year for GAAP reporting purposes but that designation shall not affect the taxable year of
the Company or the provisions of this Agreement relating to Capital Accounts, allocations of
Profits, Losses or other allocation items, or Distributions.
“GAAP” means generally accepted accounting principles in effect in the United States of
America from time to time.
“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 Unitholder to the Company
shall be the gross fair market value of such asset, as determined by the Board;
(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 as
of the following times: (i) the acquisition of an additional interest in the Company by any new or
existing Unitholder in exchange for more than a de minimis Capital Contribution; (ii) the
Distribution by the Company to a Unitholder of more than a de minimis amount of Company property as
consideration for an interest in the Company; (iii) the liquidation of the Company within the
meaning of Regulations, Section 1.704-1(b)(2)(ii)(g); and (iv) other times as the Regulations may
permit; provided that an adjustment described in clauses (i), (ii), and (iv) of this
subparagraph shall be made only if the Board determines that such adjustment is necessary to
reflect the relative economic interests of the Unitholders in the Company; and further provided
that the adjustment described in clause (i) of this subparagraph (b) shall not be made to reflect
the issuance of additional Units during the Start-up Period.
(c) The Gross Asset Value of any item of Company assets distributed to any Unitholder 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; and
E-3
Ozark Ethanol, LLC | Limited Liability Company Agreement | |
Appendix E |
(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 (d) of the
definition of “Profits” and “Losses” or Section 3.3(g) of this Exhibit E; provided,
however, that Gross Asset Values shall not be adjusted pursuant to this subparagraph (d) 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) of this definition, the Gross Asset Value shall thereafter be adjusted by the
Depreciation taken into account with respect to such asset, for purposes of computing Profits,
Losses and other allocation items.
“Liquidation Period” has the meaning set forth in Section 7.5 of the Agreement.
“Liquidation Provisions” means the provisions of Article XII of this Appendix E and Article 7
of the Agreement.
“Liquidator” has the meaning set forth in Section 7.6 of the Agreement.
“Losses” has the meaning set forth in the definition of “Profits” and “Losses.”
“Net Cash Flow” means the gross cash proceeds of the Company less the portion thereof used to
pay or establish reserves for all Company expenses, debts, obligations and liabilities of the
Company, including capital improvements, replacements, and contingencies, all as reasonably
determined by the Board. “Net Cash Flow” shall not be reduced by depreciation, amortization, cost
recovery deductions, or similar allowances, but shall be increased by any reductions of reserves
previously established.
“Nonrecourse Deductions” has the meaning set forth in Regulations, Sections 1.704-2(b)(1) and
1.704-2(c).
“Nonrecourse Liability” has the meaning in Regulations, Section 1.704-2(b)(3).
“Profits” and “Losses” mean, for each Fiscal Year, an amount equal to the Company’s taxable
income or loss for the Fiscal Year, determined in accordance with Code Section 703(a) (for this
purpose, all items of income, gain, loss, or deduction required to be stated separately pursuant to
Code Section 703(a)(1) shall be included in taxable income or loss), with the following adjustments
(without duplication):
(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 the 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),
E-4
Ozark Ethanol, LLC | Limited Liability Company Agreement | |
Appendix E |
and not otherwise taken into account in computing Profits or Losses pursuant to this
definition of “Profits” and “Losses” shall be subtracted from the 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 the 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 the 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 the 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 Fiscal 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 Unitholder’s interest in the Company, the amount of the 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 the 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 3.3 and Section 3.4 of this Appendix E, the amount, if any, included
in the Company’s taxable income pursuant to Section 87 of the Code (the income add-back in the
amount of the small ethanol producer credit), and the partner level deduction pursuant to Section
199 of the Code (relating to domestic production activities) shall not be taken into account in
computing Profits or Losses.
The amounts of the items of Company income, gain, loss or deduction available to be specially
allocated pursuant to Sections 3.3 and Section 3.4 of this Appendix E shall be determined by
applying rules analogous to those set forth in subparagraphs (a) through (f) above.
“Regulations” means the Income Tax Regulations, including Temporary Regulations, promulgated
under the Code, as the regulations are amended from time to time.
“Regulatory Allocations” has the meaning set forth in Section 3.4 of this Appendix E.
“Start-up Period” means the period from the inception of the Company and ending on the date on
which the Company begins to carry on a trade or business within the meaning of Code Section 162(a)
that constitutes its primary trade or business.
