EXHIBIT 3.13
LIMITED LIABILITY COMPANY
OPERATING AGREEMENT
OF
AG2AG, LLC
A DELAWARE LIMITED LIABILITY COMPANY
DATED AS OF FEBRUARY __, 2001
AG2AG, LLC
LIMITED LIABILITY COMPANY AGREEMENT
This Limited Liability Company Agreement (the "Agreement") for Ag2Ag,
LLC is entered into by the entities listed on Schedule A to this Agreement, who,
together with any subsequently admitted Member, are referred to collectively as
"Members."
ARTICLE 1
ORGANIZATION
1.1. Formation. The Members hereby form a Limited Liability Company
(the "Company") pursuant to the Delaware Limited Liability Company Act.
1.2. Name. The Company shall operate under the name Ag2Ag, LLC or such
other name as the Members from time to time decide.
1.3. Offices. The registered office of the Company shall be located at
such place as shall be indicated in the Certificate of Formation as amended from
time to time. The Company's principal office shall be located at 1275 Red Fox
Road, Arden Hills, Minnesota 55112, or at such other location as the Members
decide.
1.4. Purposes. The Company has been organized to:
(a) Form and operate an agricultural electronic marketplace in
order to provide the regional and local cooperative systems with the ability to
enhance and strengthen their customer relationships; and
(b) Engage in any other lawful business activity related or
incident to the purposes set forth in clause (a) above.
1.5. Powers. The Company shall have the power and authority to enter
into, make and perform all contracts, agreements and undertakings, and to do any
and all acts and things necessary, appropriate, incidental or convenient to the
accomplishment of its purposes and for the protection and benefit of the
Company.
1.6. Terms: Authorization. The Company shall commence upon the filing
of the Certificate of Formation with the office of the Secretary of State, and
shall continue until terminated as provided herein. Any attorney or employee of
the Land O'Lakes, Inc. law department, as an authorized person within the
meaning of 6 Del. C. Section 201, shall execute, deliver and file the
Certificate of Formation for the Company in the form annexed hereto as Schedule
B. Any action heretofore taken in that regard is ratified and confirmed.
1.7. Fiscal Year. The fiscal and taxable year of the Company shall end
on the last day of August of each year unless otherwise designated by the
Members or otherwise required by the Code.
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ARTICLE 2
MANAGEMENT
2.1. Management of Company Affairs. Except for situations in which the
approval of the Members is required by this Limited Liability Company Agreement,
or by nonwaivable provisions of applicable law, the Company shall be managed by
one or more Managers. The Managers shall be responsible for the administration
and management of the Company and other such duties as set forth in agreements
between the Company and the Managers described in subsection 2.5 herein. The
Managers shall have the right to allocate among themselves or to others the
responsibility for the management of the Company, and may adopt and use for the
benefit of the management of the Company such titles as they shall determine, as
long as such title also includes information that the individual is a Manager. A
Manager's signature shall be sufficient to bind the Company, and no third party
need inquire into the authority of a Manager to bind the Company. Except as
otherwise specifically provided, the Members shall not be responsible for the
management of the Company.
2.2 Authority of Managers. The Managers are authorized:
(a) To operate on behalf of the Company an electronic
marketplace which shall serve the interests of regional and local cooperatives
and such other related activities as the Members shall determine.
(b) To employ, by contract or otherwise, all personnel as
shall be necessary to operate the business of the Company
(c) To select and retain (except as delegated to the Members)
accountants, other advisers to provide services to the Company.
(d) To submit an annual budget and business plan to the
Members committee of the Company (described in Article 8 herein) for approval.
The Managers shall be subject to the approved budget and business plan in
managing the Company and shall not have the authority to expend funds in excess
of such budget and business plan. Such business plan shall include an annual
budget for expenses, revenues, working capital reserves, and capital
expenditures, any additional capital contributions needed for the operation of
the business.
(e) To execute, acknowledge and deliver any and all
instruments to effectuate the foregoing.
(f) To take any other action deemed desirable by the Members
to carry out the purposes of the Company.
2.3. Related Party Transaction. The Managers may cause the Company to
obtain products or services from entities controlling, controlled by or under
the common control of any Member (including the Managers) and to pay such
entities reasonable fees for such products and services.
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2.4. Tax Matters Partner. Land O'Lakes, Inc., shall be the Company's
Tax Matters Partner in accordance with Code Section 6231(a)(7). The Managers may
appoint a new Tax Matters Partner who shall act at the direction of the
Managers.
