Amendment No. 11 to the Husker Ag, LLC Second Amended and Restated Operating Agreement
Exhibit
3.2
Amendment
No. 11
to
the
Husker
Ag, LLC
Second
Amended and Restated
1. Section
4.3 of the Operating Agreement is hereby deleted in its entirety and the
following substituted in lieu thereof:
“4.3 Minimum
Transfers and Maximum Ownership.
(a) Beginning
August 31, 2005, (i) no Member shall Transfer fewer than five (5) Units to
any
transferee (except in the case where all Units owned by a Member are transferred
to a single transferee); and (ii) no Member shall Transfer any Units that would
result in the transferor owning fewer than five (5) Units after the Transfer.
Any Member that wishes to make such a Transfer may request the Company to redeem
the affected Units pursuant to Sections 10.7 and 10.8 of this Agreement. For
this purpose, the affected Units shall include any Units intended to be
transferred or retained by the transferor in an amount of fewer than five (5)
Units.
(b) No
Member
together with its Affiliates shall own Percentage Interests in the Company
in
excess of thirty percent (30%).”
2. Article
X
of the Operating Agreement is hereby deleted in its entirety and the following
substituted in lieu thereof:
“10.1
Restrictions
on Transfer.
No
Member shall Transfer all or any portion of an Interest without the prior
written consent of the Board of Directors which consent may be withheld in
the
sole discretion of the Board. Notwithstanding anything contained herein to
the
contrary, no Member shall Transfer any Unit if, in the determination of the
Board, such Transfer would cause the Company to be treated as a Publicly Traded
Partnership, and any Transfer of Unit(s) not approved by the Board of Directors
or that would result in a violation of the restrictions in this Agreement or
applicable law shall be null and void with no force or effect whatsoever, and
the intended transferee shall acquire no rights in such Unit.
10.2 Permitted
Transfers.
Subject
to Section 10.1 above and
the
limits on minimum transfers and total maximum ownership set forth in Section
4.3
of this Agreement, any Transfer of Units made in accordance with the following
provisions will constitute a “Permitted
Transfer”
for
purposes of this Agreement:
(a) A
Transfer by a Member and any related persons (as defined in the Code) in one
or
more transactions during any thirty (30) calendar day period of Interests
representing in the aggregate more than two percent (2%) of the total Interests
in Company;
(b)
A
Transfer or series of related Transfers by one or more Members (acting together)
which involves the Transfer of fifty percent (50%) or more of the outstanding
Units; or
(c)
Transfers
of Units effected through a Qualified Matching Services Program; or
(d) A
Transfer by
gift or bequest only
to a
spouse or child of such transferring Member, or to a trust established for
the
benefit of such spouse or child, or to an existing Member of the Company upon
ten (10) days’ prior written notice to the Company of such gift or bequest;
provided,
however,
that
any such transfers shall be subject to the limitations provided in Sections
4.3(a) and 10.4(c) of this Agreement, as applicable.
10.3
Conditions
Precedent to Transfers.
The
Board of Directors, in its sole discretion, may elect not to recognize any
Transfer of Units unless and until the Company has received:
(a)
an
opinion of counsel (whose fees and expenses shall be borne by the transferor)
satisfactory in form and substance to the Board that such Transfer may be
lawfully made without registration or qualification under applicable state
and
federal securities laws, or such Transfer is properly registered or qualified
under applicable state and federal securities laws and if, requested by the
Company that such Transfer will not cause the Company to be treated as a
Publicly Traded Partnership;
(b)
such
documents and instruments of conveyance executed by the transferor and
transferee as may be necessary or appropriate in the opinion of counsel to
the
Company to effect such Transfer, except that in the case of a Transfer of Units
involuntarily by operation of law, the Transfer shall be confirmed by
presentation of legal evidence of such Transfer, in form and substance
satisfactory to the Company;
(c)
the
transferor's Membership Certificate;
(d)
the
transferee's taxpayer identification number and sufficient information to
determine the transferee's initial tax basis in the interest transferred, and
any other information reasonably necessary to permit the Company to file all
required federal and state tax returns and other legally required information
statements or returns;
(e)
evidence
satisfactory in form and substance to the Board that the transferee meets the
maximum Unit ownership limitation set forth in Section 4.3(b) of this Agreement;
and
(f) other
conditions on the Transfer of Units adopted by the Board from time to time
as it
deems appropriate, in its sole discretion.
10.4 Death
of Member.
(a) Upon
the
death of any Member, the estate or personal representative of the deceased
Member shall have the option to request the Company repurchase the deceased
Member's Interest subject to and in accordance with the applicable Code and
Treasury Regulations regarding Publicly Traded Partnerships. If the estate
or
personal representative makes such a request, the Company may elect, in its
sole
discretion and subject to Section 10.4(b) below, to purchase the deceased
Member’s Interest at the Redemption Value of such Interest in effect at the date
of death as determined in accordance with Section 10.10 below, and on the terms
and conditions set forth in Section 10.5 and Section 10.6 below. This request
may be made by the deceased Member’s estate or personal representative by
providing written notice to the Company within one hundred twenty (120) days
after the date of death; provided, however, the Company will not repurchase
such
interest earlier than sixty (60) days after receipt of the written notice from
the estate or personal representative requesting the purchase.