E-5
Ozark Ethanol, LLC | Limited Liability Company Agreement | |
Appendix E |
“Syndication Expenses” means all expenditures classified as syndication expenses pursuant to
Regulations, Section 1.709-2(b).
“Unitholder Nonrecourse Debt” has the same meaning as the term “partner nonrecourse debt” in
Regulations, Section 1.704-2(b)(4).
“Unitholder Nonrecourse Debt Minimum Gain” means an amount, with respect to each Unitholder
Nonrecourse Debt, equal to the Company Minimum Gain that would result if such Unitholder
Nonrecourse Debt were treated as a Nonrecourse Liability, determined in accordance with
Regulations, Section 1.704-2(i)(3).
“Unitholder Nonrecourse Deductions” has the same meaning as the term “partner nonrecourse
deductions” in Regulations, Sections 1.704-2(i)(1) and 1.704-2(i)(2).
ARTICLE II.
CAPITAL AND INTERESTS
Section 2.4. Capital Accounts.
A Capital Account shall be maintained for each Unitholder in accordance with the
following provisions. To facilitate the accounting for acquisitions, ownership and transfers of
more than one Class of Units by a Unitholder, each Unitholder’s Capital Account shall be subdivided
into separate Capital Accounts for each Class of Units owned, and the following adjustments to
Capital Accounts shall be made by reference to Units of each Class of Units owned:
(a) To each Unitholder’s Capital Account there shall be credited (i) the initial Gross Asset
Value of any Property, including money contributed to the Company as a Capital Contribution with
respect to the Units in the Company held by the Unitholder, (ii) the Unitholder’s distributive
share of Profits and any items in the nature of income or gain which are specially allocated
pursuant to Section 3.3 and Section 3.4 of this Appendix E, and (iii) the amount of any Company
liabilities assumed by the Unitholder or which are secured by any Property distributed to the
Unitholder. The principal amount of a promissory note which is not readily traded on an established
securities market and which is contributed to the Company by the maker of the note (or a Unitholder
related to the maker of the note within the meaning of Regulations, Section 1.704-1(b)(2)(ii)(c))
shall not be included in the Capital Account of any Unitholder until the Company makes a taxable
disposition of the note or until (and to the extent) principal payments are made on the note, all
in accordance with Regulations, Section 1.704-1(b)(2)(iv)(d)(2);
(b) To each Unitholder’s Capital Account there shall be debited (i) the Gross Asset Value of
any Property including money distributed to the Unitholder pursuant to any provision of this
Agreement, (ii) the Unitholder’s distributive share of Losses and any items in the nature of
expenses or losses which are specially allocated pursuant to Section 3.3 and Section 3.4 of this
Appendix E, and (iii) the amount of any liabilities of the Unitholder assumed by the Company or
which are secured by any Property contributed by the Unitholder to the Company;
E-6
Ozark Ethanol, LLC | Limited Liability Company Agreement | |
Appendix E |
(c) In the event Units are Transferred in accordance with the terms of Article 3 of the
Agreement, the transferee shall succeed to the Capital Account of the transferor to the extent it
relates to the Transferred Units; and
(d) In determining the amount of any liability for purposes of subparagraphs (a) and (b) above
there shall be taken into account Code Section 752(c) and any other applicable provisions of the
Code and Regulations.
The foregoing provisions and the other provisions of this Agreement relating to allocation of
Profits, Losses and other allocation items, nonliquidating Distributions, liquidating
Distributions, and the maintenance of Capital Accounts, including and subject to Section 12.1 of
this Appendix E, are intended to comply with Regulations, Section 1.704-1(b), and shall be
interpreted and applied in a manner consistent with the Regulations. In the event the Board shall
determine that it is prudent, the Board may modify the manner in which the Capital Accounts, or any
debits or credits thereto (including debits or credits relating to liabilities which are secured by
contributed or distributed property or which are assumed by the Company or any Unitholders), are
computed in order to comply with the Regulations. The Board also shall (i) make any adjustments
that are necessary or appropriate to maintain equality between the Capital Accounts of the
Unitholders 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 the Agreement not
to comply with Regulations, Section 1.704-1(b).
ARTICLE III.
ALLOCATIONS
Section 3.1. Profits.