2.5. Authority of Members. The Members shall retain all powers not
designated to the Managers, including the following:
(a) The Members shall have the authority to employ and
terminate the Managers, and to enter into written
agreements as to their employment.
(b) The Members shall have the authority to approve an
annual budget and business plan prepared by the
Managers for the benefit of the Company, and
(c) The Members or their authorized agent shall execute
on behalf of the Company the following documents:
(i) The employment, personnel lease or other
document where a Manager is a party to the
agreement or where the services of employees
of either Member are being contracted;
(ii) Master Services Agreements with technology
vendors;
(iii) Agreements with local cooperative members;
(iv) Agreements with product groups;
(v) Agreements with other service providers;
(vi) Any other agreements necessary for the
operation of the Company.
(d) The Members shall have the sole authority to employ
all auditors for the benefit of the Company.
2.6. Matters Requiring Unanimous Approval of Members. None of the
following actions may be taken by the Company without prior unanimous approval
of the Members: (i) appointment of the Managers of the Company; (ii) making any
single expenditure over $100,000 for any single transaction or making an
expenditure over $100,000 in any one quarter; (iii) admission of Members to the
Company; (iv) formation and operation of e-commerce operations relating to an
industry or industries other than the agricultural industry; (v) election to
dissolve the Company; (vi) approval of the sale of all or substantially all of
its assets or significant assets; (vii) requiring any additional capital
contributions; (viii) authorizing cash distributions of earnings of the Company
to the Members including, but not limited to, distributions which are not in
proportion to their respective Membership Interests.
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ARTICLE 3
RECORDS
3.1. Books and Records. The Company's books and records shall be
maintained by the Managers at the principal office of the Company and shall
include the following:
(a) A current list of the frill name and last known
mailing address of each Member and Manager;
(b) A copy of the Certificate of Formation of the Company
and all amendments thereto, together with executed
copies of any powers of attorney pursuant to which
any amendment has been executed;
(c) Copies of the Company's currently effective written
Limited Liability Company Agreement and all
amendments thereto, copies of any similar prior
written agreements no longer in effect, and copies of
any writings permitted or required with respect to a
Member's obligation to contribute cash, property, or
services;
(d) Copies of the Company's currently effective written
Managers Agreement and all amendments thereto, and
copies of any similar prior written agreements no
longer in effect;
(e) Copies of the Company's federal, state and local
income tax returns and reports for the three most
recent years;
(f) Copies of financial statements of the Company, if
any, for the three most recent years;
(g) Minutes of every annual or special meeting of the
Members Committee;
(h) Any written consents obtained from Members for
actions taken by Members without a meeting.
3.2 Copies of Books and Records. At the request of Farmland Industries,
the Company shall provide copies of the books and records.
ARTICLE 4
MEMBERSHIP INTERESTS
4.1 Membership Interests. In exchange for the capital contribution
provided for in Article 5, the Members shall each have the following membership
interest ("Membership Interest") in the Company:
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Land O' Lakes, Inc. 50%
Farmland Industries, Inc. 50%
Membership Interest shall be further defined to mean the entire
ownership interest of a Member in the Company at any particular time, including,
without limitation, the right of such Member to any and all benefits to which a
Member may be entitled as provided in this Agreement and under law, together
with the obligations of such Member to comply with all terms and provisions set
forth in this Agreement and under law.
ARTICLE 5
CAPITAL CONTRIBUTIONS AND LOANS
5.1. Capital Contributions. Each Member shall make an initial aggregate
contribution to the capital of the Company ("Capital Contributions"), of cash as
described on attached Schedule A. Each of Land O'Lakes, Inc. and Farmland
Industries, Inc. shall be allocated one (1) Member Unit in respect of each $1.00
of value represented by their respective initial capital contributions.
5.2. Additional Capital Contributions. Additional amounts may be
required from the Members ("Additional Capital Contributions"), only in
accordance with this Agreement or as approved by the Managers.
5.3. Capital Accounts. The Company shall maintain a capital account for
each Member according to the regulations under Section 704 of the Code. A
Member's capital account initially shall be the agreed value of initial capital
contributed by such Member as shown on Schedule A. Each Member's capital account
shall thereafter be credited with the amount of the Member's additional cash
contributions, if any, the agreed value of the Member's additional contributions
of property, if any, and the Member's share of Tax Profits excluding Built-in
Gains and Built-in Losses and shall be debited with the amount of cash
withdrawals and distributions, the agreed value of property distributions and
the Member's share of Tax Losses excluding Built-in Gains and Built-in Losses.