(b) Any
Transfer pursuant to this Section 10.4 shall be subject to a determination
by
the Board that such Transfer shall not cause the Company to be deemed a Publicly
Traded Partnership, and such Transfer shall be affected in accordance with
this
Agreement, the Code and applicable Treasury Regulations, and shall be further
subject to the prior approval of the Board which may be withheld in its sole
discretion
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(c) Beginning
August 31, 2005, the estate or personal representative of a deceased Member
may
not transfer fewer than five (5) Units to any transferee (except in the case
where all Units owned by the deceased Member are transferred to a single
transferee). Any purported transfer pursuant to this Section 10.4 of fewer
than
five (5) Units to any transferee, except in the case where all Units are to
be
transferred to a single transferee, shall be deemed to be an offer by the estate
or personal representative to sell the affected Units to the Company in
accordance with the terms set forth in Section 10.4(a) above. If the Company
elects to purchase the affected Units in that case, the estate or personal
representative shall be required to sell the Units to the Company in accordance
with such terms and conditions. For this purpose, the affected Units shall
include any Units intended to be transferred in an amount of fewer than five
(5)
Units.
10.5
Payment
Terms. If
the
purchase price for an Interest transferred pursuant to Section 10.4 above
exceeds five thousand dollars ($5,000.00), the Company shall have the option
to
pay for the Interest purchased by paying five thousand dollars ($5,000) at
Closing (as defined below) and executing a promissory note for the balance
of
the purchase price. The promissory note shall be paid in five (5) equal annual
installments due on the anniversary date of the Closing and shall accrue
interest per annum at a rate determined by the Board which shall not be less
than the then current prime rate established by any major bank selected by
the
Board for loans to the bank’s most creditworthy commercial borrowers. The
Company may prepay the promissory note, in whole or in part, at any time without
penalty or premium.
10.6 Events
in Connection with the Sale of Interests.
(a) If
there
is a sale of Interest under Section 10.4 of this Agreement to the Company,
the
closing ("Closing")
shall
occur at a time mutually agreeable to the parties and in accordance with the
time periods set forth in the applicable provision of this Agreement;
provided,
however,
the
Closing shall not
occur
until at least sixty (60) days after the Company’s receipt of notice from the
estate or personal representative requesting the Company repurchase the deceased
Member’s Interest, but in no event later than one hundred twenty (120) days
after the date of the Company’s receipt of such notice.
(b) In
the
event of a sale of Interest under Section 10.4 of this Agreement to the Company,
the purchase price shall be increased or decreased, as the case may be, by
an
amount equal to any indebtedness owed the deceased Member by the Company, or
the
deduction of any indebtedness owed the Company by the deceased Member, or
both.
(c) In
the
event of the sale of Interests under this Agreement by a Member, all rights
of
the Member with respect to the Interest, including the right to vote such
Interest and to receive distributions, shall terminate at Closing, except for
the Member’s right to receive payment therefor.
10.7 Redemption
of Interests.
(a) A
Member
(the “Requesting
Member”)
may
request redemption of his or her Interest upon not less than sixty (60) calendar
days’ prior written notice to the Board of Directors. The Board, in its sole
discretion, shall determine whether to redeem such Interest and the Board is
under no obligation to redeem any Interest of any Requesting
Member.
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(b) Notwithstanding
anything contained herein to the contrary, any redemption pursuant to this
Section 10.7 shall be subject to a determination by the Board, in its sole
discretion, that such redemption shall not cause the Company to be deemed a
Publicly Traded Partnership, and such redemption shall be affected in accordance
with this Agreement, the Code and applicable Treasury Regulations, and shall
be
further subject to the prior approval of the Board which may be withheld in
its
sole discretion.
10.8 Redemption
Payment.
(a) Upon
the
redemption of a Member under Section 10.7, the Requesting Member shall be
entitled to a payment equal to the Redemption Value of such Member’s Interest in
the Company as of the effective date of the (the “Redemption
Payment”);
provided, however,
if the
remaining Members of the Company agree to dissolve the Company in accordance
with Section 13.1 of this Agreement, then in no event shall such Member be
entitled to a Redemption Payment, but such Member will be entitled to such
Member’s share of the assets of the Company pursuant to Section 13.3 below.
(b) The
Redemption Payment shall not
be paid
until at least sixty (60) days after the Company’s receipt of the notice from
the Requesting Member required under Section 10.7(a) above. The Redemption
Payment shall be paid in cash, or if the Redemption Payment exceeds five
thousand dollars ($5,000), the Company shall have the option to pay the
Redemption Payment by paying five thousand dollars ($5,000) upon the effective
date of the redemption and executing a promissory note for the balance of the
Redemption Payment. Such note shall be dated and delivered on the effective
date
of the withdrawal and shall be paid in five (5) equal annual installments due
on
the anniversary date of the withdrawal and shall accrue interest per annum
at a
rate determined by the Board which shall not be less than the then current
prime
rate established by any major bank selected by the Board for loans to the bank’s
most creditworthy commercial borrowers. The Company may prepay the promissory
note, in whole or in part, at any time without penalty or premium.