After giving effect to the special allocations in Section 3.3 and Section 3.4 of this
Appendix E, Profits for any Fiscal Year shall be allocated to Classes according to the Class
Percentage and then to Unitholders of the Class in proportion to Units held. The Class Percentages
are subject to change if the Company issues additional Units pursuant to Section 3.2 of the
Agreement.
Section 3.2. Losses.
After giving effect to the special allocations in Section 3.3 and Section 3.4 of this
Appendix E, and except as otherwise provided in Section 3.5 of this Appendix E, Losses for any
Fiscal Year shall be allocated to Classes according to the Class Percentage and then to Unitholders
of the Class in proportion to Units held. The Class Percentages are subject to change if the
Company issues additional Units pursuant to Section 3.2 of the Agreement.
Section 3.3. Special Allocations.
The following special allocations shall be made in the following order:
E-7
Ozark Ethanol, LLC | Limited Liability Company Agreement | |
Appendix E |
(a) Minimum Gain Chargeback. Except as otherwise provided in Section 1.704-2(f) of the
Regulations, notwithstanding any other provision of this Article III, if there is a net decrease in
Company Minimum Gain during any Fiscal Year, each Unitholder shall be specially allocated items of
Company income and gain for the Fiscal Year (and, if necessary, subsequent Fiscal Years) in an
amount equal to the Unitholder’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 Unitholder
pursuant thereto. The items to be so allocated shall be determined in accordance with Regulations,
Sections 1.704-2(f)(6) and 1.704-2(j)(2). This Section 3.3(a) is intended to comply with the
minimum gain chargeback requirement in Regulations, Section 1.704-2(f) and shall be interpreted
consistently therewith.
(b) Unitholder Minimum Gain Chargeback. Except as otherwise provided in Regulations, Section
1.704-2(i)(4), notwithstanding any other provision of this Section, if there is a net decrease in
Unitholder Nonrecourse Debt Minimum Gain attributable to a Unitholder Nonrecourse Debt during any
Fiscal Year, each Unitholder who has a share of the Unitholder Nonrecourse Debt Minimum Gain
attributable to the Unitholder Nonrecourse Debt, determined in accordance with Regulations, Section
1.704-2(i)(5), shall be specially allocated items of Company income and gain for the Fiscal Year
(and, if necessary, subsequent Fiscal Years) in an amount equal to the Unitholder’s share of the
net decrease in Unitholder 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 Unitholder pursuant thereto. The items to be
so allocated shall be determined in accordance with Regulations, Sections 1.704-2(i)(4) and
1.704-2(j)(2). This Section 3.3(b) is intended to comply and shall be interpreted consistently with
the minimum gain chargeback requirement in Regulations, Section 1.704-2(i)(4).
(c) Qualified Income Offset. In the event any Unitholder unexpectedly receives any
adjustments, allocations, or Distributions described in Regulations, 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), items of Company
income and gain shall be specially allocated to the Unitholder in an amount and manner sufficient
to eliminate, to the extent required by the Regulations, the Adjusted Capital Account Deficit of
the Unitholder as quickly as possible, provided that an allocation pursuant to this Section 3.3(c)
shall be made only if and to the extent that the Unitholder would have an Adjusted Capital Account
Deficit after all other allocations provided for in this Article III have been tentatively made as
if this Section 3.3(c) were not in this Appendix E.
(d) Gross Income Allocation. In the event any Unitholder has a deficit Capital Account at the
end of any Fiscal Year which is in excess of the sum of (i) the amount such Unitholder is obligated
to restore pursuant to the penultimate sentences of Regulations, Sections 1.704-2(g)(1) and
1.704-2(i)(5), each Unitholder shall be specially allocated items of Company income and gain in the
amount of the excess as quickly as possible, provided that an allocation pursuant to this Section
3.3(d) shall be made only if and to the extent that such Unitholder would have a deficit Capital
Account in excess of such sum after all other allocations provided for in this Article III have
been made as if Section 3.3(c) of this Appendix E and this Section 3.3(d) were not in this Appendix
E.
E-8
Ozark Ethanol, LLC | Limited Liability Company Agreement | |
Appendix E |
(e) Nonrecourse Deductions. Nonrecourse Deductions for any Fiscal Year shall be specially
allocated to the Unitholders in the manner which Profits would be allocated under Section 3.1 of
this Appendix E determined without regard to the other provisions of this Article III.