If Member Units are transferred, the portion of the transferor's capital account
attributable to the transferred Member Units shall be added to the transferee's
capital account and subtracted from the transferor's capital account.
5.4. Capital Withdrawal Rights, Interest and Priority. Prior to the
dissolution and termination of the Company, no Member shall be entitled to
withdraw or reduce such Member's Capital Account or to receive any distributions
from the Company, other than distributions as provided in Article 6 hereof.
Except as provided in Article 12, no Member shall be entitled to receive or be
credited with any interest on the balance in such Member's Capital Account at
any time. No Member shall have any priority over any other Member as to the
return of the balance in such Member's Capital Account.
5.5. Loans, Any Member may make a loan to the Company in such amounts,
at such times and on such terms and conditions as may be approved by the Member
Committee, subject
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to the conflict of interest provisions set forth in this Agreement. Loans by any
Member to the Company shall not be considered as contributions to the capital of
the Company.
5.6. Limited Liability. Except as otherwise provided herein, no Member
shall be liable for the debts, liabilities, contracts, or any other obligations
of the Company. Except as otherwise provided by applicable state law or this
Agreement, a Member shall be liable only to make its Capital Contributions and
shall not be required to lend any funds to the Company. No Member shall have any
personal liability for the repayment of any Capital Contributions of any other
Member.
5.7. Allocation of Income and Losses. The income and losses of the
Company shall be allocated in accordance with the Members' share of the Member
Units as reflected from time to time by the records of the Company. The initial
Member Units issued upon the organization of the Company are based upon the
agreed value of the contribution as reflected by Schedule A.
5.8. Other Allocations.
(a) Built-in Gains and Built-in Losses. Built-in Gains
and Built-in Losses shall be allocated to the
contributing Members according to the principles of
Section 704(c) of the Code, as amended, and the
regulations thereunder. Unless otherwise specified at
the time of contribution, the portion of the Built-in
Gains and Built-in Losses to be allocated to each
Member Unit received in exchange for a capital
contribution shall be in the same proportion as the
value of that Member Unit bears to the total value of
all Member Units received in such exchange.
(b) Remaining Tax Profits and Tax Losses. The Tax Profits
and Tax Losses remaining after the allocations, if
any, required by subparagraph (a) above, shall be
allocated ratably to the holders of Member Units.
(c) Authority to Vary Allocations. The Members may decide
to vary these allocations to the extent necessary to
comply with federal income tax laws.
ARTICLE 6
DISTRIBUTIONS
6.1 Distributions.
(a) Except as otherwise provided in Article 12 of this
Agreement with respect to the dissolution of the Company, distributions of net
cash from operations of the Company, or from sales or exchanges of Company
property, to the extent such cash is in excess of the amount that the Managers
in their reasonable discretion determine is necessary to meet the Company's
reasonably foreseeable cash requirements and needs of the business and
activities of the Company and to establish an adequate reserve for the payment
of Company liabilities and contingencies, may be authorized and paid from funds
lawfully available therefor as and when determined by the Managers in their sole
and absolute discretion.
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(b) In the event that the Managers authorize any distribution
of net cash to be made in respect of the Member Units pursuant to this
Agreement, such distributions shall be made (i) first, to the Members pro-rata
in proportion to the respective Capital Contributions of each Member, until each
Member has received distributions pursuant to this subsection 6.1(b)(i) in an
amount equal to such Member's aggregate Capital Contributions and (ii) then, to
the Members pro-rata in proportion to the Members' then respective Membership
Interests. In the event that any distributions of assets other than net cash are
made in respect of the Member Units, such assets shall be distributed to the
Members in the same proportions in which the Members would have been entitled to
receive cash distributions or as otherwise agreed to by the Members.
ARTICLE 7
NEW MEMBERS, TRANSFERS AND CESSATION OF MEMBERSHIP
7.1. Admission of New Members. No person may be admitted as a Member
without the approval of all other Members.
7.2. Transfers
(a) Sale to Another Member. A Member Unit may be transferred
or sold to another Member at any time under such terms or conditions as the
Members shall agree.