(c) The
Redemption Payment shall be increased or decreased, as the case may be, by
an
amount equal to any indebtedness owed the Requesting Member by the Company,
or
the deduction of any indebtedness owed the Company by the Requesting Member,
or
both. All rights of the Member with respect to the Interest, including the
right
to vote such Interest and to receive distributions, shall terminate at Closing,
except for the Member’s right to receive payment therefor upon the effective
date of the redemption which shall be determined in accordance with Section
10.9
below.
10.9
Effective
Date of Transfer.
(a) Any
Transfer of a Unit shall be deemed effective as of the day of the month and
year: (i) which the Transfer occurs (as reflected by the form of assignment);
and
(ii) the
transferee's name and address and the nature and extent of the Transfer are
reflected in the records of the Company; provided,
however,
the
effective date of a Transfer for purposes of allocation of Profits and Losses
and for Distributions shall be determined pursuant to Section 10.9(b) below.
Any
transferee of a Unit shall take subject to the restrictions on Transfer imposed
by this Agreement.
(b) The
Board, in its sole discretion, may establish interim periods in which Transfers
may occur (the “Interim
Transfer Periods”);
provided,
however,
the
Board shall provide Members reasonable notice of the Interim Transfer Periods
and advance notice of any change to the Interim Transfer Periods. For purposes
of making allocations of Profits and Losses, and Distributions, the Company
will
use the interim closing of the books method (rather than a daily proration
of
profit or loss for the entire period) and, except as otherwise determined by
the
Board, recognize the Transfer as of the last day of the Interim Transfer Period
in which the Member complied with the notice, documentation and information
requirements of Article 10. All Distributions shall be made to the owner of
record as of the record date as such record date is determined by the Board.
The
Board the authority to adopt other reasonable methods and/or
conventions.
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(c) The
Board
shall have the power and authority to adopt another reasonable method and/or
convention with respect to such allocations and distributions; provided, neither
the Company, the Board, any Director nor any Member shall incur any liability
for making allocations and distributions in accordance with the provisions
of
this Section 10.9 (other than tax liabilities which may be incurred by Members),
whether or not the Board or any Director or the Company or any Member has
knowledge of any Transfer of ownership of any Interest in the
Company.
10.10 Redemption
Value.
Upon
the Transfer of any Interest pursuant to Section 10.4, or the redemption of
an
Interest pursuant to Section 10.7, the purchase price or Redemption Payment
shall be equal to the Redemption Value of the Interest. "Redemption Value"
of an
Interest on any date shall, unless otherwise specifically provided in this
Agreement, be equal to the most recent redemption valuation determination of
the
per Unit value of the Company by the Board in good faith; provided, that such
valuation shall be calculated on a basis as consistent as practicable from
period to period. The Board may, in its sole discretion, employ the advice
of
independent and qualified professionals in the determination of the Redemption
Value, but is not under any obligation to do so. The Redemption Value of the
Company shall be determined at least annually. Valuations shall generally be
performed, at the discretion of the Board, as of the end of each fiscal year
of
the Company's operations at the annual meeting of the Board; however, the Board,
in its sole discretion, may have redemption valuations of the Company performed
at any time or from time to time during any year and, except as otherwise
specifically provided in this Agreement, shall utilize the results of the most
recent valuation in determining the Redemption Value of an Interest for purposes
of this Agreement. No Member or any party other than the Board shall have the
right to require or request that a new or more recent valuation be performed
for
purposes of determining the Redemption Value of the Company or an Interest
hereunder. The Company shall not
establish the Redemption Value more than four (4) times during the Company’s
taxable year.
10.11 Expenses.
Except
as otherwise expressly provided herein, all expenses of the Company incident
to
the admission of the transferee to the Company as a Member shall be charged
to
and paid by the transferring Member.
10.12 Pledged
Units.
Subject
to Section 10.1 above and
the
limits on minimum transfers and total maximum ownership set forth in Section
4.3
of this Agreement, in the event that any Member pledges or otherwise encumbers
any part of its Units as security for the payment of a debt, any such pledge
or
hypothecation shall be made pursuant to a pledge or hypothecation agreement
that
requires the pledgee or secured party to be bound by all of the terms and
conditions of this Article 10. In the event such pledgee or secured party
becomes a Member hereunder pursuant to the exercise of such party's rights
under
such pledge or hypothecation agreement, such pledgee or secured party shall
be
bound by all of the terms and conditions of this Agreement. In such case, such
pledgee or secured party, and any transferee or purchaser of the Units held
by
such pledgee or secured party, shall not have any voting rights associated
with
such Units unless and until the Directors have approved in writing and admitted
as a Member hereunder, such pledgee, secured party, transferee or purchaser
of
such Units.”
Effective
Date: August 31, 2005.
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