(f) Unitholder Nonrecourse Deductions. Any Unitholder Nonrecourse Deductions for any Fiscal
Year shall be specially allocated to the Unitholder who bears the economic risk of loss with
respect to the Unitholder Nonrecourse Debt to which such Unitholder 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 Unitholder in complete
liquidation of the Unitholder’s interest in the Company, the amount of the 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 Unitholders 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 Unitholder to whom the Distribution was made in
the event Regulations, Section 1.704-1(b)(2)(iv)(m)(4) applies.
(h) Issuance of Units in Connection with Services. Taxable income or items thereof shall be
specially allocated among the Unitholders in the manner and in the amounts determined by the Board
of Managers in accordance with Section 3.2(d) of this Agreement as the result of issuing Units in
connection with the performance of services.
(i) Syndication Expenses. Syndication Expenses for any Fiscal Year shall be specially
allocated to the Unitholders in proportion to their Units, provided that, if Units are
issued pursuant to Article 3 of this Agreement during the Fiscal Year, all Syndication Expenses
shall be divided among the Unitholders from time to time so that, to the extent possible, the
cumulative Syndication Expenses allocated with respect to each Unit at any time is the same amount.
In the event the Board of Managers shall determine that such result is not likely to be achieved
through future allocations of Syndication Expenses, the Board may allocate other items of income,
gain, deduction, or loss so as to achieve the same effect on the Capital Accounts of the
Unitholders.
(j) Special Allocation of Gain. Any net gain recognized during the Liquidation Period that
otherwise would be allocable under Section 3.1 of this Appendix E shall be specially allocated to
the Unitholders of each Unit that was issued during the Start-up Period to the extent that Two
Dollars ($2.00) exceeds the initial Capital Contribution made with respect to each such Unit. If
such gain is insufficient to satisfy the entire special allocation, such gain shall be specially
allocated pro rata among all such Units. The intent of this special allocation is provide an
incentive with respect to the Units purchased for less than $2.00 per Unit during the Start-up
Period that will be paid only if and to the extent that aggregate distributions made by the Company
during the Liquidation Period (or out of the proceeds of a refinancing) with respect to other Units
issued during the Start-up Period are at least $2.00 per Unit. Accordingly, this special
allocation generally shall be made with respect to gain realized by the Company during the
Liquidation Period; provided, that if Profits are allocated before the Liquidation Period
E-9
Ozark Ethanol, LLC | Limited Liability Company Agreement | |
Appendix E |
pursuant to subparagraph (c) of the definition of “Profits” and “Losses” (relating to
adjustments to Gross Asset Values), the Board of Managers shall make a good faith determination of
whether and to what extent it is appropriate for this special allocation to be made as part of that
Profit allocation in order to better assure that the intended incentive will be distributed when
the Company later liquidates. If the Company subdivides or combines its outstanding Units or
declares a distribution payable in its Units, the amount per Unit of this special allocation shall
be proportionately increased, in the case of combination, or decreased, in the case of a
subdivision or distribution.
(k) Equalization of Certain Profits or Loss Allocations. Immediately following the end of the
Start-up Period and subject to Section 3.3(i) of this Appendix E, items of income, loss and
deduction shall be specially allocated to the extent possible among the Units until the cumulative
Profits or Losses allocated to each Unit since the Company’s formation is equal.
Section 3.4. Curative Allocations.
The allocations set forth in Sections 3.3(a) through (g) and 3.5 of this Appendix E (the
“Regulatory Allocations”) are intended to comply with certain requirements of the Regulations. It
is the intent that, to the extent possible, all Regulatory Allocations shall be offset either with
other Regulatory Allocations or with special allocations of other items of Company income, gain,
loss or deduction pursuant to this Section 3.4. Therefore, notwithstanding any other provision of
this Article III (other than the Regulatory Allocations), the Board shall make the offsetting
special allocations of Company income, gain, loss or deduction in whatever manner it determines
appropriate so that, after the offsetting allocations are made, each Unitholder’s Capital Account
balance is, to the extent possible, equal to the Capital Account balance such Unitholder would have
had if the Regulatory Allocations were not part of the Agreement.
Section 3.5. Loss Limitation.