(b) Voluntary Sale or Transfer to Third Party. No Member may
sell, transfer, assign, give, mortgage, alienate, pledge, hypothecate or
otherwise encumber or dispose of all or any part of such Member's Member Units
or Membership Interest, voluntarily, involuntarily or by operation of law,
without the unanimous written consent of all Members. Any purported encumbrance
or disposition of any Member Units or Membership Interest in violation of the
terms of this Agreement shall be null and void and of no effect. Notwithstanding
the foregoing, any Member may (a) pledge and grant a security interest in it's
Interest to any of its creditors, and (b) may execute such documents requested
by such creditor, which documents may provide for the transfer of such Member's
Interests in the Company to such creditor, or to a third party designated by
such creditor through (i) foreclosure, (ii) transfer in lieu of foreclosure, or
(iii) any sale by such creditor to a third party following creditor's
foreclosure or a transfer in lieu of foreclosure all in accordance with
subsection (c) below.
(c) Transfer by Legal Process. Upon any involuntary transfer
of all or any portion of the Units of a Member pursuant to a levy of execution,
foreclosure of pledge, garnishment, attachment, divorce decree, bankruptcy or
other legal process (or by operation of law resulting from the death,
disability, liquidation, dissolution or winding up of a Member), such Member
shall cease to be a Member, but any successor in title to the transferred Units
shall have no right to become a Member or vote in any Company matters unless
admitted as a Member by written unanimous consent of the other Members. If such
successor does not become a Member, such successor shall be merely an assignee
within the meaning of Section 18-702(b) of the Act.
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(d) Assignment of Right to Distributions. Each Member shall
have the right to sell, transfer or assign, for cash, or cash and notes, by a
written instrument its right to receive distributions of cash or other property
from the Company; provided that any such assignment is not secured by the Units
and further provided that such an assignee shall not be substituted as a
substitute Member in place of any Member.
7.3. Securities Law Transfer Restrictions. All Members acknowledge that
the Member Units have not been registered under the Securities Act of 1933, as
amended (the 1933 Act), in reliance on applicable exemptions. Therefore, the
Members agree that the Member Units shall be nontransferable, except in
compliance with the terms of the Agreement, the 1933 Act and applicable state
securities laws, and any transfer not in compliance shall be void.
7.4. Rights of Assignees. A transferee of Member Units or Membership
Interests who is not admitted as a Member shall have only the rights of an
assignee. An assignee of Member Units or Membership Interests who is not a
Member shall not be entitled to interfere in the management of the Company's
affairs, vote, or receive any information of Company transactions. The assignee
shall merely be entitled to receive, in accordance with the terms of the
assignment, the distributions to which the assignor otherwise would be entitled.
7.5. Resignation and Withdrawal of Member. No Member may resign or
withdraw from the Company without the unanimous written consent of the other
Members.
ARTICLE 8
MEMBERS COMMITTEE
8.1. Formation. The Members shall establish a Members Committee to
represent the Members with respect to such matters as shall be referred to the
Committee by either of the Members.
8.2. Voting Rights. Each Member, except as changed by amendment to the
Agreement, shall have fifty percent (50%) of all voting rights as to all matters
relating to the activities of the Company. Such rights may be exercised directly
by the Members, or by the Committee as provided hereafter on behalf of the
Members.
8.3. Representatives of Members. As to the affairs of the Members
Committee, each Member shall appoint two individuals to represent it on the
Members Committee. Each person selected shall serve at the discretion of the
Member, and shall have authority with respect to any and all matters which are
referred to the Members Committee by the Members. Such matters may be submitted
in any format or manner whatsoever and cover any subject matter deemed relevant
or necessary by the Member submitting the matter to the Members Committee. The
vote of a Member shall be determined by a majority vote of the individuals
representing the Member on the Members Committee. If only one Member Committee
representative can attend a meeting, he/she may cast his/her vote for both
Member Committee representatives.
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8.4 Quorum. One Member Committee representative from each Member shall
be required to constitute a quorum at all meetings of the Member Committee for
the transaction of any business.
8.5. Administration of the Members Committee. The individual members of
the Members Committee shall appoint a Chairman and Secretary who shall be
responsible for the affairs of the Members Committee.
8.6. Meetings of the Members Committee,. A meeting of the Members
Committee may be called at any time by the Chairman, Secretary or any Member.
8.7. Informal Action by Members. Any action required to be taken by the
Members may be taken without a meeting of the Members Committee, if a consent in
writing setting forth the action so taken shall be executed by the Members and
filed with the Company.
ARTICLE 9
EXCULPATION AND INDEMNIFICATION
9.1. Exculpation. No Manager or Member shall be liable to any of the
other Members for "Good Faith Errors" ("Good Faith Errors" shall be defined as
mistakes of judgment or losses due to such mistakes or to the negligence or bad
faith of any employee, broker, adviser or other agent or representative of the
Company, provided that such agent or representative was selected with reasonable
care). The Managers and Members may consult with legal counsel selected by the
Managers and Members and shall have no liability for the consequences of any act
or omission resulting from good faith reliance on the advice of such counsel.
The exculpation provided in this paragraph 9.1 also shall apply to the agents,
employees and other legal representatives of such Manager or Member.
9.2. Indemnification. The Company shall indemnify and hold harmless the
Managers and each Member from and against any loss or expense incurred by reason
of the fact that the Managers or Members are or were a Manager or Member of the
Company, including without limitation any judgment, settlement, reasonable
attorneys fees and other costs or expenses incurred in connection with the
defense of any actual or threatened action or proceeding, providing such loss or
expense resulted from Good Faith Errors or from action or inaction taken in good
faith for a purpose which said Manager or Member reasonably believed to be in,
or not opposed to, the best interest of the Company. The indemnification
provided in this paragraph 9.2 also shall apply to the agents, employees and
other legal representatives of each Manager or Member.
ARTICLE 10
TRANSACTIONS UPON FORMATION OF THE COMPANY
10.1. Transfer/Assignment/License of Intellectual Property.
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(a) Simultaneous with Land O'Lakes' payment of its Capital
Contribution to the Company or as soon as practicable thereafter, Land O'Lakes
and the Company shall enter into a license, sublicense or assignment agreement,
in a form approved by the Managers and as attached hereto and made a part hereof
as Exhibit 1, providing for the assignment, license or sublicense to the Company
of the following:
(i) Applications which shall support the operations
of the Company and which Land O'Lakes either owns, has an
ownership interest in or a license to operate;
(ii) Trademarks, tradenames and/or services marks
("Marks") which Land O'Lakes either owns, has an ownership
interest in or a license to use, for the limited purpose of
posting said Marks on Company's Ag2Ag.com site.
(b) Simultaneous with Farmland Industries' payment of its
Capital Contribution to the Company or as soon as practicable thereafter,
Farmland Industries and the Company shall enter into a license, sublicense or
assignment agreement, in a form approved by the Managers and as attached hereto
and made a part hereof as Exhibit 2, providing for the assignment, license or
sublicense to the Company of the following:
(i) Applications which shall support the operation of
the Company and which Farmland Industries either owns, has an
ownership interest in or a license to operate;
(ii) Trademarks, tradenames and/or services marks
("Marks") which Farmland Industries either owns, has an
ownership interest in or a license to use, for the limited
purpose of posting said Marks on Company's Ag2Ag.com site.
(c) Simultaneous with Farmland Industries' payment of its
Capital Contribution to the Company, and for no consideration, Farmland
Industries shall assign to the Company, all of Farmland Industries' right, title
and interest in and to the domain name "Ag2Ag.com", including any related
tradenames, trademarks or other related intellectual property, and shall execute
such instruments as reasonably necessary to evidence such assignment.
ARTICLE 11
COVENANTS
11.1. Services to be Provided. To the extent reasonably requested by
the Company, Land O'Lakes and Farmland Industries each hereby agrees to provide
to the Company such administrative, business management, operations, accounting
and legal services and to make available such personnel, facilities, equipment
and proprietary technology related to the business as may be reasonably
necessary to the provisions of such services. In consideration of the delivery
of such services, the Company shall pay to each Member from time to time such
amount to be fixed on a basis approved by such Member and the Managers as will
allow such Member to
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recover the cost of providing such services, including third-party costs and
expenses reasonably incurred in connection with the services. Within fifteen
(15) days following the end of each calendar month, Land O'Lakes or Farmland may
furnish the Company with an invoice showing the amount due for services. Terms
for all payments due Land O'Lakes or Farmland will be net thirty (30) days from
the date of invoice.