Losses allocated pursuant to Section 3.2 of this Appendix E shall not exceed the maximum
amount of Losses that can be allocated without causing any Unitholder to have an Adjusted Capital
Account Deficit at the end of any Fiscal Year. In the event some but not all of the Unitholders
would have Adjusted Capital Account Deficits as a consequence of an allocation of Losses pursuant
to Section 3.2 of this Appendix E, the limitation set forth in this Section 3.5 shall be applied on
a Unitholder by Unitholder basis among the Units, so as to allocate the maximum permissible Losses
to each Unitholder under Regulations, Section 1.704-1(b)(2)(ii)(d).
Section 3.6. Other Allocation Rules.
(a) For purposes of determining the Profits, Losses, or any other items allocable to any
period, Profits, Losses, and any such other items shall be determined by the Board using any
permissible method under Code Section 706 and the Regulations under Code Section 706.
(b) If additional Units are issued pursuant to Section 3.2(c) of the Agreement during a Fiscal
Year, the Profits, Losses and other items allocated with respect to the Class of Units issued for
that Fiscal Year will be allocated among the Unitholders of that Class in a manner that takes into
account their varying interests in the Company during the Fiscal Year using any permissible
E-10
Ozark Ethanol, LLC | Limited Liability Company Agreement | |
Appendix E |
methods under Code Section 706 and the Regulations under Code Section 706 and any conventions
permitted by law as may be specified in the terms governing the issuance of the Units or, if not
specified, as directed by the Board.
(c) The Unitholders agree to be bound by the provisions of this Article III in reporting their
shares of Company income and loss for income tax purposes.
(d) Solely for purposes of determining a Unitholder’s proportionate share of the “excess
nonrecourse liabilities” of the Company within the meaning of Regulations, Section 1.752-3(a) (3),
the Unitholders’ aggregate interests in Company profits shall be deemed to be as provided in the
capital accounts.
(e) To the extent permitted by Regulations, Section 1.704-2(h) (3), the Unitholders shall
endeavor to treat Distributions as having been made from the proceeds of a Nonrecourse Liability or
a Unitholder Nonrecourse Debt only to the extent that the Distributions would cause or increase an
Adjusted Capital Account Deficit for any Unitholder.
Section 3.7. Tax Allocations: Code Section 704(c).
(a) In accordance with Code Section 704(c) and the Regulations under Code Section 704(c),
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 Unitholders so as to take into
account any variation between the adjusted basis of such Property to the Company for federal income
tax purposes and its initial Gross Asset Value (computed in accordance with the definition of Gross
Asset Value).
(b) In the event the Gross Asset Value of any Company asset is adjusted pursuant to
subparagraph (b)(ii) of the definition of Gross Asset Value, subsequent allocations of income,
gain, loss, and deduction with respect to such asset shall take account of any variation between
the adjusted basis of such asset for federal income tax purposes and its Gross Asset Value in the
same manner as under Code Section 704(c) and the Regulations under Code Section 704(c).
(c) Allocations pursuant to this Section shall be made as required or permitted by
Regulations, Section 1.704-3 pursuant to such method provided therein as may reasonably be
designated by the Board. Any elections or other decisions relating to allocations under this
Section will be made in any manner that the Board reasonably determines to reflect the purpose and
intention of this Agreement. Allocations under this Section 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
Unitholder’s Capital Account or share of Profits, Losses and other allocation items or
Distributions under any provision of this Appendix E or the Agreement.
E-11
Ozark Ethanol, LLC | Limited Liability Company Agreement | |
Appendix E |
ARTICLE IV.
DISTRIBUTIONS
Section 4.1. Net Cash Flow.
The Board may make Distributions of Net Cash Flow at times and in aggregate amounts
determined by the Board in its sole discretion. When the Board determines that a Distribution is
to be made, except as otherwise provided in the Liquidation Provisions, Net Cash Flow, if any,
shall be distributed to each Class by Class Percentage and then to Unitholders of a Class in
proportion to Units held. The Class Percentages are subject to change if additional Units are
issued pursuant to Section 3.2 of the Agreement.
Section 4.2. Amounts Withheld.