11.2. Confidentiality. Each Member agrees that with respect to any
confidential information of the Company which the Member receives from the
Company, such Member shall hold such information confidential, and cause its
employees and agents to treat such confidential information consistent with the
Member's internal corporate policies regarding confidential information. The
Company agrees that with respect to any confidential information of a Member
which the Company receives from such Member, the Company will hold such
information confidential and cause its employees and agents to treat such
confidential information consistent with the Company's internal corporate
policies regarding confidential information. The provisions of this Section 11.2
shall not apply to (i) information acquired from a Person (other than the
Company), free of any obligation to keep it confidential; (ii) information which
has become generally publicly known through authorized disclosure; (iii)
information which has become generally known or readily available to members of
the agricultural industry; (iv) information developed by a Person (other than
the Company) without the unauthorized use of any confidential information of the
Company; and (v) information rightfully obtained from a Person (other than the
Company) who has the right to transfer and disclose it.
ARTICLE 12
DISSOLUTION AND LIQUIDATION
12.1. Events Causing Dissolution. The Company shall be dissolved upon
the unanimous written agreement of the Members to dissolve.
12.2. Dissolution Procedures.
(a) On dissolution of the Company, the Managers, or, if
none, the remaining Members, or, if none, a
liquidator selected by the assignees owning more than
50% of the outstanding Member Units, shall
immediately commence to wind up the Company's
affairs. The holders of the Member Units shall
continue to share profits and losses during the
period of liquidation in accordance with Article 5
hereof
(b) All distributions shall be made to the Members based
upon the allocation of the profit and loss then in
effect as provided by paragraph 5.7.
(c) Following the distribution of the assets to the
Members and payment of or provision for all debts and
liabilities of the Company and all expenses of
liquidation, and subject to the right of the Members
(or such liquidator) to set up such cash reserves as
they decide shall be reasonably necessary for any
contingent or unforeseen liabilities or obligations
of the Company, the
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proceeds of the liquidation and any other funds (or
other remaining assets) of the Company shall be
distributed, in cash or in kind or partly in each, to
the Members as provided in Article 5.
(d) Each Member shall look solely to the assets of the
Company for all distributions with respect to the
Company and its capital contribution thereto and
share of profits or losses thereof, and shall have no
recourse therefor (upon dissolution or otherwise)
against any Manager or any other Member.
(e) Upon the completion of the liquidation of the Company
and the distribution of all Company funds and other
assets, the Company shall terminate and the Members
shall have the authority to obtain Articles of
Dissolution of the Company as well as any and all
other documents required to effectuate the
dissolution and termination of the Company.
ARTICLE 13
RIGHT OF FIRST REFUSAL
13.1 Right of First Refusal
(a) A Member which desires to sell, assign, exchange or
otherwise transfer for consideration, or gift
(collectively, "sell" or "sale") to a third party
(voluntarily or involuntarily, including without
limitation by court order or by or through a pledgee,
lienholder, receiver or trustee in bankruptcy) (the
"Selling Member") all (but not less than all) of its
Membership Interest or Economic Interest (as defined
below) shall obtain from the potential purchaser a
bona fide written offer to purchase such Membership
Interest or Economic Interest, stating all material
terms and conditions upon which the purchase is to be
made and the consideration offered therefor (an
"Offer"). The Selling Member shall give written
notice (the "First Notice") to each other Member, by
certified mail or personal delivery, of its intention
to so transfer such interests, furnishing to each
other Member a copy of the Offer.
(b) The other Member shall have the right (but not the
obligation) to exercise a right of first refusal to
purchase, all (but not less than all) of the
Membership Interest or Economic Interest proposed to
be sold by the Selling Member upon the same terms and
conditions as stated in the Offer by giving written
notification to the Selling Member, by certified mail
or personal delivery within 30 days after receiving
the First Notice from the Selling Member or to sell
its Membership Interest or Economic Interest to the
Third Party.
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(c) If the other Member fails to exercise its right of
first refusal as to all of the Membership Interest or
Economic Interest of the Selling Member proposed to
be sold in the Offer within thirty (30) days, the
Selling Member shall be entitled to complete the
transactions specified in the Offer on the terms and
conditions set forth in the Offer for a period of
thirty (30) days thereafter free of the right of
first refusal. If the Selling Member fails to
complete the transaction within such thirty (30) day
period, the Membership Interest or Economic Interest
of the Selling Member shall again become subject to
all provisions of this Article 13.
(d) if the other Member gives written notice to the
Selling Member of its desire to exercise this right
of first refusal and to purchase all of the Selling
Member's Membership Interest or Economic Interest
upon the same terms and conditions as are stated in
the Offer, the purchasing Member shall have the right
to designate the time, date and place of closing,
provided that the date of closing shall be within one
hundred twenty (120) days after receipt of the First
Notice.