All amounts withheld pursuant to the Code or any provision of any state, local or foreign
tax law with respect to any payment, Distribution or allocation to the Company or the Unitholders
shall be treated as amounts paid or distributed, as the case may be, to the Unitholders with
respect to which the amount was withheld pursuant to this Section for all purposes under this
Agreement. The Company is authorized to withhold from payments and Distributions, or with respect
to allocations to the Unitholders, and to pay over to any federal, state and local government or
any foreign government, any amounts required to be so withheld pursuant to the Code or any
provisions of any other federal, state or local law or any foreign law, and shall allocate any such
amounts to the Unitholders with respect to which such amount was withheld.
Section 4.3. Limitations On Distributions.
(a) The Company shall make no Distributions to the Unitholders except as provided in this
Article IV, Article XII of this Appendix E, Article 7 of the Agreement, and Section 3.6 of the
Agreement.
(b) A Unitholder may not receive a Distribution from the Company to the extent that, after
giving effect to the Distribution, all liabilities of the Company, other than liability to
Unitholders on account of their Capital Contributions, would exceed the Gross Asset Value of the
Company’s assets.
ARTICLE V.
[RESERVED]
ARTICLE VI.
[RESERVED]
E-12
Ozark Ethanol, LLC | Limited Liability Company Agreement | |
Appendix E |
ARTICLE VII.
[RESERVED]
ARTICLE VIII.
ACCOUNTING, BOOKS AND RECORDS
Section 8.1. Accounting, Books And Records.
(a) The books and records of the Company shall be kept, and the financial position and
the results of its operations recorded, in accordance with GAAP, consistently applied; provided,
that the financial provisions in the Agreement and this Appendix E relating to Capital
Contributions, Profits, Losses and other allocation items, Distributions and Capital Accounts shall
be construed and determined in accordance with this Agreement without regard to whether such
provisions are inconsistent with GAAP. The books and records shall reflect all the Company’s
transactions and shall be appropriate and adequate for the Company’s business. The Company shall
maintain all of the following:
(i) a current list of the full name and last known business or residence address of
each Unitholder set forth in alphabetical order, together with the Capital Contributions,
Capital Account and Units of each Unitholder;
(ii) the full name and business address of each Manager;
(iii) a copy of the Certificate of Formation and any and all amendments thereto
together with executed copies of any powers of attorney pursuant to which the Certificate of
Formation or any amendments thereto have been executed;
(iv) copies of the Company’s federal, state, and local income tax or information
returns and reports, if any, for the six most recent taxable years;
(v) a copy of this Agreement and any and all amendments thereto together with executed
copies of any powers of attorney pursuant to which this Agreement or any amendments thereto
have been executed;
(vi) copies of the financial statements of the Company, if any, for the six most recent
Fiscal Years; and
(vii) the Company’s books and records as they relate to the internal affairs of the
Company for at least the current and past four Fiscal Years.
(b) The Company shall use the accrual method of accounting in preparing its financial reports
and for tax purposes and shall keep its books and records accordingly. The Board may, without any
further consent of the Unitholders (except as specifically required by the Code), apply for IRS
consent to, and otherwise effect a change in, the Company’s Fiscal Year.
E-13
Ozark Ethanol, LLC | Limited Liability Company Agreement | |
Appendix E |
Section 8.2. Reports.
(a) In General. The chief financial officer of the Company (or other officer determined
by the Board or the CEO) shall be responsible for causing the preparation of financial reports of
the Company and the coordination of financial matters of the Company with the Company’s
accountants.
(b) Financial Statements. The Company shall maintain the financial statements listed in
clauses (i) and (ii) below, prepared, in each case (other than with respect to Unitholder’s Capital
Accounts, which shall be prepared in accordance with this Agreement) in accordance with GAAP
consistently applied (and file with the Securities and Exchange Commission, if required, for
purposes of reporting under the Securities Exchange Act of 1934, Regulation S-X).
(i) As soon as practicable following the end of each GAAP Fiscal Year (and in any event
not later than one hundred and twenty (120) days after the end of the GAAP Fiscal Year) and
at the time as Distributions are made to the Unitholders pursuant to the Liquidation
Provisions following the occurrence of a Dissolution Event, a balance sheet of the Company
as of the end of the GAAP Fiscal Year and the related statements of operations, statement of
Unitholders’ Capital and changes therein, and cash flows for the GAAP Fiscal Year, together
with appropriate notes to the financial statements and supporting schedules, all of which
shall be audited and certified by the Company’s accountants, and in each case, to the extent
the Company was in existence, setting forth in comparative form the corresponding figures
for the immediately preceding GAAP Fiscal Year end (in the case of the balance sheet) and
the two (2) immediately preceding GAAP Fiscal Years (in the case of the statements).