(e) In the event of the purchase of either the Selling
Member's Membership Interest or Economic Interest by
a third party purchaser, and as a condition to
recognizing the effectiveness and binding nature of
any such sale and substitution of a new Member as
against the Company or otherwise, the Company may
require the Selling Member and the proposed
purchaser, donee or successor-in-interest, as the
case may be, to execute, acknowledge and deliver to
the Company such instruments of transfer, assignment
and assumption and such other certificates,
representations and documents, and to perform all
such other acts which the other Member may deem
necessary or desirable to:
(i) constitute such purchaser, donee or
successor-in-interest as a Member;
(ii) confirm that such purchaser, donee or
successor-in-interest, has accepted, assumed
and agreed to be subject and bound by all of
the terms, obligations and conditions of
this Agreement, as the same may have been
further amended;
(iii) preserve the Company after the completion of
such sale, transfer, assignment, or
substitution under the laws of each
jurisdiction in which the Company is
qualified, organized or does business;
(iv) maintain the status of the Company as a
partnership for federal tax purposes; and
(v) assure compliance with any applicable state
and federal laws including securities laws
and regulations.
(f) The Selling Member hereby indemnifies the Company and
the other Member against any and all loss, damage, or
expense (including, without
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limitation, tax liabilities or loss of tax benefits)
arising directly or indirectly as a result of any
transfer or purported transfer in violation of this
Article 13.
(g) The provision of this Article 13 shall not apply to a
sale to any Affiliate of a Member, which Affiliate
agrees to be bound by the terms hereof. Affiliate of
a Member shall be defined to mean (i) a partner,
shareholder or member of a Member holding a
controlling interest in the Member or (ii) a
partnership, corporation or limited liability company
of which a Member, or an affiliate of a Member, is a
controlling partner, shareholder or member.
(h) "Economic Interest" shall be defined as a Member's or
other Person's share of one or more of the Company's
profits, losses and distributions of the Company's
assets pursuant to this Agreement and the Act, but
shall not include any right to participate in the
management or affairs of the Company, including the
right to vote on, consent to or otherwise participate
in any decision of the Members or Managers, or any
power of appointment.
ARTICLE 14
DEFINITIONS
14.1 Definitions. The terms set forth below shall have the following
meanings in this Agreement:
Person means any natural person, corporation, partnership, limited
liability company, joint venture, association, joint-stock company, trust,
unincorporated organization or other entity.
Built-in Gains means allocations pursuant to Section 704 (c) of the
Code taken into account in determining Tax Profits or Tax Losses, to the extent
such gains are attributable to the excess of the agreed value over the tax
basis, both as shown on Schedule B, of property contributed to the Company.
Built-in Losses means allocations pursuant to Section 704 (c) of the
Code taken into account in determining Tax Profits or Tax Losses, to the extent
such losses are attributable to the excess of tax basis over agreed value, both
as shown on Schedule B, of contributed property.
Code means the Internal Revenue Code of 1986, as from time to time
amended. A reference to a Section of the Code shall be a reference to the
corresponding provision of any successor statute.
Tax Losses and Tax Profits mean the net loss or income of the Company
as reported by the Members for federal income tax purposes as to such taxable
year, calculated by (i) including all amounts allocated to all Members under
Sections 702(a)(1) Through 702 (a) (8) of the Code,
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(ii) increased by tax-exempt income and (iii) decreased by expenditures
described in Section 705(a)(2)(B) of the Code.
ARTICLE 15
MISCELLANEOUS
15.1. Waiver of Partition. Each Member hereby waives any right to seek
a court decree of dissolution or partition or to seek the appointment by a court
of a liquidator for the Company.
15.2. Right to Distribution In Kind. Except as provided by this
Agreement, no Member shall have any right to demand or receive any particular
property upon dissolution and termination of the Company or to demand the
return of the Member's capital contribution to the Company. The property to be
received upon liquidation of the Company shall be decided by the Members, except
that no Member shall be required to accept a distribution in kind in excess of
the Member's fractional interest in the Company (Member Units owned by such
Member divided by total Member Units outstanding) without the Member's consent.
15.3. Integrated Agreement. This Agreement constitutes the entire
agreement of the parties. It supersedes any prior agreements, negotiations or
understandings among them, and it may be amended only as provided in Article
16.
15.4. Binding Agreement. This Agreement shall bind the executors,
administrators, estates, heirs and legal successors of the parties hereto.