(ii) If required by the Securities and Exchange Commission, as soon as practicable
following the end of the first three quarters of each GAAP Fiscal Year (and in any event not
later than forty-five (45) days after the end of such quarter), an unaudited balance sheet
of the Company as of the end of such quarter and the related unaudited statements of
operations and cash flows for such GAAP Fiscal Quarter and for the GAAP Fiscal Year to date,
in each case, to the extent the Company was in existence, setting forth in comparative form
the corresponding figures for the prior GAAP Fiscal Year’s quarter and the quarter just
completed.
Section 8.3. Tax Matters.
(a) Generally. The Board shall have the power and authority, without any further consent
of the Members being required: (i) to cause the Company to make or revoke any and all elections
for federal, state, local, and foreign tax purposes including an election pursuant to Code Section
754; (ii) to extend the statute of limitations for assessment of tax deficiencies against the
Unitholders with respect to adjustments to the Company’s federal, state, local or foreign tax
returns; (iii) to the extent provided in Code Sections 6221 through 6231 and similar provisions of
federal, state, local, or foreign law, to represent the Company and the Unitholders before taxing
authorities or courts of competent jurisdiction in tax matters affecting the Company or the
Unitholders in their capacities as Unitholders; and (iv) to file or amend any tax returns and
execute any agreements or other documents relating to or affecting tax matters, including
E-14
Ozark Ethanol, LLC | Limited Liability Company Agreement | |
Appendix E |
agreements or other documents that bind the Unitholders with respect to tax matters. The
Board shall designate a qualifying Member to act as the tax matters partner within the meaning of
and pursuant to Regulations, Sections 301.6231(a)(7)-1 and -2 or any similar provision under state
or local law.
(b) Tax Information. Necessary tax information shall be delivered to each Unitholder as soon
as practicable after the end of each Fiscal Year of the Company but not later than five (5) months
after the end of each Fiscal Year.
ARTICLE IX.
[RESERVED]
ARTICLE X.
[RESERVED]
ARTICLE XI.
[RESERVED]
ARTICLE XII.
DISSOLUTION AND WINDING UP
Section 12.1. Compliance With Certain Requirements Of Regulations; Deficit Capital
Accounts.
In the event the Company is “liquidated” within the meaning of Regulations, Section
1.704-1(b)(2)(ii)(g), Distributions shall be made pursuant to the Liquidation Provisions to the
Unitholders who have positive Capital Accounts in compliance with Regulations, Section
1.704-1(b)(2)(ii)(b)(2). If any Unitholder has a deficit balance in his Capital Account (after
giving effect to all Capital Contributions, Distributions and allocations of Profits, Losses and
other allocation items for all Fiscal Years, including the Fiscal Year during which such
liquidation occurs), such Unitholder shall have no obligation to make any contribution to the
capital of the Company with respect to such deficit, and such deficit shall not be considered a
debt owed to the Company or to any other Person for any purpose whatsoever. In the discretion of
the Liquidator, a pro rata portion of the Distributions that would otherwise be made to the
Unitholders pursuant to the Liquidation Provisions may be:
(a) Distributed to a trust established for the benefit of the Unitholders 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 Unitholders from time to time, in the reasonable discretion of the Liquidator,
in the same proportions as the amount distributed to the trust by the Company would otherwise have
been distributed to the Unitholders pursuant to Section 7.2 of the Agreement; 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 the withheld amounts shall be distributed to the Unitholders as soon as practicable.
E-15
Ozark Ethanol, LLC | Limited Liability Company Agreement | |
Appendix E |
Section 12.2. Deemed Distribution And Recontribution.
Notwithstanding any other provision of the Liquidation Provisions, 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 debts, obligations and
liabilities of the Company 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
contributed all of its Property and liabilities to a new limited liability company in exchange for
an interest in the new company, and immediately thereafter, the Company will be deemed to liquidate
by distributing the interest in the new company to the Unitholders.
Section 12.3. Character Of Liquidating Distributions.
All payments made in liquidation of the interest of a Unitholder in the Company shall be
made in exchange for the interest of such Unitholder in Property pursuant to Section 736(b)(1) of
the Code, including the interest of the Unitholder in Company goodwill.
E-16