15.5. Governing Law. Except as otherwise specifically provided,
Delaware law shall govern this Agreement and all questions arising hereunder.
15.6. Jurisdiction. Each Member hereby irrevocably submits itself to
the jurisdiction of the States of Missouri or Minnesota, and to the jurisdiction
of the Federal District Courts for the District of Jackson County, Missouri or
Ramsey County, Minnesota, for the purpose of any suit, action, or other
proceeding arising out of or relating to this Agreement. Each Member hereby
agrees that it will not bring or file any suit, action, or other proceeding
arising out of or relating to this Agreement in a venue other than the two
listed above.
15.7. Additional Documents and Acts. Each Member agrees to execute and
deliver such additional documents and instruments and to perform such additional
acts as may be necessary or appropriate to effectuate, carry out and perform all
of the terms, provisions, and conditions of this Agreement and the transactions
contemplated hereby.
15.8. No Third Party Beneficiary. This Agreement is made solely and
specifically among and for the benefit of the parties hereto, and their
respective successors and assigns, and no other person will have any rights,
interest, or claims hereunder or be entitled to any benefits under or on account
of this Agreement as a third party beneficiary or otherwise.
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15.9. Notices. All notices, offers and acceptances and other
communications hereunder shall be in writing and shall be delivered in person,
by telecopy with confirmation, by overnight delivery service with receipt, or
shall be deposited in the United States Mail, postage prepaid, by certified or
registered mail, return receipt requested, to the address shown on Schedule A,
or, if to the Company, to its registered office. A communication shall be deemed
received: (i) if by personal delivery, on the date delivered, (ii) if by
telecopy, on the date confirmed, (iii) if by overnight delivery service, on the
date delivered and (iv) if by mail, five business days after mailing.
15.10. Counterparts. This Agreement may be executed in multiple
counterparts.
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ARTICLE 16
AMENDMENTS
16.1 Amendments. This Agreement shall not be amended to change any
Member's share of distributions without the consent of such Member. Subject to
the preceding sentence, this Agreement may be amended at anytime, with the
consent of Members owning more than 50% of the voting rights of all Members.
This Agreement is executed as of the ____ day of February, 2001.
MEMBERS:
LAND O'LAKES, INC.
By:
----------------------------------
Print Name:
---------------------------
Its:
----------------------------------
FARMLAND INDUSTRIES, INC.
By:
----------------------------------
Print Name:
---------------------------
Its:
----------------------------------
MANAGERS:
By:
----------------------------------
(PLEASE PRINT)
By:
----------------------------------
(PLEASE PRINT)
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AG2AG, LLC
SCHEDULE A
CAPITAL CONTRIBUTIONS
<Table>
<Caption>
MEMBERSHIP INTEREST CASH CONTRIBUTIONS MEMBER UNITS
Land O'Lakes, Inc. $50,000.00 50,000 50%
4001 Lexington Avenue No.
Arden Hills, MN 55126
Farmland Industries, Inc. $50,000 50,000 50%
3315 North Oak Trafficway
P.O. BOX 7305
Kansas City, MO 64116-0005
</Table>
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AG2AG, LLC
SCHEDULE B
CERTIFICATE OF FORMATION
OF
AG2AG, LLC
The undersigned, an authorized natural person, for the purpose of
forming a limited liability company, under the provisions and subject to the
requirements of the State of Delaware particularly Chapter 18, Title 6 of the
Delaware Code and the acts amendatory (thereof and supplemental thereto, and
known, identified, and referred to as the "Delaware Limited Liability Company
Act"), hereby certifies that:
FIRST: The name of the limited liability company (hereinafter called
the "limited liability company") is:
Ag2Ag, LLC
SECOND: The address of the registered office and the name and address
of the registered agent of the limited liability company required to be
maintained by Section 18-104 of the Delaware Limited Liability Company Act are:
The Corporation Trust Company, Corporation Trust Center, 1209 Orange Street,
Wilmington, New Castle County, Delaware 19801.
Executed on December _____, 2000.
-------------------------------
COLLEEN DORSEY
Authorized Person
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EXHIBIT 1
[FORM OF ASSIGNMENT, LICENSE OR SUBLICENSE TO THE COMPANY
BY LAND O'LAKES]
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EXHIBIT 2
[FORM OF ASSIGNMENT, LICENSE OR SUBLICENSE TO THE COMPANY
BY FARMLAND]
22